September 21, 2007

 

In the Matter of the Petition by                                             

                                                                                                                                  

CHARLES MULIDORE                                                                     

 

P.S. Docket No. DCA 07-126

 

APPEARANCE FOR PETITIONER:         

Charles Scialla                                                                     

Scialla Associates Inc.

                                                                       

APPEARANCE FOR RESPONDENT:     

Ronald V. Zimcosky Jr.                                                                   

Labor Relations Specialist                                                             

United States Postal Service

                                                                       

 

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Charles Mulidore, filed a Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets from a District Finance Manager, dated April 16, 2007.  This Notice stated the Postal Service’s intention to withhold $300.00 from Petitioner’s salary to recover a salary advance paid to another employee and never repaid, while Petitioner was Officer-in-Charge of the Warren, Ohio Post Office.

By Order dated July 24, 2007, Petitioner’s motion to dismiss the claim against him, based on Respondent’s delay in asserting the claim and failure to produce documents, was denied, and it was determined that this case would be decided on written submissions.  Neither party opposed this.  The parties were given time to file additional evidence and argument, beyond that filed with the Petition and the Answer.  Petitioner filed additional argument.  Respondent filed several documents, including sworn declarations from three witnesses.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  Sometime before July 2, 2004, Petitioner was assigned as the Officer-in-Charge (OIC) of the Warren, Ohio Post Office.  He was still the OIC on that date.  The record does not show when he left the position.  (This is reflected in several documents and is not disputed by Petitioner).

            2.  On July 2, 2004, a clerk in the Warren Post Office issued a $300.00 salary advance to an unnamed employee.  The clerk does not now recall who she issued the advance to, or which supervisor approved it.  (Kerns Declaration).[1]

            3.  Postal Service procedures for salary advances require that the requesting employee get approval from his/her supervisor on a PS Form 1608.  The supervisor signs the form in triplicate and the employee takes the form to a window unit to obtain the money.  The window clerk annotates the form with required information, records the amount in the appropriate accounting code in the computer system, keeps one copy of the form and returns two copies to the employee.  The employee returns one copy to the supervisor and keeps the other.  (Respondent’s supplemental response, Exs. M-8 and 15).

            4.  On July 2, 2004, the clerk who issued the advance made the required entry into the computer system, showing that a salary advance of $300.00 was issued at 5:05 p.m. on July 2, 2004.  (Respondent’s supplemental response, Exs. M-9, 10, and 11).

            5.  In March of 2007, in preparation for a change to the computer system, the District Finance Office reviewed outstanding financial items for area offices and noted that a $300.00 salary advance at the Warren Post Office was still in the system with no record of it being repaid by the employee to whom it was issued.  (Kerns Declaration; Flak Declaration; Strenk Declaration).

            6.  The Finance Office sent an inquiry to Mr. Kerns, who was then and is now the Warren OIC, who searched office records and was unable to find a Form 1608 or any other record of the transaction.  (Kerns Declaration; Respondent’s supplemental response, Ex. M-6).

            7.  On March 29, 2007, the Finance Manager issued Petitioner a Notice of Debt Determination, stating that Petitioner owed the Postal Service $300.00, based on the uncollected salary advance.  (Respondent’s supplemental response, Ex. M-1).

            8.  On April 16, 2007, the Finance Manager issued the Notice of Involuntary Administrative Salary Offsets.  (Respondent’s supplemental response, Ex. M-3).

            9.  Postal Service Handbook F-1, Post Office Accounting Procedures, November 1996, Updated with Postal Bulletin Revisions Through July 19, 2007, includes the following:

 

            13  Accounting Responsibilities

                        131  Basic Accounting Responsibilities

Postmasters must collect all receipts to which their    offices are entitled, account for all funds entrusted to them, and ensure that they meet accounting objectives.

 

14  Liability for Financial Losses

When an accountable financial loss occurs and evidence shows that the postmaster or responsible manager enforced U.S. Postal Service (USPS) policies and procedures in managing the post office, the Postal Service grants relief for the full amount of the loss.  When evidence fails to show that the postmaster or responsible manager met those conditions, the Postal Service charges the postmaster or responsible manager with the full amount of the loss.

 

            10.  A Memorandum, dated September 16, 1987, from two Assistant Postmasters General to regional directors of finance and human resources states:

“It has been brought to our attention that there is some confusion in regard to the policy of the Postal Service concerning the personal accountability of postmasters and supervisors in situations involving employee credit shortages where contractual or other reasons preclude collection of the shortage from the employee.

