Office of Inspector General

Semiannual

Report to Congress

April 1 — September 30, 2013
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.
Semiannual Report to Congress April 1 — September 30, 2013

The U.S. Postal Service has had an impressive track record of success in the face of competing technologies, such as the telegraph, telephone, and computers. Successive predictions of the Postal Service’s demise 

were greatly exaggerated, to borrow a phrase. But the digital revolution, with its smart devices, and social 

networking, has proven to be an especially challenging period. Creative destruction is weakening many of the 

nation’s business sectors and public infrastructures. 

While the digital age has ushered in major changes in communications, the Postal Service’s mission to bind the 

nation together has remained largely unchanged. It is past time to provide the Postal Service the tools it must 

have to adapt its business model for a new era of communications while retaining the valuable infrastructure that 

serves American citizens and commerce. 

Likewise, the Office of Inspector General’s commitment to integrity, accountability, and transparency remains 

steady even as the tools we use to achieve our goals continually evolve. Collaboration, data analytics, and 

modeling have enhanced our work, helping us to focus on high-risk, high-value work. We can now proactively 

pursue risks and work the best cases in a shorter period of time. We are collaborating with the Postal Service to 

model data across program areas for more timely, relevant, and actionable products.

The Semiannual Report to Congress, for the reporting period of April 1 through September 30, 2013, features 

overviews of our key audit and investigative work in the period, as well as special reports and white papers. 

The appendices provide detailed information on audit reports and their recommendations, investigative cases 

pursued in the period, and monetary impacts of our work. In this reporting period, we issued 114 reports, 

including audit reports and management advisories, which resulted in about $13.5 billion in monetary impact. 

We completed 2,143 investigations that led to 332 arrests and nearly $80 million in fines, restitutions, and 

recoveries, of which $74 million went to the Postal Service. 

I look forward to working with the Governors, Congress, and Postal Service management as we address the 

challenges ahead. With the support of these groups, the OIG 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 our 

audit and investigative work. 

David C. Williams

Inspector General

A MESSAGE FROM THE INSPECTOR GENERAL
Semiannual Report to Congress April 1 — September 30, 2013

Summary of Performance 

For the period of April 1 — September 30, 2013

AUDITS

Reports issued 114

Significant recommendations issued 106

Total reports with financial impact 34

 Funds put to better use $11,034,458,086

 Questioned costs $1,104,835,559

 Revenue Impact $1,342,582,211

TOTAL $13,481,875,856

INVESTIGATIONS 1

Investigations Completed 2,143

Arrests 332

Indictments/Informations 237

Convictions/pretrial diversions 2 318

Administrative actions 1,175

Cost Avoidance $147,036,411

Fines, Restitution, and Recoveries $79,671,450

 Amount to the Postal Service 3 $74,015,994

OIG HOTLINE CONTACTS

Telephone calls 32,244

E-Mail 19,888

Standard Mail 843

Voice Mail Messages 467

Facsimile - FAX 284

National Law Enforcement Communications Center 333

TOTAL CONTACTS 54,059

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.
Semiannual Report to Congress April 1 — September 30, 2013

SIGNIFICANT AUDIT WORK

FINANCIAL AND SYSTEMS ACCOUNTABILITY

Availability of Critical Applications......................................................................................................................... 2

REVENUE AND PERFORMANCE

Virtual Post Office Boxes ...................................................................................................................................... 2

U.S. Postal Service Data Governance ................................................................................................................. 3

Small Business Growth......................................................................................................................................... 3

Intelligent Mail Barcode Development and Use of Data ....................................................................................... 3

MISSION OPERATIONS

U.S. Postal Service Parcel Delivery Lockers ........................................................................................................ 4

Emergency Preparedness for Hurricane Sandy and Vehicle Operations – Response to Hurricane Sandy ......... 4

SUPPORT OPERATIONS

Overtime Use During Fiscal Years 2011 and 2012 .............................................................................................. 4

Postal Service Injury Compensation Program...................................................................................................... 5

Contracting of Real Estate Management Services ............................................................................................... 5

SPECIAL FEATURES 

The Untold Story of the ZIP Code......................................................................................................................... 6

What America Wants from the Postal Service ...................................................................................................... 6

The Global Logistics Revolution: A Pivotal Moment for the Postal Service .......................................................... 7

Public-Private Partnerships: Best Practices and Opportunities for the Postal Service ......................................... 7

OFFICE OF INVESTIGATIONS 

FINANCIAL FRAUD ................................................................................................................................................. 8

HEALTHCARE FRAUD............................................................................................................................................ 8

MAIL THEFT............................................................................................................................................................. 9

CONTRACT FRAUD ................................................................................................................................................ 9

APPENDICES 

APPENDIX A

Reports Issued to Postal Service Management.................................................................................................. 10

Reports with Quantifiable Potential Monetary Benefits........................................................................................11

Report Listing...................................................................................................................................................... 12

PARIS Risk Models............................................................................................................................................. 14

APPENDIX B

Findings of Questioned Costs............................................................................................................................. 15

APPENDIX C

Recommendations That Funds Be Put to Better Use ......................................................................................... 16

APPENDIX D

Other Impacts ..................................................................................................................................................... 17

APPENDIX E

Reports with Significant Recommendations Pending Corrective Actions ........................................................... 18

APPENDIX F 

Significant Management Decisions in Audit Resolution ..................................................................................... 32

APPENDIX G

Status of Peer Review Recommendations ......................................................................................................... 32

APPENDIX H

Investigative Statistics*....................................................................................................................................... 33

APPENDIX I

Summary of U.S. Postal Inspection Service Actions Under 39 USC § 3005 and 3007 ...................................... 34

Financial Reporting on Investigative Activities for the Postal Inspection Service .............................................. 34

APPENDIX J

All Closed Congressional/ PMG/BOG Inquires................................................................................................... 35

SUPPLEMENTAL INFORMATION

Freedom of Information Act................................................................................................................................. 42

Workplace Environment...................................................................................................................................... 42

Acronym Guide ................................................................................................................................................... 43

Table of Contents
Semiannual Report to Congress 2 April 1 — September 30, 2013

Financial and Systems Accountability

SIGNIFICANT AUDIT WORK

FINANCIAL AND SYSTEMS ACCOUNTABILITY

Availability of Critical Applications

The Postal Service relies on several systems to support customer service, automate 

and improve mail acceptance and postage payment, and improve the user’s overall 

experience. These systems, known as critical applications, can also reduce manual 

inputs, increase efficiency, and streamline postal operations. Often seamless to 

customers, these sophisticated systems cut across all aspects of postal operations. For 

example, business mailers rely on the Facility Access and Shipment Tracking (FAST) 

system to set up appointments for entering their mail. PostalOne! is an electronic suite 

of services for business mailers that allows for a seamless mail acceptance process. 

Point-of-Service (POS) terminals are the “cash registers” at retail outlets that automate and expedite retail transactions. A wide range of customers, 

including home-based and small businesses, use the USPS.com applications, which provide access to online services and products.

Our report looked at how frequently these systems were down and unavailable to users and customers. The Postal Service has set a target of 99.7 

percent for most applications to be available and 99.9 percent for online applications. We found the overall availability of these systems have ranged 

from 98.9 to 99.9 percent during FY2011 through the first 6 months of FY 2013. We determined the Postal Service’s operations, processes, and 

procedures were effective in ensuring the availability of the FAST, PostalOne! – Business Customer Support System, and USPS.com applications.

The Postal Service has not been as effective in its POS terminal operations and in conducting monitoring activities to ensure that it meets availability 

targets. The Postal Service sites do not always report terminals disconnected from the network to the designated help desk. Further, employees 

are not properly following policy and management is not providing sufficient guidance on reporting POS terminal outages. We also determined 

the Postal Service does not monitor the availability of POS terminals during business hours or track how long terminals are unavailable. This is 

because no group has been assigned to conduct real-time monitoring or develop and maintain reports and metrics on the availability of POS 

terminals over time. We recommended the Postal Service develop and provide guidance and oversight that require POS users to immediately 

report all outages and issues to the designated help desk. We also recommended the Postal Service assign a group to conduct real-time 

monitoring and develop a process for timely reporting of outages and maintaining reports and metrics on the availability of POS terminals.

Management disagreed with recommendations to develop guidance for all POS-Retail associates on responding to an outage or a POS terminal in 

degraded mode. They also disagreed with the recommendation to document and provide oversight to ensure users of POS-Retail terminals at all Postal 

Service sites immediately report terminal outages and issues to the designated help desk. Management said data provided to the OIG indicates that 

employees call the help desk when there is an issue, substantiating their awareness of procedures. Management also disagreed with recommendations to 

assign responsibility for conducting real-time monitoring of POS-Retail terminals and to develop metrics and a process for timely reporting outages and 

degraded issues because end users are an effective way to monitor POS and enable the help desk to effectively troubleshoot and resolve issues; real-time 

monitoring represents a major effort; and a help desk case rate is reviewed on a quarterly basis and analyzed to continuously improve system availability.

REVENUE AND PERFORMANCE

Virtual Post Office Boxes

In today’s mobile society, people socialize, shop, work, and play anywhere and everywhere. Yet even as many aspects of communications and 

commerce have gone mobile, the physical address has remained static. Our research paper explored the concept of a Virtual Post Office (PO) Box, 

which would offer portability to the address and create opportunities for customers and businesses to manage the physical delivery of mail and 

parcels the same way they manage digital communications. Much like the traditional PO Box service, the Virtual PO Box would provide users with 

an alternate address instead of their residential or business address. Virtual PO Box customers could log into their USPS.com accounts to link this 

address with any physical address, including a home or business address, a nearby Post Office, a physical PO Box, or even a gopost® parcel locker. 

Virtual PO Boxes with an online management feature would also give users additional control over their mail, turning mailboxes into powerful 

tools for managing goods and information. They would provide users with an address that could be redirected anywhere they choose, solve the 

issue of some post offices having an insufficient number of physical PO Boxes to rent to customers, or act as a permanent address that would 

remain constant, which could help reduce change-of-address complications when a customer moves. Besides adding functionality to email 

accounts and smart devices, the virtual PO Box would be a portal for broad new uses for the Postal Service’s current network and products. 

Management Response to Audit Work

Office of Audit (OA) adheres to professional audit 

standards and generally presents its audit work to 

management for comments prior to issuing a final 

report. Unless otherwise noted in the selected audit 

work discussed in this report, management has 

agreed or partially agreed with our recommendations 

and is taking or has already taken corrective action 

to address the issues raised.
Semiannual Report to Congress 3 April 1 — September 30, 2013

Revenue and Performance

We explored the Virtual PO Box concept more deeply at a roundtable with Postal Service officials and stakeholders, including representatives from 

the Postal Regulatory Commission, labor unions, management associations, and digital experts from business and academia. Participants noted the 

implementation challenges of the Virtual PO Box, especially in the areas of operations, privacy, and how the Postal Service’s traditional role as a physical 

deliverer of mail might change. However, participants said the Postal Service is uniquely positioned to meet its customers’ growing needs and to participate 

in the rapidly changing digital arena. But timing is critical, they said, and such an ambitious project would require a long adoption cycle. They suggested 

the Postal Service could reach out to potential partners and collaborate with other companies and organizations that have had success in the digital era.

U.S. Postal Service Data Governance 

The Postal Service operates one of the largest information technology infrastructures in the world. Data collected from hundreds of computer 

applications help it manage operations and shape strategic goals. Our report found numerous shortcomings in the management of this critical 

data. Notably, the Postal Service defined a structure for a data governance program in 2003, but full roles and responsibilities were not uniformly 

adopted across the enterprise. We also identified limitations in the Postal Service’s data governance program that placed the organization at 

risk for potential vulnerabilities in data quality, availability, and integrity, which could cause inefficient operations, disruptions in service, and 

fraud. These limitations included an inconsistent corporate-wide data strategy, unreliable and inaccurate data, data inconsistencies within the 

Enterprise Data Warehouse, insufficient IT security measures, and difficulties with accessing and sharing data. We identified best practices 

used by companies with successful data governance programs and we applied these best practices to identify a possible implementation 

strategy. Management agreed with our recommendation and has begun establishing a formal, enterprise-wide data governance program. 

Small Business Growth

The small business mailing and shipping market is a key Postal Service customer segment – it generates more than $9 billion in annual revenue 

– and a vital part of the national economy. Market research indicates the small business market is a multi-billion dollar opportunity for the Postal 

Service, and the organization has renewed its focus on this market. The Postal Service relies on its sales staff and postmasters to reach out 

to current and prospective small-business customers. Our report determined the Postal Service has opportunities to improve the efforts of its 

postmasters and sales staff in retaining and growing small business revenue. To start, it should place an organizational priority on generating 

small business revenue. It should further leverage the relationship postmasters have with local small businesses by establishing a process for 

postmasters to join local civic organizations. The Postal Service could enhance collaboration between postmasters and sales staff, developing 

clear communication paths to support postmasters, and it should improve the availability and usage of quality sales-related tools and training. 

Our report found that these collective improvements could result in additional small business revenue of $122 million in fiscal year 2013, 

although management disagreed with this revenue outcome. Management also disagreed with our recommendations to increase the 

priority that postmasters and sales staff place on generating small business revenue and to leverage the postmasters’ community status. 

They disagreed with our suggestion to develop new communication paths for postmasters to get needed support from either business 

development specialists or sales staff. Management stated they have a successful set of well-defined processes in this area.

Intelligent Mail Barcode Development and Use of Data

The Postal Service developed its Intelligent Mail Program 10 years ago to provide better information about mail as it moves through the 

system and to improve efficiency by using information-rich, standardized barcodes to track mail as it is processed. The main component 

of the program is the Intelligent Mail barcode (IMb), one of a suite of four barcodes used to generate data. The IMb uniquely identifies 

letter and flat-sized mailpieces. Other barcodes in the suite include IMb for trays; IMcb for containers; and IMpb for parcels. 

The Postal Service is anticipating increased usage of the IMb as mailers prepare for the coming requirement that all automation mail include 

full-service IMb. As IMb usage increases, so does the data it generates. Our audit determined the Postal Service lacks a comprehensive plan 

for continued development and use of IMb data. First, the Postal Service developed the IMb database structure and made decisions about 

storage capacity, processing speed, and timely availability of data without considering the needs of all IMb data users. Also, current plans for 

using IMb data have grown beyond the original vision, meaning data storage capabilities and system upgrades were needed to support the 

requirements stakeholders identified after initial development. The Postal Service envisions developing an information technology infrastructure 

to scan and track letter and flat-sized mailpieces as they travel through its processing network. However, without a comprehensive plan, the 

program applications in development may have limited functionality and may not meet all users’ needs, such as real-time mail tracking.

We recommended management develop a comprehensive IMb data plan utilizing data governance principles for the collection, storage, 

and use of IMb data. The plan should include input from all business users, an assessment of all costs, and milestones for the life of the IMb 

program. Management disagreed with our conclusion that the Postal Service has not had, and does not have, a comprehensive IMb plan. 

Management said the plan resides with the chief information officer, and it put forward project investments as evidence of the plan. 
Semiannual Report to Congress 4 April 1 — September 30, 2013

Mission Operations 

MISSION OPERATIONS

U.S. Postal Service Parcel Delivery Lockers

Parcel lockers, the free 24-hour receptacles for receiving package delivery, have significant potential, but the Postal Service should revise the complex 

registration process of its pilot test of parcel lockers and adjust other impediments to their usage. With some adjustments and by broadening the options 

available in the pilot test, the Postal Service could evaluate additional revenue generating opportunities of parcel lockers, as well as their full potential for 

cost avoidance.

The growth in parcel volume and the changing needs of customers prompted the Postal Service to develop its gopost® parcel lockers, which provide an 

alternative to home delivery of packages. Under the current pilot test, registered customers use their gopost card and personal identification number to ship 

and receive parcels and receive email or text notifications about their parcel shipments. The Postal Service is testing gopost primarily in the greater 

Washington, DC, area in shopping centers, commercially situated post offices, and transportation hubs. It has also deployed lockers in New York City. 

Our review, which focused on gopost in the Capital Metro Area, determined the Postal Service is missing opportunities for greater customer adoption of 

gopost because the registration process for using gopost is complex. About two-thirds of registered users gave up on their registration before finalization. We 

recommended the Postal Service simplify the process, perhaps taking lessons learned from other posts that have implemented parcel lockers. We recognized 

that this issue has not been explored because management wanted to limit initial functionality of the pilot test to evaluate operational strategy, but we suggest 

broadening the options tested during the pilot test to better evaluate the full revenue generating capability of gopost. 

Emergency Preparedness for Hurricane Sandy and Vehicle Operations – Response to Hurricane Sandy

Hurricane Sandy, the deadliest and most destructive storm of the 2012 hurricane season, battered the eastern United States in October last year, causing 

billions of dollars in damage. The Postal Service suffered damage to 181 Postal Service facilities and 110 delivery vehicles, our two audits determined. The 

Postal Service followed its hurricane guidelines and enacted its integrated emergency management plan, which mitigated the effects of Hurricane Sandy on 

postal property and equipment. However, the plan could not completely safeguard postal property due to the deviation of the storm and its unprecedented 

impact. The storm hit hard the low-lying locations in New York and New Jersey that are not normally prone to flooding. 

The Postal Service’s emergency preparedness plans for its delivery vehicles included directing personnel to move vehicles to higher ground. Our report 

determined this move helped to mitigate damage to vehicles, but 110 of the 16,267 vehicles were still damaged or destroyed. Management ensured that 

damaged delivery vehicles were repaired and serviced before being reused.

In most of the 27 locations we visited, the Postal Service implemented emergency management plans to safeguard employees and assets. The organization 

properly assessed damages and quickly re-established operations. However, managers at four locations did not adequately safeguard employees, and 

managers at 13 locations did not adequately safeguard mail or other assets because they were not sufficiently trained. Also, we found that seven of the nine 

districts and installations did not always properly complete and approve the integrated emergency management plan because of inadequate oversight and 

confusion over which facilities required the plan. This resulted in employees, mail, and $1.1 million of cash and other assets being exposed to increased risk. 

