December 31, 2001

In the Matter of the Petition by

 

ERIC ORTIZ

2808 York Avenue

 

at

 

Cleveland, OH 44113-4110


P.S. Docket No. DCA 01-336

 

APPEARANCE FOR PETITIONER:

Al Lum

Scialla Associates, Inc.

52-40 72nd Place

Maspeth, NY 11378-1516

 

APPEARANCE FOR RESPONDENT:

Kennoa M. Dixon

Labor Relations Specialist

United States Postal Service
2200 Orange Avenue, Room 106

Cleveland, OH 44101-9401

 

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Eric Ortiz, filed a timely Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets dated October 19, 2001, from the District Manager of Accounting Operations.  This Notice stated the Postal Service's intention to withhold $10,459.87 from Petitioner's salary to recover for a shortage in the unit reserve account for which he was responsible.

            A hearing was held in Cleveland, Ohio on December 18, 2001.  The Postal Service presented testimony from Gary Strenk, District Accounting Manager, and Tim Jankow and Renee Bursley, postal systems coordinators who investigated the shortage in Petitioner's account.  Petitioner testified in his own behalf and also presented testimony from Jeff Glagola, Area Manager, and Crystal Phillips, who preceded Petitioner as custodian of the unit reserve at the Strongsville Post Office.  Both parties also relied on documents filed prior to the hearing, and Petitioner presented two additional exhibits at the hearing.  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 been employed by the Postal Service for approximately four years.  He has been a supervisor for approximately two years.  At the time pertinent to this case, he was a supervisor and custodian of the unit reserve stock at the post office in Strongsville, Ohio.  (Tr. 24, 37, 60-61, 65).[1]

            2.  When Petitioner took over the unit reserve at Strongsville in approximately July 2000, he gave the safe combination to his station manager, Mr. Peter Western, so that the manager would have access to the unit reserve in Petitioner's absence.  As supervisor of mail carriers, Petitioner sometimes was away from the office for extended periods doing route inspections.  Mr. Western accepted the combination without comment about the propriety of this arrangement, and occasionally did take stamp stock from the unit reserve to issue to clerks.  On those occasions, he left handwritten notes for Petitioner so that Petitioner could make the appropriate entries into the system.  Some months thereafter, Petitioner learned that it was contrary to regulations to allow any other person to have access to the unit reserve.[2]  The safe combination was changed and Petitioner made arrangements to always come to the office to issue stamp stock himself.  (Tr. 55-57, 67-68; Pet. Exs. 4 and 5).

            3.  On August 16, 2001, Mr. Jankow, having noted from records in the District Finance Office that some large overages reported in the retail floor stock at Strongsville "didn't look right," came to Strongsville to conduct an audit.  He and Petitioner counted the unit reserve on that date and found a shortage of $59,930.42.[3]  (Tr. 23-24, 29, 53; Pet. Ex. 2).

            4.  Various overages were offset against this shortage to reduce the net shortage to $10,459.87.  On September 24, 2001, Petitioner was issued a letter of demand for that amount, and on October 19, 2001, Petitioner was issued the Notice of Involuntary Administrative Salary Offsets in the same amount.  (Tr. 14-17, 24-25, 31; PS Exs. 1, 2, 3, and 8).

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.”  Handbook F‑1, Post Office Accounting Procedures (November 1996), §141.

            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.

            The evidence in this case establishes that the audit on August 16, 2001 was properly conducted and that Petitioner was the custodian of the unit reserve stock.  In his testimony, Petitioner stated a belief that the shortage was just a bookkeeping error.  There is no evidence to support that theory, however, so Respondent's evidence is sufficient to establish a loss.

            Respondent's position is simply that a loss from the unit reserve has been proved and that Petitioner, as custodian, is strictly liable for that loss.

            Petitioner argues that he was not adequately trained to be a unit reserve custodian.  The evidence does not support that argument, but the determinative fact in this case is that for a substantial period while he was custodian Petitioner did not have sole access to the unit reserve stock.  This is contrary to postal regulations. Normally, it is the custodian's responsibility to insure that no one else has access.  It is a different situation, however, when the custodian's management approves or condones a practice of shared access.  (Donald La Montagne, P. S. Docket No. DCA 99-283 & 350 (October 21, 1999); Linda A. Lilly, P. S. Docket No. DCA 96-195 (October 31, 1996)).  In this case, it was Petitioner's supervisor, the station manager, to whom Petitioner gave access.  Although Mr. Western was unavailable to testify, it is clear from the uncontradicted testimony and documentary evidence that he at least condoned Petitioner's giving him access to the unit reserve.

            Because Petitioner did not have exclusive control of the unit reserve, and because the shared access was approved or condoned by higher authority, the loss cannot be attributed to Petitioner.  The Petition is sustained.  Respondent may not collect $10,459.87 from Petitioner's salary.


Bruce R. Houston

Chief Administrative Law Judge


[1]  References to pages in the hearing transcript are "Tr._."  References to Postal Service exhibits attached to the Answer will be "PS Ex._."  References to Petitioner's exhibits, filed on December 7, 2001, will be "Pet. Ex._."

[2]  Handbook F‑1, Post Office Accounting Procedures (November 1996), §§422 and 422.1.

[3]  The opening balance was $537,596.46, but only $477,666.04 was present.