TITLE: B-303920, Clarence Maddox ï¿½ Relief of Liability for Improper Payments for  Bottled Water, March 21, 2006
BNUMBER: B-303920
DATE: March 21, 2006
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B-303920, Clarence Maddox ï¿½ Relief of Liability for Improper Payments for  Bottled Water, March 21, 2006

   B-303920

   March 21, 2006

   Mr. Leonidas Ralph Mecham, Director

   Administrative Office of the United States Courts

   Washington, D.C. 20544

   Subject: Clarence Maddox - Relief of Liability for Improper Payments for

   Bottled Water

   Dear Mr. Mecham:

   This responds to your request that we relieve Mr. Clarence Maddox, Clerk
   of Court for the United States District Court, Southern District of
   Florida (the court), from liability for improper payments for bottled
   water in the amount of $1,433.22.[1] For the reasons stated below, Mr.
   Maddox is relieved of liability by operation of law for 27 payments made
   prior to March 2003, totalling $947.62. With regard to the remaining 11
   payments, totalling $485.60, we are unable to grant relief.

   Background

   At the time of the payments at issue, Mr. Maddox acted as both disbursing
   and certifying officer[2] for the court. September letter at 1. The
   bottled water in question was purchased for employees at the Fort Pierce
   Division courthouse. Id. at 2. The first authorization of payment for
   bottled water for the Fort Pierce staff was made by Mr. Maddox's
   predecessor clerk of court in 1997, two years prior to Mr. Maddox's
   appointment in 1999. Id.; an undated memo to file labeled "Attachment 2."
   Apparently, these payments were made periodically thereafter, continuing
   after Mr. Maddox's appointment, until February 2004. At that time, Mr.
   Maddox was informed of the results of an external audit covering the
   period January 1, 2001, through September 30, 2003, which indicated that
   $1,216.49 in payments for staff bottled water at Fort Pierce were
   improper. Maddox request at 1-2; February 2004 external audit of the court
   covering the period Jan. 1, 2001, through Sept. 30, 2003, at 3, 16. At
   that point, Mr. Maddox stopped the payments. September letter at 2.

   Statute of Limitations

   Pursuant to 31 U.S.C. sect. 3526(c) (2000), our Office is authorized to
   settle accounts of accountable officers and to grant or deny relief
   "within 3 years after the date the Comptroller General receives the
   account." B-287043, May 29, 2001; B-251994, Sept. 24, 1993. However, since
   accounts are now maintained and audited by the agencies themselves, the
   focal point for beginning the 3-year period has changed to when the
   agencies themselves are able to identify discrepancies in their accounts,
   i.e., the date a "substantially complete" account is available to the
   agency for audit. B-251994, Sept. 24, 1993. Here, in his role as
   disbursing officer, Mr. Maddox was required to submit a monthly statement
   of accountability, including all supporting documents. AOUSC's Guide to
   Judiciary Policies and Procedures, Vol. 1, Chapter 7, Part E - Reporting,
   paragraphs 1.2, 2.1, 2.2. It is with the receipt of the monthly statements
   of accountability that Mr. Maddox's account was substantially complete for
   purposes of AOUSC audit.[3] As a result, Mr. Maddox is relieved by
   operation of law with respect to 27 of the improper payments at issue,
   those made prior to March 2003, which have a total value of $947.62.
   Hence, Mr. Maddox remains liable only for the remaining improper payments
   for which relief was requested, 11 payments with a total value of $485.60.
   This decision addresses his relief of liability for those 11 payments
   only.

   Discussion

   Since bottled drinking water for employees is ordinarily considered a
   personal expense, appropriated funds may be used to purchase bottled
   drinking water for employees only upon a showing of necessity. B-247871,
   Apr. 10, 1992. We have found necessity to be established, for example,
   where the available drinking water has been analyzed by appropriate
   authorities and found to pose a health risk. Id. See also B-301152, May
   28, 2003 ("Without question, an agency may use appropriated funds to
   satisfy basic fundamental needs such as potable water, clean air, and
   sufficient light"). Here, despite Mr. Maddox's reference to "ongoing
   concerns about environmental issues in the Courthouse, which has had
   ongoing sewer and plumbing problems," Maddox request at 1, apparently no
   such analysis of the drinking water was ever performed. April letter at 1.
   In any case, since neither AOUSC nor Mr. Maddox disputes that the payments
   for bottled water for employees[4] were unauthorized,[5] the only issue
   before us is whether relief can be granted to Mr. Maddox under the
   circumstances here.

