In the Matter of the Petition by

MAUREEN BROOKS
7610 Maritime Lane

at

Springfield, VA 22153-1627

P.S. Docket No. DCA 02-489

APPEARANCE FOR PETITIONER:
William Brown
12 Mount Run
Tinton Falls, NJ  07753-7674

APPEARANCE FOR RESPONDENT:
Kevin M. Kozlowski
Labor Relations Specialist
United States Postal Service
8409 Lee Highway
Merrifield, VA  22081-9402

FINAL DECISION UNDER THE DEBT COLLECTION ACT OF 1982

            Petitioner, Maureen Brooks, filed a timely Petition for Hearing after receiving a Notice of Involuntary Administrative Salary Offsets dated October 23, 2002.  This Notice stated the Postal Service's intention to withhold $13,100.67 from Petitioner's salary to recover a shortage in an account at the post office Petitioner managed.

            A hearing was held in Arlington, Virginia on December 12, 2002.  The Postal Service presented testimony from Walter Honchar, Petitioner’s supervisor, and John Palastro, a Postal Inspector.  Petitioner testified on her own behalf, and also presented testimony from Arthur Cross and Chatika Copeland, two clerks that she supervised.  Both parties also relied on documents filed with the Petition and Respondent’s Answer, and Petitioner presented some additional documents at the hearing.  The following findings of fact are based on the entire record.

FINDINGS OF FACT

            1.  Petitioner has been a Postal Service employee for twenty-four years, a supervisor for fifteen years, and the branch manager of Buckingham Station in Arlington, Virginia since May of 2001.  Prior to that she managed another Arlington station for ten years.  (Tr. 80-81).^[1]

            2.  The usual procedure in closing the Buckingham Station each day is that cash for bank deposit is sent by Registered Mail™ via truck to the Merrifield Processing and Distribution Center at approximately 6:00 p.m.  If the cash deposit is not ready for the pickup driver, it is placed in a registered envelope in the safe used to hold Registered Mail packages.  It is then picked up early the next morning for delivery to Merrifield.  (Tr. 66-67, 79, 83, 94).

            3.  On May 14, 2002, because some of Petitioner’s regular clerks were not at work, Petitioner borrowed clerk Arthur Cross from another Arlington post office.  Mr. Cross is an experienced employee but does not work regularly at Buckingham.  He was assigned to close the station on May 14.  Because he was new to Buckingham, he did not have the cash deposit ready for the 6:00 p.m. driver.  Therefore, he prepared a deposit slip showing a total deposit of $13,100.67 ($12,954 in cash and $146.67 in checks).  He entered a registry number (RB234649095US) in a log book used to list items retained in the safe overnight and placed the log book in the safe.  (Tr. 65-67, 72-73, 82-83; IM Exs. 1, 2, 3, 4 and 6).

            4.  On May 23, Petitioner was notified by the Merrifield Accounting Office that the Buckingham bank deposit for May 14 did not arrive at Merrifield.  (Tr. 85, 95;     IM ¶1; IM Ex. 3).

            5.  The Postal Inspection Service investigated by interviewing Buckingham employees and examining records.  One of the records they examined was the Registry Dispatch Book from the registry cage at Buckingham.  The page that would have contained entries for May 14, 2002, was torn out of the book, but a laboratory analysis showed imprints on the page beneath the missing page.  One of the imprints was “RB234649095US,” the registry number that Mr. Cross assigned to the missing bank deposit.  Mr. Cross originally told the Postal Inspectors that he gave a registered package containing the bank deposit to Ms. Copeland, who placed it in the safe.  Ms. Copeland said that this did not happen.  When shown photographs of the imprints by the inspectors a few days later, Mr. Cross identified the handwriting as his, although he did not remember that he had made the log book entry or placed the package in the safe himself.  (Tr. 58, 60-61, 77-79; IM ¶¶5-8, Exs. 4-6).

            6.  The Inspection Service conducted polygraph examinations of several Buckingham employees, all of whom denied any involvement in the theft of the missing cash.  Although in the opinion of the examiner one of the employees was not truthful,^[2] the Inspection Service did not pursue their investigation because they concluded that several unauthorized persons had access to the safe.  (Tr. 46, 52, 54-55; IM ¶¶8, 11-14).

            7.  As part of his investigation, Inspector Palastro “conducted a limited security survey” of Buckingham procedures relating to the handling of registered packages.  In a supplement to his Investigative Memorandum, he listed several procedures and conditions that were not in accordance with Postal Service rules for handling Registered Mail.  One of these was that too many people had access to the registry cage and the safe contained therein.  At the time of the loss, as many as ten employees had access to the cage and the safe.  Since that time, Petitioner has made some procedural changes and corrections, including reducing to five the number of employees with the safe combination.  (Tr. 45, 53, 56-57, 97-98; IM Supp., July 17, 2002).

            8.  Postal Service Handbook DM-901, Registered Mail, includes the following pertinent provisions:

711.31  Daily Record

The supervisor must keep a daily record of employees working in the registry section on Form 1625, Record of Entry – Registry Section or Distribution Units.  Keep a separate record of employees detailed to that section.

