In the Matter of the Petition by                                )
                                                                                )
DEBBIE ECCLES                                                      )
P.O. Box 341                                                           )
                                                                                )
              at                                                               )
                                                                                )
Klamath Falls, OR 97601-0015                                )  P.S. Docket No. DCA 99-148

APPEARANCE FOR PETITIONER:                            Jim Alexander
                                                                                P.O. Box 4004
                                                                                Medford, OR 97501-0144

APPEARANCE FOR RESPONDENT:                        Cindy Mitchell
                                                                                Labor Relations Specialist
                                                                                United States Postal Service
                                                                                P.O. Box 2089
                                                                                Portland, OR 97208-2089

Petitioner, Debbie Eccles, filed a Petition requesting a 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 from Respondent, United States Postal Service. The Notice informed Petitioner that Respondent intended to deduct a total of $1,489.87 from her salary to make up two shortages discovered in audits of her window credit.

A hearing was held at which the parties presented evidence and made arguments in support of their positions.

1. Until late in 1998, Petitioner was a window clerk in the Klamath Falls, Oregon Post Office (Respondent’s Exhibit ("RX") A, pp. 10-12).

2. Petitioner had first been assigned as a window clerk in 1990. At that time, she received two weeks of classroom training and a week of on-the-job training in the duties and practices of a window clerk. (Transcript of Hearing, pages ("Tr.") 64, 172-173).

3. Petitioner worked as a window clerk until August of 1993, and she did not return to a window clerk position until October 1996. Before returning to the window, she was given a day or two of brush-up training at the window by a certified trainer. The trainer was satisfied that Petitioner was capable of working as a window clerk on her own. The retraining concluded when Petitioner said that she felt ready to resume her duties as a window clerk. (Tr. 64, 92-94, 97, 99, 100, 104-106, 171-173, 190; Petitioner’s Exhibits ("PX") 27, 28).

4. On October 25, 1996, Petitioner was assigned sole responsibility and became accountable for a window credit of stamps, accountable paper and cash, which she used for conducting transactions with the public (Tr. 172; RX D, p. 5; Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996) ("F-1 Handbook"), Section 426.1).

5. Petitioner’s window credit was counted regularly and the amount of the cash and stamps she had on hand compared with what should have been in her credit according to the regularly maintained records of the post office. Shortages occurred in all but one of these counts. The dates of the counts were February 20, 1997 ($81.58 shortage); June 19, 1997 ($280.55 shortage); October 16, 1997 ($561.43 shortage); February 12, 1998 ($523.26 shortage); May 6, 1998 ($144.99 shortage); June 9, 1998 ($594.44 shortage); August 4, 1998 ($10.14 overage); October 8, 1998 ($477.06 shortage) and December 3, 1998 ($1,012.81 shortage). (Tr. 60-63, 104, 110; RX B, pp. 2-14; RX D, pp. 4, 5).

6. The results of the counts were recorded on PS Form 3294, Cash and Stamp Stock Summary, and Petitioner signed the forms reflecting the October 8 and December 3, 1998 counts, signifying her agreement with the counts (RX B, pp. 2-14).

7. The October 16, 1997 count revealed a shortage of $881.43. However, it was later determined that during the period before the count, Petitioner had exchanged paperwork with another clerk showing a transfer of $320 worth of stamps to Petitioner, but she had neglected to get the stamps. The transaction was corrected, and Petitioner’s shortage was reduced by $320. (Tr. 96; RX C, pp. 11-12).

8. In late 1997 or early 1998, because of Petitioner’s continued shortages, the postmaster assigned a certified on-the-job instructor for window clerks to observe Petitioner while she worked at the window to see if the source of her shortages could be detected. The instructor observed Petitioner at work for three days, but found no problems and concluded that Petitioner exercised reasonable care and followed established procedures during those three days. (Tr. 18-20, 22, 28; PX 25).

9. The May 6, 1998 shortage was initially $144.99, but that was later reduced to $84.99 when it was discovered that Petitioner had mistakenly undercharged a customer for stamped envelopes by $60. The customer was persuaded to bring in the underpayment, and the amount of Petitioner’s shortage was reduced. Petitioner repaid that adjusted amount by voluntary salary deductions in June and July 1998. (Tr. 65-66, 69, 95, 111, 183, 187; RX C, p. 13; RX F, p. 3; PX 3).

10. On or about June 9, 1998, a customer came to Petitioner’s window to buy stamps and paid for the stamps with a check in the amount of $307, but the check did not show up in Petitioner’s credit. When asked about the check, Petitioner told her supervisor that she had returned the check to the customer. Actually, the check had become mixed in with some rate charts and other materials that Petitioner took home. Petitioner did not return the check to the post office until July 15, 1998. (Tr. 65, 70-71, 95-96, 111, 183, 187-188, 193-195; RX F, pp. 4-8).

11. On October 8, 1998, Respondent issued Petitioner a Letter of Demand for the $477.06 shortage discovered that day, and on December 3, 1998, Respondent issued a Letter of Demand for the $1,012.81 shortage discovered that day. (Tr. 136, 179; PX 9, pp. 1-2; RX C, pp. 17-20).

12. On March 29, 1999, Respondent issued Petitioner a Notice of Involuntary Administrative Salary Offsets in the total amount of $1,489.87, combining the October 8 and December 3, 1998 shortages in one Notice (PX 1).

