In the Matter of the Petition
by
ALISA MOORE
1648 Farningham Lane
at
P.S. Docket No. DCA 04-123
APPEARANCE FOR PETITIONER:
Albert E. Lum
5240 72nd Place
Maspeth, NY
11378-1516
APPEARANCE FOR RESPONDENT:
Tony Santitoro
Labor Relations Specialist
United States Postal Service
P.O. Box 9401
Raleigh, NC 27676-9401
FINAL DECISION
UNDER THE DEBT COLLECTION ACT OF 1982
Petitioner, Alisa Moore, filed a Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets, dated August 13, 2004. This Notice stated the Postal Service's intention to withhold $4,486.61 from Petitioner's salary to recover a shortage in a vending machine account for which Petitioner was accountable.
A hearing was held in Raleigh, North Carolina on October 26, 2004.[1] The Postal Service presented testimony from an Internal Control Analyst and the Manager of Post Office Operations for the Greensboro District. Petitioner testified on her own behalf and called one subordinate clerk. Both parties relied on documents that had previously been filed, and Petitioner submitted one additional exhibit during the hearing. The following findings of fact are based on the entire record.
FINDINGS OF FACT
1. Petitioner has been a supervisor at the Hillsborough, North Carolina Post Office since sometime in 2000. In late 2000, when that office was converted to the POS-One computerized stamp stock management system, Petitioner was assigned accountability for the unit reserve and for the vending machine account. (Tr. 16, 35, 86-88).[2]
2. Petitioner’s duties with regard to the two vending machines in the Hillsborough office are to supply the machines with stamps from her unit reserve account, remove money from the machines and deposit it in the appropriate bank account, and to keep accurate records by making the correct entries in the POS system to show vending sales and transfers of stamps from the unit reserve to vending. (Tr. 46).
3. The correct Accounting Inventory Code (AIC) for recording vending machine sales is 096. Sometime in late 2002, because Petitioner found it time-consuming to use AIC 096, she began recording vending sales in AIC 109, which is used for recording sales of imprinted postage (PVI).[3] The apparent time saving is that Petitioner could simply enter a total amount in AIC 109, rather than make separate entries for each stamp denomination as she would have had to do for AIC 096. (Tr. 15-17, 41, 49, 57-58, 92; PS Exs. 2 and 16).
4. Petitioner did not seek permission or advice from any supervisor or financial official prior to adopting the “shortcut” described above. One consequence of the procedure she adopted was that the total accountability of the vending account was not reduced in the POS system by any entries she made into AIC 109. (Tr. 16-18, 44, 97-98; PS Ex. 2).
5. In January 2004, a team from the Postal Service Inspector General’s Office inspected the Hillsborough office and reviewed financial practices. They reported a number of improper practices and a shortage of approximately $85,000 in the vending account. Other than references to this total, there are no documents in the record that show how the IG audit was done or that explain how they determined the specific amount of the shortage.[4] After the IG team completed their inspection, Petitioner entered $85,630.15 into the POS system as a shortage in the vending account, thereby reducing the accountability of the vending account by that amount. (Tr. 10-11, 23-24, 113, 116, 118-19; PS Exs. 9 and 15; Pet. Ex. 1).
6. Sometime after the IG team reported its findings, an Internal Control Analyst from the Greensboro District went to Hillsborough to look into the vending shortage and other shortages.[5] She and Petitioner audited the vending account and found it to be $55.15 over, the $85,630.15 adjustment to balance the account having already been made by Petitioner’s entering that figure into the POS system. The Analyst did not review any paperwork that provided the basis for the IG finding that the account was short approximately $85,000. (Tr. 10-11, 22-24, 46-47; PS Exs. 11 and 12).
7. After learning of the improper accounting entries Petitioner had been making (see Findings #3 and #4), the Analyst then reviewed records known as VESS Reports,[6] to attempt to determine the amount of vending stamp sales that Petitioner had properly deposited but not accurately entered into the POS system. The Analyst was able to document a total of $76,656.92 that could be credited against the reported $85,630.15 shortage. (Tr. 20, 25, 41, 47-48; Pet. Ex. 2).
8. On March 22, 2004, Petitioner’s supervisor issued her a Proposed Letter of Warning, as disciplinary action, citing several discrepancies and faulty procedures reported by the IG team, including Petitioner’s improper posting of vending sales. This proposed action was sustained and finalized by the Manager, Human Resources, in a letter dated April 12, 2004. (PS Exs. 7 and 8).
9. On April 13, 2004, Petitioner’s supervisor issued her a Notice of Debt Determination, stating that Petitioner owed the Postal Service $8,973.23 ($85,630.15 - $76,656.92). (PS Ex. 9).
