[Federal Register Volume 87, Number 133 (Wednesday, July 13, 2022)]
[Rules and Regulations]
[Pages 41584-41589]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-13241]


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COURT SERVICES AND OFFENDER SUPERVISION AGENCY

28 CFR Part 814

RIN 3225-AA18


Collection by Offset From Indebted Government Employees

AGENCY: Court Services and Offender Supervision Agency (CSOSA).

ACTION: Direct final rule.

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SUMMARY: This direct final rule codifies internal procedural 
requirements for the offset to employees' salaries by the Court 
Services and Offender Supervision Agency for the District of Columbia 
as required by the Office of Personnel Management regulations. The OMB 
regulations require review and approval of this rulemaking by the 
Office of Personnel Management prior to its publication, CSOSA is 
publishing this rule as a direct final rule.

DATES: This direct final rule is effective October 11, 2022 without 
further action, unless an adverse comment is received by August 12, 
2022. If an adverse comment is received, CSOSA will publish a timely 
withdrawal of the rule in the Federal Register.

ADDRESSES: Paul Girardo, Associate Director, Office of Financial 
Management, Court Services and Offender Supervision Agency, 633 Indiana 
Ave. NW, Washington, DC 20004.

FOR FURTHER INFORMATION CONTACT: Paul Girardo, Associate Director, 
Office of Financial Management, Court Services and Offender Supervision 
Agency, 633 Indiana Ave. NW, Washington, DC 20004; telephone: 202-220-
5718; email: <a href="/cdn-cgi/l/email-protection#bfefdecad391f8d6cddecddbd0ffdcccd0ccde91d8d0c9"><span class="__cf_email__" data-cfemail="015160746d2f4668736073656e4162726e72602f666e77">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: The Office of Personnel Management, in its 
regulations at 5 CFR 550.1104, requires agencies to issue regulations 
governing the collection of a debt by salary offset. The Court Services 
and Offender Supervision Agency (CSOSA) has developed a new regulation 
in compliance with 5 CFR 550.1104.

[[Page 41585]]

    CSOSA was established within the Executive Branch of the Federal 
Government by the National Capital Revitalization and Self-Government 
Improvement Act of 1997, Public Law. 105-33, 111 Stat. 251, 712 (DC 
Code 24-1232, 24-1233). On August 4, 2000, CSOSA, including the 
Pretrial Services Agency for the District of Columbia (PSA), an 
independent entity within CSOSA, was certified by the Attorney General 
as an independent Federal agency.
    CSOSA provides supervisory and intervention services to individuals 
on probation, parole, and supervised release for District of Columbia 
Code violations. CSOSA also provides supervisory and intervention 
services to offenders from other jurisdictions in accordance with the 
Interstate Parole and Probation Compact. PSA supervises, monitors, and 
provides treatment services to defendants awaiting trial in the 
Superior Court for the District of Columbia (DC Superior Court) and the 
United States District Court for the District of Columbia (U.S. 
District Court).
    This part applies to employees of CSOSA and PSA, both hereinafter 
referred to as CSOSA employees. The CSOSA Director assumes overall 
responsibility for Agency compliance with this regulation. The CSOSA 
Director delegates the processing and administration of employee salary 
offset procedures for PSA employees to the PSA Director.

I. Background

    This direct final rule (hereinafter part) responds to and complies 
with the requirements of the Office of Personnel Management's 
regulations at 5 CFR part 550 subpart K, Collection by Offset from 
Indebted Government Employees.
    This part covers internal Agency and government-wide collections of 
debt through the use of salary offset. Employees will be provided with 
notice, as set forth in the regulation. The part also notes any 
exceptions that apply to CSOSA's collection of debts from employees 
through the use of salary offset. This part also: (1) details the 
process by which an employee may petition for a hearing; (2) delineates 
the hearing procedure; (3) specifies how the deductions will be made 
and the limitations on the amount and duration; (4) specifies the 
process for liquidating debt from a final paycheck and recovery from 
other payments due a separating employee; (5) provides information on 
how interest, penalties, and administrative costs will be assessed.

