IN THE CASE OF:	  

		BOARD DATE:	        04 DECEMBER 2008

		DOCKET NUMBER:  AR20070016677 


THE BOARD CONSIDERED THE FOLLOWING EVIDENCE:

1.  Application for correction of military records (with supporting documents provided, if any).

2.  Military Personnel Records and advisory opinions (if any).


THE APPLICANT'S REQUEST, STATEMENT, AND EVIDENCE:

1.  The applicant requests, in effect, that the finding that he is financially liable for the loss of certain equipment by a Financial Liability Investigation of Property Loss (FLIPL) be reversed, and that he be refunded the $1,697.40 he paid toward his FLIPL debt.

2.  The applicant states that he cannot be found financially liable for the loss of Government property because of numerous prejudicial errors and violations of Army Regulation 735-5 (Policies and Procedures for Property Accountability) throughout the course of the FLIPL in question.  He also states that there are insufficient facts to conclude that he was negligent or that his actions proximately caused the loss of Government property.  He further states that definitive loss also was not found.  Additionally, he states, in effect, that even in the approving authority's final response, he was only cited as having command responsibility, which is inherent to being in command, and requests that the assessment of financial liability against him be dismissed.  

3.  The applicant provides a self-authored memorandum, dated 25 October 2007, addressed to the Army Board for Correction of Military Records (ABCMR); an undated memorandum for record which informed him that financial liability would be assessed against him in the amount of $4,833.00 and that his request for reconsideration was denied; an e-mail, dated 25 October 2007 from a property book officer from Headquarters, 30th Medical Brigade; a self-authored memorandum, dated 27 July 2007, subject:  Request for Reconsideration of Assessment of Liability, FLIPL 06-xxx-07, $4833.00, 421st MMB [Multifunctional 
Medical Battalion], with exhibits A through R attached as Tabs D through U of his application; a memorandum, dated 25 June 2007, addressed to the applicant regarding the FLIPL in question; a DD Form 200 (Financial Liability Investigation of Property Loss), which appears to have been approved on 26 June 2007; a memorandum, dated 25 June 2007, subject:  Continuation of DD Form 200, Block 14b; an unsigned self-authored memorandum, dated 21 March 2007, in which the applicant rebutted the initial FLIPL findings; the reverse side of his officer evaluation reports from 24 May 2005 through 23 May 2006 and from
24 May 2006 through 3 November 2006; a certificate which awarded him the Meritorious Service Medal for the period 8 June 2003 to 6 December 2006; a certificate, dated 1 December 2006, which shows that he was inducted into the Honorable Order of St. Michael (Bronze Award); and his Officer Record Brief, dated 26 October 2007 in support of this application.

CONSIDERATION OF EVIDENCE:

1.  The applicant's military records show that was commissioned as a second lieutenant on 17 May 1997 and entered active duty on 17 November 1997.  He was promoted to first lieutenant on 17 May 1999 and to captain on 1 June 2001. He commanded Headquarters and Headquarters Detachment (HHD), 421st MMB from May 2005 to December 2006.  He is currently a major in the Regular Army. 

2.  The applicant provided evidence which shows that a FLIPL was initiated on
6 December 2006 after a change of command inventory identified lost or missing equipment.  This evidence also shows that the Financial Liability Officer (FLO) for this FLIPL was appointed on 14 December 2006 (Tab E), and that he submitted his finding and recommendations on 5 March 2007, in which he recommended that the applicant be assessed a financial liability in the amount of $1,697.40 for two reels of telephone cable, WF-16/U at $795.00 each, equaling $1,590.00; and 17 cable reels, DR-8 (reel/spool/metal container) at $39.60 each, equaling $673.20.  In a memorandum, dated 5 March 2007 (Tab H), the applicant was notified that he was being recommended for assessment of financial liability in the depreciated amount of $1,697.40.  In an unsigned self-authored memorandum, dated 21 March 2007 (last document under Tab V), the applicant rebutted the initial FLIPL findings; however, on 25 June 2007 (Tab L), the approving authority concurred and adopted the FLO's recommendations.  However, the approving authority did so with three exceptions, two of which were adding a medical instrument case and a medical chest to the property the applicant would be financially liable for.  He also indicated that he intended to hold the applicant financially liable not only for the telephone cable in accordance with the FLO's recommendation, but also the medical instrument case and the 
medical chest, and that since the dollar value of those three line items exceeded one month of the applicant's basic pay, he would be holding him financially liable for one month's pay in the amount of $4,833.40.  

