Each year over 301,000 Postal Service employees participate in the Uniform Program. As part of the program, eligible employees, such as letter carriers, window clerks, and postal police officers, are issued a Uniform Allowance Purchase Card (UAPC) to purchase approved uniform items from licensed vendors. In calendar years (CY) 2016 to 2018, there were an average of 196 licensed vendors as part of the program.
Our objective was to evaluate the effectiveness of management controls over the Postal Service’s Uniform Program. Our scope included UAPC transactions for CY 2016 through 2018, which included 1.1 million transactions and $235.7 million in purchases.
What the OIG Found
Management controls over the Uniform Program were not effective in ensuring compliance with program requirements. Specifically, we identified:
- 2,039 UAPC purchases from 73 non-licensed vendors during our scope period.
- 439 non-uniform items such as flashlights, knives, and batteries bought with UAPCs at approved vendors.
- 702,758 transactions (63 percent) with missing or vague item descriptions such as “product or invoice” preventing the Postal Service from being able to identify the items purchased.
- 73 of 588 (12 percent) license agreements could not be located for all vendors who processed transactions during our scope period.
- 100 percent of the license agreements provided were not signed by the Postal Service, only having the vendor signature.
Further, we placed uniform orders at five online and two in-store licensed vendors and were able to purchase two window clerk shirts with the official Postal Service emblem — one online and one from an in-store vendor — without verification of employee identification. Referrals to our Office of Investigations were made, as appropriate.
These noncompliance issues occurred because management controls did not include a review process of sales reports or invoices to identify (1) purchases from non-licensed vendors, (2) purchases of unauthorized uniform items, or (3) transaction with inappropriate item descriptions; nor did management validate license agreements were signed by both parties or centrally located.
As a result, we estimated an average of $133,178 in annual questioned costs for unapproved transactions and fees paid to Citibank to cover program management costs; and an average of $6,283 in revenue loss for administrative and annual licensing fees not collected from the non-licensed vendors.
What the OIG Recommended
We recommended management:
- Implement a periodic reconciliation process of Citibank vendor sales transactions to the approved vendors list to identify transactions at non-licensed vendors.
- Implement a review process to ensure vendors adhere to quarterly report submission requirements.
- Implement a periodic validation process of vendor quarterly reports and vendor sales invoices to ensure accuracy and compliance.
- Implement a process to validate vendor compliance in selling uniform items to approved Postal Service employees or require vendors to include employee names and form of payment on quarterly sales reports to identify ineligible purchases.
- Identify a centralized location, physical or electronic, to store all license agreements accessible by the Uniform Program office.
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Source: USPS Office of Inspector General