Our objective was to evaluate the effectiveness of management controls over the Landlord Maintenance Program (LPM). Specifically, the controls in place to ensure compliance with policies and procedures related to leased buildings for which the landlords have repair and maintenance responsibilities. Our fieldwork was completed before the President of the United States issued the national emergency declaration concerning the novel coronavirus disease (COVID-19) outbreak on March 13, 2020. The results of this audit do not reflect any process changes that may have occurred as a result of the pandemic.
The Postal Service leases over 25,000 properties totaling almost 80 million square feet of interior space. Most leases are renewed every five years and include a maintenance rider. The rider establishes responsibility for maintenance and repairs between the Postal Service and the lessor. When the landlord does not complete a repair in the timeframe the Postal Service stipulates, the Postal Service can perform the work through an enforcement process. The landlord is then responsible for reimbursing the Postal Service for any costs incurred through the fee recovery process.
The Postal Service’s LMP manages repair requests at landlord-responsible leased facilities. This includes addressing issues with the landlord to complete maintenance requests, enforce delayed maintenance, resolve disputes, and ensure repayment of Postal Service incurred expenses via direct reimbursement or rent reduction. The LMP outsources some tasks in the process including landlord notifications, management of repair requests, and enforcements through a contract with Jones Lang LaSalle Americas, Inc. and their subcontractor, EMCOR Group, Inc. The Landlord Maintenance Standard Operating Procedures outline the guidelines and time requirements for these notifications and repair procedures. Additionally, these procedures include a process step for the contractor to confirm, with the facility, that the landlord completed the work. Landlords are required to complete urgent/routine repair requests within 30 days. For emergency repair requests, landlords are required to complete the repair within 48 hours.
The Postal Service did not ensure responsible landlords completed urgent/routine repair requests timely. We selected a statistical sample of 207 out of 58,937 urgent, routine, and emergency repair requests to assess the program management of repairs at leased facilities. This included a review of landlord notifications and enforcements, completion of repairs, and recovery of Postal Service incurred costs.
We found the LMP addressed emergency repairs with the landlord within 48 hours of the request. However, the LMP did not ensure the contractor followed up on urgent/routine repairs to ensure work was completed within 30 days. As a result, landlords did not complete 118 of 192 (61 percent) urgent/routine repair requests as required.
The repairs landlords did not complete within the 30-day requirement included requests to fix leaking roofs, broken docks and doors, and potholes in pavement and parking lots. We also found that landlords took 112 days on average to address these issues. For example, we found tiles potentially containing asbestos took up to 605 days to address. We also found delays up to 484 days occurred due to weather conditions to address potholes and crumbling concrete for sidewalk entrances, while repairs to leaking roofs took up to 151 days.
We also found differing standards for landlord notification letters, repair procedures, and contractor performance goals, which increased the difficulty to manage the program and hold the contractor accountable for ensuring the landlord addressed and completed repairs timely. We also found that the electronic Facilities Management System did not provide complete and accurate data for the LMP management to identify when follow-up did not occur.
Additionally, we found that the contractor did not always initiate the enforcement process for the 118 urgent/routine repairs that landlords did not resolve timely. For 27 repairs, landlords completed the work within 44 days or the LMP staff granted an extension. However, of the remaining 91 repairs, the contractor did not enforce 53 repairs as required.
Finally, the LMP staff did not initiate the fee recovery process for 26 of 37 enforced repairs at leased facilities. For five other repairs, recovery did not occur for 110 to 116 days after the Postal Service paid for the work to be completed. We also identified missing records in electronic Facilities Management System for Postal Service costs for completed repair work. As a result, the LMP was not always able to recover funds from the landlord. We estimated the Postal Service incurred an annual cost of $1,125,610 by not recovering repair costs.
When established controls are not followed, landlords may not complete repairs timely and the Postal Service may incur additional costs. Unresolved repairs can result in health, safety, and security issues.
We recommended management:
- Ensure the timeframes to complete urgent/routine repairs are consistent between the Landlord Maintenance Standard Operating Procedures and landlord notifications.
- Enforce requirements with the contractor to ensure landlords complete repairs within the established timeframes.
- Reinforce to LMP staff their responsibility to monitor and ensure the contractor enforces urgent/routine repairs after 30 days.
- Document procedures for the Postal Service Repair & Alterations group to communicate completed work for enforced repairs at leased facilities to the LMP.
- Establish and implement a plan with timeframes for the LMP to timely initiate the fee recovery process and collect expensed funds.
Read full report
Source: USPS Office of Inspector General