B-218867, OCT 15, 1985, OFFICE OF GENERAL COUNSEL
Highlights
THAT WAS OBTAINED THROUGH NEGLIGENCE OF CLERK IN ANOTHER UNIT. THE FINANCE OFFICER WAS FOUND TO HAVE MAINTAINED AN ADEQUATE SYSTEM OF PROCEDURES AND CONTROLS TO SAFEGUARD FUNDS IN THE CONTROL OF HIS SUBORDINATES. PROXIMATE CAUSE OF LOSS WAS OUTSIDE HIS CONTROL. THAT WAS OBTAINED OUTSIDE OF HER CONTROL. SHE INDICATED THAT SHE WAS IN THE PROCESS OF CHANGING HER DUTY STATIONS AND HAD LOST HER MILITARY I.D. SHE WOULD HAVE DISCOVERED THAT THE REAL SP5 KELLER WAS A WHITE FEMALE RATHER THAN A BLACK FEMALE. WAS VALID AND PROPERLY PREPARED. THERE WAS NO REASON FOR MS. FOSTER TO SUSPECT THAT A FRAUD WAS BEING PERPETRATED UPON THE FINANCE AND ACCOUNTING OFFICE SINCE THE PAYEE'S PAPERWORK WAS OSTENSIBLY IN ORDER.
B-218867, OCT 15, 1985, OFFICE OF GENERAL COUNSEL
ACCOUNTABLE OFFICERS - RELIEF - ILLEGAL OR ERRONEOUS PAYMENTS - WITHOUT FAULT OR NEGLIGENCE DIGEST: 1. ARMY FINANCE OFFICER RELIEVED OF LIABILITY FOR ERRONEOUS PAYMENT RESULTING FROM FRAUDULENTLY OBTAINED TEMPORARY I.D. THAT WAS OBTAINED THROUGH NEGLIGENCE OF CLERK IN ANOTHER UNIT. THE FINANCE OFFICER WAS FOUND TO HAVE MAINTAINED AN ADEQUATE SYSTEM OF PROCEDURES AND CONTROLS TO SAFEGUARD FUNDS IN THE CONTROL OF HIS SUBORDINATES. PROXIMATE CAUSE OF LOSS WAS OUTSIDE HIS CONTROL. ACCOUNTABLE OFFICERS - RELIEF - ILLEGAL OR ERRONEOUS PAYMENTS - WITHOUT FAULT OR NEGLIGENCE 2. ARMY CASHIER RELIEVED OF LIABILITY FOR ERRONEOUS PAYMENT WHEN CASHIER COMPLIED WITH ESTABLISHED PROCEDURES, BUT RELIED ON A FRAUDULENT I.D. THAT WAS OBTAINED OUTSIDE OF HER CONTROL.
MR. CLYDE E. JEFFCOAT: PRINCIPAL DEPUTY COMMANDER U.S. ARMY FINANCE AND ACCOUNTING CENTER INDIANAPOLIS, INDIANA 46249
THIS RESPONDS TO YOUR REQUEST OF MAY 7, 1985, FOR THE RELIEF OF LIEUTENANT COLONEL (LTC) T.F. CONRAD, FINANCE AND ACCOUNTING OFFICER, FORT MEADE, MARYLAND, AND MS. DONNA FOSTER, CASHIER, FINANCE AND ACCOUNTING OFFICE, FORT MEADE, MARYLAND, FOR THE LOSS OF $950, RESULTING FROM THE IMPROPER PAYMENT OF AN ADVANCE PAYMENT VOUCHER ON DECEMBER 7, 1983. FOR THE REASONS STATED BELOW, WE GRANT THE REQUESTED RELIEF.
