In the Matter of the Petition by:                               )
                                                                               )
ANDREW J. HARDWICK                                         )
136 Mizell Road                                                      )
                                                                               )
at                                                                            )
                                                                               )
Montgomery, AL 36117-9999                                )   P. S. Docket No. DCA-136

APPEARANCES FOR PETITIONER:                        Johnny Hardwick, Esq.
Marvin Wiggins, Esq.
449 South McDonough Street
Montgomery, AL 36104-3401

APPEARANCE FOR RESPONDENT:                       Fred G. Ott
United States Postal Service
6701 Winton Blount Boulevard
Montgomery, AL 36119-9401

FINAL DECISION UNDER THE DEBT COLLECTION
ACT OF 1982

By Petition timely filed on April 30, 1992, Petitioner Andrew J. Hardwick requested an oral hearing on a Notice of Involuntary Administrative Salary Offset Under the Debt Collecton Act. The Notice stated that based on an audit of his reserve stock showing a shortage in the amount of $1,423.50, Petitioner was indebted to Respondent United States Postal Service in that amount. The Notice also stated that collection would be made by deducting 15% of Petitioner's "disposable pay" (approximately $205) from each paycheck for approximately seven pay periods.

In the Petition, Petitioner objected to the determination of indebtedness, alleging "contributory negligence" by the Postmaster in failing to take certain actions "in violation of Postal Service Handbook F-1." A supplemental hearing was requested for discovery purposes of needed records. In Answer, Respondent noted that Petitioner was custodian of the reserve stock when the shortage was found and was responsible and accountable for the shortage.

By agreement of the parties the statutory 60-day period for issuance of a decision was tolled for several weeks to permit discovery of records which Respondent agreed to furnish and which Petitioner later advised had been furnished (Orders and Memoranda of Telephone Conferences dated May 29 and June 5, 1992). On June 5, 1992, Petitioner filed an Amendment to the Petition seeking attorney fees, to which Respondent objected.

An oral hearing was held on June 24, 1992, in Montgomery, Alabama. Respondent called the following witnesses: Carll Smith, Area Manager and Petitioner's immediate supervisor; and Rose Booher, "Superintendent Station/Branch" at the Downtown Station in Montgomery, AL, who supervised the box and window clerks and custodians. Petitioner called no witnesses. Instead, after presentation of Respondent's case, Petitioner made a motion to have the demand quashed. The motion was taken under advisement and for reasons discussed later in this Decision is now denied.

The following Findings of Fact and Conclusions of Law are made from the entire record of this proceeding including, among other evidence, the Petition, Answer, pre-hearing communications, evidence presented at the hearing, and relevant portions of Postal Service handbooks.

FINDINGS OF FACT

1. Petitioner has been Station Manager at the Downtown Station in Montgomery, AL, since prior to 1990. He has received very good ratings and has been considered a responsible employee. One of his duties was accountability for the reserve stock of the Downtown Station. Although corrobative records are lacking, there is unrefuted testimony that by proper accounting procedures, including a stamp count, Petitioner was apprised of the amount of reserve stock when he assumed accountability for that stock.

2. In performing his reserve stock duties, in accordance with prescribed Postal Service procedures Petitioner had to sign appropriate documents recording receipts into and transfers from the reserve stock. He also signed quarterly "Accountability Audit" forms required by the Area Manager which are checked off to show, among other requirements, that various required forms were completed and checked, keys checked, and safe combinations changed. Such forms signed by Petitioner on September 30, 1991, and December 18, 1991, showed the existence of shortages in the accounts of two window clerks which were held in suspense pending an investigation and a grievance procedure. Those shortages have not been shown to have any relationship to the shortage involved in this proceeding.

3. During the spring and summer of 1991 Petitioner was detailed to his immediate supervisor's position as the Area Manager. During the time Petitioner was on detail, a manager from another station was detailed in Petitioner's place as Station Manager, but was not assigned accountability for the reserve stock. Instead, for most of the time Petitioner was on detail, he delegated management of the reserve stock to the Station's Superintendent, Ms. Booher, but he did not follow prescribed procedures to change accountability for that stock.

