Office of Inspector General

Semiannual Report to Congress

October 1, 2010 — March 31, 2011
The mission of the U.S. Postal Service Office of Inspector General is to conduct and supervise 

objective and independent audits, reviews, and investigations relating to Postal Service 

programs and operations to:

 Prevent and detect fraud, theft, and misconduct.

 Promote economy, efficiency, and effectiveness.

 Promote program integrity.

 Keep the Governors, Congress, and Postal Service management informed of problems, 

deficiencies, and corresponding corrective actions.

MISSION STATEMENT
This report, submitted pursuant to the Inspector General Act, outlines our work and activities for the 

6-month period ending March 31, 2011. In the first section of this report, we highlight audits and reviews 

that address risks in the strategic, financial, and operational areas of the Postal Service. The second 

section highlights investigations conducted during this reporting period that contributed to safeguarding the 

Postal Service’s revenue and assets and helped deter postal crimes.

Postal Service executives often work closely with their Office of Inspector General (OIG) counterparts 

to identify problems and collaborate on solutions. These efforts have resulted in significant savings 

opportunities. During this period, we issued 107 audit reports and management advisories, and the Postal 

Service accepted 98 percent (87 of 89) of the OIG’s significant recommendations.

In addition, we completed 1,661 investigations that led to 326 arrests and more than $708 million in fines, 

restitutions, and recoveries, of which nearly $68 million went to the Postal Service. 

The Postal Accountability and Enhancement Act of 2006 encouraged the U.S. Postal Service to modernize 

and adopt a leaner, volume-driven infrastructure that assures readiness for the 21st Century. The Postal 

Service has taken steps toward rightsizing its network and aligning its workhours to the ebb and flow of 

mail, but progress has been slow. The considerable financial challenges facing the Postal Service make 

these necessary changes even more urgent. 

Our audit report on the Postal Service’s financial condition underscored the organization’s financial 

crisis, which is the result of overpayments to federal benefits funds, the recent recession, the disruption 

of the digital age, and an oversized Postal Service network. Our work has determined that a prefunding 

adjustment to pension and retiree health care funds would improve the Postal Service’s financial position. 

Still, the Postal Service needs to continue to optimize, simplify, innovate, and find its role in an age of fastchanging digital communications. 

In February, we released a white paper that examined key digital trends and the gaps in providing all 

citizens with access to digital communications. The research provides a framework for postal stakeholders 

to consider what a future postal system might look like and to contemplate how the Postal Service might 

serve as a bridge between hard-copy communications and the digital world. 

Our work in this period also focused on other challenges the Postal Service faces, including customer 

service issues and information technology controls. Our investigative work centered on ensuring the 

integrity of postal personnel, processes, and finances. 

The OIG — with the support of the Governors, Congress, and Postal Service management — will continue 

to play a key role in maintaining the integrity and accountability of America’s postal service, its revenue and 

assets, and its employees through its audit and investigative body of work.

David C. Williams

Inspector General

A MESSAGE FROM THE INSPECTOR GENERAL
SUMMARY OF PERFORMANCE

October 1, 2010 — March 31, 2011

AUDITS

Reports issued 107

Significant recommendations issued 89

Total reports with financial impact 30

Funds put to better use $61,629,436,252 

Questioned costs1 $566,259,866 

Revenue Impact $58,520,796 

TOTAL FINANCIAL IMPACT2 $ 62,254,216,914

INVESTIGATIONS3

Investigations completed 1,661

Arrests 326

Indictments/informations 366

Convictions/pretrial diversions4 381

Administrative actions 1,009

Cost avoidance $88,992,568

Fines, restitutions, and recoveries5 $707,668,622

Amount to Postal Service $67,959,781

OIG HOTLINE CONTACTS

Telephone calls 31,891

E-mail 13,496

Virtual Front Office calls 10,828

Standard Mail 1,095

Voice mail messages 360

Facsimile – FAX 218

National Law Enforcement Communications Center 337

TOTAL CONTACTS 58,225

1

 Includes unsupported costs of $266,180,194.

2

 The Postal Service agreed to recommendations or proposed alternative corrective actions that, if implemented, could result in more than 

$62 billion in savings.

3

 Statistics include joint investigations with other law enforcement agencies.

4

 Convictions reported in this time frame may be related to arrests made in prior reporting periods. 

5

 Amount include case results of joint investigations with other OIG, federal, state, and local law enforcement entities.
TABLE OF CONTENTS

INTRODUCTION.................................................................................................................3

ASSESSING PROGRESS TOWARD STRATEGIC GOALS.........................................................4

Goal 1: Improve Service................................................................................................................................................ 5

Goal 2: Improve Employee Engagement......................................................................................................................... 7

Goal 3: Improve Financial Performance.......................................................................................................................... 8

REGULATORY STUDIES AND REPORTING OBLIGATIONS....................................................12

PRESERVING ACCOUNTABILITY.......................................................................................14

OFFICE OF INVESTIGATIONS ...........................................................................................18

Financial Crimes........................................................................................................................................................ 19

Workers’ Compensation Fraud.................................................................................................................................... 21

Delay, Destruction, and Theft of Mail by Employees...................................................................................................... 23

Contract Fraud........................................................................................................................................................... 24

Official Misconduct .................................................................................................................................................... 26

Executive Investigations and Internal Affairs................................................................................................................. 27

SPECIAL FEATURES..........................................................................................................8

Fundamental Questions for the Future of the Postal Service............................................................................................ 9

Substantial Savings Available by Prefunding Pensions and Retirees’ Health Care............................................................ 10

Can the Postal Service Bridge the Digital Divide? ......................................................................................................... 11

Postal Service Financial Condition............................................................................................................................... 12

Workshare Discounts Exceeding Avoided Costs............................................................................................................ 14

Major Fraud Investigations Division ............................................................................................................................. 25

Contract Fraud Risk Alert Issued to Postal Service........................................................................................................ 26

APPENDICES..................................................................................................................29

APPENDIX A — Reports with Quantifiable Potential Monetary Benefits.......................................................................... 30

Report Listing.................................................................................................................................... 32

APPENDIX B — Findings of Questioned Costs............................................................................................................. 35

APPENDIX C — Recommendations That Funds Be Put to Better Use............................................................................. 36

APPENDIX D — Other Impacts ................................................................................................................................... 37

APPENDIX E — Reports with Significant Recommendations Pending Corrective Actions................................................. 39

APPENDIX F — Significant Management Decisions in Audit Resolution ......................................................................... 55

APPENDIX G — Status of Peer Review Recommendations............................................................................................ 56

APPENDIX H — Investigative Statistics........................................................................................................................ 57

APPENDIX I — Summary of U.S. Postal Inspection Service Investigative Activities Under Title 39 USC 3005 & 3007....... 58

APPENDIX J — Closed Congressional and Board of Governors’ Inquiries....................................................................... 59

SUPPLEMENTAL INFORMATION ......................................................................................65

Freedom of Information Act......................................................................................................................................... 65

Workplace Environment.............................................................................................................................................. 65

Acronym Guide .......................................................................................................................................................... 66

October 1, 2010 — March 31, 2011 | 3 

INTRODUCTION

INTRODUCTION

The history of the U.S. Postal Service is inextricably tied to the history 

of this country’s founding. The Second Continental Congress, meeting 

in Philadelphia in 1775, understood that the conveyance of letters and 

intelligence was essential to the cause of liberty. It created a postal system 

that same year, appointing Benjamin Franklin as its postmaster general. 

Since its creation, the Postal Service’s mission has remained essentially 

unchanged: to bind the nation together through the provision of reliable, 

affordable, universal mail service. For the past 40 years, the Postal Service 

has paid for its operations from revenues earned by the sale of postage and 

services. It is not supported by taxpayers, and has not taken a congressional 

subsidy to pay for its operations since 1982.

The Postal Service has relied on a steady increase in mail volume and 

revenue to cover its expenses. This paradigm shifted a few years ago, when 

the recession and the changing nature of communications collided. Mail volumes plummeted causing revenue to 

drop and annual net losses to mount. The Postal Service has seen mail volume decline by 41 billion pieces, or 20 

percent, since 2007. Changes to its business model are essential, which the Postal Service has addressed in its 

10-year plan to maintain a viable Postal Service. 

The Postal Service Office of Inspector General has done work to evaluate the challenges facing the Postal 

Service, which include an oversized postal network, the need to strengthen its innovation efforts, and shrinking 

revenue in a new era of communications. The Postal Service’s most pressing demand, however, is the federally 

mandated overfunding of its retiree benefit plans. The Postal Service has posted net losses totaling $20 billion in 

the past 4 years, nearly all of it attributable to the mandated prefunding of its Retiree Health Benefits Fund.

Our work includes a detailed review of the Postal Service’s overpayment to the Civil Service Retirement System 

and the Federal Employee Retirement System. We benchmarked prefunding levels of public and private sector 

entities for pensions and retiree health benefits and noted where the Postal Service could find substantial cost 

savings. 

In this most recent reporting period, we also assessed the Postal Service’s financial condition and reviewed the 

discounted rates it provides to commercial mailers. We looked at how the Postal Service could make better use 

of its workforce and network by driving out inefficiencies and redundancies. 

We also have studied opportunities for the Postal Service as it moves into the 21st century and finds its role 

in a constantly evolving communications environment. Our reports and white papers have helped shape the 

discussions on how to position the Postal Service to be sustainable and successful in the digital age.

The reports and investigations noted in this semi-annual report to Congress support our mission to root out 

fraud, waste, and abuse to protect the Postal Service’s bottom line, safeguard the integrity of the Postal System, 

and maintain confidence in the mail. We rely on technology, engagement, and collaboration to protect current 

and future postal revenues and to promote more efficient and productive Postal Service operations. We are also 

proud to have contributed to the debate on how best to sustain a valuable national infrastructure.

The Postal Service’s mission has remained unchanged since the days of 

Benjamin Franklin: to bind the nation together through the provision of reliable, 

affordable, universal mail service.
4 | Semiannual Report to Congress
October 1, 2010 — March 31, 2011 | 5 

GOAL 1: IMPROVE SERVICE

The Postal Service’s priority is to provide timely, reliable 

delivery and improved customer service across all access 

points. Specifically, it is focusing on the quality and 

consistency of service as well as the speed and reliability 

of end-to-end mail delivery for all product lines.

Intelligent Mail Customer Satisfaction 

The Postal Service relies heavily on information technology 

to support its mission of providing prompt, reliable, and 

efficient mail. The agency has implemented Intelligent Mail 

barcodes for mailpieces and containers, and deployed the 

enabling technology to support mail visibility in the Postal 

Service network. The Postal Service offers two Intelligent 

Mail service options: basic and full. 

We reviewed the performance risks associated with the 

full service program to determine customer satisfaction 

and identify barriers to mailer participation. As a result, 

we recommended that the Postal Service re-emphasize 

program benefits to business mailers, consider offering 

program incentives to business mailers to offset program 

start-up costs, and provide continuing training to business 

mail entry clerks and PostalOne! help desk employees. We 

recognize that corporate efforts were already under way 

to emphasize program benefits before the inception of our 

audit and that the mailer participation results are mixed 

thus far. 

Follow-up Review of Operations and Service 

in the Philadelphia District 

Overall, operations and service have improved in the 

Philadelphia Metropolitan Customer Service District. 

They fully implemented 10 of the 13 recommendations 

we previously made. These recommendations entailed 

improving communication with employees and customers, 

modifying staffing of operations based on mail volumes, 

and increasing supervision of employees. However, the 

recommendations related to color coding, mail condition 

reporting, and mail flow had not been fully implemented 

due to lack of management oversight. Consequently, 

service scores and customer satisfaction could be 

adversely impacted.

Express Mail Guarantees 

Express Mail is an expedited mail delivery service of the 

Postal Service that guarantees mail delivery time. The 

Postal Accountability and Enhancement Act of 2006 

classifies Express Mail as a competitive product and 

requires the Postal Service to ensure that each competitive 

product covers its attributable costs. The Postal Service 

charges Express Mail postage for each addressed 

mailpiece according to its weight and zone, with on-time 

delivery guaranteed or the customer gets their money back. 

We assessed whether it is a prudent business practice for 

the Postal Service to guarantee Express Mail Service to all 

ZIP Codes and American territories. 

The Postal Service came very close to meeting its overall 

goal of 96 percent on-time Express Mail delivery in 

FY 2009. However, of the 115.6 million pieces of Express 

Mail sent from October 1, 2007, through March 31, 2010, 

the Postal Service did not meet the guaranteed delivery 

times for 5 million pieces, resulting in potential monetary 

exposure of $80.6 million. The actual amount refunded 

for this period was $14.5 million. In addition, the Postal 

Service was not monitoring Express Mail Corporate Account 

negative balances and closing inactive accounts effectively. 

Internal Controls over Powered Industrial 

Vehicles 

We reviewed internal controls over powered industrial 

vehicles at the Salt Lake City Processing and Distribution 

Center and Auxiliary Service Facility. These vehicles 

include tow motors, fork trucks, tractors, platform lift 

trucks, motorized hand trucks, and other specialized 

industrial trucks. The Salt Lake City locations do not have 

an automated monitoring system, such as the Powered 

ASSESSING PROGRESS TOWARD STRATEGIC GOALS

In this section, the Office of Audit (OA) assesses the Postal Service’s progress toward the strategic goals 

articulated in its Foundation for the Future: 2010 Comprehensive Statement on Postal Operations, 2010 

Performance Report, and 2011 Performance Plan. These goals are to improve service, improve employee 

engagement, and improve financial performance. We have organized our audit work in line with these goals. 

We also present feature stories, and work on issues of regulatory studies and reporting obligations, and 

preserving accountability. In addition, we report on Risk Analysis Research Center research and white papers. 

MANAGEMENT 

RESPONSE TO 

AUDIT WORK

OA adheres to professional 

audit standards and 

generally presents its 

audit work to management 

for comments prior to 

issuing a final report. 

Unless otherwise noted in 

the selected audit work 

discussed in this report, 

management has agreed 

or partially agreed with our 

recommendations and is 

taking or has already taken 

corrective action to address 

the issues raised.

IMPROVE SERVICE
6 | Semiannual Report to Congress

Industrial Vehicle Management System, to control access, 

analyze usage, or track locations of the vehicles. The 

system consists of intelligent wireless devices installed 

on vehicles and client-server software for access control, 

utilization analysis, real-time location tracking, and many 

other functions. 

Management at the Salt Lake City facilities was able to 

effectively manage workhours in tow and forklift operations. 

However, they did not always manage internal controls over 

vehicle safety and maintenance. Specifically, management 

did not ensure:

 Certification of powered equipment operators; 

 Completion of Occupational Safety and Health 

Administration checklists by drivers; 

 Timely completion of preventive maintenance; 

 Repairs to vehicles and compliance with district 

procedures on the use of portable electronic devices.

Postal Vehicle Service Transportation Routes 

This audit is one in a series of audits responding to the 

Postal Service’s request to assess whether selected Postal 

Vehicle Service operations were effective and economical. 

As background, the Postal Vehicle Service transportation 

network uses postal vehicles and employees who work 

from network distribution centers in or near metropolitan 

areas, and the drivers travel about 150 million miles 

annually. Since these operations are local, the network is 

managed at the facility level under guidance from district, 

area, and headquarters transportation officials. 

Employees working at the Suburban Maryland Processing 

& Distribution Center (P&DC) were inconsistently applying 

safety policies while transporting mail and equipment. 

Also, Suburban Maryland P&DC officials did not always 

conduct required schedule and vehicle utilization reviews, 

resulting in unassigned driver time and underutilized trips. 

Management could remove 14,177 excess workhours 

from existing schedules and reduce related fuel costs 

and damage claims, thereby saving the Postal Service 

$650,000 per year.

Postal Vehicle Service Scheduling 

and Staffing

We assessed whether scheduling and staffing of Postal 

Vehicle Service operations are efficient, effective, and 

economical at the Connecticut Valley District. The 

Connecticut Valley District could more efficiently and 

effectively manage transportation processes and schedules, 

thereby reducing driver workhours as well as associated 

fuel use and damage claims. In addition, the Postal Service 

could use alternate schedules to include split days off and 

expand the use of part-time drivers, where possible. This 

would allow managers to more efficiently staff operations 

and match workhours with workload. By making these 

changes, we estimate that the Connecticut Valley District 

could save $2 million a year in labor and related costs.

Surface Mail Classes on Air Transportation 

Networks

We assessed whether opportunities exist to limit surface 

mail classes on air transportation networks and identify 

related cost-savings opportunities. Typically, the Postal 

Service uses surface transportation to transport Standard, 

Periodicals, and Package Services mail classes, and air 

transportation for mail classes with more stringent service 

standards, including First-Class Mail, Priority Mail, and 

Express Mail. 

The Postal Service unnecessarily spent more than $10 

million a year transporting surface mail classes on air 

networks. Headquarters was not effectively monitoring the 

types of mail being flown, and headquarters and area level 

officials did not routinely assess the volume of surface 

mail on air networks. The volume of surface mail classes 

being flown increased in FYs 2007 and 2009, even though 

overall mail volumes steadily decreased since FY 2006. 

Management stated that actions already implemented 

should begin to show positive results by the end of 

the first quarter of FY 2011, and will reduce or eliminate 

unnecessary expenses.

IMPROVE SERVICE

The Postal Vehicle Service transportation network uses postal vehicles and postal employees who work 

from network distribution centers in or near metropolitan areas. The OIG audits the operations, including 

scheduling and staffing, to determine if they are effective and economical.
October 1, 2010 — March 31, 2011 | 7 

IMPROVE SERVICE

Flats Sequencing System – Arizona 

We conducted an audit to analyze how delivery operations 

have improved as a result of delivery units receiving flat 

mail in walk-sequence order from the Flats Sequencing 

System (FSS). The seven Arizona District delivery units 

reviewed have improved delivery operations and cut 

operating costs by $1.3 million. However, these delivery 

units received more than 14 million flat mailpieces not 

in sequence. Seven million of these pieces were not 

carrier routed and required manual sorting and casing 

to put in walk sequence. This occurred because these 

mailpieces did not meet flat mail automation requirements. 

As a result, the Postal Service missed the opportunity to 

further reduce more than $500,000 in costs for FY 2010. 

We recommended that the Postal Service continue to 

collaborate with business mailers to ensure flat mailpieces 

meet automation requirements and reduce the amount of 

unworked flat mail sent to delivery units. 

City Delivery Operations Workforce Planning 

We evaluated the Postal Service’s workforce planning 

process for city carriers. Planning and managing the city 

delivery workforce and associated workhours requires 

managers to match staff according to workload trends. 

Management often used full-time city delivery carriers 

in overtime status to deliver mail, when using lower cost 

part-time and transitional carriers would have been more 

economical. The Postal Service focused primarily on 

increasing route efficiency and reducing overall workhours 

and had not developed an overall strategy to optimize 

the use of city carrier resources to deliver the mail. By 

not optimizing its staffing resources, the Postal Service 

incurred excess costs of more than $100 million annually. 

Management agreed in principle with the recommendation 

to collaborate with area management to develop and 

implement an overall city delivery operations strategy 

to optimize the combination of full-time, part-time, and 

transitional city carrier resources, but disagreed with the 

findings and monetary impact.

Retail Customer Service 

Operations Realignment 

The Hawkeye District’s customer service mail volumes 

have declined by about 35.4 percent since 2007; however, 

its network of delivery facilities has only declined by 4.3 

percent. While management has consolidated some 

facilities to improve operational efficiency and reduce retail 

customer service costs, they have not pursued these efforts 

district-wide. We assessed whether the Postal Service can 

reduce retail customer service costs by realigning delivery 

operations in the Hawkeye District. Opportunities exist for 

the Hawkeye District to improve operational efficiency and 

reduce retail customer service costs by realigning delivery 

operations. We identified 65 small delivery offices that 

management can relocate to nearby delivery offices with 

sufficient excess floor space to absorb their operations. 

The proposed realignment would allow the Hawkeye District 

to reduce retail customer service costs by between 

$1.7 million and $3.2 million a year over the next 10 years.

Management agreed with our recommendation to explore 

opportunities to reduce retail customer service costs by 

realigning delivery operations district-wide. They plan to 

explore opportunities to realign 75 percent of the customer 

service operations identified on our suggested list by 

December 2012.

GOAL 2: IMPROVE EMPLOYEE 

ENGAGEMENT

Postal Service employees are its greatest asset. A key 

strategy to improve productivity and efficiency is to increase 

employee engagement. 

 The Flats Sequencing System (FSS) is intended to boost efficiency in processing, distribution, and 

delivery. FSS automatically sorts flat-sized mail into delivery point sequence at high speeds. OIG audits 

analyze how delivery operations have improved as a result of receiving flat mail in walk sequence

from the FSS.
8 | Semiannual Report to Congress

IMPROVE EMPLOYEE ENGAGEMENT

Allegations of Inaccurate Time and 

Attendance 

We audited management controls over time and attendance 

at certain locations and found that they were not adequate 

to ensure employees’ workhours were reported accurately. 

Specifically, we found that Postal Service supervisors did 

not complete the required forms to support changes to 

time and attendance. The managers and postmasters 

responsible for ensuring policies are followed stated 

that completing the forms was not a priority. In addition, 

one manager stated that supervisors either forgot or 

had difficulty in printing the forms. As a result, we found 

questionable deletions of clock rings by supervisors in 

some post offices. These changes exposed the Postal 

Service to increased risk for grievances.

GOAL 3: IMPROVE FINANCIAL 

PERFORMANCE

The Postal Service faces the challenge of improving service 

while simultaneously working to cut costs. Following are 

examples of work we conducted in this area to help the 

Postal Service improve operational efficiencies and to 

decrease the risk of revenue loss. 

City Delivery Efficiency Reviews 

The Postal Service is delivering fewer pieces of mail to an 

increasing number of addresses as new households and 

businesses are added to the delivery network. The Postal 

Service must increase its efficiency to accommodate this 

growth while facing financial losses from declining mail 

volumes and rising costs. Our reviews of the New York, 

Northern Virginia, and Chicago districts found that each 

district had opportunities for enhanced delivery efficiency 

and reduced workhour costs. Our analysis showed that 

the New York, Northern Virginia, and Chicago districts 

used about 25, 16, and 16 minutes, respectively, more per 

carrier route than the average carrier route in the nation. 

Reducing these minutes daily on each carrier route would 

result in total workhour reductions of more than 571,000 

workhours at these districts. 

Follow-Up on the Assessment 

of Overall Plant Efficiency 2010 

We conducted a follow-up review on the Postal 

Service’s progress in reducing workhours based on 

recommendations we made in a prior report. Last year, 

we reported on efficiency levels and mail volume in 

processing and distribution centers, as well as processing 

and distribution facilities, and recommended that the Postal 

Service reduce almost 16.2 million workhours by FY 2012. 

We determined that the Postal Service made substantial 

progress by reducing workhours in the network from the 

previous year. Plants that were the least productive in FY 

2009 reduced more than 13.3 million workhours (achieving 

82.8 percent of the recommended workhour savings) and 

improved productivity by more than 9.3 percent.

Consolidation Reviews

In response to requests from Congress, we conducted 

the following reviews to assess the business case for 

consolidation and the impact on customer service. 

An Area Mail Processing (AMP) consolidation involves 

In a review of City Delivery Efficiency, OIG auditors found that the Northern Virginia, New York, and 

Chicago Districts had opportunities to enhance delivery efficiency and reduce workhour costs.

RISK ANALYSIS RESEARCH CENTER

The OIG’s Risk Analysis Research Center (RARC) conducts in-depth research and analysis, clarifies complex postal 

issues, and informs current debates about postal policy by facilitating the interchange of ideas. The team also conducts 

economic and academic studies as well as coordinates guest lectures by experts in the postal community. The RARC 

research group has three separate teams: Mission Operations, Support Operations, and Financial Operations. Some 

of the issues covered in RARC white papers have included the Civil Service Retirement System pension responsibility, 

fundamental questions for the 21st century Postal Service, and the identification of digital trends and shortcomings, as 

well as how the Postal Service could bridge the gap between the physical and digital worlds. 
October 1, 2010 — March 31, 2011 | 9 

IMPROVE FINANCIAL PERFORMANCE

moving all originating and/or destinating mail from 

one or more facilities into other processing facilities to 

improve operational efficiency and/or service. In our 

reviews, consolidations were supported and complied with 

established policies; however, we identified opportunities 

for improvement.

