In the Matter of the Petition by

CATHERINE FAIR
10513 S.W. 124th Place

at

Miami, FL 33186-3647

P. S. Docket No. DCA 01-332

APPEARANCE FOR PETITIONER:
Joseph Brady
7910 NW 25th Street, Suite 200
Miami, FL  33122-1622

APPEARANCE FOR RESPONDENT:
Laura Taylor-Laury
Labor Relations Specialist
United States Postal Service
2200 NW 72nd Avenue
Miami, FL  33152-0779

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Catherine Fair, filed a Petition for Hearing under the Debt Collection Act after the Postal Service began withholding money from her salary to recover for a $4,460.26 shortage in a window clerk account for which Petitioner was responsible.

            A hearing was held in Miami, Florida on February 7, 2002.[1]  The Postal Service presented testimony from Ernie Green, Supervisor of Customer Service at the Homestead, Florida Post Office, and Mark Gibson, the Homestead Postmaster.  Petitioner testified in her own behalf, and also called Camille Lucas and Carmen Castillo, two other employees at the Homestead Post Office during the time pertinent to this case.  Both sides also relied on documents filed with the Petition and the Answer, and Respondent presented five additional documents at the hearing.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  During the time pertinent to this case, Petitioner was a window clerk at the main post office in Homestead, Florida.  As such, she was assigned a flexible credit account for which she was responsible.  (Tr. 15, 79).[2]

            2.  On February 4, 1997, Petitioner's supervisor, Mr. Green, conducted a regular periodic audit of Petitioner's account and found it to be $4,465.29 short.  He issued Petitioner a letter of demand for that amount.  Petitioner participated in the count and, at the conclusion of the count, asked for a recount.  (Tr. 15-16, 41-42; PS Ex. 1, pp. 3-6).

            3.  On February 7, 1997, Mr. Green and Petitioner did a recount.  This time, the shortage was found to be $4,460.26.  Petitioner signed a PS Form 3294, Cash and Stamp Stock Count and Summary indicating her agreement with the accuracy of the count.  Mr. Green issued Petitioner a second letter of demand for $4,460.26 on February 7, 1997.  (Tr. 16, 41-42; PS Ex. 2).

            4.  On receipt of the letters of demand, Petitioner's union filed a grievance on her behalf under labor/management procedures.  The only contention she made at that time was that she exercised reasonable care in performing her duties.  (PS Ex. 10).

            5.  When conducting an audit, the opening balance, i.e., the amount that should be present in an employee's account, is obtained from the previous day's Form 1412, a record of daily financial transactions.  That was the source of the figure $9,184.92, shown as Petitioner's opening balance on the PS Forms 3294 for February 4 and February 7, 1997.  That particular Form 1412 is no longer available, but Petitioner testified that she had no reason to question the accuracy of the opening balance when the counts were done.  (Tr. 28, 82; PS Ex. 1, p. 3; PS Ex. 2, p. 3).

            6.  At the time he audited Petitioner's account on February 4, 1997, Mr. Green also conducted a "key check."  This means that he checked to see that spare keys to Petitioner's stamp drawer were properly secured and that Petitioner's keys did not unlock any other person's stamp drawer.  Records of key checks are kept in logs that are dated and signed by the supervisor and the employee each time a key check is performed.  Mr. Green and Petitioner each signed these logs indicating the key checks were done on February 4, 1997.  The logs also contain dates and signatures of many other employees indicating key checks done for those employees in 1996 and 1997.  (Tr. 18-19, 24-26, 41; PS Exs. 8 and 9).  

            7.  Petitioner's audit history shows that she had a $1,458.93 shortage on an audit conducted on May 24, 1996 and a $6,188.03 shortage on an audit conducted on September 10, 1996.  Her account was within tolerance on an audit done on October 9, 1996.  (Tr. 17-18; PS Ex. 5).

DECISION

            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 “are held strictly accountable for any loss unless evidence establishes that they followed the postal procedures established when performing their duties.”  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 that any specific dereliction or act of negligence by Petitioner caused the loss.  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.

            In this case, Petitioner challenged the audit because the Form 1412s and some other daily records for that time, February 1997, are no longer available.  However, Petitioner presented nothing that raises a doubt about the accuracy of the audit or the opening balance.  She signed the PS Form 3294 on February 7, 1997, indicating agreement with the accuracy of the count, and she testified that she had no reason to question the opening balance.  (See Findings of Fact #3 and #5).  Petitioner also presented no evidence of any regulation, rule, or policy to dispute Respondent's assertion that there is no requirement to keep these records for more than three years.  Perhaps it would be a wise practice, as Petitioner argues, that all records be kept when a shortage is disputed.  However, when Petitioner filed her grievance immediately after receiving the first letter of demand in February 1997, she made no allegation that there was any discrepancy in the records, and her general argument now that she has been harmed in this case by the unavailability of records fails because she made no showing as to how these records would have assisted her in presenting her case.  Through the testimony of Mr. Green and the PS Form 3294 for the audit of February 7, 1997, Respondent has carried its burden of proving a loss of $4,460.26.

            Petitioner also argues that she should be relieved of liability because management failed to provide adequate security for Petitioner's stamp stock.  This is based solely on Ms. Lucas's testimony that she was responsible for buying locks for the Homestead Post Office in the years 1992-95, and that sometime in 1998 she discovered that one group of locks that had been purchased were keyed alike, meaning that all could be opened with the same key.  She had no information that Petitioner's locks were affected by this, however, and Petitioner gave no testimony that she ever had a problem with the security of her stamp stock drawer.  Nor did Petitioner raise any security issue when she filed her grievance in 1997.  Ms. Lucas's testimony does not outweigh Mr. Green's testimony, supported by the key check logs, that he performed the required key checks when he audited Petitioner's and other clerks' accounts in 1996 and 1997.  Further, it is highly unlikely that a security problem of the magnitude suggested by Ms. Lucas could have gone unnoticed for more than two years or never been noted on any of the keys checks conducted by Mr. Green.

            Finally, Petitioner argues that she should be relieved of liability because she exercised reasonable care in performing her duties.[3]  She provided little specific evidence of this, other than to testify that she was careful in selling money orders and that she checked her Form 1412 each evening to make sure her account was in balance.  She was supported to some extent by a co-worker, Ms. Castillo, who testified that in her opinion Petitioner exercised reasonable care.  The fact that Petitioner had other large shortages on two of the three audits immediately preceding the one in issue here casts doubt on this evidence, however.  I cannot conclude that Petitioner should be relieved of liability because she followed established procedures or exercised reasonable care in performing her duties.

            The Petition is denied.  Respondent may collect $4,460.26 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 attached to Respondent's Answer and supplemental documents filed by Respondent will be "PS Ex._."

     [3]  The current Handbook F-1, quoted above, states that an employee may be relieved of liability if ". . . evidence establishes that they followed the postal procedures . . .."  An earlier version of the Handbook F-1 used the phrase "exercised reasonable care," which is also still used in the labor agreement.  For purposes of this case, it is assumed that these standards are not different.