B-227289, JUN 5, 1987, OFFICE OF GENERAL COUNSEL

B-227289: Jun 5, 1987

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APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - CERTIFYING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS DIGEST: RELIEF IS GRANTED ARMY FINANCE AND ACCOUNTING OFFICIAL UNDER 31 U.S.C. 3528 FROM LIABILITY FOR CERTIFICATION OF IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF TWO SUBSTITUTE TREASURY CHECKS. THE OFFICER DID NOT KNOW AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE DISCOVERED THAT THE PAYEE HAD ACTUALLY RECEIVED TWO REPLACEMENT CHECKS AND INTENDED TO CASH BOTH PAYMENT INSTRUMENTS. PROPER PROCEDURES WERE FOLLOWED IN THE CERTIFICATION OF THE SUBSTITUTE CHECKS AND ADEQUATE COLLECTION EFFORTS ARE NOW BEING MADE. WE WILL DENY RELIEF IF THE FINANCE OFFICER DELAYS MORE THAN 3 MONTHS IN FORWARDING THE DEBT TO ARMY'S COLLECTION DIVISION.

B-227289, JUN 5, 1987, OFFICE OF GENERAL COUNSEL

APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - CERTIFYING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS DIGEST: RELIEF IS GRANTED ARMY FINANCE AND ACCOUNTING OFFICIAL UNDER 31 U.S.C. 3528 FROM LIABILITY FOR CERTIFICATION OF IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF TWO SUBSTITUTE TREASURY CHECKS. THE OFFICER DID NOT KNOW AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE DISCOVERED THAT THE PAYEE HAD ACTUALLY RECEIVED TWO REPLACEMENT CHECKS AND INTENDED TO CASH BOTH PAYMENT INSTRUMENTS. PROPER PROCEDURES WERE FOLLOWED IN THE CERTIFICATION OF THE SUBSTITUTE CHECKS AND ADEQUATE COLLECTION EFFORTS ARE NOW BEING MADE. HOWEVER, FOR CASES INVOLVING NOTICES OF LOSSES RECEIVED AFTER JUNE 1, 1986, WHERE THE PAYEE HAS LEFT THE ARMY OF ITS EMPLOY, WE WILL DENY RELIEF IF THE FINANCE OFFICER DELAYS MORE THAN 3 MONTHS IN FORWARDING THE DEBT TO ARMY'S COLLECTION DIVISION.

BRIGADIER GENERAL B. W. HALL:

THIS RESPONDS TO YOUR REQUEST OF MAY 11, 1987, THAT WE RELIEVE MAJOR (MAJ) G. M. VAUGHN, FINANCE CORPS, DSSN 6344, FINANCE AND ACCOUNTING OFFICER, THE ADJUTANT GENERAL'S CENTER, ST. LOUIS, MISSOURI, UNDER 31 U.S.C. SEC. 3528 FOR AN IMPROPER PAYMENT OF A $20.81 CHECK PAYABLE TO MR. RUSSELL BOYD. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

THE LOSS RESULTED WHEN THE PAYEE NEGOTIATED TWO TREASURY-ISSUED REPLACEMENT INSTRUMENTS. IT IS UNCLEAR WHY TREASURY ISSUED THE PAYEE TWO REPLACEMENT CHECKS. NEVERTHELESS, THE ROLE OF MAJ VAUGHN IN ISSUING THE REPLACEMENT INSTRUMENTS WAS THAT OF CERTIFYING OFFICIAL. SEE AR-103, PARA. 4-143(B); SEE ALSO, B-215380, ET AL., JULY 23, 1984.

THIS OFFICE HAS AUTHORITY UNDER 31 U.S.C. SEC. 3528 TO RELIEVE A CERTIFYING OFFICER FROM LIABILITY FOR AN ERRONEOUS CERTIFICATION IF THE CERTIFICATION WAS BASED ON OFFICIAL RECORDS AND THE OFFICIAL DID NOT KNOW, AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE DISCOVERED, THE CORRECT INFORMATION. IN ADDITION, THE COMPTROLLER GENERAL MAY DENY RELIEF IF HE DETERMINES THAT A DILIGENT EFFORT TO COLLECT THE OVERPAYMENT WAS NOT MADE.

IT APPEARS IN THIS CASE THAT THESE CRITERIA HAVE BEEN MET. AS FAR AS THE ARMY CERTIFYING OFFICIAL WAS CONCERNED, HE "DID NOT KNOW" AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE DISCOVERED, THE CORRECT INFORMATION THAT IS; THAT THE PAYEE HAD RECEIVED TWO REPLACEMENT CHECKS AND HAD-- OR PLANNED TO-- CASH BOTH INSTRUMENTS. IT ALSO APPEARS THAT ADEQUATE COLLECTION EFFORTS ARE NOW BEING MADE. ACCORDINGLY, WE GRANT RELIEF.

ALTHOUGH WE HAVE GRANTED RELIEF TO THE FINANCE OFFICER IN THIS CASE, WE DO NOT BELIEVE THAT THE ARMY'S COLLECTION PROCEDURES, TAKEN TOGETHER, MEET THE DILIGENT CLAIMS COLLECTION REQUIREMENT OF 31 U.S.C. SEC. 3528. ONCE THE DEBIT VOUCHER WAS RECEIVED BY THE FINANCE OFFICER, IT TOOK ARMY OVER 20 MONTHS TO REFER THE MATTER TO YOUR COLLECTION DIVISION. AS WE PREVIOUSLY INDICATED TO YOU, FOR CASES INVOLVING NOTICES OF LOSSES RECEIVED AFTER JUNE 1, 1986, WHERE THE PAYEE HAS LEFT THE ARMY OR ITS EMPLOY, WE WILL NO LONGER GRANT RELIEF IF ARMY DELAYS MORE THAN 3 MONTHS IN FORWARDING THE DEBT TO YOUR COLLECTION DIVISION. HOWEVER, SINCE THE NOTICE OF LOSS FROM TREASURY WAS RECEIVED PRIOR TO THAT DATE, WE WILL NOT DENY RELIEF HERE.

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