TITLE: B-309267, Relief of Accountable Officer at Veterans Affairs Medical Center, January 15, 2008
BNUMBER: B-309267
DATE: January 15, 2008
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B-309267, Relief of Accountable Officer at Veterans Affairs Medical Center, January 15, 2008
B-309267
January 15, 2008
Mr. Edward J. Murray
Deputy Assistant Secretary for Finance
Department of Veterans Affairs
Washington, D.C. 20420
Subject: Relief of Accountable Officer at Veterans Affairs Medical Center
Dear Mr. Murray:
This responds to your request of March 26, 2007, that we relieve Joan C.
Jackson, former principal cashier at the Washington, D.C., Veterans
Affairs Medical Center, for physical losses that occurred in February and
March 2001 and January 2003. Letter from Edward J. Murray, Deputy
Assistant Secretary for Finance, Department of Veterans Affairs, to Gary
L. Kepplinger, General Counsel, GAO, Mar. 26, 2007. At issue here are two
losses--one of $3,280 that occurred in 2001 and a second of $123 that
occurred in 2003. For the reasons stated below, we deny relief for the
loss of $3,280 in patient funds receipts from 2001. In 1991, GAO delegated
to agencies the authority to resolve losses of less than $3,000. B-243749,
Oct. 22, 1991. Thus, the Department of Veterans Affairs (VA) may resolve
administratively the loss of $123 in patient funds receipts from 2003 in a
manner consistent with this decision and our prior decisions.
BACKGROUND
Joan Jackson was employed as a principal cashier at the Veterans Affairs
Medical Center in Washington, D.C. (DC VAMC) during a time period in which
physical losses were sustained by the patient funds accounts. These
accounts contain personal funds that patients turned over to the DC VAMC
to be held for safekeeping during the patients' time at the facility. As
principal cashier, Ms. Jackson's duties included receiving cash from
patients and preparing receipts and deposit slips reflecting the amounts
collected. See VA Handbook 4020, para. 5 (Oct. 17, 1994). Copies of both
the receipts and the deposit slips are to be given to the patient, to the
accounting department for entry into the agency's Financial Management
System (FMS, also called the general ledger), and to the Patient Funds
Office for entry into the subsidiary records of patient accounts, known as
VISTA. See Memorandum from David L. King, Chairperson, Board of
Investigation, Department of Veterans Affairs, to DC VA Medical Center
Director, Administrative Report of Investigation of Shortage of Funds at
the Washington DC VAMC, May 2, 2006 (Board of Investigation Report), at
para. 4(B)(1). The principal cashier must give the cash received and a
copy of the receipt to a courier for transportation to a bank where it is
deposited into the U.S. Treasury. See VA Handbook 4020, para. 5. VA policy
requires that VISTA balances be reconciled with FMS at the end of each
month. See VA Handbook 4020, para. 19; VA Manual MP-4, pt. V, sect. G.
A number of unexplained losses of patient funds occurred during February
and March 2001 and again during January 2003. Ms. Jackson was the
responsible cashier for the receipts set out below, totaling $3,403, all
of which were lost. See Memorandum from Sanford M. Garfunkel, Director, DC
VAMC, to Chief Financial Officer, Veterans Health Administration,
Determination of Fault or Negligence in Patient Funds Shortages, Sept. 5,
2006 (VAMC Memo), at paras. 5(a)-(c) and attachments A-C. Each receipt
represents cash received from a different DC VAMC patient for deposit into
a patient funds account. These receipts are the subject of this decision.
Date of Receipt Amount
1. 02/12/2001 700.00
2. 02/20/2001 230.00
3. 03/06/2001 1,750.00
4. 03/30/2001 600.00
5. 01/07/2003 53.00
6. 01/10/2003 15.00
7. 01/17/2003 55.00
Source: VAMC Memo, attachments A-C.
VA has already denied relief to Ms. Jackson for a loss of $2,629, which
resulted from eight additional missing receipts. See VAMC Memo, at para.
