A-58695, OCTOBER 31, 1935, 15 COMP. GEN. 362

A-58695, OCTOBER 31, 1935, 15 COMP. GEN. 362

CERTIFYING OFFICERS - LIABILITY - VETERANS' ADMINISTRATION SECTION 28 OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED MAY 29, 1928, 45 STAT. 965, AND REENACTED JULY 3, 1930, 46 STAT. 994, RELIEVING DISBURSING OFFICERS FROM LIABILITY FOR PAYMENTS THE RECOVERY OF WHICH FROM THE PAYEE IS WAIVED BY THE VETERANS' ADMINISTRATION, IS NOT FOR APPLICATION TO CERTIFYING OFFICERS OF THE VETERANS' ADMINISTRATION FOR LIABILITY FOR IMPROPER PAYMENTS NEWLY IMPOSED UNDER EXECUTIVE ORDER NO. 6166, DATED JUNE 10, 1933.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, OCTOBER 31, 1935:

THERE WAS RECEIVED LETTER DATED AUGUST 3, 1935, FROM THE ASSISTANT ADMINISTRATOR, DAF-CA FLANDERS, JAMES G. XC-1,940,975 WORLD WAR, AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 13, 1935, CITING LETTER DATED FEBRUARY 27, 1935, ADDRESSED TO THIS ADMINISTRATION, RELATIVE TO EFFECTING COLLECTION OF $91.88, THE AMOUNT OF CHECK NO. 2,247,692, FROM THE CERTIFYING OFFICER OR OFFICERS RESPONSIBLE FOR THE PAYMENT. YOUR LETTER OF APRIL 13, 1935, WHICH WAS ACKNOWLEDGED ON APRIL 25, 1935, REQUESTS A REPORT AS TO THE ACTION TAKEN IN THE MATTER.

SECTION 28, TITLE I, OF THE WORLD WAR VETERANS' ACT, 1924, AS AMENDED MAY 29, 1928 (38 U.S.C., SEC. 453), PROVIDES THAT:

"THERE SHALL BE NO RECOVERY OF PAYMENTS FROM ANY PERSON, WHO, IN THE JUDGMENT OF THE DIRECTOR, IS WITHOUT FAULT ON HIS PART, AND WHERE, IN THE JUDGMENT OF THE DIRECTOR, SUCH RECOVERY WOULD DEFEAT THE PURPOSE OF BENEFITS OTHERWISE AUTHORIZED OR WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE. NO DISBURSING OFFICER SHALL BE HELD LIABLE FOR ANY AMOUNT PAID BY HIM TO ANY PERSON WHERE THE RECOVERY OF SUCH AMOUNT IS WAIVED UNDER THIS SECTION.'

EXECUTIVE ORDER NO. 6166, DATED JUNE 10, 1933, PLACES THE CERTIFYING OFFICER IN THE SAME POSITION AS HERETOFORE OCCUPIED BY THE DISBURSING OFFICER.

PURSUANT TO THIS PROVISION OF THE STATUTE THE CENTRAL COMMITTEE ON WAIVERS AND FORFEITURES OF THIS ADMINISTRATION, TO WHICH HAS BEEN DELEGATED AUTHORITY TO WAIVE RECOVERY OF THESE OVERPAYMENTS, FOUND ON JUNE 28, 1935, THAT MRS. MARIAN F. FLANDERS, WIDOW, WAS WITHOUT FAULT IN CONNECTION WITH THE OVERPAYMENT; AND THAT BY REASON OF HER POOR FINANCIAL CONDITION AND INABILITY TO MAKE A RESTITUTION, RECOVERY FROM HER WOULD BE OBVIOUSLY AGAINST EQUITY AND GOOD CONSCIENCE. THE COMMITTEE DECIDED THAT RECOVERY OF THE OVERPAYMENT TO HER SHOULD BE AND THE SAME THEREBY WAS WAIVED.

IN VIEW OF THE WAIVER OF RECOVERY OF THE OVERPAYMENT IN THIS CASE, IT DOES NOT APPEAR THAT THERE IS ANY AMOUNT NOW FOR COLLECTION.

IN REPLY TO REQUEST FOR REPORT AS TO THE CIRCUMSTANCES UNDER WHICH THE CHECK IN THIS CASE WAS ISSUED, THE ASSISTANT ADMINISTRATOR OF THE VETERANS' ADMINISTRATION, BY LETTER DATED NOVEMBER 26, 1934, STATED AS FOLLOWS:

* * * THIS CHECK WAS ISSUED ON ACCOUNT OF ACCRUED DISABILITY ALLOWANCE.

