B-194378, FEB 7, 1980

B-194378: Feb 7, 1980

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WHILE RECONCILING HER ACCOUNT DISCOVERED A SHORTAGE IN HER ADVANCE ACCOUNT WHICH IS USED TO REIMBURSE VOUCHER EXPENDITURES. NIELSEN BEGAN WORKING AS AN ALTERNATE CASHIER AND WAS GIVEN FULL RESPONSIBILITY FOR THE FUND FROM SEPTEMBER 26 TO SEPTEMBER 30. MCNEILL WAS ON SICK LEAVE. 000 (2 - $500 STACKS OF $10 BILLS) MISSING FROM THE CASH BOX WHICH WAS STILL SECURED IN THE CASHIER'S SAFE. NEITHER CASE WAS THERE EVIDENCE OF FORCED ENTRY INTO THE CASH BOX. NOR WAS AN EXPLANATION FOR THE LOSS DISCLOSED BY THE INVESTIGATIVE EFFORTS OF THE SECRET SERVICE OR FBI. WE ARE INFORMED THAT VARIOUS SECURITY DEFICIENCIES SUCH AS INDIRECT ACCESS TO THE SAFE BY A BELL TELEPHONE EMPLOYEE AND OTHER VA EMPLOYEES WHICH EXISTED AT THE TIME THE SHORTAGES WERE DISCOVERED.

B-194378, FEB 7, 1980

OFFICE OF GENERAL COUNSEL

MAX CLELAND, VETERANS ADMINISTRATION:

THIS RESPONDS TO A LETTER FROM THE CONTROLLER OF THE VETERANS ADMINISTRATION (VA) (VA REFERENCE 047C1:1-3), RENEWING YOUR AGENCY'S REQUEST THAT RELIEF FROM LIABILITY BE GRANTED TO COVER SHORTAGES IN THE ADVANCE ACCOUNT OF BOTH MRS. MARJORIE MCNEILL, CLASS-B CASHIER AT THE VA MEDICAL CENTER, PHILADELPHIA, PENNSYLVANIA, IN THE SUM OF $501.08, AND OF MR. BRIAN NIELSEN, ALTERNATE CASHIER, IN THE AMOUNT OF $1,000.

ON SEPTEMBER 16, 1977, PRINCIPAL CASHIER, MRS. MCNEILL, WHILE RECONCILING HER ACCOUNT DISCOVERED A SHORTAGE IN HER ADVANCE ACCOUNT WHICH IS USED TO REIMBURSE VOUCHER EXPENDITURES. THE CASH HAD BEEN SECURED IN A LOCKED CASH BOX AND KEPT IN A SAFE IN THE AGENT CASHIER'S OFFICE AT THE MEDICAL CENTER. ON SEPTEMBER 19, MR. NIELSEN BEGAN WORKING AS AN ALTERNATE CASHIER AND WAS GIVEN FULL RESPONSIBILITY FOR THE FUND FROM SEPTEMBER 26 TO SEPTEMBER 30, WHILE MRS. MCNEILL WAS ON SICK LEAVE. ON THE MORNING OF SEPTEMBER 29, HE DISCOVERED $1,000 (2 - $500 STACKS OF $10 BILLS) MISSING FROM THE CASH BOX WHICH WAS STILL SECURED IN THE CASHIER'S SAFE. NEITHER CASE WAS THERE EVIDENCE OF FORCED ENTRY INTO THE CASH BOX, SAFE, OR OFFICE, NOR WAS AN EXPLANATION FOR THE LOSS DISCLOSED BY THE INVESTIGATIVE EFFORTS OF THE SECRET SERVICE OR FBI. WE ARE INFORMED THAT VARIOUS SECURITY DEFICIENCIES SUCH AS INDIRECT ACCESS TO THE SAFE BY A BELL TELEPHONE EMPLOYEE AND OTHER VA EMPLOYEES WHICH EXISTED AT THE TIME THE SHORTAGES WERE DISCOVERED, HAVE BEEN SUBSEQUENTLY REMEDIED.

IN THE ORIGINAL REQUEST FOR RELIEF, THE ADMINISTRATIVE DETERMINATIONS REQUIRED BY 31 U.S.C. SEC. 82A-1 (1970)

"(1) *** THAT SUCH LOSS *** OCCURRED WHILE SUCH OFFICER OR AGENT WAS ACTING IN THE DISCHARGE OF HIS OFFICIAL DUTIES ***; AND

"(2) THAT SUCH LOSS *** OCCURRED WITHOUT FAULT OR NEGLIGENCE ON THE PART OF SUCH OFFICER OR AGENT."

HOWEVER, THE GAO MUST BE ABLE TO CONCUR WITH SUCH ADMINISTRATIVE FINDINGS ON THE BASIS OF THE PERTINENT FACTS. OUR LETTER TO YOU DATED JULY 25, 1979, REQUESTED ADDITIONAL INFORMATION WHICH HAS NOW BEEN SUPPLIED.

WE ARE INFORMED THAT DURING THE WEEK THAT MR. NEILSEN WAS TRAINED, HE DID NOT HAVE ACCESS TO THE CASH BOX. AS A GENERAL PRACTICE, ONLY THE PERSONS ASSIGNED TO A CASH BOX HAD THE KEY TO THAT CASH BOX. ALL DUPLICATE KEYS WERE KEPT IN THE DIRECTOR'S OFFICE SUITE SAFE. THE AGENT CASHIER OFFICE KEY KEPT BY THE HOSPITAL POLICE COULD NOT BE LOCATED AFTER THE SECOND SHORTAGE WAS DISCOVERED.

