B-215433; B-215515 July 2, 1984
Highlights
Sec. 3527(c) in two cases where substitute checks were issued on the same day the original checks were issued. Request fails to give reasonable explanation for disbursing officer believing that check was lost. Or destroyed when substitute is requested on the same day as the original was issued. We are unable to grant relief on the basis of the information supplied. A Treasury check was issued to an Army member or civilian employee. A stop payment order was then placed on each check and a substitute check was issued to the payee on the same day as the original check was issued. Both the original check and the substitute check were successfully negotiated by the payee and paid by the Treasury.
B-215433; B-215515 July 2, 1984
Relief denied Army disbursing officer under 31 U.S.C. Sec. 3527(c) in two cases where substitute checks were issued on the same day the original checks were issued. Request fails to give reasonable explanation for disbursing officer believing that check was lost, stolen, or destroyed when substitute is requested on the same day as the original was issued.
Mr. Clyde E. Jeffcoat Principal Deputy Commander U.S. Army Finance and Accounting Center Indianapolis, Indiana 46249
Dear Mr. Jeffcoat:
This responds to two separate requests that we relieve Army Finance and Accounting Officer H.H. Gassie under 31 U.S.C. Sec. 3527(c) from liability for improper payments made from his accounts. Both requests involve a substantially identical fact situation--the negotiation by a payee of both an original check and a subsequently issued replacement check by the finance officer's deputy. As discussed below, we are unable to grant relief on the basis of the information supplied.
The two requests involved here concern checks made payable to Terry L. Parrish in the amount of $544 (B-215433), and to Roger W. Hulett in the amount of $110 (B-215515). Each of the improper payments in question arose in a substantially similar fact situation. In each case, a Treasury check was issued to an Army member or civilian employee. In each case, the payee represented to Army disbursing officials that the check had not been received. A stop payment order was then placed on each check and a substitute check was issued to the payee on the same day as the original check was issued. In both cases, both the original check and the substitute check were successfully negotiated by the payee and paid by the Treasury.
This Office has authority under 31 U.S.C. Sec. 3527(c) to relieve a disbursing officer from liability for a deficiency resulting from an improper payment upon determining "that the payment was not the result of bad faith or lack of reasonable care by the official." Relief of an accountable officer does not affect the liability to the Government of the person who received an improper payment. As we discussed in 62 Comp. Gen. 91 (1982), we are continuing to handle duplicate check cases under this authority pending Congressional clarification of this issue. We have recognized that in "duplicate check" cases, such as those before us, the improper payment "is totally beyond the responsibility and control of the agency disbursing officer and is something for which he should incur no liability." 62 Comp.Gen. 91, 94 (1982). Relief is granted when the record indicates that Army personnel acted within the bounds of due care as established by applicable regulations, that there is no evidence of bad faith on the part of the accountable officer, and that a diligent effort was made to collect the overpayment. 62 Comp.Gen. 91.
It appears that the request for stop payment and the issuance of a substitute check in these two cases were technically within the bounds of Army Regulations. See AR 37- 103, paragraphs 4-160 et seq. (15 days).
However, as we have noted before, we have some concern over the issuance of substitute checks where there does not appear to be an adequate interval between the issuance of the original check and the issuance of the substitute to reasonably support a claim of non-receipt due to a check having been "lost, stolen, or destroyed." In our letter to you of May 1, 1984, we agreed not to question the issuance of substitute checks 3 days after the date the original check was issued, but we also noted that we considered time to be a factor in determining whether the disbursing officer had exercised reasonable care. See B-201286, May 1, 1984. It was our understanding at that time that you yourself did not endorse a shorter interval than 3 days. In these two cases, the information supplied in your request does not explain why it might be reasonable to accept a claim of non-receipt on the same day as the original check was issued. Until this is explained, we must deny relief even though the substitute check was issued within the period technically authorized by Army Regulations.
Sincerely yours,
Harry R. Van Cleve Acting General Counsel