In the Matter of the Petition by

CHRISTINA A. LAMB

P.S. Docket No. DCA 09-203

APPEARANCE FOR PETITIONER:
Albert E. Lum
Scialla Associates Inc.

APPEARANCE FOR RESPONDENT:
Ronald Jones, II, Esq.
Southwest Law Office
United States Postal Service

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Christina A. Lamb, filed a Petition for Hearing on June 2, 2009.  Respondent, United States Postal Service, sought to collect from Petitioner a debt in the amount of $6,854.47 based upon a shortage in the Unit Reserve Stock at the Burleson Post Office.  A hearing was held in Fort Worth, Texas on September 29, 2009.[1]  The following findings are based upon the record.

FINDINGS OF FACT

            1.      On April 27, 2007, an audit of the unit reserve account in the Burleson Post Office was conducted and showed the account to be in balance (Tr., p. 64; Respondent’s Exhibit M). [2]

            2.      On May 18, 2007, Petitioner began a detail as Officer in Charge (OIC) of the Burleson Post Office (Tr., p. 225). 

            3.      During Petitioner’s detail, the Burleson Postmaster was on detail as acting Manager of Postal Operations but remained as unit reserve custodian at the Burleson Post Office (Tr., pp.100-01).

            4.      Although Petitioner had been employed by the Postal Service for a number of years prior to her arrival at the Burleson Post Office, Petitioner had no experience in the operation of a retail post office (Tr., p. 225).

            5.      On March 6, 2008, responsibility for management of the Burleson Post Office was transferred from the Burleson Postmaster to Petitioner as OIC (Respondent’s Exhibit D-10).

            6.      On the day of the transfer, a count was conducted of the retail stock by Petitioner and a T6 Clerk (Tr., pp. 167-69, 228). 

            7.      The Burleson Postmaster, who was unit reserve custodian at the time, did not participate in or attend any count on March 6, 2008 (Respondent’s Exhibit D-10).

            8.      Also on the day of the transfer, Petitioner executed P.S. Form 222, acknowledging responsibility for the Burleson Post Office (Respondent’s Exhibit D-14), and P.S. Form 971, a Certificate of Transfer accepting responsibility for the “Stock, Funds, Capital Property and Equipment Covered by this Form” (Respondent’s Exhibit D-10; Tr., pp. 67-68).

            9.      Although the Unit Credit Worksheet, which is part of the transfer of accountability package, indicates that a P.S. Form 3294 was completed, no Form 3294 could be located to confirm that a count of the unit reserve was conducted (Respondent’s Exhibit D-12; Tr., pp. 20, 208, 230; Management Instruction FM-310-2007-1, Transfer of Accountability for Post Offices, Stations, and Branches (December 1, 2007), p. 4).

            10.     Petitioner does not recall a count of the unit reserve on March 6, 2008 (Tr., pp. 228-29).

            11.     The T6 clerk who assisted in the count of the retail floor stock could not state with specificity that he counted the unit reserve on March 6, 2008, nor could he recall the results of any such count (Tr., pp. 167-69).

            12.     The current Postmaster of Lipan, Texas was the Transfer Agent on March 6, 2008 (Tr., p. 114).

            13.     Although the Transfer Agent did testify that she saw a Form 3294 “in the room” during the count, she did not testify that she saw a recorded count of the unit reserve on Form 3294 (Tr., pp. 126-27).

            14.     The Transfer Agent testified that the figure $42,822.70 in Box 8 of the Certificate of Transfer was obtained from P.S. Form 1412 (Tr., p. 119).

            15.     A chronological listing of the most recent unit reserve stock audits from the post office accounting system did not contain an entry for March 6, 2008, and the transfer of accountability from the Burleson Postmaster to Petitioner was also never entered into the accounting system (Respondent’s Exhibit M; Tr., pp. 47, 73).

            16.     On September 2, 2008, Petitioner accepted a position at another postal facility and sought to transfer responsibility for the Burleson Post Office (Tr., p. 232).

            17.     On October 9, 2008, as part of the transfer of accountability, an audit was conducted of the unit reserve of the Burleson Post Office.  Petitioner was present at the audit.  The audit revealed a shortage of $6,854.47.  (Respondent’s Exhibit D-10; Tr., pp. 232-33).

