In the Matter of the Petition by                                 )
                                                                                )
JAMES N. JENKINS                                                  )
P.O. Box 991                                                           )
                                                                                )
              at                                                               )
                                                                                )
Redmond, WA 98073-0991                                     )  P.S. Docket No. DCA 99-135

APPEARANCE FOR PETITIONER:                            James N. Jenkins
                                                                                P.O. Box 991
                                                                                Redmond, WA 98073-0991

APPEARANCE FOR RESPONDENT:                        Carol Manago
                                                                                Labor Relations Specialist
                                                                                United States Postal Service
                                                                                P. O. Box 90204
                                                                                Seattle, WA 98109-9401

Petitioner, James Jenkins, filed this Petition after receiving a Notice of Involuntary Administrative Salary Offsets on March 26, 1999. This Notice stated the Postal Service's intention to withhold $963.27 from Petitioner's salary to recover for a shortage in his account, discovered during an audit on January 15, 1998.

Petitioner elected a hearing based solely on written submissions, and the parties were given an opportunity to submit additional evidence and arguments, beyond that submitted with the Petition and Answer. Because Mr. Jenkins stated, in a telephone conference on May 19, 1999, that he had not received the April 30, 1999 Order, which set the schedule for filing additional evidence and arguments, the parties were given additional time to do so. Petitioner filed several additional documents. Respondent did not. Neither party submitted any sworn statements of witnesses who have knowledge of this matter. The following findings of fact are based on all the materials submitted by the parties.

1. Petitioner, James Jenkins, has been a window clerk at the Redmond, Washington Post Office since 1987. As a window clerk, he is assigned a flexible credit account. (Petition and Supplement to Petition).

2. On January 15, 1998, Petitioner's account was audited by his supervisor, Richard Ogle, and found to be short by $963.27. Petitioner signed a PS Form 3294, Cash and Stamp Stock Count and Summary, indicating that he agreed with the accuracy of the count (PS Ex. 2).⁽¹⁾ This form shows that Petitioner's opening balance was $37,737.60, but that only $36,774.33 in cash and stamp stock was present.

3. On January 16, 1998, Mr. Ogle issued Petitioner a Letter of Demand for $963.27 (PS Ex. 1).

4. Petitioner's audit history shows that, prior to the January 15, 1998 audit, he had been audited 36 times during his service as a window clerk. On nine of these audits he had shortages outside the tolerance level, and on eight of them he had overages outside the tolerance level. One of the shortages was determined to be offset by a related overage in another account. (Petition; PS Ex. 5).

5. On the five audits of his account since the January 1998 audit, Petitioner has had two shortages and one overage outside the tolerance level (PS Ex. 5).

6. Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), §429.16 contains the following provision regarding "Handling Overages:"

4> If the overage is related to a shortage in another accountability of the same employee or to a current shortage in another employee's accountability, withdraw funds from trust to clear related shortages. Managers should exercise judgment when determining the existence of a relationship that may warrant offsetting overages.

In the same section, a provision under "Handling Shortages" states:

3> When there is a balance for that employee from a previous overage within 1 year and a relationship is established, use this balance to offset part or all of the shortage.

Respondent's position is simply that the audit of January 15, 1998, showed a shortage in Petitioner's account, that this constitutes proof of loss, and that there is no reason to relieve Petitioner from the strict liability standard prescribed by postal regulations and the labor/management agreement. Specifically, Respondent argues that there is no relationship between Petitioner's shortage and any other overages in the office.

Petitioner makes several arguments. First, he totals all his shortages and overages since January 1996, concludes that the net shortage is only $305.04, and argues that the Postal Service can prove no loss greater than that amount. Second, he asserts that there is regular interaction between the several flexible credit accounts in the office, and that no consideration was given to overages in other accounts. Next, he presents facts to show that the work activity in his office has increased steadily over the years, without any increase in the number of employees, and that he has been one of the most productive employees in the office, in terms of average number of daily transactions. These facts, he argues, show that management has not provided an efficient working environment and that this should translate to a greater tolerance for errors. Finally, he argues that his overall record demonstrates that he has exercised reasonable care, giving consideration to the staffing level in the office.

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 that they followed the postal procedures established when performing their duties." Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), §141.⁽²⁾ 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. The burden then shifts to the employee to show that he or she followed established procedures, or to present other evidence that would warrant relieving the employee of liability.

Petitioner is correct in asserting that the Postal Service must prove an actual loss, and in asserting that related overages must be considered in determining whether a shortage in an employee's account equates to a loss. However, Petitioner has presented no evidence that any overage is related to his shortage. Merely combining the total of all his shortages and overages over a period of years does not show any relationship. As to overages in other employees' accounts, Petitioner has presented no evidence of amounts, dates, or anything else that would suggest a relationship.

There is no reason to doubt Petitioner's claims regarding the office workload, or his personal productivity, but there is nothing in this to warrant relieving him from the strict accountability standard quoted above. Also, Petitioner's bare assertion that he has exercised reasonable care is insufficient to relieve him of liability, in light of his audit history that shows he has had many other shortages and overages, both before and after the January 1998 audit.

The Petition is denied. Respondent may collect $963.27 from Petitioner's salary.

Bruce R. Houston
Chief Administrative Law Judge

1. "PS Ex. _" refers to tabbed documents attached to Respondent's Answer.

2. Article 28.1 of the National Agreement Between the United States Postal Service & American Postal Workers Union contains essentially the same standard. The agreement uses the phrase "exercises reasonable care," instead of the phrase "followed the postal procedures established." The former phrase was also included in Handbook F-1 before the November 1996 change. It has not been determined that there is any significant difference between the two phrases.