B-215921, SEP 28, 1984, OFFICE OF GENERAL COUNSEL

B-215921, SEP 28, 1984, OFFICE OF GENERAL COUNSEL

DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICIAL AND HIS SUPERVISOR UNDER 31 U.S.C. SEC. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF BOTH ORIGINAL AND SUBSTITUTE MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE SUBSTITUTE CHECK, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL AND HIS SUPERVISOR, AND SUBSEQUENT COLLECTION ATTEMPTS HAVE BEEN PURSUED.

MR. CLYDE E. JEFFCOAT PRINCIPAL DEPUTY COMMANDER U.S. ARMY FINANCE AND ACCOUNTING CENTER INDIANAPOLIS, INDIANA 46249

DEAR MR. JEFFCOAT:

THIS RESPONDS TO YOUR REQUEST THAT WE RELIEVE MAJOR (MAJ) T. WAGNER, FINANCE CORPS, FINANCE AND ACCOUNTING OFFICES, U.S. ARMY FINANCE AND ACCOUNTING CENTER, EUROPE, AND HIS DEPUTY, SERGEANT FIRST CLASS (SFC) S. EITUTIS UNDER PAYABLE TO MR. LANCE J. STROBRIDGE. MR. STROBRIDGE REPAID $210.17 OF THIS INDEBTEDNESS LEAVING A BALANCE DUE OF $153.65 THAT IS CHARGED TO MAJ WAGNER'S ACCOUNT. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

THE LOSS RESULTED WHEN THE PAYEE NEGOTIATED BOTH THE ORIGINAL AND A SUBSTITUTE CHECK. BOTH CHECKS WERE IN THE SAME AMOUNT. THE SUBSTITUTE CHECK WAS ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECK HAD NOT BEEN RECEIVED AND A REQUEST FOR STOP PAYMENT HAD BEEN MADE. BOTH CHECKS WERE ISSUED BY THE ARMY UNDER AUTHORITY DELEGATED BY THE DEPARTMENT OF THE TREASURY. 31 C.F.R. SEC. 245.8.

THIS OFFICE HAS AUTHORITY UNDER 31 U.S.C. SEC. 3527(C) TO RELIEVE A DISBURSING OFFICER FROM LIABILITY FOR A DEFICIENCY RESULTING FROM AN IMPROPER PAYMENT UPON DETERMINING "THAT THE PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE BY THE OFFICIAL." WE HAVE RECOGNIZED THAT IN "DUPLICATE CHECK" CASES, SUCH AS THIS, THE IMPROPER PAYMENT "IS TOTALLY BEYOND THE RESPONSIBILITY AND CONTROL OF THE AGENCY DISBURSING OFFICER AND IS SOMETHING FOR WHICH HE SHOULD INCUR NO LIABILITY." COMP.GEN. 91, 94 (1982). RELIEF IS GRANTED WHEN THE RECORD INDICATES THAT THE DISBURSING OFFICER ACTED WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY APPLICABLE REGULATIONS, THAT THERE IS NO EVIDENCE OF BAD FAITH ON THE PART OF THE DISBURSING OFFICER AND THAT A DILIGENT EFFORT WAS MADE TO COLLECT THE OVERPAYMENT. ID.

THE SUBSTITUTE CHECK HERE WAS SIGNED BY THE FINANCE AND ACCOUNTING OFFICER'S DEPUTY WHICH REQUIRES THAT WE RELIEVE THE FINANCE AND ACCOUNTING OFFICER IN HIS SUPERVISORY CAPACITY AS WELL AS THE DEPUTY AS DISBURSING OFFICER. WE HAVE CONCLUDED THAT WHERE A SUBSTITUTE CHECK IS PROPERLY ISSUED THE SUPERVISOR IS NO MORE NEGLIGENT THAN THE DEPUTY WHO ACTUALLY SIGNED THE CHECK, B-212576, ET AL., DECEMBER 2, 1983.

IT APPEARS THAT THE REQUEST FOR STOP PAYMENT AND THE ISSUANCE OF A SUBSTITUTE CHECK IN THIS CASE WERE WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY ARMY REGULATIONS. SEE AR 37-103, PARAS. 4-161, 4-162 AND 4 -164. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICERS.

AS WE HAVE NOTED BEFORE, THE SETTLEMENT OF A DISBURSING OFFICER'S ACCOUNT DOES NOT RELIEVE THE AGENCY OF ITS RESPONSIBILITY TO PURSUE COLLECTION ACTION ON THE DEBT CREATED BY THE IMPROPER PAYMENT. HERE, IT APPEARS THAT THERE WAS A DELAY IN PROCESSING THE DEBT VOUCHER. ALTHOUGH THE DEBT VOUCHER WAS DATED JANUARY 24, 1983, THE LOSS OF FUNDS DID NOT APPEAR IN MAJ WAGNER'S ACCOUNT UNTIL JUNE 1983. AT THAT TIME MAJ WAGNER'S SUCCESSOR, MR. J.F. SUSZYNSKI, SDA, IMMEDIATELY BEGAN COLLECTION ACTION AND $210.17 OF THE INDEBTEDNESS WAS RECOVERED. HOWEVER, AFTER IT WAS DETERMINED IN JUNE 1983, THAT MR. STROBRIDGE WAS NO LONGER IN PAY STATUS WITH THE ARMY IT DOES NOT SEEM THAT ANY FURTHER RECOUPMENT ATTEMPTS WERE MADE. FURTHER, IT WAS NOT UNTIL JUNE 24, 1984, THAT THE MATTER WAS REFERRED TO YOUR COLLECTION REPRESENTATIVE. ALTHOUGH UNTIL RECENTLY THE COLLECTION EFFORT FOR THE BALANCE OF THE DEBT DUE CAN HARDLY BE DEEMED AGGRESSIVE AS REQUIRED BY THE FEDERAL CLAIMS COLLECTION ACT, AS AMENDED, 31 U.S.C. SEC. 3711 ET SEQ., AND THE PROCEDURES OUTLINED IN OUR DECISION 62 COMP.GEN. 476, SUCH EFFORT IS NOW BEING TAKEN. ACCORDINGLY, RELIEF IS GRANTED.

WE REFER YOU TO OUR DECISION B-215380, ET AL., JULY 23, 1984. PLEASE NOTE THAT THE MATTERS WE MENTIONED IN THAT CASE FOR CONSIDERATION BY THE ARMY ARE ALSO APPLICABLE HERE. AS WE INDICATED IN THAT CASE, IT IS VERY IMPORTANT THAT THE PROPER DOCUMENTATION BE PROVIDED WITH YOUR RELIEF REQUEST. ONE OF THE RELEVANT DOCUMENTS MISSING FROM THIS FILE WAS DA FORM 3037, STATEMENT OF CLAIMANT REQUESTING STOPPAGE OF PAYMENT ON CHECK.