B-229903, Jan 11, 1988, Office of General Counsel

B-229903: Jan 11, 1988

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APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officers - Disbursing Officers - Relief - Illegal/Improper Payments - Substitute Checks DIGEST: Relief is granted Army disbursing official and his successor under 31 U.S.C. Proper procedures were followed in the issuance of the recertified check and there was no indication of bad faith on the part of the disbursing officials. Collection efforts were unsuccessful due to the fact that the payee firm had filed for bankruptcy prior to the finance office being notified that a loss had occurred. 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 not been received and after Major Metcalf (Major Dent's successor) had received a credit from Treasury.

B-229903, Jan 11, 1988, 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 successor under 31 U.S.C. Sec. 3527(c) from liability for improper payment resulting from payee's negotiation of both original and recertified checks. Proper procedures were followed in the issuance of the recertified check and there was no indication of bad faith on the part of the disbursing officials. Collection efforts were unsuccessful due to the fact that the payee firm had filed for bankruptcy prior to the finance office being notified that a loss had occurred.

Brigadier General Hall:

This responds to your request of December 18, 1987, that we relieve Maj. C. A. Dent (DSSN 5003) and Maj. D. H. Metcalf, Finance Corps, Finance and Accounting Officers, U.S. Army Training Center Engineer and Fort Leonard Wood, Fort Leonard Wood, Missouri, under 31 U.S.C. Sec. 3527(c) for an improper payment of a $1,145.69 check payable to Federal Discounters (also known as National Film and Video Center, Incorporated). For the reasons stated below, relief is granted.

The loss resulted when the payee negotiated both the original and recertified checks. 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 not been received and after Major Metcalf (Major Dent's successor) had received a credit from Treasury. Both 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 a recertified check in this case was within the bounds of due care and that there was no indication of bad faith on the part of the disbursing officers. See 62 Comp.Gen. 476 (1983). We understand that collection efforts were not successful due to the fact that the charge issued by Treasury was received 7 months after the payee firm filed bankruptcy. Accordingly, we grant relief.