PUBLIC ACT NO. 2, 73D CONGRESS, AND REGULATIONS PROMULGATED THEREUNDER MAKE NO PROVISION FOR PAYMENT OF DISABILITY ALLOWANCE WHERE PAYMENTS WERE NOT BEING CURRENTLY MADE AT TIME OF DEATH. WHERE PAYMENTS WERE BEING MADE AT TIME OF DEATH ANY BENEFITS DUE AND UNPAID TO THE BENEFICIARY MAY BE ADJUDICATED AND PAID. THE VETERAN DIED MAY 6, 1932, AND NO PAYMENTS ON THE AWARD WHICH WAS APPROVED APRIL 29, 1932, WERE MADE DURING HIS LIFETIME.

MRS. FLANDERS (PAYEE) WAS ADVISED OF THE ACCRUED AMOUNT OF DISABILITY ALLOWANCE DUE HER HUSBAND'S ESTATE ON AUGUST 13, 1932, AND WAS FURNISHED FORMS FOR FILING CLAIM. THESE FORMS WERE NOT RECEIVED IN THE VETERANS'ADMINISTRATION UNTIL MARCH 17, 1933, AND BEFORE ACTION COULD BE TAKEN PUBLIC ACT NO. 2 WAS PASSED AND ALL CLAIMS WERE HELD PENDING REGULATIONS.

A COMMUNICATION FROM THE BOSTON, MASSACHUSETTS, REGIONAL OFFICE, RELATIVE TO THE CLAIM, WAS RECEIVED ON FEBRUARY 12, 1934, AND THROUGH INADVERTENCE A VOUCHER FOR THE ACCRUED DISABILITY ALLOWANCE WAS APPROVED AND PAYMENT WAS MADE AS STATED ABOVE. THE RECORDS INDICATE THAT THE CHECK IN QUESTION WAS CASHED BY MRS. MARIAN F. FLANDERS, THE PAYEE.

UNDER THE FACTS AS REPORTED THE CASHING BANK APPEARING TO BE A BONA FIDE HOLDER IN DUE COURSE FOR VALUE THE TREASURER OF THE UNITED STATES BY DECISION OF FEBRUARY 27, 1935, WAS AUTHORIZED TO REMOVE THE STOP PAYMENT ORDER AND EFFECT PAYMENT ON THE CHECK THEREBY DEPLETING THE APPROPRIATION TO THE EXTENT OF THE AMOUNT OF THE CHECK FOR OTHERWISE PROPER PAYMENTS.

THE DECISION TO YOU DATED FEBRUARY 27, 1935, CONCLUDED AS FOLLOWS:

SINCE, ON THE BASIS OF THE FACTS OF RECORD, THE DISBURSING OFFICER MAY NOT BE HELD LIABLE FOR THE UNLAWFUL PAYMENT HERE IN QUESTION (SEE ACT OF AUGUST 23, 1912, 37 STAT. 375, AND 4 COMP. GEN. 991), IT IS REQUESTED THAT YOU TAKE THE NECESSARY STEPS TO COLLECT THE AMOUNT OF THE UNLAWFUL PAYMENT, TO WIT, $91.88, FROM THE CERTIFYING OFFICER OR OFFICERS RESPONSIBLE THEREFOR AND TRANSMIT SAID AMOUNT HERE FOR PROPER DISPOSITION.

SECTION 28 OF THE WORLD WAR VETERANS' ACT AS ORIGINALLY ENACTED JUNE 7, 1924, 43 STAT. 615, DID NOT CONTAIN THE SENTENCE RELIEVING DISBURSING OFFICERS FROM LIABILITY FOR AMOUNTS THE RECOVERY OF WHICH WAS WAIVED UNDER THE SECTION. NOTWITHSTANDING THE CONTENTION OF THE VETERANS' BUREAU AT THE TIME THAT UNDER THE ORIGINAL LAW DISBURSING OFFICERS SHOULD NOT HAVE BEEN HELD LIABLE FOR SUCH AMOUNTS, THIS OFFICE, IN DECISION OF OCTOBER 4, 1927, 7 COMP. GEN. 264, 265, HELD AS FOLLOWS:

* * * NO INTENT IS SHOWN IN THE STATUTE TO RELIEVE A DISBURSING OFFICER, AND THERE APPEARS NO GOOD REASON WHY THE DISBURSING OFFICER WHO WAS RESPONSIBLE FOR THE OVERPAYMENT SHOULD BE RELIEVED FROM THE EFFECT OF HIS ERROR OR INEFFICIENCY BECAUSE OF THE DISCRETION GRANTED BY LAW TO THE ADMINISTRATIVE OFFICE TO RELIEVE THE GOVERNMENT BENEFICIARY FROM THE NECESSITY OF REFUNDING AN OVERPAYMENT. THE DECISION OF FEBRUARY 11, 1927, 6 COMP. GEN. 522, IS AFFIRMED. SEE ALSO 2 COMP. GEN. 144.

