Office of Inspector General

Semiannual Report to Congress

October 1, 2011 — March 31, 2012
Semiannual Report to Congress

Mission 

Statement

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; and

Keep the Governors, Congress, and Postal Service management 

informed of problems, deficiencies, and corresponding corrective 

actions.

About the Cover: gopostTM, a new concept introduced by the Postal Service earlier this year, is currently being tested in Northern Virginia. The gopost units are automated, secured, 

self-service parcel lockers placed in convenient locations where customers will be able to pick up or ship packages at their convenience. For more information go to www.gopost.com.
October 1, 2011 — March 31, 2012

A message from the 

Inspector General

The Postal Service is an invaluable part of the nation’s communications infrastructure. For more 

than 230 years, the Postal Service has served to bind the nation together, promote democracy, and 

enable commerce. Its mission remains largely unchanged despite the rapid changes in the way we 

communicate and share information. In fact, its role as a reliable, secure, and trusted delivery provider 

may be needed more than ever.

The Postal Service’s challenges are considerable, but its opportunities are great. Its 5-year business 

plan and its efforts to realign its physical and human infrastructure are among the steps the Postal 

Service is taking to position itself as a 21st century communications provider. Through our own 

mission of promoting integrity and accountability, the Office of Inspector General (OIG) supports the 

overall mission of the Postal Service. Our goal is to deliver optimal value to our joint stakeholders 

through independent audits and investigations. 

In our semiannual report, submitted pursuant to the Inspector General Act, we outline our work and 

activities for the 6-month period ended March 31, 2012. In the first section, we highlight audits 

and reviews that address risks in areas around the Postal Service’s strategic goals: improve service, 

improve financial performance, and improve safety and employee engagement. 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 OIG counterparts to identify problems and 

collaborate on solutions, which this report highlights. These efforts have resulted in significant savings 

opportunities. During this period, we issued 64 audit reports and management advisories that resulted 

in about $1.9 billion in monetary impact, and the Postal Service accepted 95 percent (80 of 84) of the 

OIG’s significant recommendations.

We also fulfill our traditional OIG role of rooting out fraud, waste, and misconduct to protect the 

Postal Service’s bottom line and maintain confidence in the mail. Our dedication to integrity, 

accountability, and transparency means that no person in the organization is above the law or immune 

from the ethical standards set by the Postal Service. In this period, we completed 1,648 investigations 

that led to 250 arrests and more than $315 million in fines, restitutions, and recoveries, of which more 

than $48 million went to the Postal Service. 

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.

The Postal Service’s challenges 

are considerable, but its 

opportunities are great.

David C. Williams

Inspector General
Semiannual Report to Congress

Summary of Performance 

For the Period October 1, 2011— March 31, 2012

AUDITS

Reports issued 64

Significant recommendations issued 84

Total reports with financial impact 13

 Funds put to better use $1,047,184,458

 Questioned costs $777,383,244

 Revenue Impact $105,058,258

TOTAL $1,929,625,960

INVESTIGATIONS 1

Investigations Completed 1,648

Arrests 250

Indictments/Informations 290

Convictions/pretrial diversions 2 324

Administrative actions 800

Cost Avoidance $85,774,919

Fines, Restitution, and Recoveries $315,481,668

 Amount to the Postal Service 3 $48,428,097

OIG HOTLINE CONTACTS

Telephone calls 38,916

E-Mail 21,558

Standard Mail 1,366

Voice Mail Messages 389

Facsimile - FAX 312

National Law Enforcement Communications Center 289

TOTAL CONTACTS 62,830

1

 Statistics include joint investigations with other law enforcement agencies.

2

 Convictions reported in this period may be related to arrests in prior reporting periods.

3

 Amounts include case results of joint investigations with other OIG, federal, state, and local law enforcement entities.
October 1, 2011 — March 31, 2012

TABLE OF CONTENTS

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

OFFICE OF AUDIT ..................................................................................................................................... 5

Goal 1: Improve Service................................................................................................................................................ 6

Goal 2: Improve Financial Performance.......................................................................................................................... 7

Goal 3: Improve Safety and Employee Engagement ...................................................................................................... 11

REGULATORY STUDIES AND REPORTING OBLIGATIONS ............................................................... 11

PRESERVING ACCOUNTABILITY.......................................................................................................... 12

OFFICE OF INVESTIGATIONS ............................................................................................................... 17

Financial Crimes........................................................................................................................................................ 18

Healthcare Fraud ....................................................................................................................................................... 20

Mail Theft .................................................................................................................................................................. 21

Official Misconduct .................................................................................................................................................... 22

Contract Fraud........................................................................................................................................................... 23

APPENDICES........................................................................................................................................... 25

APPENDIX A — Reports with Quantifiable Potential Monetary Benefits.......................................................................... 26

Report Listing.................................................................................................................................... 27

APPENDIX B — Findings of Questioned Costs............................................................................................................. 30

APPENDIX C — Recommendations That Funds Be Put to Better Use............................................................................. 31

APPENDIX D — Other Impacts ................................................................................................................................... 32

APPENDIX E — Reports with Significant Recommendations Pending Corrective Actions................................................. 34

APPENDIX F — Significant Management Decisions in Audit Resolution ......................................................................... 52

APPENDIX G — Status of Peer Review Recommendations............................................................................................ 52

APPENDIX H — Investigative Statistics........................................................................................................................ 53

APPENDIX I — Summary of U.S. Postal Inspection Service Investigative Activities Under Title 39 USC 3005 & 3007....... 54

APPENDIX J — Closed Congressional and Board of Governors’ Inquiries....................................................................... 55

SUPPLEMENTAL INFORMATION ......................................................................................................... 61

Freedom of Information Act......................................................................................................................................... 61

Workplace Environment.............................................................................................................................................. 61

Acronym Guide .......................................................................................................................................................... 62
Introduction
October 1, 2011 — March 31, 2012 3

While the digital revolution is remarkable, it is also 

imperfect, leaving gaps in security, privacy, and inclusion. The Postal Service, as a trusted provider of delivery 

services, continues to have a vital role to play as a part 

of the nation’s communications infrastructure. The Postal 

Service has begun the difficult task of reinventing its 

business model and refocusing its network. The path 

forward probably will require a merging of traditional 

postal services with new services that fill the gaps left by 

the digital age. 

As the cover of our semiannual report to Congress illustrates, the transition from traditional services to innovative 

ideas has already begun. Retail transactions are taking 

place in new ways, whether through online sales or 

through the use of gopost automated lockers for sending 

or receiving packages. Meanwhile, the traditional Post 

Office continues to play a pivotal role in providing services 

to citizens. 

The Postal Service also has taken innovative steps with 

some of its new product offerings, such as Priority Mail 

Flat Rate boxes, the Intelligent Mail barcode, and simplified addressing. 

Yet, innovation needs further cultivation. In December 

2011, we issued a report that reviewed innovation 

best practices and processes among 14 organizations 

recognized as innovation leaders. Our work with these 

organizations identified 19 best practices that the Postal 

Service should consider implementing to foster and institutionalize a strong culture of innovation. By using these 

best practices, and partnering with stakeholders, the 

Postal Service could tap into new revenue streams. 

We also issued a report that recommended the Postal 

Service provide its underused retail space to federal, state 

and municipal agencies to expand citizens’ access to service and to increase revenue and potentially lower lease 

costs. In a separate report, we recommended the Postal 

Service explore partnerships with commercial internet 

service providers to increase broadband coverage in 

areas they do not currently serve by offering master lease 

agreements to Postal Service real estate and installing 

wireless fidelity hot spots. 

As the Postal Service optimizes its network and assembles a lean delivery system for mail and parcels, it should 

also take steps to enter the digital market, perhaps by 

making digital communications stronger and safer. This 

would help fill the void left by the shortcomings of the digital revolution. In our white paper, eMailbox and eLockbox: 

Opportunities for the Postal Service, we suggest that the 

Postal Service engage quickly and proactively to adapt to 

new technologies and new market conditions. We offer 

two specific ideas, a Postal Service-sponsored, secure 

e-mail service (eMailbox) and an accompanying secure 

data storage service (eLockbox) to provide new options 

to residential customers and businesses, while leveraging 

key address management tools and other assets of the 

Postal Service.

All of these ideas play against a backdrop of considerable 

challenges for the Postal Service. Its net loss from fiscal 

year 2007 through FY 2011 was $25 billion and its volume decline in that period was 39 billion pieces of mail. In 

a report on the Postal Service’s finances, we underscored 

the Postal Service’s financial challenges, including its 

ongoing liquidity concerns. An improved financial outlook 

remains tied to legislative action and stakeholder cooperation. 

In the meantime, the Postal Service must continue to 

work toward positioning itself for success in a fastchanging communications environment. Its mission to 

support the communication and commercial needs of 

Americans remains vital, but it is also broader than paper 

and envelopes in this digital age.

The Postal Service, as a trusted provider of delivery 

services, continues to have a vital role to play as a 

part of the nation’s communications infrastructure.

The communications revolution, the digital age, and globalism are having an enormous 

impact on the Postal Service. The ways in which Americans communicate today are 

different not just from a decade ago, but from a few years ago – some might argue from a 

few minutes ago. Social networking and smart devices are changing communications and 

commerce, as an increasing number of American consumers rely on handheld devices to 

shop, bank, and interact with businesses. 

INTRODUCTION
Office of 

Audit
October 1, 2011 — March 31, 2012 5

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

the strategic goals articulated in its 2011 Annual Report to Congress and Comprehensive 

Statement on Postal Operations - Delivering the New Reality. The Postal Service publishes 

a number of reports that are responsive to different legislative requirements. They provide 

stakeholders with an accounting of their activities and results. To avoid duplication and 

improve consistency, their Annual Report to Congress, the Comprehensive Statement on 

Postal Operations, and their Annual Performance Report and Plan are combined in this 

single document. The chapter, the 2011 Annual Performance Report and 2012 Annual 

Performance Plan, lists the Postal Service’s strategic goals as follows: to improve service, 

improve financial performance, and improve safety and employee engagement. We have 

organized our audit work in line with these goals. We also present work on the issues of 

regulatory studies and reporting obligations, and preserving accountability. 

Assessing Progress 

Toward Strategic Goals

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, management has agreed or partially agreed with our recommendations 

and is taking or has already taken corrective action to address the issues raised.

OFFICE OF AUDIT
6 Semiannual Report to Congress

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.

Retail Facilities Discontinuance Program

The Postal Service could benefit from an integrated retail network optimization strategy that 

includes short- and long-term plans, milestones, and goals. While the Postal Service has implemented new regulations, policies, and procedures, it is unclear what specific changes will be 

made, how long it will take to make them, and their anticipated benefits. Management stated 

that they have a strategy to expand alternate channel access as part of their plan to reduce the 

retail infrastructure, but did not establish specific goals for closing and consolidation initiatives.

Standardization of Mail Processing Equipment 

at Processing and Distribution Centers

The Postal Service achieved considerable standardization of letter and flat machines at the 

facilities reviewed. Overall, the Postal Service generally matched machine deployment to mail 

volume, although opportunities for further standardization exist at some facilities. Management agreed with our recommendation to periodically compare equipment to mail volumes at 

processing and distribution centers (P&DC), and to redeploy excess mail processing equipment to those sites where 

equipment deficiencies exist. The Postal Service told us that they consistently review and analyze the capacity of their 

equipment, have removed more than 1,500 pieces of equipment over the past 3 years, and continue to identify areas 

for improvement. 

Mail Verification Procedures at Detached Mail Units

Our report determined that Postal Service mail verification procedures were not always adequate to ensure that business mailings contained sufficient postage or met Postal Service specifications. We also found that Postal Service 

employees sometimes overrode system-generated notifications that mailings did not contain sufficient postage or meet 

specifications without verifying whether these notifications were valid. We further noted that detached mail unit staffing 

was inconsistent and did not always align with mailers’ production levels, resulting in idle staff time at some locations 

and heavy workload at others.

Global Business Systems International Dispatch

Our report determined that Global Business Systems (GBS) Dispatch controls over outbound international mail are 

adequate. However, controls within the Surface Air Management System do not always prevent outbound international 

mail from exceeding air carrier capacities. Additionally, GBS Dispatch does not detect destination country discrepancies 

between mailpieces scanned into Point of Service (POS) ONE terminals in the retail environment and the enhanced 

distribution barcode scanned during dispatch. 

Domestic Mail Manual Preparation and Acceptance Mail Instructions

Our audit determined that the Postal Service has an opportunity to simplify mail preparation and acceptance instructions. There presently are more than 2,300 pages of instructions in the Domestic Mail Manual1

 (DMM) Furthermore, 

mailers are required to complete postage statements ranging from five to 25 pages. In addition, there are about 

800,000 mailing permits in the PostalOne1

 System but only 39 percent are active. Our analysis revealed that the 

Postal Service could reduce the number of active permits from 300,000 to a range of 4,600 to 10,000 by eliminating 

multiple permits.

Postal Service Pricing Strategy

Our report found that the Postal Service has more than 7,600 domestic prices for the three product lines and almost 

50 percent of them contain low to no mail volume. In addition, the volume and revenue data used to support product 

pricing is about 140 days old and, by comparison, its domestic competition has real-time product data. Management 

is currently reviewing its costing systems and revenue and volume reporting procedures, and plans to optimize pricing.

1

 These 2,300 pages of instructions include the DMM, Quick Service Guides Handbook DM-109, Job Aids, and Customer Service Rulings.

Postage and other postal products and 

services are sold at retail outlets around 

the country. The Postal Service has 

32,000 retail offices, but more than 

35 percent of its retail revenue comes 

from expanded access locations, such 

as grocery stores, drug stores, selfservice kiosks, and www.usps.com. 

IMPROVE SERVICE
October 1, 2011 — March 31, 2012 7

Contract Delivery Service Cost Controls in the Suncoast District 

Our audit in the Suncoast District determined that contracts were appropriately awarded based on active deliveries. 

However, administrative officials did not always perform route surveys to verify the actual number of deliveries. Without 

current and accurate survey information, it may be difficult for contract officials to negotiate an accurate price for a 

contract. We recommended that management complete the route surveys, train administrative officials on their responsibilities, monitor completion of the surveys, and clarify the policy on performing route surveys. Management took 

immediate action in implementing these recommendations

GOAL 2: 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.

Contracting Opportunities and Impact of the Service Contract Act

In response to a congressional request, we reviewed potential cost savings that could be achieved if the Postal Service 

did not have to comply with the Service Contract Act (SCA) and took advantage of additional contracting out opportunities. Postal Service market research indicated that opportunities exist for cost savings if the agency did not have 

to comply with the SCA. In addition, our analysis showed that Postal Service wages for cleaning/janitorial and postal 

vehicle service (PVS) driver positions were higher than SCA rates. We estimate that the Postal Service could save about 

$675 million annually if it outsourced cleaning/janitorial and PVS driver positions. Barriers to outsourcing the positions 

include labor union agreements, workforce retention issues, fluctuations in market or economic conditions, and the 

potential for congressional constituency concerns.

2

 The 2012 Consolidated Appropriations Act, the most recent law affecting the PSRHBF payment, changed the due date of the $5.5 billion originally due September 30, 2011 

to August 1, 2012. As a result, the total required PSRHBF payment in 2012 is $11.1 billion: $5.5 billion due by August 1, 2012, and $5.6 billion due by September 30, 2012.

Postal Service Financial Condition

Volume Loss - In recent years the 

Postal Service has experienced 

significant financial challenges. 

The Postal Service had over $25 

billion in net losses for the period of 

October 2007 through September 

2011. The net loss was $3.3 billion 

for the 3 months ending December 

31, 2011, compared to a net loss 

of $329 million for the same period 

last year (SPLY). For the 3 months 

ending December 31, 2011, combined First-Class Mail and Standard 

Mail, which represent about 95 

percent of the Postal Service’s total 

mail volume, decreased 2.7 billion 

pieces, or 6.2 percent, compared 

to SPLY, with an associated drop 

in revenue of $650 million, or 

4.8 percent. These losses were 

primarily caused by the economic 

recession and the continuing 

changes in consumer preferences 

for electronic media over hard copy 

correspondence and transactions.

Liquidity Concerns - Amid challenging economic conditions, 

technological changes, and declining mail volumes, the Postal Service 

may not have sufficient revenues 

to cover its financial obligations. 

Current financial projections 

indicate that it will not be able to 

make the required $11.1 billion 

prefunding payment for retiree 

health benefits (PSRHBF) due in 

FY 20122

. Current projections also 

indicate that the Postal Service 

will have a precariously low level 

of cash and liquidity on September 

30, 2012. Even without making the 

PSRHBF payments in 2012, the 

Postal Service may not be able to 

meet all of its financial obligations 

in October 2012 when it is required 

to make a payment of about $1.3 

billion to the Department of Labor 

(DOL) for workers’ compensation.

Business Plan - In 2011, to 

address its financial challenges, 

the Postal Service initiated aggressive cost-cutting plans, increased 

financial controls, and streamlined 

processes in an effort to reduce 

its annual operational expenses 

by $20 billion by 2015. These 

initiatives consisted of a variety 

of actions and future plans, such 

as: increasing pricing for mailing 

services, restructuring its health 

care programs, eliminating Saturday 

delivery, expanding access to retail 

services, establishing a more flexible workforce, expanding products 

and services, and redesigning 

administrative functions by reducing the number of area and district 

offices and further decreasing the 

number of administrative, supervisor, and postmaster positions. Many 

of these actions require legislation 

and stakeholder cooperation.

The Postal Service consistently reviews 

and analyzes the capacity of its equipment and it has removed more than 

1,500 pieces of equipment over the 

past 3 years. The organization continues 

to identify areas for improvement. 

IMPROVE FINANCIAL PERFORMANCE
8 Semiannual Report to Congress

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 AMP consolidation involves 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.

