April 5, 2000 In the Matter of the Petition by RENEE EVANS P.O. Box 4893 at Santa Rosa, CA 95402-4893 P. S. Docket No. DCA 99-548 APPEARANCES FOR PETITIONER: Clarence Craig 7157 Reichmuth Way Sacramento, CA 95831-3013 Jaime Chacon P.O. Box 2014 Mission Viejo, CA 92690 APPEARANCES FOR RESPONDENT: Alma L. Sanchez Calvin Adams Labor Relations Specialists United States Postal Service 1300 Evans Avenue San Francisco, CA 94188-2290
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Renee Evans, filed a timely Petition after receiving a Notice of Involuntary Administrative Salary Offsets, dated December 20, 1999, from her supervisor. This Notice stated the Postal Service's intention to withhold $4,768.60 from Petitioner's salary to recover for a shortage in the main stock account for which Petitioner was responsible.
A hearing was held in San Francisco, California on March 2, 2000. At the start of the hearing, the Postal Service representative announced that the alleged indebtedness had been reduced to $3,666.37, based on offsetting an overage in another employee's account.
The Postal Service presented testimony from Elaine Wollitz, who conducted an audit of Petitioner's account in May 1999, Mary Shrum, who trains personnel in the computerized stock accounting system now in use, Anthony Carvelli, the Acting Manager of Post Office Operations in May 1999, Howard White, Jr., who succeeded Petitioner as postmaster in Sausalito, California, and Lito Sajonas, the Manager of Post Office Operations for the San Francisco District. Petitioner testified on her own behalf. Both parties relied on documents filed with the Petition and the Answer, and both offered additional documents at the hearing. Petitioner's representative made an oral argument at the close of the hearing. Respondent's representative elected to file a written argument after reviewing the hearing transcript. The following findings of fact are based on the entire record, including observation of the witnesses and their demeanor.
FINDINGS OF FACT
1. Petitioner has held management positions with the Postal Service for several years. From approximately January 1998 until early May 1999, she was the postmaster at Sausalito, California. During at least the latter part of that time, she was also the custodian of the main stock at the Sausalito Post Office. The main stock includes all postage stamps, and certain other items, received by a post office but not yet consigned to window clerks. (Tr. 121; Answer, Ex. 3, p. 1).(1)
2. On May 5, 1999, the main stock was audited by Ms. Wollitz, Mr. White, Ms. Shrum and Petitioner, because Petitioner was moving to another job and the stock was being turned over to Mr. White. The audit showed a shortage of $4,768.60, the total account being more than $350,000.00. (Tr. 10, 81-82, 121; Answer, Ex. 3, p. 6). Ms. Wollitz, Mr. White and Petitioner signed a summary sheet indicating their agreement with the results of the count (Answer, Ex. 2, p. 2).
3. Two items that made up a large portion of the shortage were 100 coils of 33¢ stamps ($3,300.00), and 4000 32¢ stamps identified as "Hershey" stamps ($1,280.00). (Tr. 32-33, 122-23; Answer, Ex. 2, pp. 3-4). Immediately after the audit, Petitioner told Ms. Wollitz that she recalled giving these two items to two clerks, the first to Mr. Tabalno and the second to Ms. Fernando, apparently without making the proper entries into the computer system. When a stock custodian issues stock to clerks, a PS Form 17 is required to be used, to insure that the correct amount is added to the clerk's account and subtracted from the main stock. This form can either be generated by the computer or a manual form can be used and the computer entry made later. Petitioner attempted to find manual Form 17s that would have recorded these transactions, but neither she nor the clerks were able to do so. (Tr. 10-12, 35-36, 124, 132).
4. Shortly after the shortage was discovered, Petitioner did audits of her clerks to see if there were any large overages that might relate to her shortage. On May 10, 1999, Ms. Fernando had an overage of $1,102.23. Mr. Tabalno was on leave and was not counted again until May 29, 1999, by Mr. White. At that time he had no overage, but on his last previous audit, January 21, 1999, he had an overage of $3,436.23. Petitioner asked both these clerks if they would be willing to let their overages be offset against her $4,768.60 shortage. Both declined.(2) (Tr. 13-14, 123-24, 130; Answer, Ex. 5, pp. 1 and 3).
5. Mr. Wysocki was a former customer service supervisor and main stock custodian in the Sausalito Post Office. On September 8, 1998, apparently at or about the time the main stock was transferred from him to Petitioner, the account had an overage of $3,618.04. When an overage is found in an account, the amount of the overage is placed in a "trust" account, in order to balance the principal account from that time forward. Money in a trust account may later be used to offset related shortages. (Tr. 43, 51-52, 85, 88, 130). On a PS Form 571 dated September 11, 1998, signed by Petitioner, she noted that Mr. Wysocki did not follow proper procedures in issuing stock to clerks, and that she would be offsetting this overage against certain clerk shortages (Pet. Ex. 1).(3) On September 22, 1998, Petitioner approved using Mr. Wysocki's overage to offset two clerk shortages totaling $1,564.24 that had been found by audits on July 28 and September 21, 1998 (PS Ex. 6).
