B-202597 L/M, MAY 6, 1983, OFFICE OF GENERAL COUNSEL

B-202597 L/M: May 6, 1983

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VETERANS ADMINISTRATION: THIS IS IN RESPONSE TO YOUR LETTER DATED JUNE 28. WE HAVE CONSIDERED THE SUPPLEMENTAL INFORMATION PROVIDED IN YOUR LETTER DATED JUNE 28. WE HAVE RECONSIDERED OUR JUNE 28. THAT MONEY IS NOW MISSING. BECAUSE THE LOSS WAS NOT DISCOVERED FOR OVER A MONTH. IT IS UNCERTAIN EXACTLY WHEN THE LOSS OCCURRED. BAZILE BELIEVES THAT THE MONEY IN AN ENVELOPE TO WHICH THE OFFICE RECEIPT FORMS WERE ATTACHED WAS PLACED IN THE OFFICE SAFE. SHE IS UNABLE TO RECALL ANY OF THE DETAILS OF THE TRANSACTION BEYOND THE COMPLETION OF THE RECEIPT. THE ENVELOPE CONTAINING THE LOST MONEY WAS APPARENTLY NOT SECURED BY MRS. WE ARE TOLD. WAS IN ACCORDANCE WITH THE PREVAILING OFFICE PROCEDURE AT THAT TIME.

B-202597 L/M, MAY 6, 1983, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

MR. CONRAD R. HOFFMAN, VETERANS ADMINISTRATION:

THIS IS IN RESPONSE TO YOUR LETTER DATED JUNE 28, 1982, REQUESTING RECONSIDERATION OF OUR DECISION B-202597, MAY 10, 1982. IN THAT DECISION, WE DECLINED TO RELIEVE MRS. JUNE WALKER BAZILE, FORMERLY AN ALTERNATE CASHIER AT THE VETERANS ADMINISTRATION (VA) REGIONAL OFFICE IN LOS ANGELES, FROM PERSONAL LIABILITY FOR THE PHYSICAL LOSS OF $1,773.04 RECEIVED BY HER AS A CASH PAYMENT ON A DELINQUENT VA LOAN GUARANTY MORTGAGE. WE HAVE CONSIDERED THE SUPPLEMENTAL INFORMATION PROVIDED IN YOUR LETTER DATED JUNE 28, 1982 AND THE FURTHER INFORMATION PROVIDED BY MS. EDYTH V. ANDERSON OF THE VA OVER THE PAST MONTHS. FOR THE REASONS STATED BELOW, WE HAVE RECONSIDERED OUR JUNE 28, 1982 DECISION AND GRANT MRS. BAZILE RELIEF FROM LIABILITY AS REQUESTED.

THE RECORD INDICATES THAT ON DECEMBER 18, 1979, MRS. BAZILE ACCEPTED AND ACKNOWLEDGED RECEIPT OF A $1,773.04 CASH PAYMENT ON A VA DELINQUENT LOAN GUARANTY MORTGAGE. THAT MONEY IS NOW MISSING. BECAUSE THE LOSS WAS NOT DISCOVERED FOR OVER A MONTH, IT IS UNCERTAIN EXACTLY WHEN THE LOSS OCCURRED. NO OFFICIAL RECORD OF THE TRANSACTION, EXCEPT THE RECEIPT GIVEN THE VETERAN, HAS BEEN FOUND. BASED ON HER USUAL ROUTINE, MRS. BAZILE BELIEVES THAT THE MONEY IN AN ENVELOPE TO WHICH THE OFFICE RECEIPT FORMS WERE ATTACHED WAS PLACED IN THE OFFICE SAFE. HOWEVER, SHE IS UNABLE TO RECALL ANY OF THE DETAILS OF THE TRANSACTION BEYOND THE COMPLETION OF THE RECEIPT.

THE ENVELOPE CONTAINING THE LOST MONEY WAS APPARENTLY NOT SECURED BY MRS. BAZILE IN A LOCKED BOX, BUT RATHER PLACED IN AN OPEN CONTAINER IN THE OFFICE SAFE, WHICH, WE ARE TOLD, WAS IN ACCORDANCE WITH THE PREVAILING OFFICE PROCEDURE AT THAT TIME. THE VETERANS ADMINISTRATION MANUAL, MP-4, PART I, PARA. 2A.03 PROVIDES:

"A. THE AGENT CASHIER WILL BE ASSIGNED SUCH OFFICE SPACE AS WILL AFFORD PROPER PROTECTION AND WILL PERMIT THE DUTIES TO BE PERFORMED WITHOUT FUNDS OR VALUABLE DOCUMENTS BEING MADE ACCESSIBLE TO OTHER EMPLOYEES ***. FOR PROPER PROTECTION OF FUNDS AND DOCUMENTS FOR WHICH THE AGENT CASHIER, ALTERNATE AGENT CASHIER, AND COLLECTION CLERKS ARE INDIVIDUALLY RESPONSIBLE, CASH BOXES, WHICH CAN BE LOCKED, WILL BE PROCURED FOR EACH OF THESE EMPLOYEES. ***"

DESPITE THIS REGULATION, WE HAVE NOW LEARNED THAT MRS. BAZILE WAS NOT PROVIDED WITH A LOCKBOX IN WHICH SHE COULD SECURE HER DAILY RECEIPTS. THE LOCKBOX SHE WAS PROVIDED WAS ONLY FOR HER OWN "CASHIER ADVANCE," AND COULD NOT BE USED TO SECURE DAILY RECEIPTS, BECAUSE VA REGULATIONS PROHIBIT SUCH COMMINGLING OF FUNDS.

