In the Matter of the Petition by ) July 6, 1995 ) LINDA L. McFARLAND ) 2068 Crozer Street, NW ) ) at ) ) Salem, OR 97304-3538 ) P.S. Docket No. DCA 95-81 APPEARANCE FOR PETITIONER: Charles Scialla Scialla Associates, Inc. 453 Preakness Avenue, Suite 5 Paterson, NJ 07502-1121 APPEARANCE FOR RESPONDENT: Robert V. Conser Labor Relations Specialist United States Postal Service P.O. Box 2089 Portland, OR 97208-2089
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Linda L. McFarland, 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 Postal Service’s collection from her salary for a shortage discovered in the Corvallis, Oregon Post Office main stamp stock, which Petitioner managed. Petitioner claimed that the count of the main stock reflected a shortage only because she had erroneously understated the amount of stock (entering "1500" as the number of 52-cent stamps rather than the correct "15,000") sent for routine destruction at the Portland Post Office.
FINDINGS OF FACT
1. Petitioner has been the Supervisor of Customer Services at the Corvallis, Oregon Post Office for about four years. For the last two or three years, her duties have included management of the main stamp stock of the office, which involves accounting for stamp shipments received by the post office, distributing and accounting for stamps to window clerks, of which there are at least 13 in the Corvallis Post Office, and shipping stamps to the Stamp Destruction Committee in Portland for routine destruction. She also handles the counting of the window clerks’ credits every four months and prepares daily bank deposits of post office receipts. (Transcript of Hearing ("Tr.") 83, 100, 105, 108-111, 122-123).
2. In late 1994, Petitioner knew that a postage rate change was coming the first of the year, and so she wanted to send for destruction stamps of denominations that would no longer be in demand after the rate change. The 52-cent stamp was the proper postage and was commonly used for a 2-ounce First Class letter. After the rate change, the rate for a letter over an ounce would increase, and the demand for 52-cent stamps could be expected to decline. Therefore, 52-cent stamps were among the denominations Petitioner sought to send for destruction. (Tr. 61-62, 64, 68-69, 73-74, 110).
3. On October 18, 1994, Petitioner and the window distribution clerk in her office prepared a shipment of stamps to send to the Stamp Destruction Committee in Portland. The shipment included 9 types of stamps, including a number of 52-cent Love stamps. The shipment was accompanied by a form Petitioner filled out, PS Form 3238, March 1989, Stamps & Stamped Paper Destruction Certificate, which listed the items shipped for destruction. The column headings and the line for the 52-cent stamps read as follows:
"Quantity Kind of Stock Redemption Dollar Value
(Include Denomination) Rate
* * *
1500 .52 love 100% 780.00"
(Tr. 58-59, 108-109, 111-112; Respondent’s Exhibit ("RX") 8 (pp. 1, 2).
4. Petitioner and the window distribution clerk both counted the stamps in the shipment separately. Petitioner entered the results of her count on the 3258 and the window distribution clerk counted independently and advised whether his number agreed with Petitioner’s. The window distribution clerk did not check the number Petitioner entered in the "Quantity" column but did check her math to make sure the quantity she entered times the denomination equaled the "Dollar Value" entry.1 Both Petitioner and the window distribution clerk signed the 3238 signifying their agreement that the figures entered on the form reflected the contents of the shipment. (Tr. 23, 59-61, 65-67, 111, 116).
5. It would have been unusual for Petitioner to have sent just 1500 of the 52-cent stamps for destruction. The 52-cent Love stamps were packaged for distribution to post offices in sealed (shrink-wrapped) pads containing 5000 stamps, 50 stamps on each of 100 sheets in the pad. A label included by the printer within but visible through the wrapping of the pad stated that there were 5000 stamps in each pad. So long as the wrapping had not been opened, the pad could be treated in inventories or other stamp counts as 5000 stamps without counting the individual sheets or stamps. It has been Petitioner’s practice not to open pads until they are needed, in order to cut down on the number of individual stamps or sheets that must be maintained and counted in the main stock. When sending stamps for destruction, she would send complete, unopened pads of 5000 stamps each rather than sheets or loose stamps from pads already opened. Additionally, because the post office was trying to dispose of large quantities of stamps that would be in less demand after the rate change, Petitioner would not have bothered sending 30 sheets of stamps (30 x 50=1500) when she had sealed, 5000-stamp pads to dispose of. Any loose stamps and sheets would have been distributed to window clerks for sale. (Tr. 21-22, 32-34, 48, 55, 61-64, 73-74, 113-114; Petitioner’s Exhibit ("PX") 2).
6. When stamp shipments reach the Stamp Destruction Committee, the packages remain sealed and are secured in the registry unit until the Committee meets to count them. At that time the shipments are opened in a secure room, one at a time, and two members of the Committee independently count the stamps in each package.2 The two members then give the results of their counts to a third member of the Committee who compares the numbers from the Committee counts with the amount entered on the 3238 by the sending post office. If the two members disagree, a third member of the Committee counts and any differences are resolved. The Committee corrects any errors found on the 3238, calling the post office if there are significant discrepancies and offering the post office an opportunity to recover the stock. In the case of the October 18, 1994 Form 3258 from the Corvallis Post Office, the Committee noted a miscount on one line (the post office listed 20 $4.95 Soccer Folios sent, and the Committee discovered that there were actually 22) and corrected the number under the "Quantity" column and the carried over "Dollar Value" as well as the total "Dollar Value" entry and initialed all changes they made. The Committee made no correction to the entry for the 52-cent Love stamps, indicating they agreed with the 1500 entry made by Petitioner. Once the shipment is counted and any discrepancies corrected, all the stock is put back in the box and the box is resealed before the next shipment is opened. (Tr. 15-24, 34, 41-43, 46-47, 50-54; RX 7, 7A, 7B, 8 (pp. 1, 2)).
