B-223503, AUG 18, 1986, 65 COMP.GEN. 811

B-223503, AUG 18, 1986, 65 COMP.GEN. 811

DISBURSING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - NOT RESULT OF BAD FAITH OR NEGLIGENCE RELIEF IS GRANTED ARMY DISBURSING OFFICIAL UNDER 31 U.S.C. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF BOTH ORIGINAL AND RECERTIFIED CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE RECERTIFIED CHECK, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL AND SUBSEQUENT COLLECTION ATTEMPT ARE BEING PURSUED. HOWEVER, FOR LOSSES RECORDED 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.

TO: MR. CLYDE E. JEFFCOAT, AUGUST 18, 1986:

THIS RESPONDS TO YOUR REQUEST OF JUNE 19, 1986, THAT WE RELIEVE LIEUTENANT COLONEL (LTC) T. S. SHARP, JR., FINANCE CORPS, FINANCE AND ACCOUNTING OFFICER, U.S. ARMY FINANCE AND ACCOUNTING CENTER, 1ST INFANTRY DIVISION AND FORT RILEY, FORT RILEY, KANSAS, UNDER 31 U.S.C. SEC. 3527(C) FOR AN IMPROPER PAYMENT OF A $511.25 CHECK PAYABLE TO MR. GEORGE J. BRUCE. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

THE LOSS RESULTED WHEN THE PAYEE NEGOTIATED BOTH THE ORIGINAL AND A RECERTIFIED CHECK. THIS IS OUR FIRST OPPORTUNITY TO CONSIDER A RELIEF REQUEST INVOLVING THE NEW RECERTIFICATION PROCEDURES. A RECERTIFIED CHECK, UNLIKE A SUBSTITUTE CHECK, BEARS A DIFFERENT CHECK SERIAL NUMBER FROM THE ORIGINAL INSTRUMENT AND IS DISBURSED FROM A NEW BUDGET CLEARING ACCOUNT. UNDER TREASURY FISCAL REQUIREMENTS MANUAL FOR GUIDANCE OF DEPARTMENTS AND AGENCIES, BULLETIN NO. 83-28, THE TREASURY DEPARTMENT REDELEGATED AUTHORITY TO ADMINISTRATIVE AGENCIES TO CERTIFY REPLACEMENT PAYMENTS TO PAYEES WHO CLAIM NONRECEIPT, LOSS, THEFT, MUTILATION, DESTRUCTION OR FORGERY OF U.S. TREASURY CHECKS AND MADE THE AGENCY CERTIFICATION OF REPLACEMENT CHECKS MANDATORY. TO IMPLEMENT THE NEW RECERTIFICATION PROCEDURES, THE ARMY ISSUED A LETTER OF INSTRUCTION ON FEBRUARY 6, 1985.

UNDER THESE INSTRUCTIONS, A FINANCE OFFICER WHEN NOTIFIED BY THE PAYEE OR CLAIMANT OF NONRECEIPT OF AN ORIGINAL CHECK WILL REQUIRE THE PAYEE OR CLAIMANT TO COMPLETE AND SIGN DA FORM 3037 (STATEMENT OF CLAIMANT REQUESTING STOPPAGE OF PAYMENT ON CHECK). ON THE BASIS OF THE DA FORM 3037, THE FINANCE OFFICER MAY ISSUE A REPLACEMENT CHECK IMMEDIATELY OR DELAY THE NEW PAYMENT UNTIL A LATER TIME. AFTER THE FORMS ARE SIGNED, THE FINANCE OFFICE WILL PREPARE AND PROCESS A SF 1184, "UNAVAILABLE CHECK CANCELLATION."

UNDER THE RECERTIFICATION PROCEDURES, UPON RECEIPT OF THE SF 1184, THE TREASURY DEPARTMENT, DIVISION OF CHECK CLAIMS PROCESSES THE CHECK CANCELLATION FORM TO DETERMINE THE PAYMENT STATUS OF THE CHECK. THE PAYMENT STATUS OF THE CHECK AND THE ACTION TO BE TAKEN BY TREASURY IS THEN TRANSMITTED TO THE FINANCE OFFICER BY MEANS OF THE DAILY ADVICE OF STATUS (DAS). IF THE PAYMENT STATUS OF THE CHECK IS "OUTSTANDING" THE TREASURY DEPARTMENT IS TO CREDIT THE ARMY'S BUDGET CLEARING ACCOUNT. IF, AFTER CREDIT HAS BEEN GIVEN BY TREASURY, THE CHECK IS NEGOTIATED, TREASURY WILL ISSUE A CHARGEBACK TO THE ARMY'S BUDGET CLEARING ACCOUNT AND THE FINANCE OFFICER SHOULD BEGIN COLLECTION ACTION AT THAT TIME.

IN THIS CASE, NONRECEIPT OF THE ORIGINAL CHECK WAS CLAIMED ON APRIL 12, 1985. THE DAS FROM TREASURY, DATED APRIL 19, 1985, INDICATED THAT THE CHECK WAS OUTSTANDING. THE RECERTIFIED CHECK WAS ISSUED MAY 6, 1985, ON THE BASIS OF THE CLAIMANT'S ORIGINAL ALLEGATION THAT THE FIRST CHECK FOR DAMAGED HOUSEHOLD GOODS HAD NOT BEEN RECEIVED. ON JULY 17, 1985, THE FINANCE OFFICER WAS INFORMED BY MEANS OF A CHARGEBACK FROM TREASURY THAT BOTH THE ORIGINAL AND RECERTIFIED CHECK HAD BEEN NEGOTIATED.

IT APPEARS THAT THE ISSUANCE OF A RECERTIFIED CHECK IN THIS CASE WAS WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY THE ARMY'S LETTER OF INSTRUCTION ON THE RECERTIFICATION OF CHECKS DISBURSING AND ACCOUNTING PROCEDURES, FEBRUARY 6, 1985. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICER AND ADEQUATE COLLECTION EFFORTS ARE NOW BEING MADE. ALTHOUGH WE HAVE GRANTED RELIEF TO THE DISBURSING OFFICER IN THIS CASE, WE DO NOT BELIEVE THAT THE ARMY'S COLLECTION PROCEDURES, TAKEN TOGETHER, MEET THE DILIGENT CLAIMS COLLECTION REQUIREMENT OF 31 U.S.C. SEC. 3527(C). ONCE THE CHARGEBACK WAS RECEIVED FROM TREASURY, IT TOOK ARMY OVER 10 MONTHS TO REFER THE MATTER TO YOUR COLLECTION DIVISION. WE PREVIOUSLY INDICATED TO YOU, FOR LOSSES RECORDED 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 THIS CASE OCCURRED PRIOR TO THAT DATE, WE WILL NOT DENY RELIEF HERE.