THE RECORD INDICATES THE FOLLOWING FACTS. ON DECEMBER 7, 1983, A BLACK FEMALE IDENTIFYING HERSELF AS SP5 PAULINE KELLER, ON LEAVE, CAME INTO THE FINANCE AND ACCOUNTING OFFICE AT FORT MEADE, AND REQUESTED AN ADVANCE PAYMENT. SHE INDICATED THAT SHE WAS IN THE PROCESS OF CHANGING HER DUTY STATIONS AND HAD LOST HER MILITARY I.D. CARD. A MILITARY PAY CLERK, SP4 DUNKIN E. HAMLIN, ESCORTED THE IMPOSTER TO THE CUSTOMER SERVICE STATION WHERE SHE APPLIED FOR A TEMPORARY I.D. CARD. SANDRA A. FLOWERS OF THE CUSTOMER SERVICE STATION PREPARED A DA 428 APPLICATION FOR TEMPORARY I.D. CARD, VERIFYING THE INFORMATION PROVIDED BY THE IMPOSTER USING AN APPARENTLY VALID DRIVERS LICENSES AGAINST THE WORLD WIDE LOCATOR. MS. FLOWERS, HOWEVER, FAILED TO FOLLOW THE OFFICE PROCEDURE WHICH REQUIRED HER TO VERIFY THE INFORMATION ON THE DA 428 AGAINST THE INDIVIDUAL'S PERSONNEL FILE. HAD SHE CHECKED THE FILE, SHE WOULD HAVE DISCOVERED THAT THE REAL SP5 KELLER WAS A WHITE FEMALE RATHER THAN A BLACK FEMALE. MS. FLOWERS THEN ISSUED THE IMPOSTER A TEMPORARY I.D. CARD AND THE IMPOSTER RETURNED TO THE FINANCE AND ACCOUNTING OFFICE.
MR. HAMLIN THEN PREPARED A VOUCHER FOR THE ADVANCE PAYMENT BASED UPON THE FRAUDULENTLY OBTAINED I.D. AND FORGED LEAVE PAPERS AND PERMANENT CHANGE OF DUTY ORDERS. WE NOTE THAT MR. HAMLIN VIOLATED THE OFFICE PROCEDURE OF PREPARING THE VOUCHER BASED UPON THE REQUESTOR'S PERSONAL FINANCIAL RECORD (PFR). THE IMPOSTER STATED THAT HER PFR HAD BEEN MAILED TO HER NEXT DUTY STATION IN EUROPE. THEREFORE, MR. HAMLIN PREPARED THE VOUCHER BASED UPON THE PAY GRADE OF SP5 PAULINE KELLER; HIS CALCULATIONS PROVED TO BE INCORRECT.
MR. HAMLIN THEN FORWARDED THE VOUCHER TO STAFF SERGEANT (SSG) TRIDENA I. BROWN, THE CERTIFYING OFFICER. SHE TOO FAILED TO FOLLOW OFFICE PROCEDURE WHICH REQUIRED HER TO VERIFY THE PAY CLERK'S CALCULATIONS ON THE VOUCHER WITH THE REQUESTOR'S PFR. SSG BROWN THEN SIGNED THE VOUCHER AND SENT THE IMPOSTER TO THE CASHIER, MS. FOSTER.
MS. FOSTER, IN ACCORDANCE WITH HER PROCEDURES, HAD THE IMPOSTER SIGN THE VOUCHER IN HER PRESENCE, CHECKED TO SEE THAT THE TEMPORARY I.D. WAS VALID AND PROPERLY PREPARED, COMPARED THE SIGNATURE OF THE IMPOSTER ON THE I.D. WITH THAT ON THE VOUCHER, VERIFIED THE CERTIFYING OFFICER'S SIGNATURE, AND PAID THE VOUCHER. THERE WAS NO REASON FOR MS. FOSTER TO SUSPECT THAT A FRAUD WAS BEING PERPETRATED UPON THE FINANCE AND ACCOUNTING OFFICE SINCE THE PAYEE'S PAPERWORK WAS OSTENSIBLY IN ORDER.
THE IMPROPER PAYMENT WAS DISCOVERED ON DECEMBER 15, 1983, WHEN MS. KATHERINE TAMES, MILITARY PERSONNEL CLERK, FILED THE DA 428 APPLICATION FOR TEMPORARY I.D. IN THE PERSONNEL FILE OF THE REAL SP5 PAULINE KELLER AND NOTICED THAT THE PICTURE ON THE DA 428 AND THE ONE IN MS. KELLER'S FILE DID NOT MATCH.
THE INVESTIGATION WHICH FOLLOWED DISCOVERY OF THE FRAUD FAILED TO PRODUCE ANY SUSPECTS AND COLLECTION HAS NOT BEEN POSSIBLE TO DATE. WE ARE INFORMED BY THE ARMY THAT, SHOULD THE PERSON WHO PERPETRATED THE FRAUD BE IDENTIFIED, THEY WILL DILIGENTLY PURSUE COLLECTION ACTION AT THAT TIME.
