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B-196855 L/M, DEC 9, 1981, OFFICE OF GENERAL COUNSEL

B-196855 L/M Dec 09, 1981
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THE NEXT MORNING WHEN THE SAFE WAS OPENED. THE FISCAL FACILITIES FOR SAFEGUARDING FUNDS IN THE BOND OFFICE WERE GROSSLY INADEQUATE AND FAILED TO COMPLY WITH INS REQUIREMENTS. RELIEF FROM LIABILITY FOR THE LOSS WAS GRANTED UNDER 31 U.S.C. DEPARTMENT OF JUSTICE: THIS IS IN RESPONSE TO A LETTER FROM YOUR OFFICE. WE HAVE CONCLUDED THAT THE FACTS IN THIS CASE SATISFY THE CRITERIA UNDER PROVISIONS CONTAINED IN 31 U.S.C. JOAN EMIL GROCHOWSKY AND GERALD GROCHOWSKY WERE CASH CLERKS WORKING IN THE BOND OFFICE OF THE INS NEW YORK DISTRICT OFFICE. 500 WAS ACCEPTED BY GERALD GROCHOWSKY FROM A MR. WHO WAS STANDING ALONGSIDE OF HIM. GROCHOWSKY BEGAN TYPING THE BOND AND RECEIPT AND WHEN HE WAS FINISHED.

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B-196855 L/M, DEC 9, 1981, OFFICE OF GENERAL COUNSEL

DIGEST: AN INS BOND OFFICE CASHIER RECEIPTED FOR $7,500 FROM A BOND APPLICANT AND PLACED IT IN THE SAFE TO WHICH 4 OTHER EMPLOYEES HAD ACCESS. THE NEXT MORNING WHEN THE SAFE WAS OPENED, $1,000 HAD DISAPPEARED FROM THE $7,500. THE FISCAL FACILITIES FOR SAFEGUARDING FUNDS IN THE BOND OFFICE WERE GROSSLY INADEQUATE AND FAILED TO COMPLY WITH INS REQUIREMENTS. ACCORDINGLY, RELIEF FROM LIABILITY FOR THE LOSS WAS GRANTED UNDER 31 U.S.C. SEC. 82A-1, INASMUCH AS THE INADEQUATE FACILITIES SERVED TO REBUT THE PRESUMED NEGLIGENCE THAT RESULTS FROM AN UNEXPLAINED LOSS.

DORIS M. MEISSNER, DEPARTMENT OF JUSTICE:

THIS IS IN RESPONSE TO A LETTER FROM YOUR OFFICE, FILE SYMBOL CO 1011-C, REQUESTING THAT THIS OFFICE RELIEVE MS. JOAN EMIL GROCHOWSKY (FORMERLY JOAN EMIL) AN EMPLOYEE OF THE IMMIGRATION AND NATURALIZATION SERVICE (INS) OF LIABILITY FOR THE LOSS OF $1,000. AS EXPLAINED BELOW, WE HAVE CONCLUDED THAT THE FACTS IN THIS CASE SATISFY THE CRITERIA UNDER PROVISIONS CONTAINED IN 31 U.S.C. SEC. 82A-1 FOR THIS OFFICE TO GRANT MS. GROCHOWSKY RELIEF FROM LIABILITY FOR THE LOSS.

