B-216246, MAY 22, 1985, OFFICE OF GENERAL COUNSEL

B-216246: May 22, 1985

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OFFICER WAS ENTITLED TO RELY ON DESIGNATED CERTIFYING OFFICER'S CERTIFICATION. HE MAINTAINED AND IMPLEMENTED AN ADEQUATE SYSTEM OF PROCEDURES AND CONTROLS AND SUBSEQUENT COLLECTION EFFORTS HAVE BEEN MADE. UNDER ARMY REGULATION (AR) 37-107.1-7.F A CERTIFYING OFFICER IS ADMINISTRATIVELY LIABLE FOR THE CORRECTNESS AND ADEQUACY OF THE DOCUMENTS HE OR SHE HAS CERTIFIED. IT IS NOT NECESSARY FOR OUR OFFICE TO RELIEVE THE CERTIFYING OFFICIAL. RELIEF IS GRANTED. PIZUR IS A CERTIFYING OFFICIAL SHE IS NOT ACCOUNTABLE FOR THIS DISBURSEMENT. THE VOUCHER EXAMINER WAS TO ANNOTATE THE BILLS REGISTER CARD AND PLACE THE NOTICE OF ASSIGNMENT ON THE LEFT HAND SIDE OF THE CONTRACT FOLDER. THE EXAMINER NEGLECTED TO NOTE A MODIFICATION OF THE CONTRACT THAT SHOULD HAVE BEEN REFLECTED IN A DECREASE IN THE CONTRACT PRICE.

B-216246, MAY 22, 1985, OFFICE OF GENERAL COUNSEL

CERTIFYING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - BASIS FOR RELIEF DIGEST: 1. RELIEF GRANTED TO FINANCE AND ACCOUNTING OFFICER FOR LOSS DUE TO IMPROPER PAYMENT OF CONTRACT PROCEEDS TO ASSIGNOR INSTEAD OF ASSIGNEE. OFFICER WAS ENTITLED TO RELY ON DESIGNATED CERTIFYING OFFICER'S CERTIFICATION; HE MAINTAINED AND IMPLEMENTED AN ADEQUATE SYSTEM OF PROCEDURES AND CONTROLS AND SUBSEQUENT COLLECTION EFFORTS HAVE BEEN MADE. CERTIFYING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - ADMINISTRATIVE ACTION 2. UNDER ARMY REGULATION (AR) 37-107.1-7.F A CERTIFYING OFFICER IS ADMINISTRATIVELY LIABLE FOR THE CORRECTNESS AND ADEQUACY OF THE DOCUMENTS HE OR SHE HAS CERTIFIED. HOWEVER, FINANCIAL LIABILITY REMAINS WITH THE FINANCE AND ACCOUNTING OFFICE. THEREFORE, IT IS NOT NECESSARY FOR OUR OFFICE TO RELIEVE THE CERTIFYING OFFICIAL. SEE, ALSO 31 U.S.C. SECTION 3528(D).

MR. CLYDE E. JEFFCOAT: PRINCIPAL DEPUTY COMMANDER U.S. ARMY FINANCE AND ACCOUNTING CENTER INDIANAPOLIS, INDIANA 46249

THIS RESPONDS TO YOUR REQUEST THAT WE RELIEVE SPECIAL DISBURSING AGENT, MR. P. J. DOMINICK, TOBYHANNA ARMY DEPOT, TOBYHANNA, PENNSYLVANIA, UNDER 31 U.S.C. SECTION 3527(C) FOR AN IMPROPER PAYMENT MADE TO NAVIGATION SYSTEMS, INC., IN THE AMOUNT OF $12,459.72. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED. YOUR RELIEF REQUEST ALSO INCLUDED SUPERVISORY VOUCHER EXAMINER, MRS. BARBARA A. PIZUR. HOWEVER, SINCE MRS. PIZUR IS A CERTIFYING OFFICIAL SHE IS NOT ACCOUNTABLE FOR THIS DISBURSEMENT. DEPARTMENT OF THE ARMY REGULATION (AR) 37-107.1 7.F.

