A-94937, AUGUST 8, 1938, 18 COMP. GEN. 139

A-94937: Aug 8, 1938

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IS AUTHORIZED ONLY TO THE EXTENT THE INDEBTEDNESS REMAINS UNLIQUIDATED IN THE POSTAL ACCOUNTS OF THE POSTMASTERS CONCERNED AFTER APPLICATION OF THE AMOUNT PAID BY THE SURETY OF THE FORMER EMPLOYEE UNDER ITS BOND. 1938: THERE IS FOR CONSIDERATION BY THIS OFFICE THE REQUEST OF THE POST OFFICE DEPARTMENT THAT THE AMOUNT IN THE RETIREMENT FUND TO THE CREDIT OF MRS. THERE IS ALSO DUE MRS. THAT THERE IS IN THE RETIREMENT FUND TO THE CREDIT OF THE FORMER EMPLOYEE $518.40. SHE WAS FOUND GUILTY IN CRIMINAL COURT OF FAILING TO ACCOUNT FOR SUCH FUNDS AND WAS SENTENCED TO SERVE ONE YEAR AND A DAY. WILLIAMS HAD CHARGE OF KEEPING THE BOX AND KEY RECORDS AND ALL CLERKS COLLECTING BOX RENTS WERE REQUIRED TO TURN THE MONEY OVER TO HER.

A-94937, AUGUST 8, 1938, 18 COMP. GEN. 139

SET-OFF - UNPAID SALARY AND RETIREMENT DEDUCTIONS - BONDED POSTAL EMPLOYEE'S GOVERNMENT INDEBTEDNESS - PARTIAL LIQUIDATION BY SURETY PRIOR TO SET-OFF REQUEST SET-OFF OF UNPAID SALARY AND AMOUNTS IN THE RETIREMENT FUND TO THE CREDIT OF A FORMER POSTAL EMPLOYEE IN LIQUIDATION OF A GOVERNMENT INDEBTEDNESS ARISING THROUGH THE FAILURE TO ACCOUNT FOR POST-OFFICE BOX RENTALS, ETC., IS AUTHORIZED ONLY TO THE EXTENT THE INDEBTEDNESS REMAINS UNLIQUIDATED IN THE POSTAL ACCOUNTS OF THE POSTMASTERS CONCERNED AFTER APPLICATION OF THE AMOUNT PAID BY THE SURETY OF THE FORMER EMPLOYEE UNDER ITS BOND, THERE BEING NO AUTHORITY FOR REFUND TO THE SURETY OF ANY AMOUNT SO PAID AND NOT SUBSEQUENTLY CLAIMED, NOR ANY RIGHT OF SUBROGATION IN FAVOR OF THE SURETY WITH RESPECT TO THE RETIREMENT FUNDS, OR REQUIREMENT THAT THE UNPAID SALARY BE PAID THE SURETY IN PREFERENCE TO THE EMPLOYEE.

DECISION BY ACTING COMPTROLLER GENERAL ELLIOTT, AUGUST 8, 1938:

THERE IS FOR CONSIDERATION BY THIS OFFICE THE REQUEST OF THE POST OFFICE DEPARTMENT THAT THE AMOUNT IN THE RETIREMENT FUND TO THE CREDIT OF MRS. GEORGIA M. WILLIAMS, FORMER CLERK IN THE POST OFFICE AT BOISE, IDAHO, BE APPLIED AGAINST HER INDEBTEDNESS TO THE UNITED STATES ARISING FROM HER FAILURE TO ACCOUNT FOR BOX-RENT FUNDS AMOUNTING TO $1,327.26, AND KEY DEPOSIT FUNDS IN THE AMOUNT OF $155.40, AN AGGREGATE OF $1,482.66. THERE IS ALSO DUE MRS. WILLIAMS UNPAID SALARY IN THE AMOUNT OF $129.22.

THE UNITED STATES CIVIL SERVICE COMMISSION REPORTED UNDER DATE OF MARCH 14, 1938, THAT THERE IS IN THE RETIREMENT FUND TO THE CREDIT OF THE FORMER EMPLOYEE $518.40, SET-OFF OF WHICH HAS BEEN OBJECTED TO BY SAID EMPLOYEE. IN LETTER DATED JANUARY 31, 1938, TO THE UNITED STATES CIVIL SERVICE COMMISSION, THE CHIEF INSPECTOR, POST OFFICE DEPARTMENT, REPORTED AS FOLLOWS:

INVESTIGATION DISCLOSED THAT MRS. WILLIAMS FAILED TO ACCOUNT FOR $1,327.26 BOX-RENT FUNDS FROM THE SEPTEMBER QUARTER, 1932, TO THE JUNE QUARTER, 1937, AND FOR $155.40 KEY DEPOSIT FUNDS. SHE WAS FOUND GUILTY IN CRIMINAL COURT OF FAILING TO ACCOUNT FOR SUCH FUNDS AND WAS SENTENCED TO SERVE ONE YEAR AND A DAY.

