BNUMBER:  B-244343.2
DATE:  November 2, 1995
TITLE:  Peter M. Spokowski

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Matter of:Peter M. Spokowski

File:     B-244343.2

Date:     November 2, 1995

DIGEST

Where agency alleges employee has submitted a voucher containing 
fraudulent temporary quarters subsistence expenses (TQSE), agency must 
provide evidence sufficient to overcome presumption of honesty and 
fair dealing.  Agency found that employee submitted temporary duty 
(TDY) claims for meals consumed while away from his duty station, and 
later submitted overlapping claims on his TQSE voucher for meal 
expenses at this duty station for dates coinciding with periods of TDY 
travel.  The Army also questioned other claimed expenses.  Agency 
finding of fraud cannot be supported on basis of the record presented.  
Employee is entitled to be reimbursed reasonable subsistence expenses 
as determined by agency.

DECISION

Mr. Peter M. Spokowski requests reconsideration of our Claims Group 
Settlement Certificate Z-2866727, dated April 29, 1991.  In addition, 
he requests waiver of indebtedness and all interest, penalty and 
administrative costs incurred on an advance of temporary quarters 
subsistence expenses incident to a permanent change of station from 
Indian Head, Maryland, to Newport News, Virginia.

By travel order dated March 9, 1989, Mr. Spokowski was directed, as an 
employee of the Department of the Navy, to make a permanent 
change-of-station from Burlington, Massachusetts, to the Naval 
Ordnance Station, Indian Head, Maryland.  All expenses claimed have 
been paid.[1]

Later in 1989, Mr. Spokowski transferred to the Department of the Army 
and was authorized to make a second move, a permanent 
change-of-station from Maryland, to Newport News, Virginia.  Incident 
to this move, he was authorized allowances for real estate expenses, 
including relocation income tax allowance, shipment and temporary 
storage of household goods, and temporary quarters subsistence 
expenses.  The Army paid the real estate and moving expenses.  It also 
advanced Mr. Spokowski $13,635.00 in three payments to cover temporary 
quarters subsistence expenses.  From January through April 1990, he 
occupied temporary quarters in Williamsburg, Virginia, near his new 
duty station in Newport News, and moved into a permanent residence on 
May 1, 1990.  Shortly thereafter, he submitted a voucher to support 
his expenditure of the funds advanced to him.

The Army reviewed his vouchers and concluded initially that his claims 
for meal expenses were not adequately supported.  Mr. Spokowski did 
not keep records of actual meal expenses, as required by the Army, 
during the period covered by his temporary quarters allowance.  
Instead he used an estimate of the daily cost of restaurant meals for 
the Williamsburg area and claimed the same amount each day for himself 
and his wife and daughter.  His temporary quarters contained a 
kitchen, but he states he and his family consistently ate out.  The 
only receipts provided by Mr. Spokowski covered meals consumed while 
he was on temporary duty.

The Army believed further the laundry expense claims to be excessive.  
Mr. Spokowski also used a daily average as the basis for claiming coin 
operated laundry expenses.  The Army believes the average to be 
excessive.  His temporary quarters did not contain a washer or dryer.

Suspecting fraud, the Army initiated a criminal investigation.  The 
Army's report, dated February 19, 1991, did not address the Army's 
initial concerns about certain meal and laundry claims.  However, it 
found that Mr. Spokowski was, by admission, in a temporary duty status 
on several occasions during the period covered by his authorized TQSE, 
and that he failed to exclude his TDY expenses (incurred away from his 
duty station) from his subsequent claim for TQSE (expenses incurred 
while at his duty station).  At times, he was accompanied on temporary 
duty assignments by his wife and daughter, but did not indicate their 
presence on his vouchers, and claimed TQSE meal expenses for them as 
though they had remained in the temporary quarters at his duty station 
during periods when they accompanied him on travel away from his duty 
station.  By the Army's calculations, the overlapping claims totalled 
$1,215.39.  The report concluded that Mr. Spokowski's failure to 
exclude the periods of temporary duty from his claim for temporary 
quarters subsistence, resulting in the overlapping claims, constituted 
an attempt to defraud the government. 

