In the Matter of the Petition by                                )
                                                                               )
DOROTHY EVANS                                                 )
P. O. Box 80001                                                     )
                                                                               )
at                                                                            )
                                                                               )
Atlanta, GA 30366-0001                                        )     P.S. Docket No. DCA 98-170

APPEARANCE FOR PETITIONER:                           Landon Lee
                                                                               P. O. Box 184
                                                                               Norcross, GA 30091-0184

APPEARANCE FOR RESPONDENT:                        Richard Anastasi
                                                                               Labor Relations Specialist
                                                                               United States Postal Service
                                                                               3900 Crown Road
                                                                               Atlanta, GA 30304-9351

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

Petitioner, Dorothy Evans, filed a Petition requesting a hearing under the Debt Collection Act of 1982, as amended, 5 U.S.C. §5514(a), after receiving a Notice of Involuntary Administrative Salary Offsets from Respondent, United States Postal Service. The Notice informed Petitioner that Respondent intended to deduct a total of $1,048.25 from her salary to make up a shortage discovered in an audit of her window credit.

With Petitioner's agreement, the hearing on Respondent's claim against Petitioner was consolidated with the hearing for Postal Service Docket No. DCA 98-171 because the petitioner in that case was another window clerk in the same office and the general defenses of each petitioner were based on the same alleged management failures to provide proper security. Although neither petitioner testified at the hearing, their representative presented witnesses and evidence on their behalf. Respondent and Petitioner made closing arguments in support of their positions.

FINDINGS OF FACT

1. Petitioner is a window clerk in the Peachtree Corners Branch of the Norcross, Georgia Post Office. She is assigned sole responsibility and is accountable for a credit consisting of cash, stamps and accountable paper which she uses for conducting her transactions with customers. (Transcript of Hearing, pages ("Tr.") 15, 55-56; Exhibit to Grievance File⁽¹⁾ ("Griev. Exh.") D; Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996) ("F-1 Handbook"), Section 426.1).

2. On May 14, 1997, Petitioner's window credit was counted and found to be short by $1,045.09 (Griev. Exh. A1-A4). At Petitioner's request, a recount was conducted on May 15, 1997, which revealed a shortage of $1,048.25 (Tr. 13; Griev. Exh. B1-B4). Petitioner signed the PS form 3294, Cash and Stamp Stock Count and Summary, signifying her agreement with the count (Griev. Exh. B4).

3. Respondent issued Petitioner a Letter of Demand on May 15, 1997, seeking repayment of $1,048.25 (Griev. Exh. C).

4. In a February 4, 1997 audit of Petitioner's credit--the audit immediately preceding those of May 14-15--an overage of $443.14 had been disclosed and placed in trust (Griev. Exh. D).

5. In a May 19 letter to the Norcross Postmaster, Petitioner requested reconsideration of the $1,048.25 debt and asked that she be given credit against the shortage for the $443.14 overage (Griev. Exh. K1).

6. The F-1 Handbook addresses offsetting a clerk's shortage by the amount of an earlier overage in the same credit:

"When there is a balance for that employee from a previous overage within 1 year and a relationship is established, use this balance to offset part or all of the shortage.

If no relationship is established, follow collection procedures in Article 28, section 4, of the National Agreement (see section 361). Managers should exercise judgment when determining the existence of a relationship that may warrant offsetting shortages." (F-1 Handbook, Section 429.16).

7. In a May 24 memorandum to Petitioner, the postmaster refused Petitioner's request for an offset, stating, "In order that I might consider your request, there must be documented evidence to substantiate a relationship between the overage and shortage." (Griev. Exh. L1). It was the policy of the Norcross Post Office to grant credit for a prior overage against a shortage only if there was documentation showing a previous error or transaction that definitely accounted for the shortage and showed that the shortage and the prior overage arose from the same particular, documented transaction (Tr. 206-207, 209-210, 215, 217, 220).

8. On March 18, 1998, the Norcross Postmaster issued Petitioner a Notice of Involuntary Administrative Salary Offsets (Attachment 1 to Petition), and Petitioner filed a timely request for a Debt Collection Act hearing.

9. In April 1997, approximately eight employees knew the combination to the safe where clerks stored their drawers containing their stamps and cash when not at the window (Tr. 62; Petitioner's Hearing Exhibit I). However, knowing the combination to the safe did not provide access to Petitioner's drawer because only she had a key to her drawer in the safe (Tr. 16-17, 77, 98; Exhibits to Respondent's Answer ("RX") 2, 8).

