July 11, 2018

In the Matter of the Debt Collection Act Petition

RICHARD HOWARD v. UNITED STATES POSTAL SERVICE

P.S. Docket No. DCA 18-45

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

APPEARANCE FOR RESPONDENT:
Kenneth L. Spence
Labor Relations Specialist                             

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

The Postal Service seeks to collect $204.48 from Richard Howard based on a shortage in a unit reserve account.  Although the Postal Service proved the existence and amount of the debt, Mr. Howard proved that the Postal Service did not suffer an actual loss.  Accordingly, the Petition is granted.  The Postal Service may not collect $204.48 by involuntary administrative salary offset.

FINDINGS OF FACT

1.         Mr. Howard was the unit reserve custodian at Groves Station, Texas at all times relevant to this dispute (Tr. 28).
2.         Prior to July 15, 2017, Mr. Howard conducted an informal count of the unit reserve, which revealed a shortage of 100 books of Flag stamps, valued at $9.80 per book.  Mr. Howard conducted the count because the retail clerks were receiving a system error message that they were selling stock, specifically books of Flag stamps, that should not have been available.  Based on the error message and the informal count, Mr. Howard believed he had improperly transferred a pack of 100 books of Flag stamps from the unit reserve to the retail clerks without completing the proper paperwork or transferring the stamps in the electronic accounting system.  (Tr. 27-28, 31).  Mr. Howard immediately notified the postmaster of the mistake (Tr. 29).
3.         On July 15, 2017, the postmaster conducted an audit of the retail floor stock, which showed an overage of 66 books of Flag stamps (Pet. Exh. 4).  The overage equaled $646.80 (66 x $9.80).
4.         Rather than crediting Mr. Howard with the 66 books of Flag stamps, the Postmaster removed 81 books of Madonna and Child stamps and 5 books of Jack O’Lantern stamps from the retail stock and placed them in the unit reserve (Tr. 17-18, 21).  The postmaster gave Mr. Howard the Madonna and Jack O’Lantern stamps because they were off-season and had the same value per book ($9.80) as the Flag stamps (Tr. 20-21).  No paperwork to transfer the stamps was completed nor was the transfer recorded in the electronic accounting system (Tr. 32).
5.         On October 30, 2017, Mr. Howard and the postmaster conducted an audit of the unit reserve showing an overall shortage of $204.48.  The audit showed a shortage of 100 books of Flag stamps and an overage of 81 books of Madonna and Child stamps.  The audit did not show an overage of five books of Jack O’Lantern stamps in the unit reserve, but Mr. Howard believes those stamps would have been returned to the floor because it was near Halloween (Tr. 33-34).  The audit was otherwise balanced.  (Pet. Exh. 2, at 83-84).
6.         On February 15, 2018, the Postal Service issued a Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act for $204.48 (Resp. Exh. 3).
17.       On February 26, 2018, Mr. Howard filed a timely Petition.

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.  See Chavis-White v. United States Postal Service, DCA 16-182, 2017 WL 5516568 (April 19, 2017).
Here, Mr. Howard was the unit reserve custodian and a $204.48 shortage was identified after a properly conducted stamp stock count of the unit reserve (Findings 1, 5).  The Postal Service has thus met its initial burden, and the burden shifts to Mr. Howard to come forward with evidence sufficient to alleviate or offset the shortage.
Mr. Howard met that burden by establishing that the Postal Service did not suffer an actual loss.  Flag stamps were distributed in packs of 100 books (Finding 2).  The July 15, 2017 retail floor audit showed that the retail stock had an overage of 66 books of Flag stamps as of that date (Finding 3).  Logically, the retail clerks initially had 100 extra books of stamps and had sold 34 of those books before the audit was conducted, thus resulting in the system error messages that alerted Mr. Howard to the problem (Id.).  Mr. Howard acknowledged that he erred by not properly transferring the stamps from the unit reserve to the retail floor.  This error, however, did not result in a financial loss to the Postal Service.  As we often have noted, the Debt Collection Act is not a vehicle to punish poor job performance.  See, e.g., Zane, DCA 16-217.
Furthermore, the postmaster’s action of placing 86 similarly priced books of stamps into the unit reserve (Finding 4) supports a conclusion that she believed the stamps were not missing, but improperly transferred.  Her failure to complete any transfer paperwork or accounting supports my inference that she believed extra stamps were in the retail stock and that she was trying to balance both accounts by putting stamps back in the unit reserve.  The overage of 66 books of Flag stamps is directly related to the 100 book shortage found in the unit reserve.  I see no reason why Mr. Howard should not be credited with the overage (Finding 3), which is more than enough to offset the debt (Finding 6).  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”).

ORDER

The Petition is granted.  The Postal Service is prohibited from offsetting the $204.48 debt assessed against Mr. Howard by involuntary administrative salary offset.

Diane M. Mego
Administrative Judge