P.S. Docket No. DCA 12-30


October 4, 2012

In the Matter of the Petition by

STEPHAN SLAUGHTER

P.S. Docket No. DCA 12-30

APPEARANCE FOR PETITIONER

Albert E. Lum

APPEARANCE FOR RESPONDENT

Christopher Kelly

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

 

Petitioner, Stephan Slaughter, filed a Petition for Hearing on January 25, 2012.  Respondent, United States Postal Service, sought to collect from Petitioner two debts in the respective amounts of $946.90 and $897.35 based upon shortages in two separate unit reserve accounts.  A hearing was conducted in Charleston, South Carolina.[1]  The following findings are based upon the record.

FINDINGS OF FACT

  1. At all relevant times Petitioner served as unit reserve custodian for the East Bay station in Charleston, South Carolina, and the Old Main station in the historic district of Charleston, South Carolina (Tr., pp. 72-73).[2]
  2. On June 8, 2011, Petitioner was removed from both facilities pending an investigation into an unrelated matter, but remained as unit reserve custodian at both facilities (Tr., p. 74).
  3. Notwithstanding his absence from the facility, on or about June 11, 2011, Petitioner received a telephone call from his postmaster requesting that he transfer stock from the unit reserve to the retail floor stock at the East Bay station (Id.).
  4. Petitioner made arrangements to meet one of his subordinates at the East Bay station to conduct the transfer of stock on Sunday, June 12, 2011 (Id.).
  5. Although Petitioner was present at the East Bay station as planned, Petitioner’s subordinate failed to appear to receive the transfer (Id.).
  6. At some point shortly after the failed attempt to meet, Petitioner informed both his postmaster and his subordinate of the location of the key to the unit reserve (Tr., pp. 14-15; 37; 75; 92).
  7. Petitioner’s subordinate, along with another employee, “secured” the unit reserve at East Bay station at the direction of the postmaster (Tr., pp. 37-38).
  8. Shortly thereafter, the same two individuals transferred stock from the unit reserve at the East Bay station to the retail floor stock to replenish a low supply of stamps (Tr., pp. 38-39; 66; 68-69).
  9. On August 29, 2012, following a properly conducted audit at the East Bay station, a shortage of $946.90 was discovered (Respondent’s Exh. A1; Tr., p. 20).
  10. On August 29, 2012, following a properly conducted audit of the unit reserve at the Old Main station, a shortage of $897.35 was discovered (Respondent’s Exh. B2; Tr., p. 21).
  11. The unit reserve accounts at the East Bay station and the Old Main station are maintained as separate accounts (Tr., p. 73).
  12. Although only one Notice of Involuntary Administrative Salary Offsets was offered into evidence, the parties do not dispute the timeliness of this Petition or jurisdiction to hear this dispute regarding both debts at issue (Tr., pp. 6-8).

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).

            The parties do not dispute the validity of the audit or the amount of the shortages at issue (although Petitioner does contend that if liable he is entitled to certain credits as an offset).  Thus, Respondent has met its initial burden that after a properly conducted audit a shortage exists in the two accounts for which Petitioner served as unit reserve custodian.  Having met its initial burden, the burden of persuasion shifts to Petitioner to show why he should not be held liable for these debts.  Caroline Harrington, P.S. Docket No. DCA 08-333 (May 13, 2009). 

East Bay Station Shortage

            Petitioner maintains that the integrity of the unit reserve was compromised by the transfer of unit reserve stock during his absence from the East Bay station.  During Petitioner’s absence, two employees transferred stock from the unit reserve to the retail floor stock at the East Bay station (Finding 8).  It is unclear whether the postmaster directed the two employees to do so, but it is apparent that Petitioner voluntarily surrendered the location of the key to his postmaster and subordinate prior to the transfer (Finding 6).  Petitioner testified that he believed that by doing so, an audit would be conducted and that accountability for the unit reserve would transfer prior to any transfer of stock from the unit reserve (Tr., p. 92).[3]  Petitioner’s understanding is consistent with Postal Service procedures which require that “[a]ccountability for stamp stock must be transferred when the unit reserve stock custodian is replaced or is scheduled to be absent for a period during which access to the unit reserve stock may be necessary.”  Handbook F-101, Field Accounting Procedures, § 11-10.2.1 (emphasis added)(hereafter Handbook F-101).[4] 

