) Relief is a matter of equity and is fact specific.
(b) Because an accountable officer is strictly liable, a loss or deficiency raises a refutable presumption of negligence. The accountable officer must affirmatively show that there was no negligence, bad faith or fraud.

(1) Negligence.

(A) Gross negligence is not required for liability. Simple negligence on the part of the accountable officer is sufficient to bar relief.

(B) If there is negligence, it must be the proximate cause of the loss.

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(C) The Comptroller can allow relief when it is shown that more than one (1) person had access to the funds or that there is pervasive laxity in the security procedures of the office and that laxity is the proximate cause of the loss.

(D) Relief may not always be granted in cases of pervasive laxity because an accountable officer has a duty to report security weaknesses to appropriate supervisory personnel, and to make the best of the security conditions available, however inadequate. The determination of whether to grant relief may turn on whether that duty has been breached.

(2) Bad Faith or Fraud.

(A) The officer is liable only for the amount of the overpayment.

(B) The use of due care is the basis of relief. Relief will not be granted on the basis of:

(i) inadequate training or inexperience; however, entrusting funds to an inexperienced or incapable subordinate may make a supervisor equally liable for the loss;

(ii) hardship of repayment by the accountable officer; (iii) heavy workload; or
(iv) an exemplary work history. (c) Statute of Limitations.
(1) The accountable officer’s account is considered settled after a three (3) year period.

(2) The Comptroller is without authority to grant relief after the three (3) year period. An agency must therefore report financial irregularities to the Comptroller within two (2) years of the time it receives a substantially complete account.

(3) The statute of limitations only applies to cases involving erroneous payments made by accountable officers; and does not apply to losses from disbursements involving fraud or criminal activity,

(A) on the part of the accountable officer, by the terms of the statute,

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(B) or on the part of a subordinate personnel, which are considered physical losses.

(d) Physical Losses. The Comptroller considers the agency to have received an account at the time the agency’s accounts are substantially complete, whether or not they are properly documented or filed, or at the later of:
(1) when an accountable officer certifies a periodic statement of accountability, or

(2) when an agency receives the information placing it on notice that a deficiency exists:

(A) if the deficiency is the result of a duplicate payment or forgery, when the agency receives notice of the loss from the Treasury,

(B) if the deficiency is the result of fraud, embezzlement or criminal activity, when the loss is discovered and reported to the appropriate agency officials,

(C) a delay in receiving documentation supporting the statement of accountability will suspend the running of the statute:

(i) Only the Comptroller, not the agency, can suspend the running of the statute of limitations. An agency’s attempt to hold the officer liable will not toll the statute.

(ii) Liability must be established within the three (3) year period. Collection of the deficiency from the officer need not start or finish within the three (3) year period.