In the Matter of the Petition by

ALVETTA S. CALLIS
1600 Dressage Court

at

Raleigh, NC 27613-7137

P.S. Docket No. DCA 02-125

APPEARANCE FOR PETITIONER:
Albert E. Lum
Scialla Associates, Inc.
52-40 72nd Place
Maspeth, NY 11378-1516

APPEARANCE FOR RESPONDENT:
Frank L. C' de Baca
Labor Relations Specialist
United States Postal Service
P.O. Box 9401
Raleigh, NC 27676-9401

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Alvetta S. Callis, filed a Petition under the Debt Collection Act of 1982, after receiving a Notice of Involuntary Administrative Salary Offsets dated March 13, 2002, from the Manager of Finance for the Greensboro District, United States Postal Service, the Respondent in this matter.  The Notice stated Respondent's intent to withhold $4,171.97[1] from Petitioner's salary based on office shortages at the North Hills and Five Points Stations.  A hearing was held in Raleigh, North Carolina on May 10, 2002.[2]

FINDINGS OF FACT

            1.  In 1993, Petitioner became the supervisor of the Five Points, North Hills, and three other stations of the Raleigh, North Carolina post office.  At that time, there were problems with the finances at the Five Points Station.  Petitioner sought help from her supervisor, who was unable to resolve the problems, and from the Greensboro District finance office.  She did not receive what she considered adequate help from that office.  (Transcript, page (Tr.) 95, 97-98).

            2.  In approximately 1995, Petitioner took over responsibility for the main stock account at Five Points.  An audit performed at the time she took over showed that everything was in order.  (Tr. 106, 115).

            3.  As of January 1997, the records at the Greensboro District office showed that the Five Points Station should have had a total accountability (clerks, main stock, and vending) that was $960.36 more than the total that was shown by the records maintained at Five Points.  The hearing record does not show what caused the "out of balance" condition.[3]  This condition persisted without change in amount
until January 29, 1998.  On that date, the Station received stamp stock with a value of $7,210.00 and had stamp sales of $1,166.60.  On that basis, the total station accountability should have increased by the difference between the two numbers, or $6,043.40.  Instead, Petitioner improperly altered the records at Five Points in a manner that caused the reported station accountability to decrease by $836.60.  As a result, the out-of-balance condition between the Five Points and Greensboro records, which had been $960.36, increased to $7,840.36.  The evidence does not show exactly what changes Petitioner made to the Five Points records.  (Respondent's Exhibits (RExh.) 2, 4; Tr. 107, 113).

            4.  Representatives of the Greensboro finance office eventually noted the increased out-of-balance condition and, on September 2, 1998, examined the records at Five Points and also conducted an audit of the Five Points main stock.  The audit found the main stock to have a shortage of $969.92.  Petitioner and a representative of the finance office signed the audit, agreeing to the count.  (RExh. 3).

            5.  On September 9, 1998, an audit of the main stock at the North Hills Station was conducted, revealing an overage of $3,640.59.  Petitioner, who was the main stock custodian, and a representative of the finance office also signed that audit, agreeing to the count.  (RExh. 7).

            6.  The record shows no further activity until, by letter dated April 6, 2000, the Manager of Finance for the Greensboro District advised Petitioner that she owed the Postal Service $3,560.01, "based on the audit of your unit reserve."  Petitioner wrote two letters to the Manager of Finance objecting to, and seeking records related to, the alleged debt.  In response to her second letter, the Manager of Accounting Operations, by letter dated October 13, 2000, forwarded a limited number of records.  In the October 13 letter, the manager stated that the original debt had been established at $7,840.36, but that "previous overages" had been applied to the debt to reduce it to $3,560.01.[4]  (Petitioner's Exhibits (PExh.) 1-3; RExh. 1; Tr. 103).

            7.  The record does not show any additional activity until the Manager of Finance issued the Notice of Involuntary Administrative Salary Offsets on March 13, 2002, stating that Petitioner was indebted to the Postal Service for "office shortages" at North Hills and Five Points Stations.[5]  The amount of the debt stated in the Notice was $4,171.97, but the parties have agreed that the amount at issue is $3,560.01.  (Attachment to Petition; Order and Memorandum of Telephone Conference, dated April 24, 2002).

DECISION

            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.  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, Respondent argues that Petitioner is liable for the $7,840.36 difference (less credit for unspecified overages) that arose between the records of Greensboro and Five Points regarding the total accountability at Five Points on January 29, 1998.  (Finding 3).  As indicated above, in order to hold Petitioner liable, Respondent must demonstrate that there was a shortage in an account for which Petitioner was responsible.  With the exception of the $969.92 shortage in the Five Points main stock (Finding 4), Respondent has failed to meet its burden.

            Respondent apparently equates the out-of-balance condition between the Greensboro and Five Points records with an actual shortage.  The evidence, however, does not support Respondent's theory.  The source of the bulk of the out-of-balance condition was Petitioner's manipulation of the Five Points financial records on January 29, 1998.  There is no evidence that Petitioner's activity, while clearly improper, actually caused or reflected a shortage either in the main stock account or in any other account at Five Points.  The only evidence of an actual shortage was the audit done of the main stock account on September 2, 1998, which showed a shortage of $969.92.  Respondent's witnesses testified that one of the changes to the Five Points data made by Petitioner on January 29, 1998, was to arbitrarily lower the main stock balance, thus calling into question the "previously established balance" against which the main stock was counted on September 2, 1998.  Respondent contends that without that change to the main stock balance the shortage shown by the audit would have been much higher.  Petitioner, however, testified that she did not lower the main stock balance.  In view of Petitioner's denial, the absence of any relevant, contemporaneous records, and the passage of time since the events of January 1998, I am not persuaded by Respondent's evidence that Petitioner did, in fact, lower the main stock balance.  Thus, Respondent has demonstrated a $969.92 shortage in the main stock as of September 2, 1998, but has not met its burden of proving that there was a shortage in the main stock account greater than that shown by the September 2, 1998 audit.

            Petitioner contends that overages in the North Hills main stock (Finding 5) and in an audit of the Five Points vending account should be applied to reduce or eliminate Petitioner's liability.  However, the evidence does not establish the necessary relationship between those overages and the shortage in the Five Points main stock to support applying those overages to the shortage.  See, Handbook F-1, Post Office Accounting Procedures (November 1996), §429.16.

            Petitioner offered no evidence to show that she should be relieved of liability because she "followed the postal procedures established when performing [her] duties."  Further, her actions in manipulating the records on January 29, 1998, although not causing an actual shortage, demonstrate that she did not follow established procedures.

            Accordingly, the Petition is granted to the extent that Petitioner's liability is reduced to $969.92, but is otherwise denied.  Respondent may collect that amount from Petitioner's salary.

                                                                                                David I. Brochstein
                                                                                                Administrative Judge

[1]   The amount actually at issue is $3,560.01 (Order and Memorandum of Telephone Conference, dated April 24, 2002).

[2]   The hearing was conducted by the undersigned Administrative Judge via videoconference from Arlington, Virginia.  All other participants, including the court reporter, were present in a conference room at the hearing site.

[3]   The only records showing the out of balance condition were summaries prepared by Greensboro finance office personnel.  Those records do not indicate which of the accounts (clerks, main stock, and/or vending) were out of balance.  (RExh. 2, 4; Tr. 12, 44).  The records from which the summaries were made were not offered into evidence.

[4]   The evidence does not show what overages had been applied.

[5]   There was, however, no evidence introduced relating to any shortage at North Hills.