10. In April 1997, about 13-15 employees had keys to the Peachtree Corners Branch building (Tr. 62, 135-137; Petitioner's Hearing Exhibit H), and at one time in April 1997, the code for the building alarm system may have been written on the wall near the alarm controls inside the building (Tr. 107-109, 111; Petitioner's Hearing Exhibit P).

11. On about April 4, 1997, it was discovered that when a clerk's drawer was in the office safe, even though it was locked by the clerk, the drawer could be pushed in slightly (Tr. 39-45, 74, 156-157; Griev. Exh. H). This created a small opening at the front of the drawer that might have allowed someone to get their fingers over the drawer top and into the change compartment at the front of the drawer (Tr. 41, 73, 172, 189-190). Stamp coils and other stock could not be reached (Tr. 41, 73-74, 189-190). When this was brought to management's attention, within a few days wooden blocks were placed at the back of each compartment that prevented such movement of the drawers and any possible access (Tr. 42-43, 60, 94, 157-158; Griev. Exh. H).

12. During 1996 and 1997, an employee who knew the combination to the safe where the clerks stored their stamp drawers occasionally worked alone or with one other person in the Peachtree Corners Branch office on Sundays. He told at least one fellow worker that he enjoyed casino gambling. (Tr. 48, 104-105, 124; Petitioner's Hearing Exhibits F1-F19, G1-G12, O).

13. During the period from about September 1996 through April 1997, a number of the window clerks in the Peachtree Corners Branch experienced shortages in their window credits, but at least half of the 10 to 14 clerks with window credits stored in the safe had no significant shortages (Tr. 80-83, 89, 169-170, 173, 175, 178; Griev. Exh. J1-J7; Respondent's Hearing Exhibits 4-8). Additionally, Petitioner, as well as at least two other clerks had substantial overages on other counts during the period (Griev. Exh. D, J1, J6). A number of the clerks had window credits but seldom worked the window, and the audits during the period in question showed that these clerks did not have significant shortages while the largest shortages were in the credits of those who worked the window regularly (Tr. 80-83, 87, 175-178; Petitioner's Hearing Exhibits F-1, F-2, Respondent's Hearing Exhibits 4-8; Griev. Exh. D, J1-J7).

14. A supervisor in the office conducted a detailed review of Petitioner's window transactions for the 3½ months prior to the May 15 audit and determined that Petitioner had a higher than normal rate of "error corrects." Error corrects refer to accounting adjustments made at the end of the day by a clerk to correct erroneous entries made during the day. While correction of such errors would not cause a shortage, the high level of such corrections may indicate a lack of care on Petitioner's part. (Tr. 32, 57-58, 63; RX 7).

15. The F-1 Handbook establishes liability for financial losses as follows:

"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.

141 Other Employees' Liability

The postmaster or responsible manager consigns postal funds and accountable paper to other career employees. Employees are held strictly accountable for any loss unless evidence establishes that they followed the postal procedures established when performing their duties." (F-1 Handbook, Section 14).

16. Bargaining unit employees, such as Petitioner, are accountable to the postmaster responsible for assigning them their stamp credit (F-1 Handbook, Section 426.7).

DECISION

Respondent argues that it has demonstrated that Petitioner had a shortage in her credit in the amount of $1,048.25 for which she, under applicable regulations, is strictly liable. Petitioner does not challenge the count itself but rather argues that management and not she is responsible for any loss resulting from the shortage in her credit because of management's failures to follow its own security procedures.

In a Debt Collection Act proceeding, it is Respondent's burden to demonstrate that it suffered a loss in the amount of the debt claimed against the employee. Normally, demonstrating a shortage in the employee's credit is sufficient to do this, and Respondent has demonstrated that Petitioner was $1,048.25 short in the count of May 15, 1997 (Finding 2).⁽²⁾ Thus, Respondent has demonstrated that it suffered a loss in that amount.

Petitioner argues that she is not liable for the loss because Respondent failed to follow established security requirements. Petitioner focuses on Section 14 of the F-1 handbook (Finding 15), arguing that under the first part of Section 14, management (the postmaster) is liable for the full amount of any loss

in the office, including that from Petitioner's credit, because, according to Petitioner, the postmaster did not enforce Postal Service policies and procedures in managing the post office (Finding 15). Under Petitioner's argument, if management fails to enforce established policies and procedures there is no need to consider section 141 of the F-1 Handbook, and window clerks would not be responsible for losses to credits consigned specifically to their custody and to which they have exclusive access. This is not a correct interpretation of the F-1 liability provisions.

