In the Matter of the Petition by) December 19, 1995 ) CHARLES PAUL RANDALL ) 4224 Lusk Drive ) ) at ) ) Sacramento, CA 95864-0767 ) P.S. Docket No. DCA 95-372 APPEARANCE FOR PETITIONER: Susan Glover National Association of Postal Supervisors P.O. Box 13157 Sacramento, CA 95813-3157 APPEARANCE FOR RESPONDENT: Robin D. George United States Postal Service 3775 Industrial Boulevard West Sacramento, CA 95799-0061
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Charles Paul Randall, filed a petition requesting an oral hearing under the Debt Collection Act of 1982, as amended, 5 U.S.C. §5514 (a), to challenge the intended collection by Respondent, United States Postal Service, of a debt allegedly owed by Petitioner. Petitioner was responsible for the main stamp stock of the Citrus Heights, California Post Office, and the claimed debt arose from a shortage in the main stock.
An oral hearing was held in Sacramento on November 28, 1995.
FINDINGS OF FACT
1. On April 25, 1994, Petitioner was assigned responsibility for the main stamp stock at the Citrus Heights, California Post Office. At that time, the main stock account was in balance; a count of the main stock on that date revealed that the stock on hand equaled the amount of stock shown in the stamp inventory records of the post office. A PS Form 3294, Cash and Stamp Stock Count and Summary, was signed by Petitioner, indicating his agreement with the count, but the count was performed by comparing the computer-generated stock inventory printout from the post office’s accounts with the stock on hand, and the 3294 was not filled out in detail. (Transcript page ("Tr.") 16-18, 50-51, 54-55, 66; Petitioner’s Exhibit ("PX") A; Respondent’s Exhibit ("RX") 3, 11).
2. Petitioner’s duties included accounting for the main stock, filling window clerks’ requisitions for stamps, supervising the window clerks, processing nonsalable stamps for destruction and accounting for stock supplied to the Citrus Heights Post Office. Clerks’ stamp requisitions were filled individually by the main stock custodian directly from the main stock. The postmaster did not use the procedure set forth in section 443 of the F-1 Handbook, Post Office Accounting Procedures, that called for consolidation of all requisition forms into one large order to be filled from the main stock and then later broken down and distributed to the individual clerks. (Tr. 18, 22, 117-119, 122-124; PX E).
3. The main stock was housed in a cage in the vault. Although the lock to the cage was not changed when a new custodian was assigned, the key to the cage was transferred to the new custodian, and only the main stock custodian had a key to the cage. A duplicate key was kept in a sealed envelope in the vault, and the security of the duplicate was not compromised at any time relevant to the events at issue in this proceeding. (Tr. 51, 52-54, 59-60, 68, 77).
4. Petitioner had previously managed the unit reserve stamp stock at a nearby station for about 10 months. Although the amount of stock was much less and the number of credits fewer than at the Citrus Heights Post Office ($40,000 of unit reserve stamp stock and four credits at the station versus almost $1,000,000 in the main stock and twenty-five credits at Citrus Heights), the basic duties associated with managing the reserve stock at the station were quite similar to those at Citrus Heights. (Tr. 17-18, 47, 116).
5. At the time Petitioner was assigned the main stock at Citrus Heights, the previous main stock custodian worked with Petitioner for about two days to train him, and the postmaster advised Petitioner that the former custodian would be available for as much training as Petitioner desired. Additionally, Petitioner knew that the postmaster and the former custodian, as well as one window clerk who had served as the custodian on occasion, worked at the Citrus Heights Post Office and remained ready to help if Petitioner had questions or problems. Petitioner also had available to him the F-1 Handbook, Post Office Accounting Procedures, which advised how to manage the financial operations of a post office including administering the main stock. (Tr. 18-20, 37-38, 47, 70, 74-75, 116-118).
6. There were three counts of the main stock relating to periods Petitioner was the custodian. The first, on September 20, 1994, revealed an overage of $5,305.86. It was later discovered that Citrus Heights had received roughly that amount of stamps from the stamp distribution office and Petitioner had added the stock to the main stock but had not noted the receipt in the records of the post office. (Tr. 20-22; RX 11). The second count, on January 27, 1995, revealed an overage of $2,162.63, which was placed in trust. (Tr. 23-24; RX 8, 11). The postmaster was concerned about the size of the discrepancies in the main stock. He told Petitioner of his concerns and directed that the main stock be audited monthly (Tr. 24).
