Office of Inspector General

Semiannual Report to Congress

October 1, 2009 – March 31, 2010
The mission of the U.S. Postal Service Offi ce of Inspector General (OIG) 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, effi ciency, and effectiveness.

 Promote program integrity.

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

problems, defi ciencies, and corresponding corrective actions.

MISSION STATEMENT
This report, submitted pursuant to the Inspector General 

Act, outlines our work and activities for the 6-month 

period ending March 31, 2010. In the fi rst section 

of this issue, we continue our review of the Postal 

Service’s progress towards its strategic goals: “focus 

on what matters most to customers,” “leverage our 

strengths,” and “embrace change.” These goals are 

mapped out in the Postal Service’s 5-year strategic 

plan for 2009 – 2013. The second section highlights 

investigations conducted to prevent and detect fraud, 

waste, and misconduct and have a deterrent effect on 

postal crimes.

Postal Service executives often work closely with their 

OIG counterparts to identify problems and collaborate 

on solutions. These efforts have resulted in signifi cant 

savings opportunities. During this period, we issued 

188 audit reports and management advisories, and the 

Postal Service accepted 88 percent (51 of 58) of the 

OIG’s signifi cant recommendations.

In addition, we conducted 1,992 investigations that 

led to 393 arrests and more than $1.3 billion in 

fi nes, restitutions, and recoveries, of which nearly 

$21.5 million went to the Postal Service. One 

pharmaceutical case contributed more than $1.2 billion 

to the total fi nes, restitutions, and recoveries amount. 

This report gives an abbreviated account on page 3 

of a study we sponsored that found the Civil Service 

Retirement Pension fund overcharged the Postal Service 

by $75 billion. As background, when the Post Offi ce 

Department became the U.S. Postal Service in 1971, 

employees that belonged to the federal pension fund 

started contributing to the Postal Service. For employees 

who worked for both the Post Offi ce Department and the 

Postal Service, the federal and the postal pension funds 

shared responsibility. However, the federal fund paid for 

retirements based on 1971 salaries, not fi nal salaries. In 

essence, the federal fund collected full contributions, but 

paid only partial benefi ts.

The Offi ce of Personnel Management (OPM) developed 

the allocation method and has explained that these 

mischarges were done to respond to what it saw as the 

will of Congress expressed in a piece of 1974 legislation. 

However, the 1974 language was repealed by reform 

legislation in 2003, when large overpayments were 

discovered. If the $75 billion is restored to the Postal 

Service’s pension fund, it could be used to pay down the 

Postal Service’s retiree health care liabilities, ending the 

large payments required under the Postal Accountability 

and Enhancement Act of 2006 (PAEA, or the Postal Act 

of 2006). 

Both houses of Congress asked me to testify on 

the Postal Service’s current fi nancial condition. In 

testimony, I noted that the Postal Service is moving 

in the right direction, but its velocity is insuffi cient 

to avoid an economic catastrophe that will severely 

challenge its viability. Following are several key areas 

noted in my testimony.

 Each year, the Postal Service pays $7 billion more 

than is warranted for its benefi t funds. Addressing 

this overcharge could allow needed time to plan and 

integrate large-scale cost reduction initiatives. 

 The large network of post offi ces, plants, and 

administrative apparatus is fi nancially burdensome. 

To its credit, the Postal Service has streamlined 

some of its network, reducing more than 130,000 

employee positions since 2003 and cutting $6 billion 

in costs for 2009 alone. The Postal Service must 

accelerate its infrastructure optimization plan, while 

balancing its commitment to service.

 The Postal Service’s complex workforce rules do not 

always match mission requirements. The ebb and 

fl ow of mail in the processing plants suggests the 

need for more fl exible staff willing to perform a wider 

range of duties.

 We, along with the Postal Service, have recognized 

the need for a simplifi ed, modernized pricing 

structure. A simple pricing structure could be easier 

to use and allow more accurate charges to customers.

As the Postal Service strives to remain viable, the 

OIG — with the support of the Governors, Congress, 

and Postal Service management — will continue to play 

a key role in maintaining the integrity and accountability 

of America’s postal service, its revenue and assets, and 

its employees.

David C. Williams

Inspector General

A MESSAGE FROM THE INSPECTOR GENERAL
SUMMARY OF PERFORMANCE

October 1, 2009 – March 31, 2010

AUDITS

Reports issued 188

Signifi cant recommendations issued 58

Total reports with fi nancial impact 67

Funds put to better use $393,937,272

Questioned costs1 $124,721,438

Revenue Impact $583,939

TOTAL FINANCIAL IMPACT2 $519,242,649

INVESTIGATIONS3

Investigations completed 1,992

Arrests 393

Indictments/informations 350

Convictions/pretrial diversions4

 428

Administrative actions 1,042

Cost avoidance $101,132,992

Fines, restitutions, and recoveries5 $1,302,632,341

Amount to Postal Service6 $21,496,041

OIG HOTLINE CONTACTS

Telephone calls 46,540

E-mail 14,440

Virtual Front Offi ce calls 9,210

Standard Mail 1,212

Voice mail messages 493

Facsimile – FAX 358

National Law Enforcement Communications Center 286

TOTAL CONTACTS 72,539

1

 Includes unsupported costs of $14,683,806.

2

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

$519 million in savings.

3

 Statistics include joint investigations with other law enforcement agencies.

4

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

5

 Amount under Fines, Restitution, and Recoveries includes $1,295,200,100 from one pharmaceutical investigation.

6 Amount to Postal Service includes $15,075,934 from one pharmaceutical investigation.
TABLE OF CONTENTS

ASSESSING PROGRESS TOWARD STRATEGIC GOALS .......................... 2

Goal 1: Focusing on What Matters Most to Customers .................................................................................................... 3

Goal 2: Leveraging the Postal Service’s Strengths .......................................................................................................... 5

Goal 3: Embracing Change ......................................................................................................................................... 11

Regulatory Studies and Reporting Obligations .............................................................................................................. 11

Preserving Accountability ............................................................................................................................................ 12

INVESTIGATIONS ................................................................................. 16

Financial Crimes ........................................................................................................................................................ 17

Workers’ Compensation Fraud .................................................................................................................................... 18

Delay, Destruction, and Theft of Mail by Employees ...................................................................................................... 20

Identity Theft .............................................................................................................................................................. 21

Contract Fraud ........................................................................................................................................................... 21

Offi cial Misconduct .................................................................................................................................................... 22

Executive Investigations and Internal Affairs ................................................................................................................. 23

SPECIAL FEATURES............................................................................... 3

OIG Study: CSRS Pension Overcharged by $75 Billion .................................................................................................... 3

OIG Research and White Papers .................................................................................................................................... 4

The Impact of Postal Service’s New Pricing Initiatives ................................................................................................... 12

Postal Service’s Financial Condition ............................................................................................................................. 14

Data Mining Group ..................................................................................................................................................... 15

External Peer Review of the Offi ce of Audit ................................................................................................................... 15

Joint Year-long Workers’ Compensation Fraud Initiative ................................................................................................ 19

APPENDICES ....................................................................................... 24

APPENDIX A — Reports Issued to Postal Service Management ..................................................................................... 25

Reports with Quantifi able Potential Monetary Benefi ts .......................................................................... 25

Report Listing .................................................................................................................................... 29

APPENDIX B — Findings of Questioned Costs ............................................................................................................. 33

APPENDIX C — Recommendations That Funds Be Put to Better Use ............................................................................. 34

APPENDIX D — Reported Non-monetary Benefi ts ........................................................................................................ 35

APPENDIX E — Reports with Signifi cant Recommendations Pending Corrective Actions ................................................. 36

APPENDIX F — Signifi cant Management Decisions in Audit Resolution ......................................................................... 47

APPENDIX G — Investigative Statistics ........................................................................................................................ 48

APPENDIX H — Summary of U.S. Postal Inspection Service Investigative Activities Under Title 39 USC 3005 & 3007 ....... 49

APPENDIX I — Closed Congressional and Board of Governors Inquiries ........................................................................ 50

SUPPLEMENTAL INFORMATION ........................................................... 57

Freedom of Information Act ......................................................................................................................................... 57

Workplace Environment .............................................................................................................................................. 57

Acronym Guide .......................................................................................................................................................... 58
ASSESSING PROGRESS TOWARD STRATEGIC GOALS
October 1, 2009 – March 31, 2010 | 3 

GOAL 1: FOCUSING ON 

WHAT MATTERS MOST TO 

CUSTOMERS

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

delivery and improved customer service across all access 

points. Specifi cally, it is focusing on the quality and 

consistency of service as well as the speed and reliability 

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

Service faces the challenge of improving service 

while simultaneously working to cut costs. The following 

examples represent work we conducted to help the Postal 

Service improve operational effi ciencies related to customer 

service and to decrease the risk of revenue loss. 

Processing Standard Mail and Pension 

Checks at the Albany P&DC

The Postal Service uses a system of color-coding to 

facilitate timely movement of Standard Mail. The mail is 

color-coded to easily identify the intended day of delivery. 

ASSESSING PROGRESS TOWARD STRATEGIC GOALS

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

its strategic goals articulated in its Vision 2013: Five-Year Strategic Plan for 2009-2013, 

published in October 2008. These goals are to focus on what matters most to customers, 

leverage Postal Service strengths, and embrace change. OA also discusses the issues 

of regulatory studies and reporting obligations, and preserving accountability. In addition, 

Risk Analysis Research Center (RARC) research and white papers are presented.

MANAGEMENT 

RESPONSE TO 

AUDIT WORK

OA adheres to professional 

audit standards and 

presents its audit work to 

management for comments 

prior to issuing a fi nal report. 

Unless otherwise noted, in 

the 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.

OIG STUDY: CSRS PENSION FUND OVERCHARGED BY $75 BILLION

When the Post Offi ce Department transformed into the U.S. Postal Service in 1971, the Postal Service and federal 

government agreed to share the cost of Civil Service Retirement System (CSRS) pension benefi ts for employees who 

worked for both entities. However, the federal government paid benefi ts as if the employees retired in 1971 at their 1971 

salaries, not their fi nal salaries at retirement. The Postal Service picks up the remaining costs, which includes infl ationary 

salary increases and cost-of-living allowances since 1971. In essence, the federal fund collects full contributions but 

pays only partial benefi ts.

The OIG’s white paper, “The Postal Service’s Share of CSRS Pension Responsibility,” undertaken in conjunction with the 

actuarial consulting fi rm, the Hay Group, argues that this method of sharing the costs is inequitable. The costs of pension 

benefi ts should be based on employee years of service. For example, if an employee worked half of his or her career 

with the Postal Service and half with the Post Offi ce Department, the Postal Service should pick up half of the cost of the 

pension payouts, and the federal government should pick up the other half. Currently, the study shows the Postal Service 

could be responsible for 70 percent of the pension of an employee who worked only 50 percent of his or her career with 

the Postal Service. The white paper estimates that if the federal government’s pension fund was charged the appropriate 

share of payments to retirees, there would be $75 billion more in the Postal Service’s pension fund. 

This is not the fi rst time the Postal Service has been overcharged for its pension payments. In 2002, it was determined 

the Postal Service would overfund CSRS by $78 billion. Legislation in 2003 corrected this overfunding. Then it was 

determined the Postal Service was overcharged $27 billion for CSRS military service credits. In 2006, these funds were 

returned to the Postal Service by Congress, and the surplus was used to fund retiree health care liabilities. 

The white paper has garnered signifi cant attention from postal stakeholders and the news media. If the $75 billion 

is restored to the Postal Service’s pension fund, it could be used to pay down the Postal Service’s retiree health care 

liabilities, ending the large payments required under the Postal Accountability and Enhancement Act of 2006 (PAEA, 

or the Postal Act of 2006). Fixing the overcharge will also allow the Postal Service to address its real challenges and 

implement its plan at a safer pace.

This is the third study sponsored by the OIG that delves into the fi nancial entanglements between the Postal Service and 

the federal government — generally at the expense of the Postal Service. The other two reports focused on the Postal 

Service’s congressionally mandated retiree health care prefunding payments “Estimates of Postal Service Liability for 

Retiree Health Care Benefi ts,” and the Postal Service’s interaction with the federal budget, “Federal Budget Treatment of 

the Postal Service.”

GOAL 1: FOCUSING ON WHAT MATTERS MOST TO CUSTOMERS
4 | Semiannual Report to Congress

Auditors assessed the internal controls at the Albany 

Processing and Distribution Center (P&DC) and determined 

that opportunities exist to improve color-coding, as well 

as the counting and reporting of delayed mail. Further, 

auditors determined that mail was not properly colorcoded to ensure the oldest mail was processed fi rst, 

delayed mail was not always properly reported, and the 

oldest mail on hand was not always accurately reported. 

We recommended that management provide suffi cient 

oversight, continue color-code training, and direct the 

color-code coordinator to conduct periodic reviews of the 

process. Furthermore, based on a review of mail condition 

reporting documents during November and December 

2009 (and subsequent investigative work), auditors found 

that some of the reports were inaccurate.

In addition, we completed a review on signifi cant delays 

for the delivery of pension checks in New York, which 

entered the mailstream at the Albany P&DC. Auditors found 

pension checks were delayed due to poor internal controls, 

subsequently the checks were processed and delivered late 

to customers. The Postal Service took immediate actions 

to rectify the problem, including expediting replacement 

checks and letters to creditors. 

Plant-Verifi ed Drop Shipment Controls

Plant-verifi ed drop shipment (PVDS) allows mailers to have 

their Standard Mail, Periodicals, and Package Services mail 

verifi ed and postage added at one postal facility and then 

allows the mailer to drop ship verifi ed mail directly to the 

Post Offi ce destination facility to obtain postage discounts. 

In fi scal years (FY) 2008 and 2009, revenue from 

destination-entered Standard Mail was $15.3 billion and 

$13 billion, respectively. We conducted on-site observations 

and interviews at selected facilities and reviewed PVDS 

documentation and determined that controls were not 

adequate to ensure that the Postal Service received all 

revenue due from PVDS. Management initially disagreed 

with our recommendations, but stated that they plan to 

require drop shippers to barcode their mail. Under this plan, 

there would be electronic documentation at origin facilities, 

which could be accessed and verifi ed. The change will be 

enacted in Intelligent Mail Release 6 (June 2011). 

OIG RESEARCH & WHITE PAPERS

In addition to extensive audits and reviews, on occasion 

OA and the OIG’s Risk Analysis Research Center (RARC) 

sponsor academics and subject matter experts to 

conduct research and analysis on Postal Service issues 

and topics. The results of the analyses are published 

in research and white papers. What is the difference 

between the two types of papers? 

Research Papers analyze a perspective and present 

the author’s interpretation or evaluation. The author of 

a research paper surveys a fi eld of knowledge to fi nd 

the best possible information in that fi eld. The result is a 

paper with academic writing that summarizes analyses 

and fi ndings to inform the reader.

White Papers are authoritative reports often used to 

address issues and present solutions. White papers 

serve to educate readers and to help with decisions 

about a particular topic or subject. A White paper is 

also used to explain complex technical topics. In some 

instances, these papers provide unbiased information 

and analysis regarding a business issue or problem.

Both research and white papers can be found on the 

OIG’s Internet site: www.uspsoig.gov.

Capital Metro Area Pieces at Risk Report

0

1%

2%

3%

Capital Metro Baltimore Capital Greater S. Carolina Greensboro Mid-Carolinas Northern Virginia Richmond

3.1%

2.8%

3.3%

2.7%

3.2% 3.1% 3.2%

2.8%

Target @ 2%

In March 2007, the Postal Service established “At-Risk and Out-of-Sequence Goals.” Achieving these goals is critical for Postal Service performance and cost management success. 

As shown in Chart 1, each district in the Capital Metro Area exceeded the DBCS pieces at risk target of 2 percent of total pieces handled.

GOAL 1: FOCUSING ON WHAT MATTERS MOST TO CUSTOMERS
October 1, 2009 – March 31, 2010 | 5 

GOAL 2: LEVERAGING THE POSTAL SERVICE’S STRENGTHS

Reducing Pieces at Risk 

We assessed opportunities, in the Capital Metro Area, to 

reduce Delivery Bar Code Sorter (DBCS) mailpieces at risk 

of not reaching their destination in the allocated time. The 

primary component of mailpieces at risk is rejected mail 

that results in manual rehandling. The Postal Service’s 

annual pieces at risk target for DBCS mail is 2 percent 

of total pieces handled. For the 2-year period ending 

September 30, 2009, Capital Metro pieces at risk averaged 

3.1 percent, which was 55 percent higher than the target. 

Capital Metro processing plants did not achieve the pieces at 

risk target because electronic technicians and maintenance 

supervisors were unaware of the management maintenance 

order used to diagnose and reduce DBCS pieces at 

risk. In addition, not all DBCS staff was properly trained, 

and maintenance supervisors did not ensure preventive 

maintenance routines were completed properly to bring at 

risk pieces within operational quality standards. 

As a result, the Capital Metro Area incurred excess 

mailpiece rejects that required manual processing, costing 

about $1 million for the 2-year period ending September 

30, 2009. The Capital Metro Area can avoid incurring an 

additional $1.1 million over the next 2 years by addressing 

these issues. 

GOAL 2: LEVERAGING THE 

POSTAL SERVICE’S STRENGTHS

The Postal Service’s second strategic goal concentrates 

on building the reach and capability of its network by 

using information technology to enhance products and 

performance, and by empowering employees to build 

the business.

Our work in this area assisted the Postal Service in 

identifying opportunities to improve transportation 

effi ciency, optimize the mail processing network, control 

facility and operational costs, and maximize the costeffectiveness of contracts.

Network Rationalization Initiatives

The Postal Act of 2006 encouraged the Postal Service 

to streamline its networks. The Postal Service has been 

challenged to plan, develop, and implement rationalization 

initiatives. The most immediate challenge is to dramatically 

reduce costs and eliminate ineffi ciencies fast enough to 

enable the Postal Service to meet its fi nancial obligations, 

while complying with its universal service obligation. 

Additional challenges include:

 Opposition to infrastructure changes. 

 Resistance to First-Class Mail service downgrades. 

 Facilities with long-term leases.

 Workforce infl exibilities.

 Facility data consistency and reliability.

 Lack of a comprehensive network plan.

