A-15534, DECEMBER 13, 1926, 6 COMP. GEN. 404

A-15534, DECEMBER 13, 1926, 6 COMP. GEN. 404

DISBURSING OFFICERS - LIABILITY AN OFFICER OF THE NATIONAL GUARD WHO, AS A UNITED STATES PROPERTY AND DISBURSING OFFICER, ADVANCED PUBLIC FUNDS TO ANOTHER OFFICER OF THE NATIONAL GUARD TO DISBURSE FOR HIM, IS LIABLE UNDER HIS BOND FOR THE SUM IMPROPERLY APPROPRIATED BY THE OFFICER TO WHOM THE ADVANCE WAS MADE. NO LAWFUL CREDIT MAY BE BASED UPON A FRAUDULENT TRANSACTION IN THE HANDLING OF PUBLIC FUNDS AND THE ACCOUNTING OFFICERS OF THE UNITED STATES ARE WITHOUT AUTHORITY TO RELIEVE A DISBURSING OFFICER WHO IS THE VICTIM OF A FRAUD, ALTHOUGH HE MAY HAVE BEEN INNOCENT OF PARTICIPATION IN AND WITHOUT KNOWLEDGE OF THE FRAUD. IT IS ONE OF THE DUTIES OF AN OFFICER INTRUSTED WITH PUBLIC FUNDS TO KEEP THEM SAFELY AND HIS DUTY OF SAFE CUSTODY MUST BE PERFORMED AT THE PERIL OF THE OFFICER. HE IS AN INSURER OF SUCH FUNDS AND, IN THE ABSENCE OF A STATUTE TO THE CONTRARY, IS LIABLE FOR ANY LOSSES WHICH OCCUR WITHOUT HIS FAULT. THIS LIABILITY IS ABSOLUTE, ADMITTING OF NO EXCUSE AND IS BASED UPON PUBLIC POLICY.

COMPTROLLER GENERAL MCCARL TO COL. RICHINGS J. SHAND, UNITED STATES PROPERTY AND DISBURSING OFFICER, ILLINOIS NATIONAL GUARD, DECEMBER 13, 1926:

THERE WAS RECEIVED NOVEMBER 27, 1926, YOUR APPLICATION FOR REVIEW OF CERTIFICATE NO. M-22428 DATED NOVEMBER 1, 1926, WHEREIN CREDIT FOR $1,612.50 WAS DISALLOWED IN YOUR DISBURSING ACCOUNT UNDER BOND DATED SEPTEMBER 29, 1920, FOR IMPROPER PAYMENTS MADE TO CAPT. RALPH L. RAMSEY, COMMANDER OF THE THIRTY-THIRD TANK COMPANY, ILLINOIS NATIONAL GUARD.

BRIEFLY, THE UNDISPUTED FACTS ARE, (1) THAT THE PAY ROLLS OF CARETAKERS FOR THE THIRTY-THIRD TANK COMPANY FROM MAY 15, 1924, TO MARCH 19, 1926, SHOW TWO MECHANICS EMPLOYED CONTINUOUSLY, ONE AT $150 PER MONTH, THE OTHER AT $130 PER MONTH; (2) THAT DURING THIS PERIOD THERE WAS IN FACT BUT ONE MECHANIC ON DUTY WITH THE COMPANY, HIS RATE OF PAY BEING AT $150 PER MONTH; (3) THAT THE NAMES OF THE ENLISTED MEN APPEARING ON THE PAY ROLLS ARE EMPLOYED IN THE CAPACITY OF ASSISTANT MECHANIC AT $130 PER MONTH WERE FORGERIES PERPETRATED BY CAPTAIN RAMSEY, THE MEN WHOSE NAMES WERE FORGED HAVING NEITHER PERFORMED ANY DUTIES AS ASSISTANT MECHANICS NOR RECEIVED ANY OF THE PAY INDICATED TO BE DUE THEM ON THE PAY ROLLS; (4) THAT INSTEAD OF MAKING PAYMENTS DIRECT TO THESE MECHANICS WHOSE NAMES APPEARED ON THE PAY ROLL, AS THE REGULATIONS IN EFFECT AT THE TIME REQUIRED, YOU ADVANCED TO CAPTAIN RAMSEY THE MONEY TO MAKE THE PAYMENTS, AND (5) THAT PUBLIC FUNDS TO WHICH HE WAS IN NO WAY ENTITLED HAVING THUS BEEN PLACED IN THAT OFFICER'S HANDS, HE WAS ABLE TO, AND DID, APPROPRIATE TO HIS OWN USE THE SUM OF $3,230 (OF WHICH THE AMOUNT DISALLOWED UNDER YOUR BOND OF SEPTEMBER 29, 1920, IS BUT A PART), THE CONCEPTION AND PERPETRATION OF WHICH DEFALCATION BECAME POSSIBLE THROUGH YOUR ACTION IN MAKING PAYMENT TO HIM INSTEAD OF TO THE PERSONS WHOSE NAMES APPEARED UPON THE PAY ROLLS.

