In the Matter of the Petition by

ALEXANDER BINETSKY
1013 Hilary  Avenue

at

Croydon, PA 19021-5560

P.S. Docket No. DCA 02-473

APPEARANCE FOR PETITIONER:
Albert E. Lum
5240 72nd Place
Maspeth, NY  11378-1516

APPEARANCE FOR RESPONDENT:
Miriam F. O'Leary
Labor Relations Specialist
United States Postal Service
P.O. Box 7956
Philadelphia, PA  19101-7956

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Alexander Binetsky, filed a timely Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets from the Supervisor, Financial Services, on October 21, 2002.  This Notice stated the Postal Service’s intention to withhold $2,422.52 from Petitioner’s salary to recover a financial loss from an account for which Petitioner was responsible.

            A hearing was held in Philadelphia, Pennsylvania on December 19, 2002.^[1]  The Postal Service presented testimony from Carmen Campagna, the Supervisor of Financial Services, and Dennis Carr, Manager of Customer Service Operations.  Petitioner testified in his own behalf and also presented testimony from Gregory Hamler, Petitioner’s supervisor, Eric Strickon, who assisted with an audit on August 3, 2000, and Nancy Jones, a sales associate at Adams Avenue Station.  Both parties relied on documents filed with the Petition and the Answer, and both parties submitted some additional documents at the hearing.  On agreement of the parties, a one-page Investigative Memorandum prepared by a Postal Inspector on August 14, 2000, was submitted by Respondent and made part of the record after the hearing was adjourned.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  Petitioner has been a Postal Service employee since 1986 and has been a supervisor since 1990.  In late 1999 or early 2000, Petitioner was assigned to be the custodian of the unit reserve accounts for three stations in Philadelphia – Frankford, Bridesburg, and Adams Avenue.  (Tr. 37, 52-53, 57-58, 72, 88).^[2]

            2.  The unit reserve account at Adams Avenue consists only of the “cash retained” portion.  Any stamp stock sent to Adams Avenue is placed directly into the floor stock.  “Cash retained” in a unit reserve is used to make change for clerks who conduct transactions with customers from the floor stock.  The custodian is required to keep the cash retained locked up, and no one else should have access to it.     (Tr. 29, 32-34, 54, 89).^[3]

            3.  At Adams Avenue the cash retained is kept in a separate compartment within a safe that also contains the cash drawers assigned to individual clerks and a drawer for the vending machine account.  Each clerk drawer, the vending drawer, and the unit reserve cash retained compartment has its own key.  The cash retained compartment is locked during the day, but the practice at Adams Avenue for some years was to leave the key to the cash retained compartment hanging on the wall near the safe.  Petitioner continued this practice when he became the custodian.  (Tr. 79-80, 83-86, 95).

            4.  On the afternoon of August 2, 2000, the Adams Avenue Station was robbed.  The thief, armed with a gun, threatened and struck one of the clerks, who then opened the unit reserve compartment of the safe, apparently using the key hanging on the wall.  The thief grabbed what money he could carry and ran from the post office.  (Tr. 73-74, 83-86; Investigative Memorandum, August 14, 2000).

            5.  On August 3, 2000, Mr. Strickon and Mr. DeLollis were assigned to conduct an audit to determine how much money had been stolen.  They counted all the clerk cash drawers, plus the drawer assigned to the vending machine account, and found a total of $1,187.61.  In the unit reserve cash retained compartment they found $820, for a total of $2,007.61.  Ms. Jones was present when these counts were done.  Office records showed that the total cash in all these accounts should have been $3,469.86, so they concluded that $1,462.25 had been lost.^[4]  There are no documents in the record to show from which account(s) the money was taken, but Ms. Jones recalls that “all the clerks came out okay, but the cash retained was down $1,462.”  (Tr. 47-48, 62-65, 75; PS Ex. 10A; Pet. Exs. 1 and 2).

