The USPS Office Of Inspector General’s 2011 Audit Plan
A few highlights:
The Financial Risk category pertains to the critical financial risk the Postal Service faces as it, like other companies, deals with the economic slowdown affecting the nation. Factors
exacerbating financial risk include the crisis in the financial industry, increases in energy costs, significant declines in mail volumes, and mandated annual payments to pre-fund retiree health benefits. The anticipation of further declines in volume means the Postal Service still faces major challenges to cut costs and increase revenues.
Examples in the Financial Risk category include issues with a clear financial impact, such as:
– Labor costs and volume reductions.
– Financial statement audits.
– Sarbanes-Oxley Act implementation.
Examples of Planned Work Under Financial Risk in FY 2011
In FY 2011, we plan to conduct work that addresses:
– Department of Labor and the US Postal Service—Workers’ Compensation Program: We plan to review the requirements for the Postal Service to participate in the Federal Employee Workers’ Compensation Program, problems existing in the program, and the impacts to the Postal Service of the current arrangement. We also plan to benchmark with other companies to determine how their costs compare with the Postal Service and to identify best practices for reducing workers’ compensation cost.
– Financial Fraud Vulnerability – Internal and External: We have several audits planned in this area—we plan to look at no-fee money orders, imprudent purchases,
bad check prevention and collection, click-n-ship postage, Automated Postal Center Postage and stamp accountability.
– Substantial Savings Available by Prefunding Pension & Retiree Health Care at Benchmarked Levels: We will benchmark Postal Service prefunding pension and retiree health care fund requirements against other large companies and the federal government.
Examples of Planned Work Under Operational Risk in FY 2011
Work we plan to do in FY 2011 includes:
– Plant Production Efficiency: We plan to assess the overall efficiency of the processing and distribution network for FY 2010.
– First-Class Mail on Air Transportation: We plan to determine whether opportunities exist to improve density of First Class mail on air transportation and reduce overall
– City Delivery Efficiency – National Capping: We will summarize the results of our audits that assessed overall efficiency of city delivery operations and identified
opportunities to reduce operating costs.
– OSHA Compliance: We plan to assess the Postal Service’s processes to ensure compliance with Occupational Safety and Health Administration regulations.
– Benchmarking with Other Delivery Companies: We plan to identify opportunities for improving mail distribution to carriers by benchmarking with the commercial mailing
– Nationwide Facility Excess: We will identify nationwide opportunities for the Postal Service to optimize excess space.
MANAGEMENT CHALLENGES FACING THE POSTAL SERVICE
We address the following management challenges facing the Postal Service:
– Strategic Direction and Infrastructure Challenges – The Postal Service must address its critical financial challenge while 1) increasing its effectiveness and efficiency; 2) ensuring that products and services are self-sustaining; and 3) balancing legal considerations and stakeholder views.
– Labor and Management – The Postal Service must ensure its compensation and benefit costs are effectively aligned in anticipation of further reductions in revenue. The
Postal Service must analyze labor dispute settlements to assess whether there are recurring scenarios that could be avoided.
– Cost Control and Reduction of Energy Consumption – The Postal Service must control costs and reduce energy use to maintain universal service. The Postal Service
must compare contract analysis assumptions with actual performance to determine whether it should continue to outsource products and services or perform them
– Revenue, Brand Protection, and Growth – The Postal Service must manage its pricing of products and services to ensure maximum revenue and provide greater value to its customers.
– Customer Service – The Postal Service must balance its public service obligation with the need to remain commercially viable.
– Preserving Integrity and Security – The Postal Service must provide a secure infrastructure for the nation’s mail system – despite threats of terrorism or natural disaster – to safeguard its resources (employees, facilities, and applications) and protect and maintain the integrity of its proprietary and customer data.
– Technology Improvements and Information Transparency – The Postal Service must optimize its use of technology and provide information that better meets the needs of its managers and stakeholders.
– Public Outreach – The Postal Service must educate stakeholders and the public about the financial challenges it faces and the fact that it is funded by ratepayers not tax
– Regulatory Challenges – The Postal Service must comply with legal and regulatory mandates.