B-223580, AUG 22, 1986, OFFICE OF THE GENERAL COUNSEL

B-223580, AUG 22, 1986, OFFICE OF THE GENERAL COUNSEL

ACCOUNTABLE OFFICERS - IRREGULARITIES, ETC. - ACCOUNTING PROCEDURES DIGEST: ARMY REQUESTED RELIEF OF ACCOUNTABLE OFFICERS HELD LIABLE FOR INCORRECT PAYMENT OF FUNDS. PAYMENT FOR PURCHASE WAS CONSIDERED IMPROPER BECAUSE THE ORDERING OFFICER INVOLVED HAD NOT BEEN OFFICIALLY APPOINTED. SINCE THE ARMY RECEIVED AND USED THE GOODS PURCHASED AND THE ONLY DEFECT WAS IN THE ORDERING OFFICIAL'S APPOINTMENT, THERE WAS NO LOSS TO THE GOVERNMENT AND NO NEED TO GRANT RELIEF.

MR. CLYDE E. JEFFCOAT:

PRINCIPAL DEPUTY COMMANDER

U.S. ARMY FINANCE & ACCOUNTING CENTER

INDIANAPOLIS, INDIANA 46249

THIS IS IN RESPONSE TO YOUR LETTER OF JUNE 19, 1986, REQUESTING THAT FINANCE AND ACCOUNTING OFFICER, LIEUTENANT COLONEL (LTC) E. T. HANSEN, FINANCE CORPS, SYMBOL NO. 5082, FORT LEWIS, WASHINGTON, AND CLASS A AGENT, CAPTAIN (CPT) PAUL CHRISTIAN, BE RELIEVED OF LIABILITY IN CONNECTION WITH AN INCORRECT PAYMENT OF GOVERNMENT FUNDS, FOR A TOTAL AMOUNT OF $363.83, PURSUANT TO 31 U.S.C. SEC. 3527(C). FOR THE REASONS STATED BELOW, IT IS NOT NECESSARY TO SEEK RELIEF SINCE NO LOSS TO THE GOVERNMENT WAS ACTUALLY SUSTAINED. SEE B-211074, DEC. 15, 1983.

ON JULY 31, 1985, COMMAND EXERCISE DIRECTOR, MAJOR ZILKA REQUESTED THAT A $400 OPERATIONAL FUND BE USED FOR A FIELD TRAINING EXERCISE. HE ALSO REQUESTED THROUGH COMMAND CHANNELS THAT CPT CHRISTIAN BE APPOINTED AS CLASS A AGENT AND THAT SERGEANT FIRST CLASS (SFC) TIMOTHY DERAPS BE APPOINTED AS ORDERING OFFICER FOR THE EXERCISE. THE OPERATIONAL FUND AND CPT CHRISTIAN'S APPOINTMENT WERE APPROVED BY PROGRAM DIRECTOR, LTC DODSON, WHO WAS TO FORWARD THE REQUEST FOR THE APPOINTMENT OF SFC DERAPS AS ORDERING OFFICER TO THE CONTRACTING DIVISION. HOWEVER, DUE TO A BREAKDOWN IN COMMAND CHANNELS, SFC DERAPS WAS LISTED AS THE ORDERING OFFICER ON CPT CHRISTIAN'S APPOINTMENT DOCUMENT, ALTHOUGH THE CONTRACTING DIVISION NEVER OFFICIALLY APPROVED SFC DERAPS' APPOINTMENT.

ON AUGUST 2, 1985, AFTER RECEIVING BOTH ORAL AND WRITTEN INSTRUCTIONS REGARDING HIS DUTIES AS A CLASS A AGENT, CPT CHRISTIAN RECEIVED A $400 ADVANCE. SFC DERAPS ALSO RECEIVED A BRIEFING ON AUGUST 2 AT THE CONTRACTING DIVISION. AFTER THE COMPLETION OF THE EXERCISE, THE CONTRACTING DIVISION REVIEWED THE PURCHASES MADE BY CPT CHRISTIAN IN WHICH HE EXPENDED $363.83 OF THE $400 ADVANCE. DURING THIS REVIEW, THE CONTRACTING OFFICER DISCOVERED THAT THE ORDERING OFFICER HAD NOT BEEN PROPERLY APPOINTED AND HE DENIED APPROVAL OF THE PURCHASES. /1/ THE ARMY HAS CONCLUDED THAT ITS ONLY OBJECTION TO THE PURCHASE IS THE DEFECTIVE APPOINTMENT OF SFC DERAPS AND THAT THE PURCHASES WOULD HAVE BEEN APPROVED HAD SFC DERAPS BEEN OFFICIALLY APPOINTED.

NEITHER LTC HANSEN OR CPT CHRISTIAN ARE LIABLE FOR AN IMPROPER PAYMENT SINCE THE GOVERNMENT INCURRED NO LOSS. THE GOVERNMENT RECEIVED THE GOODS FOR WHICH IT HAD BARGAINED, AND SUFFERED NO MONETARY LOSS. THE PROBLEM WITH THE PAYMENTS OCCURRED BECAUSE OF A BREAKDOWN IN COMMAND CHANNELS AND BECAUSE THE CONTRACTING OFFICER FAILED TO PROPERLY APPOINT THE ORDERING OFFICER. SINCE THE GOVERNMENT INCURRED NO LOSS, IT IS NOT NECESSARY TO RELIEVE EITHER LTC HANSEN OR CPT CHRISTIAN FROM LIABILITY. PLEASE REFER TO TITLE 7, SUBSECTION 28.14 OF GAO MANUAL FOR GUIDANCE OF FEDERAL AGENCIES FOR A DISCUSSION OF HOW TO HANDLE IRREGULARITIES.

/1/ THE CONTRACTING OFFICER ADVISED THAT THE AFTER-THE-FACT APPROVAL PROCESS, OR RATIFICATION, WAS INAPPROPRIATE BECAUSE A COMMERCIAL VENDOR HAD NOT MADE A CLAIM.