 

The Postal Service will not normally hold postmasters and supervisors personally accountable for such employee shortages if they do not have direct access to the credit or are not involved in collusion with the employee.  That policy was enunciated in a December 4, 1985, memorandum from former Senior Assistant Postmaster General for the Employee and Labor Relations Group, Michael S. Coughlin, and it has not been withdrawn or modified.  The policy is not intended to absolve a postmaster, supervisor or others who have financial accountability for postal funds and accountable paper from conscientiously enforcing Postal Service policies and procedures.  However, rather than issuing a letter of demand to these individuals, it is more appropriate to consider counseling or discipline for failure to properly carry out the duties of their position.  The action warranted should be determined on a case by case basis depending upon the particular circumstances.”  (Attachment to Petitioner’s Motion to Dismiss, June 7, 2007).

 

DECISION

            Petitioner contends that it would be inconsistent with the policy expressed in the 1987 memorandum quoted above to hold an OIC personally liable when there is no evidence that he was involved in improperly issuing the salary advance, or that he was even aware of it.

            Respondent’s position is that it was Petitioner’s job to ensure that required procedures were followed, and records kept, in issuing a salary advance and to see to it that any such advance was repaid.  Respondent’s theory is that Petitioner’s failure to exercise required oversight of his office’s finances resulted in the inability to identify the recipient of the salary advance in a timely manner and collect it back from that person.  This, Respondent argues, equates to a finding that Petitioner did not enforce Postal Service policies and procedures in managing his office within the meaning of Section 14 of the F-1 Handbook quoted above.  Therefore, Respondent argues, Section 14 is a sound basis for holding an OIC liable for the loss of the $300.00.  

            We have not given Section 14 the broad application that Respondent urges here, i.e., to hold a postmaster personally liable for otherwise uncollectible losses based simply on his/her overall responsibility for running a post office.  This is consistent with the policy expressed in the 1987 memorandum quoted above, although that memorandum deals specifically with employee credit shortages.  The broad, and somewhat ambiguous, language of Section 14 does not support a strict liability standard, such as is applied to employees who are given an assigned individual accountability for a unit reserve account, for example.[2]  When Section 14 has been used as the basis for liability we have required some showing that the postmaster’s, or manager’s, failure to enforce policies and procedures caused the loss.  See Johnson, P. S. Docket No. DCA 04-71 (August 23, 2004); Brooks, P. S. Docket No. DCA 02-489 (February 7, 2003); Frank, P. S. Docket No. DCA 00-406 (June 15, 2001); Butler, P. S. Docket No. DCA 01-152 (August 2, 2001); Jeffries, P. S. Docket No. DCA-194 (July 12, 1994). 

            Respondent’s evidence is sufficient to prove the alleged loss.  Petitioner does not dispute the documents, i.e., the PS Form 1412 and POS Reports for July 2, 2004 (see Finding #4) showing that the $300.00 was received, but not repaid, by an unidentified employee.  The next task, therefore, is to identify Petitioner’s failure to enforce policies and procedures, and determine whether that failure caused the loss of $300.00.  As Respondent did not specifically articulate what Petitioner failed to do, other than collect the money, we might assume that his failure was in not reviewing his office’s financial data closely enough to notice that a salary advance had been issued on July 2, 2004, and that it remained “on the books.”[3]  

            There are too many unanswered questions here and Respondent’s evidence falls short.  We do not know how long after July 2, 2004 Petitioner remained in the OIC position, and we do not have specific evidence as to what he failed to do. Respondent, in Mr. Kerns’ statement, says that no Form 1608 was signed when the salary advance was issued.[4]  If that is so, then the clerk and/or the unknown authorizing supervisor, acted in violation of the prescribed procedures and this case is very much like the cases addressed by the 1987 memorandum (see Finding #10).  As noted earlier, we have no statement from the clerk, we do not know when anyone first asked her about this matter, and we have no evidence that anyone questioned other supervisors as to who might have authorized the salary advance, or for which employee.

            Respondent’s evidence fails to prove that the loss alleged here was caused by Petitioner’s failure to enforce Postal Service policies and procedures.  The Petition is granted.  Respondent may not collect $300.00 from Petitioner’s salary.

 

 

Bruce R. Houston

Chief Administrative Law Judge

 

 

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[1]  Mr. Kerns is the current OIC in Warren.  Respondent did not submit a statement from the clerk herself.

[2]  See F-1 Handbook, Section 141.

[3]  There is no evidence that Petitioner was personally involved in issuing, or approving, the advance, and he claims to remember nothing about it.

[4] This is an assumption, based on the fact that no Form 1608 was found. We have no direct evidence that the clerk issued the advance without a Form 1608.