Flint, MI, P&DC Consolidation

We reviewed the consolidation of mail processing operations from the Flint P&DC into the Michigan Metroplex P&DC 

and found that a valid business case exists to consolidate destinating mail processing operations. Our analysis indicated 

that (1) adequate capacity exists to process additional mail volumes at the gaining facility; (2) customer service will be 

minimally impacted; (3) efficiency at the Michigan Metroplex P&DC should continue to improve with the addition of mail 

volume from the Flint P&DC; (4) no career employee will lose their job with the Postal Service; however, some reassignments will occur; and (5) equipment relocation costs were overstated, but had no material impact on the business case.

Industry, CA, P&DC Originating Mail Consolidation

We determined that a valid business case existed to consolidate originating mail processing operations from the Industry P&DC to the Santa Ana P&DC, resulting in a projected cost savings of about $1.32 million annually. Our analysis 

also indicated that adequate machine and facility capacity exists to process mail at the gaining facility; customer service 

will be minimally impacted; no career employees will be laid off, although some reassignments will occur; the Santa 

Ana P&DC is more efficient and processes its mail volume at a higher productivity level than the Industry P&DC; and 

AMP policies and guidelines were generally followed. 

Mansfield, OH, Mail Processing Center Consolidation

Our report determined that there is a business case supporting the consolidation, producing a first year savings of 

about $4.8 million if the Postal Service successfully repositions affected employees. Our analysis also indicated that 

there would be some staff reduction at the facility, there is adequate capacity at the Cleveland P&DC, and customer 

service would be negatively impacted for some service, while others would be upgraded. Finally, some AMP policies 

and guidelines were not followed, but this did not impact the business case supporting the consolidation.

Past Network Optimization Initiatives 

The Postal Service uses Handbook PO-408, 

Area Mail Processing Guidelines, to consolidate 

mail processing operations and perform postimplementation reviews. Area mail processing 

(AMP) consolidations are designed to make 

more efficient use of Postal Service assets. 

The Postal Service expanded the AMP process 

to include a headquarters initiated top-down 

process using computer modeling. The top-down 

process provides increased flexibility and more 

consistent and standardized data analysis. 

Between FY 2004 and FY 2011, the Postal 

Service initiated 418 AMP studies, 103 of which 

were implemented. The Postal Service halted 

66 studies due to service issues, inadequate 

savings, and stakeholder opposition; and it has 

249 in various stages of approval. During the 

same period, the OIG issued 39 audit reports 

concerning AMP initiatives. The OIG issued 

two status reports on the Postal Service’s 

optimization initiatives, five reports about the 

consolidation process, and 32 reports about 

individual consolidations. We determined that a 

valid business case exists for 31 of the 32 AMPs 

(97 percent) we reviewed. These business cases 

were supported by adequate capacity, increased 

efficiency, reduced workhours and mail processing costs, and improved service standards. 

Since FY 2004, the Postal Service improved 

the AMP process by updating feasibility studies and stakeholder communications. This 

resulted in better data consistency, planning, 

and implementation as well as a better review 

process. We noted that the projected AMP 

annual savings for the 33 completed postimplementation reviews was about $94 million. 

The reviews indicate that the Postal Service 

realized annual savings of about $323 million. 

A variance of more than $229 million occurred 

because concurrent initiatives’ savings were 

included with AMP consolidation savings. There 

are 14 post-implementation reviews past due. 

Management plans to further enhance the AMP 

communication plan to incorporate stakeholder 

input and will ensure resources are allocated 

to complete reviews in a timely manner. 

IMPROVE FINANCIAL PERFORMANCE
October 1, 2011 — March 31, 2012 9

Oxnard, CA, Processing and Distribution Facility Destinating Mail Consolidation

Our report determined that a business case exists to support the consolidation of the Oxnard, CA, processing and distribution facility (P&DF) destinating mail into the Santa Barbara, CA, P&DC, and that the consolidation should produce 

substantial cost savings. We also determined that the Santa Barbara P&DC needs to optimize staffing.

21st Century Post Office: Share Excess Resources

Our report determined that Post Offices nationwide have surplus space, window, and retail workhour capacity to 

perform additional government transactions. We recognize the Postal Service’s need to optimize its network through 

consolidations and closures and believe management could employ underused Post Office resources to maintain or 

expand the reach of government departments to citizens. Providing these services could save much needed resources, 

expand public access to government services, and provide revenue to the Postal Service.

21st Century Post Office: Aligning with the National Broadband Infrastructure Initiative 

Our report determined that for-profit Internet service providers (ISP) have provided thorough broadband coverage in 

areas of the U.S. that would garner economic profit. However, there are areas (mostly rural) in the U.S. that do not have 

service due to the negative financial return involved when entering those markets. The Postal Service can assist the 

National Broadband Infrastructure (NBI) Initiative through a public/private partnership with commercial ISPs to provide 

facilities and land for the expansion of the broadband infrastructure.

Management disagreed with our findings and recommendations to offer a master lease agreement to Postal Service 

real estate and install Wi-Fi hotspots in areas without service. However, management generally agreed that a public/

private partnership could at some point further the interests of the NBI Initiative. 

Integrating Sustainable Energy in Facilities 

Our report determined that the Postal Service has not measured the performance of currently installed alternative 

energy systems and that additional alternative energy projects might not be economically viable for the Postal Service 

at this time. However, there might be future opportunities to integrate state-of-the-art alternative energy technologies 

to provide potential savings and other benefits. We determined that the Postal Service needs to establish and monitor 

performance metrics for any new alternative energy systems it implements to determine whether these systems are 

successful. 

Innovation Best Practices Analysis

This audit’s objective was to 

identify and learn about innovation best practices the Postal 

Service can consider using. We 

noted that, despite facing regulatory and market constraints to 

innovation, the Postal Service 

has introduced innovations such 

as Priority Mail® Flat Rate Boxes, 

the Intelligent Mail® barcode, and 

simplified addressing. However, 

the Postal Service does not have 

its own formal innovation process 

or strategy or one that encourages 

partnering with stakeholders to 

grow new revenue streams. With 

the assistance of Kaiser Associates, 

we conducted best practices/processes research at 14 companies 

representing a variety of industries. 

We identified 19 best practices 

the Postal Service could use, of 

which management identified 

six as aligning with its DRIVE3

(Delivering Results, Innovation, 

Value and Efficiency) initiative. 

We recommended that the remaining 13 best practices be phased in 

over the subsequent 2 years, and 

that management incorporates 

innovation into the Postal Service’s 

strategic plan by March 30, 2012. 

3

 DRIVE is a data-driven management system designed to improve USPS business strategy. It manages 36 key initiatives in a way that provides streamlined reporting and accountability http://blue.usps.gov/wps/portal

The OIG conducted a number of 

reviews to assess the business case 

for consolidation of mail processing 

facilities and to determine the potential impact on customer service. 

IMPROVE FINANCIAL PERFORMANCE
10 Semiannual Report to Congress

Density of First-Class Mail on Air Transportation

Our audit disclosed that some First-Class Mail was being transported by air in less-than-full mail 

containers bound for the same destinations across the country. Overall, the Postal Service could 

have saved at least $27.3 million if it maximized First-Class Mail container density before tendering them for transport by air from April 1, 2010, through March 31, 2011. 

Postal Vehicle Services Transportation Routes – Margaret L. Sellers P&DC

Our report determined that Margaret L. Sellers P&DC management appropriately reviewed 

and adjusted Postal Vehicle Service (PVS) schedules due to the implementation of the Flats 

Sequencing System. However, P&DC officials could more effectively manage PVS transportation 

processes and schedules to reduce driver workhours, fuel use, and damage claims. Additionally, 

we verified that management properly cancelled or consolidated underutilized trips from highway 

contract routes that serve the P&DC.

Standardization of Integrated Mail Handling System Loaders at Network 

Distribution Centers

Our report determined that 247 of the 524 Integrated Mail Handling System loaders at Network 

Distribution Centers (NDC) have been modified to accommodate over-the-road (OTR) mail containers. Once the remaining loaders are modified, the Postal Service would gain consistent use of 

the equipment in the NDC network and be able to improve the flow and redistribution of OTR 

containers, reduce cardboard purchases, avoid unnecessary transportation of empty OTR containers, and eliminate a safety hazard.

Inbound International Parcel Mail

The Postal Service did not always identify, record, and bill foreign posts for inbound international 

parcel mail. As a result, the Postal Service did not collect $10.9 million in revenue for inbound 

international parcel mail received and delivered in the U.S. between calendar years 2008 and 

2010. While the Postal Service significantly improved the completeness of its billing records in 

2010 after the Foreign Post Settlement System replaced the International Accounting Branch 

Settlement System in December 2009, improvements are needed over internal controls designed to identify, record, 

and bill for inbound international mail.

Expedited Packaging Supplies Program

Our review disclosed that the Postal Service did not have an efficient and effective process in place to identify and 

reduce waste associated with its expedited packaging supply program. Specifically, the Postal Service could not 

account for at least 370 million Express and Priority Mail boxes and envelopes, at a cost of about $87 million, from FYs 

2008 through 2010. This represents 19 percent of the total expedited packaging supplies produced for this timeframe. 

Management stated that it is implementing comprehensive automated procedures to improve the efficiency and effectiveness of its expedited packaging supplies program. SEAM (Solution for Enterprise Asset Management), a system to 

improve inventory management forecasting and auto replenishing of expedited packaging supplies at Post Offices, will 

be piloted beginning June 25, 2012, in the Central Plains and Western Pennsylvania Districts, with a national launch 

currently scheduled for September 7, 2012. 

Further, pilot testing for integrating SEAM into the Point-of-Sale (POS) System began May 4, and will be fully released 

in POS in May 2012. Integrating SEAM into POS will add significant efficiency through “cycle count functionality,” which 

utilizes past ordering history to generate automated replenishment orders. 

In addition, management noted the specialized and customized ordering and fulfillment validation procedures have been 

improved. All specialized ($50,000 minimum revenue) and customized ($250,000 minimum) orders and reorders are 

now validated through PostalOne!, the Revenue, Pieces and Weights System, and/or the National Meter Accounting 

& Tracking System to ensure customers qualify and are using packaging.

Packaging for expedited services (Express 

Mail and Priority Mail) is available for 

free to customers. Our review determined that the Postal Service needs 

an efficient and effective process to 

identify and reduce waste associated with 

its expedited packaging supply program. 

The Postal Service could have saved more 

than $27 million in a year if it maximized 

First-Class Mail container density before 

tendering the containers for transport by air. 

IMPROVE FINANCIAL PERFORMANCE
October 1, 2011 — March 31, 2012 11

Management Operating Data System 

This audit’s objective was to 

determine the impact Management Operating Data System 

(MODS) data errors and other 

excluded MODS data would have 

on MODS-based productivities 

and their associated cost avoidance models and the attribution of 

costs to products. The MODS is a 

web-based application that collects 

data from the Time and Attendance 

Collection System (TACS) and the 

Web End-of-Run (WebEOR). It uses 

this data to report on mail volume, 

workhours, and machine usage at 

major mail processing facilities. The 

accuracy of MODS data is critical 

both operationally for planning and 

tracking and for cost attribution. 

We determined that the Postal 

Service must take additional steps 

to provide accurate mail processing and cost avoidance estimates. 

Management should focus corrective actions on the MODS operation 

numbers and facilities creating 

the most significant number of 

errors. Additionally, management 

could improve data quality review 

procedures and use alternative 

methodologies to further minimize 

the effect of MODS errors. We 

analyzed the impact of alternative 

methodologies on two cost avoidance models and estimated that 

the revised workshare discounts 

could have resulted in $86.8 

million in reduced workshare 

discounts and increased revenue.

However, management did not 

agree with our calculation of monetary impact stating it is incorrect to 

claim any monetary impact (positive 

or negative) by adjusting discounts 

or adjusting the price gaps between 

products in mail classes. The 

monetary impact we calculated is 

dependent on corrective actions 

taken on MODS data quality and 

could be realized depending on 

management decisions regarding 

product pricing made within the 

limitations of the Consumer Price 

Index price cap and unused rate 

authority available at that time. 

GOAL 3: IMPROVE SAFETY AND EMPLOYEE ENGAGEMENT

Postal Service employees are its greatest asset. A key strategy to improve productivity is to improve safety and increase 

employee engagement.

Health and Safety Program

Our report determined that the Postal Service has processes in place to minimize health and safety hazards and assist 

with Occupational Safety and Health Administration compliance. However, employees do not always follow these processes, 

as we identified hazards and unsafe conditions at locations we visited. We also identified opportunities to improve safety 

processes and procedures. 

Unauthorized Overtime

The Postal Service has procedures to assist supervisors with monitoring and controlling unauthorized overtime; however, at 

the 12 locations we visited during our audit, management did not always follow the prescribed procedures. Specifically, they 

did not always properly complete and maintain records for employees who requested or incurred unauthorized overtime. Our 

audit disclosed that some of the unauthorized overtime workhours recorded in the Time and Attendance Collection System 

(TACS) may have been informally authorized by management. However, management did not track and we were unable 

to segregate informally authorized overtime from the unauthorized overtime workhours recorded in TACS. As a result, we 

classified the entire amount recorded in TACS as unsupported questioned costs. Lastly, we identified controls in the Central 

Pennsylvania District that should be considered best practices throughout the Postal Service. These best practices include 

active daily monitoring of unauthorized overtime by supervisors and active oversight by managers and the district TACS 

office.

Mail Processing Allegation

In response to a congressional request, we determined that Biohazard Detection System (BDS) stop times varied on a daily 

basis and that there was no evidence the P&DC manager bypassed the BDS while processing mail, as was alleged by a 

Postal Service employee.

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.

Revenue, Pieces, and Weight Inputs into the Cost and Revenue Analysis Report

Our report determined that the Postal Service could significantly reduce manual data collection for revenue, pieces, 

and weights estimation by modifying existing automated processes to collect mailpiece images for analysis and moving 

sampling from delivery units to supporting processing plants. The Postal Service could make the hardware changes 

needed with existing technology, which would benefit both operational needs and statistical sampling efforts. We estimate that the Postal Service could save about $13 million in annual data collection costs. Management agreed with our 

recommendations; but disagreed with our assessment of the state of automated data and the cost savings estimate.

IMPROVE SAFETY AND EMPLOYEE ENGAGEMENT
12 Semiannual Report to Congress

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.

Financial Audits

The 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. 

FY 2011 Financial Statements Audits

These reports present the results of our audit of the financial activities and accounting records at headquarters, 

and Eagan, St. Louis, and San Mateo Accounting Services for FY 2011. 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. Further, accounting transactions impacting the general ledger account balances for 

assets, liabilities, equity, income, and expenses are fairly stated, 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 except 

for one instance of noncompliance related to the suspension of the employer Federal Employees Retirement System 

obligation, the Postal Service complied 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. However, 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 from their field-level internal control testing. During 

this reporting period, we issued 158 management advisories that concluded on whether analysts properly conducted 

and documented their examinations of key financial reporting controls. Although significant improvements in the group’s 

testing of key controls were made from the prior year, we did not always agree with the results of the testing. We noted 

the group did not identify testing errors in four site reviews, did not perform steps in accordance with their program in 

three site reviews, and did not adequately document their work in two site reviews.

Information Technology Security

We conducted this audit to assess the Postal Service‘s current state of information technology (IT) security. A successful IT security program ensures the confidentiality, integrity, and availability of critical information resources. We 

found that Corporate Information Security has made progress to enhance and execute the Postal Service‘s information 

security program. However, we identified ongoing challenges and areas where management should strengthen security 

controls surrounding critical information resources to support the organization‘s information security goals and prevent 

damage to the Postal Service brand. 

Bad Check Prevention and Collection

Our audit determined that the Postal Service’s policies and procedures to prevent and collect bad checks were effective 

and efficient. In FY 2011, the Postal Service collected about 69 percent of bad check debt, and bad checks represented 0.14 percent of retail check payments. In addition, we determined that the collection process for bad checks 

was cost effective, and that staffing to process and collect bad checks decreased concurrently with bad check volume.

International Air Mail Records Units

Los Angeles International Service Center

The Los Angeles International Service Center (ISC) records unit generally processed international mail transactions to 

ensure that the St. Louis accounting branch was able to timely bill foreign postal administrations. However, the records 

unit did not maintain supporting documentation, such as manifests or verification notes, to help ensure accurate billing. 

Also, the records unit did not always perform a complete weekly audit of verification notes, and management did not 

always perform a complete review of System for International Revenue and Volume, Inbound (SIRVI) test data, used in 

the billing to and collection of payments made by foreign postal administrations for the delivery of foreign mail, or review 

PRESERVING ACCOUNTABILITY
October 1, 2011 — March 31, 2012 13

and approve SIRVI tests daily. Such reviews and approvals are necessary to 

ensure that country-specific volume estimates used to determine the terminal 

dues paid to the Postal Service for the delivery of foreign country incoming mail 

are correct.

J.T. Weeker (Chicago) ISC

The J.T. Weeker ISC records unit generally processed international mail transactions timely and accurately to ensure that the St. Louis accounting branch 

correctly and timely billed the foreign postal administrations. However, system 

access safeguards could be improved. Also, we found a records unit clerk did 

not modify a letter post dispatch record when the unit later received supporting 

documentation from the San Francisco ISC to support a greater weight for 

the dispatch.

New York ISC

The New York ISC records unit processed international mail transactions to 

ensure that the St. Louis accounting branch billed foreign postal administrations timely. However, management did not always completely review SIRVI test 

data. Additionally, system access safeguards could be improved.

