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APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICIAL AND HIS DEPUTY UNDER 31 U.S.C. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE RECERTIFIED CHECK. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL AND HIS DEPUTY. SUBSEQUENT COLLECTION ATTEMPTS ARE BEING PURSUED. WE WILL NO LONGER GRANT RELIEF IF THE FINANCE OFFICER DELAYS MORE THAN 3 MONTHS IN FORWARDING THE DEBT TO YOUR COLLECTION DIVISION. RELIEF IS GRANTED. BOTH CHECKS WERE IN THE SAME AMOUNT. THE RECERTIFIED CHECK WAS ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECK HAD NOT BEEN RECEIVED AND A REQUEST FOR STOP PAYMENT HAD BEEN MADE.

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B-225191, JAN 13, 1987, OFFICE OF GENERAL COUNSEL

APPROPRIATIONS/FINANCIAL MANAGEMENT - ACCOUNTABLE OFFICERS - DISBURSING OFFICERS - RELIEF - ILLEGAL/IMPROPER PAYMENTS - SUBSTITUTE CHECKS DIGEST: RELIEF IS GRANTED ARMY DISBURSING OFFICIAL AND HIS DEPUTY UNDER 31 U.S.C. SEC. 3527(C) FROM LIABILITY FOR IMPROPER PAYMENT RESULTING FROM PAYEE'S NEGOTIATION OF BOTH ORIGINAL AND RECERTIFIED MILITARY CHECKS. PROPER PROCEDURES WERE FOLLOWED IN THE ISSUANCE OF THE RECERTIFIED CHECK, THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICIAL AND HIS DEPUTY, AND SUBSEQUENT COLLECTION ATTEMPTS ARE BEING PURSUED. HOWEVER, FOR CASES INVOLVING NOTICES OF LOSSES RECEIVED AFTER JUNE 1, 1986, WHERE THE PAYEE HAS LEFT THE ARMY OR ITS EMPLOY, WE WILL NO LONGER GRANT RELIEF IF THE FINANCE OFFICER DELAYS MORE THAN 3 MONTHS IN FORWARDING THE DEBT TO YOUR COLLECTION DIVISION.

BRIGADIER GENERAL B. W. HALL:

THIS RESPONDS TO YOUR REQUEST OF NOVEMBER 3, 1986, THAT WE RELIEVE LIEUTENANT COLONEL (LTC) M. D. ERICKSON, FINANCE CORPS, DSSN 5577, FINANCE AND ACCOUNTING OFFICER, U.S. ARMY FINANCE AND ACCOUNTING CENTER, EUROPE, AND HER DEPUTY, MS. D. J. TURNER, UNDER 31 U.S.C. SEC. 3527(C) FOR AN IMPROPER PAYMENT OF A $392.68 CHECK PAYABLE TO MS. MARY S. N. WHITE. FOR THE REASONS STATED BELOW, RELIEF IS GRANTED.

THE LOSS RESULTED WHEN THE PAYEE NEGOTIATED BOTH THE ORIGINAL AND A RECERTIFIED CHECK. BOTH CHECKS WERE IN THE SAME AMOUNT. THE RECERTIFIED CHECK WAS ISSUED ON THE BASIS OF THE PAYEE'S ALLEGATION THAT THE ORIGINAL CHECK HAD NOT BEEN RECEIVED AND A REQUEST FOR 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 AND TREASURY FISCAL REQUIREMENTS MANUAL FOR GUIDANCE OF DEPARTMENTS AND AGENCIES, BULLETIN NO. 83-28.

IT APPEARS THAT THE ISSUANCE OF A RECERTIFIED CHECK IN THIS CASE WAS WITHIN THE BOUNDS OF DUE CARE. ID. THERE WAS NO INDICATION OF BAD FAITH ON THE PART OF THE DISBURSING OFFICERS AND ADEQUATE COLLECTION EFFORTS ARE BEING MADE. ACCORDINGLY, WE GRANT RELIEF.

