B-180957 O/M, SEP 25, 1979

B-180957 O/M, SEP 25, 1979

SUBJECT: OUTSTANDING DEBT OWED BY ACCOUNTABLE OFFICER JUANITA CHAISSON - B-180957 O/M.

DIRECTOR, CLAIMS DIVISION:

DEPUTY DIRECTOR JOHN GIBBONS ASKED US TO COMMENT ON A LETTER FROM THE CHIEF, LITIGATION AND CLAIMS BRANCH, BUSINESS AND ADMINISTRATIVE LAW DIVISION, OFFICE OF GENERAL COUNSEL, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (HEW). IN THAT LETTER, HEW REQUESTED YOUR DIVISION TO "CONSIDER ACTION TO TERMINATE COLLECTION EFFORTS IN ACCORDANCE WITH 4 C.F.R. 104.3(A)" WITH RESPECT TO A DEBT IN THE AMOUNT OF $1,246.34 OWED THE UNITED STATES BY MS. JUANITA CHAISSON. THE DEBT AROSE FROM THE UNEXPLAINED LOSS OF GOVERNMENT FUNDS IN THE CUSTODY OF MS. CHAISSON, A CLASS "A" CASHIER EMPLOYED BY THE PUBLIC HEALTH SERVICE, BILLINGS, MONTANA.

ACCORDING TO THE RECORD, THE FUNDS IN QUESTION HAD BEEN KEPT IN A CASH BOX IN A SAFE LOCATED IN A SUPPLY ROOM ADJACENT TO THE CASHIER'S OFFICE WHERE MS. CHAISSON WORKED. IT APPEARED THAT MS. CHAISSON HAD PLACED THE CASH BOX IN THE SAFE AT APPROXIMATELY 2:45 P.M. ON FRIDAY, AUGUST 24, 1973, BUT DID NOT LOCK THE SAFE, INSTEAD MERELY TURNING THE DIAL SO THAT THE HANDLE WOULD NOT TURN. SHE THEN LEFT THE OFFICE, WHICH THEN WAS VACANT, FOR ABOUT ONE AND ONE-HALF HOURS APPARENTLY WITHOUT HAVING LOCKED THE DOOR TO THE SUPPLY CLOSET WHICH CONTAINED THE SAFE. WHEN SHE RETURNED, SHE LOCKED THE SAFE BUT DID NOT CHECK THE FUNDS, NOR DID THE RECORD INDICATE THAT SHE EVEN OPENED THE SAFE DOOR TO VERIFY THE PRESENCE OF THE CASH BOX. ON MONDAY, AUGUST 27, 1973, MS. CHAISSON REPORTED THE CASH BOX MISSING. THERE WAS NO EVIDENCE OF FORCIBLE ENTRY INTO THE SAFE.

WHEN WE ORIGINALLY CONSIDERED MS. CHAISSON'S REQUEST FOR RELIEF IN 1974, WE CONCLUDED THAT SHE APPEARED TO HAVE BEEN NEGLIGENT IN VACATING THE OFFICE FOR ONE AND ONE-HALF HOURS WHILE LEAVING THE SAFE IN AN UNSECURED CONDITION. IN ANY EVENT, WE POINTED OUT THAT THE RECORD DID NOT CONTAIN THE AGENCY DETERMINATION, REQUIRED BY 31 U.S.C. SEC. 82A-1, THAT THE LOSS OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF MS. CHAISSON, AND THAT THEREFORE WE HAD NO AUTHORITY TO GRANT RELIEF. WE HAVE SINCE REVIEWED THE CASE AND AFFIRMED OUR CONCLUSION OF LIABILITY ON SEVERAL OCCASIONS. B-180957, APRIL 24, 1975 (TO THE SECRETARY OF HEW); B-180957, SEPTEMBER 15, 1975 (TO REPRESENTATIVE (NOW SENATOR) JOHN MELCHER).

