BNUMBER:  B-261312
DATE:  February 5, 1995
TITLE:  [Letter]

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B-261312

February 5, 1995

Steve E. Turner
Director, Defense Finance
  and Accounting Service
Department of Defense
Kansas City, Missouri  64197-0001

Dear Mr. Turner: 

This responds to your request that we grant relief, under our 
authority in 31 U.S.C.  sec.  3527(c), to Shirley Ibach, Defense Accounting 
Officer, Marine Corps Air Station (MCAS), El Toro, California, from 
liability for four improper payments totalling $13,204.  For the 
reasons stated below, we grant relief.  We also grant relief to the 
cashier, LCpl. Miguel Muniz, who actually made the improper payments.

The improper payments occurred on February 19, 1993, as a result of a 
fraudulent scheme by Pvt. James Burks representing himself as a Sgt. 
Thomas Campbell.  The improper payments were made after Pvt. Burks 
presented four sets of travel orders, for $3,301 each, to the cashier 
in the finance office at MCAS El Toro, and explained that he and three 
other Marine sergeants were temporarily in the Los Angeles and San 
Diego areas participating in training activities.  Pvt. Burks stated 
that he was the only one of the four allowed to leave the training 
sessions and that he was responsible for retrieving all four travel 
advances.  The cashier advised Pvt. Burks that the checks would not be 
ready until later in the day and that he would need to have a written 
authorization from the other sergeants if he planned to pick up their 
advances.

That afternoon, Pvt. Burks returned and produced a handwritten letter 
bearing the purported signatures of the other three marines granting 
him the authority to retrieve their checks.  After presenting the 
letter, a forged armed forces identification card and Sgt. Campbell's 
social security number to the cashier,     Pvt. Burks was allowed to 
sign for the four checks.  The cashier examined the letter, 
identification card and signature, and compared them against the 
information contained in the travel orders.  Based on this 
examination, he turned the four checks over to Pvt. Burks.

The fraud was discovered 3 days later, when the automated Marine Corps 
Expenditure System identified improper appropriation account data on 
the travel orders and rejected them.  Pvt. Burks was apprehended after 
attempting to use the same scheme to obtain approximately $15,000 in 
travel advances at Port Hueneme, California.  A search of his vehicle 
at the time of his arrest uncovered forged armed forces identification 
cards, fraudulent travel orders, and other evidence that led to his 
eventual court martial, imprisonment, forfeiture of pay, and 
dishonorable discharge.  Although the disbursing official attempted to 
collect the $13,204 from Pvt. Burks's pay, she was unsuccessful 
because Pvt. Burks's pay had been forfeited.

As the disbursing official responsible for the accounts, Ms. Ibach is 
personally liable for deficiencies in her accounts caused by the 
improper payments.  The cashier who made the improper payments is also 
liable as a disbursing official for the amount of the payments, and 
consequently, we address his liability even though you did not request 
that we relieve him.  See B-248532, Oct. 26, 1992.  This Office has 
authority under 31 U.S.C.  sec.  3527(c) to relieve a disbursing official 
from liability for improper payments if we determine that the payments 
were not the result of bad faith or a lack of reasonable care.  
B-246418, Feb. 3, 1992.

In cases where a subordinate rather than the disbursing official 
actually disbursed the funds, we have granted relief upon a showing 
that the disbursing official properly supervised the subordinate, 
maintained an adequate system of procedures and controls to safeguard 
the funds, and took steps to ensure the system's implementation and 
effectiveness.  B-240654, Feb. 6, 1991.  The good faith and reasonable 
care of the cashier who made the payment can be shown by evidence that 
the cashier complied with these procedures, and that nothing occurred 
which should have made the cashier suspicious of fraud.  B-241880, 
Aug. 14, 1991.

The supporting documents establish that Ms. Ibach implemented and 
maintained an adequate system of procedures and controls to reasonably 
safeguard the funds in her care, and that the cashier followed the 
procedures.  Moreover, nothing in the record suggests that the cashier 
should have been suspicious of the fraudulent nature of the 
transaction.  In this case, the improper payments were apparently the 
result of skillfully executed criminal activity that even an adequate 
and effectively supervised system cannot always prevent.  B-240280, 
May 22, 1991.

Accordingly, since there is no indication of bad faith or lack of 
reasonable care on the part of Ms. Ibach or the cashier, we grant 
relief to them from liability for the loss.  However, as a practical 
matter, the disbursing official may want to consider 

several measures to limit losses in her account should such criminal 
activity occur in the future.  Those measures could include, for 
example, 1) a limit on the travel advance amount that may be picked up 
by a third party and 2) a restriction on the availability of travel 
advances that may be picked up by third parties who are not assigned 
to the military base where the finance center is located.

Sincerely yours,

Gary L. Kepplinger
Associate General Counsel

B-261312

February 5, 1995

DIGEST

Relief is granted disbursing official who implemented and maintained 
an adequate system of procedures and controls to reasonably safeguard 
the funds in her care.  We also grant relief to the cashier.