Lima, OH, Consolidation. In January 2010, the Postal 

Service completed a feasibility study proposing the 

consolidation of the Lima Processing & Distribution Facility 

(P&DF) into the Toledo Processing & Distribution Center 

(P&DC). In May 2010, the senior vice president approved 

the transfer of all operations and volumes from the Lima 

P&DF to the Toledo P&DC based, in part, on projected 

annual savings of $2.3 million and improving and/or 

maintaining customer and service commitments. The 

Toledo P&DC completed originating and destinating mail 

consolidations on June 30, 2010, and December 31, 2010, 

respectively.

While there was a valid business case for the consolidation 

of the Lima P&DF into the Toledo P&DC, management did 

not ensure that on-time performance and customer service 

were improved or maintained during the implementation of 

the consolidation. As a result, customers were negatively 

impacted. We found that significant degradations in service 

occurred after the Postal Service transferred all operations 

and volumes from the Lima P&DF to the Toledo P&DC 

Fundamental Questions for the Future of the Postal Service

The U.S. Postal Service is facing severe financial problems, and the search is on for viable solutions. This situation has 

provoked a broad public policy debate on what a 21st century Postal Service should look like. The difficulty in finding 

a solution is compounded by the fact that the entire environment of communications and commerce is changing. The 

Postal Service’s traditional role of delivering hard copy mail may no longer be as important in the digital age. What 

should the Postal Service’s future role be? 

The Risk Analysis Research Center (RARC) looked at the foundational issues at the 

heart of postal policy. The white paper, Fundamental Questions for the Future of the 

Postal Service, poses eight critical questions for determining the role of the Postal 

Service in the 21st century.

1. What is the nation’s essential need for the Postal Service in the 21st century?

2. Is a profit-driven business or a national infrastructure best suited to carry out the 

Postal Service’s mission?

3. How should the nation’s Postal Service be financed?

4. What is the proper governance model for the Postal Service?

5. What does the universal service obligation mean?

6. Does monopoly-financed universal service assist or harm the Postal Service?

7. Should the Postal Service be allowed to expand into nonpostal services to 

supplement monopoly shortfall?

8. Should the Postal Service have additional social responsibilities beyond its core mission?

These questions cannot be answered in isolation. Each is best considered in relationship to others. For example, an 

answer to whether the Postal Service should be organized as a profit-maximizing business or a national infrastructure 

will be influenced by decisions on the Postal Service’s universal service obligation, social responsibilities, and optimal 

role in the digital age. In turn, the nature of the Postal Service’s mission will influence its governance model, financing 

method, and placement in the competitive marketplace. 

The paper’s goal is not to answer the questions but to encourage discussion that leads to a coherent, consistent postal 

policy for the present and the future. Finding a consensus among stakeholders and policymakers on the answers to 

these questions will not be an easy process. But if agreement is reached on the role of the Postal Service, developing a 

business model to place the Postal Service on a sustainable path as a provider of vital services to the American people 

in the 21st century should be possible.
10 | Semiannual Report to Congress

and management did not project these degradations in 

the consolidation proposal. While management actively 

worked to address the delayed mail issues, these service 

degradations continued when we completed our audit work 

in March 2011.

Wilkes-Barre, PA, Consolidation. We assessed the 

operational impacts of the consolidation and determined 

that a valid business case existed for consolidating mail 

processing operations from the Wilkes-Barre Processing 

& Distribution Facility (P&DF) into the Scranton P&DF and 

the Lehigh Valley Processing & Distribution Center (P&DC). 

Additionally, the Postal Service followed established policies 

and guidelines. This consolidation was unique because it 

was the first time the Postal Service split both outgoing and 

incoming mail operations from one facility into two different 

facilities.

As a result of the consolidation, the Postal Service projected 

savings of about $6.1 million per year after the first year. 

However, we estimate that the net cost savings is $5.2 

million as the Postal Service overstated savings by more 

than $929,000. Management agreed with the findings 

and provided an update indicating that actual savings will 

exceed projections.

Marysville, CA, Consolidation. We concluded that 

consolidating the Marysville P&DF outgoing mail processing 

operations into the Sacramento P&DC was a valid business 

decision. Our analysis showed adequate capacity exists at 

the Sacramento P&DC to process increased mail volume. 

We also found that the consolidation increased efficiency, 

minimally impacted employees, improved service, and 

addressed community concerns. Also, environmental 

impacts were minimized and contingency plans were in 

place for emergencies.

Houston, TX, Consolidation. We determined that a 

business case exists to consolidate the Houston P&DC’s 

mail processing operations into the North Houston 

P&DC. This conclusion is based on the premise that the 

North Houston P&DC would be expanded, and that mail 

volumes will not substantially increase. As a result of this 

consolidation and after the expansion completion, the 

Postal Service could save about $35 million annually.

Huntington, WV, Consolidation. We determined that 

a business case exists to consolidate mail processing 

operations from the Huntington P&DF into the Charleston 

P&DC to achieve cost savings of about $3.5 million 

annually.

Columbus, GA, Consolidation. We determined that 

a business case existed to support consolidating the 

Columbus Customer Service Mail Processing Center’s 

originating mail operation into the Macon P&DC. The 

consolidation resulted in minimal operational impacts. 

Additionally, the Postal Service followed established AMP 

policies and guidelines for the consolidation.

Network Distribution Center Activation

We assessed the financial and operational impacts of the 

network distribution center activation to determine whether 

IMPROVE FINANCIAL PERFORMANCE

Substantial Savings Available Through Changes to Prefunding Pensions 

and Retirees’ Health Care 

We sought to identify and benchmark prefunding levels of public and private sector entities for pensions and retiree 

health benefits and determine whether substantial cost-saving opportunities exist. Our benchmarking results showed 

that the Postal Service could fund pensions and the retiree health care fund at less than 100 percent of actuarial 

liabilities. Moreover, we determined that the average level that Fortune 1000 companies prefund retiree health care 

(many do not prefund) is 28 percent with the military prefunding at 29 percent. In addition, we determined that those 

state governments that prefund retiree health care averaged 30 percent.

By contrast, the federal government does not prefund its civilian retiree health care at all, even though its liabilities result 

from using the same plans as the Postal Service. Under these circumstances, there is a strong case to be made for the 

Postal Service to prefund at reduced levels, such as those found in the private and public sectors. More than simply a 

matter of principle, reduced prefunding would provide the Postal Service with significant financial relief.

We propose that the prefunding requirements be set to standards similar to other organizations, so that the Postal 

Service can meet its obligation while conserving cash and improving its financial condition. However, due to pending 

legislation in this area that assumes 100 percent funding levels, management did not agree to pursue necessary 

legislative changes to permit the Postal Service to prefund pension and retiree health care funds to the benchmarked 

levels of 80 and 30 percent, respectively. Management agreed with the monetary impact and will continue to work with 

Congress and the administration to address this matter and other recommendations related to restructuring the funding 

provisions for Postal Service retirement plans. 
October 1, 2010 — March 31, 2011 | 11 

IMPROVE FINANCIAL PERFORMANCE

the activation achieved anticipated benefits. This audit is 

the second in a series of self-initiated audits to address 

strategic, operational, and financial risks associated with 

these activations. Our review concluded that the activations 

generally went well, but not all projected benefits have been 

realized. This initiative generated about $111 million, or 

39 percent of projected annual savings, and a 10 percent 

improvement in package service performance. To enhance 

savings opportunities, management could further improve 

transportation use in the network distribution centers. 

Facility Optimization 

We assessed whether there were optimization opportunities 

in the Western, Eastern, Southwest, and Capital Metro 

areas. The Postal Service has the option to optimize excess 

real property through selling property, leasing owned 

property, subleasing property, or investing in real estate 

projects. While the Postal Service has made progress in 

optimizing its existing space, it can do more to dispose of 

excess interior space in a timelier manner. The opportunity 

to optimize space exists because Postal Service policy 

requires installation heads to report excess space, but 

guidance to effectively accomplish this task is needed. 

Further, additional metrics should be added to the system 

to track, monitor, and report excess space, and initiate 

disposal actions for that excess space.

While management agreed to update its disposal 

process and implement metrics to better manage excess 

space; management did not agree with the amount of 

excess space or the potential monetary impact reported. 

Specifically, they disagreed with the methodology used to 

calculate existing excess space, in addition to the data and 

Can the Postal Service Bridge the Digital Divide? 

Many businesses, including the U.S. Postal Service, are looking for ways to build a bridge between their old physicalworld business models and the continually changing digital world. From the Internet to the digital economy, the worlds 

of communications, transportation, and commerce are fundamentally changing. This “digital revolution,” in combination 

with the great recession of 2008 to 2009, has had a significant impact on global postal operators, resulting in a steep 

decline in the physical volumes of personal, business, and advertising mail. The shift from physical to digital will only 

continue to accelerate and become more prominent. 

In a white paper, Postal Service Role in the Digital Age – Part 1: Facts and Trends, the Risk 

Analysis Research Center highlights key digital trends and the shortcomings of the current 

digital world. This research provides critical background information for postal stakeholders 

to envision what the future may look like, to understand the relevance of today’s postal 

products and mandates, and to identify the market gaps that need to be filled to satisfy 

society’s future needs. A few of the digital trends highlighted in the paper include: 

 A progressive shift has occurred from hard copy communications to the digital by 

business, government, and consumers.

 Communication control has shifted from the sender to the receiver. 

 Explosive growth of mobile devices increases consumption of content “on the go.”

Though there has been rapid growth in the digital world, there are shortcomings and 

fundamental gaps that prevent all U.S. consumers from migrating into this world. Some 

of these include: 

 The Internet and all of its functionality are not available to all citizens to reap its economic 

benefits.

 There is still a lack of an adequate level of privacy, confidentiality, dependability, 

and security in digital communications and transactions.

 Consumers are seeing limited choices, even withdrawal of the physical option, as companies push them into 

digital-only communications.

The Postal Service has maintained its position in physical communications and can continue to play a significant role 

in the digital world. Its trusted role as an intermediary provides it unique opportunities, such as serving as a bridge 

between the digital and the physical world – an extension of its current mission to bind the nation together. This white 

paper is the first in a series of papers we plan to release on this topic.
12 | Semiannual Report to Congress

IMPROVE FINANCIAL PERFORMANCE

cost factors used to value the excess space and calculate 

monetary impact. In the areas reviewed, we found more 

than $500 million in costs associated with the excess 

space.

Excess Space in Mail Processing Facilities 

in the Suncoast District 

Over the past 2 years, management has implemented two 

plant consolidations and one district consolidation in the 

Southeast Area to improve operational efficiency. These 

consolidations generated more than 100,000 square feet 

of excess space in the Suncoast District. Based on our 

review and discussions with management, there are various 

opportunities to improve the use of space at plants in the 

Suncoast District. These opportunities include additional 

plant consolidations or relocating retail operations into mail 

processing facilities, which could generate an average 

annual cost savings of about $1.3 to $1.9 million. 

Management stated that they would review facilities to 

determine excess square footage and will update this data 

in the electronic Facilities Management System. In addition, 

management stated a study is under way for consolidating 

the Daytona Beach P&DC and moving its workload into 

the Mid-Florida P&DC. Management is also updating their 

Southeast Area Facility Optimization plans, including plans 

for the Manasota and St. Petersburg facilities. Management 

did not agree with the monetary impact of $19.3 million 

because they believe we did not factor some costs into the 

estimate.

REGULATORY STUDIES AND REPORTING 

OBLIGATIONS 

The Postal Accountability and Enhancement Act of 2006 

requires the Postal Service to conduct certain regulatory 

studies and mandates a number of reporting obligations. 

The Postal Service uses special financial studies to attribute 

costs to the various categories of mail and special services, 

and to develop workshare cost avoidance estimates. 

Postal Service Financial Condition 

Volume Loss

The Postal Service is contending with the effects of electronic diversion and the economic downturn that began in late 

2007. The net operating loss for FY 2010 was almost $8.4 billion, which followed losses of more than $3.7 billion in 

FY 2009 and $2.8 billion in FY 2008. These losses were primarily caused by the cost of pre-funding the retiree health 

benefits and the decline in mail volume. For the first quarter of FY 2011, the Postal Service reported a $329 million net 

loss. This is up from a net loss of $297 million for the same period last year.

Liquidity Concerns

Liquidity is a pressing concern. The Postal Service projects it will have sufficient cash flows for routine, ongoing 

operations, but that it will not have sufficient cash on hand and borrowing capacity to fully fund the Postal Service 

Retirement Health Benefits Fund payment or other obligations due on September 30, 2011. It will have a critically 

low level of cash and liquidity by the middle of October 2011, when it is required to make a $1.2 billion payment for 

workers’ compensation to the U.S. Department of Labor (DOL).

Cost Cutting

Through aggressive cost-cutting measures, increased financial controls, and streamlined processes, the Postal Service 

reduced total costs in FY 2010 by $3 billion over the $6 billion already achieved in FY 2009. In January 2011, the 

Postal Service announced plans to redesign administrative functions by reducing the number of area and district offices 

and further decreasing the number of administrative, supervisor, and postmaster positions. This is expected to result 

in annualized savings of more than $700 million starting in FY 2012. Additionally, the Postal Service proposed a set of 

actions that focus on retiree health benefits, delivery frequency, access, workforce, pricing, products, and oversight. 

These actions require legislation and stakeholder cooperation. 

Sarbanes-Oxley

Despite its fiscal challenges, the Postal Service completed in 2010 one of the largest and most complex SarbanesOxley Act of 2002 certifications. This accomplishment required internal change as well as changes by customers, 

suppliers, business partners, and others in the mailing community.
October 1, 2010 — March 31, 2011 | 13 

REGULATORY STUDIES AND REPORTING OBLIGATIONS

Periodicals Mail Costs 

We assessed whether Postal Service data collection 

systems and procedures accurately attribute costs to 

Periodicals Mail, and reviewed their manual processing. 

We found that although Periodicals volume has decreased 

and automation and mailer preparation efforts have 

increased, manual costs attributed to Periodicals continue 

to rise. We identified several reasons for these increases 

in manual processing costs, including a program instituted 

by management called the “Hot 2C” program to provide 

expedited processing, missed critical entry times by the 

mailers, bundle breakage and preparation problems, and 

mailpiece characteristics that make them non-machinable. 

Additionally, we found that processing and distribution 

center personnel do not consistently report these issues in 

the Electronic Mail Improvement Reporting System, which 

is a critical step in bringing an issue to management’s 

attention. Management stated that they had ongoing efforts 

to analyze operational conditions and their impact on 

cost attribution. Additionally, they plan to issue additional 

guidance on the “Hot 2C” program.

Information Resource Access 

Of the applications in the Postal Service inventory, hundreds 

are critical to Postal Service business operations. The 

Postal Service maintains policies and procedures governing 

access controls over these information systems that are 

important to operations and business decisions. Information 

resource access processes and controls generally support 

business requirements. Database performance monitoring 

controls exist to reduce the potential effect of poorly written 

database queries on production databases. In addition, 

functional system coordinators justifiably denied access 

requests. 

However, management can strengthen database access 

controls by adhering to existing processes and periodically 

reviewing information security policy exceptions. Effective 

access controls increase the probability that the Postal 

Service will prevent a compromise that might negatively 

affect the confidentiality of information resources and 

data. We estimated that more than $38 million in data is 

potentially at risk of loss due to inadequate access controls 

that affect information technology.

Network Perimeter Firewalls 

The perimeter firewalls that protect critical Postal Service 

data are the first line of defense between the private 

network and the Internet. Our review concluded that the 

Postal Service perimeter firewalls may not consistently 

provide for the confidentiality, integrity, and availability of 

information and network resources. Correctly configured 

and effectively managed firewalls increase the probability 

that the Postal Service will prevent a compromise that 

might negatively affect the confidentiality, integrity, and 

availability of information resources and data. We estimated 

that more than $70 million in data is potentially at risk of 

loss due to inadequate controls and protection. 

Audits of facility optimization showed, that while the Postal Service has made progress in optimizing its existing space, it can do more to dispose of excess interior space in a 

more timely manner. Pictured: West Edina Carrier Annex, Minneapolis, MN (left), Marysville, CA P&DF (center), South Eastern Station (right). 
14 | Semiannual Report to Congress

REGULATORY STUDIES AND REPORTING OBLIGATIONS

Securing Information on Portable Devices

The increased frequency of information breaches reported 

by federal agencies has heightened concerns about the 

extent to which sensitive information stored on portable 

devices is vulnerable. We identified opportunities for 

the Postal Service to improve their security of sensitive 

information stored on portable devices by recommending 

that management strengthen their ability to secure and 

manage laptop computers by installing data encryption, 

maintaining accurate inventories, and properly documenting 

approvals for all laptops they exclude from the encryption 

requirement. We estimated more than $56 million in 

potential costs to the Postal Service, if sensitive data stored 

on these devices were compromised.

FY 2010 Selected Information Technology 

General Controls 

We conducted this audit in support of the independent 

public accounting firm’s overall audit opinions on the Postal 

Service’s financial statements and internal controls over 

financial reporting. Infrastructure level internal controls in 

the nine Information Technology process areas we tested 

were properly designed and operating effectively. However, 

by strengthening controls over database and server security 

settings, management can reduce the risk of a compromise 

that could negatively affect the confidentiality, integrity, and 

availability of information resources and data. We quantified 

the costs associated with this risk at $63.9 million.

FY 2011 Cost and Revenue Analysis Reviews 

We issued three reports on the Postal Service’s OriginDestination Information System – Revenue, Pieces, and 

Weight process. The objective of our reviews was to 

determine whether Postal Service personnel conducted 

statistical tests to collect cost, revenue, and volume data in 

accordance with established policies and procedures. 

PRESERVING ACCOUNTABILITY 

During this period we audited Postal Service financial 

transactions. We also assessed the accuracy of 

management data to help preserve the integrity of Postal 

Service processes and personnel.

Postage in the Hands of the Public, Liability 

Estimate 

We reviewed the model used to calculate the Postage in 

the Hands of the Public liability estimate to determine if 

opportunities exist for improving the model and the financial 

reporting and predictability of the estimate. The Postal 

Service developed a process to estimate the deferred 

revenue for prepaid postage at the end of a reporting 

period. The estimate represents postage sold to but not 

yet used by customers. The model includes separate 

calculations for Forever Stamps®, denominated stamps, 

meters and pre-cancelled stamps, and mail-in-transit that, 

together, comprise the estimate. At the end of FY 2009, the 

estimated liability was $2.4 billion.

Workshare Discounts Exceeding Avoided Costs 

The Postal Service provides mailers with workshare discounts in the form of reduced postage rates for presorting, prebarcoding, handling, or transporting mail. The Postal Service credits workshare discounts with stimulating mail volume 

growth, enabling it to streamline its workforce and infrastructure, reducing mailing costs, and improving service. The 

Postal Accountability and Enhancement Act of 2006 allows workshare discounts to exceed avoided costs only under 

certain specific circumstances. Otherwise, workshare discounts must not exceed the costs the Postal Service avoids as 

a result of workshare activity. We assessed whether these discounts were properly justified. 

The audit found that justifications for 19 workshare discounts that exceed avoided costs by about $104 million were 

not supported by detailed documentation. While the Postal Service does provide pricing documentation in price change 

filings with the Postal Regulatory Commission, when it comes to justifying certain workshare discounts above avoided 

costs, the Postal Service does not always have sufficient tangible documentation, such as quantitative data, to include 

in its justifications. According to management, reliable quantitative data supporting justifications are not always 

available or necessary. Management does not document the price decision-making process, but makes decisions after 

discussions with parties both inside and outside the Postal Service. In addition, Postal Service cost avoidance models 

may not accurately reflect avoided costs for workshared mail. 

Although management disagreed with the recommendation, they are pursuing an alternative solution. They further 

stated that the Postal Service provided justifications for the discounts that did exceed avoided cost and that the Postal 

Regulatory Commission had determined those discounts were consistent with the statute. Management stated that 

the Postal Service is not required to provide justification for workshare discounts that exceed avoided costs for mail 

consisting exclusively of mail matter of educational, cultural, scientific, or informational value.
October 1, 2010 — March 31, 2011 | 15 

PRESERVING ACCOUNTABILITY

Changes in consumer purchase and usage behaviors 

associated with the introduction of the Forever Stamp 

explained, for the most part, recent significant fluctuations 

in the estimated liability. Further, the Postal Service’s 

mandated quarterly financial reporting highlighted 

the changes to the estimate. However, we identified 

opportunities that could improve the predictability and 

financial transparency of the estimate. Specifically, we 

determined that management needs to develop a clear, 

single document of the procedures used, the assumptions 

made, the analyses conducted, and the rationale for 

methods used to estimate the liability; and they should 

enhance the separate calculations for the components 

used in the estimate. Further, the Postal Service should 

implement a formal communication and informationsharing process among personnel responsible for 

developing the liability estimate. Management asserted that 

they have already accomplished these recommendations 

by the process documentation prepared during FY 2010 for 

Sarbanes-Oxley Act of 2002 compliance.

Workers’ Compensation Liability Estimate 

Our objectives were to improve the workers’ compensation 

model and reduce the volatility of management’s worker’s 

compensation liability estimate. Volatility is inherent in the 

estimation of workers’ compensation liability, not only in the 

Postal Service but also in other benchmarked organizations. 

The majority of benchmarking partners’ annual reports 

recognized the potentially high level of uncertainty 

associated with estimating the financial liability for workers’ 

compensation. However, the Postal Service could take 

action to smooth or reduce the volatility of the estimate 

of this significant liability. Specifically, management 

should consider using discount rates similar to the U.S. 

Department of Labor and revise the weights of the actuarial 

methods they use in the model.

In addition, management could improve the model by 

ensuring that personnel who develop the liability estimate 

better understand the model, including the assumptions 

made, the analyses conducted, and the rationale for the 

methods used. Although we did not find opportunities for 

economic impact in this audit, we will perform additional 

work to address potential cost savings.

Financial Audits 

Following is a summary of the financial audits performed in 

support of the independent public accounting firm’s opinion 

on the Postal Service’s financial statements and internal 

controls over financial reporting. In addition, we issued 

three capping reports summarizing our Financial Testing 

Compliance Quality Assurance, business mail entry units, 

and postal retail units. 

FY 2010 Financial 

Statements Audit 

This report presents the 

results of our audit of the 

selected financial activities 

and accounting records 

at Headquarters and the 

Information Technology 

and Accounting Service 

Centers (IT/ASC) for FY 

2010. We noted that the 

Postal Service’s financial 

accounting policies and 

procedures provide for an 

adequate internal control 

structure and comply 

with generally accepted 

accounting principles; 

accounting transactions 

impacting the general 

ledger account balances 

for assets, liabilities, equity, 

income, and expenses are 

fairly stated in accordance 

with generally accepted 

accounting principles; 

general ledger account balances conform with the 

general classification of accounts of the Postal Service 

on a basis consistent with that of the previous year; 

and the Postal Service is in compliance with laws and 

regulations that have a direct and material effect on the 

financial statements taken as a whole. For these audits, 

we did not propose any adjustments, but we did identify 

various control deficiencies that were not material to the 

overall financial statements and did not affect the overall 

adequacy of internal controls. Also, throughout the year, 

we reviewed internal controls over financial reporting and 

identified various control deficiencies that we brought 

to management’s attention at the time of discovery to 

assist them with their responsibility for establishing and 

maintaining an adequate internal control structure over 

financial reporting. 

FY 2011 Financial Testing Compliance Group 

Oversight Reviews. To comply with Sarbanes-Oxley 

Act requirements, the Postal Service must report on the 

effectiveness of the agency’s internal controls to ensure 

accurate financial reporting. It must submit an annual 

assessment to the Postal Regulatory Commission. The 

Postal Service established the financial testing compliance 

group to conduct tests of key financial reporting controls. 

We conducted oversight reviews, at the request of the 

independent public accountants, to assist the Postal 

Service in determining whether they can rely on the results 

Postage sold to customers, but not yet used for mailing purposes, creates 

a liability for the Postal Service. At the end of FY 2009, that estimated 

liability was $2.4 billion. The popularity of Forever Stamps has driven 

changes in the purchase and usage of stamps, necessitating a review of 

the model used to calculate this estimated liability.
16 | Semiannual Report to Congress

from their field-level internal control testing. During this 

reporting period, we issued 42 management advisories 

on business mail entry units (BMEU), detached mail units, 

postal retail units, plant verified drop shipments, Business 

Reply Mail, Voyager, and SmartPay® that concluded on 

whether analysts properly conducted and documented their 

examinations of key financial reporting controls. 