II. Procedural Issues and Regulatory Review

    Administrative Procedure Act (APA): Because this rule pertains to 
changes required and approved by the Office of Personnel Management, 
CSOSA is issuing the rule as a direct final rule without general notice 
of proposed rulemaking. Any interested person, however, who wishes to 
submit comments on the rule may do so by writing or emailing the agency 
at the addresses given above in the ADDRESSES caption. Should CSOSA 
receive any adverse comments, it will publish a document in the Federal 
Register withdrawing this rule.
    Executive Order 12866 and 13563 (Regulatory Planning and Review): 
CSOSA does not anticipate that this direct final rule will have 
significant economic impact, raise novel issues, and/or have any other 
significant impacts because it simply implements 5 CFR part 550, 
subpart K, which require federal agencies to update regulations 
governing the collection of debt by salary offset. Thus, this direct 
final rule is not a significant regulatory action under 3(f) of 
Executive Order 12866 and does not require an assessment of potential 
costs and benefits under 6(a)(3) of the order.
    Regulatory Flexibility Act (RFA): The Regulatory Flexibility Act 
does not apply. This direct final rule will not directly regulate small 
entities. CSOSA, therefore, does not need to perform a regulatory 
flexibility analysis of small entity impacts.
    Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA): CSOSA has determined that this direct final rule does not 
impose a significant impact on a substantial number of small entities 
under the RFA; therefore, CSOSA is not required to produce any 
Compliance Guides for Small Entities as mandated by the SBREFA.
    Congressional Review Act: CSOSA has determined that this direct 
final rule is not a major rule under the Congressional Review Act, as 
it is unlikely to result in an annual effect on the economy of $100 
million or more; is unlikely to result in a major increase in costs or 
prices for consumers, individual industries, Federal, state, or local 
government agencies or geographic regions; and is unlikely to have a 
significant adverse effect on competition, employment, investment, 
productivity, or innovation, or on the ability of U.S.-based 
enterprises to compete in domestic and export markets.
    Unfunded Mandates Reform Act (UMRA): This revision does not impose 
any Federal mandates on state, local, or tribal governments, or on the 
private sector within the meaning of the UMRA.
    National Environmental Policy Act (NEPA): This direct final rule 
will have no physical impact upon the environment and, therefore, will 
not require any further review under NEPA.
    Paperwork Reduction Act (PRA): The Paperwork Reduction Act does not 
apply because the rule does not impose information collection 
requirements that require the approval of the Office of Management and 
Budget under 44 U.S.C. 3501, et seq.
    Executive Order 13132 (Federalism): This final revision does not 
have new federalism implications under Executive Order 13132.
    Executive Order 12988 (Civil Justice Reform): This direct final 
rule meets applicable standards of 3(a) and 3(b)(2) of Executive Order 
12988 and CSOSA has determined that the direct final rule will not 
unduly burden the Federal court system.
    Plain Language: E.O. 12866 and E.O. 13563 require regulations to be 
written in a manner that is easy to understand. CSOSA has concluded 
that it has drafted this direct final rule in plain language.
    Assessment of Federal Regulations and Policies on Families: Section 
654 of the Treasury and General Government Appropriations Act, enacted 
as part of the Omnibus Consolidated and Emergency Supplemental 
Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681) requires 
the assessment of the impact of this rule on family well-being. CSOSA 
has assessed this direct final rule and determined that the regulation 
is required by OPM and the subject activities are required of agencies 
with debt collection responsibilities.
    Executive Order 13175 (Indian Tribal Governments): CSOSA reviewed 
this direct final rule under the terms of E.O. 13175 and has determined 
that the rule will not have tribal implications.
    Executive Order 12630 (Government Actions and Interference with 
Constitutionally Protected Property Rights): CSOSA has determined that 
this direct final rule is not subject to E.O. 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights, because it does not involve implementation of a policy with 
takings implications.
    Executive Order 13211 (Energy Supply): This CSOSA direct final rule 
was drafted and reviewed in accordance with E.O. 13211, Energy Supply. 
CSOSA has determined that this direct

[[Page 41586]]

final rule will not have a significant adverse effect on the supply, 
distribution, or use of energy and is not subject to E.O. 13211.

