In the Matter of the Petition by) November 4, 1997 ) ALMA SOUICE-WILLIAMS ) 6743 6th Avenue ) ) at ) ) Los Angeles, CA 90043-4407 ) P.S. Docket No. DCA 97-176 APPEARANCE FOR PETITIONER: Mary S. DiGioia 10414 Felson Street Bellflower, CA 90706-7007 APPEARANCE FOR RESPONDENT: Patricia Brown Labor Relations Specialist United States Postal Service 2300 Redondo Avenue Long Beach, CA 90809-9401
Petitioner, Alma Souice-Williams, filed a timely 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 May 12, 1997. The Notice advised Petitioner that she was indebted to the Postal Service in the amount of $12,161.75 resulting from a shortage in the reserve stock at the Marina Del Rey Station of the Venice, California Post Office.
A hearing was held on August 7, 1997, in Los Angeles, California. The Postal Service presented the testimony of three employees, and Petitioner testified on her own behalf. In addition to the transcript of the hearing, the record also contains the Declaration of Michael Orland as well as Respondent's Exhibits RX-1 through RX-14 and Petitioner's Exhibits PX-1 through PX-5. The parties submitted written arguments in lieu of making closing statements.
FINDINGS OF FACT
1. Petitioner is a level 16 Supervisor of Customer Service in the Venice, California Post Office. She has been a supervisor since 1987. Included in her duties in this position is the responsibility for the reserve stock at the Marina Del Rey Station. Her supervisor considered her to be a competent and reliable manager. (Transcript page (Tr.) 12, 117; Declaration of Michael Orland).
2. When performing her duties as the reserve stock custodian, Petitioner exercised care to always follow Postal Service procedures (Tr. 132, 177). Prior to becoming a supervisor, Petitioner spent thirteen years as a window clerk. She never experienced a shortage in her accountability while working as a window clerk. (Tr. 133).
3. On October 28, 1996, prior to her departure for an extended medical convalescence, Petitioner's stock at the Marina Del Rey Station was audited. Petitioner participated in the audit. The audit was accomplished by counting the actual stock on hand and comparing the total to Petitioner's total stamp accountability. The audit disclosed a shortage of $12,469.18 in Petitioner's accountability. (Tr. 12-14; Respondent's Exhibit (RX) 10).
4. Petitioner did not sign the audit form at the time of the audit, but she did agree with the accuracy of the stamp count. Upon her return from sick leave in January 1997, Petitioner signed the form and backdated her signature to the date of the audit. (Tr. 127, 128).
5. Just prior to the time of this audit, in October 1996, Petitioner was experiencing a flaw in the software she used to keep track of her stamp stock inventory. The software would erroneously indicate a $13,000 overage in her stamp inventory. At the same time, however, the software would continue to show an accurate total stamp accountability figure for Petitioner. (Tr. 45, 48, 63, 120).
6. Petitioner was provided a correction diskette and instructed to rebuild her stamp inventory totals on the correction diskette. Petitioner did not accomplish this task prior to leaving on sick leave. (Tr. 49, 120, 121).
7. Because of the magnitude of the shortage, Petitioner's supervisor requested that the Accounting Office perform a second audit to verify its accuracy. This second audit was performed on November 6, 1996. This audit disclosed that the shortage attributed to Petitioner should be reduced by approximately $307, to $12,161.75(1). (Declaration of Michael Orland; Tr. 74-76).
8. The Postal Systems Coordinator who conducted this second audit also conducted an analysis of the erroneous inventory figures which had been reported by Petitioner's inventory software and found that the $13,000 overage was attributable to the fact that the software was misreporting the quantity of two items in her stamp stock inventory. This flaw only affected the inventory figures but did not affect the accuracy of Petitioner's accountability figure. Thus, Petitioner's actual accountability was $12,161.75 short. (Tr. 82, 83; RX-11, RX-12; Petitioner's Exhibit (PX) 3).
9. The auditor also conducted an audit of the accountable paper office that furnished stamp stock to Petitioner to determine whether that office had an unexplained overage that corresponded to Petitioner's shortage. That office, however, had a $5,575.00 shortage. (Tr. 91; RX-13).
10. Audits conducted in prior years on Petitioner's accountability disclosed sizeable overages. Petitioner had a $8,605.30 overage in 1994, a $21,668.80 overage in June of 1995 and a $2,611.00 overage in September 1995 (RX-14; Tr. 124). Contemporaneous shortages in the accounts of her clerks as well as shortages in Petitioner's redeemed stock during the same period account for a portion of the overages (RX-14).
