B-244431 October 8, 1991

B-244431 October 8, 1991

Sandra S. Williams Office of Finance and Management National Finance Center P.O. Box 60,000 New Orleans, Louisiana 70160

Dear Ms. Williams:

This is in response to your letter of May 31, 1991, which asked whether the six year statute of limitations found in 31 U.S.C. Sec. 3702 applies to checks presented for reissuance that were originally issued prior to October 1, 1989.

As you pointed out in your letter, the Competitive Equality Banking Act of 1989 (Act) established new time limits on the payability of government checks. Pub. L. 100-86, 101 Stat. 659 (1987). The law amended 31 U.S.C. Sec. 3702(c) to read that:

"Any claim on account of a Treasury check shall be barred unless it is presented to the agency that authorized the issuance of such a check within one year after the date of issuance of the check or the effective date of the subsection, whichever is later."

However, the Act also states:

"[N]othing in this subsection affects the underlying obligation of the United States, or agency thereof, for which a Treasury check was issued." 31 U.S.C. Sec. 3702(c)(2).

The checks involving your claimant were both issued in October 1979. The Act requires that checks issued before October 1, 1989 be cancelled beginning not later than 18 months after the effective date of the Act. 31 U.S.C. Sec. 3334(b)(1). The proceeds of the cancelled checks are to be applied to eliminate balances in certain Treasury accounts. 31 U.S.C. Sec. 3334(b)(2). The effective date of the Act was October 1, 1989 (see 53 Fed. Reg. 10366, Feb. 8, 1988). Thus, on April 1, 1991, the Treasury began a mass cancellation of all pre-effective date checks. Presumably, the checks presented to your Office have been cancelled and a claim under the check is no longer available.

Nevertheless, the statute unequivocally states that the underlying obligation remains unaffected. Thus, our Office recently held that although the specific moneys backing the cancelled checks are, by law, diverted to another use, the underlying obligation for which the checks were issued remains valid. B-239249.1, Apr. 15, 1991. We advised that for claims submitted under such obligations, the original appropriations charged could, to the extent they are available under Public Law 101-510, Sec. 1405, 104 Stat. 485, 175 (1990), be used to support reissued checks. Id. We also advised that for accounts closed under Public Law 101-510 the statute allows current appropriations made for the same general purpose to be charged subject to a one percent limitation. See OMB Circular No. A-34, Part XI, as added by OMB bulletin No. 91-07, January 17, 1991.

We further pointed out, however, that although a claim is preserved by the provision stating that the underlying obligation of the United States remains unaffected, the provision does not "resurrect claims that are otherwise unenforceable." B-239249.1, Apr. 15, 1991 (note 2). In other words, a claim against the government on the underlying obligation presented to the GAO or the agency whose activities gave rise to the claim six years after the claim accrues would be "otherwise unenforceable" because of the provisions of 31 U.S.C. Sec. 3702(b) which explicitly bar such stale claims. The claims you refer to in your letters, dating back to 1979, obviously are barred by section 3702(b).

I trust the foregoing answers your questions.

Sincerely yours,

Gary L. Kepplinger Associate General Counsel