June 5, 2012

In the Matter of the Petition by

MARLON A. POLANCO

P.S. Docket No. DCA 12-31

APPEARANCE FOR PETITIONER
Marlon A. Polanco
 
APPEARANCE FOR RESPONDENT
John Sanchez

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

 Petitioner, Marlon A. Polanco, filed a timely Petition for Hearing under the Debt Collection Act after receiving a Notice of Involuntary Administrative Salary Offsets dated January 6, 2012.  The Notice stated the Postal Service’s intention to withhold $1,291.82 from Petitioner’s salary to recover a shortage in an account for which Petitioner was the responsible custodian.
 At the request of the parties, the matter is being decided based on written submissions.  Both parties submitted documents and written argument.  The following findings of fact are based on the entire record.
FINDINGS OF FACT
 1.  Petitioner was the supervisor of the Toluca Lake Branch Post Office in North Hollywood, California, and was the custodian of the office’s unit reserve.  The unit reserve holds the station’s stamps for issuance to retail clerks for sale to customers.  (Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996) (“F 1 Handbook”), sections 413, 483-6; Respondent’s Exhibit (“Resp. Exh.”) 8).
 2.  On September 18, 2009, Petitioner transferred stamps from the unit reserve to the station’s retail unit.  The transfer was recorded on a PS Form 17 on which Petitioner listed the quantity and value of the stamps transferred.  Two retail clerks acknowledged receipt of the stamps by signing the Form 17. (Pet. Exh. 1).
 3.  Of the 18 different types of stamps individually listed on the Form 17, all but one were enumerated in multiples of 100.  The one exception was for stamp item no. 678900, “2009 Forever Stamp PSA Dbl-Sd Bklt.”  The itemized list for that item listed 5 booklets with a value of $44.00 ($8.80 per booklet).  (Pet. Exh. 1).
4.  The 2009 Forever Stamps were received and held in the Toluca Lake unit reserve in packages of 100 booklets, and were routinely transferred to the retail stock in the same form, and not as individual booklets.  Thus, the quantity transferred to the retail stock was not 5 booklets, as reflected on the Form 17, but was 5 packages of 100 books each, for a total of 500 booklets and a total value of $4,400.00.  (Petitioner’s October 15, 2011 Letter; Pet. Exh. 3, 4).
 5.  On October 3, 2009, the retail stock in the office was counted.  The count reflected that the value of the retail stock physically counted exceeded the accountability - i.e., the value of the stamps shown by office’s computerized records - by $3,044.59.  For the 2009 Forever Stamp (item no. 678900), the accountability reflected a negative number of 323 booklets and the physical count revealed 109 booklets on hand.  (Resp. Exh. 1).
6.  On October 16, 2009, the Toluca Lake unit reserve was counted.  The count reflected that the unit reserve accountability value exceeded the total value of the stock physically present by $4,410.02.  For the 2009 Forever Stamp (item no. 678900), the count reflected that 2,400 books should be on hand, and an actual count of 2,400 books.  (Resp. Exh. 2).  Respondent assigned Petitioner a shortage of $4,336.41 based on this count (Resp. Exh. 2 (p. 3), 3).  
7.  Respondent offset the October 3 retail stock overage of $3,044.59 against the $4,336.41 unit reserve shortage of October 16, and concluded that Petitioner was responsible for repayment of the difference, $1,291.82 (Resp. Exh. 3).
8.  Respondent issued Petitioner a letter of Debt Determination finding him responsible for the unit reserve shortage, offset by the retail stock overage, and seeking payment of $1,291.82 (Resp. Exh. 6).
9.  On January 6, 2012, Respondent issued Petitioner a Notice of Involuntary Administrative Salary Offsets, stating its intention to collect a debt by offsetting 15 percent of Petitioner’s pay beginning 30 days thereafter.  Petitioner filed a timely Petition in response to the Notice.

DECISION

 Respondent argues that Petitioner, as the unit reserve custodian, is responsible for the shortage discovered in the unit reserve on October 16, 2009.  Additionally, as the station manager, according to Respondent, he is responsible for the financial condition of the station and is liable if the finances are not in balance.
 Petitioner argues that he made an error in completing the PS Form 17 for the September 18, 2009 transfer of stock to the retail floor stock (Findings 2, 3).  The entry for 2009 Forever Stamps, according to Petitioner, should have been 500 booklets (5 packages of 100 booklets each) with a value of $4,400 instead of 5 booklets valued at $44.00 as recorded on the Form 17.  He supports his argument with a 2011 letter signed by the two retail clerks who signed the Form 17 acknowledging receipt of the stock.  They stated that booklets were always shipped to retail in packages of 100, not as individual booklets.  Additionally, all of the other line items on the Form 17 (17 out of 18 items) were in multiples of 100.  As reflected in Finding 4, this evidence persuades me that Petitioner made the claimed error in transferring stock to the retail unit on September 18, 2009.  Adjusting the unit reserve accountability for that error would reduce that accountability by $4,356,  nearly the same amount assigned as the total reserve stock shortage shortly thereafter, on October 16, 2009 (Finding 6).
 The itemized entry for the 2009 Forever Stamps in the retail stock supports Petitioner’s theory.  The negative balance for the stamp in the computer accountability reflects that the retail unit disposed of (probably sold) more stamps than had been officially assigned to its accountability (Petitioner’s Rebuttal).  This most likely resulted from a physical transfer of more booklets to the retail stock than were reflected on the Form 17 transfer document.  No alternate explanation has been offered.
 Although the fact that the unit reserve count showed the correct number of 2009 Forever Stamp booklets on hand (Finding 6) does not square with this theory, nevertheless, on balance, I find the preponderant evidence sufficient to demonstrate that the October 16 apparent shortage in the unit reserve did not represent an actual loss to Respondent.  The evidence regarding the practice of transferring stamps in 100-book blocks, the negative balance of the Forever Stamps in the retail stock, the total amount of the apparent unit reserve shortage relative to the amount caused by the error, and the proximity in time of the two counts all result in my conclusion that the apparent shortage was, in fact, caused by Petitioner’s error in accounting for the transfer of stock to the retail unit, and not by an actual stock loss.  See, e.g., Thomas R. Guinee, P.S. Docket No. DCA 09-42 (May 21, 2009).
 Accordingly, the Petition is granted.  Respondent may not withhold $1,291.82 from Petitioner’s salary on an involuntary basis.

David I. Brochstein
Administrative Judge