September 3, 2009   

 

In the Matter of the Petition by                                        

                                                         

DANNY J. SMITH                                                                    

                                     

P.S. Docket No. DCA 09-90

 

APPEARANCE FOR PETITIONER:         

Albert E. Lum

Scialla Associates Inc.

APPEARANCE FOR RESPONDENT:     

Ray Huey

Labor Relations Representative

United States Postal Service

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

 

            Petitioner, Danny J. Smith, filed a Petition for a hearing under the Debt Collection Act of 1982 after receiving a Notice of Involuntary Administrative Salary Offsets dated April 1, 2009,[1] from Respondent, United States Postal Service.  The Notice stated Respondent’s intention to withhold $9,850.67 from Petitioner’s salary because of a shortage in the reserve stock at the Rogers, Arkansas Post Office.  A hearing was held in Rogers, Arkansas.[2]

FINDINGS OF FACT

            1.  As of July 9, 2008, Petitioner assumed the position of custodian of the unit reserve stamp stock at the Rogers, Arkansas Post Office.  Prior to the transfer of the stock to him, he and the departing custodian performed an audit and found the reserve stock to be in balance to within $.01.  (Transcript, page (Tr.) 10, 11; Exhibit (Exh) I).

            2.  On the same date, Petitioner, the departing custodian, and one or two other employees prepared a shipment of stamps (“redeemed stock”) from the retail floor stock to be sent to the stamp destruction office.  Petitioner and the others counted the stamps and boxed them for shipment.  The recorded value of the stamps prepared for shipment was $34,770.20.  However, because of errors in counting the stamps, the actual value of the stamps in the shipment was only $13,255.40.[3]  Thus, the value of the shipment to the stamp destruction office was overstated by $21,514.80.  (Tr. 18, 38, 46-47; Exh D1-3, E1-2).

            3.  On the same date, the redeemed stock was officially transferred from the retail floor stock to the unit reserve stock accountability and the boxed stamps were shipped to the stamp destruction office.  Petitioner signed the document transferring the redeemed stock from the retail stock to the reserve stock accountability and the document shipping the redeemed stock to the stamp destruction office.  The redeemed stock was never physically in the reserve stock vault, and Petitioner did not count the stamps again before shipping them to the stamp destruction office.  (Tr. 13, 52-53; Exh D1-3).

            4.  The stamp destruction office, upon noting the large difference between the recorded and actual values of the stamps, returned the shipment to the Rogers Post Office in late August 2008.  Petitioner accepted the stamps back into the unit reserve at their recorded value - again apparently without counting them.  On September 11, 2008, an audit of the unit reserve stock indicated that there was a shortage in the amount of $21,514.77, virtually the same difference as the amount of the error introduced in counting the redeemed stock (Finding 2).[4]  (Tr. 19; Exh E1-2, H).

            5.  In January 2009, Respondent apparently issued Petitioner a letter, which is not in the record, informing him that he was indebted to the Postal Service in the amount of $9,850.67 because of the shortage in the reserve stock.[5]  On April 1, 2009, Respondent issued a Notice of Involuntary Administrative Salary Offsets to Petitioner, and Petitioner filed a timely request for a Debt Collection Act hearing (see footnote 1).  (Exh J).

            6.  Under Postal Service procedures, no single person is accountable for shortages in the retail floor stock (Tr. 40; Handbook F-101, “Field Accounting Procedures,” §14-2.1).

DECISION

            In order to meet its burden of proof in this Debt Collection Act case, Respondent must demonstrate that there was an actual shortage in an account for which Petitioner was accountable.  Respondent has not done so here.

            As was found above, the apparent shortage in the unit reserve account was caused entirely by errors in counting the redeemed stock before it was transferred from the retail floor account to the unit reserve account and shipped to the stamp destruction office.  Before the redeemed stock was transferred into the unit reserve, the unit reserve had been audited and found to be in balance.  After the redeemed stock was returned to the post office and again accepted into the unit reserve, an audit of the unit reserve found an apparent shortage in the exact amount (i.e., within pennies) of the error introduced when the redeemed stock was initially counted.  But for the apparent shortage caused by the redeemed stock, the unit reserve was still in balance at the time of the audit.  Thus, Respondent has not shown an actual shortage in that account.

            Respondent also argues that the errors committed in counting the redeemed stock served to mask what must have been a shortage in the retail floor stock at that time and, at a minimum, delayed investigation of that shortage.  However, even if there were a shortage in the retail floor stock at the time the redeemed stock was counted, the retail floor stock was not an account for which Petitioner was accountable.  Moreover, while Petitioner participated in, and signed off on, the erroneous count, there is no evidence that that error in any way caused any shortage in the retail floor stock.  Finally, while any shortage might have been discovered earlier had Petitioner been more careful during the initial count or had he again counted the redeemed stock when it was accepted into the unit reserve,

… we have said many times that the Debt Collection Act is not a vehicle to punish poor job performance.  It may be that Petitioner did not perform [his] job well, but postal regulations do not make [him] personally liable, under a strict liability standard, for losses from an account that is not assigned to [him].

 

Albertha Johnson, P.S. Docket No. DCA 04-71 (August 23, 2004); see also Peter G. Harris, P.S. Docket No. AO 09-41 (August 26, 2009); Robert Capone, P.S. Docket No. DCA 02-500 (February 21, 2003).

            Respondent has not met its burden of proof.  Accordingly, the Petition is granted.  Respondent may not withhold $9,850.67 from Petitioner’s pay.

 

 

 

 

David I. Brochstein

Administrative Judge


[1]   Petitioner initially filed a Petition on March 9, 2009, before a Notice of Involuntary Administrative Salary Offsets had been issued.  The April 1 Notice was issued thereafter and Petitioner filed a second Petition, dated April 13, 2009.

[2]   The hearing was conducted by the undersigned Administrative Judge via speaker telephone from Arlington, Virginia.  All other participants, including the court reporter, were present in a conference room at the hearing site.

[3]   For example, there were two cellophane wrapped packages of stamp books with “1500” printed on the label.  Each package contained 100 books of 41-cent stamps, with each book containing 15 stamps, for a total of 1500 stamps.  However, each package was counted as containing 1500 books of 41-cent stamps at $6.15 per book.  This error overstated their value by $17,220.  (Exhibit E).

[4]   The $.03 difference is immaterial, and is ignored for purposes of this decision.

[5]   Petitioner was given credit for some later overages in the retail floor stock, which reduced the amount sought from $21,514.80 to the $9,850.67 demanded in this case.