In the Matter of the Petition by

DAVID W. STEVENSON
345 Locust Street

at

Huntington, WV 25705-3725

P.S. Docket No. DCA 01-195

APPEARANCE FOR PETITIONER:
Albert Lum
52-40 72 Place
Maspeth, NY 11378-1516

APPEARANCE FOR RESPONDENT:
David E. Mills
Labor Relations Specialist
United States Postal Service
P.O. Box 59401
Charleston, WV 25350-9401

Petitioner, David Stevenson, filed a timely Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets on May 22, 2001, from his supervisor. This Notice stated the Postal Service's intention to withhold $2,171.25 from Petitioner's salary to recover for a shortage in a stamp stock account for which Petitioner was responsible.

A hearing was held in Huntington, West Virginia on August 16, 2001.¹  The Postal Service presented testimony from the postmaster, Stephen Cook, Stephen Miller, who conducted the audit in issue, Gina Young, who conducted an overall review of Petitioner's office, and Sharon Stark, another supervisor. Petitioner testified in his own behalf and also presented testimony from Patrick Davis, who participated in the audit of Petitioner's unit reserve stock. Both sides also relied on documents filed with the Petition, the Answer, and a supplement to the Answer. The following findings of fact are based on the entire record.

1. Petitioner has been a Postal Service employee for twenty-three years. Since 1992, he has been the station manager at Guyandotte Station in Huntington, West Virginia. For approximately the last three years he has also been the manager for the Beverly Hills Station and the Marshall University Station, also in Huntington, West Virginia. (Tr. 139, 144).² 

2. During all the time pertinent to this case, Petitioner was the unit reserve stock custodian for the three stations noted above. Each station employed one full-time window clerk. Petitioner was responsible for issuing stock to the clerks at each of the three stations, in addition to being responsible for supervising the carriers that worked out of each station. (Tr. 10-12).

3. Stamp stock accounts in Petitioner's three stations are managed by a computer system known as MOS/IRT. Stock transactions, including issuance of stock to clerks by the unit reserve custodian, are entered into the IRT (integrated retail terminal) to record each transaction and to maintain an accurate balance in each account. When Petitioner assumed responsibility for the Beverly Hills and Marshall University Stations, each of those stations had just one IRT. During working hours, the window clerk used the IRT to record all sales transactions with customers. Because only one person could be on a terminal at any given time, therefore, the IRT was not available to Petitioner if he had to issue stock during business hours. Petitioner told the postmaster that he needed an additional terminal at each station. Mr. Cook was able to get an additional IRT for Beverly Hills, but Marshall still has only one. (Tr. 14-15, 52, 126, 149-50, 219-20; Answer, Exs. 3, 16).

4. With only one IRT, the proper procedure for recording the issuance of stock to a clerk is to use a manual PS Form 17, signed by the custodian and the clerk, recording the amount and type of stamps issued, and the date. The custodian would then, at the earliest opportunity, enter the information from the manual Form 17 into the IRT. (Tr. 64-65, 124-25).

5. In March 2001, Stephen Cook, the Huntington Postmaster, directed that the Marshall University Station be turned over to Patrick Davis. On March 21, 2001, Mr. Davis and Petitioner began an inventory of the Marshall unit reserve account in preparation for the turnover. Because it appeared that some stamp stock was missing, Petitioner asked that they stop the count in order to give him some time to resolve the apparent discrepancies by looking for overages in his other accounts or in clerk accounts. He was unable to find any corresponding overages. (Tr. 39-41, 123-24, 175-76; Answer, Ex. 10).

6. On March 30, 2001, Stephen Miller conducted an audit of the Marshall unit reserve, along with Petitioner and Mr. Davis. The opening balance shown on office records, i.e., the amount that should have been present, was $18,800.45. The audit showed that only $16,629.20 was present, a shortage of $2,171.25. Petitioner participated in the count and signed a PS Form 3294, Stamp Stock Count and Summary, indicating his agreement with the accuracy of the count. (Tr. 58-61, 128; Answer, Ex. 8).

