July 8, 1991
In the Matter of the Petition by
PHILLIP G. BOATMAN
P.O. Box 1212
at
Collinsville, VA 24078-1079
P.S. Docket No. DCA-95
APPEARANCE FOR PETITIONER:
Vernon L. Jolley
3110 Harmony Road, S.W.
Roanoke, VA 24018-3106
APPEARANCE FOR RESPONDENT:
Nancy K. Ara
United States Postal Service
419 Rutherford Avenue, N.E.
Roanoke, VA 24022-9994
FINAL DECISION UNDER DEBT COLLECTION ACT OF 1982
By timely petition, Petitioner, Phillip G. Boatman requested an oral hearing on a notice to him that he was indebted to Respondent, United States Postal Service, in the amount of $622.22, based on an audit conducted at the Bassett, Virginia, Post office on February 28 and March 1, 1989. The notice further advised that Respondent intended to withhold 15 percent of Petitioner’s disposable pay, or approximately $93.30, from each of Petitioner’s pay checks until the debt was satisfied.
Respondent’s position is that Petitioner, as the Postmaster at Bassett, was responsible under Postal Service Accounting Procedures for a shortage in the main stamp stock detected in February 1989. Respondent maintains that Petitioner failed to conscientiously enforce United States Postal Service policies and procedures in managing the post office and, therefore, has not met the prerequisite for being excused from responsibility for the loss.
Petitioner contests the indebtedness on two primary grounds. First, Petitioner alleges that he was not the custodian of the main stamp stock, having delegated that responsibility to the Superintendent of Postal Operations (SPO) at Bassett. Second, Petitioner questions the validity of the audit which determined that there was a shortage in the stock, alleging that he was not permitted to review the audit and was not in the vault when the count of the main stock occurred.
A hearing was held in Roanoke, Virginia, at Petitioner’s request. Respondent presented the testimony of Postal Service employees Leslie Foster, C.D. Patterson, Jr., Billy Martin, and Allen Rhodes. Petitioner testified on his own behalf and called no other witnesses.
FINDINGS OF FACT
1. Handbook F-1, “Post Office Accounting Procedures,” contain the following provisions relevant to this matter:
“120 Responsibility
121 Basic
Postmasters must collect all receipts to which their offices are entitled, account for all funds entrusted to them, and ensure that accounting objectives are met.
122 Delegation
122.1 Separation of Duties. In delegating responsibility, there must be
adequate internal control separating duties of personnel who handle cash or accountable paper from duties of personnel who record and establish responsibility for financial transactions. To the maximum extent practicable, supervisory personnel responsible for the Main Stock must not make sales or handle cash.
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130 Liability
131 Postmasters
When an accountable financial loss occurs and evidence shows the postmaster conscientiously enforced USPS policies and procedures in managing the post office, the Postal Service grants relief for the full amount of the loss. When evidence fails to show the postmaster met those conditions, the Postal Service charges the postmaster with the full amount of the loss.
132 Other Employees
The postmaster consigns postal funds and accountable paper to other employees. Employees are held strictly accountable for any loss unless evidence establishes they exercised reasonable care in performance of their duties.
* * *
144 Accountable Paper
* * *
144.2 Main Stock. Postmasters must ensure that all accountable paper received into and dispensed from the Main Stock is controlled. The responsibility for maintaining the Main Stock may only be assigned to a supervisory employee having no access to the office cash records. . . .” (Respondent’s Exhibit (Resp. Exh.) 13).
2. In 1985, Petitioner, the Postmaster at Bassett, Virginia, delegated responsibility for the main stamp stock to W. D. Jarrett, the SPO at Bassett. At the time, Petitioner told the SPO to change the combination to the safe which held the main stock to his own (the SPO’s) combination. The normal procedure is for only the main stock custodian to know the combination, although a copy is kept at the MSC. Petitioner did not follow up to ensure that the combination had been changed and the record does not indicate whether the combination was actually changed. (Transcript page (Tr.) 84-86, 108-09).
3. On February 7 and 8, 1989, a Function Four Survey was conducted at the Bassett Post Office. The survey team reported a number of deficiencies in the operation of the office, including deficiencies in the financial and financial recordkeeping functions. Relevant to the dispute under consideration in this decision, the team determined that there was a difference of $2,843 between the main stamp stock inventory shown on Forms 3295 and that indicated on Form 3298/Accountbook. The team recommended that a complete financial audit of the post office be conducted. (Resp. Exh. 2). Neither the Forms 3295 nor the Form 3298 appear in the record.
4. Following the Function Four Survey, Petitioner was transferred to another post office for additional training. In connection with the transfer, on February 21, 1989, accountability for the Bassett Post Office was transferred from Petitioner to a new officer-in-charge. On that date, the main stock was physically counted by the Associate Office Coordinator for Roanoke, Virginia, and by the SPO, who was the main stock custodian. Petitioner was present at the post office during at least part of that day, but did not participate in the count to any substantial degree. On that date the main stock contained $22,299.16 in stamps, as reflected in a Form 3294. The Form 3294, filled out on February 21 and corrected on February 24 to reflect a shipment of stamps which had not previously been entered in the post office records, noted a “Stamp Stock per Form 3958” of $22,921.38. The difference between these two figures is $622.22, the amount charged to Petitioner. The Form 3958 relied on for the $22,921.38 amount is not part of the record. (Tr. 76, 81, 87, 88, 114; Resp. Exh. 1, 2).
5. By letter dated August 1, 1989, Petitioner was advised that he owed the Postal Service $622.22 and was asked to authorize voluntary salary offsets to repay that amount. In response, Petitioner filed a petition for a hearing under the Debt Collection Act. On motion by Respondent, the petition was later dismissed because no formal notice of involuntary salary offsets had been issued. (Record in P.S. Docket DCA-54).
6. The notice of involuntary salary offsets was issued by letter from the MSC Manager dated March 27, 1991. Petitioner filed a timely petition under the Debt Collection Act.
DECISION
Petitioner argues that he should be relieved of liability because he was not allowed to participate in the audit which resulted in the finding of a shortage in the main stock and because he was not the main stock custodian at the time the shortage was found. Respondent contends that, as postmaster, Petitioner was liable for the loss of accountable paper unless he can show that he conscientiously enforced Postal Service policies and procedures.
It is undisputed that Petitioner delegated responsibility for the main stamp stock to the SPO. Respondent has not alleged or shown that such a delegation was improper. Under a reasonable interpretation of the Post Office Accounting Procedures, Handbook F-1, the SPO then became primarily liable for losses unless evidence established that he exercised reasonable care in the performance of his duties. No such evidence was introduced. Petitioner would be liable for the loss if it were shown that he did not perform his duties related to the main stamp stock. Having delegated that responsibility to the SPO, the extent of the duties remaining the responsibility of Petitioner is not clear from the record. However, controlling access to the stamp stock would have been the responsibility of the SPO, as the designated custodian, and not that of Petitioner.
The Function Four team identified one problem directly associated with the main stamp stock – i.e., that the Forms 3295 (inventory forms) did not balance with the Form 3958/Accountbook. The record does not show what caused the discrepancy or that Petitioner was directly responsible for the problem. The evidence indicates that there may have been shortcomings in the financial management of the post office attributable to Petitioner. However, the record does not establish that Petitioner was responsible for any deficiencies in the management of the main stamp stock, which is the only issue to be decided here.
Accordingly, I conclude that Petitioner is not indebted to the Postal Service in the amount $622.22, as demanded in the notice of involuntary salary offsets dated March 27, 1991.
David I. Brochstein Administrative Judge