MRS. WILLIAMS HAD CHARGE OF KEEPING THE BOX AND KEY RECORDS AND ALL CLERKS COLLECTING BOX RENTS WERE REQUIRED TO TURN THE MONEY OVER TO HER. RECEIPTS FOR MONEY TURNED OVER TO MRS. WILLIAMS WERE EXAMINED FOR SEVERAL QUARTERS AND IN EACH INSTANCE IT WAS FOUND THAT ALL THE BOX RENT FUNDS COLLECTED HAD BEEN TURNED OVER TO HER.

THE ACTING THIRD ASSISTANT POSTMASTER GENERAL, DIVISION OF FINANCE, HAS FOUND ADMINISTRATIVELY THAT MRS. WILLIAMS IS FINANCIALLY RESPONSIBLE FOR THE SHORTAGES OF THESE FUNDS, AND HAS REQUESTED THE GENERAL ACCOUNTING OFFICE TO CHARGE THE ACCOUNTS OF THE POSTMASTERS CONCERNED WITH THE BOX RENTS INVOLVED.

IT WILL, THEREFORE, BE APPRECIATED IF YOU WILL DEPOSIT THE AMOUNT OF RETIREMENT DEDUCTIONS PLUS INTEREST UP TO AND INCLUDING MAY 19, 1935, IN THE TREASURY TO THE CREDIT OF LOUIS W. TRAILKILL, FORMER POSTMASTER, BOISE, IDAHO, WHOSE POSTAL ACCOUNT HAS BEEN CHARGED IN THE SUM OF $413.32, AND DEPOSIT THE DEDUCTIONS PLUS INTEREST AFTER MAY 19, 1935, IN THE TREASURY TO THE CREDIT OF HARRY L. YOST, PRESENT POSTMASTER AT BOISE, WHOSE POSTAL ACCOUNT HAS BEEN CHARGED IN THE SUM OF $913.94. PLEASE ADVISE ME OF THE ACTION TAKEN.

IT WILL ALSO BE APPRECIATED IF YOU WILL INFORM ME OF THE AMOUNTS WHICH MAY BE DEPOSITED IN EACH OF THE ACCOUNTS MENTIONED, PURSUANT TO THE ABOVE, AS SOON AS THEY CAN BE DETERMINED; AND ALSO ADVISE ME OF THE DEDUCTIONS PLUS INTEREST UP TO AND INCLUDING APRIL 30, 1934, AND THE DEDUCTIONS PLUS INTEREST AFTER THAT DATE.

WHILE IT IS STATED IN THE LETTER, SUPRA, THAT THE POSTAL ACCOUNT OF LOUIS W. TRAILKILL HAS BEEN CHARGED IN THE SUM OF $413.32, AND THE POSTAL ACCOUNT OF HARRY L. YOST HAS BEEN CHARGED IN THE SUM OF $913.94, THE AGGREGATE OF THESE TWO SUMS, $1,327.26, IS THE TOTAL BOX-RENT FUNDS NOT ACCOUNTED FOR AND NO CHARGE WOULD APPEAR TO HAVE BEEN MADE IN EITHER OFFICIAL'S ACCOUNT FOR THE UNACCOUNTED KEY DEPOSIT FUNDS. SINCE HARRY L. YOST WAS APPOINTED MAY 2, 1935, AND TOOK CHARGE OF THE BOISE, IDAHO, POST OFFICE ON MAY 19, 1935, AND SINCE THE POSTAL ACCOUNTS WITH RESPECT TO THE KEY DEPOSIT FUNDS WERE REPORTED TO HAVE BEEN CHECKED ON MAY 28, 1935, AND WERE FOUND CORRECT, THE SHORTAGE WITH RESPECT TO SAID FUNDS, I.E., $155.40, WOULD APPARENTLY BE FOR CHARGING IN THE ACCOUNTS OF MR. YOST, MAKING A TOTAL CHARGE IN HIS POSTAL ACCOUNT IN THIS CONNECTION AMOUNTING TO $1,069.34.