3.  On 27 July 2007, the applicant requested reconsideration of the assessment of liability against him from the FLIPL (Tab C), and stated that in accordance with Army Regulation 735-5, under normal circumstances, an Active Army FLIPL should not exceed 75 days total processing time, but that the total processing time for this FLIPL was 194 days, and that no written explanation explaining the reason for the delay, as required by regulation, was provided.  He also stated, in effect, that he cannot be held financially liable because of the numerous prejudicial errors and violations of Army Regulation 735-5 throughout the course of the FLIPL, and that there were insufficient facts to conclude that he was negligent or that his actions proximately caused the loss of Government property. He further stated that he was sent a letter of notification and the DD Form 200 from the FLIPL, but that he did not receive any of the exhibits from the FLIPL.  He continued by stating that Army Regulation 735-5 provides, in pertinent part, that a complete copy of the FLIPL with copies of all the exhibits should have been provided to him, but that these items were never received in their entirety from the FLO or with the notification of liability he received from the approving authority.  Additionally, he stated that although the approving authority had the option of either adopting the recommendations of the FLO or making a decision to the contrary of the FLO either to relieve all concerned from financial liability or to assess financial liability against a new individual, the approving authority did neither, and instead adopted a hybrid assessment of liability between the FLO's recommendation and his own assessment, which is not an option permitted under Army Regulation 735-5.  However, in an undated memorandum for record (Tab A), the new approving authority denied the applicant's request for reconsideration because he stated that the applicant provided no new or factual evidence in his request.  The new approving authority also stated, in pertinent part, that the FLIPL was reviewed by an investigating officer, appointing authority, approving authority, plus a legal review, and that all had found that he was in command when the equipment was unaccounted for and should be held responsible for the loss of government property.  

4.  In an update to his application, dated 6 January 2008, the applicant essentially stated that after he e-mailed the new approving authority, a copy of which he enclosed, the new approving authority agreed to relook his request for reconsideration.  

5.  In a memorandum, dated 11 December 2007, the applicant was notified by the new approving authority that financial liability would be assessed against him in the amount of $1,697.40 for the loss of government property investigated during a FLIPL.  He was also informed that his request for reconsideration of the assessment of liability in the amount of $4,833.40 was reviewed and accepted with the following exceptions:

	a.  his rebuttal in paragraph 2 "Legal Errors" pointed to administrative errors in processing the FLIPL and did not relieve him of responsibility/accountability for the property, and that his request and right to a letter of lateness was approved and enclosed for his review; and

	b.  his request to remove all charges was considered and reviewed, and that the previous approving authority's recommendation was also reviewed and sent for a second legal review and, that with the recommendation provided by the legal officer and supporting by the new approving authority, they were upholding the FLO's original recommendation to hold him financially liable for $1,697.40.  

6.  This same memorandum also informed the applicant that the FLIPL was reviewed by an investigating officer, appointing authority, and an approving authority, and that a second legal review was done, which found the FLIPL legally sufficient.  

7.  It was noted that the applicant provided a memorandum for record, dated 
10 December 2007, from a property book officer for Headquarters, 30th Medical Brigade, who stated that the completion of the FLIPL in question was delayed beyond 75 days due to two rebuttals by the applicant, with each rebuttal providing new information that required investigation, and that the FLO's engagement in inactivation of units took priority over the FLIPL.  

8.  During the processing of this case, an advisory opinion was obtained from the Office of Supply and Maintenance, Office of the Deputy Chief of Staff, G-4.  That office recommended that the financial liability assessed against the applicant be reduced to $386.85, and that he be refunded $1,310.55.  That office also stated that the applicant cannot be held liable for the two items added by the approving authority after the investigating officer's final findings (medical instrument case and medical chest #2) as there was no actual loss found during the FLIPL.  That office also agreed with the later findings of the new approving authority to not hold the applicant responsible for the entire telephone cable with wire and instead hold him liable for just the two reels, valued at $13.20, not $558.00.  That office further stated that the rest of the investigation and its findings were found to be legally sufficient; however, it appeared that depreciation was not applied to the final values of the equipment, and that as the age of the equipment was not addressed, a standard deduction of 25 percent was applied.  

