B-113190, JANUARY 23, 1953, 32 COMP. GEN. 332

B-113190: Jan 23, 1953

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A BONDED EMPLOYEE AND HIS SURETY ARE LIABLE UNDER THE TERMS OF THE BOND FOR PECUNIARY LOSSES. WHICH ARE SUSTAINED BY THE GOVERNMENT. 1953: REFERENCE IS MADE TO LETTER DATED DECEMBER 15. REQUESTING A DECISION RELATIVE TO THE LIABILITY OF INDIVIDUAL EMPLOYEES WHO ARE REQUIRED BY THE DEPARTMENT OF AGRICULTURE TO SUPPLY FAITHFUL PERFORMANCE BONDS WHERE PECUNIARY LOSSES TO THE GOVERNMENT ARE OCCASIONED BY NEGLECT OF DUTIES. WHEREIN IT WAS STATED THAT THERE IS NO AUTHORITY TO HOLD AN EMPLOYEE LIABLE FOR A PECUNIARY LOSS SUSTAINED BY THE GOVERNMENT AS A RESULT OF ERROR IN JUDGMENT OR NEGLECT OF DUTY IN THE ABSENCE OF SPECIFIC ADMINISTRATIVE REGULATIONS ISSUED PURSUANT TO LAW PROVIDING FOR THE ASSESSMENT OF CHARGES AGAINST EMPLOYEES UNDER SUCH CIRCUMSTANCES.

B-113190, JANUARY 23, 1953, 32 COMP. GEN. 332

OFFICERS AND EMPLOYEES - BONDED - LIABILITY FOR GOVERNMENT LOSSES RESULTING FROM ERROR OR NEGLECT OF DUTY - BONDED EMPLOYEES THE EXECUTION OF A FAITHFUL PERFORMANCE BOND BY AN EMPLOYEE GIVES SPECIFIC NOTICE TO THE EMPLOYEE OF HIS POTENTIAL LIABILITY AND CONSTITUTES A PART OF HIS CONTRACT OF EMPLOYMENT AND THEREFORE, A BONDED EMPLOYEE AND HIS SURETY ARE LIABLE UNDER THE TERMS OF THE BOND FOR PECUNIARY LOSSES, DUE TO NEGLECT OF DUTY, ERROR, OR MISTAKE IN JUDGMENT, WHICH ARE SUSTAINED BY THE GOVERNMENT.

ACTING COMPTROLLER GENERAL YATES TO THE SECRETARY OF AGRICULTURE, JANUARY 23, 1953:

REFERENCE IS MADE TO LETTER DATED DECEMBER 15, 1952, FROM THE ASSISTANT SECRETARY OF AGRICULTURE, REQUESTING A DECISION RELATIVE TO THE LIABILITY OF INDIVIDUAL EMPLOYEES WHO ARE REQUIRED BY THE DEPARTMENT OF AGRICULTURE TO SUPPLY FAITHFUL PERFORMANCE BONDS WHERE PECUNIARY LOSSES TO THE GOVERNMENT ARE OCCASIONED BY NEGLECT OF DUTIES, ERRORS, AND MISTAKES IN JUDGMENT. THE LETTER REFERS TO 25 COMP. GEN. 299, AND 26 ID. 866, WHEREIN IT WAS STATED THAT THERE IS NO AUTHORITY TO HOLD AN EMPLOYEE LIABLE FOR A PECUNIARY LOSS SUSTAINED BY THE GOVERNMENT AS A RESULT OF ERROR IN JUDGMENT OR NEGLECT OF DUTY IN THE ABSENCE OF SPECIFIC ADMINISTRATIVE REGULATIONS ISSUED PURSUANT TO LAW PROVIDING FOR THE ASSESSMENT OF CHARGES AGAINST EMPLOYEES UNDER SUCH CIRCUMSTANCES.

THE CITED DECISIONS BY CLEAR INFERENCE PROVIDE THAT WHERE REGULATIONS MAKING THE EMPLOYEE LIABLE EXIST THEY CONSTITUTE A PART OF HIS CONTRACT OF EMPLOYMENT AND THAT HE IS LIABLE FOR LOSSES SUSTAINED BY THE UNITED STATES IN ACCORDANCE WITH THE PROVISIONS OF SUCH REGULATIONS. THE DECISIONS DID NOT INVOLVE BONDED EMPLOYEES AND THIS OFFICE PERCEIVES NO DISTINCTION BETWEEN ESTABLISHMENT OF PECUNIARY RESPONSIBILITY BY REGULATIONS BROUGHT TO THE EMPLOYEE'S ATTENTION AND CONSTITUTING A PART OF HIS CONTRACT OF EMPLOYMENT AND THE ESTABLISHING OF SUCH PECUNIARY RESPONSIBILITY BY REQUIRING OF HIM A BOND UNDER WHICH HE ASSUMES SUCH RESPONSIBILITY, THE BOND GIVING HIM SPECIFIC NOTICE OF HIS POTENTIAL LIABILITY AND CONSTITUTING A PART OF HIS CONTRACT OF EMPLOYMENT.

ACCORDINGLY, A BONDED EMPLOYEE AND HIS SURETY WOULD BE LIABLE FOR PECUNIARY LOSSES BY THE GOVERNMENT IN ACCORDANCE WITH THE TERMS OF HIS BOND. IN THIS CONNECTION, IT SHOULD BE NOTED THAT INASMUCH AS SUCH BONDS ARE INDEMNITY BONDS, IT WOULD BE NECESSARY TO ESTABLISH A PECUNIARY LOSS TO THE GOVERNMENT RESULTING FROM A VIOLATION BY THE EMPLOYEE OF THE OBLIGEE'S REGULATIONS, ORDERS AND INSTRUCTIONS APPLICABLE TO HIS DUTIES AND COVERED BY THE TERMS OF THE BOND BEFORE RECOVERY THEREUNDER CAN BE OBTAINED.