B-103848, JULY 31, 1951, 31 COMP. GEN. 17

B-103848: Jul 31, 1951

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CERTIFYING OFFICERS - LIABILITY - COMPENSATION OVERPAYMENTS CERTIFYING OFFICERS WHO ERRONEOUSLY CERTIFY VOUCHERS RESULTING IN OVERPAYMENTS OF COMPENSATION TO FORMER EMPLOYEES MAY NOT BE RELIEVED FROM RESPONSIBILITY FOR THE OVERPAYMENT BY THE PLACING OF A CAVEAT AGAINST FUNDS TO THE FORMER EMPLOYEES' CREDIT IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND WHICH ARE IN EXCESS OF THE OVERPAYMENT HOWEVER. WHERE SUCH OFFICERS DID NOT KNOW AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE ASCERTAINED THAT OVERPAYMENTS WERE INVOLVED RELIEF FOR THE ERRONEOUS CERTIFICATIONS MAY BE GRANTED UNDER THE PROVISIONS OF SECTION 2 OF THE ACT OF DECEMBER 29. 1951: REFERENCE IS MADE TO LETTER DATED MAY 31.

B-103848, JULY 31, 1951, 31 COMP. GEN. 17

CERTIFYING OFFICERS - LIABILITY - COMPENSATION OVERPAYMENTS CERTIFYING OFFICERS WHO ERRONEOUSLY CERTIFY VOUCHERS RESULTING IN OVERPAYMENTS OF COMPENSATION TO FORMER EMPLOYEES MAY NOT BE RELIEVED FROM RESPONSIBILITY FOR THE OVERPAYMENT BY THE PLACING OF A CAVEAT AGAINST FUNDS TO THE FORMER EMPLOYEES' CREDIT IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND WHICH ARE IN EXCESS OF THE OVERPAYMENT HOWEVER, WHERE SUCH OFFICERS DID NOT KNOW AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE ASCERTAINED THAT OVERPAYMENTS WERE INVOLVED RELIEF FOR THE ERRONEOUS CERTIFICATIONS MAY BE GRANTED UNDER THE PROVISIONS OF SECTION 2 OF THE ACT OF DECEMBER 29, 1941.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF STATE, JULY 31, 1951:

REFERENCE IS MADE TO LETTER DATED MAY 31, 1951, FROM THE DEPUTY UNDER SECRETARY OF STATE, RELATIVE TO EXCEPTIONS TAKEN AGAINST CERTAIN OVERPAYMENTS OF COMPENSATION TOTALING $88.97 TO MRS. CATHERINE K. FLANAGAN, FORMER EMPLOYEE OF THE STATE DEPARTMENT, UPON CERTIFICATION OF J. S. SAGONA AND F. R. YOUNG, AUTHORIZED CERTIFYING OFFICERS, OF YOUR DEPARTMENT.

IT IS STATED IN THE SAID LETTER THAT WHILE MRS. FLANAGAN ADMITS RECEIVING THE OVERPAYMENT SHE ALLEGES SHE IS FINANCIALLY UNABLE AT PRESENT TO REFUND ANY PART THEREOF, EVEN IN SMALL INSTALLMENTS. IT IS FURTHER STATED THEREIN THAT WHILE SHE HAS AMPLE ACCUMULATIONS IN THE CIVIL SERVICE RETIREMENT FUND TO DISCHARGE HER INDEBTEDNESS, SHE HAS COMPLETED MORE THAN 10 YEARS OF SERVICE AND OFFSET CANNOT BE EFFECTED UNLESS SHE FILES APPLICATION FOR REFUND OF THE RETIREMENT DEDUCTIONS WHICH SHE DECLINES TO DO, STATING THAT SHE WISHES TO AVAIL HERSELF OF FUTURE ANNUITY BENEFITS. IT IS INDICATED THAT WHILE SHE HAS EXPRESSED A WILLINGNESS TO HAVE THE AMOUNT DEDUCTED FROM THE ANNUITY WHICH, UNDER PRESENT LAW, WILL BE DUE HER SOME 25 YEARS HENCE, AND CIVIL SERVICE COMMISSION FORM 3037 HAS BEEN FILED WITH THE COMMISSION SHOWING THE AMOUNT OF THE DEBT, THE CERTIFYING OFFICERS CONTINUE TO BE HELD LIABLE, AND SHOULD THEIR LEGAL RESPONSIBILITY TO MAKE THE GOVERNMENT WHOLE BE PRESSED, THEY MAY BE FORCED TO PAY THE AMOUNT FROM PERSONAL FUNDS, IN ORDER TO CLEAR THE EXCEPTIONS. ACCORDINGLY, AND SINCE THE GOVERNMENT HAS CONTROL OF THE FUNDS OF THE PAYEE IN THE RETIREMENT ACCOUNT AND A CAVEAT HAS BEEN FILED TO CAUSE SUCH AMOUNT TO BE APPLIED IN LIQUIDATION OF THE OVERPAYMENT TO HER, THE LETTER OF THE DEPUTY UNDER SECRETARY REQUESTS THAT CONSIDERATION BE GIVEN TO RELIEVING THE CERTIFYING OFFICERS.