Our review of Postal Service progress in streamlining 

the network between FYs 2005-2009 disclosed that the 

Postal Service made progress reducing its mail processing 

and transportation infrastructure. Management closed 68 

airport mail centers and 12 remote encoding centers, and 

continues to realign bulk mail center operations. We also 

reported that the Postal Service has made limited progress 

in implementing area mail processing (AMP) consolidations 

in the P&DC network — 268 P&DC nationwide. The Postal 

Service initiated 98 AMP studies since FY 2005; however, it 

only implemented 26 consolidations (12 were implemented 

after our review) of which two resulted in a facility closure. 

See the list on the next page.

Management uses both a bottom-up and top-down 

approach for identifying AMP consolidation candidates. 

However, most of the AMP proposals are generated using 

the bottom-up approach and result in partial consolidations 

of originating mail rather than a facility closure. Developing 

objective criteria and implementing an annual top-down 

methodology would provide a more consistent and 

defensible approach to AMP consolidations, which may 

reduce stakeholder resistance and accelerate the AMP 

consolidation process. To remain fi nancially viable, the 

Postal Service must continue to effectively streamline the 

mail processing and transportation network and optimize 

the workforce. 

A map of AMP reviews and a summary table outlining 

audits conducted (noting the main issues identifi ed) and 

consolidations implemented since 2005 follow on next page. 

Area Mail Processing Consolidations

The Postal Service manages one of the world’s largest and 

most complex distribution and transportation networks. 

Plant consolidations are one of three core elements of 

network streamlining. The following reports were issued 

during the reporting period due to congressional requests.

Lakeland and Manasota P&DCs. We concluded that there 

was a valid business case that Area Mail Processing (AMP) 

consolidations increase effi ciency, reduce processing costs, 

and improve service in support of the Postal Service’s 

network streamlining efforts. Auditors assessed compliance 

with established policies and the operational impact of 

consolidating the Lakeland and Manasota P&DC mail 

processing operations into the Tampa P&DC. The AMP 

proposals were generally supported and in compliance 

with established policies. However, implementation of the 

Manasota P&DC consolidation was delayed 6 months due 
6 | Semiannual Report to Congress

GOAL 2: LEVERAGING THE POSTAL SERVICE’S STRENGTHS

to the consolidation of other P&DC originating operations 

into the Tampa P&DC. Therefore, the Manasota P&DC AMP 

proposal did not capture volume and workhour data from 

the Lakeland P&DC consolidation into the Tampa P&DC. 

The volatility of mail volume can impact projections when 

implementation is not immediate, increasing the risk of 

including outdated data in the proposal.

Dallas P&DC. The consolidation of the Dallas P&DC 

outgoing mail operations to the North Texas P&DC was a 

prudent business decision. Our analysis showed adequate 

capacity exists at the North Texas P&DC to process 

increased mail volume. We also found that the consolidation 

would improve customer service, minimally impact 

employees, and improve overall effi ciency. As a result of 

this consolidation, the Postal Service could save more than 

$11.9 million annually.

New Castle P&DF. We examined the proposed 

consolidation of outgoing mail processing operations from 

the New Castle Processing and Distribution Facility (P&DF) 

into the Pittsburgh P&DC. Our audit revealed that the 

consolidation was a prudent business decision because 

it minimally impacted employees, improved service, and 

reduced costs through increased effi ciency. Additionally, 

the Postal Service addressed community concerns and the 

AMP consolidation estimates appeared reasonable.

Use of the Carrier Optimal Routing System

Implemented in October 2005, the Postal Service’s Carrier 

Optimal Routing (COR) system helps establish safer, more 

effi cient routes; and reduce workhours and delivery costs. 

OA found that while the COR system was used to perform 

more than 15,000 route adjustments nationally; the Postal 

Service had not completed an additional 39,237 routes 

to optimize lines of travel and reduce delivery costs. 

The districts were unable to fully utilize the COR system 

because it was not user-friendly, the data preparation 

process was labor intensive and time consuming, and 

district personnel were not always selected and trained 

to operate the COR system. Auditors reported more than 

$221 million in signifi cant funds that could be put to better 

use if changes were made in these areas. 

AMPs Implemented — October 1, 2005, to March 30, 2010*

# Losing Facility State Gaining Facility State

1 Marina P&DC CA Los Angeles and Long Beach P&DCs CA

2 Bridgeport P&DF CT Stamford P&DC CT

3 Canton P&DC OH Akron P&DC OH

4 Greenburg PO PA Pittsburgh P&DC PA

5 Kansas City P&DC KS Kansas City P&DC MO

6 Marysville P&DF CA Sacramento P&DC CA

7 Mojave PO CA Bakersfi eld P&DC CA

8 Monmouth P&DC NJ Trenton and Kilmer P&DCs NJ

9 Newark P&DC NJ DBVD and Northern Metro P&DCs NJ

10 Northwest Boston P&DC MA Boston P&DC MA

11 Olympia P&DF WA Tacoma P&DC WA

12 Pasadena P&DC CA Santa Clarita and Industry P&DCs CA

13 St. Petersburg P&DC FL Tampa P&DC FL

14 Waterbury P&DF CT Southern Connecticut P&DC CT

15 Lakeland P&DC FL Tampa P&DC FL

16 Long Beach P&DC CA Santa Ana P&DC CA

17 Staten Island P&DF NY Brooklyn P&DC NY

18 Portsmouth P&DC NH Manchester P&DC NH

19 Flint P&DC MI MI Metroplex P&DC MI

20 Binghamton P&DF NY Syracuse P&DC NY

21 Cape Cod P&DF MA Brockton P&DC MA

22 Watertown PO NY Syracuse P&DC NY

23 Queens P&DC NY Brooklyn P&DC NY

24 Western Nassau P&DC NY Mid-Island P&DC NY

25 Winchester PO VA Dulles P&DC VA

26 Oxnard P&DF CA Santa Clarita P&DC CA

*Marina P&DC AMP was completed in July 2005. It was included on the above list to show the two P&DC closures completed by Postal Service. 

*The Kansas City, KS, P&DC was the second closure.
October 1, 2009 – March 31, 2010 | 7 

GOAL 2: LEVERAGING THE POSTAL SERVICE’S STRENGTHS

Area Mail Processing Issues

Report Number Report Issue Date Project Description

Savings 

Accuracy

Data Accuracy and 

Support Service Impacts

Oversight and/or 

approval

Stakeholder 

Communication

AMP Guidance 

and Process

NO-AR-05-004 12/08/04 Mansfi eld, OH AMP √ √

NO-AR-05-013 09/22/05 Canton, OH AMP √ √

NO-AR-06-001 12/21/05 AMP Guidelines — Headquarters √ √

EN-AR-06-001 09/26/06 Pasadena, CA AMP √ √ √√ √ √

NO-AR-06-010 09/30/06 Bridgeport, CT AMP √ √

EN-AR-07-001 11/09/06 Sioux City, IA AMP √ √ √ √√

EN-AR-07-002 12/05/06 Service Implications of AMP — Headquarters √ √√ √ √

NO-AR-07-003 03/30/07 Steubenville, OH PIR √ √

EN-MA-07-001 06/26/07 AMP Initiation Process — Headquarters √

EN-AR-07-003 07/18/07 Bronx-Morgan, NY AMP √ √

EN-AR-07-004 08/14/07 Marina, CA PIR √ √ √

EN-MA-08-001 09/25/07 Automated AMP Worksheets — Headquarters √

EN-AR-08-001 01/14/08 Kansas City, KS AMP √ √ √ √

EN-AR-08-003 04/16/08 Marysville, CA Consolidation √ √ √

EN-AR-08-005 07/17/08 Detroit, MI AMP √ √ √

EN-AR-08-006 09/17/08 Mojave, CA Consolidation √ √

EN-AR-09-001 02/04/09 AMP Communication — Headquarters √ √

NO-AR-09-011 09/22/09 Canton Consolidation Review

EN-AR-10-001 01/07/10 Status on the Rationalization Initiative — Headquarters √ √

EN-MA-10-002 01/21/10 Mojave Mail Processing Changes √

NO-AR-10-002 02/01/10 New Castle, PA AMP

EN-AR-10-003 02/12/10 Manasota, FL AMP √ √

EN-AR-10-004 02/12/10 Lakeland, FL AMP

NO-AR-10-003 02/24/10 Dallas, TX AMP √ √ √

This chart depicts systemic issues/problems that were identifi ed during consolidation reviews. (The individual checks represent an area needing improvement.)

A Map of AMP Reviews

Canton, OH (2 reports)

Detroit, MI 

New Castle, PA Sioux City, IA

Kansas City, KS

Dallas, TX 

6 Headquarters Reviews

Bronx, NY

Bridgeport, CT

Mansfi eld, OH

Steubenville, OH

Manasota, FL 

Lakeland, FL

Mojave, CA (2 reports)

Marina, CA

Pasadena, CA

Marysville, CA

AMP Proposal Reviews (12)

Post Consolidation Reviews (4)

HQ Level AMP related Reviews (6)

Post-Implementation Reviews (2)
8 | Semiannual Report to Congress

Surface Transportation 

Network transportation has two surface transportation 

components: Postal Vehicle Services (PVS), which uses 

Postal Service employees, vehicles and facilities, and 

highway contract routes (HCR), which are contracted 

transportation. In FY 2009, the Postal Service spent 

about $1.2 billion on PVS operations covering more 

than 130 million miles, and more than $3 billion on HCR 

transportation covering more than 1.6 billion miles. The 

following audits were conducted in Chicago.

PVS Transportation. Auditors assessed whether select 

PVS vehicle operations at the Cardiss Collins P&DC 

were effective and economical. The audit determined 

that the Postal Service could more effectively manage 

PVS transportation processes and schedules, thereby 

reducing driver workhours 

and associated fuel use and 

damage claims and saving 

signifi cant funds.

HCR Transportation — 

Greater Chicago Mail 

Processing Facilities.

We assessed whether HCR 

contracts were effective and 

economical. Auditors concluded 

that the greater Chicago mail 

processing facilities could 

improve the effectiveness of 

scheduled HCRs by canceling 

or modifying 68 trips, thereby 

reducing contract and fuel costs 

over the term of existing HCR 

contracts. The Postal Service 

could eliminate these trips 

without negatively affecting 

on-time service because trip 

mail volume was low and mail 

could be consolidated on other 

trips. Management agreed with 

the recommendations, but did 

not agree with our estimated 

savings because they are 

reviewing all operations in the 

Chicago metropolitan area, 

and all actual savings will be 

based on negotiations with 

contractors. 

Mail Processing and 

Transport Equipment

The Postal Service uses many 

types of equipment to process 

and transport the mail. Mail transport equipment (MTE) 

consists of various types of containers used to hold mail 

during processing and transportation within or between 

Postal Service facilities, its contractors, its mailers, 

and other external customers. Following are two audits 

conducted in this area.

Mail Processing Equipment. We assessed the 

management and disposition of excess mail processing 

equipment (MPE) in the Portland, OR, District and 

concluded that the Postal Service could improve its 

processes and internal controls in this area. Auditors found 

that Portland District management did not properly and 

promptly dispose of excess Carrier Sequence Bar Code 

Sorter (CSBCS) machines, and did not adequately maintain 

MPE inventory. As a result, there is an increased risk of loss 

and misstated value of MPE in fi nancial records. In addition, 

the Postal Service may have missed an opportunity to 

recover partial lease costs for a facility used to store excess 

MPE. We recommended management ensure that MPE 

is accurately documented in databases and personnel 

responsible for the management and accountability of 

MPE receive training and adhere to established policies 

and procedures. We also recommended management 

reconsider subleasing the Albany, OR, Detached Carrier Unit 

facility to offset lease costs.

Mail Transport Equipment. We assessed the effectiveness 

of the Postal Service’s management and control of 

MTE, including distribution, fl ow, security, and inventory 

management focusing on the Pacifi c and Eastern Areas. 

The audit determined that the Pacifi c and Eastern Areas 

did not always ensure compliance with inventory and 

accountability processes nor ensure assets were always 

safeguarded. Auditors concluded that weak controls in the 

Pacifi c and Eastern Areas resulted in the loss or misuse 

of MTE assets. In addition, the situation could present 

a danger to public safety and security if assets are not 

properly safeguarded, and refl ect poorly on the Postal 

Service brand and public image.

Powered Industrial Vehicle 

Management System 

Powered vehicles are used in postal plants to move mail 

from incoming trucks, to equipment to be sorted, and 

back to the trucks for delivery. The Powered Industrial 

Vehicle Management System (PIVMS) monitors this 

motorized equipment in the plants and assists in managing 

equipment operator workhours, identifying opportunities 

to reduce vehicle inventory, and ensuring internal controls 

over safety and security. We assessed whether PIVMS was 

performing economically and effi ciently at the Tampa and 

Indianapolis P&DCs. 

GOAL 2: LEVERAGING THE POSTAL SERVICE’S STRENGTHS

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re Auditors determined that the Postal Service could more effectively 

manage Postal Vehicle Services (PVS) transportation processes and 

schedules, thereby reducing driver workhours and associated fuel use 

and damage claims and saving signifi cant funds.

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During our audit of mail transport equipment in the Eastern Area, 

we observed unauthorized possession of approximately 250 Postal 

Service pallets in Philadelphia, PA, on November 3, 2009.
October 1, 2009 – March 31, 2010 | 9 

GOAL 2: LEVERAGING THE POSTAL SERVICE’S STRENGTHS

Tampa P&DC. We determined that the use of PIVMS at 

the Tampa P&DC contributed signifi cantly to its success 

in realizing effi ciency improvements. Our audit also 

revealed that the Tampa P&DC reduced vehicle equipment 

and transferred excess equipment effectively from the 

Tampa P&DC to elsewhere in the Southeast Area. In 

addition, management implemented more controls than 

those offered by the PIVMS, such as requiring powered 

equipment operators to use a conventional metal key to 

start the vehicles, in addition to their PIVMS badges. Since 

the Tampa P&DC used the PIVMS as intended, we did not 

make any recommendations. 

Indianapolis P&DC. We found management used the 

PIVMS to identify employees involved in vehicle accidents 

and evaluate equipment operator staffi ng levels. However, 

PIVMS was not used to manage equipment operator 

productivity, schedule preventive maintenance, monitor 

vehicle battery usage, or identify opportunities to reduce 

vehicle inventory. Better use of PIVMS could result in 

signifi cant savings to the Postal Service. 

Network Distribution Center

In the 1970s, the Postal Service developed a network of 

21 bulk mail centers (BMCs) to support mail distribution 

and transportation for Parcel Post, Standard Mail, and 

Periodicals. With mailers entering more mail near fi nal 

destination, declining mail volume, and a changing 

mail mix, much of the mail previously processed at 

the BMCs has diminished. In 2006, the Postal Service 

began evaluating various network design alternatives 

to streamline the BMC network. Due to economic and 

regulatory changes, the 2006 regional distribution centers 

concept and the 2007 Time-Defi nite Surface Network 

(TDSN) concept were halted. Early in 2009, the Postal 

Service began developing an internal re-engineering effort 

focused on transforming BMCs into network distribution 

centers (NDCs). NDCs would consolidate the processing 

and dispatching of mail to achieve economies of scale and 

greater operational effi ciency, as well as reduce workhours 

and transportation cost. 

In May 2009, the Postal Service began Phase 1 activation 

of the NDC concept. The core principle is to fi ll containers 

and trucks early in the network and to dispatch them as 

deep into the network as possible. NDC Phase 1 activation 

took place in the Northeast, New York Metro, and Eastern 

Areas. Three BMCs (Philadelphia, Springfi eld [MA], and New 

Jersey) and 42 P&DC and P&DFs that transport mail to 

these three NDCs were impacted in the Phase 1 activation.

Our audit of the NDC Phase 1 activation determined that the 

planning process appeared adequate, the execution of the 

plan generally went well, and 

the impact on operations was 

mostly positive. However, OA 

found that management could 

enhance the planning process 

by completing customer supplier 

agreements and the employee 

excessing process earlier in the 

activation. Management could 

also include specifi c milestones 

in the Readiness Assessment 

Checklist. 

Inbound International 

Mail 

Foreign Postal Administrations 

(FPA) pay the Postal Service 

to sort and dispatch inbound 

international mail at one of fi ve 

International Service Centers 

(ISC) located in New York, Miami, Chicago, Los Angeles, 

and San Francisco. Inbound international mail is foreignoriginating mail destined for delivery in the U.S. 

Auditors analyzed data at the Los Angeles ISC and found 

that volume data used to bill FPAs for inbound international 

letter post, Parcel Post, and Express Mail service was 

not always accurate and properly supported. Specifi cally, 

proper source documentation was not always available 

and weights and piece counts were not always correct. 

Management initiated software change requests (SCRs) 

in August 2008 to correct these issues, but after 1 year 

these SCRs were still outstanding. As a result, the Postal 

Service underbilled foreign countries by nearly $163,000 

for international mail service for 4 months between 

October 1, 2008, to January 31, 2009. We recommended 

management expedite approved SCRs to enable the 

Early in 2009, the Postal Service began developing an internal 

re-engineering effort focused on transforming bulk mail centers into 

network distribution centers. Depicted here is the interior of a bulk 

mail center.

BMC History

 1970s

 Standard Periodical 

& Package Mail 

distribution & 

transportation

 21 facilities

 FY 2006

 Perform bulk 

mail processing 

operations act as 

STC and mailer 

entry ports

 70 facilities

 FY 2007

 Outsource origin 

and destination 

distribution of 

bulk mail

 Contractor facilities

 FY 2009

 Consolidation of 

outgoing processing 

and transportation

 21 facilities

BMC RDC TDSN NDC
10 | Semiannual Report to Congress

GOAL 2: LEVERAGING THE POSTAL SERVICE’S STRENGTHS

International Reconciliation System to reconcile data and 

provide valid dispatch-level data for billing.

City Delivery Effi ciency Review — 

San Francisco

Delivery operations are the Postal Service’s largest cost 

center, accounting for about 45 percent of salary expenses 

and workhours. Although workhour usage has been 

reduced in delivery operations, these reductions have 

not kept pace with declining mail volume. For example, 

we found that effi ciency could be improved at the San 

Francisco Napoleon Street Station by eliminating time 

wasting practices. We recommended a reduction of 

54,975 workhours at this station to achieve an associated 

economic impact of about $2.1 million annually.

Rural Delivery Christmas Operations

Regular rural carriers receive supplemental Christmas 

overtime pay when they exceed their route’s established 

time during the Christmas holiday mailing season. Due to 

the decline in mail volume, we concluded that there is no 

longer a need for supplemental Christmas overtime hours 

during this period. We made recommendations that would 

reduce the operating cost of Christmas rural delivery.