   Regarding the standard for relief to be used in this case, discussion of
   the exact nature of Mr. Maddox's role as an accountable officer, and the
   relevant legislation, is important. Congress enacted the Federal Courts
   Improvement Act of 2000, Public Law 106-518, title III, sect. 304(a), 114
   Stat. 2417 (Nov. 13, 2000), codified at 28 U.S.C. sect. 613, which gave
   the judicial branch specific authority to establish certifying officer
   positions, set out the responsibilities and liabilities of certifying and
   disbursing officers, and gave both the right to seek relief from liability
   from our Office. 28 U.S.C. sect. 613.

   The court did not implement the certifying officers legislation until
   November 2003, after the improper payments identified in the February 2004
   audit had occurred. Although Mr. Maddox's title at the time of those
   payments was disbursing officer, AOUSC explains that prior to signing the
   checks, he, in effect, certified the legal availability of appropriations
   for this purpose. Maddox request at 3, fn.1. We think the appropriate
   standard for relief, therefore, is that provided at 31 U.S.C. sect. 3528
   for certifying officers. To do so is consistent with previous cases where
   we found that, when the accountable officer is not technically a
   certifying officer but is performing a certifying function with respect to
   the action at issue, then application of the section 3528 standard is
   appropriate. See B-214782, Nov. 26, 1984; B-215380, et al., July 23, 1984.
   Regarding the post-audit period payments, the record is not clear as to
   whether or when Mr. Maddox's title changed to certifying officer. To the
   extent that Mr. Maddox was a certifying officer at the time of any of the
   improper payments, the Judiciary's certifying officer legislation passed
   in 2000 provides that a certifying officer "is entitled to relief from
   liability arising under this section in accordance with title 31." 28
   U.S.C. sect. 613(c). For that reason also, then, application of the
   section 3528 standard for relief would be the correct standard to apply
   with respect to the post-audit period payments.

   Under 31 U.S.C. sect. 3528, the certifying official who signs the voucher
   is responsible for the existence and correctness of the facts cited in the
   certificate, voucher, or supporting papers and the legality of the
   proposed payment, and is liable for the amount of any illegal, improper,
   or incorrect payment resulting from any false, inaccurate, or misleading
   certificate made by him, as well as for any payment prohibited by law or
   which did not represent a legal obligation. 67 Comp. Gen. 457, 466 (1988).
   Our Office may relieve a certifying officer from liability for an improper
   payment of public money when we find that the obligation was incurred in
   good faith; no law specifically prohibited the payment; and the United
   States government received value for payment. 31 U.S.C. sect.
   3528(b)(1)(B).[6] A finding of good faith under the above standard
   requires that we find that the certifying officer did not have, nor should
   reasonably have had, doubt regarding propriety of payment; whether a
   certifying officer should have been in doubt requires weighing all the
   surrounding facts and circumstances and cannot be resolved by any hard and
   fast rule. B-262110, Mar. 19, 1997; B-247563.3, Apr. 5, 1996; B-257893,
   June 1, 1995.

   At issue here is whether Mr. Maddox's actions demonstrated good faith
   within the meaning of the statute, i.e., does the record indicate that he
   doubted the propriety of the payments for employee bottled water, or were
   the circumstances surrounding the improper payments such that he
   reasonably should have had doubt about the propriety of those payments.
   You state that Mr. Maddox was not aware that the bottled water was being
   purchased for employees. However, we think that the facts and
   circumstances here should have alerted Mr. Maddox to the fact that he and
   his assistants were improperly certifying payments to purchase bottled
   water for employees.

   In your request letter, you assert that the purchase of bottled water
   would not seem unusual to Mr. Maddox and his assistants as they examine
   vouchers, because bottled water for jurors is "an authorized expenditure
   often seen in courts." September letter at 2. Furthermore, Mr. Maddox
   asserts that there was nothing on the face of the vouchers that should
   have caused him to doubt the propriety of the claim. Maddox request at 4.
   We disagree. According to the record, the juror bottled water and the Fort
   Pierce staff bottled water were paid for out of separate appropriations
   accounts, juror bottled water out of fund No. 092500 for "Jurors and
   Commissioners" and Fort Pierce staff bottled water out of fund No. 092000
   for "Salaries and Expenses of the United States Courts," April letter at
   2,(5). Three of the vouchers for improper bottled water payments which you
   provided to us state the applicable account number in each case as
   "092000," which is identified above for "Salaries and Expenses of the
   United States Courts," and is distinguishable from the account for juror
   bottled water. Id. We therefore think that reasonable examination of the
   vouchers should have revealed that it was not juror bottled water that was
   being purchased.

