In the Matter of the Petition by )March 10, 1993
)
RAYMOND FARQUHARSON )
956 E. 156th Street )
)
at )
)
Bronx, NY 10455-1931 )P.S. Docket No. DCA-155
APPEARANCE FOR PETITIONER: Johnny W. McQuilla
Bernard Brent
National Association of Postal
Supervisors
PO Box 459
Bronx, NY 10451-0459
APPEARANCE FOR RESPONDENT: Victor L. Olmo
Labor Relations Representative
United States Postal Service
590 Grand Concourse
Bronx, NY 10451-9401
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Raymond Farquharson, filed a petition requesting an oral hearing under the Debt Collection Act of 1982, as amended, 5 U.S.C. § 5514(a), based on a Notice of Involuntary Administrative Salary Offsets received by him on November 21, 1992. The Notice advised Petitioner that action would be taken to collect a debt in the amount of $233.71 based on a shortage allegedly found in connection with the closeout of the Jerome Station, Bronx, New York, on April 17, 1991.
At Petitioner's request, a hearing was held at the Bronx Post Office, Annex No. 1, on February 4, 1993. Testifying at the hearing were John Raciti, Manager of the Jerome Station; David Robinson, Area Manager; and Mark Angioli, Manager of Finance, all of whom had been called as witnesses by both parties.
At the hearing, Petitioner made a motion to dismiss based on Respondent's failure to comply with the requirement of the Employee and Labor Relations Manual that all records relating to a debt be made available to the employee upon request. Specifically, Petitioner asserted that the failure to make available the stamp accountability worksheet for April 17, 1991, interfered with Petitioner's ability to defend against the assessment. The motion was taken under advisement.
FINDINGS OF FACT
1. In April 1991, Petitioner was the finance supervisor at the Jerome Station in the Bronx, New York, and, on April 17, 1991, was in charge of closing out the station at the end of the business day. Part of the process of closing out the station involved receiving financial data, stored on computer disks, from each of the clerks who worked that day and consolidating the data into a composite report for the station. The information on the computer disks was generated by the station's IRTs [Integrated Retail Terminals], which also recorded the information for each clerk on a paper tape, given the designation PS 1412 (Petitioner's Exhibit (Pet. Exh.) 12). The consolidation of the records was also performed using an IRT, which automatically processed the information on the clerks' disks and developed consolidated financial data for the station. The consolidated information, when printed on a paper tape, was given the designation UNIT PS 1412C. (Pet. Exh. 12; Transcript page (Tr.) 27).
2. Included in the consolidated PS 1412C data was an amount which represented the funds (cash, checks, and money orders) which should be available for the final bank deposit of the day. This amount, recorded as account "752," was normally calculated by the IRT based, at least in part, on the consolidated information concerning receipts and disbursements, including data related to postage sales. (Tr. 31ff.)
3. On April 17, 1991, the PS 1412C for the Jerome Station indicated that the amount required to be available for deposit at the end of the day was $11,603.72. However, the total of the amounts noted on the bank deposit slips for the final deposit for that day, and the amount actually deposited, was $11,179.14. The difference between the two amounts was $424.58. The record is unclear as to whether the difference was noticed by Petitioner at the time of the closeout. (Id.).
4. Bronx Post Office, General Order #309, dated November 16, 1989, covered bank remittances and contained the following relevant language:
" 9) The bank initially credits the Postmaster's account based on the face value of the deposit tickets; therefore, it is very important that the 1412C and the deposit ticket contain the same information.
NOTE: The 'total currency dollar amount' recorded on the deposit ticket for Advance deposit must agree with dollar amount entered on 1412-C in AIC 751.
The total of dollar amounts recorded on BOTH deposit tickets for final currency and checks/money orders must agree with the dollar amount entered on 1412-C in AIC 752.
* * * * *
10) Any bank deposit shortage resulting from conflicting amounts on the deposit ticket and the 1412C will be your responsibility. Bank overages will be returned to you only if reported in advance." Respondent's Exhibit (Resp. Exh.) 10).
The procedures actually in effect in April 1991, however, did not require an employee closing out to spend an inordinate amount of time trying to account for this type of discrepancy. Instead, employees were instructed to make an entry in a suspense or overage account, as appropriate, representing the amount of the discrepancy, in order to cause the PS 1412C to "balance." The deposit was then to be dispatched to the finance center and the discrepancy followed up at a later time. However, in this instance Petitioner failed to make the entry necessary to make the PS 1412C balance before dispatching the deposit. (Tr. 36-38, 39, 65, 66, 103, 131).
5. The PS 1412C for the station also contained two items in the "receipts" category which are relevant to this matter. The first such item was the consolidated amount for postage sales in the "090" account. The sum of the corresponding ("090") amounts on the clerks' PS 1412s was $1770.00. The "090" amount on the PS 1412C, which should have been the same, was $2003.76, a difference of $233.76. The record establishes that the actual postage sales by all the clerks who worked on April 17, 1991, totalled $1770.00 and that the $2003.76 amount on the PS 1412C was erroneous. (Pet. Exh. 8; Tr. 26, 27, 30, 34, 80-82). The second relevant item was a receipt designated only as account "367," with no further explanation, in the amount of $190.07. The sum of the "090" account difference and the "367" account entry was $423.83.