List of Subjects in 28 CFR Part 814

    Debt collection; Employee indebtedness; Salary offset.

Authority and Issuance

0
In consideration of the foregoing, CSOSA adds 28 CFR 814 to read as 
follows:

PART 814--SALARY OFFSET PROCEDURES

Sec.
814.1 Purpose and Scope.
814.2 Definitions.
814.3 Entitlement to notice, hearing, written responses and 
decisions.
814.4 Exception to entitlement to notice, hearing, written 
responses, and final decisions.
814.5 Notification before deductions begin.
814.6 Petitions for hearing.
814.7 Petitions for hearing made after time expires.
814.8 Representation at the hearing.
814.9 Procedures for hearing and final decisions.
814.10 Method and source of deductions.
814.11 Interest, penalties, and administrative costs.
814.12 Non-waiver of rights by payments.
814.13 Refunds.

    Authority:  5 U.S.C. 5514; 5 CFR part 550, subpart K; sec. 8(1) 
of E.O. 11609, 36 FR 13747, 3 CFR, 1971-1975 Comp., p. 586.


Sec.  814.1  Purpose and Scope.

    (a) Purpose. This part prescribes the Court Services and Offender 
Supervision Agency's (CSOSA) standards and procedures for the 
collection of debts owed by CSOSA employees to the United States 
through voluntary or involuntary Agency salary offset.
    (b) Scope. (1) This part applies to internal and Government-wide 
collections of debts, owed by CSOSA employees, through administrative 
offset from the current pay account of the debtor without his or her 
consent.
    (2) The procedures contained in this part do not apply to--
    (i) Any case where an employee consents to collection through 
deduction(s) from the employee's Agency pay account;
    (ii) Debts arising under the Internal Revenue Code (26 U.S.C. 1 et 
seq.);
    (iii) Debts arising under the tariff laws of the United States;
    (iv) Any case where collection of a debt by salary offset is 
explicitly provided for or prohibited by another statute (e.g., travel 
advances in 5 U.S.C. 5705 and employee training expenses in 5 U.S.C. 
4108); or
    (v) Any other debt excluded by the Federal Claims Collection 
Standards (FCCS), 31 CFR parts 900 through 904.
    (3) This part does not preclude a CSOSA employee from requesting 
waiver of an erroneous payment under 5 U.S.C. 5584, 10 U.S.C. 2774, or 
32 U.S.C. 716, or in any way questioning the amount or validity of a 
debt, in the manner prescribed by the Director. Similarly, this part 
does not preclude a CSOSA employee from requesting a waiver of the 
collection of a debt under any other applicable statutory authority.
    (4) Nothing in this part precludes the compromise of the debt, or 
the suspension or termination of collection actions, in accordance with 
31 U.S.C. 3711 or other applicable statutory authority.


Sec.  814.2  Definitions.

