BNUMBER:  B-260753
DATE:  January 11, 1996
TITLE:  [Letter]

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B-260753

January 11, 1996

Mr. John S. Nabil
Director, Defense Finance and Accounting Service
Denver Center
6760 E. Irvington Place
Denver, Colorado  80279-8000

Dear Mr. Nabil:

This responds to your letter dated March 7, 1995, requesting relief 
from liability on behalf of four accountable officers for an improper 
payment in the amount of $1,254.  The improper payment resulted when a 
check was issued for a travel advance to S. Sgt. Scott G. Franklin 
after he had already been paid in cash.  We conclude that Capt. Dale 
R. Carlson and Mrs. Gertrude Noel did not make the improper payment; 
relief is therefore unnecessary.  With regard to Mr. James Dockter and 
Mrs. Julane Wood, relief is granted.

On November 2, 1992, the Accounting and Finance Office at F.E. Warren 
Air Force  Base (Finance Office) mailed a check for a permanent change 
of station (PCS) claim payable to Sergeant Franklin in the amount of 
$1,254.  Sergeant Franklin did not receive the check and on November 
10, 1992, he so notified the travel section of the Finance Office, 
claiming that the check had been mailed to the wrong address.  On 
November 12, 1992, S. Sgt. Jon Goldtrap, in violation of Air Force 
Regulations, prepared a voucher to pay Sergeant Franklin the $1,254 in 
cash.  Air Force Regulations specify that when a certified U.S. 
Treasury check has been reported as lost, recertified payments must be 
"by a new numbered (not a control or substitute) replacement check 
issued to a recipient based on a claim against the original check."  
AFR 177-108, ch. 9, para. 9-2(e).  The Finance Office's cashier,        
Mrs. Gertrude Noel, upon receipt of Sergeant Goldtrap's voucher, paid 
cash to          Sergeant Franklin on November 12.

Several weeks later, on December 9, 1992, Mrs. Julane Wood, Chief of 
Paying and Collecting, unaware that Sergeant Franklin had been paid in 
cash, authorized the issuance of a second check to replace the check 
that Sergeant Franklin claimed not to have received.  S. Sgt. 
Goldtrap, in authorizing the cash payment, erroneously charged the PCS 
appropriation account, account 573500 32358890Y 503725, rather than 
the replacement check appropriation as required by governing 
regulations.  Consequently, when Mrs. Wood checked the replacement 
check appropriation to determine if Sergeant Franklin had been paid, 
there was no record of a replacement check being issued.  Mrs. Wood 
then directed T. Sgt. Larry Buchholtz to prepare a voucher for a 
replacement check.  Sergeant Buchholtz prepared the voucher on 
December 9, 1992, and Sergeant Franklin received and cashed the 
replacement check later that month.  On April 29, 1993, Mrs. Wood 
discovered that Sergeant Franklin, then separated from the Air Force, 
had been paid twice.  Diligent collection action was undertaken, 
although collection efforts failed.

The cash payment of November 12, although in violation of Air Force 
Regulations, did not constitute an improper payment; there is nothing 
in the record to suggest that Sergeant Franklin was not otherwise 
entitled to the amount he was paid.  The replacement check issued on 
December 9 was improper in that it duplicated a payment already made 
to Sergeant Franklin.  The two disbursing officers accountable for 
this payment are Mr. James Dockter, who was the accounting and finance 
officer on December 9, and Mrs. Wood.  Disbursing officers are 
personally liable for deficiencies in their accounts resulting from 
illegal, improper, or incorrect payments.  However, under 31 U.S.C.  
3527(c), this Office may relieve a disbursing officer of liability 
when the record indicates that the disbursing officer acted within the 
bounds of reasonable care as established by applicable regulations, 
that there is no evidence of bad faith on the part of the disbursing 
officer, and that a diligent effort was made to collect the 
overpayment.[1]  70 Comp. Gen. 298, 299 (1991);       62 Comp. Gen. 
91, 92 (1982).

There is no suggestion in this case of bad faith on the part of either 
Mr. Dockter or Mrs. Wood.  Moreover, the record establishes that 
diligent collection efforts were made to recover the $1,254 from Mr. 
Franklin.  Therefore, the question that remains is whether these two 
accountable officers exercised reasonable care for purposes of 31 
U.S.C.  3527(c).  70 Comp. Gen. at 299.

In cases where a subordinate of an accountable officer actually 
disbursed the funds, reasonable care of the supervisory official, in 
this case Mr. Dockter, is shown by evidence that the supervisor 
maintained an adequate system of procedures and controls to avoid 
errors and that the supervisor took steps to ensure the system's 
effectiveness.  B-241019, Aug. 19, 1991; B-235036, Oct. 17, 1989.  The 
record shows that the Air Force had in place, at the time of this 
improper payment, procedures and controls adequate to safeguard 
against a duplicate payment of the sort at issue here.  Air Force 
Regulations governing the issuance of replacement checks required that 
any payment made as a result of a lost or stolen check was to be in 
the form of a check, not cash, the amount of which was to be logged 
into the replacement check log system and charged to appropriation 
account 57F3880 670100.  Moreover, the record indicates that the 
Finance Office undertook reviews to ensure that these regulations were 
followed.  Thus, the record establishes that the supervisory official, 
Mr. Dockter, exercised reasonable case.

The record also establishes that Mrs. Wood exercised reasonable care 
in that she followed these regulations.  B-246369, Feb. 3, 1992.  Mrs. 
Wood, in accordance with established procedure, checked the 
replacement check appropriation when she was advised that Sergeant 
Franklin had claimed not to have received the initial check, in order 
to confirm that a replacement had not yet been advanced.  The improper 
payment resulted not from any lack of reasonable care on her part, but 
because  Sergeant Goldtrap, when he erroneously authorized a cash 
payment to Sgt. Franklin, did not charge the amount against the 
replacement check appropriation account.       Mrs. Wood, 
consequently, had no means of knowing that Sergeant Franklin had 
already been paid.  The record, therefore, establishes that both 
accountable officers,  Mr. Dockter and Mrs. Wood, exercised reasonable 
care.  The statutory criteria in   31 U.S.C.  3527(c) have been met 
and relief is granted.

Sincerely yours,

Gary L. Kepplinger
Associate General Counsel

B-260753

January 11, 1996

DIGEST

Two disbursing officers are relieved of liability pursuant to 31 
U.S.C.  3527(c) for the improper payment of a recertified check after 
a cash payment for a lost check had already been made.  There is no 
indication of bad faith on the part of the disbursing officers; 
disbursing officers exercised reasonable care as established by 
applicable regulations; and collection action was initiated in a 
timely and adequate manner.

f:\userfile\duncane\07530l.wp5

1. Capt. Dale R. Carlson, an accounting and finance officer, Mrs. 
Gertrude Noel, and Sergeant Goldtrap are responsible for the cash 
payment to Sergeant Franklin on      November 12.  Disciplinary action 
for violating Air Force Regulations is outside of this Office's 
jurisdiction.