4. Petitioner instructed Ms. Booher to use a duplicate key to the reserve stock, which was normally locked up in the vault in a sealed envelope, in order to issue stock to the clerks when they ordered stamps. Until Petitioner returned from his detail and the duplicate key was returned to the vault, Ms. Booher kept the key on her personal key chain and took it home with her. Even after Petitioner's return from his detail, about once a month he instructed her to issue reserve stock and she did.

5. Neither Ms. Booher nor Petitioner had been trained specifically about reserve stock accountability although she had been given some training on using the IRT (Integrated Retail Terminal) for reserve stock transactions and Petitioner had given her some instructions. She was aware, however, that under Postal Service procedures when stock accountability was transferred from one person to another, a verified count of the stock needed to be made at that time to ascertain the amount of stock accountability. When Petitioner instructed her to issue the reserve stock when he went on detail, Ms. Booher mentioned the need for a count of the stock, but Petitioner said he trusted her and a count was not made. She did not believe accountability had been transferred to her because there had been no stock count, because she had received nothing in writing to that effect, and her job description did not include reserve stock accountability.

6. In performing reserve stock duties, Ms. Booher issued stock when clerks ordered the stock on a Form 17 (used to show stock transfers), and the clerks verified her count of the issued stock by their own count. She would then sign the Form 17 and enter the transaction into the unit's computer data base on one of the IRTs in the Station.

7. Petitioner had requested an IRT for his own use in recording reserve stock transactions but did not receive one until sometime after this shortage was discovered. Prior to that time, he and Ms. Booher would have to use a window clerk's IRT or one in the Passport Office when it was closed.

8. Because of a shortage in the main stock at the Montgomery GMF, an audit was made on February 6, 1992, of the

Downtown Station's reserve stock by a person from another office and Petitioner. The audit consisted of counting the stock on hand and comparing the amounts with those shown by the inventories. This audit disclosed a shortage of stamps in the total amount of $1,423.50. A second audit, which came up with the same shortage, was performed on February 14, 1992, by Petitioner and Ms. Booher. As shown from the stamp inventories, the missing stock consisted of coils of 25-cent stamps. There is no evidence of any transactions which would explain what happened to the missing stock.

9. Following a letter of demand by Respondent seeking reimbursement from Petitioner for the shortage and a denial of Petitioner's request to have the indebtedness waived, the Notice of Involuntary Administrative Salary Offset Under the Debt Collection Act was issued by the Postmaster to recover the $1,423.50, and thereafter Petitioner filed his Petition requesting an oral hearing.

10. Although Petitioner initially may not have received some requested records, he received them before the hearing and made no complaint at the hearing that he lacked any requested records. The Area Manager had allowed Petitioner a week to seek to find the missing stamp stock and had furnished him with additional help during that period, but Petitioner had been unable to find the missing stock. No reason has been shown why the stamps are missing, where they might be, or other explanation for the shortage disclosed by the records.

PETITIONER'S MOTION

In his motion presented at the close of Respondent's case at the hearing, Petitioner stated the following primary reasons for quashing the demand for reimbursement: Respondent failed to provide sufficient evidence that there was an actual financial loss to Respondent; Petitioner was shown to be a responsible employee who was not given adequate training or equipment;Respondent failed to show that Petitioner's assigning reserve stock duties to Ms. Booher was clearly contrary to prescribed procedures or that such action was irresponsible and caused the shortage. Respondent replied that there was unrefuted evidence of the loss and under applicable Postal Service Handbook provisions Petitioner is accountable for the loss.

In ruling that the Motion would be taken under advisement, I noted that Respondent's burden was only to make an initial showing of the loss to the Postal Service and Petitioner's accountability for the loss. I concluded, in effect, that in view of the present state of the evidence it would be helpful for Petitioner to present some evidence, and I would especially like to hear Petitioner's explanation about the loss. After consulting with his attorney, Petitioner elected, however, not to present any further evidence and rested his case on the Motion to Quash.