THE FACTUAL SITUATION INVOLVED IN THIS CASE MAY BE EXPLAINED AS FOLLOWS. ON MONDAY, JANUARY 29, 1979, JOAN EMIL GROCHOWSKY AND GERALD GROCHOWSKY WERE CASH CLERKS WORKING IN THE BOND OFFICE OF THE INS NEW YORK DISTRICT OFFICE. AT APPROXIMATELY 5:15 P.M. A BOND IN THE AMOUNT OF $7,500 WAS ACCEPTED BY GERALD GROCHOWSKY FROM A MR. BLISSETT WHO PAID THE MONEY IN BILLS OF VARIOUS DENOMINATIONS. MR. GROCHOWSKY STATES THAT HE COUNTED OUT $7,000 AT THE COUNTER, WHILE TALKING TO MR. BLISSETT ABOUT THE BOND, PLACING THE BILLS IN STACKS OF $1,000 AND GAVE THE REMAINING $500 TO JOAN GROCHOWSKY, WHO WAS STANDING ALONGSIDE OF HIM, TO COUNT. SHE CLAIMS SHE COUNTED THE REMAINING $500 AS WELL AS THE $7,000. MR. GROCHOWSKY BEGAN TYPING THE BOND AND RECEIPT AND WHEN HE WAS FINISHED, HE GAVE THEM TO MS. GROCHOWSKY FOR PROCESSING. SHE HAD MR. BLISSETT SIGN THE BOND WHILE SHE SIGNED THE RECEIPT FOR THE MONEY. MAKING TWO TRIPS, SHE TOOK THE MONEY AND PLACED IT ON THE DESK WHERE MR. GROCHOWSKY WAS WORKING. THE MONEY WAS THEN WRAPPED IN THE BOND FORM AND PLACED IN THE SAFE. MR. AND MS. GROCHOWSKY CLAIM THAT MR. BLISSETT CONTINUED TO TALK TO THEM ABOUT THE BOND ALL DURING THE TIME THEY WERE COUNTING AND HANDLING THE MONEY WHICH WAS A SERIOUS DISTRACTION. AFTER PROCESSING TWO ADDITIONAL BONDS, THEY LOCKED THE SAFE CONTAINING THE MONEY AND LEFT FOR THE EVENING.

ON TUESDAY, JANUARY 30, 1979, AT APPROXIMATELY 8:30 A.M., MS. GROCHOWSKY OPENED THE SAFE. MR. GROCHOWSKY BEGAN THE ROUTINE PROCEDURE OF VERIFYING THE CASH-ON-HAND. NORMALLY THE VERIFICATION WOULD HAVE BEEN ACCOMPLISHED BY ANOTHER CLERK WHO WAS OUT ON SICK LEAVE. THE VERIFICATION RESULTED IN A SHORTAGE OF $1,000 IN THE AMOUNT FOR THE BLISSETT BOND. INVESTIGATION REVEALED THAT MS. GROCHOWSKY HAD ISSUED THE RECEIPT FOR THE $7,500 AND THEREFORE WAS ACCOUNTABLE FOR THE $1,000 SHORTAGE.

INS REQUESTED MS. GROCHOWSKY TO MAKE GOOD ON THE $1,000 SHORTAGE BY A LUMP SUM REIMBURSEMENT. SHE REFUSED AND INS BEGAN DEDUCTING INSTALLMENT PAYMENTS FROM HER SALARY UNDER AUTHORITY CONTAINED IN 5 U.S.C. SEC. 5512(A).

MS. GROCHOWSKY, THROUGH HER ATTORNEY, REQUESTED THIS OFFICE TO INITIATE THE PROCEDURE UNDER 5 U.S.C. 5512(B), WHEREBY WE ARE REQUIRED TO REPORT THE AMOUNT DUE TO THE ATTORNEY GENERAL OF THE UNITED STATES AND HE MUST ORDER SUIT AGAINST THE ACCOUNTABLE OFFICER TO BE COMMENCED WITHIN 60 DAYS AS A JUDICIAL CONTROL ON THE ADMINISTRATIVE WITHHOLDING ACTION. WITHHOLDING OF THE PAY OF THE ACCOUNTABLE OFFICER WAS TERMINATED BY THE AGENCY WHEN THE ACCOUNTABLE OFFICER REQUESTED THAT SUIT BE FILED. WE MADE THE REQUIRED REPORT BY LETTER TO THE ATTORNEY GENERAL IN JANUARY 1980. HOWEVER, NO ACTION WAS TAKEN BY THAT OFFICE TO INITIATE THE LITIGATION.

ON JANUARY 23, 1981, THE ACTING COMMISSIONER, INS, WROTE A LETTER TO THIS OFFICE REQUESTING THAT WE RELIEVE MS. GROCHOWSKY OF LIABILITY FOR THE LOSS UNDER 31 U.S.C. SEC. 82A-1 AND MADE THE NECESSARY FINDINGS AND DETERMINATIONS REQUIRED BY THAT STATUTE FOR RELIEF. WE RESPONDED THAT, AT THE REQUEST OF MS. GROCHOWSKY, WE HAD REFERRED THE MATTER TO THE ATTORNEY GENERAL FOR THE INITIATION OF LITIGATION AS REQUIRED BY 5 U.S.C. SEC. 5512(B). THUS WE WERE UNABLE TO CONSIDER ADMINISTRATIVE RELIEF OF LIABILITY UNDER 31 U.S.C. SEC. 82A-1 AS LONG AS LITIGATION WAS PENDING.