7. Over the period March 15-17, 1995, Petitioner, with the assistance of a window clerk, counted, packaged and shipped for destruction approximately $231,000 of nonsalable stamps. Preparing the shipment was complicated by numerous interruptions from window clerks seeking change or advice. The stamps were sent by Registered Mail™ with the value of each box of stamps entered on a separate PS Form 3806, Receipt for Registered Mail, for that box. The sum of the amounts entered on the registered receipts was approximately $243,000, but the difference between that figure and the amount of stamps sent for destruction was later found to have resulted from Petitioner’s double count of certain items when the values were entered on the registered receipts. (Tr. 42, 58-59, 146; PX J, K).
8. An informal count of the main stock by Petitioner on about March 21, 1995, revealed a shortage of about $11,000. A formal count on March 28, 1995, revealed a shortage of $11,611.57 (adjusted for the stock sent for destruction), and responsibility for the main stock was transferred to the former custodian on that date. Petitioner signed the 3294, indicating his agreement with the count of the main stock. (Tr. 27-28, 66, 137-139; PX B, D; RX 3, 11).
9. The postmaster initially thought the shortage in the main stock was related to the stamps sent for destruction because the $12,000 discrepancy between the amount shown on the stamp destruction records and the Registered Mail receipts was about the same as the amount of the apparent shortage in the main stock. He called the stamp destruction committee, told them of his concerns and asked them to be especially careful when counting the shipment of stock from Citrus Heights. When the stock was ultimately counted, only a minor adjustment of less than $100 was in order, and the shortage was reduced accordingly. (Tr. 29-31, 42, 58; RX 10).
10. Over the next two-and-one-half months, the credits of all of the Citrus Heights clerks were audited. One clerk was found to have an overage of almost $4000, and, upon further investigation, it was discovered that the overage resulted from Petitioner’s issuance of stock to the clerk without obtaining the clerk’s written confirmation of the transfer and Petitioner’s failure to reduce the value of the main stock as shown in the post office records. It was Petitioner’s responsibility to make sure the written confirmation was returned by the clerk. (Tr. 31-35, 79, 119-121; PX F, H; RX 12). After adjustments, including those for the unrecorded issuance of stock and for overages in other clerks’ accounts of $957.12, the shortage in the main stock was $6,721.05. Despite the efforts of Respondent’s officials, Petitioner and Petitioner’s representatives, no explanation for the remaining shortage was identified. (Tr. 32, 82-83, 134, 137-139, 142; RX 10).
11. At times in the performance of his duties, Petitioner was a bit sloppy (Tr. 91-93). Occasionally he did not timely record in the post office accounts a transfer of stamps from the main stock to a clerk (Tr. 78), and he made a lot of counting mistakes when handling the main stock (Tr. 104-105).
12. Employees who are assigned accountability for stamp stock, including the main stock, "are held strictly accountable for any loss unless evidence establishes they exercised reasonable care in the performance of their duties." (Handbook F-1, Post Office Accounting Procedures, 132, 431.2, PX C; RX 1, 2).
13. Following a letter of demand (PX N; RX 4) and reconsideration of the claim against Petitioner (PX P, Q, R, S; RX 5, 6, 10), Respondent issued Petitioner a Notice of Involuntary Administrative Salary Offsets asserting Respondent’s claim of $6,721.05 (PX U), which Petitioner has challenged by his petition in this proceeding.
DECISION
Respondent argues that it has shown that there was a shortage in the main stock of the Citrus Heights Post Office that resulted in a loss to the Postal Service. It contends that Petitioner, as the custodian of the main stock, is strictly accountable for the loss because he has not shown that he exercised reasonable care in the performance of his duties.
