Knowledge Is Power

Knowledge Is Power
By Myrna Pashinski
NAPS Rocky Mountain Area Vice President

Let’s talk about being indebted to the USPS for a shortage on your unit reserve. What would you do if there was an audit of your unit reserve and a major shortage was found? Who’s responsible for the shortage?

If you manage the unit and have a supervisor, the supervisor is responsible because they signed for the stock. If you are the postmaster, you might say you are responsible because you signed for the unit reserve; in both cases you would be right.

The financial obligation rests with the person who signed for the unit reserve. However, that doesn’t necessarily protect you as the manager from corrective action if you did not provide the proper resources, training and coaching to your subordinate team member.

Corrective action to anyone in case of a shortage is not the subject of this column, even though we all know that is the first result of a unit reserve shortage—some sort of letter of corrective action followed by the dreaded letter of debt saying how much you owe the USPS.

NAPS is here to help with the letter of debt for your team member and our NAPS member. That will be the topic of a different column, but I thought about what else is available to protect against such a loss for a member.

As the manager or postmaster, you might not be obligated to cover the cost of the shortage of your supervisor. So, I Googled: “I work for the USPS and am responsible for a stamp unit reserve of $250,000. What type of insurance do I need to protect myself from an audit shortage?” Here’s the AI overview:

“Based on the information provided, it’s important to understand the concept of financial liability in the USPS context and how it relates to your role as a stamp unit reserve custodian.

1. Your responsibility:

  • As a USPS employee assigned a fixed credit, such as a stamp unit reserve, you are held strictly accountable for its full value, which is
    $250,000 in your case.
  • If a financial audit reveals a shortage in the reserve, you are financially liable unless you can demonstrate reasonable care in fulfilling your duties.

2. Tolerance and accountability:

  • There’s a defined tolerance amount for stamp stock counts in the unit reserve, which is based on a specific chart and has a maximum limit of $150.
  • However, if a shortage exceeds this tolerance amount or if the unit reserve stock is canceled or transferred, you, as the custodian, are responsible for the entire shortage amount.

3. Types of insurance:

  • While the USPS offers insurance for mail and packages against loss or damage during transit, which is relevant for individual shipments, this type of insurance is not designed to cover shortages in the stamp unit reserve itself.
  • The relevant type of protection in your situation generally is known as a fidelity bond.
  • A fidelity bond is designed to protect the employer (in this case, the USPS) from financial losses resulting from the dishonest acts of employees, such as theft or embezzlement.

4. How a fidelity bond works:

  • If a financial audit reveals a shortage in your stamp unit reserve due to actions covered by the fidelity bond, the bond would pay out to the USPS, covering the loss.
  • The bond acts as a form of security for your obligations as the custodian of the stamp unit reserve.

5. Additional considerations:

  • The USPS may require you to have a fidelity bond in place, especially given the substantial value of the stamp unit reserve for which you are responsible.
  • The amount of the bond would be determined by the USPS to ensure adequate protection of their interest.
  • You may need to check your employment agreement or relevant USPS policies to determine if a fidelity bond is required and how it would be obtained.

In summary, to protect yourself against potential financial liability for a shortage in your stamp unit reserve resulting from a financial audit, you typically would need a fidelity bond. This bond provides assurance to the USPS that it would be compensated for any losses due to covered acts of dishonesty by an employee responsible for handling funds or property.”

The definition of a fidelity bond is extremely negative. It covers employees for dishonesty and fraud, but what isn’t negative about a shortage in your unit reserve—no pun intended?

A shortage is scary, but it’s good to know there’s insurance for that type of indebtedness to the USPS, even when you were not acting dishonestly or fraudulently. The audit revealed a shortage; it didn’t reveal your character.

I’m not an insurance agent, just a proponent for you knowing there is insurance that could protect you if you were held accountable for your unit reserve shortage.