OIG Finds Problems with application of criteria used by USPS To Select Post Offices For Closure

OIG also found: “The Postal Service provided information on the RAOI offices by the four groups on two public websites, USPS.com® and PRC.gov, on July 26 and 27, 2011, respectively. We noted that composition of the four groups differs between the two public postings.”‘

The USPS OIG issued audit report “Postal Service-Operated Retail Facilities Discontinuance Program” below are some of the highlights:

The Postal Service issued new procedures for the discontinuance of Postal Service-operated retail facilities. Subsequently, the Postal Service applied the new procedures to begin the first headquarters-initiated study to review more than 3,600 offices for discontinuance opportunities. Our objectives were to assess policy changes for the closing, consolidation, and suspension process; and discontinuance opportunities. This report is part of an ongoing series of retail optimization reviews.

WHAT THE OIG FOUND:
The Postal Service could benefit from an integrated retail network optimization strategy. While the Postal Service has implemented new regulations and policies, and the Retail Access Optimization Initiative, it is unclear what specific changes will be made, how long it will take to make them, and anticipated benefits. The new policy expanded authorization to initiate discontinuance studies to include nationwide directives and aligned procedures for all Postal Service-operated retail facilities. However, we found inconsistent application of the criteria for selection of facilities for discontinuance studies. In addition, the criteria could benefit from an objective integrated economic modeling. Lastly, the Postal Service made improvements in the emergency suspension process; however, due to data limitations, we were unable to assess compliance of prior suspensions with established policy.

WHAT THE OIG RECOMMENDED:
We recommended management develop an integrated retail network optimization strategy and an economic model, improve the reliability of retail facilities data, and timely process and make decisions to approve or disapprove discontinuance proposals.

WHAT MANAGEMENT SAID:
Management generally agreed with our recommendations and will take actions to improve the retail network optimization strategy. In addition, management stated they will implement an economic model by February 2012, maintain accurate retail facilities data, and timely review and approve or disapprove discontinuance proposals. Management added they will complete by June 2012, feasibility studies of offices whose operations have been suspended prior to fiscal year 2010.

Handbook PO-101 expanded the authorization to initiate discontinuance studies from Postal Service Headquarters (HQ) management (top-down approach), aligned procedures for all Postal Service-operated retail facilities, and added factors to consider for identifying retail offices for the discontinuance study. However, due to data inaccuracies or incomplete information, we found inconsistent application of the criteria for selection of facilities for discontinuance studies. For example:

Eight of the 164 randomly selected Group 14 offices (5 percent) do not meet the annual revenue criteria of less than $27,500.

Also, we found the top-down criteria used to select the offices could benefit from an objective integrated economic modeling. The economic modeling should determine potential revenue sales by geographic and demographic data and estimate revenue loss that may result from closing a retail facility.

Discontinuance Opportunities
Although the RAOI and the district-initiated studies may be viable options for the Postal Service to reduce over 4,000 facilities in the retail network, we found issues with application of the criteria used to select facilities for discontinuance studies. In addition, we found the Postal Service included units without retail functions in the RAOI. On September 21, 2011, the Postal Service reported to the PRC that, as of August 31, 2011, five annexes were erroneously included on the original RAOI list. Further, according to the Postal Service, the proximity of the nearest PO was based on geographic coordinate distance, which management stated is a better measurement for potential impact on customers. Management added that to assess impact on customers, it would need the distance from the customer’s home to the nearest PO, not the distance from the losing facility to the nearest PO.”

The Postal Service provided information on the RAOI offices by the four groups on two public websites, USPS.com® and PRC.gov, on July 26 and 27, 2011, respectively. We noted that composition of the four groups differs between the two public postings. Management reported to the PRC that 265 offices were not subjected to the HQ-defined criteria. However, according to the Postal Service press release, only 19 offices were not subjected to the HQ-defined criteria (see Table 2). Management stated the RAOI list posted on USPS.com was simplified for the public.”

We randomly selected and tested offices in groups 1, 2, and 3 for discontinuance studies and found that some did not meet the HQ-defined criteria. Specifically:
 Eight of the 164 Group 1 offices (5 percent) we randomly selected do not meet the annual revenue criteria of less than $27,500.
 Thirty-two of the 123 Group 2 offices (26 percent) we randomly selected do not meet the criteria of five or more access points within 2 miles.
 One of the 123 Group 2 offices we randomly selected is a delivery unit with no retail operations.
 Five of the 123 Group 2 offices (4 percent) we randomly selected do not meet the annual revenue criteria of less than $600,000.
 Sixty-three of the 93 Group 3 offices (68 percent) we randomly selected do not meet the criteria of five or more access points within ½ mile.
 One of the 93 Group 3 offices we randomly selected does not meet the annual revenue criteria of less than $1 million.

