March 19, 2003
In the Matter of the Petition by
FRANK J. HEAD
3752 Cherry Ridge Boulevard
at
Decatur, GA 30034-5009
P.S. Docket No. DCA 03-39
APPEARANCE FOR PETITIONER:
Frank Head
3752 Cherry Ridge Boulevard
Decatur, GA 30034-5009
APPEARANCE FOR RESPONDENT:
Sandra D. Duncan
Labor Relations Specialist
United States Postal Service
Post Office Box 599353
North Metro, GA 30026-9353
FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Frank J. Head, requested a hearing under the Debt Collection Act of 1982, as amended, 5 U.S.C. §5514(a), after receiving a Notice of Involuntary Administrative Salary Offsets stating the Postal Service’s intention to make deductions from his salary to recover for a shortage occurring in the unit reserve accountability for which he was responsible.
Petitioner elected to submit the case on the written record without an oral hearing. The parties supplemented the record and submitted written arguments. The following findings of fact are based on the documents and witness statements submitted.
1. Petitioner became the postmaster of the Rex, Georgia Post Office on January 3, 2000, and thereafter became the custodian of the unit reserve at the post office. Prior to his appointment as postmaster, Petitioner had over 30 years’ experience with the Postal Service, but never in a position at a post office or retail location. He had been a Senior Budget and Financial Analyst, however, and had some familiarity with Postal Service financial requirements. (Petitioner’s Statement dated February 24, 2003; Declaration of Joe Griggers).
2. On September 27, 2002, Petitioner and Jacqueline Spradley counted the unit reserve incident to a transfer of responsibility for the post office and the unit reserve to Ms. Spradley. The count identified a shortage in the amount of $2,300.75. The results of the count were recorded on PS Form 3294, and Petitioner signed the form, indicating his agreement with the count. (Respondent’s Exhibit (“RX”) R-2; Declaration of Jacqueline Spradley; Declaration of Richard Campbell; Declaration of Joe Griggers).
3. Also on September 27, 2002, Petitioner and Ms. Spradley counted the retail floor stock in the post office and found it to be short by $40.23. They then counted the vending stock and found it to be short by $21.70. (Declaration of Jacqueline Spradley; Declaration of Richard Campbell).
4. On October 7, 2002, Respondent issued Petitioner a Letter of Debt Determination advising Petitioner that he was accountable for the $2,300.75 shortage revealed during the September 27, 2002 count of the unit reserve (RX R‑3; Declaration of Joe Griggers).
5. Petitioner sought reconsideration of the debt, but on December 2, 2002, Petitioner’s manager denied reconsideration (RX R-6, R-7; Declaration of Joe Griggers).
6. On December 15, 2002, Petitioner filed a “Petition for Hearing Under the Debt Collection Act,” which was docketed as P.S. Docket No. DCA 02-541. That Petition, however, was premature as Respondent had not issued a Notice of Involuntary Administrative Salary Offsets at that time. Accordingly, P.S. Docket No. DCA 02-541 was dismissed.
7. On January 22, 2003, Respondent issued Petitioner a Notice of Involuntary Administrative Salary Offsets stating its intention to collect the $2,300.75 by deductions from Petitioner’s salary. Appellant’s challenge to that collection was docketed as P.S. Docket No. DCA 03-39, and documents previously filed in P.S. Docket No. DCA 02-541 were incorporated into the record of P.S. Docket No. DCA 03-39. (February 3, 2003 Order and Memorandum of Telephone Conference in P.S. Docket No. DCA 03-39).
8. There had been overages totaling $1,400.24 in the unit reserve in counts occurring before that of September 27, 2002. An overage of $1,241.02 was disclosed on June 14, 2001, $106.17 on October 6, 1999, and $53.05 on June 16, 1999. At the time each was discovered, the overages were entered into trust in the post office’s accounts and the unit reserve accountability was adjusted to reflect the amount of stock on hand as revealed in each count. (RX R-6; Declaration of Joe Griggers).
9. Postal Service regulations establish the standard for liability of a unit reserve custodian for losses:
“Employees 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 with revisions through September 5, 2002), Section 141).
10. Ninety-three books of stamps, valued at $632.40, were issued from the unit reserve to the retail floor stock on July 8, 2002, and the transaction was properly recorded in the accounts of the Rex Post Office, reducing the unit reserve’s accountability by that amount (Declaration of Joe Griggers and attached Form 17, Inventory Receipt and Form 3958, all dated July 8, 2002).
Respondent has demonstrated that on September 27, 2002, a $2,300.75 shortage existed in the unit reserve for the Rex Post Office (Finding 2). Petitioner was the custodian of the unit reserve account (Finding 1). Proving the existence of the shortage in Petitioner’s account is generally sufficient to show that Respondent has suffered a loss in the amount of the shortage. However, in this case, Petitioner argues that he was entitled to the benefit of $1,400.24 in overages discovered in the Rex Post Office unit reserve on three occasions prior to the count of September 27, 2002 (Finding 8). Applying the overages as he urges would substantially offset the September 27, 2002 shortage and would reduce the loss to Respondent.
However, Petitioner has failed to demonstrate any relationship between the earlier overages and the September 27, 2002 shortage. After each of the earlier overages, the unit reserve accountability was restored to a balanced condition, and the overage was entered into trust (Finding 8). Once those accounting adjustments were made, the records of the post office reflected an accountability for the unit reserve that was exactly what was physically contained in the unit reserve (Finding 8). Petitioner has not suggested how any shortage developing thereafter in the unit reserve would be related to the earlier overages. That Petitioner was the unit reserve custodian when the overages developed and was still the custodian when the September 27, 2002 shortage was discovered is not a sufficient relationship, in and of itself, to entitle Petitioner to credit for the earlier overages. Accordingly, Petitioner has not shown he is entitled to an offset for the prior unit reserve overages.
Also, Petitioner claimed credit for what he contends was an unreported, July 5, 2002 transfer of stock in the amount of $632.40 from the unit reserve to the floor stock. Properly recording the transfer, according to Petitioner, would have reduced the unit reserve accountability, and his shortage, by the amount of the transfer. However, Respondent submitted evidence that demonstrated that the transfer in question occurred on July 8, not July 5, 2002, that it was recorded properly in the post office accounts and that the unit reserve accountability was reduced by $632.40 on July 8 (Finding 10). Accordingly, Petitioner is not entitled to credit for the July 8 transfer.
Respondent has established a loss in the amount of $2,300.75. Petitioner is only entitled to relief for the loss if the evidence shows that he followed established procedures in managing the unit reserve (Finding 9). It is Petitioner’s burden to demonstrate that he followed established procedures, but he did not offer evidence on this point. Accordingly, Petitioner is not entitled to relief from responsibility for the September 27, 2002 shortage in the unit reserve.
Petitioner is liable for $2,300.75. Respondent may collect this amount through involuntary deductions from his salary. The Petition is denied.
Norman D. Menegat
Administrative Judge