In the Matter of the Petition by

NOREEN A. COUTURE
14 Ridgeway Road

           at

Hampden, MA 01036-9731

P.S. Docket No. DCA 99-399

APPEARANCE FOR PETITIONER:    David W. Deakin, Jr.
                                                        23 East Main Street
                                                        Mystic, CT 06355-9998

APPEARANCE FOR RESPONDENT: Mark G. Forgue
                                                        Labor Relations Specialist
                                                        United States Postal Service
                                                        190 Fiberloid Street
                                                        Springfield, MA 01152-9405

Petitioner, Noreen Couture, filed a Petition for Hearing after being informed that the Postal Service intended to withhold $152.14 from her salary to recover for a shortage in her account disclosed by an audit on March 25, 1999.

A hearing was held in Springfield, Massachusetts on January 19, 2000.⁽¹⁾ At the outset, the Postal Service representative announced that a $19.00 portion of the alleged debt had been withdrawn. Therefore, the amount in issue is $133.14. The Postal Service presented testimony from Robert Lane, a Postal Systems Coordinator, who directed that the March 25, 1999 audit be performed, Henry Naglack, the Acting Post Office Operations Manager and Petitioner's supervisor, Richard Beaudry, who conducted the audit, and Theresa Lapan, who witnessed the audit. Petitioner testified in her own behalf. Both parties also relied on documents attached to the Petition and the Answer, and also submitted some additional documents at the hearing. The following findings of fact are based on the entire record.

1. Petitioner has been the postmaster in Williamsburg, Massachusetts since April 1996. On July 10, 1998, she was removed from that position temporarily and placed on administrative leave. The Acting Manager of Post Office Operations, Henry Naglack, gave her a memorandum on that date stating, "[Y]ou are not to enter the premises of the Williamsburg Post Office for any reason." The memorandum does not spell out the reason for this action, but refers to "the allegations made against you, as discussed in our meeting on Friday, July 10." (Tr. 44, 103, 141-43; Pet. Ex. 2).⁽²⁾

2. The purpose of the July 10 meeting was a "pre-disciplinary" meeting, to discuss possible action against Petitioner for allowing a window clerk who had failed a training test to continue to work the window. During the meeting, Mr. Naglack also raised an issue over an allegation made against Petitioner by an employee who claimed that Petitioner had created a hostile work environment by screaming at, and grabbing, the employee. (Tr. 146-47). At some point thereafter, Petitioner was given a Letter of Warning over the clerk training issue (Tr. 111). Sometime soon after Petitioner was removed from the office, the Postal Service did a "climate assessment," which included interviews with all employees about the work environment. It is unclear whether this matter has been concluded, but no disciplinary action has been taken against Petitioner, and her official job title is still Williamsburg Postmaster, although she has been detailed elsewhere since August 1998. (Tr. 45, 123-29, 132, 145).

3. From July 11, 1998, until August 10, 1998, Petitioner was on administrative leave. She was then detailed to another office at another location and is still working there. On July 13, 1998, she was called back to the Williamsburg Post Office to participate in a transfer of the main stock of that office to Richard Beaudry who was to be the Officer-in-Charge. (Tr. 15, 18, 103-04, 107, 144, 153). In about November 1998, the Manager of Post Office Operations, Jeannette Price, gave Petitioner permission to return to the Williamsburg Post Office to retrieve some documents she needed to prepare an annual merit evaluation. Petitioner called Mr. Beaudry and arranged to do this late one afternoon. No other employees were present while Petitioner was at the office. (Tr. 65, 126-28).

4. While Petitioner was postmaster, she also worked the window and had a flexible credit account assigned to her. When she left the office in July 1998, this account was locked in the safe and no one else used it. This account had been last audited in May 1998. (Tr. 24, 53, 100-01, 133-34). In March 1999, Robert Lane, a Postal Systems Coordinator, requested that Petitioner's stamp stock drawer, her flexible credit account, be audited, because it contained some stamps that were required to be turned in. He directed Richard Beaudry, the OIC, to do the count and to use a witness who had previously been designated by Petitioner.⁽³⁾ Mr. Lane knew that Petitioner had been removed from the Williamsburg office and directed not to return, and neither he nor Mr. Beaudry made any attempt to contact her and tell her an audit was going to be conducted.⁽⁴⁾ Nor did they consult with Mr. Naglack or Ms. Price to discuss whether Petitioner should be given an opportunity to be present. (Tr. 10-11, 26, 46-47, 50, 54-55). Petitioner was on duty on March 25, 1999, and was reachable by telephone. Had she been called, she could have been present for the audit within a relatively short time. (Tr. 108-09).

