Skip to main content

B-201965 L/M, JUN 15, 1982

B-201965 L/M Jun 15, 1982
Jump To:
Skip to Highlights

Highlights

FN1 IS EVALUATED TO DETERMINE IF IT CONFORMS TO THE ACCOUNTING PRINCIPLES AND STANDARDS IN TITLE 2 OF GAO'S POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES. WE CANNOT DEFINITIVELY RESPOND TO YOUR QUESTION AS TO WHETHER THE PAYMENT PROCESSES IN THE UNIFORM ACCOUNTING SYSTEM BEING DEVELOPED BY FAA IS IN CONFORMITY WITH SIMILAR SYSTEMS USED BY OTHER AGENCIES. PARTICULARLY AS YOU HAVE NOT SUPPLIED US WITH A DETAILED DESCRIPTION OF THIS SYSTEM. THAT THE JFMIP PUBLICATION WAS PRIMARILY CONCERNED WITH THE COMPUTERIZATION OF MASS PAYMENTS OF A RECURRING NATURE. IT WAS NOT CONCERNED WITH INDIVIDUAL VOUCHERS FOR PROCUREMENT OF GOODS OR SERVICES FOR PURPOSES WHICH BY LAW OR BY REASON OF COMPTROLLER GENERAL DECISIONS ARE IMPERMISSIBLE.

View Decision

B-201965 L/M, JUN 15, 1982

PRECIS-UNAVAILABLE

MR. E. M. KEELING, DEPARTMENT OF TRANSPORTATION:

THIS RESPONDS TO YOUR LETTER WHEREIN YOU REQUEST THAT WE COMMENT UPON THE METHODS TO BE USED TO MAKE PAYMENTS IN THE NEW UNIFORM ACCOUNTING SYSTEM BEING DEVELOPED BY THE FEDERAL AVIATION ADMINISTRATION (FAA).

THE DESIGN OF THE NEW UNIFORM ACCOUNTING SYSTEM SHOULD BE SUBMITTED FOR THE COMPTROLLER GENERAL'S APPROVAL BEFORE IMPLEMENTATION. AS PART OF THE SYSTEM APPROVAL PROCESS, THE DESIGN OF THE SYSTEM, INCLUDING THE PAYMENT PROCESSES DISCUSSED IN YOUR LETTER, FN1 IS EVALUATED TO DETERMINE IF IT CONFORMS TO THE ACCOUNTING PRINCIPLES AND STANDARDS IN TITLE 2 OF GAO'S POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES.

WE CANNOT DEFINITIVELY RESPOND TO YOUR QUESTION AS TO WHETHER THE PAYMENT PROCESSES IN THE UNIFORM ACCOUNTING SYSTEM BEING DEVELOPED BY FAA IS IN CONFORMITY WITH SIMILAR SYSTEMS USED BY OTHER AGENCIES, PARTICULARLY AS YOU HAVE NOT SUPPLIED US WITH A DETAILED DESCRIPTION OF THIS SYSTEM. HOWEVER, THE FAA DISBURSING SYSTEM GENERALLY APPEARS TO CONFORM TO THE EXAMPLES CONTAINED IN A JOINT FINANCIAL MANAGEMENT IMPROVEMENT PROGRAM PUBLICATION ENTITLED, "ASSURING ACCURATE AND LEGAL PAYMENTS - THE ROLES OF CERTIFYING OFFICERS IN FEDERAL GOVERNMENT, JUNE 1980."

IT SHOULD BE NOTED, HOWEVER, THAT THE JFMIP PUBLICATION WAS PRIMARILY CONCERNED WITH THE COMPUTERIZATION OF MASS PAYMENTS OF A RECURRING NATURE, SUCH AS THE AGENCY'S PAYROLL. IT WAS NOT CONCERNED WITH INDIVIDUAL VOUCHERS FOR PROCUREMENT OF GOODS OR SERVICES FOR PURPOSES WHICH BY LAW OR BY REASON OF COMPTROLLER GENERAL DECISIONS ARE IMPERMISSIBLE. WE NEED TO EXPLORE WITH YOU AND OTHER AGENCIES WAYS TO DETECT SUCH ERRORS WHICH, AS THE SYSTEM IS PRESENTLY DESIGNED, WILL IN ALL PROBABILITY ESCAPE DETECTION.

