In the Matter of the Petition by

CYNTHIA TURNER
33800 Harrow Court

                at

Cleveland, OH 44139-6224

P.S. Docket No. DCA 01-273

APPEARANCE FOR PETITIONER:Charles Scialla
453 Preakness Avenue, #5
Paterson, NJ 07502-1121

APPEARANCE FOR RESPONDENT:Kennoa M. Dixon
Labor Relations Specialist
United States Postal Service
2200 Orange Avenue, Room 106
Cleveland, OH 44101-9401

Petitioner, Cynthia Turner, filed a Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets, dated August 6, 2001. This Notice stated the Postal Service's intention to withhold $5,673.52 from Petitioner's salary to recover for a shortage in a unit reserve account for which she was responsible.

A hearing was held in Cleveland, Ohio on October 10, 2001.¹  The Postal Service presented testimony from Gary Strenk, District Accounting Manager, and Renee Bursley, a postal systems coordinator who investigated the shortage in Petitioner's unit reserve account. Petitioner testified in her own behalf, and also called James Pollock, a finance specialist, and Russell Clark, District Finance Manager. Both sides relied on documents filed with the Petition and the Answer, and Petitioner presented one additional document at the hearing. The following findings of fact are based on the entire record.

1. Petitioner has been the Customer Services Supervisor at Shaker Heights Post Office in Cleveland for approximately eight years, and has been the custodian of the unit reserve stock there for approximately three years (Tr. 51).²

2. On June 7, 2001, Petitioner and Ms. Edwards, a "T-6" supervisory clerk, conducted a required annual count of the unit reserve. They found a shortage of $6,293.52, out of a total that should have been slightly more than $131,000.00. (Tr. 53, 65-66; RX-3, p. 5; RX-4).

3. Petitioner entered this shortage into the computer system used to manage office finances, where it was noted by Ms. Bursley in the Cleveland District Finance Office. Ms. Bursley then researched other financial records for Shaker Heights to determine if there were overages that might be offset against the shortage. She found a miscellaneous trust account item of $620.00 and applied it to reduce the net shortage to $5,673.52. (Tr. 24-26; RX-7 through RX-9).

4. On June 20, 2001, Petitioner wrote to the District Finance Office, citing three paperwork errors that caused the apparent shortage. First, she noted that the amount of redeemed stock sent for destruction had been inaccurately subtracted from her accountability. This error would have reduced the shortage by $969.45. Second, she said that in July 2000 she had incorrectly added 3800 $6.60 books of "deer stamps" to her account, when the correct amount was only 1900 books. This is a difference of $12,540.00 and would have created a false shortage in that amount. Third, she referred to "stock in transit," but did not make clear how this affected her account. She asked that corrections be made to reduce or eliminate the shortage. (Letter attached to Petition).

5. Ms. Bursley and Mr. Strenk did not find that the matters raised in Petitioner's June 20 letter were valid reasons to reduce the shortage. On July 5, 2001, Mr. Strenk issued Petitioner a notice that she was indebted to the Postal Service in the amount of $5,673.52. On August 6, 2001, Mr. Strenk issued the Notice of Involuntary Administrative Salary Offsets, and Ms. Turner filed her Petition. (Tr. 9-12, 26-31; RX-6).

6. Approximately one year earlier, on July 10, 2000, the computerized stock management system at the Shaker Heights Post Office was converted from the IRT system to the POS system. Part of the process was to inventory all the items in the unit reserve and to transfer the stamp stock category-by-category to the new system. Records from that conversion show that 3800 books of the $6.60 "deer stamps" were counted by Petitioner and Ms. Edwards, and were listed on the inventory. (Tr. 26-29, 52, 54, 59, 68; RX-1, p. 23, RX-2, p. 4, RX-3, p. 2).

7. If 1900 $6.60 books had been incorrectly entered into Petitioner's unit reserve account as 3800 books, as described in Petitioner's June 20, 2001 letter (see Finding #4), this would have created an imbalance that would likely have been noticed immediately by the District Finance Office. The finance office would then have issued a PS Form 1908 to Shaker Heights directing that office to make a correction. No such error was noticed by the finance office and no Form 1908 was issued. (Tr. 29-32).

8. In her June 20, 2001 letter, Petitioner stated that $49,670.98 should have been subtracted from the unit reserve account to represent redeemed stock sent for destruction, but only $48,701.53 was subtracted. In researching the June 7, 2001 shortage, Ms. Bursley totaled the redeemed stock listed on thirteen PS Form 3238s signed by Petitioner and found it to be $47,711.53. Form 3238 is the form used to ship redeemed stock for destruction. There is no evidence in the record that shows the origin of either of the two figures cited by Petitioner in her June 20 letter. (Tr. 26, 36; RX-11).

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.

Petitioner does not dispute that she was accountable for the unit reserve or that the June 7, 2001 audit was properly conducted. She contends that the opening balance was not accurate, however, because of errors made earlier. Her principal argument involves the "3800 books v. 1900 books" error.³  She states that she and Ms. Edwards discovered this error sometime in late 2000 on a spot check of the unit reserve and reported it to Mr. Pollock and Mr. Jenko in the finance office, who told her, in essence, not to worry about it. Her explanation of this error is not persuasive, however, and none of the other evidence supports her theory.

First, the difference between 1900 books and 3800 books would have created a $12,540.00 shortage, not merely the $6,293.52 shortage found by Petitioner and Ms. Edwards on June 7, 2001. Petitioner offered no explanation to account for that large difference. Second, the inventory lists and count sheets pertaining to the July 10, 2000 conversion all show 3800 books listed as being present, and the finance office did not notice an imbalance. Petitioner's explanation for how she miscounted the books is confusing. She testified that the books are shipped in packages of 100 books, but that each package has the number 2000 on it. She said she did not realize at the time that this meant 2000 stamps, not 2000 books. (Tr. 54, 68). Had this been her mistake, however, the magnitude of the error would have been many times greater than $12,540.00. Each package of 100 books, valued at $660.00 (100 x $6.60), would have been entered as $13,200.00 (2000 x $6.60). Instead of showing twice as many deer stamps as she really had, the account would have shown 20 times as many. Finally, her witness from finance, Mr. Pollock, did not support her version of what she was told by finance personnel.

Respondent has proven a loss of $5,673.52, and Petitioner has not shown any basis for relieving her from the strict liability standard set forth in the regulation. The Petition is denied. Respondent may collect $5,673.52 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 the hearing transcript are "Tr._." References to documents attached to Respondent's Answer will be "RX-_."

³ The matter of the redeemed stock error cited in her June 20, 2001 letter was not pursued in depth at the hearing. In any event, the evidence presented does not support a conclusion that any error that might have been made in counting the redeemed stock is helpful to Petitioner's case. (See Finding #8).