B-214782, NOV 26, 1984, OFFICE OF GENERAL COUNSEL

B-214782, NOV 26, 1984, OFFICE OF GENERAL COUNSEL

ACCOUNTABLE OFFICERS - RELIEF - DUPLICATE CHECKS ISSUED - IMPROPER PAYMENT DIGEST: RELIEF GRANTED ARMY FINANCE OFFICER AND SUBORDINATE AS CERTIFYING OFFICERS SUBORDINATE CERTIFIED STOP PAYMENT FORM TO DEPARTMENT TREASURY. TREASURY SUBSEQUENTLY ISSUED A REPLACEMENT CHECK. BOTH ORIGINAL AND REPLACEMENT CHECKS WERE CASHED. RELIEF FROM ERRONEOUS PAYMENT FOR OFFICER AND SUBORDINATE NOT NECESSARY UNDER THE CIRCUMSTANCES.

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

DEAR MR. JEFFCOAT:

THIS RESPONDS TO YOUR REQUEST THAT WE RELIEVE MR. S.D. SCHAMBER, SPECIAL DISBURSING AGENT (SDA), SYMBOL NUMBER 5052, UNITED STATES ARMY FINANCE AND ACCOUNTING CENTER (USAFAC), TRANSPORTATION OPERATIONS, INDIANAPOLIS, INDIANA, FOR AN IMPROPER PAYMENT OF A $176.40 CHECK TO MORTON TRANSFER, INC. THERE IS NO BASIS FOR RELIEVING MR. SCHAMBER UNDER 31 U.S.C. SEC. 3527(C) (1983). FOR THE REASONS GIVEN BELOW, RELIEF IS, HOWEVER, GRANTED UNDER 31 U.S.C. SEC. 3528 (1983).

USAFAC TRANSPORTATION OPERATIONS ISSUED A CHECK FOR $176.40 TO MORTON TRANSFER, INC. IN PAYMENT OF A NET BILLING FOR TRANSPORTATION SERVICES PROVIDED BY THE FIRM ON MAY 21, 1980. ON DECEMBER 17, 1980, A REPRESENTATIVE OF MORTON TRANSFER, INC. SENT NOTICE TO THE ARMY THAT THE FIRM WAS UNABLE TO VERIFY RECEIPT OF THE CHECK. THE CHIEF OF THE FINANCE AND ACCOUNTING CENTER'S DISBURSING DIVISION CONFIRMED THAT THE CHECK IN QUESTION WAS ISSUED ON MAY 21, 1980 AND INSTRUCTED MORTON TRANSFER, INC. TO SEND A LETTER TO THE ARMY REQUESTING A STOP PAYMENT; MORTON TRANSFER, INC. COMPLIED WITH THESE INSTRUCTIONS. ON THE BASIS OF MORTON TRANSFER, INC.'S REQUEST FOR STOP PAYMENT, MARGARET HADLER (SIGNING FOR MR. SCHAMBER), SUBMITTED TO THE TREASURY DEPARTMENT A STANDARD FORM (SF) 1180 "REQUEST FOR STOP PAYMENT" IN WHICH IT WAS CERTIFIED:

"THE ABOVE CHECK DESCRIPTION IS CORRECT AND THAT NOTHING IN MY RECORDS INDICATES THAT THE PAYEE IS NOT ENTITLED TO ITS PROCEEDS UNLESS OTHERWISE STATED UNDER 'REMARKS.'"

IN COMPLIANCE WITH ITS REGULATIONS UPON THE ALLEGATION THAT THE COMPANY HAD NOT RECEIVED THE ORIGINAL CHECK, THE DIVISION OF DISBURSEMENT, FISCAL SERVICE, DEPARTMENT OF THE TREASURY ISSUED A REPLACEMENT CHECK ON APRIL 30, 1981. MORTON TRANSFER, INC. CASHED BOTH THE ORIGINAL AND SUBSTITUTE CHECKS. IN ACCORDANCE WITH ARMY REGULATION 37-103, PARAGRAPH 4-149, THE IMPROPER PAYMENT IS CONSIDERED AN OVERPAYMENT IN THE ACCOUNTS OF THE FINANCE AND ACCOUNTING OFFICER INITIATING THE STOP PAYMENT ACTION, AND IS NOT CHARGED TO AN APPROPRIATION.