FY 2010 Financial Installation Audits 

FY 2010 Financial Testing and Compliance. This report 

presents the results of our review of the quality of financial 

testing compliance work at business mail entry units, 

postal retail units, and mail processing centers. We found 

that the compliance group had insufficient supporting 

documentation and did not always report all exceptions 

they identified during their reviews, causing their results to 

sometimes be inconsistent with our results. We also noted 

other working paper documentation issues, such as the 

compliance team not providing all sampling methodology 

documentation; however, this did not affect our ability to 

determine whether the results were consistent. Most of 

the issues we identified were in reviews the compliance 

group conducted early in their testing schedule. Given that 

the group was recently formed and analysts had a learning 

curve for their new jobs and review programs, we expected 

these results. Throughout the year, we communicated 

these issues to management. In later reviews, we found 

that there were fewer issues and improved financial testing 

compliance reviews.

Business Mail Entry Units 

The purpose of this audit was to determine whether the 

Postal Service complied with key financial reporting controls 

for business mail acceptance and verification processes 

and procedures at selected business mail entry units. The 

Postal Service requires mailers to prepare all mailings 

properly, take them to an approved BMEU, and pay postage 

for the mail before it enters the mailstream. Presorting mail 

(properly addressing mail and placing it in specific ZIP Code 

order) is a worksharing incentive that offers discounted 

postage rates to customers for performing work associated 

with mail processing. Unless employees properly prepare 

business mailings for the discounts claimed, the Postal 

Service incurs increased processing costs.

Our audits showed that the Postal Service did not comply 

with key financial reporting controls for business mail 

acceptance and verification processes and procedures. 

We noted that throughout the year the Postal Service 

implemented various actions in a concerted effort to 

improve compliance. As a result, the Postal Service’s 

level of compliance with these key controls increased 

toward the end of the fiscal year, helping to ensure that 

customers were appropriately charged and revenues 

were recognized. Our test results in the last portion of the 

year were consistent with those that the Postal Service’s 

financial testing compliance group reported for its testing 

of the same controls during the last two quarters of FY 

2010. However, given the high level of non-compliance we 

found throughout the year, plus the fact that other audit 

reports indicated similar business mail acceptance issues, 

we believe risks remain with the BMEU mail acceptance 

and verification process. Work should be done to ensure all 

revenue is appropriately recognized. 

Although the report did not contain any recommendations, 

we will continue to test and monitor business mailings 

and business mail acceptance and verification processes 

and procedures. Management did not specifically agree 

or disagree with the report’s conclusions; however, they 

stated that in general, business mail acceptance has 

made significant progress in identifying, documenting, and 

training on key controls for the acceptance and verification 

of business mailing in FY 2010.

Post Offices, Stations, and Branches 

We audited postal retail units to determine whether 

they complied with nine key financial reporting controls 

related to accountability examinations, master trust 

accounts, employee items, financial differences, unit 

closeout procedures, payroll, Voyager payments, SmartPay 

PRESERVING ACCOUNTABILITY

The Postal Service created the Key Control Guide (FY 2011 Spring Edition) as a resource for field units. 

This 11-page guide provides the information needed to identify and perform regularly-encountered key 

field controls in place at post offices, business mail entry units, and plants.
October 1, 2010 — March 31, 2011 | 17 

PRESERVING ACCOUNTABILITY

payments, and contract postal unit oversight. This report 

presents the results of our financial installation audits 

of 105 post offices, stations, and branches for FY 2010. 

Based on the items we reviewed, Postal Service retail units 

overall did not comply with all nine key financial reporting 

controls. Additionally, we reported $362,750 in monetary 

and $62,378 in other impact in our individual financial 

installation audit reports. 

Information Technology Contract Payment 

Oversight 

The purpose of this audit was to evaluate the adequacy 

of oversight for information technology contract 

payments. Specifically, we wanted to determine whether 

contracting officers issued letters to contracting officer’s 

representatives detailing their responsibilities and 

limitations, and whether invoices were properly certified. 

Supply Management’s Information Technology Category 

Management Center is responsible for creating and 

maintaining contracts for retail, hardware, and software 

systems. 

Our audit concluded that the contracting officers did not 

always appoint representatives; thus, personnel without 

letters of designation and specific contract knowledge 

were certifying invoices. Based on our sample results, 

we statistically project that there were more than $192 

million in improperly certified invoices. Specifically, we 

reviewed 255 statistically sampled IT retail and hardware 

invoices valued at nearly $50 million for FYs 2008 and 

2009 and found that 86 percent were not properly certified. 

Additionally, personnel did not perform a reconciliation of 

invoices to receiving documents before certifying invoices 

in almost all cases.

Management disagreed with the extrapolation of 

monetary impact. They stated that lack of a representative 

designation did not result in improper invoice certification. 

Also, they stated that their policy does not require that a 

representative be assigned to every contract and, in many 

cases, an office could be designated to certify invoices. 

Management also disagreed with our classification of the 

monetary impact. 

Overtime Usage

We reviewed the Postal Service’s overtime usage in 

FY 2010 and found that it paid $2.9 billion in overtime 

compared to $2.4 billion in FY 2009, representing an 

increase of 17.2 percent. We also found that management 

did not effectively plan for overtime usage as it exceeded 

its planned overtime hours by 67.8 percent in FY 2010. 

According to management, this increase in overtime usage 

was due to a reduction in personnel, mail rerouting, and 

equipment deployment delays and updates. Additionally, 

although overtime usage increased, overall workhours were 

reduced by 77.3 million. 

Travel and Other Expenses 

We assessed whether Postal Service employees adhered to 

travel policies related to lodging and airfare, and whether 

there are opportunities for cost savings in those areas. The 

audit disclosed that Postal Service employees on occasion 

did not comply with prescribed travel policies resulting in 

excessive travel costs for lodging and airfare in FY 2009 

and FY 2010. We estimate that the Postal Service could 

realize more than $1.2 million in savings over the next 2 

years if it takes action to curtail employee non-compliance 

with travel policies. 

Additionally, we assessed whether the travel and 

miscellaneous expenses of the Board of Governors — 

including external professional fees — were properly 

supported, reasonable, and in compliance with Postal 

Service policies and procedures and board policies. Further, 

we assessed whether travel and representation expenses 

claimed by Postal Service officers were properly supported 

and complied with policies and procedures. We found that 

these expenses for the Board of Governors and the Postal 

Service officers were properly supported, reasonable, and 

in compliance with the Postal Service and board policies.

The OIG audits postal retail units – post offices, stations and branches – to determine whether they comply 

with nine key financial reporting controls.

October 1, 2010 — March 31, 2011 | 19 

FINANCIAL CRIMES

FINANCIAL CRIMES

A large portion of the $67 billion in revenue generated by 

the Postal Service last year is handled at the 32,000 postal 

retail locations. Employees who allegedly embezzle funds, 

kite or otherwise misuse money orders, or steal and misuse 

postal-issued credit cards receive investigative attention 

from our special agents.

Embezzlements

Special agents employ various investigative techniques to 

uncover embezzlements by postal employees who steal 

money from cash drawers, use sophisticated schemes to 

manipulate postal money orders or money order funds, or 

falsify financial retail records. Employees found responsible 

for missing postal funds are reported to management for 

appropriate administrative action. In cases that warrant 

criminal prosecution, offenders face the loss of their jobs, 

jail time, and court-ordered restitution. The following are 

examples of embezzlement cases we investigated during 

this reporting period. 

 In December, a former Maryland postmaster was 

sentenced in federal court to 9 months incarceration, 

followed by 3 years of supervised release, the first 6 

months of which was ordered to be served in home 

detention with electronic monitoring. The former 

postmaster was further ordered to pay a $3,000 fine 

and nearly $60,000 in restitution to the Postal Service. 

In 2009, the postmaster reported an armed robbery at 

the station when he was the only person at the station 

and the counter line was closed for lunch. Agents 

became suspicious after finding out an audit of the office 

disclosed irregularities in the office accountabilities. A 

green metal box, similar to the one described as stolen, 

was recovered from the trunk of the postmaster’s 

car. Our investigation found that the postmaster had 

devised a plan to stage an armed robbery to cover his 

embezzlement of postal funds. In August 2010, the 

postmaster resigned his position and pled guilty to the 

felony theft of government property.

 A former lead sales and service associate pled guilty in 

December in federal court in New Mexico to one felony 

count of the theft of government property. As part of the 

plea agreement, the former employee agreed to pay 

restitution totaling more than $97,000 to the Postal 

Service. Our investigation showed that the associate 

had embezzled postal funds by submitting false postal 

reports and falsely entering amounts in the computer 

terminal to indicate she had issued refunds for postage, 

services not rendered, postage applied to Business 

Reply Mail, and unused metered postage. Sentencing is 

pending.

 An Illinois former associate was sentenced in federal 

court in January to a year of home detention, with 

electronic monitoring for the first 5 months, followed by 

2 years’ probation, 200 hours of community service, and 

was ordered to pay more than $34,000 in restitution to 

the Postal Service. Our investigation disclosed that the 

associate had employed three schemes to falsely create 

cash overages in her cash drawer, which she would 

embezzle at the end of the day. Part of the scheme was 

to void money orders that had been legitimately issued 

to customers that were later cashed. Following our 

investigation, the associate resigned from her position 

with the Postal Service and pled guilty in federal court to 

the misappropriation of postal funds.

 In November, a Missouri postmaster was sentenced to 

3 years probation and ordered to pay restitution of more 

than $14,000 to the Postal Service. The postmaster had 

previously repaid $26,000 of the total embezzlement 

amount of $40,000. The postmaster retired while 

under investigation and pled guilty to a felony charge in 

federal court. The OIG investigation disclosed that the 

postmaster had issued money orders for personal use, 

including rent, groceries, and cash. The postmaster paid 

for the money orders by offsetting a customer’s permit 

account. An audit of the postmaster’s accountabilities 

revealed significant shortages, and the postmaster 

admitted diverting bulk mail funds to cover a shortage in 

the vending accountability.

OFFICE OF INVESTIGATIONS

To protect the mail and to ensure the integrity of postal processes, finances, and personnel, the Postal 

Service relies on the investigative efforts of the Office of Investigations’ (OI) special agents. These special 

agents are stationed in offices nationwide. Their charge is to investigate allegations of internal crimes 

and frauds committed by postal employees and contractors against the Postal Service and employee 

misconduct. Following is work conducted by the OI during this reporting period that contributed to 

safeguarding the Postal Service’s revenue and assets and helped deter postal crimes, ultimately helping to 

maintain a stable and sound Postal Service.
20 | Semiannual Report to Congress

FINANCIAL CRIMES

 A New York associate was sentenced in December to 

3 years supervised release and ordered to pay more 

than $74,000 in restitution to the Postal Service. The 

associate had previously pled guilty in federal court 

after an OIG investigation disclosed that the associate 

was using a number of deceptive techniques to falsely 

cause an overage in his cash drawer. The associate 

was intentionally failing to properly report post office 

box rentals, cashing checks intended for customer trust 

accounts, falsely reporting that he had issued refunds 

to customers, and issuing money orders for personal 

use, primarily to pay for living expenses. OIG agents 

filed a complaint in federal court and an arrest warrant 

was issued. The associate voluntarily surrendered to 

authorities. The associate resigned from his position with 

the Postal Service. 

 In March, a Louisiana associate was sentenced to 5 

years probation and ordered to pay more than $114,000 

in restitution to the Postal Service. In December, the 

associate had pled guilty in federal court to a felony 

count of misappropriation of postal funds. As part of the 

plea agreement, the associate agreed to pay restitution. 

Prior to sentencing, she repaid approximately $109,000 

of the amount due. The OIG investigation revealed the 

associate had been cashing business checks through her 

cash drawer. The checks were submitted for payment 

of bulk mailings, which the associate accepted, but did 

not properly account for payment and instead embezzled 

the money. During an interview, the associate admitted 

she used money to gamble during her lunch hour. At the 

conclusion of the interview, the associate resigned from 

her position with the Postal Service.

Voyager Credit Card 

Through a partnership with U.S. Bank and Voyager Fleet, 

the Postal Service issues one credit card per vehicle 

for refueling, routine maintenance, and vehicle washing 

and polishing. Postal employees and contractors are 

investigated for alleged disclosure of personal identification 

numbers (PIN) to non-postal entities, using the Voyager card 

for personal use, exceeding the daily purchase limit without 

proper authorization, or transferring purchasing authority to 

a non-postal entity. Special agents investigated 35 cases 

of alleged Voyager credit card fraud in this reporting period, 

resulting in seven arrests and 16 administrative actions. 

The following are examples of two such cases.

 In March, a highway contract route truck driver formerly 

employed by a New Jersey trucking company pled guilty 

in federal court to theft of government property. The 

contract driver admitted to stealing more than $300,000 

from the Postal Service through the unauthorized 

use of Voyager fuel cards given to the company in 

connection with a contract to haul U.S. Mail. As part of 

the investigation, the truck driver admitted that from 

November 2005 to October 2008, he used the cards to 

make numerous unauthorized purchases of fuel for his 

personal use, including for a towing business and to sell 

to others at a discounted price. He used a number of 

cards – issued to trucks he drove and to trucks operated 

by other drivers – and visited multiple gas stations, 

often near his home. As part of the scheme, the driver 

installed a large rubber bladder in his personal truck 

that held approximately 100 gallons of fuel. As part of 

the plea agreement, the driver agreed to pay more than 

$335,000 in restitution to the Postal Service. Sentencing 

is pending.

 A New York highway contract owner/driver pled guilty in 

January to a felony charge of theft of public money. As 

part of the negotiated settlement with the U.S. Attorney’s 

Office, the owner’s two sons signed pre-trial diversion 

agreements. All of the defendants have agreed to pay 

restitution. In addition, in February, a gas station owner 

pled guilty after he was charged with the theft of public 

money in conjunction with this scheme to defraud the 

Postal Service. The OIG investigation revealed that the 

Postal Service lost more than $80,000 and that the gas 

station owner was manually entering the gas charges 

the owner and his sons were fraudulently charging 

on the Voyager card. Surveillance in the case showed 

that a transport truck was used to purchase unleaded 

fuel that was then transported 80 miles to a large gas 

tank located at a mountain resort owned by the owner. 

They resold the gas to seasonal snowmobilers in a 

mountainous area of New York. In exchange for his 

participation in the scheme, the gas station owner was 

allowed to up-charge the fuel as though diesel fuel had 

Special agents investigated 35 cases of Voyager credit card fraud this reporting period, resulting in 7 

arrests and 16 administrative actions. 
October 1, 2010 — March 31, 2011 | 21 

WORKERS’ COMPENSATION FRAUD

been purchased. To a lesser extent, the owner’s sons 

had charged gas used for personal use on the Voyager 

card. Based on the OIG investigation, in April 2010, 

federal arrest warrants were issued and agents arrested 

all four defendants. Sentencing for the owner is pending.

Tort Claims

The Postal Service established the Tort Claims Program 

to monitor and resolve claims filed against the Postal 

Service by customers seeking compensation for injuries or 

losses incurred while using postal facilities. According to 

an agreement with the Postal Service’s Law Department, 

special agents investigate tort claim cases involving 

suspected fraud and cases for which the U.S. Attorney’s 

Office has requested an investigation. The following are 

examples of two such cases.

 The U.S. Attorney’s Office requested the OIG’s 

investigative assistance regarding a civil suit brought 

against the Postal Service by a former California 

letter carrier. The carrier filed a civil tort claim in 2007 

against the Postal Service alleging, among other things, 

discrimination on the basis of age and physical disability, 

which caused extreme emotional distress. The employee 

also left her window clerk position and applied for 

disability retirement. In 2004, the former carrier had 

reported occupational injuries related to her back, neck, 

and shoulders. For the next 3 years, the Postal Service 

attempted to accommodate her physical restrictions by 

offering her non-carrier duty job assignments, as well 

as extensive training to become a window clerk. Our 

investigation determined the former employee was able 

to twist, turn, bend, stoop, walk, push and pull heavy 

objects, and was otherwise leading a normal life. The 

OIG provided surveillance video and a report to the U.S. 

Attorney’s Office. In November, the case was settled 

at an amount substantially less than the original law 

suit. The U.S. Attorney’s Office stated the investigative 

assistance by the OIG had resulted in a savings of at 

least $650,000 in the settlement amount. 

 A Wisconsin rural letter carrier was involved in a vehicle 

accident in 2007 while delivering mail in her privately 

owned vehicle. The carrier was deemed to have been at 

fault and the couple in the other vehicle filed a claim for 

damages. Negotiations in the matter were unsuccessful 

and the couple filed a civil tort claim in federal court. The 

U.S. Attorney’s Office requested investigative assistance 

by the OIG in the matter. The Postal Service agreed to 

pay for the vehicle damages and medical attention, but 

the plaintiffs had additionally claimed a loss of wages 

because they were unable to work. The OIG investigation 

revealed the couple owned a pizza restaurant and 

appeared to be working and otherwise leading normal 

lives. The cost savings to the Postal Service are 

estimated at $450,000. 

WORKERS’ COMPENSATION FRAUD

The monetary and medical benefits paid by the Postal 

Service to workers’ compensation claimants (employees 

who sustained job-related injuries) in FY 2010 totaled more 

than $1 billion and its estimated total liability for future 

workers’ compensation costs is more than $12.5 billion. 

Administered by the U.S. Department of Labor (DOL), 

the Office of Workers’ Compensation Programs (OWCP) 

provides direct compensation to providers, claimants, 

and beneficiaries. The Postal Service later reimburses 

the OWCP in a process known as “charge-back billings.” 

Investigative efforts during this reporting period resulted in 

more than $86 million in cost savings or avoidances, 17 

arrests, and 73 administrative personnel actions, including 

removals and suspensions and termination of benefits.

Claimant Fraud

The workers’ compensation program exists for employees 

who are legitimately injured while on duty. The program 

provides benefits to injured employees and their families 

while the employee is unable to work. Postal employees 

who attempt to defraud OWCP with false claims are 

criminally prosecuted to permanently prevent payment of 

A Florida rural carrier associate, who was receiving workers’ compensation benefits since 2004 due 

to a job-related injury to her neck and back, was found to be repeatedly exceeding her medical 

restrictions. Scuba diving was one of the activities that resulted in a jury convicting her of workers’ 

compensation fraud.
22 | Semiannual Report to Congress

WORKERS’ COMPENSATION FRAUD

additional compensation and to recover funds fraudulently 

obtained. Cases that may require administrative action 

are referred to the Postal Service and the DOL. Special 

agents work closely with Health and Resource Management 

specialists from the Postal Service on all phases of 

these investigations. Following are examples of workers’ 

compensation fraud cases investigated during this period. 

 After a 2-day jury trial in January, a Florida rural 

carrier associate was found guilty on one count of 

false statement or fraud to obtain federal employees’ 

compensation. The carrier alleged partial disability 

from a work-related neck and back injury in 2004, 

and had received approximately $297,000 in workers’ 

compensation payments. Video surveillance conducted 

by our agents showed the carrier repeatedly exceeding 

her medical restrictions. We watched the carrier scuba 

diving; lifting and carrying heavy dive equipment and 

other objects; climbing up and down steep rocky steps; 

shopping for extended periods of time; and sliding down 

a two-story water slide. The DOL terminated the carrier’s 

compensation benefits, resulting in a cost avoidance of 

about $409,000 for the Postal Service. The rural carrier 

associate was sentenced to 3 years’ probation, ordered 

to make restitution of $9,538 to the Postal Service and 

fined $1,000. Administrative action by the Postal Service 

is pending.

 In January, a special agent’s investigation of an Ohio 

motor vehicle services driver led to a 5-month federal 

prison sentence, 3 years’ probation, and obligation 

to pay more than $116,000 in restitution. The driver 

pled guilty to one count of false statement or fraud to 

obtain federal employees’ compensation. The driver 

had alleged total disability from a work-related back 

injury and received in excess of $116,000 in workers’ 

compensation payments. Investigation determined the 

driver was self-employed providing snow removal and 

lawn care services to a number of customers, and failed 

to report the income received from those activities to the 

DOL. Our agents also found the driver was working for 

another company in which he operated a tow motor and 

provided welding services. The DOL removed the driver 

from the periodic roll, realizing a savings of more than 

$600,000 for the Postal Service. The driver retired from 

the Postal Service. 

 A rural letter carrier pled guilty in November in federal 

court to false statement or fraud to obtain federal 

workers’ compensation benefits. The carrier alleged total 

disability as a result of a work related injury to her right 

elbow. Our investigation determined that the carrier was 

the owner and operator of a martial arts studio and failed 

to report the activity to the DOL. Surveillance conducted 

by our agents showed the carrier driving to the martial 

arts studio on a routine basis and conducting numerous 

administrative duties. The DOL terminated the carrier’s 

benefits, realizing a savings of more than $1 million for 

the Postal Service. The carrier retired from the Postal 

Service. In March 2011, the carrier was sentenced to 

pay restitution of $12,066. 

 After a 2-week jury trial in February, a New York mail 

handler was found guilty on two felony counts of 

false statement or fraud to obtain federal employees’ 

compensation and one felony count of false statements. 

The mail handler had alleged total disability as a result 

of a work-related injury to her right wrist, right shoulder 

and upper arm. Our investigation revealed the mail 

handler was performing activities that were inconsistent 

with the capabilities she communicated to her physician, 

the DOL, and the Postal Service. Video surveillance 

conducted by special agents showed the mail handler 

shopping on numerous occasions, carrying and lifting 

objects, reaching, pushing a fully loaded cart, and driving 

on a regular basis. Investigation further determined the 

mail handler received monthly food stamp payments and 

failed to disclose her receipt of compensation payments 

or her employment with the Postal Service on all U.S. 

Department of Agriculture food stamp application forms. 

As a result of our investigation, the DOL removed the 

mail handler from the periodic roll, realizing a cost saving 

of more than $1.5 million for the Postal Service. The mail 

handler retired from the Postal Service. Sentencing is 

scheduled for May 2011.

An Ohio motor vehicle services driver, who was allegedly totally disabled from an on-the-job injury, was 

able to provide snow removal and lawn care services – until OIG agents caught up with him. Convicted in 

federal court, the driver was sentenced to 5 months in prison and ordered to pay $116,000 in restitution.
October 1, 2010 — March 31, 2011 | 23 

Medical Provider Fraud

The workers’ compensation program is also subject to 

fraud and abuse by medical providers used by postal 

employees injured on the job. A few seek to take advantage 

of this program by submitting false bills, colluding with 

claimants to extend benefits, or falsifying claim documents. 

When evidence of abuse exists, OIG agents investigate 

these providers.

 The Postal Service was awarded $42.5 million in 

criminal fine proceeds in February 2011 attributable 

to the OIG’s participation in a qui tam1

 case against a 

pharmaceutical company that promoted the sale of a 

specific prescription drug for conditions not approved 

by the Food and Drug Administration (FDA). The qui tam

complaint filed against the pharmaceutical company 

was investigated jointly with the Department of Health 

and Human Services OIG, and the FDA Office of 

Criminal Investigations. The investigation determined 

that between July 2000 and December 2001, the 

pharmaceutical company profited from the misbranding 

and off-label promotion of the drug. By affirmatively 

promoting the drug for unapproved uses, the company 

caused the drug to be distributed in interstate commerce 

without adequate directions for its use. In November, 

the company pled guilty in a Pennsylvania federal 

court to distributing a misbranded drug. The company 

agreed to pay $422.5 million in criminal and civil fines, 

which includes a criminal fine and forfeiture of $185 

million and $237.5 million to resolve civil liabilities. The 

$42.5 million awarded to the Postal Service represents 

25 percent of the court ordered criminal fine of $170 

million. The asset forfeiture amount payable to the Postal 

Service has yet to be determined.

DELAY, DESTRUCTION, AND THEFT OF 

MAIL BY EMPLOYEES 

Special agents investigate allegations of postal employees 

delaying, destroying, or stealing mail. Suspected employees 

are referred to prosecutors or to management for 

administrative action. 

Theft of Mail by Employees

Following are examples of cases in which postal employees 

stole mail for personal gain.

 A San Francisco letter carrier pled guilty in January 

to one count of obstruction of mail. Agents observed 

the letter carrier during a surveillance operation as she 

stole First-Class Mail containing Netflix DVDs. During an 

interview with agents, the letter carrier said she began 

stealing from the mail approximately 10 years ago, 

starting with magazines and later gift cards, parcels, 

Netflix DVDs and other items she found interesting. 

Agents executed a federal search warrant at her 

residence and seized 60 tubs of mail, including more 

than 3,000 pieces of First-Class Mail. The letter carrier 

was arrested in December 2010. She was sentenced to 

6 months of home confinement, 3 years of probation and 

was ordered to pay $20,000 in restitution to Netflix, and 

a $15,000 fine to the Postal Service. The letter carrier 

retired from the Postal Service in May 2010.

 An Arkansas contract employee pled guilty in February 

to one count of theft of mail. The contract employee was 

indicted and arrested in August 2010 after confessing 

to stealing a $10,000 postal deposit. After initially telling 

agents that she never saw the remittance, the contract 

employee failed to report to work after being interviewed. 

