In the Matter of the Petition by                        )
                                                                       )
BESSIE KOHN                                                 )
3265 South Ridge Drive                                  )
                                                                        )
at                                                                     )
                                                                        )
Richmond, CA 94806-5244                             ) P. S. Docket No. DCA 96-342

APPEARANCE FOR PETITIONER:                    Bess Lewis
                                                                        National Association of Postal Supervisors
                                                                        P. O. Box 5108
                                                                        Richmond, CA 94805-0108

APPEARANCE FOR RESPONDENT:                Sandra Barton
                                                                        Labor Relations Specialist
                                                                        United States Postal Service
                                                                        1675 7th Street
                                                                        Oakland, CA 94615-9405

Petitioner, Bessie Kohn, a supervisor at the Fairfield, California Post Office, filed a petition for an oral hearing on August 26, 1996, after receiving a Notice of Involuntary Administrative Salary Offsets on August 12, 1996 from the Fairfield Postmaster. The Notice stated the Postal Service’s intention to withhold $573.25 from Petitioner’s salary to cover a shortage in her account, revealed by a July 21, 1995 audit.

A hearing was held in San Francisco, California on November 19, 1996. The Postal Service presented testimony from Ralph Cherry, the Fairfield Postmaster, and Veronica Hale, Supervisor of Customer Service. In addition to her own testimony, Petitioner presented testimony from one other supervisor and four clerks, all employed at the Fairfield Post Office. At Petitioner’s request, testimony was taken from Postal Inspector Coburn, who was at home on sick leave, via a speaker phone set up in the hearing room. Both sides also presented documentary evidence. At her request, Petitioner’s representative was given ten days after receipt of the transcript to submit a written argument. That argument was filed on December 16, 1996 and has been considered. The following findings of fact are based on the entire record, including observation of the witnesses and their demeanor.

FINDINGS OF FACT

1. Petitioner has been a Postal Service employee for twenty-five years, including fifteen years of responsibility in financial matters, and has been a supervisor at Fairfield for three years (Tr. 97). At all times pertinent to this case she was the reserve stock custodian at Fairfield, an accountability of approximately $300,000 (Tr. 8, 18). The reserve stock is the station’s main stock and is used by Petitioner for disbursing stock to the window clerks.

2. Postal funds and accountable paper are secured at the Fairfield office in a walk-in vault. This vault is locked at night, but left open during working hours. Within the vault, stock is kept in locked safes. One safe is assigned to Petitioner for the reserve stock. Three other safes, with separate compartments for each clerk, are used by the clerks to lock up their cash drawers when they are not working at the customer windows. (Tr. 12-13, 37).

3. One of Petitioner’s duties is to issue stamp stock from her reserve stock to the window clerks. The usual procedure is that the clerk will make a request for specific stock by submitting a Postal Service Form 17. Petitioner will go into the vault, withdraw the requested stock, or an equivalent amount, from her reserve stock, and ask another clerk to come into the vault and verify the count. The stock is then counted, signed for, and picked up by the requesting clerk, and accountability for it transfers from Petitioner to that clerk. (Tr. 41-42, 127-28). The requesting clerk would not normally be present when the stock is withdrawn by Petitioner, or counted by the verifying clerk, but the stock is normally in the physical custody of either Petitioner or the verifying clerk until it is taken by the requesting clerk. (Tr. 94-95, 127-28).

4. On June 23, 1995, window clerk Ken Williams requested stamp stock on a Form 17. Among other things, he requested four packs of self-adhesive flag stamps. A pack is approximately 2 inches by 2 inches by 5 inches in size, and contains 100 sheets of stamps, each sheet worth $6.40 - total value $640. (Tr. 101-02).

5. In filling Mr. Williams’ request, Petitioner followed the procedure described in paragraph 3 above, with one unfortunate variation. When she finished pulling the required items from her reserve stock, no one was immediately available to verify the count. Petitioner left the stock in a stack on top of one of the safes and returned to her office. No one was in the vault when she left. Before she returned to the vault, she engaged in a discussion with Ms. Hale and another supervisor about procedures for handling a shortage in one of the clerks’ accounts. Petitioner testified that she believed she was gone from the vault for "10-15 minutes" (Tr. 101), but, based on her account of what occurred in the interim, and other evidence, it was probably a bit longer.¹  (Tr. 58-59). At some point Ms. Colbert, one of the clerks, went into the vault to verify the count of the stock Petitioner had pulled for Mr. Williams. As she was going into the vault, another clerk, "X," was coming out.²  Ms. Colbert did not recall whether she actually finished counting the stock, due to telephone interruptions. (Tr. 90-91). By the time Petitioner returned to the vault, Mr. Williams had also been there to check his stock and told Petitioner that he had received only three packs of flag stamps. Because Petitioner was sure that she had laid out four packs, she, with assistance from several other employees, searched for the missing pack. This included eventually looking in the stock drawers of all the clerks, and in the locker of Clerk X, who had already departed for the day. (Tr. 33-35, 87, 101-05, 109). The stamps were never found.

