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APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - FORGERIES DIGEST: ARMY FINANCE OFFICER AND SUBORDINATE CASHIERS ARE RELIEVED OF LIABILITY FOR IMPROPER PAYMENT RESULTING FROM THE FRAUDULENT USE OF IMPROPERLY ISSUED IDENTIFICATION CARDS AND STOLEN CHECKS. INDIANA 46249 YOU HAVE REQUESTED RELIEF UNDER 31 U.S.C. YOUR REQUEST IS GRANTED. THE CHECKS WERE RETURNED AS DISHONORED DUE TO UNAUTHORIZED SIGNATURES. ABOUT THE SAME TIME PFC PRIDE FRAUDULENTLY OBTAINED FROM THE REGIONAL PERSONNEL CENTER (RPC) A MILITARY ID CARD WHICH WAS ISSUED ON FEBRUARY 12. THERE HAVE BEEN NO OPPORTUNITIES TO MAKE COLLECTION OF THE IMPROPER PAYMENT.

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B-224689, OCT 31, 1986, OFFICE OF THE GENERAL COUNSEL

APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - FORGERIES DIGEST: ARMY FINANCE OFFICER AND SUBORDINATE CASHIERS ARE RELIEVED OF LIABILITY FOR IMPROPER PAYMENT RESULTING FROM THE FRAUDULENT USE OF IMPROPERLY ISSUED IDENTIFICATION CARDS AND STOLEN CHECKS. FINANCE OFFICER MAINTAINED AN ADEQUATE SYSTEM OF SUPERVISION AND THE CASHIERS FOLLOWED THESE PROCEDURES.

BRIGADIER GENERAL B. W. HALL:

DEPUTY COMMANDER

U.S. ARMY FINANCE AND ACCOUNTING CENTER

INDIANAPOLIS, INDIANA 46249

YOU HAVE REQUESTED RELIEF UNDER 31 U.S.C. SEC. 3527(C) FOR IMPROPER PAYMENTS IN THE AMOUNT OF $1,275 CHARGED TO LIEUTENANT COLONEL (LTC) R. K. RANKIN, DSSN 6451, FINANCE OFFICER, 501ST AREA FINANCE SUPPORT CENTER, NUERNBERG, GERMANY, AND CASHIERS SERGEANTS (SGT) BOSCHE AND JUAREZ. FOR THE REASONS STATED BELOW, YOUR REQUEST IS GRANTED.

THE IMPROPER PAYMENTS INVOLVED PERSONAL CHECKS, TWO DATED FEBRUARY 13, 1986 AND ONE DATED FEBRUARY 18, 1986, DRAWN ON A BANK ACCOUNT IN THE NAME OF PRIVATE FIRST CLASS (PFC) STANLEY WILLIAMS. THE CHECKS WERE RETURNED AS DISHONORED DUE TO UNAUTHORIZED SIGNATURES. ACCORDING TO THE RECORD, A SUBSEQUENT INVESTIGATION REVEALED THAT THE CHECKS HAD BEEN FRAUDULENTLY NEGOTIATED.

PRIOR TO THESE CHECK CASHINGS, PFC WILLIAMS' MILITARY LOCKER HAD BEEN BROKEN INTO AND A SET OF STARTER CHECKS FROM THE FORT SILL NATIONAL BANK HAD BEEN STOLEN. IT APPEARS FROM THE INVESTIGATION THAT PFC WILLIAMS' ROOMMATE PFC KENNETH SYLVESTER PRIDE STOLE THE CHECKS. ABOUT THE SAME TIME PFC PRIDE FRAUDULENTLY OBTAINED FROM THE REGIONAL PERSONNEL CENTER (RPC) A MILITARY ID CARD WHICH WAS ISSUED ON FEBRUARY 12, 1986 WITH THE NAME PRIVATE SYLVESTER PRIDE AND A SOCIAL SECURITY NUMBER DIFFERENT FROM HIS CORRECT NUMBER. USING THIS FALSE IDENTIFICATION CARD, PFC PRIDE FRAUDULENTLY NEGOTIATED THE CHECKS IN QUESTION. DURING THIS SAME MONTH, FEBRUARY 1986, PFC PRIDE FAILED TO APPEAR FOR A PENDING COURT MARTIAL PROCEEDING, AND HAS BEEN IN A DESERTER STATUS SINCE THAT TIME. CONSEQUENTLY, THERE HAVE BEEN NO OPPORTUNITIES TO MAKE COLLECTION OF THE IMPROPER PAYMENT.

