P.S. Docket No. DCA 03-200
December 12, 2003
In the Matter of the Petition by
MARY BROOKS
6287 Sapphire Street
at
Alta Loma, CA 91701-3113
P.S. Docket No. DCA 03-200
APPEARANCE FOR PETITIONER:
Michael Stichler
P.O. Box 22025
Santa Barbara, CA 93121-2025
APPEARANCE FOR RESPONDENT:
Lydia Morton
Labor Relations Representative
United States Postal Service
15421 Gale Avenue
City of Industry, CA 91715-9342
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Mary Brooks, filed a Petition for Hearing in May 2003, in response to a letter of demand that was issued to her in December 2002. A Notice of Involuntary Administrative Salary Offsets, which is a prerequisite to any withholding from an employee’s pay, and which triggers the employee’s right to file a Petition for Hearing, was not issued until August 28, 2003.[1] This Notice stated the Postal Service's intention to withhold $2,154.43 from Petitioner's salary to recover a shortage in an account for which Petitioner was responsible.
A hearing was held in Rancho Cucamonga, California on October 15, 2003.[2] The Postal Service presented testimony from Roy Pardon, the Rancho Cucamonga Postmaster; Terri Eagon, a financial specialist; Kim Tran, an accounting supervisor; Lisa Otto, who succeeded Petitioner as window supervisor at Rancho Cucamonga; and Pamela Sadler, a supervisor at the Stamp Distribution Office. Petitioner testified on her own behalf, and also presented testimony from Truman Boyd, a retired postal supervisor who was Petitioner’s former representative. Both parties also relied on documents that had been previously filed. The following findings of fact are based on the entire record.
FINDINGS OF FACT
1. At the time pertinent to this case, Petitioner was Supervisor of Customer Service at the Rancho Cucamonga Post Office. She had held that position for several years, and was custodian of the unit reserve stamp stock until October 2, 2002. (Tr. 14, 37-38, 129).[3]
2. In September 2002, the postmaster directed that the unit reserve be turned over to another supervisor, Ms. Otto. On September 26, 2002, Petitioner and Ms. Otto began an audit of the unit reserve, with Ms. Eagon observing and assisting. Because of delays for various reasons, the audit was not completed until October 2, 2002. (Tr. 16-17, 43-44, 99, 137).
3. The result of the audit, in comparing the stamp stock present against the inventory list printed out by the POS system as representing what stamps should have been in the unit reserve, showed a shortage of $2,154.43.[4] (Tr. 45-46, 49; PS Ex. 33 (this document, a PS Form 3294, was attached to the Petition, but the parties re-numbered the documents in the case file prior to the hearing, as Postal Service Exhibits 1-34 and Postal Service Exhibits A-K)).
4. The $2,154.43 shortage was attributable to seven specific denominations of stamps listed on the inventory. The inventory list showed various quantities of these stamps, but there were none of any of those denominations present. (Tr. 49-50; PS Ex. 33, pp. 5-7).
5. In the course of conducting the audit, Petitioner and Ms. Otto found two boxes of stamp stock that Petitioner was not aware were in the vault. The boxes had been sealed, and had a 1995 date stamp on them. Petitioner, Ms. Otto and Ms. Eagon counted the contents, and Ms. Otto later made a record of the count, listing each denomination by quantity and dollar value. The total value of stamps contained in the two boxes was approximately $8,000. (Tr. 48-49, 75, 100-01, 104, 133; PS Exs. A, E, and H).
6. None of the stamps in the two boxes noted above were listed on the POS inventory list that was used to conduct the audit. Most of the stamps were of denominations no longer in circulation. (Tr. 20, 51-52).
7. The results of the audit were recorded on a PS Form 3294, Cash and Stamp Stock Count and Summary. Both an overage - $8,056.03, based on the two “extra” boxes of stamp stock, and a shortage - $2,154.43 (see Finding #3), were entered on the Form 3294, with a net overage of $5,901.60 also entered. Petitioner and Ms. Otto signed the form on October 2, 2002. (Tr. 45-49, 68-69, 129-30; PS Ex. 33).
8. The prescribed procedure for turning in excess or obsolete stamp stock is for the custodian and a witness to count, and record on a PS Form 17, Stamp Requisition/Stamp Return, and a PS Form 3238, Stamps & Stamped Paper Destruction Certificate, the denominations and amounts of stamps being returned. The stamps, along with a copy of the pertinent forms, are then sent by registered mail to the Stamp Distribution Office (SDO). The SDO then sends a confirmation to the shipping post office that the registered shipment has been received. The District Accounting Office tracks all shipments of stamp stock to and from post offices and the SDO. If the accounting office receives a report of a stock shipment, but no report of timely receipt, the Accounting Office initiates an inquiry. It is also common practice for the shipping office to inquire if they do not receive confirmation within a reasonable time. (Tr. 59-60, 85-87, 109-10, 116).
9. At the time of the audit, and in her testimony at the hearing, Petitioner stated that the specific stamps that had been noted as missing from the inventory list (see Finding #4) had been sent back to the SDO several months earlier. On September 30, 2002, during the course of the audit, Petitioner made an entry into the POS system to show that the stamps noted as missing from the inventory list (see Finding #4) were shipped to the SDO. There are no other records to show that Petitioner shipped these stamps to the SDO. The SDO did not receive the stamps, and Petitioner made no follow-up inquiry to ask whether the SDO had received a shipment from her. (Tr. 23, 53, 58-62, 91-94, 96, 134-35, 148, 153, 166-67; PS Ex. 34).