We recommended the Postal Service clarify and communicate to personnel which facilities must have integrated emergency preparedness plans. We 

recommended management provide periodic training and implement policies and procedures for when personnel should report to facilities under mandatory 

evacuation orders. The Postal Service should issue guidance for holding and moving mail and other assets from facilities in flood zones and policies and 

procedures for completing and approving integrated emergency management plans. We also recommended updating emergency preparedness plans with 

new low-lying flood areas to safeguard vehicles. The Postal Service disagreed that its employees were at risk relating to mandatory evacuations, stating that 

it adhered to postal policy and followed locally ordered evacuations. 

SUPPORT OPERATIONS

Overtime Use During Fiscal Years 2011 and 2012 

Many of the Postal Service’s initiatives to address its financial challenges have resulted in workforce changes, which have contributed to an increase in 

overtime usage. At the request of the Postmaster General, we looked at why overtime workhours have been increasing and how the Postal Service manages 

workhours. The Postal Service uses overtime workhours to provide flexibility and meet its operational requirements without increasing overall staffing levels. 

Our audit report found opportunities for tighter controls on overtime usage. 

Our report focused on three districts with the highest overtime rates during the past 5 years, and one district where employees received the highest overtime 

dollars. In this latter district, the Postal Service paid seven mail handlers between $65,000 and $76,000 each for overtime workhours in FY 2012, resulting in 

their salaries more than doubling. Overall, overtime hours accounted for more than 7 percent of total workhours in both FYs 2011 and 2012 – a rate well above 

the Postal Service’s target rate of 5 percent. Our report determined the Postal Service incurred significant overtime workhour use primarily because workforce 

was not aligned with workload; inadequate supervisory oversight; and mail arrived late at the delivery units, which resulted in carriers having to wait to begin 

work and then needing overtime to deliver. Overtime costs were high in one district because a union agreement negotiated at the local level paid workers extra 

money for overtime hours worked after 5:15 PM. We recommended management:

 Establish a plan to address staffing vacancies and better align the workforce to workload; 

 Require officials at identified mail processing facilities and delivery units to implement plans to better align mail arrival times and carrier schedules;

 Require supervisors to monitor carrier workload and conduct street supervision; and 

 Pursue changes to local agreements in the district we visited. 
Semiannual Report to Congress 5 April 1 — September 30, 2013

Support Operations

Postal Service Injury Compensation Program

Workers’ compensation is a significant and growing cost for the Postal Service, totaling more than $1.3 billion in FY 2012 plus another $68 million in 

administrative fees. Workers comp costs have grown more than 25 percent since the 2009 billing period and administrative fees have increased 23 percent 

in that time. As of December 2012, the Postal Service is facing a long-term workers’ compensation liability of $16.5 billion and had 16,999 employees on the 

periodic roll, which refers to employees on workers comp with disabilities that are expected to be permanent or prolonged.

Postal employees are covered by the Federal Employees’ Compensation Act (FECA), which provides benefits to civilian federal employees who sustain 

an injury or occupational disease as a result of employment. The U.S. Department of Labor administers and enforces this act and the Postal Service 

manages efforts to return injured employees to work through its Injury Compensation Program. The Postal Service is the largest FECA participant in the 

federal government. The Postal Service’s health and resource management (HRM) staff and other officials play an important role in administering the injury 

compensation program and reducing related costs by returning injured employees to work as soon as possible. Our report determined that the Postal Service 

needs to improve procedures for administering workers’ compensation claims. Management did not consistently determine the number of HRM district 

specialists needed. Also, the Postal Service has reduced the number of staff significantly since 2009 and used some health and resource management 

personnel for collateral duties. Management did not fully use nurses in case management. Specific performance measures did not exist and personnel did not 

receive adequate training. 

We identified internal best practices to return employees to work and based our recommendations on these practices. We recommended an automated work 

search system and a quick reference guide for case management. We also identified industry practices for an effective workers’ compensation program, 

including using nurse case managers, partnering with non-profit organizations, and using predictive analytics. For example, the Transportation Security 

Administration used measures that included early intervention with contracted nurse case managers and reduced its chargeback costs by about 30 percent 

from 2006-2010. 

We determined the Postal Service could reduce the number of employees receiving workers’ compensation and save more than $85.5 million annually. 

We recommended management conduct a formal staffing analysis to include using contract nurses for case management. We recommended 

management establish district performance measures based on cost reductions and implement a nationwide work search system, along with district 

rehabilitation program committees. 

Management disagreed with our recommendations to partner with nonprofit organizations, stating that it would not reduce the compensation payable to the 

employee. Management also disagreed with our recommendation to enhance the Employee Health and Safety system by providing automated reminders 

since other enhancements to the system take priority.

Contracting of Real Estate Management Services

With a presence in nearly every community, the Postal Service is one of the largest real estate owners in the country. For years, its real estate objectives have 

been to acquire, lease, build, and expand facilities to support operations. But as operations have changed, so have the Postal Service’s real estate goals and 

objectives. It now is focused on disposing of excess space and vacant properties to optimize operations, generate revenue, and reduce real estate expenses. 

In June 2011, the Postal Service awarded a contract to real estate management firm CB Richard Ellis, Inc. (CBRE) to act as the primary provider of real estate 

management services, including managing the sale of the Postal Service’s real estate. With this contract, the Postal Service turned over to CBRE many of the 

duties formerly performed by its own real estate specialists and other real estate contractors. The Postal Service expected to benefit from the expertise and 

reach of a national real estate management firm. The Postal Service paid the contractor $1.8 million for its services in FY 2012. 

Although the contract resulted in cost savings for the Postal Service during the first year, our report determined that postal officials did not effectively provide 

contract oversight to reduce risks. We also found potential conflicts of interest because CBRE provides a range of property values to negotiate a lease and 

then receives a commission from the lessor based on the property value negotiated. Its incentive to negotiate the lowest lease possible for the Postal Service 

could be called into question. Further, the Postal Service permits the contractor to act on its behalf in negotiating leases and the contractor can also represent 

the lessor after disclosure through a dual agency agreement and consent of the Postal Service. We found other shortcomings, including no maximum contract 

value. We also determined the contracting officer did not properly approve contract payments or appoint contracting officer’s representatives to monitor 

contract performance or ensure services were provided. Postal Service officials should improve contract oversight to mitigate inherent risks associated with 

this contract. We recommended management establish a reasonable maximum contract value based on historical budgets, designate contracting officer’s 

representatives, and specify their duties to monitor contract performance and approve payments. 
Semiannual Report to Congress 6 April 1 — September 30, 2013

Special Features

Special Features

The Untold Story of the ZIP Code

In 1963, the Post Office Department introduced the Zone Improvement Plan (ZIP) Code to make sorting mail easier and to move toward automated mail 

sorting. To ensure the success of the code, the Post Office found executive sponsorship, examined foreign posts for successful comparisons, developed a 

stakeholder outreach program, and remained committed to implementing the ZIP Code in spite of initial resistance by mailers. Society benefited from the 

Post Office’s efforts because the ZIP Code became a valuable tool for organizing and displaying demographic information, as well as a support structure for 

entire industries such as insurance and real estate. Because it was offered as a foundational layer on a public open platform, the ZIP Code had potential for 

tremendous and wide impact. The OIG, in conjunction with IBM, determined that the ZIP Code adds about $10 billion dollars in economic value to society each 

year.

The paper, The Untold Story of the ZIP Code, discussed ways to enhance the ZIP Code in the digital age, such as combining the ZIP Code with the precision of 

geocodes (latitude and longitude coordinates). This would help facilitate delivery route configuration and allow ZIP Codes to be linked to geographic information 

system software. It would also help align government investments to serve public needs by assisting disaster recovery efforts, tracking population “flight paths” 

to unaddressed areas, and increasing the capability to map demographic information to surface areas. Another enhancement would be to link demographic 

information with the ZIP Codes to improve target mailings. This would increase the value of the mail for both senders and receivers by connecting recipients 

with more targeted mailings, although this option should be pursued on an opt-in basis to protect privacy. A final suggestion is to maintain the ZIP Code as an 

open platform and let users come up with additional uses and applications that would increase the ZIP Code’s value into the future.

What America Wants from the Postal Service

The Postal Service is at a critical juncture in determining its role in the digital age. Americans’ communications needs are continually evolving, as are 

their expectations of the Postal Service. The OIG commissioned a study by a market research firm to hear from the American public. The project called, 

What America Wants from the Postal Service, was aimed at better understanding how Internet-connected Americans view the Postal Service now and what 

role it could play in their lives in the future. While survey results were compared across multiple demographic criteria, the age of respondents was most 

likely to reveal variations in response. 

Among the key findings from the survey:

 The vast majority of respondents think their lives would be affected if the Postal Service did not exist in 5 years.

 The majority of respondents still see value in receiving at least some of their mail in hard copy. 

 Most respondents reported they have some discomfort with conducting online transactions, but more than half said they do so anyway. 

 Most respondents reported they believe the Postal Service is a public service that should be maintained, even if it is not profitable. 

 The overwhelming majority of respondents, however, misunderstand how the Postal Service is funded. 

Those surveyed stated their satisfaction with the service and accessibility of their Post Office, but a majority of respondents indicated they would be interested 

in more self-service options. Respondents are generally not opposed to closing post offices to reduce cost, but they reported that they are less likely to support 

the notion if it resulted in their own Post Office closing. While the majority of respondents did not oppose 5-day delivery, very few participants were supportive 

of reducing mail delivery to 3 days per week or reducing Post Office hours. Respondents showed varied interest in the Postal Service providing additional 

services; the most interest was in other government services being provided at the Postal Service, such as renewing licenses or permits. Younger respondents 

showed the most interest in new services, including digital services. 
Semiannual Report to Congress 7 April 1 — September 30, 2013

Special Features

The Global Logistics Revolution: A Pivotal Moment for the Postal Service

Powerful forces like globalization and new digital technologies are changing how, when, and where goods are produced, purchased, and delivered. Together, 

these forces are transforming the global logistics market, altering hundreds of years of traditional commerce, and resulting in major implications for postal 

operators. The explosion of e-commerce parcels flooding postal networks is just one sign of the confluence of these forces. This “global logistics revolution” 

has also changed how we shop: with a smartphone or a tablet we can shop anytime, anywhere. In addition, offshore production trends are reversing, and 

some manufacturing jobs are returning to the United States. Finally, major urban areas continue to grow and link into a global transportation supergrid that 

connects people, commerce, and ideas. However, some people may be left off the supergrid, disconnecting them from the new global economy.

Postal organizations around the world could play a key role in keeping citizens and commerce connected as the global logistics revolution evolves. Some 

foreign posts already provide an array of logistics services ranging from comprehensive warehousing to customized, end-to-end cross-border and returns 

solutions. For some of these posts, these “value-added” logistics services are providing a significant new revenue stream. The Postal Service is well 

positioned to move into the large and fast-growing logistics market. With its extensive first- and last-mile reach and its mission to “bind the nation together,” 

the Postal Service is unmatched in keeping communities connected. Either on its own or by partnering with private sector companies, the Postal Service 

could offer a range of new services and products to meet the evolving needs of citizens and businesses across the country. 

The Global Logistics Revolution: A Pivotal Moment for the Postal Service highlighted the forces and trends fueling the global logistics revolution and examined 

the implications and opportunities for the Postal Service to meet the changing needs of citizens and commerce through value-added logistics. The paper found 

that if the Postal Service does not at least keep up with emerging customer expectations for improved and expanded logistics services, it could jeopardize its 

position in the evolving expedited and small package market.

Public-Private Partnerships: Best Practices and Opportunities for the Postal Service

Public-private partnerships (PPPs) are an increasingly popular way for governments to achieve policy goals and develop infrastructure while shifting 

short-term financial burdens away from taxpayers and strained government coffers. While the Postal Service does not use a single cohesive PPP strategy, 

it has experience with PPPs in several functional areas such as the contract postal unit program, which allows privately owned retail facilities to sell postal 

services. The Postal Service also has a number of marketing affiliate relationships with private businesses and operational partnerships designed to 

leverage private sector efficiencies. 

The Postal Service can learn from the experiences of foreign postal operators and other U.S. federal and state agencies. A key lesson from observing other 

public organizations is that there are significant benefits in consolidating PPP expertise within a single office. A PPP office can serve as a repository for 

best practices; standardize and disseminate such practices to functions throughout the organization; act as a champion for PPPs; and develop the financial, 

legal, technical, and communications skills necessary for the successful development of PPPs. Such an office could also serve as a well-defined and easily 

identifiable point of contact for potential partners. 

This paper reviewed lessons learned from the Postal Service’s use of PPPs, and identified critical success factors for effective PPPs based on the experiences 

of foreign postal operators and U.S. government agencies. The paper also identified potential partnership opportunities for the Postal Service, and suggested 

adoption of some best practices to help guide a future strategy. 
Semiannual Report to Congress 8 April 1 — September 30, 2013

Financial Fraud

OFFICE OF INVESTIGATIONS

The Postal Service is consistently ranked by the Ponemon Institute as America’s “most trusted federal agency.” Among the reasons for this ranking is the 

integrity of its employees. However, a few postal employees and contractors betray that trust and abuse the public’s confidence in the Postal Service. When 

that happens, the OIG’s Office of Investigations (OI) gets involved. 

To protect the mail and to ensure the integrity of postal processes, finances, and personnel, the Postal Service relies on the investigative efforts of 

OI special agents, who are stationed in offices nationwide. Their charge is to investigate internal crimes and frauds committed by postal employees 

and contractors against the Postal Service and employee misconduct. In this section, we highlight 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.

FINANCIAL FRAUD

A large portion of the $66 billion in revenue generated by the Postal Service is handled at the 32,000 postal retail locations. Our agents investigate employees 

who embezzle funds; misuse money orders; or steal and misuse postal-issued credit cards. 

 An OIG investigation revealed an Oregon sales and service associate converted postal funds for personal gain. The associate fraudulently negotiated 

checks from business mailing customers for a lesser amount than the face value of the check, keeping the difference for personal use. During an interview 

with agents, the sales associate also admitted to defrauding the Postal Service by failing to report the sale of stamps and using the proceeds from her 

schemes to support her gambling addiction. In June 2013, the employee pleaded guilty to one count of misappropriation of postal funds and was 

sentenced to 18 months in prison, 3 years of probation, and ordered to pay $135,000 in restitution to the Postal Service. The Postal Service terminated 

the employee in January 2012. 

 In June 2013, a Brooklyn contract postal unit employee pleaded guilty to theft of government property and was sentenced to 3 years of probation, 

6 months of home detention, and ordered to pay $62,000 in restitution to the Postal Service. Our investigation revealed that over a 3-year period, the 

employee underreported more than $113,000 in postage meter revenue and could not account for $10,000 in missing stamp stock. During an interview 

with OIG agents, the employee admitted to manipulating Postal Service records to embezzle funds for personal use. Because of the investigation, 

the Postal Service recovered $123,000. 

HEALTHCARE FRAUD

Employees who suffer a work-related injury or illness receive monetary and medical benefits known as workers’ compensation. The benefits paid by the 

Postal Service to workers’ compensation claimants in FY 2013 totaled $1.4 billion. Its estimated total liability for future workers’ compensation costs now 

stands at $16.5 billion. 

The U.S. Department of Labor, Office of Workers’ Compensation Programs (OWCP) administers workers’ compensation on behalf of the Postal Service 

and passes through direct compensation to providers, claimants, and beneficiaries. Special agents detect and investigate fraudulent claims. Investigations 

that substantiate fraud result in significant long-term savings to the Postal Service. Investigative efforts in this reporting period resulted in more than 

$127.8 million in cost savings or avoidances, 27 arrests, and 109 administrative personnel actions, including removals and suspensions and termination 

of benefits. 

 Our joint investigation with the California Department of Insurance and the Department of Labor OIG determined a California letter carrier misrepresented 

his medical condition to receive OWCP benefits. The carrier alleged his workplace injury induced stress, and a fear of crowds and public places, which 

severely affected his lifestyle. Our surveillance and undercover operations revealed the carrier regularly participated in bowling tournaments and frequently 

traveled to casinos in Las Vegas. In January 2013, the carrier pleaded guilty to one count of workers’ compensation fraud and was sentenced to 1 day of 

imprisonment, 5 years of probation, 200 hours of community service, and ordered to pay $34,000 in restitution. Three months later, the carrier resigned 

from the Postal Service and the termination of OWCP benefits resulted in a $1.5 million cost avoidance. 

 A former Indianapolis letter carrier was sentenced in June 2013 to time served and ordered to pay almost $19,000 in restitution to the 

Department of Labor after pleading guilty to one count of false statement or fraud to obtain federal employees’ compensation. The investigation 

determined the carrier misrepresented his physical condition to his personal physician and OWCP officials. OIG agents observed the carrier 

riding go carts, playing laser tag, serving as a camp counselor, and engaging in landscape work, for which he was monetarily compensated, 

for prolonged periods. During landscaping activities, we observed the carrier swinging a sledgehammer and lifting 40-pound bags of topsoil to 

and from a pickup truck. The letter carrier’s OWCP benefits were terminated in November 2012 resulting in a cost avoidance of nearly $1.8 million. 

The Postal Service terminated the letter carrier in December 2012. 
Semiannual Report to Congress 9 April 1 — September 30, 2013

Mail Theft

 OIG agents interviewed a former rural letter carrier receiving OWCP benefits and determined the claimant had exaggerated her claims. 

She said she could not walk, stand, kneel, squat, climb, bend, reach, and grasp. But agents determined the claimant participated in 

parasailing, water sliding, zip lining, bicycle riding, and was an active contestant on TV game show The Price is Right. All these activities 

exceeded her medical restrictions. The former rural letter carrier pleaded guilty in federal court to federal workers’ compensation fraud 

after providing false statements to receive OWCP benefits. Termination of her workers’ compensation benefits in June 2013 yielded a cost 

avoidance of more than $700,000. Also in June, she was sentenced to 3 years of probation and ordered to pay $30,000 in restitution. 