AS A DISBURSING OFFICER, LTC CONRAD IS PERSONALLY LIABLE FOR DEFICIENCIES IN HIS ACCOUNTS CAUSED BY ILLEGAL, IMPROPER OR INCORRECT PAYMENTS. HOWEVER, UNDER THE PROVISIONS OF 31 U.S.C. SEC. 3527(C) (1982), THIS OFFICE IS AUTHORIZED TO GRANT RELIEF FROM LIABILITY UPON A DETERMINATION THAT THE PAYMENT WAS "*** NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE BY THE OFFICIAL." SEE GENERALLY, 54 COMP.GEN. 112 (1974).
IN CASES WHERE A SUBORDINATE ACTUALLY DISBURSES FUNDS RATHER THAN THE DISBURSING OFFICER HIMSELF, WE HAVE GRANTED RELIEF UPON A SHOWING THAT THE DISBURSING OFFICER PROPERLY SUPERVISED HIS SUBORDINATES BY MAINTAINING AN ADEQUATE SYSTEM OF PROCEDURES AND CONTROLS TO SAFEGUARD THE FUNDS, AND TOOK STEPS TO SEE THAT THE SYSTEM WAS EFFECTIVE AND BEING FOLLOWED. SEE E.G., B-217440, ET AL., APR. 16, 1985. MOREOVER, WE HAVE RECOGNIZED THAT "*** EVEN THE MOST CAREFULLY ESTABLISHED AND EFFECTIVE SUPERVISED SYSTEM CANNOT PREVENT EVERY CONCEIVABLE FORM OF CRIMINAL ACTIVITY." ID.
IN THE PRESENT CASE, IT APPEARS THAT THE LOSS OCCURRED AS A RESULT OF SKILLFULLY EXECUTED CRIMINAL ACTIVITY. WHILE IT IS TRUE THAT BOTH MR. HAMLIN AND MS. BROWN DID NOT FOLLOW PROCEDURES BY FAILING TO REQUIRE THE IMPOSTER TO PRODUCE THE PFR OF SP5 KELLER, THIS FAILURE WAS NOT THE PROXIMATE CAUSE OF THE FRAUD AND LED ONLY TO IMPROPER CALCULATION OF THE VOUCHER. WHAT LED TO THE LOSS WAS THE FAILURE OF MS. FLOWERS TO VERIFY THE I.D. APPLICATION AGAINST THE REAL PAULINE KELLER'S PERSONNEL FILE. MS. FLOWERS IS NOT AN EMPLOYEE OF THE FINANCE AND ACCOUNTING OFFICE AND THE PREVENTION OF HER ERROR WAS BEYOND THE CONTROL OF LTC CONRAD. THEREFORE, WE CANNOT SAY THAT LTC CONRAD ACTED IN BAD FAITH OR WITHOUT REASONABLE CARE. SEE B-192558, DEC. 7, 1978 (IMPROPER PAYMENTS RESULTING FROM THE PROCUREMENT OF FALSE I.D. WERE BEYOND THE CONTROL OF THE DISBURSING OFFICER).
THE CASHIER, MS. FOSTER, MADE THE PAYMENT IN THE CASE BASED UPON THE DOCUMENTS PRESENTED TO HER. THESE DOCUMENTS APPEARED TO BE VALID AND ENTITLED THE PAYEE TO RECEIVE PAYMENT. MS. FOSTER VERIFIED THE CERTIFYING OFFICER'S SIGNATURE, AND IDENTIFIED THE PAYEE AND HER SIGNATURE BEFORE MAKING WHAT APPEARED TO BE A VALID PAYMENT. NOTHING IN THE RECORD SUGGESTS THAT MS. FOSTER WAS NEGLIGENT OR THAT SHE SHOULD HAVE BEEN AWARE OF THE FRAUD BEING PERPETRATED.
WE CONCUR THAT THIS IMPROPER PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE ON THE PART OF LTC CONRAD OR MS FOSTER. ACCORDINGLY, WE GRANT RELIEF AS REQUESTED.