Carrier Sequence Bar Code Sorters

The Postal Service primarily uses two types of equipment to 

sort letter mail into walk sequence. They are the high-speed 

delivery barcode sorters (DBCS) machines in the plants and 

the carrier sequence barcode sorters (CSBCS) machines in 

the associate offi ces. Our evaluation of the Mid-Carolinas 

District determined a business case exists for the continued 

use of CSBCS machines in some associate offi ces. While 

the district had reduced 11 CSBCS machines during our 

audit, we determined an additional 10 CSBCS machines 

could be eliminated, saving more than $3 million in mail 

processing and maintenance hours.

Enterprise Architecture

The existing enterprise architecture (EA) framework within 

Information Technology (IT) has not reached a level of 

maturity to facilitate repeatable, defi ned, managed, and 

optimized processes and systems. The Postal Service (as 

an enterprise) is not using its resources and technologies to 

best achieve its business goals.

Human Resources Shared Service Center

The Human Resources Shared Service Center (HRSSC) 

provides a wide range of services to address personnel 

issues for postal employees nationwide. The Information 

Technology department, located at the HRSSC, provides 

help desk services by administering the HRSSC Remedy 

application and troubleshooting problems. 

Our audit found general controls surrounding the HRSSC 

information technology environment are not operating as 

intended. Specifi cally, management can improve controls 

over security management, physical access, confi guration 

management, and contingency planning. Management 

generally agreed with the recommendations, but disagreed 

with the recommendations to designate a security control 

offi cer, and to revise the timeframe for the antivirus 

notifi cation on the Interactive Voice Response servers. 

Additionally, management did not agree that HRSSC 

personnel were not trained on policy requirements. Without 

adequate controls, management increases the potential for 

undetected and unmitigated security risks that could result 

in unauthorized disclosure of sensitive data. 

Maximizing the Cost-Effectiveness 

of Contracts 

We issued two contract-related audit reports during the 

reporting period. One audited a proposal for direct labor 

and indirect labor rates for future pricing actions for an 

indefi nite delivery quantity contract; the other verifi ed 

billed, direct labor hours. These audits were provided 

to contracting offi cers for their consideration in future 

negotiations for obtaining the best terms for the Postal 

Service and for effectively managing these contracts.

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The Postal Service primarily uses two types of equipment to sort letter mail into walk sequence. There are the 

high-speed delivery barcode sorters (DBCS) machines in the plants and the less effi cient carrier sequence 

barcode sorter (CSBCS) machines in the associate offi ces.
October 1, 2009 – March 31, 2010 | 11 

GOAL 3: EMBRACING CHANGE

The proposal audit disclosed that the contractor submitted 

inadequate cost or pricing data. In addition, the contractor’s 

accounting system continued to be inadequate for 

accumulating and billing costs under Postal Service 

contracts. In a previous report, we noted that the contractor’s 

accounting system was not acceptable for an award of a 

prospective contract. The contractor began implementing 

corrective actions based on our recent recommendations for 

improvement to its accounting system.

GOAL 3: EMBRACING CHANGE 

The Postal Service needs to embrace change to ensure 

that it is relevant and responsive to customer needs. This 

strategic goal focuses on using the full potential of the 

Internet, being a sustainability leader, and collaborating to 

grow the business. Evolving customer needs, shaped by the 

Internet and a new generation of customers, are redefi ning 

expectations for service and convenience. 

Sustainability 

We assessed the Postal Service’s compliance with 

energy and recycling policies at 88 fi eld sites during 

FY 2009. In this review, seven of these sites met basic 

energy standards, showing some improvement for energy 

awareness. Consistent with our previous review of another 

90 sites, questionnaire responses indicated that most of 

the sites can improve basic building maintenance, such 

as setting prescribed temperatures, installing occupancy 

sensors, and taking measures to reduce domestic water 

use. To be more effective, we believe that the Postal Service 

can take further advantage of technology advancements 

namely, remote building management systems. We 

previously reported that remote building management 

systems automate control settings and provide a return to 

the Postal Service of up to 31 percent. Also, reinforcing 

awareness of energy policies should encourage more 

facilities to meet basic standards and reduce energy 

consumption through the use of low- or no-cost energy 

saving practices.

As it relates to recycling awareness, the data collected 

also showed some improvements. Specifi cally, 25 of 

the 88 sites we visited met basic standards. However, 

consistent with our prior review, many fi eld sites were still 

placing recyclable material in trash dumpsters and could 

still improve awareness communications with employees 

to be more effective.

Revenue Generation in Supply Management

Supply Management’s primary objective is lowering costs 

through effectively managing the supply stream, not 

generating revenue. However, the Postal Service is seeking 

to generate revenue wherever it can and has asked that all 

Postal Service organizations take an innovative approach 

to revenue generation. Viewing suppliers as potential 

customers and offering them Postal Service solutions to 

meet their needs adds value to the supply chain. As such, 

Supply Management developed a goal to further identify 

opportunities that contribute to Postal Service revenue. 

We assessed how the Postal Service is leveraging buying 

power to generate revenue and found that several Supply 

Management portfolios have revenue generating efforts 

underway that leverage its signifi cant buying power. 

One promising collaborative effort is the Supplier Sales 

Lead Program (SSLP) which evaluates opportunities for 

reinvigorating supplier sales leads and leveraging existing 

relationships with the Postal Supplier Council. 

We also provided Supply Management with a 

commissioned benchmarking study that identifi ed private 

sector and foreign post best practices for leveraging 

the supplier base to generate revenue. Our report made 

recommendations to strengthen the support for the 

SSLP and consider program expansion. In addition, we 

recommended that policies and procedures be developed 

to encourage and enhance revenue generating activities in 

the supply chain.

REGULATORY STUDIES AND 

REPORTING OBLIGATIONS

The Postal Act of 2006 requires the Postal Service to 

conduct certain regulatory studies and mandates a number 

of reporting obligations. The Postal Service uses special 

fi nancial studies to attribute costs to the various categories 

of mail, special services, and to develop workshare cost 

avoidance estimates. We assessed the management of 

these special studies and found that controls are generally 

adequate to ensure that they are updated with recurring data 

inputs. However, controls over updating the studies with nonrecurring fi nancial and operational data could be improved. 

The oldest of 13 one-time studies, the Postmaster 

Variability Study, was completed in 1984; additionally 

seven other one-time studies conducted in the 1990s may 

need to be updated. Updating non-recurring data inputs 

used in cost models could help the Postal Service develop 

more accurate worksharing cost avoidance estimates. For 

example, a 5 percent change in postmaster variability will 

increase or decrease the estimate of the portion of costs 

that are volume variable (as opposed to institutional) by 

about $39.9 million over a 2-year period. 

From 18 other cost models and analyses, we examined the 

Periodicals Destination Entry Cost Avoidance Model and 

found that 24 data inputs developed in the 1990s may no 

As it relates to recycling awareness, 

the data collected showed some 

improvements. Specifi cally, 25 of 

the 88 sites we visited met basic 

standards. However, many fi eld 

sites were still placing recyclable 

material in trash dumpsters and 

could still improve awareness 

communications with employees 

to be more effective.
12 | Semiannual Report to Congress

PRESERVING ACCOUNTABILITY

longer represent current operating conditions. This older 

data was also used in other cost models. 

Additionally, we found the Postal Service complied with the 

regulatory mandate to list the special studies and discuss 

whether the studies refl ected current operating conditions. 

The Postal Regulatory Commission plans to complete a 

strategic rulemaking during FY 2010 that should assist the 

Postal Service in prioritizing updates of the studies and data.

PRESERVING ACCOUNTABILITY

During this period we audited Postal Service installations 

and the fi nancial statement. We also assessed the accuracy 

of management data to help preserve the integrity of Postal 

Service processes and personnel. By focusing on key 

vulnerabilities of Postal Service installations, auditors show 

how the Postal Service can further protect the integrity of 

the mailstream. 

Field Financial Audits 

Following is a summary of the fi nancial audits performed 

in support of the independent accountant’s opinion on the 

Postal Service fi nancial statements.

Post Offi ces and Business Mail Entry Units. During this 

reporting period, we issued 123 individual and two capping 

reports summarizing our Post Offi ce and Business Mail Entry 

Unit (BMEU) audits. Our overarching conclusion was that 

fi nancial transactions were reasonably and fairly presented 

in the accounting records and that generally, internal 

controls were in place and effective. However, we identifi ed 

12 Post Offi ces and fi ve BMEUs where major controls 

were not effective. Additionally, we reported a signifi cant 

nationwide defi ciency related to business mail acceptance 

at BMEUs for the third consecutive year. Although it was not 

completely remediated in FY 2009, the Postal Service has 

made progress to correct the defi ciency and to comply with 

future Sarbanes-Oxley Act of 2002 requirements. We will 

continue to monitor and report the Postal Service’s progress 

on the key fi nancial reporting controls.

THE IMPACT OF THE POSTAL SERVICE’S NEW PRICING INITIATIVES

PAEA (Postal Act of 2006) ushered in a new era of enhanced pricing fl exibility and gave the Postal Service profi t 

incentives. The Postal Service, its regulators, and mailers all face new choices in determining how they will adapt: 

 The Postal Service must determine how to use its new pricing fl exibility to retain earnings. 

 The regulator must determine how to balance the Postal Service’s pricing fl exibility against other regulatory goals 

such as ensuring a level playing fi eld. 

 Mailers have new opportunities to work with the Postal Service to create customized pricing agreements. 

RARC retained John C. Panzar Ph.D., professor of economics, to perform foundational research of Postal Service pricing 

initiatives in this new environment. Dr. Panzar’s theoretical analysis revealed key insights to understanding pricing and 

marketing initiatives under price cap regulation. The research paper, “Postal Service Pricing Policy after PAEA,” explores 

and informs the pricing policy debate and offers specifi c fi ndings in the areas of workshare discounts, quantity discounts, 

and channel-based discounts. Dr. Panzar also provides his opinion about reasons for potential antitrust implications. 

Workshare Discounts. Historically, the Postal Service has generally set workshare discounts equal to the cost the 

Postal Service avoids when performing workshared activities. On the contrary, Dr. Panzar believes the Postal Service 

faces a strong economic incentive to set workshare discounts below the costs those activities avoid. In Panzar’s opinion, 

this is permissible under PAEA, but it would break with long-standing practice and invite antitrust scrutiny.

Quantity Discounts. The author’s research found that quantity discounts, such as negotiated service agreements, can be 

lucrative for the Postal Service. If the customers receiving these discounts are not in competition with other, less-favored 

customers, quantity discounts are a “win-win,” as the price cap automatically protects everyone. However, if customers 

are in competition, those who do not get quantity discounts are disadvantaged and may seek antitrust relief.

Channel-Based Discounts. Under PAEA, channel-based discounts are allowed. The discounts are based on alternate 

distribution channels, such as postage meter or Internet transactions. These types of discounts are attractive to the 

Postal Service because they reduce costs; however, in some instances, they are likely to produce winners and losers 

among customers.

In summary, Dr. Panzar suggests these new pricing initiatives can be profi table for the Postal Service; but in his opinion 

because they may exclude customers or produce winners and losers, there is a potential antitrust implication, which is 

something the Postal Service has never had to consider.
October 1, 2009 – March 31, 2010 | 13 

PRESERVING ACCOUNTABILITY

Cost and Revenue Analysis. We issued a report 

summarizing Cost and Revenue Analysis test observations. 

Auditors found the Postal Service generally conducted the 

statistical tests in accordance with established policies and 

procedures. However, we found the most frequent type of 

test errors were data collectors not using marking slips to 

identify mail being tested. In addition to testing errors, we 

found that data collectors did not always follow procedures 

for protecting data collection equipment. 

Financial Risk Models

To identify current and emerging business mail fi nancial 

risks, OA developed the following fi nancial risk models. 

These models use predetermined risk factors to rank the 

74 Postal Service districts from highest to lowest fi nancial 

risk. Auditors run and analyze these models quarterly for 

internal use.

Cost and Controls Model. The Costs and Controls model 

identifi es areas for audit and, in isolated instances, identifi es 

fraudulent fi nancial activities. Using this as the basis for 

initiating their work, auditors recently completed fi nancial 

risk-based audits in the Bay Valley District, Los Angeles 

District, Greater South Carolina District, Northern New Jersey 

District, Gateway District, Capital District, and New York 

Metro Area. These risk-based audits continue to disclose 

non-compliance with Postal Service policies over cash, 

stamps, money orders, disbursements, fi nancial accounting 

and reporting, miscellaneous expenses, and payroll. 

Business Mail Entry Unit Model. Using the Business 

Mail Entry Unit (BMEU) model as the basis for initiating 

audit work, auditors recently completed fi nancial riskbased audits in the Arizona, Connecticut, Kentuckiana, Los 

Angeles, and Northland Districts. These risk-based audits 

disclosed non-compliance with Postal Service policies over 

mail acceptance processes. 

Vending Model. OA developed a vending risk model to 

monitor the Postal Service’s phase out of stamp vending 

machines from Post Offi ces and retail locations. The model 

ranked the Postal Service’s districts by fi ve fi nancial risks 

associated with vending operations. Using the risk model 

results, we initiated vending audits in the Rio Grande and 

Los Angeles Districts. These audits identifi ed units that had 

not properly closed out vending and had undeposited cash. 

In March 2010, we issued a management advisory which 

reported as of January 2010, that although all vending 

operations should have been closed out, 402 units had 

more than $1.8 million in stamp stock balances and fi ve 

units had more than $16,000 in undeposited cash.

Financial Audits

We performed separate audits 

of selected fi nancial activities 

and accounting records at the 

Postal Service headquarters 

and at the three Information 

Technology and Accounting 

Service Centers (IT/ASC) 

located in St. Louis, MO; 

Eagan, MN; and San Mateo, 

CA. We also conducted audits 

of the Governors’ travel and 

miscellaneous expenses, Postal 

Service offi cers’ travel and 

representation expenses, and 

information system general 

controls at the IT/ASCs and 

the Raleigh, NC, Information 

Technology Service Center. 

For these audits, we did not 

propose any adjustments, but we did identify various 

control defi ciencies that were not signifi cant to the overall 

fi nancial statements and did not affect the overall adequacy 

of internal controls. Since the Postal Service took corrective 

action during our audits, we provided no recommendations.

Information Systems General Controls

We evaluated security management, access controls, 

confi guration management, and segregation of duties 

as they related to operating systems and database 

platforms for selected applications, data, and the computer 

infrastructure at the Postal Service information technology 

centers. These general computer controls provided 

reasonable assurance that computer-processed data was 

complete, validated for accuracy, and secure; data integrity 

controls were in place; and business practices complied 

with Postal Service policies, procedures, and standards. 

We provided recommendations in prior audit reports during 

FY 2009 to assist management in improving information 

technology operations in the areas of operating system, 

network, and database access controls; security over 

sensitive data transmissions; and physical security. 

Imprudent Purchases 

We audited the Postal Service’s compliance with the 

Management Instruction on Expenses for Internal and 

External Events and followed up our previous audit report 

on SmartPay® Purchase Card spending. Our audit disclosed 

imprudent purchases and non-compliance with the meals 

and events policy. This policy describes procedures for 

purchase and payment of offi cial Postal Service business 

internal and external event-related expenses. Internal 

events are non-routine meetings such as conferences, 

During this reporting period, we issued 123 individual and two capping 

reports summarizing our Post Offi ce and Business Mail Entry Unit audits.

OA developed a vending risk 

model to monitor the Postal 

Service’s phase out of stamp 

vending machines from Post 

Offi ces and retail locations.
14 | Semiannual Report to Congress

training sessions, briefi ngs, postal employee recognition 

and appreciation events that are attended mainly by Postal 

Service employees. External events are offi cial business 

events such as marketing events; stamp, facility and 

other offi cial dedication ceremonies; conferences; forums; 

workshops and training events; tradeshows; community 

service activities; and hosting business meals attended by 

employees, customers, and other external stakeholders.

Based on our review of judgmentally selected transactions, 

we identifi ed more than $54,000 in imprudent purchases 

and more than $792,000 in purchases that were not made 

in accordance with Postal Service policy. 

Money Orders

As a follow-up to our 2008 audit of no-fee money orders, 

our most recent audit disclosed continued misuse of 

no-fee money orders by individual Post Offi ces nationally. 

This audit disclosed that employees used no-fee money 

orders for convenience when other payment methods 

were prescribed and, in isolated instances, to commit 

fraud. In addition, employees did not maintain adequate 

documentation to support the use of no-fee money 

orders and input incorrect reason codes when processing 

transactions. Nationwide, we determined that units have 

misused more than $4.86 million in no-fee money orders 

over the last 2 years. Specifi cally, units issuing these no-fee 

money orders did not follow Postal Service policy that limits 

the use of no-fee money orders for purchases to a onetime local expense, not to exceed $500. We reported this 

amount as unrecoverable, unsupported questioned costs.

PRESERVING ACCOUNTABILITY

POSTAL SERVICE’S FINANCIAL CONDITION 

In an economy that has seen the reported end of the recent recession, the Postal Service continues to see a decline in 

mail volume and revenues. This is due to a combination of continued lagging retail activity across many sectors and the 

continued diversion of mail activity to electronic platforms, a migration which accelerated during the economic downturn. 

The Postal Service has initiated unprecedented cost cutting in recent years, saving $6.1 billion in 2009. This effort has 

included cutting work hours, making contract adjustments, and signifi cantly decreasing capital spending.

One area of focus has been the 10-year payment schedule required to fund retiree health benefi ts, which includes 

average annual payments of $5.6 billion, represent 8.2 percent of total operating revenues, and exceed the highest net 

income ever achieved in the Postal Service. A large part of the Postal Service’s current debt is a direct result of making 

these payments. The Postal Service has sought Congressional relief in the form of restructuring the payments to the 

retiree health benefi ts fund, fl exibility in closing Post Offi ces, and the ability to deliver mail less than 6 days per week.

The overall operating loss for FY 2009 was $3.8 billion. During FY 2010, mail volumes are expected to decline an 

additional 10 billion pieces, in addition to the 25.6 billion piece decline in FY 2009. Total mail volume in Quarter 1, 

FY 2010 was down 8.9 percent compared to the same period last year.