During an additional interview with agents, the contract 

employee admitted to staging a burglary at the post 

office and stealing the $10,000 to support her family. 

After pleading guilty in February, she was sentenced 

to 5 years probation and ordered to pay $10,000 in 

restitution. Her employment was terminated in February 

2010.

 In February, a North Carolina highway contract carrier 

was sentenced to 5 months in prison and 3 years of 

probation after pleading guilty to one count of theft 

of mail. During an interview with agents, the highway 

contract carrier confessed to stealing Netflix and 

Blockbuster DVDs, rifling First-Class Mail, and delaying 

First–Class Mail, Periodicals, and Standard Mail by 

storing the mail in the trunk of her vehicle. Agents 

conducted surveillance on the highway contract carrier 

and determined she had not delivered at least three 

Netflix DVDs. Agents stopped the highway contract 

carrier after she departed the post office. During a 

consensual search of her personal vehicle, agents 

recovered five Netflix movies, four parcels, and 2,175 

pieces of deliverable mail. The majority of the mail was 

hidden in the trunk of the vehicle inside diaper bags 

underneath diapers, inside the sleeve of a jacket, and 

inside of the area where the spare tire is stored. The 

carrier admitted to agents the mail had been in her 

vehicle for approximately 3 weeks. She also stated 

she had approximately 25-50 Netflix movies at her 

DELAY, DESTRUCTION, AND THEFT OF MAIL BY EMPLOYEES

WORKERS’ COMPENSATION FRAUD 

INVESTIGATIVE RESULTS

October 1, 2010 — March 31, 2011

 277 fraud investigations resolved

 $86 million in compensation payments avoided

 17 arrests

 21 indictments

 18 convictions

 73 personnel actions taken by management

1

A legal action under a statute such as the False Claims Act, allowing private parties to sue for a penalty on behalf of the government.
24 | Semiannual Report to Congress

DELAY, DESTRUCTION, AND THEFT OF MAIL BY EMPLOYEES

residence. The carrier stated she delayed the mail 

because she felt overwhelmed by her route. She was 

indicted and arrested for theft of mail in July and pled 

guilty in September 2010. The highway contract carrier’s 

contract with the Postal Service was terminated in 

January 2010.

 A Kentucky contract letter carrier pled guilty to one count 

of obstruction of correspondence in February 2011. The 

investigation determined that the carrier obstructed the 

delivery of more than 3,000 pieces of First-Class Mail, 

Periodicals, and Standard Mail that she kept inside her 

vehicle. Approximately 348 pieces of First-Class Mail 

were rifled, including one prescription drug parcel. The 

undelivered mail dated back to September 2009. After 

conducting surveillance of the contract carrier and 

approaching her vehicle, agents observed undelivered 

Standard Mail and Periodicals along with ripped open 

First-Class letters in the vehicle. Mail was recovered 

from the door pockets, sun visor, rear seat area, and 

the rear cargo area of the vehicle. The contract carrier 

admitted to opening mail for gift cards and cash to 

support her drug addiction. She was indicted and 

arrested in November and her contract was terminated 

by the Postal Service. Sentencing is pending.

Delay or Destruction of Mail by Employees

Citizens and businesses expect their deposited mail to 

be delivered in a timely manner and not be delayed or 

destroyed. Postal employees and contractors who delay, 

desert, or dump mail are investigated by our special agents.

 In December 2010, an Oklahoma temporary employee 

carrier pled 

guilty to one 

count of delay/

destruction of 

mail. A postal 

supervisor 

notified agents 

that more than 

500 pieces 

of FirstClass Mail, 

Periodicals, 

and Standard 

Mail were 

found in 

a trash 

dumpster at 

an apartment 

complex in 

Oklahoma City, 

OK. The carrier 

admitted to 

throwing the mail away because he was unable to “get 

it delivered.” The carrier was indicted by a federal grand 

jury and arrested in October. He was sentenced to 2 

months probation and ordered to pay a fine of $100. The 

carrier resigned from the Postal Service.

CONTRACT FRAUD

The Postal Service manages contracts, ranging from 

multimillion dollar national contracts for services such 

as transportation networks and IT infrastructures to local 

contracts for supplies and services at individual postal 

facilities. The OIG aids the Postal Service by investigating 

allegations of contract fraud, waste, and misconduct. When 

contract improprieties are documented, special agents 

present the evidence for criminal and civil prosecution and 

administrative remedies.

During this reporting period, we conducted 52 contract 

fraud investigations, resulting in 6 arrests and more than 

$13 million in monetary benefits to the Postal Service.

 A Postal Service contract air cargo carrier pled guilty 

in U.S. District Court, in Washington, DC, in December 

2010 to two counts of price fixing to restrain trade. 

The carrier was ordered to pay a $73 million criminal 

fine, of which 5 percent, $3,650,000, was paid directly 

to the Postal Service. In November 2010, pursuant to 

plea agreements, two separate air cargo carriers were 

sentenced for their role in the conspiracy and ordered 

to pay a $17.4 million and a $40 million criminal fine 

respectively, to the U.S. Government. In addition, in 

February 2011, an additional air cargo carrier pled guilty 

and was ordered to pay a $48 million criminal fine to 

the U.S. Government for its role in the conspiracy. The 

recoveries and guilty pleas that occurred in this reporting 

period resulted from a joint, ongoing investigation 

coordinated by the U.S. Department of Justice’s Antitrust 

Division and numerous federal law enforcement 

agencies into conspiracy to commit price fixing in the 

air transportation industry. The conspiracy was carried 

out, in part, through meetings, conversations, and 

communications whereby the parties agreed on certain 

components of cargo rates for shipments on certain 

routes to/from the United States.

 In November 2010, the Postal Service realized a 

recovery of more than $743,000, inclusive of OIG 

investigative costs, as a result of an investigation into an 

Ohio company awarded a contract to provide call center 

services to the Postal Service. The OIG’s investigation 

determined that the company had been improperly 

billing the Postal Service for approximately 6 years under 

the contract, which was originally awarded in 2003. 

According to the terms of the contract, when the Postal 

Service requested any modifications to the existing call 

Postal employees or contractors who delay, throw away or destroy mail are subject to 

criminal prosecution or administrative action. An Oklahoma employee was convicted 

of throwing away mail. He is no longer employed by the Postal Service.
October 1, 2010 — March 31, 2011 | 25 

CONTRACT FRAUD

service contract, the company had to provide the Postal 

Service a rough estimate. The contract also required 

that the company’s estimate be within +/-10 percent 

of the actual cost to complete the modifications. At the 

completion of the modifications, the Postal Service paid 

the company’s charges after comparing their estimates 

to their actual costs. However, the OIG found that the 

company overstated its estimates and failed to provide 

the Postal Service its actual costs. As a result, the Postal 

Service overpaid the company $575,000. The company 

agreed to pay the Postal Service an additional $168,000 

for the cost of the investigation.

 A Postal Service highway contract route contractor 

pled guilty in January in federal court to two counts of 

violations of false or fraudulent claims associated with a 

contract to transport mail. The investigation determined 

that in July 2004 and March 2006, the contractor made 

claims to the Postal Service for funds to pay prevailing 

wage rates and fringe benefits to her employee, and 

for a workers’ compensation insurance policy. However, 

the funds were not used for these purposes, as the 

contractor failed to pay the proper wage and did not 

have an active workers’ compensation insurance policy 

since September 2005. The contract had been previously 

terminated by the Postal Service based on the OIG’s 

investigative findings. Sentencing of the contractor is 

pending.

 A Utah man and his son-in-law, along with their 

respective companies (which were highway contract 

route contractors) were debarred by the Postal Service 

for a period of 3 years in an October 2010 decision. The 

OIG’s investigation determined that during certain prior 

holiday seasons, the highway contract route contractors 

submitted $32,703 in false supplemental claims to 

the Postal Service for alleged inaccurate increases in 

operating expenses. The debarment followed the OIG’s 

criminal investigation, which resulted in one contractor 

pleading guilty to a felony count of theft of government 

money, while the other pled guilty to a misdemeanor 

count of theft of government money. Both parties, as 

part of their plea, agreed to pay restitution of $32,703 to 

Major Fraud Investigations Division

The OIG established the Major Fraud Investigations Division (MFID) in April 2009 to promote integrity and accountability 

related to allegations of major fraud that impacts the Postal Service. MFID is responsible for investigating all allegations 

of fraud within the Postal Service’s programs and operations with a contract award price (individual or aggregate) or 

billings of $500,000 or more with a special emphasis on allegations that become national or multi-jurisdictional in 

nature.

The Postal Service expends $12 billion per year on goods and services and maintains an overall procurement portfolio 

of close to $42 billion. About $600 million in Postal Service funds are potentially lost to fraud each year, based on 

the Certified Fraud Examiners Association’s professionally recognized average of 5 percent of procurement dollars 

susceptible to fraudulent activity. 

During its first 2 years, MFID investigations produced nearly $61 million of monetary benefits to the Postal Service, 

51 prosecutive actions (indictments, informations, and complaints), and 27 suspensions and debarments. During this 

semiannual report period, MFID investigations resulted in more than $9 million in monetary benefits to the Postal 

Service, 17 prosecutive actions, three arrests, and 14 suspensions and debarments.

Current MFID investigations cover a wide range of issues, including contract mischarging, health care provider fraud, 

and bribery. In one anti-trust investigation, MFID uncovered that dozens of air cargo carriers engaged in a price fixing 

conspiracy.

The Postal Service contracts with both domestic and international air carriers to transport mail 

as cargo. A price-fixing scheme by air cargo carriers resulted in the Postal Service paying 

excessive cargo shipping rates. A joint investigative effort spearheaded by the Department of 

Justice that started in 2008 and includes the Postal Service OIG has resulted in several airline 

companies and their executives pleading guilty for their role in fixing prices in the air cargo 

transportation industry. This check represents part of the $11.95 million in fines paid to the 

Postal Service.
OFFICIAL MISCONDUCT

26 | Semiannual Report to Congress

the Postal Service that had not yet been paid but were 

identified by our investigation. 

 In November 2010, an Ohio Postal Service highway 

contract route contractor was sentenced in state 

court to 3 years’ probation and ordered to pay more 

than $5,500 in restitution to the Postal Service. The 

contractor had previously pled guilty to one felony count 

of theft for failing to obtain a workers’ compensation 

policy associated with a highway contract route contract 

during the period 2005 through 2010. The contractor, 

who has two employees on his contract, was required 

by the state of Ohio to have workers’ compensation 

insurance. The contractor submitted information to the 

Postal Service declaring that his workers’ compensation 

insurance policy was current. As a result of that claim, 

the Postal Service reimbursed the contractor for the 

cost of the policy. A subsequent OIG investigation found 

that the contractor did not maintain a current workers’ 

compensation policy and that contractor falsely reported 

he had coverage. 

 An OIG investigation conducted in New York uncovered 

a phantom cleaning business, set up by a customer 

service manager, used to engage in a scheme to 

fraudulently bill the Postal Service for cleaning services 

not rendered. The manager also stole third-party checks 

to conceal additional thefts of Postal Service funds. 

In total, between the two schemes from August 2006 

through July 2009, the manager embezzled about 

$184,000. In November 2010, the now former employee 

pled guilty in federal court to an indictment charging a 

violation of misappropriation of postal funds. Sentencing 

is pending.

OFFICIAL MISCONDUCT 

Postal Service employees commit misconduct when they:

 Misuse Postal Service computers.

 Destroy or steal postal property.

 Lie or forge signatures on official documents.

 Steal funds.

 Abuse authority.

 Sabotage operations.

 Use narcotics or sell drugs while on duty.

 Abuse alcohol while on duty.

During this reporting period special agents investigated 

46 cases of employees selling, possessing, or using illegal 

drugs on duty; made 28 arrests; and the Postal Service 

took 30 administrative personnel actions. Following are 

examples of cases the OIG investigated involving employee 

misconduct.

 In December, prosecution for a city carrier in New 

York state was deferred for 3 months pending good 

behavior and satisfactory compliance of the terms 

of the deferment. The carrier had been indicted in 

February 2010 for obstruction of correspondence. In 

June 2010, a non-Postal Service co-conspirator pled 

guilty to possession with intent to distribute a controlled 

substance. This investigation, conducted jointly with 

the Postal Inspection Service, identified more than 130 

parcels originating on the West Coast that had been 

scanned “Delivered” or “Notice Left” by the carrier 

since September 2009. The parcels were mailed to 

high-rise apartment buildings and were addressed to 

fictitious apartment numbers. The gross weight of these 

Contract Fraud Risk Alert Issued to Postal Service

In July 2010, we forwarded a Risk Alert to the Postal Service detailing the issue of highway contract route (HCR) 

contractors not maintaining workers’ compensation insurance, in violation of contract terms and conditions and certain 

state laws. In addition to highlighting the issue, the Risk Alert provided specific actions that can be implemented by the 

Postal Service to protect its interests, including:

 Require HCR contractors to submit proof of workers’ compensation insurance at the time of contract award and 

certify continuous coverage annually thereafter.

 Fully document the cost elements included in the establishment of HCR rates in the price negotiation memorandum. 

Key elements that are essential to contract performance, such as the maintenance of workers’ compensation 

insurance, should be in the price negotiation memorandum.

 Remove any language from the worksheets or other contract documents or policies that contradicts the false 

statement certification on the face of the worksheets.

 Require HCR contractors to sign and certify all cost statements.

 Require HCR contractors to present payment invoices to the Postal Service prior to receiving contract payments.
EXECUTIVE INVESTIGATIONS AND INTERNAL AFFAIRS

OCTOBER 1, 2010 — MARCH 31, 2011 | 27 

parcels exceeded 2,000 pounds. The carrier received 

$20 per delivered parcel. As the carrier’s parcel post 

responsibilities do not include this class of mail, he 

was unauthorized to take custody of and deliver these 

parcels. The co-conspirator retrieved several of these 

parcels, which contained 14 pounds of illegal narcotics. 

In October, the non-Postal Service co-conspirator was 

sentenced to 12 months and one day incarceration 

followed by 3 years supervised released and $100 

special assessment. The carrier was removed from the 

Postal Service. 

 A city letter carrier in New York state pled guilty in 

October to bribery of a public official. This investigation, 

conducted jointly with the Postal Inspection Service, 

revealed that the carrier facilitated the delivery 

of narcotic-laden parcels on behalf of local drug 

traffickers. The carrier also alerted local traffickers 

of law enforcement interest in suspect parcels. The 

carrier and his two Postal Service co-conspirators 

assisted the trafficking operations by providing “no such 

number” mailing addresses from their routes to which 

the parcels were delivered. During one exchange, the 

carrier received $2,400 cash for providing addresses 

and delivering these parcels. One of the co-conspirators 

was paid $100 to $300 per parcel and given marijuana 

for providing addresses. The carrier and the two coconspirators were removed from the Postal Service. 

Sentencing of the city letter carrier is set for June 3. 

The two Postal Service alleged co-conspirators have not 

been prosecuted. 

 A Louisiana mail processing clerk pled guilty to 

possession of marijuana in February. Our investigation 

revealed that the clerk would leave a marijuana joint 

on the concrete either at a local bank or car wash on 

a nearby street and would go to that area on his lunch 

break, get the marijuana, and smoke it prior to returning 

to work to finish his shift. The clerk was sentenced to 

6 months in jail; however, the jail term was suspended 

and replaced with supervised probation for 1 year. The 

clerk was also ordered to pay a $200 fine and court 

costs, remain arrest- and conviction-free for the period 

of probation and to meet other conditions. The Postal 

Service suspended the clerk for 14 days.

 An Arkansas sales and service distribution clerk pled 

guilty to four counts of possession of a controlled 

substance with intent to distribute. As part of this 

investigation, conducted jointly with Arkansas state and 

local officials, the clerk sold 45 Hydrocodone tablets to 

an undercover officer during one of three transactions 

between the clerk and the undercover officer. The clerk 

sold the prescription narcotics while in uniform and 

on one occasion used her cellular phone to arrange at 

least one of the illegal transactions while on duty and 

on postal property. The clerk was sentenced to 3 years 

supervised probation, a $500 fine, and court costs. The 

clerk was removed from the Postal Service.

 A city letter carrier in New York state was sentenced 

in March to 2 years in prison plus 2 years post release 

supervision for criminal sale of a controlled substance 

and conspiracy. This investigation, conducted jointly with 

the Postal Inspection Service and state and local police 

officials of New York, revealed that in July, while under 

surveillance, the carrier delivered a parcel that contained 

approximately 2 kilograms of cocaine to his non-postal 

co-conspirator. During the course of a New York Police 

Department (NYPD) narcotics operation, investigators 

learned of a narcotics conversation between the carrier 

and a non-postal co-conspirator. The carrier and the coconspirator were discussing the carrier’s upcoming work 

schedule and a suspected shipment of narcotics. While 

in uniform and operating a postal vehicle, the carrier met 

with the co-conspirator and delivered a large Express 

Mail parcel. The co-conspirator received the parcel from 

the clerk, placed it inside of the cab, and left the scene in 

the same cab. NYPD recovered the parcel from the cab 

and executed a search warrant of the parcel. The parcel 

contained approximately 2 kilograms of cocaine with an 

estimated street value of $250,000. The co-conspirator 

promised the carrier $1,000 to deliver the parcel. The 

carrier was removed from the Postal Service.

EXECUTIVE INVESTIGATIONS AND 

INTERNAL AFFAIRS

OI conducts criminal and administrative investigations of 

Postal Service executives, and OIG and Postal Inspection 

Service personnel, as well as whistleblower reprisal 

investigations.

Whistleblower Reprisal Activity

The Whistleblower Protection Act does not apply to the 

Postal Service. However, the Postal Service has its own 

policy governing whistleblower retaliation. The policy 

prohibits retaliation against an employee who has disclosed 

information he or she reasonably believes to be:

1) a violation of any rule, law or policy, or 2) a gross waste 

of funds, gross mismanagement, abuse of authority, or a 

substantial and specific danger to public health or safety.

Allegations received: .................................................. 108

OIG Investigations initiated:........................................... 23

Investigations closed with no finding of retaliation 

 or deferred to other adjudicative body:......................... 35

Allegations closed with no action:.................................. 90

Open investigations:..................................................... 13

OIG found reprisal:......................................................... 0

October 1, 2010 — March 31, 2011 | 29 

APPENDIX A

APPENDIX A

Reports Issued to Postal Service Management

For the period October 1, 2010 — March 31, 2011

OIG audit teams conduct performance and financial audits, evaluations, and other reviews to address the business of the Postal Service. Each team issues audit 

reports (AR) or management advisory reports (MA) in accordance with the identified needs of the project.

Summary

Strategic Goals Number of Reports Funds Put to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

Improve Service 12 $896,116,249 $298,405,248 — $1,898,137

Improve Employee Engagement 1 — — — —

Improve Financial Performance 17 $60,732,720,003 — — —

Regulatory Studies and Reporting 

Obligations

5 — — — —

Preserving Accountability 72 $600,000 $267,854,618 $266,180,194 $56,622,659 

TOTAL 107 $61,629,436,252 $566,259,866 $266,180,194 $58,520,796 

APPENDICES

The Inspector General (IG) Act of 1978 requires semiannual reports on the immediately preceding 6-month periods ending September 30 and March 31. These 

reports are sent to Congress and made available to the public.

This report summarizes OIG activities and illustrates significant problems, abuses, and deficiencies, along with recommendations and corrective actions related 

to the administration of U.S. Postal Service programs and operations during the reporting period.

The appendices on the following pages fulfill the requirements of the Act.

Definitions:

Questioned Costs. A cost that is unnecessary, unreasonable, unsupported, or an alleged violation of law, regulation, contract, and so forth.

Unsupported Questioned Costs. A cost that is not supported by adequate documentation. Unsupported costs are included with the amounts shown as 

Questioned Costs.

Funds Put to Better Use. Funds that could be used more efficiently by implementing recommended actions.

Revenue Impact. Amounts from revenue generating functions such as retail sales, rent, leases, or fees that were underpaid or not realized. In 

addition, this category includes increased revenue from existing functions and generating revenue from new sources.
30 | Semiannual Report to Congress

Reports with Quantifiable Potential Monetary Benefits

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

IMPROVE SERVICE

Delivery

City Delivery Operations Workforce Planning; DR-AR-11-001; 11/22/2010

The Effects of the Flats Sequencing System on Delivery Operations – 

Arizona District; DR-MA-11-001; 3/14/2011

— $522,450 — —

Field Financial

Express Mail Guarantees; FF-AR-11-004; 12/15/2010 — — — $1,898,137

Network Optimization

Benchmarking Mail Distribution to Carriers; EN-MA-11-001; 3/25/2011 $518,517,299 — — —

Network Processing

Processing Collection Box Flats in the Philadelphia Metropolitan Customer Service 

District; NO-MA-11-002; 3/1/2011

$188,170 — — —

Sales and Services

Retail Customer Service Operations Realignment in the Hawkeye District; 

MS-AR-11-002; 3/30/2011

$25,824,357 — — —

Transportation

Postal Vehicle Service – Scheduling and Staffing – Connecticut Valley District; 

NL-AR-11-002; 3/18/2011

$19,916,848 — — —

Postal Vehicle Service Transportation Routes – Suburban Maryland Processing 

and Distribution Center; NL-AR-11-001; 1/14/2011

$6,476,403 — — —

Surface Mail Classes on Air Transportation Networks; NL-MA-11-001; 12/6/2010 $50,031,865 $22,721,491 — —

IMPROVE FINANCIAL PERFORMANCE

Delivery

City Delivery Efficiency Review – Chicago District; DR-AR-11-004; 3/30/2011 $65,362,706 — — —

City Delivery Efficiency Review – New York District; DR-AR-11-002; 1/18/2011 $93,143,986 — — —

City Delivery Efficiency Review – Northern Virginia District; DR-AR-11-003; 

1/20/2011

$32,171,718 — — —

Engineering

Facility Optimization: Capital Metro Area; DA-AR-11-004; 2/25/2011 $36,312,795 — — —

Facility Optimization: Eastern Area; DA-AR-11-002; 2/11/2011 $190,656,882 — — —

Facility Optimization: Southwest Area; DA-AR-11-003; 3/1/2011 $99,618,007 — — —

Facility Optimization: Western Area; DA-AR-11-001; 2/7/2011 $173,835,881 — — —

Financial Reporting

Substantial Savings Available by Prefunding Pensions and Retirees’ Health Care 

at Benchmarked Levels; FT-MA-11-001; 11/23/2010

$59,832,372,092 — — —

Network Optimization

Excess Space in Mail Processing Facilities in the Suncoast District; EN-AR-11-001; 

11/10/2010

$19,396,129 — — —

Implementation of Lima, OH to Toledo, OH Area Mail Processing Consolidation; 

EN-AR-11-004; 3/31/2011

$105,125 — — —

$275,161,307 $275,161,307 — — 

APPENDIX A
October 1, 2010 — March 31, 2011 | 31 

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

Network Processing

Houston, TX Processing and Distribution Center Mail Consolidation; 

NO-AR-11-004; 12/14/2010

$189,744,682 — — —

PRESERVING ACCOUNTABILITY

Field Financial

Bellmawr Main Office Window – Bellmawr, NJ; FF-AR-11-001; 10/22/2010 — — — $11,528

Blawnox Branch Post Office – Pittsburgh, PA; FF-AR-11-002; 11/17/2010 — $620 $620 $39,880

Compliance with Travel Policies and Opportunities for Cost Savings; FF-AR-11-007; 

2/9/2011

$600,000 $610,114 — —

San Francisco District Risk-Based Post Office Audit; FF-AR-11-003; 12/13/2010 — $3,609 $3,309 $5,261

White River Junction, VT Post Office; FF-AR-11-008; 3/3/2011 — $40,660 $40,660 —

Financial Reporting

Fiscal Year 2010 Postal Service Financial Statements Audit – St. Louis Information 

Technology and Accounting Service Center; FT-AR-11-009; 3/31/2011

— $73,443,545 73,443,545 —

Postage in the Hands of the Public Liability Estimate; FT-AR-11-006; 1/6/2011 — — — $56,565,990

Supply Management

Incurred Costs of Serco, Incorporated for Fiscal Year 2007; CA-CAR-11-004; 

3/14/2011

— $197,124 — —

Information Technology Contract Payment Oversight; CA-AR-11-001; 11/23/2010 — $192,692,060 $192,692,060 —

Lunda Construction Company Payment Request; CA-CAR-11-006; 3/30/2011 — $866,886 — —

TOTAL $61,629,436,252 $566,259,866 $266,180,194 $58,520,796 

APPENDIX A
32 | Semiannual Report to Congress

APPENDIX A

Report Listing

Complete listing of all OIG reports issued to Postal Service management.

