A-17131, OCTOBER 4, 1927, 7 COMP. GEN. 264

A-17131, OCTOBER 4, 1927, 7 COMP. GEN. 264

VETERANS' BUREAU - WAIVER OF RECOVERY OF OVERPAYMENTS OF DISABILITY COMPENSATION - LIABILITY OF DISBURSING OFFICERS ACTION BY THE DIRECTOR OF THE VETERANS' BUREAU UNDER SECTION 28 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 615, IN WAIVING RECOVERY FROM A BENEFICIARY OF AN OVERPAYMENT OF DISABILITY COMPENSATION DOES NOT DISCHARGE THE CLAIM OF THE UNITED STATES AGAINST THE DISBURSING OFFICER RESPONSIBLE FOR THE OVERPAYMENT. 6 COMP. GEN. 522 AFFIRMED. A DISBURSING OFFICER, WHEN NOT ACTING AS AGENT OF THE GOVERNMENT, HAS NO RIGHT WHATEVER TO WITHHOLD AMOUNTS OTHERWISE DUE A CLAIMANT OR BENEFICIARY FROM THE GOVERNMENT TO SATISFY DISALLOWANCES IN HIS ACCOUNTS BECAUSE OF OVERPAYMENTS OR UNLAWFUL PAYMENTS MADE TO THE SAME CLAIMANT OR BENEFICIARY FOR WHICH HE IS RESPONSIBLE UNDER HIS BOND.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, OCTOBER 4, 1927:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF SEPTEMBER 6, 1927, REFERRING TO DECISION OF FEBRUARY 11, 1927, 6 COMP. GEN. 522, AND SUBMITTING FOR DECISION SPECIFIC QUESTIONS STATED AS FOLLOWS:

1. DOES NOT WAIVER OF RECOVERY UNDER SECTION 28 OF THE ACT DISCHARGE THE CLAIM OF THE UNITED STATES AGAINST THE DISBURSING OFFICER AS WELL AS AGAINST THE BENEFICIARY WHO RECEIVED FOR BENEFIT OF THE OVERPAYMENT? (A). IF YOUR ANSWER TO THE FIRST QUESTION IS IN THE NEGATIVE, DOES THE DISBURSING OFFICER HAVE THE LEGAL RIGHT, NOTWITHSTANDING THE PROVISION IN SECTION 22 OF THE ACT CITED ABOVE, TO DEDUCT FROM SUBSEQUENT PAYMENTS OF COMPENSATION DUE THE BENEFICIARY, AN AMOUNT EQUAL TO THE OVERPAYMENT? (B). IF THE DISBURSING OFFICER DOES NOT HAVE SUCH LEGAL RIGHT, MUST HE REIMBURSE THE GOVERNMENT FOR THE OVERPAYMENT OUT OF HIS OWN PERSONAL FUNDS, AND IF SO, TO WHAT RELIEF, IF ANY, IS HE ENTITLED?

THE DECISION REFERRED TO SUSTAINED DISALLOWANCE OF CREDIT IN THE ACCOUNTS OF L. S. MCCRACKEN, SPECIAL DISBURSING AGENT, UNITED STATES VETERANS' BUREAU, FOR AN OVERPAYMENT OF $60.17 DISABILITY COMPENSATION MADE TO BEN OSCAR SHEDD, A BENEFICIARY OF THE VETERANS' BUREAU, THE OVERPAYMENT RESULTING FROM AN ERROR IN CALCULATION BY THE DISBURSING OFFICER OR HIS SUBORDINATE AND CLEARLY APPARENT ON THE FACE OF THE VOUCHER. IT WAS HELD AS FOLLOWS (QUOTING FROM THE SYLLABUS):

THE PROVISIONS OF SECTION 28 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 615, PERMITTING WAIVER OF RECOVERY OF ILLEGAL PAYMENTS OF COMPENSATION TO A BENEFICIARY WHEN IN THE JUDGMENT OF THE DIRECTOR OF THE VETERANS' BUREAU THE BENEFICIARY WAS WITHOUT FAULT, FURNISH NO AUTHORITY FOR CREDITING A DISALLOWANCE IN A DISBURSING OFFICER'S ACCOUNT FOR AN ILLEGAL PAYMENT MADE ON AN ERRONEOUS COMPUTATION WHICH WAS CLEARLY APPARENT ON THE FACE OF THE VOUCHER.

THE SPECIFIC QUESTIONS SUBMITTED ARE ANSWERED IN THE ORDER STATED AS FOLLOWS:

1. NO. THE PROVISION IN THE STATUTE IN QUESTION AUTHORIZES RELIEF ONLY IN THE CASE OF "ANY BENEFICIARY.' 6 COMP. GEN. 551. A DISBURSING OFFICER MAY NOT REASONABLY BE CONSIDERED AS COMING WITHIN THE TERM "BENEFICIARY.' NO INTENT IS SHOWN IN THE STATUTE TO RELIEVE A DISBURSING OFFICER, AND THERE APPEARS NO GOOD REASON WHY THE DISBURSING OFFICER WHO WAS RESPONSIBLE FOR THE OVERPAYMENT SHOULD BE RELIEVED FROM THE EFFECT OF HIS ERROR OR INEFFICIENCY BECAUSE OF THE DISCRETION GRANTED BY LAW TO THE ADMINISTRATIVE OFFICE TO RELIEVE THE GOVERNMENT BENEFICIARY FROM THE NECESSITY OF REFUNDING AN OVERPAYMENT. THE DECISION OF FEBRUARY 11, 1927, 6 COMP. GEN. 522, IS AFFIRMED. SEE ALSO 2 COMP. GEN. 144.

