B-226124, FEB 9, 1987, OFFICE OF GENERAL COUNSEL

B-226124: Feb 9, 1987

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APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS DIGEST: RELIEF IS GRANTED ARMY SPECIAL DISBURSING AGENT UNDER 31 U.S.C. 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 SUBSEQUENT COLLECTION ATTEMPTS ARE BEING PURSUED. WE WILL DENY RELIEF IF THE FINANCE OFFICER DELAYS MORE THAN 3 MONTHS IN FORWARDING THE DEBT TO ARMY'S COLLECTION DIVISION. RELIEF IS GRANTED. BOTH CHECKS WERE IN THE SAME AMOUNT. THE SUBSTITUTE CHECK WAS ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECK HAD NOT BEEN RECEIVED AND A REQUEST FOR STOP PAYMENT HAD BEEN MADE.

B-226124, FEB 9, 1987, OFFICE OF GENERAL COUNSEL

APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS DIGEST: RELIEF IS GRANTED ARMY SPECIAL DISBURSING AGENT UNDER 31 U.S.C. SEC. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF BOTH 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 SUBSEQUENT COLLECTION ATTEMPTS ARE BEING PURSUED. HOWEVER, FOR CASES INVOLVING NOTICES OF LOSSES RECEIVED AFTER JUNE 1, 1986, WHERE THE PAYEE HAS LEFT THE ARMY OR ITS EMPLOY, WE WILL DENY RELIEF IF THE FINANCE OFFICER DELAYS 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 12, 1987, THAT WE RELIEVE MR. D. R. NEWBERRY, SPECIAL DISBURSING AGENT, DSSN 5005, FINANCE AND ACCOUNTING OFFICER, U.S. ARMY TANK AUTOMOTIVE COMMAND, WARREN, MICHIGAN, UNDER 31 U.S.C. SEC. 3527(C) FOR AN IMPROPER PAYMENT OF A $240.05 CHECK PAYABLE TO MR. CEDRIC D. EVERSON. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

THE LOSS RESULTED WHEN THE PAYEE NEGOTIATED BOTH THE ORIGINAL AND A SUBSTITUTE CHECK. BOTH CHECKS WERE IN THE SAME AMOUNT. THE SUBSTITUTE CHECK WAS ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECK HAD NOT BEEN RECEIVED AND A REQUEST FOR STOP PAYMENT HAD BEEN MADE. BOTH 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 A SUBSTITUTE CHECK 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 OFFICER AND IT APPEARS THAT ADEQUATE COLLECTION EFFORTS ARE NOW BEING MADE. ACCORDINGLY, WE GRANT RELIEF.

ALTHOUGH WE HAVE GRANTED RELIEF TO THE DISBURSING OFFICER IN THIS CASE, WE DO NOT BELIEVE THAT THE ARMY'S COLLECTION PROCEDURES, TAKEN TOGETHER, MEET THE DILIGENT CLAIMS COLLECTION REQUIREMENT OF 31 U.S.C. SEC. 3527(C). ONCE THE DEBIT VOUCHER WAS RECEIVED FROM TREASURY, IT TOOK ARMY ALMOST 17 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 THE DEBIT VOUCHER IN THIS CASE WAS RECEIVED PRIOR TO THAT DATE, WE WILL NOT DENY RELIEF HERE.