RECENTLY, WE WERE ADVISED BY THE DEPARTMENT OF JUSTICE THAT THE GOVERNMENT DOES NOT INTEND TO BRING SUIT IN THIS CASE. ACCORDINGLY, WE MAY NOW DETERMINE WHETHER THE FACTS IN THIS CASE SATISFY THE CRITERIA FOR RELIEF OF THIS ACCOUNTABLE OFFICER FOR THE LOSS.

THE GAO IS AUTHORIZED BY 31 U.S.C. SEC. 82A-1 TO RELIEVE AN ACCOUNTABLE OFFICER FROM LIABILITY FOR A PHYSICAL LOSS IF GAO CONCURS WITH ADMINISTRATIVE DETERMINATIONS THAT THE LOSS OCCURRED WHILE THE ACCOUNTABLE OFFICER WAS ACTING IN THE DISCHARGE OF OFFICIAL DUTIES AND THAT THE LOSS OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE ACCOUNTABLE OFFICER. THE ACTING COMMISSIONER OF INS HAS MADE BOTH OF THESE DETERMINATIONS.

REVIEWING THE FACTUAL SITUATION, WE HAVE NO DIRECT EVIDENCE OF NEGLIGENCE ON THE PART OF MS. GROCHOWSKY. SHE COUNTED THE FUNDS AND PLACED THEM IN THE SAFE AND LOCKED IT BEFORE LEAVING WORK ON JANUARY 29, 1979. HOWEVER, WHEN FUNDS IN THE SAFE WERE VERIFIED ON THE NEXT DAY, THE LOSS WAS DISCOVERED. THERE WAS NO EVIDENCE OF FORCIBLE ENTRY OR ANY OTHER EVIDENCE TO ACCOUNT FOR THE DISAPPEARANCE. THUS, WE ARE FACED WITH AN "UNEXPLAINED LOSS." WHEN PUBLIC FUNDS DISAPPEAR WITHOUT APPARENT EXPLANATION, A PRESUMPTION OF NEGLIGENCE ARISES ON THE PART OF THE ACCOUNTABLE OFFICER, AND THIS PRESUMPTION WILL GENERALLY PRECLUDE THE GRANTING OF RELIEF UNLESS IT CAN BE REBUTTED. 48 COMP.GEN. 566 (1969); B-199034, FEBRUARY 8, 1981. IN THIS CASE WE BELIEVE THE PRESUMPTION OF NEGLIGENCE ON THE PART OF THE ACCOUNTABLE OFFICER CAN BE SUCCESSFULLY REBUTTED IN VIEW OF THE SERIOUSLY DEFICIENT FACILITIES, PROCEDURES AND PRACTICES OF THE BOND OFFICE IN PROTECTING AND HANDLING CASH PAYMENTS.

THE TREASURY DEPARTMENT'S MANUAL OF PROCEDURES AND INSTRUCTIONS FOR CASHIERS, 1976 EDITION, CONTAINS INSTRUCTIONS FOR SAFEGUARDING FUNDS. AMONG OTHER THINGS, IT STATES THAT A CASHIER IS TO BE PROVIDED ADEQUATE FACILITIES TO WHICH ONLY HE OR SHE HAS ACCESS FOR SAFEGUARDING FUNDS, AND THAT SPECIFIC INSTRUCTIONS FOR THE PHYSICAL PROTECTION OF CASH, IN ACCORDANCE WITH INDIVIDUAL CIRCUMSTANCES, ARE TO BE INCLUDED IN AGENCY REGULATIONS. THE MANUAL ALSO PROVIDES THAT SAFE COMBINATIONS SHOULD BE CHANGED: (1) ANNUALLY; (2) WHENEVER THERE HAS BEEN A CHANGE OF CASHIERS; (3) WHEN IT HAS BEEN NECESSARY TO EFFECT ACCESS TO THE FUNDS IN THE CASE OF UNFORESEEN ABSENCE OF A CASHIER; OR (4) WHEN THE COMBINATION HAS BEEN COMPROMISED.

