In the Matter of the Petition by

ANTHONY WILSON
at
Jackson, MS

P.S. Docket No. DCA 10-188

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

APPEARANCE FOR RESPONDENT:
William M. DuBois
Manager, Labor Relations
United States Postal Service

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Anthony Wilson, filed a Petition for Hearing on July 21, 2010.  Respondent, United States Postal Service, sought to collect from Petitioner a debt in the amount of $8,200 based upon an alleged shortage in the unit reserve as the result of an audit conducted on July 1, 2009, at the Southwest Station, Jackson, Mississippi.  A hearing was held in Jackson, Mississippi on October 26, 2010.[1]  The following findings are based upon the record.

FINDINGS OF FACT

            1. Petitioner served as unit reserve custodian at the Southwest Station for all relevant times (Tr., p. 65).[2]

            2. As of May 19, 2008, the POS ONE system reflected an inventory of 604 Love & Kisses stamp booklets (Item Number 677100) and 96 American Flag stamp coils (Item Number 784400) in the retail floor stock for the Southwest Station and 770 Love & Kisses stamp booklets (Item Number 677100) and 100 American Flag stamp coils (Item Number 784400) in the unit reserve (Tr., pp. 67-68; Petitioner’s Exh. 10).[3]

            3. On June 30, 2008, as the result of a stamp price increase, Petitioner transferred the entire inventory of Love & Kisses stamp booklets (Item Number 677100) and American Flag stamp coils (Item Number 784400) from retail floor stock to the unit reserve and then shipped the same former retail floor stock to the Stamp Destruction Office (SDO) on July 1, 2008 (Tr., pp. 67-69; Petitioner’s Exh. 10; Petitioner’s Exh. 1-4).

            4. Following this shipment, the unit reserve had 770 booklets of Item Number 677100 and 100 coils of Item Number 784400 as it did prior to this transfer, and there was no stock for these item numbers remaining in the retail floor stock (Petitioner’s Exh. 1-5).

            5. On August 11, 2008, Petitioner shipped out a partial shipment from the unit reserve to the SDO for destruction that contained 500 booklets of Item Number 677100 and 100 coils of Item Number 784400 (Tr., pp. 72-73; Petitioner’s Exh. 2-5) leaving a remaining balance of 270 booklets of Item Number 677100 and 0 coils of Item Number 784400 (Tr., pp. 75-76; Petitioner’s Exh. 2-7).

            6. The value of the items shipped to the SDO on August 11, 2008, was $8,200 (Petitioner’s Exh. 2-5).

            7. On or about August 29, 2008, the POS ONE computer system at the Southwest Station crashed. It was restored on September 11, 2008. (Tr., pp. 76-77, 81).

            8. On December 18, 2008, a retail floor stock count was conducted in which the POS ONE system expected the presence of 604 booklets of Item Number 677100 in the retail floor stock although all of the retail floor stock of Item Number 677100 had been shipped from the retail floor stock to the unit reserve on June 30, 2008 (Tr., p. 83; Petitioner’s Exh. 3-3).

            9. On March 23, 2009, a count was conducted of the retail floor stock and the POS ONE report generated on that date did not list Item Number 677100 at all, thus indicating no expected retail floor stock for that item (Tr., p. 84; Petitioner’s Exh. 4).

            10. On June 16, 2009, a POS ONE report listed the expected presence of 500 booklets of Item Number 677100 and 100 coils of Item Number 784400 in the unit reserve, although the same volume of stock had already been shipped from the unit reserve to the SDO on August 11, 2008 (Tr., p. 85; Petitioner’s Exh. 5).

            11. An audit conducted on July 1, 2009, revealed a shortage in the unit reserve of $8,200, specifically in Item Number 677100 (500 booklets at $8.20) and Item Number 784400 (100 coils at $41.00)(Petitioner’s Exh. 9).[4]

            12. The Debt Collection Act Petition was timely filed.

DECISION

            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.  See Victoria Bingham, P.S. Docket No. DCA 09-177 (December 7, 2009).  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.  Christina A. Lamb, P.S. Docket No. DCA 09-203 (October 30, 2009).

