B-198451.2,L/M, SEP 15, 1982, OFFICE OF GENERAL COUNSEL

B-198451.2,L/M: Sep 15, 1982

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

RELIEF IS NOT NECESSARY AS THE ACCOUNTS MUST BE CONSIDERED AS SETTLED. GAMBLE WAS THE ADMINISTRATIVE OFFICER. HE WAS ALSO THE FISCAL ADMINISTRATOR FOR THE CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED SERVICES (CHAMPUS). CHECKS WERE ISSUED IN ACCORDANCE WITH THE VOUCHERS. THE HOSPITALS' TRUE CHARGES WERE PAID IN CASH BY MR. GAMBLE'S FRAUDULENT ACTIVITY WAS DISCOVERED IN AUGUST 1978. THE REQUEST FOR RELIEF WAS ACCOMPANIED BY AN AGENCY DETERMINATION THAT THE IMPROPER PAYMENTS WERE NOT THE RESULT OF BAD FAITH OR A LACK OF DUE CARE ON THE PART OF ANY OF THE FINANCE OFFICERS. THE LONG PERIOD OF TIME WHICH HAS PASSED SINCE THE IMPROPER PAYMENTS WERE MADE RAISES A THRESHOLD ISSUE AS TO OUR AUTHORITY TO CONSIDER THIS CASE.

B-198451.2,L/M, SEP 15, 1982, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

BRIGADIER GENERAL ROBERT B. ADAMS, DEPARTMENT OF THE ARMY:

THIS RESPONDS TO YOUR REQUEST THAT FIVE FINANCE OFFICERS BE RELIEVED OF LIABILITY FOR DEFICIENCIES IN THEIR ACCOUNTS AMOUNTING TO $1,509,499.00. BECAUSE THE 3-YEAR PERIOD PRESCRIBED BY 31 U.S.C. SEC. 82I HAS ELAPSED, RELIEF IS NOT NECESSARY AS THE ACCOUNTS MUST BE CONSIDERED AS SETTLED.

THE DEFICIENCIES AROSE IN THE FOLLOWING MANNER: MICHAEL L. GAMBLE WAS THE ADMINISTRATIVE OFFICER, OFFICE OF THE COMPTROLLER, U. S. ARMY HOSPITAL, SEOUL, KOREA. HE WAS ALSO THE FISCAL ADMINISTRATOR FOR THE CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED SERVICES (CHAMPUS). BEGINNING IN 1975, MR. GAMBLE DIVERTED CHAMPUS FUNDS TO HIS OWN ACCOUNT. WORKING THROUGH AN AGENT, HE CONVINCED A NUMBER OF HOSPITALS PROVIDING SERVICES TO PATIENTS UNDER THE CHAMPUS PROGRAM TO SUBMIT INCOMPLETE DOCUMENTATION IN SUPPORT OF THEIR CLAIMS FOR CHAMPUS PAYMENTS. MR. GAMBLE THEN COMPLETED THE FORMS, GROSSLY INFLATING THE AMOUNTS OF THE HOSPITAL CHARGES AND INDICATING THAT PAYMENTS SHOULD BE SENT TO ONE OF FOUR POST OFFICE BOXES THAT EITHER HAD BEEN RENTED BY MR. GAMBLE OR HAD BEEN MADE AVAILABLE FOR HIS USE. HE CAUSED VOUCHERS TO BE PREPARED IN ACCORDANCE WITH THE ALTERED CLAIM FORMS AND CERTIFIED THE VOUCHERS AS CORRECT TO THE FINANCE AND ACCOUNTING OFFICE. CHECKS WERE ISSUED IN ACCORDANCE WITH THE VOUCHERS. MR. GAMBLE WOULD THEN PICK UP THE CHECKS FROM THE POST OFFICE BOXES, FORGE THE ENDORSEMENTS OF THE HOSPITALS, AND DEPOSIT THE CHECKS INTO VARIOUS BANK ACCOUNTS. THE HOSPITALS' TRUE CHARGES WERE PAID IN CASH BY MR. GAMBLE'S AGENT, PRESUMABLY WITH MONEY SUPPLIED TO HIM BY MR. GAMBLE.

