In the Matter of the Petition by                              )
                                                                             )
WILLIAM B. THOMPSON                                       )
756 San Martin Place                                            )
                                                                             )
  at                                                                        )
                                                                             )
Thousand Oaks, CA 91360-1324                        )      P.S. Docket No. DCA 98-190

APPEARANCE FOR PETITIONER:                         William B. Thompson
                                                                             756 San Martin Place
                                                                             Thousand Oaks, CA 91360-1324

APPEARANCE FOR RESPONDENT:                     Tom Cloonan
                                                                            Labor Relations Specialist
                                                                            United States Postal Service
                                                                            836 Anacapa Street
                                                                            Santa Barbara, CA 93102-9401

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner, William B. Thompson, filed a timely Petition for a hearing based on written submissions under the Debt Collection Act of 1982, as amended, 5 U.S.C. §5514(a), after receiving a Notice of Involuntary Administrative Salary Offsets. The Notice advised Petitioner that the Postal Service intended to make deductions from Petitioner's salary to collect $4,640 resulting from a shortage in the main stock at the Woodland Hills, California Post Office.

Both parties have submitted evidence in support of their positions.

FINDINGS OF FACT

1. Petitioner is the finance supervisor and custodian of the main stamp stock for the Woodland Hills, California Post Office (Declaration of Randi Schmalberg; Letter of Demand).

2. The "main stock" of a post office consists of "all stamps and stamped paper, nonpostal items, and philatelic products" received by the post office and held until they are consigned to branches or window clerks (Handbook F-1, Post Office Accounting Procedures, November 1996, Glossary).

3. On September 22, 1997, an audit was conducted of the main stock, and a shortage of at least $4,640 was discovered.⁽¹⁾

4. Respondent issued Petitioner a Letter of Demand on September 30, 1997, seeking repayment of $4,640 (Letter of Demand).

5. On April 10, 1998, Respondent issued Petitioner a Notice of Involuntary Administrative Salary Offsets indicating its intention to collect the amount of $4,640 by deductions from Petitioner's salary (Notice of Involuntary Administrative Salary Offsets). Petitioner filed a timely Petition challenging that collection.

6. The F-1 Handbook establishes liability for financial losses to assigned accountability as follows:

"141 Other Employees' Liability

The postmaster or responsible manager consigns postal funds and accountable paper to other career employees. Employees are held strictly accountable for any loss unless evidence establishes that they followed the postal procedures established when performing their duties." (F-1 Handbook, Section 14).

7. In an audit of the main stock in August 1996, which was the last audit before that of September 22, 1997, there was an overage of about $60 (PS Form 3294 dated August 7, 1996).

8. The main stock is stored inside a wire mesh, cage-like "vault" and is accessed through a sliding, lockable wire-mesh door. In 1994, Petitioner expressed concern about the security of the door, and the postmaster authorized him to buy a padlock and chain. The chain was looped through the wire mesh and metal frame of the door and the adjacent wire mesh wall and then padlocked, preventing movement of the door. (October 11, 1997 Memorandum; Photographs 1 and 2 attached to Respondent's June 1, 1998 Submission).

9. Petitioner kept one key to the padlock, and the duplicate key was placed in a duplicate key envelope (PS Form 3977) and secured in the postmaster's secretary's office. Sometime in July or August 1997, Petitioner did not bring his key to the office, and when he and another supervisor looked for the duplicate key envelope, they could not find it. Petitioner immediately purchased a replacement padlock. (Declaration of Randi Schmalberg).

10. Under Postal Service rules, when a Form 3977 containing a duplicate key is discovered to be missing, "the person having custody [of the duplicate key envelope] must immediately notify the person having jurisdiction over the safe, vault, or stamp credit. Perform an examination of inventory. Change combinations or locks, and prepare a new Form 3977." (F-1 Handbook, Section 372.4).