13. Petitioner filed a timely Petition for a hearing.

14. Postal Service regulations establish liability for financial losses from assigned window credits as follows:

"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." (Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), Section 141).

15. In March 1999, at the request of the Klamath Falls APWU president, a surprise audit of the financial operations of the post office was conducted by financial analysts from the Portland office that supervised Klamath Falls. The auditors concluded that the Klamath Falls Post Office was very well run from a financial standpoint. They noted no significant financial or security problems, and nothing that would likely have affected window clerks’ accountabilities. (Tr. 32-36, 56, 145, 178; PX 6; RX D).

16. Each window clerk has a computer disk on which are recorded the clerk’s financial transactions. These disks occasionally "crash," and Petitioner’s did on a few occasions. When that happens, the clerk has to reconstruct the transactions of the day. This is a time-consuming task, but if done carefully results in the establishment of the correct balances in the clerk’s account. There are checks and balances in the system to detect any errors made in reconstructing the disk. (Tr. 50-51).

17. The F-1 Handbook allows offsetting the overage of one clerk against the shortage of another in the following circumstances:

"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." (Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), Section 429.16; see Tr. 101, 107, 116, 122).

18. When offsetting accounts,

"The postmaster or designee must decide whether to adjust shortages and overages found in the audit of stamp credits and other cash accountability. If a postmaster believes that an overage in one employee’s credit should be offset against a shortage in another employee’s credit because a relationship between the differences exists, secure the written agreement of the employee from whom the overage is to be withdrawn." (Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), Section 429.16).

19. Due to her financial circumstances, Petitioner can reasonably afford to repay the debt claimed by Respondent at the rate of $50 per month (Tr. 170; PX 10).

In a Debt Collection Act proceeding, it is Respondent’s burden to demonstrate that it suffered a loss in the amount of the debt claimed against the employee. Normally, demonstrating a shortage in the employee’s credit is sufficient to do this, and Respondent has demonstrated that Petitioner was short a total of $1,489.87 for the counts of her window credit on October 8, 1998, and December 3, 1998 (Finding 5). Petitioner has not challenged the accuracy of the counts (Finding 6), but Petitioner argues that Respondent did not suffer a loss because there were other overages in the office—one in a clerk’s credit and one in the main stock—that should have been used to offset her shortages. The overages were applied to shortages of two other clerks when Respondent determined that there was a relationship between the shortages of those clerks and the overages existing in the office. Petitioner appears to argue that she rather than the other two clerks should have received the benefit of the overages. Regardless of the other clerks’ entitlement to the offsets, however, Petitioner has shown no relationship between her shortages and the overages at issue except that she had transactions with the clerk who had an overage and with the main stock. That is insufficient to establish a relationship. That there were overages in other accounts in the post office does not mean that Petitioner is entitled to a credit or that Respondent did not suffer a loss due to the shortages in Petitioner’s credit.

Petitioner also argues that "crashes" in her computer disk make the existence of the shortages suspect. Respondent demonstrated that such crashes, while certainly inconvenient and tedious to reconstruct, should not result in incorrect accountability totals if the reconstruction is done carefully (Finding 16).

Accordingly, Respondent has demonstrated that it suffered a loss in the amount of $1,489.87 due to the shortages in Petitioner’s window credit on October 8 and December 3, 1998.

Petitioner argues that she received inadequate training when she returned to the window in 1996, and that this lack of training excuses her from responsibility for the shortages at issue. Respondent demonstrated that Petitioner received adequate training. The instructor who trained Petitioner and Petitioner herself believed at the time of the training that she had received enough training. (Finding 3). Petitioner’s claim of inadequate training is rejected.

Petitioner argued that she followed established procedures and exercised reasonable care and that she should, therefore, not be held strictly accountable for the losses at issue. Petitioner offered the testimony of three window clerks who had worked from time-to-time at windows near hers to the effect that she was a careful clerk who followed established procedures. However, the time each had to observe Petitioner was limited, and two of them testified to having difficulties themselves with recurring shortages. The third was the APWU local president. His manner at the hearing was more that of an advocate for Petitioner rather than an unbiased witness, and his testimony was given little weight. The instructor who observed Petitioner in late 1997 or early 1998 was credible, but she could only comment on Petitioner’s work during the three days that they worked together. (Finding 8).

On the other hand, there was evidence of an almost unbroken string of counts with shortages, several over $200. In her more than two years on the window after her return in 1996, Petitioner had only one audit that was not a shortage. (Finding 5). Adding to this the identified errors made by Petitioner during her tenure (Findings 7, 9, 10) leads to the conclusion that Petitioner has not demonstrated that she followed established procedures or exercised reasonable care in the performance of her duties during the times relevant to the two shortages at issue.

Petitioner raised a number of other arguments related to the management of the Klamath Falls Post Office, but the surprise audit demonstrated that, with only a few minor deficiencies, the financial practices of the post office were very good (Finding 15). Petitioner has not demonstrated a connection between the office’s financial practices and her shortages.

Accordingly, Respondent may collect $1,489.87 from Petitioner’s salary.

Petitioner claimed that severe financial hardship would result from the deduction schedule proposed by Respondent. She offered information regarding her financial circumstances and testified that she could only afford to pay the debt at a rate of $50 per pay period. (Finding 19). Respondent did not challenge her claim of hardship or the rate of repayment she proposed. Accordingly, collection may occur at a rate no higher than $50 per month.

Except as the rate of repayment has been adjusted, the Petition is denied.

Norman D. Menegat
Administrative Judge