B-230664, Mar 21, 1988, Office of General Counsel

B-230664: Mar 21, 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 deputy 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 or his deputy. Subsequent collection attempts are being pursued. Relief is granted. The loss resulted when the payee apparently negotiated both the original and the substitute check issuEd by the Army. /1/ 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-230664, Mar 21, 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 deputy under 31 U.S.C. Sec. 3527(c) from liability for improper payment resulting form payee's apparent negotiation of both original and substitute 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 or his deputy, and subsequent collection attempts are being pursued.

Colonel John P. Barrow, Chief of Staff, Finance Corps, U.S. Army Finance and Accounting Center:

This responds to your request of February 26, 1988, that we relieve Lt. Col. R. J. Delaney, DSSN 6411, Finance Corps, Finance and Accounting Officer, 175th Finance and Accounting Office-Korea, APD San Francisco and his deputy Mr. Ra, under 31 U.S.C. Sec. 3527(c) for an improper payment of a $1,382.87 check payable to Mr. Cullen C. Litka, Jr. now deceased. For the reasons stated below, relief is granted.

The loss resulted when the payee apparently negotiated both the original and the substitute check issuEd by the Army. /1/ 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 Regulation. 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 or his deputy and it appears that adequate collection efforts are now being made. Accordingly, we grant relief.

/1/ Before his death Mr. Litka denied negotiating the substitute check at issue here and a second substitute check issued by Treasury. Treasury completed a forgery investigation that concluded that Mr. Litka benefited from both checks.