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DIGEST: Deficiency in disbursing officer's account which is solely attributable to currency devaluations in foreign exchange transactions may be restored by the Department of the Treasury as authorized by 31 U.S.C. It is not necessary or appropriate for federal agencies to seek relief from GAO for such a loss. To the extent that the loss in the value of the USDO's account resulted from foreign exchange transactions in Laos and is solely attributable to the devaluation of the Royal Kip. It is governed by 31 U.S.C. It is not necessary to seek relief for the disbursing officer under 31 U.S.C. You will find specific procedures for reporting deficiencies to the Treasury in 1 T.F.M. If you have any additional information indicating that any portion of the loss can be attributed to other factors.

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B-245760, Jan, 1992

DIGEST: Deficiency in disbursing officer's account which is solely attributable to currency devaluations in foreign exchange transactions may be restored by the Department of the Treasury as authorized by 31 U.S.C. Sec. 3342. It is not necessary or appropriate for federal agencies to seek relief from GAO for such a loss.

Melvin L. Hines

Deputy Associate Comptroller:

This responds to your request, dated September 11, 1991, regarding an apparent loss of 7,073,871 Laotian Royal Kip (U.S.E. $5,892.52) which has been carried on the accounts of the United States Disbursing Officer (USDO) in the Regional Administrative Management Center (RAMC) in Bangkok for over ten years. You suggest that the loss probably occurred when the Government of Laos issued a new currency, the Lao Kip, replacing the Royal Kip as the country's official currency. You ask that we, under authority of 31 U.S.C. Sec. 3527, permit the State Department to write off this loss.

To the extent that the loss in the value of the USDO's account resulted from foreign exchange transactions in Laos and is solely attributable to the devaluation of the Royal Kip, it is governed by 31 U.S.C. Sec. 3342, and it is not necessary to seek relief for the disbursing officer under 31 U.S.C. Sec. 3527 in order to restore the dollar value of the account. See 64 Comp.Gen. 152, 153 (1984); 61 Comp.Gen. 132 (1981). The Department of the Treasury has issued regulations to implement section 3342, at Treasury Circular No. 830 (revised June 16, 1980) and Treasury Financial Manual (formerly T.F.R.M.), vol. 1, chap. 4-9000. Under these regulations, Treasury charges net losses resulting from foreign currency transactions against its "Gains and Deficiencies Account." We suggest that you bring this matter to the attention of the Treasury. You will find specific procedures for reporting deficiencies to the Treasury in 1 T.F.M. Sec. 4- 9090.10 and 2 T.F.M. chap. 3200.

Please advise us, however, if you have any additional information indicating that any portion of the loss can be attributed to other factors, such as local theft or negligence of the disbursing officer or his subordinates. Under such circumstances, our Office would consider the loss under our authority in 31 U.S.C. Sec. 3527.

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