PODCast #2, How to Perform a Financial Liability Investigation

How to Perform a Financial Liability Investigation

So, you’ve been assigned as a Financial Liability Investigating Officer. At least that is what I am assuming since you are listening to this PODCast.

What are you supposed to do for this investigation?
Where do you plan on beginning?
How long do I have?

Let me see if I can help.

First off, I recommend that you get your hands on a copy of Department of the Army Pamphlet 735-5, Financial Liability Officer’s Guide. You can find this regulation on the Army Publishing Directorate’s website or if you go to the site where you got this PODCast, the web address is contained in the text. http://www.apd.army.mil/series_range_pubs.asp?range=735

Before going any further with this PODCast I recommend that you read Chapter 2 of that pamphlet. Chapter 2 discusses the DD Form 200 and lists some key terms and their definitions. I need you to understand terms such as proximate cause, culpability, and willful misconduct and to understand the different types of responsibility before we continue.

You only have a total of 30 days to totally complete your investigation, counsel those that you are recommending financial liability, and giving your findings to the Appointing/Approving Authority. Not counting weekends, that isn’t much time. So, you must remain focused to the task at hand.

I realize that DD Form 200 is titled Financial Liability Investigation for Property Loss and it seems like it shouldn’t be used for anything but lost equipment, but that is not the case. The form is also used to record damage.

So, if you are investigating damage, the next thing you need to do is release the damaged item for repair. But, you don’t want them to repair any evidence that you may need so you need to take a digital camera with you and take as many pictures as you feel are necessary to document the damage. You may even have to get an expert opinion on the damage as it may not be something that you can photograph. Then release the item to get repaired.

Now, you need to figure out what you are going to do next. Chapter 3 of DA Pam 735-5 gives some good procedural guidance of the conduct of an investigation like what form to use to take statements and that your purpose is to determine responsibility for the loss (or damage). So, you may find Chapter 3 useful as well.

But what Chapter 3 doesn’t give you is years of experience. That is what I plan on doing here for you now. Granted, I cannot possibly cover every possible experience nor will I be able to describe your investigation fully in order for you to to follow a strict step-by-step process to complete your investigation. You will still need to totally understand your situation and think through it just as I am hopefully going to show you how.

The main thing you need to do is to determine the proximate cause of the loss or damage. What was the one initial act that caused the loss or damage to occur. Once you determine proximate cause, then it is quite easy to determine who is culpable as they would be the one or ones that caused the one thing to happen. Too often I have seen investigating officers come back with a finding of who they think should be “blamed” yet that individual had nothing to do with the proximate cause.

You must totally understand this concept before you move on. So, I am going to give you some examples.

Proximate Cause Example #1. Soldier is eating in Dining Facility and when returning her tray, someone stole her gortex jacket that she left on back of her chair. What is the proximate cause of loss? The proximate cause of loss could be that the gortex was stolen But that was not the one initial act that caused the loss. That one act is the failure of the Soldier to safeguard her gear and perform her personal responsibility duties which ultimately caused the loss of her gortex jacket.

Proximate Cause Example #2. A new soldier arrives. The 1SG tells the Soldier to place his bags in his office while he continues in-processing. When the Soldier returns later that day to the 1SG’s office, his duffle bag has been opened and he is missing some of his TA-50. What is the proximate cause of the loss? Remember what happened in the situation above? Who failed to perform their responsibility duties here? Was it the Soldier? No, it was the 1SG. He failed to perform his Supervisory responsibility duties. So, the proximate cause of this loss is the failure to properly provide safekeeping for equipment issued to his subordinates.

Are you getting the hang of this proximate cause thing?

Lets do a damage situation.

