In the Matter of the Petition by

LESLIE N. FRIEDMAN
28 Southchase Drive

at

Fletcher, NC 28732-9266

P.S. Docket No. DCA 02-465

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

APPEARANCE FOR RESPONDENT:
Glen C. Williams
Labor Relations Specialist
United States Postal Service
2901 South I-85 Service Road
Charlotte, NC 28228-9961

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Leslie N. Friedman, filed a timely Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets dated October 1, 2002, from the Manager of Finance for the Mid-Carolinas District.  This Notice stated the Postal Service's intention to withhold $3,400 from Petitioner's salary to recover a shortage in an account for which Petitioner was responsible.[1]

            A hearing was held in Asheville, NC on November 13, 2002.[2]  The Postal Service presented testimony from James Antill, the Asheville Postmaster, Cathy Lineberger, a stamp distribution supervisor, and Douglas Hughey, a postal systems coordinator.  Petitioner testified in his own behalf and also called Ken Howard, a supervisor in his post office.  Both sides also relied on documents contained in the case file.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  Petitioner has been a postal employee for fifteen years, a supervisor since 1994, and at the time pertinent to this case was the Station Manager at Grace Station in Asheville, NC.  He was also the custodian of the unit reserve stock at Grace Station.  (Tr. 9, 52).[3]

            2.  Post offices in Asheville receive stamp stock from the Mid-Carolinas Stamp Distribution Office (SDO) in Charlotte, NC.  Standard procedure is that the unit reserve custodian sends a PS Form 17 to the SDO listing the types and quantities of stamps being ordered.  A clerk at the SDO fills the order, makes appropriate entries into the computer system, which then prints another PS Form 17 listing the amounts of each denomination of stamp being shipped, and the clerk and an SDO supervisor verify that the shipment contains the stock that is listed on the Form 17.  Shipments are sent by registered mail to the ordering post office.  (Tr. 11, 34-38).

            3.  A PS Form 17 dated December 21, 2001, shows that the SDO shipped $25,310 of stamps to the Grace Station in Asheville on that date.  Listed among the items shipped were 500 books of 34¢ "United We Stand" stamps, total value $3,400.  The PS Form 17 was initialed by the SDO clerk who prepared the shipment and by Ms. Lineberger as verifying the accuracy.  (Tr. 12, 37-38; Pet. Ex. 4a).

            4.  The shipment described above, with the accompanying PS Form 17, was received at Grace Station by Petitioner on December 26, 2001.  Petitioner initialed the Form 17 and entered $25,310 into his unit reserve account.  Although prescribed procedure calls for the receiver to also have a witness count and verify the accuracy of the shipment, Petitioner did not have a witness do this on December 26, 2001.  In mid-January 2002, Petitioner signed for another shipment sent from the SDO on January 10, 2002, without having a witness present.  (Tr. 12-13, 58, 66, 72; Pet. Exs. 4a, 4b, and 8a).

            5.  On December 12, 2001, while Petitioner was detailed to another post office, Mr. Howard, acting in his stead, audited one of the window clerks and found a shortage of more than $600, which the clerk attributed to 100 books of 34¢ stamps that he said he never received.  In early January 2002, after Petitioner had returned to Grace Station, he and Mr. Howard examined the unit reserve in connection with the clerk's claim and noticed that there were 500 fewer "United We Stand" books than were listed on the inventory.  (Tr. 52-53, 72, 76-77; Pet. Ex. 1).

            6.  Petitioner and Mr. Howard searched unsuccessfully for the missing 500 books and surmised that the shipment received on December 26, 2001, was short by that amount.  On about January 17, 2002, Petitioner called Ms. Lineberger at the SDO and asked her to see if she could account for the missing books.  Ms. Lineberger counted three types of 34¢ stamp books in her vault and found no overage.  (Tr. 40-42, 52-54, 77; PS Ex. 1; Pet. Ex. 1).

            7.  After Ms. Lineberger reported to Petitioner that she did not find the missing stamps, Petitioner and Mr. Howard then audited the stamp accounts of all the clerks at Grace Station.  They found no overage that related to the missing 500 books.  On April 19, 2002, Petitioner and Mr. Howard conducted a full count of the unit reserve and found it to be short $3,060.  They recorded this result on a PS Form 3294, Cash and Stamp Stock Count and Summary.  (Tr. 10-11, 55; PS Ex. 1; Pet. Ex. 3). 

            8.  Petitioner received a Letter of Commendation from his postmaster, Mr. Antill, on November 15, 2001, for his contribution to the overall good performance rating received by the City of Asheville for FY01.  (Pet. Ex. 2).

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.  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 that the unit reserve account was short $3,060 on April 19, 2002, or that Petitioner was the custodian of that account.  Unless the preponderance of evidence shows that the December 26, 2001 shipment was short, the April 19, 2002 audit is sufficient to prove a loss.  Petitioner argues that this is an unexplained shortage and that he should be relieved of liability because he exercised reasonable care in performing his duties.  The only evidence presented on this point was Petitioner's testimony that he was careful "as a matter of course" and had not had previous stamp credit problems.  He also cites the 2001 Letter of Commendation.

            The issue here is not whether Petitioner is an honest and loyal employee.  There is no evidence that he is not.  The issue is over how to apply the standards of accountability and liability that are prescribed for Postal Service employees who manage large sums of cash and stamp stock.  Whether or not Petitioner was normally careful in performing his duties, it is clear that he did not follow proper procedure when he received the December 26, 2001 stock shipment.[4]  He testified that he cannot remember whether he counted the shipment, but conceded that he had no witness present.

            We must assume that if Petitioner did count the shipment he would have notified the SDO immediately if it was short.  Therefore, the evidence raises two possibilities as to when a loss might have occurred, but neither relieves Petitioner of his accountability.  If the shipment really was short, his failure to count it lost the opportunity to confirm that fact and take appropriate action.  On the facts of this case, Petitioner's theory that the shipment was short is mere speculation and is contradicted by the evidence that the shipment was properly verified by SDO personnel, as well as by Ms. Lineberger's inability to find any corresponding overage in her account approximately three weeks later.  If the shipment was not short, the loss in the unit reserve occurred at some other time.  Petitioner can be relieved of liability only if the evidence demonstrates that he followed established procedures in performing his duties. 

            Petitioner's general statement of being careful as a matter of course is not strong enough to carry Petitioner's burden of demonstrating that he followed postal procedures in performing his duties.  Likewise, the Letter of Commendation does not outweigh the specific evidence that he failed on at least two occasions to follow prescribed procedures (see Finding #4).

            Respondent has proved a loss of $3,060 from Petitioner's account, and Petitioner has not carried his burden of proving that he should be relieved of liability under the standard quoted above.  The Petition is denied.  Respondent may collect $3,060 from Petitioner's salary.

                                                                        Bruce R. Houston
                                                                        Chief Administrative Law Judge

   [1]  During the hearing, the Postal Service representative stated that Respondent's claim was reduced to $3,060.

   [2] The hearing was conducted by the undersigned Administrative Law Judge via speaker telephone from Arlington, VA.  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 documents submitted by Respondent will be "PS Ex._," and documents submitted by Petitioner will be "Pet. Ex._."

   [4]  Petitioner's argument uses the phrase "reasonable care," which was the language in an earlier version of the F-1 Handbook.  We have never had occasion to rule that this is different from the current standard that asks whether an employee "followed the postal procedures."