B-226017, JAN 14, 1987, OFFICE OF GENERAL COUNSEL

B-226017, JAN 14, 1987, OFFICE OF GENERAL COUNSEL

APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICIAL AND HIS DEPUTY UNDER 31 U.S.C. SEC. 3527(C) FROM LIABILITY FOR TWO IMPROPER PAYMENTS RESULTING FROM THE SAME PAYEE TWICE NEGOTIATING BOTH THE ORIGINAL AND SUBSTITUTE MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE SUBSTITUTE CHECK, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL AND HIS DEPUTY, AND SUBSEQUENT COLLECTION ATTEMPTS ARE BEING PURSUED. HOWEVER, WE RECOMMEND THAT ARMY DEVELOP GUIDELINES FOR DEALING WITH MULTIPLE REQUESTS BY THE SAME PAYEE FOR SUBSTITUTE PAYMENTS. ADDITION, FOR CASES INVOLVING DEBIT VOUCHERS RECEIVED AFTER JUNE 1, 1986, WHERE THE PAYEE HAS LEFT THE ARMY OR ITS EMPLOY, WE WILL DENY RELIEF IF THE FINANCE OFFICERS DELAY MORE THAN 3 MONTHS IN FORWARDING THE DEBT TO ARMY'S COLLECTION DIVISION.

BRIGADIER GENERAL B. W. HALL:

THIS RESPONDS TO YOUR REQUEST OF JANUARY 5, 1987, THAT WE RELIEVE LIEUTENANT COLONEL (LTC) D. MATHIS, FINANCE CORPS, DSSN 5062, FINANCE AND ACCOUNTING OFFICER, U.S. ARMY GARRISON, FORT MEADE, MARYLAND, AND HIS DEPUTY, CAPTAIN (CPT) B. T. MILLIGAN, UNDER 31 U.S.C. SEC. 3527(C) FOR TWO IMPROPER PAYMENTS TOTALING $607.51 PAYABLE TO MR. MAURICE S. WEEMS. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

THE LOSSES RESULTED WHEN THE PAYEE TWICE NEGOTIATED BOTH AN ORIGINAL AND A SUBSTITUTE CHECK. IN EACH INSTANCE, BOTH CHECKS WERE IN THE SAME AMOUNT. THE SUBSTITUTE CHECKS WERE ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECKS HAD NOT BEEN RECEIVED AND A REQUEST FOR STOP PAYMENT HAD BEEN MADE. THE CHECKS WERE ISSUED BY THE ARMY UNDER AUTHORITY DELEGATED BY THE DEPARTMENT OF THE TREASURY. 31 C.F.R. SEC. 245.8.

IT APPEARS THAT THE REQUEST FOR STOP PAYMENT AND THE ISSUANCE OF THE SUBSTITUTE CHECKS IN THIS CASE WERE WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED 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 AND IT APPEARS THAT ADEQUATE COLLECTION EFFORTS ARE NOW BEING MADE. ACCORDINGLY, WE GRANT RELIEF.

ALTHOUGH WE HAVE GRANTED RELIEF TO THE DISBURSING OFFICERS IN THIS CASE, WE ARE NEVERTHELESS CONCERNED THAT A SECOND SUBSTITUTE CHECK WAS ISSUED TO THE SAME PAYEE WITHIN A 2-WEEK PERIOD WITHOUT THE FINANCE OFFICERS VERIFYING THE STATUS OF THE PRIOR ISSUED SUBSTITUTE PAYMENT. WE RECOGNIZE THAT THERE ARE NO ARMY REGULATIONS REQUIRING THAT FINANCE OFFICERS DELAY ISSUING A SUBSTITUTE CHECK TO A PAYEE WHO HAD, IN THE PAST, CLAIMED NON- RECEIPT, OR THAT REQUIRE FINANCE OFFICERS TO VERIFY THE STATUS OF PREVIOUSLY ISSUED CHECKS. HOWEVER, AS WE STATED IN B-220500, SEPTEMBER 12, 1986, WE THINK THAT THE ARMY SHOULD DEVELOP GUIDELINES FOR HANDLING MULTIPLE REQUESTS BY THE SAME PAYEE FOR SUBSTITUTE PAYMENTS.

FINALLY, WE ARE ALSO CONCERNED WITH THE COLLECTION ACTION TAKEN IN THIS CASE. ONCE THE DEBIT VOUCHER WAS RECEIVED FROM TREASURY, IT TOOK ARMY ALMOST 29 MONTHS TO REFER THE MATTER TO YOUR COLLECTION DIVISION. AS WE PREVIOUSLY INDICATED TO YOU, FOR CASES INVOLVING NOTICES OF LOSSES RECEIVED AFTER JUNE 1, 1986, WHERE THE PAYEE HAS LEFT THE ARMY OR ITS EMPLOY, WE WILL NO LONGER GRANT RELIEF IF ARMY DELAYS MORE THAN 3 MONTHS IN FORWARDING THE DEBT TO YOUR COLLECTION DIVISION. HOWEVER, SINCE THIS CASE OCCURRED PRIOR TO THAT DATE, WE WILL NOT DENY RELIEF HERE.