P.S. Docket No. DCA 17-31


March 9, 2018

In the Matter of the Debt Collection Act Petition

S. LYNNE WATSON v. UNITED STATES POSTAL SERVICE

P.S. Docket No. DCA 17-31

APPEARANCE FOR PETITIONER:
Albert E. Lum
Labor Relations Admin Group LLC

APPEARANCE FOR RESPONDENT:
Yeftahk Dahn
Labor Relations Specialist

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

The Postal Service seeks to collect $13,004.07 from S. Lynne Watson based on a shortage in a unit reserve account.  The Postal Service has proved both the existence and amount of the debt.  Ms. Watson, however, has proved that the Postal Service did not suffer an actual loss for $9,954.70 of the assessed debt.  Accordingly, the Petition is granted in part and denied in part.  The Postal Service may collect $3,049.37 by involuntary administrative salary offset.

FINDINGS OF FACT

  1. The parties have stipulated that Ms. Watson was the unit reserve custodian at the James A. Farley Station in New York City at all times relevant to this dispute (Tr. 8, 21; Exh. 1).
  2. Ms. Watson and the custodian of a special events account exchanged stamp stock about once a month for special events at field sites (Tr. 11, 16).  At the end of 2015, Ms. Watson gave stamp stock to the special events custodian for an event without documenting the transfer with a PS Form 17, Stamp Requisition/Stamp Return (Tr. 8–9, 22).
  3. Ms. Watson’s manager and another Postal Service employee counted the unit reserve stock on January 14, 2016.  Ms. Watson was also present and signed the Point-of-Service (POS ONE) Report for the count.  (Tr. 11–12, 21; Exh. 1).  The count showed a shortage of $13,004.07 (Tr. 8; Exh. 1).  Among the items in the shortage were:
    • 100 USS Arizona Memorial Priority Mail Express stamps,
    • 1000 Patriotic Wave stamps,
    • 5500 Breast Cancer Research stamps,
    • 100 Johnny Cash stamps,
    • 100 Civil War: 1864 stamps, and
    • 200 Summer Harvest booklets.
    (Exh. 1).
  4. Within a week of the unit reserve count, the special events custodian found items that were physically present in her inventory, but were not listed as part of her account in the POS ONE system.  Instead, POS ONE listed them as part of the unit reserve inventory.  (Tr. 11, 17; Exh. 4).  Among these items were:
    • 100 USS Arizona Memorial Priority Express stamps,
    • 1000 Patriotic Wave stamps,
    • 4000 Breast Cancer Research stamps,
    • 200 Johnny Cash stamps, and
    • 79 Summer Harvest booklets.
    (Exh. 4).  The parties have stipulated that the total value of these items in the special events account was $9,390.70 (Tr. 44, Exh. 4).
  5. The special events custodian notified her manager of her discovery by letter, identifying the items she had in her physical possession but that were not listed in her POS ONE account, and explaining that the items properly belonged to the unit reserve account (Tr. 31; Exh. 4).  She then gave the stamps to the manager, who counted them and verified his receipt of them (Tr. 11).
  6. The Postal Service issued Ms. Watson a Letter of Debt Determination on March 2, 2016 (Exh. 10).  Although the Postal Service later generated a Notice of Involuntary Administrative Salary Offsets on March 16, 2016 (Exh. 11), Ms. Watson never received it (see Order, May 22, 2017).  The Postal Service began deducting money from Ms. Watson’s salary at some point thereafter (Petition).
  7. Ms. Watson and her manager conducted another count of the unit reserve on June 27, 2016, which showed an overage of $14,803.65 (Exh. 6; Tr. 24).  Among the items in the overage were:
    • 133 USS Arizona Memorial Priority Express stamps,
    • 4000 Breast Cancer Research stamps,
    • 201 Johnny Cash stamps,
    • 100 Civil War: 1864 stamps, and
    • 79 Summer Harvest booklets.
    (Exh. 6).
  8. The Civil War: 1864 stamps have a value of $5.64 each (Exh. 6).
  9. Ms. Watson filed a Petition on January 30, 2017, challenging the offsets being taken from her salary.

