USPS OIG Audit Report: Management of Vacant Properties

The U.S. Postal Service owns over 8,000 properties and leases over 23,000 properties with annual rents of more than $800 million. The Postal Service Facilities organization oversees these properties, including balancing the real estate portfolio, maximizing revenue, and managing vacant properties.

Area and district personnel vacate Postal Service properties due to events such as network optimization efforts, emergency suspensions (environmental or accidental issues), and staffing shortages. As of April 2015, the Postal Service identified 62 vacant leased properties with annual lease amounts of $2.1 million and 79 vacant owned properties valued at about $48 million. This was a snapshot in time. We did not evaluate all properties identified as vacant over the past 2 fiscal years and the actions taken by the Postal Service during that timeframe.

The electronic Facilities Management System is the official Postal Service record for real property. It should be used to manage all property-related projects.

Our objective was to assess the management of vacant properties and identify opportunities for the Postal Service to reduce associated costs.

What The OIG Found
The Postal Service could better manage its vacant properties and increase its opportunities to reduce associated costs. The Postal Service did not know how many vacant properties it owned or leased. Specifically, Facilities was not aware of some of its vacant properties and did not effectively manage the vacant properties it knew about.

We identified 25 leased or owned properties that Facilities did not know were vacant. This occurred because there was no policy requiring area and district personnel to notify Facilities when properties became vacant in the field.

Also, Facilities personnel did not effectively manage 57 of 141 (40 percent) properties they knew were vacant. Specifically, they did not document use of available options such as subleasing, lease termination, lease buyout, or property disposal to reduce costs for vacant leased or owned properties. Facilities is required to track its building information in the electronic Facilities Management System database.

This occurred because Facilities either did not actively monitor when the properties became vacant or stated there was minimal, if any, potential return on investment from disposing of properties that were fully depreciated or were not in a usable condition. Regardless of a property’s accounting value or condition, the Postal Service could still generate revenue by selling it.

Because the Postal Service was not aware of some of its vacant properties or did not effectively manage them, it missed opportunities to increase revenue by selling its vacant owned properties and to reduce lease costs.

Further, Facilities did not track in its electronic Facilities Management System building information for the 166 vacant properties we reviewed. Specifically, although copies of lease agreements or other documents may have been scanned into the system, data fields were not always populated for Postal Service personnel to use to better manage its vacant property portfolio.

This included data fields containing information such as vacancy status, emergency suspension notifications, lease termination clauses, and disposal efforts. For example, there were Postal Service properties that were sold prior to this review that were designated in the electronic data system as active and vacant. Facilities’ practice was to document this information on multiple spreadsheets; however, these documents were not shared between area and headquarters personnel and limits the ability to create management reports to monitor vacant properties.

As a result, there is an increased risk that management will not have access to accurate and timely information necessary for decision making. We identified vacant property data valued at $51 million that was not available in the electronic Facilities Management System, as required.

What The OIG Recommended
We recommended that management modify policy to require personnel to notify Facilities when any Postal Service property becomes vacant. We also recommended that management actively monitor vacant properties; document actions taken or not taken, with explanation; and pursue options, when appropriate, to generate revenue and reduce costs.

We further recommended that management use the electronic Facilities Management System by populating relevant data fields to manage all vacant properties.

Read full report:

Source: Management of Vacant Properties | USPS Office of Inspector General

Leave a Reply

Required fields are marked *