Travel and Other Expenses

We assessed whether the travel and miscellaneous expenses (including external professional fees) of the Board of Governors were properly supported, reasonable, and in compliance with Postal 

Service policies and procedures and board policies. We also assessed whether travel and representation expenses 

claimed by Postal Service officers were properly supported and in compliance with policies and procedures. We found 

that these expenses for the Board of Governors were properly supported, reasonable, and in compliance with Postal 

Service and board policies. However, Postal Service officers did not always comply with the guidelines when claiming 

expenses incurred during official travel and for representation. We reviewed 68 of 972 reimbursements and found 

17 issues regarding reimbursement claims, international travel approval letters, travel deviation requests, alcohol 

purchases, and parking fees. These instances did not materially affect the overall financial statements. In response to 

our findings, management stated that they will select a permanent accountant with appropriate training to advise the 

officers and their administrative assistants on the revised guidelines by September 2012. 

RISK ANALYSIS RESEARCH CENTER

Budget Scoring and Postal Service

By law, the Postal Service’s finances are separate from the rest of the federal budget, but efforts to solve the Postal 

Service’s financial problems continue to be caught up in budget scoring considerations. Budget scoring is a required 

procedure that evaluates proposed legislation for its effect on the federal deficit. It is part of the broader budget 

enforcement process. For example, budget scoring is making it difficult to enact legislation to fix the recognized overfunding of the Postal Service’s Federal Employees’ Retirement System (FERS) obligations.

The Postal Service Office of Inspector General (OIG) explored these obstacles in 

an August 2009 white paper entitled Federal Budget Treatment of the Postal 

Service. In a white paper released in February 2012, Budget Enforcement 

Procedures and the Postal Service, the OIG updated budget events since the 2009 

paper, which had laid out the limited advantages conferred by the way the Postal 

Service’s off-budget status is implemented. The new paper provides a detailed 

description of the federal budget process and argues that until Postal Service 

finances and the federal budget can be disentangled, it is important for the Postal 

Service and its stakeholders to understand the current budget landscape and its 

potential to affect comprehensive postal reform. 

Mail that is destined for or coming from 

foreign countries is handled through one of 

the Postal Service’s International Service 

Centers located at airports in five major 

cities. Proper supporting documentation 

is essential to ensure the Postal Service 

accurately bills and collects payments 

from foreign postal administrations 

for delivery of cross-border mail. 

Photo by Michael Zara

PRESERVING ACCOUNTABILITY
14 Semiannual Report to Congress

eMailbox and eLockbox

Digital media and technologies continue to offer both new challenges to physical mail and important potential areas of 

growth for the Postal Service. A Postal Service-sponsored, secure e-mail service (“eMailbox”) and an accompanying 

secure data storage service (“eLockbox”) would provide new options to residential customers and businesses, while 

leveraging key address management tools and other assets of the Postal Service. The Postal Service could offer an 

eMailbox that links a current physical address to a permanent electronic address for every individual or business. This 

eMailbox could be the cornerstone of a secure and confidential communications network that would be accessible to 

users anytime, anywhere through a personal computer, tablet, or smartphone.

Under this concept, users’ postal e-mail addresses and physical addresses would be linked, utilizing current Postal 

Service assets, including the Address Management System (AMS) and National Change of Address (NCOA) System 

databases. This linkage would let consumers decide whether to receive their mail digitally or physically. It would also 

strengthen the Postal Service’s role as a bridge between the digital and physical worlds. Users would be validated 

under a multifactor authentication process, their data held confidentially, and privacy maintained. 

The eMailbox could also support new digital commercial and government 

services. An eLockbox could offer related digital storage, including storage 

of legal documents, medical records, and other personal records, as well as 

sentimental photographs and multimedia files. 

The paper eMailbox and eLockbox: Opportunities for the Postal Service suggests that the Postal Service must engage quickly and proactively to adapt to 

new technologies and commensurate new market conditions. Together, these 

two services could provide a sound base for other applications on a secure 

postal platform and would help maintain and expand the Postal Service’s 

reputation as a trusted third party entity and facilitator of communication, 

whether digital or physical. 

PRESERVING ACCOUNTABILITY

Risk Analysis Research Center

The OIG’s Risk Analysis Research Center (RARC) 

conducts in-depth research and analysis about 

postal issues. The group 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 whitepapers have 

included the cost and revenue structures of the 

Postal Service, the federal budget and the 

Postal Service, and a series of papers on 

the Postal Service’s role in the digital age.
October 1, 2011 — March 31, 2012 15

Postal Service Revenue: Structure, Facts, and Future Possibilities 

The Postal Service’s future financial health depends on its ability to cut costs 

and generate sufficient revenue to support its operations. In the past, volume 

growth paid for expansion of the delivery network. This is no longer true. Now, 

new digital technologies are transforming the communications marketplace by 

delivering information instantaneously, regardless of distance, at a lower cost. 

Because of this profound change, postal services operate in a new business 

environment that simultaneously threatens traditional mail segments and creates novel opportunities. Equally challenging, the economic recession triggered 

decreases in spending and declines in mail volume as mailers, looking to cut 

costs and increase time responsiveness, accelerated their transition to electronic delivery alternatives.

In the context of this very difficult financial situation, the white paper, Postal Service Revenue: Structure, Facts, and 

Future Possibilities, analyzed the major components of the Postal Service’s revenue structure in fiscal year (FY) 2010 

as well as substantive product, business segment, and customer trends. One key finding is that the Postal Service’s 

main product lines — First-Class Single Piece, First-Class Workshare, Standard Regular, and Standard Enhanced Carrier Route (ECR) — provided 75 percent of revenue, 94 percent of volume, and 86 percent of contribution in FY 2010. 

Also, we noted that advertising mail is a strong, potentially significant growth opportunity.

The paper also highlighted that although the Postal Service infrastructure serves the entire nation, large business mailers generate the majority of revenue. Despite encouraging growth, the Expedited and Package Services (EPS) segment 

contains strong competitors with significant market power. The Postal Service earned 15 percent of its revenue from 

these categories in FY 2010. Thus, even with robust growth, it is extremely unlikely that EPS revenue could offset the 

projected declines in First-Class Mail (FCM).

Finally, most foreign posts view diversification as necessary to survival and derive at least 40 percent of their revenue 

outside the traditional hard-copy mail business. The Postal Service has a less diversified portfolio with only about 13 

percent of its revenue from non-mail sources. Our analysis suggests that in the long term, the Postal Service must 

have the flexibility to reduce costs and increase revenue or risk greatly narrowing the scope of self-funded, hard-copy 

universal service for the American people.

Many foreign posts have diversified 

their offerings beyond mail services 

and now derive at least 40 percent of 

their revenue from outside the traditional hard-copy mail business. 

PRESERVING ACCOUNTABILITY
Office of 

Investigations
October 1, 2011 — March 31, 2012 17

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.

The Postal Service relies on the investigative efforts 

of the Office of Investigations’ special agents.

OFFICE OF INVESTIGATIONS
18 Semiannual Report to Congress

FINANCIAL CRIMES

A portion of the $66 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. 

 A former New York lead sales and service associate was sentenced in November 2011 after pleading guilty in federal 

court to misappropriation of funds and obstruction of justice. The sales associate was sentenced to serve 12 months 

of home confinement and ordered to pay about $187,000 in restitution to the Postal Service. In January 2009, OIG 

agents investigated irregularities in stamp stock shortages in a New York Post Office and concluded that the sales 

associate performed fraudulent refunds on legitimate register transactions for stamp purchases. The associate 

also falsified and destroyed documents to disguise the thefts from the Postal Service register. During an interview, 

the associate admitted to stealing approximately $100,000 in Postal Service funds by performing fictitious stamp 

refunds. As a result of the investigation, the Postal Service terminated the sales associate in April 2009. 

 The OIG initiated an investigation into suspicious Postal Service Voyager credit card transactions at a Pennsylvania 

Post Office location, after being advised that excessive charges were discovered while reconciling Voyager card 

expenses. The reconciliation showed that the suspicious charges occurred at one particular service station that 

performed routine maintenance on the Postal Service vehicles. The investigation revealed that a Postal Service 

supervisor allowed the service station to physically retain the Voyager card for over a year and during that time at 

least two station employees conducted 48 fraudulent transactions totaling $21,171. Both service station employees 

admitted to the fraudulent use of the Voyager card and in October 2011 and November 2011, respectively, the two 

service station employees pled guilty to one count of theft by deception and one count of criminal conspiracy to theft 

by deception. The employees were sentenced to a maximum of 23 months home confinement, 2 years’ probation, 

and $21,912 in restitution. In February 2011, the Postal Service Vehicle operations management assistant received 

a 7-day suspension for failing to properly reconcile Voyager card statements. In May 2011, the supervisor was issued 

a 7-day suspension for leaving a Postal Service Voyager Card at the service station. 

 A highway contract route (HCR) supervisor in New Jersey was sentenced to 5 years of probation and ordered to pay 

$365,416 in restitution to the Postal Service for theft of government property and aiding and abetting in October 

2011. Another HCR employee involved in the same scheme was previously sentenced in August 2011 to 5 years of 

probation and ordered to pay $335,972 in restitution. The OIG launched the investigation predicated on information 

it received on the contractor purchasing 17,251 gallons of fuel above the authorized amount in the contract. The 

OIG conducted surveillance and determined that one of the contractors used several Voyager cards at gas stations 

near his home to purchase fuel for his personal benefit. The employee admitted to using Voyager cards to make 

numerous unauthorized purchases of fuel for his personal use, sale to other persons at a discounted price, and for 

a towing business. As part of the scheme, the employee installed a large rubber bladder in his personal truck which 

held about 100 gallons of fuel. The employee informed the OIG that he had an agreement with his supervisor to purchase and resell large amounts of fuel utilizing the Voyager cards. The employee recorded consensually monitored 

conversations he had with the supervisor for the OIG. The supervisor eventually admitted to using Voyager cards 

to make numerous unauthorized purchases of fuel and purchases of cartons of cigarettes for his personal use, as 

well as affirming that he allowed the employee to use the Voyager cards for personal gain. The supervisor received 

thousands of dollars in cash payments and services from the employee. 

 A New Jersey postmaster devised a scheme to embezzle Postal Service funds by offsetting the daily bank deposit 

with erroneous invoices for local transportation and office and custodial supplies. The postmaster used the funds 

to purchase money orders, which were used to pay personal expenses. On September 30, 2010, the postmaster 

resigned from the Postal Service, while under investigation. A year later, the former New Jersey postmaster pled 

guilty in federal court to misappropriation of Postal Service funds and was sentenced to 6 months of home confinement, 4 years of probation and ordered to pay about $69,000 in restitution to the Postal Service. 

FINANCIAL CRIMES
October 1, 2011 — March 31, 2012 19

 A former California sales and service associate (SSA) was convicted in October 

2011, on one count of theft of public money and seven counts of passing 

counterfeit U.S. obligations, following a 3-day federal jury trial. During the 

investigation, which was conducted jointly with the U.S. Secret Service, the sales 

associate was observed on several occasions sorting, separating, and switching 

what appeared to be $100 bills from his cash drawer. Additionally, the associate 

was observed on several occasions placing a “window closed” sign on his counter, then proceeding to print Postal Service money orders without any customers 

present. The SSA issued and cashed the money orders in his name. In June 

2011, the Postal Service issued the sales associate letters of demand (an invoice 

for the amount owed) totaling about $45,200, which was followed by an issuance of a Notice of Removal in August 2011. After the associate’s arrest in 

April 2011, the U.S. Secret Service seized and forfeited two of his luxury sports 

utility vehicles. 

 An OIG investigation determined that a postal manager in New York created fraudulent cleaning service invoices and 

submitted them to the Postal Service, resulting in check disbursements that the postal manager intercepted and 

cashed. The postal manager also stole third-party customer checks from the mail and inappropriately cashed them 

for personal use. OIG agents determined that the postal manager stole about $227,000, over a 3-year period. The 

postal manager admitted he intercepted and cashed Postal Service customer checks and also created fraudulent 

custodial cleaning services invoices, submitted them to the Postal Service for payment, then cashing the checks to 

use on personal expenses. As a result of the investigation, the postal manager resigned from the Postal Service in 

November 2010. A year later, the former New York postal manager pled guilty in federal court to misappropriation of 

Postal Service funds. Sentencing is pending.

 OIG agents investigated the source of irregularities in a Postal Service money order reconciliation report for a 

Maine Post Office and determined the sales and service associate embezzled $35,518, by inappropriately altering 

and cashing Postal Service money orders for personal use. During an interview with the OIG, the sales associate 

admitted he used a Postal Service money order scheme to steal Postal Service funds to pay off his personal credit 

cards and a car loan. As a result of the investigation, the Postal Service terminated the sales associate in August 

2010. In November 2011, the former associate pled guilty in federal court to one count of misappropriation of 

funds and was sentenced in February 2012, to serve 45 days in prison, a year of probation, and pay approximately 

$18,130 in restitution.

 An investigation by the OIG into an Oregon postmaster relief led to a guilty plea in December 2011. The former 

Oregon employee pled guilty in the Circuit Court of the State of Oregon to two counts of theft in the first degree. The 

former employee was sentenced to 24 months supervised probation, 3 days incarceration, and $6,379 in restitution 

to the Postal Service for kiting Postal Service money orders to conceal her embezzlement of Postal Service funds 

through the issuance of money orders without remittance. The former employee admitted to embezzling Postal 

Service funds and kiting money orders. She resigned in lieu of removal due to the OIG investigation.

 In December 2011, a former Missouri officer in charge pled guilty to four counts of embezzlement of money orders 

and was sentenced to 5 years of probation and ordered to pay about $11,200 in restitution to the Postal Service. The 

investigation revealed the employee kited 155 postal money orders in the amount of about $52,500. The employee 

admitted using postal funds to pay vendors at a restaurant she operated with her son. The Postal Service removed 

the worker in March 2011.

 A sales and service associate in Puerto Rico pled guilty in March 2012 in federal court to one count of embezzlement 

of postal funds. He was sentenced to serve 24 months of probation and ordered to pay $6,436 in restitution to the 

Postal Service. The investigation determined that the sales associate improperly voided about $6,436 in valid retail 

merchandise and stamp sale transactions in Postal Service registers to steal money for his personal use. The associate admitted he voided legitimate register transactions to help make up for cash drawer shortages. 

A sales associate was observed sorting, 

separating and switching what appeared 

to be $100 bills from his cash drawer 

and printing Postal Service money orders 

without any customers present and a 

“window closed” sign at his counter. A 

joint OIG-U.S. Secret Service investigation 

determined the associate had issued and 

cashed the money orders in his own name. 

FINANCIAL CRIMES
20 Semiannual Report to Congress

HEALTHCARE FRAUD

The monetary and medical benefits paid by the Postal Service to workers’ compensation claimants (employees who 

sustained job-related injuries) in FY 2011 totaled more than $1.3 billion and its estimated total liability for future workers’ compensation costs is more than $15.1 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 $84 million in cost savings or avoidances, 13 arrests, and 73 administrative personnel actions, including removals and suspensions and termination of benefits.

 A former Ohio letter carrier was sentenced in January 2012 to 366 days of imprisonment, followed by 2 years of 

supervised release, and ordered to pay $71,887 in restitution to the DOL. The investigation determined the former 

letter carrier misrepresented her physical condition to her treating physician and DOL OWCP officials. OIG agents 

observed the letter carrier engaging in activities exceeding her reported physical limitations. The former letter carrier failed to fully disclose her self-employment, owning and operating an alpaca farm and a cosmetics business. 

In March 2009, OIG agents conducted surveillance of the employee on a 7-day Caribbean cruise, where she was 

observed gambling for hours, riding a motor scooter, walking long distances, sitting for long periods, carrying heavy 

suitcases, and other activities. Pursuant to the criminal conviction, the DOL terminated the former letter carrier’s 

workers compensation benefits, resulting in a cost savings to the Postal Service of about $1,000,000.

 An OIG investigation determined that a former Michigan letter carrier was involved in a workers’ compensation 

health care fraud scheme and the theft of a Voyager card. In December 2011, the letter carrier pled guilty in federal 

court to making false statements to obtain federal workers’ compensation benefits and was sentenced to 3 years 

of probation and ordered to pay approximately $14,000 in restitution. Investigators determined the letter carrier’s 

Voyager card-personal identification number was used on 17 occasions for gas purchases totaling more than $600. 

An interview with the letter carrier’s treating physician revealed medical documents and forms provided to the Postal 

Service and DOL, with the doctor’s signature, were fraudulent and were not prepared by the physician. During an 

interview with OIG agents, the letter carrier admitted she stole the Voyager card on her last day of work and used the 

card to purchase fuel for her personal vehicle. The letter carrier admitted she created medical documents and forged 

the doctor’s signature, which resulted in the employee receiving $12,852 in fraudulent benefits. 

 An investigation revealed that a former Michigan letter carrier filed four workers’ compensation claims regarding 

alleged injuries to her neck and shoulder. The investigation determined the former letter carrier was working in 

a family charter fishing business while claiming to be totally disabled. OIG agents observed the former employee 

exceeding her physical restrictions while working on a fishing expedition. The former letter carrier admitted to 

her role in a workers’ compensation fraud scheme. As a result of the investigation, DOL terminated her workers’ 

compensation benefits, yielding a cost avoidance of more than $695,000. In February 2012, the letter carrier was 

sentenced in federal court to 12 months of probation and ordered to pay $14,625 in restitution.

 The OIG closed out its investigation of an Illinois mail processing clerk in December 2011 after the clerk pled guilty 

and was sentenced in federal court to one count of theft of government funds following an OIG investigation into a 

fraudulent workers’ compensation claim. The clerk was sentenced to 5 years of probation, 6 months home confinement, 500 hours community service, and ordered to pay $101,178 in restitution. An OIG investigation determined 

the clerk submitted inflated and fraudulent medical travel refund requests for mileage reimbursements to DOL. During an interview with the OIG, the clerk admitted she submitted false travel reimbursements to DOL for about 1 year. 

In September 2011, the DOL terminated the clerk’s workers’ compensation benefits resulting in $898,598 in cost 

avoidance. The Postal Service terminated the clerk’s employment in February 2011. 