5. On March 25, 1999, Mr. Beaudry opened the PS Form 3977 in the presence of Theresa Lapan, Petitioner's designated witness. Mr. Beaudry and Ms. Lapan then audited Petitioner's stamp stock drawer and found it to be $133.14 short. Each of them counted each denomination of stamps separately and recorded their counts on PS Form 3294, Cash and Stamp Stock Count and Summary, each using a separate form. They checked each count to be sure that their totals matched. Because all their totals did match, they did not do a second count. Each signed both copies of the Form 3294. (Tr. 52, 56, 59, 74, 79-80; Pet. Atch., pp. 6-9; PS Ex. 3).

6. Handbook F-1, Post Office Accounting Procedures, contains the following provision pertinent to employee audits:

426.2 Protecting Stamp Credits

3>  Grant an employee the opportunity to be present whenever his or her financial accountability is inventoried or audited. If the employee is not available, a witness of the employee's choice must be present. Each employee assigned a stamp credit must furnish the installation head two names of postal employees (in order of precedence) whom the employee chooses to witness the audit or inventory when he or she is absent. Enter the names of the selected witnesses on Form 3977.

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 followed the postal procedures established when performing their duties." Postal Service Handbook F-1, Post Office Accounting Procedures (November 1996), §141. 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 followed established postal procedures in managing the assigned stamp stock, or to present other evidence that would warrant relieving the employee of liability.

The primary issue in this case is whether there was a "properly conducted inventory, or audit." Petitioner argues that she was "available" within the meaning of §426.2, quoted above, and that she was improperly denied her right to be present at the audit. As to the accuracy of the audit, she contends that it is common practice to do a second count when an employee is short, and Mr. Beaudry and Ms. Lapan counted only once. She also argues that the unfairness of conducting the count in her absence is further demonstrated by the fact that Ms. Lapan was one of the employees who made negative comments about Petitioner during the "climate assessment." Finally, Petitioner argues that Respondent failed to comply with procedural rules by not providing requested documents to Petitioner within five days, as is required by §452.231 of the Employee and Labor Relations Manual (ELM).

Respondent argues that management's decision to bar Petitioner from the Williamsburg Post Office was reasonable, that Mr. Lane and Mr. Beaudry were under no obligation to notify Petitioner that an audit would be conducted in her absence, and that Mr. Beaudry and Ms. Lapan followed all procedural rules in performing the audit. Respondent also argues that there is no basis for challenging the accuracy of the audit and, therefore, a loss of $133.14 is established. As to the delay in providing Petitioner with copies of certain records, Respondent argues that the delay was only a matter of a few days, and points to Petitioner's admission in her testimony that this delay caused her no harm in preparing and presenting her case in this proceeding.

The regulation (§426.2 quoted above) does not define the term "available," nor does it specify who is empowered to decide whether an employee is "available." A management decision to direct an employee to stay away from an office from which the employee has been temporarily removed is entitled to some deference. (See Michael J. Riordan, P.S. Docket No. DCA 97-54 (June 2, 1997). The facts of this case, however, do not support a conclusion that Petitioner was not available. There is no evidence that anyone's safety was in danger, eight months had passed since Petitioner had been removed, and she had been permitted to return to the office for business reasons twice during the interim. She was on duty when the audit was conducted, there was no apparent urgency in doing the count, and Respondent has not shown that some similar arrangement for her return to the office could not have been made. I conclude that the Postal Service failed to comply with the requirements of the quoted portion of §426, Handbook F-1. Therefore, the results of the audit conducted by Mr. Beaudry and Ms. Lapan cannot be used to prove a shortage in Petitioner's account. Joann Graham, P.S. Docket No. DCA 96-386 (January 2, 1997), and Larry G. Bender, P.S. Docket No. DCA-178 (October 28, 1993).

There being no other evidence to prove a loss to the Postal Service, the Petition is granted. Respondent may not collect money from Petitioner's salary.

Bruce R. Houston
Chief Administrative Law Judge

¹ The hearing was conducted by the undersigned Administrative Law Judge via speaker-telephone from Arlington, Virginia. All other participants, including the court reporter, were present in a conference room at the hearing site.
² References to the hearing transcript are "Tr. _." References to documents introduced at the hearing are "PS Ex. _," or "Pet. Ex. _." Documents attached to the Petition or the Answer are identified as such.
³ Employees who hold a flexible credit account are required to designate, in writing, another employee to witness a credit audit if the accountable employee is unavailable. This is done on a PS Form 3977, which is a sealed envelope that holds a spare key to the employee's stock drawer.
⁴ In November 1998, in connection with an unrelated financial matter, Mr. Lane asked Petitioner if she could come to the office to help look into it, but Petitioner replied that she had been instructed to contact the office only by electronic mail. (Tr. 11; PS. Ex. 1).
⁵ On the Form 3977, Petitioner named two witnesses, Ms. Lapan being listed first.