OIG Criticizes USPS Oversight Of Grievance Settlements And Questions Payments to Union Officials

Recent audit report from the USPS Office of Inspector General :

Most Postal Service bargaining unit employees are represented by one of the four major unions. The national agreements signed by senior-level management and the four union presidents include grievance-arbitration procedures that Postal Service management, bargaining unit employees (also referred to as craft employees), and union representatives must follow. These procedures provide guidance for resolving workplace disputes, differences, disagreements, and complaints. The Postal Service pays millions of dollars in grievance settlements; in fiscal year (FY) 2008 and FY 2009 they paid $250 million and $179 million respectively. As a result, it is important to ensure the Postal Service has appropriate internal controls in place.


Management controls over grievance settlements and disbursements need to be strengthened. We found that grievance payments were often not supported by adequate documentation and, as a result, we identified at least $27.8 million in unsupported questioned costs. We also found that oversight of the grievance settlement process was not consistent among the districts and that union representatives received grievance payments to which they may not have been entitled. The weakness in the control environment makes it difficult to determine the propriety of settlement amounts, and
payments to employees and union officials who represent bargaining unit employees.

Documentation to Support Grievance Settlements and Payments

We reviewed 600 randomly selected grievances2 and found that 234 (or 39 percent) were not adequately supported by required documentation. The missing documentation included signed Grievance Arbitration Tracking System (GATS) decision letters that document the reason for the settlement; the Grievance Form, which explains the original grievance; and documentation that explains how management determined the amount of the payment. As a result, there is no assurance that at least $27.8 million in grievance settlement payments were justified or warranted.

Human resources managers and labor relations officials at six of the 10 districts in our sample stated that supervisors are not required to copy and maintain supporting documentation used to settle informal grievances because they can settle them verbally. Management at the remaining four districts stated the documentation was missing due to poor recordkeeping by supervisors and individuals who prepared the grievance payments.

The Postal Service requires management to maintain documentation supporting grievance files and appeals for 7 years. In addition, the Government Accountability Office (GAO) developed standards for internal controls. These standards require agencies to assess the level of risk associated with specific activities and develop nternal controls to mitigate these risks. One internal control activity includes documenting all transactions and other significant events and making the documentation readily available.

Payments to Union Representatives

We also found that union representatives received excessive payments from grievance settlements. Union representatives in four districts (Colorado/Wyoming, Alabama, Mid- America, and Capital) were involved with the allocation of class-action grievance settlements for six grievances that resulted in union representatives receiving payments that were significantly more than other members of the class. Specifically, union representatives received $33,447 (or 24 percent) of $141,639 in settlements for these six grievances. One union representative in the Mid-America District received as much as 35 percent of a grievance settlement, while other payees received less than 1 percent.

This occurred because the Postal Service has not established procedures for reviewing the allocation of settlements to ensure that payees whom the union identifies are part of a class action. Once the Postal Service negotiates a settlement, they often have no involvement with its allocation. As a result, union representatives may be receiving payments to which they are not entitled.

Inconsistent Oversight of Grievance Settlements

We identified inconsistencies in the oversight of grievance settlements among the districts we reviewed. Specifically:

  • Six of the 10 districts did not encourage or expect management representatives to seek higher-level consultation during the grievance process.
  • Four of the 10 districts had not established dollar thresholds indicating when consultation or approval was required. Thresholds varied among the six districts that did have established thresholds.

There was no requirement or nationwide methodology for monitoring grievances through GATS. District officials stated they each used one or more GATS reports, and seven of the 10 stated they used one or more alerts in GATS to monitor settlement amounts or prevalent issues.
We found that these inconsistencies existed, because supervisors are authorized to settle grievances at any amount; and although some Postal Service managers had implemented a consultation process, others believe oversight of grievances before settlement and documentation of any consultation would violate union contracts.

Without consistent procedures and appropriate oversight, management has no assurance that grievance settlements and disbursements are appropriate. According to GAO, internal controls provide reasonable assurance that funds are safeguarded and laws and regulations are complied with and support effective and efficient operations.

Without sufficient internal controls, the risk of fraud, waste, and abuse is high.

Download the full OIG report.

10 thoughts on “OIG Criticizes USPS Oversight Of Grievance Settlements And Questions Payments to Union Officials

  1. Even as an ex postal worker I was due some where in the range of 10k for a settlement about 4 or 5 years ago. I never recieved the paperwork, and when calling the APWU I was told they would get right back to me. I am crippled and could not get to the office, so I just kept calling, Every time same story, will get back to me, When they finally did, in the form of a letter from our local president, it was to inform me that I had missed the deadline Gee the dead line was way after I first called. I always wonder who benefitted form the 10k that I didn;t recieve.

  2. Imagine that, union reps that benefit above dues paying members for grivences that they craft to make sure they collect handsomely. Been going on forever, same old song and dance.

