B-230863, Sep 23, 1988, Office of General Counsel

B-230863: Sep 23, 1988

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APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officers - Disbursing officers - Relief - Illegal/improper payments - Travel allowances DIGEST: Relief is granted to Army disbursing officers in a case involving fraudulent travel vouchers. The results of a thorough Army review indicate that there is nothing in the pertinent vouchers which would have given notice of possible fraud. There is no evidence in the record of any reason for the accountable officers to have been suspicious of the fraudulent nature of the transactions. The improper payments were the result of criminal activity over which the accountable officers had no control. There is no indication that the payments were the result of bad faith or lack of reasonable care.

B-230863, Sep 23, 1988, Office of General Counsel

APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officers - Disbursing officers - Relief - Illegal/improper payments - Travel allowances DIGEST: Relief is granted to Army disbursing officers in a case involving fraudulent travel vouchers. The results of a thorough Army review indicate that there is nothing in the pertinent vouchers which would have given notice of possible fraud. There is no evidence in the record of any reason for the accountable officers to have been suspicious of the fraudulent nature of the transactions. The improper payments were the result of criminal activity over which the accountable officers had no control. There is no indication that the payments were the result of bad faith or lack of reasonable care. Even the most carefully established and effectively supervised system cannot prevent every conceivable form of criminal activity.

Brigadier General V.A. Richard:

This is a further response to your letter dated January 19, 1988 (Subject: McGrath, T.R.). As set forth below, under 31 U.S.C. Sec. 3527(c), we grant relief from liability in the requested amount for the Army disbursing officers for whom relief is requested in your January 19 letter.

This case involves the filing of fraudulent travel vouchers. Because of the classified nature of this case, we will not discuss the facts in detail other than to note that the fraudulent vouchers were either supported by fraudulent receipts or by untrue explanatory statements by the traveler to support claimed amounts.

This Office is authorized to grant relief from liability under 31 U.S.C. Sec. 3527(c) for a deficiency in the account of a disbursing official upon a determination that the improper payment was not the result of bad faith or lack of reasonable care by the official and that diligent collection efforts are being made. B-224736, July 2, 1987.

Where a subordinate actually disburses funds rather than the supervisory disbursing officer, we have granted relief upon a showing that the finance officer properly supervised his subordinates by maintaining an adequate system of procedures and controls to safeguard the funds and took steps to see that the policy was effectively being followed. B-228851, October 13, 1987.

Here, the results of a thorough Army review indicate that there is nothing in the pertinent vouchers which would have given notice of possible fraud. See B-229274, January 15, 1988. There is no evidence in the record of any reason for the accountable officers to have been suspicious of the fraudulent nature of the transactions. See B-226911, October 19, 1987.

The improper payments in this case were, according to your submission, the result of criminal activity over which the accountable officers had no control. There is no indication that the payments were the result of bad faith or lack of reasonable care.

We frequently have noted in substantially similar cases that even the most carefully established and effectively supervised system cannot prevent every conceivable form of criminal activity. B-217114.2, February 3, 1988.

We note that prompt collection action was initiated against the involved personnel.

Accordingly, we grant relief in the requested amount to the accountable officers named in your January 19 letter.