5(a)(2). The VA found that although Ms. Jackson claimed to have deposited
those funds on March 1, 2001, the deposit was never made. Id. In addition,
VA found that the armored car log furnished by Ms. Jackson as proof of
deposit appeared to have been altered. Id. Although copies for all of
these receipts exist, they were apparently not delivered to the accounting
section, and the amounts were not entered into FMS.
For the remainder of the patient fund losses, which total $3,403, there
are copies of each receipt for patient funds signed by Ms. Jackson. See
VAMC Memo, attachments B and C. However, there is no record of deposit
slips for any of the funds in question. See VAMC Memo, at paras. 5(b),
(c). Although these receipts were entered into VISTA, they were apparently
not entered into FMS. See Board of Investigation Report, at para. 4(A)(1).
Similarly, there is no record of the funds involved ever being deposited
in the Treasury. Id. The losses dating from February and March 2001 were
not discovered until November 2001, during an attempt to reconcile FMS
with VISTA, and were more fully investigated in December 2002. See VAMC
Memo, at attachment B-5. The record indicates that the losses dating from
January 2003 were investigated in 2005 and 2006 but does not indicate
specifically how they were discovered.[1] See id. at para. 5(c).
GAO'S AUTHORITY TO RELIEVE
GAO has the authority to relieve accountable officers from liability for
physical losses when the agency has made a determination that the officer
was carrying out official duties when the loss occurred and the loss was
not the result of fault or negligence by the officer. 31 U.S.C. sect.
3527(a). Although the money involved in this case was patient money and
not government money, a loss of patient funds from a VA hospital while in
the custody of the United States is a liability of the government for
which an accountable officer may be liable. See B-215477, Nov. 5, 1984;
B-164896-O.M., Aug. 1, 1968.
GAO has delegated the authority to resolve losses of less than $3,000 to
the agency in which the loss occurred. B-243749, Oct. 22, 1991. This
$3,000 limitation applies to single incidents or the total of similar
incidents which occur about the same time and involve the same accountable
officer. See id.; GAO, Policies and Procedures Manual for the Guidance of
Federal Agencies, title 7, sect. 8.9C (Washington, D.C.: May 18, 1993)
(GAO-PPM). Whether losses constitute a single incident or similar
incidents depends on the specific factual circumstances of the case at
hand. For example, in a case where two losses from two different funds
were attributable to the same theft, we found them to be one loss. See
B-189795, Sept. 23, 1977. On the other hand, we considered two losses to
be separate incidents when the first was believed to be a bookkeeping
error and the second was due to an apparent theft. See B-260862, June 6,
1995.
All of the losses forwarded to us for consideration in this case involve
the same accountable officer. All involve unexplained losses in the
patient funds account. For each loss, there was a receipt generated, but
no record of a deposit slip. The losses in 2001 occurred over a relatively
brief period of time, about seven weeks. In the absence of any evidence to
the contrary, we find them to be similar incidents. On the other hand, the
losses from January 2003 cannot be said to have occurred at about the same
time as those from 2001 and thus may not be combined with the 2001 losses.
Therefore, we view the lost receipts from February and March of 2001 to be
similar incidents and consider them as one loss for the purpose of
deciding this case. Also, we view the three lost receipts from January
2003 to be similar incidents that should be considered a second loss.
Since the missing receipts from 2001 total $ 3,280, GAO retains the
authority to resolve that loss. Because the 2003 lost receipts total only
$123, the 2003 loss may be resolved administratively by VA, consistent
with the standards for relief set forth in 31 U.S.C. sect. 3527(a) and in
relevant guidance from this and previous GAO decisions. See 7 GAO-PPM
sections 8.9.C, 8.9.A.
DISCUSSION
When, as in this case, there is an unexplained loss, a presumption of
negligence arises on the part of the accountable officer. See B-227714,
Oct. 20, 1987. The presumption may be rebutted by convincing evidence that
the loss was not caused by the negligence or lack of reasonable care by
the accountable officer. See 70 Comp. Gen. 2 (1990). We found no evidence
in the record submitted to us that would overcome this presumption. In
fact, the record suggests that Ms. Jackson indeed was negligent in the
handling of patient funds, as evidenced by the courier records and failure
to follow the required procedure of completing deposit tickets and
forwarding copies of the same to both the Accounting Department and
Patient Funds Office. See VAMC Memo, at para. 5(a)(2).
