B-217827, MAR 21, 1985, OFFICE OF GENERAL COUNSEL

B-217827, MAR 21, 1985, OFFICE OF GENERAL COUNSEL

ACCOUNTABLE OFFICERS - RELIEF - ILLEGAL OR ERRONEOUS PAYMENTS - WITHOUT FAULT OR NEGLIGENCE DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICER UNDER 31 U.S.C. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF BOTH ORIGINAL AND SUBSTITUTE MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE SUBSTITUTE CHECK, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL, AND SUBSEQUENT COLLECTION ATTEMPTS HAVE BEEN PURSUED. ARMY IS REMINDED THAT DELAYS IN THE COLLECTION PROCESS SHOULD BE AVOIDED AND THAT AGENCIES ARE TO REPORT ANY FINANCIAL IRREGULARITY TO GAO WITHIN 2 YEARS OF WHEN A LOSS IS REFLECTED IN FINANCE AND ACCOUNTING OFFICER'S ACCOUNT.

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

THIS RESPONDS TO YOUR REQUEST OF MARCH 4, 1985, THAT WE RELIEVE MR. C. E. ESWORTHY, SPECIAL DISBURSING AGENT (SDA), FINANCE AND ACCOUNTING OFFICER, FORT RITCHIE, MARYLAND, UNDER 31 U.S.C. SEC. 3527(C) FOR AN IMPROPER PAYMENT OF A $217.79 CHECK PAYABLE TO MR. NORMAN C. MALONE. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

THE LOSS RESULTED WHEN THE PAYEE NEGOTIATED BOTH THE ORIGINAL AND A SUBSTITUTE CHECK. BOTH CHECKS WERE IN THE SAME AMOUNT. THE SUBSTITUTE CHECK WAS ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECK HAD NOT BEEN RECEIVED AND A REQUEST FOR STOP PAYMENT HAD BEEN MADE. BOTH CHECKS WERE ISSUED BY THE ARMY UNDER AUTHORITY DELEGATED BY THE DEPARTMENT OF THE TREASURY. 31 C.F.R. SEC. 245.8.

THIS OFFICE HAS AUTHORITY UNDER 31 U.S.C. SEC. 3527(C) TO RELIEVE A DISBURSING OFFICER FROM LIABILITY WHEN THE RECORD INDICATES THAT THE DISBURSING OFFICER ACTED WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY APPLICABLE REGULATIONS, THAT THERE IS NO EVIDENCE OF BAD FAITH ON THE PART OF THE DISBURSING OFFICER AND THAT A DILIGENT EFFORT WAS MADE TO COLLECT THE OVERPAYMENT. 62 COMP.GEN. 91 (1982).

IT APPEARS THAT THE REQUEST FOR STOP PAYMENT AND THE ISSUANCE OF A SUBSTITUTE CHECK IN THIS CASE WERE WITHIN THE BOUNDS OF DUE CARE AS ESTABLISHED BY ARMY REGULATIONS. SEE AR 37-103, PARAS. 4-161, 4-162 AND 4 -164. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICER AND ADEQUATE COLLECTION EFFORTS HAVE BEEN MADE. ACCORDINGLY, WE GRANT RELIEF.

WHILE WE HAVE GRANTED RELIEF, WE WOULD LIKE TO BRING TO YOUR ATTENTION SOME CONCERNS OVER THE HANDLING OF THIS CASE. OUR MAJOR CONCERN IS THE LONG DELAY IN COMPLETION BY THE ARMY OF ITS CLAIM COLLECTION RESPONSIBILITIES. MR. ESWORTHY'S SUCCESSOR SENT MR. MALONE TWO COLLECTION LETTERS IN NOVEMBER AND DECEMBER OF 1982. HOWEVER, WHEN THESE ATTEMPTS PROVED UNSUCCESSFUL, NO FURTHER ACTION WAS TAKEN. THE MATTER WAS NOT REFERRED TO YOUR DESIGNATED COLLECTION REPRESENTATIVE UNTIL FEBRUARY 13, 1985, OVER 2 YEARS AFTER THE ARMY WAS NOTIFIED OF THE LOSS AND ALMOST 4 YEARS FROM THE CASHING OF THE SECOND CHECK. YOUR RELIEF REQUEST PROVIDES NO EXPLANATION WHY THE CASE WAS HELD INACTIVE FOR SO LONG.

FINALLY, NOT ONLY WAS THE COLLECTION PROCESS DELAYED BUT YOUR REQUEST FOR RELIEF WAS ALSO UNTIMELY. WE AGAIN REMIND YOU THAT YOUR AGENCY IS ASKED TO REPORT ANY FINANCIAL IRREGULARITIES TO OUR OFFICE WITHIN 2 YEARS FROM THE TIME THE LOSS IS REFLECTED IN A FINANCE AND ACCOUNTING OFFICER'S ACCOUNT. 7 GAO POLICY AND PROCEDURES MANUAL SEC. 28.14. THIS SHOULD AVOID ANY POTENTIAL STATUTE OF LIMITATIONS PROBLEMS.