November 6, 2003
In the Matter of the Petition by
ROSETTA PARKER
943 Hunters Run Drive
at
Richmond, VA 23223-2628
P.S. Docket No. AO 03-100
APPEARANCE FOR PETITIONER:
Rosetta Parker
943 Hunters Run Drive
Richmond, VA 23223-2628
APPEARANCE FOR RESPONDENT:
Linda A. Powers
Labor Relations Representative
United States Postal Service
1801 Brook Road
Richmond, VA 23232-9401
INITIAL DECISION
Petitioner, Rosetta Parker, a former Postal Service employee, filed a Petition challenging the Postal Service's assertion that she owed the Postal Service a debt of $31,081.61.[1] The Petition was docketed under the procedures set forth in 39 C.F.R. Part 966, which allow a former employee to challenge collection of a debt alleged by Respondent.
A hearing was held in Richmond, Virginia on June 6, 2003. The Postal Service presented testimony from Caroline Riley, a financial analyst. Petitioner testified in her own behalf, and both parties relied on documents filed prior to the hearing. Because the Postal Service had not followed all prescribed procedures in initiating this administrative offset action, Petitioner claimed that there might be other relevant documents that she did not have with her at the hearing. She asked that she be allowed to submit additional documents after the hearing closed. That request was granted. Petitioner did file some additional documents and Respondent filed a reply. Both parties also requested time to file written post-hearing arguments. That request was granted and both parties did so. The following findings of fact are based on the entire record.
FINDINGS OF FACT
1. During the time pertinent to this case, Petitioner was a Customer Services Supervisor in Richmond, Virginia. Her principal place of duty was at Capitol Station Post Office, but she was custodian of the unit reserve stock at two smaller offices known as Central and Civic Center. There was no resident supervisor at either of those offices. Petitioner would travel to those offices when it was necessary for her to issue stamp stock to clerks for sale, or to perform any other supervisory duties. (Tr. 10, 40, 56-58).[2]
2. There are four components of the total alleged debt of $30,873.57: $1,443.81 is based on a shortage at Civic Center, resulting from a quantity of stamps being unaccounted for after that office converted its computerized stock management system from IRT to POS ONE; $23,994.41 is based on a shortage in the unit reserve at Central, disclosed by a January 9, 2002 audit conducted by Petitioner; $608 is a shortage found in an audit of the unit reserve at Civic Center on May 13, 2002; and $4,755.35 is based on records transmitted by Civic Center in October 2000, showing an out-of-balance situation that was never cleared up by Petitioner. (PS, p. 11; Pet., pp. 4-5).
$1,443.81
3. In September/October 2000, Civic Center converted from IRT to POS ONE. Part of the process was that any stamp stock held by individual clerks was to be separately sealed, locked in a safe, and for accounting purposes put in a category called “stamps by mail,” on a computer disk controlled by Petitioner as unit reserve custodian. Within seven days, each clerk’s sealed package was to be counted, and appropriate adjustments made for shortages or overages. (Tr. 14-16).
4. Records for October 2, 2000 show that Petitioner received $3,665.03 in stamp stock from two clerks (Tr. 17-19; PS, pp. 14-15).
5. A record dated December 1, 2000, for Civic Center shows the figure $3,665.03 as “Stmp Account Open,” and the figure $1,465.81 as “Stmp Account Close.” (Tr. 19-21; PS, p. 16).
$23,994.41
6. On January 9, 2002, Petitioner conducted an annual count of the unit reserve stock at Central and found it to be short $23,994.41. Records showed that $275,341.35 should have been present, but only $251,346.94 was present. She did this count by herself. On the PS Form 3294 used to record the count, Petitioner wrote, in the notes section, “Error made in audit count of Unit Reserve Item #55350 Billy Mitchell 55¢ stamp during last inventory of April 2001.” (Tr. 23-24, 58-59; PS, p. 21; Pet., pp.12-13).
7. The next previous count of the unit reserve at Central was conducted on April 18, 2001, by Petitioner and Richard Franklin. This count showed a $34,604.15 overage. The bulk of this apparent overage was attributable to a large quantity of Billy Mitchell 55¢ stamps. The inventory record for the opening balance showed zero of these stamps, but Petitioner entered into the POS system that her count showed 53,615 of these stamps being present. (53,615 55¢ stamps equates to $29,488.25). (Tr. 24, 72-73, 99, PS, pp. 22-23; Pet., pp. 14-15, 17).
8. At the time of the January 9, 2002 count, the inventory showed that Petitioner’s account should have contained 51,970 Billy Mitchell 55¢ stamps, but only 1700 were present. (PS, p. 24; Pet., p. 19).