In its initial assessment of the losses attributed to Ms. Jackson, VA
stated that there was pervasive laxity in the administration of patient
funds and argued for relief on this basis. On occasion, we have found that
evidence establishing a pervasive laxity in agency procedures may rebut a
presumption of negligence. See B-182386, Apr. 24, 1975. It should be
understood, however, that we will accept pervasive laxity as the possible
cause of an unexplained loss only when we find that the accountable
officer was not negligent, or if found to be negligent, the accountable
officer's negligence was not the proximate cause of the loss. See
B-271896, Mar. 4, 1997. Thus, where the facts and circumstances
surrounding a loss indicate pervasive laxity in the supervision and
management of a cashier's office and neither the acts nor omissions of the
accountable officer can reasonably be said to have been the proximate
cause of the loss, we have relieved the accountable officer. Id. That is
not the case presented here, however.
VA cited three specific decisions to support its argument: B-271896, Mar.
4, 1997; B-229778, Sept. 2, 1988; and B-182386, Apr. 24, 1975. These
decisions differ significantly from the present case because the evidence
of laxity in the decisions generally involved the supervision and
management of a cashier's office. For example, in B-271896, agency
management allowed other employees access to the cash area, and the
cashier's safe combination lock was broken for more than a week.
Similarly, in B-229778, six employees had access to the safe where the
principal and alternate cashier's cash boxes were kept, and the keys to
both boxes were kept in a sealed envelope in the safe. In B-182386, the
combination to the safe had not been changed even though cashiers had
changed three times over a period of 2 years and both the principal and
alternate cashiers handled the fund and operated from the same cashbox. In
the present case, VA has evidence suggesting that Ms. Jackson indeed was
negligent, and neither Ms. Jackson nor VA has offered any evidence that
agency management failed to take adequate steps to physically secure the
funds at the DC VAMC. In fact, the record shows that the principal
cashier, the co-payment teller[2] and the alternate cashiers had their own
cash boxes or drawers. No one person had keys to any box but their own,
even in those cases in which two cash boxes were stored in the same safe.
There is no evidence that anyone other than Ms. Jackson had access to the
cash for which she issued signed receipts.
In addition, in prior decisions we have considered situations in which
accountable officers have brought their concerns about the security of
funds to the attention of agency management officials who failed to
respond. While we have not required accountable officers to do so as a
condition for granting relief, we have treated such actions as evidence of
laxity on the part of agency management. Thus, where an accountable
officer requested that the combination to her safe be changed, we
considered her supervisor's failure to change the combination evidence of
pervasive laxity. See B-232744, Dec. 9, 1988. In this case, however, there
is no evidence that Ms. Jackson brought any security concerns to the
attention of her superiors.
Instead of citing examples of physical insecurity, VA has stated that
pervasive laxity existed due to the failure of the accounting office to
perform monthly reconciliations between FMS and VISTA. This includes a
failure to track deposit tickets and receipts. In addition, the accounting
office repeatedly failed to reconcile deposits and resolve issues with the
VA-wide finance center located in Austin, Texas, which is supposed to
perform reconciliations. Although these failures are certainly evidence of
poor oversight and management, they do not explain the two losses in this
case, and they did not result in the loss. It is true, as VA asserts, that
the losses might have been discovered earlier had the proper controls been
in place. However, the deficiencies in management do not cast doubt on the
physical security of the cash in question and cannot be considered
sufficient evidence to rebut the presumption of negligence on the part of
Ms. Jackson.
Accordingly, we deny relief for loss of patient funds receipts from
February and March 2001, in an amount totaling $ 3,280. VA may resolve the
$123 loss from March 2003 administratively consistent with this decision
and our prior discussion.
Sincerely yours,
Susan A. Poling
Managing Associate General Counsel
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[1] The record does indicate that in all instances involved, the patients'
accounts were credited with the deposits. See Board of Investigation
Report at para. 4(A)(1).
[2] The main duty of the co-payment teller, who works out of the cashier's
office, is to collect copayments from patients for medical care they
received at the VAMC. None of the funds considered in this decision were
collected as co-payments.