B-198451, SEPTEMBER 28, 1982, 61 COMP.GEN. 646

B-198451, SEPTEMBER 28, 1982, 61 COMP.GEN. 646

ACCOUNTABLE OFFICERS - RELIEF - ILLEGAL OR ERRONEOUS PAYMENTS - RELIEF AUTHORITY - NOT DELEGATED TO AGENCIES MONETARY LIMIT ESTABLISHED BY GENERAL ACCOUNTING OFFICE (GAO) (CURRENTLY $500) FOR ADMINISTRATIVE RESOLUTION OF IRREGULARITIES IN THE ACCOUNTS OF ACCOUNTABLE OFFICERS APPLIES ONLY TO THE PHYSICAL LOSS OR DEFICIENCY OF GOVERNMENT FUNDS, AND NOT TO ILLEGAL OR IMPROPER PAYMENTS. ACCORDINGLY, REQUEST FOR RELIEF UNDER 31 U.S.C. 82A-2 WAS PROPERLY SUBMITTED TO GAO WHERE DEFICIENCY OF $102 RESULTED FROM IMPROPER PAYMENT BASED ON FRAUDULENTLY ALTERED TRAVEL ORDERS.

TO THE OFFICE OF THE ASSISTANT SECRETARY, DEPARTMENT OF THE ARMY, SEPTEMBER 28, 1982:

THIS RESPONDS TO YOUR REQUEST THAT WE RELIEVE LT. COL. DUANE G. INGALSBE, FINANCE AND ACCOUNTING OFFICER, 7TH INFANTRY DIVISION AND FORT ORD, FORT ORD, CALIFORNIA, FROM LIABILITY FOR A DEFICIENCY IN HIS ACCOUNT IN THE AMOUNT OF $102.20 RESULTING FROM AN IMPROPER PAYMENT. THE REQUEST FOR RELIEF WAS SUBMITTED IN ACCORDANCE WITH 31 U.S.C. 82A 2. FOR REASONS TO BE DISCUSSED BELOW, LT. COL. INGALSBE'S ACCOUNT MUST NOW BE CONSIDERED SETTLED AND RELIEF IS NOT NECESSARY. HOWEVER, THE REQUEST POSES A THRESHOLD ISSUE THAT REQUIRES COMMENT-- THE APPLICABILITY OF THE GENERAL ACCOUNTING OFFICE'S $500 LIMIT ON THE ADMINISTRATIVE RESOLUTION OF IRREGULARITIES IN THE ACCOUNTS OF ACCOUNTABLE OFFICERS.

FACTS

ON AUGUST 24, 1978, A WOMAN IDENTIFYING HERSELF AS 1ST LT. DEBRA A. HOUNSELL WALKED INTO THE FORT ORD FINANCE OFFICE, PRESENTED TRAVEL ORDERS PURPORTING TO ASSIGN HER TO ACTIVE DUTY IN SAN FRANCISCO, AND REQUESTED A TRAVEL ADVANCE OF $304.40. THE ORDERS CONTAINED MINOR DISCREPANCIES WHICH COULD HAVE BEEN TYPOGRAPHICAL ERRORS, BUT OTHERWISE APPEARED NORMAL AND VALID.

A TRAVEL CLERK AT THE FINANCE OFFICE PREPARED A TRAVEL VOUCHER BASED ON THE ORDERS AND SENT MS. HOUNSELL TO THE DISBURSING SECTION. THERE, A CASHIER CHECKED HER MILITARY IDENTIFICATION CARD (DD FORM 2A) AND GAVE HER THE MONEY.

IT WAS SUBSEQUENTLY DISCOVERED THAT THE TRAVEL ORDERS AND ID CARD WERE FRAUDULENT. ACCORDING TO THE RECORD, MS. HOUNSELL HAD FOUND A SET OF TRAVEL ORDERS IN A GARBAGE CAN AT FT. HAMILTON, NEW YORK, ALTERED THE NAME, DATE, AND DESTINATION, AND PHOTOCOPIED THE ALTERED ORDER UNTIL THE CHANGES WERE NO LONGER DISCERNIBLE. SHE THEN USED THE PHONY TRAVEL ORDERS TO OBTAIN A TEMPORARY ID CARD AND THE TRAVEL ADVANCE. SHE HAD ALSO USED THE FALSE DOCUMENTS TO OBTAIN ANOTHER TRAVEL ADVANCE AT A DIFFERENT LOCATION AND MEDICAL TREATMENT AT AN ARMY HOSPITAL.

UPON DISCOVERING THE FRAUD, THE ARMY CONDUCTED A THOROUGH INVESTIGATION WHICH RESULTED IN LOCATING MS. HOUNSELL. MS. HOUNSELL HAS PAID BACK $202.20, REDUCING THE AMOUNT OF THE DEFICIENCY TO $102.20. ALTHOUGH FURTHER COLLECTION IS POSSIBLE, THE RECORD SUGGESTS THAT IT IS UNLIKELY. THE FORT ORD FINANCE OFFICE HAS TAKEN STEPS TO GUARD AGAINST SIMILAR INCIDENTS IN THE FUTURE.

