FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner, David Morgan, filed three timely Petitions requesting an oral hearing under the Debt Collection Act of 1982, as amended, 5 U.S.C. §5514(a), after receiving three separate Notices of Involuntary Administrative Salary Offsets on April 25, 1997.

A hearing was held on August 6, 1997, in Los Angeles, California. The Postal Service presented the testimony of three employees and Petitioner testified on his own behalf. In addition to the transcript of the hearing, the record also contains Respondent's Exhibits R1-R10 and R12-R16 and Petitioner's Exhibits P3-P5 and P12. At the close of the hearing the parties requested and were given the opportunity to submit written closing statements. Only Respondent submitted a written closing statement.

FINDINGS OF FACT

1. Petitioner is a window clerk at the Morningside Park Station of the Inglewood, California Post Office. He has held this position since 1987. (Respondent's Exhibit (RX) 1; Transcript Page (Tr.) 111).

2. On November 6, 1996, Petitioner's account was audited by his supervisor. Petitioner participated in this audit and signed the audit documents, thereby indicating his agreement with the accuracy of the count. This audit disclosed a shortage of $1,304.48 in postal funds and stamp stock in his account. (Tr. 17, 18; RX 15).

3. On November 19, 1996, Petitioner's accountability was again audited by two inspectors from the Postal Inspection Service. This audit disclosed an overage of approximately $60.00. At the same time, the inspectors attempted to reconcile the amount of issuance and the amount recorded with respect to twelve money orders issued by Petitioner during the period March 1, to July 15, 1996. Each of these money orders had been issued by Petitioner in an amount substantially larger than the amount indicated on his daily receipts. The total difference between the amount of issuance and the amount recorded and accounted for by Petitioner was $3,208.27. (RX 1, 10; Tr. 25-30).

4. Every Postal Service money order has a serial number. It is a three-part form, with each part separated by carbons. The top part is the redeemable money order which is issued to the customer. The second part is the customer receipt and the third part is the Postal Service receipt, or "voucher". When issued, the entire three-part form is run through an imprinter which imprints the identification of the issuing office, the date of issuance and the amount. For each money order issued, the issuing clerk should record the serial number and the issued amount in his Integrated Retail Terminal (IRT). At the end of the day the clerk then compares the retained money order vouchers with his IRT tape of the day's transactions to insure the accuracy of the amounts indicated on his IRT tape. (Tr. 67-69). If the clerk cannot find the voucher for an issued money order, he or she is instructed to create a "facsimile" of the missing voucher (Tr. 70, 126).

5. Petitioner did not turn in any vouchers or facsimiles with respect to any of the twelve under-reported money orders. However, Petitioner did turn in vouchers for the money orders he had correctly issued and recorded in the same amount. (Tr. 70-73).

6. In conducting their investigation, the inspectors identified Petitioner as the clerk issuing the money orders by comparing the serial numbers on the money orders in question with Petitioner's IRT tapes. The inspectors then compared the amount of issuance of the twelve redeemed money orders with the amount indicated on Petitioner's IRT tape for the date of issuance. (Tr. 65, 67).

7. If Petitioner had collected the correct amount from the customer when issuing each of the twelve money orders, but then erroneously recorded a lower amount on his IRT tape, Petitioner would have a corresponding overage in his accountability. In this case, the Postal Service would not suffer a loss due to Petitioner's actions. However, an audit of Petitioner's accountability on July 23, 1996, immediately after the period of time during which the under-reported money orders were being issued, disclosed a shortage of $778.75. In fact, over the prior year, Petitioner's audits never had overages but instead, had shortages. (RX 10; Tr. 96).

8. Petitioner's only explanation for under-reporting the twelve money orders and the failure to have submitted vouchers or facsimiles for each, was that he was a careless employee. He would sometimes issue 60 to 70 money orders in a day and would become "sloppy". (Tr. 111, 120).

9. On April 25, 1997, Respondent issued three Notices of Involuntary Administrative Salary Offsets (Notices) to Petitioner. The first Notice advised Petitioner that he was indebted to the Postal Service in the amount of $3,208.20⁽¹⁾, resulting from shortages in his money order accountability at the Morningside Park Station of the Inglewood, California Post Office. The Petition filed with respect to this Notice was docketed as P. S. Docket No. DCA 97-162. The second Notice advised Petitioner that he was indebted to the Postal Service in the amount of $1,304.48 resulting from an audit shortage in his accountability at the Morningside Park Station. The Petition filed with respect to this Notice was docketed as P.S. Docket No. DCA 97-163. The third Notice advised Petitioner he was indebted to the Postal Service in the amount of $428.00, also allegedly resulting from shortages in his money order accountability. The Petition filed as a result of this Notice was docketed as P.S. Docket No. DCA 97-164. However, the parties have stipulated that this Notice was issued in error by Respondent⁽²⁾. Accordingly, the parties are no longer contesting P.S. Docket No. DCA 97-164 and agree to have it dismissed. (Tr. 61).

