Citation Nr: 1337587 Decision Date: 11/18/13 Archive Date: 11/26/13 DOCKET NO. 13-17 983 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in Muskogee, Oklahoma THE ISSUES 1. Whether an overpayment of VA Dependents' Education Assistance (DEA) benefits under 38 U.S.C. Chapter 35 in the principal amount of $5,132.13 is a valid debt. 2. Entitlement to a waiver of recovery of VA DEA benefits under 38 U.S.C. Chapter 35 in the principal amount of $5,132.13. ATTORNEY FOR THE BOARD Kristy L. Zadora, Counsel INTRODUCTION The Veteran had active duty service from June 1982 to January 1987. The appellant is his daughter. This appeal to the Board of Veterans' Appeal (Board) arose from a December 2012 decision in which the Muskogee RO's Committee on Waivers and Compromises (Committee) denied waiver of recovery of an overpayment VA DEA benefits under 38 U.S.C. Chapter 35 in the calculated amount of $5,132.13. The appellant filed a notice of disagreement (NOD) in December 2012, and the RO issued a statement of the case (SOC) in March 2013. The appellant filed a substantive appeal (via a VA Form 9, Appeal to Board of Veterans' Appeals) in April 2013. The Board notes that, in additional to the paper claims file, there is a paperless, electronic (Virtual VA) folder associated with the Veteran. A review of the Virtual VA claims processing system does not reveal any additional documents pertinent to the claims on appeal. For the reasons expressed below, the appeal (characterized to encompass both matters on the title page, as explained below) is being remanded to the RO, via the Appeals Management Center (AMC) in Washington, D.C. VA will notify the appellant when further action, on her part, is required. REMAND Unfortunately the Board finds that further RO action in this appeal is warranted, even though such will, regrettably, further delay an appellate decision. Initially, the Board notes that before a decision can be made on whether the appellant is entitled to a waiver of recovery of the assessed overpayment, it must be determined whether or not the overpayment was properly calculated. See Schaper v. Derwinski, 1 Vet. App. 430, 434 (1991). In general, waiver determinations, which do not involve fraud, misrepresentation, or bad faith by the claimant, should be waived only when it is shown that the recovery would be against the principles of equity and good conscience. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. § 1.963 (2013). The Board emphasizes that waiver decisions are based upon the evidence of record, which, in essence, places the burden of proof upon the claimants. See 38 C.F.R. § 1.966 (2013). Preliminary review of the current evidentiary record in this case reveals an October 2012 letter to the appellant indicating that she owed $3,449.80 as her school had sent VA notice that she had stopped her educational training. A December 2012 decision subsequently denied the appellant's request for a waiver of debt in the amount of $5,132.13, reasoning that she was significantly responsible for the creation of this debt, that the financial records indicated that her income to debt ratio did not result in financial hardship and that to pursue collection of this debt would not violate equity and good conscience. The appellant argues that while she understand that she must repay any benefit she received for a class that she did not successfully complete, the amount owed is overstated as she had made payments on the outstanding debt. She further contends that she had erroneously included the receipt of DEA benefits in her October 2012 Financial Status Report (FSR), which was used by the Committee in determining whether she would incur financial hardship by repaying the debt, and that an updated or corrected FSR would demonstrate such financial hardship as she no longer receives DEA benefits. The United States Court of Appeals for Veterans Claims (Court) has held that when the validity of the debt is challenged, a threshold determination must be made on that question prior to a decision on the waiver of indebtedness. See Schaper, supra. A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. See 38 C.F.R. § 1.911(c)(1) (2013); see also VAOPGCPREC 6-98. The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. See Schaper, 1 Vet. App. at 434. As such, the Board believes that further action by the Committee to determine whether the creation of the debt at issue was proper and, if so, the correct amount is needed prior to further appellate consideration. Thus, the Board finds that additional development is necessary before the Board may proceed with further appellate review. It also appears that some of the assessed indebtedness in question may have been recouped. Nevertheless, in accordance with Franklin v. Brown, 5 Vet. App. 190 (1993), the Board must consider the entire amount calculated. The record contains a March 2013 Audit demonstrating how the debt in question was incurred. Although an April 2013 Report of Contact reflects the appellant's request for an audit, it does not appear that she has been provided with such an audit or that the audit in the record indicating the amount of any repayments for the period in question has been conducted. Moreover, the March 2013 audit references multiple payments apparently made to the appellant in January 2001, which is prior to the period in question and during a time when the appellant was likely enrolled in elementary school. In addition, it appears from the record that the appellant has repaid some of the debt in question and that her income has been reduced since the Committee's December 2012 decision. Consequently, if the debt is determined to be valid, the appellant should be asked to submit a current FSR. Accordingly, these matters are hereby REMANDED for the following action: 1. A written paid and due audit of the appellant's account for the period of the overpayment should be performed. This audit should reflect, on a month-by-month basis, the amounts actually paid to the appellant, as well as the amounts properly due. The audit should specifically address any payments made to the appellant in January 2001, as detailed in the March 2013 audit. In addition, the audit should include the amount of the overpayment, if any, that may have been repaid by the appellant. A copy of the written audit should be inserted into the claims file and another provided to the appellant. 2. After completion of the above development, as well as any other action deemed necessary, adjudicate the issue of whether the overpayment of DEA benefits under 38 U.S.C. Chapter 35 at issue was properly created, and the amount of any such overpayment. A comprehensive explanation of the reasons and bases for that decision should be prepared and incorporated into the claims file, to include a discussion of any information obtained from the appellant. If it is determined that any or all of the overpayment at issue was improperly created, award action should be taken to rectify the error. In any case, the appellant should be informed of the decision made and should be allowed the requisite period of time for a response. 3. Thereafter, if an overpayment is found to have been properly created, the appellant should be allowed an opportunity to submit additional evidence pertinent to her request for waiver of recovery of the assessed overpayment, including a current and complete FSR, providing all current income, expenses, and assets. 4. After the actions requested above have been completed, the Committee should review the record and reconsider the appellant's request for waiver pursuant to the principals of equity and good conscience. A formal, written record of the Committee'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 (SSOC) is not the appropriate means for accomplishing this task, under proper appellate guidelines. 5. To help avoid future remand, ensure that all requested actions have been accomplished (to the extent possible) in compliance with this REMAND. If any action is not undertaken, or is taken in a deficient manner, appropriate corrective action should be undertaken. Stegall v. West, 11 Vet. App. 268 (1998). 6. If the benefit sought on appeal remains denied, furnish to the appellant an appropriate supplemental statement of the case that includes clear reasons and bases for all determinations-to include the issue of whether the debt was properly created, along with recitation of the pertinent law and regulations governing the issue of proper creation, including 38 U.S.C.A. § 5112; 38 C.F.R. § 1.965(a)-and afford them the appropriate time period for response before the claims file is returned to the Board for further appellate consideration. The purpose of this REMAND is to afford due process and to accomplish additional development and adjudication; it is not the Board's intent to imply whether the benefits requested should be granted or denied. The appellant need take no action until otherwise notified, but she may furnish additional evidence and/or argument during the appropriate time frame. See Kutscherousky v. West, 12 Vet. App. 369 (1999); Colon v. Brown, 9 Vet. App. 104, 108 (1996); Booth v. Brown, 8 Vet. App. 109 (1995); Quarles v. Derwinski, 3 Vet. App. 129, 141 (1992). This REMAND must be afforded expeditious treatment. The law requires that all claims 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. 2012). _________________________________________________ JACQUELINE E. MONROE 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 the appeal. 38 C.F.R. § 20.1100(b) (2012).