ADDITIONALLY, YOU REQUEST THAT WE CONFIRM THE ACCURACY OF SEVERAL STATEMENTS CONCERNING THE LIABILITY OF CERTIFYING OFFICERS AND OTHER EMPLOYEES FOR ERRONEOUS PAYMENTS MADE UNDER THIS NEW ACCOUNTING SYSTEM.

STATEMENT A: "SO LONG AS THE CENTRAL CERTIFYING OFFICER EXERCISES REASONABLE DILIGENCE TO ASSURE HIMSELF OR HERSELF THAT THE SYSTEM IS PERFORMING IN A RELIABLE MANNER AND CAN DEMONSTRATE THE EXERCISE OF SUCH DILIGENT REVIEW, THE COMPTROLLER GENERAL WOULD NORMALLY GRANT RELIEF OF LIABILITY FOR ILLEGAL, IMPROPER, OR INCORRECT PAYMENTS."

THE RESPONSIBILITIES OF CERTIFYING OFFICERS ARE SET FORTH IN 31 U.S.C. SEC. 82C AND 31 U.S.C. SEC. 82F. THESE STATUTES STATE IN PERTINENT PART:

"THE OFFICER OR EMPLOYEE CERTIFYING A VOUCHER SHALL (1) BE HELD RESPONSIBLE FOR THE EXISTENCE AND CORRECTNESS OF THE FACTS RECITED IN THE CERTIFICATE OR OTHERWISE STATED ON THE VOUCHER OR ITS SUPPORTING PAPERS AND FOR THE LEGALITY OF THE PROPOSED PAYMENT UNDER THE APPROPRIATION OR FUND INVOLVED; AND (2) BE HELD ACCOUNTABLE FOR AND REQUIRED TO MAKE GOOD TO THE UNITED STATES THE AMOUNT OF ANY ILLEGAL, IMPROPER, OR INCORRECT PAYMENT RESULTING FROM ANY FALSE, INACCURATE, OR MISLEADING CERTIFICATE MADE BY HIM, AS WELL AS FOR ANY PAYMENT PROHIBITED BY LAW OR WHICH DID NOT REPRESENT A LEGAL OBLIGATION UNDER THE APPROPRIATION OR FUND INVOLVED. ***" 31 U.S.C. SEC. 82C.

"THE RESPONSIBILITY AND ACCOUNTABILITY OF CERTIFYING OFFICERS UNDER SECTIONS 82B AND 82C TO 82E OF THIS TITLE SHALL BE DEEMED TO INCLUDE THE CORRECTNESS OF THE COMPUTATIONS OF CERTIFIED VOUCHERS AND DISBURSING OFFICERS SHALL NOT BE HELD ACCOUNTABLE UNDER SECTION 82B OF THIS TITLE FOR THE CORRECTNESS OF SUCH COMPUTATIONS."

31 U.S.C. SEC. 82F. PURSUANT TO THE FIRST PROVISO OF 31 U.S.C. SEC. 82C, THE COMPTROLLER GENERAL IN HIS DISCRETION MAY RELIEVE A CERTIFYING OFFICER OF LIABILITY FOR ANY ERRONEOUS CERTIFICATION IF HE DETERMINES AS FOLLOWS:

"(1) THAT THE CERTIFICATION WAS BASED ON OFFICIAL RECORDS AND THAT SUCH CERTIFYING OFFICER OR EMPLOYEE DID NOT KNOW, AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE ASCERTAINED, THE ACTUAL FACTS, OR (2) THAT THE OBLIGATION WAS INCURRED IN GOOD FAITH, THAT THE PAYMENT WAS NOT CONTRARY TO ANY STATUTORY PROVISION SPECIFICALLY PROHIBITING PAYMENTS OF THE CHARACTER INVOLVED, AND THAT THE UNITED STATES HAS RECEIVED VALUE FOR SUCH PAYMENT."

