May 16, 2001

In the Matter of the Petition by

TIMOTHY PERAMAKI
617 Illinois Court, Apt. 18

El Segundo, CA 90245-3429

P.S. Docket No. DCA 01-39

APPEARANCE FOR PETITIONER:
Ken Emerald
7754 Balboa Boulevard
Van Nuys, CA 91406-2219

APPEARANCE FOR RESPONDENT:
Gina E. Morris
Acting Labor Relations Specialist
United States Postal Service
28201 Franklin Parkway
Santa Clarita, CA 91383-9401

Petitioner, Timothy Peramaki, filed a Petition for Hearing Under the Debt Collection Act after receiving a Notice of Involuntary Administrative Salary Offsets stating the Postal Service’s intention to deduct $110.34 from his salary to recover for a shortage occurring in Petitioner’s window credit.

At Petitioner’s request, an oral hearing was conducted. The parties, witnesses and court reporter were at the Encino Station in Encino, California, and the Hearing Official participated by telephone from the Judicial Officer Department in Arlington, Virginia. The parties presented documents and testimony of witnesses and made oral closing arguments after the presentation of evidence was concluded.

The following findings of fact are based on the documents submitted and the testimony of the witnesses at the hearing.

1. Petitioner became a window clerk at the Encino Station in 1992 (Transcript of Hearing, Page ("Tr.") 59). As a window clerk, Petitioner had a credit of stamps assigned to him for his sales to customers, but contrary to a requirement in postal regulations (Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996) ("Handbook F-1"), Section 426.45), management failed to have Petitioner date and sign a form (PS Form 3369) assigning him his initial window credit (Petitioner’s Exhibit ("PX") 11b (Handbook F-1, Section 426.1); PX 14a).

2. In 1995, Petitioner transferred to a job at the Encino Station that did not specifically include window clerk duties. However, Respondent wished to have Petitioner available as a back-up window clerk, so management did not recover his window credit, as it normally would have done once he was assigned to his new job. (Tr. 60; Petition; Respondent’s Exhibit ("RX") I).

3. On March 25, 1997, an official count of Petitioner’s credit was made, and it revealed that the amount of cash and stamp stock he had on hand was $110.34 less than he should have had based on the accounting records of the station (Tr. 20, 22-24; PX 13a).

4. At Petitioner’s request, his credit was recounted on March 26, 1997. This count, by Petitioner and his supervisor, also showed a shortage in the amount of $110.34. The results of the count were recorded on PS Form 3294, Cash and Stamp Stock Count and Summary, which Petitioner signed, indicating his agreement to the accuracy of the count. (Tr. 20, 22-24, 28, 40-41, 43, 44, 47; PX 19; RX A).

5. Shortly before the count, while taking cash from his credit to the bank to get change, Petitioner lost a $100 bill. Accordingly, he was not surprised when his count showed a shortage of just over $100. (Tr. 21, 26-27, 29, 41-42, 54-55, 69, 71, 74; contra Tr. 64-66).

6. A record is kept of the counts done of Petitioner’s credit in the past. This record, PS Form 3368, reflected that in the count of January 4, 1997, which immediately preceded the March 1997 count, Petitioner was $17.32 short. As that amount was within an allowable tolerance, his accountability was not adjusted back to zero, and the shortage was carried forward. In the counts of Petitioner’s credit conducted every four months back to January 1995, Petitioner was generally within $20 of the amount shown in the office records. His largest previous shortage was $43.71. (Tr. 31; RX E).

7. During the time between 1995, when he left regular window duty, and March 1997, Petitioner worked with customers at the window on few occasions. However, he conducted transactions with other clerks that caused the amount of stock and cash on hand at the previous audits to vary substantially. (Tr. 60, 72-73; PX 20a-c; RX E, F).

8. Respondent issued Petitioner a Letter of Demand on April 7, 1997, demanding payment of the $110.34. The Letter of Demand was signed by the Manager of Finance of Respondent’s Van Nuys District. Postal Service regulations require that letters of demand be signed by the postmaster or his designee. (Tr. 44-45; PX 28; Handbook F-1, Section 361.1).

9. Petitioner’s union filed a grievance regarding the Letter of Demand, but the union eventually withdrew the grievance (RX G, H, I, J).