7. Once the stamps in the October 18, 1994 shipment were destroyed, on November 22, 1994, a copy of the 3238 bearing the changes made by the Committee was returned to the Corvallis Post Office. As soon as Petitioner received that copy of the 3238, she suspected there had been an error made because she knew the number of 52-cent Love stamps remaining in the main stock at the Corvallis Post Office was substantially less than it would have been had the shipment to the Stamp Destruction Committee included only 1500 of the stamps. (Tr. 56, 106-107, 121).
8. Petitioner immediately advised the postmaster of her concerns, and they agreed to count the main stamp stock. The count was performed on November 30, 1994, and revealed a shortage of $7020 (Tr. 106, 121-122; RX 1, 2, 4, 5). The difference between 15,000 and 1,500 is 13,500, and the value of 13,500 52-cent stamps is $7020.
9. Petitioner is an excellent and careful employee. There have never been any problems noted with her practices of issuing stock to clerks, accounting for changes to the main stock or in any other aspect of her performance of her duties. A September 27, 1994 review of the financial operations of the Corvallis Post Office by a postal systems examiner (internal auditor) from the Portland Post Office revealed a very good operation. The Corvallis Postmaster, for whom Petitioner had worked for approximately four-and-one-half years, found that she exercised reasonable care in the performance of her duties. In the roughly 2 to 3 years Petitioner has had financial responsibility at the post office, she has never had a shortage. In each of the last six audits of the main stock preceding that of November 30, 1994 (over the period from late 1993 through September 1994), the account balanced to the penny. (Tr. 65, 67, 69-70, 78, 88-89, 91-92, 96, 97, 103; RX 3).
10. After attempts to collect the $7020 from Petitioner were unsuccessful, the postmaster, on March 13, 1995, issued her a Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act, stating Respondent’s intention to collect $7020 through deductions from Petitioner’s salary (RX 2, 4, 5, 6; PX 1). This Petition followed.
11. Employees who are assigned responsibility for postal funds and accountable paper, such as Petitioner was, "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, April 1991, Section 132).
DECISION
Respondent has the burden of demonstrating by a preponderance of the evidence that the shortage reflected in the main stock of the Corvallis Post Office on November 30, 1994, represented a loss to the Postal Service. It is plain that if the $7020 shortage in the main stock resulted from sending 13,500 52-cent stamps to the Committee without reducing the main stock accountability accordingly and those stamps were destroyed, Respondent did not suffer a loss.
Although, understandably, the members of the Stamp Destruction Committee could not remember their handling of the particular shipment from Corvallis, their testimony, which was confirmed in a number of respects by notations on the 3238, regarding their usual practices was credible and demonstrated that the Committee members carefully followed the procedures of securing, counting and recounting, checking and double checking stamp shipments they received. That they detected one error in the package at issue here and made corrections to the form 3238 supports a conclusion that they were performing their function carefully when they counted the shipment from Corvallis. They did not note any problem with the entry of "1500" Petitioner made for the 52-cent Love stamps. Additionally, both Petitioner and the window distribution clerk signed off on the 3238 reflecting the "1500" entry. This is strong evidence that the package contained only 1500 of the 52-cent Love stamps.
On the other hand, however, Petitioner and the window distribution clerk, both experienced at handling stock and preparing shipments for destruction and both credible, testified that it would have been very unlikely that Petitioner would have shipped thirty loose sheets of 52-cent stamps for destruction when she had unopened, sealed, 100-sheet pads of 5000 stamps each in the main stock that could be counted and shipped with minimum effort. They also testified that the Corvallis Post Office had so many 52-cent stamps to dispose of that they would not have bothered sending so few as 1500 in the package for destruction. Petitioner’s history of the main stock accounts balancing to the penny and the fact that the shortage of $7020 is explained to the penny by the omission of a zero at the end of her "Quantity" entry for the 52-cent Love stamps also support her position. Additionally, she immediately reported the discrepancy when she received the 3238 from the Stamp Destruction Committee. Thus, Petitioner has presented strong evidence that 15,000 stamps (three pads of 5000) were sent for destruction and that Petitioner entered "1500" by mistake. Accepting Petitioner’s version of the events would likely mean that a member of the Stamp Destruction Committee misread "1500" as "15,000" when comparing the Committee’s counts with the entry on the 3238.
The stamps themselves were destroyed before Petitioner noted the discrepancy, so it was not possible for her to confirm her suspected error, and it is not now possible to prove either theory with certainty. Both sides have presented credible, albeit circumstantial, evidence of virtually equivalent weight supporting their views of the contents of the October 18, 1994 shipment to the Stamp Destruction Committee. Where the evidence is, as I find, evenly balanced on the issue of whether 1500 or 15,000 stamps were sent to the Stamp Destruction Committee, Respondent as the party with the burden of proving by a preponderance of the evidence that a loss occurred loses. See Texas Distributors, Inc. v. Local Union No. 100, et al., 598 F.2d 393, 402 (5th Cir. 1979).
Additionally, an employee will not be found strictly liable if the evidence demonstrates that she exercised reasonable care. Everyone seems to agree that Petitioner exercised reasonable care in the performance of all of her duties related to management of the main stock and her other financial responsibilities. At least the last six counts of the main stock have balanced to the penny, and she has never had a shortage. I find that Petitioner exercised reasonable care, and, for that reason, even if a loss to the Postal Service had been demonstrated, she would not be liable.
Because Respondent has not met its burden of proving by a preponderance of the evidence that the $7020 shortage in the main stock constituted a loss to the Postal Service and because Petitioner exercised reasonable care, she is not liable for the $7020 claimed by Respondent.
The Petition is granted.
Norman D. Menegat Administrative Judge