P.S. Docket No. DCA 14-313


June 11, 2015

GLORIA MELENDEZ v. UNITED STATES POSTAL SERVICE

P.S. Docket No. DCA 14-313

APPEARANCE FOR PETITIONER:
Albert E. Lum

APPEARANCE FOR RESPONDENT:
Tamara R. Johnson
Labor Relations Specialist

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Respondent, United States Postal Service, seeks to collect $102,422.52 from Petitioner, Gloria Melendez, based on a shortage in a unit reserve account.  Ms. Melendez has filed a Petition challenging the alleged debt.  Because the Postal Service has not proved Ms. Melendez was accountable for the unit reserve, the Petition is granted.

FINDINGS OF FACT

  1. In 2012, Joan McCray and Gloria Melendez were finance supervisors at Loop Station in Chicago, Illinois (Tr. 46–47, 125–26; Resp. Exh. 1).  Ms. McCray, the senior supervisor, was the unit reserve custodian (Resp. Exh. 2; Tr. at 13, 70, 93–94, 110–11, 126). 
  2. Ms. McCray and Ms. Melendez performed a unit reserve count on May 30, 2012.  The difference between the system count and the actual count was $6.90.  (Resp. Exh. 2). 
  3. Ms. McCray took leave from work beginning on August 20, 2012 for medical reasons (Resp. Exh. 1 at 2–4; Tr. at 128).  Ms. McCray, Ms. Melendez, and the Station Superintendent all expected Ms. McCray to return to work within a few weeks (Tr. at 30–31, 128). 
  4. Shortly after Ms. McCray went out on medical leave, she and Ms. Melendez talked by telephone regarding the unit reserve.  Ms. McCray gave Ms. Melendez the computer password and the combination for the unit reserve safe so that Ms. Melendez could access and issue stock from the unit reserve in Ms. McCray’s absence (Tr. at 26, 128–29, 182–83).
  5. With the exception of a few days later in 2012, Ms. McCray never returned to work (Tr. at 26–27, 29–30, 129).  She died in September or October 2013 (Tr. at 41, 99, 109–10).   
  6. In October 2013, an Acting Superintendent accessed the unit reserve with the intention of conducting a count and then assuming accountability.  After counting the stock, she discovered a $92,000 shortage.  (Tr. at 17–19, 92–94). 
  7. The Acting Superintendent did not, however, finalize the count.  As she proceeded to finalize the count, she realized Ms. McCray was still listed as the unit reserve custodian in the POS system.  The Acting Superintendent had assumed Ms. Melendez had replaced Ms. McCray as the unit reserve custodian at some prior time.  She did not want to finalize the count with Ms. McCray still listed as the unit reserve custodian.  (Tr. at 17–19, 92–94). 
  8. In December 2013, the Station Superintendent instructed Ms. Melendez to accept accountability for the unit reserve so that several Postal Service employees could perform and finalize a unit reserve count (Pet. Exhs. 5, 6; Resp. Exh. 3; Tr. at 174).  In compliance with that request, Ms. Melendez opened the safe and initiated a count in the POS system on December 18, 2013.  The Station Superintendent, however, instructed her not to participate in the count (Tr. at 174, 179–81, 190–91, 194). 
  9. The count on December 18, 2013, showed a shortage of $102,422.52 (Resp. Exh. 3; Pet. Exh. 3). 
  10.   Immediately following the December 18 count, the Postal Service drafted a letter to Ms. Melendez stating its intention to collect a $102,422.52 debt from her (Resp. Exh. 8).  Ms. Melendez acknowledged receipt of the letter on February 18, 2014 (Id.; Tr. at 172–73).
  11. On May 20, 2014, the Postal Service sent Ms. Melendez an invoice for $102,422.52 based on the unit reserve shortage (Petition at Attachment 4).
  12. In July and August 2014, the Postal Service offset money from Ms. Melendez’s salary to partially satisfy the debt (Petition at Attachments 2–3; Order and Memorandum of Telephone Conference, November 14, 2014).
  13. On September 9, 2014, Ms. Melendez filed a petition challenging the debt and the Postal Service’s collection efforts before it issued a Notice of Involuntary Administrative Salary Offset.1

DECISION

To collect a debt for a unit reserve shortage, the Postal Service must prove an actual loss exists in an account for which an employee is accountable.  See Veronica Jorden v. United States Postal Service, P.S. Docket No. DCA 14-150 (September 29, 2014). Here, the Postal Service argues Ms. Melendez assumed financial accountability for the unit reserve account in August 2012 when she began acting as the unit reserve custodian during Ms. McCray’s absence.  The Postal Service admits Ms. Melendez was not actually the unit reserve custodian, but it argues she nonetheless became accountable because she stood in for the unit reserve custodian.  Thus, according to the Postal Service, Ms. Melendez is responsible for the $102,422.52 stock shortage found in December 2013.  (Tr. 195–96).  Ms. Melendez counters by asserting that she is not accountable for the shortage because no audit transferred accountability to her (Tr. 197).

The Postal Service’s own regulations describe the usual process for transferring accountability of the unit reserve stock.  Handbook F-101, Field Accounting Procedures, Section 11-10.2.2 (October 2013).  First, the employee transferring accountability and the employee accepting accountability count the unit reserve stock.  The employees then record the results of the count on a PS Form 3294 (Cash and Stamp Stock Count and Summary), which also includes the names and signatures of the employees and the date of the transfer.  The employees also fill out and sign a PS Form 3959 (Unit Reserve Stamp Stock) to record the opening balance, any overage or shortage, the closing balance, and the date.  Finally, the employee accepting accountability of the stock signs a PS Form 3369 (Consigned Credit Receipt). 

These procedures are not mere formalities.  They help establish (1) the identity of the unit reserve custodian, and (2) the baseline balance against which to measure any future shortages in the unit reserve account.  See Jhan M. Harris, P.S. Docket No. DCA 11-39 (July 29, 2011); Christina A. Lamb, P.S. Docket No. DCA 09-203 (October 30, 2009).  Here, the Postal Service’s ability to comply with these requirements was complicated by Ms. McCray’s absence beginning in August 2012.  Nonetheless, there is nothing in the record showing that the management officials at the Loop Station formally transferred accountability to Ms. Melendez.  Without a formal transfer, there is no way of knowing when the shortage occurred or establishing a baseline balance against which to measure a shortage. 

Thus, in the absence of evidence that accountability was transferred to Ms. Melendez, the Postal Service may not hold her accountable for the shortage.  This is true even though Ms. McCray shared her password and the safe combination with Ms. Melendez, and Ms. Melendez then used that information to perform the duties of the unit reserve custodian in Ms. McCray’s absence.

Simply put, Ms. Melendez was not the unit reserve custodian, and she therefore cannot be held accountable for the shortage discovered in December 2013.

CONCLUSION AND ORDER

The Postal Service may not collect the alleged debt for the unit reserve shortage.  The Postal Service must return any money it previously offset from Ms. Melendez’s salary to satisfy the debt.

Alan R. Caramella
Administrative Judge

1 Even though the Postal Service did not issue a Notice of Involuntary Administrative Salary Offset, I have authority to decide this case because the Postal Service offset money from Ms. Melendez’s salary to partially satisfy the debt.  39 C.F.R. § 961.4(a).