In the Matter of the Petition by           )
                                                          )
NANCY L. CLARK                             )
P. O. Box 124                                    )
                                                          )
                at                                       )
                                                          )
Gorham, ME 04038-0124                  )   P.S. Docket No. DCA 94-144

APPEARANCE FOR PETITIONER:      Charles Scialla
                                                          Scialla Associates, Inc.
                                                          453 Preakness Avenue, Number 5
                                                          Paterson, NJ 07502

APPEARANCE FOR RESPONDENT:   Thomas Caiazzo
                                                           Labor Relations Specialist
                                                           United States Postal Service
                                                           380 Riverside Street
                                                           Portland, ME 04103-7051

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner, Nancy L. Clark, filed a petition for hearing on September 21, 1994, after receiving a September 14, 1994 Notice of Involuntary Administrative Salary Offsets from the Postmaster, Gorham, Maine. This Notice stated the Postal Service's intention to make withholdings from Petitioner's salary to collect $2,900.00 for a shortage in the Main Stock at the Gorham Post Office on January 14, 1994, for which Petitioner was accountable as the Main Stock Custodian.

A hearing was conducted in Portland, Maine on November 16, 1994. The Postal Service presented testimony from Paul Robinson, Postmaster of Gorham, Maine, and from Mike Fortunato, Manager of Post Office Operations for the region that includes Gorham, Maine. Petitioner, Nancy Clark, testified in her own behalf. Following receipt of the transcript, the parties were given until December 19, 1994 to submit post-hearing briefs. The parties had earlier waived the statutory requirement for a decision within sixty days of the filing of the Petition. Briefs from both parties were received by December 19, 1994 and have been duly considered.

FINDINGS OF FACT

1. The "Main Stock" of a post office is defined as "all stamps and stamped paper, nonpostal stamps, and philatelic products received by a post office that have not been consigned to the main office window unit, stations, branches, or window clerks." (Handbook F-1, Post Office Accounting Procedures, April 1991, Glossary).

2. Postmasters are accountable for the Main Stock, but "may assign responsibility for administering the Main Stock to a supervisory employee who will act as Main Stock custodian." (Handbook F-1, Sections 431.1 and 431.21).

3. As of February 1993, Nancy Clark was Supervisor of Customer Services at the Gorham, Maine, Post Office, and was assigned to have the accountability for the Main Stock by the Postmaster, Paul Robinson. (Transcript, 8-9, 30, 55-56).⁽¹⁾

4. Petitioner had some previous experience as a Main Stock custodian at another post office in Maine. (Tr. 9, 68-69).

5. On December 24, 1993, Petitioner was in charge of the Gorham Post Office, that day being the Postmaster's scheduled day off. (Tr. 15, 57).

6. The Gorham Post Office was quite busy on the morning of December 24, 1993, the normal staff of approximately fifteen employees was one short, and Ms. Clark helped perform some non-supervisory duties. (Tr. 15-17, 57-58, 61, 74).

7. At some time during the morning of December 24, 1993, Ms. Clark received, and signed for, a shipment of stamps from the Bureau of Engraving and Printing. The shipment consisted of two boxes, one of which was listed on the invoice as containing 800 coils of 29¢ stamps, a "coil" being 100 stamps. (P.S. Exs. 1 and 3; Tr. 11, 58).⁽²⁾

8. An inventory of the Main Stock was conducted on January 14, 1994, and was found to be short by 100 coils of 29¢ stamps, of a value of $2,900.⁽³⁾ This was a regular periodic inventory, required to be done at least annually. The results of the inventory were recorded on PS Form 3294, Cash and Stamp Stock Count and Summary. (Tr. 10-11, 30-31, 58; P.S. Ex. 3).⁽⁴⁾

9. The following was written in the remarks section of the Count and Summary by Mr. Robinson on January 14: "800 coils rec. 12/24/93. Not counted due to manpower shortages. Nancy was doing bargaining work. We feel only 700 coils received." (Tr. 11, 31).

10. Proper procedure for a Main Stock custodian on receipt of a shipment of stamps is to open, count and verify the shipment, and then to secure the stock. (Tr. 12, 41-42). Petitioner was aware of this responsibility. (Tr. 65, 70). It is also permissible to secure a shipment, unopened, then to open it and verify the count at a later time. (Tr. 52). Ms. Clark testified, however, that she could not have used this alternative procedure at Gorham, because the unopened boxes would not fit in the safe. (Tr. 75-76).

11. A shipment of 800 coils of 29¢ stamps is packaged in a cardboard box, arranged in 16 trays of 50 coils each. A label on the outside states the contents of the box. (Tr. 36-37; P.S. Ex. 15). The box includes the following instructions, printed on one side:

POSTMASTER

CONTENTS: This carton contains 16 trays of coil stamps.

