In the Matter of the Petition by ) December 28, 1995 ) PATRICIA SKINNER ) 231 Ramsgate Way ) ) at ) ) Vallejo, CA 94591-8357 ) P.S. Docket No. DCA 95-389 APPEARANCE FOR PETITIONER: Michael W. Miller National Association of Postal Supervisors P.O. Box 5445 Walnut Creek, CA 94596-5445 APPEARANCE FOR RESPONDENT: Alma Sanchez Labor Relations Specialist United States Postal Service 1150 N. McDowell Blvd. Petaluma, CA 94999-9401
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Patricia Skinner, filed a petition requesting an oral hearing under the Debt Collection Act of 1982, as amended, 5 U.S.C. §5514 (a), after receiving a Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act. The October 5, 1995 Notice asserted the Postal Service’s intention to make withholdings from Petitioner’s salary to collect $2,487.30 based on the results of an audit of the main stamp stock of the San Rafael, California Post Office during the time Petitioner was the main stock custodian.
An oral hearing was held in San Francisco on November 29, 1995.
FINDINGS OF FACT
1. At least through June, 1995, Petitioner was the finance supervisor and main stamp stock custodian at the San Rafael, California Post Office. (Transcript page ("Tr.") 54, 81; Petitioner’s Exhibits ("PX") B, D, F).
2. In April 1995, Petitioner made an informal count of the main stamp stock and determined that there was an overage of approximately $1,400. She concluded that the stock on hand exceeded by about $1,400 the amount of stock shown by the post office’s computerized records to be in the main stock. (Tr. 33-34, 54, 75-76, 83-84; PX B-22).
3. On about May 22, 1995, with the authorization of the San Rafael Postmaster and without counting the main stock again, Petitioner took stamp stock in the amount of $3,000 to $3,300 from the main stock and transferred it to one of San Rafael’s stations, Civic Center, to reduce suspense items that had been carried on the station’s books for some time.1 Suspense items include bookkeeping entries to account for shortages found in clerks’ credits through formal counts, and suspense entries are to be resolved by collection or otherwise within a reasonable time. The San Rafael Post Office had been criticized by the office it reports to for the large amount and age of outstanding suspense items at Civic Center Station. The suspense items at Civic Center Station were eliminated by giving stock from the main stock to individual clerks at Civic Center Station which stock was then credited against prior shortages that had been placed in suspense. No entries were made in the records relating to the main stock to show the transfer of stock, so the amount shown in the computerized records of the post office as the amount of stock in the main stock remained unchanged. (Tr. 34-36, 53, 75-76, 83-84, 88, 92, 96-98; PX B-22, J).
4. In late May, a general audit of the operations of the San Rafael Post Office was conducted by the Inspection Service. A May 31, 1995 count of the main stock completed as part of that audit revealed a shortage of $2,487.30. (PX B, D).
5. Petitioner, as the main stock custodian, is "strictly liable for any loss unless evidence establishes that [she] exercised reasonable care in the performance of [her] duties." (Handbook F-1, Post Office Accounting Procedures, section 132).
6. Respondent’s efforts to collect the amount of the shortage from Petitioner culminated in issuance on October 5, 1995, of a Notice of Involuntary Administrative Salary Offsets which prompted Petitioner to seek a hearing under the Debt Collection Act to challenge the debt.
DECISION
Respondent argues that it has shown that the shortage in the main stock at the San Rafael Post Office resulted in a loss to the Postal Service. It contends that it has demonstrated that Petitioner did not exercise reasonable care in the performance of her duties as the main stock custodian and that, therefore, she is strictly accountable for the loss. In support of its argument that Petitioner failed to exercise reasonable care, Respondent attributes to her a number of the deficiencies in the financial controls and management of the San Rafael Post Office that were identified in the Inspection Service audit of the post office performed in late May, of which the audit of the main stock was but a part.
Petitioner argues that Respondent has failed to show that any actions of hers, whether or not such actions conformed precisely to Postal Service financial management requirements, led to the shortage in the main stock. She also argues that she should receive credit for overages in clerks’ accountabilities that are currently held in trust at San Rafael and that she should receive credit for an overage in the unit reserve stock of Kentfield Station, for which she is also responsible. Further, Petitioner contends that once the shortage was identified in the main stock, all of the clerks should have been audited immediately to determine whether overages in their credits might account for the shortage in the main stock. Finally, Petitioner suggests that the postmaster failed to exercise adequate control over the financial operations of the post office and that that failure excuses any lack of reasonable care by Petitioner.
It is Respondent’s burden in this proceeding to demonstrate that the May 31, 1995 shortage in the main stock at San Rafael represented a loss to the Postal Service. It has not done so.
One week before the count of the main stock that revealed the $2,487.30 shortage, Petitioner, with the authorization of the postmaster, made an extraordinary and unrecorded transfer of what she thought was an overage in the main stock. In this transfer, stock worth at least $3,000 was transferred to resolve Civic Center Station suspense items without reducing the value of the main stock as carried in official records of the post office. It is apparent that any error in Petitioner’s informal count of the main stock and assessment of the overage as of May 22 would have a direct bearing on a shortage found but a week later in the main stock and that there likely would have been an overage in the main stock as of May 31 if the transfer to Civic Center Station had not been made.
Under these circumstances, for purposes of this proceeding and to the extent of the shortage, Petitioner should be given credit for the approved, unrecorded withdrawal from the main stock. That being the case, I find that Respondent has not demonstrated that the shortage discovered on May 31, 1995, in the main stock represented a loss to the Postal Service.2
The petition is sustained.
Norman D. Menegat Administrative Judge