 A former New York letter carrier was sentenced in April 2013 to 2 years’ probation, 750 hours community service, and ordered to pay about $93,000 

in restitution to the Postal Service after pleading guilty to false statements to obtain workers’ compensation benefits. Investigators determined 

the letter carrier engaged in physical activities that exceeded his medical restrictions. During surveillance, agents observed the letter carrier 

participating in various activities, including bowling and golf. The employee admitted he failed to report improvement in his medical condition 

to his doctor and the Department of Labor so he could continue to receive workers’ compensation benefits. The Postal Service terminated the 

employee and the Department of Labor terminated the employee’s workers’ compensation benefits, yielding a cost avoidance of $950,000. 

 A 2-year investigation with assistance from the FBI, Social Security Administration OIG, Health and Human Services OIG, the DOL-OIG, and 

the Puerto Rico Police Department, resulted in indictments against providers and beneficiaries. In August, a federal grand jury in Puerto Rico 

charged 10 current and former Postal Service employees and two doctors with fraud associated with OWCP. The indictment charges that 

two doctors falsely evaluated and diagnosed OWCP claimants to justify non-existent injuries, allowing the claimants to fraudulently receive 

OWCP benefits. The investigation also uncovered evidence that 10 current and former Postal Service employees illegally received OWCP 

benefits; eight were treated by one of the indicted doctors. The 10 claimants received approximately $3.5 million in OWCP benefits. 

MAIL THEFT

The majority of Postal Service employees work conscientiously to move the nation’s mail to its proper destination. A few employees abuse the public’s trust. 

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. 

 Earlier this year, agents identified a Texas mail processing clerk as a suspect in a rash of mail thefts in the region. Agents conducted surveillance and 

observed the employee opening envelopes and removing cash from the mail. During an interview with OIG agents, the employee confessed to opening 

about 15-20 envelopes per night and stealing up to $150 per night from the mail during a 3-month period. The employee resigned from the Postal Service in 

June and 2 months later pleaded guilty in federal court to theft of mail by a postal employee. Sentencing is scheduled for November. 

 A former New York electronic technician pleaded guilty to theft of mail by an employee; detention, delay, and opening of mail; and wrongful conversion by a 

government employee. The employee was sentenced in August to 366 days in prison, 3 years of supervised release, ordered to pay a $7,500 fine, $7,800 

in restitution, and a special assessment of $2,000. During a surveillance operation, agents observed the employee rifle and steal the contents of multiple 

pieces of mail including cash, jewelry, collectable coins, and baseball cards while giving the appearance of servicing the sorting equipment. The technician 

resigned from the Postal Service.

 A joint investigation with the Postal Inspection Service revealed a Postal Service contract employee in Boston was involved in a scheme to steal Discover 

credit cards from the mail. The investigation determined the employee was responsible for the theft of more than 400 Discover cards, with losses totaling 

more than $183,000. The employee pleaded guilty to credit card fraud and obstruction of correspondence and was sentenced to 51 months in prison, 

and 3 years of supervised release. The court ordered nearly $184,000 in restitution to Discover Financial Services in July 2013. 

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 our investigations document contract improprieties, special agents present the evidence for criminal and civil prosecution and administrative 

remedies. During this reporting period, our 110 contract fraud investigations resulted in five arrests, 10 convictions, and more than $67.9 million in monetary 

benefits to the Postal Service.

 The OIG developed information that the owner of a New Jersey construction company responsible for performing contract repairs and renovations was 

engaged in a scheme to defraud the Postal Service. The investigation determined that Franchi Construction Inc. billed the Postal Service for labor not 

performed and equipment never installed in postal facilities. During an interview with agents, the owner of the company admitted to mischarging and 

submitting false claims for work that was never performed. The Postal Service recovered about $23,000 from the construction company and subsequently 

terminated its contract in May 2013. A month later, the construction company was suspended from conducting business with the Postal Service for 1 year. 

 A Washington, DC, purchasing specialist was sentenced in federal court in May to 18 months in prison, 3 years of probation, and ordered to pay $40,000 

in restitution to the Postal Service. The purchasing specialist was involved in a bribery scheme that yielded more than $40,000. The specialist received 

the bribes in exchange for using his position to obtain and facilitate contracts for AH Computer Consulting. A complaint to the OIG Hotline in May 2012 

prompted our investigation. In July 2012, the firm was ordered to pay a $75,000 fine and an owner was sentenced to 12 months and 1 day in prison followed 

by 1 year of probation. The Postal Service terminated the purchasing specialist in April 2013 and debarred the company and its owners 3 months later.
Semiannual Report to Congress 10 April 1 — September 30, 2013

Appendix A

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.

APPENDIX A

Reports Issued to Postal Service Management

For the period April 1 — September 30, 2013

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

Risk Categories

Number of 

Reports

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Cost Revenue Impact

Financial and Systems 

Accountability

18 $10,780,000,000 — — —

Mission Operations 18 $66,910,934 $716,801,533 $1,307,556 —

Revenue and Performance 23 $9,152,797 $74,757,101 $68,921,485 $1,156,541,483

Support Operations 19 $178,394,355 $313,276,925 $313,276,925 $186,040,728

SUB-TOTAL 78 $11,034,458,086 $1,104,835,559 $383,505,966 $1,342,582,211

PARIS Risk Model Reports 36 — — — —

TOTAL 114 $11,034,458,086 $1,104,835,559 $383,505,966 $1,342,582,211

Summary

Risk Categories

Number of 

Reports

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Cost Revenue Impact

Issued Reports 134 $11,301,059,516 $1,491,074,832 $766,476,936 $1,445,927,938

PARIS Risk Model Reports 72 — — — —

TOTAL 206 $11,301,059,516 $1,491,074,832 $766,476,936 $1,445,927,938

Fiscal Year 2013 Summary

For the period October 1, 2012 — September 30, 2013
Semiannual Report to Congress 11 April 1 — September 30, 2013

Appendix A

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

Financial and Systems Accountability

Finance

Using U.S. Postal Service-Specific Assumptions for Calculating the Civil 

Service Retirement System Liability; FT-MA-13-023; 9/27/2013

$1,300,000,000 — — —

Using U.S. Postal Service-Specific Assumptions for Calculating the Federal 

Employees Retirement System Liability; FT-MA-13-024; 9/27/2013

$9,480,000,000 — — —

Mission Operations

Delivery and Post Office Operations

City Delivery Street Efficiency Southern, Pacific, and Western Areas; DR-AR13-004; 5/24/2013$28,080,953 — — —

U.S. Postal Service Parcel Delivery Lockers; DR-MA-13-002; 5/6/2013 $1,268,615 — — —

Use of Postal Support Employees in Customer Service Operations; DR-AR-13-

006; 8/16/2013

— $43,233,842 — —

Vehicle Maintenance Facility Efficiency Capital Metro and Pacific Areas ; 

DR-AR-13-007; 9/30/2013

$16,102,750 $1,307,556 $1,307,556 —

Network Processing and Transportation

Assessment of Overall Plant Efficiency 2013; NO-MA-13-007; 9/26/2013 — $628,670,104 — —

Efficiency Review of the Atlanta Network Distribution Center - Processing and 

Transportation; NO-AR-13-005; 8/16/2013

$15,999,708 — — —

Nationwide Analysis of Tier 1 Network Distribution Centers – Postal Vehicle 

Service Operations ; NO-AR-13-008; 9/27/2013

$2,997,060 — — —

New Castle and Greensburg, PA Consolidation; NO-AR-13-004; 8/16/2013 — $978,954 — —

Springfield Network Distribution Center - Postal Vehicle Service Operations; 

NO-AR-13-006; 8/26/2013

$1,570,135 — — —

Supervisor Workhours and Span of Control; NO-MA-13-005; 4/4/2013 — $11,955,046 — —

Surface Visibility - Transportation Operations - Oklahoma District; NO-AR-13-

007; 9/25/2013

$891,713 — — —

Use of Non-Traditional Full-Time and Postal Support Employee Positions in 

Processing Operations; NO-AR-13-003; 5/17/2013

— $30,656,031 — —

Reports with Quantifiable Potential Monetary Benefits

Definitions:

Questioned Costs. A cost that is unnecessary, unreasonable, unsupported, or an alleged violation of law,

regulation, contract, and so forth.

Unsupported 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 System (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 

challenging 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.
Semiannual Report to Congress 12 April 1 — September 30, 2013

Appendix A

Revenue and Performance

Data Analysis and Performance

Click-N-Ship For Business; DP-AR-13-005; 4/29/2013 — — — $20,507,473

Enterprise Data Warehouse Cost of Use; DP-AR-13-009; 8/5/2013 $3,800,989 $483,808 — —

Management of Detail Assignments; DP-AR-13-006; 5/23/2013 — $68,838,928 $68,838,928 —

Postal Service Management of Closed Post Office Boxes; DP-AR-13-007; 

6/18/2013

— — — $5,322,026

Postal Service Warranty Process; DP-AR-13-011; 9/25/2013 $5,351,808 $5,351,808 — —

Sales and Marketing

Domestic Negotiated Service Agreements; MS-AR-13-007; 4/29/2013 — $82,557 $82,557 $1,164,301

Electronic Parcel Payment Systems Internal Control Requirements; 

MS-AR-13-012; 9/27/2013

— — — $262,419,575

Political and Election Mail Sales; MS-AR-13-008; 6/19/2013 — — — $2,400,000

Retail Customer Experience Program; MS-AR-13-010; 7/9/2013 — — — $54,454,156

Small Business Growth; MS-AR-13-009; 6/20/2013 — — — $810,273,952

Support Operations

Human Resources and Support

Grievance Settlements and Payments Follow Up; HR-AR-13-008; 9/27/2013 — $3,388,305 $3,388,305 —

Overtime Use During Fiscal Years 2011 and 2012; HR-AR-13-002; 7/5/2013 $6,762,306 — — —

Postal Service Injury Compensation Program; HR-AR-13-004; 7/25/2013 $171,632,049 — — —

Revenue Generation Patents; HR-MA-13-004; 9/26/2013 — — — $183,382,092

Supply Management and Facilities

Contracting of Real Estate Management Services; SM-AR-13-001; 6/12/2013 — $1,703,766 $1,703,766 —

Enterprise Technology Services Program; SM-AR-13-003; 7/18/2013 — $77,221,508 $77,221,508 —

Independent Audit of Lockheed Martin Mission Systems and Training 

Automated Package Processing System Recognition Computer System 

Upgrade Proposal; SM-CAR-13-005; 9/20/2013

— $2,400,000 $2,400,000 —

Noncompetitive Purchasing Practices; SM-AR-13-004; 9/25/2013 — $210,563,133 $210,563,133 —

Oversight of Performance-Based Contracts; SM-AR-13-002; 6/17/2013 — $18,000,213 $18,000,213 —

Vacant Land Parcels; SM-AR-13-005; 9/30/2013 — — — $2,658,636

Total $11,034,458,086 $1,104,835,559 $383,505,966 $1,342,582,211

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

Report Listing

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

For the period April 1 — September 30, 2013

Financial and Systems 

Accountability

Finance

Donated Leave Accounting; 

FT-MA-13-012; 4/18/2013

Fiscal Year 2013 Field Testing Control 

and Oversight Business Mail Entry Unit/

Staged Detached Mail Unit Reviews 

Quarter 2; FT-MA-13-016; 5/20/2013

Fiscal Year 2013 Field Testing Control 

and Oversight Business Mail Entry Unit/

Staged Detached Mail Unit Reviews 

Quarter 3; FT-MA-13-018; 8/27/2013

Fiscal Year 2013 Field Testing Control and 

Oversight Business Reply Mail Reviews 

Quarter 3; FT-MA-13-019; 8/30/2013

Fiscal Year 2013 Field Testing Control and 

Oversight Continuous Detached Mail Unit 

Reviews Quarter 2; FT-MA-13-015; 5/20/2013

Fiscal Year 2013 Field Testing Control and 

Oversight Continuous Detached Mail Unit 

Reviews Quarter 3; FT-MA-13-021; 8/30/2013

Fiscal Year 2013 Field Testing Control and 

Oversight Plant Verified Drop Shipment 

Reviews Quarter 2; FT-MA-13-013; 5/3/2013

Fiscal Year 2013 Field Testing Control and 

Oversight Plant Verified Drop Shipment Reviews 

Quarter 3; FT-MA-13-020; 8/30/2013

Overview of U.S. Postal Service Export Controls 

Monitoring Program; FT-MA-13-017; 7/25/2013

Sure Money Program; FT-MA-13-014; 5/8/2013

Using U.S. Postal Service-Specific Assumptions 

for Calculating the Civil Service Retirement 

System Liability; FT-MA-13-023; 9/27/2013

Using U.S. Postal Service-Specific Assumptions 

for Calculating the Federal Employees Retirement 

System Liability; FT-MA-13-024; 9/27/2013

Using U.S. Postal Service-Specific Assumptions 

for Calculating the Retiree Health Care 

Liability; FT-MA-13-022; 9/27/2013

Information Technology

Availability of Critical Applications; 

IT-AR-13-008; 9/25/2013

Data and Voice Communications; 

IT-AR-13-005; 6/14/2013
Semiannual Report to Congress 13 April 1 — September 30, 2013

Appendix A

Engineering Systems and Network Operations 

Disaster Recovery Plan – Merrifield, VA 

Campus; IT-AR-13-007; 9/24/2013

LiteBlue Security Assessment; 

IT-AR-13-009; 9/26/2013

Management and Utilization of Software 

Licenses; IT-AR-13-006; 7/31/2013

Mission Operations

Delivery and Post Office Operations

City Delivery Street Efficiency Southern, Pacific, 

and Western Areas; DR-AR-13-004; 5/24/2013

Delivery Data Transmission; 

DR-MA-13-003; 8/6/2013

U.S. Postal Service Parcel Delivery 

Lockers; DR-MA-13-002; 5/6/2013

Use of Postal Support Employees in Customer 

Service Operations; DR-AR-13-006; 8/16/2013

Vehicle Maintenance Facility Efficiency 

Capital Metro and Pacific Areas; 

DR-AR-13-007; 9/30/2013

Vehicle Operations - Response to Hurricane 

Sandy; DR-AR-13-005; 8/6/2013

Vehicle Parts Inventory Management - 

Pacific Area; DR-AR-13-003; 4/12/2013

Network Processing and Transportation

Altoona, PA Originating and Destinating Mail 

Consolidation; NO-AR-13-010; 9/30/2013

Assessment of Overall Plant Efficiency 

2013; NO-MA-13-007; 9/26/2013

Efficiency Review of the Atlanta Network 

Distribution Center – Processing and 

Transportation; NO-AR-13-005; 8/16/2013

Modified Altoona, PA Originating and 

Destinating Area Mail Processing 

Package; NO-MA-13-006; 8/7/2013

Nationwide Analysis of Tier 1 Network 

Distribution Centers – Postal Vehicle Service 

Operations; NO-AR-13-008; 9/27/2013

New Castle and Greensburg, PA 

Consolidation; NO-AR-13-004; 8/16/2013

Springfield Network Distribution Center 

– Postal Vehicle Service Operations; 

NO-AR-13-006; 8/26/2013

Supervisor Workhours and Span of 

Control; NO-MA-13-005; 4/4/2013

Surface Visibility – Transportation Operations – 

Oklahoma District; NO-AR-13-007; 9/25/2013

Timeliness of Mail Processing at the 

Hartford, CT Processing and Distribution 

Center; NO-AR-13-009; 9/30/2013

Use of Non-Traditional Full-Time and Postal 

Support Employee Positions in Processing 

Operations; NO-AR-13-003; 5/17/2013

Revenue and Performance

Data Analysis and Performance

Click-N-Ship for Business; DP-AR13-005; 4/29/2013

Delivering Results, Innovation, Value, and 

Efficiency Management; DP-AR-13-008; 6/19/2013

Enterprise Data Warehouse Cost of 

Use; DP-AR-13-009; 8/5/2013

Intelligent Mail Barcode Development and 

Use of Data; DP-AR-13-010; 9/6/2013

Management of Detail Assignments; 

DP-AR-13-006; 5/23/2013

Monitoring of Government Travel 

Card Transactions in the Northeast 

Area; DP-MA-13-004; 8/30/2013

Monitoring of Government Travel 

Card Transactions in the Southern 

Area; DP-MA-13-003; 8/30/2013

Postal Service Management of Closed Post 

Office Boxes; DP-AR-13-007; 6/18/2013

Postal Service Warranty Process; 

DP-AR-13-011; 9/25/2013

U.S. Postal Service Budget Formulation and 

Execution Process; DP-MA-13-002; 8/7/2013

U.S. Postal Service Data Governance; 

DP-AR-13-004; 4/23/2013

U.S. Postal Service Pay for Performance 

Program; DP-MA-13-001; 6/3/2013

Sales and Marketing

Benchmarking of Costing Methodologies; 

MS-MA-13-004; 8/14/2013

Domestic Negotiated Service Agreements; 

MS-AR-13-007; 4/29/2013

Electronic Parcel Payment Systems Internal 

Control Requirements; MS-AR-13-012; 9/27/2013

Political and Election Mail Sales; 

MS-AR-13-008; 6/19/2013

Postal Service Product Costing 

Methodologies; MS-MA-13-002; 4/11/2013

Retail Customer Experience Program; 

MS-AR-13-010; 7/9/2013

Shortpaid Postage – InformationBased Indicia Packages, Southern 

Area; MS-AR-13-011; 9/17/2013

Small Business Growth; 

MS-AR-13-009; 6/20/2013

The Postal Service’s Use of Social 

Media; MS-MA-13-003; 8/1/2013

Virtual Post Office Box Roundtable Discussion 

Summary; MS-WP-13-003; 6/28/2013

Virtual Post Office Boxes; 

MS-WP-13-002; 4/17/2013

Support Operations

Human Resources and Support

Emergency Preparedness for Hurricane 

Sandy; HR-AR-13-009; 9/30/2013

Employee and Labor Relations Manual 

Revisions; HR-AR-13-005; 8/20/2013

Grievance Settlements and Payments 

Follow Up; HR-AR-13-008; 9/27/2013

Limited Duty and Rehabilitation Employees 

Returned to Work; HR-AR-13-006; 9/12/2013

Overtime Use During Fiscal Years 2011 

and 2012; HR-AR-13-002; 7/5/2013

Postal Career Executive Service I Annual 

Leave; HR-MA-13-003; 7/12/2013

Postal Service Injury Compensation 

Program; HR-AR-13-004; 7/25/2013

Response to Bicameral Task Force on Climate 

Change; HR-MA-13-002; 4/25/2013

Revenue Generation Patents; 

HR-MA-13-004; 9/26/2013

W.F. Bolger Center for Leadership 

Development; HR-AR-13-007; 9/24/2013

Supply Management and Facilities

Accenture Federal Services Contracting 

Practices; SM-MA-13-005; 6/6/2013

Contracting of Real Estate Management 

Services; SM-AR-13-001; 6/12/2013

Enterprise Technology Services 

Program; SM-AR-13-003; 7/18/2013

Independent Audit of Lockheed Martin Mission 

Systems and Training Automated Package 

Processing System Recognition Computer System 

Upgrade Proposal; SM-CAR-13-005; 9/20/2013

Independent Audit of Siemens Industry, Inc. 

