B-212576, B-212842, B-212844, B-212901, DEC 2, 1983, OFF. OF GEN. COUNSEL

B-212576,B-212901,B-212844,B-212842: Dec 2, 1983

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WE HAVE CONSOLIDATED THESE REQUESTS BECAUSE THEY EACH INVOLVE A SUBSTANTIALLY IDENTICAL FACT SITUATION - THE NEGOTIATION BY A PAYEE OF BOTH AN ORIGINAL CHECK AND A SUBSEQUENTLY ISSUED REPLACEMENT CHECK BY THE FINANCE OFFICER'S DEPUTY. A TREASURY CHECK WAS ISSUED TO AN ARMY MEMBER OR CIVILIAN EMPLOYEE. A STOP PAYMENT ORDER WAS THEN PLACED ON EACH CHECK AND A REPLACEMENT CHECK WAS ISSUED TO THE PAYEE. BOTH THE ORIGINAL CHECK AND THE SUBSTITUTE CHECK WERE SUCCESSFULLY NEGOTIATED BY THE PAYEE AND PAID BY THE TREASURY. SEC. 3527(C) TO RELIEVE A DISBURSING OFFICER FROM LIABILITY FOR A DEFICIENCY RESULTING FROM AN IMPROPER PAYMENT UPON DETERMINING "THAT THE PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE BY THE OFFICIAL.".

B-212576, B-212842, B-212844, B-212901, DEC 2, 1983, OFF. OF GEN. COUNSEL

PRECIS-UNAVAILABLE

MR. CLYDE E. JEFFCOAT, PRINCIPAL DEPUTY COMMANDER U. S. ARMY FINANCE AND ACCOUNTING CENTER DEPARTMENT OF THE ARMY:

THIS RESPONDS TO FOUR SEPARATE REQUESTS THAT WE RELIEVE VARIOUS ARMY FINANCE AND ACCOUNTING OFFICERS UNDER 31 U.S.C. SEC. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENTS MADE FROM THEIR ACCOUNTS. WE HAVE CONSOLIDATED THESE REQUESTS BECAUSE THEY EACH INVOLVE A SUBSTANTIALLY IDENTICAL FACT SITUATION - THE NEGOTIATION BY A PAYEE OF BOTH AN ORIGINAL CHECK AND A SUBSEQUENTLY ISSUED REPLACEMENT CHECK BY THE FINANCE OFFICER'S DEPUTY. AS DISCUSSED BELOW, YOUR SUBMISSIONS PROVIDE THE NECESSARY ELEMENTS FOR RELIEF, AND WE GRANT RELIEF IN EACH CASE.

EACH OF THE IMPROPER PAYMENTS IN QUESTION AROSE IN A SUBSTANTIALLY SIMILAR FACT SITUATION. IN EACH CASE, A TREASURY CHECK WAS ISSUED TO AN ARMY MEMBER OR CIVILIAN EMPLOYEE. SHORTLY THEREAFTER, IN EACH CASE, THE PAYEE REPRESENTED TO ARMY DISBURSING OFFICIALS THAT THE CHECK HAD NOT BEEN RECEIVED. A STOP PAYMENT ORDER WAS THEN PLACED ON EACH CHECK AND A REPLACEMENT CHECK WAS ISSUED TO THE PAYEE. IN ALL CASES, BOTH THE ORIGINAL CHECK AND THE SUBSTITUTE CHECK WERE SUCCESSFULLY NEGOTIATED BY THE PAYEE AND PAID BY THE TREASURY.

THIS OFFICE HAS AUTHORITY UNDER 31 U.S.C. SEC. 3527(C) TO RELIEVE A DISBURSING OFFICER FROM LIABILITY FOR A DEFICIENCY RESULTING FROM AN IMPROPER PAYMENT UPON DETERMINING "THAT THE PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE BY THE OFFICIAL." RELIEF OF AN ACCOUNTABLE OFFICER DOES NOT AFFECT THE LIABILITY TO THE GOVERNMENT OF THE PERSON WHO RECEIVED AN IMPROPER PAYMENT. AS WE DISCUSSED IN 62 COMP.GEN.91 (1982), WE ARE CONTINUING TO HANDLE DUPLICATE CHECK CASES UNDER THIS AUTHORITY PENDING CONGRESSIONAL CLARIFICATION OF THIS ISSUE. WE HAVE RECOGNIZED THAT IN "DUPLICATE CHECK" CASES, SUCH AS THOSE BEFORE US, THE IMPROPER PAYMENT "IS TOTALLY BEYOND THE RESPONSIBILITY AND CONTROL OF THE AGENCY DISBURSING OFFICER AND IS SOMETHING FOR WHICH HE SHOULD INCUR NO LIABILITY." 62 COMP.GEN. 91, 94 (1982). RELIEF IS GRANTED WHEN THE RECORD INDICATES THAT ARMY PERSONNEL ACTED WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY APPLICABLE REGULATIONS, THAT THERE IS NO EVIDENCE OF BAD FAITH ON THE PART OF THE ACCOUNTABLE OFFICER, AND THAT A DILIGENT EFFORT WAS MADE TO COLLECT THE OVERPAYMENT. 62 COMP.GEN. 91.

