B-227264, JUN 11, 1987, OFFICE OF GENERAL COUNSEL

B-227264: Jun 11, 1987

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APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS RELIEF IS GRANTED ARMY DISBURSING OFFICIAL UNDER 31 U.S.C. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF BOTH ORIGINAL AND RECERTIFIED MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE RECERTIFIED CHECK. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL. SUBSEQUENT COLLECTION ATTEMPTS ARE BEING PURSUED. RELIEF IS GRANTED. BOTH CHECKS WERE IN THE SAME AMOUNT. THE RECERTIFIED CHECK WAS ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECK HAD BEEN IMPROPERLY CASHED BY HIS EX-WIFE AND AFTER TREASURY HAD NOTIFIED THE FINANCE OFFICE THAT RECLAMATION ACTION HAD BEEN TAKEN AND A CREDIT RECEIVED.

B-227264, JUN 11, 1987, OFFICE OF GENERAL COUNSEL

APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS RELIEF IS GRANTED ARMY DISBURSING OFFICIAL UNDER 31 U.S.C. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF BOTH ORIGINAL AND RECERTIFIED MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE RECERTIFIED CHECK, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL, AND SUBSEQUENT COLLECTION ATTEMPTS ARE BEING PURSUED.

BRIGADIER GENERAL B. W. HALL:

THIS RESPONDS TO YOUR REQUEST OF MAY 12, 1987, THAT WE RELIEVE LIEUTENANT COLONEL (LTC) T. S. SHARP, FINANCE CORPS, DSSN 5008, FINANCE AND ACCOUNTING OFFICER, 1ST INFANTRY DIVISION (M) AND FORT RILEY, FORT RILEY, KANSAS, UNDER 31 U.S.C. SEC. 3527(C) FOR AN IMPROPER PAYMENT OF A $786.95 CHECK PAYABLE TO MR. JAMES R. PEELER. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

THE LOSS RESULTED WHEN THE PAYEE NEGOTIATED BOTH THE ORIGINAL AND A RECERTIFIED CHECK. BOTH CHECKS WERE IN THE SAME AMOUNT. THE RECERTIFIED CHECK WAS ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECK HAD BEEN IMPROPERLY CASHED BY HIS EX-WIFE AND AFTER TREASURY HAD NOTIFIED THE FINANCE OFFICE THAT RECLAMATION ACTION HAD BEEN TAKEN AND A CREDIT RECEIVED. SUBSEQUENTLY, THE PAYEE ACKNOWLEDGED RECEIPT OF THE ORIGINAL CHECK AND RELEASED HIS CLAIM AGAINST THE GOVERNMENT.

BOTH THE ORIGINAL AND RECERTIFIED CHECKS WERE ISSUED BY THE ARMY UNDER AUTHORITY DELEGATED BY THE DEPARTMENT OF THE TREASURY. 31 C.F.R. SEC. 245.8 AND TREASURY FISCAL REQUIREMENTS MANUAL FOR GUIDANCE OF DEPARTMENTS AND AGENCIES, BULLETIN NO. 83-28.

IT APPEARS THAT THE ISSUANCE OF THE RECERTIFIED CHECK IN THIS CASE WAS WITHIN THE BOUNDS OF DUE CARE. IN ADDITION, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICER. SEE 31 U.S.C. SEC. 3527(C).

THE DIFFICULTY IN THIS CASE, HOWEVER, IS IN DETERMINING IF DILIGENT COLLECTION ACTION WAS TAKEN. 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. HERE, THE FINANCE OFFICER RECEIVED NOTIFICATION FROM TREASURY OF A CHARGEBACK ON SEPTEMBER 2, 1986. HOWEVER, SINCE ALL CREDITS AND CHARGES MUST BE FORWARDED THROUGH U.S. ARMY FINANCE AND ACCOUNTING CENTER (USAFAC), THE FINANCE OFFICER SENT THE NOTIFICATION PACKET TO USAFAC FOR PROCESSING. NO COLLECTION ACTION WAS TAKEN AT THIS POINT AGAINST THE PAYEE, SINCE THE FINANCE OFFICER HAD NOT RECEIVED THE OFFICIAL NOTICE OF LOSS. HE DID TRY TO CONTACT TREASURY PERSONNEL TO FIND OUT THE OFFICIAL STATUS OF THE CASE. ON NOVEMBER 14, 1986, THE FINANCE OFFICER RECEIVED THE OFFICIAL CHARGEBACK FROM TREASURY. HE IMMEDIATELY TRIED TO CONTACT THE PAYEE BY LETTER BUT WAS UNSUCCESSFUL. THE FINANCE OFFICER REFERRED THE LOSS TO YOUR COLLECTION DIVISION ON DECEMBER 29, 1986. SINCE THE DEBT WAS REFERRED TO YOUR COLLECTION DIVISION WITHIN 90 DAYS OF THE RECEIPT OF THE OFFICIAL NOTICE OF LOSS, WE FIND THAT THE COLLECTION ACTION TAKEN IN THIS CASE SATISFIED THE DILIGENT COLLECTION STANDARD OF 31 U.S.C. SEC. 3527(C). ACCORDINGLY, WE GRANT RELIEF.

WE NOTE THAT IT TOOK USAFAC OVER A MONTH TO PROCESS THE CHARGEBACK FROM TREASURY. AS WE SUGGESTED IN B-226316, ET AL., APRIL 9, 1987, WE THINK THAT ARMY SHOULD DETERMINE IF THERE IS ANY WAY TO PROCESS AND SEND THE CHARGEBACK INFORMATION FROM TREASURY TO THE FINANCE OFFICES IN A MORE TIMELY MANNER.