USPS OIG Audit Report – Purchasing Compliance and Imprudent Purchases Follow-Up Audit;
The Postal Service has an increased risk of loss when purchases are made without proper authorization or justification
This report presents the results of a follow-up audit to determine whether purchases complied with U.S. Postal Service policy and whether imprudent purchases were still occurring related to the SmartPay® Purchase Card and select Accounts Payable Excellence (APEX) system transactions since our last audit.The SmartPay program is the primary method for making local purchases needed for day-to-day operations, and the APEX system is used to perform accounts payable voucher processing for purchases such as meals and events. This is the U.S. Postal Service Office of Inspector General’s (OIG) third report focusing on purchases that could negatively impact the Postal Service’s public image and brand.
Based on our review of 673 judgmentally selected transactions totaling about $3.4 million,
we identified 124 purchases totaling $401,113 that were not made in accordance with Postal Service policy. Specifically, approving officials did not ensure that eBuy5 requests contained a business justification for meals served at events, personnel did not obtain officer approval for beer and wine purchases, purchases did not have an approved eBuy requisition attached, individuals purchased gift cards from unapproved vendors, and responsible officials did not enter gifts into the eAwards system.
The business justification was not provided in the requisition of 49 internal and external events where meals totaling $118,198 were served. Meals provided at eight of these events did not have proper approval from either an officer or a Postal Career Executive Service (PCES) manager.
– Beer and wine purchases totaling $2,927 were provided at nine events for which the cardholder did not obtain an officer’s approval. Beer and wine purchases are allowed when approved by an officer.
– Cardholders made 32 purchases totaling $177,462 without submitting an eBuy requisition or without proper eBuy authorization.These purchases consisted of pre-paid car washes, vehicle rentals, auto repairs and parts, and online stamp supplies.
– Five cardholders made eight purchases of gift cards from unauthorized vendors totaling $16,308.10
… we identified one district that continued to make imprudent and unnecessary purchases during a time of severe economic uncertainty for the Postal Service. Specifically, we identified three purchases totaling $14,778 for season and group tickets to future professional sporting events. These purchases were made for one city’s professional basketball, football, and baseball teams. Although the district purchased these tickets to provide as recognition awards, the recipients were not determined prior to ticket purchase. The following are details regarding these potentially imprudent purchases:
* Six season tickets (264 tickets for 44 games) totaling $8,448 were purchased on April 21, 2010, for one National Basketball Association team.
* Six personal seat licenses and season tickets14 (60 tickets for 10 games) totaling $4,350 were purchased on July 12, 2010, for one National Football League team.
* Six group tickets14 for 14 games (84 tickets for $1,980) for one major league baseball team were purchased on March 9, 2010.