 A former California clerk was arrested and pled guilty in federal court in October 2011 to making a false material statement in an insurance claim involving workers’ compensation. The clerk received a sentence of 1 year in 

prison, 3 years of supervised release, and was ordered to pay about $80,000 in restitution. The OIG investigation 

determined the clerk filed a fraudulent claim for allegedly suffering a neck and shoulder injury while on duty, which 

allowed her to receive workers’ compensation benefits. OIG agents observed the clerk exceeding her medical restrictions by riding and caring for her horses, to include brushing and saddling. In November 2007, the Postal Service 

terminated the clerk’s employment. A year later, the DOL terminated the employee’s workers’ compensation benefits 

and the Postal Service realized a cost avoidance in excess of $630,000.

An OIG investigation determined that 

a former employee who had filed four 

workers’ compensation claims was working in a family charter fishing business 

while claiming to be totally disabled. 

The former employee admitted to her 

role in a workers’ compensation fraud 

scheme and was sentenced to 12 months 

probation and ordered to pay restitution.

Workers’ Compensation 

Fraud Investigative Results

October 1, 2011 — 

March 31, 2012

 388 fraud investigations resolved

 $84 million in compensation payments avoided

 13 arrests

 18 indictments

 16 convictions

 73 personnel actions 

taken by management

HEALTHCARE FRAUD
October 1, 2011 — March 31, 2012 21

 The State of Florida Circuit Court sentenced, in February 2011, a Florida rural carrier associate to 2 days in jail and 

1 year probation, and ordered him to pay $11,362 in restitution, after he was found guilty of one count of attempted 

workers’ compensation fraud. The carrier alleged total disability from a work-related injury; however, the investigation 

determined the carrier was employed as a newspaper delivery person and as a bank teller. In June 2011, the DOL 

removed the rural carrier associate from the periodic roll, realizing a cost avoidance of more than $450,000 for the 

Postal Service. The carrier later resigned from the Postal Service.

MAIL THEFT

Special agents investigate allegations of postal employees delaying, destroying, or stealing mail. Investigations of suspected employees are referred to prosecutors or to management for administrative action. 

 This OIG opened the investigation of an Illinois letter carrier after receiving a complaint from a citizen that someone 

established a bank checking account through identity theft. The investigation revealed that merchandise fraudulently 

purchased with a debit card linked to the unauthorized checking account was mailed to the letter carrier’s residence. 

The carrier admitted stealing the bank debit card and pin number addressed to the complainant and using it to purchase merchandise from various retailers. The carrier also accepted responsibility for stealing U.S. Treasury Checks 

totaling $2,798 and one check issued by the State of Illinois Comptroller’s Office in the amount of $1,016. The 

carrier resigned from the Postal Service during the investigation. In November 2011, the former letter carrier was 

sentenced in federal court to 21 months imprisonment followed by 3 years’ supervised release, and ordered by the 

court to pay restitution in the amount of $37,363. 

 In January 2012, the State of Indiana Superior Court sentenced an Indiana sales and service associate to 10 years 

imprisonment and placed him on supervised probation for 545 days following a 2-year home detention period. In 

September 2011, the sales associate pled guilty to dealing a controlled substance and official misconduct. The OIG 

received approximately 17 complaints from military veterans reporting the Postal Service failed to deliver shipments 

of pain medication mailed to them by the Department of Veterans Affairs (VA). OIG agents observed the sales 

associate open two parcels containing medication from the VA. OIG agents searched the associate and discovered 

medicine bottles and the packaging for the two parcels on his person. A search of the associate’s work locker and 

residence resulted in the recovery of additional VA parcels and prescription bottles belonging to other VA patients. 

Further investigation determined the sales associate was selling the stolen pain medication. The Postal Service 

terminated the sales associate in April 2011.

 A Washington flex carrier stole prescription narcotics from the mail, an OIG investigation disclosed. The OIG observed 

the flex carrier stealing a U.S. Department of Veterans Affairs pharmaceutical package from a Postal Service safe. 

During an interview with OIG agents, the employee confessed to stealing at least 20 parcels containing prescription 

narcotic Hydrocodone. As a result of the investigation, the flex carrier resigned from the Postal Service in April 2011. 

In December 2011, the flex carrier was sentenced in federal court to 2 years of supervised release, 3 months of 

home confinement, and 150 hours of community service. 

 In November 2011, a Washington custodian was sentenced in federal court to 7 days in federal custody, 3 years of 

supervised release, 90 days of home confinement, 120 hours of community service, and ordered to pay restitution 

of $5,685. During the investigation, OIG agents recovered 766 First-Class Mail greeting cards that were stolen from 

the mail and rifled in the custodian’s home. During an interview with OIG agents, the employee admitted to the thefts 

from the Post Office. As a result of the investigation, the Postal Service terminated the custodian in April 2010. 

 The loss of eight prescription medication packages from the Post Office in January 2010 prompted an OIG investigation, in which an OIG agent observed an employee enter the Postal Service accountable cage and steal a VA 

package. During an interview, the letter carrier admitted he stole VA medication packages for about a year. As a 

result of the OIG investigation, the employee resigned from the Postal Service in May 2011. The former Idaho letter carrier pled guilty in federal court to mail theft and was sentenced in January 2012 to 2 years of probation and 

ordered to pay a $3,000 fine and approximately $255 in restitution. 

Employees who attempt to defraud the 

workers’ compensation program are 

criminally prosecuted. This former clerk 

was arrested and pled guilty in federal 

court to making false material statements 

in an insurance claim involving workers’ 

compensation. The former employee was 

seen riding and caring for horses, which 

exceeded her medical restrictions. 

Special agents investigate allegations 

of postal employees stealing mail. In 

this case, an OIG agent observed an 

employee enter the mail accountable 

cage and steal a Department of Veterans 

Affairs (VA) prescription medication 

package. The employee admitted he 

stole VA packages for about a year. 

MAIL THEFT
22 Semiannual Report to Congress

 An Oregon letter carrier was sentenced in federal court in November 2011 to 5 month’s home detention, 60 months 

of probation, and ordered to pay restitution. The letter carrier previously pled guilty to one count of mail theft. An 

investigation by the OIG and an Oregon Police Department determined the carrier stole large volumes of First-Class 

Mail and parcels instead of delivering them to Postal Service customers. During the interview with OIG and local 

police officers, the carrier admitted to opening many of the mail pieces and removing much of the contents in search 

of cash and gift cards. Additionally, the carrier admitted to discarding large amounts of mail and failing to deliver significant amounts of bulk business mail. A search of the letter carrier’s residence uncovered more than 465 pieces of 

First Class Mail, and about 25 U.S. Mail tubs filled with bulk business mail, as well as 127 empty mail tubs. As result 

of the investigation, the letter carrier retired from the Postal Service in January 2011.

 OIG agents, working with the Federal Bureau of Investigation (FBI) and the Internal Revenue Service-Criminal 

Investigations Division (IRS-CID), determined that a New York letter carrier was engaged in a federal tax return 

scheme, filing false taxes and having the IRS mail tax refund checks to addresses along his assigned mail route. 

The letter carrier then stole and cashed the checks for personal use. As a result of the investigation, the Postal Service removed the letter carrier in August 2010. In December 2011, he was found guilty in federal court of conspiracy 

to defraud the United States and conspiracy to steal and receive stolen mail matter. The former letter carrier received 

a sentence of 3 years in prison, 3 years of probation, and was ordered to pay about $2.4 million in restitution for his 

involvement in a fraudulent tax return scheme. 

 In April 2011, the OIG, as part of a multi-agency taskforce with the FBI and IRS-CID, began investigating a New York 

letter carrier involved in a conspiracy to obtain U.S. Treasury checks that were to be mailed and addressed to various 

individuals in Jamaica, New York. In August of that year, the letter carrier was arrested for providing U.S. Treasury 

checks to a co-conspirator as part of an ongoing scheme involving the fraudulent use of Social Security numbers to 

submit false federal tax returns and obtain tax refunds via the mail. The letter carrier admitted his involvement in 

the scheme and resigned from the Postal Service in December 2011. The next month, the former letter carrier pled 

guilty in federal court to conspiracy to defraud the government and theft of mail by employee.

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 335 cases of employees suspected of selling, possessing, or 

using illegal drugs on duty; made 18 arrests; and the Postal Service took 239 administrative personnel actions.

During this reporting 

period, we conducted 

69 contract fraud 

investigations, 

resulting in four 

arrests and more 

than $44 million in 

monetary benefits to 

the Postal Service.

OFFICIAL MISCONDUCT
October 1, 2011 — March 31, 2012 23

Major Fraud Investigations Division

The president of a private mailing company was 

sentenced in September 2011 to 51 month’s 

incarceration, 3 years supervised release, and 

ordered to pay restitution to the Postal Service. 

An OIG investigation determined that between 

January 2005 and December 2006, a postal 

mailer devised a scheme to defraud the Postal 

Service. The mailer directed and submitted 

numerous fraudulent postage statements for 

Standard Mail, indicating that a certain number 

of pre-cancelled stamps were used in mailings 

when the mailer knew it to be false. The mailer 

paid a Missouri postmaster a bribe with checks 

totaling $20,000 and paid a postal customer 

service supervisor a separate bribe of $10,000 

in cash. The loss of revenue to the Postal Service 

from the scheme to defraud was estimated 

to be between $2 million and $4 million. The 

president of the mailing company and one additional employee, along with the postal customer 

service supervisor and the postmaster, were 

prosecuted in federal court. In June 2011, the 

mailing company employee was sentenced to 3 

years of probation, 80 hours community service, 

and ordered to pay restitution. That same month, 

the customer service supervisor was sentenced 

to one count of bribery and received 2 years of 

probation and 60 hours community service. Also 

in June, a jury found the postmaster guilty of 

bribery and accepting a gratuity. In August 2011, 

the postmaster was sentenced to 24 months in 

prison and 1 year of supervised release. This 

case, which the OIG officially closed on February 

22, 2012, resulted in an approximate total of 

$3,894,630 in restitution to 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 69 contract fraud investigations, resulting in four arrests and 

more than $44 million in monetary benefits to the Postal Service.

The Postal Service Facilities Real Estate and Assets Office issued a letter of demand to a contractor in December 

2011, ordering a repayment of $96,876. The contractor leased space from Postal Service for a cellular telephone 

tower on the roof of a postal facility. The contractor subcontracts with various cellular telephone providers, including 

Sprint/Nextel, for their equipment installation and use of the tower. The lease with the contractor, initiated about 10 

years earlier, required the individual subcontracting cellular telephone companies to pay for their own power and mandated they install an electric meter to measure and account for their power usage. Sprint/Nextel installed equipment 

on the Postal Service roof in October 2001; however, they did not install a meter to measure electricity used to power 

their equipment until June 2010. As a result, in conflict with the lease, Postal Service paid for Sprint/Nextel’s electricity usage during that time. A Postal Service manager negotiated with the contractor; however, a settlement could not 

be reached. The OIG investigation assessed the estimated charge for the electricity used by Sprint/Nextel during this 

period as $50,502. According to the contract, late charges are assessed a fee of 1.5% interest monthly, compounded 

daily. The additional interest charges amounted to $46,374, for a total of $96,876. 

CONTRACT FRAUD
Appendices
October 1, 2011 — March 31, 2012 25

APPENDIX A

APPENDIX A

Reports Issued to Postal Service Management

For the period October 1, 2011— March 31, 2012

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 (MA) reports 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 7 — $1,115,430 $1,115,430 $10,310,906 

Improve Financial Performance 20 $919,304,263 $27,304,758 — $8,256,408 

Improve Safety and Employee 

Engagement

4 — $717,473,875 $717,473,875 — 

Regulatory Studies and Reporting 

Obligations

2 $127,880,195 — — $86,490,944

Preserving Accountability 31 — $31,489,181 $30,902,002 —

SUB-TOTAL 64 $1,047,184,458 $777,383,244 $749,491,307 $105,058,258 

PARIS Risk Model Reports 30 — — — — 

TOTAL 94 $1,047,184,458 $777,383,244 $749,491,307 $105,058,258 

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.
26 Semiannual Report to Congress

Reports with Quantifiable Potential Monetary Benefits

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

IMPROVE SERVICE

Marketing and Service

Mail Verification Procedures at Detached Mail Units; MS-AR-12-002; 1/12/2012 — — — $10,310,906 

Supply Management

Contract Delivery Service Cost Controls in the Suncoast District; CA-MA-12-001; 

2/27/2012

— $1,115,430 $1,115,430 —

IMPROVE FINANCIAL PERFORMANCE

Marketing and Service

Inbound International Parcel Mail; MS-AR-12-001; 11/23/2011 — — — $8,256,408 

Supply Management

Contracting Opportunities and Impact of the Service Contract Act; CA-AR-12-001; 

11/2/2011

$675,043,634 — — —

Transportation

Density of First-Class Mail on Air Transportation; NL-AR-12-003; 3/12/2012 $239,902,579 $27,304,758 — —

Postal Vehicle Service Transportation Routes – Margaret L. Sellers Processing and 

Distribution Center; NL-AR-12-001; 2/2/2012

$4,358,050 — — —

IMPROVE SAFETY AND EMPLOYEE ENGAGEMENT

Human Resources and Security

Unauthorized Overtime Usage in Field Operations; HR-AR-12-003; 3/30/2012 — $717,473,875 $717,473,875 —

REGULATORY STUDIES AND REPORTING OBLIGATIONS

Cost, Pricing, and Rates

Management Operating Data System; CRR-AR-12-002; 12/13/2011 — — — $86,490,944 

Revenue, Pieces, and Weight Inputs Into the Cost and Revenue Analysis Report; 

CRR-AR-12-003; 1/27/2012

$127,880,195 — — —

PRESERVING ACCOUNTABILITY

Financial

Bad Check Prevention and Collection; FI-AR-12-002; 1/10/2012 — $577,115 — —

APPENDIX A

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.

PARIS Risk Models. Performance and Results Information Systems (PARIS) models with data visualization techniques. These models identify operational 

and financial risks, and enable OA staff to conduct reviews of Postal Service functions on a nationwide basis, while also identifying areas of emerging risk 

— fundamentally changing the way the OIG examines and monitors risk. We present quarterly summary results and trend analyses of these risk models to 

key Postal Service executives and stakeholders. 
October 1, 2011 — March 31, 2012 27

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

Financial Reporting

Fiscal Year 2011 Postal Service Financial Statements Audit – Eagan Information 

Technology and Accounting Service Center; FT-AR-12-007; 12/19/2011

— $28,758,859 $28,758,859 —

Fiscal Year 2011 Postal Service Financial Statements Audit – St. Louis Information 

Technology and Accounting Service Center; FT-AR-12-010; 1/18/2012

— $861,075 $851,011 —

Information Technology

USPS.com Data Breach; IT-AR-12-004; 3/15/2012 — $1,292,132 $1,292,132 —

TOTAL $1,047,184,458 $777,383,244 $749,491,307 $105,058,258 

 

APPENDIX A

Report Listing

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

For the period October 1, 2011— March 31, 2012

IMPROVE SERVICE

Cost, Revenue, and Rates

Global Business Systems International Dispatch; 

CRR-AR-12-001; 11/8/2011

Marketing and Service

Mail Verification Procedures at Detached Mail 

Units; MS-AR-12-002; 1/12/2012

Network Processing

Standardization of Mail Processing Equipment at 

Processing and Distribution Centers; 

NO-AR-12-001; 10/4/2011

Planning, Innovation, and Optimization

Domestic Mail Manual Preparation and Acceptance 

Mail Instructions; CI-AR-12-004; 2/2/2012

Postal Service Pricing Strategy; CI-AR-12-002; 

12/9/2011

Retail, Business, and International

Postal Service-Operated Retail Facilities 

Discontinuance Program; EN-AR-12-002; 

12/1/2011

Supply Management

Contract Delivery Service Cost Controls in the 

Suncoast District; CA-MA-12-001; 2/27/2012

IMPROVE FINANCIAL PERFORMANCE

Facilities, Environmental, and Sustainability

21st Century Post Office: Aligning with the National 

Broadband Infrastructure Initiative; 

DA-MA-12-002; 1/23/2012

21st Century Post Office: Opportunities to Share 

Excess Resources; DA-MA-12-003; 2/9/2012

Integrating Sustainable Energy in Facilities; 

DA-MA-12-001; 12/19/2011

Financial 

Expedited Packaging Supplies Program; 

FI-AR-12-001; 12/28/2011 

Marketing and Service 

Inbound International Parcel Mail; MS-AR-12-001; 

11/23/2011

Network Processing 

Consolidation of Mail Processing Operations at the 

Mansfield, OH, Customer Service Mail Processing 

Center; NO-AR-12-003; 1/20/2012

Industry, CA, Processing and Distribution Center 

Originating Mail Consolidation; NO-AR-12-002; 

10/17/2011

Oxnard, CA, Processing and Distribution Facility 

Destinating Mail Consolidation; NO-AR-12-004; 

3/6/2012

Planning, Innovation, and Optimization

Innovation Best Practices Analysis; CI-AR-12-001; 

12/19/2011

U.S. Postal Service Past Network Optimization 

Initiatives; CI-AR-12-003; 1/9/2012

Retail, Business, and International

Cancelled Postage Statements - St. Paul, MN, 

Business Mail Entry Unit; EN-MA-12-001; 

3/22/2012

Flint, MI, Processing and Distribution Center 

Consolidation; EN-AR-12-001; 10/6/2011

Supply Management

Contracting Opportunities and Impact of the 

Service Contract Act; CA-AR-12-001; 11/2/2011

Detailed Financial Condition Risk Assessment - 

Eagle Express Lines; CA-CAR-12-004; 1/24/2012

Financial Capability Audit - Carter Control Systems, 

Inc.; CA-CAR-12-005; 1/31/2012

Financial Capability Risk Assessment - Kalitta Air; 

CA-CAR-12-003; 1/24/2012

Technical Support to Negotiation of Siemens AG, 

Industry, Mobility, Infrastructure and Logistics 

Subcontract Proposal; CA-CAR-12-002; 

11/9/2011
28 Semiannual Report to Congress

APPENDIX A

Transportation

Density of First-Class Mail on Air Transportation; 

NL-AR-12-003; 3/12/2012

Postal Vehicle Service Transportation Routes – 

Margaret L. Sellers Processing and Distribution 

Center; NL-AR-12-001; 2/2/2012

Standardization of Integrated Mail Handling System 

Loaders at Network Distribution Centers; 

NL-AR-12-002; 2/28/2012

IMPROVE SAFETY AND EMPLOYEE 

ENGAGEMENT

Facilities, Environmental, and Sustainability

Dayton, OH, Processing and Distribution Center 

Congressional Request; DA-MA-12-004; 3/5/2012

Human Resources and Security

Postal Service Mail Security; HR-AR-12-002; 

3/30/2012

Unauthorized Overtime Usage in Field Operations; 

HR-AR-12-003; 3/30/2012

U.S. Postal Service’s Health and Safety Program; 

HR-AR-12-001; 11/14/2011

REGULATORY STUDIES AND REPORTING 

OBLIGATIONS

Cost, Pricing, and Rates

Management Operating Data System; 

CRR-AR-12-002; 12/13/2011

Revenue, Pieces, and Weight Inputs into the Cost 

and Revenue Analysis Report; CRR-AR-12-003; 

1/27/2012

PRESERVING ACCOUNTABILITY

Financial

Bad Check Prevention and Collection; 

FI-AR-12-002; 1/10/2012

Fiscal Year 2011 Financial Testing Compliance 

Business Mail Entry Unit Oversight Reviews – 

Birmingham Business Mail Entry Unit, 

Birmingham, AL; FF-MA-12-001; 10/4/2011

Fiscal Year 2011 Financial Testing Compliance 

Business Mail Entry Unit Oversight Reviews 

– Ft. Lauderdale Business Mail Entry Unit, Ft. 

