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APPROPRIATIONS/FINANCIAL MANAGEMENT - Accountable Officers - Disbursing officers - Relief - Illegal/improper payments - Substitute checks DIGEST: Relief is granted Army disbursing official 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. Subsequent collection attempts are being pursued. 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. Both checks were issued by the Army under authority delegated by the Department of the Treasury. 31 C.F.R.

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B-227564, Jul 23, 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 under 31 U.S.C. Sec. 3527(c) from liability for improper payment resulting from payee's negotiation of both original and certified 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 subsequent collection attempts are being pursued. However, in duplicate check cases where a member or employee resigns from the Army still indebted to the Army, the finance officer should refer the loss to Army's Collection Division within 3 months from the debtor's resignation date.

Brigadier General B. W. Hall:

This responds to your request of June 18, 1987, that we relieve Major (Maj.) G. O. Smith, Finance Corps, DSSN 6552, Finance and Accounting Officer, Fitzsimons Army Medical Center, Aurora, Colorado, under 31 U.S.C. Sec. 3527(c), for improper payment of $413.89 payable to Mr. Wayne M. Brown. The payee has repaid $252.29, leaving a debt of $161.60. For the reasons stated below, relief is granted.

This 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 Department 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. See B-223503, August 18, 1986. There was no indication of bad faith on the part of the disbursing officer and adequate collection efforts are being made. Accordingly, we grant relief.

Although we have granted relief, we would like to discuss the collection action taken in this case. As we previously indicated to you, 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 Army delays more than 3 months in forwarding the debt to your Collection Division.

This rule, however, is not applicable here since the payee was still employed by the Army when the notice of loss was received. After being notified of the loss, Maj. Smith worked out a payment schedule with Mr. Brown and $25.00 a pay period was withheld to repay his debt. However, before the debt was entirely repaid, Mr. Brown resigned. Although, his final pay was also withheld, there was still an unpaid balance of $161.60.

One month after Mr. Brown's resignation, Maj. Simpson, Maj. Smith's successor, reinstituted collection activity by sending a collection letter. Two follow-up collection letters were also sent. After being unsuccessful in his collection attempts, Maj. Simpson referred the loss to the U.S. Army Finance and Accounting Center (USAFAC) on February 2, 1987. USAFAC then sent the case to your Collection Division on May 29, 1987. This was almost 11 months from the date of Mr. Brown's resignation.

In keeping with the diligent collection standard of 31 U.S.C. Sec. 3527(c), we think in cases where a member or employee resigns from the Army still owing a debt (and all possible setoffs have been made) that the finance officer should refer the loss within 3 months from the debtor's resignation date to your designated collection representative.

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