B-217944 October 25, 1985

B-217944: Oct 25, 1985

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Purchasers were unable to obtain title certificates because of outstanding liens. It would have discovered liens before sale. Army is authorized to use sale proceeds to obtain release of liens. If proceeds have already been deposited as miscellaneous receipts. Utah 84407 Dear Mr.Gibson: This is in response to two claims submitted to the General Accounting Office under 10 U.S.C. The first claim was submitted to GAO on March 8. Was sold by the Defense Property Disposal Office (DPDO) in Anchorage to Mr. Was submitted to GAO on May 9. Was a 1972 Ford LTD. We are enclosing for your information a copy of a decision of the Comptroller General. We concluded that a lienholder is not a proper claimant under 10 U.S.C.

B-217944 October 25, 1985

DIGEST

Mr. Dan Gibson Chief, Sales Division (DPDR-OMC) Defense Property Disposal Service Defense Logistics Agency 500 West 12th Street Ogden, Utah 84407

Dear Mr.Gibson:

This is in response to two claims submitted to the General Accounting Office under 10 U.S.C. Sec. 2575(b) and the Defense Utilization and Disposal Manual, DoD 4160.21-M, paragraph 60e. Both claims involve liens on unclaimed motor vehicles sold under the authority of 10 U.S.C. Sec. 2575(a).

The first claim was submitted to GAO on March 8, 1985. An abandoned pickup truck which had been found on the grounds of Fort Richardson, Alaska, was sold by the Defense Property Disposal Office (DPDO) in Anchorage to Mr. Linden E. Turner for $552.51. The Alaska Division of Motor Vehicles refused to issue a title certificate to tin Turner because of an outstanding lien on the vehicle held by the Fitzsimonds General Hospital Federal Credit Union, Aurora, Colorado.

The second claim, involving similar facts, was submitted to GAO on May 9, 1985. DPDO Anchorage sold a lot of abandoned vehicles to Mr. Johnny Jackson for $575. One of the vehicles, also found at Fort Richardson, was a 1972 Ford LTD. The Alaska Division of Motor Vehicles refused to issue a title certificate to Mr. Jackson because of an outstanding lien on the vehicle held by Ms. Jacquelyn Wingfield of Anchorage.

We are enclosing for your information a copy of a decision of the Comptroller General, B-210638February 8, 1984, which appears to be relevant to your claims. In that decision, we concluded that a lienholder is not a proper claimant under 10 U.S.C. Sec. 2575 which by its terms is limited to claims by the owner or the owner's heirs, next of kin, or legal representative. However, we went on to say:

"[S]ince under DoD regulations the car should not have been sold by the Army without first notifying and obtaining a release from the [lienholder] we believe the Army must be considered to have received the proceeds for the benefit of the lienholder. In such a situation, we believe it proper to turn the proceeds over to the lienholder."

Accordingly, under this decision, you are authorized to contact the lienholders and to use the sale proceeds to obtain release of the liens. /*/ (In the Johnny Jackson case, it will be necessary to administratively estimate what portion of the $575 lot price is reasonably attributable to the 1972 Ford.)

The documents submitted to us do not indicate whether the proceeds in either case are being held in a trust account or have already been deposited in the Treasury as miscellaneous receipts. If the proceeds are in a trust account, the expenditure can be made directly from that account. If the proceeds have been deposited as miscellaneous receipts, the expenditure is chargeable to account 20X1807 (Refund of Moneys Erroneously Received and Covered, established by 31 U.S.C. Sec. 1322(b)(2)). This is accomplished by having the appropriate finance office submit a properly certified Standard Form 1166 to the Treasury Department in accordance with the Treasury Fiscal Requirements Manual, vol. I, part 6, chapter 3000 (I TFRM 6-3000).

Finally, we call all your attention to DoD 4160.21-M, paragraphs 56b(2)(c) and 56c(2)( which provide that a vehicle with a lien should not be turned in to the DPDO unless a release of the lien has been obtained. It appears that, in both subject cases, Fort Richardson personnel failed to inquire as to the existence of liens, although in both cases there was contact with the Alaska Division of Motor Vehicles where the liens were on record. To prevent recurrence of problems of this type, it may be helpful to remind field offices of this requirement.

Sincerely yours,

Robert H. Hunter Assistant General Counsel

Enclosure

*. Technically, unlike the situation in B-210638, no formal "claims" have been filed in either of the subject cases. However, in the circumstances presented, this should not prevent the Government from taking appropriate action as described in the decision to resolve the situation which was created by the apparent error of Government personnel.