In the Matter of the Petition by                                                 )
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ROSEMARY WILD                                                                   )
11473 Flint Lane                                                                      )
                                                                                                )
at                                                                                             )
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Bokeelia, FL 33922-3011                                                        )    P.S. Docket No. DCA 97-477

APPEARANCE FOR PETITIONER:                                            Charles Scialla
                                                                                                453 Preakness Avenue, #5
                                                                                                Paterson, NJ 07502-1121

APPEARANCE FOR RESPONDENT:                                         R. G. Warner
                                                                                                Labor Relations Specialist
                                                                                                2203 N. Lois Avenue, Suite 1042
                                                                                                Tampa, FL 33607-7142

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner, Rosemary Wild, filed a timely Petition requesting an oral hearing under the Debt Collection Act of 1982, as amended, 5 U.S.C. §5514(a), after receiving a Notice of Involuntary Administrative Salary Offsets on December 17, 1997. The Notice advised Petitioner that she was indebted to the Postal Service in the amount of $37,595.47 resulting from a shortage in the unit reserve under her responsibility at the Downtown Station in Naples, Florida.

A hearing was held on March 4, 1998, in Naples, Florida. The Postal Service presented the testimony of five employees, and Petitioner testified on her own behalf. In addition to the transcript of the hearing, the record also contains Respondent's Exhibits 1 through 5 and Petitioner's Exhibits 1 through 6. The parties submitted written closing arguments.

FINDINGS OF FACT

1. In August 1996, Petitioner was a level 16 Supervisor of Customer Services assigned to the Naples, Florida Post Office. Included in her responsibilities in this position was the accountability for the unit reserve at the Naples Downtown Station and supervision of the window clerks there. She also had similar responsibilities for the main post office where she also was the custodian of the unit reserve and supervised the window clerks. She also supervised the Golden Gate Station and eleven contract stations in the Naples area, although she had no assigned stamp stock at these locations. Petitioner also had other miscellaneous duties at this time. In all, she supervised a total of 32 employees. (Transcript pages (Tr.) 106-108, 130, 131; Respondent's Exhibit (RX) 3).

2. On August 3, 1996, Petitioner and another employee began an audit of the unit reserve stock at the Downtown Station. After realizing that the audit would show a substantial shortage, Petitioner terminated the audit without signing the audit documents. (Tr. 13, 15, 138, 139).

3. On August 5, 1996, Petitioner informed the Naples Postmaster that there was a shortage in excess of $37,000 at the Downtown Station. She was instructed by the Postmaster to commence another audit of the unit reserve and to audit the clerks at the Downtown Station. (Tr. 86, 87, 148 149; RX-3).

4. On August 6, 1996, Petitioner and a co-worker completed an audit of the unit reserve which indicated a shortage of $37,430.11 (Tr. 24). The audits of the clerks failed to reveal any significant overages or shortages (RX-3).

5. Petitioner was on leave between August 7 and August 21, 1996 (Tr. 87, 149). However, on August 22, 1996, she and another co-worker again audited the Downtown Station's unit reserve. This audit revealed a shortage of $37,595.47. Immediately following this audit, Petitioner contacted the Postal Inspection Service which subsequently conducted an investigation into the shortage. (Tr. 34, 35, 59, 150; RX-3).

6. The investigation failed to determine the cause of the shortage. However, the investigation disclosed certain practices by Petitioner that may have contributed to the shortage. Beginning in February of 1996, Petitioner began handling her accountability at the Downtown Station in terms of dollars and cents instead of keeping stamp stock records in terms of individual stamp stock identification numbers and quantities. Petitioner began this practice in anticipation of the Downtown Station being converted from a conventional post office to a postal store. Because of this change in method of accountability, the investigation could not determine what denomination and quantity of stamps may have contributed to the shortage.¹ (Tr. 91, 92; RX-3).

7. Petitioner also revealed to the investigator that she did not keep all the stamp stock in her safe but would leave stock on a shelf in the vault where it was accessible to other clerks as well as maintenance personnel. Petitioner had been warned by her postmaster that this practice was unauthorized and, in fact, unnecessary. Although Petitioner claimed that she needed another safe because she did not have enough room in her safe to store all her stock, on at least one occasion the postmaster personally rearranged her stamp stock to place all of it in her safe. The postmaster also explained to Petitioner that if the Stamp Distribution Office (SDO) sent more stamps than could be physically placed in the safe, then she could always "register" the excess stamps back to the SDO or even "register" the excess to herself. (Tr. 70, 97, 98, 151, 157; RX-3).