  3. If the USPS made grievance settlement payouts come out of each individual offices own operating budget, rather than a big grievance ‘cookie jar’ put in place at Headquarters – (D.C.), then maybe these Plant Managers, Postmasters, etcetera, would be more inclined / motivated to not only pay attention to the grievance issues going on in their offices, but at more, demand their subordinate supervisor’s cease and desist from repeatedly violating the same ol’ contract issues – e.g., performing bargaining unit work. Most the money paid out to the employee’s and Union’s are as a result of unnecessary repeated violations of the same crap over and over again.
    Management’s system encourages violations of the contracts with the Union’s. If a Plant manager is told by his/her superiors to keep thier respective operating budgets at or under a certain $$$ amount, this USPS national grievance ‘cookie jar’ is the perfect tool to succeed. Example: Use cheaper Level 4 Mail Handlers to perform higher Level 6 Clerk work, then pay the effected Clerks an additional 50% through the grievance procedure.
    But of course, management has no intentions of settling these grievances at the lowest levels of the grievance/arbitration procedure. They’d rather fight it all the way to Arbitration and spend a few more thousand $$$ trying to beat it. BRILLIANT!!!!
    Management is your true criminals, not Union’s. But then again, it’s not a prerequisite to have a high school level education to be promoted into the ranks of management. Most my supervisor’s look like current or ex meth addicts, and behave like tweekers.

  4. In the last two years postal management has given up almost 500 MILLION dollars in the last two years for NO WORK. I think Management needs to be investigated for wasting this money. Don’t you! How much has it given up over the last 10-20 or 30 years? BILLIONS!!!!!!!! Then add theother perks etc to that!

  5. I absolutely agree that an ounce of prevention is worth a pound of cure. Why do supervisors habitually and knowingly violate the contract? 1) They don’t care 2) They aren’t trained to care, 3) Why should they care? In step one grievances alone the steward POINTS out the contract violations in plain English,the manual, the section, paragraph etc the supervisor can find it, verify it, confirm it. Most grievances can be settled here. But the supervisor does not want to appear eager, easily persuaded, not to mention co-operative. Its a costly game on both sides from there on in. Some grievances are more complicated but a majority are quite easy to understand and comply with. The union has always taken the position, “WE” as in union member work force AND the USPS are working towards the same goals. As indicated in ALL postal manuals and just common sense. The USPS wants to stay in business and the labor force wants to keep their jobs. “WE” must keep conflict, mis-understandings and contract violations, (both sides) to a strict minimum, and keep the work load flowing…..BUT management needs to exercise authority and abusive in most cases, which chokes the systems, deteriorates morale, interrupts operations, creates grievances, costs range from employees consulting with union officials, overtime is then allocated to compensate for “lack of employee output on the work room floor.” Awards are given in most cases but the process goes from a step 1 grievance, step 2 , step 3, arbitration (costly) class actions, because the practice doesn’t just stop! It is absolutely and unnecessarily ridiculous and an extreme waste of resources. Does anyone understand the “Do it right the first time” concept? IF supervisors were concerned one iota about the USPS, its profits, its business, its purpose, its regulations, its future AND its employees, Would they be voluntarily committing these extra expenses and waste of resources? The union on the other hand is a “defensive mechanism” a recourse after the fact. They don’t approach management until after the fact, the offense has been created. If supervisors want to earn their high salaries, and we know they get them, they should be made to understand these concepts. If I received a traffic ticket and it was costly, I sure as hell would watch my driving skills. That is the whole purpose.

  6. What the O.I.G. needs to investigate are the Supervisors and Postmasters who continually violate the National Agreement without fear of accountability. No one talks about the millions of dollars in grievance settlement let alone the money spent on the filing of grievance along with replacement overtime for the stewards who file them. No accountabilty no fear. Management will continue to do what they always do until they are STOPPED. Most if not all these supervisors would have been fired in the private sector if they did what they do here.

  7. Wonder how much money the OIG is wasting doing all these stupid “investigations” ???? I think they are simply trying to justify their reason for being. NOTHING MORE.
    GO AWAY O.I.G.

    You are the largest WASTE of money in this equation. We all know mgmt costs the postal service money by not abiding by the contract. They agreed to the terms of the contract and then violate it when they think it’s easier than actually doing their job. Then when a steward burns them with a contractual violation… it’s no ones business what the award is except the union and the craft members.

    Want to fix something O.I.G. ?? Why not investigate Supervisors and Managers who continually violate contracts and cost the P.O. millions in grievance settlements. That would be a great start you idiots.

  8. It ain’t my money. As long as management IS NOT RESPONSIBLE for their actions….pay ’em.

  9. How about the O.I.G. questioning management and their violations of policies and procedures set in place that RESULT in these ongoing, costly grievance settlements?

  10. The O.I.G. has absolutely no business delving into the Grievance/Arbitration Process. Their “INVESTIGATIONS” are NOTHING MORE THAN AN

    It would be nice if our National exclusive Unions would explore this
    “in your face” nonsense from the OIG….

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