Lauderdale, FL; FF-MA-12-002; 10/11/2011

Fiscal Year 2011 Financial Testing Compliance 

Business Mail Entry Unit Oversight Reviews – 

South Hackensack Business Mail Entry Unit, South 

Hackensack, NJ; FF-MA-12-007; 10/28/2011

Fiscal Year 2011 Financial Testing Compliance 

Detached Mail Unit Oversight Reviews – 

Broadridge Financial Solutions, Inc. Detached Mail 

Unit, Edgewood, NY; FF-MA-12-008; 11/2/2011

Fiscal Year 2011 Financial Testing Compliance 

Detached Mail Unit Oversight Reviews – Brown 

Printing Company Detached Mail Unit, East 

Greenville, PA; FF-MA-12-006; 10/28/2011

Fiscal Year 2011 Financial Testing Compliance 

Detached Mail Unit Oversight Reviews - DHL 

Global Mail Detached Mail Unit – Rutherford, NJ; 

FF-MA-12-004; 10/25/2011

Fiscal Year 2011 Financial Testing Compliance 

Detached Mail Unit Oversight Reviews – Freedom 

Graphics Systems Detached Mail Unit, Grand 

Prairie, TX; FI-MA-12-001; 10/14/2011

Fiscal Year 2011 Financial Testing Compliance 

Detached Mail Unit Oversight Review – Harte 

Hanks Detached Mail Unit, Grand Prairie, TX; 

FI-MA-12-002; 10/24/2011

Fiscal Year 2011 Financial Testing Compliance 

Detached Mail Unit Oversight Reviews - Instant 

Web Companies Direct Detached Mail Unit, 

Hamburg, PA; FF-MA-12-005; 10/28/2011

Fiscal Year 2011 Financial Testing Compliance 

Detached Mail Unit Oversight Reviews – RR 

Donnelley Detached Mail Unit, Logan, UT; 

FF-MA-12-003; 10/24/2011

Fiscal Year 2011 Financial Testing Compliance 

Detached Mail Unit Oversight Reviews – WA Wilde 

Detached Mail Unit, Holliston, MA; FF-MA-12-009; 

11/9/2011

Fiscal Year 2011 Financial Testing Compliance 

Oversight Reviews; FI-MA-12-003; 1/20/2012

Postal Service Mail Volume Reporting; 

FF-AR-12-002; 3/7/2012

Quarter 1, Fiscal Year 2012, Field Testing Control 

and Oversight Business Mail Entry Unit/Staged 

Detached Mail Unit Reviews; FI-MA-12-005; 

3/1/2012

Quarter 1, Fiscal Year 2012, Field Testing Control 

and Oversight Plant Verified Drop Shipment 

Reviews; FI-MA-12-004; 2/10/2012

Financial Reporting

Fiscal Year 2011 Postal Service Financial 

Statements Audit – Eagan Information Technology 

and Accounting Service Center; FT-AR-12-007; 

12/19/2011

Fiscal Year 2011 Postal Service Financial 

Statements Audit – San Mateo Accounting Service 

Center; FT-AR-12-009; 1/18/2012

Fiscal Year 2011 Postal Service Financial 

Statements Audit – St. Louis Information 

Technology and Accounting Service Center; 

FT-AR-12-010; 1/18/2012

Fiscal Year 2011 Postal Service Financial 

Statements Audit – Washington, D.C., 

Headquarters; FT-AR-12-005; 12/12/2011

J.T. Weeker (Chicago) International Service Center 

- International Airmail Records Unit; 

FT-AR-12-002; 10/31/2011

Los Angeles International Service Center - 

International Airmail Records Unit; FT-AR-12-001; 

10/26/2011

New York International Service 

Center – International Airmail Records Unit; 

FT-AR-12-006; 12/19/2011

Officers’ Travel and Representation Expenses for 

Fiscal Year 2011; FT-AR-12-008; 12/19/2011

Opinion on the Postal Service’s Special-Purpose 

Financial Statements; FT-AR-12-003; 11/15/2011

Postal Service Board of Governors’ Travel and 

Miscellaneous Expenses for Fiscal Year 2011; 

FT-AR-12-004; 12/6/2011

Information Technology

Fiscal Year 2011 Information Technology Internal 

Controls; IT-AR-12-003; 1/9/2012

Patch Management Processes; IT-AR-12-002; 

1/9/2012

SAP Human Capital Management System Security 

Assessment; IT-AR-12-005; 3/19/2012

State of Corporate Information Technology Security; 

IT-AR-12-001; 10/21/2011

USPS.com Data Breach; IT-AR-12-004; 3/15/2012
October 1, 2011 — March 31, 2012 29

PARIS Risk Models

Complete listing of all OIG PARIS Risk Models issued to Postal Service management.

For the period October 1, 2011— March 31, 2012

Cost, Pricing, and Rates

Fiscal Year 2011 Cost, Revenue, and Rates Risk 

Model Quarter 4; CRR-ID-12-001; 11/15/2011

Fiscal Year 2012 Cost, Pricing, and Rates Risk 

Model Quarter 1; CRR-ID-12-002; 2/15/2012

Delivery

Fiscal Year 2011 City Delivery Efficiency Risk 

Model Quarter 4; DR-ID-12-001; 11/17/2011

Fiscal Year 2012 City Delivery Efficiency Risk 

Model Quarter 1; DR-ID-12-002; 2/21/2012

Facilities, Environmental, and Sustainability

Fiscal Year 2011 Green Risk Model Quarter 4; 

DA-ID-12-003; 11/23/2011

Fiscal Year 2011 Maintenance Risk Model Quarter 

4; DA-ID-12-001; 11/23/2011

Fiscal Year 2011 Real Estate Risk Model Quarter 4; 

DA-ID-12-002; 11/23/2011

Fiscal Year 2012 Green Risk Model Quarter 1; 

DA-ID-12-004; 2/14/2012

Fiscal Year 2012 Real Estate Risk Model Quarter 1; 

DA-ID-12-005; 2/15/2012

Financial

Fiscal Year 2011 10K Review; FI-ID-12-001; 

1/5/2012

Fiscal Year 2011 Audit of Confidential Funds; 

FF-ID-12-001; 11/2/2011

Fiscal Year 2011 Cost and Controls Risk Model 

Quarter 4; FF-ID-12-002; 11/14/2011

Fiscal Year 2012 Business Mail Entry Unit Risk 

Model Quarter 1; FI-ID-12-002; 3/15/2012

Fiscal Year 2012 Cost and Controls Risk Model 

Quarter 1; FF-ID-12-004; 3/1/2012

Financial Reporting

Fiscal Year 2011 Bank Secrecy Act Risk Model 

Quarter 4; FT-ID-12-001; 11/8/2011

Fiscal Year 2011 General Ledger Risk Model 

Quarter 4; FT-ID-12-002; 12/7/2011

Fiscal Year 2012 Bank Secrecy Act Risk Model 

Quarter 1; FT-ID-12-003; 2/13/2012

Fiscal Year 2012 General Ledger Risk Model 

Quarter 1; FT-ID-12-004; 2/16/2012

Human Resources and Security

Fiscal Year 2012 Human Capital Risk Model 

Quarter 1; HR-ID-12-001; 3/29/2012

Information Technology

Fiscal Year 2012 Information Technology Security 

Model Quarter 1; IT-ID-12-002; 2/7/2012

Information Technology Rationalization; 

IT-ID-12-001; 1/9/2012

Marketing and Services

Fiscal Year 2011 Retail Customer Service Risk 

Model Quarter 4; MS-ID-12-001; 11/15/2011

Fiscal Year 2012 Retail Customer Service Risk 

Model Quarter 1; MS-ID-12-002; 2/15/2012

Network Processing

Fiscal Year 2011 Operations Risk Model Quarter 4; 

NO-ID-12-001;11/10/2011

Planning, Innovation, and Optimization

Fiscal Year 2011 Workplace Environment Risk 

Model Quarter 4; CI-ID-12-005; 12/15/2011

Fiscal Year 2012 Workplace Environment Risk 

Model Quarter 1; CI-ID-12-012; 2/28/2012

Retail, Business, and International

Fiscal Year 2011 Revenue Generation and 

Assurance Risk Model Quarter 4; EN-ID-12-001; 

12/12/2011

Fiscal Year 2012 Revenue Generation and 

Assurance Risk Model Quarter 1; EN-ID-12-002; 

3/15/2012

Supply Management

Fiscal Year 2011 Supplier Solvency Risk Model 

Quarter 4; CA-ID-12-001; 11/9/2011

Fiscal Year 2012 Supplier Solvency Risk Model 

Quarter 1; CA-ID-12-002; 2/13/2012

Transportation

Fiscal Year 2011 Air Transportation Risk Model 

Quarter 4; NL-ID-12-001; 11/15/2011

Fiscal Year 2011 Surface Transportation Risk 

Model Quarter 4; NL-ID-12-002; 11/15/2011

Fiscal Year 2012 Air Transportation Risk Model 

Quarter 1; NL-ID-12-004; 2/15/2012

Fiscal Year 2012 Surface Transportation Risk 

Model Quarter 1; NL-ID-12-003; 2/7/2012

APPENDIX A
30 Semiannual Report to Congress

APPENDIX B

APPENDIX B

Findings of Questioned Costs

For the period October 1, 2011— March 31, 2012

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 9 $ 156,986,822 $ 143,509,693

Reports requiring management decision that were issued during the reporting period 7 $ 777,383,244 $ 749,491,307

TOTAL 16 $ 934,370,066 $ 893,001,000 

Reports for which a management decision was made during the reporting period (i & ii) 16 $ 934,370,066 $ 893,001,000

(i) Dollar Value of disallowed cost $ 776,379,434 $ 747,357,164

(ii) Dollar value of cost not disallowed $ 157,990,632 $ 145,643,836

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

Negotiations are ongoing

— — —

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)

— — —

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: 

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 

Note 3 — Contract reports with a significant audit finding:

None for this report period
October 1, 2011 — March 31, 2012 31

APPENDIX C

Description Number of Reports Dollar Value

Reports for which no management decision was made at the beginning of the reporting period — —

Reports issued during the reporting period 4 $ 1,047,184,458

TOTAL 4 $ 1,047,184,458

Reports for which a management decision was made during the report period (i & ii) 4 $ 1,047,184,458 

(i) Value of recommendations agreed to by management — $ 244,260,629 

(ii) Value of recommendations that were not agreed to by management — $ 802,923,829 

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, 2011— March 31, 2012

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.
32 Semiannual Report to Congress

APPENDIX D

APPENDIX D

Other Impacts

For the period October 1, 2011— March 31, 2012

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 30

Number of customer service audits conducted Number of Audits 9

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 $64,592,682

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 23

Number of employee/facility safety and security audits conducted Number of Audits 14

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 $171,696,941

Number of data security/IT security audits conducted Number of Audits 13

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 $53,633,883

Disbursements at Risk

Dollar value of disbursements made where proper Postal Service internal controls and processes were not followed Dollar Value —

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 19

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 —

Predicted Savings Shortfall

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

actual savings realized

Dollar Value $9,718,224

Potential Additional Revenue

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

improvements

Dollar Value —
October 1, 2011 — March 31, 2012 33

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 2,099,721

Dollar value of data used to support management decisions that is not fully supported or completely accurate Dollar Value $1,178,077,000
34 Semiannual Report to Congress

APPENDIX E

APPENDIX E

Reports with Significant Recommendations Pending Corrective Actions

For the period through March 31, 2012

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

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-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: June 2012

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 non-business hours. TID: October 2012

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: June 2012

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

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

clearance. TID: May 2012

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: June 2012

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: May 2012

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: April 2012

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: March 2012

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 2012

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
October 1, 2011 — March 31, 2012 35

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

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

IS-AR-10-002 12/22/2009 General Control Review of Human Resources Shared Service Center

R-2 — Initiate appropriate security clearance investigations for all employees in sensitive positions at the Human Resources 

Shared Service Center. TID: May 2012

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

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: December 2012
36 Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

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: December 2012

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: December 2012

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: December 2012

R-5 — Complete the Certification and Accreditation process for all critical applications currently in production, as required by 

Handbook AS-805, Information Security. TID: December 2012

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: December 2012

R-7 — Develop a formal, centralized mechanism to track the status of all unmitigated residual risks identified in the applications’ 

risk mitigation plan. TID: December 2012

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: December 2012

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: December 2012

R-12 — Input the Certification and Accreditation documentation for all critical applications into the central repository. 

TID: December 2012

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: February 2012

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

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

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-4 — Re-deploy employees, as appropriate, to facilities where there is sufficient workload to support the workhours. 

TID: October 2011
October 1, 2011 — March 31, 2012 37

APPENDIX E

Report Number Report Number

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

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

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: June 2012

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: March 2012

R-2 — Install full disk encryption on all new Inspection Service laptop computers before deployment. TID: March 2012

R-3 — Develop an expedited deployment schedule to reduce the risk of sensitive data loss from the unencrypted laptops. 

TID: March 2012

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: March 2012

R-5 — Enter all new laptops in the centralized inventory system upon deployment to Inspection Service users. 

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 

Mid-Florida 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

FF-AR-10-224 9/20/2010 Postal Service Area and District Office Field Structure

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
38 Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

CA-AR-10-005 9/20/2010 U.S. Postal Service Purchasing Policies

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: February 2012

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: February 2012

R-9 — Institute an oversight mechanism to ensure and track compliance with updated noncompetitive contracting policies. 

TID: March 2012

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

NL-AR-10-010 9/29/2010 Air Networks – Federal Express Transportation Agreement – National Analysis

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

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: May 2012

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-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: March 2012

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
October 1, 2011 — March 31, 2012 39

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

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: March 2012

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 2012

R-3 — Develop and implement written procedures for receiving invoices for annual HCR services and verifying that services 

were rendered prior to payment. TID: March 2012

R-4 — Identify and notify the contracting officers to oversee and administer all HCR payments in the Postal Service Accounts 

Payable Excellence system. TID: February 2012

R-5 — Review the $7.6 million in payments made more than 30 days after contract end dates and collect overpayments. 

TID: March 2012

R-6 — Provide detailed, consistent training for all designated officials on their roles and responsibilities and the usage of the 

Utility Management System. TID: August 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: August 2011

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

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: August 2011

R-2 — Require contracting officers’ representatives to reconcile invoices to receiving documents prior to certification for 

payment. TID: August 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

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: September 2013
40 Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

FF-AR-11-004 12/15/2010 Express Mail Guarantees 

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: October 2012

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-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: October 2012

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: October 2012

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

HR-AR-11-001 3/31/2011 Allegations of Inaccurate Time and Attendance Records 

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: July 2012

R-3— Establish a review and approval process to ensure time disallowances are appropriate and documented as required. 

TID: July 2012

R-4 — Establish periodic monitoring of clock ring deletions to ensure employee workhours are recorded accurately. 

TID: July 2012

R-5 — Provide periodic refresher training to managers, postmasters, supervisors, and acting supervisors on the Time and 

Attendance Collection System. TID: July 2012

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: July 2012

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

R-2 — Ensure significant changes impacting operations and resources are accounted for in the budget plan. TID: None
October 1, 2011 — March 31, 2012 41

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DA-MA-11-002 4/8/2011 Postal Service Patent Management Continuation

R-1 — Work closely with subject matter experts to review highly rated patents to draft claims as appropriate. 

TID: June 2012

R-2 — Develop a comprehensive strategy for developing patent intellectual property that enhances Postal Service products 

and services and its competitive position in the global marketplace and is a source of income. The strategy should 

capitalize on patent evaluations performed to date and include an assessment of business options available for 

achieving the significant financial returns. TID: June 2012

R-3 — Ensure the Postal Service has an effective patent management process and comprehensive licensing program in place. 

This establishes control that protects intellectual capital and provides an appropriate return on investment. 