Report on Pre-award Accounting System 

Review; SM-CAR-13-004; 4/4/2013

Noncompetitive Purchasing Practices; 

SM-AR-13-004; 9/25/2013

Oversight of Performance-Based 

Contracts; SM-AR-13-002; 6/17/2013

Postal Service Purchasing Policies’ 

Impact on Defective Pricing Fraud 

Cases; SM-MA-13-006; 9/18/2013

Vacant Land Parcels; SM-AR-13-005; 9/30/2013
Semiannual Report to Congress 14 April 1 — September 30, 2013

Appendix A

Delivery and Post Office Operations

Fiscal Year 2013 City Delivery Efficiency Risk 

Model Quarter 2; DR-PM-13-003; 5/17/2013

Fiscal Year 2013 City Delivery Efficiency Risk 

Model Quarter 3; DR-PM-13-004; 8/5/2013

Finance

Fiscal Year 2013 Bank Secrecy Act Risk 

Model Quarter 2; FT-PM-13-006; 5/8/2013

Fiscal Year 2013 Bank Secrecy Act Risk 

Model Quarter 3; FT-PM-13-009; 8/7/2013

Fiscal Year 2013 Business Mail Entry Unit Risk 

Model Quarter 2; FT-PM-13-007; 5/16/2013

Fiscal Year 2013 Business Mail Entry Unit Risk 

Model Quarter 3; FT-PM-13-011; 8/7/2013

Fiscal Year 2013 Financial Cost and Control Risk 

Model Quarter 2; FT-PM-13-008; 5/15/2013

Fiscal Year 2013 Financial Cost and Control Risk 

Model Quarter 3; FT-PM-13-010; 8/20/2013

Human Resources and Support

Fiscal Year 2013 Green Risk Model 

Quarter 2; HR-PM-13-008; 5/15/2013

Fiscal Year 2013 Green Risk Model 

Quarter 3; HR-PM-13-015; 9/12/2013

Fiscal Year 2013 Human Capital Optimization 

Risk Model Quarter 2; HR-PM-13-011; 5/28/2013

Fiscal Year 2013 Human Capital Optimization Risk 

Model 2013 Quarter 3; HR-PM-13-012; 8/15/2013

Fiscal Year 2013 Security Risk Model 

Quarter 2; HR-PM-13-009; 5/16/2013

Fiscal Year 2013 Security Risk Model 

Quarter 3; HR-PM-13-014; 8/28/2013

Fiscal Year 2013 Workplace Environment Risk 

Model Quarter 2; HR-PM-13-010; 5/28/2013

Fiscal Year 2013 Workplace Environment Risk 

Model Quarter 3; HR-PM-13-013; 8/22/2013

Information Technology

Fiscal Year 2013 Information Technology Security 

Risk Model Quarter 2; IT-PM-13-003; 6/7/2013

Fiscal Year 2013 Information Technology Security 

Risk Model Quarter 3; IT-PM-13-004; 7/22/2013

Network Processing and Transportation

Fiscal Year 2013 Machines that Speak Risk 

Model Quarter 2; NO-PM-13-010; 5/30/2013

Fiscal Year 2013 Machines that Speak Risk 

Model Quarter 3; NO-PM-13-012; 8/8/2013

Fiscal Year 2013 Network and Delivery 

Optimization Risk Model Quarter 

2; NO-PM-13-011; 5/15/2013

Fiscal Year 2013 Network and Delivery 

Optimization Risk Model Quarter 3; 

NO-PM-13-015; 9/13/2013

Fiscal Year 2013 Risk Model - Air Transportation 

Quarter 2; NO-PM-13-009; 5/14/2013

Fiscal Year 2013 Risk Model - Air Transportation 

Quarter 3; NO-PM-13-014; 8/13/2013

Fiscal Year 2013 Surface Transportation Risk 

Model Quarter 2; NO-PM-13-008; 5/7/2013

Fiscal Year 2013 Surface Transportation Risk 

Model Quarter 3; NO-PM-13-013; 8/13/2013

Sales and Marketing

Fiscal Year 2013 Cost, Pricing, and Rates Risk 

Model Quarter 2; MS-PM-13-009; 5/20/2013

Fiscal Year 2013 Cost, Pricing, and Rates Risk 

Model Quarter 3; MS-PM-13-012; 8/15/2013

Fiscal Year 2013 Retail Customer Service Risk 

Model Quarter 2; MS-PM-13-008; 5/16/2013

Fiscal Year 2013 Retail Customer Service Risk 

Model Quarter 3; MS-PM-13-010; 8/15/2013

Fiscal Year 2013 Revenue Generation 

and Protection Risk Model Quarter 

2; MS-PM-13-007; 5/16/2013

Fiscal Year 2013 Revenue Generation 

and Protection Risk Model Quarter 

3; MS-PM-13-011; 8/19/2013

Supply Management and Facilities

Fiscal Year 2013 Real Estate Risk Model 

Quarter 2; SM-PM-13-006; 5/16/2013

Fiscal Year 2013 Real Estate Risk Model 

Quarter 3; SM-PM-13-007; 8/8/2013

Fiscal Year 2013 Supplier Solvency Risk 

Model Quarter 2; SM-PM-13-005; 5/15/2013

Fiscal Year 2013 Supplier Solvency Risk 

Model Quarter 3; SM-PM-13-008; 8/8/2013

PARIS Risk Models

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

For the period April 1 — September 30, 2013
Semiannual Report to Congress 15 April 1 — September 30, 2013

Appendix B

APPENDIX B

Findings of Questioned Costs

For the period April 1 — September 30, 2013

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 1 $4,726,009 $2,251,179

Reports requiring management decision that were issued during the reporting period 16 $1,104,835,559 $383,505,966

Totals 17 $1,109,561,568 $385,757,145

Reports for which a management decision was made during the reporting period (i&ii) 16 $1,107,161,568 $383,357,145

 (i) Dollar value of disallowed cost1 8 $898,773,496 $256,685,584

 (ii) Dollar value of cost not disallowed2 9 $208,388,072 $126,671,561

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

Negotiations are ongoing.

1 $2,400,000 $2,400,000

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)

— — —

1 Management partially agreed with the monetary impact in one audit report.

2 Management partially disagreed with the monetary impact in one audit report.

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

None this report period.

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

None this report period.

Note 3 — Contract reports with significant audit finding:

None this report period.
Semiannual Report to Congress 16 April 1 — September 30, 2013

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 13 $11,034,458,086

Totals 13 $11,034,458,086

Reports for which a management decision was made during the report period1 13 $11,034,458,086

 (i) Value of recommendations agreed to by management 9 $10,824,842,385

 (ii) Value of recommendations that were not agreed to by management 6 $209,615,701

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)

— —

1

Management partially agreed with the monetary impact of one audit report.

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 April 1 — September 30, 2013

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.
Semiannual Report to Congress 17 April 1 — September 30, 2013

Appendix D

Appendix D 

Other Impacts

For the period April — September 30, 2013

Overview

Many of our audit reports identify areas for improvements that results 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 SERVICES

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

of its products and services

Number of Recommendations 33

Number of customer service audits conducted Number of Audits 23

SAFEGUARDING ASSETS

Assets or Accountable Items at Risks 

Inadequate internal controls put the value of assets or accountable items (e.g., cash and stamps) at risk of loss Dollar Value $24,105,258

Physical Safety and Security

Dollar value of physical assets (plant, computer equipment, vehicles, etc.) at risk of loss due to inadequate 

physical protection. Dollar Value $777,509

Recommendations that address the safety and security of Postal Service employees and/or the work environment Number of Recommendations 20

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

Information Technology Security

Inadequate controls/protection put the value of data, IT assets (software, networks), 

and employee work time at risk of loss

Dollar Value $102,379,861

Dollar value of data at risk Dollar Value $144,719,892

Number of data security/IT security audits conducted Number of Audits 10

Revenue at Risk

Dollar value of revenue that the Postal Service is at risk of losing 

(mailer seeking alternative solutions for current services). Dollar Value $1,638,114,821

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 26

Misallocation of Costs

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

product specific, or institutional cost Dollar Value —

Capital Investment Savings Shortfall and Predicted Savings Shortfall 

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

the actual savings realized, and the difference between the savings predicted by the Postal Service for a project 

(e.g., capital investment, consolidation, etc.) and the actual savings realized or the OIG estimate of savings that will 

be realized

Dollar Value $1,460,848

Potential Additional Revenue

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

improvements Dollar Value $14,307,898

RELIABILITY OF DATA

Records at Risks

Data at risk of corruption or loss due to inadequate internal controls and/or protection. Number of Data Records at Risk 12,142

Dollar value of data used to support management decisions that is not fully supported or completely accurate. Dollar Value $2,465,121,829
Semiannual Report to Congress 18 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

FF-MA-08-001 07/21/2008 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: September 2013

IS-AR-09-001 10/08/2008 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: February 2013

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: February 2013

IS-AR-09-004 02/20/2009 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 Process. TID: September 2013

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

R-1 — Document the methodology used to develop future performance goals for market-dominant products. TID: December 2012

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: December 2012

IS-AR-10-008 05/04/2010 Certification and Accreditation Process

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 2013

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 2013

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 2013

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: May 2014

R-12— Input the Certification and Accreditation documentation for all critical applications into the central repository. TID: December 2013

CA-AR-10-004 05/27/2010 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 2014

CI-MA-10-001 06/18/2010 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 07/28/2010 Efficiency of Retail Customer Service Operations

R-2 — Explore opportunities to consolidate business mail acceptance operations at post offices, stations, and branches. TID: August 2014

DA-MA-10-004 08/31/2010 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

CA-AR-10-005 09/20/2010 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

APPENDIX E

Reports with Significant Recommendations Pending Corrective Actions

For the period through September 30, 2013

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.
Semiannual Report to Congress 19 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

IS-AR-10-014 09/23/2010 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: December 2014

NL-AR-10-009 09/29/2010 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 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: February 2014

CA-AR-10-006 09/30/2010 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: October 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: February 2014

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

services were rendered prior to payment. TID: October 2014

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

TID: November 2013

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: November 2013

NL-MA-11-001 12/06/2010 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: December 2012

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

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: July 2013

IT-AR-11-004 03/16/2011 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: September 2013

R-4 — Either modify the existing incident management system or pursue development of a new system that enforces date and time value 

sequence and data validation. TID: September 2014

DA-MA-11-002 04/08/2011 Postal Service Patent Management Continuation

R-1 — Work closely with subject matter experts to review highly rated patents to draft claims as appropriate. TID: September 2013

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: September 2013

CA-AR-11-004 04/27/2011 Internal Controls over the Contract Close-out Process

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: December 2013

HR-AR-11-004 05/27/2011 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
Semiannual Report to Congress 20 April 1 — September 30, 2013

Appendix E

DA-AR-11-008 06/08/2011 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: December 2013

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

December 2013

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: December 2013

HR-AR-11-005 08/05/2011 Postal Service Facility Security

R-3 — Issue supplemental guidance and enhance internal controls to ensure security control officers conduct facility security surveys as 

required, corrective actions are taken to address security deficiencies, and security control officers take the mandatory security 

training. TID: August 2012

HR-AR-11-006 08/08/2011 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: April 2013

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: April 2013

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

performance. TID: April 2013

DA-AR-11-010 08/30/2011 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 08/30/2011 Postal Service Refunds

R-2 — Analyze and establish an administrative and minimum fee that will cover processing costs. TID: January 2014

CRR-AR-11-003 09/06/2011 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: November 2013

IT-AR-11-008 09/14/2011 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 2013

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

TID: December 2013

HR-AR-11-002 09/19/2011 Postal Service Work Rules and Compensation Systems 

R-3 — A comprehensive study to determine the optimal incentive-based carrier compensation system. TID: June 2013

FF-AR-11-015 09/23/2011 Business Mail Acceptance Centralization Process 

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: October 2013

R-4 — Establish annual goals for business mail entry workhour efficiency to include measuring performance against goals.

TID: October 2013

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date
Semiannual Report to Congress 21 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

CA-AR-11-007 09/30/2011 Contract Postal Units Contract Oversight 

R-1 — Require Contract Postal Unit contractors to submit invoices for payment. TID: November 2013

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: November 2013

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: November 2013

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: November 2013

HR-AR-11-007 09/30/2011 Postal Service Workers’ Compensation Program

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 2013

MS-AR-11-007 09/30/2011 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: October 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: October 2013

CA-AR-12-001 11/02/2011 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: March 2013

R-3 — Working with Supply Management and Postal Service program officials, ensure that appropriate financial data are collected to aid 

in making in-sourcing/outsourcing decisions. TID: March 2013

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

IT-AR-12-002 01/09/2012 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: January 2014

R-2 — Ensure that administrators obtain required policy exception approvals when system patches are not applied. TID: January 2014

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: January 2014

R-4 — Ensure that configuration management inventory records are reconciled to the actual servers and databases for their respective 

group. TID: December 2013

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: September 2013

R-6 — Implement a common method for all entities to track information technology asset and patch information. TID: July 2014

R-7 — Ensure vulnerability mediation training is provided to all employees and contractors responsible for enterprise patch management.

TID: July 2014

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: July 2014

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: July 2014

IT-AR-12-003 01/09/2012 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: December 2013
Semiannual Report to Congress 22 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

MS-AR-12-002 01/12/2012 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 detached mail unit employees continue to use manual mail verification 

processes. TID: October 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

CI-AR-12-004 02/02/2012 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: August 2013

R-3 — Archive all PostalOne! deleted or canceled permits. TID: April 2015

NL-AR-12-001 02/02/2012 Postal Vehicle Service Transportation Routes – Margaret L. Sellers Processing and Distribution Center

R-2 — Verify the reallocation of 2,424 workhours within existing postal vehicle service (PVS) schedules and reallocate an additional 5,728 

workhours within PVS schedules to accommodate future Flats Sequencing System implementation. TID: November 2012

NL-AR-12-003 03/12/2012 Density of First-Class Mail on Air Transportation 

R-3 — Develop targeted secondary sort programs to process First-Class Mail bound for air transportation to maximize container space.

TID: April 2013

HR-AR-12-002 03/30/2012 Postal Service Mail Security

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

NL-AR-12-005 04/25/2012 Postal Vehicle Service — Nationwide Analysis

R-3 — Encourage area Postal Service officials to negotiate the use of split days off with local union officials where possible to reduce 

operating costs through staff reductions. TID: March 2012

NO-MA-12-001 04/27/2012 Assessment of Overall Plant Efficiency 2012

R-1 — Reduce 14,268,171 workhours by fiscal year 2014 with an associated economic impact of $664,997,872. TID: September 2014

MS-AR-12-003 05/04/2012 Package Delivery Growth

R-2 — Develop enhancements to the CustomerFirst! system to ensure that the data and information contained within are reliable and 

useful. TID: January 2015

R-4 — Evaluate the feasibility of offering a local product the customer either arranges to have picked up or takes to the local Post Office for 

sortation and delivery without involving a mail processing plant. TID: December 2013

R-5 — Continue to pursue legislative change that will allow the Postal Service to ship beer and wine. TID: January 2014

R-6 — Evaluate the feasibility of offering an international service that will allow customers the option of prepaying customs duties and 

taxes. TID: September 2013

NL-AR-12-006 05/29/2012 POSTAL SERVICE INITIATIVE: Consolidation of Mail for Transportation Between Network Distribution Centers

R-3 — Add Jacksonville Network Distribution Center’s Puerto Rico Highway Contract Routes 32202 and 32204 into the consolidation 

initiative. TID: September 2012

DR-AR-12-001 06/05/2012 City Delivery — Street Efficiency San Diego District

R-1 — Reduce 83,943 workhours to achieve an associated economic impact of more than $3.3 million annually or $6.8 million over 

2 years. TID: October 2014

NO-AR-12-005 06/05/2012 Efficiency Review of the Cleveland, OH Processing and Distribution Center 

R-1 — By fiscal year 2017, reduce workhours by 352,388 to produce a cost avoidance of $22.7 million over the following 2 years, 

or through consolidations, increase mail volume by 377 million, or a combination of workhours reductions and mail volume 

increases that will achieve the median productivity level of 1,069 pieces per hour. TID: September 2014
Semiannual Report to Congress 23 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

DR-AR-12-002 06/19/2012 City Delivery — Excess Routes

R-1 — Eliminate 33 excess city delivery routes in their respective districts. TID: May 2013

R-2 — Review delivery units consistently using fewer than projected street hours to make appropriate route adjustments, eliminations, 

and consolidations. TID: May 2013

R-3 — Reallocate the 33 assigned Postal Service-owned delivery vehicles from the eliminated city routes to rural routes to achieve 

an associated economic impact of $250,110 annual discounted savings or $500,220 over 2 years. TID: June 2013

IT-AR-12-008 06/25/2012 Security Awareness Training Program

R-3 — Establish a monitoring process to track user compliance with Handbook AS-805, Information Security, information security 

awareness training requirements. TID: July 2013

R-4 — Work with applicable managers to take appropriate action, including suspending access if necessary, to ensure employees and 

contractors complete the security awareness training in compliance with Handbook AS-805, Information Security, and regulatory 

requirements. TID: January 2014

DA-MA-12-005 07/16/2012 21st Century Post Office: Non-Postal Products and Services

R-1 — Develop a strategy to identify, evaluate, and offer the most promising non-postal products and services, including how to overcome 

identified barriers, when legislation permits. TID: June 2013

NO-AR-12-007 08/03/2012 Efficiency Review of the Los Angeles Network Distribution Center

R-1 — Reduce workhours by 200,019 by fiscal year 2017 to produce an annual cost avoidance of about $6.5 million, or increase volume 

by 39 million pieces, or combine workhour reductions and mail volume increases that will achieve the above average median 

productivity level of 117 pieces per hour. TID: February 2015

CI-AR-12-006 08/14/2012 Delivery Fleet Strategies

R-2 — Establish an annual new vehicle replacement strategy, as part of a comprehensive fleet management strategy, to replace part 

of the fleet each year, spread out the expenditures over time, and ensure the overall operational functionality of the fleet.