In addition, the Postal Service reported a $263 million net loss from Operations for Quarter 1, FY 2010. While this is 

down from a net loss from Operations of $380 million in Quarter 1 of FY 2009, the fi rst quarter of the fi scal year is 

historically the most profi table for the Postal Service.

Without substantial cost reductions, the FY 2010 loss could be signifi cantly greater than FY 2009, which was impacted 

by legislative relief in regard to the retiree health care benefi t payment. The net loss for FY 2010 is projected to be more 

than $7 billion. Legislative action reduced the 2009 payment to the Postal Service Retiree Health Benefi t Fund (PSRHBF) 

by $4 billion but did not address the longer term PSRHBF payment schedule. At the end of FY 2009, the Postal Service 

had $10.2 billion in debt outstanding, a $3 billion increase from FY 2008.

The Postal Service is expected to borrow up to their annual ceiling of $3 billion for projected debt of $13.2 billion at the 

end of FY 2010. This would bring the Postal Service close to their allowable debt ceiling of $15 billion and limit their 

ability to borrow in FY 2011. The Postal Service has substantial scheduled cash payments in September and October 

2010, including $5.5 billion due to the PSRHBF on September 30, 2010. In addition, approximately $1.1 billion is due 

in October 2010 to the Department of Labor (DOL) for workers’ compensation liability. Based on the current borrowing 

capacity and projections of cash available from operations, the Postal Service will likely have suffi cient cash available for 

ongoing operations in 2010. However, substantial uncertainty exists as to whether the Postal Service will have suffi cient 

cash available to fund the $5.5 billion retirement health benefi t payment and the October DOL obligations while maintaining 

suffi cient liquidity to meet its fi nancial obligations in 2011.

NO FEE MONEY 

ORDERS

Postal Service policy limits 

the use of no-fee money 

orders for purchases to a 

one-time local expense, not 

to exceed $500. 
October 1, 2009 – March 31, 2010 | 15 

PRESERVING ACCOUNTABILITY

Absenteeism 

The Deputy Postmaster General asked us to determine if 

the Postal Service’s absenteeism rate is comparable with 

private and federal sector rates and, if not, to determine the 

potential causes. In addition, we were asked to compare 

sick leave usage by postal employees who are 3 to 4 years 

from retirement in the Civil Service Retirement System 

(CSRS) and Federal Employees Retirement System (FERS). 

OIG auditors concluded that the Postal Service’s total 

absenteeism rate for major benefi ts is comparable to the 

total absenteeism rate of the federal sector, but higher 

than that of the civilian sector. We identifi ed two potential 

causes for the difference between the Postal Service and 

the civilian sector absenteeism rates. First, the Postal 

Service offers more leave benefi ts than the civilian sector, 

and second, they offer fewer incentives for employees 

to accumulate leave. Additionally, we found that some 

supervisors were not complying with attendance control 

procedures related to unscheduled absences. We also 

determined that CSRS and FERS retirees used comparable 

amounts of sick leave in the years preceding retirement.

Ethics Program

At the request of the prior chairman of the Audit and 

Finance Committee of the Board of Governors, we reviewed 

the Postal Service’s ethics program. We assessed whether 

the ethics program is properly designed and operationally 

effective. Auditors identifi ed areas that, if addressed, would 

increase the operational effectiveness of the program and 

enhance its current design. Management disagreed with 

our recommendation to revise the procedures to ensure 

Corporate Personnel Management communicates relevant 

information related to ethics standards violations, violations 

of criminal confl ict of interest statues, and applicable 

disciplinary actions to the designated agency ethics offi cial.

DATA MINING GROUP

Data mining plays an increasingly important role in transforming rapidly growing business data into useful, 

actionable information. 

The RARC’s Data Mining Group pursues in-depth analyses in the core areas of health care fraud, fi nancial fraud, 

contract fraud, and internal mail theft. Through the use of independent study, proven data mining methods and 

techniques, and analytical tools, the group identifi es and extracts non-obvious patterns and relationships within data 

to inform the work of auditors and special agents. The results complement and enhance the planning and initiation of 

audits and investigations. 

Team members consist of multidisciplinary experts in law enforcement, investigative analysis, and data extraction. The 

group combines this expertise with outreach to internal and external stakeholders to identify and enrich analyses that 

address emerging issues and critical challenges.

During this reporting period, the Data Mining Group developed a state-of-the-art, statistical model that identifi ed 

historical indicators of Offi ce of Workers’ Compensation Programs (OWCP) claimant fraud. They extracted hidden, 

systemic patterns of potential embezzlement activity in detailed retail revenue and expense data. They also initiated a 

pioneering study of supplies, services, and payment data to isolate suspicious, fraudulent contract activity. Lastly, the 

Data Mining Group merged mailer data with postal operations data and pinpointed processing operations and carrier 

routes with signifi cant mail loss.

Table 1: Comparison of Absenteeism Rates for Major Leave Benefi ts (Percentage)

Sick Leave Annual Leave Holiday Personal Leave Subtotal Major Leave

Postal Service 4.14 8.28 3.21 N/A19 15.63

Federal Sector 3.69 8.15 3.50 N/A 15.34

Private Industry 1.49 4.28 2.98 0.58 8.3220

State and Local 

Governments

2.45 5.91 4.18 0.72 12.0221

Source: Postal Service payroll data for FY 2008; OPM federal agency data for CYs 2001–2005 (average); BLS occupational equivalent rates for private

 industry and state and local governments from December 2008 Employment Cost Index.

Note: The absenteeism rates are the average percentage of leave used per employee based on a 2,080 work-hour year.

The Postal Service’s total absenteeism rate for major leave benefi ts is equivalent to the OPM federal sector rate, almost double the 

Bureau of Labor Statistics rate for private industry, and almost 4 percent higher than the Bureau’s state and local government rates. 

Depicted in Table 1.

EXTERNAL PEER 

REVIEW OF THE 

OFFICE OF AUDIT

During the period, the 

external peer review of 

OA was completed. Our 

system of quality control 

was determined to be 

suitably designed and 

complied with to provide 

reasonable assurance of 

conformity with applicable 

professional standards in all 

material respects. However, 

the review team did fi nd 

some matters warranting 

our attention, and we 

addressed these issues with 

an increased emphasis on 

specifi c controls. Additionally, 

during the course of the peer 

review, the team uncovered 

a disturbing fi nding that 

resulted in an investigation 

and disciplinary action 

against an employee.
INVESTIGATIONS
October 1, 2009 – March 31, 2010 | 17 

FINANCIAL CRIMES

FINANCIAL CRIMES

Embezzlements 

Special agents employ various investigative techniques to 

uncover embezzlements. These embezzlements may involve 

postal employees stealing money from cash drawers, 

using sophisticated schemes to manipulate postal money 

orders or money order funds, or falsifying fi nancial retail 

records. When employees are found to be responsible for 

missing postal funds, they are reported to management 

for appropriate administrative action. In cases that warrant 

criminal prosecution, offenders not only face the loss 

of their jobs but may face jail time and court-ordered 

restitution. Following are examples of fi nancial fraud cases 

we investigated during this reporting period.

 A $236,000 shortage in a Texas Post Offi ce led to an 

OIG investigation that identifi ed two sales and services 

associates (SSAs) as suspects. In November, the 

second of the two Texas SSAs pled guilty to theft of U.S. 

property. The fi rst SSA had pled guilty in July 2009 and 

was sentenced to 5 years’ probation and ordered to pay 

$29,000 in restitution. Our investigation showed that 

both SSAs failed to pay for postal money orders they 

issued to themselves, family, friends, and creditors. The 

SSAs admitted to stealing money orders since 2006, 

and both resigned after being interviewed by our agents. 

Sentencing in the second SSA’s case is scheduled for 

April 2010. Additionally, the postmaster was issued a 

downgrade to part-time fl exible clerk for “Unacceptable 

Performance” by not ensuring compliance with Postal 

Service policies and procedures on fi nancial integrity; 

record keeping and reporting; and maintaining the 

security of the facility. 

 A Virgina customer service supervisor was sentenced 

in January to 12 months and 1 day in federal custody, 

followed by 3 years’ probation, after he pled guilty to 

a scheme to steal and cash postal money orders. The 

supervisor, and a co-conspirator who was not a postal 

employee, stole stacks of old, outdated money orders 

and also a money order imprinter kept in a locked fi ling 

cabinet in his Post Offi ce. Special agents were notifi ed 

after unsold money orders showed up as having been 

cashed. The two conspirators cashed 254 money orders 

totaling more than $127,000. The co-conspirator pled 

guilty and was sentenced to 24 days’ incarceration 

and 4 months of home confi nement followed by 5 

years’ probation. The former supervisor was ordered to 

pay $127,000 in restitution to the Postal Service. The 

supervisor resigned from the Postal Service.

 A $156,000 money order scam by an Oregon SSA led 

to an 18-month sentence in federal prison, followed by 

3 years’ supervised release, and an order to pay more 

than $156,000 in restitution to the Postal Service. The 

sentence followed a guilty plea to theft of government 

property. Our investigation revealed that for nearly 2 

years the SSA stole cash and money orders by falsely 

issuing refunds to cover the money orders she issued 

without remitting payment. She explained that the 

money was used to pay her mortgage, to remodel her 

husband’s house, and to assist her children with their 

fi nancial needs. However, at sentencing she changed her 

story and said she used the stolen money to gamble and 

provide support for her adult children. The SSA resigned 

from the Postal Service. 

Voyager Credit Card

The Postal Service uses about 219,000 vehicles — one of 

the largest fl eets in the U.S. — to deliver mail across the 

nation. Through a partnership with U.S. Bank and Voyager 

Fleet, the Postal Service issues one credit card per vehicle 

for refueling, routine maintenance, and vehicle washing and 

polishing. Under no circumstances are postal employees or 

contractors allowed to disclose their personal identifi cation 

numbers (PINs) to non-postal entities, utilize the card for 

personal use, exceed the daily purchase limit without 

proper authorization, or transfer purchasing authority 

to a non-postal entity. However, some dishonest postal 

employees, contractors, and other individuals misuse these 

credit cards for personal gain. Special agents investigated 

29 cases of Voyager credit card fraud in this reporting 

period, resulting in 18 arrests and 14 administrative 

actions. Following is an example of one such case.

INVESTIGATIONS

To protect the mail and to maintain the integrity of postal processes and personnel, 

the Postal Service relies on the investigative efforts of the Offi ce of Investigations’ (OI) 

special agents. These special agents are stationed in offi ces nationwide. Their charge 

is to investigate internal crimes and frauds against the Postal Service. Following is work 

conducted by the OI during this reporting period that contributed to safeguarding the 

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

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

WORKERS’ COMPENSATION FRAUD

In November, two Michigan 

brothers who were both 

Postal Service HCR drivers, 

along with a non-employee 

conspirator, each pled guilty 

in federal court to Conspiracy 

to Defraud the United States 

of $102,000. All three 

were indicted in September 

2009, after our investigation 

determined that the brothers 

were using Voyager cards 

for personal use. One of 

the cards was assigned to 

their father’s Postal Service 

contract to carry mail. The 

brothers also conspired with 

a local farmer to sell large 

quantities of diesel fuel. 

The brothers’ father failed 

to notify the Postal Service 

after he became aware that 

his sons had made large 

unauthorized purchases using 

the Voyager card assigned 

to him. The brothers and the 

conspirator were arrested 

in October. The father’s 

contract to carry the mail 

was terminated in November. 

Sentencing is pending.

Tort Claims

The Postal Service established 

the Tort Claims Program to 

monitor and resolve claims 

fi led against the Postal 

Service by customers seeking 

compensation for injuries or 

losses incurred while using 

postal facilities. According to 

an agreement with the Postal 

Service’s Law Department, 

special agents investigate tort 

claim cases involving suspected fraud and cases for which 

the U.S. Attorney’s Offi ce has requested an investigation. 

Following is an example of one such case.

After our investigative work, a Florida claimant, who fi led a 

$1 million tort claim against the Postal Service, agreed to a 

$6,000 settlement for property damages in November. The 

initial claim alleged multiple injuries were sustained in an 

accident, after a mail truck ran into the claimant’s vehicle. 

Our investigation however, revealed the claimant continued 

to work at her hair salon while alleging to be injured. She 

was observed styling, washing, and blow drying a client’s 

hair, giving a pedicure, and sweeping the fl oor with no 

apparent discomfort. 

WORKERS’ COMPENSATION 

FRAUD

In FY 2009, the monetary and medical benefi ts paid by 

the Postal Service to workers’ compensation claimants 

(employees who sustained job-related injuries) totaled 

nearly $1.1 billion and its estimated total liability for future 

workers’ compensation costs is more than $8.5 billion. 

Administered by the DOL, the OWCP provides direct 

compensation to providers, claimants, and benefi ciaries. 

The Postal Service later reimburses the OWCP in a 

process known as “charge-back billings.” The OIG’s 

mission for workers’ compensation fraud investigations is 

both proactive and reactive. Depending on the case type, 

special agents focus on the prevention and deterrence of 

workers’ compensation fraud. They also focus on detecting 

and investigating an allegation of a fraudulent claim. The 

results of our investigative efforts during this reporting 

period included $99.8 million in cost savings or avoidances, 

25 arrests, and 99 administrative personnel actions, 

including removals, suspensions, and letters of warning.

Claimant Fraud

Unfortunately, a small percentage of postal employees 

attempt to defraud the workers’ compensation program. 

Criminal prosecutions are an effective deterrent to fraud 

and may permanently prevent the payment of additional 

compensation. Cases that may require administrative action 

are referred to the Postal Service and the DOL. Special 

agents work closely with health and resource management 

specialists from the Postal Service on all phases of 

these investigations. Following are examples of workers’ 

compensation fraud cases investigated during this period.

 In March, a former New Hampshire mail handler 

who had relocated to Florida, was sentenced to 12 

months’ probation after he pled guilty in federal court 

to false statements or fraud to obtain federal workers’ 

compensation benefi ts. In 2002, the mail handler fi led 

a total disability workers’ compensation claim for an 

alleged on-the-job injury to his back. Our investigation 

determined that the mail handler was self-employed and 

operating a fi shing charter business. Video surveillance 

captured the mail handler catching and reeling in fi sh, 

casting out fi shing lines, and rigging bait. As a result of 

the investigation, the DOL terminated the mail handler’s 

benefi ts resulting in a cost avoidance of more than 

$900,000 for the Postal Service.

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

Service issues one credit card per vehicle for refueling, routine 

maintenance, and vehicle washing and polishing.

Video surveillance captured the mail handler catching and reeling 

in fi sh, casting out fi shing lines, and rigging bait, all while collecting 

federal workers’ compensation benefi ts.
October 1, 2009 – March 31, 2010 | 19 

WORKERS’ COMPENSATION FRAUD

 After a 7-day jury trial in January, a New York custodian 

was found guilty on four felony counts of making 

false or fraudulent statements to obtain federal 

employee’s compensation. The custodian alleged partial 

disability from a work-related back injury in 1992, 

and had received approximately $87,000 in workers’ 

compensation payments. Video surveillance conducted 

by our agents showed the custodian repeatedly 

exceeding his medical restrictions. We watched the 

custodian plow and shovel snow; rake leaves; dig, load 

and carry buckets of dirt; climb ladders; and mow lawns. 

The DOL removed the custodian from the periodic rolls, 

realizing a savings of about $260,000 for the Postal 

Service. He was also terminated from the Postal Service 

as a result of the investigation. Sentencing is scheduled 

for May 2010.

 A county judge sentenced a Utah rural carrier in 

December, to 60 days of home confi nement, 3 years’ 

probation, and ordered her to pay restitution of more 

than $13,000 to the DOL for credit to the Postal Service. 

Pursuant to the information fi led against her, the carrier 

pled guilty to one count of fraud in November. Prior to 

these actions, our investigation determined that the rural 

carrier, who claimed to be totally disabled from an onthe-job back injury, was working as a real estate agent. 

The investigation was initiated when the rural carrier 

mailed bulk mail postcards advertising her services as 

a licensed real estate agent. The DOL terminated the 

rural carrier’s benefi ts, realizing a savings of more than 

$1.6 million for the Postal Service. The rural carrier 

resigned from the Postal Service. 

OWCP Medical Provider Fraud

The workers’ compensation program is also subject to 

fraud and abuse by medical providers used by postal 

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

of this program by submitting false bills, colluding with 

claimants to extend benefi ts or falsifying claim documents. 

When evidence of abuse exists, OIG agents investigate.

Following are two such cases.

 To update a case reported 

in the previous semiannual 

report, on November 5, 

2009, the Postal Service 

received nearly $15 million 

in criminal restitution due 

to the OIG’s participation in 

an investigation against a 

pharmaceutical company 

that promoted the sale 

of specifi c prescription 

drugs for conditions not 

approved by the Food 

and Drug Administration 

(FDA). The company was 

ordered to pay a criminal 

fi ne of nearly $1.2 billion 

and a criminal forfeiture 

of $105 million, for a 

total criminal resolution of 

$1.3 billion to the federal 

government. This is the 

largest criminal fi ne ever 

imposed in the U.S. for any 

matter. The pharmaceutical 

products were prescribed 

and provided to the DOLOWCP, Medicare, Medicaid, 

and other government 

insurance recipients. The 

company also agreed to 

pay an additional $1 billion, 

plus interest, to settle 

civil liability arising from 

the illegal promotion of 

these products. In August 

2009, the Postal Service 

was awarded nearly $1.4 

million as part of the civil settlement in this case (which 

refl ects the actual harm experienced by the Postal 

Service). The OIG has fi led an application with the FDA to 

obtain a portion of the forfeited amount.

JOINT YEAR-LONG WORKERS’ COMPENSATION FRAUD INITIATIVE 

The OIG and U.S. Postal Inspection Service launched a joint year-long initiative to combat workers’ compensation fraud. 

The new initiative began operations on February 1, 2010, and is planned to last through the end of the calendar year. 

The investigative initiative is an intensely-focused effort to identify fraudulent claimants and protect those with legitimate 

injuries and illnesses. It builds on the prevention and awareness campaign launched by the OIG in September 2009, and 

is expected to further prevent or reduce workers’ compensation fraud.

According to Inspector General David Williams and Chief Postal Inspector William Gilligan, this initiative is an opportunity 

for the two organizations to collaborate and work with the Postal Service’s Health and Resource Management staff to 

focus on protecting the Postal Service’s integrity and fi nancial health.

