NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

NANCY C. WARRENDER,

Petitioner

v.

OFFICE OF PERSONNEL MANAGEMENT,

Respondent

______________________ 

2017-1679

______________________ 

Petition for review of the Merit Systems Protection 

Board in No. DC-0845-15-1135-I-1.

______________________ 

Decided: July 14, 2017

______________________ 

 NANCY C. WARRENDER, Burlington, NC, pro se.

 FARIDA ALI, Commercial Litigation Branch, Civil 

Division, United States Department of Justice, Washington, DC, for respondent. Also represented by CHAD A.

READLER, ROBERT E. KIRSCHMAN, JR., BRIAN MIZOGUCHI. 

______________________ 

Before LOURIE, MOORE, and HUGHES, Circuit Judges.

PER CURIAM. 
2 WARRENDER v. OPM

Nancy Warrender appeals from the final order of the 

Merit Systems Protection Board (“Board”) affirming the 

decision of the Office of Personnel Management (“OPM”) 

denying her request for waiver of repayment of a benefit 

overpayment paid under the Federal Employee Retirement System (“FERS”). See Warrender v. Office of Pers. 

Mgmt., No. DC-0845-15-1135-I-1, 2016 WL 7439441 

(M.S.P.B. Dec. 16, 2016) (“Final Order”). For the reasons 

that follow, we affirm. 

BACKGROUND

Ms. Warrender, a former employee of the Internal 

Revenue Service (“IRS”), was approved by OPM for FERS 

disability retirement benefits on January 10, 2006. 

OPM’s award letter advised her that she was required to 

apply for Social Security Administration (“SSA”) disability 

benefits, provide proof that she had applied for SSA 

disability benefits, and notify OPM of any SSA disability 

benefits received. 

OPM sent Ms. Warrender another letter on March 16, 

2006, inquiring into the status of her SSA benefits application and reminding her that OPM was required to 

deduct all or part of any SSA benefits from the FERS

benefit. The March 16, 2006 letter also advised Ms. 

Warrender that she should set aside any overpayment 

based on her receipt of SSA disability benefits because 

she was legally required to repay that money to OPM. 

Ms. Warrender responded to the March 16, 2006 letter, 

informing OPM only that she had filed a reconsideration 

appeal at the SSA for its initial denial of her benefits 

application.

By letter dated March 16, 2015, OPM notified Ms. 

Warrender that it had determined that she became entitled to SSA benefits, effective August 1, 2009, and thus 

that she had been overpaid $51,348.00 in civil service 

annuity benefits for the period of August 1, 2009 through 

the end of February, 2015. 
WARRENDER v. OPM 3

Ms. Warrender requested reconsideration, asking for 

a waiver of the overpayment, and OPM issued a decision 

on August 4, 2015, affirming its initial decision and 

establishing a repayment schedule of 150 monthly installments of $341.16 and one final installment of 

$174.00. 

Ms. Warrender appealed to the Board and on April 12, 

2016, an administrative judge issued an initial decision 

affirming OPM’s denial of a waiver, but adjusting the 

repayment schedule down to 342 monthly payments of 

$150.00 and a final installment of $48.00 due to Ms. 

Warrender’s financial hardship. See Warrender v. Office 

of Pers. Mgmt., No. DC-0845-15-1135–I–1 (M.S.P.B. April 

12, 2016) (Resp’t’s App. 45–61) (“Initial Decision”). Ms. 

Warrender subsequently filed a petition for review to the 

full Board and on December 16, 2016, the Board affirmed 

the Initial Decision in its Final Order. 

Ms. Warrender timely appealed. This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(9). 

DISCUSSION

The scope of our review in an appeal from a decision 

of the Board is limited. We must affirm the Board’s 

decision unless it was “(1) arbitrary, capricious, an abuse 

of discretion, or otherwise not in accordance with law; 

(2) obtained without procedures required by law, rule, or 

regulation having been followed; or (3) unsupported by 

substantial evidence.” 5 U.S.C. § 7703(c); see Briggs v. 

Merit Sys. Prot. Bd., 331 F.3d 1307, 1311 (Fed. Cir. 2003). 

Ms. Warrender bears the burden of proving entitlement to 

a waiver of an overpayment by substantial evidence. 5 

C.F.R. § 845.307(b) (“Burden of annuitant. The recipient 

of an overpayment must establish by substantial evidence 

that he or she is eligible for waiver or an adjustment.”). 

On appeal, Ms. Warrender challenges only the 

Board’s finding that she does not qualify for a waiver of 
4 WARRENDER v. OPM

the overpayment. She argues that the Board erred in not 

considering that the “MSPB failed to grant leave 

when . . . [her] father died in 2016 and failed to account 

[for] form OMB 3206-0167 Part 2 C5& C6.” Pet’r’s Br. 1. 

She also asserts that she had applied for a pro bono 

attorney and was not provided with one. Finally, she asks 

for a waiver of the overpayment due to financial hardship.

The government responds that the Board’s decision 

should be affirmed because Ms. Warrender fails to 

demonstrate any error by the Board. The government 

asserts that it is unclear how the Board could grant Ms. 