            6.  No adjustment was made in the POS system after the robbery to change the accountability of the unit reserve “cash retained.”^[5]  Although the F-1 Handbook requires that the cash retained portion of a unit reserve be counted every accounting period, Petitioner did not regularly do that and did not count the Adams Avenue cash retained again until August 23, 2002.  This count showed a cash retained shortage of $4,896.52.  When the District Finance Office noted that this shortage had been posted on the daily financial report (PS Form 1412) for Adams Avenue, Petitioner was issued a Letter of Debt Determination for $4,896.52 by his supervisor.  (Tr. 9, 38, 79, 90-92, 98, 100-01; PS Exs. 1 and 1f).

            7.  Shortly after the Letter of Debt Determination was issued, it was determined that the amount $2,448.26 had been entered twice and also that Petitioner was entitled to another credit of $25.74.  Therefore, in the Notice of Involuntary Administrative Salary Offsets issued to Petitioner on October 11, 2002, the amount of the debt was reduced to $2,422.52.  (Tr. 11, 14-15, PS Exs. 3b and 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 shortage relative to a previously established balance, this constitutes proof of loss unless other evidence raises sufficient doubt about the accuracy of the previously established balance, or otherwise suggests that there may have been no actual loss.

            Respondent’s position is that Petitioner has demonstrated no correlation between his August 2002 shortage and the robbery that occurred more than two years earlier.  Part of Respondent’s argument is that Petitioner was the person responsible for financial management at Adams Avenue Station, including maintenance of all the pertinent records, and he should not benefit from his own failure to count his “cash retained” regularly as the F-1 Handbook requires.  Also, in response to Petitioner’s argument that he should be relieved of all liability because he did not have exclusive access to the cash retained, Respondent argues that his decision to make the unit cash retained available to others was clearly contrary to postal regulations and was done at his own risk.

            Petitioner makes two arguments.  First, he contends that the opening balance used to establish the amount of the shortage at the August 23, 2002 audit was not correct.  He argues that he should be given credit for $1,462.25 because the evidence shows that this amount was taken from his cash retained account by the robber on August 2, 2000, and that this amount was never entered into the POS system to reduce his account.  Second, he argues that he should not be liable for any loss from the cash retained account because it was the long-standing practice at Adams Avenue that other employees shared access to that account.

            Petitioner’s second argument fails because there is no evidence that management approved or condoned the practice of sharing access to the unit reserve cash retained with subordinates.  Even if Petitioner’s predecessors initiated this practice, that does not validate it.  Petitioner knew he was accountable for the unit reserve and he surely knew that allowing others to access the cash retained portion did not protect him from liability for losses.

            Petitioner’s first argument, however, has merit.  The only evidence as to the source of the money stolen by the robber came from Mr. Strickon and Ms. Jones.  Both support Petitioner’s claim that $1,462.25 was taken from his unit reserve cash retained.  There is also no evidence to contradict Petitioner’s claim, supported by Ms. Jones’ testimony, that this amount was never deducted from the unit reserve account.  Contrary to Respondent’s argument that Petitioner has shown no correlation between the robbery and his August 2002 shortage, this evidence indicates that there is a correlation.  Therefore, even though Respondent is correct in asserting that Petitioner failed in his responsibility to count the unit reserve cash retained every accounting period, and even though there appears to be no excuse for his failure to take any action for two years to establish a true account balance, the evidence of record shows that the loss established by the August 23, 2002 audit was only $960.27 ($2,422.52 - $1,462.25).^[6]

            The Petition is sustained in part and denied in part.  Respondent may collect $960.27 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, VA.  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 will be “PS Ex._,” and references to documents submitted by Petitioner will be “Pet. Ex._.”    

[3]  Postal Service Handbook F-1, Post Office Accounting Procedures, §486.1 (in the record as part of PS Ex. 11).

[4]  The Investigative Memorandum states that $1,316.75 was stolen.  The reason for the difference is that the robber dropped a container of coins as he ran from the building and $145.50 was recovered.

[5]  POS-One is the computerized cash and stamp stock management system.

[6]  Respondent has not argued that Petitioner should be held liable for the loss of money stolen at gunpoint by the robber.