Proximate Cause Example #3. Vehicle is being Ground Guided by an NCO and vehicle backs into Brigade Commander’s parked vehicle causing $1,200 worth of damage. Driver was not licensed for vehicle he was operating. So, is the driver responsible for the damage? This is one of those situations where investigating officers always want to blame the driver. But, the driver was doing what the NCO told him to do while the NCO was ground guiding him. It is assumed in my example that the NCO knew the Soldier was not licensed to operate the vehicle and told him to do it anyway. So, here we have an NCO, allowing a Soldier to drive a vehicle in which he is not licensed and the NCO is telling him where to move the vehicle by ground guiding him. So, the proximate cause of the damage is failure of the NCO to properly ground guide a vehicle. Because the NCO allowed the Soldier to drive while unlicensed, the company commander could also direct an Article 15 or other administrative action such as a letter of reprimand.

Now they get a little harder.

Proximate Cause Example #4. The CIF tells the company commander that PFC Riley failed to clear CIF when he PCS’d on 4 April 2007 and now a Financial Liability Investigation must be completed. Soldier’s clearance papers show that he cleared CIF of all items. What is the proximate cause of loss? Did you get this one? Since there is no true loss, there is no proximate cause of loss. The CIF needs to update their paperwork and the Financial Liability Investigation needs to be canceled.

Okay, that one was a trick question. Try this one.

Proximate Cause Example #5. Soldier has stored their TA-50 (or it could be any Government equipment) at their house. Someone breaks into the house. The police report shows that there was a forced entry into the house and an unknown thief escaped. What is the proximate cause? This time there was forced entry so the proximate cause is not that the individual did not secure their gear. This time the proximate cause is the forced entry and then the theft. So, unless you can link an individual to the theft, you cannot hold anyone liable.

Proximate Cause Example #6. Same as above except this time the Soldier secured his gear in the front of his car. The car was broken into and the gear stolen. What is the proximate cause of this one? Remember that proximate cause is the one initial act that caused the loss. In this case it was the fact that the gear was inside the car and visible to the thief. So, the Soldier failed to properly secure their gear. What if the equipment was in the trunk? If the one initial act is not the failure to properly secure, the theft might be the one act. However, most units will have a policy that states that Government equipment will not be stored in a car. Failure to follow that policy could be the proximate cause of loss.

Proximate Cause Example #7. A Soldier’s house burns down. You are investigating the destruction of all of her OCIE. What is the proximate cause. The proximate cause of the destruction is the house burning down. Unless you know what caused the fire, you cannot be anymore specific. And unless you can prove that the individual caused the fire, then you cannot charge her for the destruction of the equipment. If you have the Fire Marshall’s statement that states that the cause of the blaze was due to an improperly used candle or something, you can link the individual to the proximate cause.

Okay, here is our last example.

Proximate Cause Example #8. A HMMWV, while avoiding another vehicle, exited the highway and rolled. The driver, a Specialist, was severely injured as he was not wearing his seatbelt. The passenger, a Sergeant, was wearing his seatbelt and had only minor injuries. The vehicle is totaled. The MP’s determined that the driver was driving at an excessive speed and over-reacted to the situation ahead. What is the proximate cause? The MP’s have already done the investigation for you. The proximate cause of the accident is excessive speed and over-reaction by the driver. Now, who is the individual that can be linked to the proximate cause. In this example, you must remove your emotion. Who is really to blame, the Specialist driver or the TC Sergeant? If we were civilians, perhaps the situation would be different. But, in this case, the TC is the cause of the accident as he permitted the driver to drive over the speed limit. Not only that, he can be held liable for the injuries the Specialist incurred since he can also be linked to the fact that the driver was not wearing his seatbelt. Some investigating officers find this result so unsettling that they will change their findings as they feel that the Sergeant should not be charged.

Remember, you are to find the proximate cause and then link an individual to that cause if you can. It is not up to you to determine whether that finding is fair or if that individual has the means to pay for the damage or loss. That is not in your charter. Don’t let emotions get in the way of you performing your task – finding the proximate cause.

