From The USPS Office of Inspector General (OIG)
This report presents the results of our review of high-risk contract postal units (CPU) (Project Number 08BD009FF006). The U.S. Postal Service Office of Inspector General
(OIG) performed this self-initiated review to test selected transactions, address financial risk, and provide feedback to management to improve financial operations nationwide.
Host Post Offices, which are the post offices responsible for overseeing CPUs, did not provide sufficient oversight of the CPUs we reviewed, including collecting debts and
putting information into the financial system. Specifically:
• Host Post Office personnel did not always enter CPU financial information into the financial system in a timely manner. Our audit disclosed that employes at seven CPUs entered financial information from 6 to 13 days late.1 In conducting further analysis, we determined that, as of September 30, 2008, Host Post Offices took 5 days or longer to enter financial information at 114 of 2,901 CPU sites nationwide.
• Host Post Offices did not collect $76,643 in outstanding stamp and cash shortages from eight CPUs we reviewed. As of September 30, 2008, there was $162,993 in outstanding cash and stamp shortages for all CPUs nationwide.
• Host Post Offices improperly allowed CPUs to issue $14,198 in unauthorized and unsupported disbursements. This amount included $2,434in Express Mail refunds3 and other financial expenses and $11,764 for disbursements without supporting documents.
• Personnel at Host Post Offices responsible for two CPUs were unresponsive to our requests for documentation for disbursements totaling $11,042. We consider
these disbursements unsupported questioned costs.
During discussions with personnel at Host Post Offices, employees attributed these issues to employee turnover, inadequate training, and other higher priority duties. As a
result, the Postal Service has not collected $76,643 in funds owed by CPUs for stamp and cash shortages, and $25,240 in unauthorized and unsupported expenses.
We judgmentally selected the CPUs we reviewed based on risk factors using the OIG Financial Risk Model and, as such, we are concerned that the issues identified at these
CPUs could be occurring at others throughout the country. Specifically, we noted that, as of December 31, 2008, there were over $200,000 in uncollected stamp credit
shortages at CPUs nationwide. In addition, 14 units closed between August 2003 and May 2008 never cleared over $136,000 in stamp stock accountability. Consequently,
we believe the Postal Service can improve its oversight of CPUs in order to mitigate these expenses and reduce potential impropriety
CPUs are stations, branches, and community post offices operated under contract by individuals who are not Postal Service employees. Contracts to operate CPUs provide
that the contractor will transact specified postal business. During our quarterly analyses of the Financial Risk Model, we identified unusual expenses and other high-risk financial activity occurring at CPUs throughout the country. The transactions indicate potential financial mismanagement and may involve funds owed to the Postal Service. We designed this limited scope review to evaluate these risk factors at selected CPUs.