9.  A copy of this advisory opinion was forwarded to the applicant for comment and/or rebuttal.  In a memorandum, dated 13 March 2008, the applicant responded by requesting full relief of the recommended corrected financial assessment of $386.85, and reiterated that he cannot be found financially liable for the loss of Government property because of numerous errors and violations of Army Regulation 735-5 throughout the course of the FLIPL.  He also stated that he was found liable for the incorrect item, LIN-C18446, which is a computer set, not telephone cable WF-16/U.  He further stated that the DD Form 200 is a legal document, and thus he cannot be held liable to pay for errors on it.    

10.  Army Regulation 735-5 prescribes basic policies and procedures in accounting for Army property and accounting for lost, damaged, or destroyed (LDD) Army property.  Paragraph 13-6 of this regulation states FLIPLs will be conducted within a specific number of days, following the discovery of the LDD of U.S. Government property.  When delayed beyond the below listed processing times, the person responsible for the delay will prepare a written statement explaining the reason for the delay and attach it to the financial liability investigation of property loss as an exhibit.  Total processing time equals the difference in days between the date of discovering the discrepancy, block 3, 
DD Form 200, and the date the financial liability investigation of property loss is approved.  The time used to notify the individual of the FLO's recommendation and the approving authority's decision to hold the respondent financially liable per paragraphs 13-34 and 13-42 are not included.  Subtract one date from the other, less the time used to notify the individual, to determine the total processing time. FLIPLs for active Army instances are not to exceed 75 calendar days total processing time under normal circumstances.

11.  Paragraph 13-28 of this regulation provides time constraints for conducting the investigation by the FLO.  Unless the approving authority specifies a shorter time, a FLO has up to 30 calendar days (United States Army Reserve and Army National Guard 60 days) from the date of receipt to complete the financial liability investigation of property loss.  Appointment as a FLO becomes that person's primary duty (emphasis added) until the approving authority accepts the investigation as completed, or until otherwise relieved from that duty.  Any delay must be explained in writing by the FLO and attached to the FLIPL.

12.  Paragraph 13-29 of Army Regulation 735-5 states that a FLO’s responsibility is to determine the cause and value of the LDD of Government property listed on the FLIPL, and to determine if assessment of financial liability is warranted.  That 
determination must be based on the facts developed during a thorough and impartial investigation.  However, before beginning the investigation the FLO must have an understanding of the terms "responsibility, culpability, proximate cause, and loss"; each term impacts upon a determination of financial liability.  Individuals may be held financially liable for the LDD of Government property if they were negligent or have committed willful misconduct, and their negligence or willful misconduct is the proximate cause of that LDD.  The following terms are addressed in order to assist the FLO in evaluating financial liability: 

   a.  Responsibility.
   
      (1)  General.  The type of responsibility a person has for property determines the obligations incurred by that individual for the property.  DA Pam 735-5 (Financial Liability Officer’s Guide) presents specific issues the FLO must consider before recommending financial liability. 
	
(2)  Command responsibility is the obligation of a commander to ensure all 
Government property within his or her command is property used and cared for, and that proper custody, safekeeping, and disposition of Government property are provided.  Command responsibility is inherent in command and cannot be delegated.  It is evidenced by assignment to command at any level and includes ensuring the security of all property within the command, whether in use or in storage, observing subordinates to ensure their activities contribute to the proper custody, care, use, safekeeping, and disposition of all property within the command, enforcing all security, safety, and accounting requirements, and taking administrative or disciplinary action when necessary.
	
(3)  Supervisory responsibility is the obligation of a supervisor to ensure all 
Government property issued to, or used by his or her subordinates, is properly used and cared for, and that proper custody, safekeeping, and disposition of the property are provided.  It is inherent in all supervisory positions and is not contingent upon signed receipts or responsibility statements.  It arises because of assignment to a specific position and includes providing proper guidance and direction, enforcing all security, safety, and accounting requirements, and maintaining a supervisory climate that will facilitate and ensure the proper care and use of Government property. 
	   
(4)  Direct responsibility is the obligation of a person to ensure all
Government property for which he or she has receipted is properly used and cared for, and that proper custody, safekeeping, and disposition are provided. Direct responsibility results from assignment as an accountable officer, receipt of formal written delegation, or acceptance of the property on hand receipt from an accountable officer. 
		
