Audit Report – DP-AR-14-004 – 08/27/2014
The U.S. Postal Service Office of Inspector General (OIG) maintains four risk models containing 41 risk elements related to Post Office™ operations. The OIG uses these risk elements, which measure financial, operational, and human resources activity, to evaluate overall risk and periodically shares the evaluations with senior U.S. Postal Service officials.
We judgmentally selected 11 elements from the risk models that captured the most important aspects of monitoring Post Office operations, including refunds, cash balances, grievances, and overtime. Additionally, we selected two important risk elements related to Post Office box and caller service management that were identified in previous audits as high risk areas. We tested these elements as they applied to Eastern Area operations for the period October 1, 2008, through December 31, 2013.
Our objective was to determine whether the Eastern Area effectively monitors risk related to the 13 selected operational elements.
What the OIG Found
The Eastern Area is effectively monitoring 12 of the 13 operational risk elements we reviewed. However, we found area and district managers do not monitor refunds.
Area and district personnel are not monitoring refunds because they are not required to do so under current Postal Service policy, they have limited resources, and they consider the financial risk from errors to be low.
Without refund monitoring, there is an increased opportunity for refund fraud against the Postal Service. Specifically, the Postal Service issues refunds when labels or meter strips are damaged or printed in error and voided. Accordingly, a clerk might affix labels to mail in lieu of stamps and then process a refund to obtain funds.
What the OIG Recommended
We recommended the vice president, Eastern Area Operations, require the area controller and area marketing manager to monitor unit-level refunds, and emphasize the need to verify refunds during closeout.