    Administrative offset means withholding funds payable by the United 
States to, or held by the United States for, a person to satisfy a debt 
owed by the payee.
    Agency means an executive department or agency; a military 
department; the United States Postal Service; the Postal Rate 
Commission; the United States Senate; the United States House of 
Representatives; any court, court administrative office, or 
instrumentality in the judicial or legislative branches of the 
Government; or a Government Corporation.
    Creditor agency means the agency to which the debt is owed, 
including a debt collection center when acting on behalf of a creditor 
agency in matters pertaining to the collection of a debt (as provided 
in 5 CFR 550.1110).
    Day means calendar day. For purposes of computation, the last day 
of the period will be included unless it is a Saturday, Sunday, or a 
Federal holiday, in which case the next business day will be considered 
the last day of the period.
    Debt means an amount determined by an appropriate official to be 
owed to the United States from sources which include loans insured or 
guaranteed by the United States and all other amounts due the United 
States from fees, leases, rents, royalties, services, sales of real or 
personal property, overpayments, penalties, damages, interest, fines 
and forfeitures (except those arising under the Uniform Code of 
Military Justice), and all other similar sources.
    Debt collection Center means the Department of the Treasury, 
Department of Agriculture's National Finance Center or other Government 
agency or division designated by the Secretary of the Treasury with 
authority to collect debts on behalf of creditor agencies in accordance 
with 31 U.S.C. 3711(g).
    Debtor means a Federal employee who owes a debt to the United 
States.
    Delinquent debt means a debt which the debtor does not pay or 
otherwise resolve by the date specified in the initial demand for 
payment, or in an applicable written repayment agreement or other 
instrument, including a post delinquency repayment agreement.
    Director means the CSOSA Director who is responsible for overall 
Agency (CSOSA/Pretrial Services Agency for the District of Columbia 
(PSA)) compliance with employee salary offset regulations. The CSOSA 
Director delegates the processing and administration of employee salary 
offset procedures for PSA employees to the PSA Director.
    Disposable Pay means that part of the debtor's current basic, 
special, incentive, retired, and retainer pay, or other authorized pay, 
remaining after deduction of amounts required by law to be withheld 
(other than deductions to execute garnishment orders in accordance with 
5 CFR parts 581 and 582). For purposes of calculating disposable pay, 
legally required deductions that must be applied first include: tax 
levies pursuant to the Internal Revenue Code (title 26, United States 
Code); properly withheld taxes, Federal Insurance Contributions Act 
(FICA), Medicare; health and life insurance premiums; and retirement 
contributions. Amounts deducted under garnishment orders, including 
child support garnishment orders, are not legally required deductions 
for calculating disposable pay.
    Employee means any individual currently employed by CSOSA or PSA, 
as defined in this section, including seasonal and temporary employees 
and current members of the Armed Forces or a Reserve of the Armed 
Forces (Reserves).
    Evidence of Service means information retained by the Agency 
indicating the nature of the document to which it pertains, the date of 
mailing the document, and the address and name of the debtor to whom it 
is being sent. A copy of the dated and signed written notice of intent 
to offset provided to the debtor pursuant to this part may be 
considered evidence of service for purposes of this part. Evidence of 
service may be retained electronically so long as the manner of 
retention is sufficient for evidentiary purposes.
    FCCS means Federal Claims Collection Standards (FCCS), published in 
31 CFR parts 900 through 904.
    Hearing means a review of the documentary evidence to confirm the

[[Page 41587]]

existence or amount of a debt or the terms of a repayment schedule. If 
the Director determines that the issues in dispute cannot be resolved 
by such a review, such as when the validity of the claim turns on the 
issue of credibility or veracity, the Director may provide an oral 
hearing.
    Hearing official is an administrative law judge or a hearing 
officer not under the control of the Director of CSOSA (per 5 CFR 
550.1104(d)(7)). A hearing official oversees paper (documentary) and 
oral hearings and provides a written decision on salary offset issues.
    Paying agency means the agency employing the individual and 
authorizing the payment of his or her current pay.
    Salary Offset means an administrative offset to collect a debt 
under 5 U.S.C. 5514 owed by a Federal employee through deductions at 
one or more officially established pay intervals from the current pay 
account of the employee without consent.
    Waiver means the cancellation, remission, forgiveness, or non-
recovery of a debt owed by an employee to CSOSA or PSA or another 
agency as required or permitted by 5 U.S.C. 5584, 8346(b), 10 U.S.C. 
2774, 32 U.S.C. 716, or any other law.


Sec.  814.3  Entitlement to notice, hearing, written responses and 
decisions.

    (a) Except as provided in Sec.  814.4, each employee from whom 
CSOSA proposes to collect a debt using salary offset under this part is 
entitled to receive from CSOSA:
    (1) A written notice as described in Sec.  814.5; and
    (2) An opportunity to petition for a hearing and, if a hearing is 
given, to receive a written decision from the official within 60 days 
of holding the hearing on the following issues:
    (i) The determination concerning the existence or amount of the 
debt; and
    (ii) The repayment schedule, if it was not established by written 
agreement between the employee and CSOSA.
    (b) [Reserved]


Sec.  814.4  Exception to entitlement to notice, hearing, written 
responses, and final decisions.