11. The record does not demonstrate a relationship between these prior year overages and the $12,161.75 shortage in dispute (Tr. 54, 88-90).
12. On December 4, 1996, Respondent issued Petitioner a Notice of Involuntary Administrative Salary Offsets asserting an indebtedness of $12,161.75 and Petitioner filed a timely Petition challenging the collection (PX-1).
DECISION
Respondent argues that the evidence clearly supports a finding that there was a $12,161.75 shortage in the reserve stock at the Marina Del Rey Station while the stock was under Petitioner's responsibility. Respondent further argues that the large overages in Petitioner's accountability, which were disclosed through audits in prior years, as well as the shortage at issue, demonstrate that Petitioner failed to exercise reasonable care in the performance of her duties. Respondent argues therefore, that Petitioner should be held strictly liable for the loss to the Postal Service of the $12,161.75 shortage.
Petitioner challenges whether there was a loss to the Postal Service, pointing to the numerous overages found in Petitioner's accountability in audits in prior years. Petitioner further argues that Respondent failed to follow proper procedures, asserting that her stock should have been resealed after the shortage was disclosed until a recount could be performed and that the accountability of the clerks in the station should have been immediately audited to determine whether the shortage could be attributable to overages in their accounts. Finally, Petitioner argues that she followed proper postal procedures in performing her duties.
The applicable standard of liability in this dispute can be found in Subsection 132, Other Employees, of Handbook F-1, Post Office Accounting Procedures.(2) This section provides that employees who are assigned responsibility for postal funds and other accountable paper will be held strictly liable for any loss unless they can demonstrate that they exercised reasonable care in the performance of their duties. To establish a prima facie case, the Postal Service must only prove that a loss occurred and that Petitioner was accountable for the stock from which the loss occurred. Respondent is not required to prove any negligence or dereliction on the part of Petitioner. Thereafter, Petitioner is required to demonstrate that she exercised reasonable care to avoid being held strictly liable.
When an audit shows a shortage relative to a previously established balance, this constitutes proof of a loss unless other evidence raises sufficient doubt about the accuracy of the audit or the previously established balance, or otherwise suggests that there may have been no actual loss. Richard G. Dreher, P.S. Docket No. DCA 97-223 (September 2, 1997).
Petitioner participated in the audit and does not dispute the accuracy of its findings. Furthermore, a second audit was conducted the following week which, although slightly reducing the overall shortage, verified the loss to the Postal Service. (Finding of Fact Nos. (FOF) 3, 7).
Petitioner argues that her prior overages should be allowed to offset the shortage involved in this Petition. However, she has failed to offer any evidence or otherwise establish that there is any relationship between her prior overages and the subject shortage. Some of her prior overages were used to offset other shortages in her accountability or applied against shortages experienced by clerks who received stamps from her. (FOF 10). Based on the evidence in this appeal, Petitioner has failed to demonstrate any relationship between the prior overages and the shortage she is now challenging (FOF 11).
Petitioner has failed to show that Respondent neglected any requirement of Postal Service procedures in investigating this shortage. The Postal Systems Coordinator who conducted the second audit spent considerable effort to investigate whether the flaw in Petitioner's software was related to the shortage. In addition, he also audited the accountable paper office that furnished stamps to Petitioner to determine whether that office had a corresponding overage that could be used to offset Petitioner's shortage. (FOF 8, 9). Although it may have been helpful to audit the accountability of the clerks who worked for Petitioner, Petitioner has failed to establish that this was a requirement.
Since Respondent has adequately established that it suffered a loss as a consequence of the $12,161.75 shortage in Petitioner's accountability, Petitioner will be liable unless she demonstrates that she exercised reasonable care. In this regard, Petitioner testified (and I have found) that she exercised care and always followed Postal Service procedures in performing her duties as reserve stock custodian (FOF 2). In addition, Petitioner's supervisor considered her to be a reliable and competent manager (FOF 1). Respondent has failed to rebut Petitioner on this issue. An unexplained shortage, standing alone, does not constitute proof of a failure to exercise reasonable care. Similarly, the unexplained overages experienced by Petitioner in previous years do not establish the Petitioner is currently failing to exercise reasonable care in the performance of her duties.
Accordingly, this petition is sustained. Petitioner is not liable to repay the Postal Service the $12,161.75 shortage found in her stamp stock accountability at the Marina Del Rey Station.
William K. Mahn Administrative Judge
2. The F-1 Handbook was revised effective November 1996. However, because the events relevant to this case arose before then, the April 1991 edition applies. References in this decision to the F-1 Handbook are to the 1991 edition.