6. Shortly after April 17, the Jerome Station Manager was notified of the discrepancy in the amount of the bank deposit. The record is unclear whether the initial notification came from Petitioner or from the Postal Service finance center. Petitioner, the Station Manager, and the Area Manager all attempted to discover the reason for the discrepancy, but were unable to do so. In particular, they were unable to determine any cause for the erroneous calculation of total postage sales which appeared on the station PS 1412C. In October 1991, the Jerome Station was charged with a $423.78 shortage by the Bronx "MSC"1/ (Pet. Exh. 9; Resp. Exh. 3). In February 1992, for reasons not relevant to this dispute, the station was credited with the $190.07 originally shown as a receipt under account "367," thereby reducing the amount of the charged shortage to $233.71. (Tr. 34).
7. By letter dated May 6, 1992, Petitioner was issued a letter by the Bronx Postmaster, informing him that he was indebted to the Postal Service in the amount of $233.71. On November 18, 1992, the Bronx Postmaster issued Petitioner a Notice of Involuntary Administrative Salary Offsets which Petitioner received on November 21, 1992. (Resp. Exh. 1; Pet. Exh. 2).
DECISION
Respondent argues that the assessment against Petitioner was proper because the shortage recorded on the station PS 1412C was an actual shortage and because Petitioner failed to follow the procedures required during closeout to identify and follow up on the apparent discrepancy.
Respondent argues that Petitioner failed to demonstrate that the $2,003.71 amount recorded on the PS 1412C for stamp sales was in error. In addition, Respondent argues that Petitioner has not shown that there was a malfunction of the IRT which might account for the apparent shortage.
Respondent contends that Petitioner did not perform his duties in a reasonable manner in that he did not follow the requirements of General Order #309 or Handbook F1 [Post Office Accounting Procedures]. In addition, Respondent argues that Petitioner did not treat properly the discrepancy between the amount required by the PS 1412C to be available for the final deposit and the amount of funds actually available for deposit. In particular, Respondent contends that Petitioner did not detect the discrepancy at the time of the deposit, did not send a note with the deposit flagging the discrepancy for future investigation, and did not make the proper entries on the PS 1412C to call attention to the discrepancy.
Petitioner argues that Respondent has not shown that Petitioner failed to remit any sum actually received by the Postal Service for the sale of postage and that the discrepancy between the deposit required by the PS 1412C and the amount available for deposit represents what he terms merely a paper error. Petitioner argues that the evidence shows that the source of the discrepancy was an unexplained difference between the amount shown on the PS 1412C for postage sales and the actual amount of those sales. Petitioner surmises that the IRT may have malfunctioned.
Petitioner concedes, generally, that there may have been certain actions which he should have taken during closeout, but did not. However, he argues that he should not have to pay the amount assessed against him because it represents funds which Respondent did not earn -- i.e., that his actions did not cause an actual loss to the Postal Service.
Having reviewed the record in this matter, I conclude that Respondent has failed to show that the $233.71 shortage with which Petitioner was charged represents an actual loss to the Postal Service. Apart from the $190.07 amount, discussed above but not at issue here, the amount of the apparent shortage in the funds available for the final deposit is accounted for by the difference between the amount recorded on the PS 1412C for total postage sales and the actual amount of postage sales for the day. The amount calculated by the IRT during consolidation and entered on the PS 1412C for postage sales should have been simply the total of the corresponding amounts on the clerks' PS 1412s. For reasons which none of the witnesses could explain, the amount entered on the PS 1412C by the IRT exceeded the sum of the amounts on the clerks' PS 1412s, and by almost exactly the amount now being assessed against Petitioner.2/ The apparent increase in receipts caused by overstated postage sales caused a corresponding increase in the amount required for the final bank deposit, as calculated by the IRT and reflected in the PS 1412C. Based on this, I conclude that the portion of the deposit "shortage" being assessed against Petitioner does not represent an actual loss to the Postal Service, but was the product of an unexplained error in the postage sales calculation performed by the IRT. Although Petitioner may have been deficient in the manner in which he conducted the closeout on April 17, 1991, the evidence offered in this matter does not show that any deficiencies in his performance created or contributed to an actual loss to the Postal Service or resulted in a situation in which it was unclear whether a loss occurred. In this instance, the evidence presented shows affirmatively that no actual loss occurred. In addition, the language of General Order #309, although potentially applicable, is not to be applied here where the record shows that there has been no actual shortage.
Accordingly, I conclude that Petitioner is not indebted to the Postal Service in the amount of $233.71 as contained in the Notice of Involuntary Administrative Salary Offsets issued on November 18, 1992. Because of this resolution of the matter, it is not necessary to decide Petitioner's motion to dismiss.
David I. Brochstein
Administrative Judge
1/ The record contains no explanation of the $.80 difference between the $423.78 shortage charged against the Jerome Station and the $424.58 discrepancy in the original bank deposit. Resolution of this difference is unnecessary to a decision in this matter.
2/ The difference between the two amounts is $.05 [$233.76 - $233.71], and the fact that there is a difference has not been shown to have any significance.