    For internal collections, the provisions of Sec.  814.3 do not 
apply to:
    (a) Any adjustment to pay arising out of an employee's election of 
coverage or a change in coverage under a Federal benefits program 
requiring periodic deductions from pay, if the amount to be recovered 
was accumulated over four pay periods or less;
    (b) A routine intra-agency adjustment of pay that is made to 
correct an overpayment of pay attributable to clerical or 
administrative errors or delays in processing pay documents, if the 
overpayment occurred within the four pay periods preceding the 
adjustment and, at the time of such adjustment, or as soon thereafter 
as practical, the individual is provided written notice of the nature 
and the amount of the adjustment and point of contact for contesting 
such adjustment; or
    (c) Any adjustment to collect a debt amounting to $50 or less, if, 
at the time of such adjustment, or as soon thereafter as practical, the 
individual is provided written notice of the nature and the amount of 
the adjustment and a point of contact for contesting such adjustment.


Sec.  814.5  Notification before deductions begin.

    (a) CSOSA and/or a Debt Collection Center will provide employees 
notification before deductions begin. Except as provided in Sec.  
814.4, agency pay deductions under the authority of 5 U.S.C. 5514 must 
not be made unless the Director (or authorized designee) provides the 
employee a written notice at least 30 days before any deduction begins. 
(For debts outstanding more than 10 years on or before June 11, 2009, 
see also 31 CFR 285.7(d) for additional notification requirements.) The 
written notice must state at a minimum:
    (1) CSOSA's determination that a debt is owed, including the 
origin, nature, and amount of that debt;
    (2) CSOSA's intention to collect the debt by means of deduction 
from the employee's current disposable pay account;
    (3) The frequency and amount of the intended deduction (stated as a 
fixed dollar amount or as a percentage of pay, not to exceed 15 percent 
of disposable pay except as provided in Sec.  814.10) and the intention 
to continue the deductions until the debt is paid in full or otherwise 
resolved;
    (4) An explanation of CSOSA's policy concerning interest, 
penalties, and administrative costs, including a statement that such 
assessments must be made unless excused in accordance with the FCCS as 
defined in Sec.  814.2;
    (5) The employee's right to inspect and copy Government records 
relating to the debt or, if employee or his or her representative 
cannot personally inspect the records, to request and receive a copy of 
such records;
    (6) If not previously provided, the opportunity (under terms 
agreeable to CSOSA) to establish a schedule for the voluntary repayment 
of the debt or to enter into a written agreement to establish a 
schedule for repayment of the debt in lieu of offset. The agreement 
must be in writing, signed by both the employee and CSOSA; and 
documented in CSOSA's files;
    (7) The employee's right to a hearing conducted by an official 
arranged by CSOSA (an administrative law judge, or alternatively, a 
hearing official not under the control of the Director of CSOSA) if a 
petition is filed as prescribed in Sec.  814.6;
    (8) The method and time period for petitioning for a hearing;
    (9) The name and address of the office to which the petition should 
be set.
    (10) That the timely and complete filing of a petition for hearing 
will stay the commencement of collection proceedings;
    (11) That a final decision on the hearing (if one is requested) 
will be issued at the earliest practical date, but not later than 60 
days after the filing of the petition requesting the hearing unless the 
employee requests and the hearing official grants a delay in the 
proceedings;
    (12) That any knowingly false or frivolous statements, 
representations, or evidence may subject the employee to:
    (i) Disciplinary procedures appropriate under 5 U.S.C. chapter 75, 
5 CFR part 752, or any other applicable statutes or regulations;
    (ii) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or 
any other applicable statutory authority; or
    (iii) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002 
or any other applicable statutory authority;
    (13) Any other rights and remedies available to the employee under 
statutes or regulations governing the program for which the collection 
is being made;
    (14) Unless there are applicable contractual or statutory 
provisions to the contrary, that amounts paid on or deducted for the 
debt which are later waived or found not owed to the United States will 
be promptly refunded to the employee; and
    (15) Proceedings with respect to such debt are governed by 5 U.S.C. 
5514.
    (b) The Director, as defined in Sec.  814.2, will retain evidence 
of service indicating the date of mailing of the notice.


Sec.  814.6  Petitions for hearing.