After a 7-day jury trial in January, a New York custodian was found guilty 

on four felony counts of making false or fraudulent statements to obtain 

workers’ compensation benefi ts.

In November 2009, the Postal Service received nearly $15 million in 

criminal restitution due to the OIG’s participation in an investigation against 

a pharmaceutical company that promoted the sale of specifi c prescription 

drugs for conditions not approved by the Food and Drug Administration.
20 | Semiannual Report to Congress

DELAY, DESTRUCTION, AND THEFT OF MAIL BY EMPLOYEES 

 In January, a New Orleans physician was indicted on 

one count of health care fraud and one count of aiding 

and abetting. The physician agreed to pay $750,000 

in restitution. Our investigation revealed the physician 

was engaging in a health care scheme to defraud the 

OWCP by billing it for services rendered to patients at a 

time when his offi ce was closed due to the aftermath of 

Hurricane Katrina. From January 2004 to January 2009, 

the physician treated 47 postal employees with 62 injury 

claims. The physician submitted more than $1.7 million 

in bills to the OWCP, of which more than $1 million was 

allegedly fraudulent. Sentencing is pending.

DELAY, DESTRUCTION, AND 

THEFT OF MAIL BY EMPLOYEES 

The Postal Service is consistently ranked by the Ponemon 

Institute as America’s “most trusted federal agency.” It’s 

ranked that way because of the integrity of its employees. 

Unfortunately, a small number of postal employees and 

contractors abuse the public’s trust by delaying, destroying, 

or stealing mail. It’s our responsibility to identify these 

dishonest individuals and take proper investigative steps 

to have them prosecuted or refer them to management for 

administrative action. 

Theft of Mail by Employees

Following are examples of cases in which postal employees 

stole mail for personal gain.

 A California Air Mail Facility ramp clerk was sentenced 

in October to 90 days’ imprisonment, 5 years’ 

probation and ordered to pay $10,585 in restitution 

and a $30,000 fi ne after pleading guilty to theft and 

obstruction of mail. The restitution was payable to 

three victims and the fi ne was payable to the Postal 

Service. While under our agents’ surveillance, the clerk 

rifl ed 34 Express Mail envelopes resulting in the theft 

of $11,900 and $5,000 worth of blank money orders. 

During an interview with special agents, the clerk — 

with 38 years of service — admitted to stealing jewelry 

and cash from the mail. She stated she specifi cally 

targeted packages that appeared to contain either 

money going through the mail, or jewelry that she 

could sell for cash in order to pay bills, give to family 

members, and to use for gambling. The clerk was 

removed from the Postal Service. 

 In January, a Minnesota mail processing clerk was 

removed from the Postal Service after admitting 

to stealing nearly 16,000 Best Buy Reward Zone 

Certifi cates from customers across the U.S. to redeem 

them for nearly $200,000 of Best Buy merchandise. 

The investigation determined that the clerk (who 

sometimes served as an acting supervisor) also sold 

fraudulently obtained Best Buy merchandise to fellow 

postal employees, including four supervisors who 

received letters of discipline. Agents executed a federal 

search warrant at the clerk’s residence and seized 371 

fraudulently purchased electronic items that required 

a six-ton postal truck to transport from the employee’s 

residence. They also seized nearly 2,600 Best Buy 

Reward Zone mail pieces. An Information was fi led 

against the clerk charging him with theft of mail. He was 

arrested, arraigned, and pled guilty in September 2009. 

Sentencing is pending. In January, a Minnesota mail processing clerk was removed from the Postal Service after admitting to stealing 

nearly 16,000 Best Buy Reward Zone Certifi cates from customers across the U.S. to redeem them for nearly 

$200,000 of Best Buy merchandise.

WORKERS’ COMPENSATION FRAUD 

INVESTIGATIVE RESULTS

October 1, 2009 – March 31, 2010

 379 fraud investigations resolved

 $99.8 million in compensation payments avoided

 25 arrests

 17 indictments

 21 convictions

 99 personnel actions taken by management
October 1, 2009 – March 31, 2010 | 21 

 A California mail handler, responsible for stealing more 

than 1,000 parcels, pled guilty to theft of mail and in 

March was sentenced to 24 months’ imprisonment 

on each of the two counts against her, to be served 

concurrently, and ordered to pay restitution to the victims 

of more than $38,000. Upon release from imprisonment, 

she will be on 3 years’ probation. The mail handler said 

the parcels she stole contained jewelry and clothes that 

she pawned for cash. She also admitted to stealing 

approximately 400 video games from the mail, which 

she sold at a retail video game store for cash. She said 

she kept some of the jewelry for herself or gave stolen 

mail items to her family and friends as gifts. Searches 

of the mail handler’s vehicle and residence turned up 

sleeves of video games, along with jewelry, watches, and 

a ring all stolen from the mail; plus receipts for sales of 

the video games. She estimates collecting up to $9,000 

from this scheme.

Delay or Destruction of Mail by Employees

Special agents also investigate postal employees who delay, 

desert, or dump mail. The following cases were investigated 

during this period.

 In December, prosecution of a Michigan city carrier was 

deferred per an agreement, part of which required the 

carrier to resign from the Postal Service. In August 2009, 

we observed the carrier transferring what appeared to 

be mail from his postal vehicle to his personal vehicle. 

Special agents then went to the carrier’s residence 

where they recovered more than 20,000 pieces of mail, 

some dating to August 2008. In September 2009, the 

carrier was arrested on a federal warrant and charged 

with delay and theft of mail. The city carrier resigned in 

December 2009. 

 A Florida highway contract route (HCR) carrier was 

sentenced in December, to 3 years’ probation and 

100 hours of community service after pleading guilty 

to delay and destruction of mail. The carrier failed to 

deliver mail entrusted to her, took mail to her residence, 

and burned some of the mail in her backyard. A search 

of the carrier’s residence resulted in the recovery of 

approximately 40 large containers of various classes of 

mail, including First-Class Mail. Our special agents also 

found suspected marijuana and drug paraphernalia. 

Postal management terminated the carrier’s contract and 

the Postal Service is pursuing costs of nearly $7,000, 

due to the contractor defaulting on the contract. 

IDENTITY THEFT

When criminals steal someone’s identifying information — 

such as a name, date of birth, or SSN — and use it to 

fraudulently apply for credit or take over someone’s credit 

or bank accounts, they are committing identity theft. Special 

agents investigate certain identity theft cases where there 

is postal employee involvement. Here is an example of one 

such case worked in this area.

In December, an Ohio rural carrier was sentenced to 28 

months’ imprisonment, 4 years’ supervised release, and 

ordered to pay more than $18,000 in restitution. The 

carrier had previously pled guilty to an 11 count indictment 

charging her with identity theft, credit card fraud, and mail 

theft. Our investigation revealed that the rural carrier was 

committing identity theft by soliciting and stealing credit 

cards, and credit card convenience checks, from customers 

on her route. She stole the information to purchase items 

for herself and make cash advances of more than $18,000. 

To cover her theft, the rural carrier intercepted any letters 

to customers concerning these credit cards, as well as 

packages ordered on the Internet in postal customers’ 

names. As part of her plea agreement, the rural carrier 

resigned from the Postal Service in September 2009. 

CONTRACT FRAUD

The sheer volume and huge dollar value of contracts 

provides opportunities for contractors and employees 

to defraud the Postal Service. Today the Postal Service 

manages billions in contracts, ranging from multi-million 

IDENTITY THEFT

Special agents went to a Michigan city carrier’s residence where they recovered more than 20,000 pieces of 

mail, some dating to August 2008.
22 | Semiannual Report to Congress

OFFICIAL MISCONDUCT 

dollar national contracts for services such as transportation 

networks and IT infrastructures, to local contracts for 

supplies and services at individual postal facilities. The 

OIG aids the Postal Service by investigating allegations 

of contract fraud, waste, and misconduct. When contract 

improprieties are documented, special agents present 

the evidence for criminal and civil prosecution and 

administrative remedies. 

During this reporting period, we conducted 62 contract 

fraud investigations, resulting in 13 arrests and more than 

$1 million in funds returned to the Postal Service. Following 

are examples of recent contract fraud investigations by 

special agents. 

 Based on our investigation, in December a Texas huband-spoke contractor who performed terminal handling 

services and Christmas contracts at airport terminals, 

entered into a $775,000 civil settlement agreement with 

the Postal Service through the U.S. Attorney’s Offi ce. 

The investigation centered on false claims for payment 

and payment retention by the contractor under various 

terminal handling service contracts. We found that the 

contractor was fraudulently charging the Postal Service 

for employee hourly wages when those employees were 

working on non-postal contracts located within the same 

facility. Additionally, the contractor fraudulently charged 

the Postal Service contract hourly rates in excess of the 

rates actually paid to its contract employees. 

 In October, a landlord withdrew a false equitable 

adjustment claim against the Postal Service. As 

background, in the early 1990s, the landlord and the 

Postal Service entered into a 10-year lease with a 5-year 

renewal option and second 5-year negotiated option for 

a Virginia postal facility. In February 2008, the landlord 

submitted an equitable adjustment claim that we 

determined was false and had already been paid for in 

the common area maintenance payments. The resulting 

settlement agreement allowed the Postal Service to 

retain more than $15,000 from monies that were being 

withheld from rental payments and ultimately resulted in 

a savings to the Postal Service of more than $514,000. 

 In September 2009, an Ohio HCR contractor pled guilty 

to 6 misdemeanor counts of theft for failing to obtain 

workers’ compensation insurance on Postal Service HCR 

contracts. The contractor was sentenced to 180 days 

incarceration that was suspended, and ordered to pay 

restitution of $30,000 to the Ohio Bureau of Workers’ 

Compensation. Our investigation disclosed that the 

Postal Service paid the contractor more than $20,000 

to obtain workers’ compensation insurance on his fi ve 

postal contracts. During an interview with Special Agents, 

the HCR contractor admitted that although he was paid 

by the Postal Service to obtain workers’ compensation 

insurance, he failed to do so.

OFFICIAL MISCONDUCT 

Postal Service employees are guilty of misconduct when they:

 Misuse Postal Service computers.

 Destroy or steal postal property.

 Lie or forge signatures on offi cial documents.

 Steal funds.

 Abuse authority.

 Sabotage operations.

 Use narcotics or sell drugs while on duty.

 Abuse alcohol while on duty

Illegal drugs in the workplace can negatively impact 

employee productivity and safety, affect employee judgment, 

increase stress levels, and lead to acts of violence or 

hostility. Use and sale of narcotics on duty by employees 

can also contribute to other crimes such as theft, 

embezzlements, and fraudulent workers’ compensation 

claims. Special agents are charged with investigating postal 

employees selling narcotics while on postal property or 

while on duty. Our efforts in dealing with illegal drugs in the 

workplace focus on detection, investigation, and prevention. 

Detection of illegal drug sales, distribution, and usage in 

the workplace is the fi rst step in this overall approach. 

Employees selling or distributing illegal drugs are vigorously 

investigated and prosecution is pursued. 

For the 6-month period, special agents investigated 67 

cases of postal employees suspected of possessing 

or using illegal drugs on duty, and 23 employees were 

removed from the Postal Service. 

Following are examples of cases the OIG investigated 

involving employee misconduct.

 In January, a sales, services, and distribution associate 

(SSDA), who was also the treasurer of an American 

Postal Workers Union (APWU) Local in Georgia, was 

sentenced in federal court to 5 years’ probation and 

ordered to pay more than $16,000 in restitution to 

the APWU. The SSDA had previously pled guilty to 

embezzling those APWU funds as established during 

a joint OIG and DOL Offi ce of Labor Management 

Standards investigation. The SSDA was removed from 

the Postal Service. 

 In November, a postmaster relief in Texas pled guilty 

(along with two non-Postal Service co-conspirators) 

to one count of conspiracy to possess with intent to 

distribute more than 100 kilograms of marijuana. 

Sentencing is pending. The joint investigation with 

federal and state investigators linked the employee to 

a narcotics smuggling operation that used a Texas Post 

Offi ce to ship parcels containing narcotics to locations 
October 1, 2009 – March 31, 2010 | 23 

EXECUTIVE INVESTIGATIONS AND INTERNAL AFFAIRS

throughout the U.S. The postmaster relief accepted some 

parcels while on the clock and entered the Post Offi ce 

after hours on days when she did not work to mail other 

drug parcels. She was also issued a Letter of Demand 

from the Postal Service for a $1,172 shortage identifi ed 

in her Post Offi ce. The shortage was attributed to the 

postmaster relief entering the Post Offi ce after hours 

and printing postage meter labels for parcels containing 

narcotics. The postmaster relief was removed from the 

Postal Service. A Minnesota city carrier, who pled guilty 

in December to state charges of possession and selling 

drugs, was sentenced to two concurrent year-and-aday sentences on each of the felony counts. However, 

his sentencing was reduced to serving 6 months in a 

workhouse and 10 years’ probation. The carrier was 

removed from the Postal Service. The investigation, 

conducted jointly with the Minnesota Bureau of Criminal 

Apprehension and the Drug Enforcement Administration 

(DEA), revealed that while on the clock the carrier 

was found to be in possession of drug paraphernalia, 

marijuana, and methamphetamines. The carrier admitted 

to using drugs while on the clock and to selling portions 

of drugs he purchased to offset the cost of his personal 

drug use. A search warrant of the carrier’s residence 

recovered approximately 130 marijuana plants, drug 

paraphernalia, scales, and chemicals and equipment 

typically used in the manufacture of methamphetamines. 

 In January, two Massachusetts city carriers pled guilty in 

federal court to drug conspiracy and possession charges. 

One carrier was sentenced to 18 months’ imprisonment, 

to be followed by 36 months of supervised release while 

the second was sentenced to 8 months’ imprisonment, 

with 36 months of supervised release. Both city carriers 

were removed from the Postal Service. A joint investigation 

with the DEA into drug activity at a General Mail Facility 

determined that the carriers were selling drugs while on 

the clock and on postal property. Both were arrested in 

October 2008 pursuant to federal criminal complaints 

for conspiracy to possess with intent to distribute and 

Distribution of Oxycodone. The city carriers were indicted 

on the same charges in January 2009. 

EXECUTIVE INVESTIGATIONS 

AND INTERNAL AFFAIRS

OI conducts criminal and administrative investigations of 

Postal Service executives, and OIG and Postal Inspection 

Service personnel, as well as whistleblower reprisal 

investigations.

Whistleblower Reprisal Activity

The Whistleblower Protection Act does not apply to the 

Postal Service. However, the Postal Service has its own 

policy governing whistleblower retaliation. The policy 

prohibits retaliation against an employee who has disclosed 

information he or she reasonably believes to be: 

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

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

substantial and specifi c danger to public health or safety.

Allegations received: .................................................. 110

OIG investigations initiated: ........................................... 30

Investigations closed with no fi nding of retaliation 

 or deferred to other adjudicative body: ......................... 14

Allegations closed with no action: .................................. 71

Open investigations: ..................................................... 25

OIG found reprisal: ......................................................... 1

A Minnesota city carrier, who pled guilty in December to state 

charges of possession and selling drugs, was sentenced to two 

concurrent year-and-a-day sentences on each of the felony counts.
APPENDICES
October 1, 2009 – March 31, 2010 | 25 

APPENDIX A

APPENDIX A

Reports Issued to Postal Service Management

For the Period October 1, 2009 – March 31, 2010

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

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

Summary

Vision Categories Number of Reports Funds Put to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

Focusing on What Matters Most 

to Customers

5 $22,388,109 $1,011,280 — $162,581 

Leveraging the Postal Service's 

Strengths

24 $371,474,330 $112,642,332 $9,046,661 —

Embracing Change 1 — — — —

Regulatory Studies and 

Reporting Obligations 

2————

Preserving Accountability 156 $74,833 $11,067,826 $5,637,145 $421,358 

TOTAL 188 $393,937,272 $124,721,438 $14,683,806 $583,939 

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 signifi cant problems, abuses, and defi ciencies, 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 fulfi ll the requirements of the Act.

