In the Matter of the Petition by                              )
                                                                              )
SIDNEY RANTZ                                                     )
315 Cove Road                                                     )
                                                                              )
   at                                                                        )
                                                                              )
Stamford, CT 06902-6122                                    )     P.S. Docket No. DCA 98-199

APPEARANCE FOR PETITIONER:                          Sidney Rantz
                                                                              315 Cove Road
                                                                              Stamford, CT 06902-6122

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, Sidney Rantz, filed this Petition under the Debt Collection Act after receiving a Notice of Involuntary Administrative Salary Offsets dated April 14, 1998, from his postmaster. This Notice stated the Postal Service's intention to withhold $266.76 from Petitioner's salary to recover for a shortage in Petitioner's flexible credit account. Petitioner asked for a hearing based solely on written submissions.

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 three years. At the time pertinent to this case, he worked at a branch of the Greenwich, Connecticut Post Office known as the Greenwich Avenue Facility.⁽¹⁾

2. Petitioner's flexible stamp credit was audited on October 17, 1995 by a supervisor named Esposito, and found to be $261.76 short. A recount was conducted the next day, with the same result. Petitioner signed a PS Form 3294 on that date, October 18, 1995, indicating that he agreed with the count. (Rx. 4, RSx. 5).

3. A letter of demand for $261.76, signed by the supervisor, Esposito, was given to Petitioner on October 18, 1995, and the Notice of Involuntary Administrative Salary Offsets, signed by Postmaster Robert Pilkington on April 14, 1998 was received by Petitioner on April 16, 1998 (letter filed with Petition).

DECISION

Petitioner argues four points. First, he argues that the Postal Service has presented no evidence that he was negligent in the performance of his duties, or of any overt act by him that caused the shortage. Second, he argues that the amount of the alleged debt is incorrect. Third, he asserts that the proposed repayment schedule would cause a hardship. Finally, he argues that the determination of the existence of a debt was not made by the "Postmaster/Installation Head" as required. Only the second 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 $261.76 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 he exercised reasonable care or followed established procedures, or that any other reason exists to relieve him of liability.

As to the amount of the debt, Petitioner does not state what he believes to be the correct amount, but the figure $266.76 in the Notice of Involuntary Administrative Salary Offsets is clearly incorrect. All other documents show that the shortage was $261.76. Petitioner noted no objection to this number when he signed the form stating that he agreed to the count on October 18, 1995.

On the issue of hardship, Petitioner has presented nothing, although he was informed in the Order dated June 5, 1998, that he 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 he 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." The person who conducted the audit, Esposito, signed in the "Supervisor" block of the Form 3294, and Petitioner has presented no evidence that Esposito was not a proper person to conduct the audit of Petitioner's flexible stamp credit.

The Petition is granted in part and denied in part. Respondent may collect $261.76 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._), and to Respondent’s Supplemental Answer (RSx._).

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.