Certainly, if management's failure to enforce policies and procedures compromises the security of an employee's credit, the employee would not be liable for a loss to her credit that resulted from management's security failures and was not caused by her own fault. See Patricia Barnhart, P.S. Docket No. DCA-175, October 6, 1993 (Postmaster was liable for burglary loss to clerk's credit because the postmaster knowingly permitted storage of the clerk's cash overnight in the counterline instead of the safe). However, the mere existence of management failures to enforce policies and procedures in managing the office does not absolve clerks of all liability for shortages to their credits. There must be a likely cause and effect relationship between management's failure and the shortage.

Petitioner has made a shotgun attack on the security practices of the Peachtree Corners Branch, but, as discussed below, she has not shown a connection between any management lapses and the shortage in her credit. Petitioner did not prove that management failed to enforce applicable security policies and procedures. She did not prove facts to support her arguments (1) that the number of employees knowing the combination to the safe, having access to the code to the alarm system or possessing keys to the building (Findings 9, 10) violated Postal Service policies, (2) that management failed to change the combination to the safe when it should have, (3) that stock could be removed from Petitioner's drawer while it was stored in the safe or that management delayed in correcting the problem (Finding 11)⁽³⁾, (4) that a former employee in the office who occasionally worked alone in the post office and who enjoyed casino gambling (Finding 12) took stock from her drawer, or (5) that problems with the IRTs caused her accountability to be off and the count of her stock suspect. Evidence that the drawers of two clerks (not Petitioner's) could be opened with the same key had no bearing on whether Petitioner's drawer was compromised. Petitioner's speculation about the possible results of what she contends were security violations does not overcome the evidence that Petitioner had exclusive access to her credit during the period in question (Findings 1, 9-12).

Petitioner argues that there must have been some external explanation for the "rash" of shortages experienced by the window clerks in the office between about September 1996 and April 1997. However, Petitioner offered only anecdotal evidence that the number of shortages among the clerks was unusual, and Respondent demonstrated that at least one-half of the clerks in the office did not have shortages during the period and that it was the clerks who worked the window the most that had the shortages (Finding 13). This pattern would not be expected if, as Petitioner suggests, someone were stealing from the clerks' drawers stored in the safe, as there would be no reason that the inactive drawers would be less likely to be short than those of active clerks. Moreover, Petitioner and two other clerks had substantial overages in counts occurring during the period (Finding 13). This evidence is not sufficient to show that some external action beyond Petitioner's control caused the shortage.

Therefore, Petitioner remains responsible for her credit and is strictly accountable unless she shows that she followed the required procedures in performing her duties (Findings 15, 16). Petitioner did not testify at the hearing, and she presented no evidence that would demonstrate that she followed established procedures in managing her credit, instead focusing on her theory that management security failures were sufficient to relieve her of liability. Moreover, Respondent performed a detailed assessment of Petitioner's performance over the three months preceding her audit, and discovered what the supervisor believed were an inordinate number of errors made in routine transactions (Finding 14). Thus, Petitioner has not shown that she followed the established postal procedures when performing her duties (Finding 15), and, accordingly, she is liable for the full amount of the shortage, $1,048.25. Respondent may collect this amount by offset from Petitioner's salary.

The Petition is denied.

Norman D. Menegat
Administrative Judge

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1. The Petition included as an attachment a file used in the grievance of Respondent’s letter of demand for the shortage. The grievance file documents are numbered as exhibits, and the identifying numbers of those exhibits from the grievance file will be used for convenience.

2. Petitioner argues that any loss should be calculated by giving her credit for the $443.14 overage she had in the count immediately preceding those of May 14-15 (Findings 4, 5, 6). In refusing Petitioner’s request for such credit, the postmaster demanded a higher level of proof of a relationship between the earlier overage and the May 15 shortage than is required by the F-1--the postmaster required concrete, documentary evidence. See Nancy A. Anderton, P.S. Docket No. DCA 98-42, March 31, 1998, and cases cited in that decision. The F-1 Handbook obliges the postmaster to exercise her judgment to determine whether there is circumstantial evidence of a likely relationship that warrants offsetting the overage with the shortage. There could be any number or circumstances that might warrant an offset based on a relationship, and they do not turn on an absolute requirement for documentary proof. However, even though the postmaster failed to apply the correct standard, there is no evidence in the record that suggests any basis for finding the existence of a relationship between the overage and the shortage that is at issue in this proceeding.

3. Petitioner’s argument that with some sort of implement a person might have been able to extract stock from Petitioner’s drawer is pure speculation that cannot serve to relieve her from liability for the loss. Her argument that someone could have removed the blocks management placed to prevent movement of the drawers is also only speculation because, while the evidence demonstrated that removal would have been possible, there is no evidence any were ever removed.