[Request for Relief for Army Finance and Accounting Officer and Two Cashiers]

B-226872, MAY 13, 1987, OFFICE OF GENERAL COUNSEL

APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - CASHIERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - FORGERIES APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - FORGERIES ARMY FINANCE OFFICER AND SUBORDINATE CASHIERS ARE GRANTED RELIEF UNDER 31 U.S.C. SEC. 3527(C) FOR IMPROPER PAYMENTS TOTALING $1,000. IMPROPER PAYMENTS RESULTED FROM CRIMINAL ACTIVITY OVER WHICH THE FINANCE OFFICER AND CASHIERS HAD NO CONTROL. THE OFFENDER WAS ABLE TO CASH FORGED CHECKS WITH TWO DIFFERENT CASHIERS, EACH OF WHOM CHECKED HER ID AND NEITHER OF WHOM WERE LED TO BELIEVE THAT A FRAUD WAS BEING PERPETRATED.

BRIGADIER GENERAL B. W. HALL:

THIS REPLIES TO YOUR LETTER OF APRIL 14, 1987, REQUESTING THAT WE GRANT RELIEF TO MAJOR (MAJ) B. T. MILLIGAN, FINANCE AND ACCOUNTING OFFICER, 17TH AREA FINANCE SUPPORT CENTER (DSSN) 6329, SERGEANT (SGT) G. W. HESTER AND STAFF SERGEANT (SSG) J. K. MCDONALD, TWO CASHIERS UNDER MAJ MILLIGAN, FOR IMPROPER PAYMENTS TOTALING $1,000. WE GRANT RELIEF TO MAJ MILLIGAN BECAUSE SHE MAINTAINED AND ENFORCED ADEQUATE PROCEDURES AND CONTROLS TO AVOID ERRORS IN CASHING CHECKS. WE ALSO GRANT RELIEF TO SGT HESTER AND SSG MCDONALD BECAUSE THEY COMPLIED WITH ESTABLISHED PROCEDURES IN MAKING THE PAYMENTS IN QUESTION.

THE IMPROPER PAYMENTS OCCURRED WHEN AN INDIVIDUAL PURPORTING TO BE SPECIALIST FIVE (SP5) TAMMY KERSEY CASHED TWO PERSONAL CHECKS FOR $500.00 EACH ON APRIL 9, AND APRIL 12, 1985. THE CHECKS DRAWN ON SP5 KERSEY'S AMERICAN EXPRESS ACCOUNT WERE SUBSEQUENTLY DISHONORED BECAUSE OF INSUFFICIENT FUNDS. WHEN THE REAL SP5 KERSEY LEARNED OF THE OVERDRAFTS, SHE IMMEDIATELY DENIED WRITING THE CHECKS.

THE RECORD INDICATES THAT SUBSEQUENT INVESTIGATION REVEALED THAT SP5 KERSEY'S CHECKBOOK HAD BEEN EITHER LOST OR STOLEN ON APRIL 6, 1985. THE PERPETRATOR, ON APRIL 8, 1985, WAS ABLE TO OBTAIN A VALID MILITARY IDENTIFICATION CARD (ID) BEARING HER PICTURE AND THE NAME OF SP5 KERSEY. THEREAFTER, THE PERPETRATOR NEGOTIATED SEVEN OF SP5 KERSEY'S PERSONAL CHECKS AT VARIOUS LOCATIONS THROUGHOUT GERMANY. AS OF THE DATE OF YOUR SUBMISSION, THE ARMY HAS BEEN UNABLE TO IDENTIFY OR APPREHEND THE INDIVIDUAL RESPONSIBLE IN THIS CASE. CONSEQUENTLY, THERE HAVE BEEN NO OPPORTUNITIES TO MAKE COLLECTION OF THE IMPROPER PAYMENTS.

IN CASES SUCH AS THIS ONE, BOTH THE PERSON WHO MADE THE IMPROPER PAYMENT AND THE PERSON IN WHOSE NAME THE ACCOUNT IS OFFICIALLY HELD ARE LIABLE AS DISBURSING OFFICIALS FOR THE AMOUNT OF AN IMPROPER PAYMENT. 62 COMP.GEN. 476, 479-80 (1983). UNDER 31 U.S.C. SEC. 3527(C) (1982), THIS OFFICE HAS THE AUTHORITY TO RELIEVE A DISBURSING OFFICIAL FROM LIABILITY FOR AN IMPROPER PAYMENT WHEN THE PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE BY THE OFFICIAL. THE GOOD FAITH AND REASONABLE CARE OF A SUPERVISOR DISBURSING OFFICIALS SHOWN BY EVIDENCE THAT THE SUPERVISOR MAINTAINED ADEQUATE PROCEDURES AND CONTROLS TO AVOID ERRORS AND THAT THE SUPERVISOR TOOK STEPS TO IMPLEMENT THOSE CONTROLS. 62 COMP.GEN. AT 480 (1983). THE GOOD FAITH AND REASONABLE CARE OF THE PERSON WHO MADE THE PAYMENT CAN BE SHOWN BY EVIDENCE THAT THE INDIVIDUAL COMPLIED WITH ESTABLISHED PROCEDURES AND THAT NOTHING OCCURRED WHICH SHOULD HAVE MADE THAT PERSON SUSPICIOUS OF FRAUD. B-223400, AUGUST 22, 1986.

THE CHECK CASHING PROCEDURES IN FORCE FOR CASHING PERSONAL CHECKS REQUIRED CASHIERS TO CHECK THE PAYEE'S ID CARD SIGNATURE AGAINST THE SIGNATURE ON THE CHECK, TO ENSURE THAT THE PAYEE APPEARED TO BE THE SAME INDIVIDUAL PICTURED ON THE ID AND TO CHECK THE NUMERICAL EXPRESSION OF THE CHECK'S AMOUNT AGAINST THE WRITTEN EXPRESSION OF THE CHECK'S AMOUNT. THE RECORD INDICATES THAT THESE PROCEDURES WERE ADEQUATE AND EFFECTIVELY IMPLEMENTED BY MAJ MILLIGAN AND THAT THEY WERE FOLLOWED BY BOTH SGT HESTER AND SSG MCDONALD. IT APPEARS THAT THE IMPROPER PAYMENTS WERE THE RESULT OF SKILLFULLY EXECUTED CRIMINAL ACTIVITY BEYOND THE CONTROL OF EITHER THE CASHIERS OF THE FINANCE OFFICER IN THIS CASE. ACCORDINGLY, FOR THESE REASONS RELIEF IS GRANTED.