B-239122, Feb 21, 1991, Office of General Counsel

B-239122: Feb 21, 1991

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An accountable officer's account is settled by operation of law and the officer cannot be held liable for any deficiency in the account. The improper disbursement was the result of a submission of fraudulent documents purporting to cover the expenses of an International Trade Administration (ITA) function. She did not yet have an official government identification card. The Department's Office of the Inspector General investigated this matter but was unable to identify the person responsible for the fraud. Proctor is strictly liable for the $964 deficiency in her account resulting from the improper payment. This Office is authorized to grant relief to Ms. That diligent collection efforts were made. 62 Comp.Gen. 91.

B-239122, Feb 21, 1991, Office of General Counsel

DIGEST: Upon the running of the 3-year statute of limitations of 31 U.S.C. Sec. 3256, an accountable officer's account is settled by operation of law and the officer cannot be held liable for any deficiency in the account.

Sonya G. Stewart

Director for Finance and Federal Assistance:

This responds to your request that we relieve Joan proctor, an imprest fund cashier at the Department of Commerce (Department), from liability for $964 which she improperly disbursed from the imprest fund in January 1987. For the reasons stated below, we conclude that because the applicable statute of limitations had expired, Ms. Proctor's liability had already been settled by operation of law by the time you submitted your request.

The improper disbursement was the result of a submission of fraudulent documents purporting to cover the expenses of an International Trade Administration (ITA) function. On Friday, January 2, 1987, Ms. Proctor, after normal working hours, cashed two vouchers for a total of $964 for a person purporting to be a Ms. Rose Green, a new employee. Ms. Green insisted that she needed the funds that day to reserve a date at a local restaurant for the ITA function the following Monday. She presented Ms. Proctor with supporting documentation showing review and approval of the expenditure by ITA's budget and accounting offices.

Although Ms. Proctor reviewed the documents and recognized at least one of the signatures, she did not compare the approving official's signature with the signature card on file. Ms. Green had apparently forged the signature of this official. Additionally, Ms. Proctor accepted Ms. Green's driver's license as identification instead of proper government identification because Ms. Green claimed that being a new employee, she did not yet have an official government identification card.

The Department's Office of the Inspector General investigated this matter but was unable to identify the person responsible for the fraud.

As an accountable officer, Ms. Proctor is strictly liable for the $964 deficiency in her account resulting from the improper payment. Comp.Gen. 476, 479 (1983). Under 31 U.S.C. Sec. 3527(c), this Office is authorized to grant relief to Ms. Proctor if the record indicates that she acted with reasonable care and in good faith, and that diligent collection efforts were made. 62 Comp.Gen. 91, 92 (1982). However, our authority to grant relief expires "3 years after the date the Comptroller General receives the account." 31 U.S.C. Sec. 3526(c). The settlement of an account is conclusive on the Comptroller General at that time. Id.

We consider the Comptroller General to have "received" the account at that time that the agency's accounts are substantially complete for audit purposes (i.e., when the various documents supporting the applicable statement of accountability are available to the agency and GAO for audit); if the loss is due to fraud, as is the case here, the 3 year period begins when the loss is discovered and reported to appropriate agency officials. GAO Policy and Procedures Manual for the Guidance of Federal Agencies, tit. 7, Sec. 8.7 (Feb. 12. 19910.

Unfortunately, the record does not indicate exactly when the Department became aware of this irregularity. Still, the record notes that the matter was turned over to the Inspector General's office in February 1987, suggesting that the fraud was discovered before March 26, 1987, and that the 3-year limitation period expired prior to March 26, 1990, the date of your submission. Thus, Ms. Proctor's accounts have been settled by operation of law, and she is not responsible for the deficiency.

Nonetheless, we are concerned about the timeliness of your submission. To avoid statute of limitations problems and ensure that the account irregularities are addressed properly and fully, we ask that agencies submit such matters as this to us within 2 years of the agency's discovery of the irregularity. GAO, Policy and Procedures Manual, tit. 7, Sec. 8.4.C. In this case, we are concerned that Ms. Proctor may not have exercised reasonable care. The good faith and reasonable care of a cashier is shown by evidence that the cashier complied with existing directive and followed established procedures, and that nothing occurred which should have made the cashier suspicious of fraud. B-226872, Oct. 16, 1987. Although the Department's Cash Management Handbook does not clearly require that a cashier verify the signature of the official approving a payment from the imprest fund, it does require that the cashier maintain a current roster of officials authorized to approve payments, including facsimiles of their signatures. We are concerned that Ms. Proctor may not have acted with reasonable care when she failed to compare the approving official's signatures on the forms with those on file. In addition, we are concerned that Ms. Proctor paid funds to a person who could not present official government identification. We are pleased that the Department's procedures now make clear the need both to obtain such