    (a) To request a hearing concerning the existence or amount of the 
debt or the offset schedule established by the Agency, the employee 
must send a written petition to the office designated in the notice of 
intent to offset, see Sec.  814.5(a)(9), within 15 days of receipt of 
the deduction notice, stating why the employee believes the 
determination of the Agency concerning the existence or

[[Page 41588]]

amount of the debt is in error or requesting changes to the proposed 
deduction frequency and amount.
    (b) The petition must:
    (1) Be signed by the employee;
    (2) Fully identify and explain with reasonable specificity all the 
facts, evidence, and witnesses, if any, that the employee believes 
support the employee's position; and
    (3) Specify whether an oral or paper (documentary) hearing is 
requested. If an oral hearing is requested, the request should explain 
why the matter cannot be resolved by review of the documentary evidence 
alone.


Sec.  814.7  Petitions for hearing made after time expires.

    (a) If the petition for hearing is filed after the 15-day period 
provided for in Sec.  814.6, the Director may grant the request if the 
employee can establish that the delay was the result of circumstances 
beyond the employee's control, or that the employee failed to receive 
actual notice of the filing deadline.
    (b) An employee waives the right to a hearing, and will have his or 
her disposable pay offset in accordance with the offset schedule 
established by the Agency, if the employee:
    (1) Fails to file a timely request for a hearing, unless such 
failure is excused; or
    (2) Fails to appear at an oral hearing, of which the employee was 
notified, unless the hearing official determines that the failure to 
appear was due to circumstances beyond the employee's control.
    (c) The following procedure is instituted upon a failure to appear 
at a hearing.
    (1) In the absence of good cause shown (e.g., illness), an employee 
who fails to appear at a hearing shall be deemed, for the purpose of 
this part, to admit the existence and amount of the debt as described 
in the notice of intent.
    (2) If the representative of the creditor agency fails to appear, 
the hearing official shall proceed with the hearing as scheduled and 
make a determination based upon oral testimony presented and the 
documentary evidence submitted by both parties. With the agreement of 
both parties, the hearing official shall schedule a new hearing date, 
and both parties shall be given reasonable notice of the time and place 
of the new hearing.


Sec.  814.8  Representation at the hearing.

    (a) The creditor agency may be represented by legal counsel.
    (b) The employee may be self-represented or may be represented by 
an individual of the employee's choosing, at the employee's expense.


Sec.  814.9  Procedures for hearing and final decisions.

    (a) Form of hearings--(1) General. After the employee requests a 
hearing, the hearing official shall notify the employee of the form of 
the hearing. If the hearing will be oral, the notice shall set forth 
the date, time, and location of the hearing. If the hearing will be a 
review of the written record, the employee shall be notified that he or 
she should submit evidence and arguments in writing to the hearing 
official by a specified date, after which the record shall be closed. 
The date specified shall give the employee reasonable time to submit 
documentation.
    (2) Oral hearing. An employee who requests an oral hearing shall be 
provided an oral hearing, if the hearing official determines that the 
matter cannot be resolved by review of documentary evidence alone 
(e.g., when an issue of credibility or veracity is involved). Where an 
oral hearing is appropriate, the hearing is not an adversarial 
adjudication and need not take the form of an evidentiary hearing, 
e.g., the rules of evidence do not apply. Oral hearings may take the 
form of, but are not limited to:
    (i) Informal conferences with the hearing official in which the 
employee and agency representative will be given full opportunity to 
present evidence, witnesses, and arguments;
    (ii) Informal meetings in which the hearing official interviews the 
employee; or
    (iii) Formal written submissions with an opportunity for oral 
presentations.
    (3) Paper (documentary) hearing. If the hearing official determines 
that an oral hearing is not necessary, the hearing official will make 
the determination based upon a review of the available written record.
    (4) Record. The hearing official shall maintain a summary record of 
any hearing conducted under this part. Witnesses who testify in oral 
hearings will do so under oath or affirmation.
    (b) Written decision--(1) Date of decision. The hearing officer 
shall issue a written opinion stating his or her decision, based upon 
documentary evidence and information developed at the hearing, as soon 
as practicable after the hearing, but not later than sixty (60) days 
after the date on which the hearing petition was received by the 
creditor agency, unless the employee requested a delay in the 
proceedings, in which case the 60-day decision period shall be extended 
by the number of days by which the hearing was postponed.
    (2) Content of decision. The written decision shall include:
    (i) A statement of the facts presented to support the origin, 
nature, and amount of the debt;
    (ii) The hearing official's findings, analysis, and conclusions, 
including a determination whether the employee's petition for hearing 
was baseless and resulted from an intent to delay creditor agency 
collection activity; and
    (iii) The terms of any repayment schedule, if applicable.


