In the Matter of the Petition by: JOAN K. SMITH, 12602 Abbotts Way, at Oklahoma City, OK 73142-4511 P.S. Docket No. DCA-111 01/30/92 Mason, Randolph D., Administrative Law Judge APPEARANCE FOR PETITIONER: Lewis Barber, Jr., Esq., Barber & Marshall, P.A., 1528 N.E. 23rd Ste. 410, Oklahoma City, OK 73111-3260 APPEARANCE FOR RESPONDENT: O. D. Curry, Labor Relations Representative, U. S. Postal Service, 320 S.W. 15th Street, Oklahoma City, OK 73125-9401
By timely petition filed on October 9, 1991, Petitioner, Joan K. Smith, requested an oral hearing on a notice to her that she was indebted to Respondent, United States Postal Service, in the amount of $3,578.63 based upon a shortage in her accountability. The notice further advised that Respondent intended to withhold 15% of her disposable pay until elimination of the debt.
Respondent's position is that Ms. Smith was responsible for the shortage and that she failed to exercise reasonable care in the performance of her duties. Petitioner disagrees and contends that she accurately counted the stamps in question and dispatched them to the Stamp Destruction Committee, and that any loss was incurred after she properly dispatched the stamps.
A hearing was held at Petitioner's request in Oklahoma City, OK, on December 3, 1991. Respondent presented the testimony of Postal employees Oliver R. Shirley, Kim Balczon, Crystal Pounds and Paul Lunday. Petitioner presented her own testimony and that of Postal employee Clarence Gene Brown.
On or before January 8, 1992, both parties filed proposed findings of fact and conclusions of law which have been duly considered. To the extent indicated below, proposed findings and conclusions have been adopted; otherwise, they have been rejected as irrelevant or contrary to the evidence. The findings of fact and conclusions of law set forth below are based on the entire record herein, including observation by the Administrative Law Judge of the witnesses and their demeanor, the briefs, exhibits, and other relevant evidence adduced at the hearing:
Joan K. Smith has been employed by the Postal Service for 13 years. She is a level 15, the initial supervisory level. On March 22, 1991, she was the Station Manager/supervisor of two stations in the Oklahoma City area: West Park Mall and Rockwell. The Rockwell station was a temporary assignment where the manager would normally be higher than a level 15 (Tr. 174). Her immediate supervisor was also responsible for at least one other station (Tr. 175).
On March 22, 1991, Petitioner Joan K. Smith received certain stamps from various window clerks which were to be sent to the Stamp Destruction Committee. At West Park, the window clerks had counted their stamps with Gene Brown, who was an assistant acting supervisor, before Petitioner received the stamps (Tr. 176, 177, 229, 237-238). Over the next few hours, Petitioner recounted them, added these stamps to some of her own stamp accountability in the unit reserve, n1 which were counted only by her (Tr. 234), and listed the consolidated stamps on a Form 17 (Tr. 177, 203, 230). Later that day, Petitioner performed a similar procedure at the Rockwell Station with employee Preston Woods signing as a witness (Tr. 206).
n1 Section 432.1 of Handbook F-1 provides that unit reserve stock is a stamp credit consigned to the station or branch manager who is responsible for its efficient management.
As reflected on the Forms 17, Petitioner admits that she either received from the window clerks, or took from her own unit reserve, $35,970.52 in stamps from the West Park Station and $22,944.95 from the Rockwell Station.
At each station, Petitioner placed the unbound, open boxes of stamps, together with some loose stamps, and a Form 17 in a hamper and placed a seal on the hamper (Tr. 178, 227). She then instructed clerks at both locations to send the sealed hampers by truck addressed simply either to "Main Office, Oklahoma City" or "OKC" and the main office zip code. The West Park hamper was given a Registry number; no Registry number was assigned to the Rockwell hamper. At West Park she got a number from the clerk and registered the hamper herself, which was contrary to the established procedure (Tr. 236; PX-1). There was no indication on the address label of either hamper that the contents were bound for the Stamp Destruction Committee or that the hampers contained stock for destruction (RX-2).
Postal procedures require that stamp stock that is to be destroyed is registered back through the Postal Service to the Stamp Destruction Committee of the Accountable Paper Section. In that process, it comes through the Registry section to be processed as a registered item (Tr. 25, 91). The stamps are sealed in containers, labeled with a registry number, and processed through the registry section on their way to the addressee office.
