GAO:USPS Web-Based Awards System Inconsistent With Published Policy

The GAO Report on Misuse of Government credit cards included three cases surrounding USPS:

Multiple merchants
Web-based awards system inconsistent with published agency policy
USPS $15,700

• USPS purchased noncash award items—some costing over $600—including briefcases, music systems, 30 GB iPods, and iPod docking stations.

• The USPS Employment and Labor Relations Manual (ELM) 18, subchapter 470, specifies that noncash awards should not exceed $50.

• USPS officials maintain that their internal Web-based awards system allows for noncash awards up to $3,000, which is inconsistent with the published ELM policy.

• According to USPS officials, a January 2006 memo overrode the ELM and allowed for noncash awards over $50.

• We found that although the internally issued memo addressed income tax consequence of awards, the memo did not specifically state that it was meant to supersede the ELM, address the inconsistency in policy, or establish a noncash awards threshold.

• USPS officials informed us that a correction of its award policy is currently under way to address the inconsistencies described above.

Other cases cited in GAO report

Ruth’s Chris Steakhouse
Excessive cost
USPS 13,500

• The cardholders charged dinner for 81 individuals at more than $13,500

Case 7 relates to the $13,500 that USPS spent on food at the National Postal Forum in Orlando, Florida, in 2006. For this occasion, USPS paid for 81 dinners averaging over $160 per person for customers of the Postal Customer Council 32 at an upscale steak restaurant. Further, USPS paid for over 200 appetizers and over $3,000 of alcohol, including more than 40 bottles of wine costing more than $50 each and brand-name liquor such as Courvoisier, Belvedere, and Johnny Walker Gold.

Postmaster’s Spending on Online Dating Services 

Case 4 involves a USPS postmaster who fraudulently used the government purchase card for personal gain. Specifically, from April 2004, through October 2006, the cardholder made more than 15 unauthorized charges from various online dating services totaling more than $1,100. These were the only purchases made by this cardholder during our audit period, yet the cardholder’s approving official did not detect any of the fraudulent credit card activity. According to USPS officials, this person was also under an internal administrative investigation for viewing pornography on a government computer. Based on the administrative review, the cardholder was removed from his position in November 2006 after working out an agreement with USPS in which he was authorized to remain on sick leave until his retirement date in May 2007. In April the USPS Office of Inspector General issued a demand letter and recovered the fraudulent Internet dating service charges.

GAO Report