   You maintain that the decision to purchase bottled water for the Fort
   Pierce staff was made by Mr. Maddox's predecessor clerk of court, and that
   the processing of the improper payments was "well ingrained" at the time
   Mr. Maddox was appointed in 1999. September letter at 2. You also maintain
   that, because of the work volume in Mr. Maddox's office (approximately
   19,000 vouchers annually) and the distance between Mr. Maddox's office and
   the Fort Pierce courthouse (130 miles), he and his assistants had to rely
   on the control procedures in place, and that "[i]t would not be reasonable
   to expect Mr. Maddox to be personally aware of every expenditure in the
   Fort Pierce Division." Id. at 2-3. However, a certifying officer may not
   escape liability for losses resulting from improper certification simply
   by stating either that he was not in a position to determine that each
   item on a voucher was correctly stated, or that he must depend on the
   accuracy of his subordinates. 55 Comp. Gen. 297, 299 (1975). Moreover,
   heavy workload is not a consideration for relieving a certifying officer
   from liability for an improper payment. B-303177, Oct. 20, 2004. A
   certifying officer has a high degree of responsibility, and such authority
   is not perfunctory. 55 Comp. Gen. at 299. As the statutory standards for
   waiver reflect, the responsiblity of certification must be respected;
   otherwise it would afford little protection of the United States against
   improper payments. Id.

   Mr. Maddox defends his performance by pointing to an audit that was
   performed in March 2001, which assigned no fault to similar employee
   bottled water payments. Also, he maintains, a "Clerk's transition audit"
   was conducted by the AOUSC administrative office in 2000, and it failed to
   note any discrepancy regarding the payments at issue. Maddox request at 2.
   While it is unfortunate that the staff bottled water payments were not
   identified as improper in those audits, that fact did not act to waive any
   right of the government to assign liability for future improper payments
   of the same nature. Despite Mr. Maddox's assertions that he was unaware of
   the staff bottled water payments, he was responsible for reviewing and
   signing the vouchers to purchase bottled water for the staff at Fort
   Pierce. To reiterate, a certifying official who signs a voucher is
   responsible for the existence and correctness of the facts cited in the
   certificate, voucher, or supporting papers and the legality of the
   proposed payment. 31 U.S.C. sect. 3528(a); B-239592, Aug. 23, 1991.

   In Mr. Maddox's June 15 request, he maintains that the facts here are
   analogous to those in our decision, B-247563.3, Apr. 5, 1996, in which we
   granted relief to a certifying officer for improper payments for various
   expenditures. While the facts in that case were similar to those here in
   some ways, a critical distinction can be found in the fact that the
   Austin, Texas-based certifying officers had to use an automated payment
   system (APS) for authorizing expenditures at the Veterans Affairs Oklahoma
   City Medical Center. The use of that system required the certifying
   officers to rely on the integrity of the APS without physically examining
   hard copy documentation in all cases. In cases involving automated
   systems, we have held that the reasonableness of a certifying officer's
   reliance on the system to continually produce legal and accurate payments
   is a factor to be considered when addressing relief of the officer's
   liability for illegal or improper payments, and we have set forth criteria
   to judge the reasonableness of that reliance. 69 Comp. Gen. 85 (1989). In
   the cited case, the record did not reveal any facts which should have
   caused the certifying officers to question the reliability of the system
   as a whole, and we therefore had no basis to conclude that they should
   have doubted the propriety of the expenditures certified. That is not the
   case here.

   After consideration of the full record, we decline to grant relief for the
   11 payments (totalling $485.60) that Mr. Maddox certified after February
   2003, because we conclude that Mr. Maddox did not meet the good faith
   standard under 31 U.S.C. sect. 3528(b)(1). Mr. Maddox should have been
   aware that he was certifying payments for employee bottled water based on
   the information detailed on the vouchers themselves, which could have been
   discovered through careful examination of the vouchers. Mr. Maddox remains
   liable for the 11 improper payments which have not been settled by
   operation of law, in the amount of $485.60.

