In the Matter of the Petition by ) May 19, 1999
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LAWRENCE V. KOZAK )
3818 Berkley Avenue )
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at )
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Drexel Hill, PA 19026-2804 ) P.S. Docket No. DCA 99-101
APPEARANCE FOR PETITIONER: W. Thomas Brown
National Association of Postmasters
4141-106 Lake Lynn Drive
Raleigh, NC 27613-3455
APPEARANCE FOR RESPONDENT: Jeanette L. Horn
Labor Relations Specialist
United States Postal Service
1905 Old Philadelphia Pike
Lancaster, PA 17602-9401
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Lawrence Kozak, filed this Petition after receiving a Notice of Involuntary Administrative Salary Offsets, dated March 3, 1999, from his supervisor. This Notice stated the Postal Service’s intention to withhold $707.98 from Petitioner’s salary to recover for a shortage "based on your failure to properly audit and maintain the financial accountability of your office."
A hearing was held in Lancaster, Pennsylvania on April 22, 1999. The Postal Service presented testimony from Gerald Chonka, a postal systems coordinator, who conducted a financial audit of Petitioner’s post office; and Michael Melynk, Petitioner’s supervisor at the time of the audit. Mr. Kozak testified in his own behalf, and both sides presented some documentary evidence. The following findings of fact are based on the entire record, including observation of the witnesses and their demeanor.
FINDINGS OF FACT
1. Petitioner became the postmaster at Paoli, Pennsylvania in February 1993 (Tr. 52, 57-58).(1) He was also the custodian of the main stock at Paoli (PS Ex. 2).
2. On December 18, 1995, Petitioner had heart surgery (Tr. 68). On that day, Mr. Chonka came to Paoli to take the steps necessary to transfer the Paoli Post Office from Petitioner to James Merna, who was to be the officer-in-charge during Petitioner’s absence. Because it took a few days to review all the accounts necessary to establish a balance, the transfer did not take place until December 22, 1995. Another supervisor, Jeffrey Calhoun, assumed custody of the main stock account on December 19, 1995. The record is unclear as to when Mr. Kozak returned to work, but the main stock account was never re-transferred to him. (Tr. 10-12, 35; PS Ex. 2).
3. In performing his task, Mr. Chonka did a physical count of the main stock, and found it to be $14,754.05 short (Tr. 12, 32; PS Ex. 2).
4. Between December 22, 1995, and January 17, 1996, Mr. Chonka returned to Paoli several times to do further reviews of the Paoli office, in an effort to account for the large shortage. This included auditing all the clerks’ accounts, and reviewing all items that were being carried in suspense accounts (shortages) and trust accounts (overages). He also consulted with accounting personnel at the Minneapolis Postal Data Center and the St. Louis Postal Data Center seeking information about possible data errors, or money order transactions, that might have affected Paoli accounts. No useful information was obtained from either Minneapolis or St. Louis. (Tr. 12-14; PS Ex. 2).
5. In a memo to the District Finance Manager, dated February 6, 1996, Mr. Chonka listed all clerk overages and shortages. The overages totaled $20,872.67, and the shortages totaled $6,046.12. The memo concluded that considering "all financial discrepancies," and "relating the stamp accountability overages to the shortages," there was a net amount $1,523.45 unaccounted for, which should be charged to Mr. Kozak. There is no explanation, either in the memo or in testimony presented at the hearing, as to how the figure $1,523.45 was arrived at. (PS Ex. 2).
6. In the months that followed Mr. Chonka’s audit and memo, further adjustments were made to the trust and suspense accounts. For example, a spreadsheet, whose author is not identified, titled "Outstanding TASS Differences," dated "10/15/96" lists total overages as $14,264.28, and total shortages as $14,834.15, for a net shortage of $569.87.(2) In an October 26, 1996 memo, the Manager of Finance for Lancaster recommended that Petitioner be issued a letter of demand for that amount.(3)
7. The amount ($707.98) for which Petitioner was eventually issued a letter of demand, on March 5, 1997, comes from another TASS spreadsheet, whose author is also not identified, dated "2/22/97." This spreadsheet lists total overages as $14,126.17, and total shortages as $14,834.15, the difference being $707.98. (PS Ex. 3).(4) Both of these spreadsheets list overages for named employees, along with dates for each. The names and dates are the same as are found on Mr. Chonka’s February 6, 1996 memo, but the amounts are significantly different. The record provides no explanation that accounts for the total difference of more than six thousand dollars between the total overages listed in the February 6, 1996 memo, and those listed on PS Ex. 3.
DECISION
Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), Section 14, provides as follows:
14 Liability for Financial Losses
Respondent’s burden of proof is to show that the Postal Service suffered a loss of stamp stock, or money, and that the loss occurred from an account for which the Petitioner was responsible. Respondent does not have to prove that some specific dereliction, or act of negligence, by Petitioner caused the loss.
The issue in this case is whether Respondent’s evidence is sufficient to prove a loss to the Postal Service of $707.98. Even though there are no documents in the record that recorded the audit done on December 18-19, 1995, or that show what the account balance was supposed to be, compared to what was actually present, Mr. Chonka’s testimony and his February 6, 1996 memo are sufficient to establish that the main stock was short by $14,754.05. His testimony was credible and showed his thoroughness in carrying out his audit. Also, Petitioner has not challenged the accuracy of the count, or the amount of the shortage. The difficulty comes, however, in examining the calculations regarding overages and other shortages that were used in reaching the net shortage being charged to Mr. Kozak. Using the figures on Mr. Chonka’s memo, the net difference between the overages ($20,872.67) and the other shortages ($6,046.12) is $14,826.55. This is more than main stock shortage. There is no evidence in the record to demonstrate why these figures should not be used, rather than those that appear on the spreadsheet (PS Ex. 3) that Respondent offers as a basis for the $707.98 charge against Petitioner. Without an explanation of how the dollar figures on PS Ex. 3 were arrived at, and some persuasive evidence that they represent the correct amount of overages to be offset against the main stock shortage, this document is nothing but a piece of paper with numbers on it. It does not prove a loss. Mr. Chonka, despite his apparent attention to detail in performing the December 1995/January 1996 financial review, did not create the 2/22/97 spreadsheet and could not confirm its accuracy.
In various documents that were filed with both the Petition and the Answer there are many references to Petitioner’s failure to properly manage the finances of the Paoli Post Office. These are reinforced to some extent by Mr. Chonka’s testimony on the difficulties in "balancing the books," when he did his December 1995/January 1996 financial review at Paoli. The Debt Collection Act, however, is only a vehicle for recovering "losses," not a means to punish poor job performance. Because Respondent has not proved a loss, the Petition is sustained. Respondent may not collect $707.98 from Petitioner’s salary.
Bruce R. Houston Chief Administrative Law Judge
2. This document is attached to the Petition. TASS is "Trust and Suspense System." (Tr. 37).
3. This document is also attached to the Petition.
4. A more legible copy of this document was also entered into the record as Pet. Ex. 3.
5. As most of the events pertinent to this case occurred before November 1996, the earlier version of Handbook F-1 is also applicable. The corresponding section of that version was Section 131, which contained language similar to that quoted above.