In the Matter of the Petition by                                ) 
                                                                               )
HARVEY MARCUS                                                 )
P.O. Box 773111                                                    )
                                                                               )
              at                                                              )
                                                                               )
Coral Springs, FL 33077-3111                               )      P.S. Docket No. DCA 99-336

APPEARANCE FOR PETITIONER:                           Jeffrey L. Riddell
                                                                               1950 NE 6th Street
                                                                               Pompano Beach, FL 33060-6541

APPEARANCE FOR RESPONDENT:                       Toby L. Lowe
                                                                               Labor Relations Specialist
                                                                               United States Postal Service
                                                                               2200 NW 72nd Avenue, Room 212
                                                                               Miami, FL 33152-9401

Petitioner, Harvey Marcus, filed a timely Petition after receiving a Notice of Involuntary Administrative Salary Offsets from his supervisor on July 7, 1999. This Notice stated the Postal Service's intention to withhold $8,407.06 from Petitioner's salary to recover for a shortage in Petitioner's account disclosed by an audit on February 22, 1996.

A hearing was held on November 18, 1999, in Pompano Beach, Florida. The Postal Service presented testimony from Luis Mongilia, Petitioner's supervisor at the time of the audit, Peter Picard, who participated in the audit, Thomas Bender, a Postal Inspector who investigated the shortage, and James Mulvey and James Salmeri, two other supervisors. Mr. Marcus testified in his own behalf, and his representative, Jeffrey Riddell, testified briefly. Both parties also relied on documents attached to the Petition and the Answer, and both parties submitted additional documents at the hearing. The following findings of fact are based on the entire record, including observation of the witnesses and their demeanor.

1. During the time pertinent to this case, Petitioner worked as a window clerk at the Atlantic Branch Post Office in Coral Springs, Florida (Tr. 25).⁽¹⁾

2. Stamp stock accounts assigned to clerks are required to be audited every four months (Tr. 25, 184). On February 22, 1996, Petitioner was due to be audited, but he was on leave. Every clerk is required to designate some other person as a witness to participate in an audit in case the clerk to be audited is unavailable. Petitioner's designated witness was Peter Picard, another clerk at the Atlantic Branch. Prior to the audit, Petitioner's supervisor, Luis Mongilia, called Petitioner at home and Petitioner gave approval for Mr. Picard to participate in the audit. (Tr. 8-9, 60-61; PS Ex. 10, pp. 10-11).

3. Spare keys to a clerk's stamp stock supply are kept in the vault in a PS Form 3977, which is a sealed envelope. The name of the clerk's designated witness and the number of keys contained therein are printed on the outside of the envelope. When the clerk is not present, as in this case, it is necessary to use the spare key(s) to gain access to his stock. Mr. Mongilia and Mr. Picard opened the envelope and removed the keys. Neither is able to recall now how many keys were in the envelope, but they found no discrepancy between what was logged on the form and what was in the envelope (Tr. 40, 80). When they finished the audit, they replaced the keys in a new Form 3977, sealed it, signed it and dated it. (Tr. 13, 39-40, 55, 65, 80, 82-85; PS Ex. 10, pp. 1-2). They did not save the original Form 3977, although the instructions on the form itself state that, "the supervisor must maintain the inventory with the opened envelope." (Tr. 65-66; Pet. Ex. 3).

4. Mr. Mongilia and Mr. Picard counted all of Petitioner's stamp stock and cash on February 22, 1996, including some that Petitioner had left stored in a drawer in the window counterline. The total amount present was $12,012.03. The opening balance, i.e., the amount that should have been present, was $20,419.09, leaving a shortage of $8,407.06. (Tr. 7-8, 15, 76-78; PS Ex. 9 and 9A).