10. Petitioner received the Notices on May 1, 1997, and timely filed a Petition for each Notice on May 15, 1997. (Petitions in P.S. Docket Nos. DCA 97-162-164).

DECISION

Petitioner makes two arguments in these Petitions. Petitioner argues that he was a careless window clerk and management was aware of his carelessness. Because management was aware of his careless approach to his job, Petitioner argues that it should not now be allowed to recover these alleged debts from him. Petitioner also argues that there are numerous shortages in the accounts of other employees at the Inglewood Post Office but he is being singled out for this collection effort.

Respondent argues that Petitioner is responsible for losses to the Postal Service in the amount of the $1,304.48 shortage found in Petitioner's account during the November 6, 1996 audit and the $3,208.27 loss resulting from Petitioner's failure to properly account for the value of twelve money orders issued during the period of March 1, to July 15, 1996. Respondent further argues that Petitioner failed to conscientiously follow Postal Service policies and procedures or to exercise reasonable care and, therefore, is liable to repay to the Postal Service the sums of $1,304.48 and $3,208.27.

The applicable standard of liability in this dispute can be found in Subsection 132, Other Employees, of Handbook F-1, Post Office Accounting Procedures.⁽³⁾ This section provides, inter alia, that employees who are assigned responsibility for postal funds and other accountable paper will be held strictly liable for any loss unless they can demonstrate that they exercised reasonable care in the performance of their duties. Thus, in the case of the $1,304.48 shortage found in Petitioner's flexible credit or the $3,208.27 under-reported amount of twelve money orders issued by Petitioner between March 1, and July 15, 1996, the Postal Service must only prove that a loss occurred and that Petitioner was accountable for the stock and money orders from which the losses occurred. Respondent is not required to prove any negligence or dereliction on the part of Petitioner.

Respondent has met that burden in this proceeding. The evidence demonstrates that Petitioner had a shortage of $1,304.48 in his window clerk account at the Morningside Park Station. (Finding of Fact No. (FOF) 2). When a properly conducted audit shows a shortage relative to a previously established balance, this constitutes proof of loss unless other evidence raises sufficient doubt about the accuracy of the audit or the previously established balance, or otherwise suggests that there may have been no actual loss. Richard G. Dreher, P.S. Docket No. DCA 97-223 (Sept. 2, 1997). Petitioner, however, did not dispute the shortage found by the November 6, 1996 audit, or offer any explanation for it.

The evidence further demonstrates that Petitioner issued twelve money orders in amounts substantially larger than the amounts he reported and for which he paid over funds (FOF 3). Since Petitioner's account did not contain an overage corresponding to the difference between the greater amount in which the twelve money orders were issued, as compared to the amount Petitioner reported, the Postal Service suffered a loss in the amount of $3,208.27. Here again, Petitioner has failed to offer any explanation for the loss (except to claim he was a careless employee). In these circumstances⁽⁴⁾, Petitioner is liable to repay the Postal Service the entire $3,208.27 loss it suffered as a consequence of Petitioner's failure to properly account for the twelve money orders in question.

Finally, Petitioner testified that he is being singled out for collection of a shortage. However, he has failed to offer any evidence to demonstrate that the other employees are similarly situated. Simply stated, there is not a sufficient record in these Petitions to make any finding with respect to whether, and, if so, why Petitioner is being singled out for repayment of shortages in his accountability.

Accordingly, the Petitions filed in DCA 97-162 and DCA 97-163 are denied. Petitioner is liable to repay to the Postal Service both the $1,304.48 shortage in his flexible credit and the $3,208.27 loss resulting from issuing twelve money orders in amounts larger than reported by Petitioner. The Petition filed in DCA 97-164 is dismissed.

William K. Mahn
Administrative Judge

1. The correct total of under-reported amounts on the twelve money orders is $3,208.27, a $.07 difference (RX 10).

2. The $428.00 alleged indebtedness involved in this Notice and Petition was included in the $3,208.20 being sought in P.S. Docket No. DCA 97-162 (Transcript page (Tr.) 61).

3. The F-1 Handbook was revised effective November 1996. However, because the events relevant to this case arose before then, the April 1991 edition applies. References in this decision to the F-1 Handbook are to the 1991 edition.

4. Petitioner made no attempt to argue or offer evidence to demonstrate that he exercised reasonable care in the performance of his duties, but instead, repeatedly stated that he was a careless employee. (Tr. 120, 121, 123, 126, 130, 135).