THE IMPROPER PAYMENT OCCURRED WHEN A VOUCHER EXAMINER FAILED TO NOTE THAT THE PROCEEDS OF THE CONTRACT BETWEEN NAVIGATION SYSTEMS, INC., AND THE U.S. GOVERNMENT HAD BEEN PROPERLY ASSIGNED TO LORAIN NATIONAL BANK OF LORAIN, OHIO. UNDER THE STANDARD OPERATING PROCEDURES IN EFFECT AT THAT TIME, THE VOUCHER EXAMINER WAS TO ANNOTATE THE BILLS REGISTER CARD AND PLACE THE NOTICE OF ASSIGNMENT ON THE LEFT HAND SIDE OF THE CONTRACT FOLDER. INSTEAD, THE EXAMINER SIMPLY PLACED THE NOTICE AT THE BACK OF THE FILE. IN ADDITION, THE EXAMINER NEGLECTED TO NOTE A MODIFICATION OF THE CONTRACT THAT SHOULD HAVE BEEN REFLECTED IN A DECREASE IN THE CONTRACT PRICE. THE RESULT OF THESE ERRORS WAS THAT THE EXAMINER DIRECTED THAT A PAYMENT OF $12,459.72 BE MADE TO NAVIGATION SYSTEMS, INC. (ASSIGNOR), RATHER THAN THE CORRECT PAYMENT OF $12,103 TO THE LORAIN NATIONAL BANK (ASSIGNEE).

ON THE BASIS OF THIS CERTIFICATION, MR. DOMINICK PAID THE WRONG AMOUNT TO THE WRONG PARTY. THE ERROR WAS SUBSEQUENTLY DISCOVERED AND MR. DOMINICK MADE THE CORRECT PAYMENT TO THE ASSIGNEE. SEE B-216246, OCTOBER 2, 1984. MR. DOMINICK MADE VIGOROUS ATTEMPTS TO RECOVER THE IMPROPER PAYMENT FROM THE ASSIGNOR BUT WAS UNSUCCESSFUL. THE MATTER WAS TURNED OVER TO YOUR DESIGNATED COLLECTION REPRESENTATIVE IN CONFORMANCE WITH THE FEDERAL CLAIMS COLLECTION ACT.

THIS OFFICE HAS AUTHORITY UNDER 31 U.S.C. SECTION 3527(C) TO RELIEVE A DISBURSING OFFICER FROM LIABILITY WHEN THE RECORD INDICATES THAT THE DISBURSING OFFICER 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 DISBURSING OFFICER, AND THAT A DILIGENT EFFORT WAS MADE TO COLLECT THE OVERPAYMENT. 62 COMP.GEN. 91 (1982). RECOGNIZING THE BURDEN THIS PLACES ON A FINANCE AND ACCOUNTING OFFICER WHO IS RESPONSIBLE FOR BOTH THE CERTIFYING AND DISBURSING FUNCTIONS, WE HAVE GRANTED RELIEF IN CASES WHERE THE ERROR WAS SOLELY A SUBORDINATE'S AND WHERE THE FINANCE AND ACCOUNTING OFFICER PRESIDES OVER AN EFFICIENT SYSTEM OF DISBURSEMENT. B-214273, DECEMBER 11, 1984.

DEPARTMENT OF THE ARMY REGULATION (AR) 37-107.1-7E PROVIDES THAT A DISBURSING OFFICER IS ENTITLED TO RELY ON A DESIGNATED CERTIFYING OFFICER'S CERTIFICATION "UNLESS HE HAS A REASONABLE DOUBT AS TO THE CORRECTNESS OF THE FACTS STATED ON OR ATTACHED TO THE VOUCHER." HERE, THE BILL REGISTER CARD WAS NOT ANNOTATED, THE NOTICE OF ASSIGNMENT WAS NOT IN THE PROPER PLACE, AND THERE WAS NO INDICATION ON THE FACE OF THE VOUCHER THAT AN ASSIGNMENT OF THE CONTRACT PROCEEDS HAD BEEN MADE. UNDER THESE CIRCUMSTANCES, IT WAS NOT UNREASONABLE FOR MR. DOMINICK TO SIGN THE CHECK AS DIRECTED. MOREOVER, IT APPEARS THAT MR. DOMINICK HAD ESTABLISHED AND MAINTAINED AN ADEQUATE SYSTEM OF PROCEDURES AND CONTROLS TO AVOID ERRORS AND THAT APPROPRIATE STEPS WERE TAKEN TO ENSURE THE SYSTEM'S IMPLEMENTATION AND EFFECTIVENESS. HAD THE VOUCHER EXAMINER FOLLOWED THE PROCEDURES THEN IN EFFECT, THE ERROR COULD HAVE BEEN AVOIDED. WHILE WE FIND THE PROCEDURES THEN IN PLACE TO HAVE BEEN ADEQUATE, WE NOTE WITH APPROVAL THAT PROCEDURES FOR HANDLING ASSIGNMENTS OF CLAIMS HAVE BEEN STRENGTHENED TO ENSURE THAT SIMILAR INCIDENTS DO NOT OCCUR.

THUS, WE CONCUR IN YOUR CONCLUSION THAT THE IMPROPER PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE ON THE PART OF MR. DOMINICK. ACCORDINGLY, WE GRANT RELIEF.