B-228705, Oct 19, 1987, Office of General Counsel

B-228705, Oct 19, 1987, Office of General Counsel

APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officers - Disbursing Officers - Relief - Illegal/Improper Payments - Fraud DIGEST: U.S. Naval Disbursing Officer is relieved of liability for the improper payment made on a fraudulent travel claim. A subordinate travel clerk in compliance with Navy regulations, allowed payment without documentation or receipts, the disbursing officer maintained and supervised a system of procedures under Navy regulations and substantial attempts to recover the funds have been made.

Mr. Untermeyer:

This is in response to your letter of June 30, 1987 requesting that we relieve Mrs. C.B. Olechowski, Deputy Disbursing Officer, Personnel Support Activity Detachment, Scotia, New York, for the improper payment of $573.12 on a fraudulent travel claim. For the reasons stated below, relief is granted.

An improper payment resulted when a former Personnelman First Class, Mr. Peter Josse, submitted a fraudulent travel claim on July 18, 1983, in connection with his separation from the service. The claim, for commercial air travel which Mr. Josse later admitted he never intended to take, was paid without being accompanied by receipts or documentation of the travel, a process allowed under the Navy regulations at the time. This non-supported claim was computed and audited by DKl Domingo Iglesias based on private vehicle milage and per diem, an alternative allowed under the Navy regulations at the time in cases where a commercial air claim was not supported by documentation.

After an investigation, in which Mr. Josse admitted to knowingly filing a fraudulent travel claim, extensive efforts were made to collect from him. While the collection efforts extended over a year after the claim came to the Navy's attention, the efforts did not satisfy the timely efforts defined in the Joint Claims Collection Standards which require three letters at 30-day intervals, beginning promptly after the claim is identified. 7 C.F.R. Secs. 102.1 and 102.2. It is apparent from the record that these collection efforts were not successful, and there is little likelihood of collection in the future. The record further indicates that the improper payment did not result from any negligence on the part of Mrs. Olechowski.

Mrs. Olechowski is personally liable for deficiencies in her accounts resulting from illegal, improper, or incorrect payments. 62 Comp.Gen. 776, 780 (1983). However, under 31 U.S.C. Sec. 3527(c) (1982), this Office has authority to relieve liability arising from improper payments where the record indicates the officer acted with reasonable care and in good faith, making diligent efforts to correct the mistake. 62 Comp.Gen. 91 (1982). In a case where a subordinate actually disbursed the funds, relief has been granted to the supervisor upon a showing that he adequately supervised his subordinates by maintaining a system of procedures and controls designed to safeguard the funds. B-219127, July 15, 1985. We are unclear from the record whether DKl Iglesias is also accountable for the loss as one who actually disbursed funds to Mr. Josse. However, there is sufficient evidence to determine that he was without fault or negligence in the erroneous payment.

The investigation indicates that the travel claim was proper, and the processing and subsequent payment complied with naval regulations effective at the time. Although the clerk could have contacted the claimant and requested support documentation, this was not required, and his failure to do so does not indicate that Mrs. Olechowski did not adequately supervise her subordinates. The Navy investigation confirms that the procedures followed by Mrs. Olechowski complied with Naval regulations.

Collection action has been extensive, but due to the fact that Mr. Josse is no longer a member of the service, the overpayment, for practical purposes, is uncollectible. Accordingly, we grant relief to Deputy Disbursing Officer, Mrs. C.B. Olechowski and DKl Iglesias, if he is responsible, from liability for the improper payment of $573.12.