For the period October 1, 2010 — March 31, 2011

IMPROVE SERVICE

Delivery

City Delivery Operations Workforce Planning; 

DR-AR-11-001; 11/22/2010

The Effects of the Flats Sequencing System on 

Delivery Operations – Arizona District; 

DR-MA-11-001; 3/14/2011

Engineering

Full Service Intelligent Mail Program Customer 

Satisfaction; DA-MA-11-001(R); 11/23/2010

Field Financial

Express Mail Guarantees; FF-AR-11-004; 

12/15/2010

Network Optimization

Benchmarking Mail Distribution to Carriers; 

EN-MA-11-001; 3/25/2011 

Network Processing

Follow-Up Review of Operations and Service in the 

Philadelphia Customer Service District; 

NO-MA-11-003; 3/4/2011

Internal Controls Over Powered Industrial Vehicles 

at the Salt Lake City Processing and Distribution 

Center and Salt Lake City Auxiliary Service Facility; 

NO-AR-11-003; 11/19/2010

Processing Collection Box Flats in the Philadelphia 

Metropolitan Customer Service District; 

NO-MA-11-002; 3/1/2011

Sales and Services

Retail Customer Service Operations Realignment in 

the Hawkeye District; MS-AR-11-002; 3/30/2011

Transportation

Postal Vehicle Service – Scheduling and Staffing 

– Connecticut Valley District; NL-AR-11-002; 

3/18/2011

Postal Vehicle Service Transportation Routes – 

Suburban Maryland Processing and Distribution 

Center; NL-AR-11-001; 1/14/2011

Surface Mail Classes on Air Transportation 

Networks; NL-MA-11-001; 12/6/2010

IMPROVE EMPLOYEE ENGAGEMENT

Human Resources and Security

Allegations of Inaccurate Time and Attendance 

Records; HR-AR-11-001; 3/31/2011

IMPROVE FINANCIAL PERFORMANCE

Delivery

City Delivery Efficiency Review – Chicago District; 

DR-AR-11-004; 3/30/2011

City Delivery Efficiency Review – New York District; 

DR-AR-11-002; 1/18/2011

City Delivery Efficiency Review – Northern Virginia 

District; DR-AR-11-003; 1/20/2011

Engineering

Facility Optimization: Capital Metro Area; 

DA-AR-11-004; 2/25/2011

Facility Optimization: Eastern Area; DA-AR-11-002; 

2/11/2011

Facility Optimization: Southwest Area; 

DA-AR-11-003; 3/1/2011

Facility Optimization: Western Area; 

DA-AR-11-001; 2/7/2011

Financial Reporting

Substantial Savings Available by Prefunding 

Pensions and Retirees’ Health Care at 

Benchmarked Levels; FT-MA-11-001; 11/23/2010

Network Optimization

Excess Space in Mail Processing Facilities in the 

Suncoast District; EN-AR-11-001; 11/10/2010

Huntington, WV Processing and Distribution Facility 

Consolidation; EN-AR-11-003; 3/31/2011

Implementation of Lima, OH to Toledo, OH Area 

Mail Processing Consolidation; EN-AR-11-004; 

3/31/2011

Network Distribution Center Activation Impacts; 

EN-AR-11-002; 3/14/2011 

Network Processing

Columbus, GA Customer Service Mail Processing 

Center Originating Mail Consolidation; 

NO-AR-11-005; 2/14/2011

Follow-Up on the Assessment of Overall Plant 

Efficiency 2010; NO-MA-11-001; 2/1/2011

Houston, TX Processing and Distribution Center 

Mail Consolidation; NO-AR-11-004; 12/14/2010

Marysville, CA Processing and Distribution Facility 

Consolidation; NO-AR-11-002; 11/23/2010

Wilkes-Barre, PA Processing and Distribution 

Facility Consolidation; NO-AR-11-001; 10/4/2010

REGULATORY STUDIES AND REPORTING 

OBLIGATIONS

Cost, Revenue, and Rates

Periodicals Mail Costs; CRR-AR-11-001; 

12/7/2010

Information Technology

Fiscal Year 2010 Selected Information Technology 

General Controls; IT-AR-11-002; 1/12/2011 

Information Resource Access; IT-AR-11-003; 

2/15/2011 

Network Perimeter Firewalls; IT-AR-11-001; 

12/6/2010

Sales and Services

Workshare Discounts Exceeding Avoided Costs; 

MS-AR-11-001; 12/23/2010
October 1, 2010 — March 31, 2011 | 33 

PRESERVING ACCOUNTABILITY

Field Financial

Bellmawr Main Office Window – Bellmawr, NJ; 

FF-AR-11-001; 10/22/2010

Blawnox Branch Post Office, Pittsburgh, PA, 

FF-AR-11-002; 11/17/2010

Compliance with Travel Policies and Opportunities 

for Cost Savings; FF-AR-11-007; 2/9/2011

Fiscal Year 2010 Financial Installation Audit 

– Business Mail Entry Units; FF-AR-11-006; 

1/20/2011

Fiscal Year 2011 Audit of Statistical Tests – 

Dallas District; FF-MA-11-031; 3/9/2011 

San Francisco District Risk-Based Post Office 

Audit; FF-AR-11-003; 12/13/2010

White River Junction, VT Post Office; 

FF-AR-11-008; 3/3/2011

Financial Reporting

Audit Opinion on the Postal Service’s SpecialPurpose Financial Statements; 

FT-AR-11-001; 11/15/2010

Fiscal Year 2010 Financial Statements Audit – 

Eagan Information Technology and Accounting 

Service Center; FT-AR-11-005; 12/30/2010

Fiscal Year 2010 Postal Service Financial 

Statements Audit St. Louis Information Technology 

and Accounting Service Center; FT-AR-11-009; 

3/31/2011

Fiscal Year 2010 Postal Service Financial 

Statements Audit – Washington, D.C. 

Headquarters; FT-AR-11-002; 12/6/2010

Fiscal Year 2010 Quality of Postal Service Financial 

Testing and Compliance Results; FF-MA-11-001; 

1/3/2011

Postage in the Hands of the Public Liability 

Estimate; FT-AR-11-006; 1/6/2011

Postal Service Board of Governors’ Travel and 

Miscellaneous Expenses for Fiscal Year 2010; 

FT-AR-11-004; 12/6/2010

Postal Service Officers’ Travel and Representation 

Expenses for Fiscal Year 2010; FT-AR-11-003; 

12/6/2010

Testing of Certain Fiscal Year 2010 Sarbanes-Oxley 

Information Technology Key Infrastructure Controls; 

FT-AR-11-007; 2/16/2011

Workers’ Compensation Liability Estimate; 

FT-MA-11-002; 12/23/2010

Fiscal Year 2010 Financial Installation Audits

Post Offices, Station, and Branches; 

FF-AR-11-005; 12/23/2010

Fiscal Year 2011 Financial Testing 

Compliance

Business Mail Entry Unit Oversight Reviews – 

Charlotte, NC; FF-MA-11-018; 2/1/2011

Business Mail Entry Unit Oversight Reviews – 

Denver Business Mail Entry Unit, Denver, CO; 

FF-MA-11-009; 2/1/2011

Business Reply Mail Oversight Reviews, Hudson 

Post Office – Hudson, NH; FF-MA-11-016; 

2/2/2011

Business Mail Entry Unit Oversight Reviews, North 

Metro Processing and Distribution SmartPay 

Purchase Card Programs – Duluth, GA; 

FF-MA-11-024; 2/25/2011

Business Mail Entry Unit Oversight Reviews – 

Omaha Business Mail Entry Unit, Omaha, NE; 

FF-MA-11-022; 2/18/2011

Business Mail Entry Unit Oversight Reviews – 

Pittsburgh, PA; FF-MA-11-012; 1/27/2011

Business Mail Entry Unit Oversight Reviews – 

Raleigh, NC; FF-MA-11-017; 2/1/2011

Business Mail Entry Unit Oversight Reviews, 

Reading Business Mail Entry Unit, Reading – PA; 

FF-MA-11-021; 2/7/2011

Business Mail Entry Unit Oversight Reviews – 

Richmond, VA; FF-MA-11-015; 2/1/2011

Business Reply Mail Oversight Reviews, Smyrna 

Post Office – Smyrna, TN; FF-MA-11-008; 

1/25/2011

Detached Mail Unit Oversight Reviews – American 

Express Detached Mail Unit, Weston, FL; 

FF-MA-11-042; 3/21/2011

Detached Mail Unit Oversight Reviews – PSI 

Detached Mail Unit, Compton, CA; FF-MA-11-039; 

3/18/2011

Oversight Reviews – Atlanta Business Mail Entry 

Unit, Atlanta, GA; FF-MA-11-013; 2/9/2011

Oversight Reviews, Austin Business Mail Entry Unit, 

Austin, TX; FF-MA-11-011; 1/28/2011

Oversight Reviews – Birmingham Business Mail 

Entry Unit, Birmingham, AL; FF-MA-11-005; 

1/24/2011

Oversight Reviews – Laguna Postal Store Postal 

Retail Unit, Elk Grove, CA; FF-MA-11-004; 

1/20/2011

Oversight Reviews, Miami Plant Verified Drop 

Shipment, Miami, FL; FF-MA-11-007; 1/24/2011

Oversight Reviews – Phoenix Business Mail Entry 

Unit, Phoenix, AZ; FF-MA-11-019; 2/3/2011 

Oversight Reviews – Postal Retail Unit, Gooding, 

ID; FF-MA-11-002; 1/18/2011

Oversight Reviews – San Francisco Processing 

and Distribution Center Business Reply Mail, 

San Francisco, CA; FF-MA-11-003; 1/21/2011

Oversight Reviews – Santa Ana Processing and 

Distribution Center Business Mail Entry Unit, 

Santa Ana, CA ; FF-MA-11-014; 1/31/2011

Oversight Reviews – Stockton Processing and 

Distribution Center Plant Verified Drop Shipment 

Site, Stockton, CA; FF-MA-11-006; 1/24/2011

Oversight Reviews – Wellington Postal Retail Unit, 

Wellington, OH; FF-MA-11-010; 1/27/2011

Plant Verified Drop Shipment Oversight Reviews 

– Mid-Island Processing and Distribution Center, 

Melville, NY; FF-MA-11-020; 2/4/2011

Plant Verified Drop Shipment Oversight Reviews – 

Oxnard Processing and Distribution Center, Oxnard, 

CA; FF-MA-11-044; 3/29/2011

Plant Verified Drop Shipment Oversight Reviews 

– South Florida Logistics and Distribution Center 

Plant Verified Drop Shipment, Opa Locka, FL; 

FF-MA-11-043; 3/21/2011

Plant Verified Drop Shipment Oversight Reviews 

– Springfield Processing and Distribution Center 

Plant Verified Drop Shipment, Springfield, MA; 

FF-MA-11-037; 3/18/2011

Plant Verified Drop Shipment Oversight Reviews 

– Tallahassee Plant Verified Drop Shipment, 

Tallahassee, FL; FF-MA-11-038; 3/21/2011

APPENDIX A
34 | Semiannual Report to Congress

Plant Verified Drop Shipment Oversight Reviews – 

Williamsport Processing and Distribution Center, 

Williamsport, PA; FF-MA-11-040; 3/21/2011

SmartPay Purchase Card Program Oversight 

Reviews – Altoona Plant, Duncansville, PA; 

FF-MA-11-026; 3/3/2011

SmartPay Purchase Card Program Oversight 

Reviews – Burlington Main Office, Burlington, WA; 

FF-MA-11-029; 3/7/2011

SmartPay Purchase Card Program Oversight 

Reviews – Columbia Vehicle Maintenance Facility – 

I, Columbia, SC; FF-MA-11-036; 3/15/2011

SmartPay Purchase Card Program Oversight 

Reviews – Columbia Vehicle Maintenance Facility - 

II, Columbia, SC; FF-MA-11-035; 3/11/2011

SmartPay Purchase Card Program Oversight 

Reviews – Holden Post Office, Holden, MA; 

FF-MA-11-032; 3/8/2011

SmartPay Purchase Card Program Oversight 

Reviews – Nevada-Sierra SmartPay Purchase 

Card Program, Las Vegas, NV; FF-MA-11-033; 

3/10/2011

SmartPay Purchase Card Program Oversight 

Reviews – Northland District, Minneapolis, MN; 

FF-MA-11-028; 3/7/2011 

SmartPay Purchase Card Program Oversight 

Reviews – Queens Processing and Distribution 

Center, Flushing, NY; FF-MA-11-041; 3/21/2011

SmartPay Purchase Card Program, Oversight 

Reviews – San Antonio Vehicle Maintenance 

Facility, San Antonio, TX; FF-MA-11-046; 

3/31/2011

SmartPay Purchase Card Program Oversight 

Reviews – Thousand Oaks Station, San Antonio, 

TX; FF-MA-11-034; 3/10/2011

SmartPay Purchase Card Program Oversight 

Reviews – Wheeler Station SmartPay Purchase 

Card Program, St. Louis, MO; FF-MA-11-027; 

3/4/2011

Voyager eFleet Card Program Oversight Reviews – 

Bogalusa Post Office, Bogalusa, LA; 

FF-MA-11-045; 3/30/2011

Voyager eFleet Card Program Oversight Reviews 

– Evergreen Voyager eFleet Card Program, 

Evergreen, CO; FF-MA-11-047; 3/31/2011

Fiscal Year 2011 Review of Statistical Tests

Greater South Carolina District; FF-MA-11-030; 

3/4/2011

South Florida District; FF-MA-11-023; 2/25/2011

Human Resources and Security

Overtime Usage; HR-AR-11-003; 3/31/2011

Information Technology

Computer Incident Data Reliability; IT-AR-11-004; 

3/16/2011

Securing Information on Portable Devices; 

IT-AR-11-005; 3/14/2011

Supply Management

Audit of Kalitta Air, LLC Fuel Adjustment Process 

Affecting Fuel Component of Fixed Price per 

Kilogram Indefinite Quantity Contract; 

CA-CAR-11-005; 3/28/2011

Financial Capability Audit – Key Handling Systems, 

Incorporated; CA-CAR-11-003; 3/8/2011

Incurred Costs of Serco, Incorporated for Fiscal 

Year 2007; CA-CAR-11-004; 3/14/2011

Information Technology Contract Payment 

Oversight; CA-AR-11-001; 11/23/2010

Lunda Construction Company Payment Request; 

CA-CAR-11-006; 3/30/2011

Modified Financial Condition Risk Assessment, 

Hewlett-Packard Company; CA-CAR-11-002; 

2/24/2011

NCR Government Systems, LLC Proposal to the 

U.S. Postal Service; CA-CAR-11-001; 3/4/2011

APPENDIX A
October 1, 2010 — March 31, 2011 | 35 

APPENDIX B

APPENDIX B

Findings of Questioned Costs

For the period October 1, 2010 — March 31, 2011

As required by the IG Act, the following pages show the total number of audit reports and the total dollar value of questioned costs in audit reports.

Questioned Cost: A cost that is unnecessary, unreasonable, unsupported, or an alleged violation of law, regulation, or contract.

Description Number of Reports Questioned Costs

Unsupported Costs 

Included in 

Questioned Costs

Reports for which no management decision was made at the beginning of the reporting period 3 $812,244 —

Reports requiring management decision that were issued during the reporting period 11 $566,259,866 $266,180,194

TOTAL 14 $567,072,110 $266,180,194 

Reports for which a management decision was made during the reporting period (i & ii) 9 $565,195,856 $266,180,194

(i) Dollar Value of disallowed cost $97,342,489 $73,488,134

(ii) Dollar value of cost not disallowed $467,853,367 $192,692,060

Reports for which no management decision was made by the end of the reporting period 

Negotiations are ongoing

5 $1,876,254 —

Reports for which no management decision was made within 6 months of issuance

(See Note 1 for a list of individual reports)

1 $73 —

Reports for which no management decision was made within 1 year of issuance

(See Note 2 for a list of individual reports)

2 $812,171 —

Contract reports with a significant audit finding

 (See Note 3 for a list of individual reports)

— — —

Note 1 — Reports for which no management decision was made within 6 months of issuance:

Subject Report/Case Number Report Date Questioned Costs

Unsupported Costs Included 

in Questioned Costs

Tom Roberts Realty U.S. Postal Service Contract CA-CAR-10-010 7/28/2010 $73 —

TOTAL $73 —

Note 2 — Reports for which no management decision was made within 1 year of issuance:

Subject Report/Case Number Report Date Questioned Costs

Unsupported Costs Included 

in Questioned Costs

Audit of Portions of a Termination for Convenience 

Settlement Proposal Submitted by Northrop Grumman 

Electronic Systems

CA-CAR-09-011 3/16/2009 $475,322 —

Termination Settlement Proposal Submitted by C.R. 

Daniels, Incorporated

CA-CAR-09-019 7/24/2009 $336,849 —

TOTAL $812,171 —

Note 3 — Contract reports with a significant audit finding:

None for this report period
36 | Semiannual Report to Congress

APPENDIX C

Description Number of Reports Dollar Value

Reports for which no management decision was made at the beginning of the reporting period 1 $ 33,984,345

Reports issued during the reporting period 19 $61,629,436,252 

TOTAL 20 $61,663,420,597 

Reports for which a management decision was made during the report period (i & ii) 20 $61,663,420,597 

(i) Value of recommendations agreed to by management — $ 60,314,158,646 

(ii) Value of recommendations that were not agreed to by management — $1,349,261,951 

Reports for which no management decision was made by the end of the reporting period — — 

Reports for which no management decision was made within 6 months of issuance 

(See Note 1 for a list of individual reports)

— —

Reports for which no management decision was made within 1 year of issuance 

(See Note 2 for a list of individual reports)

— —

Note 1 — Reports for which no management decision was made within 6 months of issuance:

None for this report period

Note 2 — Reports for which no management decision was made within 1 year of issuance:

None for this report period

APPENDIX C

Recommendations That Funds Be Put to Better Use

For the period October 1, 2010 — March 31, 2011

As required by the IG Act, the following pages show the total number of audit reports and the total dollar value of recommendations for funds that can be put to 

better use by management.

Funds Put to Better Use: Funds that could be used more efficiently by implementing recommended actions.
October 1, 2010 — March 31, 2011 | 37 

APPENDIX D

APPENDIX D

Other Impacts

For the period October 1, 2010 — March 31, 2011

Overview

Many of our audit reports identify areas for improvement that result in non-monetary benefits to the Postal Service. These benefits include improvements to 

service, protection of assets and improvements in the reliability of data.

Type of Measure Value or Amount

IMPROVED SERVICE

Recommendations that address the Postal Service’s efforts to improve the quality and accessibility of its products 

and services

Number of Recommendations 22

Number of customer service audits conducted Number of Audits 19

SAFEGUARDING ASSETS

Assets or Accountable Items at Risk

Inadequate internal controls put the value of assets or accountable items (such as cash and stamps) at risk of loss Dollar Value $37,811,884

Physical Safety and Security

Dollar value of physical assets (plant, computer equipment, vehicles, and so forth) at risk of loss due to inadequate 

physical protection

Dollar Value —

Recommendations that address the safety and security of Postal Service employees and/or the work environment Number of Recommendations —

Number of employee/facility safety and security audits conducted Number of Audits 21

Information Technology Security

Inadequate controls/protection put the value of data, IT assets (software, networks), and employee work time at risk of loss Dollar Value —

Dollar value of data at risk Dollar Value $392,528,983

Number of data security/IT security audits conducted Number of Audits 9

Revenue at Risk

Dollar value of revenue that the Postal Service is at risk of losing. (Mailers seeking alternative solutions for current services) Dollar Value $ 81,605,917

Disbursements at Risk

Dollar value of disbursements made where proper Postal Service internal controls and processes were not followed Dollar Value $148,941,542

Goodwill / Branding

An “adverse impact” on goodwill is an actual event/problem that harms the Postal Service’s reputation or a 

potential problem that could negatively impact the Postal Service “brand name”

Number of Issues Identified 12

Misallocation of Costs 

A misallocation of costs can occur when Postal Service costs are misclassified as volume variable, product specific, or 

institutional costs

Dollar Value —

Capital Investment Savings Shortfall

The difference between the savings predicted by the Decision Analysis Report for capital investment projects and the 

actual savings realized

Dollar Value $172,574,067

Potential Additional Revenue

Revenue the Postal Service could potentially generate for goods delivered or services rendered based on suggested 

improvements

Dollar Value —
38 | Semiannual Report to Congress

APPENDIX D

Type of Measure Value or Amount

RELIABILITY OF DATA

Records at Risk

Data at risk of corruption or loss due to inadequate internal controls and or protection Number of Data Records at Risk 1,738,242

Dollar value of data used to support management decisions that is not fully supported or completely accurate Dollar Value —
October 1, 2010 — March 31, 2011 | 39 

APPENDIX E

APPENDIX E

Reports with Significant Recommendations Pending Corrective Actions

For the period through March 31, 2011

As required by the IG Act, the following pages include a list of each audit report for which no management decision has been made by the end of the 

reporting period.

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

SA-AR-07-002 3/30/2007 Postal Service Security Controls and Processes for the Capital Metro Area

R-1 — Establish and provide consolidated standard operating procedures and guidance to the Area Security Coordinator, 

District Security Control Officers, and facility Security Control Officers to assist them in performing their duties and 

responsibilities consistently and in a timely manner. TID: April 2011

R-5 — Develop appropriate performance measures for physical security to assess the achievement of security goals and 

incorporate them into performance plans for area-, district-, and field-level security personnel. TID: April 2011

SA-AR-07-003 5/9/2007 Postal Service Security Controls and Processes for the Pacific Area 

R-2 — Develop appropriate performance measures for physical security to assess the achievement of security goals and 

incorporate them into performance plans for area-, district-, and field-level security personnel. TID: April 2011

HM-AR-07-002 5/16/2007 Postal Service’s Workplace Safety and Workplace-Related Injury Reduction Goals and Progress 

R-1 — Closely monitor conversion to the SAP Environmental Health and Safety module and, as soon as possible, ensure the 

upgraded system captures costs by facility, district/performance cluster, and area office as well as the costs for the 

following key categories:

 Non-injury accidents.

 Injury accidents.

 Type of injury.

 Type of illness.

 Per employee.

TID: September 2011

IS-AR-07-016 8/20/2007 Audit of Database Administration Practices 

R-2 — Establish policies and procedures for the protection and use of sensitive and business-controlled sensitive data in the 

test, development and production environments. TID: October 2011

IS-AR-07-017 8/29/2007 Separation of Duties at the Eagan, MN; San Mateo, CA; and St. Louis, MO Information Technology 

and Accounting Service Centers

R-1 — Assess the risk of the duties of all Information Technology and Accounting Service Center positions (career and noncareer) for the purpose of assigning these positions as sensitive. TID: September 2011

R-4 — Notify the Postal Inspection Service when a new Information Technology and Accounting Service Center position is 

created, a new employee is hired, or an employee is promoted to a new position, to make certain the proper clearance 

level is attributed to the employee. TID: March 2011

CRR-AR-08-002 2/12/2008 Security Review of the Electronic Verification System

R-2 — Revise Publication 91 in consultation with the manager, Corporate Information Security, to require mailers to utilize a 

secure file transfer method when transmitting manifests for electronic verification to the Postal Service. TID: April 2011
40 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

FF-AR-08-131 3/19/2008 Fiscal Year 2007 Financial Installation Audits – Business Mail Entry Units

R-2 — Provide proper management oversight and instructions to schedule periodic verifications when Periodicals mailings are 

received during nonbusiness hours. TID: May 2011

DA-AR-08-006 6/4/2008 Flats Sequencing System: Production First Article Testing Readiness and Quality

R-5 — In coordination with the supplier, ensure that the initial Maintenance Diagnostic and Support System and the Program 

Control System functionalities are available for First Article Testing and develop a schedule for future design releases.

TID: May 2011

FF-MA-08-001 7/21/2008 Fiscal Year 2008 – Use of No-Fee Money Orders

R-2 — Evaluate the feasibility of restricting the use of no-fee money orders for local purchases in order to reduce the Postal 

Service’s exposure to financial loss. TID: March 2011

SA-AR-08-009 7/23/2008 Postal Service Continuity of Operations for the Great Lakes Area

R-1 — Update contact information of key continuity of operations personnel at least semiannually, or more often as changes 

occur. TID: December 2010

R-2 — Complete continuity of operations training, including Postal Alert and Notification System training. TID: December 2010

R-3 — Identify and prioritize essential functions. TID: December 2010

R-4 — Establish a formal review process to ensure continuity of operations plans are completed, updated annually, and 

maintained in the Postal Alert and Notification System, as required. TID: December 2010

R-5 — Establish an area emergency management coordinating committee to provide oversight and assistance to district and 

facility Emergency Management Teams in establishing, implementing, and reviewing emergency management plans. 