6. On June 23, 1995, after it was clear the missing stock could not be found, Petitioner reported the matter to the Postal Inspection Service. She also reported her suspicion of Clerk X. Subsequent to that, she reported to the Postal Inspectors that she believed Clerk X was under-reporting the amount of stamps he sold at the window, and was pocketing the money. (Tr. 111-14). Other than interview Petitioner about the events of June 23, 1995, the Inspection Service has conducted no investigation into this matter. (Tr. 142-45).

7. On July 21, 1995, Ms. Hale and Petitioner performed a count of Petitioner’s stock. They completed a PS Form 3294, Stamp Stock Count and Summary, showing a shortage of $573.25, and both signed the form, signifying that each agreed with the count. (Tr. 7, 45-46; Resp. Ex. 4).

DECISION

Respondent’s position is that the July 21, 1995 audit established a loss of $573.25, and that the events of June 23, 1995 demonstrate a failure by Petitioner to exercise reasonable care in safeguarding stock that she was accountable for. Petitioner contends that there would have been no loss if the postal inspectors had made an effort to catch the thief and recover the stamps, rather than just ending their inquiry when they learned she had left the stock unattended for a few minutes. She also argues that overages in other accounts could have been used to offset this shortage, or that, based on the circumstances surrounding the apparent theft, it would have been appropriate for the postmaster to have submitted a "Claim for Loss," without holding any individual liable.

The issue here is not whether Ms. Kohn is an honest, dependable, hard-working employee. There is no indication that she is not. The issue is over how to apply the standards of accountability and liability that are prescribed for Postal Service employees who manage large sums of cash or stamp stock. The provision applicable to Ms. Kohn is contained in Handbook F-1, Post Office Accounting Procedures, Section 130 - Liability. Subsection 131 applies to postmasters, and Subsection 132 to other employees:

The postmaster consigns postal funds and accountable paper to other employees. Employees are held strictly accountable for any loss unless evidence establishes they exercised reasonable care in the performance of their duties.

There is no question that Petitioner was assigned the accountability for the reserve stock at the Fairfield post office. She agrees that she was. The loss in this case is established both by the inventory count on July 21, 1995, and by the events of June 23, 1995. Although the record of the July 21 inventory is not clear enough to show that the reserve stock was short by one pack of flag stamps, it is clear from Ms. Kohn’s testimony that such a pack was lost on June 23.

The determinative issue is whether Petitioner used reasonable care in the performance of her duties. I must conclude that she did not. Leaving more than two thousand dollars of stamp stock exposed and unattended, even though it was within the vault, constitutes lack of reasonable care. The vault was open to any employee, at least three other people were in the vault during the time the stamps were left there, and at least two of those people were alone in the vault. This is not meant to suggest that any particular person took the stamps, only that it was careless of Petitioner to leave the stock unattended. The evidence does not show that Petitioner was called away from the vault by her supervisor, Ms. Hale, only that she did spend some time in discussion with Ms. Hale after she left the vault to go to her office. (Tr. 65, 67, 71, 120-21; Pet. Ex. K). Even if Petitioner believed she was obligated to give attention to Ms. Hale and the problem of the clerk’s shortage, however, this did not relieve her of the duty to protect her stock, and nothing prevented her from re-securing it within the vault, taking it with her, or simply waiting until one of the clerks was available to count and watch it.

Petitioner’s suspicion as to who took the stamps and her frustration over failure of the postal inspectors to follow what she believed were useful leads, even if reasonable, do not help her. It is very speculative as to whether the inspectors could have recovered the stamps or proved who took them. Assuming that someone did take the stamps, however, it was Petitioner’s error to leave them unsecured.

As to Petitioner’s argument that she should have been credited with overages sufficient to cover this loss, Postal Service policy and regulations require that there be some relationship between the overage and the shortage. Handbook F-1, Sections 472.221, 472.222, 472.223; Kenneth Pederson, P.S. Docket No. DCA 95-387, (January 2, 1996); Donald Maus, P.S. Docket No. DCA-83, (December 28, 1990). There is no evidence of a relationship between any overage and the shortage in this case (Tr. 30).

Finally, whether or not the postmaster could have submitted a "Claim for Loss," is not relevant to this proceeding. Adjudication of cases such as this under the Debt Collection Act is based on whether the Postal Service has established a loss, whether the person charged was accountable for the stock from which the loss occurred, and whether that person exercised reasonable care in the performance of duties relative to that stock.

CONCLUSION

The Petition is denied. Respondent may collect $573.25 by offset from Petitioner’s salary.

                                                                                       Bruce R. Houston
                                                                                       Chief Administrative Law Judge

¹ One of the documents introduced by Petitioner is a statement written by Ms. Hale on the day of the incident, June 23, 1995, in which she states that Petitioner said the stamps were left on the safe for forty-five minutes. (Pet. Ex. K).

² Petitioner believes this person took the missing stamps, but as this has never been proved it is appropriate to omit the name.