 Thirty-two of the 123 randomly selected Group 25 offices (26 percent) do not meet the criteria of having five or more access points within 2 miles.

 One of the 123 randomly selected Group 2 offices is a delivery unit with no retail operations.

 Sixty-three of the 93 randomly selected Group 36 offices (68 percent) do not meet the criteria of having five or more access points within ½ mile.

see full report (PDF)
OIG Audit of USPS Retail Facilities Discontinuance Program

11 thoughts on “OIG Finds Problems with application of criteria used by USPS To Select Post Offices For Closure

  1. Big surprise there! To say the USPS upper management didn’t follow their own instructions on closing facilities is so predictable! Postal upper management makes no decisions that make sense or are actually backed by meaningful numbers! The decisions made by upper management in the USPS are motivated by private agendas of the individuals. Most of the upper management in the USPS do not make decisions based on sound fiscal management. These people are drunk on their own power and will fire lower level supervisors or craft for fabricated “falsification,” yet that is the model that is provided BY management! These people will lie, cheat, steal and abuse those under them in order to get what they want. Just look at the management in the Greater Indiana District! I’m sure that’s not the only district in the USPS that is underhanded in their dealings. In fact, ALL the districts in the USPS are most likely the same…riddled with sinister managers with their own hidden agendas. There is no accountability in the USPS UPPER MANAGEMENT. Oh, the lower level supervisors and craft people have plenty of accountability, but not the upper management. These people are dangerous and really should be stopped. But it ain’t gonna happen.

  2. OIG should check into the figures that Capitol Station (under captiol building) in Springfield IL is going to save 48 million in ten years on a site that the Post Office pays NO rent, NO electricity, NO maintance on. It is all for the congress and employess of the Stratton Building, so the state of Illinios foots the bill. All the Post office pays is the salary of the ONE person that works there, they will have to pay him anyway. The post office will have to employ two or three carriers to carry that building. So my question is. Where do they get that he makes 4.8 million a year? These people are making numbers up. They would not know a true fact if it came up and bit them.

  3. OIG wants to help the Post Office? Go in and arrest Donahue and all his top managers. Here’s some charges; delaying first class mail, falsifying reports, and lastly impersonating a business man. Send him back to the window in Pittsburg!

  4. Enough already…this will go on and on forever! Only thing proven is that for an enormous organization (and I use that loosely) they are worst at providing any statistical information. Continuous overfunding, overspending on capital projects that don’t work as expected, overuse of casuals amounting in millions of dollars in grievances, abolishment of jobs needed etc. and now faulty figures on facility closings…oh yeah why am i not surprised?

  5. Small post offices still exist that serve no purpose. Located within 3 miles of a large 22 level office that provides rural delivery to residents near this office. Office has a PM and a clerk to provide retail and box service. A wasted cost.

  6. Closing all these small post offices takes the heart out of the communities. In doing so the Postal Service will only save just seven tenths of one per cent of the total postal budget. The demise of the postal service began in the 1960’s when they gave away the lucrative parcel post business to UPS and FedEx. At that time they should of separated the package business from the paper business, set up a parcel post category away from the letters and papers. Postal parcel post trucks similar to UPS now days, giving service all over the county. Makes one think there were people inthe postal service who wanted UPS to thrive, perhaps move into top jobs with UPS or FedEx.

  7. The way to help the post office and us unemployed Vets is by offering a early retirerment. The retirement offer should be the same as capital hill retirement. 1.7 percent for the first 20 years then a added 1 percent for each year served. This would reduce the employees by several thousands. Then you back fill the position with Vets. The entry level for Vets would be 1/2 the yearly cost.(wages). Plus these vets get a good paying job and help move the enconmony. You either pay these vets unemployment or give them a good job which inturn pays taxes. How do want to pay them ? They earned it!!!! When I mean thousands I mean 300,000 thousands and more.

  8. The way to help the post office and us unemployed Vets is by offering a early retirerment. The retirement offer should be the same as capital hill retirement. 1.7 percent for the first 20 years then a added 1 percent. This would reduce the employees by several thousands. Then you back fill the position with Vets. The entry level for Vets would be 1/2 the yearly cost.. Plus these vets get a good paying job and help move the enconmony. You either pay these vets unemployment or give them good job which inturn pay taxes. How do want to pay them ? They earned it!!!! When I mean thousands I mean 300,000 thousands and more.

  9. Is the OIG acusing Postal Management of manipulating numbers? Next thing you know they’ll be saying that Management falsifies Boxline and delivery scans in order to show the need to reduce staffing.

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