   (5)  Custodial responsibility is the obligation of an individual for property in 
storage awaiting issue or turn-in to exercise reasonable and prudent actions to properly care for, and ensure proper custody, safekeeping, and disposition of the property are provided.  Custodial responsibility results from assignment as a supply sergeant, supply custodian, supply clerk, or warehouse person.  Personnel with custodial responsibility are rated by and answerable directly to the accountable officer or the individual having direct responsibility for the property.  Responsibilities include:

   (a)  ensuring the security of all property stored within the 
supply room and storage annexes belonging to the supply room or supply support activity is adequate;

   (b)  observing subordinates to ensure their activities contribute to 
the proper custody, care, safekeeping and disposition of all property within the supply room and storage annexes belonging to the supply room or supply support activity;

    			(c)  enforcing all security, safety, and accounting requirements; and 
 
    			(d)  when unable to enforce any of these, reporting the problem(s) to their immediate supervisor. 

   (6)  Personal responsibility is the obligation of a person to exercise 
reasonable and prudent actions to properly use, care for, safeguard and dispose of all Government property in his or her physical possession.  It applies to all Government property issued for, acquired for, or converted to a person's exclusive use, with or without receipt. 

   b.  Culpability. 

	    (1)  Before a person can be held financially liable, the facts must show that he or she, through negligence or willful misconduct, violated a particular duty involving the care of the property. 

	    (2)  Simple negligence is the absence of due care, by an act or omission of a person which lacks that degree of care for the property that a reasonably prudent person would have taken under similar circumstances, to avoid the LDD of Government property. 
	    
	    (3)  Gross negligence is an extreme departure from due care resulting from an act or omission of a person accountable or responsible for Government 
property which falls far short of that degree of care for the property that a reasonably prudent person would have taken under similar circumstances.  It is accompanied by a reckless, deliberate, or wanton disregard for the foreseeable loss or damage to the property. 
	    (4)  Whether a person's acts or omissions constitute negligence depends 
on the circumstances of each case.  Negligence under some circumstances may not reflect negligence under other circumstances.  Therefore, the FLO should consider the following factors, as a minimum, when determining the reasonableness of a person's conduct: 

	    		(a)  The person's age, experience, physical condition, and special qualifications;

	    		(b)  The type of responsibility the person had toward the property;

	    		(c)  The type and nature of the property;

	    		(d)  The nature, complexity, level of danger, or urgency of the activity ongoing at the time of the LDD of the property;

	    		(e)  The adequacy of supervisory measures or guidance for property control;

	    		(f)  The feasibility of maintaining close supervision over the property, given the nature and complexity of the organization or activity supervised; 

	    		(g)  The extent supervision could influence the situation considering pressing duties or lack of qualified assistants.

	    (5)  Willful misconduct is any intentional wrongful or unlawful act or omission relating to Government property. 

	    (6)  A retired military member or civilian employee can be held financially liable for the LDD of Government property that can be attributed to their negligence while on active duty or employed by the Department of the Army. 

	c.  Proximate cause.  Before holding a person financially liable for a loss to the Government, the facts must clearly show that the person's conduct was the "proximate" cause of the LDD.  That is, the person's acts or omissions were the cause that, in a natural and continuous sequence, unbroken by a new cause, produced the LDD, and without which the LDD would not have occurred. 

	d.  Loss.  Before holding a person financially liable, the facts must show that a loss to the Government occurred.  "Loss" means loss of, damage to, or destruction of property of the U.S. Government.  Loss includes a loss from accountability.  Property is considered lost when it cannot be found or accounted for by the last responsible person in the audit trail. 
13.  Paragraph 13-38 of Army Regulation 735-5 provides that upon receiving a FLIPL of property loss on which the approving authority believes financial liability is appropriate, the approving authority will obtain a legal opinion as to its legal sufficiency prior to determining whether to assess financial liability.  A legal advisor will provide a written opinion as to the legal sufficiency of the financial liability investigation of property loss.  If, in the legal advisor's opinion, the financial liability investigation of property loss is not legally sufficient, the opinion will state the reasons why and make appropriate recommendations.  The opinion will be attached to the FLIPL prior to the approving authority's review and decision.  The approving authority should ensure corrective actions are taken before taking final action to assess financial liability.  A lawyer other than the one who advised the respondent in the preparation of the respondent's rebuttal statement must perform the legal review required by the approving authority. 

14.  Paragraph 13-44 of this regulation provides that the approving authority, upon receipt of a request for reconsideration, will review any new evidence offered, and make a decision to either reverse the previous decision assessing financial liability against the individual or recommend the continuation of the assessment of financial liability.  A request for reconsideration will be reviewed only on the basis of legal error (that is, the request must establish that the facts of the case do not support an assessment of financial liability). 