YOU NOW DISCLAIM RESPONSIBILITY FOR THE LOSS ON THE GROUND THAT THE ROLLS PRESENTED TO YOU WERE REGULAR UPON THEIR FACE AND HAD BEEN APPROVED BY THE ADJUTANT GENERAL OF THE STATE OF ILLINOIS; AND, MOREOVER, THAT YOU WERE AUTHORIZED BY NATIONAL GUARD REGULATIONS TO DRAW YOUR CHECK IN FAVOR OF YOURSELF "TO MAKE PAYMENTS OF FIXED SALARIES BY CASH DUE AT A CERTAIN PERIOD.'

THE CONDUCT AND CONTENTIONS SET OUT INDICATE A MISCONCEPTION ON YOUR PART OF THE MEANING OF REGULATIONS AND OF THE DUTIES IMPOSED BY LAW ON A PUBLIC OFFICER CHARGED WITH THE CUSTODY AND DISBURSEMENT OF PUBLIC FUNDS.

YOUR BASIC DUTY WAS TO MAKE PAYMENTS TO THE PERSONS WHOSE NAMES APPEARED ON THE PAY ROLLS AND THUS THERE WOULD HAVE BEEN OPPORTUNITY FOR THE PRACTICE DISCLOSED.

A DISBURSING OFFICER OF THE UNITED STATES IS REQUIRED TO KEEP ACCURATE ACCOUNTS OF ALL MONEYS RECEIVED AND DISBURSED BY HIM, TO KEEP THE BOOKS, PAPERS, AND MONEYS PERTAINING TO HIS OFFICE AT ALL TIMES READY FOR INSPECTION AND TO PRODUCE, ON DEMAND, VOUCHERS SHOWING THE CORRECTNESS OF HIS ACCOUNTS, WHICH VOUCHERS MUST ACCOMPANY THE ACCOUNTS UPON RENDITION, AT PRESCRIBED INTERVALS, TO THE ADMINISTRATIVE AND ACCOUNTING OFFICERS OF THE UNITED STATES. THE OFFICER'S RESPONSIBILITY FOR THE PUBLIC FUNDS IS PERSONAL AND ABSOLUTE AND HE IS ENTITLED TO RELIEF FROM RESPONSIBILITY ONLY BY PROPERLY ACCOUNTING FOR THE FUNDS ADVANCED TO HIM. THE QUESTION AS TO THE SUFFICIENCY OF THE ACCOUNTING IS FOR DETERMINATION IN THE GENERAL ACCOUNTING OFFICE. WATKINS V. UNITED STATES, 9 WALL 759, 19 L.ED. 820; SOULE V. UNITED STATES, 100 U.S. 8, 25 L.ED. 536. 1 MS. COMP. GEN. 401. NO LAWFUL CREDIT CAN BE BASED UPON A FRAUDULENT TRANSACTION AND THIS OFFICE IS WITHOUT AUTHORITY TO RELIEVE A DISBURSING OFFICER WHO IS THE VICTIM OF A FRAUD, ALTHOUGH HE MAY HAVE BEEN INNOCENT OF PARTICIPATION IN AND WITHOUT KNOWLEDGE OF THE FRAUD. 26 COMP. DEC. 37; 1 COMP. GEN. 739; 3 ID. 156, 358, 473; 4 MS.ID. 72; 9 ID. 2113, 10 ID. 1307; 11 ID. 36, 344; 26 ID. 1179; 34 ID. 462; 44 ID. 585.

MERE GOOD FAITH IN MAKING AN IMPROPER PAYMENT OF PUBLIC MONEY IS NOT RECOGNIZED AS ANY EXCUSE WHATEVER. CHIPPEWA BRIDGE CO. V. DURAND, 122 WISE. 85, 99 N.W. 603, 106 A.S.R. 931. IT IS ONE OF THE DUTIES OF A PUBLIC OFFICER INTRUSTED WITH PUBLIC MONEYS TO KEEP THEM SAFELY AND THIS DUTY OF SAFE CUSTODY MUST BE PERFORMED AT THE PERIL OF THE OFFICER. ACCORDING TO THE WEIGHT OF AUTHORITY HE IS AN INSURER OF THE PUBLIC FUNDS LAWFULLY IN HIS POSSESSION AND THEREFORE IS LIABLE FOR LOSSES WHICH OCCUR WITHOUT HIS FAULT; THE LIABILITY IS ABSOLUTE. THIS STANDARD OF RESPONSIBILITY IS BASED UPON PUBLIC POLICY. YAWGER V. AMERICAN SURETY CO., 212 N.Y. 292, 106 N.E. 64; L.R.A. 1915, D. 481; CAMERON V. HICKS, 65 W.VA. 484, 64 S.E. 932, 17 ANN.CAS. 926; UNITED STATES V. PRESCOTT, 3 HOW. 578, 11 L.ED. 734; SHELTON V. STATE, 53 IND. 331, 21 AM.REP. 197, TILLINGHAST V. MERRILL, 151 N.Y. 135, 34 L.R.A. 678.