IN GENERAL, THE DISAPPEARANCE OF FUNDS WITHOUT EXPLANATION GIVES RISE TO A PRESUMPTION OF NEGLIGENCE ON THE PART OF THE ACCOUNTABLE OFFICER AND SUCH A FINDING OF NEGLIGENCE WILL PREVENT RELIEF FROM LIABILITY UNDER 31 U.S.C. SECS. 3527 (FORMERLY SECS. 82A-1). 48 COMP.GEN. 566 (1969). HOWEVER, AN ACCOUNTABLE OFFICER MAY BE NEGLIGENT AND NEVERTHELESS BE RELIEVED FROM LIABILITY IF THE NEGLIGENCE IS NOT THE "PROXIMATE CAUSE" OF THE LOSS OR SHORTAGE. B-201173, AUGUST 18, 1981; B-182386, APRIL 24, 1975. IN THE CASE AT HAND, WE BELIEVE THAT THE PROXIMATE CAUSE OF THE LOSS WAS NOT NEGLIGENCE ON THE PART OF MRS. BAZILE, BUT RATHER THE VA'S FAILURE TO FOLLOW ITS OWN REGULATIONS AND A GENERAL LAXITY IN AGENCY SECURITY.

ALTHOUGH, AS DISCUSSED ABOVE, VA REGULATIONS REQUIRE THAT CASHIERS BE PROVIDED WITH INDIVIDUAL LOCKBOXES, NO SUCH LOCKBOX WAS PROVIDED TO MRS. BAZILE FOR STORAGE OF HER DAILY RECEIPTS. WE HAVE PREVIOUSLY HELD THAT WHEN AN AGENCY FAILS TO PROVIDE PROPER SECURITY FACILITIES, THAT FAILURE MAY BE VIEWED AS THE PROXIMATE CAUSE OF AN ENSUING LOSS, AND THE ACCOUNTABLE OFFICER MAY BE RELIEVED FROM LIABILITY. B-191942, SEPTEMBER 12, 1979 (AGENCY FAILED TO PROVIDE SEPARATE LOCKBOXES FOR EACH CASHIER); B-78617, JUNE 24, 1949 (REGULATIONS REQUIRED STORAGE OF FUNDS IN A SAFE, WHICH AGENCY FAILED TO PROVIDE). MOREOVER, THE FAILURE OF THE VA TO FOLLOW PROPER PROCEDURES IN THIS CASE RESULTED IN A SITUATION IN WHICH SEVERAL PERSONS IN ADDITION TO MRS. BAZILE HAD ACCESS TO THE FUNDS. THIS PRECLUDES DEFINITE PLACEMENT OF THE RESPONSIBILITY FOR THE LOSS AND REQUIRES THE RELIEF OF MRS. BAZILE. B-199034, FEBRUARY 9, 1981.

THE VETERANS ADMINISTRATION MANUAL, MP-4, PART I, PARA. 2B.12 REQUIRES THAT RECEIPTS IN EXCESS OF $1,000 BE DEPOSITED DAILY. MRS. BAZILE DID NOT ATTEMPT TO COMPLY WITH THIS REGULATION ON THE DAY THE FUNDS WERE RECEIVED. IN GENERAL, THE FAILURE OF AN ACCOUNTABLE OFFICER TO MAKE DAILY DEPOSITS AS REQUIRED BY REGULATIONS IS NEGLIGENCE AND WILL RESULT IN THAT ACCOUNTABLE OFFICER BEING HELD LIABLE IF THOSE FUNDS ARE STOLEN AT A TIME WHEN THEY WOULD HAVE BEEN DEPOSITED HAD REGULATIONS BEEN FOLLOWED. B-71445, JUNE 20, 1949. HOWEVER, IN THE CASE AT HAND BECAUSE THE LOSS WAS NOT DISCOVERED FOR OVER A MONTH, THE EXACT TIME OF THE LOSS CANNOT BE ASCERTAINED. IN VIEW OF THE VA'S FAILURE TO PROVIDE PROPER SECURITY ARRANGEMENTS, THE FUNDS MAY WELL HAVE BEEN STOLEN ON THE SAME DAY THEY WERE RECEIVED. INDEED, THE FACT THAT THE LOSS WAS NOT DISCOVERED UNTIL THERE WAS AN ATTEMPT TO RECONCILE USED AND UNUSED RECEIPTS, SUGGESTS THAT THE LOSS OCCURRED SOON AFTER THE RECEIPT. OTHERWISE THIS AMOUNT WOULD HAVE APPEARED IN AN AUDIT THAT TOOK PLACE ABOUT TWO DAYS AFTER THE RECEIPT. THEREFORE, WE ARE UNABLE TO FIND THAT MRS. BAZILE'S FAILURE TO MAKE A DAILY DEPOSIT WAS NECESSARILY A PROXIMATE CAUSE OF THE LOSS. SEE B-191942, SEPTEMBER 12, 1979.

ACCORDINGLY, WE GRANT RELIEF TO MRS. BAZILE IN THE AMOUNT OF $1,773.04.

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