THERE IS NO BASIS FOR GRANTING MR. SCHAMBER RELIEF AS AN ACCOUNTABLE OFFICER UNDER THE REQUESTED STATUTE BECAUSE 31 U.S.C. SEC. 3527(C) (1983) APPLIES ONLY TO DISBURSING OFFICERS. B-215380 ET AL., JULY 23, 1984. THE ARMY'S LIMITED AUTHORITY TO ISSUE SUBSTITUTES FOR CHECKS DRAWN FOR PAY AND ALLOWANCES OF CIVILIAN EMPLOYEES AND ACTIVE DUTY MILITARY PERSONNEL DOES NOT APPLY IN THIS CASE. 31 C.F.R. SEC. 245.8 (1983); SEE GENERALLY ARMY REGULATIONS 37-103, PARAGRAPHS 4-160-167 (1981). THE LOSS REFLECTED IN MR. SCHAMBER'S ACCOUNT OCCURRED WHEN MORTON TRANSFER, INC. WRONGFULLY PRESENTED TO AND RECEIVED PAYMENT FOR THE SECOND CHECK FROM THE TREASURY (THE ORDER OF PRESENTATION IS UNIMPORTANT). 62 COMP.GEN. 91, 94 (1982). ACCORDINGLY, THE DISBURSEMENT THAT RESULTED IN THE ERRONEOUS PAYMENT WAS THE ISSUANCE OF THE SUBSTITUTE CHECK BY THE TREASURY. IN SUCH CIRCUMSTANCES, 31 U.S.C. SEC. 3527(C) CANNOT BE APPLIED TO RELIEVE AN ARMY OFFICIAL WHO HAS ONLY CERTIFIED THE STOP PAYMENT FORM, SF 1180.

MR. SCHAMBER'S HANDLING OF MORTON TRANSFER, INC.'S CLAIM THAT IT HAD NOT RECEIVED THE CHECK WAS IN COMPLIANCE WITH ALL APPLICABLE ARMY AND TREASURY REGULATIONS.

A CERTIFYING OFFICIAL IS HELD RESPONSIBLE FOR A PAYMENT WHICH IS:

"(A) ILLEGAL, IMPROPER, OR INCORRECT BECAUSE OF AN INACCURATE OR MISLEADING CERTIFICATE;

"(B) PROHIBITED BY LAW; OR

"(C) THAT DOES NOT REPRESENT A LEGAL OBLIGATION UNDER THE APPROPRIATION OR FUND INVOLVED." 31 U.S.C. SEC. 3528(A)(4).

HOWEVER, THIS OFFICE IS AUTHORIZED TO GRANT RELIEF, AS FOLLOWS:

"(B) THE COMPTROLLER GENERAL MAY RELIEVE A CERTIFYING OFFICIAL FROM LIABILITY WHEN THE COMPTROLLER GENERAL DECIDES THAT--

"(1) THE CERTIFICATION WAS BASED ON OFFICIAL RECORDS AND THE OFFICIAL DID NOT KNOW, AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE DISCOVERED, THE CORRECT INFORMATION ***." 31 U.S.C. SEC. 3528(B)(1).

SINCE WE CONCLUDED IN 62 COMP.GEN. 92, 94-95 THAT THE SECOND CHECK RESULTS, UPON ITS PAYMENT, IN AN ERRONEOUS DISBURSEMENT FOR WHICH THERE IS NO AVAILABLE APPROPRIATION, CERTIFICATION OF THE SECOND CHECK WILL RESULT IN LIABILITY OF THE CERTIFYING OFFICIAL IN THE FIRST INSTANCE UNDER 31 U.S.C. SEC. 3528. AS WE NOTED IN THAT DECISION, OFFICIALS INVOLVED IN A SECOND PAYMENT IN MOST CASES WILL HAVE EXERCISED DUE CARE SINCE THEY ARE REQUIRED TO ISSUE THE SECOND CHECK ON THE BASIS OF THE REPRESENTATION OF NON-RECEIPT. THE LOSS IS BEYOND THEIR CONTROL. HOWEVER, 31 U.S.C. SEC. 3528 ALSO ESTABLISHES THE CRITERIA BY WHICH THIS OFFICE MAY GRANT RELIEF FROM LIABILITY AND WE THINK THAT THESE CRITERIA HAVE BEEN MET. AS FAR AS MR. SCHAMBER AND MS. HADLER ARE CONCERNED IN THIS CASE, THEY "DID NOT KNOW, AND BY REASONABLE DILIGENCE AND INQUIRY COULD NOT HAVE DISCOVERED, THE CORRECT INFORMATION." B-215380, ET AL., ID.

MR. SCHAMBER AND MS. HADLER CANNOT BE RESPONSIBLE FOR KNOWING THE TRUTH ABOUT MORTON TRANSFER, INC.'S CLAIMED NON-RECEIPT OF THE ORIGINAL AND SUBSTITUTE CHECKS. ACCORDINGLY, WE GRANT RELIEF TO MR. SCHAMBER AND MS. HADLER UNDER 31 U.S.C. SEC. 3528.