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DoD Financial Management Regulation Volume 5, Chapter 7
November 2009
alteration of the check by the payee. In either event, the explanatory memorandum to the
Department of the Treasury that returns the FMS Form 5206 shall be sufficiently clear to enable
the Department of the Treasury to initiate reclamation action through the banking system.
070609. Relief of Liability. Both underdrafts and overdrafts would fall within one
or more of the following: illegal, incorrect, or improper payment irregularities in the accounts of
the DO. The DO has the authority and the means to correct underdrafts. Overdrafts frequently
are not within the power of the DO to correct. If the check issue overdrafts resulted in
overpayment of a payee, then that overpayment is an erroneous payment debt. When the DO has
attempted to contact the payee and failed, or when the payee has been notified and has neither
the ability nor the inclination to make restitution, the DO shall transfer the debt to the supporting
DFAS site for further collection action. In order to meet standards for relief of liability,
uncollectible overdrafts shall be transferred to the supporting DFAS site within 90-days. After
the debt has been transferred, relief of liability for the illegal, incorrect, or improper payment, as
appropriate, may be requested following the procedures in Chapter 6 of this volume.
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