B-215229; B-215331; B-215443, JUL 5, 1984, OFFICE OF GENERAL COUNSEL

B-215229,B-215443,B-215331: Jul 5, 1984

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DISBURSING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - NOT RESULT OF BAD FAITH OR NEGLIGENCE DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICER AND HIS DEPUTY UNDER 31 U.S.C. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENTS IN THREE SEPARATE CASES RESULTING FROM THE RESPECTIVE PAYEES' NEGOTIATION OF BOTH ORIGINAL AND SUBSTITUTE MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE SUBSTITUTE CHECKS. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICER. SUBSEQUENT AGGRESSIVE COLLECTION ATTEMPTS HAVE BEEN PURSUED. WE HAVE CONSOLIDATED THESE REQUESTS BECAUSE THEY EACH INVOLVE A SUBSTANTIALLY IDENTICAL FACTUAL SITUATION. 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-215229; B-215331; B-215443, JUL 5, 1984, OFFICE OF GENERAL COUNSEL

DISBURSING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - NOT RESULT OF BAD FAITH OR NEGLIGENCE DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICER AND HIS DEPUTY UNDER 31 U.S.C. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENTS IN THREE SEPARATE CASES RESULTING FROM THE RESPECTIVE PAYEES' NEGOTIATION OF BOTH ORIGINAL AND SUBSTITUTE MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE SUBSTITUTE CHECKS. IN ALL THREE CASES, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICER, AND SUBSEQUENT AGGRESSIVE COLLECTION ATTEMPTS HAVE BEEN PURSUED.

MR. CLYDE E. JEFFCOAT PRINCIPAL DEPUTY COMMANDER U.S. ARMY FINANCE AND ACCOUNTING CENTER INDIANAPOLIS, INDIANA 46249

DEAR MR. JEFFCOAT:

THIS RESPONDS TO THREE SEPARATE REQUESTS THAT WE RELIEVE MAJOR T. WAGNER, FINANCE CORPS, FINANCE AND ACCOUNTING OFFICER, U.S. ARMY FINANCE AND ACCOUNTING CENTER, EUROPE, AND HIS DEPUTY, SERGEANT FIRST CLASS E. EUTITUS, PURSUANT TO 31 U.S.C. SEC. 3527(C), FOR LIABILITY FOR IMPROPER PAYMENTS CHARGED TO MAJOR WAGNER'S ACCOUNT. WE HAVE CONSOLIDATED THESE REQUESTS BECAUSE THEY EACH INVOLVE A SUBSTANTIALLY IDENTICAL FACTUAL SITUATION-- THE NEGOTIATION BY A PAYEE OF BOTH AN ORIGINAL CHECK FOR HIS OR HER CIVILIAN PAY AND A SUBSTITUTE CHECK ISSUED LATER BY THE DEPUTY FINANCE OFFICER WHEN THE PAYEE ALLEGED NON RECEIPT OF THE ORIGINAL CHECK AND SIGNED A REQUEST FOR STOP PAYMENT ON THE ORIGINAL CHECK.

GAO NO. DATE OF REQUEST PAYEE AMT. OF CHECK

B-215229 MAY 8, 1984 JOYCE A. SANDERS $234.42

B-215331 MAY 22, 1984 JAMES B. MILLHAEM $283.61

B-215443 MAY 30, 1984 CHARLOTTE A. LAWSON $516.79

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." WE HAVE RECOGNIZED THAT IN "DUPLICATE CHECK" CASES, SUCH AS THIS, 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." COMP.GEN. 91, 94 (1982). RELIEF IS GRANTED WHEN THE RECORD INDICATES THAT THE DISBURSING OFFICER 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 DISBURSING OFFICER AND THAT A DILIGENT EFFORT WAS MADE TO COLLECT THE OVERPAYMENT. ID.

THE SUBSTITUTE CHECKS IN THESE CASES WERE SIGNED BY THE FINANCE AND ACCOUNTING OFFICER'S DEPUTY WHICH REQUIRES THAT WE RELIEVE THE FINANCE AND ACCOUNTING OFFICER IN HIS SUPERVISORY CAPACITY, AS WELL AS THE DEPUTY AS DISBURSING OFFICER. WE HAVE CONCLUDED THAT WHERE A SUBSTITUTE CHECK IS PROPERLY ISSUED, THE SUPERVISOR IS NO MORE NEGLIGENT THAN THE DEPUTY WHO ACTUALLY SIGNED THE CHECK. B-212576, ET AL., DECEMBER 2, 1983.

IT APPEARS THAT IN ALL THREE CASES, THE REQUEST FOR STOP PAYMENT AND THE ISSUANCE OF A SUBSTITUTE CHECK WERE TIMELY AND WITHIN THE BOUNDS OF DUE CARE, AS PRESCRIBED BY ARMY REGULATIONS. SEE AR 37-103, PARAS. 4 161, 4- 162 AND 4-164. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICERS.

AS WE HAVE NOTED BEFORE, THE SETTLEMENT OF A DISBURSING OFFICER'S ACCOUNT DOES NOT RELIEVE THE AGENCY OF ITS RESPONSIBILITY TO PURSUE COLLECTION ACTION ON THE DEBT CREATED BY THE IMPROPER PAYMENT.

SINCE IT APPEARS THAT AGGRESSIVE COLLECTION ATTEMPTS ARE BEING MADE TO COLLECT ALL THREE DEBTS IN ACCORDANCE WITH THE FEDERAL CLAIMS COLLECTION ACT, AS AMENDED, 31 U.S.C. SEC. 3711 ET SEQ., AND THE PROCEDURES OUTLINED IN OUR DECISION 62 COMP.GEN. 476 (1983), RELIEF IS GRANTED AS REQUESTED.