November 17, 2006       

 

In the Matter of the Petition by                                  

                                                                                                                                  

OLIVER HSIUNG                                                                                                     

 

P.S. Docket No. DCA 06-136                         

 

APPEARANCE FOR PETITIONER:         

Oliver Hsiung
           

APPEARANCE FOR RESPONDENT:     

Rafael A. Rodriguez
           

 

 

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Oliver Hsiung, filed a Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets dated July 28, 2006, from his supervisor.  This Notice stated the Postal Service’s intention to withhold $3,762.45 from his salary to recover a loss from a stamp stock account for which Petitioner was responsible.

            A hearing was held in New York City on October 18, 2006.  The Postal Service presented testimony from Petitioner’s supervisor, who conducted an audit of Petitioner’s unit reserve account.  Petitioner testified on his own behalf and also presented testimony from a clerk in his office.  Both parties relied on documents filed with the Petition and the Answer.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  At all times pertinent to this case, Petitioner was a customer services supervisor at the Bronx General Post Office and was the custodian of the unit reserve stock.  (Tr. 13).[1]

            2.  A unit reserve custodian is responsible for supplying stamp stock to the retail floor unit for sale by window clerks to customers.  Proper procedure requires that transfers to the retail floor unit be recorded on a PS Form 17, verified by both the unit reserve custodian and the designated retail clerk who receives the stamps.  Also, the unit reserve custodian makes an entry into the POS computer system to record the amount and denomination of stamps “shipped” to the floor stock, and the retail clerk makes a similar computer entry showing the amount received.  Failure to make these computer entries before the unit reserve or the retail floor stock is next audited would likely result in the unit reserve showing a shortage and the retail unit showing a corresponding overage, assuming no other accounting irregularities occurred in the meantime.  (Tr. 16-17, 43-44). 

3.  On May 10, 2006, a representative of a company called Right (sp?) Check called Petitioner to say that the company wished to buy 500 books of 39¢ “flag” stamps and that he would come to the Bronx GPO that day to pick them up.  The reason for the call was that a window clerk would not likely have that quantity of stamps available to sell.  Petitioner removed the 500 books of “flag” stamps from his unit reserve, but did not complete a Form 17.  When the customer arrived, Petitioner gave the 500 books to one of his window clerks, who sold them to the customer.  The purchase was made by an American Express credit card, the customer paying $3,900.00 for the 500 books ($7.80 x 500).  The sale was recorded on the clerk’s computer terminal and the clerk gave the customer a receipt.[2]  Petitioner did not have the clerk verify the transfer on a Form 17 and did not make the required computer entry to record the transfer of the stamps from the unit reserve to the retail floor unit.  (Tr. 20-22, 30, 41-43; Pet. Ex. 1).

4.  On May 12, 2006, Petitioner’s supervisor conducted a regular, periodic audit of the unit reserve.  Petitioner was present for the audit.  The audit disclosed that the unit reserve was short 500 books of “flag” stamps – value $3,900.00.[3]  The total net unit reserve shortage reflected in the audit was $3,762.45.  Petitioner signed a PS Form 3294, Cash and Stamp Stock Count and Summary, indicating that he agreed with the accuracy of the count.  He also told his supervisor about the May 10 transaction discussed above, and she told him he would have to investigate and find proof that his explanation accounted for the shortage.  (Tr. 8-9, 14-15, 21-22; PS Ex. 3).  

5.  The retail floor stock was not immediately counted to determine whether there was a corresponding overage in that account.  The next audit of the retail floor stock was June 29, 2006, and it showed a $556.55 shortage.  The record contains a list of dates and results of floor stock audits, but not any documents pertaining specifically to the June 29 audit.  (Tr. 12-14; PS Ex. 6).

6.  On June 7, 2006, Petitioner’s supervisor issued Petitioner a Letter of Debt Determination for $3,762.45, and the Notice of Involuntary Administrative Salary Offsets was issued on July 28, 2006.  (PS Exs. 1 and 2).

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. 

The sole issue in this case is whether Respondent has proved a loss.  Petitioner argues that the May 10 sale, made without the required computer entries,   explains why the unit reserve was “short” on May 12.  If Petitioner’s explanation is correct, the Postal Service did not suffer a loss because it sold, and was paid for, the “missing” 500 books of “flag” stamps. 

Respondent does not dispute that 500 books of “flag” stamps were sold to a customer on May 10, but contends that Petitioner’s evidence does not prove that these were same 500 books that are missing from the unit reserve.  Respondent points to the June 29, 2006 retail floor stock audit and argues that, if Petitioner is correct, there should have been an overage there, reflected by an entry showing that stamps not actually in the floor stock inventory were sold.

Petitioner’s argument is more persuasive.  First, Petitioner’s testimony that he made this transfer without entering it into the computer was credible and was supported by the clerk who remembered the transaction and did not remember the procedures described in Finding #2 taking place.  Second, the May 10 sale matches the May 12 unit reserve shortage in the number, denomination, type and total value of stamps.  It would be a remarkable coincidence to assume, as Respondent argues, that the May 10 sale and the May 12 shortage are unrelated.  Respondent’s point about no overage appearing on the next floor stock audit is a legitimate argument, but the probative value of that fact is diminished because that audit occurred 47 days later, and other accounting irregularities could have occurred during the interim.

The Petition is granted.  Respondent may not collect $3,762.45 from Petitioner.  Any money already withheld from Petitioner for this alleged debt must be returned to him.

 

 

 

                                                           

 

Bruce R. Houston

Chief Administrative Law Judge