Okay, enough about proximate cause, let’s move on to how you go about finding the proximate cause. In order to do that, you must have all the facts. I suggest that you immediately discuss the situation with the company commander as they had to do the initial investigation in order to complete block 9 of the DD Form 200. Too often, for some reason, company commanders, don’t like to put what the proximate cause of the loss or damage is. Perhaps that is because they try to be popular or don’t want to immediately place blame without an outsider looking at the case. So, perhaps, you can find out everything you need from the company commander. They may already have copies of all the paperwork to substantiate those findings and possibly even sworn statements that they did not attach to the initial DD Form 200. Then all you have to do is package it all together.

If you feel you still don’t have all the facts, I suggest that you write out the questions that you need answered in order to figure out the facts. This would be your “Road Map” to the investigation. Without a road map you may end up talking to individuals that have really nothing to do with the facts of the case. You may end up down a rat hole that sucks up days of what little time you have to complete the investigation. Without the road map you won’t know what paperwork you need to substantiate your findings. You may need to adjust your road map during the investigation to keep focused on the objective – finding the proximate cause. Answer the simple questions of Who, What, Where, When, and How. Why may not be a question that needs to be answered. The only question with Why would be to determine if it was done through willful misconduct or simple or gross negligence.

You got your road map. Now figure out who you need to talk to to answer your questions. Again, you may end up adjusting these names as you continue through your interviews. If the person you are talking to cannot provide you the answers to the questions that you have, you don’t have to continue to talk to them or to take their statement. If what they are telling you will not lead you to the goal of determining the proximate cause and who may be behind the proximate cause, then stop and move on to the next person on your road map.
When you take someone’s statement, don’t just let them ramble on. Ask them specific questions and then let them respond. Have them remain focused as well on their Sworn Statements or you could have pages and pages of junk that is worthless and will not add anything to your investigation. When I have performed investigations, I have literally written a question unto the sworn statement, listened to their response, agree upon their answer and put that on the sworn statement. You may want them to write out unto a blank page of paper of what they would like to write unto their sworn statement as practice.

Now it is time to put complete your findings When putting your packet together only put those statements that support your findings even if you have many more statements and material. Practice in Microsoft Word or on blank pieces of paper what you want to put as your final finding. Chapter 4 of DA Pam 735-5 has some great step-by-steps and some examples of what you need to do to put your final findings together. Chapter 5 discusses in detail how to compute actual loss or damage costs. I don’t plan on discussing them any further in this PODCast.

DO NOT YET TYPE YOUR FINDINGS UNTO THE DD FORM 200.

I highly suggest that you take your findings and recommendations and discuss them with your Appointing Authority, Brigade S4, Property Book Officer, or even your Approving Authority before committing your findings unto the actually DD Form 200. You may have overlooked something that they can guide you in the right direction or you may have totally missed the mark and need to start over. I have always advocated that Brigade and Battalion XO’s become intimately involved in the investigation process with the investigating officer to aid in the investigations and to ensure that the findings are timely and accurate. If they don’t offer up the help, go see them and ask for assistance. Time spent with them will be time well spent at the end when it ends up on the COL’s desk for final approval.

Once your findings and recommendations are given the okay, type them up on the DD Form 200. Your next step is to notify any individuals that you are recommending financial liability against to give them a chance to rebut your findings and recommendations. Don’t forget this step. It is not your job to convince them that your recommendation is correct. Your task is to only contact them and let them know you are recommending them for financial liability and then provide them with all of your evidence you intend to attach to the investigation. They need to see what you see so that they can provide you with any rebuttals.

When they provide their rebuttals, read them and figure out if you need to investigate further. If they provide no new evidence then you do not have to investigate further. Your last task is to prepare the whole packet for the appointing/approval authority’s acceptance. Again, I refer you to DA Pam 735-5.

I hope my guidance here has been useful. You are the one now that has to go out there and complete the investigation. Remember that there are many people that can help you if you have questions. Questions that involve responsibility or DD Form 200 processes should be directed to either your S4 or the property book officer.

There is also another resource and that is LOGNet. LOGNet is always there for you to ask any question and get a quick response. LOGNet can be accessed at https://lognet.bcks.army.mil/.

Good luck in your investigation. Remember, stay focused!