TID: September 2016

DR-AR-12-003 08/16/2012 City Delivery — Street Efficiency Capital District

R-1 — Reduce 110,740 workhours to achieve an associated economic impact of $4.5 million annually, or $9 million over 2 years.

TID: October 2014

DR-AR-12-004 08/16/2012 City Delivery — Street Efficiency Louisiana District

R-1 — Reduce 107,550 workhours to achieve an associated impact of more than $4.4 million annually, or $8.8 million over 2 years.

TID: September 2014

EN-AR-12-003 08/17/2012 Efficiency of Customer Service Operations

R-3 — Provide training as needed to customer service managers that would enable them to effectively use managerial reports and tools.

TID: September 2013

DR-AR-12-005 08/21/2012 Carrier Optimal Routing System Phase ll

R-1 — Continue to pursue funding to resolve performance issues with the Web Carrier Optimal Routing system and implement the 

web-based program nationwide. TID: September 2013

R-2 — Re-emphasize performing route adjustments using the Carrier Optimal Routing system to achieve an annual economic impact 

of more than $84 million. TID: None

R-3 — Cross-train existing and additional personnel in both Carrier Optimal Routing system database preparation and route adjustment 

processes to ensure the availability of adequately trained resources. TID: February 2013

DR-AR-12-006 08/24/2012 City Delivery Staffing

R-1 — Balance the number of full-time carriers per route and manage labor cost within established fiscal year budgets. TID: None

R-2 — Continue pursuing the ability to increase the number of part-time, non-career flexible employees at installations nationwide in 

the city letter carrier craft to reduce labor costs. TID: None

DR-MA-12-002 08/24/2012 City Delivery Route Optimization Pilot Initiative

R-2 — Execute a new initiative to maximize savings by using lessons learned and data results from the pilot with the goal of optimizing 

the full- and part-time staff mix. TID: None
Semiannual Report to Congress 24 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

MS-AR-12-007 09/10/2012 Customer Complaint Resolution Process

R-2 — Identify deficiencies and desired enhancements for the Enterprise Consumer Care system and take necessary action to notify the 

Information Technology department. TID: March 2014

R-3 — Develop a mechanism for tracking Enterprise Consumer Care system usage and wait times and ensuring that current archiving 

processes and system outage records are continued. TID: March 2014

IT-AR-12-009 09/12/2012 Security of File Transfer Protocol Transmissions

R-1 — Assign a controlling authority the responsibility for managing all electronic file transfer activities and enforcing electronic file transfer 

policies. TID: September 2017

R-3 — Direct the controlling authority identified in recommendation 1 to develop a business case solution to mitigate and, ultimately, 

eliminate the use of file transfer protocol transmissions to ensure the protection of sensitive data in accordance with 

Handbook AS-805, Information Security. TID: May 2013

R-4 — Conduct periodic security assessments to identify and monitor file transfer protocol usage throughout the Postal Service network.

TID: September 2013

R-5 — Identify, monitor, and remove all unnecessary file transfer protocol services running on all servers and mainframes and identify 

the related sensitive applications. TID: September 2013

R-6 — Implement a secure electronic file transfer protocol for receiving manifest files from external business partners.

TID: September 2017

FI-AR-12-004 09/14/2012 Revenue Sharing Agreements

R-5 — Establish and maintain a central repository for all revenue sharing agreement documentation. TID: May 2013

R-6 — Develop detailed policies and procedures for creating, designing, and monitoring revenue sharing agreements and disseminate the 

new procedures to the entire organization. TID: May 2013

DA-AR-12-002 09/18/2012 Lease Purchase Options for Postal Service Facilities

R-2 — Establish procedures for assigning lease purchase options to third parties in the real estate market. TID: November 2013

HR-AR-12-006 09/21/2012 Motor Vehicle Accident Prevention Program

R-2 — Provide periodic refresher training to supervisors on the Safe Driver Program and ensure employees performing driving 

observations take the Driver Observation training course. TID: June 2013

R-3 — Establish and implement proactive monitoring processes that include using Department of Motor Vehicle’s databases to validate 

driver’s licenses for employees in driving positions. TID: None

NL-AR-12-008 09/21/2012 St. Louis Network Distribution Center — Postal Vehicle Service Operations

R-1 — Periodically assess postal vehicle service spotter truck driver workload and staffing requirements with respect to productivity 

standards to maintain appropriate staffing levels. TID: July 2012

R-3 — Ensure that St. Louis Network Distribution Center management re-emphasis the safety policy that drivers must wear safety belts 

whenever the vehicle is in motion and provide management oversight for enforcement. TID: September 2012

CA-AR-12-006 09/28/2012 Oversight of Equitable Adjustments

R-1 — Require contracting officers to include a general release of claims in all supplemental agreements that constitute a release by 

the supplier for additional costs beyond that which is provided for in the contract modification or a more specific release in complex 

or contentious equitable adjustments. TID: November 2012

R-3 — Reiterate the contract file tracking process to ensure contract files are not lost when they are transferred from one office to another.

TID: December 2013

CI-AR-12-007 09/28/2012 Post-Implementation Review Process

R-1 — Improve the Post-Implementation Review (PIR) process in Handbook PO-408, Area Mail Processing Guidelines, to identify and 

separate savings and costs associated with concurrent initiatives from savings and costs directly related to the area mail processing 

consolidation, implement the use of automated data calculation and pre-population for PIR worksheets and checklists, establish 

a process to allocate savings and costs when multiple consolidations are made into the same gaining facility, and assess whether 

current PIR timelines should be adjusted. TID: March 2014

DA-AR-12-004 09/28/2012 Accuracy of the Electronic Facilities Management System 

R-1 — Modify the Electronic Facilities Management System to address inconsistency in data entry, including the use of drop-down lists and 

requiring completion of all data fields. TID: December 2012

R-2 — Develop a plan to require annual review and validation of all Electronic Facilities Management system data by Facilities Service 

Office personnel. TID: August 2013

R-3 — Develop and administer training for the use of Electronic Facilities Management System. TID: None
Semiannual Report to Congress 25 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

DA-MA-12-006 09/28/2012 Partnerships with Other Government Agencies

R-1 — Clearly define organizational roles and responsibilities for developing and managing partnerships with other federal agencies 

and establish a written policy to identify, develop, track, and follow-up on potential partnership opportunities. TID: February 2013

DR-MA-12-003 09/28/2012 City Delivery Operations - Lancaster Carrier Annex

R-1 — Reduce 12,339 office and street workhours in fiscal years 2013 and 2014 to achieve an annualized economic impact of $515,838, 

or $1,031,676 over 2 years. TID: September 2014

NL-AR-12-010 09/28/2012 First-Class Mail on Air Transportation — Assignment by Weight

R-1 — Modify the assignment process to assign First-Class Mail to air transportation considering weight where feasible, with the heavier 

mail being assigned to FedEx and the lighter mail being assigned to United Parcel Service and commercial passenger air carriers – 

with consideration of contractor service performance and future air transportation contract requirements. TID: December 2014

NL-AR-12-011 09/28/2012 Mail Transport Equipment – Shortages of Pallets, Tubs, and Trays – Fall 2011 Mailing Season

R-1 — Finalize procedures, processes, and guidelines to ensure there is effective planning and budgeting for Mail Transport Equipment 

(MTE) needs for the fall mailing season, taking into consideration operational and customer needs, financial condition, MTE 

leakage, and MTE condemnation. TID: July 2013

R-2 — Finalize implementation of prior U.S. Postal Service Office of Inspector General recommendations from the Management of Mail 

Transport Equipment (MTE) – National Analysis audit (Report Number NL-AR-10-009, dated September 29, 2010) covering an 

automated inventory and tracking system, ensuring adequate resources for areas and plants, and update policies and procedures 

that support current MTE operational requirements. TID: October 2013

R-3 — Finalize processes and procedures (considering costs and benefits) to limit or better control distribution and have visibility of 

Mail Transport Equipment distributed to mailers and other customers. TID: January 2014

R-4 — Evaluate the best practices identified in this report and identify any applicable industry best practices for implementation 

(considering costs and benefits), such as the viability of implementing Radio Frequency Identification technology to control the 

leakage of plastic pallets and reduce annual purchase of replacement plastic pallets. TID: March 2013

DA-MA-13-001 10/02/2012 Biohazard Detection System Progress

R-1 — Complete a comprehensive update to the 2002 threat assessment to determine risks to the mail stream prior to procuring new 

biohazard detection equipment. TID: September 2013

R-2 — Develop a policy requiring periodic update of threat assessments. TID: July 2013

IT-AR-13-001 10/05/2012 Information Technology – Contractor Timecard Approvals in the Program Cost Tracking System

R-2 — Make improvements to the Program Cost Tracking System procedures to ensure program managers validate their assigned project 

timecards initially approved by Information Technology Business Management. TID: September 2013

CA-AR-13-001 10/09/2012 Best Value in the Purchasing Process 

R-2 — Update the contract file transfer process to include a step to require the receiving contract officials to certify that contract files 

contain required documentation. TID: December 2013

DR-AR-13-001 10/11/2012 Delivery Operations Data Usage 

R-1 — Streamline systems, reports (including exception based reporting) and data (including real-time data) to meet city delivery needs.

TID: June 2012

R-2 — Re-emphasize city delivery operating procedures to new supervisors and managers. TID: October 2012

FT-AR-13-001 10/19/2012 Officer Compensation for Calendar Year 2011

R-1 — Coordinate with the Board to ensure the Postal Service reports to the Office of Personnel Management and Congress a complete 

list of critical senior executive or equivalent positions allowed to receive total compensation in an amount not to exceed 120 percent 

of the total annual compensation payable to the vice president of the U.S. TID: September 2013

R-2 — Request an interpretation from the Government Accountability Office on whether annuity payments are considered in an employee’s 

total compensation and subject to the Postal Act of 2006 compensation caps. TID: September 2013

MS-AR-13-001 12/06/2012 Delivery Unit Optimization Initiative 

R-1 — Revise delivery unit optimization guidelines to include a well-defined, consistent methodology for projecting cost savings and 

operational efficiencies. TID: March 2013

R-2 — Develop a process to ensure the revised guidelines are applied consistently and post consolidation reviews are performed to 

accurately validate savings and efficiencies. TID: March 2013

SM-MA-13-001 12/17/2012 Accenture Federal Services Contracts

R-3 — Revise the policy and clauses for time and material contract types to include a definition of material handling costs and exclude 

payment of profit or handling fees on materials. TID: March 2013
Semiannual Report to Congress 26 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

HR-AR-13-001 12/24/2012 Workers’ Compensation Data Systems

R-1 — Provide additional training for personnel responsible for entering and monitoring data in the Employee Health and Safety system.

TID: None

R-2 — Issue supplemental guidance and enhance internal controls to ensure that responsible officials consistently adhere to workers’ 

compensation claims management procedures. TID: None

R-3 — Assess options to enhance and integrate the reporting capabilities of the Injury Compensation Performance Analysis System to 

provide management with data necessary for effective analysis and decision making. TID: None

DP-AR-13-001 01/03/2013 Caller and Reserve Service Operations

R-1 — Implement, if feasible, an automated process to identify all inactive or unassigned caller and reserve service addresses by linking 

mailing data systems to the Web Box Activity Tracking System. TID: August 2013

R-3 — Update caller and reserve service policies and procedures so they are consistent, clear, accurate, and easily located and accessible 

in one place. TID: January 2014

IT-AR-13-003 01/28/2013 Fiscal Year 2012 Information Technology Internal Controls 

R-3 — Implement corrective actions as coordinated between the Information Technology Sarbanes-Oxley Compliance Management 

Office and the Postal Service Office of Inspector General during the audit relating to use of scans, scripts, and monitoring efforts to 

confirm the installation and reporting of intrusion detection and prevention software or services on all in-scope Windows and UNIX 

servers. TID: December 2013

R-4 — Implement corrective actions as coordinated between the Information Technology Sarbanes-Oxley Compliance Management Office 

and the Postal Service Office of Inspector General during the audit relating to segregation of duties in the regular reviews of actions 

taken to assess Guardium log records. TID: December 2013

R-6 — Implement corrective actions as coordinated between the Information Technology Sarbanes-Oxley Compliance Management Office 

and the Postal Service Office of Inspector General during the audit relating to compliance with expected Windows operating system 

configurations on in-scope servers. TID: December 2013

R-8 — Implement corrective actions as coordinated between the Information Technology Sarbanes-Oxley Compliance Management Office 

and the Postal Service Office of Inspector General during the audit relating to redesign of the control over UNIX configurations to 

remove duplication and better reflect expectations for controls over financial reporting. TID: December 2013

R-9 — Implement corrective actions as coordinated between the Information Technology Sarbanes-Oxley Compliance Management Office 

and the Postal Service Office of Inspector General during the audit relating to alignment of the procedures and processes used to 

test and approve UNIX patches before implementation in the production environment. TID: December 2013

SM-MA-13-004 02/12/2013 Hybrid Mail Efforts

R-1 — Develop a business strategy to increase hybrid mail revenue for small- and medium-sized businesses if profitable and feasible 

(including transactional mail) and overcome privacy concerns. TID: None

IT-AR-13-004 03/04/2013 Web Server Security Assessment

R-4 — Review web server configurations in accordance with policy to ensure servers remain configured according to security standards.

TID: September 2013

SM-MA-13-002 03/15/2013 Trends and Systemic Issues in Defense Contract Audit Agency Audit Work for Fiscal Years 2009-2012

R-1 — Emphasize to contracting officials the importance of requesting Defense Contract Audit Agency audits to support decisions in 

awarding and managing contracts. TID: October 2013

MS-AR-13-005 03/18/2013 Residential Customer Service Experiences

R-1 — Update the residential Customer Experience Measurement survey to allow customers to provide more definitive location identifiers 

(for example, Post OfficeTM name, city, and ZIP Code) that relate to their experiences. TID: March 2014

R-2 — Develop a process to collect and analyze residential customer experience information from other access channels.

TID: March 2014

R-3 — Develop a strategy to design and implement corrective actions in a more timely and response manner when poor customer service 

experience scores are identified. TID: December 2013

R-4 — Ensure that mechanisms are developed and implemented to track residential customer experiences as key operational initiatives 

are taken to improve the Postal Service’s financial condition. TID: December 2013
Semiannual Report to Congress 27 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

DR-MA-13-001 03/21/2013 Lessons Learned From Retail Optimization Initiatives

R-1 — Process and approve or disapprove the remaining 600 Retail Access Optimization Initiative discontinuance proposals.

TID: September 2014

R-2 — Enhance communication plans with stakeholders by providing consistent, accurate, and timely information that supports 

retail optimization initiatives. TID: None

R-3 — Develop and implement a formal post-implementation review that evaluates savings achieved and potential revenue loss 

associated with retail network realignments. TID: November 2014

NO-AR-13-001 03/21/2013 Washington Network Distribution Center – Postal Vehicle Service Operations

R-1 — Follow prescribed Postal Service standard operating procedures to the extent possible for live loading mail into trailers for 

immediate movement from the facility yard and consider the reduction of moves in future workload and staffing analyses.

TID: March 2013

R-2 — Periodically assess Postal Vehicle Service truck driver workload and staffing requirements with respect to productivity standards 

to maintain appropriate staffing levels. TID: April 2013

R-3 — Eliminate 3,492 annual workhours associated with improving Postal Vehicle Service truck driver productivity to the Breakthrough 

Productivity Initiative standard of 40 moves per day, or 200 moves per week. TID: February 2013

R-4 — Ensure managers within the Capital Metro Area follow prescribed highway contract procedures for making highway contracts 

efficient, including the continual monitoring and adjustment of trips based on need. TID: May 2013

R-5 — Verify the elimination or modification of 24 trips from highway contracts initiated by management during our audit for a savings of 

about $800,000 annually. TID: March 2013

R-6 — Eliminate or modify 36 trips from highway contracts identified during our audit for a savings of about $1.3 million annually.

TID: January 2013

R-7 — Continually re-emphasizes the safety policy that drivers must wear safety belts whenever their vehicles are in motion, and provide 

management oversight for enforcement. TID: January 2013

R-8 — Ensure Postal Service management repairs exterior doors that have broken locks and security badge readers that do not operate 

and hold safety talks with all employees to highlight that security policy states exterior doors are not to be propped open with any 

devises to bypass security. TID: December 2012

NO-MA-13-004 03/27/2013 Lessons Learned from Mail Processing Network Rationalization Initiatives

R-1 — Improve the communication process by ensuring accurate and consistent information is shared with stakeholders on consolidation 

impacts. TID: April 2013

NO-AR-13-002 03/29/2013 Postal Service Performance During the Fiscal Year 2013 Fall Mailing Season

R-1 — Coordinate with area vice presidents to ensure that all field personnel properly color code Standard Mail in accordance with Postal 

Service policy and store mail transportation equipment to facilitate mail flow. TID: August 2013

NO-MA-13-005 04/04/2013 Supervisor Workhours and Span of Control

R-2 — Fill vacant supervisor positions up to the appropriate span of control level and reduce supervisor replacement workhours 

accordingly. TID: October 2013

DP-AR-13-004 04/23/2013 U.S. Postal Service Data Governance

R-1 — Direct the vice president, Information Technology, to implement a formal, enterprise-wide data governance program.

