B-249888, January 28, 1993
B-249888: Jan 28, 1993
Navy disbursing official is relieved of liability pursuant to 31 U.S.C. There is no indication of bad faith on the part of the disbursing official. Relief is granted. The statement must contain a certification that the payee is entitled to the proceeds of only one check and that willful and knowing negotiation of both the original and the successor check is an act of fraud. A daily advice of status for the check was issued by Treasury as of June 20. A NAVCOMPT (Navy Comptroller) Form 2272-ADPE was prepared to issue a successor check. 855.01 was drawn and made payable to J. DISCUSSION Disbursing officers are personally liable for deficiencies in their accounts resulting from illegal. That there is no evidence of bad faith on the part of the disbursing officer.
B-249888, January 28, 1993
APPROPRIATIONS/FINANCIAL MANAGEMENT Accountable Officers Disbursing officers Relief Illegal/improper payments Substitute checks U.S. Navy disbursing official is relieved of liability pursuant to 31 U.S.C. Sec. 3527(c) for the improper payment resulting from payee's negotiation of both original and recertified checks. The disbursing official followed the proper procedures in the issuance of the successor check; there is no indication of bad faith on the part of the disbursing official; and he initiated collection action in a timely and adequate manner.
Mr. Steve E. Turner Acting Director Defense Finance and Accounting Service Kansas City Center Kansas City, Missouri 64197-0001
Dear Mr. Turner:
This responds to your request of August 10, 1992, that we relieve Major M. J. Lofton (Disbursing Officer, U.S. Marine Corps, Camp Lejeune, North Carolina) of his personal liability for the improper payment of $6,855.01 to Mr. J. A. Jackson. For the reasons stated below, relief is granted.
The improper payment resulted from Mr. Lofton's issuance of a successor or replacement check to Mr. Jackson on the basis of his written assertion of June 4, 1990, that he had not received the original check dated April 26, 1990.
The Department of the Navy requires disbursing officers to obtain a written "Statement of the Claimant" from a payee alleging nonreceipt of an original check to support the issuance of a successor check. See Navy Comptroller's Manual, Vol. 4, chap. 4, sec. 6, para. 0602. The statement must contain a certification that the payee is entitled to the proceeds of only one check and that willful and knowing negotiation of both the original and the successor check is an act of fraud, carrying criminal and civil penalties. Mr. Jackson's written request for a successor check contained the required certification.
On June 6, 1990, the disbursing officer submitted Form SF 1184 to Treasury to cancel the original check if it had not been negotiated. A daily advice of status for the check was issued by Treasury as of June 20, 1990, indicating that the check had not been negotiated. On July 2, 1990, a NAVCOMPT (Navy Comptroller) Form 2272-ADPE was prepared to issue a successor check. On July 3, check number 519072148244 for $6,855.01 was drawn and made payable to J. A. Jackson, Jr.
According to your submission, Treasury notified Navy that the original check had been negotiated and paid. On March 14, 1991, the disbursing officer received Treasury's notice that the successor check had been negotiated on or about December 31, 1990.
Disbursing officers are personally liable for deficiencies in their accounts resulting from illegal, improper, or incorrect payments. However, under 31 U.S.C. Sec. 3527(c) (1988), this Office may relieve a disbursing officer of liability when the record indicates that the disbursing officer acted within the bounds of reasonable care as established by applicable regulations, that there is no evidence of bad faith on the part of the disbursing officer, and that a diligent effort was made to collect the overpayment. 62 Comp.Gen. 91 (1982); B-225932, Mar. 27, 1987.
It appears from your submission that the disbursing officer acted with reasonable care in issuing the successor check to Mr. Jackson. The payee had signed a statement of nonreceipt of the original check containing the required certification. Also, the disbursing officer complied with Navy requirements by determining from Treasury prior to issuing the successor check that the original check had not been negotiated. Finally, there is no indication of bad faith on the part of the disbursing officer.
To satisfy the statutory requirement of diligent collection action, a disbursing officer must demonstrate the agency's compliance with the Federal Claims Collection Standards, 4 C.F.R. parts 101-105 (1992). 62 Comp.Gen. 476 (1983). The Federal Claims Collection Standards require as an initial action that a demand letter be sent to the debtor which, among other things, establishes a due date for payment within 30 days of the date of the letter. 4 C.F.R. Sec. 102.2. The regulations further require the agency to send a total of three progressively stronger written demands at intervals of no more than 30 days unless a response to the first or second demand indicates that further demands would be futile and the debtor's response does not require rebuttal. Id. The agency must refer a claim to the appropriate authority when its collection action proves unsuccessful. 4 C.F.R. Sec. 105.1.
We find that the Marine Corps took timely and aggressive collection action that substantially complied with the Federal Claims Collection Standards. Following notification that the original check had been negotiated, the disbursing officer sent a letter on September 20, 1990, to Mr. Jackson requesting his response on whether the signature on the back of the original check was his. The letter also requested Mr. Jackson to send the Marine Corps a money order for $6,855.01 made payable to the U.S. Treasury if the signature was his. Your submission states that Mr. Jackson did not respond to this letter. The disbursing officer sent Mr. Jackson another letter on March 19, 1991, requesting repayment after being notified that the successor check also had been negotiated. Mr. Jackson did not respond to this letter or reimburse the agency for the second payment.
After these collection actions were unsuccessful, the matter was referred on May 7, 1991, to the Debt Management Division, Defense Finance and Accounting Service, Kansas City Center for further collection efforts on behalf of the Marine Corps. The Debt Management Division subsequently sent additional letters to Mr. Jackson, and referred the indebtedness to a private collection agency.
Accordingly, we grant relief.