Audit Report – HR-AR-14-002 – 06/13/2014
Recycling is the process of changing used materials into new products to reduce waste. Each year the U.S. Postal Service generates recyclable material, and although there are costs to recycle, it also generates revenue. In 2012, Postal Service recycling efforts generated $49.5 million, with only about one-third of Postal Service facilities participating in backhaul recycling. Backhauling is when Postal Service employees deliver mail to a facility and return to the originating facility with materials for consolidation and recycling.
The Postal Service requires recycling programs in all districts; however, program results vary. From fiscal years 2012 to 2013, the San Francisco District was among the highest in average monthly waste disposal costs ($112,049) and among the lowest in average monthly recycling revenue ($3,312). Our objective was to determine whether opportunities exist to decrease waste disposal costs and increase recycling revenue in the San Francisco District.
WHAT THE OIG FOUND:
Opportunities exist to decrease waste disposal costs and increase recycling revenue in the San Francisco District. We determined management could expand backhauling and better recycle plastics. An average of 65 percent of the material in trash containers at San Francisco District sites was recyclable because management did not make recycling a priority and always require backhauling. Additionally, employees were not always aware of or trained in recycling policies. We also found that management did not accurately report recycling costs and could not adequately determine the impact of its recycling program because there are no controls to ensure proper recording of recycling costs. Also, recycling contractors did not always separate cost and revenue on invoices.
We identified best practices in the Northern Virginia District that, if implemented, could help the San Francisco District reduce waste disposal costs and increase recycling revenue. They include monitoring recycling contracts and providing awareness training. By more effectively managing its recycling program, the San Francisco District could reduce annual waste disposal costs by an average of $542,135 and increase annual recycling revenue by an average of $178,245.
WHAT THE OIG RECOMMENDED:
We recommended management implement backhauling procedures, provide additional recycling guidance and training to appropriate personnel, establish controls to ensure personnel accurately record recycling costs, and ensure future recycling contracts require contractors to separate revenue and costs on their invoices.