TID: June 2012

HR-MA-11-001 4/22/2011 Retirement for U.S. Postal Service Employees on Workers’ Compensation

R-1 — Continue to pursue legislative change to reform the Federal Employees’ Compensation Act to reduce workers’ 

compensation benefits for retirement age employees. TID: None

CA-AR-11-004 4/27/2011 Internal Controls over the Contract Close-out Process

R-1 — Establish standardized contract close-out policies and procedures. This should include a system alert requiring 

contracting staff to complete Contract Authoring Management System close-out reports before they close-out a 

contract and ensuring that remaining funds are promptly decommitted when the contract is completed and closed. 

TID: September 2012

R-3 — Establish a periodic control to ensure category management center personnel follow records management 

requirements for contract files, including, but not limited to retaining records for the required 6 years. TID: March 2012

NO-MA-11-004 5/20/2011 Assessment of Overall Plant Efficiency 2011

R-1 — Reduce 14,017,630 workhours by FY 2012 with an associated economic impact of $647,586,823. 

TID: September 2013

HR-AR-11-004 5/27/2011 Compliance with Occupational Safety and Health Administration Recordkeeping Requirements

R-2 — Revise the Postal Service Occupational Safety and Health Administration Recordable Date policy to better clarify how 

to determine Occupational Safety and Health Administration recordable dates when they differ from the initial injury or 

illness date. TID: March 2012

R-4 — Establish mandatory training for officials responsible for determining Occupational Safety and Health Administration 

recordable cases and completing related forms. TID: December 2011
42 Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NL-AR-11-003 6/7/2011 Management of the Highway Contract Route Voyager Card Program

R-1 — Further develop, update, and reinforce requirements for the Postal Service and HCR suppliers to enhance systems 

infrastructure, including incorporating systems edits and automation tools where possible, and monitor fuel 

transactions as necessary to avoid unauthorized purchases and ensure adherence to contract gallon limits. 

TID: October 2011

R-2 — Ensure that contracting officers apply pooling in accordance with established requirements and ensure pools are 

appropriately documented and approved. TID: October 2011 

R-3 — Perform and document all outstanding reconciliations for prior periods to determine excess purchased fuel gallons and 

collect resultant overpayments. TID: October 2011

R-4 — Implement controls over the contractors that include: 

 Strengthening procedures for safeguarding and securing HCR Voyager Cards; ensuring suppliers use available tools 

to effectively manage the cards; and requiring that suppliers maintain an inventory of issued cards. 

 Coordinating with the U.S. Bank to limit the number of HCR Voyager Cards issued to highway suppliers; establish 

a secure activation protocol for mailed HCR Voyager Cards and unique personal identification numbers; and 

implement a periodic review of new, cancelled, and extra HCR Voyager Cards to identify potential patterns of 

mismanagement or misuse. 

TID: June 2012

R-5 — Continue to pursue funding when feasible for enhancing the functionality of the Fuel Asset Management System and 

Enterprise Data Warehouse eFuel modules and to ensure the systems are user-friendly and enable management to 

more efficiently and effectively monitor authorized gallons, identify excess gallons, and recover any related excess 

payments. TID: None

R-6 — Periodically assess the financial and operational viability of the HCR Voyager Card program, including performing a 

formal cost-benefit analysis based on complete and recent data, considering the costs of implementing controls to 

address deficiencies identified in this report as appropriate. TID: September 2011

R-7 — Continue to identify and evaluate other fuel management program best practices used in the transportation industry, 

and perform a comparative analysis against the existing HCR Voyager Card program, where possible. TID: None

DA-AR-11-008 6/8/2011 Conflicts of Interest: Facility Leases and Contract Delivery Services

R-1 — Revise the Postal Service’s policy for leasing property under 3,000 square feet from employees or relatives to include 

an ethics review. TID: March 2012

R-2 — Evaluate the universe of potential facility lease conflicts and develop an action plan to minimize active and future 

conflicts. TID: June 2012

R-3 — Implement a control to systemically identify, monitor, and resolve potential conflicts of interest with facility leases and, 

if necessary, request waivers for leases that represent conflicts. TID: March 2012

R-4 — Evaluate the universe of potential delivery service contract conflicts and develop an action plan to minimize active and 

future conflicts. TID: February 2012

R-5 — Implement a control to systemically identify, monitor, and resolve contract delivery service regulatory and policy 

violations in a timely manner. TID: February 2012

DR-MA-11-002 7/19/2011 National Assessment of City Delivery Efficiency 2011 - Office Performance

R-1 — Reduce 2,002,690 workhours during fiscal year 2012 with an associated economic impact of $88,192,128. TID: None
October 1, 2011 — March 31, 2012 43

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NL-AR-11-004 7/25/2011 Postal Vehicle Service Transportation Routes – Baltimore Processing and Distribution Center

R-1 — Ensure that Baltimore 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 11,789 workhours identified in our audit - and already agreed to by management - from the 

Postal Vehicle Service trip schedules. TID: None

R-3 — Reassess the remaining 7,273 workhours and eliminate the workhours as indicated by the reassessment or document 

the reasons for retaining them. TID: August 2011

R-4 — Eliminate from highway contracts 24 trips identified in our audit and already agreed to by local and area management.

TID: None

HR-AR-11-005 8/5/2011 Postal Service Facility Security

R-3 — Issue supplemental guidance and enhance internal controls to: 

 Ensure security control officers conduct facility security surveys as required. 

 Ensure corrective actions are taken to address security deficiencies. 

 Ensure security control officers take the mandatory security training. 

TID: August 2012

HR-AR-11-006 8/8/2011 2009 Pay for Performance Program

R-1 — Clarify policies and procedures to better define the relationship between the national performance assessment and 

core requirements, and the role of higher level management in the pay for performance process. TID: July 2012

R-2 — Establish and implement mandatory training events that educate new and existing participants and managers on policy, 

roles and responsibilities, goal setting, and the program’s objectives. TID: July 2012

R-3 — Evaluate the effectiveness of the current process used to establish and use behavioral core objectives to rate 

employees’ performance. TID: July 2012

HR-MA-11-003 8/12/2011 Stand-by Time

R-1 — Assess the inappropriate use of stand-by overtime nationwide, especially in function one, and implement internal 

controls to address usage and recording issues identified. TID: September 2011

R-2 — Enhance management controls to ensure employees and supervisors accurately report and record stand-by time. 

TID: September 2011

CA-AR-11-005 8/24/2011 Contract Funding Approval

R-1 — Direct program office officials to submit eBuy requisitions for contract funding approval for transportation contacts 

within Contract Authoring Management System prior to contractual commitments. TID: March 2012
44 Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

MS-AR-11-006 8/24/2011 Effects of Compliance Rules on Mailers

R-1 — Estimate and consider mailing industry costs as part of cost-benefit analyses, where practical, to determine whether 

the benefits of new initiatives and rule changes are justified in light of total industry costs. TID: None

R-2 — Further involve stakeholder groups in formal dialogue during the strategic planning phase of new initiatives. TID: None

R-3 — Enhance transparency and accountability by documenting Postal Service collaborative efforts (discussions, action 

items, resolutions, milestones). TID: None

DA-AR-11-010 8/30/2011 Intelligent Mail: Realizing Revenue Assurance Benefits

R-1 — Establish timeframes for implementing the enhanced/expanded automated verifications as described in the original 

Intelligent Mail infrastructure Decision Analysis Report. TID: January 2013

R-2 — Develop a tolerance level for low scan rates to use for exception reporting. TID: January 2013

R-3 —Develop a process for identifying the cause(s) of low scan rates for customer follow-up as warranted. 

TID: January 2013

FF-AR-11-013 8/30/2011 Postal Service Refunds

R-2 — Analyze and establish an administrative and minimum fee that will cover processing costs. TID: January 2013

R-4 — Complete the update to the PostalOne! System to enable electronic transmission of Value Added Refund data to 

accounts payable. TID: October 2012

CRR-AR-11-003 9/6/2011 Service Performance Measurement Data - Commercial Mail

R-1 — Establish milestones for implementing recovery of Full-Service Intelligent Mail Barcode discounts provided to mailers 

when Full-Service mailings do not meet the specific requirements for the discounts received. TID: January 2013

NO-AR-11-008 9/13/2011 Timely Processing of Mail at the Richmond, VA, Processing and Distribution Center

R-1 — Promptly assess the current mail volume and swiftly adjust workhours, assignments, sort plans, transportation, and 

any other operational requirements to ensure the Richmond P&DC meets customer service commitments. 

TID: August 2011

IT-AR-11-009 9/14/2011 Project Phoenix

R-1 — Modify the Technology Solution Life Cycle process to require the identification, documentation, and analysis of 

applicable back-end business processes and information technology systems during the technology solution 

requirements, analysis, and design phases. TID: June 2012

IT-AR-11-008 9/14/2011 Remote Access Controls

R-1 — Implement two-factor authentication to comply with Handbook AS-805 requirements and to meet Payment Card 

Industry – Data Security Standards. TID: December 2012

R-2 — Configure remote access firewalls according to Handbook AS-805 and applicable firewall security standards. 

TID: March 2012

R-11 — Suspend remote access for all employees or contractors until they complete required security awareness training. 

TID: October 2012
October 1, 2011 — March 31, 2012 45

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

HR-AR-11-002 9/19/2011 Postal Service Work Rules and Compensation Systems

R-1 — Additional increased flexibility to temporarily assign employees across crafts. TID: None

R-2 — Improved workforce flexibility through non-traditional career options, such as emphasizing part-time employment as a 

career choice or modifying full-time assignments. TID: None

R-3 — A comprehensive study to determine the optimal incentive-based carrier compensation system. TID: None

FF-AR-11-015 9/23/2011 Business Mail Acceptance Centralization Process

R-1 — Adopt a standardized, clear process to guide each district on how to conduct a centralization feasibility study and 

update the Business Mail Entry Centralization Standard Operating Procedure accordingly. TID: April 2012

R-2 — Require each district to conduct a centralization feasibility study, document the results, and take action based on the 

results of the study, as appropriate. TID: October 2013

R-3 — Manage business mail entry workhour usage to achieve 93 percent efficiency and develop tools to monitor 

performance. TID: September 2012

R-4 — Establish annual goals for business mail entry workhour efficiency to include measuring performance against goals. 

TID: September 2012

FF-AR-11-014 9/23/2011 Government Relations Operations

R-1 — Establish procedures to gather workload statistics on all functions within the Office of Government Relations and Public 

Policy, periodically monitor those statistics, and make appropriate adjustments to the organizational structure, as 

needed. TID: March 2012

R-2 — Develop written policies and procedures to guide operations within the Office of Government Relations and Public 

Policy. TID: March 2012

R-3 — Review placement of the Stamp Services organization within the Office of Government Relations and Public Policy to 

determine whether it is properly aligned within the Postal Service based on Stamp Services’ primary mission. 

TID: None

NL-AR-11-006 9/23/2011 Mail Transport Equipment – Needs, Distribution, and Use

R-1 — Perform a comprehensive mail transport equipment needs analysis for the network distribution center network to 

determine the amount of rolling stock, by type, needed on a daily basis to meet operational requirements. 

TID: October 2011

R-2 — Monitor the purchases of cardboard containers (other than Postal Paks) for network distribution center facilities to 

ensure they make only necessary purchases and are the best mail transport equipment option for the Postal Service 

given rolling stock inventory in the network. TID: September 2011

R-3 — Reissue over-the-road container policy to reflect the present and future operational needs and use of the containers 

within and outside the network. TID: October 2011

CA-MA-11-002 9/26/2011 Contract Delivery Service Cost Controls

R-1 — Instruct administrative officials to complete route surveys for the 47 contract delivery service routes identified in this 

audit. TID: November 2011 
46 Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DR-AR-11-007 9/26/2011 Follow-up on City Delivery Standard Operating Procedures

R-1 — Re-evaluate the certification criteria and ensure the criteria require units to meet, at least the national average percent 

to standard for office operations. TID: December 2012

R-3 — Establish an annual process to de-certify units that do not maintain performance standards after certification. 

TID: December 2012

NL-AR-11-008 9/27/2011 Evaluation of Major Transportation Technology Initiatives

R-1 — Ensure that Network Operations sponsors and project managers follow the Postal Service’s technology solution life 

cycle guidelines. TID: October 2011

R-2 — Require operational deficiencies be identified for corrective action and addressed prior to project closeout. 

TID: November 2011

R-3 — Facilitate the inclusion of a robust risk assessment, risk mitigation, system data migration, and transition planning best 

practices into investment planning policies. TID: October 2011

R-4 — Ensure establishment and maintenance of the proper line of authority, funding, and oversight for key programs by 

responsible sponsors and management officials. TID: October 2011

R-5 — Ensure comprehensive training is provided for employees throughout the technology’s life cycle. TID: May 2012

CA-AR-11-007 9/30/2011 Contract Postal Units Contract Oversight

R-1 — Require CPU contractors to submit invoices for payment. TID: None

R-2 — Create a process to ensure the contracting officer or contracting officer’s representative validates and certifies invoices 

prior to payment, using data maintained in the Contract Postal Unit Technology system. TID: None

R-3 — Establish a mandatory training procedure to ensure all contract officer representatives receive training of appointed 

duties within 2 weeks of notification of the contracting officer’s representative appointment. TID: March 2012

R-4 — Develop an oversight mechanism to monitor whether contracting officer’s representatives conduct quarterly 

performance and annual financial reviews, obtained completed appointment letters, and retain contract postal unit 

contracts in the contract administrative files. TID: March 2012

HR-AR-11-007 9/30/2011 Postal Service Workers’ Compensation Program

R-1 — Continue to pursue legislative change to transform the Federal Employees’ Compensation Act into a modernized 

workers’ compensation program that includes best practices for increasing program effectiveness and efficiencies 

and reducing costs. TID: None

R-2 — Pursue legislative change to amend Federal Employees’ Compensation Act to allow recovery of continuation of pay 

benefits in third-party cases. TID: None

R-3 — Pursue legislative change to reform Federal Employees’ Compensation Act to allow employing agencies to present 

evidence at hearings when fraud is alleged. TID: None

R-4 — Clearly define organizational responsibilities for detecting workers’ compensation fraud:

 Establish requirements for Department of Labor to respond to reports of investigations within 45 days after receiving 

them.

 Establish a provider compliance program. 

 Revise the method used to determine the administrative fee to ensure the fee is based on actual costs to administer 

Postal Service Workers’ Compensation Program.

TID: None

R-5 — Develop mandatory and refresher training for Postal Service officials responsible for workers’ compensation to ensure 

they are aware of their roles and responsibilities for workers’ compensation. TID: September 2012
October 1, 2011 — March 31, 2012 47

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

MS-AR-11-007 9/30/2011 Strategic Approaches to Revenue Protection

R-1 — Work with a broadened group of internal and external stakeholders to prepare for streamlining the entry of business 

mail, accelerate the timeline for streamlined acceptance and verification, and seek to leverage technology to provide 

revenue protection for Basic Service Intelligent Mail and non-automated volumes. TID: January 2013

IT-AR-12-001 10/21/2011 State of Corporate Information Technology Security

R-2 — Complete the certification and accreditation process for the remaining national applications. TID: December 2013

R-4 — Implement a corporate-wide encryption solution to enhance the sensitive data protection effort. TID: September 2012

CA-AR-12-001 11/2/2011 Contracting Opportunities and Impact of the Service Contract Act 

R-2 — Review the benefits of outsourcing cleaning/janitorial service positions and postal service vehicle driver positions and 

work with Supply Management to restructure those positions to achieve the most cost effective solution. 

TID: May 2011

R-3 — Ensure that appropriate financial data is collected to aid in making in-sourcing/outsourcing decisions. TID: None

HR-AR-12-001 11/14/2011 Postal Service Health and Safety Program 

R-1 — Review and revise, as appropriate, supervisor performance measures to place a higher priority on maintaining a safe 

and healthy work environment; for example: performance measures could be linked to the number of abated and/or 

unabated safety hazards. TID: October 2011

R-4 — Establish and implement standard operating procedures for dock operations. TID: May 2012

R-5 — Perform and oversee preventive maintenance procedures for eyewash and shower units. TID: September 2012

R-6 — Conduct required safety inspections and abate safety hazards in a timely manner to ensure safe and healthy working 

conditions for the employees. TID:September 2012

R-7 — Enter Postal Service Forms 1767 accurately and timely in the Safety Toolkit. TID: September 2012

EN-AR-12-002 12/1/2011 Postal Service-Operated Retail Facilities Discontinuance Program

R-1 — Develop and implement an integrated retail network optimization strategy to include specific goals and milestones. 