            Accordingly, I credit Petitioner’s testimony that he anticipated that an audit and transfer of unit reserve custodial responsibility would occur prior to dispensing of stock from the unit reserve as that testimony is consistent with the plain language of §§ 11-10.2.1 and 11-10.2.2 of Handbook F-101.  I likewise credit his testimony that it was on that basis that he surrendered the location of the key.  Although it is unclear whether the postmaster directed their actions, both employees testified that they entered the unit reserve to dispense stock prior to the audit of August 29, 2012 (Finding 8).  As such, in the absence of authority to do so without following the procedures set forth in Handbook F-101, §§ 11-10.2.1 and 11-10.2.2, such entry into the unit reserve by persons other than the custodian undermines the integrity of the unit reserve. 

            Although Petitioner voluntarily surrendered the location of the key to the unit reserve, unlike cases in which we have held a unit reserve custodian liable for a shortage after the unit reserve custodian gives permission to others to enter into the unit reserve, in this case there was at best a misunderstanding between the parties as to the process by which stock should be transferred from the unit reserve during Petitioner’s absence.  See, e.g., Zeola Brady, P.S. Docket No. DCA 10-190 (February 11, 2011)(Petitioner held liable for shortage after giving permission for others to access stock).  This misunderstanding tips the balance in favor of Petitioner.  Accordingly, I find that Petitioner has presented sufficient evidence to establish that he should be relieved of liability for the unit reserve shortage at the East Bay station.

Old Main Station Shortage

            Unlike the shortage at East Bay, what is missing from this matter is an explanation for the shortage at the Old Main station.  While the testimony focused on a transfer of stock at the East Bay facility, there was no discussion of a similar transfer from the unit reserve at Old Main following Petitioner’s absence and prior to the August 29, 2012 audit of that facility.  Petitioner did raise a question regarding an overage in Item Number 113900 (Mackinac Bridge) stamps, and attempted to draw a correlation between the stamp shortage at Old Main and the stamp overage at East Bay.  However, that issue was addressed to my satisfaction by Respondent and I find the correlation between the overage and shortage too tenuous to permit an offset (Tr., pp. 29-32).  Accordingly, I conclude with respect to the Old Main shortage that Petitioner has not established sufficient facts to relieve him of liability for the unit reserve shortage at that facility.

ORDER

            The Petition is GRANTED IN PART and DENIED IN PART.  With respect to the unit reserve shortage at the East Bay station, Respondent may not collect the debt of $946.90.  With respect to the unit reserve shortage at the Old Main station, Respondent may collect the debt of $897.35 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 to “Tr., p_.” Citations to the record are abbreviated to “Respondent’s Exh. __” and “Petitioner’s Exh. __” respectively.

[3] For its part, Respondent was unable to cite any specific authority at trial that would permit the employees to enter the unit reserve and transfer stock in the absence of the unit reserve custodian.  A subsequent review of Handbook F-101 finds no such authority present.

[4] When the postmaster became aware that Petitioner was removed from the facility on June 8, 2011, and that his absence might be “for a period during which access to the unit reserve stock may be necessary,” it was incumbent upon him to consider the proper method to dispense stock from the unit reserve in Petitioner’s absence.  Handbook F-101, § 11-10.2.1.  However, rather than follow the procedures set forth in Handbook F-101, §§ 11-10.2.1 and 11-10.2.2, other Postal Service employees entered the unit reserve and removed stamp stock (Finding 8).  This is not the procedure contemplated by the above referenced Postal Service guidelines.  See, e.g., Shirley Williford, P.S. Docket No. AO 09-129 (March 15, 2010)(failure of Postal Service to anticipate unit reserve custodian’s imminent retirement and find suitable replacement constitutes a basis to relieve Petitioner of personal liability for shortage).