DECISION

Unit reserve stock custodians are accountable for the value of all items in the unit reserve.  Handbook F-101, Field Accounting Procedures § 13-2.5 (June 2016).  To hold an employee accountable for a shortage, the Postal Service has the initial burden to establish that an actual loss exists in an account for which the employee was the unit reserve custodian.  The Postal Service is not required to prove any specific dereliction or act of negligence by the employee.  It is sufficient for the Postal Service to show that, after a properly conducted stamp stock count, there was a shortage in an account for which the employee was accountable.  Zane v. United States Postal Service, DCA 16-217, 2017 WL 5516570 (January 26, 2017); Christina Lamb, DCA 09-203, 2009 WL 10690559 (October 30, 2009).  If the Postal Service meets its initial burden, the burden shifts to the employee to come forward with evidence sufficient to alleviate or offset the shortage.  E.g., Chavis-White v. United States Postal Service, DCA 16-182, 2017 WL 5516568 (April 19, 2017).
Here, the parties agree that Ms. Watson was the unit reserve custodian and that a $13,004.07 shortage was discovered in January 2016 after a properly conducted stamp stock count of the unit reserve (Tr. 8).  The Postal Service has thus met its initial burden, and the burden shifts to Ms. Watson to come forward with evidence sufficient to alleviate or offset the shortage.
Ms. Watson has met that burden—in part—by establishing that the Postal Service has not suffered an actual loss for the full amount it seeks to collect.  More specifically, the evidence establishes that the items found in the special events inventory had been transferred to the special events account without being recorded.  The value of those items thus should be credited against the shortage discovered during the January 2016 count.  Based on the parties’ stipulation as to the value of that stock, the debt must be reduced by $9,390.70.
The Postal Service nonetheless argues that Ms. Watson is liable for the full amount of the debt because she and the special events custodian did not properly account for their stock transfers with a PS Form 17.  However, regardless of whether Ms. Watson and the special events custodian used the proper forms when they transferred stamp stock between their respective accounts, the fact remains that the Postal Service did not suffer an actual loss of the stock that was found in the special events inventory.  See, e.g., Zane, DCA 16-217 (the Debt Collection Act is not a vehicle to punish poor job performance).  Ms. Watson is therefore not liable for the $9,390.70 of stock that was found in the special events inventory.
As to the remaining $3,613.37 of the debt, Ms. Watson argues that there were several errors in the January 2016 count: redeemed items were not calculated; stamps were counted individually that should have been counted as sheets; and, generally, “items were not listed properly” (Tr. 26).  Ms. Watson testified that she brought these errors to her manager’s attention, but he did not immediately correct the errors because he was busy with other duties (Tr. 30–31, 32–33).  Instead, she testified that her manager acknowledged the errors by simply agreeing to account for them during the June 2016 count (Tr. 29, 31, 37).  The June 2016 count did reveal a $14,803.65 overage (Finding 7), which Ms. Watson now argues should be used to offset the remaining $3,613.37 debt.  Our prior decisions allow an overage to offset a shortage if a preponderance of the evidence establishes that the overage and the shortage involve the same stock.  See, e.g., Ralph v. United States Postal Service, DCA 15-204, 2016 WL 10572240 (January 5, 2016); Richard Dreher, DCA 97-233, 1997 WL 35414669 (September 2, 1997)(citing Postal Service regulations for the proposition that “[t]he evidence need only show a likelihood that the shortage and overages represent the same stock”); Handbook F-101, §13-8.5.1 (June 2016)(requiring supervisors to “[e]xercise judgment when determining the existence of a relationship [between an overage and a shortage] that may warrant an offset”).
Here, however, the evidence does not generally support Ms. Watson’s argument.  The June count did reveal overages for the Johnny Cash, Summer Harvest, Breast Cancer, and USS Arizona stamps (Finding 7).  But as discussed above, Ms. Watson is receiving a credit for these overages based on the overages discovered in the special events account in January 2016 (Compare Finding 3, with Finding 4).  Of the remaining overages discovered in June 2016, only one corresponds to the shortage discovered in January 2016.  The June 2016 count showed an overage of 100 Civil War: 1864 stamps (Finding 7) that corresponds exactly to the shortage for that item in January 2016 (Finding 3).  Because of this exact correspondence, and the manager’s agreement to further reconcile the January shortage after the June count, I find that it is more likely than not that the Postal Service did not suffer an actual loss of 100 Civil War: 1864 stamps.  Ms. Watson is thus entitled to a $564 credit based on the value of these stamps (Finding 8).
Finally, Ms. Watson argues that the January errors included improperly counted redeemed stamps on PS Form 17s sent to the stamp fulfillment center and the retail floor (Exh. 8).  Ms. Watson has not, however, explained how her evidence supporting this argument, which is dated July 5, 2016, through April 4, 2017, bears any relationship to the count conducted in January 2016.  This argument thus fails.

ORDER

The Petition is granted in part and denied in part.  Ms. Watson has proved that she is entitled to an offset of $9,954.70 from the originally assessed debt of $13,004.07.  The Postal Service may collect $3,049.37 by involuntary administrative salary offset.

Alan R. Caramella
Administrative Judge