10. Immediately following the completion of the audit on October 2, 2002, Petitioner began a lengthy absence from work, due to a job-related injury. She did not return to work until May 2003. Postmaster Pardon issued Petitioner a letter of demand for $2,154.43 on December 10, 2002. The parties dispute whether Petitioner actually received this letter before March 2003.[5] (Tr. 21, 129: PS Ex. 2).
11. Petitioner was issued previous letters of demand in September 1994, May 1995, and July 1999, for shortages of $2,377.35, $1,852.11, and $699.53, respectively. She paid the $1,852.11, but the other two were written off. (Tr. 26, 29, 130; PS Exs. 1, 7-9).
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 any specific dereliction, or act of negligence, by Petitioner. 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. If Respondent proves a loss, the burden then shifts to the employee to show that he or she followed established procedures, or to present other evidence that would warrant relieving the employee of liability.
Respondent’s contention is that the audit conducted by Petitioner, Ms. Otto, and Ms. Eagon clearly shows a loss of $2,154.43, because several specific quantities of stamps equaling that amount were listed on the inventory but were not present. As to Petitioner’s claim that she had previously shipped those stamps to the SDO for destruction, Respondent argues that there is no evidence to support this.
As to the apparent overage resulting from the two boxes of old stamp stock found in the vault, Respondent argues that there is no basis for offsetting this overage against the shortage, because there is no relationship between the two.
Petitioner makes several arguments. First, she contends that she was deprived of the opportunity to demonstrate that the $2,154.43 was not a real loss. This is based on her assertion that she left the Rancho Cucamonga office on October 2, 2002, believing that she would not be charged for any loss because the PS Form 3294 that she signed showed a net overage of more than $5,000. When she learned some months later of the alleged indebtedness, having been absent from work in the meantime, she says it was too late to trace relevant records.
Next, Petitioner contends that she did send the “missing” stamps to the SDO and, therefore, the $2,154.43 was not lost. In support of this, she points to records of an October 28, 2001 count of her unit reserve (PS Ex. 28), which contain some handwritten notes beside a few items on the inventory list, indicating that these items were to be “redeemed,” i.e., sent to the SDO.
Finally, Petitioner argues that she is entitled to credit for the $8000 of unlisted stamp stock found during the September 2002 audit. She points out that this stock must have been issued to her at some time, as Respondent’s witnesses conceded, and therefore was part of her accountability even though it was not currently listed on her inventory in September 2002.
Petitioner’s first argument is not persuasive. Although it is true that there was some delay before she was charged with the $2,154.43 shortage, she was clearly aware that this shortage existed at the time of the audit, and she and Ms. Eagon discussed at that time her claim that she had shipped the stock out. While it is not necessary to rule on the propriety of her action in making the September 30, 2002 POS entry (See Finding #9), that action does show that she knew then that finding some record of the shipment was a matter of concern. Also, the testimony of Ms. Eagon, Ms. Tran, and Ms. Sadler demonstrates that a genuine effort was made to locate any record that these stamps had been shipped to the SDO. Therefore, I find no harm to Petitioner from the delay.
As to Petitioner’s second argument, as stated above the record does not support her claim that she sent these stamps to the SDO. None of the documents that would normally accompany such a shipment have been found, the office that tracks such shipments has no record of it, the SDO has no record of receiving the shipment, and no one recalls Petitioner ever making an inquiry about the status of the shipment. These facts outweigh the notations made by Petitioner, or someone else, in October 2001 that these stamps were scheduled to be redeemed.
Finally, there is the matter of the two boxes of stamp stock that no one is able to explain. The general rule on offsetting overages against shortages is that an offset is not appropriate unless the evidence establishes a probable relationship between the two, i.e., that the overage and the shortage represent the same stamp stock.[6] It is clear in this case that the overage and the shortage do not represent the same stamp stock. The shortage is based on comparison of a September 25, 2002 inventory list, and its bottom-line total, against stamps actually present in Petitioner’s vault. None of the stamps found in the two boxes were listed on the inventory, and the unit reserve account had been balanced previously without counting these stamps.
It may be correct to assume that these stamps were in Petitioner’s inventory at some time in the past, and that she was once accountable for them. We do not have the entire history of this unit reserve account, but it appears that the existence of these stamps has been unknown to anyone for several years and they clearly had not been included as part of the unit reserve accountability for several years. What happened to the accounting for these stamps remains a mystery, but to credit Petitioner with them now, to offset the September 2002 shortage, would be purely a windfall to her.
The Petition is denied. Respondent may collect $2,154.43 from Petitioner’s salary.
Bruce R. Houston
Chief Administrative Law Judge
[1] The case remained on our docket while these procedural steps were clarified and completed.
[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 documents filed by the parties prior to the hearing will be identified by exhibit number and page number.
[4] The POS Report showed that $272,426.86 should have been present. The count showed a total of more than $278,000, but this included some stamps that were not part of the unit reserve accountability at that time (see Findings #5 and #6).
[5] Resolution of that dispute is not critical to the decision in this case.