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B-227672, B-227674, Jul 22, 1987, Office of General Counsel

B-227672,B-227674 Jul 22, 1987
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APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officer - Disbursing officers - Relief - Illegal/improper payments - Substitute checks DIGEST: Relief is granted two Army disbursing officials under 31 U.S.C. 3527(c) from liability for improper payments resulting in each case from payee's negotiation of both original and recertified checks. Proper procedures were followed in the issuance of the substitute check. There were no indications of bad faith on the part of the disbursing officials and subsequent collection attempts are being pursued. We will deny relief if Army delays more than 3 months in forwarding the debt to its collection division. We have consolidated these requests because they each involve a substantially identical fact situation.

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B-227672, B-227674, Jul 22, 1987, Office of General Counsel

APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officer - Disbursing officers - Relief - Illegal/improper payments - Substitute checks DIGEST: Relief is granted two Army disbursing officials under 31 U.S.C. 3527(c) from liability for improper payments resulting in each case from payee's negotiation of both original and recertified checks. Proper procedures were followed in the issuance of the substitute check, there were no indications of bad faith on the part of the disbursing officials and subsequent collection attempts are being pursued. However, for cases involving notices of loss received after June 1, 1986, where the payee has left the Army or its employ, we will deny relief if Army delays more than 3 months in forwarding the debt to its collection division.

Brigadier General B. W. Hall:

This responds to two separate requests of June 29, 1987, that we relieve two finance and accounting officers, Mr. S. Gast, Special Disbursing Agent, DSSN 6376, U.S. Army Tank and Evaluation Command, Aberdeen Proving Grounds, Maryland, and Lieutenant Colonel R. E. Yrjanson, DSSN 6396, Finance and Accounting Officer, 7th Infantry Division and Fort Ord, Fort Ord, California, under 31 U.S.C. Sec. 3527(c), for improper payments of a $475 check payable to Mr. Anthony T. Seyler and a $259.11 check payable to Ms. Joyce A. Clemons, respectively. We have consolidated these requests because they each involve a substantially identical fact situation-- the negotiation by a payee of both an original and a subsequently issued recertified check. For the reasons stated below, relief is granted.

These losses resulted when each of the payees negotiated both the original and a recertified check. In each instance, both checks were in the same amount. The recertified check in each case was issued on the basis of the payee's allegation that the original check had not been received and a request for stop payment had been made. All of the checks were issued by the Army under authority delegated by the Department of the Treasury. 31 C.F.R. Sec. 245.8 and Treasury Fiscal Requirements Manual for Guidance of Departments and Agencies, Bulletin No. 83-28.

It appears that the issuances of the recertified checks in these cases were within the bounds of due care. See B-223503, August 18, 1986. There were no indications of bad faith on the part of the disbursing officers and adequate collection efforts are being made. Accordingly, we grant relief in both cases.

Although we have granted relief, we do not believe that the Army's collection procedures in either case, taken together meet the diligent claims collection requirement of 31 U.S.C. Sec. 3527(c). In both instances, the loss was not referred to your collection division in a timely manner. As we previously indicated to you, for cases involving notices of loss received after June 1, 1986, where the payee has left the Army or its employ, we will no longer grant relief if Army delays more than 3 months in forwarding the debt to your collection division. However, since the notices of loss in these two cases were received prior to that date, we will not deny relief here.

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