2 (A). CONTRARY TO WHAT APPEARS TO BE THE IMPRESSION OF THE BUREAU, AS EXPRESSED IN YOUR LETTER, A DISBURSING OFFICER HAS NO INHERENT RIGHT TO SET OFF OR APPLY AMOUNTS DUE A CLAIMANT FROM THE GOVERNMENT TO REIMBURSE HIM (THE DISBURSING OFFICER) FOR AMOUNTS ERRONEOUSLY PAID TO THE CLAIMANT BUT WHICH THE CLAIMANT CAN NOT BE REQUIRED TO REFUND TO THE UNITED STATES. THE ACCOUNTABLE RELATIONSHIP BETWEEN A DISBURSING OFFICER AND THE GOVERNMENT IS INDEPENDENT OF THE ACCOUNTABLE RELATIONSHIP BETWEEN THE GOVERNMENT AND ITS BENEFICIARY OR CLAIMANT. PAYMENT BY A DISBURSING OFFICER TO THE UNITED STATES FOR AMOUNTS DISALLOWED IN HIS ACCOUNTS AND COLLECTION BY THE DISBURSING OFFICER FROM THE PERSON TO WHOM THE DISALLOWED PAYMENTS WERE MADE, ARE SEPARATE AND DISTINCT TRANSACTIONS AND SHOULD NOT BE CONFUSED. A GOVERNMENT DEBTOR IS DIRECTLY LIABLE TO THE UNITED STATES, AND THE DISBURSING OFFICER WHO MADE THE PAYMENT IS ALSO LIABLE DIRECTLY TO THE UNITED STATES UNDER HIS BOND, INDEPENDENTLY OF THE LIABILITY OF THE DEBTOR TO THE UNITED STATES. THE GOVERNMENT ITSELF HAS THE INHERENT RIGHT TO SET OFF DEBITS AGAINST CREDITS IN THE ACCOUNT OF THE SAME INDIVIDUAL CLAIMANT OR BENEFICIARY IN MAKING SETTLEMENT OF CLAIMS AGAINST THE OF THE GOVERNMENT, HAS NO RIGHT WHATEVER TO WITHHOLD AMOUNTS OTHERWISE DUE THE CLAIMANT OR BENEFICIARY FROM THE GOVERNMENT TO SATISFY UNITED STATES. BUT A DISBURSING OFFICER, WHEN NOT ACTING AS AGENT DISALLOWANCES MADE IN HIS ACCOUNTS ON ACCOUNT OF OVERPAYMENTS OR UNLAWFUL PAYMENTS MADE TO THE SAME CLAIMANT OR BENEFICIARY FOR WHICH HE IS RESPONSIBLE UNDER HIS BOND. THUS, WHEN THE GOVERNMENT, THROUGH THE DIRECTOR OF THE VETERANS' BUREAU, RELIEVES A CLAIMANT OR BENEFICIARY UNDER A SPECIAL ACT OF THE CONGRESS, THE RELATIONSHIP BETWEEN THE GOVERNMENT AND THE DISBURSING OFFICER IS NOT AFFECTED, BUT THE DISBURSING OFFICER REMAINS LIABLE UNDER HIS BOND FOR THE LOSS SUSTAINED BY THE GOVERNMENT AS A RESULT OF HIS ERROR OR THAT OF ANY OF HIS SUBORDINATES. THIS QUESTION IS ANSWERED IN THE NEGATIVE.

2 (B). IN SO FAR AS THE GOVERNMENT IS CONCERNED, THE DISBURSING OFFICER WOULD BE REQUIRED TO REIMBURSE THE GOVERNMENT FOR THE LOSS SUSTAINED ON ACCOUNT OF THE OVERPAYMENT FOR WHICH HE OR HIS SUBORDINATES ARE RESPONSIBLE OUT OF HIS OWN PERSONAL FUNDS. WHETHER HE IS ABLE TO COLLECT FROM THE SUBORDINATE RESPONSIBLE OR FROM THE PERSON TO WHOM THE OVERPAYMENT WAS MADE, IS A MATTER BETWEEN THE DISBURSING OFFICER AND SUCH PERSON. IT IS NOT APPARENT WHY A DISBURSING OFFICER SHOULD HAVE RELIEF FROM LIABILITY UNDER HIS BOND FOR A LOSS SUSTAINED BY THE GOVERNMENT AS A RESULT OF HIS NEGLIGENCE, CARELESSNESS, OR INEFFICIENCY.