Petitioner argues that Respondent has not shown that the Postal Service suffered a loss because it has not shown that the shortage was other than a "paper" shortage. Additionally, Petitioner argues that he was not given adequate training for the responsibility of the main stock at Citrus Heights. He also asserts that the Citrus Heights Post Office’s failure to consolidate the clerks’ stamp requisitions from the main stock violated Respondent’s requirements and increased the risk that losses could occur. He also contends that the shortage could have resulted from an error during the return of nonsalable stock and that the constant interruptions to preparation of the shipment increased the chance of error. Petitioner questions Respondent’s failure to change the locks to the cage where the main stock was kept each time a new custodian was appointed, the failure to count all the clerks’ credits as soon as the shortage in the main stock was discovered and the failure to complete "in detail" PS Form 3294, Cash and Stamp Stock Count and Summary, each time the main stock was counted.
By demonstrating that the amount of stamp stock on hand as of March 28, 1995, was less than the amount that should have been in the main stock according to the records of the post office, Respondent has shown a shortage and made a prima facie case that Respondent suffered a loss equal to the amount of the shortage. Petitioner has not rebutted this showing, and I conclude that Respondent suffered a loss of $6,721.05 due to the shortage in the main stock while Petitioner was custodian.
Petitioner is strictly liable for the loss unless the evidence establishes that he exercised reasonable care in the performance of his duties. The evidence in this case does not establish reasonable care. The substantial discrepancies in each of the three counts of the main stock while Petitioner was the custodian and the discovery that the first overage resulted from Petitioner’s failure to record receipt of new stock do not support a finding of reasonable care. Additionally, the discovery that almost $4000 of the main stock shortage found on March 28, 1995, resulted from Petitioner’s failure to retrieve the written confirmation from a clerk to whom Petitioner had issued stock and to record the transfer in post office records undermines a finding that Petitioner exercised reasonable care. Furthermore, there was evidence that Petitioner was sometimes slow to record issuances of stock, made counting errors and was not as careful as he should have been in managing the main stock. Petitioner’s double counting of stock was responsible for a $12,000 discrepancy between stock sent for destruction and the total amount listed on the registered receipts for the shipment. The evidence does not establish that Petitioner exercised reasonable care.
Petitioner has raised a number of defenses to the debt, but as discussed below, I do not find them sufficient to absolve Petitioner of liability for the main stock shortage.
Petitioner has not shown that he received inadequate training. He had experience working as the custodian of a unit reserve for ten months, and even though the unit reserve was much smaller than the Citrus Heights main stock, the requirements of the positions were substantially similar, providing on-the-job training to Petitioner. He received some additional training when he took over the main stock, and persons familiar with the management of the main stock were available if Petitioner needed help. The F-1 Handbook was also available to him.
Petitioner has not shown that the shortage resulted from the practice in the Citrus Heights Post Office of not consolidating all window clerk stamp requisitions. While it appears that such practice might have made it less likely that Petitioner would issue stock to a clerk without recording the transaction, the practice at Citrus Heights has not been shown to have caused any errors, and it is apparent that with the exercise of proper care in counting the stock and recording the transactions, the practice would not necessarily lead to shortages in the main stock.
That the 3294s reflecting counts of the main stock were not completed "in detail" as directed in section 431.221 of the F-1 does not excuse the shortage. The practice of using the computer-generated inventory of stamps as the base for comparing and recording the actual stock on hand has not been shown to have had any possible effect on the main stock shortage. Furthermore, there does not seem to be any disagreement that the main stock was in balance when Petitioner assumed custody of it and that it was short when counted on March 28, 1995. Petitioner signed the 3294s attesting to the accuracy of both counts.
The postmaster initially believed that the shortage was related to the shipment of nonsalable stamp stock for destruction and that there was no need to audit all of the clerks immediately. His actions have not been shown to be unreasonable. That an immediate audit might have resolved the shortage is speculative, and Petitioner has presented no evidence that would support a finding that any clerks had overages related to the shortage in the main stock except for those that were credited to Petitioner’s shortage.
Finally, there has been no showing that the shortage was related to the stamps sent for destruction in March 1995. Also, if Petitioner’s counting of the nonsalable stock for shipment was hampered by window clerks’ interruptions, it was incumbent upon Petitioner, as the window supervisor, to take steps to avoid such interruptions.
The petition is denied. Respondent may collect $6,721.05 from Petitioner’s salary by offset.
Norman D. Menegat Administrative Judge