By letter dated June 28, 1991, the Army informed Mr. Spokowski that, 
of the $13,635.00 advanced to him, it had allowed $1,503.47, but was 
denying the remaining $12,131.53, consisting of amounts claimed for 
temporary quarters subsistence expenses, based on the rule that fraud 
in connection with any part of the claimed expenses taints the entire 
claim.  The Army established a debt of $12,131.53 owed by Mr. 
Spokowski to the government, and on the day he was informed of this 
debt, he resigned from the Army.   The Army withheld $6,010.34 from 
his final pay.   As of June 1994, Mr. Spokowski had repaid $1,632.00, 
leaving a balance of $5,992.66 plus penalties and fees.

In a settlement certificate dated April 29, 1991, our Claims Group 
concurred with the Army that fraud in connection with expenses claimed 
incident to the move to Virginia tainted the claim for temporary 
quarters subsistence expenses.[2]

In October 1991, Mr. Spokowski requested that the General Accounting 
Office (GAO) reconsider its decision, and also requested that GAO 
waive the remainder of his debt.  We informed Mr. Spokowski in 
November 1991 that we had requested further documentation from the 
Army, and told him that in light of the Army's indication that their 
reply would be delayed, we were closing our file on the case pending 
receipt in the additional documentation.  In March 1994, the Army sent 
a notice to Mr. Spokowski confirming the debt and seeking payment.  In 
late 1994, Mr. Spokowski again appealed to GAO for a waiver of the 
debt.  We reopened the case at that time.

ANALYSIS AND CONCLUSION

This Office will independently consider all the evidence to determine 
if fraud exists.  57 Comp. Gen. 664, 667 (1978).  In our decision 61 
Comp. Gen. 399 (1982), we restated that the burden of establishing 
fraud rests upon the party alleging it, and must be proven by evidence 
sufficient to overcome the existing presumption of honesty and fair 
dealing.  Circumstantial evidence is competent for this purpose, 
provided it affords a clear inference of fraud and amounts to more 
than a suspicion or conjecture.  If, in any case, the circumstances 
are as consistent with honesty and good faith as they are with 
dishonesty, the inference of honesty is required to be drawn.  
Accordingly, a mere discrepancy or inaccuracy, in itself, cannot be 
equated with an intent to defraud the government.

In 57 Comp. Gen. 664, we acknowledged the difficulty of prescribing 
exact rules concerning fraud or misrepresentation since the question 
of whether fraud exists depends on the facts of each case.  We believe 
that, although it is the employee's responsibility to accurately 
complete a travel voucher to ensure proper payment, it may not be 
assumed automatically that an employee who has not observed all the 
requirements of the Federal Travel Regulation in completing a voucher 
is filing a fraudulent claim.  It should be borne in mind that 
innocent mistakes are made and shortcuts taken in the completion of 
vouchers.  Not every inaccuracy on a voucher should be equated with an 
intent to defraud the government.  Generally, where discrepancies are 
minor, small in total dollar amounts, or where they are infrequently 
made, a finding of fraud would not normally be warranted absent the 
most convincing evidence to the contrary.  By the same token, where 
discrepancies are glaring, involve greater sums of money, or are 
frequently made, a finding of fraud could be more readily made absent 
a satisfactory explanation from the claimant.

Based on our review of the evidence in the record, we are not 
convinced that the Army has met its burden of establishing fraud.  The 
Army investigative report states that Mr. Spokowski claimed 
reimbursement for expenses incurred on days he was in temporary duty 
status (including lodging and meals away from his duty station), while 
at the same time claiming temporary quarters expenses, including 
meals, as though he had not left his duty station.  On certain 
occasions, his wife and daughter accompanied him on temporary duty.  
Meal expenses claimed on their behalf as temporary quarters expenses 
(for meals consumed at his duty station), but for days during periods 
when they accompanied him on TDY away from the duty station, added to 
the Army's concern.  The Army report takes into account two factors.  
The first is that, in signing the vouchers in question,  Mr. Spokowski 
indicated full compliance with the instructions, yet had not informed 
the finance office of his temporary duty status on certain dates.  The 
second is that because Mr. Spokowski had made prior changes of 
station, he was familiar with the requirements for submitting a claim.  
Given this familiarity, the report states, he should have been aware 
of the need to separate temporary duty status claims from claims for 
temporary quarters subsistence expenses, and to avoid submitting 
overlapping claims.  Citing these factors, the Army found intent to 
defraud the government on Mr. Spokowski's part.

