[Comments on NIH Employee's Request for Relief From Liability for Lost Travel Advance]

B-226247, May 12, 1988, 67 Comp.Gen. 402

Appropriations/Financial Management - Accountable Officers - Determination Criteria - Liability - GAO Authority The Department of Health and Human Services is advised that where agency policies (1) prohibit an employee from personally retrieving from the agency cashier payments authorized for travel advances or expense reimbursements, and (2) mandate the use of agency messengers to retrieve those amounts, the messenger becomes the agent of the government and the employee will not be liable for amounts received by the messenger unless and until those funds are actually delivered to the employee.

The Honorable Otis R. Bowen:

In letter of January 16, 1987, Ms. Karen L. Milne of the Epilepsy Branch of the National Institutes of Health (NIH), requested "relief" from liability for a $100 travel advance payment which she maintains she did not receive. As explained below, we conclude that she was not liable for the loss of that advance. Consequently, the Department of Health and Human Services (HHS) is advised to refund to her any amounts paid by her, voluntarily or otherwise, in the course of the agency's debt collection efforts.

On September 17, 1986, a messenger employed by HHS was assigned to pick up from an HHS cashier a number of travel advances for employees of HHS, including one advance (in the amount of $100) designated for Ms. Milne. The messenger's instructions were to retrieve the advances and deliver them to the particular travelers, or if a traveler was not available, to the person who prepared the travel order and travel advance request for that person. The cashier's records indicate that the messenger signed for and received a sealed envelope containing a $100 cash travel advance designated for Ms. Milne, along with a number of similarly prepared travel advance payments for other employees of the Epilepsy Branch and other NIH offices. Upon arriving at the Epilepsy Branch, the messenger discovered that neither the Epilepsy Branch travelers (including Ms. Milne) nor the person who prepared the Epilepsy Branch travel request were available to receive delivery. Consequently, he left a package containing travel advances designated for four Epilepsy Branch employees with a secretary assigned to that office. She agreed to make delivery for him. Apparently, somewhere in that process, Ms. Milne's advance disappeared. She did not actually receive it, and despite an agency investigation, it could not be located, nor could the agency ascertain what became of it. Based on decisions of this Office involving similar facts, /1/ HHS concluded that, as a matter of law, Ms. Milne was deemed to have constructively received the missing advance and was liable for it. /2/

The rule established in the cases cited by HHS proceeds from the principle of the law of agency that where a person designates another person to receive cash or other property, that person becomes the agent of the person making the designation. E.g., B-204387, Feb. 24, 1982. These cases follow this principle, but differ significantly on their facts from the present case. In each of the cited cases there was no evidence that employees were required to receive their travel advances through a designated person or system. In each of the cited cases it was clear that the travel advance could have been collected directly by the traveler.

In the present case, however, it is undisputed that at the time of this loss, the head of the Epilepsy Branch had established a policy which required all Epilepsy Branch staff to use the agency's messenger service to retrieve travel advances. Employees were expressly forbidden to pick up their own advances. This policy was grounded in concern for the "waste" of professional staff time which would otherwise occur if each traveler were to travel on government time to and from another building (where the cashier's office was located) in order to obtain advances and reimbursements on travel vouchers. /3/ Thus, under Epilepsy Branch policies, Ms. Milne had no choice in the matter.

Given these facts, it is clear that both the messenger and the secretary through whom the missing advance was to have been passed to Ms. Milne were the agents of the government, not Ms. Milne. /4/ Cf. B-224883.2, Dec. 1, 1987. For this reason, we conclude that Ms. Milne did not constructively receive the missing funds, and bears no liability for their loss. Any amounts which were recovered from her, voluntarily or otherwise, should be promptly refunded.

/1/ E.g., B-200867, Mar. 30, 1981; B-204387, Feb. 24, 1982.

/2/ Ms. Milne is seeking "relief" from HHS's assessment of liability. Travel advances are governed by 5 U.S.C. Sec. 5705 (1982). Under that act, amounts advanced to employees which are not used for allowable expenses must be recovered from the employee. There is no authority to "relieve" employees for advances which may be lost or stolen. Cf., e.g., 54 Comp.Gen. 190 (1974).

/3/ After this loss occurred, this policy was canceled and replaced with a new Epilepsy Branch policy which allows each employee the choice of whether to use the agency messenger service or pick up the advance personally.

/4/ It is also clear that the messenger and the secretary are jointly liable for the missing funds as "accountable officers." E.g., 63 Comp.Gen. 489, 490 n.l. (1984); B-188413, June 30, 1977. However, agencies are authorized under 31 U.S.C. Sec. 3527 (1982) to relieve accountable officers of liability for debts of less than $750 which arise from unexplained losses. See 61 Comp.Gen. 646 (1982); GAO, Policy and Procedures Manual for Guidance of Federal Agencies, tit. 7, Sec. 28.14 (T.S. No. 7-40, July 14, 1983). It may be appropriate for HHS to relieve one or both of those individuals from liability in this matter. Cf. 63 Comp.Gen. at 492-494 ("pervasive laxity" in agency procedures).