September 21, 2011             

In the Matter of the Petition by 

HERMENEGILDO LOPEZ
at
New York,

P.S. Docket No. DCA 11-128

APPEARANCE FOR PETITIONER:
Albert E. Lum

APPEARANCE FOR RESPONDENT:     
Katherine Ferlauto

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner, Hermengildo Lopez, filed a Petition for Hearing on April 13, 2011. Respondent, United States Postal Service, sought to collect from Petitioner a debt in the amount of $1,760 based upon a shortage in the unit reserve for which Petitioner was custodian. A hearing was conducted on July 12, 2011, in Islandia, New York.[1]  The following findings are based upon the record.

FINDINGS OF FACT

1. Petitioner was served with a Notice of Involuntary Administrative Salary Offsets dated April 9, 2011 (Petition Attachment).

2. Petitioner was unit reserve custodian for a subsidiary of the Merrick Post Office referred to as Bank Plaza Station at all relevant times (Tr., p. 16).[2]

3. As the result of the Merrick Post Office unit reserve custodian’s prolonged absence during the summer of 2010, Petitioner transferred stock from the Bank Plaza Station unit reserve directly to the retail floor stock at the Merrick Post Office (Tr., pp. 65-66).

4. Petitioner’s practice was to transfer the stock from the Bank Plaza Station, maintain handwritten notes of the transfer, and execute the appropriate paperwork for the transfer after the fact (id.). 

5. As part of these stock transfers, sometime prior to September 25, 2010, Petitioner transferred 100 books of Item Number 678800 (hereafter “Love King and Queen stamps”) and 100 books of Item Number 679000 (hereafter “The Simpsons stamps”) from the Bank Plaza Station unit reserve to the Merrick Post Office retail floor stock (Tr., pp. 66-70).

6. Sometime after the transfer described above, but prior to September 25, 2010, Petitioner also became unit reserve custodian at the Merrick Post Office (Tr., p. 68).

7. After Petitioner became unit reserve custodian at both facilities, he transferred stock from the unit reserve at the Merrick Post Office, to the retail floor stock at the Merrick Post Office, then to the unit reserve at the Bank Plaza Station, to replenish the stock he had previously transferred directly to the Merrick Post Office retail floor stock (Tr., pp. 66; 78-80).

8. At the time Petitioner became unit reserve custodian at the Merrick Post Office, there were no Love King and Queen stamps or The Simpsons stamps in the unit reserve at the Merrick Post Office.  Therefore he was unable to transfer those items to the retail floor stock for eventual transfer to the Bank Plaza Station unit reserve.  (Tr., p. 66).

9. Instead, Petitioner ordered 100 books of Love King and Queen stamps and 100 books of The Simpsons stamps through the Stamp Distribution Office (SDO) for eventual return to the unit reserve at the Bank Plaza Station (Tr., pp. 66-67). 

10. Once these books were delivered to the Merrick Post Office unit reserve from the SDO, Petitioner took the stamps to the Bank Plaza Station to replenish the stamps he previously transferred from that unit reserve location to the retail floor stock at Merritt Post Office (Respondent’s Exh. 17; Tr., p. 67). 

11. However, in doing so, he forgot to execute a P.S. Form 17 or any other paperwork to document this transfer out of the Merrick Post Office unit reserve (Respondent’s Exh. 17; Tr., pp. 37; 67; 73-74; 79).

12. On September 25, 2010, an audit was conducted of the retail floor stock at the Merrick Post Office (Tr., p. 13).

13. The count of the retail floor stock revealed a stock shortage and triggered an audit of the unit reserve (Tr., pp. 13; 38).

14. On September 25, 2010, a properly conducted audit of the unit reserve at the Merrick Post Office revealed a shortage of $1,760, consisting of a shortage of 100 books of Love King and Queen stamps ($8.80) and 100 books of The Simpsons stamps ($8.80)(Respondent’s Exh. 2; Tr., pp. 14; 38-39).

15. 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 unit reserve custodian, and that the unit reserve audit conducted on September 25, 2010, was conducted in an account for which Petitioner was accountable (Findings 6, 14).  The audit revealed a combined shortage of $1,760 for Love King and Queen stamps and The Simpsons stamps (Finding 14).  Accordingly, Respondent has met its initial burden.

Petitioner does not contest the validity of the audit, nor that he was the unit reserve custodian at the time of the loss.  Instead, Petitioner argues that a corresponding overage in the retail floor stock with respect to the two specific item numbers that comprised the unit reserve shortage should be applied to this debt as an offset.  In doing so, Petitioner relies on my decision in Robert Porter, P.S. Docket No. DCA 10-290 (February 15, 2011)(Petitioner held not accountable due to corresponding overage in retail floor stock).  For the reasons that follow, that case is not applicable in this situation.

Petitioner explained in detail how he transferred stock between the different accountability units prior to his appointment as unit reserve custodian in both locations. His method of transferring stock, while unorthodox, was consistent during his time as unit reserve custodian at the Bank Plaza Station (Tr., pp. 79-80).  Respondent does not dispute Petitioner’s testimony about this practice, except to note that Petitioner did not file the appropriate paperwork for the transfer at issue, and thus should be held accountable (Tr., p. 17). However, if failure to follow proper procedures were the sole standard to apply in such cases, no hearing would be necessary, as rarely does such a shortage exist when all the rules have been faithfully adhered to by Petitioner.  Instead, the standard we apply is whether Petitioner has established, by a preponderance of the evidence, that his explanation is more likely than not the cause of the shortage in the unit reserve.  If so, then there exists no debt for which Petitioner is accountable. 

While Respondent is correct that Petitioner failed to follow proper procedures, and Respondent is also correct that overall shortages in the retail floor stock may represent actual losses to the Postal Service, Petitioner need only prove that he is not responsible for the shortage in the unit reserve.  Petitioner readily admits that it was his error that led to the shortage. However, we have stated many times that the Debt Collection Act is not a vehicle to punish poor job performance where no actual loss is shown.  See, e.g., Danny J. Smith, P.S. Docket No. DCA 09-90 (September 3, 1990); see also, Peter G. Harris, P.S. Docket No. DCA 09-41 (August 26, 2009); Albertha Johnson, P.S. Docket No. DCA 04-71 (August 23, 2004); Robert Capone, P.S. Docket No. DCA 02-500 (February 21, 2003). 

In this case, it is not the overage in the retail floor stock that relieves Petitioner of responsibility for the debt.  Instead, I find that Petitioner’s testimony about the transfer of the stock during the summer of 2010, particularly his explanation about the transfer that led to the shortage (Findings 10-11), is more likely than not the basis for the shortage in the Merrick Post Office unit reserve.  In so finding, I also conclude that no actual loss exists for which Petitioner is liable under the Debt Collection Act.   

ORDER

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 exhibits admitted into the record are abbreviated to “Respondent’s Exh.” or “Petitioner’s Exh.” Citations to the transcript are abbreviated as “Tr., p. __.”