ARMY INITIALLY VIEWED THIS AS A "PHYSICAL LOSS" CASE, COGNIZABLE UNDER 31 U.S.C. 95A. HOWEVER, WE ADVISED THAT IT MUST BE TREATED AS AN IMPROPER PAYMENT, CITING B-75978, JUNE 1, 1948, AND B-178953, AUGUST 8, 1973.

THE $500 LIMIT

BEFORE SUBMITTING THE RELIEF REQUEST UNDER 31 U.S.C. 82A-2, ARMY OFFICIALS INFORMALLY QUESTIONED WHETHER THE REQUEST WAS NECESSARY SINCE THE LOSS WAS LESS THAN $500. WE ENCOURAGED THE REQUEST TO PERMIT US TO CLARIFY THE MATTER.

IN 1969, THE COMPTROLLER GENERAL ISSUED A CIRCULAR LETTER TO ALL DEPARTMENT AND AGENCY HEADS, B-161457, AUGUST 1, 1969, SUBJECT: "AUDIT AND SETTLEMENT OF ACCOUNTABLE OFFICERS' ACCOUNTS. THE LETTER STATED:

AN IRREGULARITY ARISING FROM A SINGLE INCIDENT OR SERIES OF SIMILAR INCIDENTS OCCURRING ABOUT THE SAME TIME AMOUNTING TO LESS THAN $150 MAY BE RESOLVED BY ADMINISTRATIVE ACTION APPROPRIATE TO THE CIRCUMSTANCES. SUCH CASES WILL BE PROPERLY DOCUMENTED AND AVAILABLE FOR GAO REVIEW ON A SITE AUDIT BASIS. A CENTRAL CONTROL RECORD SHALL BE MAINTAINED BY EACH DEPARTMENT AND AGENCY OF ALL SUCH ACTIONS.

THE PROVISIONS OF THIS SECTION DO NOT APPLY TO EXCEPTIONS OR CHARGES RAISED BY THE GAO.

THE GAO POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES WAS THEN AMENDED TO INCORPORATE THIS NEW AUTHORITY. 7 GAO 28.14.

IN 1974, THE LIMIT WAS RAISED TO $500. THE INCREASE WAS ANNOUNCED IN 54 COMP.GEN. 112, 113, AND IN ANOTHER CIRCULAR LETTER TO DEPARTMENT AND AGENCY HEADS ISSUED ON THE SAME DAY, B-161457, AUGUST 14, 1974.

THE DOCUMENTS CITED ABOVE ALL SPEAK IN TERMS OF "IRREGULARITIES," AND 7 GAO 28.14, AS AMENDED IN 1970, INDICATES THAT THE TERM "IRREGULARITY" ENCOMPASSES BOTH PHYSICAL LOSSES AND IMPROPER PAYMENTS.

HOWEVER, A MORE RECENT DECISION STATES THAT THE $500 LIMIT APPLIES ONLY TO PHYSICAL LOSSES AND NOT TO IMPROPER PAYMENTS. 59 COMP.GEN. 113 (1979). THIS SEEMINGLY INCONSISTENT GUIDANCE PROMPTED THE ARMY'S INQUIRY IN THIS CASE.

WE BELIEVE 59 COMP.GEN. 113 IS CORRECT AND THAT THE $500 LIMIT SHOULD BE VIEWED AS APPLICABLE ONLY TO "PHYSICAL LOSS OR DEFICIENCY" CASES AND NOT TO ILLEGAL OR IMPROPER PAYMENTS. FOR THE MOST PART, THE LAW GOVERNING THE PHYSICAL LOSS OR DEFICIENCY OF GOVERNMENT FUNDS IS CLEAR, AND MOST CASES CENTER AROUND THE DETERMINATION OF WHETHER THERE WAS ANY CONTRIBUTING NEGLIGENCE ON THE PART OF THE ACCOUNTABLE OFFICER. OUR NUMEROUS DECISIONS IN THIS AREA SHOULD PROVIDE ADEQUATE GUIDANCE TO AGENCIES IN RESOLVING MOST SMALLER LOSSES.

WITH RESPECT TO ILLEGAL OR IMPROPER PAYMENTS, HOWEVER, THE LAW IS CONTINUALLY EVOLVING, AND OUR DECISIONS CONSTITUTE ONE OF THE PRIMARY VEHICLES IN THIS EVOLUTION. THE LEGISLATIVE HISTORY OF 31 U.S.C. 82A-2 (AND THIS IS RELEVANT TO 31 U.S.C. 82C GOVERNING CERTIFYING OFFICERS IN CIVILIAN AGENCIES ALSO) INDICATES THAT, FOR PURPOSES OF ACCOUNTABILITY AND RELIEF, AN ILLEGAL OR IMPROPER PAYMENT "IS ONE WHICH THE COMPTROLLER GENERAL FINDS IS NOT IN STRICT TECHNICAL CONFORMITY WITH THE REQUIREMENTS OF LAW * * * ." H.R. REP. NO. 996, 84TH CONG., 1ST SESS., QUOTED IN 49 COMP.GEN. 38, 40 (1969).

