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Highlights

Relief is granted to cerfitying officer under 31 U.S.C. The payment was not specifically prohibited by statute and the government received value for the payment. Certifying officer's good faith was demonstrated. That NARA does not have authority to pay an employee's attorney fees for negotiating such a settlement with the agency. A certifying officer who authorizes a payment that is improper. Is responsible for repaying the payment. 31 U.S.C. The certifying officer is jointly and severally liable with the persons or persons who benefited from the payment to repay the United States the amount of the loss incurred as a result of the illegal. Having determined that "the cost of further collection will exceed the amount recoverable thereby". 4 C.F.R.

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B-257893 June 1, 1995

Relief is granted to cerfitying officer under 31 U.S.C. Sec. 3528(b)(1)(B) who certified an unauthorized payment, pursuant to agreement for an employee's attorney fees. The payment was not specifically prohibited by statute and the government received value for the payment. Certifying officer's good faith was demonstrated, in part, by reliance on the Office of General Counsel's approval of the settlement agreement.

Ms. Trudy Huskamp Peterson Acting Archivist of the United Stated National Archives Washington, D.C. 20408

Dear Ms. Peterson:

By letter dated June 30, 1994, you asked that we relieve Mr. David Millane, certifying officer of the National Archives and Records Administration (NARA), of liability for certifying a payment our Office determined to be unauthorized. B-253507, Jan. 11, 1994. For the reason discussed below, we grant relief.

Background

In December 1992, NARA entered into a settlement agreement with Mr. Lawrence Oberg, its former Inspector General (IG). The agreement stemmed from a proposal by NARA to remove the IG from his position. NARA had concluded that he violated the Inspector General Act of 1978, Pub. L. No. 95-452, 92 Stat. 1101, as amended by Pub. L. No. 100-504, 102 Stat. 2515 (1988). NARA settled this matter through negotiations with Mr. Oberg's attorney. Under the terms of the settlement agreement, Mr. Oberg agreed to accept a one-grade reduction in salary and removal from the IG position, and NARA agreed to pay his attorney fees in the amount of $10,833. On March 2, 1993, Mr. Millane certified the $10,833 payment in attorney fees. We subsequently held, however, that NARA does not have authority to pay an employee's attorney fees for negotiating such a settlement with the agency. B-253507, Jan. 11, 1994.

A certifying officer who authorizes a payment that is improper, incorrect, or illegal, is responsible for repaying the payment. 31 U.S.C. Sec. 3528(a)(4). The certifying officer is jointly and severally liable with the persons or persons who benefited from the payment to repay the United States the amount of the loss incurred as a result of the illegal, improper, or incorrect payment. 67 Comp.Gen. 457, 464 (1988); B-239592, Aug. 23, 1991. As required, NARA examined the possibility of collecting this claim from Mr. Oberg. 4 C.F.R. Sec. 102.1(a). NARA decided to terminate collection action, however, having determined that "the cost of further collection will exceed the amount recoverable thereby". 4 C.F.R. Sec. 104.3(c). The certifying officer, nonetheless, remains liable for the unauthorized payment. 67 Comp.Gen. at 464.

Analysis

This Office is authorized to relieve a certifying officer from liability when we find that (1) the obligation was incurred in good faith; (2) no law specifically prohibited the payment; and (3) the United States received value for the payment. 31 U.S.C. Sec. 3528(b)(1)(B). A finding of the first criterion, good faith, is in large part premised on our finding that the certifying officer did not, nor should reasonably have had, doubt regarding the propriety of the payment. B-250884, Mar. 18, 1993. Whether the certifying officer should have been in doubt requires weighing all surrounding facts and circumstances and cannot be resolved by any "hard and fast rule." 70 Comp.Gen. 723, 726 (1994). In many cases, good faith is found simply by the absence of any evidence to the contrary. Id.

Your letter states that the certifying officer, on numerous occasions, had certified payments of attorney fees arising from the administrative settlement of personnel disputes. You cite as an example Equal Employment Opportunity (EEO) actions and actions before the MSPB where attorney fees are specifically authorized by law. See 62 Comp.Gen. 464 (1993); B-231813, Aug. 22, 1989; B-199291, June 19, 1981. You further assert that the material sent to the certifying officer contained nothing which, on its face, should have alerted the officer that there was no legal basis for paying the fees. To the contrary, you contend that the certifying officer was informed that the then Archivist of the United States had authorized the settlement and that NARA's Office of General Counsel had approved the terms of the agreement. Although a certifying officer may not be relieved from liability for repayment of an unauthorized payment by claiming reliance on the advice of agency counsel, we have increasingly recognized that advice from agency counsel is a relevant factor in demonstrating good faith under section 3528(b)(1)(B). In B-250884, Mar. 18, 1993, for example, we held that good faith could be demonstrated in circumstances where a certifying officer had relied on agency guidelines; the guidelines had been promulgated by the agency's Chief Financial Officer with the assistance of the General Counsel and approved by the agency's Administrator. Under the circumstances presented in this case, we think that Mr. Millane's good faith is demonstrated by his reliance on a settlement agreement which had been approved by the Archivist and NARA's Office of General Counsel, and by the absence of any contrary evidence.

The second criterion is that no law specifically prohibited payment to the former IG for attorney fees. We have interpreted this criterion as referring to statutes which expressly prohibit payments for specific items or services, and not to general fiscal statutes. 70 Comp.Gen. at 726; B-191900, July 21, 1978. [1] There is no express statutory prohibition on the payment of attorney fees. The prohibition is a result of decisions by the accounting officers of the government that appropriated funds are not generally available to pay for an employee's attorney fees. In reference to this case, we specifically held in B-253507, Jan. 11, 1994, that an agency is authorized to pay an employee's attorney fees only where there is specific statutory of authority to do so, and we found no such authority here.

The third criterion is met because the government received value for the payment of attorney fees to the former IG. In this regard, we have recognized that the requirement of "value received" is met if the agency receives an intangible benefit, such as achieving the desired result of the payment. B-250884, Mar. 18, 1993; B-127160, Apr. 3, 1961. Through the settlement process, NARA achieved its aim of removing Mr. Oberg from his position as Inspector General and imposing a one-grade reduction on him for actions the agency deemed inappropriate. NARA also received the benefits associated with avoiding litigation and related costs.

In conclusion, since all three criteria found in 31 U.S.C. Sec. 3528(b)(1)(B) have been met, we grant relief to Mr. Millane, the certifying officer in this case.

1. The phrase "no law specifically prohibited the payment" is not the same as the more general "payment prohibited by law". It does not include violations of general fiscal statutes such as the Antideficiency Act, 31 U.S.C. Sec. 1341, or the general purpose statute, 31 U.S.C. 6, 1301(a). B-142871, Sept. 15, 1961. See GAO, Principles of Federal Appropriations Law at 9-86 (1994).

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