EVEN WHERE THE CONGRESS HAS AUTHORIZED DISBURSING OFFICERS TO ENTRUST MONEY TO OTHER OFFICERS FOR THE PURPOSE OF HAVING THEM MAKE DISBURSEMENTS, AS IN THE ACT OF JULY 9, 1918, 40 STAT. 878, FOR THE EMERGENCY PERIOD, AND THE ACT OF JUNE 3, 1924, 43 STAT. 365, TO WHICH YOU HAVE REFERRED IN YOUR COMMUNICATION, THERE HAS BEEN NO PROVISION FOR ALLEVIATING THIS ABSOLUTE AND PERSONAL RESPONSIBILITY OF THE DISBURSING OFFICER, BUT, ON THE CONTRARY, IT IS EXPRESSLY DECLARED TO CONTINUE, THE PURPOSE OF SUCH ACTS BEING MERELY TO AUTHORIZE, FOR CONVENIENCE, A DISPOSITION OF THE PUBLIC FUNDS BY THE DISBURSING OFFICER WHICH WOULD OTHERWISE BE ILLEGAL, AS IT WAS IN YOUR CASE, NO REGULATIONS THEN HAVING BEEN PRESCRIBED BY THE SECRETARY OF WAR UNDER THE ACT LAST CITED.

THE DISALLOWANCE IN YOUR DISBURSING ACCOUNT WAS CORRECT AND IT IS DIRECTED THAT YOU DEPOSIT THE SUM OF $1,612.50 UNDER YOUR BOND OF SEPTEMBER 29, 1920, TO THE CREDIT OF THE UNITED STATES TREASURER, ON OR BEFORE JANUARY 1, 1927.

IN THIS CONNECTION YOUR ATTENTION IS DIRECTED TO SECTIONS 89, 90, 91, AND 93 OF THE CRIMINAL CODE, ACT MARCH 4, 1909, 35 STAT. 1105 (FORMERLY SECTIONS 5490, 5491, 5492, AND 5494 OF THE REVISED STATUTES) WHEREIN IT IS PROVIDED AS FOLLOWS:

SEC. 89. EVERY OFFICER OR OTHER PERSON CHARGED BY ANY ACT OF CONGRESS WITH THE SAFE-KEEPING OF THE PUBLIC MONEYS, WHO SHALL LOAN, USE, OR CONVERT TO HIS OWN USE, OR SHALL DEPOSIT IN ANY BANK OR EXCHANGE FOR OTHER FUNDS, EXCEPT AS SPECIALLY ALLOWED BY LAW, ANY PORTION OF THE PUBLIC MONEYS INTRUSTED TO HIM FOR SAFE-KEEPING, SHALL BE GUILTY OF EMBEZZLEMENT OF THE MONEY SO LOANED, USED, CONVERTED, DEPOSITED, OR EXCHANGED, AND SHALL BE FINED IN A SUM EQUAL TO THE AMOUNT OF MONEY SO EMBEZZLED AND IMPRISONED NOT MORE THAN TEN YEARS.

SEC. 90. EVERY OFFICER OR AGENT OF THE UNITED STATES, WHO, HAVING RECEIVED PUBLIC MONEY WHICH HE IS NOT AUTHORIZED TO RETAIN AS SALARY, PAY, OR EMOLUMENT, FAILS TO RENDER HIS ACCOUNTS FOR THE SAME AS PROVIDED BY LAW SHALL BE DEEMED GUILTY OF EMBEZZLEMENT, AND SHALL BE FINED IN A SUM EQUAL TO THE AMOUNT OF THE MONEY EMBEZZLED AND IMPRISONED NOT MORE THAN TEN YEARS.

SEC. 91. WHOEVER, HAVING MONEY OF THE UNITED STATES IN HIS POSSESSION OR UNDER HIS CONTROL, SHALL FAIL TO DEPOSIT IT WITH THE TREASURER, OR SOME ASSISTANT TREASURER, OR SOME PUBLIC DEPOSITORY OF THE UNITED STATES, WHEN REQUIRED SO TO DO BY THE SECRETARY OF THE TREASURY, OR THE HEAD OF ANY OTHER PROPER DEPARTMENT, OR BY THE ACCOUNTING OFFICERS OF THE TREASURY (GENERAL ACCOUNTING OFFICE) SHALL BE DEEMED GUILTY OF EMBEZZLEMENT THEREOF, AND SHALL BE FINED IN A SUM EQUAL TO THE AMOUNT OF MONEY EMBEZZLED AND IMPRISONED NOT MORE THAN TEN YEARS.

SEC. 93. UPON THE TRIAL OF ANY INDICTMENT AGAINST ANY PERSON FOR EMBEZZLING PUBLIC MONEY UNDER ANY PROVISION OF THE * * * PRECEDING SECTIONS, IT SHALL BE SUFFICIENT EVIDENCE, PRIMA FACIE, FOR THE PURPOSE OF SHOWING A BALANCE AGAINST SUCH PERSON, TO PRODUCE A TRANSCRIPT FROM THE BOOKS AND PROCEEDINGS OF THE TREASURY (GENERAL ACCOUNTING OFFICE) AS REQUIRED IN CIVIL CASES, UNDER THE PROVISIONS FOR THE SETTLEMENT OF ACCOUNTS BETWEEN THE UNITED STATES AND RECEIVERS OF PUBLIC MONEY.