SINCE RELIEF WAS NOT GRANTED, IT BECAME THE AGENCY'S RESPONSIBILITY TO INITIATE COLLECTION ACTION PURSUANT TO THE FEDERAL CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. SECS. 951-953 (1976), AND THE IMPLEMENTING REGULATIONS ISSUED JOINTLY BY THE COMPTROLLER GENERAL AND THE ATTORNEY GENERAL, 4 C.F.R. PARTS 101-105. B-179902 O/M, JANUARY 4, 1974.

AT THE OUTSET, IT APPEARS THAT HEW'S SUBMISSION MAY HAVE BEEN BASED ON A MISINTERPRETATION OF THE REGULATIONS. THE LETTER ASKS US TO CONSIDER TERMINATION ACTION IN ACCORDANCE WITH 4 C.F.R. SEC. 104.3(A), BUT STATES THAT IT IS BASED ON 4 C.F.R. SEC. 103.1, WHICH PROVIDES THAT ONLY THE COMPTROLLER GENERAL OR HIS DESIGNEE MAY COMPROMISE A CLAIM ARISING OUT OF AN EXCEPTION MADE BY GAO IN THE ACCOUNT OF AN ACCOUNTABLE OFFICER. DECISION TO DENY RELIEF IS NOT THE EQUIVALENT OF AN EXCEPTION. MOREOVER, SECTION 103.1 CONCERNS ONLY THE AUTHORITY TO COMPROMISE. IT DOES NOT AFFECT THE AGENCY'S AUTHORITY TO TERMINATE COLLECTION ACTION UNDER PART 104. B-117604, JANUARY 3, 1968. IN ANY EVENT, WE WILL CONSIDER THE SUBMISSION AS HAVING BEEN MADE UNDER 4 C.F.R. SEC. 104.4, WHICH PROVIDES IN PERTINENT PART:

"WHEN AN AGENCY HAS DOUBT AS TO WHETHER COLLECTION ACTION SHOULD BE SUSPENDED OR TERMINATED ON A CLAIM IT MAY REFER THE CLAIM TO THE GENERAL ACCOUNTING OFFICE FOR ADVICE. ***"

THE RECORD INDICATES THAT SEVERAL WRITTEN DEMANDS FOR PAYMENT HAVE BEEN MADE UPON MS. CHAISSON, WITH NO SUCCESS. ON MARCH 2, 1977, THE PUBLIC HEALTH SERVICE ADVISED THE CHIEF, LITIGATION AND CLAIMS BRANCH, THAT EFFORTS TO COLLECT THE DEBT "HAVE NOT BEEN SUCCESSFUL." IT ALSO APPEARS THAT MS. CHAISSON, A GS-5, IS THE SOLE SUPPORT OF THREE CHILDREN AND HER DEPENDENT FATHER, AND HAS ENCOUNTERED SERIOUS PERSONAL AND FINANCIAL HARDSHIPS. A LETTER DATED MARCH 16, 1977, FROM THE FINANCIAL MANAGEMENT OFFICER, BILLINGS AREA INDIAN HEALTH SERVICE, NOTES THE FOLLOWING:

"A YEAR AGO SHE UNDERWENT MAJOR SURGERY AND WAS HOSPITALIZED FIVE WEEKS. THE SURGERY WAS UNSUCCESSFUL AND JUST RECENTLY THE OPERATION WAS PERFORMED AGAIN. HOPEFULLY, THIS TIME IT WILL BE SUCCESSFUL AND SHE WILL NOT BE CRIPPLED FOR LIFE. IT HAS CAUSED OTHER PROBLEMS, HOWEVER, AND BECAUSE OF LIMITATIONS ON LEAVE SHE HAS BEEN FORCED TO APPLY FOR SHORT PERIODS OF (LEAVE WITHOUT PAY). THE CURTAILMENT IN HER EARNINGS HAS RESULTED IN MORE FINANCIAL BURDENS.

