June 11, 2015

STEPHEN B. GRANT v. UNITED STATES POSTAL SERVICE

P.S. Docket No. DCA 15-47

APPEARANCE FOR PETITIONER:
Albert E. Lum
Scialla Associates

APPEARANCE FOR RESPONDENT:
Jacqueline K. Allen
Labor Relations Specialist

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner, Stephen Grant challenges a debt assessment issued by Respondent, United States Postal Service seeking to offset from Mr. Grant’s salary a $9,712.90 shortage discovered in a unit reserve account for which he was the accountable custodian.  I presided at a hearing on May 20, 2015.  I grant the Petition, ruling in favor of Mr. Grant.

FINDINGS OF FACT

1. On September 18, 2013, a count of the unit reserve at the Atlanta West End Station resulted in the Postal Service reporting a $9,712.90 shortage in its POS accounting system (Tr. 42, 46, 57, 80, 87, 103-05; Resp. Exhs. 2, 8).  At that time, Mr. Grant served as the accountable unit reserve custodian for that facility.  Following the September 18, 2013 count, responsibility for the unit reserve transferred to a successor custodian.  (Tr. 15, 56, 59, 79-81, 125-26; Resp. Exhs. 4, 19). 

2. Mr. Grant was not asked to participate in the September 18, 2013 count (Tr. 15, 21, 34, 38, 55, 132, 138, 149-50).  He was not at work in the post office that day, having been approved in advance for annual leave (Tr. 4-5 (Stipulation), 136, 142-45, 149; Pet. Exh. 1). 

3. During a subsequent count, the Postal Service discovered $5,490 in stamps that had fallen behind a cabinet of the Atlanta West End Station unit reserve.  Those discovered stamps were part of the September 18, 2013 shortage for which the Postal Service had charged Mr. Grant.  (Tr. 49, 51-53, 56-58, 61-62, 115-19).

4. On March 17, 2014, the Postal Service issued Mr. Grant a letter of demand assessing him with accountability for the $9,712.90 unit reserve shortage it had recorded in the POS system (Pet. Att. 8).

5. Thereafter, without having issued a Notice of Involuntary Administrative Salary Offsets (Notice), the Postal Service collected at least twelve involuntary offsets from Mr. Grant’s salary.  Mr. Grant then filed a Debt Collection Act Petition.  (Tr. 133-34; Pet. Att. 6, 7).

6. After I ordered the Postal Service to refund the salary offsets, Mr. Grant waived issuance of a Notice (March 25, 2015 Order and Memorandum of Telephone Conference; Tr. 3-4; see also 39 C.F.R. § 961.4(a)).

DECISION

To recover in this case, the Postal Service must prove that Mr. Grant was the accountable custodian of the Atlanta West End Station’s unit reserve, and that a stock shortage representing an actual loss existed after a properly conducted count of the unit reserve.  If the Postal Service satisfies that initial burden, Mr. Grant may be held liable for the unit reserve shortage unless he shows circumstances sufficient to alleviate or offset that debt.  See Squalls, DCA 12-197 (December 7, 2012).

The Postal Service has not satisfied its burden.  Although the parties agree that Mr. Grant served as unit reserve custodian as of September 18, 2013 (Finding 1), the count was not properly conducted.

The custodian or a witness designated by the custodian must participate for a count to be considered properly conducted absent unusual excusable circumstances.  See Williford, AO 09-129 (I.D. March 15, 2010); Handbook F-101, Field Accounting Procedures, § 13-3.1 Counting Requirements (stamp credits must be counted by the accountable employee and another employee); § 13-3.5 Physical Count (the two counting employees must enter independent counts, verify the items, resolve any discrepancies, and sign the count sheets); § 3-8.3 Witness Requirements (employee or a designated witness must be given the opportunity to be present when accountability is counted). 

The Postal Service did not ask Mr. Grant to participate in the count and he was not included.  Indeed, after evaluating conflicting evidence on this point, I have concluded that although Mr. Grant generally was available to participate in a unit reserve count, the Postal Service conducted the count at issue while Mr. Grant was away on annual leave.  (Finding 2).  There is no indication in the record that Mr. Grant would not have participated in the count had he been provided the opportunity to do so. This deficiency in the manner of the count, which is attributable to the Postal Service, invalidates the count as the basis for assessing liability.  Therefore, even if the count otherwise were reliable (which I need not decide)¹ because the audit was not properly conducted, it cannot be used to establish the existence of the assessed shortage.  See Evans-Jackson, DCA 13-78 (June 4, 2013).  As the Postal Service has failed to present any other evidence demonstrating an accountable shortage, it may not collect the assessed debt from Mr. Grant.  See Bucher, DCA 02-411 and DCA  02-433 (November 19, 2002).

CONCLUSION AND ORDER

The Petition is granted.  The Postal Service is prohibited from collecting the $9,712.90 assessed debt from Mr. Grant by involuntary administrative salary offset.

Gary E. Shapiro
Administrative Judge

¹ After the hearing and close of the record (Tr. 169), Respondent filed a motion asking me to re-open the record to accept a POS report concerning the September 18, 2013 audit.  Respondent represented that the document was discovered after the hearing by a witness “while looking through her paperwork at home for something else.”  That motion is denied and the document has not been considered.  Respondent’s proffer failed to satisfy the exacting standard for demonstrating that this new evidence could not have been discovered with the exercise of due diligence prior to the hearing.  See, e.g., Russell v. United States, 661 F.3d 1371 (Fed. Cir. 1991); Fed. R. Civ. P. 59, 60.  Furthermore, accepting the document would have been extraordinarily prejudicial and unfair to Petitioner at this point in time.