In the Matter of the Petition by ) December 30, 1996 ) BERNARD SOKOL ) 2840 Ocean Parkway, Apt. 11B ) ) at ) ) Brooklyn, NY 11235-7957 ) P.S. Docket No. DCA 96-387 APPEARANCE FOR PETITIONER: Charles Scialla Scialla & Associates, Inc. 453 Preakness Avenue, Suite No. 5 Patterson, NJ 07502-1121 APPEARANCE FOR RESPONDENT: Albert E. Lum United States Postal Service James A. Farley Building, Room 3507 421 Eighth Avenue New York, NY 10199-9401
Petitioner, Bernard Sokol, 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, on October 23, 1996. The Notice advised Petitioner that he was indebted to the Postal Service in the amount of $552.55 resulting from shortages in the retail stock he had distributed to Tour 3 personnel. Petitioner filed a timely petition from this Notice of impending deductions.
An oral hearing was held on December 5, 1996, in New York, New York. The Postal Service presented testimony from one Postal Service employee and Petitioner presented testimony from three employees as well as testifying on his own behalf.
FINDINGS OF FACT
1. Petitioner is a supervisor of Customer Service at the James A. Farley (JAF) Post Office in New York City. In this position he is responsible for approximately $2,000,000 in main stock as well as somewhat less than $1,000,000 in retail products. Petitioner assumed responsibility for the main stock vault in 1993, but only became responsible for retail products in the beginning of 1996. (Transcript pages (Tr.) 8, 9, 24, 32, 33, 41).
2. Petitioner is considered by his supervisors to be a very responsible employee who kept meticulous records (Tr. 14, 25). During the three years he has been responsible for the main stock vault he has never experienced an audited shortage greater than $6.00 (Tr. 33).
3. The official procedures for handling and accounting for the distribution of retail products are contained in Section 570, Retail Products, of the Post Office Accounting Procedures Manual (F-1 Handbook).(1) Section 572 instructs window clerks to enter the cash value of each sale of a retail product on Form 3317-A at the time the sale is made. At the end of each day, the window clerks must report the sale of retail products on Form 1412 in AIC 093.(2) (Respondent's Exhibit (RX) 13A).
The distribution and sale of retail products is not audited (Tr. 14, 15, 31, 34).
4. Retail products are typically issued directly to window clerks (Tr. 8, 9). However, on Tour 3 the window clerks did not have lockers or cabinets to secure the retail products. Instead, a cage was constructed for the supervisors of Tour 3 to allow them to secure the retail products, and Petitioner issued the Tour 3 requisitioned retail products directly to the two supervisors of this Tour. In so doing, Petitioner would have the supervisor receiving the retail products sign a Form 17 acknowledging the value of the retail products received. (Tr. 9, 29, 40; RX 4-12).
5. The Tour 3 supervisors placed the retail products they received from Petitioner in a hamper and placed the window clerks of this Tour on an honor system requiring the window clerks to return to them the cash they received for the sale of these products. Contrary to the requirements of Section 572 of the F-1 Handbook, the window clerks on Tour 3 did not record the cash value of retail product sales on Form 3317-A, nor did they report the daily total of retail product sales on Form 1412 in AIC 093. (Tr. 30, 44-47).
6. The Tour 3 supervisors returned the sums of cash received from the window clerks under this honor system to Petitioner in a co-mingled fashion. That is, although Petitioner issued the retail products to the two supervisors individually, they returned the cash in a combined fashion. Thus, neither Petitioner nor his superiors could identify which Tour 3 supervisor, and to what amount, was responsible for shortages as they occurred. Petitioner would account for the cash received in this fashion by recording it in AIC 093. (Tr. 12, 35, 39).
7. Petitioner was not the supervisor of either Tour 3 supervisor. In fact, they were at his same grade level (or acting at that level) (Tr. 37). Furthermore, Petitioner lacked the authority to issue a letter of demand for indebtedness to either of the Tour 3 supervisors (Tr. 17). When Petitioner discovered that the Tour 3 supervisors were not returning sufficient cash to account for the value of retail products they received from him, he brought the shortage to the attention of the tour superintendent by memorandum dated May 31, 1996. In this memorandum he informed the tour superintendent that he could not account for $552.55 of retail products issued over the past three months to the supervisors of Tour 3. (RX 2; Tr. 12, 39).
8. Thereafter, on July 31, 1996, the tour superintendent determined that Petitioner was responsible for the $552.55 shortage (RX 1).
DECISION
Petitioner does not dispute either the existence of, or the amount of the shortage being charged against him. In fact, Petitioner was the only individual at the JAF Post Office in a position to become aware that a shortage existed since the distribution and sale of retail products is not periodically audited (Finding of Fact No. (FOF) 3). Once he became aware of a shortage, he brought the shortage to the attention of management (FOF 8). Petitioner does believe, however, that he exercised reasonable care at all times in carrying out his duties with respect to the distribution of retail products.
The $552.55 shortage occurred after the retail products left the control of Petitioner, presumably caused by the honor system of accounting instituted by the Tour 3 supervisors for the sale and accounting of these products, but in violation of Section 572 of the F-1 Handbook (FOF 5). Nevertheless, Respondent considers Petitioner responsible for the shortage solely because he accepted cash from the Tour 3 supervisors in a co-mingled fashion, thereby preventing them from identifying which, and to what amount, each of the Tour 3 supervisors were responsible for the shortage.
Neither Petitioner's supervisor, the Manager of Customer Services or the tour superintendent, believe Petitioner to be the cause of the shortage. Both of these individuals consider Petitioner to be a meticulous record keeper and a very responsible employee (FOF 2). In fact, both supervisors testified, and the evidence in the record clearly demonstrates, that Petitioner carefully accounted for the distribution of retail products by having each of the Tour 3 supervisors sign a Form 17 reflecting the value of retail products received in each distribution (FOF 4). The value of the retail products under his responsibility was significantly less than the value of the main stock under his responsibility. Nevertheless, he carefully accounted for the distribution of retail products by having the window clerks of other tours and the supervisors of Tour 3 sign a Form 17 each time they received a quantity of retail products (FOF 4). Under the procedures set forth in Section 570 of Handbook F-1, he had no other responsibilities. However, because the window clerks of Tour 3 lacked cabinets or lockers to secure the retail products, the supervisors of that tour instituted an unauthorized procedure and returned cash to Petitioner to have him account for the sales in AIC 093. (FOF 6) Once Petitioner became aware of a shortage with respect to the accounting of retail products he reported that shortage (FOF 7).
Petitioners actions in accepting the cash back from the Tour 3 supervisors, even in a co-mingled fashion, and accounting for it himself, does not amount to a failure to exercise reasonable care. Petitioner did not supervise either of the Tour 3 supervisors and did not have the responsibility for ensuring that they properly accounted for the sale of the retail products they received from Petitioner (FOF 7).
Respondent has failed to show how Petitioner's actions caused the shortage or that he failed to exercise reasonable care. Accordingly, I conclude that Petitioner is not liable for the amount claimed by Respondent. The petition is sustained.
William K. Mahn Administrative Judge
1. Retail products are described as items directly related to the preparation of matter to be entered in the mail stream (i.e., small boxes, envelopes, packing material, etc.) (Respondent's Exhibit (RX) 13A).
2. "AIC 093" refers to a code for the computer entry of revenue from the sale of retail products (Tr. 41; F-1 Handbook, Appendix A).