November 25, 2003
In the Matter of the Petition by
GEORGE CHIPOURAS
2658 Queen Anne Circle
at
Annapolis, MD 21403-4221
P.S. Docket No. AO 03-189
APPEARANCE FOR PETITIONER:
Albert E. Lum
5240 72nd Place
Maspeth, NY 11378-1516
APPEARANCE FOR RESPONDENT:
William B. Neel, Esq.
Capital Metro Law Office
United States Postal Service
400 Virginia Avenue SW, Suite 650
Washington, DC 20024-2730
INITIAL DECISION
Petitioner, George Chipouras, a former Postal Service employee, filed a Petition challenging the Postal Service's assertion that he owed the Postal Service a debt of $15,851.21. 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 Arlington, Virginia on August 19, 2003. The Postal Service presented testimony from Katherine White, a financial analyst, George Olsen, the Annapolis Postmaster, Cheryl Pulley, a postmaster from a nearby office, and Roger Evans, a finance manager. Petitioner testified on his own behalf and also presented testimony from La Donna Ingram, a clerk in his former office. Both parties also relied on documents previously filed, and Petitioner submitted two additional documents during the hearing. The following findings of fact are based on the entire record.
FINDINGS OF FACT
1. At the time pertinent to this case, Petitioner was the supervisor at Legion Avenue Station in Annapolis, Maryland. From sometime in 1999 until approximately October 2002, he was custodian of the unit reserve stock. He retired in January 2003. (Tr. 36-37, 48-50, 112; Petition; PS Exs. 6 and 8).[1]
2. In late July 2001, in preparation for converting the Legion Avenue office from the IRT computerized stock management system to a new system – POS-ONE, Katherine White reviewed the office’s financial records. A system printout for July 27, 2001, titled “Clerk Balances,” showed that the Legion Avenue office was internally out of balance by $15,851.21. (Tr. 15-16, 74, 94; PS Ex. 9).
3. On the Clerk Balances form, two figures designated by accounting inventory code (AIC) 853 are supposed to match each day if the office stamp stock accountability is in balance. One is labeled “Unit 1412 853,” and represents the total accountability of the office as has been reported to the District Finance Office. The other is labeled “Clerk Balances 853,” and includes the accountability of each window clerk plus the unit reserve which, together, make up the total office accountability. Each clerk’s accountability is listed separately on the form. On the July 27, 2001 printout, “Unit 1412 853” was $464,060.95, but the “Clerk Balances 853” was only $448,209.74. The unit reserve portion of this latter figure is listed under “Stamp Stock Balances,” and was $389,579.22 on July 27, 2001. (Tr. 16, 27, 38-39, 41, 79-83, 102-04; PS Ex. 9).
4. In order to bring the office into balance, which was necessary for the conversion to the POS system, Ms. White added $15,851.21 to Ms. Ingram’s accountability on July 27, 2001. This was purely a temporary accounting entry, and in no way indicated that Ms. Ingram, or any other individual, was accountable for the apparent shortage. In carrying out her role in preparation for the conversion to POS, Ms. White did not conduct an audit. She did not count any stamp stock, either the unit reserve or any clerk account. (Tr. 8-10, 15, 20-21, 23; Pet. Ex. 2).
5. Mr. Olsen was assigned as Officer-in-Charge of the Annapolis Post Office in February 2002.[2] Some time thereafter, when reviewing “paperwork” from the accounting office regarding the finances of the several Annapolis offices, he noted an approximately $15,000 “suspense” item listed for the Legion Avenue office.[3] He told Petitioner to look into this and clear it up. When Petitioner stated that he did not know what to do, Mr. Olsen told Petitioner he would make Ms. Pulley, who has expertise in such matters, available to assist him. (Tr. 43-45, 52, 68-69).
6. On October 18, 2002, Petitioner turned the unit reserve stock over to Lisa Mason. A count of the stamp stock on that date showed the account was 85¢ short, compared to the inventory list against which the count was compared. (Tr. 48-50, 64-66; PS Ex. 11).
7. On December 26, 2002, Mr. Olsen issued Petitioner a Letter of Demand for $15,851.21. This letter was re-issued on March 5, 2003, apparently because of some procedural defects. Petitioner requested reconsideration, in a letter dated March 29, 2003, and this was denied in a letter from Mr. Olsen, dated April 8, 2003. Mr. Chipouras filed his Petition on April 29, 2003.
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 contends that the out-of-balance situation on July 27, 2001 (see Finding of Fact #3), proves a loss because the larger figure, i.e., the “Unit 1412 853,” is accepted as accurate. This is because the District Finance Office has access to that figure daily, based on data that is transmitted from each unit. Therefore, Respondent argues, it is safe to assume that the “Unit 1412” figure is correct and, if the “Clerk Balances 853,” which is not a figure that the District Finance Office tracks daily, is different, it is the latter that is incorrect.
Further, Respondent argues that, as the station supervisor, Petitioner was responsible for the overall financial accountability of Legion Avenue Station and that it was his duty to clear up this discrepancy. His failure to do so, even after being directed to do so by Mr. Olsen, including his failure to use the resource made available to him (Ms. Pulley), is a proper basis for liability, Respondent contends.
Petitioner argues that he was personally accountable only for the unit reserve at Legion Avenue Station, and that there is no proof of loss from that unit reserve. Petitioner cites the testimony of each of Respondent’s witnesses, all of whom stated that they could not tell from the available records what caused the apparent shortage, when it occurred, or whether it was in the unit reserve. (Tr. 17-18, 74, 84, 89, 94-95, 98).
We have said many times that accounting discrepancies do not necessarily equate to a loss, and that debt collection procedures are not a vehicle to punish poor job performance. It may be that Petitioner did not perform his job well, but Petitioner was personally accountable only for the unit reserve. Even if we were to accept Respondent’s premise that the difference in the AIC 853 figures demonstrates a loss in the overall office accountability, Postal regulations do not make Petitioner personally liable, under a strict liability standard, unless a loss is proved from an account that was assigned to him.
Other than the count of the unit reserve when Petitioner turned it over to Ms. Mason in October 2002, which does not appear to have a bearing on this case, there is no evidence in the record of any audit of the unit reserve, or any other account at Legion Avenue Station. The other evidence presented by Respondent is not sufficient to prove a loss from the unit reserve.
The Petition is granted. Respondent may not collect $15,851.21 from Petitioner on account of the debt alleged in this case.
Bruce R. Houston
Chief Administrative Law Judge
[1] References to the hearing transcript are “Tr._.” References to documents attached to Respondent’s Answer are “PS Ex._.” References to documents submitted by Petitioner will be “Pet. Ex._.”
[2] He became postmaster in November 2002.
[3] “Suspense” and “trust” are accounting terms, indicating entries made to balance an account by placing apparent shortages in “suspense” and apparent overages in “trust.”