Citation Nr: 1111991 Decision Date: 03/25/11 Archive Date: 04/06/11 DOCKET NO. 07-30 329 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Atlanta, Georgia THE ISSUE Entitlement to waiver of recovery of an overpayment of Chapter 35 education benefits in the amount of $1,010.42, to include whether the debt was properly created. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD C. Eckart, Counsel INTRODUCTION The Veteran's dates of service are to be clarified later. He is shown to be in receipt of a permanent and total disability rating from a May 2003 DRO decision. The appellant is the Veteran's daughter. This appeal to the Board of Veterans' Appeals (Board) is from a February 2007 administrative decision of the Department of Veterans Affairs (VA) Committee on Waivers and Compromises (COWC) in Atlanta, Georgia, which denied a waiver in the amount of a $1010.42 overpayment of Chapter 35 benefits. The appellant requested a videoconference hearing, but subsequently failed to appear for the hearing scheduled for December 2007. The appeal is REMANDED to the Agency of Original Jurisdiction (AOJ) via the Appeals Management Center (AMC), in Washington, DC. VA will notify the appellant if further action is required. REMAND The Board finds that it is necessary to remand this matter for further development. Initially, the Board notes that the appellant's request for a waiver of overpayment (said at the time to be in the amount of $599.65) received by the RO in June 2006 also appears to challenge the creation of the debt. In this document, the appellant commented that she did not understand how she had a debt since the VA had sent her a letter and check in April 2006 that made no reference to an overpayment or debt. The preliminary issue of the validity of a debt is a threshold determination that must be made prior to a decision on a request for waiver of the indebtedness. See Schaper v. Derwinski, 1 Vet. App. 430 (1991). VA's General Counsel has reinforced this obligation by interpreting that where the validity of a debt is challenged that issue must be developed before the issue of entitlement to waiver of the debt can be considered. VAOGCPREC 6-98. When an overpayment has been made by reason of an erroneous award based solely upon administrative error, the reduction of that award cannot be made retroactive to form an overpayment of debt owed to VA from the recipient of the erroneous award. 38 U.S.C.A. § 5112(b)(10) (West 2002); Erickson v. West, 13 Vet. App. 495, 499 (2000); 38 C.F.R. § 3.500(b) (2010). Administrative errors include actions that grant or deny entitlement, whether based upon mistake of fact or law. VAOPGPREC 2-90 (March 20, 1990) (describing errors of fact, e.g., VA mistakes or overlooks the facts of record or makes a purely clerical error versus errors of judgment, e.g., VA fails to properly interpret, understand and follow existing procedure or legal requirements); see also Jordan v. Brown, 10 Vet. App. 171 (1997). Sole administrative error, however, may be found to occur only in cases where the Veteran had no knowledge of the erroneous award, or had no cause to know that payments were erroneous. Such error contemplates that neither the appellant's actions nor his failure to act contributed to payment pursuant to an erroneous award. 38 U.S.C.A. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2); Jordan v. Brown, supra (sole administrative error is not present if the payee knew, or should have known, that the payments were erroneous). In this case, the AOJ has not yet addressed the question of whether the debt is valid, and without administrative error, and should take steps to ensure proper adjudication of this matter. Such actions should include obtaining a written paid and due audit of the appellant's Chapter 35 account for the period of the overpayment, which is shown by the RO to have taken place from following her termination of enrollment in school on August 16, 2005. Thus, if the debt is deemed valid and without administrative error, further development pertaining to the question of entitlement to a waiver will be necessary. The appellant has alleged in her February 2007 notice of disagreement that the debt was created after her grade point average suffered after she became pregnant and was involved in an abusive relationship, and she was forced to withdraw. She alleges in essence that hardship resulted from this situation, and also appears to request the VA consider such potentially extenuating circumstances when weighing fault. She also indicated that around the time she withdrew from classes she had sought the guidance from the VA office in her city and had been told that they were communicating on her behalf in regards to requesting a waiver, but that she did not see what had been communicated on her behalf. In light of such contentions, the AOJ should take steps to obtain any correspondences from the VA office on the appellant's behalf that is not already of record and pertinent to this matter. Additionally, the appellant should be given the opportunity to provide the AOJ with further evidence regarding the circumstances surrounding her withdrawal from classes. Furthermore, while the appellant now appears to suggest that her financial hardship has decreased, her most recent financial status report (FSR) is dated in June 2006. If necessary, she should be provided the opportunity to submit a more recent financial status report in addition to any other evidence to support any ongoing claims of financial hardship. Accordingly, the case is REMANDED for the following action: 1. The AOJ should clarify the Veteran's service dates, and place the dates in the education folder. 2. The AOJ should take steps to obtain any outstanding correspondences between the VA and the appellant in regards to her Chapter 35 benefits, as per her contentions submitted in her February 2007 notice of disagreement. Thereafter, the RO/AMC/Committee on Waivers and Compromises should determine if the debt was valid. 3. If the debt is determined to be valid, the AOJ should then consider all of the evidence of record and adjudicate the issue of whether there was sole administrative error on the part of VA in the creation of the overpayment. 4. Following completion of the above development, the AOJ should set forth in the record a written paid and due audit of the appellant's Chapter 35 benefits account for the period of the overpayment. After taking in consideration all appropriate expenses that maybe considered for period of the assessed overpayment, this audit should reflect, on a month-by-month basis, the amounts actually paid to the appellant, as well as the amounts properly due. A copy of the written audit should be inserted into the claims file and another provided to the Veteran. 5. The AOJ should request that the appellant complete a current Financial Status Report (VA Form 20-5655), as well as provide any additional information in regards to her claimed circumstances surrounding her withdrawal from classes on and around August 16, 2005. 6. After the actions requested above have been completed to the extent possible, as well as any other action deemed necessary, the case should be referred to the AOJ to review the record and reconsider the appellant's request for waiver, including any additional evidence obtained on remand. A formal, written record of the AOJ 's decision, including an analysis of the various elements to be considered, should be prepared and placed in the claims file. A supplemental statement of the case is not the appropriate means for accomplishing this task, under proper appellate guidelines. 7. If the AOJ's determination remains unfavorable to the appellant, she and her representative should be furnished a supplemental statement of the case, which sets forth and considers all of the applicable legal criteria pertinent to this appeal. This document should further reflect detailed reasons and bases for the decision reached. The appellant and her representative should be given the opportunity to respond. The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). [Continued on following page.] This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2010). _________________________________________________ DENNIS F. CHIAPPETTA Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2010).