9. Central Station records for March 19, 2002 and April 12, 2002 show 1920 Billy Mitchell 55¢ stamps in the inventory. An inventory list filed by Petitioner as part of her post-hearing submission shows 3045 Billy Mitchell 55¢ stamps in the inventory on April 10, 2001. Records of stamps shipped into Central Station between October 1999 and September 2000 show a total of 15,000 Billy Mitchell 55¢ stamps in five separate shipments. (Tr. 109-10; Pet., pp. 20-21, 23-27; Pet. Supp., Ex. 5, p. 5).
10. A document titled “TASS Worksheet,” shows that on April 18, 2001, the $34,604.15 unit reserve overage recorded on that date was used to offset a $34,092.12 shortage in the retail floor stock at Central. At the hearing, the record was unclear as to when the floor stock was counted, although the worksheet shows April 18, 2001 for both the overage and the shortage. Petitioner believed she did the count of the floor stock but could not recall it.[3] The names G. L. Singleteary and R. Parker appear on the worksheet on the line next to the entry showing the retail floor stock shortage. Ms. Singleteary was a supervisory clerk. The name R. Parker and Petitioner’s social security number are contained on the line next to the entry showing the unit reserve overage, along with a note, “Overage Related to Retail Floor Shortage.” It is assumed that the action taken to offset these two amounts was to make accounting entries that increased the accountability of the unit reserve by $34,604.15, and decreased the accountability of the retail floor stock by $34,092.12 (Tr. 25-28, 47-50, 60-61, 113; PS, p. 20).
11. A manager or supervisor at a station has authority to offset an overage against a shortage if management is satisfied that there is a correlation between the two. The accounting office will approve unless there appears to be no correlation. In this case, the accounting office approved because the two amounts were very close, the dates were shown to be the same, and transfers of stock between a unit reserve and the retail floor stock are common. (Tr. 27-30, 49-50, 62-63).
$608
12. On March 8, 2002, Ms. Rainey shipped 100 books of 34¢ stamps (value $680) from Capitol Station to Civic Center. A PS Form 17 accompanying the stamps included a note from Ms. Rainey to Ms. Parker: “Please return 100 Books of United We Stand or book of comparable value to E. Q. Rainey, Capitol Station.” On the same Form 17, next to a March 22, 2002 date stamp, is a notation “returned.” (Pet., p. 29).[4]
13. A count of the unit reserve at Civic Center by Petitioner on May 13, 2002, showed a shortage of $680. There are no records to show whether the $680 was added to Petitioner’s unit reserve account in the computer system when the stamps were received from Ms. Rainey on March 8, 2002, or to show that $680 was subtracted from her account when the stamps were returned. (Tr. 67-68, 79-81; Pet., pp. 30-31).
$4,755.35
14. Records from Civic Center dated September 27, 2000, show an entry of $163,371.98 for accounting code (AIC) 853 “Stamps Close.” These records also show an entry of $158,616.63 for accounting code (AIC) 853 “Clerk’s Balances.” These two numbers are supposed to match at the close of each business day. The difference between these two figures is $4,755.35 and is the basis for this segment of the alleged debt. (Tr. 36-39; PS, p. 11-12).
15. An accounting entry was made to bring Civic Center into balance in order for the conversion from the IRT system to the POS ONE system to be completed (see Finding #3), but no stamp stock was counted to determine the source of the $4,755.35 discrepancy. (Tr. 69-70).
General
16. Ms. Riley conducted a financial review of the Central Station in February 2002, and found some practices that were not in accordance with prescribed postal procedures for managing an office’s finances and maintaining security of stamp stock. (Tr. 40-44; PS, pp. 1-10).
17. Petitioner filed her Petition after receiving a note dated February 14, 2003, from the Accounting Service Center, informing her that her final paycheck was being applied to her outstanding debt (Attachment to Petition).
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. Respondent is not required to prove any specific dereliction, or act of negligence, by the employee. 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.
$1,443.81
Respondent’s theory of liability for this amount is that the records, which were created in Petitioner’s office, do not show that she followed through with the required procedures to account for all the clerks’ stamp stock after the office was converted from the IRT system to the POS ONE system. That may well be true, but the record in not sufficient to establish a loss of $1,443.81, or any other specific amount. The figure $1,443.81 does not appear in the records relied on by Respondent, and even though one may compute a number close to that, the evidence of record is simply not clear enough to prove a loss or that Petitioner was accountable for it.
$23,994.41
Petitioner’s contention centers on the April 18, 2001 audit that showed a $34,604.15 overage in the unit reserve. She argues that this is an inaccurate figure because she made an error in entering into the computer the quantity of Billy Mitchell 55¢ stamps that she actually had in the unit reserve (see Findings #6 and 7). Therefore, she argues, that supposed overage was not real, and her accountability should not have been increased to reconcile the accountability with what she inputted into the system as being present on April 18, 2001. Consequently, therefore, she contends that the reported overage should not have been offset against the $34,092.12 shortage in the retail floor stock (see Finding #10). She testified that she did not authorize that offset (Tr. 48, 104). Finally, she argues that there really was no $23,994.41 shortage on January 9, 2002, because her unit reserve account had been incorrectly inflated since April 2001 due to her input error with the Billy Mitchell stamps.