10. In a May 12, 2004 response to a request for reconsideration of the Letter of Warning and the Notice of Debt Determination from Petitioner’s representatives, the supervisor denied the request to “write off” the shortage, but reduced the alleged debt to $4,486.61. (PS Ex. 2).
11. On August 13, 2004, the supervisor issued Petitioner the Notice of Involuntary Administrative Salary Offsets, alleging a debt of $4,486.61. (Tr. 55-56; PS Ex. 1).
12. Postal Service Handbook P102, Self Service Vending Operational and
Marketing Program, May 1999, Updated with Postal Bulletin Revisions Through
643 Shortages
* * *
643.12 Other Operational Problems
Servicing personnel do not have complete control, at all times, of the assigned credit; therefore, shortages must be assumed to be the result of machine malfunction, unless the following can be determined:
a. Fire, theft, robbery, errors on PS Forms 17, Stamp Requisition, customer refunds, acceptance
of bogus and/or foreign coin-like and bill-like objects, or any other procedural errors.
b. The loss was the direct result of negligence on the part of the servicing personnel.
c.
Theft, embezzlement, etc., by the servicing personnel with sufficient
evidence to prefer charges.
DECISION
Respondent’s burden of proof in a Debt Collection Act case is first to prove an actual loss to the Postal Service of money or stamp stock. If that burden is met, Respondent must then prove the basis for the employee’s liability, whether this be strict liability, or liability based on negligence or misconduct. As to the first part of the burden, Respondent’s proof is marginal. On the second part it clearly fails.
At the hearing, Respondent disavowed the IG audit as a basis for the alleged shortage because that audit was not properly conducted. Respondent asserted that the basis for the shortage was another audit that was conducted after the IG team departed. Respondent’s representative at the hearing stated that “we didn’t use that [the IG audit] to base anything on. We based everything on the individual audit that we did.” (Tr. 22). The Manager of Post Office Operations testified that, “That’s why we conducted our own. It [the IG audit] was not conducted the appropriate way.” (Tr. 71).
It is not clear, however, what audit Respondent is relying on. The Analyst testified that the shortage was based on an audit that Petitioner conducted after the IG team departed, but there are no documents in the record pertaining to any such audit, and Petitioner testified that all she did was enter into the POS system the amount of the shortage from the IG audit. There are also no documents in the record pertaining to the audit conducted by the Analyst and Petitioner after the vending account was adjusted by $85,630.15. This is the audit that showed a $55.15 overage. Nevertheless, because Petitioner has not challenged the result of that audit, it is reasonable to assume that there was in fact a loss from the vending account, perhaps $85,630.15 minus $55.15, minus the $76,656.92 later credited to the account (see Finding #7).
Even assuming a loss has been proved, Respondent has not carried its burden of establishing Petitioner’s liability. The standard of liability for losses from vending machines, unlike losses from main stock or clerk credits, is not a strict liability standard. It requires evidence that the loss was caused by the negligence or wrongdoing of the assigned employee (see Finding #12). Andrea Quinn, P. S. Docket No. DCA 01-76/77 (June 14, 2001); Beverly M. Dennis, P. S. Docket No. DCA 97-107 (May 22, 1997). There is no evidence of theft or embezzlement by Petitioner, and while there can be no doubt that her accounting practices were improper and perhaps negligent, the evidence does not show that the shortage was the “direct result” of her actions. (See Alvetta S. Callis, P. S. Docket No. DCA 02-125 (June 6, 2002)). Her actions made it difficult to reconstruct an accurate accounting, but this does not equate to causing a loss.
The Petition is granted. Respondent may not collect $4,486.61 from Petitioner’s salary.
Bruce R. Houston
Chief Administrative Law Judge
[1] The hearing was conducted by the undersigned
Administrative Law Judge via speaker telephone from
[2] References to the hearing transcript are “Tr._.” Documents filed by Respondent with the Answer
will be identified as “PS Ex._.”
Documents submitted by Petitioner will be “Pet. Ex._.”
[3] Postage
Validation Imprinter (PVI).
[4] One IG memo
refers to vending machine shortages of “approximately $85,000.” (Pet. Ex. 1).
Another IG memo refers to a vending shortage “approximating
$85,760.04.” (PS Ex. 15).
[5] The record is
unclear as to when this occurred. The
analyst testified that it was April 2004, but two memoranda, one of which she
prepared, indicate that it was February 2, 2004. (Tr. 10, 12, 24, 47-48; PS Exs. 11 and 12).
[6] Vending
Equipment Sales and Service.