"TWO SEPARATE AUTOMOBILE ACCIDENTS RECENTLY INVOLVING HERSELF AND HER FATHER RESULTED IN PROPERTY LOSS, INJURIES AND NEARLY THE DEATH OF HER FATHER WHO SPENT SEVERAL WEEKS IN INTENSIVE CARE AND CONSTANT CARE FOR A FRACTURED NECK AND OTHER INJURIES. SHE WAS NOT AT FAULT IN EITHER ACCIDENT BUT, NONETHELESS, WILL BEAR ANOTHER FINANCIAL BURDEN AND ADDITIONAL WORK RESPONSIBILITY."

THE REGULATIONS AUTHORIZE TERMINATION OF COLLECTION ACTION IN SPECIFIED CIRCUMSTANCES. ONE OF THESE CIRCUMSTANCES IS SET FORTH IN 4 C.F.R. SEC. 104.3(A), AS FOLLOWS:

"(A) INABILITY TO COLLECT ANY SUBSTANTIAL AMOUNT. COLLECTION ACTION MAY BE TERMINATED ON A CLAIM WHEN IT BECOMES CLEAR THAT THE GOVERNMENT CANNOT COLLECT OR ENFORCE COLLECTION OF ANY SIGNIFICANT SUM FROM THE DEBTOR HAVING DUE REGARD FOR THE JUDICIAL REMEDIES AVAILABLE TO THE GOVERNMENT, THE DEBTOR'S FUTURE FINANCIAL PROSPECTS, AND THE EXEMPTIONS AVAILABLE TO THE DEBTOR UNDER STATE AND FEDERAL LAW. IN DETERMINING THE DEBTOR'S INABILITY TO PAY THE FOLLOWING FACTORS, AMONG OTHERS, MAY BE CONSIDERED: AGE AND HEALTH OF THE DEBTOR; PRESENT AND POTENTIAL INCOME; INHERITANCE PROSPECTS; THE POSSIBILITY THAT ASSETS HAVE BEEN CONCEALED OR IMPROPERLY TRANSFERRED BY THE DEBTOR; THE AVAILABILITY OF ASSETS OR INCOME WHICH MAY BE REALIZED UPON BY ENFORCED COLLECTION PROCEEDINGS."

THE APPLICATION OF THE COLLECTION TERMINATION REGULATIONS TO GOVERNMENT EMPLOYEES IS SOMEWHAT UNCLEAR. WE HAVE NOTED IN THE PAST THAT, "IN VIEW OF THE MANY WAYS AVAILABLE TO ENFORCE COLLECTION OF SMALL DEBTS OWED BY *** GOVERNMENT EMPLOYEES," THE APPLICATION OF THE TERMINATION PROVISIONS TO GOVERNMENT EMPLOYEES "MAY BE DOUBTFUL IN ANY EVENT." 49 COMP.GEN. 359, 361 (1969). HOWEVER, THERE IS NOTHING IN THE FEDERAL CLAIMS COLLECTION ACT OR ITS LEGISLATIVE HISTORY TO PRECLUDE TERMINATION OF COLLECTION ACTION IN THE CASE OF A GOVERNMENT EMPLOYEE IN APPROPRIATE CIRCUMSTANCES, NOR HAVE WE EVER HELD THAT TERMINATION WAS CATEGORICALLY PRECLUDED.