IT APPEARS THAT THE GENERAL CASUALTY CO., SEATTLE, WASH., SURETY ON THE BOND OF MRS. GEORGIA M. WILLIAMS IN THE AMOUNT OF $1,000, EFFECTIVE MAY 1, 1934, HAS PAID, UPON DEMAND OF THE POST OFFICE DEPARTMENT, THE FULL AMOUNT OF THE BOND WITHOUT REQUESTING ANY DEDUCTIONS, WHICH AMOUNT IS REPORTED HELD IN THE SPECIAL DISBURSING ACCOUNT WITH THE SUPERINTENDENT, DIVISION OF FINANCE, POST OFFICE DEPARTMENT, IT BEING STATED IN THAT CONNECTION THAT DEMAND WAS MADE IN ERROR. THERE IS NO CLAIM OF RECORD FROM THE SURETY FOR REFUND ON ACCOUNT OF ANY ASSERTED OVERPAYMENT AND SINCE THE INDEBTEDNESS OF THE FORMER EMPLOYEE WAS IN EXCESS OF THE AMOUNT OF THE BOND AT THE TIME PAYMENT WAS MADE, THE SURETY PAID NO MORE THAN IT WAS OBLIGATED TO PAY UNDER THE BOND AND THERE IS NO AUTHORITY FOR REFUNDING TO IT ANY PART OF THE AMOUNT PAID AND NO RIGHT OF SUBROGATION EXISTS IN FAVOR OF THE SURETY WITH RESPECT TO ANY MONEYS IN THE RETIREMENT FUND. 7 COMP. GEN. 136; ID. 335. THE SUM OF $252.22 IS REPORTED CHARGED TO MRS. WILLIAMS WHILE SHE WAS BONDED BY THE COLUMBIA CASUALTY CO., WHICH WAS UP TO APRIL 30, 1934, AND THE SUM OF $1,230.44 WAS CHARGED TO HER WHILE SHE WAS BONDED BY THE GENERAL CASUALTY CO. ACCORDINGLY, THE AMOUNT OF $1,000 RECOVERED FROM THE SURETY SHOULD BE DEPOSITED TO THE CREDIT OF THE POSTAL ACCOUNT OF HARRY L. YOST.

WITH RESPECT TO THE UNPAID SALARY DUE THE FORMER EMPLOYEE, SUCH AMOUNT COULD HAVE BEEN ALLOWED AS A CREDIT BY THE GOVERNMENT BEFORE RESORTING TO ITS REMEDY UNDER THE BOND OF THE EMPLOYEE, BUT, AS HERETOFORE STATED, PAYMENT HAS BEEN MADE BY THE SURETY AND THE GOVERNMENT IS NOT REQUIRED TO REFUND THE EMPLOYEE'S UNPAID SALARY TO SAID SURETY IN PREFERENCE TO THE EMPLOYEE. 7 COMP. GEN. 305; 12 ID. 491.

THE INDEBTEDNESS OF THE EMPLOYEE AFTER APPLYING THE PAYMENT MADE BY THE SURETY AMOUNTS TO $482.66, AND WHILE IT WOULD BE UNLAWFUL TO REIMBURSE A SURETY FROM THE AMOUNT TO THE CREDIT OF THE EMPLOYEE IN THE RETIREMENT FUND FOR AN AMOUNT PAID TO THE GOVERNMENT BY THE SURETY TO MAKE GOOD A LOSS SUSTAINED BY THE GOVERNMENT ON ACCOUNT OF THE DEFAULT OF THE EMPLOYEE, IT IS LEGAL AND PROPER FOR THE GOVERNMENT TO APPLY SUCH FUNDS IN LIQUIDATION OF THE INDEBTEDNESS. 1 COMP. GEN. 605; 7 ID. 305; 16 ID. 962. ACCORDINGLY, OF THE AMOUNT TO THE CREDIT OF MRS. GEORGIA M. WILLIAMS IN THE RETIREMENT FUND, THE AMOUNT OF $482.66 WILL BE PAID TO THE TREASURER OF THE UNITED STATES FOR DEPOSIT OF THE AMOUNT OF $413.32 TO THE CREDIT OF THE POSTAL ACCOUNT OF LOUIS W. TRAILKILL AND THE AMOUNT OF $69.34 TO THE CREDIT OF THE POSTAL ACCOUNT OF HARRY L. YOST, PRESENT POSTMASTER OF BOISE, IDAHO, IN LIQUIDATION OF THE INDEBTEDNESS OF MRS. GEORGIA M. WILLIAMS TO THE UNITED STATES AND THERE WILL THEN BE FOR THE CONSIDERATION OF THE UNITED STATES CIVIL SERVICE COMMISSION THE APPLICATION OF MRS. WILLIAMS FOR REFUND OF THE BALANCE DUE AFTER SET-OFF IS MADE. ALSO, SINCE THE SET-OFF, TOGETHER WITH THE AMOUNT PAID BY THE SURETY AS HEREIN RELATED, WILL LIQUIDATE THE INDEBTEDNESS TO THE UNITED STATES, PAYMENT OF THE UNPAID SALARY DUE THE FORMER EMPLOYEE IS AUTHORIZED IF OTHERWISE PROPER.