Under Postal procedures, when the Form 3830A "bill" on the outside of the registered package or bag indicates that the addressee is another office, such as the Stamp Destruction Committee, then the Registry Section does not open the bag or break the seal. In that case it simply signs for the seal and "rebills" the bag to the proper addressee. However, if no addressee is named, then the Section must break the seal and open the bag to ascertain the proper addressee (Tr. 25-27).
On March 22, 1991, the two sealed hamper liners that had been sent by Petitioner arrived in the Registry Section in the evening from Rockwell Station and West Park Mall containing stamp stock. Each of these hampers had been sealed on the outside by Petitioner (RX-2; Tr. 51). They were each opened in the Registry Section since Petitioner had failed to attach a label to indicate that the addressee was the Stamp Destruction Committee (Tr. 29, 30, 71). When they were opened, the registry clerks saw stamps which were not in registered, sealed boxes, as they should have been. The stamps were in open boxes and some of the stamps were "lying loose on the liner inside" (Tr. 58, 70-71). The hampers were immediately closed up again, with new seals attached, and properly addressed to the Stamp Destruction Committee (Tr. 29-30, 33, 49-50, 65, 70; RX-1, 2). To insure security, these procedures were appropriately witnessed by the person who opened each hamper and two other employees (Tr. 75). The sealed hampers were then kept in a secure, locked area until they were delivered to the Stamp Destruction Committee (Tr. 30, 66).
On March 25, 1991, at 6:17 AM the two sealed hampers containing the stamp stock were delivered to Anthony Gropf, who was Supervisor of the Registry Section and Chairman of the Stamp Destruction Committee (RX-3; Tr. 38). n2
n2 Both of the seals were noted on the Form 3854-A as securing and transmitting stamps from the West Park Mall Station; this was an error, since one was from Rockwell Station and one from West Park Mall. However, this clerical error caused no confusion upon arrival at the Stamp Destruction Committee, because the stamps were properly treated as being from the appropriate stations when audit annotations were made by the Committee on each of the Forms 17 (RX-5, 6).
The two hampers with their unbroken seals were logged into the Stamp Destruction Committee on March 26, 1991 (RX-4; Tr. 93). The unbroken seals indicated that no one could have opened these hampers after they were resealed by the employees of the Registry Section. The Committee held these stamps in a locked room until March 28, at which time the seals were broken, the hampers opened, and the stamps counted and marked ready for destruction (Tr. 129, 131, 93, 107, 127). On that date, the two original Forms 17, which Petitioner had used to ship the stamps from both West Park and Rockwell on March 22, were marked "received" by Mr. Gropf and "witnessed" by two other Committee employees (RX-5). The Committee then counted the stamps twice (one member counts and one verifies) and made the necessary corrections to the count that had been recorded by Joan K. Smith on each Form 17 (Tr. 96, 152-153). The Committee found that 18 of the 47 totals entered by Petitioner on these forms were incorrect. In some cases there were more stamps found in the hampers than had been set forth on the Form 17 by Petitioner; in other cases there were less.
The Committee established that only $32,229.64 in stamps was sent from West Park, whereas Petitioner's Form 17 indicates that $35,970.52 was sent to the Committee (RX-5; Tr. 105). Seven of the stamp categories listed on the form were missing when the hamper was opened and counted by the Committee. The primary items that were missing from the West Park hamper were 706 $5 books of stamps, accounting for $3,530 of the shortage.
With regard to the Rockwell hamper, although Petitioner's Form 17 states that $22,944.95 in stamps were sent to the Committee, the Committee counted $23,068.29. Thus, she underreported the actual amount of stamps sent for destruction from this station.
After taking into account the unlisted, additional stamps, and other concessions made by the Postal Service, it has been established, and I find, that a shortage existed in the stamp stock for which Petitioner was accountable in the amount of $3,578.63 n3(RX-5, 6; PX-14).
n3 West Park's shortage of $3,740.88 and Rockwell's overage of $123.34 resulted in a net shortage of $3,617.54. This is $38.91 more than the $3,578.63 debt alleged by Respondent. Since the discrepancy has not been explained and Respondent did not seek to adjust the amount of the shortage, Petitioner will only owe the $3,578.63 originally charged.
