Setoff of Money From Civil Service Retirement Fund Account

A Postal Service employee sought a review of the setoff of money from his Civil Service retirement fund account. The Postal Service determined that the employee was indebted to the Government for indemnity claims paid for losses of registered mail to which the employee had access incident to his employment. The employee denied involvement in any losses suffered by the Postal Service and questioned the legal propriety of the setoff. The record showed that the employee was caught stealing registered mail. It was determined that he had access to each of the losses in question. The Postal Service determined that the evidence was sufficient to meet the legal standards for establishing civil liability. These standards include: being caught committing a similar offense; access to the items in question; and an absence of indication that any other employee might have committed the theft. GAO has held that when these legal standards have been met, a prima facie case has been established against the employee. When this occurs, a mere denial of liability is not sufficient to overcome the case and the individual is considered indebted to the Government in the amount of the loss. A Civil Service retirement fund may be applied in the liquidations of an employee's indebtedness to the Government. The action of the Postal Service setting off the amount involved from the employee's retirement fund was sustained. However, since the amount otherwise due to the employee was also withheld as setoff to liquidate his indebtedness without the amount of that indebtedness having been found due in a court proceeding, the former employee may institute suit for recovery of the amount so withheld.