Warrender “leave” for the period of time when her father 

died or how any such failure to grant leave affected her 

claim for an overpayment waiver. Further, the government points out that form OBM 3206-0167 contains 

neither a “Part 2” nor sections “C5 & C6,” so the Board 

could not have erred in not considering those sections. 

Finally, the government maintains that substantial 

evidence supports the Board’s finding that Ms. Warrender 

was not without fault in the overpayment and that OPM’s 

recovery would not be against equity and good conscience.

We agree with the government that the Board properly affirmed OPM’s decision to deny a waiver. First, we 

conclude that the Board applied the correct legal framework in its analysis. 

OPM may recover an overpayment from a recipient 

who is not eligible for waiver. See 5 C.F.R. § 831.1401. A 

recipient is eligible for waiver if (a) he or she is “without 

fault” and (b) “recovery would be against equity and good 

conscience.” Id. § 845.301. One who receives an “overpayment is without fault if he or she performed no act of 

commission or omission that resulted in the overpayment. 

The fact that the [ ] OPM or another agency may have 

been at fault in initiating an overpayment will not necessarily relieve the individual from liability.” Id. § 845.302. 
WARRENDER v. OPM 5

OPM is required to consider certain factors when determining fault:

(1) Whether payment resulted from the individual’s incorrect but not necessarily fraudulent 

statement, which he or she should have known to 

be incorrect;

(2) Whether payment resulted from the individual’s failure to disclose material facts in his or her 

possession, which he or she should have known to 

be material; or

(3) Whether he or she accepted a payment that he 

or she knew or should have known to be erroneous. 

Id. § 845.302(a) (emphasis added). 

Even if Ms. Warrender “is ineligible for waiver,” she 

may still be “entitled to an adjustment in the recovery 

schedule if [ ] she shows that it would cause [ ] her financial hardship to make payment at the rate scheduled.” Id.

§ 845.301. “Financial hardship may be deemed to exist 

in—but not limited to—those situations where the annuitant from whom collection is sought needs substantially 

all of his/her current income and liquid assets to meet 

current ordinary and necessary living expenses and 

liabilities.” Id. § 831.1404.

The Board’s analysis complied with the legal framework outlined above. The Board first determined that 

Ms. Warrender was not eligible for a waiver because she 

knew or should have known of the overpayment, but it 

then adjusted the repayment schedule due to her financial 

hardship.

Second, we find the Board’s decision to be supported 

by substantial evidence and in accordance with law. The 

Board explained that Ms. Warrender “knew or should

have known the payment she received was erroneous” 

because she received two letters from OPM expressly 
6 WARRENDER v. OPM

stating that she must report the amount of SSA benefits 

she receives so that the amount could be deducted from 

her FERS annuity. Final Order, 2016 WL 7439441, ¶ 8. 

That finding is supported by substantial evidence. 

The record shows that OPM sent Ms. Warrender two 

letters, dated January 10, 2006 and March 16, 2006, 

expressly informing her that OPM was “required to 

deduct all or part of [any] Social Security benefits from 

the FERS” and that she should thus “hold” or set aside 

any SSA retroactive payment “so that [she would] have 

sufficient funds to repay [her] duplicate payment” because 

she was “legally required to repay this money to OPM.” 

Resp’t’s App. 4–8. Ms. Warrender does not deny that she 

received either letter. In fact, she responded to the March 

16, 2006 letter, informing OPM that she had filed for a 

reconsideration of the SSA’s initial denial of her benefits 

application. Id. at 9–10. Thus, the Board properly found 

that she knew or should have known of the overpayment.

Because the Board found that Ms. Warrender knew or 

should have known that she received an overpayment, it 

then properly determined that the “set-aside rule” applied 

to her case. According to the set-aside rule, individuals 

who know or suspect that they are receiving overpayments must set aside the amount overpaid pending recoupment. See, e.g., Boyd v. Office of Pers. Mgmt., 851

F.3d 1309, 1313–14 (Fed. Cir. 2017). When the set-aside 

rule applies, recovery by OPM of the overpayment is “not 

against equity and good conscience” and cannot be waived 

absent “exceptional circumstances,” which do not include 

financial hardship. Id. at 1313 (internal quotation marks 

omitted). Thus, the Board found that Ms. Warrender did 

not qualify for a waiver. 

That determination was legally sound and is supported by substantial record evidence. Ms. Warrender challenges the Board’s determination based solely on her 

financial hardship. But, as we noted above, financial 
WARRENDER v. OPM 7

hardship cannot qualify an individual for a waiver if the 

set-aside rule applies—i.e., if she knew or should have 

known of the overpayment—as is the case here. Thus, the 

Board properly affirmed OPM’s decision denying Ms. 

Warrender a waiver from recovery of the overpayment. 

Ms. Warrender does not appear to dispute the Board’s 

adjustment of her repayment schedule and, as the Board 

noted, even if she did, any request for further adjustment 

should be addressed to OPM, as provided by section 

V(F)(5) of OPM’s Policy Guidelines. See Martin v. Office 

of Pers. Mgmt., 49 M.S.P.R. 134, 137 (1991), aff’d, 960 

F.2d 156 (Fed. Cir. 1992). 

CONCLUSION

We have considered the remaining arguments but 

find them to be unpersuasive. For the foregoing reasons, 

we affirm the decision of the Board.

AFFIRMED

COSTS

No costs.