IN B-160483, DECEMBER 9, 1966, WE HELD THAT THERE WAS NO AUTHORITY UNDER THE FEDERAL CLAIMS COLLECTION ACT TO DISCONTINUE COLLECTION ACTION ON A DEBT BY A GOVERNMENT EMPLOYEE RESULTING FROM EXCESSIVE OVERPAYMENTS OF SALARY OVER A 4-YEAR PERIOD. IN ANOTHER CASE WE CONCLUDED THAT A DEBT BY AN EMPLOYEE SHOULD NOT BE TERMINATED "SO LONG AS THE EMPLOYEE OCCUPIES HIS PRESENT POSITION AND HAS A TAKE HOME PAY OF $980 A MONTH AFTER TAX WITHHOLDING IN ADDITION TO HIS RETIRED MILITARY PAY." B-172122 O/M, MAY 21, 1971. SEE ALSO B-180674, NOVEMBER 25, 1974, AND B-189701, SEPTEMBER 23, 1977, IN WHICH WE EXPRESSED THE VIEW THAT A DEBTOR EMPLOYED BY THE GOVERNMENT DOES HAVE THE "PRESENT OR PROSPECTIVE FINANCIAL ABILITY" TO PAY AND THAT TERMINATION WOULD THEREFORE BE INAPPROPRIATE. ON THE OTHER HAND, WE HAVE RECOGNIZED THAT TERMINATION MIGHT BE AN AVAILABLE COURSE OF ACTION IN THE CASE OF GOVERNMENT EMPLOYEES ON SEVERAL OCCASIONS. B-163495, FEBRUARY 23, 1968; B-175499, APRIL 21, 1972; B-181467, JULY 29, 1976; B-188000, OCTOBER 12, 1977; B-184947, MARCH 21, 1978.

WITH RESPECT TO A DEBT OWED BY AN ACCOUNTABLE OFFICER, HOWEVER, WE MUST ALSO CONSIDER THE EFFECT OF 5 U.S.C. SEC. 5512(A) (1976), WHICH PROVIDES:

"THE PAY OF AN INDIVIDUAL IN ARREARS TO THE UNITED STATES SHALL BE WITHHELD UNTIL HE HAS ACCOUNTED FOR AND PAID INTO THE TREASURY OF THE UNITED STATES ALL SUMS FOR WHICH HE IS LIABLE."

WE HAVE HELD THAT SECTION 5 U.S.C. 5512 DOES NOT APPLY TO ORDINARY DEBTORS BUT ONLY TO ACCOUNTABLE OFFICERS, AND THAT ITS APPLICATION IS MANDATORY. 37 COMP.GEN. 344 (1957); 39 COMP.GEN. 203 (1959). WHILE WE HAVE NEVER SPECIFICALLY ADDRESSED THE EFFECT OF THE 1966 ENACTMENT OF THE FEDERAL CLAIMS COLLECTION ACT ON SECTION 5512, IT IS OUR VIEW THAT SECTION 5512, A SPECIFIC PROVISION, WAS NOT MODIFIED BY THE MORE GENERAL PROVISIONS OF THE FEDERAL CLAIMS COLLECTION ACT AND REMAINS CONTROLLING. THUS, IN THE CASE OF AN ACCOUNTABLE OFFICER, THE "AGGRESSIVE ACTION" PRESCRIBED BY 4 C.F.R. SEC. 102.1 MUST TAKE THE FORM OF MANDATORY WITHHOLDING PURSUANT TO SECTION 5512. ACCORDINGLY, IN VIEW OF THE MANDATORY NATURE OF 5 U.S.C. SEC. 5512, AND SINCE A PERSON EMPLOYED BY THE GOVERNMENT MUST BE PRESUMED ABLE TO REPAY THE DEBT, AT LEAST IN SMALL INSTALLMENTS, WE DO NOT BELIEVE THAT THE FEDERAL CLAIMS COLLECTION ACT AUTHORIZES THE TERMINATION OF COLLECTION ACTION IN THE CASE OF AN ACCOUNTABLE OFFICER WHO IS STILL EMPLOYED BY THE GOVERNMENT.

IN THIS CONNECTION, WE WOULD NOTE FURTHER THAT 5 U.S.C. SEC. 5512(B) GIVES THE DEBTOR THE OPTION OF FORCING THE MATTER TO LITIGATION BY REQUESTING GAO TO REPORT THE BALANCE DUE TO THE ATTORNEY GENERAL, WHO MUST THEN ORDER SUIT TO BE COMMENCED AGAINST THE INDIVIDUAL.

