USPS OIG Audit Report: Highway Contract Routes – Extra Trips in the San Francisco District

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Background

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; it results in added 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 a trip is complete and payment is due to the supplier. If a payment is not made on time, the Postal Service pays interest.

This is the fourth in a series of reports on HCR extra trips. Our objective was to assess HCR extra trips in the San Francisco District, which was consistently one of the 10 most at risk districts for extra trips in our Transportation Risk Model. In fiscal year (FY) 2015, Quarter 1, the San Francisco District paid $387,955 in extra trips. We reviewed a sample of over 1,200 extra trips that contributed to these extra payments.

What the OIG Found

The San Francisco District could improve controls over the use and processing of extra trips. We estimate the San Francisco District had 302 extra trips totaling $90,898 that could have been avoided in FY 2015. These trips were caused by late processing of mail resulting from non-adherence to dispatch leave times. Further, we estimate management could avoid about $90,898 in FY 2016 by eliminating delayed mail.

We also determined the Postal Service did not always properly authorize and document extra trips. All of the 1,289 PS Forms 5397 we reviewed had missing or unauthorized signatures and 39 percent of the 1,289 forms had missing time or volume information. Local officials did not have authorized approvers sign the forms. Consequently, the San Francisco District will have incurred $287,436 in improperly supported or improperly authorized costs in FY 2015.

Finally, we determined the Postal Service made nominal interest payments in FY 2015, Quarter 1 because PS Forms 5397 were not submitted on time, delaying payments to HCR contractors. The delays 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, Pacific Area Operations, curtail extra trips by reducing processing delays; provide training on and monitor compliance with extra trip authorization forms; and ensure the forms are submitted on time.

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Source: Highway Contract Routes – Extra Trips in the San Francisco District | USPS Office of Inspector General

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