TID: December 2013

MS-AR-13-007 04/29/2013 Domestic Negotiated Service Agreements

R-1 — Develop and implement standardized procedures for managing negotiated service agreements. The procedures should include 

requirements for validating data used by individuals for various internal and external reporting purposes. TID: October 2013

R-2 — Create a data retention policy and central repository for data archival. Specifically, the data should be retained throughout the life 

of the NSA and for a specified period after the agreement expires or is terminated. Historical data should include the methodology 

the Postal Service uses to project a customer’s mail volume to determine discounts, a comparison of the mailer’s pre-agreement 

volumes with its annual volumes under the NSA, and analyses of data from other mailers with similar NSAs. TID: October 2013

DR-MA-13-002 05/06/2013 U.S. Postal Service Parcel Delivery Lockers

R-1 — Adjust access and implementation factors in the pilot to maximize customer utilization. TID: September 2013

R-2 — Add revenue and cost reduction features to the pilot to maximize return-on-investment opportunities. TID: September 2013

R-3 — Implement parcel locker best practices and strategies from international entities in the pilot where applicable. TID: September 2013
Semiannual Report to Congress 28 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

DP-AR-13-006 05/23/2013 Management of Detail Assignments

R-1 — Designate overall responsibility for managing detail assignments and associated travel costs to an appropriate functional area 

to ensure detailed assignment compliance, effectiveness, and efficiency. TID: August 2014

DR-AR-13-004 05/24/2013 City Delivery Street Efficiency Southern, Pacific, and Western Areas

R-1 — Reduce 340,499 workhours in the five districts cited. TID: None

SM-AR-13-002 06/17/2013 Oversight of Performance-Based Contracts

R-2 — Ensure that clear policy guidance is provided for contracting officers when considering the use of performance-based contracting.

TID: January 2014

R-3 — Provide training to contracting officers on the use of performance-based contracting methods. TID: January 2014

DP-AR-13-008 06/19/2013 Delivering Results, Innovation, Value, and Efficiency Management

R-1 — Evaluate implementing regular audits and controls for each project at the program management level. TID: September 2013

R-2 — Develop and implement a Postal Service-wide program management policy that identifies the best practices currently employed 

by the Postal Service, as well as differentiates between mandated and optional practices. This process should also take into 

consideration best practices, including those provided by the Postal Service Office of Inspector General. TID: March 2014

MS-AR-13-009 06/20/2013 Small Business Growth

R-3 — Establish a process for improving the availability and use of sales-related tools, market data, and training. The process should 

include providing postmasters additional training on selling Postal Service products and services, updating data in the Business 

Opportunity Tool Kit, and providing postmasters with product sales scripts and market data. TID: June 2014

HR-AR-13-002 07/05/2013 Overtime Use During Fiscal Years 2011 and 2012

R-1 — Require responsible management officials to conduct complement analyses and establish staffing plans for the Houston, Chicago, 

South Florida, and Hawkeye Districts to better align the workforce to the workload. TID: February 2014

R-2 — Require responsible officials at identified mail processing facilities and delivery units to implement a plan to ensure mail arrival 

times and carrier schedules are aligned to minimize stand-by time and associated overtime. TID: February 2014

R-3 — Implement controls to ensure supervisors at the Fort Dearborn, Roberto Clemente, and Cragin Stations take advantage of pivot 

opportunities and conduct street supervision of carriers. TID: September 2013

R-4 — Pursue changes to local agreements in the Houston District associated with strict rotation and the requirement for the 

Postal Service to pay letter carriers an additional $10 per hour for any hour they work after 5:15 p.m. TID: February 2014

HR-MA-13-003 07/12/2013 Postal Career Executive Service I Annual Leave

R-1 — Clarify the annual leave policy (with examples) to include how various ways of using annual leave satisfy the requirement to use 80 

hours annually and communicate to applicable personnel. TID: January 2014

R-2 — Modify and test leave system controls to ensure U.S. Postal Inspection Service Postal Career Executive Service I equivalent 

employees’ annual leave amounts are calculated according to Postal Service policy, and communicate policy to applicable 

personnel. TID: January 2014

HR-AR-13-004 07/25/2013 Postal Service Injury Compensation Program

R-1 — Conduct a formal staffing analysis to determine the number and type of employees needed to handle workers’ compensation 

claims, including Health and Resource Management specialists, internal or contract nurses, specially trained or contract third-party 

recovery specialists, or other support personnel and adjust staffing accordingly. TID: October 2013

R-2 — Establish performance measures or other incentives for district managers based on chargeback reductions. TID: October 2013

R-3 — Complete implementation of Rehabilitation Program Committees nationwide to include developing standard guidelines to facilitate 

returning injured employees to work. TID: October 2013

R-4 — Complete the nationwide implementation of WebESP to provide a more efficient and effective process for identifying and assigning 

available work for injured employees. TID: March 2014

R-5 — Develop a simplified and standardized quick reference guide of key process steps to help district Health Resource Management 

staff effectively perform their duties. TID: October 2013

R-8 — Evaluate how predictive analytics can be used to support claims management activities and reduce costs. TID: None

IT-AR-13-006 07/31/2013 Management and Utilization of Software Licenses 

R-2 — Establish an enterprise-wide inventory listing of all software installed on the Postal Service’s network. TID: January 2014

R-4 — Require management to establish and maintain an enterprise-wide software inventory list and periodically scan workstations 

to identify unauthorized software products running on the Postal Service network. TID: January 2014
Semiannual Report to Congress 29 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

DR-MA-13-003 08/06/2013 Delivery Data Transmission

R-1 — Issue guidance on conducting a refresher stand-up talk to carriers showing how to connect cell phones and Intelligent Mail Data 

Devices and noting the importance of the connection. TID: July 2012

R-2 — Ensure that an onscreen connectivity indicator is installed on either carrier cell phones or Intelligent Mail Data Device scanners.

TID: June 2013

R-3 — Modify the Intelligent Mail Device Acquisition System report for delivery unit management to provide unit and route specific 

information on cell phone and Intelligent Mail Data Device scanner connectivity. TID: October 2013

NO-MA-13-006 08/07/2013 Modified Altoona, PA Originating and Destinating Area Mail Processing Package

R-1 — Make necessary corrections in the revised Area Mail Processing package by adjusting workhours and employee complement 

accordingly and then determine whether they should pursue the additional consolidation to include some of the Altoona’s 

designating operations. TID: July 2013

MS-MA-13-004 08/14/2013 Benchmarking of Postal Service’s Costing Methodologies

R-1 — Develop a formal process, in coordination with the chief information officer and chief operating officer, to strengthen the 

communication process between Finance, Operations, and users of the product costing system data regarding data needs and 

production. TID: July 2016

R-2 — Establish a long-term implementation plan, in coordination with the chief information officer and chief operating officer, to expand 

usage of system-generated data that includes a data transition roadmap. TID: July 2016

R-3 — Expand usage of currently available system-generated data from operations or data that can be available in the near term to enable 

the product costing system to rely more on operations data and less on special studies. TID: July 2016

R-4 — Evaluate the feasibility of performing cost and revenue analysis at the ZIP Code level or relevant regional areas to support 

development of customer-specific rates for those products for which such price distinctions are considered legal. TID: None

NO-AR-13-004 08/16/2013 New Castle and Greensburg, PA Consolidation

R-1 — Coordinate with the Facility Service Office when rental space is vacated to ensure management takes appropriate lease termination 

actions. TID: July 2013

NO-AR-13-005 08/16/2013 Efficiency Review of the Atlanta Network Distribution Center — Processing and Transportation

R-1 — Improve the efficiency of the Atlanta Network Distribution Center’s mail processing operations by attaining the above-average 

median productivity level of 119 pieces per workhour by Fiscal Year 2016. TID: September 2013

R-2 — Realign, remove, and modify Highway Contract Route transportation associated with the Atlanta and Memphis Network Distribution 

Centers. TID: October 2013

R-3 — Reinforce field compliance with Network Distribution Center guidelines for properly sorting, labeling, and consolidating mail prior 

to transport. TID: September 2013

R-4 — Reinforce existing safety procedures requiring restraint of Mail Transport Equipment rolling stock containers in trailers.

TID: August 2013

HR-AR-13-005 08/20/2013 Employee and Labor Relations Manual Revisions

R-1 — Implement procedures to update the Employee and Labor Relations Manual on a regular basis to ensure that it is current, accurate, 

and complete. TID: December 2013

R-2 — Clearly identify functional organizations responsible for Employee and Labor Relations Manual section and chapter contents and 

communicate that information to appropriate stakeholders. TID: December 2013

NO-AR-13-006 08/26/2013 Springfield Network Distribution Center — Postal Vehicle Service Operations

R-3 — Eliminate an additional 8,623 annual workhours associated with improving Postal Vehicle Service driver productivity to the standard 

of five moves per hour. TID: September 2013

SM-MA-13-006 09/18/2013 Postal Service Purchasing Policies’ Impact on Defective Pricing Fraud Cases

R-1 — Require suppliers to certify that cost or pricing data is accurate, complete, and current. TID: March 2014

HR-AR-13-007 09/24/2013 W.F. Bolger Center for Leadership Development

R-1 — Establish an accounting methodology to allocate all W.F. Bolger Center for Leadership Development operating costs between 

internal and external customers. TID: December 2013

R-2 — Conduct at least one formal audit of the contractor’s financial records annually. TID: None
Semiannual Report to Congress 30 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

IT-AR-13-007 09/24/2013 Engineering Systems and Network Operations Disaster Recovery Plan — Merrifield, VA Campus

R-1 — Establish, implement, and test a disaster recovery plan for Engineering Systems and Network Operations in Merrifield, VA that is 

commensurate with the sensitivity of data, available resources, and level of risk for the applications and incorporates an appropriate 

alternative site located far enough away from the Merrifield campus that it will not be affected by the same disaster. TID: May 2014

R-2 — Timely complete or update, as appropriate, business impact or infrastructure impact assessments for all applications supported by 

Engineering Systems. TID: December 2013

IT-AR-13-008 09/25/2013 Availability of Critical Applications

R-2 — Provide the guidance developed by the Retail Business Technology group for Point of-Service (POS)–Retail users on how to 

respond to an outage or a POS–Retail terminal in degraded mode. TID: November 2013

NO-AR-13-007 09/25/2013 Surface Visibility — Transportation Operations — Oklahoma District

R-1 — Ensure the containers coming from the mail processing operations have the proper barcoded placards so they can be scanned.

TID: October 2013

R-2 — Eliminate the prescan barcode workarounds and any unnecessary manual inputs and follow prescribed scan procedures.

TID: October 2013

R-3 — Put controls in place to prevent recurrence of improper scanning. TID: October 2013

R-4 — Retrain employees on the proper Surface Visibility policies and procedures regarding scanning. TID: November 2013

R-5 — Verify and document the elimination or modification of 38 trips from highway contract routes in the Oklahoma District and eliminate 

3,636 workhours from Postal Vehicle Service trip schedules assigned to the Tulsa Processing and Distribution Center, or document 

the reasons for retaining the workhours. TID: November 2013

SM-AR-13-004 09/25/2013 Noncompetitive Purchasing Practices

R-1 — Direct contracting officials to include and verify that sufficient information is in the contract file to support price and cost analysis.

TID: December 2013

R-2 — Reiterate policy that field personnel not approve suppliers to start work without authorization from the contracting officer.

TID: December 2013

R-3 — Ensure contracting officials collaborate with the competition advocate and internal business partners requesting purchases to 

promote increased competition when awarding contracts. TID: December 2013

HR-MA-13-004 09/26/2013 Revenue Generation Patents

R-1 — Work closely with subject matter experts to review patents with revenue generation potential and draft claims as appropriate.

TID: None

IT-AR-13-009 09/26/2013 LiteBlue Security Assessment

R-1 — Enhance access controls to all Postal Service employee self-service applications. TID: February 2014

R-3 — De-identify personally identifiable information on forms loaded into the employee self-service module of the electronic Official 

Personnel Folder application. TID: None

R-4 — Re-enable system banners after patching is complete. TID: None

R-5 — Implement database auditing and logging on all databases that contain personally identifiable information. TID: None

R-8 — Develop a method by which database administrators can obtain information on specific requirements and authorizations for each 

application to track authorized account settings and parameters. TID: None

NO-MA-13-007 09/26/2013 Assessment of Overall Plant Efficiency 2013

R-1 — Reduce 14,364,398 workhours by fiscal year 2018, with an associated economic impact of $628,670,104. TID: September 2018

FT-MA-13-022 09/27/2013 Using U.S. Postal Service-Specific Assumptions for Calculating the Retiree Health Care Liability

R-1 — Coordinate with the Office of Personnel Management to modify the future retiree health care liability calculation to use actuarial 

assumptions specific to the Postal Service. TID: None

FT-MA-13-023 09/27/2013 Using U.S. Postal Service-Specific Assumptions for Calculating the Civil Service Retirement System Liability

R-1 — Coordinate with the Office of Personnel Management to modify the future Civil Service Retirement System liability calculation to 

use actuarial assumptions specific to the Postal Service. TID: None

FT-MA-13-024 09/27/2013 Using U.S. Postal Service-Specific Assumptions for Calculating the Federal Employees Retirement System Liability

R-1 — Coordinate with the Office of Personnel Management to modify the future Federal Employees Retirement System liability 

calculation to use actuarial assumptions specific to the Postal Service and, based on the results, take action as appropriate.

TID: None
Semiannual Report to Congress 31 April 1 — September 30, 2013

Appendix E

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

HR-AR-13-008 09/27/2013 Grievance Settlements and Payments Follow Up

R-1 — Issue a reminder, re-emphasizing to managers the importance of adhering to existing internal control guidelines, specifically as 

they relate to using Grievance Arbitration Tracking System alerts to monitor grievance activity and document handling to ensure 

completeness of grievance case files. TID: December 2013

MS-AR-13-012 09/27/2013 Electronic Parcel Payment Systems Internal Control Requirements

R-2 — Develop interim controls, such as establishing roles and responsibilities in the identification of shortpaid mailpieces, providing 

enhanced scanners to clerks and carriers, judgmentally sampling PC Postage parcels at sorting facilities and delivery units, and 

increasing the accuracy of scales on mail processing equipment, to improve detection of shortpaid parcels until automated controls 

are in place. TID: June 2014

R-4 — Implement software changes to the Electronic Verification System in order to correctly validate destination entry rates claimed by 

mailers. TID: January 2015

NO-AR-13-008 09/27/2013 Nationwide Analysis of Tier 1 Network Distribution Centers – Postal Vehicle Service Operations 

R-1 — Require the six Tier 1 Network Distribution Centers identified in the report conduct an assessment of driver workload and staffing 

and make appropriate adjustments to workhours based on compliance with yard move productivity standards. TID: January 2015

R-2 — Ensure Tier 1 Network Distribution Centers annually assess Postal Vehicle Service driver workload and staffing requirements.

TID: January 2015

DR-AR-13-007 09/30/2013 Vehicle Maintenance Facility Efficiency Capital Metro and Pacific Areas 

R-1 — Fill vacant mechanic and support staff positions to improve inefficiencies in operations. TID: None

R-2 — Assess the reporting structure for vehicle operations maintenance assistants (VOMAs) and require vehicle maintenance managers, 

or designees, to provide adequate oversight of VOMAs to ensure they perform their vehicle maintenance-related duties. TID: None

HR-AR-13-009 09/30/2013 Emergency Preparedness for Hurricane Sandy

R-1 — Provide periodic training to responsible personnel to ensure they are aware of procedures for safeguarding employees during an 

emergency. TID: None

R-2 — Clarify policies and procedures regarding employees reporting to postal facilities where mandatory evacuation orders have been 

issued. TID: March 2014

R-3 — Issue supplemental guidance for holding mail and moving mail and other assets from facilities located in mandatory evacuation 

areas. TID: March 2014

R-4 — Establish controls to ensure integrated emergency management plans are reviewed, approved, and updated at least annually. 

TID: December 2013

R-5 — Clarify which facilities are required to maintain complete, approved integrated emergency management plans and communicate 

that to appropriate personnel. TID: December 2013

NO-AR-13-009 09/30/2013 Timeliness of Mail Processing at the Hartford, CT Processing and Distribution Center

R-1 — Adjust planning and scheduling to accommodate mail volumes especially during holiday periods. TID: None

SM-AR-13-005 09/30/2013 Vacant Land Parcels

R-1 — Declare the land parcel located in Norman, OK as excess. TID: June 2014

R-3 — List the Elk River, MN; Norman, OK; and Islip, NY parcels for sale. TID: June 2014

R-4 — Evaluate the eight parcels in Kahului, HI; Cooper City, FL; Stuart, FL; Kihei, HI; Pahoa, HI; Incline Village, NV; Mendocino, CA; and 

Pinetop, AZ and develop a strategy to sell the properties when market conditions improve. TID: None

R-5 — Evaluate the 10 additional parcels in Apache Junction, AZ; Central, AZ; Tehachapi, CA; Marengo, IN; Kokomo, IN; Hilton Head, SC; 

Garland, TX; Loiza, PR; Viequez, PR; and San Juan, PR to determine whether they are suitable for sale. TID: None
Semiannual Report to Congress 32 April 1 — September 30, 2013

Appendix F

APPENDIX F 

Significant Management Decisions in Audit Resolution 

For the period April 1 — September 30, 2013

As required by the IG Act, the following discusses information concerning any significant management decision with which the Inspector General disagrees 

and is currently in audit resolution.

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 reviews that remain outstanding or have not been fully implemented.

Office of Audit

Internal Peer Reviews

None conducted during this period.

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.

