P.S. Docket No. DCA 06-155
December 05, 2006
In the Matter of the Petition by
RUTH TEAGUE
P.S. Docket No. DCA 06-155
APPEARANCE FOR PETITIONER:
David Deakin
APPEARANCE FOR RESPONDENT:
Ralph J. DiVasta
Labor Relations Specialist
United States Postal Service
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Ruth Teague, filed a Petition for Hearing after her request for reconsideration of a Letter of Indebtedness was denied by her supervisor on August 11, 2006. This letter stated the Postal Service's intention to withhold $2,793.52 from Petitioner's salary to recover a loss from a stamp stock account for which Petitioner was accountable.
A hearing was held in North Reading, Massachusetts on October 25, 2006.[1] The Postal Service presented testimony from a financial supervisor who performed an audit in Petitioner’s post office, another financial specialist, and a clerk from Petitioner’s post office. Petitioner did not testify, but presented testimony from her supervisor, her successor as Officer-in-Charge of the Groton Post Office, and another financial specialist. Both parties relied on documents that had previously been filed, and both parties filed written post-hearing arguments. The following findings of fact are based on the entire record.
FINDINGS OF FACT
1. For some years until March 31, 2006, Petitioner was the postmaster at Groton, Massachusetts. She was also the custodian of the unit reserve stock at Groton. (Tr. 24, 34, 72).[2]
2. On March 31, 2006, the Post Office Operations Manager for central Massachusetts, Petitioner’s supervisor, removed her from her position as postmaster because some financial procedures were not being followed properly. The Manager designated a clerk who had previously acted as Petitioner’s replacement during vacations to manage the office until a new Officer-in-Charge could be installed. The unit reserve accountability was not transferred to the clerk.[3] (Tr. 21-22, 85-88).
3. On April 11, 2006, a financial supervisor, another financial specialist and the new OIC came to Groton for the purpose of transferring the office to the OIC. Petitioner was not present. When the clerk told the financial supervisor that she had access to the unit reserve, the financial supervisor decided that they should also audit the unit reserve at that time. No one attempted to locate Petitioner to determine whether she was available to participate. The financial supervisor, the incoming OIC and the clerk conducted the audit and found the unit reserve to be short $2,793.52. The pertinent office record showed that $56,946.94 of stamp stock should have been present, but only $54,153.42 was present. Because several different items were not in balance, they counted the stock three times. (Tr. 22-28, 52, 64, 75, 97-98; Answer, pp. 10, 43-44).
4. While Petitioner was the custodian of the unit reserve, she gave the combination to the safe where the unit reserve was stored, and access to the unit reserve account in the POS computer system, to her clerk. The record is not clear as to when this was first done, but it was a long-standing arrangement between Petitioner and her clerk. Postal regulations governing management of stamp stock state that only the unit reserve custodian should have access to the unit reserve. (Tr. 59, 72, 91; Answer, pp.3-5, 7-8).
5. A listing of fourteen audits done on the retail floor stock at the Groton Post Office from January 18, 2005 to March 29, 2006 shows shortages on ten counts – total $1,101.91; and overages on four counts – total $2,873.37. The count on March 29, 2006 showed a $549.24 overage. The next floor stock audit after the April 11 unit reserve audit was done on April 29, 2006, and showed a $611.87 shortage in the retail unit. (Tr. 11-12, 37-38; Answer, pp.29-30).
6. On July 18, 2006, Petitioner’s supervisor issued her a letter of indebtedness for $2,793.52. On August 3, 2006, Petitioner requested reconsideration, by letter to her supervisor. This request was denied on August 11, 2006, and Petitioner filed her Petition for Hearing. (Documents attached to Petition).
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 the employee. 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.
Respondent argues that the April 11, 2006 audit was accurate and was properly conducted, and that Petitioner has presented nothing to establish a basis for relief from liability. Specifically, Respondent argues that Petitioner cannot claim that she followed established procedures because she clearly violated those procedures by allowing her clerk to have access to the unit reserve.
Petitioner makes two arguments. First, she contends that the audit was not properly conducted because it was done without her being present. Second, she contends that she should be given credit for net overages of $1,771.46 in the several audits of the retail floor stock between January 2005 and March 29, 2006.
The provisions in the F-1 Handbook that Petitioner cites as requiring Petitioner’s presence at the audit all deal with audits of “stamp credits.” These are defined as “the value of stamp stock consigned to an employee from the main stock or unit reserve stock in an office.”[4] While it is usually good practice to have the current stamp stock custodian present for a unit reserve audit, there appears to be no contractual or regulatory requirement that the custodian must be present. Further, Petitioner’s clerk was present to participate in the audit, and Petitioner had already compromised the security of the unit reserve by allowing the clerk to have access to it. In the circumstances presented here (see Findings #3 and 4), the financial supervisor and the incoming OIC acted reasonably in doing a prompt audit of the unit reserve. In the absence of any evidence that their count was not accurate, I find that the Postal Service did not breach any duty owed to Petitioner by conducting the audit without her being present. Respondent’s evidence is sufficient to prove the loss alleged.
In her argument for offsetting floor stock overages, Petitioner relies on Respondent’s documents (see finding #5). Petitioner argues that the net overage on the fourteen floor stock audits prior to April 11, 2006 – $1,771.46 – should be offset against the unit reserve shortage because all stamp stock in the retail floor unit comes from the unit reserve.
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.[5] As other factors, such as discrepancies in transactions with customers, may affect the balance in the retail floor stock, it is not automatic to credit every floor stock overage to the unit reserve account.
The flaw in Petitioner’s argument is that there is no evidence that shows a relationship between any particular floor stock overage and the unit reserve shortage found on April 11, 2006. Because the retail floor stock account was put back in balance after each audit, the “net” overage of the fourteen previous counts is not a meaningful figure and bears no relation to the unit reserve shortage found on April 11, 2006. The record does not support offsetting any floor stock overage against the unit reserve shortage.
Respondent has proved the loss alleged, and Petitioner has not demonstrated any basis for relief from liability. The Petition is denied. Respondent may collect $2,793.52 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, VA. 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 filed with Respondent's Answer, with pages numbered 1-44, will be identified as “Answer, p._.”
[3] Petitioner was returned to her position as Groton Postmaster on July 21, 2006.