THE COMPTROLLER GENERAL DOES NOT HAVE ANY HARD AND FAST RULES FOR DETERMINING WHEN HE WILL RELIEVE A CERTIFYING OFFICER FOR AN ERRONEOUS CERTIFICATION. SEE 55 COMP.GEN. 297, 299 (1975). RATHER, EACH REQUEST FOR RELIEF IS DECIDED UPON ITS PARTICULAR FACTS AND CIRCUMSTANCES. NORMALLY CONSIDER SEVERAL FACTORS IN DETERMINING WHETHER TO RELIEVE A CERTIFYING OFFICER FOR AN ERRONEOUS CERTIFICATION.

AS STATED IN OUR AUDIT REPORT OF NOVEMBER 7, 1977, FGMSD-76-82, AND THE JUNE 1980 REPORT OF THE JOINT FINANCIAL MANAGEMENT IMPROVEMENT PROGRAM, ONE MAJOR FACTOR TO BE CONSIDERED IN RELIEVING CERTIFYING OFFICERS WHO USE AUTOMATED ACCOUNTING SYSTEMS IS WHETHER THE CERTIFYING OFFICER RECEIVED ASSURANCES THAT THE "COMPUTERIZED SYSTEM CONTROLS ARE OPERATING EFFECTIVELY." WE STRESS, HOWEVER, THAT THIS IS ONLY ONE FACTOR THAT WE WOULD CONSIDER IN DETERMINING WHETHER TO GRANT RELIEF TO A CERTIFYING OFFICER FOR AN ERRONEOUS CERTIFICATION UNDER THE PROPOSED SYSTEM. OTHER FACTORS - SUCH AS LACK OF DUE CARE ON THE PART OF THE CERTIFYING OFFICER - MAY BE PRESENT IN A PARTICULAR CASE WHICH WOULD CAUSE US TO DENY RELIEF TO A CERTIFYING OFFICER EVEN THOUGH THE OFFICER MAY HAVE RECEIVED ADEQUATE ASSURANCES AS TO THE EFFECTIVENESS OF COMPUTERIZED CONTROL SYSTEMS.

STATEMENT B: "IN THE EVENT THE CERTIFYING OFFICER CERTIFIES A VOUCHER FOR PAYMENT WITH THE KNOWLEDGE THAT INTERNAL CONTROLS ARE NOT ADEQUATE TO INSURE SYSTEM RELIABILITY, HE OR SHE WILL BE RELIEVED OF LIABILITY FOR ERRONEOUS PAYMENTS IF A SENIOR MANAGEMENT OFFICIAL DESIGNATED BY THE SECRETARY OF TRANSPORTATION OR THE FAA ADMINISTRATOR PROVIDES THE SECRETARY OR ADMINISTRATOR AND GAO WITH A WRITTEN STATEMENT CERTIFYING THAT PAYMENTS HAD BEEN CONSIDERED PROPER EVEN THOUGH NECESSARY INTERNAL CONTROLS COULD NOT BE MADE AVAILABLE PRIOR TO VOUCHER CERTIFICATION. IDEALLY, THE MANAGEMENT STATEMENT SHOULD HAVE BEEN ISSUED PRIOR TO CERTIFICATION OF THE VOUCHER IN WHICH ERRONEOUS PAYMENTS ARE LATER FOUND."