Defi nitions:

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 effi ciently 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.
26 | Semiannual Report to Congress

Reports With Quantifi able Potential Monetary Benefi ts

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

FOCUSING ON WHAT MATTERS MOST TO CUSTOMERS

Delivery

City Delivery Effi ciency Review — San Francisco Napoleon Street Station; 

DR-AR-10-002; 12/18/2009

$21,308,433 — — —

Engineering

Capital Metro Area: Reducing Pieces at Risk; DA-AR-10-001; 2/26/2010 $1,079,676 $1,011,280 — —

Fiscal Year 2009 U.S. Postal Service Financial Statements Audit

Los Angeles International Service Center — Inbound International Mail; 

FT-AR-10-001; 10/13/2009

— — — $162,581 

LEVERAGING THE POSTAL SERVICE’S STRENGTHS

Delivery

Continuing Use of Carrier Sequence Barcode Sorter Machines at Delivery Units; 

DR-AR-10-004; 3/31/2010

$3,011,956 — — —

Rural Delivery Christmas Operations; DR-AR-10-003; 3/16/2010 $2,955,524 — — —

Use of the Carrier Optimal Routing System; DR-AR-10-001; 10/15/2009 $221,337,796 $101,820,325 — —

Human Resources and Security

Grievance Overpayments in the Baltimore District; HR-AR-10-001; 3/8/2010 — $1,669,669 — —

Saved Grade Status and Temporary Assignments — Postal Service Headquarters; 

HM-MA-10-001; 12/22/2009

— $67,629 $67,629 —

Network Optimization

Excess Mail Processing Equipment in the Portland District; 

EN-AR-10-002; 1/11/2010

$520,538 $46,206 — —

Network Processing

Dallas Processing and Distribution Center Outgoing Mail Consolidation; 

NO-AR-10-003; 2/24/2010

$114,041,172 — — —

Powered Industrial Vehicle Management System at the Indianapolis Processing 

and Distribution Center; NO-AR-10-004; 3/29/2010

$7,913,246 — — —

Supply Management

Offi ce Supplies National Contract Compliance; CA-AR-10-002; 12/3/2009 $51,388 $9,014,558 $8,979,032 —

Transportation

Handling and Transportation of Large and Lightweight First-Class Mail Parcels; 

NL-MA-10-001; 1/28/2010

$47,890 $23,945 — —

Highway Contract Route Transportation — Greater Chicago; 

NL-AR-10-003; 3/1/2010

$3,325,251 — — —

Postal Vehicle Service Transportation Routes — Cardiss Collins Processing and 

Distribution Center; NL-AR-10-002; 12/28/2009

$18,269,569 — — —

PRESERVING ACCOUNTABILITY

Field Financial

Capital District Financial Risk Audit; FF-AR-10-075; 1/19/2010 — $20,434 $15,774 —

Elmwood Station Financial Risk; FF-AR-10-026; 11/30/2009 — $7,763 — —

Evaluation of Locally Issued Salary Advances; FF-AR-10-122; 3/17/2010 — $333,816 $78,900 —

APPENDIX A
October 1, 2009 – March 31, 2010 | 27 

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

Fiscal Year 2009 Financial Accountability Risk Audit Elizabeth Main Post Offi ce — 

Elizabeth, NJ; FF-AR-10-050; 12/16/2009

— $10,511 $10,511 $3,028 

Fiscal Year 2009 Los Angeles District Financial Risk; FF-AR-10-028; 12/3/2009 — $104,540 $90,851 $145,611 

Gateway District Financial Accountability Risk Audit; FF-AR-10-047; 12/15/2009 — $170,631 $165,068 —

Imprudent Purchases and Management Instruction on Expenses for Internal and 

External Events; FF-AR-10-025; 12/3/2009

— $792,022 — —

New York Metro Area Financial Accountability Risk Audit; 

FF-AR-10-013; 11/13/2009

— $110,962 $19,157 $3,553 

Parkmoor Station Financial Risk; FF-AR-10-027; 12/1/2009 — $9,913 — —

Use of No-Fee Money Orders Follow-Up Audit; FF-AR-10-033; 12/4/2009 — $4,855,832 $4,685,936 —

Vending Operations Closure and Financial Risk; FF-MA-10-001; 3/10/2010 — — — $16,742 

Financial Reporting

Controls Over Money Orders; FT-AR-10-009; 2/22/2010 — $367,550 $367,550 $165,166 

Fiscal Year 2009 Postal Service Financial Statements Audit

St. Louis Information Technology and Accounting Service Center; 

FT-AR-10-006; 1/28/2010 

$74,833 $49,089 — —

Fiscal Year 2010 Financial Installation Audit

Baltimore Main Offi ce Window — Baltimore, MD; FF-AR-10-071; 1/7/2010 — $49,670 $48,845 —

Bear Creek Station — Houston, TX; FF-AR-10-098; 2/17/2010 — $1,032 $1,032 $679 

Boca Raton Business Mail Entry Unit — Boca Raton, FL; FF-AR-10-085; 2/1/2010 — — — $1,800 

Burbank Downtown Station — Burbank, CA; FF-AR-10-110; 3/1/2010 — $10,710 $10,710 —

Burlington Business Mail Entry Unit — Essex Junction, VT; 

FF-AR-10-102; 2/19/2010

— — — $8,494 

Canoga Park Main Post Offi ce — Canoga Park, CA; FF-AR-10-113; 3/3/2010 — $1,977 $1,977 —

Castle Shannon Branch — Pittsburgh, PA; FF-AR-10-090; 2/3/2010 — $1,448 $1,448 —

Cedar Park Main Offi ce — Cedar Park, TX; FF-AR-10-124; 3/15/2010 — $3,838 $555 —

Chester Post Offi ce — Chester, PA; FF-AR-10-129; 3/17/2010 — $4,009 $4,009 $194 

Church Street Station — New York, NY; FF-AR-10-011; 11/9/2009 — $15,824 $13,962 —

Cincinnati Main Offi ce Station — Cincinnati, OH; FF-AR-10-039; 12/7/2009 — $16,633 $16,633 —

Dallas Main Post Offi ce — Dallas, TX; FF-AR-10-009; 11/6/2009 — $948 $821 $3,157 

Denver Capitol Hill Station — Denver, CO; FF-AR-10-038; 12/7/2009 — $5,359 $5,359 —

Eagle Station Post Offi ce — Bloomington, IL; FF-AR-10-106; 3/2/2010 — $5,967 $3,936 — 

Frayser Station — Memphis, TN; FF-AR-10-094; 2/5/2010 — $2,830 $2,830 —

Hanover Business Mail Entry Unit — Hanover, NH; FF-AR-10-079; 1/20/2010 — — — $10,376 

Houston General Post Offi ce Window Main Offi ce — Houston, TX; 

FF-AR-10-100; 2/18/2010

— $1,004 $88 —

Huntington Beach Main Post Offi ce — Huntington Beach, CA; 

FF-AR-10-096; 2/8/2010

— $6,264 $6,264 —

Irvine Main Post Offi ce — Irvine, CA; FF-AR-10-103; 2/23/2010 — $1,444 — —

Kent Business Mail Entry Unit — Kent, OH; FF-AR-10-076; 1/14/2010 — — — $4,161 

LAX Main Offi ce Station — Los Angeles, CA; FF-AR-10-126; 3/15/2010 — $6,864 — —

APPENDIX A
28 | Semiannual Report to Congress

APPENDIX A

Funds Put 

to Better Use Questioned Costs

Unsupported 

Questioned Costs Revenue Impact

Long Beach Business Mail Entry Unit — Long Beach, CA; FF-AR-10-069; 1/7/2010 — — — $1,846 

Manassas Main Offi ce Window — Manassas, VA; FF-AR-10-070; 1/7/2010 — $2,826 $2,826 —

Medina Main Post Offi ce — Medina, OH; FF-AR-10-091; 2/3/2010 — $502 $502 $1,639 

Midway Main Offi ce Window — San Diego, CA; FF-AR-10-086; 2/1/2010 — $11,502 — —

Newport Post Offi ce — Newport, MN; FF-AR-10-128; 3/17/2010 — — — $2,250 

Oakland Business Mail Entry Unit — Oakland, CA; FF-AR-10-040; 12/7/2009 — — — $7,663 

Orange Main Post Offi ce, Orange, CA; FF-AR-10-002; 10/30/2009 — $16,973 $696 —

Orangeburg Business Mail Entry Unit — Orangeburg, NY; 

FF-AR-10-036; 12/7/2009

— $10,790 $10,790 —

Plano Business Mail Entry Unit — Plano, TX; FF-AR-10-064; 12/30/2009 — — — $1,288 

Portland Business Mail Entry Unit — Portland, OR; FF-AR-10-097; 2/16/2010 — — — $16,440 

Raleigh Business Mail Entry Unit — Raleigh, NC; FF-AR-10-095; 2/8/2010 — — — $19,208 

Tustin Main Post Offi ce — Tustin, CA; FF-AR-10-001; 10/30/2009 — $7,325 $903 —

Tyler Business Mail Entry Unit — Tyler, TX; FF-AR-10-077; 1/15/2010 — — — —

Village Station — Los Angeles, CA; FF-AR-10-130; 3/18/2010 — $60,473 $60,473 $1,585 

Wellshire Station — Denver, CO; FF-AR-10-016; 11/13/2009 — $3,995 $3,995 —

West Palm Beach Business Mail Entry Unit — West Palm Beach, FL; 

FF-AR-10-053; 12/17/2009

— — — $5,626 

West Palm Beach Main Offi ce Window Unit — West Palm Beach FL; 

FF-AR-10-056; 12/21/2009

— $3,538 $3,538 $852 

West Seattle Station — Seattle, WA; FF-AR-10-043; 12/9/2009 — $1,206 $1,206 —

Human Resources and Security

Postal Service Absenteeism; HM-AR-10-001; 2/18/2010 — $3,979,812 — —

TOTAL $393,937,272 $124,721,438 $14,683,806 $583,939 
October 1, 2009 – March 31, 2010 | 29 

APPENDIX A

Report Listing

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

For the period October 1, 2009 – March 31, 2010

FOCUSING ON WHAT MATTERS 

MOST TO CUSTOMERS

Delivery

City Delivery Effi ciency Review — 

San Francisco Napoleon Street Station; 

DR-AR-10-002; 12/18/2009

Engineering

Capital Metro Area: Reducing Pieces at Risk; 

DA-AR-10-001; 2/26/2010

Fiscal Year 2009 U.S. Postal Service 

Financial Statements Audit

Los Angeles International Service Center — 

Inbound International Mail; 

FT-AR-10-001; 10/13/2009

Network Optimization

Color-Coding of Standard Mail and Mail Condition 

Reporting at the Albany Processing and Distribution 

Center; NO-AR-10-005; 3/31/2010

Sales & Services

Plant-Verifi ed Drop Shipment Controls; 

MS-AR-10-001; 2/9/2010

LEVERAGING THE POSTAL 

SERVICE’S STRENGTHS

Delivery

Continuing Use of Carrier Sequence 

Barcode Sorter Machines at Delivery Units; 

DR-AR-10-004; 3/31/2010

Rural Delivery Christmas Operations; 

DR-AR-10-003; 3/16/2010

Use of the Carrier Optimal Routing System; 

DR-AR-10-001; 10/15/2009

Human Resources and Security

Grievance Overpayments in the Baltimore District; 

HR-AR-10-001; 3/8/2010

Saved Grade Status and Temporary 

Assignments — Postal Service Headquarters; 

HM-MA-10-001; 12/22/2009

Network Optimization

Excess Mail Processing Equipment in the Portland 

District; EN-AR-10-002; 1/11/2010

Lakeland Processing and Distribution Center 

Consolidation; EN-AR-10-004; 2/12/2010

Manasota Processing and Distribution Center 

Consolidation; EN-AR-10-003; 2/12/2010

Mojave Post Offi ce Mail Processing Changes; 

EN-MA-10-002; 1/21/2010

Network Distribution Center Phase 1 Activation; 

EN-MA-10-001; 11/6/2009

Status Report on the Postal Service’s 

Network Rationalization Initiatives; 

EN-AR-10-001; 1/7/2010

Network Processing

Dallas Processing and Distribution Center Outgoing 

Mail Consolidation; NO-AR-10-003; 2/24/2010

New Castle Processing and Distribution 

Facility Outgoing Mail Consolidation; 

NO-AR-10-002; 2/1/2010

Powered Industrial Vehicle Management System 

at the Indianapolis Processing and Distribution 

Center; NO-AR-10-004; 3/29/2010

Powered Industrial Vehicle Management System 

at the Tampa Processing and Distribution Center; 

NO-AR-10-001; 12/14/2009

Supply Management

NCR Government Systems, LLC’s Billed 

Direct Labor Hours for FY 2009; 

CA-CAR-10-002; 3/30/2010

Offi ce Supplies National Contract Compliance; 

CA-AR-10-002; 12/3/2009

Proposal Submitted by Western 

Industrial Contractors Incorporated; 

CA-CAR-10-001; 3/12/2010

Revenue Generation Efforts in Supply 

Management; CA-AR-10-001; 11/9/2009

Transportation

Handling and Transportation of Large and 

Lightweight First-Class Mail Parcels; 

NL-MA-10-001; 1/28/2010

Highway Contract Route Transportation — 

Greater Chicago; NL-AR-10-003; 3/1/2010

Management of Mail Transport Equipment — 

Eastern Area; NL-AR-10-004; 3/17/2010

Management of Mail Transport Equipment — 

Pacifi c Area; NL-AR-10-001; 10/22/2009

Postal Vehicle Service Transportation Routes — 

Cardiss Collins Processing and Distribution Center; 

NL-AR-10-002; 12/28/2009

EMBRACING CHANGE

Engineering & Facilities

Sustainability: Promoting Energy and Recycling 

Compliance Fiscal Year 2009; 

DA-MA-10-001; 1/28/2010

REGULATORY STUDIES AND 

REPORTING OBLIGATIONS

Cost, Revenue, and Rates

Management of Special Studies; 

CRR-AR-10-002; 3/19/2010

Statistical Testing at Postal Service Districts; 

CRR-AR-10-001; 1/28/2010

PRESERVING ACCOUNTABILITY

Field Financial

Capital District Financial Risk Audit; 

FF-AR-10-075; 1/19/2010

Elmwood Station Financial Risk; 

FF-AR-10-026; 11/30/2009

Evaluation of Locally Issued Salary Advances; 

FF-AR-10-122; 3/17/2010

Fiscal Year 2009 Financial Accountability Risk 

Audit Elizabeth Main Post Offi ce — Elizabeth, NJ; 

FF-AR-10-050; 12/16/2009

Fiscal Year 2009 Los Angeles District Financial 

Risk; FF-AR-10-028; 12/3/2009
30 | Semiannual Report to Congress

Gateway District Financial Accountability Risk 

Audit; FF-AR-10-047; 12/15/2009

Greater South Carolina District Financial Risk Audit; 

FF-AR-10-049; 12/16/2009

Imprudent Purchases and Management Instruction 

on Expenses for Internal and External Events; 

FF-AR-10-025; 12/3/2009

New York Metro Area Financial Accountability Risk 

Audit; FF-AR-10-013; 11/13/2009

Parkmoor Station Financial Risk; 

FF-AR-10-027; 12/1/2009

Statistical Tests for Fiscal Year 2009 — Cost and 

Revenue Analysis; FF-AR-10-015; 11/20/2009

Use of No-Fee Money Orders Follow-Up Audit; 

FF-AR-10-033; 12/4/2009

Vending Operations Closure and Financial Risk; 

FF-MA-10-001; 3/10/2010

Financial Reporting

Controls Over Money Orders; 

FT-AR-10-009; 2/22/2010

Opinion on the Postal Service’s Special Purpose 

Financial Statements; FT-AR-10-003; 11/16/2009

Postal Service Sarbanes-Oxley Information 

Technology Fiscal Year 2009 Preparatory Testing; 

FT-AR-10-011; 2/26/2010

U.S. Postal Service Ethics Program; 

FT-AR-10-010; 2/23/2010

Fiscal Year 2009 Financial Installation Audit

Business Mail Entry Units; 

FF-AR-10-051; 12/22/2009

Post Offi ces, Stations, and Branches; 

FF-AR-10-045; 12/14/2009

Fiscal Year 2009 Postal Service Financial 

Statements Audit

Eagan Information Technology and Accounting 

Service Center; FT-AR-10-004; 11/20/2009

Postal Service Board of Governors’ Travel and 

Miscellaneous Expenses for Fiscal Year 2009; 

FT-AR-10-002; 11/5/2009 

Postal Service Offi cers’ Travel and Representation 

Expenses for Fiscal Year 2009; 

FT-AR-10-007; 2/2/2010

San Mateo Information Technology and Accounting 

Service Center; FT-AR-10-008; 2/11/2010

St. Louis Information Technology and Accounting 

Service Center; FT-AR-10-006; 1/28/2010 

Washington, DC, Headquarters; 

FT-AR-10-005; 11/30/2009

Fiscal Year 2010 Financial Installation Audit

Abilene Permit Business Mail Entry Unit — 

Abilene, KS; FF-AR-10-117; 3/8/2010

Akron Main Offi ce Station — Akron, Ohio; 

FF-AR-10-031; 12/1/2009

Albuquerque Mountain Run Post Offi ce Express — 

Albuquerque, NM; FF-AR-10-114; 3/3/2010

Allendale Business Mail Entry Unit — 

Allendale, NJ; FF-AR-10-052; 12/16/2009

Anaheim Business Mail Entry Unit — 

Anaheim, CA; FF-AR-10-044; 12/9/2009

Arroyo Grande Post Offi ce — Arroyo Grande, CA; 

FF-AR-10-118; 3/8/2010

Avoca Post Offi ce — Avoca, NY; 

FF-AR-10-004; 11/3/2009

Babylon Post Offi ce — Babylon, NY; 

FF-AR-10-131; 3/19/2010

Baltimore Main Offi ce Window — Baltimore, MD; 

FF-AR-10-071; 1/7/2010

Bear Creek Station — Houston, TX; 

FF-AR-10-098; 2/17/2010

Bloomfi eld Business Mail Entry Unit — 

Bloomfi eld, IN; FF-AR-10-135; 3/26/2010

Boca Raton Business Mail Entry Unit — 

Boca Raton, FL; FF-AR-10-085; 2/1/2010

Boston Business Mail Entry Unit — Boston, VA; 

FF-AR-10-081; 1/22/2010

Boulder Valmont Station — Boulder, CO; 

FF-AR-10-108; 2/25/2010

Bountiful Business Mail Entry Unit — Bountiful, UT; 

FF-AR-10-073; 1/8/2010

Breckenridge Business Mail Entry Unit — 

Breckenridge, CO; FF-AR-10-048; 12/11/2009

Brunswick Business Mail Entry Unit — 

Brunswick, ME; FF-AR-10-112; 3/3/2010

Burbank Downtown Station — Burbank, CA; 

FF-AR-10-110; 3/1/2010

Burlington Business Mail Entry Unit — 

Essex Junction, VT; FF-AR-10-102; 2/19/2010

Byron Center Business Mail Entry Unit — 

Byron Center, MI; FF-AR-10-134; 3/24/2010

Canoga Park Main Post Offi ce — 

Canoga Park, CA; FF-AR-10-113; 3/3/2010

Castle Shannon Branch — Pittsburgh, PA; 

FF-AR-10-090; 2/3/2010

Cedar Park Main Offi ce — Cedar Park, TX; 

FF-AR-10-124; 3/15/2010

Cedar Rapids Business Mail Entry Unit — 

Cedar Rapids, IA; FF-AR-10-066; 1/13/2010

Chester Business Mail Entry Unit — Chester, PA; 

FF-AR-10-123; 3/15/2010

Chester Post Offi ce — Chester, PA; 

FF-AR-10-129; 3/17/2010

Church Street Station — New York, NY; 

FF-AR-10-011; 11/9/2009

Cincinnati Main Offi ce Station — Cincinnati, OH; 

FF-AR-10-039; 12/7/2009

Crosstown Station — Memphis, TN; 

FF-AR-10-087; 2/1/2010

Dallas Main Post Offi ce — Dallas, TX; 

FF-AR-10-009; 11/6/2009

Danville Business Mail Entry Unit — Danville, PA; 

FF-AR-10-127; 3/16/2010

Dayton Business Mail Entry Unit — Dayton, OH; 

FF-AR-10-068; 1/7/2010

De Pere Post Offi ce — De Pere, WI; 

FF-AR-10-029; 11/30/2009

Denver Capitol Hill Station — Denver, CO; 

FF-AR-10-038; 12/7/2009

Eagle Station Post Offi ce — Bloomington, IL; 

FF-AR-10-106; 3/2/2010

East Aurora Post Offi ce — East Aurora, NY; 

