B-87063, APR. 4, 1957

B-87063: Apr 4, 1957

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CONFUSED FILE" CHECK CASES WHERE THROUGH SIMILARITY OF NAMES CHECKS INTENDED FOR PAYMENT TO ONE PERSON ARE MISDIRECTED OR IN SOME WAY REACH AND ARE NEGOTIATED BY PERSONS OTHER THAN THE INTENDED PAYEE. IT IS REPORTED THAT MR. WENNERHOLM IS A CIVIL SERVICE ANNUITANT WHO HAS BEEN RECEIVING HIS CHECKS AT 4147 DIXIE CANYON. LAST MAY A LETTER WAS RECEIVED FROM A WILLIAM E. THIS CONCERNED HIS REQUEST FOR A REFUND OF RETIREMENT DEDUCTIONS BUT WAS BY ADMINISTRATIVE ERROR IDENTIFIED AS BEING FROM WILLIAM F. WENNERHOLM'S ADDRESS WAS CHANGED AND BEFORE THE ERROR WAS DISCOVERED TWO ANNUITY CHECKS EACH IN THE AMOUNT OF $207 WERE SENT TO AND APPARENTLY NEGOTIATED BY WILLIAM E. IT IS FURTHER REPORTED THAT ON OCTOBER 25.

B-87063, APR. 4, 1957

TO OFFICE OF THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION:

THE FORMER CHAIRMAN'S LETTER OF FEBRUARY 11, 1957, REQUESTS MODIFICATION OF THE PROCEDURE PRESCRIBED IN OUR DECISION OF OCTOBER 12, 1949, B-87063, FOR THE SO-CALLED "SAME NAMES," OR ,CONFUSED FILE" CHECK CASES WHERE THROUGH SIMILARITY OF NAMES CHECKS INTENDED FOR PAYMENT TO ONE PERSON ARE MISDIRECTED OR IN SOME WAY REACH AND ARE NEGOTIATED BY PERSONS OTHER THAN THE INTENDED PAYEE. UNDER YOUR PRESENT PROCEDURE YOU DO NOT AUTHORIZE PAYMENT TO THE PROPER PAYEE WITHOUT PRIOR APPROVAL BY OUR OFFICE.

AS AN EXAMPLE OF A CASE UNDER THE PRESENT PROCEDURE, IT IS REPORTED THAT MR. WILLIAM F. WENNERHOLM IS A CIVIL SERVICE ANNUITANT WHO HAS BEEN RECEIVING HIS CHECKS AT 4147 DIXIE CANYON, SHERMAN OAKS, CALIFORNIA. LAST MAY A LETTER WAS RECEIVED FROM A WILLIAM E. WENNERHOLM ASKING THAT HIS ADDRESS BE CHANGED TO 150 WEST 65TH STREET, NEW YORK 23, NEW YORK. THIS CONCERNED HIS REQUEST FOR A REFUND OF RETIREMENT DEDUCTIONS BUT WAS BY ADMINISTRATIVE ERROR IDENTIFIED AS BEING FROM WILLIAM F. WENNERHOLM. AS A RESULT WILLIAM F. WENNERHOLM'S ADDRESS WAS CHANGED AND BEFORE THE ERROR WAS DISCOVERED TWO ANNUITY CHECKS EACH IN THE AMOUNT OF $207 WERE SENT TO AND APPARENTLY NEGOTIATED BY WILLIAM E. WENNERHOLM OF NEW YORK. IT IS FURTHER REPORTED THAT ON OCTOBER 25, 1956, WHEN EFFORTS TO COLLECT THE OVERPAYMENT FROM THE APPARENT WRONGFUL NEGOTIATOR BROUGHT NO RESULTS, THE COMMISSION REFERRED THE MATTER TO THE TREASURY DEPARTMENT FOR RECLAMATION PROCEEDINGS BECAUSE OF THE DIFFERENCE IN THE MIDDLE INITIAL. ON SEPTEMBER 13, 1956, THE COMMISSION WROTE THE CHIEF, CLAIMS DIVISION OF OUR OFFICE STATING THE FACTS IN THIS CASE AND REQUESTED AUTHORIZATION TO MAKE PAYMENT TO THE PROPER PAYEE, SINCE THE COMMISSION HAD ADMINISTRATIVELY DETERMINED THAT HE WAS NOT AT FAULT IN THE MATTER. OUR OFFICE AUTHORIZED PAYMENT ON JANUARY 25, 1957. IT IS STATED THAT THE NECESSITIES OF LIFE AND ANY DELAY WORKS A SEVERE HARDSHIP ON THEM FINANCIALLY, PARTICULARLY WHERE AS IN THIS CASE THE NONRECEIPT OF THE CHECK WAS BECAUSE OF THE ERROR OF YOUR AGENCY. THE DELAY ENSUING IN OUR OFFICE IN THE PROCESSING OF THE ABOVE CLAIM WAS DUE, IN PART, TO THE FAILURE OF YOUR OFFICE TO FURNISH A COMPLETE DESCRIPTION OF THE TWO CHECKS IN YOUR AGENCY LETTER OF SEPTEMBER 13, 1956, WHICH REPORTED THE MATTER TO OUR OFFICE.

