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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. 3527(c) from liability for improper payment resulting from payee's negotiation of both original and recertified checks. Proper procedures were followed in the issuance of the substitute check. There was no indication of bad faith on the part of the disbursing official and 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.

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B-227668, Jul 27, 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. 3527(c) from liability for improper payment resulting from payee's negotiation of both original and recertified checks. Proper procedures were followed in the issuance of the substitute check, there was no indication of bad faith on the part of the disbursing official and subsequent collection attempts are being pursued.

Brigadier General B. W. Hall:

This responds to your request of June 29, 1987, that we relieve Lieutenant Colonel (Lt. Col.) J. W. Mellon, Finance Corps, DSSN 6396, Finance and Accounting Officer, 7th Infantry Division and Fort Ord, Ford Ord, California under 31 U.S.C. Sec. 3527(c), for an improper payment of $301.34 payable to Ms. Cassandra Wade. 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. See 62 Comp.Gen. 476 (1983). 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 to the finance officer in this case, we would like to comment on the collection action taken here. The finance office was notified of the loss by a Daily Advice of Status (DAS) from Treasury dated December 20, 1985. However, the first attempt to reach Ms. Wade was not made until May 22, 1986. We are informed that this delay was due to a turnover in personnel.

A collection letter was sent on July 10, 1986. Ms. Wade responded to this letter indicating that the check dates were wrong. Further research was done and a second collection letter was sent on September 15, 1986. Ms. Wade again responded and asked for copies of all her checks. Since Ms. Wade's request only entailed 5 pay periods, the finance officer complied. After receiving the information from Treasury, a third collection letter with copies of the requested information attached, was sent on November 6, 1986. This letter was returned as unclaimed. Unable to locate her, the finance officer referred the loss to the collection division on December 29, 1986.

Although there was an initial delay in starting collection activity, once begun, we believe the collection efforts in this case met the standards of 31 U.S.C. Sec. 3527(c). The finance officer's responses to the debtor were timely and once the debtor disappeared, the finance officer promptly referred the matter to your collection division.

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