7. On April 2-3, 2001, postal systems coordinators Pat Bonfili and Gina Young conducted a financial review of the Marshall University Station. They found that record keeping was "lax," and that some individual and unit Form 1412s (daily financial transaction records) were missing. They also found that all clerks who worked at Marshall had access to the safe that contained the unit reserve, and to the PS Forms 3977 (envelopes that contain spare keys to clerks' stamp stock drawers). There is no evidence that the clerks actually had access to the unit reserve. They also found that Petitioner sometimes issued stock to clerks while they were working at the window, without giving them time to verify the amounts received, and that he sometimes did not enter the transaction into the IRT until several days later. (Tr. 76-89; Answer, Ex. 6; Supplement to Answer - manual PS Form 17, February 8, 2001, IRT Form 17, February 27, 2001).

8. Ms. Bonfili and Ms. Young also counted the main stock at Guyandotte and Beverly Hills to see if they could find an overage that would offset the shortage at Marshall. They found no corresponding overage. (Tr. 95-96; Answer, Ex. 6).

9. On April 20, 2001, the postmaster issued Petitioner a letter of demand for $2,171.25. Petitioner submitted a written request for reconsideration. On May 22, 2001, the postmaster reaffirmed the assertion of the debt and issued Petitioner the Notice of Involuntary Administrative Salary Offsets. (Answer, Exs. 1, 3, and 5).

The Postal Service contends that the March 30 audit, with which Petitioner expresses no disagreement, establishes a loss of $2,171.25 from the Marshall University Station unit reserve. Further, the Postal Service contends that, as custodian, Petitioner is strictly liable for the loss and that he has shown no basis for relieving him of that liability.

Petitioner argues that Respondent shares some responsibility for the loss because Respondent placed Petitioner in the very difficult position of having to manage three separate stations, and because Respondent failed to provide Petitioner with the necessary equipment, the additional IRT.

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 "are held strictly accountable for any loss unless evidence establishes that they followed the postal procedures established when performing their duties." Handbook F-1, Post Office Accounting Procedures (November 1996), §141.

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 that any specific dereliction or act of negligence by Petitioner caused the loss. 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. There is no such evidence in this case, and Respondent's evidence is sufficient to establish a loss of $2,171.25.

Petitioner does not dispute that he was accountable for the unit reserve at Marshall, nor does he dispute that the count on March 30, 2001 established a loss. To escape liability, therefore, Petitioner must show that he followed established procedures or demonstrate some other basis for relief. He has failed to do either. He has explained the difficulties he had in keeping accurate records of his three stock accounts, and in issuing stock to his clerks in an efficient manner, but he does not dispute the finding of the postal systems coordinators (Finding of Fact #7), that he did not make timely entries of stock transactions into the IRT.

As for his contention that he should not be held accountable because Respondent placed him in the stressful position of having to manage the unit reserves at three stations, this is not a persuasive argument. In the absence of evidence demonstrating that Respondent failed to provide Petitioner with adequate equipment to secure his stock, or in some other way prevented Petitioner from maintaining the security of the unit reserve, this is not a basis for relief from liability. Petitioner has shown that the job was difficult, and that a second IRT at Marshall may very well have made the job easier, but that is not sufficient. Petitioner was aware of how to issue stock and keep records of it, and the lack of the second IRT did not cause the shortage.

Petitioner appears to have a long record of good service in various positions of responsibility. In this case, however, the record does not provide any basis for relieving him of liability for failing in the very specific responsibility of maintaining the security of his unit reserve account. The Petition is denied. Respondent may collect $2,171.25 from Petitioner's salary.

Bruce R. Houston
Chief Administrative Law Judge

¹ The hearing was conducted by the undersigned Administrative Law Judge via speaker telephone from Arlington, Virginia. All other participants, including the court reporter, were present in a conference room at the hearing site.

² References to pages in the hearing transcript are "Tr._." References to the tabbed documents attached to Respondent's Answer will be "Answer, Ex._." Any other documents attached to the Petition or to Respondent's supplement will be specifically identified.