DISCUSSION AND CONCLUSIONS:

1.  The applicant contends that the finding that he was financially liable for the loss by a FLIPL should be reversed and that he be relieved of financial liability.

2.  The applicant's contentions were carefully considered, and found to have merit.  Notwithstanding the previous legal reviews of the FLIPL in this case, it is apparent that Army Regulation 735-5 was not complied with in several instances. The fact that the approving authority initially assessed the applicant financially liable for a medical instrument case and a medical chest, which was above and beyond the FLO's recommendation and not an option for the approving authority under Army Regulation 735-5, is testament to the fact that the FLIPL was not legally correct when initially completed.  It was also noted that the applicant provided an undated memorandum for record (Tab A), in which the new 
approving authority initially fully denied the applicant's request for reconsideration, and stated that the FLIPL was given a legal review.  The fact that he was later only found to be liable for $1,697.40 after a subsequent legal review confirmed that the FLIPL was not legally correct when completed and only after the applicant repeatedly informed his former chain of command of the failure to follow regulatory guidance during the FLIPL.  Additionally, the fact that 

the "letter of lateness" signed by a property book officer from Headquarters,
30th Medical Brigade not only is not signed by a person responsible for the delay of the FLIPL as required by Army Regulation 735-5, it appears to have only been hastily prepared at the last moment, and served to show that the applicant's former chain of command failed to properly execute the FLIPL accurately or in a timely manner.  There is no evidence that the FLO for the FLIPL in question prepared any type of statement to explain the reason for the delay of the FLIPL.  Further, this "letter of lateness," by also stating that the FLO's engagement in inactivation of units took priority of the FLIPL also is in contravention with Army Regulation 735-5, which clearly states that an appointment as a FLO becomes that person's primary duty until the approving authority accepts the investigation as completed, or is otherwise relieved from that duty.  

3.  The applicant was clearly in command of HHD, 421st MMB from May 2005 to December 2006, and had command responsibility of Government property which could not be delegated.  He failed to ensure that unit property was properly sub-hand receipted, leading to a loss of accountability. 

4.  The applicant has already had $1,697.40 collected from his pay for the FLIPL debt, and the advisory opinion recommended that the financial liability assessed against him be reduced to $386.85 and that he be refunded $1,310.55.  It has been determined that the aforementioned recommended relief is appropriate; however, based upon the inequities in the FLIPL, and as a matter of equity, it would also be appropriate to relieve the applicant of all financial liability assessed against him from the FLIPL in question, and that any evidence of the FLIPL in his military records be expunged.  It would also be appropriate to refund the applicant the $1,697.40 he had collected from his pay as a result of the FLIPL in question.  

BOARD VOTE:

________  ________  ________  GRANT FULL RELIEF 

________  ________  ________  GRANT PARTIAL RELIEF 

________  ________  ________  GRANT FORMAL HEARING

________  ________  ________  DENY APPLICATION





BOARD DETERMINATION/RECOMMENDATION:

1.  Notwithstanding the staff DISCUSSION AND CONCLUSIONS above, the Board unanimously determined during their review that the evidence presented was sufficient to warrant a recommendation for partial relief.  Although the processing of the FLIPL was flawed in major ways, the fact is there was equipment lost during the applicant's tenure in command.  Therefore, he should be required to pay the Office of the Deputy Chief of Staff, G-4's recommended pecuniary liability in the amount of $386.85.  He has already paid $1,697.40 towards his FLIPL debt; therefore, he should be reimbursed the difference of $1,310.55.

2.  The Board further determined that the evidence presented is insufficient to warrant a portion of the requested relief.  As a result, the Board recommends denial of so much of the application that pertains to reimbursement of any amount in excess of $1,310.55.



      ______________________
      	   CHAIRPERSON
      
I certify that herein is recorded the true and complete record of the proceedings of the Army Board for Correction of Military Records in this case.

ABCMR Record of Proceedings (cont)                                         AR20070016677



3


ARMY BOARD FOR CORRECTION OF MILITARY RECORDS

 RECORD OF PROCEEDINGS


1

ABCMR Record of Proceedings (cont)                                         AR20070016677



11


ARMY BOARD FOR CORRECTION OF MILITARY RECORDS

 RECORD OF PROCEEDINGS


1