AS IN OUR RESPONSE TO STATEMENT A, WE CANNOT STATE CATEGORICALLY THAT A CERTIFYING OFFICER WILL BE RELIEVED OF LIABILITY FOR AN ERRONEOUS CERTIFICATION IN ANY GIVEN GENERAL SITUATION; TOO MANY VARIABLES EXIST. WHERE A CERTIFYING OFFICER RECEIVES THE TYPES OF ASSURANCES AS DESCRIBED IN STATEMENT A, AS STATED IN THE REFERENCED GAO AUDIT REPORT AND THE JOINT FINANCIAL MANAGEMENT IMPROVEMENT PROGRAM PUBLICATION, THIS FACTOR WILL BE A POSITIVE ONE IN OUR DETERMINATION OF WHETHER TO RELIEVE THE CERTIFYING OFFICER FOR THE CERTIFICATION OF AN ERRONEOUS PAYMENT. THE FACTOR OF WHETHER THE OFFICER RECEIVED A MANAGEMENT STATEMENT OF THE KIND DESCRIBED ABOVE BEFORE OR AFTER A PAYMENT WAS CERTIFIED WILL ALSO BE CONSIDERED. WHERE THE CERTIFYING OFFICER HAS SUCH A MANAGEMENT STATEMENT PRIOR TO CERTIFICATION, WE CLEARLY WILL NOT CONSIDER THE ABSENCE OF ADEQUATE CONTROLS AS EVIDENCE OF NEGLIGENCE. SEE FGMSD 76-82, SUPRA, PP. 16-18. THIS SITUATION HOWEVER MAY NOT BE ALLOWED TO GO ON INDEFINITELY. AGAIN, WE MUST STRESS THAT THESE ARE ONLY TWO SUCH FACTORS THAT WE MAY CONSIDER IN DETERMINING WHETHER TO RELIEVE A CERTIFYING OFFICER OF LIABILITY FOR AN ERRONEOUS CERTIFICATION.

STATEMENT C: "THOSE PEOPLE AT THE DECENTRALIZED ACCOUNTING OFFICES WHO MIGHT NEGLIGENTLY AUTHORIZE ERRONEOUS TRANSACTIONS TO BE INCLUDED IN THE CENTRAL PAYMENT FILE WOULD NOT BE LIABLE UNDER THE PROVISIONS OF 31 U.S.C. SEC. 82C, THOUGH THEY WOULD BE SUBJECT TO DISCIPLINARY ACTION UNDER OTHER LEGISLATION AND REGULATIONS."

THIS STATEMENT IS CORRECT. AS WE HAVE CONTINUALLY STATED, THIS OFFICE LOOKS ONLY TO CERTIFYING OFFICERS FOR REIMBURSEMENT EVEN THOUGH SOME OTHER EMPLOYEE MAY BE LIABLE TO THE CERTIFYING OFFICER UNDER ADMINISTRATIVE REGULATION. 55 COMP.GEN. 297, SUPRA, AT 299. AS THE PEOPLE WORKING AT THE DECENTRALIZED ACCOUNTING OFFICES WHOSE FUNCTION IT IS TO PROCESS EACH TRANSACTION AND TO ENTER THE RESULTING DATA INTO THE COMPUTER SYSTEM ARE NOT CERTIFYING OFFICERS, THEY ARE NOT LIABLE UNDER 31 U.S.C. SEC. 82C FOR ERRONEOUS PAYMENTS. THEY ARE SUBJECT TO DISCIPLINARY ACTION. ADDITION, OF COURSE, THE CERTIFYING OFFICER WHO IS HELD LIABLE FOR AN ERRONEOUS PAYMENT MAY OFTEN BE ENTITLED TO INSTITUTE COLLECTION ACTION AGAINST THE RECIPIENT OF THE ERRONEOUS PAYMENT.

WE TRUST THAT THE ABOVE DISCUSSION HAS BEEN HELPFUL.

FN1 FAA DESCRIBES THIS SYSTEM AS:

"1. SUPPORTING DOCUMENTATION WILL BE RETAINED IN THE DECENTRALIZED ACCOUNTING OFFICE WHERE VOUCHER EXAMINATION FUNCTIONS ARE PERFORMED; 2. A SINGLE SF 1166 AND CHECK ISSUE FILE WILL BE CENTRALLY PREPARED AND CERTIFIED; AND 3. INCLUSION OF A TRANSACTION IN THE CHECK ISSUE FILE WILL BE BASED ON ENTRY OF POSTITIVE AUTHORIZATION CODING INTO THE COMPUTER SYSTEM AT THE COMPUTER SYSTEM AT THE DECENTRALIZED ACCOUNTING OFFICE."

GAO Contacts

Office of Public Affairs