THE DECISIONS THAT FURTHER DEFINE THESE CONCEPTS MAY RESULT FROM REQUESTS FOR ADVANCE DECISIONS, BUT THEY MAY ALSO ARISE IN THE GUISE OF ACCOUNTABLE OFFICER RELIEF REQUESTS. OFTEN, THE AMOUNT OF AN INDIVIDUAL PAYMENT IS SMALL, BUT THE PRINCIPLE INVOLVED MAY HAVE MUCH GREATER SIGNIFICANCE IN TERMS OF PRECEDENT. IT IS LARGELY THROUGH THIS PROCESS THAT THE BODY OF "APPROPRIATIONS LAW" HAS DEVELOPED, AND CONTINUES TO DEVELOP, FOR THE GUIDANCE OF FISCAL, CONTRACTING, AND LEGAL STAFFS OF GOVERNMENT AGENCIES. ALSO, THE WAYS IN WHICH THE GOVERNMENT DOES BUSINESS CHANGE OVER TIME (FOR EXAMPLE, INCREASED COMPUTERIZATION, STATISTICAL SAMPLING, ELECTRONIC FUNDS TRANSFER, ETC.), AND THESE CHANGES MAKE IT NECESSARY FOR THE GENERAL ACCOUNTING OFFICE TO PERIODICALLY RE-EVALUATE ITS POSITIONS AND APPROACHES.

FOR THESE REASONS, WE THINK IT IS IMPORTANT THAT CASES INVOLVING ILLEGAL OR IMPROPER PAYMENTS CONTINUE TO BE SUBMITTED TO THIS OFFICE. ACCORDINGLY, THE $500 LIMIT FOR ADMINISTRATIVE RESOLUTION OF IRREGULARITIES APPLIES ONLY TO PHYSICAL LOSSES OR DEFICIENCIES AND NOT TO ILLEGAL OR IMPROPER PAYMENTS. THE RELIEF REQUEST IN THIS CASE IS THEREFORE PROPERLY BEFORE US.

WE NOTE FINALLY IN THIS CONNECTION THAT THERE IS A "DE MINIMIS" RULE EVEN FOR IMPROPER PAYMENTS. A 1976 CIRCULAR LETTER (B-161457, JULY 14, 1976) ADVISED AS FOLLOWS:

(IN LIEU OF REQUESTING A DECISION BY THE COMPTROLLER GENERAL FOR ITEMS OF $25 OR LESS, DISBURSING AND CERTIFYING OFFICERS MAY HEREAFTER RELY UPON WRITTEN ADVICE FROM AN AGENCY OFFICIAL DESIGNATED BY THE HEAD OF EACH DEPARTMENT OR AGENCY. A COPY OF THE DOCUMENT CONTAINING SUCH ADVICE SHOULD BE ATTACHED TO THE VOUCHER AND THE PROPRIETY OF ANY SUCH PAYMENT WILL BE CONSIDERED CONCLUSIVE ON THE GENERAL ACCOUNTING OFFICE IN ITS SETTLEMENT OF THE ACCOUNTS INVOLVED.

WHILE THIS LETTER WAS ISSUED IN THE CONTEXT OF PAYMENTS QUESTIONED IN ADVANCE RATHER THAN THOSE DISCOVERED AFTER THE FACT, ITS RESULT IS TO OBVIATE THE NEED TO SEEK RELIEF IN THESE CASES, AND WE SEE NO REASON WHY A SIMILAR APPROACH SHOULD NOT BE USED IN CASES WHERE THE IMPROPER PAYMENT WAS NOT DISCOVERED UNTIL AFTER IT WAS MADE.

STATUTE OF LIMITATIONS

THE APPLICATION OF THE 3-YEAR STATUTE OF LIMITATIONS PRESCRIBED BY 31 U.S.C. 82I WAS DISCUSSED IN DETAIL IN A RECENT DECISION, ALSO TO THE ARMY, B-198451.2, SEPTEMBER 15, 1982. (A COPY IS ENCLOSED FOR YOUR CONVENIENCE.) THE LOSS IN THIS CASE OCCURRED ON AUGUST 24, 1978, AND THE RECORD SUGGESTS NO REASON TO SUSPECT FRAUD OR CRIMINALITY ON THE PART OF ANY ARMY ACCOUNTABLE OFFICER. WITHOUT DECIDING WHETHER THE 3 YEAR PERIOD BEGAN TO RUN ON THE DATE OF THE LOSS, THE LAST DAY OF THE MONTH, OR THE LAST DAY OF THE FISCAL QUARTER, IT IS CLEAR IN ANY EVENT THAT THE 3-YEAR PERIOD HAS ELAPSED. ACCORDINGLY, FOR THE REASONS STATED IN OUR SEPTEMBER 15 DECISION, IT IS NO LONGER NECESSARY TO RELIEVE LT. COL. INGALSBE AND HIS ACCOUNT MUST BE CONSIDERED SETTLED.