Report Number Issue Date

Report Title, Recommendation Summary 

R = Recommendation number

TID = Target Implementation Date

SM-MA-13-006 09/18/2013 Postal Service Purchasing Policies’ Impact on Defective Pricing Fraud Cases

R-1 — Require suppliers to certify that cost or pricing data is accurate, complete, and current. TID: None
Semiannual Report to Congress 33 April 1 — September 30, 2013

Appendix H

For the period October 2012 — September 30, 2013

Investigations 

Closed Arrests

Indictments / 

Information Convictions**

Admin 

Action 

Taken

Cost 

Avoidance

Fines / 

Restitution, 

and Recoveries

Amount to 

USPS***

To Mgmt. for 

Admin Action

Contract Fraud 205 10 11 23 123 136,710,309 200,467,901 94,636,338 55

Financial Fraud 470 118 84 130 303 8,269,220 2,990,196 2,868,277 311

General Crimes 728 68 35 67 562 62,500 563,217 353,774 482

Healthcare Fraud 877 57 46 43 188 227,272,433 1,884,606,581 48,235,986 200

Internal Mail Theft 1,514 339 239 352 854 — 7,980,098 350,263 720

Total 3,794 592 415 615 2,030 372,314,462 2,096,607,993 146,444,638 1,768

APPENDIX H

Investigative Statistics*

For the period April 1 — September 30, 2013

Investigations 

Closed Arrests

Indictments / 

Information Convictions**

Admin 

Action 

Taken

Cost 

Avoidance

Fines / 

Restitution, 

and Recoveries

Amount to 

USPS***

To Mgmt. for 

Admin Action

Contract Fraud 110 5 6 10 66 17,025,985 68,153,767 67,973,902 25

Financial Fraud 264 64 41 64 173 2,191,900 1,229,121 1,166,463 153

General Crimes 446 43 25 41 328 — 355,490 192,560 237

Healthcare Fraud 485 27 28 21 109 127,818,526 5,503,623 4,551,777 92

Internal Mail Theft 838 193 137 182 499 — 4,429,449 131,292 374

Total 2,143 332 237 318 1,175 147,036,411 79,671,450 74,015,994 881

Whistleblower Reprisal Activity

Allegations Received 172

OIG Investigations Initiated 18

Investigations Closed with No Action 21

Allegations Closed with No Action 181

Open Investigations (As of Last Day) —

OIG Found Reprisal —

Whistleblower Reprisal Activity

Allegations Received 88

OIG Investigations Initiated 5

Investigations Closed with No Action 10

Allegations Closed with No Action 88

Open Investigations (As of Last Day) —

OIG Found Reprisal —

* 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.

* 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.

Whistleblower Reprisal Activity

The Whistleblower Protection Act does not apply to the Postal Service. However, the Postal Service has its own policy governing whistleblower retaliation. 

The policy prohibits retaliation against employees who have disclosed information they reasonably believe to be: 1) a violation of any rule, law or regulation, or 2) 

a gross waste of funds, gross mismanagement, abuse of authority, or a substantial and specific danger to public health or safety.

For the period April 1 — September 30, 2013 For the period October 2012 — September 30, 2013
Semiannual Report to Congress 34 April 1 — September 30, 2013

Appendix I

Appendix I

Summary of U.S. Postal Inspection Service Actions Under 39 USC § 3005 and 3007

For the period April 1 - September 30, 2013

Financial Reporting on 

Investigative Activities for the 

Postal Inspection Service 

Type

Personnel 172,951,164

Nonpersonnel 35,887,643

TOTAL 208,838,806

Total Capital Commitments 946,439

Type of Scheme

Complaints 

Filed

Consent 

Agreements FROs C&D Orders

Advanced Fee 1 1 — 1

Charity 1 1 — 1

Counterfeit Financial Instruments 10 10 — 10

Coupon/Rebate Fraud 2 2 — 2

False Billings 5 5 6 11

Fraudulent Postage 8 8 — 8

Identity Theft 1 1 — 1

Medical Product Fraud — — — —

Merchandise: Failure to Furnish 5 5 — 5

Merchandise: Failure to Pay 2 4 — 3

Misrepresentation 5 5 1 5

Other 6 6 — 6

Reshipping Scheme 18 18 1 19

Sweepstakes/Lottery 47 49 14 50

Work at Home 6 6 — 6

TOTAL 117 121 22 128

Other Administrative Actions

Administrative Action Requests 117

Temp. Restraining Orders Requested —

Temp. Restraining Orders Issued —

Cases Using Direct Purchase Authority —

Civil Penalties (Section 3012) Imposed —

Test Purchases —

Withholding Mail Orders issued 

(includes 1 Petition) 26

Voluntary Discontinuances —

Administrative Subpoenas Requested by the Postal Inspection Service

There was one request during the reporting period.
Semiannual Report to Congress 35 April 1 — September 30, 2013

Appendix J

APPENDIX J

All Closed Congressional/ PMG/BOG Inquires

For the period April 1 — September 30, 2013

This appendix lists the congressional, postmaster general, 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. Inquires are listed in the chronological order of 

receipt.

Inspector General Investigations (58)

Requestor Allegation/ Concern Major Findings Closure Date

Representative, 

New York

Status of complaint about theft of multiple stamp orders 

from the Stamp Fulfillment Center in Kansas City

We monitored deliveries and conducted surveillance and testing 

in 2012. This culminated in the recovery of stolen stamps, other 

illegal items, including a firearm. We recognized a loss to the 

Postal Service of more than $5,700. In 2012, the US Attorney for the 

Southern District of New York accepted the case for prosecution.

09/16/13

Representative, 

Georgia

Hostile work environment and postal management misconduct, 

e.g., harassment, discrimination, and intimidation

We confirmed North Florida District Human Resources management 

already conducted a climate assessment and recommended 

training, coaching, and review of postal operations. Employees 

indicated management had made positive changes.

06/07/13

Representative, 

Maryland

Theft and irregular delivery of mail We found a transitional employee delayed mail on several routes. 

Management removed the employee. In 2013, the former employee 

was found guilty under Maryland criminal law and was sentenced.

04/15/13

Representative, 

Virginia

Theft of mail containing a $25,000 check in 2004 We confirmed complaint was one of 20 checks sent by First Class 

Mail from Pennsylvania to trust beneficiaries. We attempted to use the 

cancelled check to determine who negotiated it and subpoenaed bank 

records for that purpose. Due to passage of time and bank mergers, 

we could not determine if any postal employees were responsible.

05/20/13

Representative, Texas Non-delivery of 22,000 Voter Registration Cards (VRCs) We confirmed that in part of Bend County, VRCs likely were not 

delivered; however, we could not determine how many were not 

delivered or their whereabouts. Our investigation revealed no evidence 

of voter fraud, mail theft, or non-delivery by postal employees.

04/15/13

Senator, Illinois Theft of jewelry valued at $1,000, sent by mail in 2009 We conducted an investigation and found a postal carrier signed 

complainants’ names on the Delivery Attempt Notice in an 

apparent attempt to provide convenient delivery. He initially paid 

the customer $500 on the claimed $1,000 loss. When the customer 

complained that the carrier had not covered the remainder of 

her loss, postal management explained postal policy provided 

relief only through the formal claims process. We documented 

that management conducted a service talk reinforcing postal 

policies. Management referred complainant to Postal Inspection 

Service, but we could not document the actions taken.

06/13/13

Senator, Kansas Delay of mail; safety and National Agreement violations Our investigation determined that the National Association 

of Letter Carriers (NALC) filed several grievances regarding 

clerks carrying mail. We learned that neither right-hand drive 

nor 2-ton vehicle training was required for the clerks, who 

were considered incidental drivers. In February, we confirmed 

that all the carrier-related grievances have been settled.

04/05/13

Senator, Kansas Postal management misconduct including payroll 

improprieties, improper clock rings, and conduct 

of personal business while on duty

Evidence the complainant supplied was incomplete; other evidence 

showed supervisors were correctly charged for their requested leave 

hours. We found the clock rings followed postal policy, although 

the complainant disagreed with the policy. We found no evidence 

of a supervisor conducting personal business while on duty.

04/26/13

Representative, Texas Anonymous employees of a delivery unit reported potential 

misconduct with controlled items including keys, gas cards, and 

postage due monies; falsification of delivery scans, or delay 

and non-delivery of mail; and a hostile work environment

We found no evidence to support allegations of misuse of controlled 

items or falsification of delivery scans. We reviewed the steps 

management took to address what it believes is an operational issue 

about delivery. Postal employees we interviewed never witnessed 

nondelivery of advertisements or delay of Certified Mail. Management 

took a number of steps to evaluate and address workplace complaints, 

such as reviews of quarterly employee survey data (showing this 

location did not rank low in satisfaction factors) and grievance rates 

(the station had not had any filings referencing these issues). 

04/26/13

Ranking Member, 

Senate Committee

Non-delivery of mail containing a check worth $100,000 We interviewed several postal management and craft personnel. 

We found a substitute carrier unfamiliar with the route attempted 

delivery but failed to leave a notice. We noted carriers were 

not following postal policies and procedures. Management 

located the mailpiece and personally delivered it.

04/26/13
Semiannual Report to Congress 36 April 1 — September 30, 2013

Appendix J

Senator, Michigan Intentional mishandling and non-delivery of Political 

Mail during November 2012 election cycle.

We conducted an investigation and determined the mailing was 

accepted by a P&DC but needed information the complainant could 

not provide in order to search using the Intelligent Mail Barcode and 

Mail History Tracking System. Searches and interviews with postal 

management and non-postal sources failed to yield results, further 

leads, or evidence of intentional mishandling, theft, or delay of mail.

04/26/13

Representative, 

Missouri

Tampering and delay of mail (phone bill 

payment) by postal employees

We learned that three phone companies (Embark, Qwest, and 

Century Tel) merged to form Centurylink in April 2011. The 

Centurylink fraud department said it was possible that the payment 

was credited to the former Century Tel, and later learned Centurylink 

resolved the issue. No postal employee misconduct was involved.

06/20/13

Representative, Illinois Repeated thefts of jewelry from mail by Jewelry Television 

purchaser, resulting in purchaser’s suspension

Our office conducted a sequence of integrity tests and 

surveillance of postal employees, none of which developed 

further leads. We interviewed numerous management and 

non-management postal employees, but found no evidence to 

substantiate postal employees tampered with or stole parcels.

06/18/13

Representative, Florida Theft of jewelry from mail Although our investigation revealed multiple complaints, including 

missing Netflix DVDs, credit card statements, and medications, a 

series of mail tests showed no system weaknesses. We could not 

determine the whereabouts of the missing package or substantiate 

the allegation that a specific postal employee was responsible 

for its disappearance, noting it might have been misdelivered.

04/26/13

Senator, Ohio Hostile environment and postal management misconduct 

including harassment, whistleblower retaliation, union contract 

violations, falsification of postal records at an Ohio delivery unit

We reiterated previous responses that we found no retaliation 

and declined to prosecute based on allegations of falsification 

of timekeeping records because no crime had been committed. 

We also mentioned the employees had resorted to the grievance 

process where the issues were being addressed through 

procedures established by the unions and management.

05/09/13

Representative, Texas Denial of insurance claim after a package mailed to 

Singapore, containing a watch worth $1,800, was stolen

Postal policies dictate the sender is responsible for reviewing 

applicable forms before presenting an item to be mailed. The sender 

acknowledged notice on the Customs declaration. Management 

asserted the claim was denied because the item shipped was 

identified as a prohibited item in the country of Singapore, and 

the OIG has no jurisdiction to intervene in such matters. However, 

we used tracking software to trace the package through some 

of the US locations, and found no evidence that theft occurred 

before the package entered the international mail stream.

05/20/13

Representative, 

West Virginia

Theft of mail from P.O. Box We conducted a series of integrity mail tests and confirmed that 

mail addressed to complainant arrived intact and was handled 

properly. We could not account for the reported problems.

04/04/13

Senator, Maryland Theft of mail containing medications mailed from 

the Department of Veterans Affairs (VA)

We conducted numerous observations and tests in and around 

the Post Office and found no suspicious activity or theft of 

parcels. While we confirmed the loss, interviews with Postal 

Service personnel about storage procedures for packages 

requiring a signature produced no evidence of mail theft.

06/20/13

Representative, 

Massachusetts

Postal management misconduct in 2006-2007, 

threatening an employee, causing a work-related 

stress injury, and covering up information

Our 2010 investigation addressed the complaints of a hostile 

work environment in which the complainant declined to be 

interviewed. His attorney provided a copy of an undated 

written statement from the accused postal manager. (This 

statement did not support the allegation.) Our 2013 investigation 

did not uncover any additional information or reveal any 

additional evidence warranting further investigation.

06/28/13

Postmaster General Postal employee misconduct including harassment, 

theft of, and tampering with mail

We interviewed postal management and reviewed its investigation 

of allegations; we found no evidence of theft of or tampering 

with mail. We conducted several integrity tests to verify that 

postal employees were properly handling the complainant’s mail. 

Test pieces arrived intact and with no signs of tampering. 

09/05/13

Senator, New Jersey Theft of and tampering with mail We conducted several mail integrity tests to verify that Postal 

Service employees were properly handling mailpieces shipped on 

routes from Wyoming to New Jersey. Test pieces arrived intact and 

with no signs of tampering. Due to the complainant not requesting 

tracking information at the time of mailing, and passage of time, 

we were unable to identify the cause or location of the loss. Our 

investigative efforts produced no evidence to substantiate postal 

employees tampered with and stole the items in the package.

06/06/13

Requestor Allegation/ Concern Major Findings Closure Date
Semiannual Report to Congress 37 April 1 — September 30, 2013

Appendix J

Representative, Texas Delay of and tampering with mail, i.e., bank statements We examined the complainant’s Neighborhood Delivery and 

Collection Box Unit, which was properly secured and did not 

exhibit any signs of damage. We interviewed the bank’s fraud 

investigator and found no similar complaints. Mail integrity 

tests arrived intact and with no signs of tampering.

06/20/13

Representative, 

Missouri

Intentional non-delivery of mail by postal employee 

following complainant’s dog biting the carrier

The investigation was unable to prove or disprove the 

allegation of intentional delay or destruction of mail. Most 

test mailings were properly delivered, and we found no 

patterns of poor service, improper conduct, or theft.

06/26/13

Senator, Maryland Delay and theft of mail We found the delivery problems were limited to the timeframe 

when a temporary change of address order was in place. 

The Postal Inspection Service was notified of a potential 

external theft problem. Once the permanent change of 

address was placed, the delivery problems were resolved.

08/23/13

Senator, Maryland Lost mail We conducted several mail integrity tests for collection boxes 

where we believe items were mailed. Tests did not reveal 

information to help us pinpoint mail problems. We interviewed 

management and craft employees and found no evidence 

of theft or delay of mail from the collection boxes.

08/07/13

Senator, Connecticut Tampering with mail causing financial loss Initial inquiries into the allegations confirmed the Connecticut 

Valley District conducted a review and provided a response. Our 

review did not reveal any evidence of misconduct or obstruction 

of the mail, or basis to open formal investigative work.

04/08/13

Senator, North Carolina Management conducted illegal counts of mail on 

rural routes — by reducing the amounts of raw mail 

not requiring sorting during the count timeframe — 

reducing salaries of carriers at a rural post office.

Complainant was last employed at this location in 2009. 

We reviewed Handbook P0-603, Rural Carrier Duties and 

Responsibilities. Interviews with workers did not substantiate 

the allegation that management prepares the mail better 

during the mail count timeframe. We did not document that 

the practice had occurred with the past or occurs today.

06/06/13

Senator, Delaware Postal Inspection Service management misconduct 

including whistleblower retaliation and discrimination 

We did not substantiate the whistleblower reprisal allegations. 

Our investigative work revealed evidence that Inspection Service 

management would have taken disciplinary action against the 

complainant regardless of his disclosures. As we concluded 

our work, we became aware the complainant filed an Equal 

Employment Opportunity (EEO) claim. The OIG will not take any 

further steps that could interfere in the resolution of the matter.

06/24/13

Senator, Florida Misuse of position; a postal customer lent money 

to his carrier, who did not repay in full

We confirmed the loan totaling $2,000 was made in 2010. The 

customer also paid the carrier in increments of $30 to ensure the 

carrier would forward the customer’s mail. We learned more than 

one resident provided financial favors, believing it would ensure 

proper mail delivery. We determined such transactions violated 

regulations under the Standards of Ethical Conduct for Employees 

of the Executive Branch. This behavior also violated Postal 

Service rules in Handbook M-41, City Delivery Carriers Duties 

and Responsibilities and Employee and Labor Relations Manual, 

ELM 665. 16, Behavior and Personal Habits. We referred our 

findings to postal management for action deemed appropriate.

07/11/13

Representative, 

California

Hostile work environment and postal management misconduct, 

including time and attendance fraud, discrimination, unfair labor 

practices, harassment, nepotism, and unsafe working conditions 

at a postal plant

As many of these issues were included in an informal Equal 

Employment Opportunity (EEO) complaint filed in 2013, the OIG took 

no further investigative steps that could interfere in the resolution of 

the matter. Concurrently, an OIG field office investigated possible 

falsification of timecards. We found numerous discrepancies in 

record keeping. Because of system outages, the system is not 

reliable in confirming intentional falsification of records or wrongful 

use of break time by employees. We referred our findings to postal 

area and district management for action deemed appropriate.

08/13/13

Senator, Louisiana Hatch Act violation; postal supervisor holding a 

local office misused position by appointing another 

postal employee to a paid town position.

The Hatch Act issues already were settled by agencies with 

jurisdiction over the matter. There is no legal basis for action 

on this allegation by the OIG. We investigated the appointment 

of a postal employee to a town position, and found a mayor, 

not the postal supervisor, made the appointment; accepting 

the appointment aligned with outside employment rules.

07/26/13

Representative, 

Maryland

Tampering with and theft of mail containing gift card We conducted substantial surveillance at different 

processing and delivery locations. All the mailpieces 

were properly handled by postal employees.

07/29/13

Requestor Allegation/ Concern Major Findings Closure Date
Semiannual Report to Congress 38 April 1 — September 30, 2013

Appendix J

Representative, 

Pennsylvania

Delay of mail — failure to honor an Express Mail signature waiver — 

and rude or threatening behavior by personnel at the delivery unit

Our office reviewed the allegations, and conducted interviews, 

and a search of postal databases and records. While we 

found no similar complaints about customer treatment, we did 

find data about delays and scanning issues. We referred our 

findings to management for action deemed appropriate.

08/27/13

Representative, 

New York

Non-delivery, non-receipt of mail Our office conducted an investigation that produced no 

investigative leads or means of accounting for the delay or 

loss of mail. In late April, complainant reported the cause was 

failure by the senders to mail their payments promptly.