Sec.  814.10  Method and source of deductions.

    (a) Types of deductions. Unless the debtor employee and the 
Director have agreed to an alternative repayment arrangement under 
Sec.  814.9, a debt shall be collected in lump sum or by installment 
deductions at officially established pay intervals from an employee's 
current pay account.
    (b) Limitation on amount of deduction. Ordinarily, the size of 
installment deductions must bear a reasonable relationship to the size 
of the debt and the employee's ability to pay. However, the amount 
deducted for any pay period must not exceed 15 percent of the 
disposable pay from which the deduction is made, unless the employee 
has agreed in writing to the deduction of a greater amount, as outlined 
in Sec.  814.10(c) and/or a higher deduction has been ordered by a 
court under section 124 of Public Law 97-276 (96 Stat. 1195).
    (c) Duration of deductions--(1) Lump sum. If the amount of the debt 
is equal to or less than 15 percent of the employee's disposable pay 
for an officially established pay interval, the debt generally will be 
collected in one lump-sum deduction.
    (2) Inability to pay lump sum. If the employee is deemed 
financially unable to pay in one lump sum or the amount of the debt 
exceeds 15 percent of the employee's disposable pay for an officially 
established pay interval, the debt shall be collected in installments. 
Except as provided in paragraphs (e) and (f) of this section, 
installment deductions must be made over a period not greater than the 
anticipated period of active duty or employment.
    (d) When deductions may begin. (1) Deductions will begin on the 
date stated in the notice of intent, unless an alternative repayment 
agreement under Sec.  814.9 has been accepted or the employee has filed 
a timely request for a hearing.
    (2) If the employee files a timely petition for hearing as provided 
in Sec.  814.6, deductions will begin after the hearing official has 
provided the

[[Page 41589]]

employee with a hearing and a final written decision has been rendered 
in favor of the Agency.
    (e) Liquidation from final check. If an employee retires, resigns, 
or the period of employment ends before collection of the debt is 
completed, the remainder of the debt will be offset under 31 U.S.C. 
3716 from subsequent payments of any nature (e.g., final salary payment 
or lump-sum leave) due the employee from the paying agency as of the 
date of separation.
    (f) Recovery from other payments due a separated employee. If the 
debt cannot be satisfied by offset from any final payment due the 
employee on the date of separation, the Director will liquidate the 
debt, where appropriate, by administrative offset under 31 U.S.C. 3716 
from later payments of any kind due the former employee (e.g., lump sum 
leave payment).


Sec.  814.11  Interest, penalties, and administrative costs.

    Debts owed to the Agency shall be assessed interest, penalties and 
administrative costs in accordance with FCCS, 31 CFR 901.9.


Sec.  814.12  Non-waiver of rights by payments.

    An employee's involuntary payment, of all or any portion of a debt 
being collected under 5 U.S.C. 5514 must not be construed as a waiver 
of any rights which the employee may have under 5 U.S.C. 5514 or any 
other provision of contract or law, unless there are statutory or 
contractual provisions to the contrary.


Sec.  814.13  Refunds.

    (a) CSOSA will promptly refund amounts paid or deducted under this 
subpart to the appropriate party, when:
    (1) A debt is waived or otherwise found not owing to the United 
States (unless expressly prohibited by statute or regulation); or
    (2) The employee's paying agency is directed by an administrative 
or judicial order to refund amounts deducted from his or her current 
pay.
    (b) Refunds do not bear interest unless required or permitted by 
law or contract.

Richard S. Tischner,
Director.
[FR Doc. 2022-13241 Filed 7-12-22; 8:45 am]
BILLING CODE P


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