MR. GAMBLE'S FRAUDULENT ACTIVITY WAS DISCOVERED IN AUGUST 1978. OF THE TOTAL OF $1,937,835.32 IN INFLATED CHAMPUS PAYMENTS, $428,336.32 HAS BEEN RECOVERED FROM MR. GAMBLE. EFFORTS CONTINUE TO COLLECT ADDITIONAL MONIES FROM HIM.

THE RECORD SHOWS THAT CHAMPUS OVERPAYMENTS RESULTING FROM MR. GAMBLE'S FRAUDULENT CERTIFICATION BEGAN IN 1975 AND CONTINUED UNTIL AUGUST 3, 1978. DURING THIS PERIOD, THE FOLLOWING FIVE INDIVIDUALS SERVED AS FINANCE OFFICER AT THE UNITED STATES ARMY FINANCE AND ACCOUNTING OFFICE, SEOUL, KOREA FOR THE TIME INDICATED:

LT. COL. C. L. WILEY 1/75 - 6/75 LT. COL. H. J. KING 7/75 - 12/13/75 MAJ. J. F. ADAMS 12/14/75 - 5/76 LT. COL. L. A. EMERSON 6/76 - 12/77 LT. COL. J. F. SUSZYNSKI 1/78 - 8/78

THE ACCOUNTS OF THESE FIVE FINANCE OFFICERS SHOW DEFICIENCIES FOR THE JANUARY 1975 TO AUGUST 1978 PERIOD AMOUNTING IN THE AGGREGATE TO $1,509,499.00. THIS OFFICE HAS BEEN ASKED TO RELIEVE ALL FIVE OF LIABILITY FOR THESE DEFICIENCIES PURSUANT TO OUR AUTHORITY UNDER 31 U.S.C. SEC. 82A-2. THE REQUEST FOR RELIEF WAS ACCOMPANIED BY AN AGENCY DETERMINATION THAT THE IMPROPER PAYMENTS WERE NOT THE RESULT OF BAD FAITH OR A LACK OF DUE CARE ON THE PART OF ANY OF THE FINANCE OFFICERS.

THE LONG PERIOD OF TIME WHICH HAS PASSED SINCE THE IMPROPER PAYMENTS WERE MADE RAISES A THRESHOLD ISSUE AS TO OUR AUTHORITY TO CONSIDER THIS CASE. UNDER 31 U.S.C. SEC. 82I, ACCOUNTS OF ACCOUNTABLE OFFICERS MUST BE SETTLED WITHIN 3 YEARS FROM THE DATE THE ACCOUNT IS RECEIVED BY GAO (UNLESS A LOSS IS DUE TO FRAUD OR CRIMINALITY ON THE PART OF THE ACCOUNTABLE OFFICER IN QUESTION). SECTION 82I IS A STATUTE OF LIMITATIONS WHICH ACTS TO BAR GAO FROM RAISING A CHARGE AGAINST AN ACCOUNTABLE OFFICER AFTER THE EXPIRATION OF THE PRESCRIBED 3-YEAR PERIOD. BECAUSE ACCOUNTS OF ACCOUNTABLE OFFICERS ARE NO LONGER REQUIRED TO BE TRANSMITTED PHYSICALLY TO GAO FOR SETTLEMENT, WE CONSIDER THE DATE OF RECEIPT BY THE AGENCY OF SUBSTANTIALLY COMPLETE ACCOUNTS, OR WHERE RECORDS ARE RETAINED AT THE SITE, THE END OF THE PERIOD OF THE ACCOUNT, AS THE POINT FROM WHICH THE 3-YEAR LIMITATIONS PERIOD BEGINS TO RUN. B-181466, JULY 10, 1974.