FF-AR-10-006; 11/4/2009

East Pittsburgh Post Offi ce — East Pittsburgh, PA; 

FF-AR-10-099; 2/17/2010

Elberon Branch — Long Branch, NJ; 

FF-AR-10-136; 3/29/2010

Elgin Post Offi ce — Elgin, IL; 

FF-AR-10-105; 2/24/2010

Eureka Downtown Station — Eureka, CA; 

FF-AR-10-003; 11/2/2009

Everett Business Mail Entry Unit — Everett, WA; 

FF-AR-10-060; 12/23/2009

APPENDIX A
October 1, 2009 – March 31, 2010 | 31 

Fort Branch Post Offi ce — Fort Branch, IN; 

FF-AR-10-139; 3/31/2010

Frayser Station — Memphis, TN; 

FF-AR-10-094; 2/5/2010

Gilbertsville Post Offi ce — Gilbertsville, KY; 

FF-AR-10-057; 12/22/2009

Glendale Business Mail Entry Unit — Glendale, CA; 

FF-AR-10-046; 12/10/2009

Gloversville Business Mail Entry Unit — 

Gloversville, NY; FF-AR-10-120; 3/10/2010

Gonzales Business Mail Entry Unit — 

Gonzales, TX; FF-AR-10-054; 12/17/2009

Grangeville Business Mail Entry Unit — 

Grangeville, ID; FF-AR-10-065; 12/30/2009

Hanover Business Mail Entry Unit — Hanover, NH; 

FF-AR-10-079; 1/20/2010

Hazel Green Post Offi ce — Hazel Green, KY; 

FF-AR-10-023; 11/18/2009

Hicksville Business Mail Entry Unit — 

Hicksville, NY; FF-AR-10-074; 1/11/2010

Hicksville Post Offi ce — Hicksville, NY; 

FF-AR-10-055; 12/17/2009

Homewood Business Mail Entry Unit — 

Homewood, IL; FF-AR-10-083; 1/28/2010

Houston General Post Offi ce Window Main 

Offi ce — Houston, TX; FF-AR-10-100; 2/18/2010

Huntington Beach Main Post Offi ce — 

Huntington Beach, CA; FF-AR-10-096; 2/8/2010

Independence Post Offi ce — Independence, CA; 

FF-AR-10-092; 2/3/2010

Irvine Main Post Offi ce — Irvine, CA; 

FF-AR-10-103; 2/23/2010

James C. Brown Jr. Post Offi ce — Las Vegas, 

NV; FF-AR-10-042; 12/9/2009

Kent Business Mail Entry Unit — Kent, OH; 

FF-AR-10-076; 1/14/2010

Lady Lake Villages Station — Lady Lake, FL; 

FF-AR-10-116; 3/8/2010

LAX Main Offi ce Station — Los Angeles, CA; 

FF-AR-10-126; 3/15/2010

Leesburg Business Mail Entry Unit — 

Leesburg, FL; FF-AR-10-021; 11/16/2009

Lexington Business Mail Entry Unit — 

Lexington, SC; FF-AR-10-041; 12/8/2009

Lindstrom Post Offi ce — Lindstrom, MN; 

FF-AR-10-093; 2/5/2010

Logan Post Offi ce — Logan, UT; 

FF-AR-10-138; 3/30/2010

Long Beach Business Mail Entry Unit — 

Long Beach, CA; FF-AR-10-069; 1/7/2010

Lorton Post Offi ce — Lorton, VA; 

FF-AR-10-022; 11/17/2009

Louisville Business Mail Entry Unit — 

Louisville, KY; FF-AR-10-067; 1/4/2010

Macon Business Mail Entry Unit — Macon, GA; 

FF-AR-10-062; 12/29/2009

Madison Post Offi ce — Madison, WI; 

FF-AR-10-034; 12/3/2009

Manassas Main Offi ce Window — Manassas, VA; 

FF-AR-10-070; 1/7/2010

Medina Main Post Offi ce — Medina, OH; 

FF-AR-10-091; 2/3/2010

Middletown Post Offi ce — Middletown, IN; 

FF-AR-10-061; 12/28/2009

Midlothian Post Offi ce — Midlothian, VA; 

FF-AR-10-014; 11/13/2009

Midway Main Offi ce Window — San Diego, CA; 

FF-AR-10-086; 2/1/2010

Minneapolis Commerce Station — 

Minneapolis, MN; FF-AR-10-089; 2/2/2010

Mishawaka Business Mail Entry Unit — 

Mishawaka, IN; FF-AR-10-088; 2/2/2010

Mokena Post Offi ce — Mokena, IL; 

FF-AR-10-104; 2/23/2010

Montgomery Business Mail Entry Unit — 

Montgomery, AL; FF-AR-10-019; 11/16/2009

Mount Pleasant Business Mail Entry Unit — 

Mount Pleasant, IA; FF-AR-10-072; 1/8/2010

Mountain Home Business Mail Entry Unit — 

Mountain Home, AR; FF-AR-10-125; 3/15/2010

Newport Post Offi ce — Newport, MN; 

FF-AR-10-128; 3/17/2010

Norfolk Business Mail Entry Unit — Norfolk, VA; 

FF-AR-10-133; 3/23/2010

North Kingstown Business Mail Entry Unit — 

North Kingstown, RI; FF-AR-10-078; 1/20/2010

Oakland Business Mail Entry Unit — Oakland, CA; 

FF-AR-10-040; 12/7/2009

Orange Main Post Offi ce, Orange, CA; 

FF-AR-10-002; 10/30/2009

Orangeburg Business Mail Entry Unit — 

Orangeburg, NY; FF-AR-10-036; 12/7/2009

Pahrump Business Mail Entry Unit — 

Pahrump, NV; FF-AR-10-063; 12/30/2009

Panama City Beach Station — Panama City 

Beach, FL; FF-AR-10-111; 3/2/2010

Paris Post Offi ce — Paris, KY; 

FF-AR-10-005; 11/13/2009

Perryville Business Mail Entry Unit — 

Perryville, MO; FF-AR-10-084; 2/1/2010

Plano Business Mail Entry Unit — Plano, TX; 

FF-AR-10-064; 12/30/2009

Plantation Branch — Plantation, FL; 

FF-AR-10-137; 3/30/2010

Plantsville Post Offi ce — Plantsville, CT; 

FF-AR-10-101; 2/18/2010

Portland Business Mail Entry Unit — Portland, OR; 

FF-AR-10-097; 2/16/2010

Princeton Post Offi ce — Princeton, IN; 

FF-AR-10-032; 12/3/2009

Prineville Business Mail Entry Unit — 

Prineville, OR; FF-AR-10-082; 1/25/2010

Quinby Station — Florence, SC; 

FF-AR-10-037; 12/7/2009

Quincy Business Mail Entry Unit — Quincy, IL; 

FF-AR-10-059; 12/23/2009

Raleigh Business Mail Entry Unit — Raleigh, NC; 

FF-AR-10-095; 2/8/2010

Redwood City Business Mail Entry Unit — 

Redwood City, CA; FF-AR-10-007; 11/5/2009

Rehoboth Beach Business Mail Entry Unit — 

Rehoboth, DE; FF-AR-10-035; 12/3/2009

Rexburg Main Post Offi ce — Rexburg, ID; 

FF-AR-10-017; 11/13/2009

San Antonio General Mail Facility Station — 

San Antonio, TX; FF-AR-10-020; 11/16/2009

Shelton Post Offi ce — Shelton, NE; 

FF-AR-10-119; 3/10/2010

Sherwood Business Mail Entry Unit — 

Sherwood, OR; FF-AR-10-080; 1/22/2010

Spencer Business Mail Entry Unit — Spencer, IA; 

FF-AR-10-010; 11/9/2009

APPENDIX A
32 | Semiannual Report to Congress

APPENDIX A

St. Albans Station Post Offi ce — Jamaica, NY; 

FF-AR-10-012; 11/12/2009

Stockton Business Mail Entry Unit — Stockton, CA; 

FF-AR-10-024; 11/19/2009

Tampa Main Offi ce Window Unit — Tampa, FL; 

FF-AR-10-115; 3/8/2010

Thurmont Business Mail Entry Unit — 

Thurmont, MD; FF-AR-10-107; 2/24/2010

Tipp City Post Offi ce — Tipp City, OH; 

FF-AR-10-121; 3/11/2010

Tustin Main Post Offi ce — Tustin, CA; 

FF-AR-10-001; 10/30/2009

Tyler Business Mail Entry Unit — Tyler, TX; 

FF-AR-10-077; 1/15/2010

Village Station — Los Angeles, CA; 

FF-AR-10-130; 3/18/2010

Waverly Post Offi ce — Waverly, NY; 

FF-AR-10-008; 11/5/2009

Wellshire Station — Denver, CO; 

FF-AR-10-016; 11/13/2009

West Palm Beach Business Mail Entry Unit — 

West Palm Beach, FL; FF-AR-10-053; 12/17/2009

West Palm Beach Main Offi ce Window Unit — 

West Palm Beach FL; FF-AR-10-056; 12/21/2009

West Seattle Station — Seattle, WA; 

FF-AR-10-043; 12/9/2009

Wheeling Business Mail Entry Unit — Wheeling, IL; 

FF-AR-10-058; 12/22/2009

Williamsburg Business Mail Entry Unit — 

Williamsburg, VA; FF-AR-10-109; 2/26/2010

Wrightsville Business Mail Entry Unit — 

Wrightsville, GA; FF-AR-10-018; 11/16/2009

Human Resources and Security

Postal Service Absenteeism; 

HM-AR-10-001; 2/18/2010

Information Technology

Database and Network Access Controls at 

the Information Technology and Accounting 

Service Centers — IS General Controls; 

IS-AR-10-001; 12/14/2009

Enterprise Architecture Within Information 

Technology; IS-AR-10-004; 1/19/2010

Fiscal Year 2009 Information Systems 

General Computer Controls Capping Report; 

IS-AR-10-005; 3/31/2010

General Control Review of Human 

Resources Shared Service Center; 

IS-AR-10-002; 12/22/2009

Mainframe Access Controls at the Eagan, MN 

and San Mateo, CA Information Technology 

and Accounting Service Centers; 

IS-AR-10-003; 12/29/2009

Windows Access Controls at the Information 

Technology and Accounting Service Centers — 

IS General Controls FY 2009; 

IS-AR-10-006; 3/24/2010

Supply Management

Supplier Risk Mitigation in the Supplies Portfolio; 

CA-AR-10-003; 1/7/2010
October 1, 2009 – March 31, 2010 | 33 

APPENDIX B

APPENDIX B

Findings of Questioned Costs

For the period October 1, 2009 – March 31, 2010

Offi ce of Inspector General

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 4 $5,109,983 $62,131

Reports requiring management decision that were issued during the reporting period 47 $124,721,438 $14,683,806

TOTAL 51 $129,831,421 $14,745,937 

Reports for which a management decision was made during the reporting period (i & ii) 44 $128,587,669 $14,618,769

(i) Dollar Value of disallowed cost $45,946,144 $5,272,187

(ii) Dollar value of cost not disallowed $82,641,525 $9,346,582

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

Negotiations are ongoing

7 $1,243,752 $127,168

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

(See Note 1 for a list of individual reports)

2 $693,246 $62,131

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

(See Note 2 for a list of individual reports)

1 $475,322 —

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

Subject Report/Case Number Report Date Questioned Costs

Unsupported Costs Included 

in Questioned Costs

Termination Settlement Proposal Submitted by 

C.R. Daniels, Incorporated

CA-CAR-09-019 7/24/2009 $336,849 —

Firm Fixed Price Proposal Submitted by 

Evogen, Incorporated

CA-CAR-09-020 7/30/2009 $356,397 $62,131 

TOTAL $693,246 $62,131

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

Subject Report/Case Number Report Date Questioned Costs

Unsupported Costs Included 

in Questioned Costs

Termination for convenience settlement proposal 

submitted by Northrop Grumman Electronic Systems

CA-CAR-09-011 3/16/2009 $475,322 —

TOTAL $475,322 —
34 | Semiannual Report to Congress

APPENDIX C

Description Number of Reports Dollar Value

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

Reports issued during the reporting period 13 $ 393,937,272 

TOTAL 13 $ 393,937,272 

Reports for which a management decision was made during the report period (i & ii) 13 $ 393,937,272 

(i) Value of recommendations agreed to by management — $ 246,880,239 

(ii) Value of recommendations that were not agreed to by management — $ 147,057,032 

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

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

(See Note 1 for a list of individual reports)

— —

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

(See Note 2 for a list of individual reports)

— —

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

None for this report period

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

None for this report period

APPENDIX C

Recommendations That Funds Be Put to Better Use

For the period October 1, 2009 – March 31, 2010

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 effi ciently by implementing recommended actions.
October 1, 2009 – March 31, 2010 | 35 

APPENDIX D

APPENDIX D

Reported Non-Monetary Benefi ts

For the period October 1, 2009 – March 31, 2010

Overview

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

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

Type of Measure Value or Amount

IMPROVED SERVICE

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

and services

Number of Recommendations 13

Number of customer service audits conducted Number of Audits 16

SAFEGUARDING ASSETS

Assets or Accountable Items at Risk

Inadequate internal controls put the value of assets or accountable items (such as cash and stamps) at risk of loss Dollar Value $312,250,505 

Physical Safety and Security

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

physical protection

Dollar Value —

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

Number of employee/facility safety and security audits conducted Number of Audits 18

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 —

Number of data security/IT security audits conducted Number of Audits 17

Revenue at Risk

Dollar value of revenue that the Postal Service is at risk of losing. (Mailers seeking alternative solutions for current services) Dollar Value $1,020,873

Disbursements at Risk

Dollar value of disbursements made where proper Postal Service internal controls and processes were not followed Dollar Value $11,484

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 Identifi ed 14

RELIABILITY OF DATA

Records at Risk

Data at risk of corruption or loss due to inadequate internal controls and or protection Number of Data Records at Risk $676,667

Dollar value of data used to support management decisions that is not fully supported or completely accurate Dollar Value $180,329,459
36 | Semiannual Report to Congress

APPENDIX E

APPENDIX E

Reports with Signifi cant Recommendations Pending Corrective Actions

For the period October 1, 2009 – March 31, 2010

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

reporting period.

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

 NO-AR-05-011 6/17/2005 Effi ciency of the Los Angeles International Service Center

R-1 — Reduce mail processing workhours by 85,000. TID: October 2010

HM-AR-06-004 5/19/2006 Postal Service's Injury Compensation Programs' Controversion and Challenge Process in Selected Areas

R-2 — Provide suffi cient oversight of injury compensation control offi ces by including steps to validate the proper tracking and 

monitoring of controverted and challenged claims in the Human Resource Information System and the Claim Control Register 

in their Area Program reviews. TID: June 2010

HM-AR-06-006 8/29/2006 Postal Service's Grievance-Arbitration Service Centers

R-8 — Automate the processing and payment of arbitrator invoices using an existing Postal Service electronic purchasing system.

TID: September 2012

EN-AR-07-002 12/5/2006 Service Implications of Area Mail Processing Consolidations

R-4 — Revise the Collection Point Management System to track changes to collection box pick-up times. TID: September 2010

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

R-1 — Provide consolidated standard operating procedures and guidance to assist in performing duties and responsibilities 

consistently and in a timely manner. TID: June 2010

R-4 — Establish requirements for mandatory security training including periodic refresher training, for responsible security personnel 

at the area-, district-, and facility-levels. TID: June 2010

R-5 — Develop performance measures to assess the achievement of security goals. TID: June 2010

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

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

them into performance plans for area-, district-, and fi eld-level security personnel. TID: June 2010

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

R-1 — Closely monitor conversion to the SAP Environmental Health and Safety module. Ensure the upgraded system captures costs 

by facility, district/performance cluster, and area offi ce, as well as the costs for identifi ed key categories. TID: September 2010

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

R-2 — Establish policies and procedures for the protection and use of sensitive data in the test, development, and production 

environments. TID: March 2010

IS-A R-07-017 8/29/2007 Separation of Duties at the Eagan, Minnesota; San Mateo, California; and St. Louis, Missouri Information Technology and 

Accounting Service Centers

R-1 — Assess the risk of the duties of all Information Technology and Accounting Service Center positions for the purpose of assigning 

these positions as sensitive. TID: September 2010

R-4 — Coordinate with the Postal Inspection Service to ensure the proper clearance level is attributed to employees. TID: March 2010
October 1, 2009 – March 31, 2010 | 37 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

FT-AR-08-005 1/24/2008 New York International Service Center — Inbound International Mail

R-1 — Establish and communicate policies and procedures to address the complete processing and billing cycle for inbound 

international mail. TID: April 2010

R-3 — Direct International Accounting Branch and appropriate systems personnel to establish controls to ensure that foreign postal 

administrations are correctly billed for all valid dispatches, including dispatch numbers used more than once in a calendar year. 

TID: April 2010

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

R-2 — Revise Publication 91, Confi rmation Services Technical Guide, to require mailers to utilize a secure fi le transfer method when 

transmitting manifests for electronic verifi cation to the Postal Service. TID: April 2010

IS-AR-08-009 3/14/2008 Update Processes for Active Directory and CA-ACF2

R-1 — Review the manager roles in the two systems to determine how these roles can be integrated. TID: September 2010

R-2 — Review the capabilities and establish requirements for tracking employees assigned to detail positions and how to pass on

timely and accurate data to another system. TID: September 2010

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

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

received during non-business hours. TID: April 2010 

CRR-AR-08-003 3/31/2008 Application Controls Review of the Electronic Verifi cation System

R-2 — Strengthen the edit rules in the Product Tracking System to enforce the requirements for destination entry discounts. 

TID: June 2010

FT-AR-08-010 3/31/2008 Fiscal Year 2007 Postal Service Financial Statements Audit — St. Louis Information Technology and Accounting 

Service Center

R-2 — Modify policies and procedures to include the destination facility validation in the highway extra trips payment process.

TID: April 2010

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

R-4 — Develop a recovery schedule to ensure the Preliminary Production Baseline Technical Data Package will be available before the 

production First Article Test begins. TID: September 2010

R-5 — Ensure that the initial Maintenance Diagnostic and Support System and the Program Control System functionalities are available 

for First Article Testing and develop a schedule for future design releases. TID: January 2011

R-7 — Ensure that the supplier follows the quality control plan and the confi guration control process and validates that the fi rst fi ve 

production systems are built to the same drawing confi guration. TID: May 2010

EN-AR-08-004 7/16/2008 Miami Airport Mail Center Outsourcing

R-1 — Perform a post-implementation review to determine the cost savings from the Miami Airport Mail Center outsourcing initiative. 