Petitioner was first notified of the shortage in April 1991, after the stamps had been destroyed (Tr. 190). However, in view of the credible testimony of two Committee members establishing the accuracy of the count, the result herein would have been the same even if Petitioner had had an opportunity to double check the count before destruction.
The stamp stock was destroyed in the same room by a shredder on the same day that it was counted by the Stamp Destruction Committee (Tr. 108, 112, 118, 157-158). On April 9, 1991, the Committee members each signed a single Form 3238 (which had been prepared as a "recap" by the Finance division at the Main Post Office) certifying the stock value destroyed covering Rockwell, West Park, and 10 other stations (RX-7). Since the form covered 12 stations for which stamps had been destroyed on many different days, the "date stamp stock destroyed" block was left blank (Tr. 124-125). Although § 550 of Handbook F-48, TL-1, dated 12/20/86, "Bulk Requisitioning and MSC Accountable Paper" provides that the date the stock was destroyed should be entered, this arguably technical, albeit understandable, breach of the instruction has no bearing on the validity of the shortage found on March 28, 1991, which was properly recorded on the Committee's stamp destruction log (RX-4) and on the Forms 17.
Each Form 17 from Rockwell and West Park arrived at the Committee with the proper registered seal number for the hamper on the top of the page, but the space for "Registry No. (if any)" was blank. At some later time that space was filled in on both the Rockwell and West Park Forms 17 with the Registry number originally assigned only to the West Park Mall shipment (Tr. 182; PX-1). There is no evidence that this indicates any fraudulent or other irregular activity by any Postal employee as suggested by counsel for Petitioner. It is again noted that the Registry Section at one time thought that both hampers had originated at West Park Mall, but this confusion was corrected when the Committee performed its work.
Petitioner first argues that she is not liable under the applicable Postal regulations, which she contends place liability only on the Postmaster. This contention is rejected. Section 132 of Handbook F-1 provides that 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 the performance of their duties.
As station manager of the two stations in issue, Petitioner was automatically accountable for the stock which she admitted receiving from her window clerks, and also that which she held in unit reserve under Section 432.1 of Handbook F-1. The latter section provides that unit reserve stock is a stamp credit consigned to the station or branch manager.
Petitioner next argues that at some point after she dispatched the stamp stock for delivery to the Stamp Destruction Committee, that someone must have removed some of the stamps, thus allegedly causing the shortage in question. However, the evidence clearly establishes that the stamps were secure at all times during their delivery to the Committee. With the exception of a few minutes when the hampers were opened at the Registry section, a procedure which was totally secure and witnessed by several credible employees, the hampers were under seal. As such, they could not have been opened. Further, when the seals were finally broken by the Committee, the latter followed strict procedures to assure the safety and accurate counting of the stock in question.
On the other hand, if anyone was guilty of failure to exercise reasonable care with respect to the stock in question, it was Petitioner. In this regard, she failed to address the hampers to the Stamp Destruction Committee. They were merely addressed to "Main Office, Oklahoma City" or "OKC" and the main office zip code, which resulted in the hampers being opened by the Registry office. Similarly, she failed to note on the address label that the hampers contained nonsalable stock, which also would have obviated the need to open the hampers at the Registry section. Section 453.5 of Handbook F-1 requires that when disposing of nonsalable stock, the employee must address the package of stock to the MSC Stamp Destruction Committee, identifying it with the words "Nonsalable Stock" immediately below and to the left of the address.
She also failed to follow procedures when she registered the Westpark Mall hamper herself, rather than having this done by the employee assigned to such duties. Moreover, she did not even bother to place some of the stamps in boxes, and some of the stamps were actually loose in the hamper.
Finally, the regulation for disposition of nonsalable stock also provides that Petitioner should have had a witness count her reserve stock since he witnessed the Form 17. Handbook F-1, $S453.3b. This she also failed to do.
Therefore, rather than establishing that she exercised due care to follow the established procedures, it is clear that Petitioner failed to follow such procedures.
Since Petitioner has failed to establish that she exercised reasonable care in the performance of her duties, she is strictly accountable and liable for the shortage of $3,578.63.
Since Petitioner has not argued that a different schedule of payments should apply, this debt shall be paid to the Postal Service by deducting 15% of Petitioner's disposable pay each pay period until elimination of the debt.