UNDER THE PROCEDURES ESTABLISHED BY OUR DECISION OF OCTOBER 12, 1949, THE CIVIL SERVICE COMMISSION WAS AUTHORIZED TO ISSUE A SECOND PAYMENT CHECK IN THOSE CASES WHERE THE AMOUNT OF THE FIRST CHECK HAD BEEN RECOVERED FROM THE ERRONEOUS NEGOTIATOR, OR WHERE THERE EXISTED ADMINISTRATIVELY A SOURCE OF RECOVERY, AS, FOR EXAMPLE, WHERE THE ERRONEOUS NEGOTIATOR HAS FUNDS DUE, AND THEN REFUNDABLE FROM THE RETIREMENT FUND, OR THEN IS IN RECEIPT OF ANNUITY PAYMENTS, FROM WHICH AN AMOUNT EQUAL TO THE ERRONEOUS PAYMENT MADE TO HIM CAN AND WILL BE RECOVERED ADMINISTRATIVELY AND THE FACT THAT HE RECEIVED THE ERRONEOUS PAYMENT IS ADMITTED OR OTHERWISE DEFINITELY ESTABLISHED. THE FORMER CHAIRMAN PROPOSED THE FOLLOWING MODIFIED PROCEDURE.

"FIRST, WE PROPOSE TO CONTINUE TO REFER ALL "SAME NAME" OR "CONFUSED FILE" CASES TO YOUR OFFICE WHEN WE DISCOVER AN ERROR AND ARE UNABLE TO RECOVER OR OFFSET THE RESULTING OVERPAYMENT IMMEDIATELY.

"SECOND, WE WOULD EXAMINE OUR FILE AND DECIDE WHETHER WE SHOULD IMMEDIATELY REAUTHORIZE PAYMENT TO THE PROPER PAYEE. WE WOULD KEEP IN MIND THE REMOTENESS OF THE PROBABILITY OF DEATH OF THE PROPER PAYEE (OR OTHER CAUSE RESULTING IN NO FURTHER ENTITLEMENT TO RECURRING OR RESIDUAL PAYMENT) BEFORE A FINAL CONCLUSION COULD BE REACHED BY THE TREASURY DEPARTMENT AND YOUR OFFICE.

"THIRD, ASSUMING WE ADMINISTRATIVELY DECIDE TO IMMEDIATELY REAUTHORIZE PAYMENT, WE WOULD DO SO. OF COURSE, SUCH PAYMENT WOULD BE MADE ONLY IF, ON THE BASIS OF FACTS WE HAVE, WE ARE SATISFIED THAT THE PROPER PAYEE HAD NO PART IN THE NEGOTIATION OF THE CHECK/S) IN QUESTION.

"FOURTH, AFTER YOUR OFFICE HAS REACHED A CONCLUSION BASED ON INVESTIGATION AND ACTUAL EXAMINATION OF ENDORSEMENT ON HE CHECK/S) IN QUESTION AND HAS NOTIFIED US, WE WOULD REVIEW OUR ACTIONS TAKEN IN ADVANCE OF YOUR NOTICE TO US. IF YOUR CONCLUSIONS ARE THE SAME AS OURS (I.E. THE PROPER PAYEE DID NOT IN FACT HAVE ANY PART IN THE NEGOTIATION OF THE CHECK/S) IN QUESTION) THEN THE MATTER WOULD BE CLOSED--- EXCEPT FOR RECOVERY OF THE PAYMENT FROM THE PERSON NOT ENTITLED. IN THE EVENT YOUR CONCLUSIONS ARE THAT THE PROPER PAYEE DID IN FACT RECEIVE AND NEGOTIATE THE CHECK/S) IN QUESTION, WE WOULD IMMEDIATELY SUSPEND FURTHER PAYMENT TO HIM UNTIL THE OVERPAYMENT IS OFFSET. IF, BEFORE YOUR DECISION REACHES US, THE ANNUITANT'S TITLE TO ANNUITY CEASES, WE WOULD HOLD UP ANY RESIDUAL PAYMENT PENDING YOUR DECISION. IN THIS CONNECTION, IN A MAJORITY OF CASES WHERE TITLE TO ANNUITY PAYMENT CEASES ON ACCOUNT OF DEATH OR OTHER CAUSE, THERE IS A RESIDUAL PAYMENT DUE OR THERE IS TITLE TO SURVIVOR ANNUITY AND AN OFFSET COULD BE MADE IN EITHER SITUATION.