THE INS ADMINISTRATIVE MANUAL CURRENT AT THE TIME OF THE INCIDENT ALSO CONTAINED INSTRUCTIONS AND REQUIREMENTS CONCERNING FACILITIES AND PROCEDURES REQUIRED TO ADEQUATELY SAFEGUARD FUNDS ENTRUSTED TO CASHIERS. PARAGRAPH 3B OF SECTION 2812.01 STATES:

"ACCOUNTABLE EMPLOYEES THAT ARE REQUIRED TO STORE FUNDS AND VALUABLES SHALL BE PROVIDED WITH EXCLUSIVE ACCESS TO APPROPRIATE STORAGE FACILITIES AND WITH ANY SAFEGUARDS NECESSARY FOR THEIR PROTECTION IN ACCORDANCE WITH PARAGRAPH 7 OF THIS SECTION."

PARAGRAPH 7 OF SECTION 2812.02 STATES:

"STORAGE FACILITIES. THE PRINCIPAL OFFICER AT EACH SERVICE LOCATION MUST PROVIDE ACCOUNTABLE EMPLOYEES WITH EXCLUSIVE ACCESS TO APPROPRIATE STORAGE FACILITIES AND WITH ANY SAFEGUARDS NECESSARY FOR THE PROTECTION OF FUNDS AND VALUABLES OF THIS SERVICE IN THEIR CUSTODY."

PARAGRAPH 6D SECTION 2981.04 STATES:

"CASHIERS WILL BE PROVIDED WITH APPROPRIATE PHYSICAL FACILITIES AND SAFEGUARDS FOR THE PROTECTION OF CASH IN THEIR POSSESSION. FILE CABINETS WITH LOCKS ARE NOT CONSIDERED ADEQUATE. AT THE MINIMUM, A CABINET WITH A BAR AND COMBINATION LOCK IS RECOMMENDED. PREFERABLY CASH SHOULD BE PLACED IN A SUITABLE SAFE OR VAULT WITHIN THE OFFICE UNDER THE EXCLUSIVE CONTROL OF THE CASHIER. IF A SAFE IS NOT AVAILABLE OR CANNOT BE FOR THE EXCLUSIVE USE OF THE CASHIER, THEN THE CASHIER SHOULD HAVE A SEPARATE DRAWER WHICH CAN BE LOCKED INDEPENDENTLY. SAFE COMBINATIONS AND DUPLICATE KEYS TO THE CASH BOX WILL BE PLACED IN A SEALED ENVELOPE, DATED AND SIGNED BY THE CASHIER, FOR RETENTION IN A SECURE PLACE, UNOPENED, BY THE PRINCIPAL ADMINISTRATIVE OFFICER, AND WILL BE USED ONLY IN THE EVENT OF EMERGENCY. SEPARATE CASH BOXES OR SAFE DRAWERS SHOULD BE PROVIDED FOR ALTERNATES. THE SAFE COMBINATION SHOULD BE MEMORIZED RATHER THAN CARRIED ON THE PERSON OR STORED IN A DESK. COMBINATIONS SHOULD BE CHANGED ANNUALLY OR WHENEVER THERE IS A CHANGE IN CASHIERS OR WHEN IT HAS BEEN NECESSARY TO EFFECT ACCESS TO THE FUNDS IN THE CASE OF AN UNFORESEEN ABSENCE OF THE CASHIER, OR WHEN THE COMBINATION HAS OTHERWISE BEEN MADE KNOWN."