   Sincerely yours,

   /signed/

   Susan A. Poling

   Managing Associate General Counsel

   cc: Clarence Maddox

   DIGEST

   We deny relief for a disbursing/certifying officer of the United States
   District Court for the Southern District of Florida who certified improper
   payments to purchase bottled water for court employees in the absence of
   any documentation that the available drinking water posed a health risk.
   While the disbursing/certifying officer claims that he was unaware that
   the bottled water being purchased was for employees (bottled water for
   jurors is an allowable expense), and that he certified the payments in
   good faith, we do not agree. To find "good faith" as used in the relief
   statute requires that there be no doubt regarding, nor reason to doubt,
   the propriety of the payments. Since the record states that the payments
   for employee bottled water came from a different account than that for
   juror bottled water, and vouchers for the improper purchases indicate that
   each purchase was funded by that different, non-juror, account, we find
   that reasonable examination of the vouchers should have identified the
   water being purchased as other than for jurors. We therefore cannot
   conclude that he had no reason to doubt the propriety of the payments.

   ------------------------

   [1] By letter of September 15, 2004, you requested relief for $1,216.49.
   Letter from Leonidas Ralph Mecham, Director, Administrative Office of the
   United States Courts (AOUSC), to David M. Walker, Comptroller General,
   GAO, September 15, 2004 (September letter). In response to our request for
   further information, Letter from Thomas H. Armstrong, Assistant General
   Counsel, GAO to Leonidas Ralph Mecham, Director, AOUSC, Mar. 24, 2005, you
   adjusted the amount to $1,433.22, Letter from Leonidas Ralph Mecham to
   Thomas H. Armstrong, Assistant General Counsel, GAO, April 25, 2005 (April
   letter).

   [2] According to the record, Mr. Maddox is a disbursing officer, and his
   two assistants are assistant disbursing officers. At the time of these
   payments, they also performed the certifying function for the court.
   Letter from Clarence Maddox, Court Administrator/Clerk of Court to
   Leonidas Ralph Mecham, Director, AOUSC, June 15, 2004 (Maddox request) at
   3, fn.1.

   [3] Although certifying officers are not custodians of public funds and do
   not have accounts and statements of accountability in the same way
   disbursing officers do, for purposes of audit and settlement, we consider
   the certifying officer's account to be the certified vouchers and
   supporting papers relating to payments made by a disbursing officer over a
   particular accounting period. B-251994, Sept. 24, 1993. Hence, the 3-year
   period is the same for the disbursing officer and for the certifying
   officers on whose certifications the disbursing officer relied. Id.

   [4] Bottled water for employees is distinguished here from bottled waters
   for jurors, which is an allowable purchase, April letter at 2,(5),
   Enclosure D--"Fund Code Descriptions" (excerpted from AOUSC's "Guide to
   Judicary Policies and Procedures," issued October 1986), as will be
   discussed further in our decision.

   [5] The prohibition on purchases of bottled water for employees during the
   relevant audit period was made clear by AOUSC internal directives. On
   January 1, 2001, AOUSC had in effect its directive, Guide to Judiciary
   Policies and Procedures. Under chapter VIII of that directive, entitled
   "Procurement, Contracting, and Property Management" and Part K:
   "Consumable Supplies and Small Miscellaneous Services Program," is an
   Exhibit K-2 entitled "Illustration of Items Not Authorized Under These
   Guidelines." The instructions on the exhibit state the following:

   "The following items shall not be purchased using funds allotted for
   consumable supplies and small miscellaneous services. Special authority
   may be requested by letter to the Chief, Procurement and Property Branch."

   Among the items on the list is "Water, bottled." In addition, in November
   2001, AOUSC published another internal directive, Acquisition Bulletin
   2002-01, which states: "The purpose of this Acquisition Bulletin is to
   provide guidance relating to the restrictions on purchases with
   appropriated/decentralized funds." Under the heading "Purchase of the
   following items with appropriated funds is generally prohibited, with
   limited exceptions:" is listed:

   "Bottled water, except: 1) in cases where there is no available drinking
   water in the building or the available water is not potable (as determined
   from a chemical analysis of the water, arranged by GSA); or, 2) as
   authorized by the refreshment policy. (Bottled water is permissible for
   jurors but must be charged to `Fees of Jurors . . .' account.)"

   September letter, Attachment 4 at 1, 3. Throughout the relevant audit
   period, at least one of these directives was in effect and was available
   to Mr. Maddox and other court employees.

   [6] An additional standard for relief exists where the certification was
   based on official records, but that is not the case here. 31 U.S.C. sect.
   3528(b)(1)(A).