TID: None

R-2 — Develop and implement an economic model that determines market demand, including projected financial, geographic, 

market, and demographic data. TID: February 2012

R-3 — Improve the reliability and usefulness of retail facilities data by validating, correcting, and updating information in the 

database. TID: None

R-5 — Direct headquarters employees to assess the closing of offices whose operations have been suspended prior to 

FY 2010. TID: June 2012
48 Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

CRR-AR-12-002 12/13/2011 Management Operating Data System

R-1 — Develop a monthly report that identifies the top Management Operating Data System (MODS) operation numbers and 

facilities causing MODS errors. TID: March 2012

R-2 — Expand existing MODS exception reports to include observations that exceed maximum machine throughput and 

manual productivities. TID: March 2012

R-3 — Issue monthly enhanced exception reports to management at the area, district, and facility level to highlight recurring 

MODS errors at facilities. TID: April 2012

R-4 — Develop controls within the MODS that enforce the requirement for facility managers to correct MODS errors in a timely 

manner. TID: September 2012

R-5 — Direct district and facility managers to mitigate and correct MODS errors. TID: December 2011

R-6 — Monitor operation numbers where the majority of MODS errors occur, and determine the potential impact on applicable 

cost data. TID: July 2012

R-7 — Evaluate existing quality assurance procedures to determine whether eliminating MODS errors at the facility level, 

and eliminating observations that exceed maximum machine throughputs or manual productivities, would improve the 

reliability of MODS-based productivities. TID: July 2012

CI-AR-12-001 12/19/2011 Innovation Best Practices Analysis

R-1 — Incorporate innovation planning into the Postal Service strategic plan by March 30, 2012. TID: November 2011

R-2 — Develop a time-phased plan to implement the first six best practices listed by September 30, 2012. TID: None

R-3 — Develop a time-phased plan to implement the remaining 13 best practices over the subsequent 24 months after 

implementing the first six best practices. TID: None

FI-AR-12-001 12/28/2011 Expedited Packaging Supplies Program

R-1 — Implement a comprehensive, automated procedure to determine the quantity of expedited packaging supplies retained 

by major mailers, Post Offices and other facilities that distribute Postal Service’s expedited packaging supplies to 

customers. TID: None

R-2 — Develop a comprehensive plan to monitor usage and identify and reduce waste associated with expedited packaging 

supplies. TID: September 2012

R-3 — Include clear and concise return procedures on each order and update the Publication 22 to reflect current changes in 

return policies. TID: January 2012

IT-AR-12-003 1/9/2012 Fiscal Year 2011 Information Technology Internal Controls

R-1 — Implement corrective actions to address all open issues noted in this report for fiscal years 2010 and 2011. 

TID: July 2012

R-2 — Implement procedures with timelines to ensure corrective actions are taken to address all open issues from prior fiscal 

years before control testing resumes in the subsequent fiscal year. TID: July 2012
October 1, 2011 — March 31, 2012 49

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

IT-AR-12-002 1/9/2012 Patch Management Processes

R-1 — Ensure that all operating system and database patches are tested, documented, and implemented as required by 

Handbook AS-805, Information Security. TID: June 2012

R-2 — Ensure that administrators obtain required policy exception approvals when system patches are not applied. 

TID: March 2012

R-3 — Ensure that written procedures are developed to define the patch management process for each group, operating 

system, and database to include test and back-out plans. TID: June 2012

R-4 — Ensure that configuration management inventory records are reconciled to the actual servers and databases for their 

respective group. TID: June 2012

R-5 — Work together to implement a process to verify that required operating system and database patches distributed to the 

mail processing plants are applied. TID: May 2012

R-6 — Implement a common method for all entities to track information technology asset and patch information. 

TID: September 2012

R-7 — Ensure vulnerability mediation training is provided to all employees and contractors responsible for enterprise patch 

management. TID: September 2012

R-8 — Conduct risk assessments and cost analyses to develop an enterprise-wide migration plan for upgrading unsupported 

operating systems and databases to vendor-supported software. TID:September 2012

R-9 — Adopt a method to identify, capture, and report patch management metrics to assist with oversight of the patch 

management process and facilitate related business and security decisions. TID: September 2012

FI-AR-12-002 1/10/2012 Bad Check Prevention and Collection 

R-1 — Increase the bad check service charge to the national retail median of $30. TID: June 2012

MS-AR-12-002 1/12/2012 Mail Verification Procedures at Detached Mail Units 

R-1 — Review automation efforts to date to identify improvements that can be made in the interim while mailers continue to 

implement Intelligent Mail barcode technologies. TID: June 2013

R-2 — Continue ongoing mail verification training efforts while DMU employees continue to use manual mail verification 

processes. TID: January 2013

R-3 — Enhance automated systems to notify managers when acceptance employees override Mail Evaluation Readability 

Lookup Instrument results. TID: June 2013

R-4 — Develop and implement automated tools that managers can use to monitor and evaluate detached mail unit staffing 

and scheduling. TID: June 2013

NO-AR-12-003 1/20/2012 Consolidation of Mail Processing Operations at the Mansfield, OH, Customer Service Mail Processing Center

R-1 — Identify repositioning plans for all impacted employees at the Mansfield Customer Service Mail Processing Center. 

TID: None

R-2 — Continue to monitor and take necessary actions to ensure mail is processed timely at the Cleveland Processing and 

Distribution Center. TID: None 

CRR-AR-12-003 1/27/2012 Revenue, Pieces, and Weight Inputs Into the Cost and Revenue Analysis Report

R-2 — Explore concentrating sampling and data collection of manually processed mail from delivery units to the serving 

processing and distribution facilities for Revenue, Pieces, and Weight estimation purposes. TID: June 2012.
50 Semiannual Report to Congress

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

CI-AR-12-004 2/2/2012 Domestic Mail Manual Preparation and Acceptance Mail Instructions

R-1 — Combine and remove all duplications in the Domestic Mail Manual, Quick Service Guides, Business Mail Acceptance, 

Job Aids, and Customer Support Rulings; and publish a new document available to all mailers online. 

TID: November 2013

R-2 — Migrate to a one permit per customer requirement using PostalOne!: TID: April 2012

R-3 — Archive all PostalOne! deleted or canceled permits. TID: April 2012

NL-AR-12-001 2/2/2012 Postal Vehicle Service Transportation Routes – Margaret L. Sellers Processing and Distribution Center

R-1 — Ensure ML Sellers Processing & Distribution Center managers follow prescribed fleet management procedures for 

making PVS schedule changes more timely including conducting annual schedule and vehicle utilization reviews 

TID: November 2012

R-2 — Verify the reallocation of 2,424 workhours within existing PVS schedules and reallocate an additional 5,728 workhours 

within PVS schedules to accommodate future FSS implementation. TID: November 2012

DA-MA-12-003 2/9/2012 21st Century Post Office: Opportunities to Share Excess Resources

R-1 — Develop and implement a strategy to share surplus Post Office resources with appropriate federal, state, and municipal 

government agencies. TID: None

CA-MA-12-001 2/27/2012 Contract Delivery Service Cost Controls in the Suncoast District

R-4 — Establish a monitoring system to ensure route surveys are completed accurately and timely. TID: None

R-5 — Clarify the policy for completing route surveys in Handbook SP-1, Highway Contract Routes - Contract Delivery Service. 

TID: April 2012

NL-AR-12-002 2/28/2012 Standardization of Integrated Mail Handling System Loaders at Network Distribution Centers

R-1 — Direct network distribution centers to modify Integrated Mail Handling System loaders to safely accept over-the-road 

containers, while continuing to accept Postal Paks, as designed. TID: July 2012

NL-AR-12-003 3/12/2012 Density of First-Class Mail on Air Transportation 

R-1 — Continue to develop optimization processes to increase First-Class Mail density to maximize container space. 

TID: April 2013

R-2 — For sites equipped with the Advanced Facer Canceler System series 200 machines, separate First-Class Mail to be 

transported by air for sorting on a single sorting machine for further processing and dispatch. TID: April 2013

R-3 — Develop targeted secondary sort programs to process First-Class Mail bound for air transportation to maximize 

container space. TID: April 2013

R-4 — For sites equipped with automated flat sorting equipment, adjust sensors to ensure flat tubs are filled to maximum 

capacity prior to discharge or removal from the machine. TID: April 2012

R-5 — Require that processing and distribution center managers use half-size, 1-foot letter trays in manual outgoing lettersorting operations to optimize container space as necessary for mail dispatched on air transportation. TID: April 2012

IT-AR-12-004 3/15/2012 USPS.com Data Breach

R-2 — Implement consistent language in Handbook AS-805, Information Security, to clarify the timeframe required to notify 

the Computer Incident Response Team of security incidents. TID: December 2012

IT-AR-12-005 3/19/2012 SAP Human Capital Management System Security Assessment 

R-1 — Encrypt human resources data at rest and in transit according to Handbook AS-805, Information Security, 

requirements. TID: None

APPENDIX E
October 1, 2011 — March 31, 2012 51

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

HR-AR-12-002 3/30/2012 Postal Service Mail Security

R-1 — Develop and implement training to ensure personnel responsible for accountable mail and keys understand their 

responsibilities. TID: July 2012

R-2 — Establish policies and procedures requiring responsible personnel to conduct periodic reviews to ensure mail 

safeguarding and accountability requirements are followed. TID: July 2012

R-3 — Develop and implement training for contract postal unit personnel to ensure they understand their responsibilities 

regarding safeguarding mail and accounting for Registered Mail. TID: July 2012

HR-AR-12-003 3/30/2012 Unauthorized Overtime Usage in Field Operations

R-1 — Issue supplemental guidance to supervisors and managers to emphasize the importance of: completing and 

maintaining PS Forms 1017-B, Unauthorized Overtime Record, for employees who incur unauthorized overtime; 

approving and disapproving PS Forms 3996, Carrier Auxiliary Control, before carriers leave for their routes and 

reviewing the forms to assess actual time used when they return; and following badge control and clock ring 

procedures to help prevent unauthorized overtime. TID: September 2012

R-2 — Develop a consolidated report, or revise an existing report, to include the Time and Attendance Collection System and 

Unauthorized Overtime Reports; and require supervisors to review the consolidated report to ensure the accuracy of 

the timekeeping data and improve monitoring of unauthorized overtime. TID: September 2012

R-3 — Provide periodic refresher training for supervisors to emphasize their responsibilities for time and attendance, including 

monitoring unauthorized overtime and using PS Form 3996, Carrier Auxiliary Control, for managing delivery operations. 

TID: September 2012

R-4 — Develop and implement performance measures or other management controls to hold managers and supervisors 

accountable for failing to address unauthorized overtime. TID: September 2012

R-5 — Establish and implement proactive monitoring processes that include periodic reminders and a system of 

accountability, similar to the procedures that have been implemented in the Central Pennsylvania District to minimize 

unauthorized overtime. TID: September 2012

APPENDIX E
52 Semiannual Report to Congress

APPENDIX F AND G

APPENDIX F

Significant Management Decisions in Audit Resolution

For the period October 1, 2011 — March 31, 2012

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

None for this report period.

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

The Postal Service Office of Inspector General did not undergo an internal peer review during this reporting period. The Department of Defense OIG conducted the last 

peer review of our organization for the period covering April 1, 2008 – March 31, 2009, and issued a quality control review report of our audit organization on March 31, 

2010. We received a peer review rating of pass and implemented all recommendations as of March 31, 2011. 

A copy of this quality control review report, in its entirety, can be viewed on the USPS OIG website, 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

None conducted during this period.
October 1, 2011 — March 31, 2012 53

APPENDIX H

Investigative Statistics*

For the period October 1, 2011— March 31, 2012

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

646 160 179 180 352 — $21,490,456 $113,147 326

Injury Compensation 

Fraud 

388 13 18 16 73 $84,344,307 $246,881,254 $1,410,650 99

Official Misconduct 280 17 15 47 211 $642,950 $271,474 $140,397 192

Financial Fraud and 

Embezzlements 

265 56 69 74 133 — $2,380,862 $2,307,270 133

Contract Fraud 69 4 9 7 31 $787,661 $44,457,622 $44,456,633 24

TOTAL 1,648 250 290 324 800 $85,774,919 $315,481,668 $48,428,097 774

* 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.

APPENDIX H
54 Semiannual Report to Congress

APPENDIX I

Administrative Subpoenas Requested by the Postal Inspection Service

There were three requests during the reporting period.

Type of Scheme

Complaints 

Filed

Consent 

Agreements FROs

Cease & 

Desist Orders

Withholding 

of All Mail 

Orders

Advance fee 1 1 1 1 —

Charity 1 1 — 1 —

Contests/sweepstakes 10 10 3 10 1

Coupon fraud 8 8 — 8 1

False billings 6 6 2 6 2

Internet Auction — — — — —

Lotteries (foreign and domestic) 5 5 — 5 —

Merchandise:

 Failure to furnish 8 8 2 8 —

 Failure to pay 7 7 — 7 —

Misrepresentation 14 14 — 14 —

Miscellaneous 13 13 — 13 17

Telemarketing — — — — —

Work at home 3 3 — 3 —

TOTAL 76 76 8 76 21

APPENDIX I

Summary of U.S. Postal Inspection Service Actions Under 39 USC 3005 and 3007

For the period October 1, 2011— March 31, 2012

Financial Reporting on 

Investigative Activities for the 

Postal Inspection Service 

Type

Personnel $170,883,696

Nonpersonnel $33,242,523 

TOTAL $204,126,219

Capital obligations $489,077 

Other Administrative Actions

Administrative Action Requests —

Temporary Restraining Orders Requested —

Temporary Restraining Orders Issued —

Cases Using Direct Purchase Authority —

Civil Penalties (Section 3012) Imposed — 

Test Purchases 4

Withholding Mail Orders Issued 21

Voluntary Discontinuances 11
October 1, 2011 — March 31, 2012 55

APPENDIX J

APPENDIX J

Closed Congressional and Board of Governors’ Inquiries

For the period October 1, 2011— March 31, 2012

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 (49)

Requestor Allegation/Concern Major Findings/Resolution Closure Date

Representative, 

Maryland

Non-receipt of a package containing designer clothing after a postal 

employee logged the package as delivered.

An investigation confirmed the loss, but found no evidence of 

misconduct by individual postal employees.

12/01/11

Senator, New York Postal employees are selling pirated media at a postal plant. An investigation elicited no witnesses of the sales or evidence to 

substantiate the allegation.

12/07/11

Representative, 

New York

Hostile workplace environment, favoritism, and fraudulent scanning 

of Express Mail as delivered.

Our workplace review confirmed tensions remain, but management 

had already taken actions to address workplace climate. Another 

investigation found improper postal protocols on date and time 

information on scans, but the scanning of Express Mail was within 

reasonable limits.

12/12/11

Senator, Maryland Postal contractor alleges discrimination in the competition of a 

contract.

OIG audited and investigated the allegations. The reviews found no 

postal misconduct or irregularities as the Postal Service scaled up 

its contract.

03/19/12

Representative, 

New York

Unauthorized changes on mail-hold form at a Post Office. An investigation confirmed a postal employee changed the end 

date of a mail-hold form. A report of the findings was sent to postal 

management for action deemed appropriate.

11/15/11

Representative, 

California

Postal employee stole jewelry and cash from a package mailed to 

Arizona.

An investigation did not substantiate the allegation of postal 

employee misconduct.

10/18/11

Senator, Michigan Non-receipt of a package. An investigation did not identify any suspects, reveal misconduct by 

postal employees, or locate the package.

10/05/11

Representative, Ohio Non-receipt of collector's coins valued at more than $60,000; last 

scan occurred in a P&DC. 

Our extensive investigation did not develop evidence of misconduct 

by postal employees; efforts to develop leads in the coin market 

were inconclusive.

01/31/12

Senator, Texas Non-receipt of greeting cards containing cash. An investigation found no misconduct by postal employees and did 

not locate the missing items.

11/09/11

Representative, 

New York

Hostile work environment at a Post Office. An investigation found the behavior in the allegations did not rise to 

the level of harassment. 

10/18/11

Senator, Michigan Non-receipt of official mail (from Social Security Administration and 

the Secretary of State, Driver's License Bureau).

An investigation found no postal employee involvement with the nonreceipt of mail; the postal Mail Recovery Center was also checked, 

but routinely destroys documents that can be re-issued, such as 

checks, as a security measure.

12/12/11

Senator, North Carolina Theft of donation checks. An investigation found recipient had erred in alleging the specifics of 

the loss; our mail integrity test produced no losses.

11/22/11

Senator, Virginia Plant managers mislabeled mail in an attempt to delay the mail and 

set the complainant up for discipline.

We did not substantiate the allegation, but found a sorting machine 

had been programmed with a new plan affecting labels and 

performance. 

11/08/11

Representative, Florida Privacy Act violation. We confirmed the allegation and referred our findings to 

management for administrative action.

10/14/11
56 Semiannual Report to Congress

APPENDIX J

Requestor Allegation/Concern Major Findings/Resolution Closure Date

Senator, Oregon Mail theft by a postal employee at a Post Office. An on-going investigation did not reveal the reason for the losses, 

found no misconduct by postal employees, and was unable to locate 

the missing items.

12/20/11

Representative, Georgia Forged documents affecting survivor benefits were in deceased 

husband’s official personnel folder.

A court order granting power of attorney to the surviving spouse may 

not have prevented him from taking actions affecting his benefits. Our 

investigation did not substantiate the allegation of forgery or alteration.

12/08/11

Representative, Florida Package not received. We developed no evidence of misconduct by any postal employee and 

no explanation for the loss.

01/10/12

Representative, 

South Carolina

Harassment and retaliation by co-workers and supervisors at a Post 

Office.

We declined to investigate three allegations of a hostile work 

environment due to a pending union grievance on the issues. 

Management disclosed an employee climate survey rated the worksite 

as respectful and professional. As to the alleged harassment and 

assault, we confirmed local police or the Inspection Service reviewed 

the incidents and took no formal action. 

11/15/11

Senator, Montana Impropriety in applications to bid on a highway contract route. An investigation determined the award to a postal spouse was both 

erroneous and quickly reversed.

11/22/11

Senator, Michigan Management is deliberately destroying mail at a processing and 

distribution center in Lansing by placing non-machinable mail into 

the Advanced Facer Canceller System.

We did not substantiate the allegation of intentional destruction of 

mail, but found employees concerned about improper loading of 

bulky mail on the machines. Our review revealed no complaints of 

damaged or destroyed mail in the area.

01/09/12

Senator, Maryland Continued harassment by postal inspectors and other groups since 

complainant retired from the Postal Service.

We did not substantiate the allegation, and could not confirm any 

contacts with the complainant from the agencies allegedly involved.

12/01/11

Representative, Florida Management failed to properly address an OIG finding of 

whistleblower reprisal (WBR) in 2010; further reprisal; and fear of 

reprisal when complainant returns to duty.

The complainant's Equal Employment Opportunity (EEO) claim was 

based on the same facts as the current WBR complaint; therefore 

OIG deferred to the EEO process. As to complainant's concerns 

about a 2010 WBR complaint we substantiated, the OIG has no 

authority to compel or review administrative actions taken at the 

conclusion of the investigation. As to complainant's concern about 

returning to work, we learned his former supervisors now report to 

other facilities.