Claims covering his family's TQSE expenses for days while he was on 
temporary duty in other locations are clearly permissible.  However, 
claims for TQSE meal expenses for himself for the days he was in 
temporary duty status, or for his family when they accompanied him on 
this travel, clearly are not allowable, but if submitted, do not in 
themselves establish fraud.  In our view, the factors on which the 
Army relies in concluding that these actions constitute fraud are not 
sufficient, without more, to rebut the presumption of honesty.  Mr. 
Spokowski's method of claiming TQSE expenses -- mechanically listing 
identical amounts each day for meals over the entire 120-day period of 
TQSE -- allowed room for mistake, error, or oversight on his part, 
particularly given the fact that he submitted the TQSE voucher in 
question several weeks after he submitted the last of five TDY 
vouchers containing overlapping claims.[3]  Based on the record before 
us, we cannot conclude that his failure to exclude TDY expenses from 
his TQSE voucher was anything more than error on his part.

However, a finding that no fraud was committed does not mean that Mr. 
Spokowski necessarily is entitled to payment on all of his claims.  
Certainly any overlapping claims should be excluded.  Moreover, an 
employee is expected to exercise the same care in incurring expenses 
that a prudent traveler would incur if traveling on personal business.  
It is the employee's responsibility to provide enough information to 
show that the expenses claimed were actually incurred.  The fact that 
the expenses claimed are within the maximum amounts specified in 
Federal Travel Regulation does not automatically entitle the employee 
to reimbursement.  It is the responsibility of the employing agency, 
in the first instance, to determine that subsistence expenses are 
reasonable.  Thomas S. Phillips, B-233391, Oct. 4, 1989.  An 
evaluation of reasonableness must be made on the basis of the facts in 
each case.  52 Comp. Gen. 78 (1972).  Accordingly, the agency may 
reduce the amount claimed to a reasonable sum as determined on the 
basis of the evidence in an individual case.  Such a determination may 
be made on the basis of statistics and other information gathered by 
government agencies regarding living costs in the relevant location.  
55 Comp. Gen. 1107 (1976).

The Army should first review its files on the matter to determine 
whether there exists evidence of fraud on the part of Mr. Spokowski 
beyond the evidence presented in the record before us.  If no such 
evidence exists,  the Army should then proceed to review the claims 
presented by Mr. Spokowski on an item-by-item basis, and allow those 
items it determines to be reasonable and prudent for a family of three 
in Williamsburg, Virginia, in 1990, for which Mr. Spokowski has not 
already been paid.  If any debt remains after this review,  Mr. 
Spokowski is obligated to repay it.[4]  If the allowable expenses 
exceed the amount of the debt, the Army will owe an amount to Mr. 
Spokowski.

Accordingly, we reverse our Claims Group's settlement and return this 
matter to the Army for action consistent with this decision.

/s/Seymour Efros
for Robert P. Murphy
General Counsel

1. The only remaining issue in connection with this first move is the 
proper calculation of the relocation income tax allowance.  On this 
issue, we reiterate the conclusion of our Claims Group that the Army 
would be well advised to recalculate the relocation income tax 
allowance based on a review of Mr. Spokowski's documentation, 
following the applicable regulations. 

2. The rule is that a fraudulent claim taints the entire claim for per 
diem on days for which fraudulent information is submitted.  59 Comp. 
Gen. 99 (1979). 

3. Mr. Spokowski submitted claims for the TDY travel in question on 
January 29, February 16, March 25, April 9, and April 26, 1990.  He 
submitted his TQSE claim on May 16, 1990.

4. If a debt remains, it may not be waived.  A travel advance provided 
an employee incident to a permanent change-of-station is not an 
erroneous payment subject to a consideration for waiver.  See, Charles 
E. Clark, B-207355, Oct. 7, 1982.  Consequently, a request for waiver 
of indebtedness for the balance of a travel advance plus interest, 
penalties, and administrative costs must be denied.