"UNDER THE MODIFIED PROCEDURE, WE WOULD REQUEST THAT THE PROCEEDS OF ANY RECLAIMED CHECKS BE DEPOSITED IN THE RETIREMENT FUND RATHER THAN HAVE THEM PAID OVER TO THE PAYEE OF THE CHECK/S).'

OUR UNDERSTANDING IS THAT THE ONLY CHECK CASES INVOLVED UNDER THE PROPOSED MODIFIED PROCEDURE ARE THOSE WHERE THE INTENDED PAYEE IS A CIVIL SERVICE ANNUITANT WHO IS ENTITLED TO MONTHLY RETIREMENT CHECKS AND THAT THE PURPOSE OF THE MODIFIED PROCEDURE IS TO RELIEVE FINANCIAL HARDSHIP IN THOSE CASES WHERE IT IS DETERMINED ADMINISTRATIVELY THAT THE ANNUITANT PAYEE IS NOT INVOLVED IN THE NEGOTIATION OF THE CHECK/S). OTHERWISE THE PROCEDURES ESTABLISHED BY OUR DECISION OF OCTOBER 12, 1949, WILL BE FOLLOWED BY THE COMMISSION. THE PRIMARY CONCERN OF OUR OFFICE IS THE SAFEGUARDING OF THE INTEREST OF THE UNITED STATES IN THE AMOUNT OF THE ERRONEOUS PAYMENTS WHILE, AT THE SAME TIME, SEEING THAT THE INTENDED PAYEE RECEIVES THE AMOUNTS DUE HIM AS EXPEDITIOUSLY AS POSSIBLE SO THAT HE WILL NOT BE UNDULY INCONVENIENCED, PARTICULARLY WHERE THE PAYEE IS AN INNOCENT PARTY AND THE DELAY IS OCCASIONED BY AN ERROR OF A GOVERNMENT AGENCY.

THE PROPOSED MODIFIED PROCEDURE WOULD OPERATE AS FOLLOWS: (1) IN THOSE CASES WHERE IT IS FOUND THAT THE PROPER PAYEE DID IN FACT PARTICIPATE IN THE NEGOTIATION OF THE CHECK/S), RECOVERY WOULD BE MADE ADMINISTRATIVELY BY SUSPENDING FURTHER MONTHLY PAYMENTS TO THE ANNUITANT UNTIL THE OVERPAYMENT IS OFFSET, AND (2) IN THOSE CASES WHERE THE ANNUITANT'S TITLE TO THE ANNUITY CEASES THE RESIDUAL PAYMENT WOULD NOT BE MADE UNTIL OUR OFFICE REACHES A DECISION IN THE CASE. WE NOTE THAT IN A MAJORITY OF CASES WHERE TITLE TO ANNUITY PAYMENT CEASES BECAUSE OF DEATH OR OTHER CAUSE, THERE IS A RESIDUAL PAYMENT DUE OR THERE IS TITLE TO SURVIVOR ANNUITY FROM WHICH AN OFFSET COULD BE MADE.

WE FULLY APPRECIATE AND UNDERSTAND THE IMPORTANCE OF MAKING AS PROMPT A SETTLEMENT AS POSSIBLE WITH THE INTENDED PAYEE, WHO IS WITHOUT FAULT IN THE MATTER. ACCORDINGLY, SINCE THE PROPOSED MODIFIED PROCEDURE WOULD EFFECT SUCH PURPOSE AND WOULD AT THE SAME TIME APPEAR TO PROTECT THE INTEREST OF THE UNITED STATES IN THE MATTER, THE MODIFIED PROCEDURE IN THE TYPE OF CASES STATED ABOVE IS APPROVED.