8. Section 441.11 of Handbook F-1, Post Office Accounting Procedures², states that the unit reserve stock must not exceed a six week supply of each item. The Naples Downtown Station had average weekly sales of $30,000 of stamps, thereby indicating that Petitioner should maintain a stamp stock accountability of approximately $180,000. Instead, and despite being told by the postmaster to reduce her accountability, Petitioner maintained an accountability in excess of $370,000. (Tr. 100, 101, 115, 134).

9. Petitioner admitted to the investigator that on at least three occasions since the last audit of the Downtown Station's unit reserve, she had given stock from her accountability to one of her clerks to make up a clerk shortage without transferring the value of the stock to the accountability of the clerk. The amount of these transfers was in excess of $3,300.00. When making these stock transfers, Petitioner made no attempt to first determine whether there was a corresponding overage in her own accountability that would justify transferring the stock to make up the shortage of the clerk. (Tr. 73, 144; RX-3).

10. Petitioner's only explanation for the shortage in her accountability at the Downtown Station was that she was overworked and that she had previously requested to be relieved of responsibility for the Downtown Station. Petitioner never made this request in writing, and the postmaster had no recollection of Petitioner ever requesting to be relieved of responsibility for the Downtown Station. (Tr. 106, 137; RX-3).

DECISION

Respondent argues that the evidence establishes that there was a shortage of $37,595.47 in the reserve stock at the Downtown Station while the stock was under Petitioner's responsibility. Respondent also contends that the evidence demonstrates that Petitioner did not follow Postal Service procedures and failed to exercise reasonable care in the performance of her duties as reserve stock custodian. Respondent believes, therefore, that Petitioner should be held strictly liable for the loss to the Postal Service of the $37,595.47 shortage.

Petitioner does not dispute that a shortage of $37,595.47 occurred in the unit reserve of the Downtown Station while she was the custodian of that stock. Petitioner's only defense in this proceeding is that she was so overworked with the many responsibilities she was performing as a Supervisor of Customer Services (See Finding of Fact No. (FOF) 1) that, under the circumstances, she exercised reasonable care, and should be relieved of responsibility for the loss.

The applicable standard of liability in this dispute can be found in Subsection 132, Other Employees, of Handbook F-1, Post Office Accounting Procedures. This section provides 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. To establish a prima facie case, the Postal Service must only prove that a loss occurred and that Petitioner was accountable for the stock from which the loss occurred. Respondent is not required to prove any negligence or dereliction on the part of Petitioner. Once Respondent makes this showing, Petitioner is required to demonstrate that she exercised reasonable care to avoid being held strictly liable. When an audit shows a shortage relative to a previously established balance, this constitutes proof of a 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 (September 2, 1997); Alma Souice-Williams, P.S. Docket No. DCA 97-176 (November 4, 1997).

Petitioner participated in the audit and does not dispute the accuracy of its findings. Furthermore, a prior audit was conducted which found essentially the same shortage ($37,430.11 vice $37,595.47). (FOF 4, 5). There is no evidence of corresponding overages in other accounts to suggest that there was no actual loss (FOF 4). Thus, unless Petitioner establishes that she exercised reasonable care, Respondent has met its burden in this case.

The evidence in this case demonstrates a significant failure by Petitioner to exercise reasonable care in the performance of her duties as reserve stock custodian. Petitioner issued stamp stock to her clerks without transferring the value of the stock issued to the clerk's accountability (FOF 9); she left stamp stock from the unit reserve on shelves in the vault where it was accessible to other employees (FOF 7); and, despite being admonished not to do so, she maintained a reserve stock balance twice as large as was specified in Handbook F-1 (FOF 8).

Petitioner's defense that she was overworked does not excuse her failure to exercise reasonable care in the performance of her duties. Such arguments may justify a waiver of all or part of the debt. However, this forum has no authority to grant a waiver. See Gloria Hall, P.S. Docket No. DCA 96-389 (February 11, 1997); Raymond J. Voisine, P.S. Docket No. DCA 95-22 (March 21, 1995).

Accordingly, this Petition is denied, and Petitioner is liable to repay $37,595.47 to the Postal Service.

William K. Mahn
Administrative Judge

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1. It is unclear why Petitioner undertook this change in method of accounting prior to the actual conversion to a postal store. At the time of conversion to a postal store, virtually all the stock on-hand at a conventional post office is redeemed and new stock is issued in a form suitable to the postal store concept, i.e., postal store stamp stock is packaged in shrink wrapped plastic, containing magnetic tabs, since it is displayed and available to the customers. (Tr. 93, 119).

2. 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.