Request for Relief for Army Disbursing Officer's Payment of Forged Check

The Secretary of the Army requests GAO's opinion on issues surrounding the issuance and cashing of a check upon forged endorsement. The Secretary's request poses four questions based on the assumption that the act of December 23, 2994, 58 Stat. 921 covered the situation described. The first matter for consideration was whether a loss sustained by an Army disbursing officer due to the cashing of a check upon a forged endorsement of the payee's name is a deficiency in his accounts within the purview of section 2 of the act. Second, the Secretary asked if the mentioned appropriation is available for payment to the payee or rightful owner where it has been administratively determined that they did not receive or participate in the proceeds of a fraudulently negotiated instrument, and provided there is no regularly established forgery fund operated for this purpose by other departments or agencies. The third question was if the appropriation is available to reimburse the Treasury Department or Post Office Department after settlement by those departments with the payee or rightful owner from their respective reclamation or forgery funds, if it is available to reimburse a commercial banking institution under similar conditions, and if such payment can be made pending recovery or attempted recovery of the loss. Fourth and finally, the Secretary asked whether additional funds may be advanced from Army Account of Advances to a disbursing officer after his accounts are closed in order that a sufficient reserve may be maintained for outstanding checks pending recovery or the attempt recovery of the amount of the loss.