B-226872, Oct 16, 1987, Office of General Counsel

B-226872, Oct 16, 1987, Office of General Counsel

APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officers - Cashiers - Relief - Illegal/Improper Payments - Forgeries APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officers - Disbursing Officers - Relief Illegal/Improper Payments - Forgeries DIGEST: Army finance office and subordinate cashier are granted relief under 31 U.S.C. Sec. 3527(c) for an improper payment of $775.00. Improper payment resulted from criminal activity over which the finance officer and cashier had no control. The offender was able to cash forged checks with the cashier, who checked her ID and who was not led to believe that a fraud was being perpetrated.

General Hall:

This responds to your letter of September 25, l987 requesting that w grant relief to Maj. K.S. Nordaune, Finance Corps, DSSN 6359, Finance and Accounting Officer, 78th Finance Support Unit, APO, New York, and his cashier, Mrs. Roberta L. Sewell, for an improper payment of $775.00. grant relief to Major Nordaune because he maintained and enforced adequate procedures and controls to avoid errors in cashing checks.

We also grant relief to Mrs. Sewell because she complied with established procedures in making the payment in question.

The improper payment occurred when an individual purporting to be Sp Tammy Kersey cashed a personal check for $775.00 on April 8, 1985. The check drawn on Specialist Kersey's American Express Account was subsequently dishonored because of insufficient funds. When the real Specialist Kersey learned of the overdraft, she immediately denied writing the check.

The record indicates that Specialist Kersey's checkbook had been eit lost or stolen on April 6, 1985. The perpetrator on April 8, 1985, was able to obtain a valid military identification card (ID) bearing her picture and the name of Specialist Kersey. Thereafter, the perpetrator negotiated seven of Specialist Kersey's personal checks at various locations throughout Germany. As of the date of your submission, the Army has been unable to identify or apprehend the individual responsible in this case. Consequently, there have been no opportunities to make collection of the improper payments.

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 an improper payment. 62 Comp.Gen. 776, 779-80 (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 good faith and reasonable care of a supervisory disbursing official is shown by evidence that the supervisor maintained adequate procedures and controls to avoid errors and that the supervisor took steps to implement those controls. 62 Comp.Gen. at 780 (1983). The good faith and reasonable care of the person who made the payment can be shown by evidence that the individual complied with established procedures and that nothing occurred which should have made that person suspicious of fraud. B-223700, August 22, 1986.

The check cashing procedures in force for cashing personal checks required cashiers to compare the signature and photograph on the payee's ID card against the signature on the check, and the person presenting the checks. Cashiers were also required to compare the numerical expression of the check's amount against the written expression of the check's amount. The record indicates that these procedures were adequate and effectively implemented by Major Nordaune and that they were followed by Mrs. Sewell. It appears that the improper payment was the result of skillfully executed criminal activity beyond the control of either the cashier or the finance officer in this case. Accordingly, relief is granted.