AS A FINAL NOTE, WHILE IT IS POSSIBLE TO READ 5 U.S.C. SEC. 5512 AS REQUIRING THAT SALARY BE WITHHELD IN ITS ENTIRETY UNTIL THE DEBT IS REPAID, WE DO NOT BELIEVE SUCH AN EXTREME INTERPRETATION IS REQUIRED, BUT RATHER BELIEVE THE STATUTE IS SATISFIED BY WITHHOLDING IN INSTALLMENTS. THERE ARE AT PRESENT NO UNIFORM GUIDELINES FOR WITHHOLDING UNDER SEC. 5512, AND IN OUR OPINION, A UNIFORM MANDATORY STANDARD WOULD BE UNDESIRABLE. RATHER, THE ACTUAL PROCEDURE OF WITHHOLDING THE SALARY OF THE ACCOUNTABLE OFFICER IS THE RESPONSIBILITY OF THE EMPLOYING AGENCY. ACHIEVE SOME DEGREE OF CONSISTENCY, HOWEVER, WE WOULD SUGGEST THAT AGENCIES LOOK TO 15 U.S.C. SEC. 1673(A) (1976) AS AN INFORMAL STANDARD. THIS PROVISION, SECTION 303 OF THE CONSUMER CREDIT PROTECTION ACT, PUB.L. NO. 90-321, PROVIDES THE LEGAL STANDARD FOR DETERMINING THE MAXIMUM PERCENTAGE OF EARNINGS WHICH CAN BE SUBJECT TO GARNISHMENT BY NORMAL LEGAL PROCESS IN STATE AND FEDERAL COURTS, AND WE BELIEVE IT MAY BE A USEFUL GUIDE FOR SEC. 5512 WITHHOLDINGS AS WELL.

THUS, AS A GENERAL PROPOSITION, WE CONCLUDE THAT THE FEDERAL CLAIMS COLLECTION ACT DOES NOT AUTHORIZE TERMINATION IN THE CASE OF AN ACCOUNTABLE OFFICER CURRENTLY EMPLOYED BY THE GOVERNMENT, AND THAT WITHHOLDING FROM SALARY IS REQUIRED BY 5 U.S.C. SEC. 5512.

TURNING NOW TO THE SPECIFIC DEBT OWED BY MS. CHAISSON, AS NOTED ABOVE, IF HEW COMMENCES WITHHOLDING, MS. CHAISSON IS ENTITLED UNDER 5 U.S.C. SEC. 5512(B) TO HAVE THE INDEBTEDNESS REFERRED TO THE ATTORNEY GENERAL FOR SUIT. IN VIEW OF THE PARTICULAR AND SOMEWHAT UNIQUE FACTS AND CIRCUMSTANCES OF THIS CASE, THE LIKELIHOOD THAT THE JUSTICE DEPARTMENT WILL PURSUE THE MATTER IS EXTREMELY REMOTE, IN WHICH EVENT THERE WOULD NO LONGER BE AN OBLIGATION TO WITHHOLD. ACCORDINGLY, ALTHOUGH WE STILL FEEL THAT OUR ORIGINAL CONCLUSION OF LIABILITY WAS CORRECT, WE BELIEVE NO USEFUL PURPOSE WOULD BE SERVED BY A CONTINUED PROTRACTING OF THE MATTER, AND RECOMMEND THAT HEW BE ADVISED THAT NO FURTHER ACTION NEED BE TAKEN AGAINST MS. CHAISSON. HEW SHOULD ALSO BE ADVISED, HOWEVER, THAT THIS ACTION APPLIES ONLY TO THIS SPECIFIC CASE AND SHOULD NOT BE CONSTRUED AS A PRECEDENT. OUR CONCLUSION STATED ABOVE CONCERNING THE RELATIONSHIP OF 5 U.S.C. SEC. 5512 AND THE FEDERAL CLAIMS COLLECTION ACT WITH RESPECT TO ACCOUNTABLE OFFICERS REMAINS APPLICABLE FOR THE FUTURE. AS REQUESTED, WE ARE RETURNING THE MATERIAL SUBMITTED BY HEW.