5. On February 23, 1996, because the shortage was so large, Mr. Mulvey and Mr. Picard counted Petitioner's stock again, with the same result (Tr. 7, 11, 87, 110-11; PS Ex. 8 and 8A). On March 5, 1996, after Petitioner returned to work, he and Mr. Mulvey counted the stock a third time. During this audit, Petitioner found an additional $43.50 of stock that Mr. Mulvey agreed should be added to his account. Respondent now agrees that this should have been subtracted from the $8,407.06, making the alleged debt $8,363.56. (Tr. 110-12, 202; PS Ex. 7).

6. The rules regarding security of stamp stock do not permit a clerk to store stamp stock in a drawer at the window counter except when the clerk is working at the window. At all other times, each clerk's stock must be locked in that clerk's drawer inside a safe or vault. (Tr. 15, 72, 79). Petitioner was aware of this rule, but sometimes stored as much as $10,000 worth of stamp stock in this drawer, even when not working at the window (Tr. 161, 165-67).

7. Petitioner's audit history shows that on the four audits immediately preceding the February 22, 1996 audit, he had shortages of $589.05, $5,299.82, $2,707.38, and $2,104.82. (Tr. 93; PS. Ex. 1 and PS Ex. 6). After the February 1996 audits, he was interviewed by postal inspectors who were investigating this series of large shortages. Petitioner attributed the shortages to negligence, stating that he was sometimes careless in leaving his stock unlocked and unattended. (Tr. 94, 160, 171; PS Ex. 1). Petitioner also told his supervisors, Mulvey and Mongilia, that he sometimes left stock unlocked in the counterline drawer and that he believed someone took stock from that drawer (Tr. 15-16, 112; PS Ex. 10, pp. 6-7).

8. In January 1996, Mark Hynes, another clerk at the Atlantic Branch, filed a grievance, claiming that a gap between the clerks' stock drawers when the drawers were locked in the vault was large enough for a person to reach a hand in, thereby making the stock insecure. Management did not concede that the gap was that large, but did agree to have repairs done to make the fit tighter. Mr. Hynes' grievance was not based on any shortage in his account. Petitioner had never made any complaint about this matter prior to his February 1996 shortage. (Tr. 49-53, 152-56).

9. At some time shortly after the February 22, 1996 count, Petitioner told Mr. Mongilia that there were extra keys in the "cage." The cage is a secure area where accountable property is kept. Mr. Mongilia checked these keys to see if they opened any counterline drawers or any other locks. These keys did not open any locks in the post office, and were eventually discarded. (Tr. 18-19, 113-14).

10. None of the other clerks at Atlantic Branch had large shortages during this period of time (Tr. 65). Because of Petitioner's large shortage on the February 1996 counts, the supervisors also counted all other clerks and the main stock. All were within tolerance (Tr. 121).

11. There is no "master key" that unlocks counterline drawers (Tr. 177).

Respondent argues that the counts on February 22 and 23, and March 5, 1996, were done properly, that Petitioner does not dispute the accuracy of these counts, and that they establish a loss of $8,363.56. Respondent also argues that Petitioner's audit history and his admission of carelessness in leaving stamp stock unsecured precludes any finding that Petitioner exercised reasonable care or followed established procedures in managing his stock. Finally, Respondent argues that Petitioner's security issues are not supported by the evidence, and that, even if management did fail to follow some procedures, there is nothing but speculation to connect those failures to Petitioner's loss, and they provide no basis for relieving him of liability.

Petitioner contends that management failed in its responsibility to provide a secure environment in which clerks can maintain the integrity of the stamp stock assigned to them. Petitioner cites the failure of Mr. Mongilia to keep the original Form 3977 in which Petitioner's spare keys were contained (see Finding of Fact #3), the security incident raised by Mr. Hynes' grievance (see FOF #8), and some uncertainty over whether the combination to the vault was changed each time a new supervisor took over. In his testimony, Petitioner espoused the theory that there was an unaccounted for key that opened the counterline drawer in which he kept much of his stamp stock, and that someone had used that key to take stock from his drawer on more than one occasion.

