USPS OIG Audit Report: Highway Contract Routes – Extra Trips in the Greater Indiana District

The U.S. Postal Service uses highway contract routes (HCR) to transport mail between its facilities and other designated points. An extra trip is one made in addition to those outlined in the contract and that results in more costs. Extra trips can be the result of late mail processing or early mail collection runs. Management should approve extra trips only when needed to prevent serious delays of preferential mail or when there is excessive mail volume. The Postal Service uses Postal Service (PS) Form 5397, Contract Route Extra Trip Authorization, to authorize extra trips and PS Form 5429, Certification of Exceptional Contract Service Performed, to certify trip completion and payment due the supplier. If a payment is not made on time, the Postal Service pays interest.

This is the second in a series of reports on HCR extra trips. Our objective was to assess HCR extra trips in the Greater Indiana District, which was consistently one of the top 10 most at risk districts for extra trips in our Transportation Risk Model. In fiscal year (FY) 2014, Quarter 3, the Greater Indiana District paid about $1.3 million for over 5,500 extra trips.

What The OIG Found
The Greater Indiana District could improve controls over the use and processing of extra trips. We estimate that the district could have avoided 101 extra trips totaling about $118,000 in FY 2014. These trips were caused by mail processing delays resulting from non-adherence to dispatch leave times and by missent mail. Management could avoid about $118,000 in FY 2015 by reducing delays and missent mail.

We also determined that the Postal Service did not always follow procedures for authorizing and documenting extra trips. We identified about 4,000 instances of improper information on about 43 percent of PS Forms 5397 reviewed. Local officials did not always review or authorize the forms and sometimes recorded incorrect trip miles. Consequently, the Greater Indiana District incurred $1,181,651 in improperly supported or authorized costs in FY 2014, and could incur $110,182 in additional costs in FY 2015.

Finally, we estimate the Postal Service made nominal interest payments in FY 2014 because PS Forms 5397 were not submitted on time, delaying payments to HCR contractors. This occurred because local employees responsible for these functions were not adequately trained and plant managers were not monitoring their activity.

What The OIG Recommended
We recommended the vice president, Great Lakes Area, curtail extra trips by reducing processing delays and missent mail, provide training on and monitor compliance with extra trip authorization forms, and ensure the forms are timely submitted.

Source: Document Library | Office of Inspector General

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