WE ALSO HAVE VIEWED SECTION 82I AS LIMITING THE AUTHORITY OF GAO TO RELIEVE ACCOUNTABLE OFFICERS. WE HAVE HELD THAT AFTER THE EXPIRATION OF THE 3-YEAR PERIOD, THE ACCOUNT OF AN ACCOUNTABLE OFFICER MUST BE REGARDED AS SETTLED. THEREAFTER GAO HAS NO OCCASION TO CONSIDER A REQUEST FOR RELIEF. B-199542, NOVEMBER 7, 1980.

IN THIS CASE, IT IS NOT ALTOGETHER CERTAIN PRECISELY WHEN THE ACCOUNTS OF EACH OF THE FINANCE OFFICERS FOR EVERY TIME PERIOD BECAME SUBSTANTIALLY COMPLETE. A FINAL REPORT ON THIS MATTER, PREPARED BY THE UNITED STATES ARMY CRIMINAL INVESTIGATION COMMAND, SHOWS THAT IMPROPER PAYMENTS, COMMENCING AT AN UNKNOWN TIME IN JANUARY 1975, AND CONTINUING UNTIL AUGUST 3, 1978, WERE REPORTED ON OCTOBER 23, 1978. WE CAN SAFELY ASSUME, THEREFORE, THAT WHEN THE SERIES OF IMPROPER PAYMENTS WAS REPORTED ON OCTOBER 23, 1978, ALL ACCOUNTS UPON WHICH THE REPORT WAS BASED WERE SUBSTANTIALLY COMPLETE. ACCORDINGLY, WE CONSIDER THE 3-YEAR PERIOD PRESCRIBED BY 31 U.S.C. SEC. 82I TO HAVE COMMENCED NO LATER THAN OCTOBER 23, 1978. SINCE THERE IS NO EVIDENCE OF FRAUD OR CRIMINAL BEHAVIOR BY ANY OF THE FINANCE OFFICERS, THEIR ACCOUNTS MUST BE CONSIDERED TO BE SETTLED AS OF OCTOBER 23, 1981.

SECTION 82I MAKES A SETTLEMENT EFFECTED BY THE PASSAGE OF TIME FINAL AND CONCLUSIVE UPON GAO. SINCE NO DEBT IS OWED THE GOVERNMENT BASED ON THE DEFICIENCIES IN THE ACCOUNTS OF THE ACCOUNTABLE OFFICERS IN THIS CASE, THERE IS NO OCCASION FOR US TO CONSIDER ANY REQUESTS FOR RELIEF. SEE B-201840, APRIL 6, 1981. OF COURSE, THE SETTLEMENT OF THE ACCOUNTABLE OFFICERS' ACCOUNTS DOES NOT RELIEVE THE AGENCY OF ITS RESPONSIBILITY TO CONTINUE TO PURSUE COLLECTION FROM MR. GAMBLE.

TO AVOID THIS KIND OF PROBLEM, THE GAO POLICY AND PROCEDURES MANUAL FOR THE GUIDANCE OF FEDERAL AGENCIES CALLS FOR PROMPT REPORTS OF FISCAL IRREGULARITIES BOTH TO AVOID THE RUNNING OF THE STATUTE OF LIMITATIONS AND TO DETERMINE MORE QUICKLY WHETHER RELIEF SHOULD BE GRANTED. SPECIFICALLY, WE REQUIRE A REPORT OF IRREGULARITIES (WHICH HAVE NOT BEEN RESOLVED ADMINISTRATIVELY) NO LATER THAN 2 YEARS AFTER THE DATE THE ACCOUNTS ARE MADE AVAILABLE TO THIS OFFICE FOR AUDIT. FRAUD OR OTHER SERIOUS IRREGULARITIES OF SUBSTANTIAL AMOUNT OR SIGNIFICANCE MUST BE REPORTED AS SOON AS POSSIBLE. 7 GAO POLICY AND PROCEDURES MANUAL SEC. 28.14.