12/12/11

Representative, Illinois Postal drivers are filling up postal trucks and receiving bonus points 

at a gas station, and converting the points to personal use.

An investigation found that postal employees refueling postal 

vehicles were using the gas station reward points for personal 

use. We found management was unaware of the activity, or that 

the points could have benefited the Postal Service. We advised 

the employees and managers of the postal policy and reported our 

findings for action deemed appropriate.

10/20/11

Representative, 

Wisconsin

Delay or theft of mail by a postal employee. The allegation was unfounded. 10/05/11

Senator, Alabama Household items and cash were missing from package; complainant 

did not suspect package had been damaged, but found when 

package arrived, it included items sender denies mailing.

An investigation was conducted which included interviews, searching 

the Postal Service Mail Recovery Center (MRC), and a review 

of records and procedures. Postal personnel who had seen the 

package believed it to be worn and easily subject to damage in 

processing. We found no history of tampering complaints from the 

delivery area; our search at the MRC produced no results.

02/17/12

Senator, Texas Hostile work environment and delayed mail at a Post Office. Our workplace evaluators discussed progress of threat assessment 

and employee meetings that were underway. We also reviewed EEO 

complaints as a possible indicator of workplace stress and found no 

basis for further OIG review, noting managerial reassignments may 

have resolved some issues. We reviewed mail reporting system 

entries for delayed and curtailed mail. We found no indication of 

falsification of volumes or incidents of delayed mail.

12/16/11

Representative, Texas Postal vendor alleges license to sell uniforms was suspended without 

proper notification.

An investigation found that the contractor distributing gift certificates 

violated the licensing agreement with the Postal Service. The gift 

certificates allowed Postal Service employees to make purchases 

with Uniform Allowance Program funds after allotment expiration 

date and remaining funds should have been returned to the Postal 

Service. The contractor reimbursed the Postal Service.

12/07/11
October 1, 2011 — March 31, 2012 57

APPENDIX J

Requestor Allegation/Concern Major Findings/Resolution Closure Date

Representative, Texas Tampering and theft of a package containing a prescribed controlled 

substance.

We did not substantiate the allegation and found minimal instances, 

and no patterns, of similar thefts.

11/15/11

Representative, 

Massachusetts

Non-receipt of mail containing a money order and gift card. We learned the identity of the person who used the gift card, but 

we found no connection to postal employees; we were not able to 

establish how the loss occurred.

03/26/12

Representative, Idaho Theft of coins from a package. An investigation found that there was no misconduct by postal 

employees or evidence of theft. OIG was unable to find the missing 

coins.

11/16/11

Senate, New York Torn and smeared mail indicates tampering. We did not find records of similar complaints, nor were we able to 

replicate the problems the recipient reported.

03/26/12

Senate Committee Extension of detail of OIG employee to committee staff. Extension granted. 10/07/11

Representative, 

Wisconsin

A postal employee tampered with an estranged spouse's mail. We did not substantiate the allegation. 08/15/11

Representative, Arizona A 6-year pattern of non-receipt of greeting cards and packages. The OIG investigation confirmed some of the losses but found no 

patterns of theft in the Arizona area or reports within the Federal 

Crimes Database (FCD) for missing mail to assist in further review.

02/09/12

Chairman, House 

Subcommittee

Do federal privacy policies hinder agencies in setting up 

interdisciplinary or interagency task forces, such as could have 

produced better results in the Tampa, FL, IRS fraudulent tax refund 

scheme? 

The OIG identified the lack of computer matching agreements, 

or difficulties in establishing them, as the biggest impediment to 

cultivating leads in the areas of identity theft and tax fraud.

11/14/11

Representative, 

West Virginia

Workplace issues including an employee working off the clock at a 

Post Office while in off-duty status.

OIG confirmed an employee was working off the clock, in apparent 

violation of postal regulations. We alerted the Labor Relations 

manager for action deemed appropriate.

01/27/12

Representative, Illinois Customer was overcharged for mail services. Our investigation verified the customer was charged an amount 

inconsistent with the size, weight, and class of his mailings, leading 

to a presumption of a mistake by the employee rating the mail for 

postage. We reported our findings to management for administrative 

action.

01/13/12

Senator, Colorado Employee claims hostile work environment and fears for her safety at 

a postal plant.

An investigation was conducted and did not find a hostile work 

environment. Management noted elevated tension due to pending 

closure and consolidation of the plant.

03/01/12

Senator, South Carolina Employee seeks resolution of Workers' Compensation overpayment 

claim.

An investigation found that the employee frequently filed for state 

unemployment insurance benefits by underreporting income. The 

investigation led to a two-count grand jury indictment. The matter is 

now within the jurisdiction of the United States Attorney.

01/13/12

Representative, 

California

Non-receipt of certified mail. We determined the carrier did not scan and obtain a signature for 

one item found to have been received. We did not find a pattern of 

losses in the delivery areas; management advised proper procedures 

would be reinforced at employee briefings.

03/26/12

Chairman, Senate 

Committee

Requesting an unredacted copy of an OIG investigative report. The Office of Investigations provided the committee the requested 

report and a summary letter.

12/02/11

Representative, 

Kentucky

Postal employee claims postmaster created a hostile work 

environment at a Post Office.

We learned the district staff conducted a climate assessment of 

the facility, noted lack of trust and communications problems, and 

established a plan to address the issues and monitor progress.

02/09/12

Senator, Oklahoma Conflict of interest in management of postal training. We did not substantiate the allegation and found outside employment 

had been properly reported.

03/26/12

Chairman, House 

Committee

Request for a briefing on whistleblower reprisal allegations involving 

a contract award.

Office of Investigations provided the requested briefing. 12/09/11

Representative, Florida Delays in receiving restitution for mail theft loss. In July 2011, we referred our findings concerning the underlying 

complaint to the United States Attorney's Office (USAO) for 

prosecution. Complainant is properly listed as a victim on the 

documentation we presented. OIG does not have jurisdiction over 

restitution. If and when the court determines restitution, we expect 

the USAO will rely on our information. 

02/09/12
58 Semiannual Report to Congress

APPENDIX J

Requestor Allegation/Concern Major Findings/Resolution Closure Date

Senator, Washington Employee reports harassment by postal employees. As part of a Postal Service response, we advised that the 

complainant was not a subject of any current or recent investigative 

activities.

12/09/11

Representative, 

Washington

Employee reports harassment by postal employees. As part of a Postal Service response, we advised that the 

complainant was not a subject of any current or recent investigative 

activities.

12/09/11

Representative, Florida Mail tampering by Post Office employee. We did not substantiate the allegations. 03/09/12

Senator, Oklahoma OIG failed to act on a complaint concerning theft of mail and stalking 

by a letter carrier.

Through the Office of Government Relations, we responded that 

the OIG made numerous attempts to contact the complainant, who 

placed unreasonable restrictions on our proposed interview. We had 

already investigated his allegations, reported to postal management, 

and learned of completed administrative actions.

01/31/12

Inspector General Audits/Risk Analysis Research Center Reports (29)

Requestor Allegation/Concern Major Findings/Resolution Closure Date

Representative, 

Michigan

Proposal to consolidate the Flint P&DC into the Michigan Metroplex 

P&DC may have relied on false cost savings projections, and not 

properly accounted for service reductions.

Office of Audit (OA) found a valid business case exists to consolidate 

destinating mail processing operations, including adequate capacity, 

minimal expected customer service impacts, and higher efficiency at 

the receiving facility because of the increased mail volume. Auditors 

noted equipment relocation costs were overstated but had no 

material impact on the business case.

10/07/11

Representative, Ohio The OIG should conduct an independent study of the proposal 

to move processing operations from Mansfield to Cleveland and 

Columbus, to ensure integrity and accountability of postal operations 

is maintained and service not compromised.

OA found a business case for the consolidation, first year savings 

exceeding $4 million, and adequate capacity at the receiving facility, 

but that some customer service would be negatively impacted. 

02/01/12

Multiple Members, 

California

The OIG should conduct an expedited audit of the consolidation of 

processing from Industry into Santa Ana, to ensure expected savings 

materialize and service levels are maintained. 

OA found a business case to support the consolidation, including 

annual savings exceeding $1 million, and adequate capacity at the 

receiving facility, which has higher efficiency and productivity levels.

10/18/11

Representative, 

Missouri

A potential subcontractor was shut out of competition under a request 

for proposals issued by a postal contractor.

The Postal Service planned to re-compete the contract and invite the 

complaining company to compete.

12/13/11

Representative, 

California

An expedited audit of the ongoing consolidation of mail processing 

and distribution from Oxnard into Santa Barbara is needed because 

of issues of job loss, environmental impact, and lack of transparency 

in the process not adequately addressed by the Postal Service.

OA found a business case for the consolidation, first year savings 

exceeding $2 million, and adequate capacity at the receiving facility, 

but that some customer service was negatively impacted. 

03/07/12

Senator, Ohio Audit of consolidation affecting Mansfield. OA found a business case for the consolidation, first year savings 

exceeding $4 million, and adequate capacity at the receiving facility, 

but that some customer service would be negatively impacted. 

02/01/12

Representative, 

Massachusetts

OIG's official rebuttal to the Governmental Accountability Office (GAO) 

report about overfunding of CSRS. 

We provided a copy of our October 11, 2011, letter to GAO's Lorelei 

St. James, Director, Physical Infrastructure.

10/18/11

Representative, 

West Virginia

Execution of the Postal Service plan to close retail postal facilities in 

southern West Virginia.

Because of the breadth of the proposal to reduce the postal retail 

footprint, our Office of Audit has undertaken a review of the 

nationwide plan. 

12/06/11

Representative, Ohio OIG should conduct an independent study of Area Mail Processing 

(AMP) proposal consolidating the Toledo P&DC into the Michigan 

Multiplex. 

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

11/18/11

Representative, 

Michigan

OIG should audit the consolidation of the Kingsford, MI, P&DC into 

Green Bay, WI.

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

12/06/11

Alaska delegation Inaccuracies in the OIG report titled Alaska Bypass: Beyond its 

Original Purpose prepared by RARC.

We responded, noting that while Alaska has special challenges due 

to its lack of adequate road and highway infrastructure, we believe 

the associated costs should be borne by state or federal taxpayers 

rather that postal customers. We also responded to the nine specific 

points of inquiry.

12/14/11
October 1, 2011 — March 31, 2012 59

APPENDIX J

Requestor Allegation/Concern Referred To Closure Date

Representative, 

Louisiana

Request for an OIG audit into the consolidation of the Lafayette 

P&DC with the Baton Rouge P&DC.

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

12/15/11

Representative, Ohio Plant management, in an effort to have all raw mail done by 

9:30 p.m., is stopping cancellation and processing, bundling the 

remaining mail and entering it into the mail stream. This bypasses 

the Biohazard Detection System (BDS).

Our audit reviewed Advanced Facer Canceller System runtime data 

and made on-site observations and interviews with plant personnel. 

We concluded the allegation that mail bypassed the BDS was not 

substantiated. 

03/05/12

Representative, Illinois Request for an OIG review of the postal study of consolidating the 

Rockford, IL, P&DC into Madison, WI.

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

12/15/11

Ranking Member, 

Senate Committee

Analysis of executive compensation and other issues. Financial data and operations observations provided as requested. 01/05/12

Senator, Pennsylvania Requesting an OIG audit into the consolidation of the Scranton P&DF 

into the Lehigh Valley P&DC, and expressing concerns about impacts 

on the postal workforce and business community. 

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

02/24/12

Senator, Vermont Compilation of audit report data, including effect of eliminating 

the requirement for the Postal Service to make annual $5.5 billion 

payments to its retiree health benefit fund.

We provided our analysis of the effect eliminating the requirement 

would have, including an estimated growth in the retiree healthcare 

fund over 21 years from $44 billion to $90 billion, which is the 

estimated current liability. We also provided observations about 

the frequency and levels of pre-funding in retiree health care and 

pension funds in the public and private sectors.

02/06/12

Representative, 

Kentucky

OIG should perform an independent review of the Postal Service 

decision to consolidate the Lexington, KY, P&DC into Louisville, KY, 

and Knoxville, TN, P&DCs

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/02/12

Senator, Pennsylvania Requests an independent review of the proposal to consolidate 

Greensburg P&DF into the Pittsburgh P&DC to ensure that the 

decisions reached accurately and effectively enhance postal 

operations without harming customers or workforce. 

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/26/12

Senator, Pennsylvania Requesting an independent review of the proposed consolidation 

of the Reading P&DC into the Harrisburg P&DC to ensure that 

the decisions reached accurately and effectively enhance postal 

operations without harming its customers or workforce. 

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/26/12

Representative, 

Pennsylvania

Requests the OIG review the postal decision to consolidate the 

Southeastern with the Philadelphia P&DC.

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

02/29/12

Representative, 

New York

Requests an independent review of the way in which the Postal 

Service conducted the large set of AMP studies nationwide, and the 

Buffalo P&DC study in particular.

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/13/12

Senator & 

Representative, 

Pennsylvania

Requesting audit of the consolidation of the New Castle P&DF into 

the Pittsburgh P&DC, and expressing concerns about impacts on the 

postal workforce, business community, and service standards. 

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/12/12

Senator & 

Representative, 

Pennsylvania

Requesting audit of the consolidation of the Southeastern P&DC into 

the Philadelphia P&DC, and expressing concerns about impacts on 

the postal workforce, business community, and service standards. 

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/12/12

Representative, 

Missouri

Requests the OIG investigate the Postal Service decision to close 

the Springfield P&DC and consolidate the work at the Kansas City, 

MO, plant.

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/13/12

Senator, Pennsylvania Requests we review studies proposing consolidation of the Altoona, 

PA, P&DC into the Johnstown P&DC, to ensure that the decisions 

reached accurately and effectively enhance USPS operations without 

harming its customers or workforce.

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/13/12

Senator, Pennsylvania Requests we review studies proposing consolidation of the 

Williamsport, PA, P&DC into the Harrisburg P&DC, to ensure that 

the decisions reached accurately and effectively enhance USPS 

operations without harming its customers or workforce. 

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/13/12
60 Semiannual Report to Congress

APPENDIX J

Requestor Allegation/Concern Referred To Closure Date

Representative, 

Pennsylvania

Requests an independent review of the methodology and decisionmaking process behind the decision to consolidate Southeastern into 

Philadelphia P&DC.

OA added a review of this consolidation to its ongoing work on the 

future of the processing network.

03/26/12

Chairman, House 

Committee

Access to an unredacted audit report. We provided OIG audit, September 3, 2010, Follow-up Review of the 

Postal Service’s Employee Benefits Programs (HR-MA-10-001).

03/28/12

Referrals and Similar (9)

Requestor Allegation/Concern Referral to or Other Action Closure Date

Representative, Florida Unjust removal from a postal position. This matter did not fall under jurisdiction of the OIG, however the 

correspondence has been forwarded to the U.S. Postal Service 

Government Relations Office (GRO).

11/08/11

Senator, North Carolina Mail fraud. This matter did not fall under jurisdiction of the OIG, however the 

correspondence has been referred to the U.S. Postal Inspection 

Service (IS).

10/12/11

Representative, Illinois Employment issues. GRO 11/02/11

Representative, 

Kentucky

Employment issues. GRO 11/08/11

Representative, 

Colorado

The issue of a lost coin from December 2009 was not resolved. Postal Service Office of Consumer Affairs responded and included a 

copy of OIG's previously released investigative records.

12/02/11

Representative, 

Pennsylvania

A letter carrier put a letter supporting a partisan candidate for local 

office into mailboxes on the carrier's route, in an apparent violation 

of the Hatch Act.

Referred as required by postal rules to the U.S. Office of Special 

Counsel.

12/28/11

Representative, 

New York

Mail fraud scheme. IS 12/28/11

Senator, Ohio Management failure to implement grievance settlements; and snow 

emergency safety issue.

We declined to interfere in the on-going grievance resolution 

process.

03/20/12

Representative, Ohio Management is fraudulently accounting for scheduled and 

unscheduled leave, and providing financial benefits to employees 

who appear not to have taken unscheduled leave.

GRO 03/14/12
October 1, 2011 — March 31, 2012 61

FREEDOM OF INFORMATION ACT/ WORKPLACE ENVIRONMENT

Requests Number of Requests

Carryover from prior period 18

Received during period 310

Total on hand during period 328

Actions Number of Requests

Processed during the period 307

 Requests denied in full 8

 Requests denied in part 84

 Requests granted in full 9

 No records 31

 Requests referred* 133

 Requests withdrawn 9

 Fee-related reasons —

 Records not reasonably described 1

 Not a proper FOIA request for some other reason 7

 Not an agency record 23

 Duplicate request 2

Balance Number of Requests

Balance at the end of the period (pending) 21

Processing Days Number of Days

Median processing days to respond to a FOIA request 2

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, 2011 — March 31, 2012

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, 2011 - March 31, 2012

Complaints Received Total

Carryover from prior period 18

Complaints received from OIG Hotline, Congress, governors, 

management, internal, and other

237

Total on hand during this period 255

Workplace Environment Actions Total

Complaints reviewed and closed during the period 226

Referred to Postal Inspection Service 1

Referred to Office of Audit —

Referred to Office of Investigations 2

Referred to Workplace Environment 32

Referred to Hotline 5

Referred to Summary of findings to Congress/BOG/Postal 

Service Management

36

Referred to FOIA —

Referred to AIG for Investigations —

Referred to Database for statistical analysis and possible 

systemic review

147

Complaints pending at the end of the period 3
62 Semiannual Report to Congress

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-N-Ship®, 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 General® , 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. 

Note: USPS Delivery Confirmation® and Approved by the Postmaster General® are registered marks also owned by the United States Postal Service.

ACRONYM GUIDE
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
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