June 15, 2001
In the Matter of the Petition by
NICHOLAS J. FRANK
310 Sawmill Lane, Apt. 7E
Horsham, PA 19044-1916
P.S. Docket No. DCA 00-406
APPEARANCE FOR PETITIONER:
Charles Scialla
453 Preakness Avenue, #5
Paterson, NJ 07502-1121
APPEARANCE FOR RESPONDENT:
James J. Morrissey
Labor Relations Specialist
United States Postal Service
P.O. Box 7956
Philadelphia, PA 19101-7956
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Nicholas J. Frank, 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 October 5, 2000. The Notice advised Petitioner that he was indebted to the Postal Service in the amount of $30,245.31, resulting from shortages in the accountability of four window clerks that was discovered during a February 8, 2000 audit of the Westpark Station of the Philadelphia Post Office where Petitioner was the acting manager.
A hearing was held on March 16, 2001, in Philadelphia, PA. The Postal Service presented the testimony of two witnesses and Petitioner presented the testimony of six witnesses, including himself. In addition to the transcript of this hearing, the record consists of three stipulations of the parties, as well as Respondent’s exhibits RX-1 through RX-15 and Petitioner’s exhibits PX-1 through PX-3.
FINDINGS OF FACT
1. Petitioner was assigned as acting manager of the Westpark Station of the Philadelphia Post Office in September 1998. In this position, Petitioner had overall responsibility for daily operations of the station. Included in that responsibility was insuring that the window clerks at the station were audited every four months. 1 (Stipulation No. 1; Transcript pages (Tr.) 29, 30, 37, 148; Respondent’s Exhibit (RX) 2).
2. The stamp stock custodian at the Westpark Station at the time of Petitioner’s assignment there was a 204-b 2 named Dina Mosely and Petitioner left the responsibility for the station’s stamp stock with her. In April of 1999, David Small, another 204-b, was appointed stamp stock custodian. (Tr. 32, 133; RX-10).
3. At the time of Petitioner’s appointment as acting manager he had one other supervisor to assist him. However, that individual retired within a month of Petitioner’s arrival. Thereafter, other than a supervisor who was detailed to the Westpark Station for 30 days, Petitioner only had "204-bs" to assist him in supervising 85 employees. (Tr. 134-136, 141, 147).
3. On October 6, 1998, the window clerks at the Westpark Station were audited. The next time the window clerks at the station were audited was in February 2000. (Respondent’s Exhibit (RX) 1).
4. The February 2000 audits disclosed that the accountability of four of the window clerks at the station had a total shortage of $30,245.31. At the same time, the unit reserve at the station had an overage of $1,995.48. (RX- 10).
5. The shortages in the accountability of the window clerks at the station represent a loss to the Postal Service in the amount of $30,245.31 (Stipulation No. 1).
6. The window clerks who experienced the shortages were aware of the fact that they should have been audited at least every four months. They notified their union steward that they were not being audited. In addition, they repeatedly notified the stamp stock custodian at the station, Mr. Small, that they were not being audited. However, they never informed Petitioner that they were not being audited, and Petitioner did not become aware of the failure of Mr. Small to conduct the audits until shortly before the February 2000 audits began. (Tr. 95, 123-125, 127, 150, 151).
7. A December 4, 1985 memorandum of the Senior Assistant Postmaster General to regional Postmasters General provides, in pertinent part:
"Normally, it is the policy of the Postal Service not to hold supervisors and postmasters personally accountable for employee shortages, if they do not have direct responsibility for the shortage. While this does not relieve management’s responsibility for auditing and supervising credits assigned to employees, other action should be taken based on the circumstances of each case, bearing in mind our basic principle that, in the administration of discipline, our actions should be corrective in nature rather than punitive."
8. A second memorandum dated September 16, 1987, from two Assistant Postmasters General to regional directors of finance and human resources further provided:
"It has been brought to our attention that there is some confusion in regard to the policy of the Postal Service concerning the personal accountability of postmasters and supervisors in situations involving employee credit shortages where contractual or other reasons preclude collection of the shortage from the employee.