            18.     On May 19, 2009, Respondent issued Petitioner a Notice of Involuntary Administrative Salary Offsets stating its intent to collect $6,854.47 by offset from Petitioner’s salary (Respondent’s Exhibit K-2).

            19.     The Debt Collection Act Petition was timely filed.

DECISION

            Respondent seeks to collect $6,854.47 from Petitioner for the shortage that was revealed by the October 9, 2008 audit of the unit reserve stock at the Burleson Post Office for which Petitioner was alleged to be custodian.  Under the Debt Collection Act, the initial burden lies with Respondent to establish that an actual loss exists in an account for which the employee is responsible.  Respondent is not required to prove any specific dereliction, or act of negligence by Petitioner.  Initially, it is sufficient that Respondent show that after a properly conducted inventory or audit a stock shortage exists in an account for which Petitioner is accountable.    

            When reviewing accountability for a loss in the unit reserve, we consider the applicable Postal Service regulation:

Managers, supervisors, employees, and contractors are responsible for accountable paper assigned to them and may be held liable for missing accountable paper, depending upon the circumstances of the loss.

Postal Service Handbook F-1, Accounting and Reporting Policy, §4-11.1.1.

            We have held that a recent change to the language setting forth employee responsibility for accountable paper no longer applies the strict liability standard that existed in the past.  See Thomas Guinee, P.S. Docket No. DCA 09-42 (May 21, 2009).  This language does not change the basic liability of the unit reserve custodian for shortages in unit reserve stock, but it does allow consideration of circumstances that might alleviate such liability. 

            The evidence indicates that as of April 27, 2007, the unit reserve account at the Burleson Post Office was in balance, but that as of October 9, 2008, there was a shortage in that account.  Respondent contends that Petitioner became unit reserve custodian on March 6, 2008, and therefore she may be charged with the shortage detected on October 9, 2008.  Petitioner denies that she became the unit reserve custodian for the Burleson Post Office on that date or anytime thereafter.  I need not decide whether Petitioner became unit reserve custodian on that date as alleged because even if she did, Respondent has not proven that the shortage discovered on October 9, 2008, occurred after March 6, 2008.  

            To establish the loss or shortage attributable to Petitioner, Respondent first needed to prove that an actual audit occurred in the unit reserve on March 6, 2008, and that the unit reserve account was in balance on that date.  The evidence is insufficient to demonstrate that this was the case.  The Certificate of Transfer indicates that part of the stock transferred to Petitioner included $42,822.70 of “Unit Reserve Stock.”  Respondent’s Exhibit D-10, Box 8.  However, that figure was based upon computer-generated records of the post office’s activities and was obtained from P.S. Form 1412.  What is missing is evidence that an actual count of the unit reserve stock was conducted to confirm that the number in Box 8 on the Certificate of Transfer matched the existing unit reserve stock on hand on March 6, 2008, and thus was in balance on that date.

            The record did not contain a P.S. Form 3294, the form recognized as a record of a physical stock count, or any other documentary or testimonial evidence demonstrating the results of an actual count of unit reserve stock on March 6, 2008 (See Findings 10-15).  Such evidence, if proffered, might provide corroboration that the unit reserve stock was in balance on March 6, 2008.  Without that evidence, all I am able to conclude is that the shortage uncovered on October 9, 2008, occurred sometime between April 27, 2007, the date of the last properly conducted audit of the unit reserve (and well before Petitioner could be held accountable for the unit reserve), and October 9, 2008, the date of the most recent audit of the unit reserve account. 

            As discussed above, in a Debt Collection Act case, Respondent must establish that after a properly conducted inventory or audit a stock shortage exists in an account for which Petitioner is accountable.  In this case, while Respondent has established that a shortage existed after a properly conducted audit, it has failed to meet its burden of proof under §4-11.1.1 that the shortage occurred in an account for which Petitioner was accountable. 

CONCLUSION

            The Petition is allowed.  Respondent may not collect $6,854.47 from Petitioner’s pay.

James G. Gilbert
Chief Administrative Law Judge

[1] The undersigned Administrative Law Judge presided via speaker telephone from the Judicial Officer Courtroom in Arlington, Virginia.

[2] Citations to the hearing transcript and page number appear as “Tr., p.__.”