IN CASES SUCH AS THIS ONE, BOTH THE PERSON WHO MADE THE IMPROPER PAYMENT AND THE PERSON IN WHOSE NAME THE ACCOUNT IS OFFICIALLY HELD ARE LIABLE AS DISBURSING OFFICIALS FOR THE AMOUNT OF THE IMPROPER PAYMENT. 62 COMP.GEN. 476, 479-80 (1983). UNDER 31 U.S.C. SEC. 3527(C) (1982) THIS OFFICE HAS THE AUTHORITY TO RELIEVE A DISBURSING OFFICIAL FROM LIABILITY FOR AN IMPROPER PAYMENT WHEN THE PAYMENT WAS NOT THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE BY THE OFFICIAL. THE OFFICIAL IS SHOWN BY EVIDENCE THAT THE SUPERVISOR MAINTAINED ADEQUATE PROCEDURES AND CONTROLS TO AVOID ERRORS AND THAT THE FAITH AND REASONABLE CARE OF THE PERSON WHO MADE THE PAYMENT CAN BE SHOWN BY EVIDENCE THAT THE INDIVIDUAL COMPLIED WITH THE ESTABLISHED PROCEDURES AND THAT NOTHING OCCURRED WHICH SHOULD HAVE MADE THAT PERSON SUSPICIOUS OF THE FRAUD. B-223285, AUGUST 28, 1986.

THE SUPPORTING DOCUMENTS ESTABLISH THAT LTC RANKIN MAINTAINED AN ADEQUATE SYSTEM OF CONTROLS TO SAFEGUARD THE FUNDS FOR WHICH HE WAS RESPONSIBLE. EVEN THE MOST CAREFULLY ESTABLISHED AND EFFECTIVELY SUPERVISED SYSTEM CANNOT PREVENT EVERY CONCEIVABLE FORM OF CRIMINAL ACTIVITY. B-219124, JULY 15, 1985. THE RECORD INDICATES, FURTHER, THAT THE TWO CASHIERS FOLLOWED PROPER PROCEDURES FOR CASHING PERSONAL CHECKS. THIS INCLUDED COMPARING REQUIRED INFORMATION PROVIDED ON THE BACK OF THE CHECK WITH THE ID CARD, COMPARING SIGNATURES AND PHOTOGRAPHS, AND CHECKING THE BAD CHECK LISTS PROVIDED. NOTHING IN THE RECORD SUGGESTS THAT EITHER CASHIER SHOULD HAVE BEEN SUSPICIOUS OF THE FRAUDULENT NATURE OF THE TRANSACTION.

ALTHOUGH THE REPORT SUBMITTED TO US LACKS SOME SPECIFIC DETAILS SUCH AS THE DATE WHEN THE CHECKS WERE STOLEN, IT IS APPARENT THAT IF THERE WAS A WEAKNESS IN THE SYSTEM WHICH PERMITTED THE COMMITMENT OF THIS FRAUD, IT EXISTED OUTSIDE THE CONTROL OF THESE DISBURSING OFFICIALS. FOR INSTANCE THE IMPROPER ISSUANCE OF THE IDENTIFICATION CARD TO PFC PRIDE WAS HANDLED IN ANOTHER OFFICE. SEE B-218867, OCTOBER 15, 1985. FURTHERMORE, IT DOES NOT APPEAR FROM THE RECORD THAT THE DISBURSING CENTER WAS ALERTED TO THE FACT THAT A SOLDIER'S BLANK STARTER CHECKS HAD BEEN STOLEN.

THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE IMPROPER PAYMENTS WERE THE RESULT OF BAD FAITH OR LACK OF REASONABLE CARE ON THE PART OF LTC RANKIN OR HIS CASHIERS. ACCORDINGLY, RELIEF IS GRANTED, AS REQUESTED.

YOU INDICATE THAT COLLECTION ACTION HAS NOT BEEN POSSIBLE BECAUSE PFC PRIDE HAS DESERTED. WE ASSUME THAT THERE ARE NO OUTSTANDING PAYMENTS DUE HIM. WE AGREE THAT IF HE IS RETURNED TO MILITARY CONTROL YOU SHOULD DILIGENTLY PURSUE COLLECTION. 31 U.S.C. SEC. 3527(D)(2)(B).

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