CONCLUSIONS OF LAW

1. As Station Manager of the Downtown Station, Petitioner had accountability for the unit reserve stock, which is defined as "all undistributed stamps, stamped paper, and philatelic products under the control of the manager or designated custodian." (Handbook F-50 § § 312, 321, 322). Petitioner was also responsible for its efficient management. (Handbook F-50 § 330; Handbook F-1 § 432.1).

2. Under Postal Service accountability procedures, employees are not to have access to the stamp credit of another employee (Handbook F-50 § 221.b). Although at "large or complex units, the Reserve Stock may be assigned as a collateral duty to a supervisor, who will have sole access (see 433.24)" (Handbook F-1 § 432.1), the procedures require that there be a "witnessed inventory whenever access to an employee's accountability" is made. (Handbook F-1 § 433.24).

3. As there were no stock counts made when Petitioner instructed Ms. Booher to perform his reserve stock duties while he was on detail and on other occasions, he did not follow prescribed procedures and he remained accountable for the reserve stock.

4. Petitioner argues that Respondent failed to present adequate evidence of a financial loss because it did not show records of what stamps were in the reserve stock when he became accountable or show records that the 25-cent stamps were ever sent to and received by the Station. These arguments lack merit. Although Respondent showed no corrobative records except copies of the audit stamp counts made in February 1992 and two "Accountability Audit" forms, the unrefuted testimony of its witnesses was adequate to establish that a stamp count had been made when Petitioner became accountable for the reserve stock, that he signed for receipts and transfers into and out of the reserve stock and the "Accountability Audit" forms, that stamp inventories of the Station showed 25-cent coils as part of the reserve stock, and that when the audits were made in February 1992 the monetary value of the 25-cent stamps missing from that stock was $1,423.50.

5. Respondent's evidence also showed that the missing stamps had no relationship to other losses in the unit, that there was no explanation for the financial loss revealed by the records, and that Petitioner was accountable for the reserve stock. Thus, Respondent made a prima facie case of Petitioner's indebtedness.

6. Respondent's prima facie case is not negated by Petitioner's other arguments in support of his Motion to Quash. Those arguments seek to place blame elsewhere or to excuse Petitioner's liability for the loss. They include arguments that he lacked adequate training on accountability and lacked equipment, i.e., his own IRT for performing his duties. The evidence supports the conclusion that he knew or should have known by virtue of his position and relevant Postal Service Handbook provisions what his responsibilities were and the procedures for dealing with accountable stock, including transferring responsibility to another person. Neither his lack of specific training on accountability nor the lack of his own IRT made it impossible for him to perform his duties, nor have they been shown to be any causative factor in the loss of the missing stamp stock.

7. Petitioner also argues that Respondent showed no actual nexus to the loss by Petitioner's failure to follow prescribed procedures in entrusting the reserve stock to his subordinate. Though true, this argument does not help Petitioner as he has not shown that his accountability for the stock was changed. It was not essential for Respondent to establish how the loss occurred, or that it occurred specifically because of Petitioner's failure to follow certain procedures, but only that the loss did occur.

DECISION

For the reasons stated above, Petitioner's Motion to Quash is denied. As Respondent made a prima facie case of Petitioner's indebtedness, which Petitioner did not overcome with any evidence, the Petition is denied and the determination that Petitioner is indebted to Respondent in the amount of $1,423.50 is sustained. Petitioner did not contend or show that the proposed salary offsets of $205 per paycheck until the debt is satisfied (approximately seven pay periods) should be adjusted because of hardship to him. Accordingly, that repayment schedule will be followed.

Petitioner's request for attorney's fees is denied. There is no authority to award attorney fees except to a prevailing party under the terms and conditions of the Equal Access to Justice Act, 5 U.S.C. § 504 (1988), and implementing regulations (39 C.F.R. Part 960).

Joan B. Thompson
Administrative Judge