            It is uncontested that Petitioner was stamp stock custodian, and that the audit conducted on July 1, 2009, was conducted in an account for which Petitioner was accountable (Findings 1, 10).  The audit revealed a combined shortage of $8,200 for Item Number 677100 and Item Number 784400 based upon the figures maintained in the POS ONE system (Finding 10).  Generally, the establishment of these facts is sufficient for Respondent to meet its initial burden of proof.  However, in this case, Petitioner argues that the data contained in the POS ONE system on which the shortage is based is inaccurate. 

            On or about August 29, 2008, the POS ONE system crashed, and required major technical repairs, including installation of a new hard drive.  Petitioner was told the previous data on the hard drive had been restored when the POS ONE system was rebooted on or about September 11, 2008.  However, as Petitioner argues, the data in the POS ONE system does not seem accurate after the crash.  For example, the specific Item Numbers at issue in this case seem to reappear in the retail floor stock in the POS ONE system in December 2008, though no such inventory exists, then disappear from the retail floor stock in the POS ONE system in March 2009, only to reappear in the unit reserve in the POS ONE system in June 2009 without explanation (Findings 8 -10).  Given that the stock items were removed from retail stock in June 2008 after a price increase, it is unlikely that any additional transfers of these Item Numbers were conducted that might explain this inventory anomaly. 

            For its part, Respondent offered no testimony regarding the crash of the POS ONE System or the efforts to restore the data.  There was no testimony from any of the technology experts who worked on the hard drive to explain how the data that existed prior to the crash was restored, or to rebut Petitioner’s contention that the data was corrupted.  Also, no testimony was offered to explain the apparent post-crash inventory discrepancies for these particular Item Numbers as reflected in the POS ONE system. 

            I credit Petitioner’s testimony and documents submitted that raise serious doubt as to the accuracy of the inventory data maintained in the POS ONE system after the crash in August 2008, and, consequently, the accuracy of the figures used as the baseline for the July 1, 2009 audit.  In the absence of evidence to prove that the data “restored” to the POS ONE system after the crash was indeed accurate, Petitioner’s explanations regarding corruption of the data as the likely cause of the unit reserve “shortage” persuade me that the POS ONE inventory is too unreliable in these circumstances to impose personal accountability for the shortage.  See, e.g., Barry Bente, P.S. Docket No. DCA 01-147 (July 23, 2001)(faulty computer disks as a basis for relief of liability for unit reserve shortage).

            In this case, Respondent needed to either present testimony in its case in chief that would have proved the accuracy of the POS ONE system figures, or present rebuttal to Petitioner’s testimony regarding the inaccurate data in the POS ONE system and explain the data restoration process used after the August 2008 crash.  In the absence of such evidence, Petitioner’s facts pertaining to the discrepancies in the POS ONE system, combined with his explanation of the transfer of the same items to the SDO prior to the crash, and the resulting conclusion that the data was corrupted, stand alone as the most reasonable explanation for the $8,200 “shortage” in the unit reserve. 

            Accordingly, I find that while the POS ONE system and the July 1, 2009 audit did reveal an apparent shortage of $8,200 in the unit reserve, that shortage was more likely than not the result of erroneous or corrupted data in the POS ONE system after the August 2008 crash.  As such, Respondent has failed to prove that an actual loss occurred in an account for which Petitioner is liable.

CONCLUSION

            The Petition is GRANTED.  Respondent may not collect the debt by administrative offset from Petitioner’s salary. 

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 transcript are abbreviated as “Tr., p. __.”

[3] Citations to exhibits admitted into the record are abbreviated to “Respondent’s Exh.” or “Petitioner’s Exh.” with a “-“ preceding the page number within the exhibit where appropriate.

[4] The only remaining balance in the unit reserve for Item Number 677100 that the POS ONE system should have expected would have been the 270 booklets that remained after the August 11, 2008 transfer (Finding 5).  The physical count on July 1, 2009, revealed 0 booklets for Item Number 677100, thus a shortage for that Item Number arguably still exists.  However, for the same reasons discussed in this decision, this apparent shortage is not reliable and does not subject Petitioner to liability based on this record.