AN AMENDMENT TO THE ORIGINAL STATUTE WAS THUS REQUIRED TO RELIEVE DISBURSING OFFICERS, AND ACCORDINGLY, THE ACT OF MAY 29, 1928, 45 STAT. 965, AMENDED SECTION 28 OF THE WORLD WAR VETERANS' ACT BY INCLUDING THE SENTENCE RELIEVING DISBURSING OFFICERS FROM LIABILITY FOR THE AMOUNTS THE RECOVERY OF WHICH WAS WAIVED THEREUNDER. AS THUS AMENDED, THE SECTION WAS REENACTED JULY 3, 1930, 46 STAT. 994.

SECTION 4 OF EXECUTIVE ORDER NO. 6166, DATED JUNE 10, 1933, ISSUED PURSUANT TO THE ACT OF MARCH 3, 1933, 47 STAT. 1517, AS AMENDED BY THE ACT OF MARCH 20, 1933, 48 STAT. 16, AND HAVING THE FORCE AND EFFECT OF LAW, ESTABLISHING A CENTRALIZED DISBURSING SYSTEM IN THE TREASURY DEPARTMENT, PROVIDES AMONG OTHER THINGS AS FOLLOWS:

THE DIVISION OF DISBURSEMENT SHALL DISBURSE MONEYS ONLY UPON THE CERTIFICATION OF PERSONS BY LAW DULY AUTHORIZED TO INCUR OBLIGATIONS UPON BEHALF OF THE UNITED STATES. THE FUNCTION OF ACCOUNTABILITY FOR IMPROPER CERTIFICATION SHALL BE TRANSFERRED TO SUCH PERSONS AND NO DISBURSING OFFICER SHALL BE HELD ACCOUNTABLE THEREFOR.

IT APPEARS TO BE YOUR CONTENTION THAT IN APPLYING SECTION 28 OF THE WORLD WAR VETERANS' ACT, AS AMENDED, SUPRA, EXECUTIVE ORDER NO. 6166 PLACES THE CERTIFYING OFFICER OF THE VETERANS' ADMINISTRATION IN THE SAME POSITION AS OCCUPIED BY THE DISBURSING OFFICERS, THAT IS TO SAY, SINCE THE DISBURSING OFFICERS MAY NOT BE HELD LIABLE ON THEIR BONDS FOR ERRONEOUS OR ILLEGAL PAYMENTS THE RECOVERY OF WHICH IS WAIVED UNDER SECTION 28 OF THE WORLD WAR VETERANS' ACT AS AMENDED, NEITHER CAN THE CERTIFYING OFFICER OR OFFICERS RESPONSIBLE FOR THE PAYMENTS BE HELD LIABLE IN SIMILAR CIRCUMSTANCES. THERE IS NO MERIT IN THIS CONTENTION. THE PURPOSE OF SECTION 4 OF THE EXECUTIVE ORDER OF JUNE 10, 1933, QUOTED ABOVE WAS TO IMPOSE A NEW AND ENLARGED LIABILITY ON CERTIFYING OFFICERS FOR UNLAWFUL PAYMENTS FOR WHICH THEY ARE RESPONSIBLE, DISTINCT FROM, AND IN ADDITION TO, THAT IMPOSED ON DISBURSING OFFICERS. IN THIS CONNECTION IT WAS STATED IN DECISION OF DECEMBER 29, 1933, 13 COMP. GEN. 326, 328, AS FOLLOWS:

UNDER A CENTRALIZED DISBURSING SYSTEM WITH DISBURSING DUTIES IN OFFICERS REMOVED FROM CONTROL BY THOSE AUTHORIZED TO OBLIGATE APPROPRIATIONS, AND ACTING WHOLLY UPON THEIR PERSONAL AND BONDED RESPONSIBILITY, THE ADMINISTRATIVE RESPONSIBILITY IN THE MATTER OF OBLIGATING AN APPROPRIATION BECOMES REAL AS THE PROCEDURE OF INDUCING PAYMENT AND THEN FIGHTING THE BATTLE FOR CREDIT EVEN THROUGH THE CONGRESS IF NECESSARY, IS NOT AVAILABLE. UNDER A CENTRALIZED AND INDEPENDENT DISBURSING SYSTEM IMPROPER OR ILLEGAL ADMINISTRATIVE ACTION ATTEMPTING TO OBLIGATE AN APPROPRIATION SHOULD RESULT IN NO PAYMENT, THUS LEAVING THE ADMINISTRATIVE OFFICIAL HIS PROBLEM TO WORK OUT AS BEST HE CAN, BUT WITH THE PUBLIC MONEYS INVOLVED STILL IN THE TREASURY AND FULLY PROTECTED.