9/30/13

Representative, 

Missouri

Non-delivery and theft of mail containing iPod touch, scanned as 

delivered, and disputes about proper handling of postal insurance

A search of the Financial Crimes Database from December 2011 to 

May 2013 found no similar complaints; other searches uncovered 

no iPod Touch devices. Our interviews and other observations 

could not account for the missing mailpiece. We did not substantiate 

the allegation that the parcel was stolen by a postal employee. 

We reviewed the insurance claim and found the process had 

been confusing, but the result conformed to regulations.

07/29/13

Postmaster General P&DC employees vandalized another employee’s vehicle We investigated, but could not find documentation of the event. 06/27/13

Representative, 

California

Postal employee misconduct and non-delivery of mail 

containing personally identifiable information (PII) 

In our observations and interviews with personnel at the two postal 

facilities and at the Passport Center, we found no evidence indicating 

Pll might have been compromised, nor did the evidence support 

the claim of willful delay or theft of mail. However, we did document 

misconduct, violations of policy, and inappropriate conduct. These 

issues included failures to secure passport applications, erroneous 

certification of mail logs, and improper handling of Express Mail. 

We notified the OIG Office of Audit, which has on-going work to 

assess the handling of PII, particularly regarding passports. 

07/11/13

Representative, 

Tennessee

Theft of cash to be used to pay for a money order We investigated the carrier’s conformance with policies allowing 

for rural money order transactions on the route. We found that 

management took appropriate steps to safeguard, discover, and 

investigate the delivery of the funds and the alleged shortage.

08/27/13

Representative, Florida Non-delivery and theft of media mail Postal management determined the package did not qualify for 

reduced Media Mail rate. Items sent via Media Mail are subject to 

review and are returned to the mailing address if the rate is incorrectly 

applied. We could not determine if the package had been returned to 

the shipper as the signature on the mailing was illegible and the credit 

card number incomplete. The complainant did not retain information 

on the identity of the seller. We found no evidence of mail theft.

09/05/13

Representative, 

Maryland

Hostile work environment and postal management 

misconduct, including mail and time and attendance fraud

Complainant withdrew his complaint. We found no 

issues that would cause us to override his request.

07/22/13

Representative, 

Maryland

Management committed time and attendance fraud by not 

paying an employee for overtime hours worked in 2012

Our Office of Investigations conducted an investigation, but found 

no pattern of overtime hour deletions or other time and attendance 

irregularities. As of late June, management had corrected the pay.

07/29/13

Senator, Idaho Non-delivery of mail package with an urn containing 

ashes shipped from Idaho to Ohio

A postal scan on the package in Illinois led us to conclude the 

container had likely been mixed with empty equipment at the 

Cincinnati P&DC and returned to Illinois for storage for at least 

several weeks, despite assurances the P&DC had checked all empty 

equipment. Management confirmed, as inspectors had noted, that 

registry personnel had not been keeping a detailed log of incoming 

registered pieces. Management reported it reinstated the proper 

process. Once located, the package was delivered on May 9.

06/13/13

Representative, Florida Requests reward for providing OIG information that led to 

an arrest

The OIG offers rewards only under extremely restricted circumstances 

involving undercover operations (seldom involving internal mail 

theft, and always approved in advance). Even then, the reward is 

based on substantial risk or hazards the informant encountered. 

The poster complainant relied on was issued by another agency and 

dates from a time that different reward practices were in place. 

07/11/13

Representative, Florida Theft of mail about the future of the Postal 

Service sent to a U.S. Senator

The ricin letter incidents of April 2013 impacted mail going to 

the U.S. Senate in general, and may have affected delivery 

of complainant’s mailpiece, but we could not document that 

specifically. Complainant alleged his return address was targeted. 

Postal Service personnel advised us mail is redirected based 

on the destination address, not the return address. We did not 

substantiate his allegation that Postal Service management 

tampered with and stole mail he sent to the U.S. Senate.

09/04/13

Senator, Maryland Hostile work environment; postal management misconduct 

including mail and time and attendance fraud

Complainant withdrew his complaint. We found no 

issues that would cause us to override his request.

07/25/13

Requestor Allegation/ Concern Major Findings Closure Date
Semiannual Report to Congress 39 April 1 — September 30, 2013

Appendix J

Senator, New Jersey Hostile work environment; postal management misconduct 

including harassment, intimidation, slander, and bullying

We found no related complaints or EEO complaints concerning postal 

management. Management promptly investigated the complaint 

in 2012 and determined that the incident did not rise to the level 

of workplace harassment or assault. However, it took responsive 

steps concerning a supervisor’s role in an altercation by requiring 

training. We confirmed the training was completed in the summer 

of 2012. The complainant did not provide any specific information 

to support his complaint of slander, intimidation, or bullying.

09/25/13

Senator, Michigan Additional documentation regarding 

non-delivery and theft of Political Mail

The documentation the mail house provided was from a Basic 

IMB mailing, using a hardcopy statement, not the electronic 

version needed for tracking. We took the opportunity to raise 

the issue of financial responsibility for the loss. Management 

advised that, based on the OIG investigation, it can authorize 

reimbursement for the postage of the mailing.

07/11/13

Senator, Ohio Misconduct by OIG agents Allegations stemmed from an investigation we conducted in 2011, 

when we recovered about 4,190 pieces of mail dated for delivery 

in 2005 and 2006, including state and federal tax refunds and 

assistance payments. We referred our findings to the prosecutor. 

In March 2012, complainant was indicted on five counts of theft; 

one count of aggravated theft; and five counts of receiving stolen 

property. In response to senator’s inquiry, we reviewed OIG videotape 

evidence showing the house prior to and at the conclusion of the 2011 

search. Our investigation found no evidence of agent misconduct. 

07/11/13

Senator, Texas Whistleblower retaliation, i.e., denial of Workers’ Compensation 

because of a protected communication, and OIG agent 

misconduct, i.e., denying access to medical care and providing 

inaccurate information to the Department of Labor (DOL).

We reviewed the complainant’s whistleblower retaliation claim and 

found no evidence of a protected communication, one of four required 

elements for whistleblower retaliation claims. Therefore, we declined 

to proceed with the retaliation claim. We also conducted interviews 

and a review of documents regarding management’s role in the denial 

of Workers’ Compensation. We found management contacted the 

OIG because of discrepancies in complainant’s documentation; we 

had advised that the evidence of injury he provided did not support 

his claim. After a review, the DOL denied his claim for compensation.

07/22/13

Representative, 

California

Theft of mail containing a credit card and 

misconduct by a Postal Service employee

We investigated 13 fraudulent gas station charges totaling $1,581 

following the reported theft of a gas charge card from the mail. 

Video surveillance and transaction information did not lead us 

to identify the individuals, or find a link to the Postal Service. 

We referred our findings to the Postal Inspection Service, which 

addresses external theft. We also looked into complainant’s 

claim of rude behavior at a post office. Management was aware 

of a clerk’s problems handling customer issues and complaints 

and was addressing the problems and making improvements.

9/30/13

Senator, Indiana Postal employee misconduct, including abuse of postal 

equipment and damage to private property

We found that in May, OIG agents had already investigated 

unrelated incidents involving this employee. After concluding 

our earlier work in May, we provided our investigative findings to 

Postal Service management for administrative action. In July, we 

confirmed the carrier is no longer employed by the Postal Service.

08/13/13

Representative, 

Virginia 

Postal management misconduct including forged 

signature on a letter of warning (LOW), which 

affected ability to compete for other jobs 

We substantiated the allegation that the signature on the LOW was not 

the complainant’s, and that it was retained in the Official Personnel 

Folder beyond the 2-year limit. We confirmed management removed 

the LOW in December 2012. Labor relations personnel we interviewed 

asserted the LOW would not have been available to hiring officials, so 

it would not have affected complainant’s job prospects. We referred 

our findings to postal management for action deemed appropriate.

09/26/13

Senator, Nevada Disparate treatment based on age Facts the complainant presented relate to EEO law. The OIG 

does not have jurisdiction to investigate those issues. The 

OIG will not interfere with review in the proper venue.

07/22/13

Senator, Mississippi Non-delivery of mail containing a stock certificate insured 

for $1,000, sent from Mississippi to Massachusetts

We found the transporter of the Registered Mail on that date 

retained no documentation, although he apparently obtained a 

signature on delivery of the dispatch. The Postal Service and 

the issuer of the stock resolved the issue, but we continue to 

be concerned about the failure to safeguard the mail and to 

follow procedures. We planned to meet with the plant manager 

to discuss procedures for handling Registered Mail.

09/25/13

Senator, 

South Carolina

Non-delivery of mail containing a firearm The investigation did not identify the whereabouts of the 

missing parcel or determine whether it was in fact stolen or 

simply lost. We worked with the National Crime Information 

Center, the Mail Recovery Center in Atlanta, and the local police 

department, in case the firearm is pawned or recovered. 

09/25/13

Requestor Allegation/ Concern Major Findings Closure Date
Semiannual Report to Congress 40 April 1 — September 30, 2013

Appendix J

Representative, 

Missouri

Tampering with and theft of mail containing checks The Postal Service determined that automated postal sorting 

machines could not read the address as the sender’s window 

envelopes did not fit the checks. As the face of the check 

shifted during processing, machines read incorrect barcode 

information. As a result the mail was misrouted and delivery 

was delayed. Postal managers discussed the problem with the 

sender, who took corrective action. We could not determine 

the cause of apparent tampering with other mail.

09/25/13

Senator, North Carolina OIG and postal management harassment 

following an on-the-job injury

We coordinated with other parts of the Postal Service and 

could not account for the assertion that we were monitoring the 

complainant. As to claims that we were electronically monitoring 

the complainant, we noted the Supreme Court recently limited 

the use of electronic monitoring devices without a warrant.

09/12/13

Senator, Maryland Non-delivery and theft of mail Complainant moved and is no longer the senator’s constituent. 08/20/13

Inspector General (IG) Audits / Risks Analysis Research Center Reports (9)

Requestor Allegation/Concern Major Findings/Resolution Closure Date

Chairwoman, 

Senate Committee

Committee requests information about 

management of detail assignments

OIG produced audit DP-AR-13-006, Management of Detail 

Assignments. We found the Postal Service did not effectively 

manage detail assignments. Specifically, the Postal Service 

did not ensure compliance with detail assignment policies 

and was unable to identify who was on detail and the 

associated costs. We recommended the Postal Service 

assign the responsibility for managing detail assignments and 

associated travel costs to the appropriate functional area. 

05/23/13

Senator, Pennsylvania Senator requests an audit of the consolidation of the 

New Castle Processing and Distribution Facility and the 

Greensburg Customer Service Mail Processing Center into 

the Pittsburgh Processing and Distribution Center

OIG produced audit NO-AR-13-004, New Castle and 

Greensburg, PA consolidation. The consolidation should 

produce a cost savings of about $3.3 million the first year 

and $8.9 million annually in subsequent years. However, we 

found that the Postal Service did not terminate, seek buyout 

opportunities, or sublet leases for facilities vacated as a 

result of the consolidation. We recommended coordination 

with the Facility Service Office when rental space is vacated 

to ensure appropriate lease termination actions are taken.

08/16/13

Ranking Member, 

Senate Committee

Committee requests analysis and report analyzing the impact of 

postal price regulations on the Postal Service’s financial condition

RARC examined the regulatory framework for pricing 

imposed by the Postal Accountability and Enhancement 

Act, and evaluated alternatives that might provide a better 

fit. The detailed report notes a critical issue with the price 

cap: as mail volume declines, the CPI-only price cap 

does not reflect the additional burdens placed on each 

product to financially support the expanding network. The 

report also notes the potential to retain price regulation, 

but with key modifications that take into consideration 

declining volume and the expanding delivery network.

04/12/13

Senator, Vermont Senator requests analysis of pensions and retiree healthcare 

provisions; and analysis of authority to offer non-postal 

products on long-term financial sustainability

Our Audit team conducted analysis and responded. We 

issued a Primer on Postal Challenges, which provides the 

OIG’s assessment of the key issues involved in preparing 

the Postal Service for the future. This document provides 

a background on Postal Service issues, as well as the 

short- and long-term options under discussion to help the 

Postal Service recover and continue to serve the country. 

04/29/13

Senator, Vermont Senator requests analysis using different assumptions We conducted additional analysis and responded. 04/29/13

Requestor Allegation/ Concern Major Findings Closure Date
Semiannual Report to Congress 41 April 1 — September 30, 2013

Appendix J

General Counsel and Support Functions (6)

Requestor Allegation/ Concern Major Findings/ Resolution Closure Date

Ranking Member, 

Senate Committee

Committee requests unredacted copy of the SEC report of investigation Withdrawn 04/05/13

Chairman, Senate 

Committee

Committee requests copy of the Dover misconduct report We provided the report in full for the committee and 

with redactions for distribution to constituents.

05/07/13

Senator, New Mexico Obstruction of Hotline mailbox as entry point for complaints to the OIG We reviewed the complaint and found 

indications this document delivery problem 

was an information technology issue.

06/18/13

Representative, 

Pennsylvania

Requests information entered by a third party 

be removed from OIG blog feed

We removed the information. 07/01/13

Representative, 

New York

Wrongful termination We assessed OIG jurisdiction over matters raised. 

We noted administrative remedies might have been 

appropriate venues to resolve the complaint. To the 

extent allegations involve managerial misconduct, 

investigative work would be hampered by passage of 

time and unavailability of parties no longer subject to OIG 

jurisdiction. Therefore, we did not refer it for investigation.

08/09/13

Representative, Utah Postal management misconduct; violation of hiring policies The matters concerning complainant’s right to 

re-employment are not within OIG jurisdiction. We 

found no basis to review this postal personnel matter.

08/08/13

Referrals (5)

Requestor Allegation/ Concern Major Findings/ Resolution Closure Date

Senator, 

Pennsylvania

Postal management misconduct; violation of policy; inappropriate conduct Referred to Office of Government Relations 04/29/13

Representative, 

Pennsylvania

Information only; mail forwarding issues Referred to Office of Government Relations 05/03/13

Representative, Ohio Requests record of complaint Referred to Office of Government Relations 05/30/13

Representative, 

Missouri

Tampering with and theft of mail Referred to Office of Government Relations 06/28/13

Representative, 

Delaware

Improprieties in denial of Workers’ Compensation appeals The issues are within the jurisdiction 

of the Department of Labor.

09/25/13

Chairman, 

Senate Committee

Committee requests copy of the campaign mail report Additional opportunities exist for the Postal Service to 

increase political mail revenue. The Postal Service has 

limited ability to influence state and local election officials 

in adopting a 100-percent vote-by-mail process. However, 

nonballot election mail, such as absentee request forms, 

may provide opportunities for increased sales of about $1.2 

million in the next general election by addressing citizen 

groups that are eligible to vote but not yet registered. We 

recommended the Postal Service develop a strategy to 

increase the sale of nonballot election mail products to 

citizen groups that are eligible to vote but not registered.

06/19/13

Chairman and 

Ranking Member, 

House Committee 

Committee requests update on status of 

recommendations from OIG audits

We responded with information in June. As of May 

31, 2013, there were 238 open and unimplemented 

recommendations, 78 of which had an estimated monetary 

impact of over $69 billion. Additionally, since May 31, 

2012, our office has deemed 161 recommendations as 

accepted and implemented by the Postal Service.

06/28/13

Ranking Member, 

Senate Committee

Committee requests briefing on price caps and attributable costs We provided an in-person briefing in June. 06/28/13

Representative, Ohio Additional information; audit of the Toledo, OH P&DC AMP study Information provided to audit staff. 09/10/13

Requestor Allegation/Concern Major Findings/Resolution Closure Date
Semiannual Report to Congress 42 April 1 — September 30, 2013

Supplemental Information

Requests Number of Requests

Carryover from prior period 27

Received during period 294

Total on hand during period 321

Actions Number of Requests

Processed during the period 294

Requests denied in full 11

Requests granted in full 9

Requests denied in part 133

No records 54

Requests referred 20

Requests withdrawn 19

Fee-related reasons —

Records not reasonably described —

Not a proper FOIA request for some other reason 7

Not an agency record 40

Duplicate request 1

Balance Number of Requests

Balance at the end of the period (pending) 27

Processing Days Number of Days

Median processing days to respond to a FOIA request 8

SUPPLEMENTAL INFORMATION

Freedom of Information Act

The OIG 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 April 1 — September 30, 2013

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 April 1 — September 30, 2013

Complaints Received Total

Carried over from previous quarter(s) 21

Complaints received from OIG Hotline, Congress, Governors, 

management, internal, and other:

263

Total on hand during this period 284

Workplace Environment Actions

Complaints reviewed and closed during the period 243

Referred to Postal Inspection Service —

Referred to Office of Audit —

Referred to Office of Investigations 2

Referred to Workplace Environment 41

Referred to Hotline 1

Referred to Summary of findings to Congress/BOG/

Postal Service Management

96

Referred to FOIA —

Referred to AIG for Investigations —

Referred to Database for statistical analysis and possible 

systemic review

103
Semiannual Report to Congress 43 April 1 — September 30, 2013

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.

© 2013. USPS. All Rights Reserved. The following are among the many trademarks owned by the United States Postal Service: United States Postal Service®, United States Postal 

Service® with Eagle Design, 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® with Eagle Design, Post OfficeTM, Postal ServiceTM, Signature ConfirmationTM, Certified Mail®, Delivery ConfirmationTM, Registered MailTM, 

ZIP CodeTM, Priority Mail International®, First-Class Mail International®, Premium Forwarding Service®, Forever®, gopost®, Priority Mail Flat Rate®, DMM®, PostalOne!®, USPS 

Delivery Confirmation®, Approved by the Postmaster General®, and Postmaster GeneralTM. 
The U.S. Postal Service has two law enforcement agencies with distinct areas of investigative 

responsibility to serve the needs of stakeholders, postal employees, and the American public.

Who do I call?

Postal Inspection Service

■ Security of employees, facilities, and equipment

■ Revenue and postage fraud

■ International mail security

■ Violent crimes: 

- Threats and assaults of employees

- Burglaries and robberies

■ Mail theft by nonemployees

■ Dangerous mail and bombs

■ Mail fraud

■ Identity theft

■ Narcotics in the mail

■ Child pornography and obscenity

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: 888-877-7644

www.uspsoig.gov

Contact: 877-876-2455

http://postalinspectors.uspis.gov