11. By memorandum dated February 10, 1998, the postmaster recommended that Petitioner receive a Special Achievement Award for his performance during fiscal year 1997 (September 1996 through September 1997). In the letter, the postmaster recognized that Petitioner was proficient in, among other things, managing the window clerks, performing audits and handling bank deposits of Postal Service funds. The letter concluded, "Mr. Thompson was an asset to the Woodland Hills Post Office in fiscal year 1997 and continues to be so. He is a well rounded manager, with knowledge of all functional areas and deserves to be rewarded for his accomplishments and efforts." (Special Achievement Award Memorandum dated February 10, 1998).

DECISION

Respondent argues that Petitioner is strictly liable for the shortage in the main stock because the stock was under his exclusive control, and he has not shown any reason to relieve him of liability. Petitioner argues that he should not be held liable because Respondent failed to provide adequate security for the main stock vault when it required him to use a chain and padlock to secure the door. He also contends that the loss of the envelope containing the duplicate key to the padlock relieves him of liability for the ensuing shortage because Respondent failed to notify him when the key was missing and because his stock was not counted when the loss was discovered.

In this case, there is no dispute that there was a shortage in the main stock of at least $4,640. This is a loss to Respondent, and Petitioner will be liable unless he can show that security lapses by Respondent led to the shortage or that he followed postal procedures when performing his duties (Finding 6).

Petitioner has not shown that Respondent failed to provide adequate security for the main stock. Any suggestion that the September 1997 shortage resulted from a 1994 problem with the lock on the vault door fails because Petitioner has not shown that the use of the chain and padlock was inadequate to address any possible problem with the door. While a permanent repair of the lock on the door might have been preferable, there has been no showing that the chain and padlock, if properly used, failed to secure the vault. Furthermore, the August 1996 audit demonstrates that the September 1997 shortage could not have stemmed from a problem with the lock that preexisted implementation of the padlock and chain.

Petitioner also argues that the loss of the duplicate key envelope for the vault (Finding 9), relieves him from liability because Respondent never notified him of its loss or conducted a count when the loss was noticed. However, there is no evidence that anyone knew the key was lost until Petitioner asked to use it in July or August of 1997 and it could not be located. Thus, Respondent did not neglect to notify Petitioner when the loss was discovered. The F-1 Handbook directs that a count of the stock be conducted when a duplicate key envelope is lost (Finding 10), but Petitioner was in a position to conduct such a count, and he has not explained why he did not.

Nevertheless, if, through no fault of Petitioner's, the duplicate key fell into unauthorized hands, Petitioner would not be liable for a loss caused by unauthorized use of the key to gain access to the vault. The record does not reflect what happened to the key or whether the missing key had any relationship to the loss to the main stock. However, it is not necessary to decide the impact on this Petition of the loss of the duplicate key envelope because there are other grounds on which to decide the case even if the lost key envelope does not provide a basis for relieving Petitioner of the debt.

Petitioner will not be liable for an unexplained loss to the main stock if the evidence shows that he followed established procedures. In his submissions in this proceeding, he has asserted that he followed established procedures in managing the main stock. Additionally, his receipt of a Special Achievement Award (Finding 11) for the same period during which the shortage likely developed suggests that management believed he followed established procedures. The postmaster's recommendation for the award does not specifically address Petitioner's management of the main stock, but the laudatory comments regarding Petitioner's management of the finance and accounting functions in the post office are at least indirect evidence of his capability and suggest that he followed established procedures in managing the main stock. Respondent has offered no evidence that would suggest otherwise. Accordingly, Petitioner is not liable for the loss to the main stock.

The Petition is sustained.

Norman D. Menegat
Administrative Judge

________________________________________

1. The record does not contain a document showing the results of the count. The only contemporaneous record, an IRT-generated Form 3958, shows an entry for “Stock Shortage” of $4,940 on September 22, 1997. However, in their correspondence and submissions, both parties acknowledge the existence of a $4,640 shortage for which Respondent seeks to recover.