B-220156, DEC 11, 1985, OFFICE OF GENERAL COUNSEL

B-220156, DEC 11, 1985, OFFICE OF GENERAL COUNSEL

ACCOUNTABLE OFFICERS - PHYSICAL LOSSES, ETC. OF FUNDS, VOUCHERS, ETC. - CASHIERS, ETC. - IMPREST FUND - RELIEF GRANTED DIGEST: U.S. ARMY AND ACCOUNTING OFFICER IS RELIEVED OF LIABILITY FOR IMPROPER PAYMENT MADE BY SUBORDINATE CASHIER SINCE HE MAINTAINED AND SUPERVISED ADEQUATE SYSTEM OF PROCEDURES TO PREVENT IMPROPER PAYMENTS. CASHIER IS ALSO RELIEVED SINCE HE FOLLOWED ALL EXISTING PROCEDURES ALTHOUGH SUCH PROCEDURES WERE CIRCUMVENTED BY PAYEE WHO PERPETRATED A CRIMINAL SCHEME TO OBTAIN FUNDS BY CASHING CHECKS ON A TOTALLY WITHDRAWN ACCOUNT.

MR. CLYDE E. JEFFCOAT:

THIS IS IN RESPONSE TO YOUR REQUEST THAT RELIEF BE GRANTED UNDER 31 U.S.C. SEC. 3527(C), FOR TWO IMPROPER PAYMENTS TOTALING $990 CHARGEABLE TO THE ACCOUNT OF MAJOR (MAJ) J. D. HARWOOD, FINANCE OFFICER, 501ST AREA FINANCE SUPPORT CENTER AND PAID BY SPECIALIST 4 (SP4) DAVID L. PANTLE. FOR THE REASONS INDICATED BELOW, RELIEF IS GRANTED TO BOTH MAJ HARWOOD AND SP4 PANTLE.

ON SEPTEMBER 23 AND OCTOBER 4, 1983, THE 501ST AREA FINANCE SUPPORT CENTER RECEIVED TWO DISHONORED CHECKS DATED AUGUST 29 AND 30, 1983, EACH IN THE AMOUNT OF $495. THESE CHECKS HAD BEEN DRAWN ON AN ACCOUNT OF MR. ALAN J. SPINA THAT HAD BEEN CLOSED PRIOR TO PRESENTMENT OF THE CHECKS. IMMEDIATE ATTEMPTS MADE TO RECOVER THE MONEY WERE UNSUCCESSFUL AS MR. SPINA COULD NOT BE FOUND. MAJ HARWOOD SUBSEQUENTLY DISCOVERED THAT MR. SPINA WAS WANTED BY THE NUERNBURG MILITARY CRIMINAL INVESTIGATION DIVISION (CID), FOR PASSING NUMEROUS DISHONORED CHECKS. FURTHER INVESTIGATION REVEALED THAT AT THE TIME SP4 PANTLE CASHED THE TWO CHECKS AT ISSUE, MR. SPINA POSSESSED WHAT APPEARED TO BE A VALID MILITARY IDENTIFICATION CARD AND WAS NOT ON ANY BAD CHECK LISTS.

AS ACCOUNTABLE OFFICIALS, MAJ HARWOOD AND SP4 PANTLE ARE PERSONALLY LIABLE FOR DEFICIENCIES IN THEIR ACCOUNTS CAUSED BY ILLEGAL, IMPROPER OR INCORRECT PAYMENTS. HOWEVER, OUR OFFICE HAS AUTHORITY UNDER 31 U.S.C. SEC. 3527(C), TO GRANT RELIEF FROM LIABILITY UPON A DETERMINATION THAT THE PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF DUE CARE BY THE OFFICIAL. SEE 54 COMP.GEN. 112 (1974).

IN CASES WHERE A SUBORDINATE, RATHER THAN THE OFFICER HIMSELF, MAKES THE ERRONEOUS PAYMENT; RELIEF MAY BE GRANTED THE SUPERVISOR UPON A SHOWING THAT HE PROPERLY SUPERVISED HIS SUBORDINATES BY MAINTAINING AN ADEQUATE SYSTEM OF PROCEDURES AND CONTROLS TO AVOID ERRORS AND THAT APPROPRIATE STEPS WERE TAKEN TO ENSURE ITS IMPLEMENTATION AND EFFECTIVENESS. SEE, E.G., B-213874, SEPTEMBER 6, 1984; B-194877, JULY 12, 1979.

THE RECORD, INCLUDING THE INVESTIGATION OF THE LOSS, INDICATES THAT PROPER PROCEDURES WERE IN EFFECT AT THE TIME THE LOSS OCCURRED AND THAT MAJ HARWOOD MAINTAINED ADEQUATE PROCEDURES AND CONTROLS TO SAFEGUARD THE FUNDS FOR WHICH HE WAS ACCOUNTABLE. THE IMPROPER PAYMENT WAS THE RESULT OF A SCHEME TO DEFRAUD THE GOVERNMENT THAT WAS UNKNOWN TO THESE RESPONSIBLE INDIVIDUALS. EVEN THE MOST CAREFULLY ESTABLISHED AND EFFECTIVELY SUPERVISED SYSTEM CANNOT PREVENT EVERY CONCEIVABLE FORM OF CRIMINAL ACTIVITY. B-217637, MARCH 18, 1985.

SP4 PANTLE MADE THE PAYMENT IN THIS CASE AFTER COMPLYING WITH STANDARD OPERATING PROCEDURES. HE CHECKED MR. SPINA'S IDENTIFICATION CARD, THE COMMUNITY BAD CHECK LIST; AND THE INDIVIDUAL PRESENTING THE CHECKS. NOTHING IN THE RECORD SUGGESTS THAT SP4 PANTLE SHOULD HAVE BEEN AWARE OF THE FRAUD BEING PERPETRATED.

WE CONCUR IN THE ARMY'S DETERMINATION THAT THIS IMPROPER PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF RESPONSIBLE CARE ON THE PART OF MAJ HARWOOD OF SP4 PANTLE. ACCORDINGLY, RELIEF IS GRANTED.