B-167139 OM, SEP 19, 1972

B-167139 OM, SEP 19, 1972

SUBJECT: REQUEST FOR RECONSIDERATION OF DENIAL OF RELIEF FOR MR. FRANK S. TURBETT, JR., DISTRICT DIRECTOR OF INTERNAL REVENUE, NEWARK, NEW JERSEY, FOR A LOSS OF $4,625.11 DUE TO EMBEZZLEMENT BY A SUBORDINATE

GENERAL COUNSEL:

ON JUNE 2, 1969, WE SUBMITTED FOR YOUR CONSIDERATION AND INSTRUCTIONS, A REQUEST FOR RELIEF FOR MR. FRANK S. TURBETT, JR., DISTRICT DIRECTOR OF INTERNAL REVENUE, NEWARK, NEW JERSEY, FOR A LOSS OF $4,625.11 DUE TO EMBEZZLEMENT OF FUNDS BY A FORMER EMPLOYEE, MR. ROBERT EMMETT MASON, REVENUE OFFICER. BEGINNING IN 1960 AND FOR AN EXTENDED PERIOD THEREAFTER, MR. MASON CONVERTED FOR HIS OWN USE, FUNDS WHICH HE HAD COLLECTED ON TAXPAYERS' RETURNS.

IN B-167139 OM DATED JULY 30, 1969, YOU STATED THAT THE EMBEZZLEMENTS CARRIED OUT SUCCESSFULLY OVER A LONG PERIOD OF TIME BY A SUBORDINATE OF AN ACCOUNTABLE OFFICER INDICATE LACK OF DUE CARE ON THE PART OF THE ACCOUNTABLE OFFICER. YOU ALSO INDICATED A NEED FOR AN EXPLANATION OF THE CONTROLS AND PROCEDURES USED AND THE MANNER IN WHICH THE ACCOUNTABLE OFFICER ASSURED HIMSELF THAT SUCH CONTROLS AND PROCEDURES WERE EFFECTIVE.

IN A LETTER DATED APRIL 5, 1972, THE FISCAL ASSISTANT SECRETARY OF THE TREASURY RECOMMENDED THAT RELIEF BE GRANTED AND FURNISHED ADDITIONAL MATERIAL REGARDING THE INSTRUCTIONS IN EFFECT AT THE TIME TO PREVENT THE OCCURRENCE OF SUCH LOSSES. HE ALSO STATED THE INGENUITY OF FORMER REVENUE OFFICER MASON PREVENTED EARLIER DETECTION OF HIS PECULATIONS. THE ADDITIONAL MATERIAL CONTAINS DOCUMENTATION THAT SHOWS THE LIABILITY TO BE ADMINISTRATIVELY UNCOLLECTIBLE.

SINCE THE REQUEST FOR RECONSIDERATION IS AN APPEAL OF YOUR DECISION TO DENY RELIEF, WE ARE FORWARDING THE CASE FILE FOR YOUR REVIEW AND DECISION.

THE FISCAL ASSISTANT SECRETARY ALSO RECOMMENDED IN THE APRIL 5 LETTER THAT RELIEF BE GRANTED TO ACCOUNTABLE OFFICERS, FRANK S. TURBETT, JR., AND EARL L. TORGERSON FOR LOSSES OF $80.52 AND $173.17, RESPECTIVELY, RESULTING FROM THE ACTIONS OF TWO SUBORDINATES OF THE ACCOUNTABLE OFFICERS. THE SUBORDINATES CONVERTED TWO TAXPAYERS' MONEY ORDERS WHICH HAD NO PAYEE WRITTEN ON THEM FOR THEIR OWN USE. A REVIEW OF THE OPERATIONAL PROCEDURES AND SECURITY PRECAUTIONS IN EFFECT GIVES US A BASIS FOR GRANTING RELIEF UNDER THE PROVISIONS OF THE ACT OF AUGUST 1, 1947, AS AMENDED BY THE ACT OF AUGUST 9, 1955 (31 U.S.C. 82A 1). THEREFORE, THE CASE FILES FOR THESE TWO LOSSES WILL NOT BE FORWARDED TO YOU.

INDORSEMENT

DIRECTOR, GENERAL GOVERNMENT DIVISION

RETURNED. REFERENCE IS MADE TO OUR PRIOR INDORSEMENT OF JULY 30, 1969, WHEREIN WE DENIED RELIEF TO THE DISTRICT DIRECTOR ON THE BASIS THAT THE RECORD PROVIDED DID NOT FURNISH AN EXPLANATION OF THE CONTROLS AND PROCEDURES USED AND THE MANNER IN WHICH THE ACCOUNTABLE OFFICER ASSURED HIMSELF THAT SUCH CONTROLS AN PROCEDURES WERE EFFECTIVE AND WERE BEING FOLLOWED.

THE ADDITIONAL MATERIAL THAT HAS BEEN FURNISHED BY THE TREASURY DEPARTMENT DISCLOSES THAT INSTRUCTIONS WERE IN EFFECT TO PREVENT LOSSES BY THE ACTS OF REVENUE OFFICERS. FURTHER, THE DEPARTMENT ADVISES THAT ITS REGIONAL OFFICE WAS UNABLE TO FIND ANY INDICATION THAT THE INSTRUCTIONS WERE NOT PROPERLY CARRIED OUT AND A REPRESENTATIVE OF YOUR DIVISION INFORMALLY ADVISED THAT WE ARE NOT IN A POSITION TO DIFFER WITH THE FINDING OF THE REGIONAL OFFICE. ALSO, THE ADDITIONAL MATERIAL FURNISHED BY THE TREASURY DEPARTMENT SUPPORTS THE STATEMENT BY THE FISCAL ASSISTANT SECRETARY THAT THE "INGENUITY OF FORMER REVENUE OFFICER MASON PREVENTED EARLIER DETECTION OF HIS PECULATIONS."

IN LIGHT OF ALL THE FACTS AND CIRCUMSTANCES NOW OF RECORD RELIEF SHOULD BE GRANTED THE DISTRICT DIRECTOR FOR THE LOSS OF THE $4,625.11.