May 2, 2002


In the Matter of the Petition by

 

DIANESE D. RIDDICK


at


P.O. Box 610

Lewiston-Woodville, NC 27849-0610


P.S. Docket No. DCA 02-105

 

APPEARANCE FOR PETITIONER:

Dianese D. Riddick

P.O. Box 610

Lewiston-Woodville, NC  27849-0610

 

APPEARANCE FOR RESPONDENT:

Jeffrey F. Perrotta

Labor Relations Specialist

United States Postal Service

P.O. Box 27499

Greensboro, NC  27498-9401

 

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Dianese D. Riddick, filed a timely Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets from her supervisor on February 15, 2002.  This Notice stated the Postal Service's intention to withhold $7,227.33 from Petitioner's salary to recover a shortage in a unit reserve account for which Petitioner was responsible.

            A hearing was held in Raleigh, North Carolina on April 17, 2002.[1]  The Postal Service presented testimony from two financial specialists, Debra Pegram and Carol Campbell.  Petitioner testified in her own behalf.  Both parties also relied on documents filed with the Petition and the Answer, and Petitioner submitted one additional document at the close of the hearing.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  On May 20, 2001, Petitioner became the officer-in-charge of the Ahoskie, North Carolina Post Office.  As such, she was the custodian of the unit reserve stock from that date until January 16, 2002.  (Tr. 11, 39-40).[2]

            2.  In approximately August of 2001, Petitioner realized that her unit reserve account was not in balance, and she discussed this with persons in the Greensboro District Office.  In early November 2001, the Greensboro District Finance Office noticed some discrepancies in records pertaining to the receipt of stamp stock shipped to the Ahoskie Post Office and in records pertaining to stamp stock sent for destruction from Ahoskie.  Ms. Campbell, the Manager of Accounting Services for the Greensboro District, sent Ms. Pegram to Ahoskie to investigate.  (Tr. 9-10, 31-32, 40).

            3.  On November 7, 2001, Ms. Pegram and Petitioner conducted an audit of the unit reserve.  Their count of the stock showed that $148,572.53 in stamps was present.  Petitioner signed a PS Form 3294, Cash and Stamp Stock Count and Summary, indicating her agreement with the accuracy of the count.  (Tr. 10, 45-46; PS Ex. 1).

            4.  The count showed a shortage of $11,454.78, based on an opening balance of $160,027.31, i.e., the amount of stamp stock that should have been present, according to the Ahoskie records of unit reserve transactions maintained by Petitioner.  It is not entirely clear how the figure $160,027.31 was calculated.  Ms. Pegram testified that the opening balance shown on the computerized system at Ahoskie showed the unit reserve accountability to be approximately $170,000.00, but that some $10,000.00 was subtracted as credit for stock that Petitioner had shipped out of the unit reserve for destruction.  The record contains no specific figures to show exactly how much was credited or for what.  (Tr. 12, 18, 23; PS Ex. 1).

            5.  From the $11,454.78 shortage, an additional $4,227.45 was subtracted, based on credits shown in the District Accounting Office, and Petitioner was issued a letter on November 15, 2001, informing her that she owed the Postal Service $7,227.33.  The record does not show specifically what the additional credit of $4,227.45 was for.  (Tr. 11-13).

            6.  As part of her investigation into Ahoskie's financial records, Ms. Pegram reconstructed records pertaining to redeemed stamp stock, i.e., unusable stock sent for destruction.  She and Petitioner corrected errors and brought that part of the unit reserve account into balance.  (Tr. 13-14, 26; Pet. Exs. 1-4).

7.  A few days before the hearing, Petitioner received an invoice from the Minneapolis Accounting Service Center dated April 8, 2002, stating that she owed the Postal Service $6,848.98.[3]  Respondent's representative announced at the hearing that the Accounting Service Center had apparently credited Petitioner's account with an additional amount, thereby reducing the alleged debt and that if Petitioner is held liable Respondent would seek only the lesser amount.  (Tr. 50-54).

DECISION

            Respondent's position is that the evidence shows no dispute over the accuracy or thoroughness of the audit conducted by Ms. Pegram on November 7, 2001, that Respondent was generous in giving Petitioner credit for various amounts to reduce the shortage, and that as custodian of the unit reserve Petitioner was responsible for insuring that all stamp stock assigned to that account was actually present.  Respondent contends that the evidence establishes a loss and that Petitioner has presented no basis for relieving her of accountability for that loss.

Petitioner presented no specific defense other than to state her belief that there must have been a paperwork error somewhere that caused an apparent shortage.  She also repeated her concern that she is being accused of taking the stock and insists that she did not.  As was made clear during an earlier telephone conference and again at the hearing, Petitioner has not been accused of theft and that is not part of Respondent's burden of proof.  The issue here is not whether Petitioner is an honest, loyal and hard-working employee.  There is no evidence that she is not.  The issue is how to apply the standards of accountability and liability that are prescribed for Postal Service employees who manage large sums of cash and stamp stock.

            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.  Respondent is not required to prove that any specific dereliction or act of negligence by Petitioner caused the loss.  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.

            In this case, the audit conducted by Ms. Pegram was properly done and Petitioner agreed that Ms. Pegram had been thorough in examining records in search of an accounting error that would explain the shortage.  Although there is some uncertainty over precisely how the opening balance was established, it is clear that the adjustments made to that balance were to Petitioner's benefit.  Petitioner's suggestion that perhaps another audit by someone else would uncover an accounting error is only speculation.  She even testified that she herself had not looked through the records since the November audit in an attempt to find an error.  Respondent's evidence is sufficient to prove a loss. 

            As to the amount of the loss, it would have been preferable for Respondent to have demonstrated the specific basis for reducing the alleged debt to $6,848.98, just as it would have been better if Respondent's evidence showed how the earlier credits or reductions were made.  As all the credits inured to Petitioner's benefit, however, she is not harmed by this lack of clarity.  Her argument that the ability of the finance people to find some apparent errors suggests that they would find more if they continued to look is again too speculative to relieve her of liability.

            Petitioner presented no evidence that would support relieving her of liability under the standard quoted above on the basis that she followed established postal procedures in managing her account.  Further, the evidence as to record-keeping errors made in receiving stock or in handling redeemed stock (Finding #6) would undermine such an argument.

            Respondent has carried its burden of proving a loss from Petitioner's account and Petitioner has presented no basis for relieving her of accountability under the applicable standard.  The Petition is denied.  Respondent may collect $6,848.98 from Petitioner's salary.



                                                                                    Bruce R. Houston

                                                                                    Chief Administrative Law Judge


[1]  A video hearing was conducted by the undersigned Administrative Law Judge from Arlington, Virginia.  All other participants, including the court reporter, were present in a conference room at the hearing site.

[2]   References to the hearing transcript are "Tr._."  References to the documents attached to the Petition will be "Pet. Ex._."  References to the one document filed by the Postal Service will be "PS Ex. 1."

[3]   Petitioner brought this to the attention of the judge at the close of the hearing.  Neither she nor Respondent's representative had a copy of the invoice at the hearing and neither could remember the amount shown on the invoice.  Petitioner was directed to fax a copy to this office.  She did so and it was placed in the case file on April 18, 2002.