B-218843, JUL 8, 1985, OFFICE OF GENERAL COUNSEL
Highlights
RELIEF IS GRANTED ARMY DISBURSING OFFICIAL AND HIS SUPERVISOR UNDER 31 U.S.C. 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. SUBSEQUENT COLLECTION ATTEMPTS HAVE BEEN PURSUED. CONCERN IS EXPRESSED OVER CLAIMS COLLECTION EFFORT WHERE ARMY FAILED TO TAKE COLLECTION ACTION FOR THREE MONTHS AFTER RECEIVING NOTICE OF LOSS AND WHILE PAYEE WAS STILL IN ARMY. RELIEF IS GRANTED. WE ARE CONCERNED ABOUT THE APPARENT LAXITY OF THE CLAIM COLLECTION EFFORTS IN THIS CASE. 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 A STOP PAYMENT HAD BEEN MADE.
B-218843, JUL 8, 1985, OFFICE OF GENERAL COUNSEL
DISBURSING OFFICERS - RELIEF - ERRONEOUS PAYMENTS - NOT RESULT OF BAD FAITH OR NEGLIGENCE DIGEST: 1. RELIEF IS GRANTED ARMY DISBURSING OFFICIAL AND HIS SUPERVISOR UNDER 31 U.S.C. SEC. 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. DISBURSING OFFICERS - RELIEF - COLLECTION ACTION DILIGENCE 2. CONCERN IS EXPRESSED OVER CLAIMS COLLECTION EFFORT WHERE ARMY FAILED TO TAKE COLLECTION ACTION FOR THREE MONTHS AFTER RECEIVING NOTICE OF LOSS AND WHILE PAYEE WAS STILL IN ARMY. ARMY NOTIFIED THAT DELAY IN COMMENCING COLLECTION ACTION MAY RESULT IN THE FUTURE IN DENIAL OF RELIEF FOR FAILING TO PURSUE CLAIMS COLLECTION DILIGENTLY AS REQUIRED BY 31 U.S.C. SEC. 3527(C).
MR. CLYDE E. JEFFCOAT: PRINCIPAL DEPUTY COMMANDER U.S. ARMY FINANCE AND ACCOUNTING CENTER INDIANAPOLIS, INDIANA 46249
THIS RESPONDS TO YOUR REQUEST THAT WE RELIEVE LIEUTENANT COLONEL (LTC) G. D. FOSTER, FINANCE CORPS, FINANCE AND ACCOUNTING OFFICER, FORT SILL, OKLAHOMA, UNDER 31 U.S.C. SEC. 3527(C) FOR AN IMPROPER PAYMENT OF A $324.00 CHECK PAYABLE TO MR. WINFRED B. GRIFFIN. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED. HOWEVER, WE ARE CONCERNED ABOUT THE APPARENT LAXITY OF THE CLAIM COLLECTION EFFORTS IN THIS CASE.
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 A 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.
HOWEVER, AS NOTED ABOVE, ON THE BASIS OF THE INFORMATION PROVIDED TO US, WE HAVE SERIOUS QUESTIONS ABOUT THE DILIGENCE OF THE COLLECTION ACTIONS TAKEN BY THE ACCOUNTABLE OFFICER.
THE FACT THAT THE PAYEE HAD CASHED BOTH CHECKS WAS BROUGHT TO LTC FOSTER'S ATTENTION BY MEANS OF A TREASURY DEPARTMENT DEBIT VOUCHER, DATED FEBRUARY 6, 1984. AT THAT TIME, THE PAYEE, WINFRED GRIFFIN, WAS STILL ON FT. SILL'S PAYROLL. IN FACT, HE WAS NOT SEPARATED FROM THE ARMY UNTIL MAY 5, 1984. HAD PROMPT PAYMENT ACTION BEEN TAKEN AT ANY TIME DURING THE 3 MONTHS BETWEEN THE NOTIFICATION BY TREASURY AND THE DEBTOR'S SEPARATION, THE ARMY COULD HAVE EASILY OFFSET THE DEBT AGAINST THE DEBTOR'S PAY UNDER THE FEDERAL CLAIMS COLLECTION STANDARDS. NOTE PARTICULARLY 4 C.F.R. SEC. 102.3(B)(5), WHICH PERMITS FEDERAL AGENCIES TO TAKE SALARY OFFSET ACTION EVEN BEFORE AFFORDING THE DEBTOR HIS FULL DUE PROCESS OPPORTUNITIES IN CASES WHERE HIS DEPARTURE FROM GOVERNMENT SERVICE IS IMMINENT OR THERE IS NOT SUFFICIENT TIME, FOR OTHER REASONS, TO COMPLETE THE PROCEDURES BEFORE EFFECTING OFFSET.
IN THIS CASE, THE RECORD SHOWS THAT THE FIRST COLLECTION ACTION-- A LETTER OF NOTIFICATION AND DEMAND FOR PAYMENT-- WAS TAKEN ON MAY 14-- OVER A WEEK AFTER MR. GRIFFIN'S SEPARATION FROM THE ARMY. BY THAT TIME, MR. GRIFFIN HAD DISAPPEARED. IT APPEARS TO US THAT THE OFFICER'S DILATORY COLLECTION ACTION MAY HAVE COST THE ARMY ITS OPPORTUNITY TO COLLECT THE DEBT.
BECAUSE WE HAD NOT PREVIOUSLY BROUGHT TO YOUR ATTENTION OUR CONCERN WITH THE LAPSE OF TIME BEFORE COLLECTION ACTION IS FIRST BEGUN IN THIS AND OTHER CASES YOU HAVE SENT TO GAO IN RECENT YEARS, WE WILL NOT NOW DENY RELIEF TO LTC FOSTER. HOWEVER, THIS WILL SERVE AS NOTICE THAT IN THE FUTURE, WE MAY BE REQUIRED TO DENY RELIEF UNDER THE DILIGENT CLAIMS COLLECTION REQUIREMENT OF 31 U.S.C. SEC. 3527(C) WHEN IT APPEARS THAT BUT FOR THE DELAY IN COMMENCING COLLECTION ACTION, THE SERVICE LOST ITS OPPORTUNITY TO UTILIZE SALARY OFFSET AS AN EXPEDITIOUS METHOD OF RECOVERING LOSS OF FUNDS.
IF YOU WOULD FIND IT HELPFUL, MY STAFF AND I WOULD BE GLAD TO MEET WITH YOU OR WHOMEVER YOU SUGGEST TO TALK ABOUT THIS AND SOME OTHER RECURRING PROBLEMS THAT ARISE IN ACCOUNTABLE OFFICER CASES. PLEASE CONTACT RICHARD PARSONS, A SENIOR ATTORNEY ON MY STAFF FOR FURTHER INFORMATION OR TO MAKE ARRANGEMENTS. HIS NUMBER IS FTS 275-5544.