In the Matter of the Petition by

JAMES SANTA ANA
1094 Calle Escondida

at

Brownsville, TX 78526-4051

P.S. Docket No. DCA 02-458

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

APPEARANCE FOR RESPONDENT:
Mary Ann Longenecker
Labor Relations Specialist
United States Postal Service
1 Post Office Drive
San Antonio, TX 78284-9401

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, James Santa Ana, filed a timely Petition for Hearing after receiving two Notices of Involuntary Administrative Salary Offsets dated September 10, 2002, from his postmaster.  These Notices stated the Postal Service's intention to withhold a total of $26,154.66 from Petitioner's salary to recover shortages in two accounts for which Petitioner was responsible.[1]

            A hearing was held in Harlingen, Texas on November 15, 2002.[2]  The Postal Service presented testimony from Mary Martinez, the Harlingen Postmaster, Joseph Espericueta, a supervisor at the Harlingen Post Office, and Robert Pantoja, a supervisor at the Harlingen Post Office during the time pertinent to this case.  Petitioner testified in his own behalf and also presented testimony from Juan Valdez, a supervisory clerk.  Both parties also 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 has been a postal employee since 1983 and has been a supervisor at the Harlingen Main Post Office since 1993.  He was the custodian of the main stock from sometime in 1993 until October 1999.  The main stock included stock for both the Harlingen Main Post Office and another office known as the “Downtown” office.  The two accounts were kept separate from each other, but both were contained in the same vault.  (Tr. 8-10, 32-33, 52, 64-66).[3]

            2.  In October 1999, the Harlingen Postmaster directed Petitioner to turn the main stock account over to another supervisor, Joseph Espericueta.  Petitioner and

Mr. Espericueta accomplished this without doing a full, formal count of the stock as is required by Postal Service procedures, and there is no paper record of a transfer to Mr. Espericueta.[4]  Nevertheless, Mr. Espericueta accepted the account and the keys to the vault, and Petitioner had no access to the main stock after October 1999.  (Tr. 10-11, 23-24, 38, 42-43, 46, 66-67).

            3.  There was a shortage of approximately $10,000 in the Downtown portion of the main stock at the time the stock was turned over to Mr. Espericueta.  (Tr. 66, 74).

            4.  On or about June 16, 2000, Mr. Espericueta did a self-audit of the main post office portion of the main stock.  This was not a formal count and no one participated with him.  He found the stock to be short $15,152.46.  (Tr. 14-15, 38-39, 47; PS Ex. 6, pp. 5-9).

            5.  On April 6, 2001, Mr. Espericueta and Petitioner did an audit of the Downtown portion of the main stock and found it to be short $10,999.30.  They recorded their count on a PS Form 3294, Cash and Stamp Stock Count and Summary, and both signed it.  (Tr. 15, 68-69; PS Ex. 6, pp. 1-4).

            6.  On April 10, 2001, Mr. Espericueta and Petitioner did an audit of the main post office portion of the main stock and found it to be short $18,613.88.  They recorded their count on a PS Form 3294, Cash and Stamp Stock Count and    Summary, and both signed it.  (Tr. 11, 68-69; PS Ex. 3).

            7.  After these April 2001 audits, Mr. Espericueta reported the shortages to the postmaster and told her that he was responsible for $3,461.42 of the main post office shortage.  On April 27, 2001, the postmaster issued Mr. Espericueta a Letter of Demand for $3,461.42.  Also on April 27, 2001, she issued Petitioner two Letters of Demand, one for $15,152.46 and one for $11,002.20.  (Tr. 11, PS Exs. 1, 2, and 5).[5]

DECISION

            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 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, the two April 2001 audits conducted by Petitioner and Mr. Espericueta are sufficient to prove the alleged losses in the two portions of the main stock account.  The issue is whether these losses can be charged to Petitioner.

            This case is quite unusual in that Respondent is attempting to hold Petitioner liable for shortages in an account that were discovered long after Petitioner ceased to be the custodian of that account.  Respondent’s theory is that the losses were known to exist before Petitioner turned over the account and that the reason the exact amount of the shortages was not known earlier is that Petitioner did not follow correct procedures in turning over the account.

The $15,152.46 shortage

            This is based on a count done by Mr. Espericueta approximately eight months after Petitioner turned over the account, during which time all parties agree that Petitioner had no access to the account.  The loss is attributed to Petitioner simply because Mr. Espericueta told the postmaster, after the April 2001 audit, that the account was short several thousand dollars when he accepted it in October 1999.  It is not necessary to disbelieve Mr. Espericueta to find that Respondent’s evidence falls short.  The failure of Petitioner and Mr. Espericueta to formally document and transfer the account in October 1999 was a mutual failure, but the fact is we do not know when this loss occurred or what the extent of it might have been when Petitioner turned over the account.  The evidence is insufficient to hold Petitioner liable for this shortage.

The $11,002.20 shortage

            Respondent’s evidence on the shortage in the “Downtown” account is stronger because Petitioner conceded in his testimony that this account was approximately $10,000 short when he turned it over to Mr. Espericueta (see Finding #3).  Therefore, even though there is no contemporaneous record to show that shortage, the fact that this account was short $10,999.30 when Petitioner and Mr. Espericueta counted it in April 2001, coupled with Petitioner’s admission, is sufficient to establish liability for that loss.  As the count showing the $10,999.30 shortage occurred more than a year after the account was turned over, however, Petitioner’s liability is limited to the $10,000 shortage that he admitted was present in October 1999.

            The Petition is granted in part and denied in part.  Respondent may collect $10,000 from Petitioner’s salary.

Bruce R. Houston
Chief Administrative Law Judge

[1]  One Notice was for $15,152.46, the other for $11,002.20.

[2]  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.

[3]  References to the hearing transcript are “Tr._.”  References to tabbed exhibits attached to Respondent’s Answer and to Respondent’s supplement will be “PS Ex._.” 

[4] Postal Service Handbook F-1, Post Office Accounting Procedures, (November 1996, Updated with Postal Bulletin Revisions Through September 5, 2002), Section 421.

[5]  It is clear that the basis for the $15,152.46 is the June 2000 count done by Mr. Espericueta, and the $3,461.42 charged to Mr. Espericueta is the difference between $15,152.46 and the $18,613.88 shortage found in April 2001.  It is also clear that the $11,002.20 represents the Downtown shortage, but the record does not explain the difference between this figure and the $10,999.30 shortage found on April 6, 2001.