Liability for Loss of Funds

B-200404: Feb 12, 1981

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An advance decision was requested concerning the propriety of reissuing final salary withheld in satisfaction of unused and unreturned travel advances. The advances were originally issued to two members of the Young Adult Conservation Corps. The funds were stored in a cash box in the office safe, along with imprest fund cash, vouchers, and an undelivered salary check. The safe was opened and the cash box was removed by unknown persons. The claimants' supervisor had requested that the claimants place their travel advances in the custody of the cashier, which they did. The cashier was then told how much to disburse to each employee for each trip. The agency initially determined that the claimants, not the cashier, were liable for the lost travel allowances. This conclusion relied heavily on the assertion that the employees voluntarily placed the funds with the cashier. There was at least some doubt that the surrender of the funds was truly voluntary. If they had gone to the cashier at any time and demanded the return of the travel funds, they would not have been accommodated without question or delay. This converted the character of the funds from personal loans to public monies. Because they were public funds, the employees could not be held responsible for their loss. Vouchers for payment of final salary, less any debts other than the travel advances stolen from the safe, could, if otherwise proper, be certified for payment. It was also asked if the accountable officer must be held liable for the loss. GAO has held in a prior case that relief may be granted if it is impossible to place responsibility for a loss definitely on a cashier or an alternate where both operated from the same safe. That case would provide a possible basis relief of the cashier if the agency wished to request it.

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