6. Mr. Tabalno had previously been audited on September 25, 1998 and found to have a shortage of $4,128.17 (Tr. 26, 128-29; Answer, Ex. 5, p. 1). He was issued a letter of demand for this amount and sometime thereafter he filed a grievance under the union/management agreement. On January 25, 2000, Mr. White, who was then the Sausalito Postmaster, resolved this grievance by offsetting Mr. Tabalno's January 21, 1999 overage ($3,436.23) against the September 25, 1998 shortage. Even though there were no documents to establish a clear relationship between the overage and the shortage, Mr. White found a sufficient relationship from the fact that these were two consecutive audits. When making this decision, he did not consider whether there might have been a relationship between Mr. Tabalno's September 25, 1998 shortage and Mr. Wysocki's September 8, 1998 overage, nor did he consider whether Petitioner's May 5, 1999 shortage might be related to Mr. Tabalno's January 21, 1999 overage. (Tr. 83-84, 86-91; PS Ex. 1).
7. On January 25 and January 28, 2000, Mr. White resolved two other grievances by offsetting money remaining in the trust account for Mr. Wysocki's overage against three clerk shortages from September 1998 totaling $1,450.77. The only known relationship between these shortages and the overage was the closeness in time. (Tr. 85-88; PS Exs. 2 and 3).
8. In response to the letter of demand for $4,768.60 issued to her on June 4, 1999, Petitioner made a written request for reconsideration on June 17, 1999, setting forth her theory that the Tabalno and Fernando overages discussed in Finding of Fact #4 were the result of her issuing stock to these two clerks without making entries into the computer system, as discussed in Finding of Fact #3. In this letter, Petitioner stated that she recalled giving Mr. Tabalno the 300 coils of 33¢ stamps shortly after the postage rate change in January 1999. (Answer, Ex. 3, p. 1). This request was denied because Petitioner could produce no Form 17s to show that she had issued the stock to the clerks (Tr. 69-70; Answer, Ex. 8). Mr. Tabalno did not testify, and other than Petitioner asking him if he would release his overage to her no one who did testify ever asked him if he thought there could be any connection between his January overage and Petitioner's May shortage (Tr. 52, 77, 98).
9. Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), §429.16, contains the following provision regarding offsetting overages and shortages:
Handling Overages
4> If the overage is related to a shortage in another accountability of the same employee or to a current shortage in another employee's accountability, withdraw funds from trust to clear related shortages. Managers should exercise judgment when determining the existence of a relationship that may warrant offsetting overages.
DECISION
The standard for determining an employee’s liability in a case such as this provides that employees to whom postal funds and accountable paper are consigned "are held strictly accountable for any loss unless evidence establishes that they followed the postal procedures established when performing their duties." Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), §141. Section 14 of the F-1 also states that a postmaster is relieved of liability for a financial loss if evidence shows that the postmaster "enforced U.S. Postal Service policies and procedures in managing the office."
Respondent’s burden of proof in a case of unexplained shortage is to show that a loss occurred from an account for which the employee is accountable. When a properly conducted inventory, or audit, shows a stock shortage relative to a previously established balance, this constitutes proof of loss unless other evidence raises sufficient doubt about the accuracy of the inventory or the previously established balance, or otherwise suggests that there may have been no actual loss.
Petitioner argues that Respondent has not proved a loss of $3,666.37 because she has presented sufficient evidence to show that Mr. Tabalno's $3,436.23 overage is related to her shortage. Part of her argument is that Mr. Tabalno's shortage in September 1998 was very close in time to Mr. Wysocki's overage and was more likely related to that overage than to Mr. Tabalno's own overage in January 1999. Respondent argues that, without any paperwork to support her claim that she issued the "missing" 300 coils of stamps to Mr. Tabalno sometime prior to her shortage being discovered, Petitioner has not established the requisite relationship between the shortage and the overage. Respondent also argues that, because Mr. Tabalno's overage was used to partly offset his own earlier shortage, that overage no longer exists and cannot now be used to relieve Petitioner of liability.
The latter part of Respondent's argument is seriously flawed. Resolving an employee's personal liability in a case such as this cannot be simply a matter of whether there is a pot of money "available" to offset against a shortage. If the evidence shows a likelihood that Petitioner's shortage and Mr. Tabalno's overage represent the same stock, Respondent has not proved a loss from Petitioner's account, and the fact that Mr. Tabalno's overage has been "used up" is irrelevant. The evidence presented by Petitioner to show that she issued 100 coils to Mr. Tabalno in January and then neglected to later make the computer entry from the manual Form 17 is certainly not conclusive, but it is credible and it is unrebutted. When viewed with the evidence as to how the several clerk shortages were resolved, it would be unfair to hold Petitioner liable on the basis that she cannot produce a clear paper trail. It is not certain which overages are connected to which shortages in this case, but based on the evidence in the record the likelihood that Mr. Tabalno's January 1999 overage relates to Petitioner's May 1999 shortage is stronger than any other.
The Petition is granted in part and denied in part. Petitioner's shortage, $3,666.37, is reduced by $3,300.00, that being the portion of Mr. Tabalno's overage that Petitioner can relate to her shortage. Petitioner is liable for the difference, $366.37. Petitioner cannot be relieved of liability completely because the evidence shows that she did not always follow established procedures in issuing stock. As was discussed at the hearing, the Postal Service has acknowledged that some money was improperly withheld from Petitioner's salary before the Notice of Involuntary Administrative Salary Offsets was issued. Once the Petition was filed, collection was stopped but no money has been returned to Petitioner. Therefore, Petitioner must be credited with any amount withheld, and if more than $366.37 was withheld the difference must be returned to Petitioner.
Bruce R. Houston Chief Administrative Law Judge