In the Matter of the Petition by

GERALD G. JOHNSON
5613 Village Green Drive

at

Katy, TX 77493-1270

P.S. Docket No. DCA 02-529

APPEARANCE FOR PETITIONER:
Gerald G. Johnson
5613 Village Green Drive
Katy, TX 77493-1270

APPEARANCE FOR RESPONDENT:
Clyde Phillip
Labor Relations Specialist
United States Postal Service
GPO Annex, Room 406
Houston, TX 77201-9401

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Gerald G. Johnson, filed a Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets from his supervisor on November 18, 2002. This Notice stated the Postal Service’s intention to withhold $4,790.62 from Petitioner’s salary to recover a loss from a stamp stock account for which Petitioner was responsible.

            Petitioner elected a hearing based on written submissions and the parties were given time, including one extension of time, to submit additional evidence and argument, beyond that filed with the Petition and the Answer. In an Order dated December 18, 2002, the parties were told that they should submit any relevant documents, and sworn statements from witnesses who could explain the documents and who had knowledge of relevant facts. This was also discussed in a telephone conference with the parties on January 9, 2003, and repeated in an Order and Memorandum of Telephone Conference on that same date. Petitioner filed an unsworn statement and Respondent filed some additional material, but no witness statements other than an unsworn memorandum prepared by Robert Nobles in March 2002. The following findings of fact are based on all the material submitted by the parties.

FINDINGS OF FACT

            1. At the time pertinent to this case, Petitioner was the postmaster and custodian of the main stock at the Chappell Hill, Texas Post Office (Johnson supplemental statement).

            2. On February 5, 2002, Petitioner suffered a heart attack and was hospitalized. Shortly thereafter, Petitioner’s supervisor, Mr. Sylvester, sent a nearby postmaster, Ms. Lewis, to take over as Officer-in-Charge (OIC) at Chappell Hill. On or about February 11, 2002, Mr. Sylvester called Petitioner and told him to have his wife deliver the keys to the Chappell Hill main stock. The keys were delivered but Petitioner, who was aware that Ms. Lewis was taking over the office, asked if they could wait two or three weeks so that he could be present when the main stock was turned over to Ms. Lewis. (Johnson supplemental statement).

            3. There is nothing in the record as to Mr. Sylvester’s response to this request, but on February 14 or 15, 2002, Ms. Lewis and Mr. Nobles, another nearby postmaster, counted the main stock and found it to be short $4,790.62. (PS Form 3294; Nobles memorandum, March 8, 2002).

            4. Ms. Lewis and Mr. Nobles also found that Petitioner’s subordinate, Ms. Rogers, was selling stamps from the main stock and that some stamps were kept in unsecured containers. There is no evidence in the record to show how or when Ms. Rogers had obtained access to the main stock, and no evidence as to the value of the stamps found unsecured. Ms. Lewis and Mr. Nobles also audited the account of a clerk at the Chappell Hill office and found her account to be short $82.45 (Nobles memorandum).

            5. Petitioner was not present for the count of his main stock and there is no evidence that he was given an opportunity to be present or to have a designated witness present. (PS Form 3294; Johnson supplemental statement).

            6. On March 18, 2002, and again on August 30, 2002, Mr. Sylvester issued Petitioner letters stating that Petitioner owed the Postal Service $4,873.07. The clerk’s $82.45 shortage was included, along with the $4,790.62 shortage in Petitioner’s account, apparently on the theory that Petitioner had failed to audit the clerk’s account in a timely manner. (Letters attached to Petition; Nobles memorandum).

            7. On November 11, 2002, Mr. Sylvester issued Petitioner a Notice of Involuntary Administrative Salary Offsets for $4,790.62, the $82.45 clerk shortage having been deleted from the alleged debt.

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 (such as Petitioner) “are held strictly accountable for any loss unless evidence establishes that they followed the postal procedures established when performing their duties.” Handbook F-1, §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 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.

            A primary issue in this case is whether there was a "properly conducted inventory, or audit.” Other than the Form 3294 and Mr. Nobles’ brief memo to Mr. Sylvester stating the result of the count, Respondent submitted no evidence. There is no statement from anyone as to how the count was conducted, how the opening balance was established, or anything that addresses the issues raised by Petitioner. In his supplemental statement, Petitioner states that he asked for the opportunity to be present when his stock was counted, and argues that once he turned over his keys as directed, he “had no way to secure my stock and no representation when it was opened or counted.” Further, he implies that there was a large quantity of redeemed stock that should have been counted but was not included on the Form 3294 and argues, “I was never given the right to go back to Chappell Hill to protect my rights.”

            The condition of the Chappell Hill office, as described in Mr. Nobles’ March 8, 2002 memo to Mr. Sylvester, and in a subsequent disciplinary action proposed by Mr. Sylvester, raises questions about how well Petitioner was managing his post office, but Respondent’s case against Petitioner for the debt alleged in this case fails for lack of evidence to meet its burden of proving a loss of $4,790.62 from Petitioner’s main stock account.

            Respondent submitted nothing to contradict Petitioner’s claim that he asked to be present when his stock was counted, or to demonstrate that it was necessary to conduct the count in his absence. Nor did Respondent submit any evidence to contradict Petitioner’s statement that he was directed by his supervisor to turn over the keys to the main stock, thereby relinquishing control of it at least three days before the count. Respondent’s Answer consists of a recitation of “facts” by Respondent’s representative, but this is not supported by sworn statements from anyone who has actual knowledge of those facts.

            Because Respondent has not provided sufficient evidence to carry its burden of proof, the Petition is granted. Respondent may not collect $4,790.62 from Petitioner’s salary.

Bruce R. Houston
Chief Administrative Law Judge