THE RECORD CONTAINS EVIDENCE THAT FIVE INDIVIDUALS HAD KNOWLEDGE OF THE SAFE COMBINATION AS WELL AS ACCESS TO THE SAFE. ONE OF THESE INDIVIDUALS HAD BEEN TRANSFERRED OUT OF THE OFFICE SIX MONTHS PRIOR TO THE INCIDENT, YET THE COMBINATION HAD NOT BEEN CHANGED. ALSO, THE CASHIERS WERE NOT ASSIGNED SEPARATE COMPARTMENTS IN THE SAFE IN WHICH TO STORE THEIR CASH. INSTEAD, THE SAFE WAS ARRANGED SO THAT ANY ONE WHO GAINED ACCESS HAD INSTANT ACCESS TO THE CASH OF EACH CASHIER. THIS EVIDENCE DEMONSTRATES THAT STORAGE FACILITIES PROVIDED BY INS FOR THE BOND OFFICE CASHIERS FAILED TO COMPLY WITH THE SAFEGUARD REQUIREMENTS OUTLINED IN THE INS ADMINISTRATIVE MANUAL. AS A RESULT, MS. GROCHOWSKY DID NOT HAVE EXCLUSIVE ACCESS TO FUNDS STORED IN THE SAFE FOR WHICH SHE WAS ACCOUNTABLE.

ALSO THE REPORT OF INVESTIGATION OF THE LOSS PREPARED BY THE DIRECTOR OF INS'S OFFICE OF PROFESSIONAL RESPONSIBILITY INDICATED THAT:

"*** THE PHYSICAL LAYOUT OF THE BOND OFFICE IN THE NEW YORK DISTRICT OFFICE NEEDS TO BE RESTRUCTURED SO AS TO CONFORM TO 'BANK-LIKE' STANDARDS. *** THE COUNTER USED FOR TRANSACTIONS IS GLASS ENCLOSED BUT CONTAINS A GLASS WINDOW APPROXIMATELY 18" X 9".

"THE COUNTERTOP IS LEVEL FROM THE PAYEE'S SIDE TO THE EMPLOYEE'S SIDE. THE COUNTER SHOULD BE STEPPED DOWN AS IN A BANK. THE WINDOW SHOULD HAVE A SLIDING GLASS DOOR WHICH SHOULD BE CLOSED WHEN THE EMPLOYEE IS COUNTING THE CASH. THIS WOULD PREVENT THE PERSON MAKING THE CASH PAYMENT FROM REACHING IN AND REMOVING THE MONEY."

THE REPORT HIGHLIGHTS THIS WEAKNESS IN THE BOND OFFICE'S FACILITIES AND SUGGESTS THAT THIS WEAKNESS COULD BE EXPLOITED BY A CLEVER PAYEE TO RECOVER A PART OF HIS PAYMENT WHILE THE CASHIER IS BUSY COUNTING THE REMAINDER OR IS INTERRUPTED IN MAKING THE COUNT BY SOME OTHER REQUIREMENT SUCH AS TO ANSWER THE TELEPHONE.

IN SUM, WE HAVE NO DIRECT EVIDENCE THAT MS. GROCHOWSKY WAS NEGLIGENT IN SAFEGUARDING THE FUNDS ENTRUSTED TO HER. ON THE OTHER HAND, THE PROTECTIVE FACILITIES AND OFFICE PROCEDURES OF THE BOND OFFICE WERE INADEQUATE TO AFFORD SECURITY FOR THE FUNDS HANDLED BY THE OFFICE. HAVE FREQUENTLY RELIEVED ACCOUNTABLE OFFICERS FROM LIABILITY FOR LOSSES WHERE THE PROTECTIVE FACILITIES DID NOT AFFORD ADEQUATE PROTECTION, AND WHERE, AS IN THE INSTANT CASE, THE ADMINISTRATIVE OFFICE DETERMINED THAT THE LOSS OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE ACCOUNTABLE OFFICER. B-196960, NOVEMBER 18, 1980; B-197270, MARCH 7, 1980; B-191942, SEPTEMBER 12, 1979.

IN VIEW OF THE NONEXCLUSIVE ACCESS TO THE SAFE AFFORDED THE ACCOUNTABLE OFFICER AND THE INADEQUATE SECURITY PROVIDED BY THE FACILITY, WE CONCUR WITH INS' DETERMINATION AND GRANT RELIEF TO MS. JOAN EMIL GROCHOWSKY IN THE AMOUNT OF THE LOSS. THE CURRENT INS APPROPRIATION AVAILABLE FOR THE EXPENSE OF THE DISBURSING FUNCTION MAY BE CHARGED WITH THE SHORTAGE.

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