Respondent’s position on this alleged debt is that the audit conducted on January 9, 2002 established a loss of $23,994.41, and that Petitioner’s explanation is merely speculation, not supported by evidence.
There are some difficulties with Petitioner’s explanation. First, if the $34,604.15 overage was not real, it would seem to be an unusual coincidence that the retail floor stock had a $34,092.12 shortage one day earlier.
Next, there is no evidence of any action taken by Petitioner to clear up this matter after the January 9, 2002 audit revealed the $23,994.41 shortage. Other than writing the note on the January 9, 2002 Form 3294 (see Finding #6), there is no evidence that she addressed this matter in any way until February 2003, when she received invoices regarding the several alleged debts.
Overall, however, the evidence supports Petitioner’s argument. The fact that Petitioner did nothing to clear up this matter in a timely manner may be evidence of poor job performance, but it is not a basis for personal liability if the evidence does not prove a loss. Petitioner’s explanation of how the error occurred is plausible, and is supported by the records of Billy Mitchell 55¢ stamps received into the Central Station unit reserve in the previous year (see Finding # 9). Although we have only Petitioner’s post-hearing submission (the April 10, 2001 inventory list) to show how many Billy Mitchell 55¢ stamps were in the inventory on any specific date before April 18, 2001, that document plus the regular shipments into Central Station over the previous year (Finding #9) show a pattern indicating something less than 5000 such stamps ever being in the inventory at any one time. Respondent argued that we do not know that the records presented by Petitioner include all such shipments. However, had there been other shipments that contradicted Petitioner’s claim, Respondent could have presented those records. Even more persuasive, however, is the number itself – 53,615. If Petitioner’s unit reserve really had that many Billy Mitchell 55¢ stamps, they would have made up more than ten percent of the total accountability. Petitioner’s explanation of an inputting error is far more likely.
In Respondent’s post-hearing brief, Respondent argues that all the alleged debts represent real losses, not paper errors. Respondent then states, however, that “even if they were, as the stock custodian, the Petitioner would be responsible for them because it was her job to make sure that all entries were legitimate and correct.” This misstates the law. An employee is only personally liable for actual monetary losses to the Postal Service.
We have said many times that accounting discrepancies do not necessarily equate to a loss, and also that debt collection proceedings are not a vehicle to punish poor job performance. Karen Higuera-Richard, P. S. Docket No. DCA 00-104 (June 20, 2000); Gertrude S. Campbell, P. S. Docket No. DCA 99-70 (June 3, 1999); Eulalia Anne S. Lee, P. S. Docket No. DCA 97-38 (June 13, 1997).
The preponderance of evidence does not prove that the $23,994.41 shortage revealed by the January 9, 2002 audit represents a real loss.
$608
Petitioner contends that she returned $680 in stamps from Civic Center to Capitol Station without making the system entry to deduct that amount from her unit reserve accountability. Therefore, she argues, the shortage that showed up on the May 13, 2002 count was not a real loss. Respondent argues that this would be correct only if the $680 had been entered into Petitioner’s account when Ms. Rainey sent the $680 in stamps to Civic Center, and there is no record to show that this was done. Therefore, Respondent argues, we must assume that the May 13, 2002 count shows a real loss.
Petitioner’s account was short exactly $680 on May 13, 2002, and the evidence is clear that she did return $680 in stamps to Ms. Rainey at Capitol Station on March 22, 2002. These facts make Petitioner’s explanation at least as plausible as Respondent’s. Therefore, the preponderance of evidence does not establish a loss of $680.
$4,755.35
All the evidence shows is that two accounting entries that should balance did not balance on September 20, 2000 (Finding #14). Neither of those figures is based on an actual count of stamp stock.
It may well be that Petitioner should have taken some action to determine the cause of the discrepancy, but the evidence is insufficient to prove a loss of $4,755.35 from Petitioner’s account.
Conclusion
The Petition is granted. Respondent mat not collect money from Petitioner on account of the debts alleged in this case.
Bruce R. Houston
Chief Administrative Law Judge
[1] At the beginning of the hearing, Respondent’s representative announced that Respondent was no longer pursuing collection of a $208.04 segment of the total alleged debt. The amount remaining in issue, therefore, is $30,873.57.
[2] References to the hearing transcript are “Tr._.” References to exhibits will be to numbered pages of documents filed by the parties.
[3] A PS Form 3368, submitted by Petitioner as part of her supplemental post-hearing filing (Ex. VI) shows that the count was done by Petitioner on April 17, 2001.
[4] PS Form 17 is a form titled “Stamp Requisition,” and is used to record the transfer of stamps from one account to another.