TID: December 2010

R-6 — Establish specific guidance for identifying and selecting alternate facilities, to include, at a minimum, the number 

of alternate facilities that should be identified, and criteria regarding location, mail volume, and mail capacity. TID:

December 2010

R-7 — Require personnel responsible for continuity of operations at primary and alternate facilities to conduct tests and 

exercises to ensure alternate facilities can effectively process the primary facilities’ mail. TID: December 2010

SA-AR-08-010 7/24/2008 Postal Service Continuity of Operations for the Pacific Area

R-1 — Establish a formal review process to ensure continuity of operations plans are completed, updated annually, and 

maintained in the Postal Alert Notification System, as required. TID: December 2010

SA-AR-08-013 8/22/2008 Security Clearances for Postal Service Employees 

R-1 — Establish and implement a policy to periodically assess the risks associated with the duties of all Postal Service 

positions to determine which positions require a security clearance. TID: September 2011

R-2 — Revise the Administrative Support Manual, as appropriate, to reflect changes to the list of positions requiring a security 

clearance. TID: September 2011

IS-AR-08-016 8/29/2008 Identity Theft Potential in the Change of Address Process

R-1 — Update the Internet and Telephone Change of Address applications to eliminate acceptance of anonymous prepaid 

credit cards. TID: December 2011
October 1, 2010 — March 31, 2011 | 41 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

IS-AR-09-001 10/8/2008 Electronic Travel Voucher System Controls

R-1 — Revise Postal Service Handbook F-15, Travel and Relocation, to require travelers to arrange for lodging at the prevailing 

government lodging rate, whenever practical. TID: June 2011

R-2 — Revise Postal Service Handbook F-15, Travel and Relocation, to require travelers to obtain prior approval and justify 

exceeding the government lodging rate within the notes on the electronic voucher. TID: June 2011

R-3 — Customize the Electronic Travel Voucher System to require the traveler to input a value in the room tax field (even if the 

room tax is zero) or provide the traveler with a check box to indicate taxes not applicable in cases where the lodging stay is 

tax exempt. TID: June 2011

R-4 — Customize the Electronic Travel Voucher System to remove the option to combine room rate and room taxes into a single 

entry. TID: June 2011

FF-AR-09-055 12/26/2008 Fiscal Year 2008 Financial Installation Audits – Post Offices, Stations, and Branches

R-5 — Issue guidance to the field to destroy all copies of Postal Service Form 1096, Customer Receipt, and determine when 

this has been completed. TID: February 2012

FT-MA-09-001 1/13/2009 Postal Service Management Instruction – Expenses for Internal and External Events

R-2 — Consult with senior level management to further update the Management Instruction, Expenses for Internal and 

External Events to require that all expenses associated with internal and external events be included in a unique 

general ledger account(s). TID: September 2011

IS-AR-09-004 2/20/2009 Access Controls in the Enterprise Data Warehouse

R-3 — Update the Business Impact Assessment for the Enterprise Data Warehouse and recertify the system as required by 

Postal Service Handbook AS-805-A, Application Information Security Assurance (ISA) Process. TID: June 2011

DR-MA-09-001(R) 3/26/2009 Management of City Letter Carriers’ Street Performance

R-1 — Revise existing Postal Service policies and Standard Operating Procedures to reduce the number of required Delivery 

Operations Information System reports from eight to four to aid supervisors in managing carrier street performance. 

TID: October 2011

R-2 — Modify the Delivery Operations Information System Route/Carrier Daily Performance Analysis Report to show “exceptions” 

- i.e., only actual route times varying from projected route times. TID: October 2011

MS-AR-09-006 3/31/2009 Intelligent Mail/Seamless Acceptance Project Management

R-4 — Incorporate effort-based workhour requirement estimates into work plans for future project releases. TID: September 

2009

R-6 — Develop a procurement plan consistent with the Postal Service’s purchasing guidelines to manage procurements related to 

the project. TID: September 2009

MS-AR-09-008 5/28/2009 Mail Processing Equipment’s Ability to Read Postage on First-ClassTM Letters

R-3 — Determine the feasibility of modifying the Advanced Facer Canceller System to include postage due and fraudulent 

postage detection software (including detection of reused stamps). TID: May 2011

R-4 — Determine the feasibility of mandating that all postage payment methods be encoded with standardized symbol coding, 

special ink, barcode or other tracking device to allow the Advanced Facer Canceller System to read postage amounts. 

TID: June 2011

R-5 — Reevaluate the phosphorescence coding methodology to include raising the coding denomination from the current 10 cent 

stamp to the current price of a First-Class card postage. TID: June 2011

R-6 — Determine the causes of shortpaid and overpaid postage validation imprinter labels on First-Class letters and develop 

awareness training for Retail employees. TID: None
42 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

CA-AR-09-005 6/1/2009 Supply Management’s Oversight of Delegations of Authority

R-2 — Remind delegatees of their responsibility to ensure compliance with their delegation of authority letters and require 

delegatees to certify they have instituted a system of controls and oversight to ensure:

 Best value determinations are performed and documented.

 Annual reports are developed and provided to Supply Management detailing financial activities, including 

the number of contracts or agreements entered into and associated expenditures.

 Annual ethics training is completed and documented for staff involved in administering contracts or agreements. 

TID: December 2011

R-3 — Require the Travel, Retail, and Temporary Services Category Management Center to develop procedures for collecting 

reports required under the delegations of authority and for reviewing delegatees’ control and oversight systems to 

ensure the delegation of authority letter minimum control requirements are met. If minimum control requirements are 

not met, discontinuation should be considered, with the results and justification documented in an oversight file. 

TID: December 2011

EN-AR-09-005 9/28/2009 Performance Goals for Market-Dominant Products

R-1 — Document the methodology used to develop future performance goals for market-dominant products. 

TID: December 2012

SA-AR-09-008 9/29/2009 Postal Service Aviation Security Capping Report

R-1 — Strengthen internal controls requiring management reviews to ensure corrective actions are taken to improve the 

performance of noncompliant offices. TID: September 2011

R-2 — Develop and implement performance measures or other appropriate evaluation factors to improve operations personnel 

performance in following established policies and procedures for detecting and preventing anonymous and potentially 

dangerous mail from entering the mailstream. TID: September 2011 

NL-AR-09-010 9/30/2009 Fuel Management Consumption Strategies for Surface Network Operations

R-1 — Revise the fuel consumption strategy for surface network operations covering Postal Service and Highway Contract 

Route transportation to ensure that it is comprehensive and implements the industry best practices identified in our 

audit. TID: June 2011

R-2 — Assess and implement all opportunities for owned, leased, and contracted vehicles to use technology to reduce wind 

resistance and identify the most viable advanced aerodynamics options consistent with industry best practices and 

adjust contracts as appropriate to account for the reduced fuel need. TID: June 2011

R-3 — Establish and implement tire inflation maintenance requirements for its owned heavy-duty vehicle fleet, as well as its 

leased, and contracted vehicles consistent with industry best practices and adjust contracts as appropriate to account 

for the reduced fuel need. TID: June 2011

R-5 — Evaluate Highway Contract Routes and, where feasible, implement speed limit requirements consistent with industry 

best practices and adjust contracts as appropriate to account for the reduced fuel need. TID: June 2011
October 1, 2010 — March 31, 2011 | 43 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DR-AR-10-001 10/15/2009 Use of the Carrier Optimal Routing System

R-1 — Resolve the system and application problems with Web Carrier Optimal Routing (WebCOR) and implement the webbased program nationwide. TID: September 2011

R-2 — Ensure district managers :

 Select and train at least four individuals as Carrier Optimal Routing system Subject Matter Experts as mandated by 

Postal Service Headquarters.

 Complete the Data Preparation Process to include using current PS Forms 3999, Inspection of the Letter Carrier 

Route.

 Complete all route adjustments using the Carrier Optimal Routing system. 

TID: December 2010

R-3 — Mandate districts to track and monitor vehicle mileage changes in the Carrier Optimal Routing system. TID: July 2011

DR-AR-10-002 12/18/2009 City Delivery Efficiency Review – San Francisco Napoleon Street Station

R-1 — Reduce workhours by 54,975 at the Napoleon Street Station with an associated economic impact of over $21.3 million 

over 10 years. TID: December 2012

IS-AR-10-002 12/22/2009 General Control Review of Human Resources Shared Service Center

R-1 — Designate as sensitive those positions at the Human Resources Shared Service Center that require access to personally 

identifiable information. TID: September 2011

R-2 — Initiate appropriate security clearance investigations for all employees in sensitive positions at the Human Resources 

Shared Service Center. TID: September 2011

R-5 — Revise Handbook AS-805, Information Security, to clarify the approval process for wireless access points on the Postal 

Service network. TID: September 2011

NL-AR-10-002 12/28/2009 Postal Vehicle Service Transportation Routes – Cardiss Collins Processing and Distribution Center 

R-1 — Ensure that Cardiss Collins Processing and Distribution Center managers follow prescribed fleet management 

procedures for making Postal Vehicle Service schedules effective, including conducting schedule and vehicle utilization 

reviews. TID: July 2010

R-2 — Verify elimination of the 43,264 workhours already agreed to by local and area management from Postal Vehicle Service 

trip schedules. TID: October 2010

DA-MA-10-001 1/28/2010 Sustainability: Promoting Energy and Recycling Compliance Fiscal Year 2009 

R-1 — Issue written guidance to installation managers to encourage the use of more remote building management systems. 

TID: October 2011

MS-AR-10-001 2/9/2010 Plant-Verified Drop Shipment Controls

R-4 — Provide an electronic reporting solution whereby PS Form 8125, Plant-Verified Drop Shipment (PVDS) Verification 

and Clearance, information at the destination facility can be compared with the information at the origin location. 

Discrepancies or incomplete forms should be investigated. TID: December 2012

EN-AR-10-003 2/12/2010 Manasota Processing and Distribution Center Consolidation 

R-1 — Ensure the implementation activities of processing and distribution center consolidations begin immediately after area 

mail processing proposal approval and require headquarters’ approval when implementation is delayed more than 3 

months. TID: May 2011
44 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NL-AR-10-003 3/1/2010 Highway Contract Route Transportation – Greater Chicago

R-3 — Eliminate 42 trips within the identified highway contract routes, already agreed to by local and area management. 

TID: November 2010

R-4 — Reassess the remaining 20 trips, and cancel or modify the trips as indicated by the reassessment, or document the 

reasons for retaining the trips. TID: November 2010

DR-AR-10-003 3/16/2010 Rural Delivery Christmas Operations 

R-1 — Renegotiate with the National Rural Letter Carriers Association (NRLCA) to eliminate the supplemental Christmas 

Overtime Pay Provision, Article 9.2(k), set forth in the NRLCA Agreement expiring in November 2010 and any 

subsequent NRLCA agreements. TID: November 2010

SA-MA-10-001 4/29/2010 Postal Service Security Clearance Requirements for Air Transportation Contractors 

R-1 — Conduct a formal risk assessment to determine if security clearance requirements for air transportation contract 

personnel adequately mitigate risks associated with the contractor’s positions and access to Postal Service facilities 

and the mail. TID: September 2011

IS-AR-10-008 5/4/2010 Certification and Accreditation Process

R-1 — Provide Corporate Information Security the authority necessary to enforce and execute the responsibilities for managing 

the Certification and Accreditation process. TID: March 2011

R-2 — Update Handbook AS-805, Information Security, to require mandatory annual training on the Certification and 

Accreditation process for all portfolio managers. TID: July 2011

R-3 — Ensure all portfolio managers receive mandatory training regarding their role, responsibility, and accountability for 

implementing and reinitiating the Certification and Accreditation process. This training should also be made available to 

all executive sponsors. TID: July 2011

R-4 — Hold portfolio managers accountable to complete the Certification and Accreditation process within the Technology 

Solutions Life Cycle prior to implementing critical applications into the production environment. TID: July 2011

R-5 — Complete the Certification and Accreditation process for all critical applications currently in production, as required by 

Handbook AS-805, Information Security. TID: March 2011

R-6 — Ensure the portfolio managers work with the executive sponsors to initiate the recertification process for critical 

applications assigned to their functional areas as required by Handbook AS-805, Information Security. TID: March 2011

R-7 — Develop a formal, centralized mechanism to track the status of all unmitigated residual risks identified in the applications’ 

risk mitigation plan. TID: July 2011

R-8 — Input unmitigated residual risks identified in the applications’ risk mitigation plan into the formal, centralized tracking 

mechanism and track the risks through resolution. TID: July 2011

R-9 — Work with executive sponsors to resolve unmitigated residual risks identified in the risk mitigation plans and recertification 

letters associated with the critical applications. TID: July 2011

R-10 — Establish policy to designate a central repository for storing the Certification and Accreditation documentation. 

TID: July 2011

R-11— Update Handbook AS-805, Information Security, to designate a single entity responsible for uploading the Certification 

and Accreditation information in the central repository for all critical applications. TID: March 2011

R-12 — Input the Certification and Accreditation documentation for all critical applications into the central repository. 

TID: March 2011
October 1, 2010 — March 31, 2011 | 45 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

SA-AR-10-001 5/12/2010 Move Update Program and Investigations

R-1 — Enhance the Move Update program to comprehensively verify compliance at mail acceptance and ensure collection of 

proper postage. TID: None

R-2 — Ensure standards for determining Move Update compliance are consistent and clearly communicated to mailers. 

TID: None

R-3 — Establish mandatory comprehensive training for responsible personnel to ensure revenue deficiencies are appropriately 

assessed. TID: None

R-4 — Review the overstated revenue deficiency to determine whether the amount should be reduced. TID: None

R-5 — Limit the use of postal inspectors to Move Update investigations with expectations of civil or criminal prosecution. 

TID: None

CA-AR-10-004 5/27/2010 Contract Payment Terms

R-1 — Revise the Postal Service’s Supplying Principles and Practices, Section 5 12.2, Payment Time Frame, and other 

sections as necessary, with language stating that when contracting officers negotiate payment terms other than net 30 

days they include the business rationale and associated documentation for the payment terms in the contract file. 

TID: June 2011

HR-AR-10-002 5/27/2010 U.S. Postal Service’s Use of Employees in Rehabilitation Status 

R-1 — Establish a plan to in-source all call center work, including a staffing and training plan. TID: None

R-2 — Expedite negotiations and finalize an agreement with the American Postal Workers Union that addresses staffing for 

in-sourced call center work. TID: None

NO-MA-10-001 6/11/2010 Assessment of Overall Plant Efficiency 2010

R-1 — Reduce 16.2 million workhours by FY 2012 with an associated economic impact of $743,961,610. TID: December 

2012

DA-AR-10-005 6/16/2010 Delivery Vehicle Replacement Strategy

R-1 — Replace maintenance intensive vehicles beginning in fiscal year 2011. TID: April 2011

CI-MA-10-001 6/18/2010 Civil Service Retirement System Overpayment by the Postal Service

R-1 — Pursue all necessary actions, including those suggested by the Office of Inspector General, to either secure the return 

of the $75 billion overpayment or to otherwise realize the benefit of this overpayment to the Postal Service. TID: None

DA-AR-10-006 7/2/2010 Facility Energy: Metering Technologies

R-1 — Install time-of-use metering at eligible processing and distribution centers by December 31, 2010. TID: June 2011

MS-AR-10-004 7/28/2010 Efficiency of Retail Customer Service Operations

R-1 — Implement best practices for Retail Customer Service operations at all facilities. TID: October 2011

R-2 — Explore opportunities to consolidate business mail acceptance operations at post offices, stations, and branches. TID:

October 2011

R-3 — Periodically evaluate operating efficiency by assessing performance against productivity targets and adjusting resources in 

response to workload changes. TID: December 2011

R-4 — Re-deploy employees, as appropriate, to facilities where there is sufficient workload to support the workhours. TID:

October 2011

IS-AR-10-012 8/4/2010 L’Enfant Badge Access Controls

R-1 — Perform periodic reviews of all badge access to the L’Enfant Plaza Headquarters building and sensitive work areas and 

remove access for individuals who no longer require it. TID: June 2011
46 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

FF-AR-10-210 8/6/2010 Revenue for Official Mail from the House of Representatives Mailroom

R-1 — Coordinate with the U.S. House of Representatives mailroom and the Southern Maryland Business Mail Entry Unit to 

develop and implement processes to verify postage claimed for individually franked mailpieces, such as establishing 

alternate mailing system agreements. TID: March 2011

FT-MA-10-001 8/16/2010 Federal Employees Retirement System Overfunding

R-1 — Pursue legislative action to alter the Postal Service’s Civil Service Retirement and Disability Fund Contributions for 1 or 

more years until the Federal Employees Retirement System surplus is extinguished. TID: September 2011

R-2 — Coordinate with the Office of Personnel Management to identify causes of actual payout differences between the 

Postal Service and the rest of the federal government and use that information to reduce the risk of future surpluses. 

TID: September 2011

R-3 — Pursue legislative action to define future distribution of significant surpluses. TID: September 2011

R-4 — Coordinate with the Office of Personnel Management to create a sub-account within the Civil Service Retirement and 

Disability Fund exclusive to the Postal Service. TID: September 2011

EN-AR-10-005 8/17/2010 Stations and Branches Optimization and Consolidation

R-1 — Develop detailed policies and procedures for the station and branch closing process. TID: October 2011

R-2 — Improve the reliability and usefulness of retail facilities data by validating, correcting, and updating information in the 

database. TID: October 2011

R-3 — Develop measurable criteria to mitigate inconsistencies in evaluating factors used for determining feasibility to 

discontinue operations. TID: October 2011

R-4 — Process and approve or disapprove discontinuance proposals in a timely manner. TID: October 2011

DA-AR-10-009 8/25/2010 Facility Optimization: Chicago District

R-1 — Ensure installation heads have the proper guidance for identifying and reporting excess space. TID: March 2011

R-2 — Include additional metrics, such as dates and space conditions, to track, monitor, and report excess space within the 

Chicago District and initiate disposal action for excess space identified. TID: March 2011

DA-AR-10-010 8/25/2010 Facility Optimization: New York District

R-1 — Ensure installation heads have the proper guidance for identifying and reporting excess space. TID: March 2011

R-2 — Include additional metrics, such as dates identified and space conditions, to track, monitor, and report excess space 

within the New York District and initiate disposal actions for excess space identified. TID: March 2011

DA-AR-10-008 8/25/2010 Facility Optimization: Northern New Jersey District

R-1 — Ensure the installation heads have the proper resources for identifying and reporting excess space. TID: March 2011

R-2 — Include additional metrics, such as dates identified and space conditions, to track, monitor, and report excess space 

within the Northern New Jersey District and initiate disposal actions for excess space identified. TID: March 2011

DA-MA-10-004 8/31/2010 Postal Service Patent Management

R-1 — Establish a strategic plan with timelines to capitalize on the Postal Service’s patent inventory strength. TID: March 2011

MS-MA-10-001 9/02/2010 Electronic Postmark Program License Fees

R-1 — Develop a process to monitor and validate licensees’ Electronic Postmark usage. TID: None

R-3 — Initiate actions to collect the past due Electronic Postmark license fees. TID: None
October 1, 2010 — March 31, 2011 | 47 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

IS-MA-10-001 9/2/2010 Securing Sensitive Data on Postal Inspection Service Laptops

R-1 — Create and maintain an inventory of all existing Inspection Service laptops. TID: October 2011

R-2 — Install full disk encryption on all new Inspection Service laptop computers before deployment. TID: August 2011

R-3 — Develop an expedited deployment schedule to reduce the risk of sensitive data loss from the unencrypted laptops. 

TID: October 2011

R-4 — Remove and destroy hard drives, or completely degauss, all sensitive data stored on the older Postal Inspection Service 

laptops before disposing of the equipment. TID: August 2011

R-5 — Enter all new laptops in the centralized inventory system upon deployment to Inspection Service users. 

TID: August 2011

FF-AR-10-224(R) 9/20/2010 Postal Service Area and District Office Field Structure

R-1 — Develop a comprehensive strategic plan to guide future area and district field structure decisions. The plan should 

address environmental factors, mail volumes, technological advancements, operational considerations and other issues 

impacting Postal Service strategic goals. TID: September 2011

R-2 — Implement one or more of the three options, or combinations of portions of these options, for consolidating the area 

and district field structure:

 Consolidate district offices that are within 50 miles of one another.

 Consolidate area and district offices that have less than the mean mail volume and workhours.

 Relocate area offices to headquarters. 

 TID: None

R-3 — Develop a policy and process for performing a comprehensive evaluation of the area and district office structure at 

least every 5 years. TID: March 2012

R-4 — Develop a policy and procedures to maintain adequate supporting documentation for all area and district consolidations or 

expansions as part of a comprehensive strategic plan. TID: March 2012

EN-AR-10-006 9/17/2010 Southeast Area Processing and Distribution Center Consolidations

R-1 — Complete the full consolidation feasibility study on the Daytona Beach Processing and Distribution Facility into the MidFlorida Processing and Distribution Center and take action to eliminate excess space in the Mid-Florida Processing and 

Distribution Center TID: December 2011

R-2 — Determine alternate uses of excess space at the Birmingham Processing and Distribution Center and annex. 

TID: June 2011

CA-AR-10-005 9/20/2010 U.S. Postal Service Purchasing Policies

R-1 — Establish a competition advocate within the Postal Service to independently review and approve justifications for 

noncompetitive purchases and support the use of competition in the Postal Service. The competition advocate should 

also prepare and submit an annual report to the chief financial officer and vice president, Supply Management, 

describing barriers to competition and goals and plans for increasing competition. TID: November 2011

R-3 — Review the need for and propriety of all existing contracts with former executives. TID: April 2011

R-5 — Take steps to ensure full and accurate tracking and public reporting of noncompetitive contracting actions. Data 

reported should include, but not be limited to, total dollars committed both competitively and noncompetitively; and 

the contractor, dollar value, and noncompetitive justifications for noncompetitive contracts. The tracking mechanism 

should be able to identify when a noncompetitive contract has crossed the review and approval threshold based on 

modification after initial award. TID: November 2011

R-6 — Revoke delegations of authority for contracts that acquire goods and services for the Postal Service and bring these 

contracts into compliance with all Postal Service purchasing policies. TID: April 2011

R-9 — Institute an oversight mechanism to ensure and track compliance with updated noncompetitive contracting policies. 

TID: March 2012
48 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

IS-AR-10-014 9/23/2010 Controls Over Payment Card Transaction Data

R-1 — Finalize and implement a Payment Card Industry remediation plan that includes all associated costs, resources, 

and milestones needed to achieve and maintain Payment Card Industry-Data Security Standards compliance. TID:

September 2013

R-3 — Ensure the Payment Card Industry compliance requirements are included in all pre- and post-award contract 

documentation that includes, but is not limited to, statements of work, amendments, and modifications. TID: May 2011

R-4 — Validate and monitor all service providers’ Payment Card Industry compliance status throughout the lifetime of the 

contract. TID: May 2011

CRR-AR-10-006 9/23/2010 Controls Over System for International Revenue and Volume, Outbound and International 

Origin-Destination Information System 

R-4 — Assess the viability of extending enhanced revenue protection programs to outbound international mail, similar to the 

new procedures for domestic mail. TID: April 2011

DR-AR-10-008 9/24/2010 Vehicle Parts Program

R-1 — Establish a process to analyze similar vehicle parts by form, fit, and function from the two consignment suppliers to aid 

in negotiations with suppliers, as necessary, to ensure the Postal Service receives the lowest available cost on vehicle 

parts. TID: May 2011

NL-AR-10-010 9/29/2010 Air Networks – Federal Express Transportation Agreement – National Analysis

R-1 — Routinely provide headquarters and area management with data, including Transportation Cost System/Cost and 

Revenue Analysis data, used to monitor and track the volume and additional costs for flying surface mail classes on 

Federal Express. TID: None

R-2 — Work collaboratively with the areas to identify and address capacity issues, real or perceived, with commercial carriers 

and ensure carriers comply with stated capacities. TID: None

R-3 — Adjust mail volume arrival profiles or Federal Express tender times where possible to ensure Terminal Handling 

Services contractors have time to build planned by-pass containers. TID: None

R-4 — Reinforce existing policies and procedures, and provide additional guidance and training as necessary, for processing 

and assigning mail to FedEx for building bypass containers, and for insuring mail arrives at Terminal Handling Services 

locations to meet FedEx contract mail tender time requirements. TID: None

R-5 — Standardize Postal Service oversight at Terminal Handling Services operations to ensure adequate on-site Postal 

Service representation to monitor Federal Express operations and ensure local compliance with established processes 

and procedures. TID: March 2011

SA-MA-10-002 9/29/2010 Allegations of Inappropriate Methodologies in a San Francisco Investigation 

R-1— Establish and implement mandatory training for postal inspectors responsible for investigating Combined Value Added 

Refund mailers to ensure they understand the business mail process to accurately calculate Postal Service losses. 