711.4  Valuable Cage or Vault

Employees in charge of or working in the valuable cage or vault must record their times of entering and leaving the valuable cage or vault.

*  *  *

721.21  Individual

Handle Registered Mail so that individual responsibility can be assigned at all times, consistent with instructions in this handbook.

*  *  *

721.231  Description and Exception

Area responsibility occurs when a group of employees, rather than an individual employee, is responsible for the Registered Mail.  Keep the group size to a minimum and use Form 1625 to record all employees working with Registered Mail.

721.232 Authority for Area Responsibility

The manager of processing and distribution may permit area responsibility at an office when the cost of individual responsibility is prohibitive.^[3]

*  *  *

722.2  Security

Provide a safe, vault, separate cage, or locked container for valuable Registered Mail.  Assign one or more employees responsibility for valuable Registered Mail.  Do not permit other employees access to this unit.

*  *  *

723  Postal Employees’ Responsibility

Postmasters and postal employees are personally responsible for the wrong delivery, depredation, or loss of any Registered Mail because of negligence or disregard of instructions.

            9.  Postal Service Handbook F-1, Post Office Accounting Procedures, §§221.13-4 and 221.23-4 require that there be a witness to the consolidation of funds for deposit to the bank.

            10.  Handbook F-1, Section 14 provides:

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.

DECISION

            Respondent’s theory of liability is that Petitioner, as manager of Buckingham Station, was responsible for having proper security practices in place for the preparation of bank deposits and the handling of registered packages, and that her failure to do so created an atmosphere of lax security that facilitated the likely theft that occurred on May 14 or 15, 2002.  Respondent’s case is based entirely on the July 17, 2002 supplement to Inspector Palastro’s Investigative Memorandum, in which he listed several failures to comply with Postal Service Handbook DM-901 and the F-1 Handbook.

            To hold Petitioner liable based on this theory requires proof not only that she failed to follow some required security procedures, but also that such failure was a proximate cause of the loss.  The security lapses listed by Inspector Palastro include (1) leaving the registry cage unlocked during the day, thereby giving access to unauthorized persons, (2) too many people having the combination to the safe where registered articles were kept, (3) not keeping a log requiring all who enter the registry cage to sign in and out, (4) not using a “manifold registry dispatch book” (PS Form 3854) to log all registered items placed in safe,^[4] (5) misuse of burglar alarm system, in that all persons used the same access code, (6) not changing combination to safe when required or keeping a record of when combination was changed, and (7) not having a witness to preparation of bank deposits at close of business.

            Petitioner argues that she has already paid an appropriate penalty because Respondent has administered disciplinary action (Letter of Warning), based on the security issues reported by Inspector Palastro.  She also argues that the Postal Service should have made a greater effort to catch the thief rather than simply charge her with the loss.  As to the first argument, there may be cases in which disciplinary action rather than financial liability is appropriate, but there is no rule or regulation that requires the Postal Service to choose one over the other.  As to the second argument, Respondent does have an obligation to attempt to recover lost funds, but the record does not demonstrate that Respondent failed to do so, or that further effort by the Inspection Service would have been successful in recovering the money.

            Because of some facts that have been established, some of the security violations have no direct bearing on the loss.  For example, because the money was not lost before the close of business, the fact that the registry cage was left open during the day did not cause the loss.  Also, the type of form Mr. Cross used to log the item did not contribute to the loss.  Also, it is not clear that the burglar alarm code or the failure to change the safe combination had any effect on this theft.

            On the other hand, the failure to properly limit access to the safe, the failure to require persons entering the cage to log in and out, and the failure to require that someone witness preparation of bank deposits created an opportunity for theft.  The question to be resolved is whether these failures by Petitioner are sufficient to make her personally liable for the loss of the registered package.

            It may seem harsh to hold a manager liable for this type of loss, but if adherence to prescribed procedures would have prevented the theft or made identification of the thief a probability, application of the rules properly holds the manager accountable.  Petitioner’s claim that she did not know of the security requirements in DM-901 until after this incident is not a viable defense.  It is her job to know.  Had she established and maintained the required procedures and controls over access to registered packages, this loss would not have occurred.

            The Petition is denied.  Respondent may collect $13,100.67 from Petitioner’s salary.

Bruce R. Houston
Chief Administrative Law Judge

[1]  References to the hearing transcript are “Tr._.”  References to numbered exhibits attached to the Postal Inspection Service Investigative Memorandum dated July 16, 2002, that makes up Respondent’s Answer, will be “IM Ex._.” 

[2]  This person did not testify at the hearing.

[3]  There is no evidence that permission to use area responsibility was granted to Buckingham Station.

[4]  It is not clear from the evidence of record what type of “log” was kept at Buckingham.  Inspector Palastro’s Investigative Memorandum states in paragraph 5 that he “retrieved the Manifold Registry Dispatch Book containing PS Forms 3854 from the registry cage at Buckingham Station,” and that they found the imprints discussed in Finding #5 from this book.  Therefore, even if Buckingham was not using this book regularly, it appears that Mr. Cross did use it on May 14.