IN LETTER OF THIS OFFICE, DATED AUGUST 29, 1945, B-49879, TO THE SECRETARY OF WAR, A SIMILAR MATTER WAS CONSIDERED AND IT WAS HELD THEREIN AS FOLLOWS:

IT IS TRUE, AS YOU POINT OUT, THAT, IF AND WHEN THE EMPLOYEE BECOMES ENTITLED TO A REFUND OF THE AMOUNT TO HIS CREDIT IN THE CIVIL SERVICE RETIREMENT AND DISABILITY FUND SO MUCH THEREOF AS MAY BE NECESSARY COULD BE WITHHELD AND APPLIED IN LIQUIDATION OF HIS INDEBTEDNESS AND, IN THAT SENSE SAID CREDIT ACTUALLY IS AT THE DISPOSAL OF THE GOVERNMENT; BUT SUCH ACTION CANNOT BE TAKEN IMMEDIATELY OR AT ANY PREDICTABLE TIME IN THE FUTURE. CF. 21 COMP. GEN. 1000. AND, SHOULD THE EXISTING LAW BE CHANGED TO AFFORD EMPLOYEES GREATER SECURITY AND IMMUNITY WITH RESPECT TO RETIREMENT FUND BENEFITS IN THE FUTURE--- IN LINE WITH WHAT APPEARS TO BE THE GENERAL TREND OF EMPLOYEE SECURITY LEGISLATION--- EVEN THE CONTINGENT RIGHT OF SET-OFF NOW EXISTING MIGHT BE LOST TO THE GOVERNMENT.

THE INDEFINITENESS AND UNCERTAINTY OF THE GOVERNMENT'S RIGHT TO ENFORCE ANY RECOVERY IN THAT MATTER, INVOLVING, AS IT DOES, POSTPONEMENT OF FINAL SETTLEMENT ON THE PART OF THE CERTIFYING AND DISBURSING OFFICERS OF THEIR RESPECTIVE OBLIGATIONS FOR AN UNASCERTAINABLE PERIOD OF TIME, CONSTRAINS ME TO THE CONCLUSION THAT THE LIABILITIES OF SUCH OFFICERS WOULD NOT BE ADEQUATELY SECURED BY SUCH A RETIREMENT FUND CREDIT. THE DELAY, ALONE, IN EFFECTING SETTLEMENT UNDER THE SUGGESTED PROCEDURE WOULD MAKE IT INCONSISTENT WITH SOUND ACCOUNTING PRACTICES EVEN IF NOT CLEARLY CONTRARY TO PUBLIC POLICY * * *.

ACCORDINGLY, THE FACT THAT THE FORMER EMPLOYEE HAS TO HER CREDIT IN THE RETIREMENT FUND AN AMOUNT IN EXCESS OF THE OVERPAYMENT AND THAT A CAVEAT HAS BEEN PLACED AGAINST PAYMENT OF SUCH FUND WITHOUT CONSIDERING THE OVERPAYMENTS TO HER, DOES NOT WARRANT RELIEVING THE CERTIFYING OFFICERS OF RESPONSIBILITY FOR THE SAID OVERPAYMENTS. HOWEVER, THE RECORDS SHOW THE ERRONEOUS PAYMENTS WERE DISCOVERED IN THE AUDIT FROM INFORMATION SHOWN ON THE TIME, ATTENDANCE AND LEAVE RECORDS. IT DOES NOT APPEAR THAT THE CERTIFYING OFFICERS IN THE EXERCISE OF REASONABLE DILIGENCE AND INQUIRY WERE REQUIRED TO EXAMINE SUCH RECORDS FOR THE PURPOSE OF CERTIFYING THE CORRECTNESS OF AMOUNTS SHOWN ON THE PAY ROLLS SUBMITTED TO THEM FOR CERTIFICATION, AND IT IS CONCLUDED THAT THEY DID NOT KNOWN AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE ASCERTAINED THAT OVERPAYMENTS WERE INVOLVED. ACCORDINGLY, RELIEF IS HEREBY ALLOWED TO THE SAID CERTIFYING OFFICERS UNDER SECTION 2 OF THE ACT OF DECEMBER 29, 1941, 55 STAT. 875, AS TO THE INSTANT OVERPAYMENTS. APPROPRIATE NOTICES OF THE GRANTING OF SUCH RELIEF WILL BE ISSUED IN DUE COURSE, BY THE AUDIT DIVISION OF THIS OFFICE, TO THE CERTIFYING OFFICERS INVOLVED.