ALTHOUGH WE HAVE GRANTED RELIEF HERE, WE WOULD LIKE TO COMMENT ON ARMY'S COLLECTION PROCEDURES. GAO HAS DETERMINED THAT IN ORDER TO MEET THE DILIGENT COLLECTION REQUIREMENT OF 31 U.S.C. SEC. 3527(C), THE FINANCE OFFICER MUST FORWARD LOSSES TO YOUR COLLECTION DIVISION WITHIN 3 MONTHS FROM HIS/HER RECEIPT OF A NOTICE FROM TREASURY THAT A LOSS HAS OCCURRED. (A LONGER TIME MAY BE REQUIRED IF SET-OFF PROCEDURES ARE UNSUCCESSFULLY ATTEMPTED.) IN ORDER TO ALLOW ARMY TIME TO COMPLY WITH THIS POLICY, GAO AGREED NOT TO INSTITUTE THIS STANDARD FOR CASES WHERE THE NOTICES OF LOSS WERE RECEIVED BEFORE JUNE 1, 1986.

TO MEET GAO'S NEW POLICY, ARMY MODIFIED ITS DISBURSING PROCEDURES IN APRIL 1986. DISBURSING POLICY MESSAGE 12-86, APRIL 1986. THE CHANGES IN ARMY'S PROCEDURES AFFECTED BOTH THE HANDLING OF LOSSES FROM SUBSTITUTE AND RECERTIFIED CHECKS. UNDER THESE NEW PROCEDURES, LOSSES FROM EITHER ARE RECORDED IN THE OFFICER STATEMENT OF ACCOUNTABILITY BY MEANS OF A JOURNAL VOUCHER. PRIOR TO THAT CHANGE, A JOURNAL VOUCHER DID NOT HAVE TO BE PREPARED IN RECERTIFICATION CASES. THE NEW PROCEDURES ALSO REQUIRE THAT THE FINANCE OFFICER FORWARD THE DEBT TO THE COLLECTION DIVISION. USAFAC (FINCP-FF), WITHIN 85 DAYS FROM RECEIVING NOTICE FROM TREASURY THAT A LOSS HAS OCCURRED. IN ADDITION, THE PROCEDURES REQUIRE THAT WITHIN 90 DAYS FROM PREPARING A JOURNAL VOUCHER THE FINANCE OFFICER SEND A RELIEF PACKET TO USAFAC (FINCL-L).

IN THIS CASE, THE NOTICE OF A LOSS (THE CHARGEBACK) FROM TREASURY WAS RECEIVED BY THE FINANCE OFFICER IN APRIL 1985. AS STATED ABOVE, AT THAT TIME ARMY PROCEDURES DID NOT REQUIRE THAT A JOURNAL VOUCHER BE PREPARED. HOWEVER, IN RECOGNITION OF THE APRIL 1986 CHANGES IN ARMY'S DISBURSING PROCEDURES, THE LOSS WAS RECORDED IN THE FINANCE OFFICER'S JUNE 1986 STATEMENT OF ACCOUNTABILITY. AT THAT TIME THE FINANCE OFFICER SENT A RELIEF PACKET TO USAFAC (FINCL-L) BUT FAILED TO FORWARD THE LOSS TO THE COLLECTION DIVISION. USAFAC (FINCL-L) SUBSEQUENTLY FORWARDED THE DEBT TO YOUR COLLECTION DIVISION IN OCTOBER 1986.

ALTHOUGH THE NOTICE OF THE LOSS WAS RECEIVED BEFORE JUNE 1, 1986, IT WAS NOT RECORDED UNTIL AFTER THAT DATE. WE THINK THAT AFTER THE JOURNAL VOUCHER WAS PREPARED THE FINANCE OFFICER SHOULD HAVE REFERRED THE LOSS TO THE COLLECTION DIVISION, USAFAC (FINCP-FF), AT THE SAME TIME THE RELIEF PACKET WAS SENT TO USAFAC (FINCL-L).

WE ARE INFORMALLY ADVISED, HOWEVER, THAT ARMY DOES NOT HOLD ITS REVISED PROCEDURES APPLICABLE IN THIS CASE SINCE THE CHARGEBACK FROM TREASURY WAS RECEIVED PRIOR TO THE ARMY'S IMPLEMENTATION OF ITS NEW PROCEDURES. UNDER THESE CIRCUMSTANCES WE WILL NOT DENY RELIEF HERE. NEVERTHELESS, WE AGAIN REITERATE, THAT FOR CASES INVOLVING NOTICES OF LOSSES RECEIVED AFTER JUNE 1, 1986, WHERE THE PAYEE HAS LEFT THE ARMY OR ITS EMPLOY, WE WILL DENY RELIEF IF THE FINANCE OFFICE DELAYS MORE THAN 3 MONTHS IN FORWARDING THE LOSS TO YOUR COLLECTION DIVISION.

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