TID: June 2011

R-2 — Establish and implement guidance and lessons learned for postal inspectors to use when conducting investigations of 

Combined Value Added Refund mailers and calculating Postal Service losses. TID: June 2011
October 1, 2010 — March 31, 2011 | 49 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NL-AR-10-009 9/29/2010 Management of Mail Transport Equipment - National Analysis 

R-1 — Further develop, update and reinforce national Mail Transport Equipment policies and procedures contained in the 

Postal Operations Manual (POM) and the Postal Handbook PO-502, Container Methods, which address Mail Transport 

Equipment inventory and accountability controls, including validating customer Mail Transport Equipment needs as well 

as tracking and reconciling Mail Transport Equipment loaned to mailers and other external customers. TID: June 2011

R-2 — Continue pursuing implementation of a planned automated Mail Transport Equipment management system and ensure 

its functionality for inventory and accountability processes and for enhancing the Postal Service’s visibility into Mail 

Transport Equipment internally and at mailers. TID: June 2011

R-3 — Reestablish an on-hand Mail Transport Equipment volume count process, both internally and externally, until an 

automated Mail Transport Equipment management system is fully developed, deployed, and operational. 

TID: June 2011

R-4 — Ensure that Area Distribution Networks’ Offices have appropriate resources assigned responsibly to monitor and 

manage Mail Transport Equipment, and maintain compliance with Postal Operations Manual requirements. 

TID: June 2011

R-5 — Document the current process for identifying annual, routine Mail Transport Equipment purchase requirements and 

ensure the process includes Mail Transport Equipment Service Center network information and facility and mailer 

inventory data, to ensure that only the necessary amount of Mail Transport Equipment is purchased. TID: June 2011

NL-AR-10-008 9/29/2010 Postal Vehicle Services - Scheduling and Staffing - Atlanta District

R-2 — Fully utilize the flexibility under the existing American Postal Workers Union Collective Bargaining Agreement and 

Memorandum of Understanding to increase the use of split days off for Postal Vehicle Service drivers and maximize the 

use of part-time regular PVS drivers where possible. TID: June 2011

R-3 — Increase the allowable percentage of all types of part-time employees to allow maximum use of part-time regular 

employees in facilities with Postal Vehicle Service operations. TID: June 2011

R-4 — Provide permanent flexibility to schedule split days off for employees in facilities with Postal Vehicle Service operations. 

TID: June 2011

CA-AR-10-006 9/30/2010 Certification Process for Electronic Payments

R-1 — Develop an oversight mechanism to monitor and ensure contracting officers’ and/or designated officials’ receipt and 

certification of invoices. TID: September 2011

R-2 — Reiterate to contracting officers and/or their designees their roles and responsibilities, and the importance of following 

Postal Service criteria, policies, and procedures for certification of invoices prior to payment to ensure that invoices are 

correct and goods and services were received. TID: March 2011

R-3 — Develop and implement written procedures for receiving invoices for annual highway contract route services and 

verifying that services were rendered prior to payment. TID: June 2011

R-4 — Identify and notify the contracting officers to oversee and administer all Highway Contract Route payments in the Postal 

Service Accounts Payable Excellence system. TID: May 2011

R-5 — Review the $7.6 million in payments made more than 30 days after contract end dates and collect overpayments. 

TID: May 2011

R-6 — Provide detailed, consistent training for all designated officials on their roles and responsibilities and the usage of the 

Utility Management System. TID: May 2011

R-7 — Regularly reconcile payments made for utility services to identify and collect overpayments. TID: May 2011

R-8 — Ensure that Utility Management System designated official contact information is accurate and that the system requires 

positive certification by the designated official before invoice payment. TID: May 2011
50 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

FT-MA-10-002 9/30/2010 Summary of Substantial Overfunding and Postal Service Pension and Retiree Health Care Funds.

R-1 — Develop a comprehensive legislative strategy to recover overfunded amounts. TID: September 2011

R-2 — Aggressively pursue and carefully review all available data related to Civil Service Retirement System, Federal 

Employee Retirement System, and retiree health benefit calculations, including those associated with determining any 

overfunding situations, to ensure that calculations are reasonable and accurate. TID: September 2011

EN-AR-11-001 11/10/2010 Excess Space in Mail Processing Facilities in the Suncoast District

R-3 — Review and implement the most effective space optimization options for the Manasota, Mid-Florida, and St. Petersburg 

mail processing facilities in the Suncoast District. TID: June 2011

DR-AR-11-001 11/22/2010 City Delivery Operations Workforce Planning 

R-1 — Collaborate with area management to continue development and enhancement of an overall city delivery operations 

strategy that optimizes the most cost-effective combination of full-time, part-time, and transitional city carrier 

resources to reduce overtime workhours and costs for final publication to area officials. TID: December 2011

DA-MA-11-001 11/23/2010 Full Service Intelligent Mail Program Customer Satisfaction

R-3 — Provide continuing training to Business Mail Entry clerks and PostalOne! Help Desk employees on important Intelligent 

Mail issues. TID: None

CA-AR-11-001 11/23/2010 Information Technology Contract Payment Oversight 

R-1 — Ensure that proper personnel have a contracting officer’s representatives (CORs) letter of designation that allows them 

to certify invoices for payment. TID: May 2011

R-2 — Require contracting officers’ representatives to reconcile invoices to receiving documents prior to certification for 

payment. TID: May 2011

IT-AR-11-001 12/6/2010 Network Perimeter Firewall

R-5 — Establish comprehensive firewall security standards TID: September 2011

R-6 — Perform a risk assessment and determine whether to process network traffic if logging is disabled TID: June 2011

R-8 — Identify and review firewall access control rules semiannually and remove duplicate and unused firewall access control 

rules. TID: March 2011

NL-MA-11-001 12/6/2010 Surface Mail Classes on Air Transportation Networks

R-1 — Verify that actions already taken related to minimizing surface mail classes on the FedEx Day-Turn network are applied 

to other air networks to ensure transportation managers use surface transportation, instead of the FedEx Night-Turn, 

commercial air carrier, United Parcel Service, and Christmas air transportation networks to move surface mail types 

where possible. TID: None

R-2 — Routinely provide headquarters and area management with data, including Transportation Cost System/Cost and 

Revenue Analysis data, to monitor and track the volume and avoid additional costs for flying surface mail classes on 

the FedEx Night-Turn, commercial air carrier, United Parcel Service, and Christmas air transportation networks. TID:

September 2011

R-3 — Reinforce existing policies and procedures for the processing and assigning of mail to air and surface transportation. 

TID: None

CRR-AR-11-001 12/7/2010 Periodicals Mail Costs

R-2 — Issue guidance to processing facilities that emphasizes managing the expected delivery dates and eliminates using the 

“Hot 2C” program to provide expedited processing or manual processing for select publications. TID: April 2011

R-3 — Re-emphasize use of the Electronic Mail Improvement Reporting System to processing facility personnel and define the 

types of issues that should be reported. TID: May 2011
October 1, 2010 — March 31, 2011 | 51 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NO-AR-11-004 12/14/2010 Houston, TX Processing and Distribution Center Mail Consolidation

R-1 — Pursue expansion of the North Houston Processing and Distribution Center and consolidate the Houston Processing 

and Distribution Center’s mail processing operations into the expanded facility, by fiscal year 2013. TID: None

FF-AR-11-004 12/15/2010 Express Mail Guarantees 

R-1 — Evaluate the reasons for late deliveries for American territories and, if it’s not possible to significantly improve on-time 

delivery, determine if they should adjust or eliminate guarantees. TID: March 2011

R-2 — Review military Express Mail and logistics to evaluate reasons for the delays in delivering mail to military personnel and 

make necessary changes to improve service performance. TID: June 2011

R-3 — Implement actions to include military ZIP Codes in the Service Delivery Calculator. TID: March 2011

R-4 — Identify reasons for late Express Mail deliveries to ZIP Codes in the 50 states with the highest volumes of late deliveries 

and either implement actions to reduce late delivery or determine if they should adjust or eliminate delivery guarantee 

time. TID: March 2011

R-5 — Establish a timeframe for and develop a process to analyze Express Mail refunds by origin and destination to evaluate 

risk and identify necessary changes in service in order to make better business decisions for guarantees. 

TID: March 2011

R-6 — Reiterate to area vice presidents and appropriate district personnel their responsibility to monitor and close inactive 

Express Mail Corporate Accounts when appropriate. TID: March 2011

R-7 — Communicate current Express Mail Corporate Account inactive account information to area vice presidents for action to 

be taken by appropriate district personnel. TID: March 2011

MS-AR-11-001 12/23/2010 Workshare Discounts Exceeding Avoided Costs

R-1 — Prepare and maintain data, analyses or other documentation to properly support the amount of discounts that exceed 

avoided costs when claiming exceptions specified in the Postal Accountability and Enhancement Act of 2006. 

Alternatively, limit proposed discounts to 100 percent of avoided costs at the next market dominant price adjustment. 

TID: None

IT-AR-11-002 1/12/2011 Fiscal Year 2010 Selected Information Technology General Controls

R-1 — Develop a procedure to notify administrators supporting Windows servers when new group policy updates are available. 

TID: August 2011

R-2 — Correct discrepancies identified by the periodic reviews of all Windows servers, as appropriate. TID: September 2011

R-3 — Develop a methodology to centrally manage all local accounts. TID: September 2011

NL-AR-11-001 1/13/2011 Postal Vehicle Service Transportation Routes – Suburban Maryland Processing and Distribution Center 

R-1 — Ensure that Suburban Maryland Processing and Distribution Center managers follow prescribed fleet management 

procedures for making Postal Vehicle Service schedules effective, including conducting schedule and vehicle utilization 

reviews. TID: None

R-2 — Verify elimination of the 14,177 workhours identified in our audit, and already agreed to by management, from the 

Postal Vehicle Service trip schedules. TID: January 2011

R-3 — Verify the elimination of two trips initiated by management identified during our audit fieldwork. TID: February 2011

R-4 — Eliminate 11 trips from highway contracts identified in our audit and already agreed to by local and area management. 

TID: February 2011

DR-AR-11-002 1/18/2011 City Delivery Efficiency Review – New York District 

R-1 — Reduce the New York District’s workhours by 279,853 to achieve an associated economic impact of more than $9.3 

million annually, or in excess of $93 million over 10 years. TID: December 2011
52 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DR-AR-11-003 1/20/2011 City Delivery Efficiency Review – Northern Virginia District 

R-1 — Reduce the Northern Virginia District’s workhours by 103,160 to achieve an associated economic impact of about $32 

million over 10 years. TID: February 2011

DA-AR-11-001 2/7/2011 Facility Optimization: Western Area

R-1— Clarify procedures for reporting excess space. TID: March 2011

R-2 — Initiate disposal actions for excess space identified. TID: March 2011

R-3 — Pursue opportunities with federal agencies as an option to optimize excess property. TID: June 2011

DA-AR-11-002 2/11/2011 Facility Optimization: Eastern Area

R-1 — Clarify procedures for reporting excess space. TID: March 2011

R-2 — Initiate disposal actions for excess space identified. TID: March 2011

R-3 — Pursue opportunities with federal agencies as an option to optimize excess property. TID: June 2011

IT-AR-11-003 2/15/2011 Information Resource Access

R-3 — Review the exception to Handbook AS-805, Information Security, for developer read access to the production 

environment to determine if the exception appropriately supports applicable policy and legal requirements. 

TID: May 2011 

DA-AR-11-004 2/25/2011 Facility Optimization: Capital Metro Area

R-1 — Clarify procedures for reporting excess space. TID: March 2011

R-2 — Initiate disposal actions for excess space identified. TID: March 2011

R-3 — Pursue rental opportunities with federal agencies as an option to optimize excess property. TID: June 2011

DA-AR-11-003 3/1/2011 Facility Optimization: Southwest Area 

R-1 — Clarify procedures for reporting excess space. TID: March 2011

R-2 — Work in coordination to initiate disposal actions for identified excess space. TID: March 2011

R-3 — Pursue opportunities with federal agencies as an option to optimize excess property. TID: June 2011

NO-MA-11-002 3/1/2011 Management Advisory – Processing of Collection Box Flats in the Philadelphia Metropolitan Customer Service District 

R-1 — Process collection box flats in accordance with Postal Service Standard Operating Procedures TID: April 2011

EN-AR-11-002 3/14/2011 Network Distribution Center Activation Impacts 

R-1 — Ensure trailer capacity is being optimized to eliminate excess capacity in the transportation network. TID: None

R-2 — Review trips in the Network Distribution Center network for additional consolidation opportunities. TID: December 2011
October 1, 2010 — March 31, 2011 | 53 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

IT-AR-11-005 3/14/2011 Securing Information on Portable Devices 

R-1 — Ensure all laptops are encrypted or granted an approved waiver in accordance with Handbook AS-805, Information 

Security. TID: None

R-2 — Identify, retrieve, and properly dispose of all outdated unencrypted laptops. TID: September 2011

R-4 — Coordinate and update Information Technology guidance and Handbook AS-701, Materials Management, to define 

staff roles and responsibilities for updating laptop changes in the Asset Inventory Management System and 4Z-PS969 

system. TID: December 2011

R-5 — Review all laptops to ensure the current status is reflected in the Asset Inventory Management System and the 

4Z-PS969 System, as appropriate. TID: June 2011

R-8 — Periodically review all BlackBerry devices to ensure they communicate with the BlackBerry Enterprise Server or are 

disconnected. TID: April 2011

R-10 — Develop and distribute procedures to establish user accountability for protecting sensitive data stored on other 

portable devices such as thumb drives, external hard drives, and Digital Video Discs. TID: March 2011

DR-MA-11-001 3/14/2011 The Effects of the Flats Sequencing System on Delivery Operations – Arizona District

R-1 — Continue to collaborate with business mailers to ensure flat mailpieces meet automation requirements and reduce the 

amount of unworked flat mail sent to delivery units. TID: None

IT-AR-11-004 3/16/2011 Computer Incident Data Reliability

R-1 — Standardize data input procedures and communicate to administrators the requirement to consistently populate 

incident data fields. TID: March 2011

R-3 — Integrate the Data Loss Prevention and Security Information Manager applications with the security incident 

management system to ensure a single incident data repository. TID: September 2011

R-4 — Either modify the existing incident management system or pursue development of a new system that enforces date and 

time value sequence and data validation. TID: September 2011

NL-AR-11-002 3/18/2011 Postal Vehicle Service – Scheduling and Staffing – Connecticut Valley District

R-1 — Ensure that Southern Connecticut Processing and Distribution Center and Springfield Processing and Distribution 

Center managers follow prescribed fleet management procedures for making Postal Vehicle Service schedules 

effective, including conducting schedule and vehicle utilization reviews. TID: None

R-2 — Verify elimination from the Postal Vehicle Service trip schedules of 7,245 workhours from the Southern Connecticut 

Processing and Distribution Center and 2,856 workhours from the Springfield Processing and Distribution Center 

identified during our audit and already agreed to by management. TID: March 2011

R-3 — Reassess the remaining 4,562 workhours identified in our audit and eliminate the workhours as indicated by the 

reassessment, or document the reasons for retaining the workhours. TID: May 2011

R-4 — Fully utilize the flexibility under the existing American Postal Workers Union Collective Bargaining Agreement and 

Memorandum of Understanding to increase the use of split days off for Postal Vehicle Service (PVS) drivers and 

maximize the use of part-time regular PVS drivers where possible. TID: None 

R-5 — Increase the allowable percentage of all types of part-time employees to allow maximum use of part-time regular 

employees in facilities with Postal Vehicle Service operations. TID: None

R-6 — Provide permanent flexibility to schedule split days off for employees in facilities with Postal Vehicle Service operations. 

TID: None

EN-MA-11-001 3/25/2011 Benchmarking Mail Distribution to Carriers

R-1 — Pursue a delivery unit assistant initiative to have transitional employees or part-time flexible employees perform 

in-office activities including casing and preparing mail for carriers. TID: None
54 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DR-AR-11-004 3/30/2011 City Delivery Efficiency Review - Chicago District 

R-1 — Reduce the district’s workhours by 188,884 to achieve an associated economic impact of more than $6.5 million 

annually, or in excess of $65 million over 10 years. TID: None

HR-AR-11-001 3/31/2011 Allegations of Inaccurate Time and Attendance Records 

R-1 — Establish and implement controls in the Time and Attendance Collection Systems to document supervisors’ justification 

of changes to employees’ time. TID: January 2012

R-2 — Issue supplemental guidance emphasizing the importance of completing Postal Service Form 1017-A, Time 

Disallowance Record, and PS Form 3971, Request for or Notification of Absence. TID: May 2011

R-3— Establish a review and approval process to ensure time disallowances are appropriate and documented as required. 

TID: May 2011

R-4 — Establish periodic monitoring of clock ring deletions to ensure employee workhours are recorded accurately. 

TID: May 2011

R-5 — Provide periodic refresher training to managers, postmasters, supervisors, and acting supervisors on the Time and 

Attendance Collection System. TID: May 2011

R-6 — Issue supplemental guidance to supervisors and managers regarding the appropriate use of operation codes 

associated with recording safety talks and informational meetings in the Time and Attendance Collection System. 

TID: May 2011

EN-AR-11-004 3/31/2011 Lima, OH to Toledo, OH Area Mail Processing Consolidation

R-1 — Promptly assess the current mail volume and swiftly adjust workhours, sort plans, transportation, and any other 

operational requirements to ensure the Toledo Processing and Distribution Center meets customer and service 

commitments TID: March 2011

R-2 — Expedite filling vacant positions and assess any additional staffing requirements at all levels. TID: July 2011

R-3 — Assess and take appropriate corrective action related to mail processing space and transport equipment requirements, 

dispatch discipline, contract drivers performing mail sortation, late truck departures, and incomplete Postal Service 

Form 5429. TID: June 2011

R-4 — Establish and deploy formal Area Mail Processing implementation teams to the gaining facilities for plant consolidations 

that result in a facility closure to ensure consolidations are implemented as approved and to identify and facilitate 

corrective actions timely. TID: June 2011

HR-AR-11-003 3/31/2011 Overtime Usage

R-1 — Develop and implement a plan to attain alignment between current workload and workforce levels, by location, to 

ensure effective and efficient use of Postal Service resources. TID: None

R-2 — Ensure significant changes impacting operations and resources are accounted for in the budget plan. TID: None
October 1, 2010 — March 31, 2011 | 55 

APPENDIX F

Significant Management Decisions in Audit Resolution

For the period October 1, 2010 — March 31, 2011

As required by the IG Act, the following page discusses information concerning any significant management decision with which the Inspector General disagrees 

and is currently in audit resolution.

Office of Inspector General

 

None for this report period

APPENDIX F
56 | Semiannual Report to Congress

APPENDIX G

APPENDIX G

Status of Peer Review Recommendations

Federal audit organizations undergo an external quality control assessment by their peers every 3 years. The Dodd-Frank Wall Street Reform and Consumer 

Protection Act of 2010 requires an appendix reporting on 1) any Office of Inspector General peer reviews conducted during the semiannual period; and 

2) any outstanding recommendations from any previous or current peer review that remain outstanding or have not been fully implemented. 

Office of Audit

Internal Peer Reviews

On March 31, 2010, the Department of Defense OIG (DOD OIG) issued a quality control review report of our audit organization. We received a peer review rating of pass. 

All outstanding recommendations have been implemented as of March 31, 2011. 

A copy of this quality control review report, in its entirety, can be viewed on the USPS OIG website at www.uspsoig.gov.

External Peer Reviews

None conducted during this period.

Office of Investigations

Internal Peer Reviews

None conducted during this period.

External Peer Reviews

From September 13 to October 4, 2010, our agency conducted a peer review of the Social Security Administration OIG’s (SSA OIG’s) Office of Investigations. We 

reviewed their Investigative Operations at their headquarters and at three of their field offices. On December 7, 2010, we issued a letter to the SSA OIG on the review 

results. There were no specific findings or recommendations.
October 1, 2010 — March 31, 2011 | 57 

APPENDIX H

Investigative Statistics*

For the period October 1, 2010 — March 31, 2011

Investigations 

Completed Arrests

Indictments/ 

Informations

Convictions/ 

Pretrial 

Diversions**

Admin. 

Action 

Taken 

Cost 

Avoidance

Fines, Restitution, 

and Recoveries

Amt. to USPS 

(from previous 

column)***

To Mgmt. 

for Admin. 

Action

Theft, Delay, or Destruction 

of Mail by Employees or 

Contractors

617 200 206 202 393 — $575,652 $292,897 462

Injury Compensation 

Fraud 1 

277 17 21 18 73 $86,048,570 $291,159,182 $54,149,082 73

Official Misconduct 381 43 59 44 277 — $3,815,087 $95,421 313

Financial Fraud 334 60 60 102 219 $1,355,000 $2,054,544 $1,980,676 239

Contract Fraud 2 52 6 20 15 47 $1,588,998 $410,064,157 $11,441,705 26

TOTAL 1,661 326 366 381 1,009 $88,992,568 $707,668,622 $67,959,781 1,113

* Statistics include joint investigations with other law enforcement agencies.

** Convictions reported in this period may be related to arrests in prior reporting periods.

*** Amounts include case results of joint investigations with other OIG, federal, state, and local law enforcement entities. 

1

 Amount under Fines, Restitution, and Recoveries includes nearly $264.5 million from one pharmaceutical investigation.

2

 Amount under Amt. to USPS (from previous column) includes $42.5 million from one pharmaceutical investigation.

APPENDIX H
58 | Semiannual Report to Congress

APPENDIX I

Administrative Subpoenas Requested by the Postal Inspection Service

There was one request during the reporting period.

Type of Scheme

Complaints 

Filed

Consent 

Agreements FROs

Cease & 

Desist Orders

Advance fee 2 2 — 2

Charity — — — —

Contests/sweepstakes 27 23 1 26

Coupon fraud 1 1 — 1

False billings 8 7 — 7

Internet Auction — — — —

Lotteries (foreign and domestic) 10 10 3 10

Merchandise:

 Failure to furnish 11 10 3 11

 Failure to pay 3 2 — 2

Misrepresentation — — — —

Miscellaneous 45 36 1 37

Telemarketing — — — —

Work at home 2 2 — 2

TOTAL 109 93 8 98

APPENDIX I

Summary of U.S. Postal Inspection Service Actions Under 39 USC 3005 and 3007

For the period October 1, 2010 — March 31, 2011

Financial Reporting on Investigative 

Activities for the Postal Inspection 

Service 

Type

Personnel $136,771,722 

Nonpersonnel $31,599,522 

TOTAL $168,371,244 

Capital obligations $4,344,449 

Other Administrative Actions

Administrative Action Requests 121

Temporary Restraining Orders issued —

Cases Using Direct Purchase Authority —

Civil Penalties (Section 3012) Imposed — 

Test Purchases —

Withholding Mail Orders Issued 12

Voluntary Discontinuances —
October 1, 2010 — March 31, 2011 | 59 

APPENDIX J

APPENDIX J

Closed Congressional and Board of Governors’ Inquiries

For the period October 1, 2010— March 31, 2011

This appendix lists the congressional and Board of Governors inquiries the OIG closed during this reporting period. OIG units reviewed or investigated these 

inquiries to resolve allegations and disputes, and to help identify systemic issues. Inquiries are listed in the chronological order of receipt.

Inspector General Investigations (53)

Requestor Allegation/Concern Major Findings Closure Date

Senator, Virginia Manager created a hostile work environment by threatening, 

intimidating, and berating employees.

Investigators coordinated with management, which conducted 

a formal Workplace Environment Improvement investigation and 

counseled the manager. We reviewed their work to ensure the 

allegations were adequately addressed.

11/10/10

White House Manager committed mail theft, forgery, and fraud. Investigation substantiated the allegations. We referred our findings 

to postal management and federal and state attorneys' offices for 

administrative action and prosecution.

10/4/10

Senator, California Non-receipt of an international Registered Mail package. The investigation found no evidence of mail tampering, delay, or theft 

by postal employees. Attempts to locate the package, working with 

the International Mail and Mail Recovery Centers, were unsuccessful.

10/4/10

Senator, Pennsylvania Management delayed mail and hid it to avoid detection. Investigation determined managers were not following mail 

processing policy and our investigators worked with management 

to clarify the policy. However, the investigation found no evidence 

management intentionally delayed mail. 