WHILE THE LANGUAGE EMPLOYED IN THE CLOSING SENTENCE OF SECTION 4 IS NOT AND DOES NOT PURPORT TO BE IN FORM AS USUALLY EMPLOYED IN LEGISLATION, WHEN CONSIDERED IN THE LIGHT OF THE FACT THAT ACCOUNTABILITY FOR PUBLIC MONEYS IS NOT A MATTER WITHIN THE PURVIEW OF THE ACT OF MARCH 3, 1933, THE EXECUTIVE PURPOSE THEREIN CLEARLY IS TO EXACT FURTHER PROTECTION FOR THE PUBLIC MONEYS THROUGH PLACING GREATER RESPONSIBILITY UPON ADMINISTRATIVE OFFICIALS TO WHOSE CERTIFICATES DISBURSING OFFICERS MUST USUALLY LOOK FOR THE FACTS NECESSARY TO SUPPORT PAYMENT ON ADMINISTRATIVELY APPROVED VOUCHERS.

SO FAR AS THE ACCOUNTING OFFICERS OF THE GOVERNMENT ARE CONCERNED THE PRIMARY AND DIRECT ACTION REQUIRED BY LAW IS UPON THE DISBURSING OFFICER WHO, USUALLY, IS BONDED; AND WHILE THE RESPONSIBILITY OF CERTIFYING OFFICIALS DOES NOT LESSEN THE RESPONSIBILITY OF THE DISBURSING OFFICER AND HIS SURETY IN THEIR LIABILITY TO THE UNITED STATES, WHERE IT IS SHOWN THAT AN ERRONEOUS OR ILLEGAL PAYMENT WAS CAUSED SOLELY BY AN IMPROPER CERTIFICATION AS TO MATTERS NOT WITHIN THE KNOWLEDGE OF OR AVAILABLE TO THE DISBURSING OFFICER, THE ACCOUNTING OFFICERS OF THE GOVERNMENT MAY AND WILL RAISE A CHARGE DIRECTLY AGAINST THE CERTIFYING OFFICER FOR THE AMOUNT OF SUCH ERRONEOUS OR ILLEGAL PAYMENT.

A RELIEF STATUTE MAY BE APPLIED ONLY TO THE PERSON OR CLASSES OF PERSONS SPECIFICALLY INCLUDED WITHIN ITS TERMS. HENCE, A RELIEF STATUTE SPECIFICALLY FOR DISBURSING OFFICERS MAY NOT BE APPLIED TO RELIEVE CERTIFYING OFFICERS. SECTION 4 OF EXECUTIVE ORDER NO. 6166 IN EFFECT CREATED A NEW CLASS OF ACCOUNTABLE OFFICERS BY ENLARGING THE LIABILITY OF CERTIFYING OFFICERS, WHICH WAS NOT IN EXISTENCE WHEN SECTION 28 OF THE WORLD WAR VETERANS' ACT WAS AMENDED TO RELIEVE DISBURSING OFFICERS, AND THE CONGRESS COULD NOT HAVE HAD IN MIND THE RELIEF OF CERTIFYING OFFICERS. THE SAME REASONING WHICH REQUIRED THE CONCLUSION OF THE DECISION OF OCTOBER 4, 1927, SUPRA, THAT DISBURSING OFFICERS WERE NOT RELIEVED UNDER THE ORIGINAL ENACTMENT OF SECTION 28 OF THE WORLD WAR VETERANS' ACT--- THE STATUTE THEN SHOWING NO SUCH INTENT- - IMPELS THE CONCLUSION HERE THAT CERTIFYING OFFICERS OF THE VETERANS' ADMINISTRATION ARE NOT RELIEVED FROM THEIR LIABILITY NEWLY IMPOSED UNDER THE EXECUTIVE ORDER HAVING THE FORCE AND EFFECT OF LAW FOR ERRONEOUS OR UNLAWFUL PAYMENTS THE RECOVERY OF WHICH FROM THE PAYEE IS WAIVED BY THE VETERANS' ADMINISTRATION UNDER SECTION 28 OF THE WORLD WAR VETERANS' ACT, AS AMENDED.

THE DECISION OF FEBRUARY 27, 1935, TO YOU MUST BE AND IS ADHERED TO AND IT IS AGAIN REQUESTED THAT THE NECESSARY STEPS BE TAKEN ADMINISTRATIVELY TO COLLECT THE AMOUNT OF THE UNLAWFUL PAYMENT, TO WIT, $91.88, FROM SUCH OFFICER OR OFFICERS FOR TRANSMISSION HERE FOR PROPER DISPOSITION.