The Postal Service will not normally hold postmasters and supervisors personally accountable for such employee shortages if they do not have direct access to the credit or are not involved in collusion with the employee. That policy was enunciated in a December 4, 1985, memorandum from former Senior Assistant Postmaster General for the Employee and Labor Relations Group, Michael S. Coughlin, and it has not been withdrawn or modified. The policy is not intended to absolve a postmaster, supervisor or others who have financial accountability for postal funds and accountable paper from conscientiously enforcing Postal Service policies and procedures. However, rather than issuing a letter of demand to these individuals, it is more appropriate to consider counseling or discipline for failure to properly carry out the duties of their position. The action warranted should be determined on a case by case basis depending upon the particular circumstances."
Contentions of the Parties
Respondent argues that Petitioner is liable for the shortages discovered in the accounts of the window clerks at the Station during the audits conducted in February 2000, because Petitioner was the manager of the station and responsible for insuring that the clerks were audited in a timely fashion.
Petitioner does not dispute the occurrence or amount of the shortages, but argues that he had no direct involvement with the stamp stock accountability at the station and should not be held liable simply because he managed the station during the time when the shortages occurred. In support of this argument, Petitioner cites the December 4, 1985 memorandum of the Senior Assistant Postmaster General, and the second memorandum dated September 16, 1987, from two Assistant Postmasters General to regional directors of finance and human resources. (See Finding of Fact Nos. (FOF) 7, 8). Petitioner argues that these memoranda generally provide that a postmaster or supervisor should not normally be held personally liable for shortages in the accounts of the employees they supervise if they do not have direct access to the credits or are not in collusion with the employees involved.
Respondent does not dispute that the policy statements reflected in these memoranda remain in effect, but argues that the circumstances involved in this Petition are not "normal" in that Petitioner allowed 18 months to elapse between audits of the window clerks. Respondent also cites to Section 14 of Handbook F-1, Post Office Accounting Procedures (November 1996), which provides in pertinent part:
"When an accountable financial loss occurs and evidence shows that the postmaster or responsible manager enforced U.S. Postal Service (USPS) policies and procedures in managing the post office, the Postal Service grants relief for the full amount of the loss. When evidence fails to show that the postmaster or responsible manager met those conditions, the Postal Service charges the postmaster or responsible manager with the full amount of the loss."
Respondent argues that this provision, which was originally promulgated as early as 1978 (See Respondent’s Exhibits 3, 5 and 6), provides the authority to hold Petitioner liable for the shortages at his station despite the general policy advice contained in the referenced memoranda.
DECISION
The evidence demonstrates that the window clerks at the Westpark Station were not audited for a 16-month period (October 1998 to February 2000). During this period the clerks experienced shortages totaling $30,245.31 and the parties have stipulated that this resulted in a loss to the Postal Service in the same amount. (FOF 3-5). As the acting manager of the station, Petitioner had the responsibility of insuring that the window clerks were audited no less than every four months (if not as frequently as every two months, which was the policy of the Philadelphia Post Office) (FOF 1).
However, Petitioner was not the unit reserve custodian at the station and did not have any direct involvement with the shortages experienced by the window clerks (FOF 6). Moreover, there is no evidence of malfeasance or collusion on the part of Petitioner. In fact, the evidence shows the contrary. Petitioner was assigned by the Postal Service as an acting manager of the Westpark Station and diligently performed the job of supervising some 85 craft employees during the time period in question, virtually without any other supervisory assistance (FOF 1, 3). In doing so, he relied on the station’s 204-bs to perform the audits of the window clerks (FOF 2). Lacking evidence of malfeasance or collusion on the part of Petitioner, Respondent has not shown any reason to depart from the policy stated in the referenced 1985 and 1987 memoranda. Accordingly, Petitioner is relieved of financial responsibility for the identified losses that occurred in the accounts of the employees he supervised.
Respondent’s reliance on Harold Pook, P.S. Docket No. DCA-60 (January 18, 1990), to support its position is misplaced. Unlike the circumstances of this Petition, Mr. Pook did not record or report the shortages when he discovered them, and did not take action to recover the shortages. Instead, he created fictitious accountability records to cover up the shortages. The Hearing Official found that these actions by Petitioner did not constitute "normal" circumstances, and that the policy statements contained in the referenced 1985 and 1987 memoranda should not be applied to relieve Mr. Pook of financial liability for the shortages.
CONCLUSION
Petitioner is relieved of responsibility for the $30,245.31 shortage in the credits of the window clerks at the Westpark Station. The Petition is sustained.
2 A 204-b is a craft employee that is detailed to a supervisory position (Tr. 147).