10/12/10

Representative, 

New York

Non-receipt of several gift cards. The investigation found no evidence of mail tampering or theft by 

postal employees. The investigation determined the mailpieces were 

likely damaged by postal sorting machines, causing the loss.

1/10/11

Senator, Maryland Former employee wrongfully accused of theft of funds from a postal 

safe; alleges another employee must have been responsible.

The investigation did not substantiate the allegation of theft by 

another employee; but we discovered accounting error created 

an appearance of a shortage. We forwarded our findings to 

management for administrative action and correction.

10/5/10

Representative, Florida A postal employee provided false statements during legal 

proceedings; the return of a manager to the complainant's duty 

station would create a hostile work environment.

The investigation did not substantiate the allegations. 11/18/10

Representative, 

New Jersey

Non-receipt of mail, including a Social Security card. The investigation found no evidence postal employees stole or 

tampered with the complainant's mail.

1/10/11

Senator, Maryland Theft of a gift card. Investigation substantiated the allegations. We referred our findings 

to the U.S. Attorneys' Office for prosecution.

10/4/10

Senator, Ohio Theft of a book mailed to a customer in California. Investigation did not substantiate the allegations. A search for the 

contents at the Mail Recovery Center was unsuccessful.

1/10/11

Representative, 

New York

A postal employee tampered with or intentionally delayed several 

customer checks sent to the complainant's company.

The investigation found evidence of theft, but the investigation 

did not conclusively determine the theft occurred internally. 

We forwarded our findings to management for action deemed 

appropriate.

1/13/11

Representative, 

Kentucky

Theft from complainant's mailbox and a Kentucky post office. The U.S. Postal Inspection Service previously conducted an 

investigation and did not substantiate the allegations; we found no 

basis for further review.

10/4/10
60 | Semiannual Report to Congress

APPENDIX J

Requestor Allegation/Concern Major Findings Closure Date

Senator, Missouri Non-receipt of several checks. The investigation found no evidence that postal employees stole 

or tampered with the complainant's mail. We determined his utility 

company's mail contractor inadvertently rejected payment checks 

over a four-year period. 

10/4/10

Representative, Florida Theft of several gift cards. Investigation confirmed the complainant's mail may have been 

delayed, stolen, or tampered with. However, the investigation found 

no evidence that a postal employee was responsible.

12/6/10

Senator, West Virginia Theft of collector coins from a package. The investigation did not substantiate the allegation. The 

investigation determined the package was likely damaged by postal 

sorting machines, causing the coins to be separated from the letter. 

Our agents were unable to locate the coins.

10/4/10

Representative, 

Pennsylvania

Non-delivery of letters because they were mailed with Forever 

Stamps.

The investigation did not substantiate the allegation. The 

investigation found no evidence of an internal, systemic problem of 

mail theft or tampering related to Forever Stamps.

10/5/10

Representative, 

New Jersey

Non-delivery of several bags of bulk mail sent from a New Jersey 

post office.

The investigation confirmed the mail was not delivered. We could not 

identify instances of misconduct or the root cause of the problem. 

10/4/10

Representative, 

Maryland

Former employee wrongfully accused of theft of funds from a postal 

safe; alleges another employee must have been responsible.

The investigation did not substantiate the allegation of theft by 

another employee; but we discovered an accounting error created 

an appearance of a shortage. We forwarded our findings to 

management for administrative action and correction.

10/5/10

Senator, Florida Intentional mail delay at a Virginia post office. Investigation found packages were scanned as "delivered" before 

delivery was attempted. However, this process is permitted under 

policy applicable to this specific courthouse location.

12/20/10

Senator, Oregon Postal employees stole and altered two checks mailed to a post 

office box in Georgia.

Review found the checks were altered by individuals external to the 

Postal Service. We referred our findings to the Postal Inspection 

Service and local law enforcement agencies.

10/4/10

Representative, Ohio A postal employee made harassing calls to a congressional district 

office regarding the use of franked mail and potentially delayed or 

discarded political mail.

Due to the nature and timing of the allegations, we were unable to 

conduct a full investigation. Review found no evidence of a systemic 

problem of delayed or discarded mail in the area.

12/17/10

Representative, Texas Non-receipt of mail, including prescription medicine from the 

Department of Veterans Affairs.

Investigation revealed employee error most likely caused the mail 

delivery issues. We reviewed management actions to resolve the 

complaint.

10/15/10

Senator, New York Postal Inspectors made false statements in investigative 

memoranda.

Investigation did not substantiate the allegations. 1/24/11

Senator, Hawaii Non-delivery of mail to a government office, resulting from postal 

employee misconduct.

Investigation located the agent for the state official, who confirmed 

she signed for and retrieved the mail. The government office could 

not account for the mail after it left the jurisdiction of the Postal 

Service.

11/16/10

Representative, 

California

Non-receipt, tampering, and delay of mail. The investigation found no evidence postal employees stole or 

tampered with the complainant's mail. Management had already 

responded with improvements to secure mail delivery.

11/16/10

Representative, 

New Hampshire

A postmaster allowed rural letter carriers to carry mail on contract 

routes, a violation of 18 U.S.C. § 440.

Review found management addressed the allegation through an 

administrative process. We noted that management and union 

officials agreed that the alleged practice would violate the law and 

federal ethics regulations. 

10/4/10

Senator, New York Non-receipt of a package. We undertook no work after learning the issues had been resolved. 10/4/10

Senator, Virginia Management intentionally delayed undeliverable mail at a Virginia 

post office.

Investigation did not substantiate the allegations. Investigation 

determined the delays were likely due to a consolidation of other 

postal facilities in the district, as well as failed implementation of a 

new PARS processing procedure for undeliverable mail.

12/6/10
October 1, 2010 — March 31, 2011 | 61 

APPENDIX J

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

West Virginia

Postal employees, acting under political influence, intentionally 

mishandled a letter sent via certified mail to a Maryland state official.

The investigation did not substantiate the allegations. Investigation 

determined a postal employee successfully delivered the letter to the 

official's office, but failed to follow postal policy regarding delivery of 

certified mail receipts. We forwarded our findings to management for 

action deemed appropriate.

1/13/11

Senator, Nevada Mail tampering; theft of a diamond from a ring mailed to a Kansas 

jeweler.

The investigation found a postal employee opened the package 

and stole the diamond from the ring. We forwarded our findings to 

management for administrative action, and to the U.S. Attorneys' 

Office for prosecution.

1/6/11

Representative, 

New York

Theft of cash from a Priority Mail envelope. Investigation found no evidence postal employees tampered with or 

stole the cash.

1/10/11

Representative, 

New York

Non-delivery of letters mailed to an addressee in New York. Investigation determined several of the letters were temporarily 

misplaced, apparently after the addressee declined to sign for them.

11/10/10

Senator, New Mexico Non-receipt of mail; postal employees intentionally discarded mail to 

harass complainant.

The investigation did not substantiate the allegations. Investigation 

found there was a widespread external mail theft problem in the 

complainant's delivery area. The Postal Inspection Service and a 

local law enforcement agency were actively investigating.

1/6/11

Senator, 

New Hampshire

A postmaster allowed rural letter carriers to carry mail on contract 

routes, a violation of 18 U.S.C. § 440.

Review found management addressed the allegation through an 

administrative process. We noted that management and union 

officials agreed that the alleged practice would violate the law and 

federal ethics regulations. 

10/14/10

Senator, Florida International Registered Mail package was significantly delayed and 

arrived missing its contents.

The investigation found no evidence of postal employee misconduct. 

Investigators were unable to determine what caused the package 

to be misrouted through India, but tracking information indicated 

the package was in good condition throughout US Postal Service 

processing.

1/24/11

Senator, California Mail tampering and delay. The complainant refused to allow investigators access to his 

evidence of tampering. We were unable to develop investigative 

leads substantiating the allegations.

12/20/10

Ranking Member, 

Senate Committee

Request for investigation of possible ethics violations at U.S. Postal 

Service.

Allegations not substantiated. 3/31/11

Senator, New York Management willfully delayed mail; whistleblower reprisal. Investigation found no evidence of mail delay. The investigation also 

determined the complaint did not meet the four necessary elements 

of whistleblower reprisal, specifically failure to show a protected 

communication to the OIG.

3/8/11

Senator, Virginia Non-delivery of a package sent to a post office box. Investigation found no evidence postal employees stole or discarded 

the package, nor could they account for the package which had 

been logged as arrived. Management worked with the addressee to 

ensure packages sent to the his post office are delivered securely.

2/24/11

Senator, Maryland Damaged letters indicating attempted mail tampering and theft. Investigation did not substantiate the allegations. The investigation 

determined the letters were likely damaged by postal sorting 

machines. 

3/3/11

Senator, South Carolina Non-delivery of a greeting card containing cash. Investigation found a postal employee most likely stole the gift card. 

We forwarded our findings to management for administrative action, 

and to a local law enforcement agency for judicial action.

3/3/11

Representative, Texas Management directed employees to discard Undeliverable Bulk 

Business Mail without sorting out First-Class Mail and Periodicals.

Investigation found a manager directed employees to discard 

Undeliverable Bulk Business Mail without sorting First-Class Mail and 

Periodicals. We referred our findings to management.

2/24/11

Representative, Virginia A postal employee was in a non-duty, non-pay status for an unduly 

long period during an OIG investigation.

The investigation, conducted between July and December, 

substantiated the charges against the postal employee. We referred 

our findings to the United States Attorney.

1/24/11

Senator, Iowa Postal employees vandalized coworker's property in retaliation for 

terminating his union membership.

Investigation found no evidence that the vandalism occurred at the 

hands of postal employees, and we referred the matter to local law 

enforcement.

2/24/11
62 | Semiannual Report to Congress

APPENDIX J

Requestor Allegation/Concern Major Findings Closure Date

Senator, New Mexico Non-receipt of various bills, banking information, and checks. Investigation substantiated the allegations and found a former postal 

employee was most likely responsible for the delivery problems. The 

employee left the Postal Service after questioning. We forwarded 

our findings to the U.S. Attorney, who denied prosecution.

2/8/11

Senator, New York Request for status of appeal of complainant's termination of 

employment with the OIG.

Review found the deciding official previously provided the requested 

information.

12/21/10

Senator, Florida A manager sexually harassed the complainant. Investigation did not substantiate the allegation, but found the 

complainant and manager maintained a sexual relationship while 

both were employees of the Postal Service. We forwarded our 

findings to management for action deemed necessary.

3/10/11

Senator, Missouri Mail tampering and theft. Investigation did not substantiate the allegations. The investigation 

determined the complainant's package was likely overfilled and split 

open during parcel sortation. Efforts to locate the contents at the 

Mail Recovery Center were unsuccessful.

3/28/11

Senator, Florida Theft of a cell phone from a package. The investigation found no evidence indicating employee theft. 3/22/11

Representative, 

Georgia

Non-delivery of a firearm mailed to California. Investigation initially found no evidence of postal employee 

involvement, but later found a postal contractor was likely 

responsible for the theft. We noted that mail was routinely not 

secured and remained accessible on Sundays and advised Postal 

Inspection Service, which has jurisdiction over installation security.

3/1/11

Ranking Member, 

Senate Subcommittee

Request for briefing on the OIG's investigative program on Federal 

Employee's Compensation Act fraud.

Briefed committee staff as requested. 1/24/11

Representative, 

Michigan

Manager improperly rejected a bid for a contract to clean postal 

facilities.

Investigation did not substantiate the allegation. The investigation 

found the manager acted in accordance with postal contracting 

policy. 

3/31/11

Representative, 

California

Wrongful discharge because of a disability. Review found the matter was outside the jurisdiction of the OIG. 3/17/11

General Counsel (9)

Requestor Allegation/Concern Major Findings Closure Date

Representative, Florida Complainant wished to withdraw complaint sent to the OIG Hotline. Review found the complainant's request was fully addressed. 10/7/10

Representative, 

West Virginia

Consolidation plans for two West Virginia facilities would expose 

operations to terrorist attacks. 

The complainant provided no credible basis for his assertions. We 

noted the role of the Postal Inspection Service in maintaining the 

security of facilities and the mail.

10/14/10

Senator, Florida Request for investigative findings under the Freedom of Information 

Act.

Processed request and provided records in accordance with the 

FOIA.

11/22/10

Ranking Member, 

House Committee; 

Ranking Member, 

Senate Subcommittee

Request for bi-annual reports on all closed investigations, 

evaluations, and audits not disclosed to the public, to support 

congressional oversight activities.

Provided requested available information. 1/14/11

Representative, Iowa Request for an OIG report of investigation. Provided a redacted copy of report previously released under the 

FOIA.

2/17/11

Senator, New York Mismanagement and misconduct at a New York facility; employee 

fraudulently obtained full-disability retirement benefits.

The Postal Service Government Relations Office previously 

addressed the allegations of mismanagement and misconduct; the 

allegation relating to retirement benefits falls under the OPM OIG 

jurisdiction. We declined further work.

2/2/11

Chairman, 

House Committee

Request for detailed information on the postal FOIA performance 

during the previous 5 years.

Provided the requested information for the OIG separately. 2/15/11
October 1, 2010 — March 31, 2011 | 63 

APPENDIX J

Requestor Allegation/Concern Major Findings Closure Date

Chairman, House 

Committee

Request for a briefing on the conformance of OIG blogging and other 

use of social media with federal laws and rules.

Provided the requested information in a briefing to committee staff. 2/18/11

Senator, Texas Theft of cash from a letter; Postal Service failed to adequately 

process an appeal of complainant's indemnity claim.

The Postal Service Government Relations Office earlier addressed 

the complainant's indemnity claim. The OIG Office of Investigations 

reviewed the mail theft allegation and declined to undertake formal 

work. We retained the allegation in our database for possible future 

systemic review.

3/21/11

Inspector General Audits/Risk Analysis Research Center Reports (7)

Requestor Allegation/Concern Major Findings Closure Date

Senator, California Concerns about consolidation of Marysville and West Sacramento 

facilities.

Review determined a business case supported the consolidation, 

finding sufficient capacity to process mail at one facility, customer 

service would improve, no career postal employees would lose their 

jobs, processing efficiency would improve, service improved and mail 

delays were reduced, environmental impacts were minimized through 

transportation reductions, and contingency plans for emergencies 

were in place.

11/23/10

Representative, 

Georgia

Concerns about consolidation of the Columbus and Macon facilities. Review determined a business case supported the consolidation, 

finding adequate capacity to process mail at one facility, customer 

service was maintained, limited numbers of employees were 

impacted, and efficiency improved.

2/14/11

Representative, 

California

Request for a review of the National Reassessment Program and the 

administration of the Pay for Performance system.

The Office of Audit initiated work in October 2010. Work on the 

National Reassessment Program was suspended pending a classaction lawsuit involving postal employees affected by the program. 

Audit work on the Pay for Performance program is ongoing.

3/17/11

Representative, 

West Virginia

Management intentionally delayed mail and wasted resources to 

bolster the case for moving mail from that location.

Review did not substantiate the allegations. The review did not find 

evidence of delayed mail. We found sufficient city and rural carrier 

staffing to support mail delivery, and overtime usage in line with 

district and national averages.

2/23/11

Chairman, 

House Committee

Request the OIG evaluate the financial impact of the McNamaraO'Hara Services Contract Act on the Postal Service.Provided requested information in a briefing to committee staff. 2/25/11

Representative, Kansas Request for OIG to provide, for the record of the hearing before 

the House Appropriations Subcommittee on Financial Services 

and General Government, information on the significance of an 

anticipated Postal Regulatory Commission (PRC) advisory opinion on 

the Postal Service ability to implement 5-day delivery service.

We advised that, regardless of the PRC opinion, appropriations 

language limits the Postal Service from implementing 5-day delivery 

service without congressional action.

3/4/11

Chairman, 

House Subcommittee

Request for OIG to provide, for the record of the hearing before the 

House Appropriations Subcommittee on Financial Services and 

General Government, information on the differences between the 

OIG and PRC estimates on the Postal Service overpayment of Civil 

Service Retirement System liabilities.

We advised, inter alia, that the difference is that the OIG 

methodology splits the pension costs evenly based on years of 

service while the PRC splits costs based on the CSRS pension 

formula, under which later years of service earn a higher benefit and 

generate higher pension costs.

3/4/11
64 | Semiannual Report to Congress

APPENDIX J

Referrals (15)

Requestor Allegation/Concern Referred To Closure Date

Representative, Texas Misrepresentation; a writer falsely claimed to be a union official in a 

letter to a congressional office.

U.S. Postal Inspection Service 10/1/10

Senator, Maryland Monetary value of annual Postal Service contract awards to small 

and disadvantaged businesses.

Government Relations Office, U.S. Postal Service 10/5/10

Representative, 

Pennsylvania

Mail theft and delay by a person external to the Postal Service. Postal Inspection Service 10/13/10

Representative, 

Pennsylvania

Mail fraud scheme. Postal Inspection Service 11/12/10

Representative, Florida Request for assistance in obtaining pay and benefits withheld while 

in a non-pay status.

Government Relations Office 12/1/10

Representative, 

Michigan

Mail fraud scheme. Postal Inspection Service 12/2/10

Representative, Florida Mail fraud scheme. Postal Inspection Service 12/2/10

Representative, Ohio Person believed to be external to the Postal Service tampered with 

and stole mail. 

Postal Inspection Service 12/22/10

White House Person believed to be external to the Postal Service tampered with 

and stole mail. 

Postal Inspection Service 12/29/10

Senator, Hawaii Further investigation of mail not delivered to a governmental official. 

A previous OIG investigation found no postal misconduct.

Postal Inspection Service 1/10/11

Representative, Virginia Request for assistance in filing an Equal Employment Opportunity 

complaint with the Postal Service.

Government Relations Office 1/13/11

Representative, Florida Postal Inspector incurred damages because the Postal Inspection 

Service and postal contractor Cartus failed to process his relocation 

benefits in accordance with postal policy.

Government Relations Office 3/3/11

Representative, 

Alabama

Request for assistance obtaining retirement pay. Government Relations Office 3/3/11

Representative, 

Missouri

Non-receipt of a reward for participation in a Postal Inspection 

Service investigation.

Postal Inspection Service 3/10/11

Senator, Maryland External theft and rifling of mail. Postal Inspection Service 3/21/11
October 1, 2010 — March 31, 2011 | 65 

FREEDOM OF INFORMATION ACT/ WORKPLACE ENVIRONMENT

Requests Number of Requests

Carryover from prior period 6

Received during period 194

Total on hand during period 200

Actions Number of Requests

Processed during the period 194

 Requests denied in full 17

 Requests denied in part 70

 Requests granted in full 6

 No records 22

 Requests referred 64

 Requests withdrawn 6

 Fee-related reasons —

 Records not reasonably described —

 Not a proper FOIA request for some other reason 5

 Not an agency record 4

 Duplicate request —

Balance Number of Requests

Balance at the end of the period (pending) 6

Processing Days Number of Days

Median processing days to respond to a FOIA request 4

SUPPLEMENTAL INFORMATION

Freedom of Information Act

The OIG’s Freedom of Information Act (FOIA) Office operates independently 

of, but frequently coordinates with, its counterparts at the Postal Service and 

the Postal Inspection Service. The FOIA Office receives requests for records 

from the public, the media, and postal employees. The FOIA, according to 

the Department of Justice, “generally provides that any person has a right, 

enforceable in court, to obtain access to federal agency records, except to 

the extent that such records (or portions of them) are protected from public 

disclosure by one of nine exemptions.”

For the period October 1, 2010 — March 31, 2011

SUPPLEMENTAL INFORMATION

Workplace Environment

The OI Workplace Environment unit reviews workplace environment and 

operational issues that may affect workplace climate in postal facilities 

through the country. The OIG Hotline is the usual source for the complaints, 

but occasionally members of Congress, the Governors, and postal 

management will raise concerns or forward complaints appropriate for 

review by the unit. Complaint topics range from sexual harassment and 

discrimination to workplace safety. Workplace Environment reviews are 

designed to identify systemic, rather than individual, issues and foster 

postal management efforts toward providing employees a stress- and 

adversity-free work environment.

The unit accepts complaints from any postal employee, including OIG and 

Postal Inspection Service staff. Reviews may result in fact-finding reports 

to management or referral for specific suggested action, such as climate 

assessments. 

Activities

For the period October 1, 2010 — March 31, 2011

Complaints received Total

Carryover from prior period 17

Complaints received from OIG Hotline, Congress, Governors, management, 

internal, and other

284

Total on hand during this period 301

Workplace environment actions Total

Complaints reviewed and closed during the period 268

Referred to Postal Inspection Service 2

Referred to Office of Audit 1

Referred to Office of Investigations 5

Referred to Workplace Environment 51

Referred to Hotline 3

Summary of findings to Congress/BOG/Postal Service management 60

Referred to FOIA —

Referred to AIG for Investigations —

Referred to database for statistical analysis and possible systemic review 146

Complaints pending at the end of the period 4
66 | Semiannual Report to Congress

ACRONYM GUIDE

APPS: Automated Package Processing System

APWU: American Postal Workers Union

C&A: certification and accreditation

CSRS: Civil Service Retirement System

CSS: customer service supervisor

DBCS: Delivery Barcode Sorter

DOL: U.S. Department of Labor

DEA: Drug Enforcement Administration

DWC: distribution window clerk

eCBM: Electronic Conditional Based Maintenance

EDDI: Electronic Data Distribution Infrastructure

EDI: Electronic Data Interchange

EIR: Enterprise Information Repository

FEGLI: Federal Employees’ Group Life Insurance

FEHB: Federal Employees Health Benefits

FSS: Flats Sequencing System

GMU: George Mason University

HCR: highway contract route

LLV: long-life vehicles

MTE: mail transport equipment

NALC: National Association of Letter Carriers

NCSC: National Customer Support Center

NDC: network distribution center

NPV: net present value

OA: Office of Audit

OI: Office of Investigations

OWCP: Office of Workers’ Compensation Programs

P&DC: processing and distribution center 

P&DF: processing and distribution facility

PAEA: Postal Accountability and Enhancement Act of 2006 

(also known as the Postal Act of 2006) 

PKI: Public Key Infrastructure

PRC: Postal Regulatory Commission

PVS: Postal Vehicle Services

RARC: Risk Analysis Research Center

SBOC: Stations and Branches Optimization Consolidation

SSA: sales and services associate

TACS: Time and Attendance Collection System

VMF: Vehicle Maintenance Facility

Acronym Guide

Here is a quick guide to acronyms used in this reporting period.

The following are among the many trademarks owned by the United States Postal Service: United States Postal Service®, U.S. Postal Service®, USPS®, First-Class Mail®, usps.com®, Click-NShip®, Automated Postal Center®, APC®, Express Mail®, Priority Mail®, Standard Mail®, Parcel Post®, Media Mail®, Customized MarketMail®, Intelligent Mail®, Parcel Select®, Express 

Mail International®, Quick, Easy, Convenient®, United States Postal Service Office of Inspector GeneralTM, Post OfficeTM, Postal ServiceTM, Signature ConfirmationTM, Certified Mail®, Delivery 

ConfirmationTM, Registered MailTM, ZIP CodeTM, Carrier PickupTM, Priority Mail International®, First-Class Mail International®, Premium Forwarding Service®, Forever Stamp® and Postmaster 

GeneralTM. 
The U.S. Postal Service has two 

law enforcement agencies with 

distinct areas of investigative

responsibility to serve the needs

of stakeholders, postal employees,

and the American public.

Who do I call?

Postal Inspection Service

■■ Security of employees, facilities, 

and equipment

■■ Revenue and postage fraud

■■ International mail security

■■ Violent crimes: 

- Threats and assaults of employees 

- Burglaries and robberies

■■ Mail theft by nonemployees

■■ Dangerous mail and bombs

■■ Mail fraud

■■ Identity theft

■■ Narcotics in the mail

■■ Child pornography and obscenity

Contact: 877-876-2455

http://postalinspectors.uspis.gov/

Office of Inspector General

■■ Theft, delay, or destruction of mail by 

employees and contractors

■■ Workers’ compensation fraud

■■ Embezzlements and financial crimes

■■ Contract fraud

■■ Kickbacks

■■ Computer crimes

■■ Narcotics

■■ Employee misconduct

■■ Internal affairs and executive 

investigations

■■ Whistleblower reprisals

Contact: 888-USPS OIG

www.uspsoig.gov
68 | Semiannual Report to Congress

U.S. POSTAL SERVICE OFFICE OF INSPECTOR GENERAL 

1735 N. Lynn Street, Arlington, VA 22209-2020 

1-888-USPS-OIG (1-888-877-7644) Fax: 703-248-2291 www.uspsoig.gov