Government affairs

Today, the U.S. Postal Service Office of Inspector General (IG) released its Semiannual Report to Congress (SARC). The SARC recaps USPSOIG’s work and activities from April 1 through September 30, 2018. The report highlights the office’s audits and white papers, its investigations, and what it deems to be challenges confronting USPS management.

The IG also identified what it believed to be challenges for USPS management to address. First and foremost are its financials. The IG highlighted some $5.0 billion in losses fiscal year (FY) 2018, which is compounded by prefunding liabilities, pension and health care costs, and liquidity issues.

Challenges also noted were that workplace relations and culture between management and staff have improved on the previous year, based on a Gallup poll, but still remains low. E-commerce has drastically changed the environment in which USPS competes, and USPSOIG recommends management find new opportunities for growth and innovation. While most service performance goals were not met, USPS did successfully increase its delivery points by more than 1 million per year. USPSOIG says USPS management must confront narcotics in the mail as the growing crisis is undermining the agency and must be dealt with.

The also identified matters where USPS is underperforming, the resulting loss of revenue, and what steps the Inspector General’s office recommends management take to fix those problems. For instance, since the adoption of the Universal Postal Union’s (UPU) International Letter Post standards in 2005, USPS has only met the standards once partially due to management’s understanding that domestic standards were similar enough to meet those at the international level. They were not and as a result, USPS forfeited revenue.

Other findings from audits and white papers include improper utilization of the Flats Sequencing Systems (FSS), leading to the improper processing of up to 23 percent of flats mail; failure to recognize savings from the FY14 and FY15 purchase of left-hand drive delivery vehicles in FY 16 and 17 reports; weaknesses around the Electronic Verification System (eVS) led to a revenue loss of $2.5 million in FY17; delays of over six months and a year for the processing of postal employees’ applications for disability retirement by the United States Office of Personnel Management (OPM); poor postal facility conditions; and USPS’s relatively low market share of e-commerce package returns; among others.

A link to the full report may be found here.