WE WERE ALSO INFORMED THAT THE CASH BOXES USED DURING THE PERIOD SEPTEMBER 16 THROUGH THE 29TH WERE APPROXIMATELY TWO YEARS OLD AND COULD HAVE BEEN EASILY OPENED WITHOUT A KEY. IN FACT, THE ONE USED BY MR. NIELSEN HAD AT ONE TIME BEEN PRIED OPEN.

AS A RESULT OF THE SHORTAGES, THE VA ADVISED OUR OFFICE THAT THE FOLLOWING SECURITY RENOVATIONS WERE REQUESTED AND HAVE NOW BEEN COMPLETED:

A. ALL SAFE COMBINATIONS WERE IMMEDIATELY CHANGED.

B. ALL DOOR LOCKS WERE RE-KEYED IMMEDIATELY FOLLOWING THE OCCURRENCE.

C. DEPOSITS OF THE SAFE COMBINATIONS WERE PERSONALLY SECURED IN THE HOSPITAL DIRECTOR'S SAFE BY THE CHIEF, FISCAL SERVICE.

D. THE NEW KEY FOR THE AGENT CASHIER'S OFFICE WAS NOT PROVIDED TO THE HOSPITAL POLICE.

E. TWO NEW SECURE TELLER'S WINDOWS WERE PERMANENTLY REPLACED IN A BRICK WALL INSTEAD OF THE PREVIOUS WINDOW IN THE DOOR.

F. THE RELOCATION OF THE WINDOWS PROVIDED SPACE FOR THE SAFE AND IS NOT VISIBLY ACCESSIBLE FROM OUTSIDE THE AGENT CASHIER'S OFFICE.

G. FORMER PASS-THROUGH OPENING FROM ANOTHER OFFICE WAS ELIMINATED.

H. CALCULATORS WERE PURCHASED AND CASHIERS ARE REQUIRED TO MAINTAIN TAPES OF ALL DAILY TRANSACTIONS.

I. NEW CASH BOXES WERE OBTAINED WITH EXCELLENT KEYING MECHANISMS FOR EACH ALTERNATE CASHIER AND ADVANCES WERE PERMANENTLY ESTABLISHED RATHER THAN THE PREVIOUS UNSECURE PROCEDURES.

J. ALL THE SECOND KEYS FOR CASH BOXES HAVE BEEN PROPERLY SECURED IN THE HOSPITAL DIRECTOR'S SAFE.

K. ALL CASHIERS HAVE BEEN THOROUGHLY TRAINED ABOUT RESPONSIBILITIES FOR CASH ADVANCES AND PROPER SECURITY PROCEDURES INITIATED.

A PHYSICAL LOSS OF FUNDS, STANDING ALONE, IS SUFFICIENT TO RAISE A PRESUMPTION OF NEGLIGENCE. WE HAVE CONSISTENTLY HELD, HOWEVER, THAT THIS PRESUMPTION IS REBUTTED BY A FINDING THAT NEGLIGENCE ON THE PART OF THE PERSON (OR PERSONS) FOR WHOM RELIEF IS SOUGHT WAS NOT THE PROXIMATE CAUSE OF THE LOSS. SEE, E.G., B-183284, JUNE 17, 1975.

THE FBI REPORTS THAT:

"INVESTIGATION DETERMINED THAT FOUR INDIVIDUALS AT VA KNEW THE COMBINATION TO THIS SAFE AND THAT AT LEAST THREE INDIVIDUALS HAD KEYS TO THE AGENTS CASHIER'S OFFICE. IN ADDITION, ANOTHER KEY WAS TO BE MAINTAINED IN THE VA SECURITY OFFICE SAFE; HOWEVER, IT COULD NOT BE LOCATED. IT WAS ALSO REVEALED THAT, PRIOR TO THE DISCOVERY OF THE THEFTS, THE FRONT OF THE SAFE WAS READILY OBSERVABLE FROM OUTSIDE OF THE OFFICE THUS GIVING RISE TO SPECULATION THAT THE COMBINATION MAY HAVE BEEN COMPROMISED."

IN VIEW OF THE ACCESS TO THE AGENT CASHIER'S OFFICE (WITH ONE OF THE KEYS THERETO MISSING), THE NUMBER OF PERSONS WITH ACCESS TO THE SAFE, AND THE LACK OF SECURITY PROVIDED BY THE CASH BOXES, AMOUNTING TO A FAILURE BY THE AGENCY TO PROVIDE AN ADEQUATELY SECURE PLACE FOR THE FUNDS TO BE KEPT, WE WILL CONCUR IN YOUR AGENCY'S DETERMINATION THAT THE LOSS OCCURRED AS A RESULT OF THESE CONDITIONS AND NOT BECAUSE OF THE FAULT OR NEGLIGENCE ON THE PART OF THE ACCOUNTABLE OFFICERS.

ACCORDINGLY, RELIEF MAY BE GRANTED FROM LIABILITY FOR BOTH MRS. MCNEILL AND MR. NIELSEN IN THE AMOUNTS REQUESTED. THE PROPER VETERANS ADMINISTRATION APPROPRIATION MAY BE CHARGED WITH THE SHORTAGES.