In the Matter of the Petition by

SCOTT KELLER
86 Church Hill Road

at

Sandy Hook, CT 06482-1110

P.S. Docket No. DCA 02-348

APPEARANCE FOR PETITIONER:
Albert E. Lum
5240 72nd Place
Maspeth, NY 11378-1516

APPEARANCE FOR RESPONDENT:
Thomas J. O’Keeffe
Labor Relations Specialist
United States Postal Service
427 West Avenue
Stamford, CT 06910-9411

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Scott Keller, filed a timely Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets dated July 2, 2002.  This Notice stated the Postal Service's intention to withhold $1,360 from Petitioner's salary to recover a shortage in an account for which Petitioner was responsible.

            A hearing was held in Stamford, CT on August 16, 2002.[1]  The Postal Service presented testimony from George O'Mara, the Officer-in-Charge of the Seymour, CT Post Office when Petitioner's account was audited, and Jack LaRocca, the Seymour, CT Postmaster.  Petitioner testified in his own behalf and both sides relied on documents filed with the Petition and the Answer.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  Petitioner is a supervisor at the Seymour, CT Post Office, and has been the custodian of the unit reserve stock since April 2000 (Tr. 8, 28; Answer, Ex. 6). [2]

            2.  Sometime prior to April 10, 2002, Petitioner noted that the vault containing the unit reserve had 200 fewer books of 34¢ stamps than he should have had.  He informed his acting supervisor, Mr. O'Mara, and the two of them audited the unit reserve on April 10, 2002.  (Tr. 7-8, 29)

            3.  In conducting the audit, Petitioner and Mr. O'Mara compared the stock item-by-item with an inventory list and also counted the total amount present.  They found that 200 books, contained in two packages of 100 books each, valued at $6.80 per book were missing, and that the total stock counted was $93,042.62, compared to $94,402.62 that should have been present.  This showed a shortage of $1,360.  (Tr. 8-9; Answer, Exs. 2, 3d, and 4c).

            4.  Petitioner and Mr. O'Mara recounted the unit reserve and got the same result.  They also counted the floor stock but found no corresponding overage, and they physically searched for the missing packages of stamps with no success.  When the postmaster, Mr. LaRocca, returned shortly thereafter they informed him of
the apparent loss and he conducted another count and search.  The missing stamps were not found.  (Tr. 9-11, 22, 30).

            5.  A unit reserve is normally audited quarterly.  While Petitioner has been the unit reserve custodian at Seymour, CT Post Office, he has been audited about seven times and there was no evidence presented of any shortage other than the one in this case.  Both Mr. O'Mara and Mr. LaRocca consider him to be a very good supervisor, an excellent employee and very trustworthy.  In February 2002, Petitioner received a cash award for performing his duties, including implementation of the new POS stamp stock management system, in a "very professional manner" over the previous several months.  (Tr. 12, 17-18, 20, 23, 31; Pet. Ex. 1).

            6.  On April 19, 2002, Petitioner was issued a letter of debt determination stating that he owed $1,360, and on July 2, 2002, Mr. LaRocca issued the Notice of Involuntary Administrative Salary Offsets for the same amount (Answer, Ex. 1).

DECISION

            The only explanation offered by either party for the shortage is that it is possible that a recent shipment of stamp stock to the Seymour, CT Post Office was short 200 books and that Petitioner did not accurately count them when they arrived.  Both sides agree that there is no specific evidence to support this.  They merely speculate that this may have happened because no other explanation presents itself.

            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.

            In this case there is no dispute over the loss or that it came from Petitioner's account.  Petitioner's position is that, under the standard quoted above he is entitled to relief from liability because his record shows him to be a trustworthy employee who exercises care in carrying out his duties and responsibilities.  Respondent's position, while conceding that Petitioner is a highly regarded employee, is that the standard is one of strict liability.  In response to Petitioner's claim that he followed procedures and exercised reasonable care in managing his account, Respondent argues that failure to accurately count an incoming stock shipment, if that is what happened, is not reasonable care.

            This final part of Respondent's argument is a "double edged sword."   If the explanation for the alleged shortage is that Petitioner miscounted an incoming shipment, this might constitute lack of reasonable care but it would also cast doubt on Respondent's proof that there was an actual loss.  It is not known with any certainty, of course, that this is what happened, but if the record contains sufficient evidence that Petitioner followed procedures and exercised care generally, Respondent has not rebutted it.  As we have said many times, an unexplained shortage, by itself, does not demonstrate that an employee failed to follow procedures or exercise reasonable care.  If it did, the last phrase of the standard in the F-1 Handbook would be meaningless.

            I find that the record does contain sufficient evidence that Petitioner followed established procedures in performing his duties.  The evidence presented by Petitioner on this issue is very thin, as he gave no testimony as to how he followed procedures.  However, the strong testimony from Respondent's witnesses, his supervisors, who testified very favorably about his performance is sufficient to shift the burden back to Respondent to contradict his claim that he exercised reasonable care and followed proper procedures.  Respondent presented no evidence of any discrepancy on his seven previous audits, or any other evidence that he failed to follow established procedures in managing his unit reserve account.

            The Petition is granted.  Respondent may not collect $1,360 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 the Postal Service Answer will be "Answer, Ex._."