10. On January 11, 2001, Petitioner received a Notice of Involuntary Administrative Salary Offsets stating that Respondent intended to make involuntary deductions from Petitioner’s salary to satisfy the $110.34 debt Respondent claimed (Petition).

11. On January 24, Petitioner filed a Petition for Hearing Under the Debt Collection Act (Petition; PX 1 (pp. 3-11)).

12. The regulations governing liability of Postal Service employees for losses to their accountabilities appear at Section 141 of the F-1 Handbook:

DECISION

Respondent’s burden of proof in this case is to show that a loss occurred from an account for which Petitioner was responsible. Here, a properly conducted count of Petitioner’s credit, with which Petitioner agreed, demonstrated a loss of $110.34 (Findings 3 & 4). Petitioner raised no grounds for challenging the accuracy of the count.

Respondent having established that it suffered a loss in the amount of $110.34, the burden shifts to Petitioner to show that he followed established procedures in managing his credit (Finding 12). In this case, it was demonstrated that shortly before the audits of March 1997, Petitioner lost $100 from his credit while going to obtain change at a bank (Finding 5). This loss was established by the testimony of two Postal Service employees that shortly before and at the time of the audit in 1997, Petitioner told each of them separately that he had lost $100 from his credit. As a result, he was not surprised that his counts were short. In his testimony at the hearing, Petitioner denied telling them that. On rebuttal, Respondent recalled one of the witnesses who testified that Petitioner had confirmed the loss of $100 in a conversation just two days before the hearing. When Petitioner was recalled, he did not deny that conversation. Additionally, the magnitude of the loss corroborates the loss of $100. The shortage in the count immediately preceding the March 1997 counts was $17.32, and that amount was carried over (Finding 6). The shortage in March 1997 was roughly $100 more, and was much larger than any previous shortages Petitioner had experienced (Finding 6). Based on the testimony of Respondent’s two witnesses as corroborated by the size of the shortage, Respondent has demonstrated that Petitioner lost $100 while obtaining change. Petitioner presented testimony that he generally followed established procedures, but in view of the lost $100 that appears directly related to the shortage, he has not met his burden of showing he followed established procedures in managing his window credit.

Petitioner argues that he should be relieved of the debt because the April 7, 1997 Letter of Demand relating to this debt was signed by the Manager of Finance of the Van Nuys District instead of the postmaster (Finding 8). Postal Service regulations require that the Letter of Demand be signed by the postmaster or his designee (Finding 8). While it was not proven that the Manager of Finance was the postmaster’s designee for purposes of issuing a Letter of Demand, we find that even if he was not, the violation was a technical one only and did not prejudice Petitioner in this proceeding. Petitioner was given a proper Notice of Involuntary Administrative Salary Offsets, which he appealed, and he has exercised his right to a hearing in this forum. Petitioner has not shown that an infirmity such as this in the Letter of Demand, if it was an infirmity, relieves Petitioner of responsibility for the shortage. ¹

Petitioner also argues that he should not be liable for the shortage because, against his wishes, management required him to retain a window credit after he was assigned to a position without window duties. According to Petitioner, he did not wish to perform any window duties, but management refused to allow him to surrender his credit, notwithstanding postal regulations that require a postmaster to cancel a stamp credit not used at least once a month. This circumstance has no bearing on Petitioner’s responsibility for the shortage in his stock. He had exclusive access to the credit and he conducted transactions from it, so he remains liable for any losses to his accountability unless he demonstrates that any of Respondent’s failures had a bearing on the shortage or that he followed established procedures.

Petitioner argues that management at the Encino Station failed to follow established procedures and that therefore, the postmaster and not he should be held liable under the applicable standards (Finding 12). Specifically, he points to management’s failure to have him date and sign the form assigning him his initial window credit (Finding 1). Section 141 (Finding 12) applies directly to Petitioner’s circumstance as an employee with an assigned accountability and establishes that he is strictly accountable for losses to that accountability absent a showing that he followed established procedures. Petitioner has not shown any procedural failures by management that would have had any bearing on his shortage or that would excuse him from liability, and, as discussed above, his loss of $100 precludes a finding that he followed established procedures in managing his credit.

The Petition is denied. Respondent may collect $110.34 from Petitioner’s salary.