USPS OIG Report: Accuracy of Grievance Settlement Payments

Background
Under its national agreement with the American Postal Workers Union (APWU), the U.S. Postal Service must make every effort to promptly pay monetary grievance settlements and arbitration awards.

The Postal Service uses the Grievance Arbitration Tracking System (GATS) database to manage grievance payments and conduct labor relations activities, such as researching appeals, disputes, and decisions.

On December 5, 2014, the Postal Service and the APWU reached a $56 million settlement on the Global Remedy dispute, a long-standing grievance regarding postmasters and supervisors performing bargaining unit work designated for clerk craft employees.

The settlement directed the Postal Service to pay $44.8 million directly to clerks and establish an escrow of $11.2 million to be disbursed in a manner determined by the union. In January 2016, the Postal Service paid $40.2 million to employees; however, it subsequently notified the APWU of errors in these initial payments.

Separately, on November 12, 2014, the Postal Service and the APWU reached a $4.8 million settlement regarding the Kelly Services, Inc. dispute, resolving payments to employees who were excluded from a previous settlement regarding the Postal Service hiring over 200 temporary employees between 1996 and 1999. The original $19 million Kelly Services settlement, reached on March 26, 2007, gave a lump sum payment to individuals who were postal clerks at the time of the settlement.

Our objective was to assess the accuracy of payments related to the APWU Global Remedy and Kelly Services settlements.

What the OIG Found
The Postal Service did not accurately process and disburse about $13.2 million in initial payments for the Global Remedy ($11.5 million) and Kelly Services ($1.7 million) APWU grievance settlements during January 2016 and December 2015, respectively.

The payment errors included non-payments, underpayments, overpayments, and payments to employees not entitled. Since April 2016, the Labor Relations Systems and Payroll groups have been collaborating to correct the errors; however, as of December 2016, all errors have not been resolved.

These errors occurred due to inadequate or ineffective internal controls over how settlement payments are processed. Specifically, the procedural guidance is not comprehensive to help ensure processing of settlement payments are consistent and timely. Also, the procedural guidance does not address a reconciliation process to help ensure settlement payments are accurate and dispersed to appropriate employees.

Due to inadequate internal controls, the Postal Service underpaid employees by $3,043 and overpaid by more than $3.4 million. In addition, management erroneously paid $75,129 to eight employees who were not on the APWU’s list of employees entitled to payment.

What the OIG Recommended
We recommended management finalize resolution of outstanding underpayments and collect outstanding overpayments in both settlements, enhance procedural guidance to be more comprehensive, and implement a reconciliation process.

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Source: USPS Office of Inspector General

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