IMMEDIATELY UPON RECEIPT:

1. Examine shipping container carefully. If seal is broken or if there are other signs of tampering, notify the Inspection Service at once.

2. Check the label or markings on this container against your invoice. If correct and not needed for immediate use, place in inventory without opening.

BEFORE OPENING: Remove the cambric tape over the aperture, fold back the flap, and count the number of inner trays.

DISCREPANCIES: Treat any discrepancy in accordance with Section 426.3, Series F-1 Handbook.

12. By removing the tape described above, a person would not be able to remove any stamps from the box, but could count to determine whether the box contained 16 trays as stated on the label. (Tr. 36-37; P.S. Ex. 15).

13. Although Petitioner testified that she does not remember whether or

not she counted the shipment on December 24, 1993, the preponderance of evidence is that she opened the box and put the contents in the safe, but did not count the stock. (Tr. 11, 61-62, 64, 70, 75-77).

DECISION

There is no evidence that Ms. Clark is not an honest, loyal, and hard-working employee, and there is little doubt that she was busy performing a variety of chores on December 24, 1993. The issue, however, is over how to apply the standards of accountability and liability that are prescribed for Postal Service employees who manage large sums of cash or stamp stock. The provision applicable to Ms. Clark is contained in Handbook F-1, Section 130 - Liability. Subsection 131 applies to Postmasters, and Subsection 132 to Other Employees:

132 Other Employees

The postmaster consigns postal funds and accountable paper to other employees. Employees are held strictly accountable for any loss unless evidence establishes that they exercised reasonable care in the performance of their duties.

In the case of an unexplained loss, as in this case, the term, "strictly accountable" means that to establish a prima facie case for liability, the Postal Service must only prove that there has been a loss and that the person charged was accountable for the stock from which the loss occurred. The Postal Service is not required to prove any specific dereliction or act of negligence by the employee. The burden then shifts to the employee to show that he, or she, exercised reasonable care.

There is no doubt that Petitioner was accountable for the Main Stock. She agrees that she was. The Postal Service has proved its loss by the inventory of January 14, 1994. When Petitioner signed for the shipment on December 24, 1993, she accepted accountability for adding 800 coils of 29¢ stamps to the Main Stock, and the January 14 inventory revealed a shortage of 100 coils. When a properly conducted inventory, or audit, shows a stock shortage relative to a previously established balance, this constitutes proof of loss unless other evidence raises sufficient doubt about the accuracy of the inventory count or the previously established balance. There is no such evidence in this case. The issue to resolve, then, is whether Petitioner exercised reasonable care.

The evidence showed that Petitioner knew it was her duty to count the shipment on December 24, 1993 and verify the contents shown on the invoice and the carton label, and that it would have taken a relatively short time to do so. The fact that she was busy doing many other duties on the morning of December 24 may help to explain why she failed to count and verify the shipment, but it does not excuse it. The evidence raises two possibilities as to when the loss might have occurred, but neither scenario relieves Petitioner of her accountability. If the shipment really was short, as Ms. Clark and the Postmaster speculated when the January 14 inventory was completed, her failure to count the shipment on December 24 lost the opportunity to confirm the shortage and take appropriate action. If the loss occurred after this shipment was received - sometime between December 24 and January 14, then we have a totally unexplained loss and no evidence at all as to what Petitioner did or did not do to safeguard the stock in the meantime. Petitioner's failure to count the shipment constituted a failure to exercise reasonable care, and the fact that it prevented the Postal Service from knowing when and where the loss occurred provides any necessary nexus between the lack of reasonable care and the loss.

CONCLUSION

Because the Postal Service has established a loss from the stock for which Petitioner was accountable, and Petitioner has not established that she exercised reasonable care in the performance of her duties relative to that stock, Petitioner is liable to the Postal Service for $2,900.00.

Bruce R. Houston
Administrative Law Judge

1. Hereafter, references to the Hearing Transcript will be designated "Tr." Petitioner's Exhibits will be "Pet. Ex." Postal Service Exhibits will be "P.S. Ex."

2. There is no issue in this case over the contents of the second box.

3. There was an additional shortage of $348, but that was later accounted for, and not charged to Ms. Clark.

4. There is some disagreement between the testimony of Ms. Clark and Mr. Robinson as to whether Mr. Robinson participated in counting the stock, but this is of no consequence, as both Mr. Robinson and Ms. Clark signed the count summary (PS Form 3294) on 1/14/94, and all parties agree that the count was correct.