WE FIND THAT THOSE REQUIREMENTS ARE MET IN EACH OF THE CASES AT HAND. APPEARS THAT THE REQUEST FOR STOP PAYMENT AND THE ISSUANCE OF A SUBSTITUTE CHECK IN THESE CASES WERE WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY ARMY REGULATIONS. SEE AR 37-103, PARAGRAPHS 4-161, 4 162 AND 4-164. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE ACCOUNTABLE OFFICERS. IN ADDITION, SINCE IT APPEARS THAT AGGRESSIVE COLLECTION ATTEMPTS ARE BEING MADE IN ACCORDANCE WITH THE FEDERAL CLAIMS COLLECTION ACT AND THE PROCEDURES OUTLINED IN OUR DECISION, 62 COMP.GEN. (B-211440 ET. AL. JUNE 20, 1983), RELIEF IS GRANTED AS REQUESTED IN THE FOLLOWING CASES:

GAO# ACCOUNTABLE OFFICER DUP. PAYEE AMOUNT

B-212576 LT. COL. T.O. LANGHORNE JEFFREY E. KELLY $432.00 B-212842 MAJOR R.C. MCCLELLAN DARREL W. HOLT 370.65 B-212844 MAJOR J.H. FUDOLD KARENSUE JOHNSON 118.00 B-212901 LT. COL. J.T. BOURLAND HOMER A BATTISTE 347.92

AS WE NOTED IN 62 COMP.GEN. (B-211440 ET AL., SUPRA), THERE APPEARS TO BE SOME MISUNDERSTANDING AS TO WHO ARE THE ACCOUNTABLE OFFICERS IN THE CASES SUBMITTED TO THIS OFFICE. SINCE MOST OF THE REQUESTS FOR RELIEF ARE FOR THE SUPERVISORY OFFICERS WHO ARE RESPONSIBLE FOR THE ACCOUNTS IN WHICH THE SHORTAGES APPEAR, IT IS SOMETIMES UNCLEAR WHETHER YOU CONSIDER THE ACTUAL DISBURSING OFFICER OR CLERK WHO PAID OUT MONEY OR ISSUED A CHECK NOT BE LIABLE AND SO NOT TO REQUIRE RELIEF (AS THEY DO) OR WHETHER YOU INTEND TO RECOVER THE LOSS FROM THE DISBURSING OFFICER IN THE CASE OF ERRONEOUS PAYMENTS. FOR EXAMPLE, IN EACH OF THESE DUPLICATE CHECK CASES, THE OFFICER SIGNING THE DUPLICATE CHECK IS THE DEPUTY OF THE OFFICER FOR WHOM RELIEF IS REQUESTED. IN SUCH CASES BOTH THE SUPERVISOR AND THE DEPUTY MUST BE RELIEVED - THE SUPERVISOR IN HIS SUPERVISORY CAPACITY AND THE DEPUTY AS DISBURSING OFFICER. HOWEVER, SINCE IN THESE PARTICULAR CASES THE DEPUTY IS NO MORE NEGLIGENT THAN THE CHIEF, WE CONCLUDE THAT YOUR INTENT IS TO REQUEST RELIEF FOR THESE DEPUTIES AS WELL AND WE GRANT THEM RELIEF ACCORDINGLY. IN FUTURE SUBMISSIONS, PLEASE INDICATE THOSE PERSONS YOU DEEM ACCOUNTABLE OFFICERS IN A PARTICULAR FACT SITUATION AND THOSE FOR WHOM YOU ARE REQUESTING RELIEF.

FINALLY, WE NOTE THAT IN B-212842 THE REQUEST FOR RELIEF WAS UNTIMELY. WE AGAIN REMIND YOU THAT YOUR AGENCY IS ASKED TO REPORT ANY FINANCIAL IRREGULARITIES TO OUR OFFICE WITHIN 2 YEARS FROM THE TIME THE LOSS IS REFLECTED IN A FINANCE AND ACCOUNTING OFFICER'S ACCOUNT. 7 GAO POLICY AND PROCEDURES MANUAL 28.14. THIS WILL AVOID ANY POTENTIAL STATUTE OF LIMITATION PROBLEMS.