In the Matter of the Petition by                               )
                                                                              )
SHIRLEY MORRIS                                                  )
15 Cold Spring Road                                             )
                                                                              )
at                                                                           )
                                                                              )
Stamford, CT 06905-4203                                     )   P.S. Docket No. DCA 98-196

APPEARANCE FOR PETITIONER:                          Shirley Morris
                                                                              15 Cold Spring Road
                                                                              Stamford, CT 06905-4203

APPEARANCE FOR RESPONDENT:                      Paula Tomaszewski
                                                                              Labor Relations Specialist
                                                                              United States Postal Service
                                                                              141 Weston Street
                                                                              Hartford, CT 06101-9411

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner filed a brief supplement to the Petition. Respondent filed an Answer, with several documents attached, and also filed a Supplemental Answer, with several additional documents. The following findings of fact are based on all the materials submitted by the parties.⁽¹⁾

FINDINGS OF FACT

1. Petitioner has been a window clerk for approximately nine years. At the time pertinent to this case, she worked at a branch of the Greenwich, Connecticut Post Office known as the Greenwich Avenue Facility.

2. Petitioner's flexible stamp credit was audited on March 10, 1995 by Richard Nemetz, Supervisor of Customer Services, and found to be $216.90 short. Petitioner signed a PS Form 3294 on that date, March 10, 1995, indicating that she agreed with the count. (Rx. 3).

3. A letter of demand for $216.90, signed by Mr. Nemetz on March 22, 1995, was given to Petitioner on March 24, 1995, and the Notice of Involuntary Administrative Salary Offsets, signed by Postmaster Robert Pilkington on April 14, 1998 was received by Petitioner on April 17, 1998 (Rxs. 5 and 6).⁽²⁾

DECISION

Petitioner argues four points. First, she argues that the Postal Service has presented no evidence that she was negligent in the performance of her duties, or of any overt act by her that caused the shortage. Second, she argues that the amount of the alleged debt is incorrect. Third, she asserts that the proposed repayment schedule would cause a hardship. Finally, she argues that the determination of the existence of a debt was not made by the "Postmaster/Installation Head" as required. None of these arguments has merit.

The standard for determining an employee's liability in a case such as this provides that employees to whom postal funds and accountable paper are consigned (such as Petitioner) "are held strictly accountable for any loss unless evidence establishes they exercised reasonable care in the performance of their duties." Postal Service Handbook F-1, Post Office Accounting Procedures (April 1991), Section 132.⁽³⁾ Respondent's burden of proof in a case of unexplained shortage is to show that a loss occurred from an account for which the employee is accountable. Respondent is not required to prove any specific dereliction, or act of negligence, by Petitioner. 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 or the previously established balance, or otherwise suggests that there may have been no actual loss. In this case there is no such evidence, and a loss of $216.90 is established. The burden then shifts to the employee to show that he or she exercised reasonable care or followed established procedures, or to present other evidence that would warrant relieving the employee of liability.

In this case, Petitioner has presented no evidence at all that she exercised reasonable care or followed established procedures, or that any other reason exists to relieve her of liability.

As to the amount of the debt, Petitioner offers no evidence as to why the amount is incorrect, nor does she state what she believes to be the correct amount. It is noted that the Form 3294 contains some scratched out numbers on the line indicating the "opening balance," but the amount of the shortage is clearly written, and Petitioner noted no objection to this number when she signed the form stating that she agreed to the count.

On the issue of hardship, Petitioner has presented nothing, although she was informed in the Order dated May 28, 1998, that she was required to present some evidence of hardship and propose an alternative payment schedule.

Petitioner's contention on the matter of who determined the existence of the debt seems to be that the Debt Collection Act requires a postmaster or "installation head" to make this determination. The only authority she cites for this, Arnold v. United States, 404 F.2d 953 (Ct. Cl. 1968), deals with another statute and is inapplicable. In this case, however, the postmaster did make the determination that the debt existed when he signed the Notice of Involuntary Administrative Salary Offsets on April 14, 1998. This is consistent with provisions of the Employee and Labor Relations Manual (ELM) that cover Debt Collection Act procedures. ELM §462.11 states, in pertinent part, "Depending on the circumstances of a particular case, the determination of a debt, the collection of which is covered by this subchapter, may be made by an official in the field or at the Minneapolis Accounting Service Center (ASC)."

If Petitioner is arguing that the postmaster must do the actual audit himself, I know of no authority that would support that argument. Postal Service Handbook F-50, Examination of Stamp Credits and Main or Unit Reserve Stocks, §212.2 states that "Examinations of stamp credits will be conducted by supervisory personnel at stations, branches, and main office window units." Mr. Nemetz was a proper person to conduct the audit of Petitioner's flexible stamp credit.

The Petition is denied. Respondent may collect $216.90 from Petitioner's salary.

Bruce R. Houston
Chief Administrative Law Judge

______________________________

1. References to documents in the file are to the numbered exhibits attached to Respondent’s Answer (Rx._).

2. The postmaster’s letter was not titled “Notice of Involuntary Administrative Salary Offsets,” but it contained information on the employee’s right to petition for a hearing under the Debt Collection Act, and the parties have treated it as being the required Notice.

3. The current Handbook F-1, effective in November 1996, contains slightly different language. The earlier edition is cited here because the shortage occurred before November 1996.