Relief of Accountable Officers - American Embassy, Harare, Zimbabwe, B-287043, May 29, 2001

B-287043 May 29, 2001 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights By reasonable diligence could not have discovered. There is nothing to suggest that the cashier who disbursed the funds should have been suspicious of the fraudulent nature of the transactions. Has expired the accountable officers' account is settled by operation of law. The officers have no liability for any deficiency in the account. Including information to clarify when the fraud was discovered. Are relieved by operation of law. Could have detected the fraud. Nor is there any indication that the improper payments were the result of bad faith on the part of the cashier disbursing the funds. The fraudulent activity was discovered when the Facilities Maintenance Supervisor saw a stock of security lights in the warehouse and remembered that he had just signed a petty cash receipt for the purchase of the same type of lights. View Decision Subject: Relief of Accountable Officers - American Embassy, Harare, Zimbabwe File: B-287043 Date: May 29, 2001 DIGEST Mr. Ronald L. Miller Chairperson Committee of Inquiry into Fiscal Irregularities Department of State Dear Mr. Miller: This responds to your request of December 20, 2000 that we relieve Ms. Gwendolyn A. Sawyer at the American Embassy in Harare, Zimbabwe, under 31 U.S.C. Sec. 3528, for certifying improper payments in the amount of 8,811.82 Zimbabwean dollars (equivalent U.S. $505.94) resulting from fraudulent activity. We requested additional information from you on January 23, 2001, including information to clarify when the fraud was discovered, which we received on March 13, 2001. Because the 3-year limitation period expired at the end of February 2001, 31 U.S.C. Sec. 3526(c), Ms. Sawyer, as well as the other accountable officers identified below, are relieved by operation of law. In our examination of the record you submitted, however, we find no evidence that the certifying officers, exercising reasonable care, could have detected the fraud, nor is there any indication that the improper payments were the result of bad faith on the part of the cashier disbursing the funds. The American Embassy in Harare reported fraudulent payments of approximately 80,000 Zimbabwean dollars (about U.S. $5,000) during the period beginning in January 1996 and ending in February 1998. The improper payments occurred as the result of the fraudulent activities of two local General Services Office (GSO) employees, Shingirayi Kanenungo and Kuku Nsingo, both electricians, who colluded with a vendor to falsify petty cash receipts. The petty cash procedure at the American Embassy consisted of the following steps: (1) an employee generally received a cash advance from the cashier based on the approval of a purchase request by the General Services Officer; (2) the employee would purchase the goods; (3) the employee would present the invoice to the Facilities Maintenance Supervisor, who would sign as the receiving officer; the embassy's procedures did not require that the receiving officer visually ascertain that the goods had been received prior to approval of the invoice; (4) the employee presented the approved invoice to the Class B cashier; and (5) the cashier batched the invoices on which he or she had made payments and provided the batch to the certifying officer for signature. The certifying officer's signature authorized a payment to reimburse the cashier's imprest fund. The GSO employees apparently would submit an inflated purchase request to the General Services Officer for approval and then to the cashier for an advance payment. The vendor would sell a low-cost item or fewer items than specified in the purchase request to the two local GSO employees and only complete the vendor's copy of the receipt. The original receipt, given to the GSO employees, would be left blank for the GSO employees to complete with a higher price and quantity than paid to the vendor. The Facilities Maintenance Supervisor would approve the invoice, and the GSO employees would submit the original copy of the receipt, which they had altered, to the post cashier. The fraudulent activity was discovered when the Facilities Maintenance Supervisor saw a stock of security lights in the warehouse and remembered that he had just signed a petty cash receipt for the purchase of the same type of lights. The GSO employees had claimed that the warehouse was out of stock. The regional security office conducted an investigation and found that 125 altered receipts had been submitted to the approving officer and then to the Class B cashier for reimbursement during a period of at least 2 years. The regional security officer reported the fraud to the American Embassy in Harare on February 11, 1998. Both GSO employees admitted to falsifying the receipts. The embassy reported the fraud to the local police and requested that theft charges be filed against the two GSO employees. Pursuant to 31 U.S.C. Sec.