The standard for determining an employee’s liability in a case such as this provides that employees to whom postal funds and accountable paper are consigned (such as Petitioner) "are held strictly accountable for any loss unless evidence establishes that they exercised reasonable care in the performance of their duties." Postal Service Handbook F-1, Post Office Accounting Procedures (April 1991), §132.⁽²⁾ Respondent’s burden of proof in a case of unexplained shortage is to show that a loss occurred from an account for which the employee is accountable. Respondent is not required to prove any specific dereliction, or act of negligence, by Petitioner. When a properly conducted inventory, or audit, shows a stock shortage relative to a previously established balance, this constitutes proof of loss unless other evidence raises sufficient doubt about the accuracy of the inventory or the previously established balance, or otherwise suggests that there may have been no actual loss. If Respondent proves a loss, the burden then shifts to the employee to show that he or she exercised reasonable care in managing the assigned stamp stock, or to present other evidence that would warrant relieving the employee of liability.

In this case, Petitioner has not challenged the accuracy of the three audits performed on February 22 and 23 and March 5, 1996, and there is no evidence to suggest that the previously established balance was not correct. Therefore, the evidence proves a loss of $8,363.56. Petitioner's argument that he should be relieved from liability based on the security issues fails because the evidence does not establish any actual breach of security, and because the evidence fails to establish a causal connection between Petitioner's shortage and any failure by management to follow every procedure to the letter. Petitioner argues that Mr. Mongilia did not record all the required information on some of the clerks' Form 3977s, and that the combination to the vault was not changed promptly each time a new supervisor took over. The evidence on these points is not conclusive one way or the other, but even if there were some management lapses, Petitioner will not be relieved from liability without some showing of a likelihood that these actions actually affected the security of his stamp stock.

It is significant, in light of Petitioner's arguments about general lack of security, that no one other than Petitioner suffered any significant shortages during this time period. There is also no persuasive evidence that anyone other than Petitioner had access to his stock. His theory about an unaccounted for key is pure speculation, and his argument that evidence to prove this was destroyed because Mr. Mongilia did not save the Form 3977 is not persuasive. Clearly, Mr. Mongilia and Mr. Picard had access to the counterline drawer when they performed the audit. Although they cannot now recall how many keys were contained in the Form 3977, both testified credibly that they followed prescribed procedures in opening the envelope and later re-sealing a new envelope, and noted no discrepancy. (see FOF #3). One must assume that they obtained the drawer key from the envelope. Surely, they did not obtain it from an unknown thief who had previously been using it to steal from Petitioner's drawer, and there was no master key they could have used. Therefore, while it would have been helpful if Mr. Mongilia had retained the original Form 3977, there is no reason to believe it would have proved the existence of a missing key. Petitioner provided no evidence that he ever had possession of another key that is not now accounted for, or that any specific number of keys should have been in the envelope.

The evidence pertaining to the issue of reasonable care is weighted heavily against Petitioner. Although he carries the burden of proof on this issue, Petitioner presented no affirmative evidence that he exercised reasonable care or that he followed established procedures. On the other hand, his audit history suggests the opposite (see FOF #7), and he told his supervisors and the postal inspectors, shortly after the February 1996 loss was discovered, that he sometimes left his stock unattended and not properly secured. Even if he locked the counterline drawer, it clearly was not proper procedure to leave stamp stock there overnight, and he offers no justification for doing so.

CONCLUSION

Respondent has established a loss of $8,363.56 from Petitioner's account, and the evidence does not establish that Petitioner exercised reasonable care, or any other basis for relieving him of liability. The Petition is denied. Respondent may collect $8,363.56 from Petitioner's salary.

Bruce R. Houston
Chief Administrative Law Judge

¹ References to the hearing transcript are "Tr. _." References to documents attached to Respondent's Answer will be "PS Ex. _," and references to Petitioner's

² The F-1 Handbook was revised effective November 1996. However, because the events relevant to this case arose before then, the April 1991 edition applies. The language stating the standard of liability is slightly different, but that difference has no bearing on the outcome of this case.