B-213764, JUN 28, 1984, OFFICE OF GENERAL COUNSEL

B-213764: Jun 28, 1984

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THE COMPTROLLER GENERAL MAY RELIEVE AN ACCOUNTABLE OFFICIAL RESPONSIBLE FOR THE PHYSICAL LOSS OF PUBLIC MONEY WHEN THE HEAD OF THE AGENCY DECIDES THAT THE ACCOUNTABLE OFFICER WAS CARRYING OUT OFFICIAL DUTIES WHEN THE LOSS OCCURRED. THE LOSS WAS NOT THE RESULT OF FAULT OR NEGLIGENCE BY THE AGENCY. THE LOSS WAS NOT THE RESULT OF AN ILLEGAL OR INCORRECT PAYMENT. WAS ASSIGNED AS RELIEF TELLER IN THE TREASURER'S MAIN OFFICE DURING A DAY IN WHICH AN INORDINATELY HIGH NUMBER OF PAYROLL CHECKS WERE CASHED. IT WAS AGENCY PRACTICE TO ALLOW ACCESS INTO THE TELLER'S DUTY AREA TO EMPLOYEES OTHER THAN CASHIERS. THESE EMPLOYEES WERE ALLOWED TO REMOVE AN UNSPECIFIED NUMBER OF CHECKS TO TOTAL THEM ON AN ADDING MACHINE IN ANOTHER PART OF THE OFFICE.

B-213764, JUN 28, 1984, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

MR. FERNANDO MANFREDO, JR., ACTING ADMINISTRATOR, PANAMA CANAL COMMISSION:

DEAR MR. MANFREDO:

THIS RESPONDS TO A REQUEST FOR RELIEF FROM LIABILITY UNDER 31 U.S.C. SEC. 3527(A) FOR THE LOSS OF FUNDS IN THE TREASURER'S OFFICE OF THE PANAMA CANAL COMMISSION. FOR THE REASONS STATED BELOW, WE GRANT RELIEF.

THE COMPTROLLER GENERAL MAY RELIEVE AN ACCOUNTABLE OFFICIAL RESPONSIBLE FOR THE PHYSICAL LOSS OF PUBLIC MONEY WHEN THE HEAD OF THE AGENCY DECIDES THAT THE ACCOUNTABLE OFFICER WAS CARRYING OUT OFFICIAL DUTIES WHEN THE LOSS OCCURRED, THE LOSS WAS NOT THE RESULT OF FAULT OR NEGLIGENCE BY THE AGENCY, THE LOSS WAS NOT THE RESULT OF AN ILLEGAL OR INCORRECT PAYMENT, AND THE COMPTROLLER GENERAL AGREES WITH THE DECISION OF THE HEAD OF THE AGENCY. 31 U.S.C. SEC. 3527(A).

IN THIS CASE, MR. FLOYD B. JOSEPH, ASSISTANT TO THE TREASURER OF THE PANAMA CANAL COMMISSION, WAS ASSIGNED AS RELIEF TELLER IN THE TREASURER'S MAIN OFFICE DURING A DAY IN WHICH AN INORDINATELY HIGH NUMBER OF PAYROLL CHECKS WERE CASHED. AT THE CLOSE OF BUSINESS ON THAT DAY MR. JOSEPH EXPERIENCED A CASH SHORTAGE OF $2,120.64. THE SHORTAGE HAS NOT BEEN ACCOUNTED FOR.

A SUBSEQUENT INVESTIGATION BY THE COMMISSION REVEALED A WEAKNESS IN ITS SYSTEM OF ACCOUNTABILITY. AT THE TIME OF THE LOSS, IT WAS AGENCY PRACTICE TO ALLOW ACCESS INTO THE TELLER'S DUTY AREA TO EMPLOYEES OTHER THAN CASHIERS. THESE EMPLOYEES WERE ALLOWED TO REMOVE AN UNSPECIFIED NUMBER OF CHECKS TO TOTAL THEM ON AN ADDING MACHINE IN ANOTHER PART OF THE OFFICE. OTHER EMPLOYEES WOULD THEN TAKE THOSE CHECKS TO MAKE AN INDEPENDENT VERIFICATION OF THE TOTAL. THE PURPOSE WAS TO FACILITATE THE CASHIER'S CLOSE-OUT AT THE END OF THE DAY BUT THE RESULT WAS THAT IT IS IMPOSSIBLE TO DETERMINE WHICH OF THE MANY EMPLOYEES WHO HANDLED THE CHECKS WAS ACCOUNTABLE FOR THEM AT THE TIME OF THE LOSS. IT IS POSSIBLE THAT DURING THE HANDLING BY THESE OTHER EMPLOYEES, CHECKS TOTALING THE AMOUNT OF THE SHORTAGE COULD HAVE BEEN INADVERTENTLY LOST, MISPLACED, OR DESTROYED.

THE COMMISSION CONCLUDED THAT THE CASH SHORTAGE OCCURRED WITHOUT THE FAULT OR NEGLIGENCE OF MR. JOSEPH, AND WAS THE RESULT OF THESE WEAKNESSES IN THE AGENCY'S SECURITY PROCEDURES WHICH HAVE SINCE BEEN CORRECTED.

WE HAVE RULED THAT THE PERVASIVE LAXITY OF AN AGENCY, IN ALLOWING MORE THAN ONE PERSON TO HAVE CONTROL OVER FUNDS, MAY BE RECOGNIZED AS THE PROXIMATE CAUSE OF A CASH SHORTAGE. SEE B-182386, APRIL 24, 1975. SINCE THE COMMISSION'S INTERNAL INVESTIGATION IN THIS CASE INDICATED NO FAULT OR NEGLIGENCE ON THE PART OF MR. JOSEPH, AND SINCE WE ARE UNABLE TO DETERMINE THAT THE CHECKS WERE IN MR. JOSEPH'S CUSTODY AT THE TIME OF THE SHORTAGE, THE RELIEF REQUEST IS GRANTED.

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