TID: April 2010

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

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

exposure to fi nancial loss. TID: June 2010

SA-AR-08-008 7/23/2008 Leased Facility Maintenance Responsibility in the Great Lakes Area

R-2 — Require the Great Lakes Facilities Service Offi ce to collect the $62,625 in recoverable supported questioned costs. 

TID: January 2013
38 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

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

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

TID: June 2010

R-2 — Complete continuity of operations training, including Postal Alert and Notifi cation System training. TID: June 2010

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

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

in the Postal Alert and Notifi cation System, as required. TID: June 2010

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

Emergency Management Teams in establishing, implementing, and reviewing emergency management plans. TID: June 2010

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

facilities that should be identifi ed, and criteria regarding location, mail volume, and mail capacity. TID: June 2010

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

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

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

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

in the Postal Alert Notifi cation System, as required. TID: June 2010

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

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

to determine which positions require a security clearance. TID: September 2010

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

clearance. TID: September 2010

CRR-AR-08-006 8/25/2008 Controls Over the International Reconciliation System

R-2 — Ensure all signifi cant issues identifi ed during Customer Acceptance Test are corrected before placing the software release 

into production. TID: April 2010

R-4 — Promptly incorporate edit requirements provided by the end-user into International Reconciliation System functionality. 

TID: April 2010

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

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

TID: January 2011 

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

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

government lodging rate, whenever practical. TID: September 2010

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: September 2010

R-3 — Customize the Electronic Travel Voucher System Controls (ETVS) to require the traveler to input a value in the room tax fi eld 

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

stay is tax exempt. TID: September 2010

R-4 — Customize the ETVS to remove the option to combine room rate and room taxes into a single entry. TID: September 2010

NO-AR-09-001 12/3/2008 Powered Industrial Vehicle Management System at the Louisville, Kentucky Processing and Distribution Center

R-1 — Ensure the Powered Industrial Vehicle Management System at the Louisville P&DC functions as intended and produces 

effi ciency improvements. TID: September 2009 
October 1, 2009 – March 31, 2010 | 39 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DA-AR-09-002 12/24/2008 Radio Frequency Identifi cation Technology: Asset Management.

R-1 — Explore opportunities to employ radio frequency identifi cation technology to reduce the amount of losses in pallet inventories. 

TID: April 2010

FF-AR-09-055 12/26/2008 Fiscal Year 2008 Financial Installation Audits — Post Offi ces, Stations, and Branches

R-5 — Issue guidance to the fi eld to destroy all copies of Postal Service Form 1096 and determine when all forms have been 

destroyed. TID: February 2012

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

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

to require that all expenses associated with internal and external events be included in a unique general ledger account(s). 

TID: September 2010

DR-AR-09-004 1/30/2009 Vehicle Warranty Claims Process

R-5 — Collaborate with vehicle manufacturer's to ensure the Postal Service receives detailed warranty reimbursement data to allow 

reconciliation. TID: April 2010

CA-AR-09-002 2/18/2009 The Postal Service’s Certifi cation Process for Non-Mail Freight Transportation Invoices 

R-1 — Develop and implement written procedures for the independent review of invoices to confi rm the receipt of goods and services, 

and to ensure accurate payment. TID: May 2010

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

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

TID: June 2010

DA-AR-09-005 3/31/2009 Recycling Opportunities — Pacifi c Area 

R-1 — Provide additional recycling training to maintenance and operations personnel responsible for conducting recycling activities 

and expand recycling programs throughout the area. TID: April 2010 

R-2 — Improve awareness of policies and procedures that; require appropriately designated site personnel to certify the tonnage

of recyclable material and trash collected by contractors. TID: April 2010

R-3 — Improve awareness of policies and procedures that; require accurate recording of recycling revenues. TID: April 2010

IS-AR-09-006 3/31/2009 Intelligent Mail Barcode Project Planning and Application Development Life Cycle

R-1 — Establish an incremental approach for approval and funding for future project releases. TID: June 2009

R-3 — Ensure the Certifi cation and Accreditation process is completed and all residual risks are identifi ed and mitigated before 

deploying the IMB Full Service-Seamless Acceptance Service Performance Release 1 application. TID: December 2009

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

R-1 — Quantify strategic benefi ts to the Postal Service and mailers. TID: October 2009

R-4 — Incorporate effort-based workhour requirement estimates into work plans for future project releases. TID: September 2009

R-5 — Develop a risk management plan to address project risks. The plan should defi ne a process for conducting risk management 

activities. TID: None

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

project. TID: September 2009
40 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DA-AR-09-007 4/7/2009 Custodial Maintenance: New York District

R-1 — Update staffi ng packages to eliminate redundancies in cleaning operations, to include a reduction in cleaning frequencies

as allowed by Handbook MS-47. TID: June 2010

Reducing cleaning frequencies from 7 to 4 days would allow for a reduction in labor hours in excess of 118,000 hours at the 

12 sites reviewed. This equates to a reduction in complement of approximately 68 positions and a savings of approximately 

$38.5 million over 10 years. Because this amount is avoidable, we will report this amount in our Semiannual Report to Congress

as funds put to better use. TID: June 2010

R-2 — Review the benefi ts of extending contract eligibility to larger postal facilities for inclusion in the next collective bargaining 

agreement beginning November 21, 2010, and subsequently utilize contract staffi ng to fi ll custodial positions lost through 

attrition. TID: June 2010

NO-MA-09-002 5/8/2009 Assessment of Overall Plant Effi ciency

R-1 — Reduce 22.9 million workhours by FY 2011 with an associated economic impact of $969 million. We will report $969 million 

in unrecoverable questioned costs in our Semiannual Report to Congress . TID: October 2012

MS-AR-09-008 5/28/2009 Postal Service Mail Processing Equipment’s Ability To Read Postage On First-Class Mail Letters

R-1 — Develop and disseminate national Standard Operating Procedures for processing and handling Advanced Facer Canceller 

System bypass letters to include procedures for identifying shortpaid and unpaid postage. TID: January 2010

R-2 — Use limited duty and light duty personnel to assist with identifying and processing shortpaid and unpaid letters. 

TID: August 2009

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

postage detection software (including detection of reused stamps). These modifi cations should be considered for upcoming 

AFCS deployments. TID: June 2010

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

ink, barcode, or other tracking device to allow the Advanced Facer Canceller System to read postage amounts. TID: June 2011

R-5 — Re-evaluate the phosphorescence coding methodology to include raising the coding denomination from the 10-cent stamp 

to the current First-Class Mail card postage. This modifi cation should be considered for upcoming Advanced Facer Canceller 

System deployments. TID: June 2011

R-6 — Determine the causes of shortpaid and overpaid Postage Validation Imprinter labels on First-Class Mail letters and develop 

awareness training for retail employees. TID: None

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

R-2 — Place minimum control requirements in the Delegations of Authority (DOA) letters that refl ect principles that are critical 

to ensuring due diligence and oversight; however, they did not document and implement a process to ensure delegatee 

compliance. Remind delegatees of their responsibility to ensure compliance with their delegation of authority letters and require 

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

 Best value determinations are performed and documented. 

 Annual reports are developed and provided to Supply Management detailing fi nancial activities, including the number of 

contracts or agreements entered into and associated expenditures. 

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

TID: December 2010

R-3 — Place minimum control requirements in the DOA letters that refl ect principles that are critical to ensuring due diligence and 

oversight; however, they did not document and implement a process to ensure delegatee compliance. Require the Travel, 

Retail, and Temporary Services Category Management Center to develop procedures for collecting reports required under the 

delegations of authority and for reviewing delegatees’ control and oversight systems to ensure the delegation of authority letter 

minimum control requirements are met. If minimum control requirements are not met, discontinuation should be considered, 

with the results and justifi cation documented in an oversight fi le. TID: December 2010 
October 1, 2009 – March 31, 2010 | 41 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DR-AR-09-007 6/30/2009 Vehicle Maintenance Facilities Scheduled Maintenance — National Capping Report

R-4 — Establish an effective process for ensuring vehicle maintenance facility management and vehicle Post Offi ce management 

include all contract and repair maintenance costs in the Vehicle Maintenance Accounting System or its replacement. 

TID: April 2010 

NL-AR-09-005 7/17/2009 Postal Vehicle Service Transportation — Philadelphia Bulk Mail Center

R-2 — Phase out the additional 8,750 postal vehicle service workhours that management agreed were in excess of the workload. 

TID: July 2010

R-3 — Ensure the bulk mail center managers periodically assess workload and staffi ng requirements to maintain appropriate 

postal vehicle service staffi ng levels. TID: October 2010

NO-AR-09-007 7/23/2009 Powered Industrial Vehicle Management System at the Oakland Processing and Distribution Center

R-1 — Ensure the Oakland Processing and Distribution Center uses the Powered Industrial Vehicle Management System to the 

fullest extent possible to manage operations and continue to improve mail processing effi ciency by reducing 38,000 

workhours in tow and forklift operations by FY 2011, with an associated economic impact of over $14.5 million present 

value dollars in savings occurring over 10 years. TID: December 2011

NL-AR-09-007 7/31/2009 Air Networks — Federal Express Transportation Agreement — Southeast Area

R-1 — Use surface transportation to the extent possible for mail that does not require air transportation to meet Postal Service 

on-time standards. TID: April 2010

R-2 — Transport mail to the maximum extent possible using the service-responsive capacity of passenger airlines under contract 

with the Postal Service. TID: April 2010

R-3 — Sort mail into bypass containers as appropriate. TID: April 2010

NL-MA-09-001 8/5/2009 Management Advisory — Fuel Management Initiatives for Surface Network Operations — Fuel Purchasing Strategy

R-2 — Ensure appropriate allocation of contracting, operational, and fi nancial resources at all levels to support the timely 

implementation of the National Fuel Purchasing Strategy. TID: June 2010 

R-3 — Ensure adequate consideration of project management principles and best practices outlined in the report in planning and 

implementing the National Fuel Purchasing Strategy, including development of a project management plan, which includes 

project goals, performance measures, baselines and target dates, changes to target dates, and documented reasons for 

changes. TID: June 2010 

R-4 — Develop a risk mitigation plan to address major project risks to help achieve the stated goals of the National Fuel 

Purchasing Strategy. TID: June 2010

R-5 — Develop measurement factors to monitor achievement of the stated goals of the National Fuel Purchasing Strategy, and 

consider including these factors as part of the National Performance Assessment plan as appropriate. TID: June 2010

DA-AR-09-011 8/13/2009 Custodial Maintenance: Nationwide

R-1 — Update staffi ng packages to eliminate duplication in cleaning operations, including an adjustment of cleaning frequencies

as determined by local conditions. TID: April 2010

R-2 — Conduct a Lean Six Sigma process improvement initiative in conjunction with the American Postal Workers Union to 

identify non-value tasks in the current custodial standard and negotiate revisions. TID: June 2010

CRR-AR-09-006 8/19/2009 Electronic Verifi cation System Rejected Transactions

R-1 — Develop and implement requirements to identify and track all rejected Electronic Verifi cation System transactions to ensure 

mailers correct and resubmit the transactions for processing. TID: November 2010

DA-AR-09-012 9/4/2009 Flats Sequencing System: First Article Retest Results

R-1 — Install and test only one additional Flats Sequencing System until the system demonstrates operational stability and 

successfully passes the fi eld acceptance test. TID: May 2010
42 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NO-AR-09-012 9/25/2009 Sunday Mail Processing Operations

R-1 — Reduce 83,000 workhours, based on FY 2008 usage, by the end of FY 2010 with an associated economic impact 

of approximately $38 million over a 10-year period. TID: October 2011

DR-AR-09-009 9/28/2009 Delivery Vehicle Fuel Management

R-1 — Consider as part of the Postal Service’s National Fuel Purchasing Strategy expansion of mobile fueling for city and 

rural delivery units with 30 or more routes using Postal Service-owned vehicles, as well as other delivery units as 

necessary. TID: June 2010

DR-AR-09-010 9/28/2009 Management of Delivery Point Sequencing Percentage Increases for City Delivery — Nationwide Review

R-2 — Require district offi cials to prioritize and execute tasks, such as updating address databases, monitoring and removing 

M-records, identifying and resolving sortation issues, and handling non-Delivery Point Sequencing mail in their delivery 

units. TID: December 2010

R-3 — Develop and execute an action plan to mitigate low city Delivery Point Sequencing percentages in delivery units. 

TID: December 2010

R-4 — Ensure accountability of Delivery Point Sequencing (DPS) Improvement Team members for completing assigned tasks 

to increase and sustain city delivery DPS percentages and reduce operating costs. TID: December 2010

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

R-1 — Document the methodology used to develop future performance goals for market-dominant products. TID: August 2010

R-3 — Ensure future annual service performance goals are published within 30 days after approval. TID: April 2010

NL-AR-09-009 9/28/2009 Vehicle Management — National Trailer Lease Renewal — Capping Report

R-1 — Develop a policy to require areas to establish a comprehensive process to routinely identify trailer requirements and 

manage trailer inventory and use, including a process to routinely determine whether trailers are improperly used for 

storage. TID: June 2010 

IS-AR-09-013 9/29/2009 Business Partner Connectivity — Leased Line Firewalls

R-1 — Review and validate all business partner connections to Postal Service information resources and notify the Network 

Connectivity Review Board to terminate connections no longer required. TID: April 2010

R-2 — Modify Handbook AS-805, Information Security, to designate the portfolio managers responsible for informing the Network 

Connectivity Review Board when a business partner connection is no longer required: TID: October 2011

R-3 — Modify Handbook AS-805, Information Security, to designate the portfolio managers responsible for periodically reviewing 

and validating business partner connectivity to Postal Service networks. TID: October 2011

R-6 — Modify Handbook AS-805D, Information Security Network Connectivity Process, to require the Network Connectivity Review 

Board to inform Database Support Services of all business partner connection requests to Postal Service databases. 

TID: October 2011

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

R-1 — Implement nationwide recommendations 2 and 3 in the aviation security report for critical Postal Service facilities. 

Specifi cally, strengthen internal controls requiring management reviews to ensure corrective actions are taken to improve 

the performance of noncompliant offi ces. TID: June 2010

R-2 — Implement nationwide to develop and implement performance measures or other appropriate evaluation factors to 

improve operations personnel performance in following established policies and procedures for detecting and preventing 

anonymous and potentially dangerous mail from entering the mailstream. TID: June 2010
October 1, 2009 – March 31, 2010 | 43 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

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

R-1 — Revise the fuel consumption strategy for surface network operations covering Postal Service and HCR transportation to 

ensure that it is comprehensive and implements the industry best practices identifi ed in our audit. TID: September 2010

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

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

contracts as appropriate to account for the reduced fuel need TID: September 2010

R-3 — Establish and implement tire infl ation maintenance requirements for the owned heavy-duty vehicle fl eet, as well as leased

and contracted vehicles consistent with industry best practices. Adjust contracts as appropriate to account 

for the reduced fuel need. TID: September 2010

R-5 — Evaluate HCR routes, and where feasible, implement speed limit requirements consistent with industry best 

practices, without negatively impacting service and adjust contracts as appropriate to account for the reduced fuel 

need. TID: September 2010

NL-AR-09-011 9/30/2009 Air Networks — Chicago O’Hare Airport Mail Center Operations

R-1 — Enforce existing productivity standards for the sack sorter operation and establish and enforce appropriate productivity 

standards for the platform operation to reduce workhours and increase effi ciency. TID: June 2010

R-2 — Provide adequate supervision over the sack sorter and platform operations to include ensuring that volume and workhour 

reporting requirements are followed. TID: June 2010

R-3 — Ensure staff is scheduled commensurate with the mail fl ow and volume for Express Mail and Automated Package 

Processing System operations and adjust operational workhours accordingly. TID: June 2010

R-4 — Provide adequate levels of supervision for Express Mail and Automated Package Processing System operations and ensure 

employees properly charge their workhours to the correct operations. TID: June 2010

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

R-1 — Resolve system and application problems with Web Carrier Optimal Routing (WebCOR) and implement the web-based 

program nationwide. TID: June 2010

R-2 — a. Select and train at least four individuals as COR system Subject Matter Experts as mandated by Postal 

 Service Headquarters.

b. Complete the Data Preparation Process to include using current PS Forms 3999, Inspection of the Letter

 Carrier Route.

c. Complete all route adjustments using the COR system. TID: May 2010

R-3 — Mandate districts to track and monitor vehicle mileage changes in the COR system. TID: June 2010
44 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NL-AR-10-001 10/22/2009 Management of Mail Transport Equipment — Pacifi c Area

R-1 — Reinforce national Mail Transport Equipment (MTE) policies and procedures and the area’s MTE standard operating 

procedures (SOP) requiring plant managers to provide suffi cient priority, resources, training and oversight to effectively 

manage MTE, including:

 Designating and training of MTE coordinators, ensuring that suffi cient time and resources are allocated to perform all 

of the duties required by the SOP, and ensuring that controls are established for monitoring MTE coordinators’ activities 

and results.

 Conducting weekly “on hand” inventory counts of MTE at all plants as required by the SOP. TID: April 2010

R-2 — Revise the Pacifi c Area MTE SOP to address all necessary MTE controls, including: 

 Requiring major mailers to provide weekly inventory counts that will form the basis for an estimated MTE inventory 

within the Pacifi c Area.

 Addressing accountability controls, including authenticating Postal Service customers, validating customer MTE needs, 

and tracking and reconciling MTE loaned to mailers and other external customers.

 Addressing security controls to safeguard MTE, including securing MTE in restricted areas; ensuring MTE is not 

exposed to the elements; preventing mailers and other external customers from having free access inside the facility 

and outside areas; and securing the facility’s perimeter. TID: April 2010

R-3 — Reinforce that the Distribution Networks Offi ce assign suffi cient area resources to monitor the management of MTE and 

compliance with all SOP requirements, including ensuring complete and reliable weekly inventory counts, following up on 

incomplete or questionable inventory counting and reporting, and providing necessary guidance and training to designated 

plant MTE personnel. TID: April 2010

FF-AR-10-033 12/4/2009 Use of No-Fee Money Orders Follow Up Audit

R-1 — Provide training to retail associates and local unit management on use of reason codes, payment processes, and closeout 

procedures. TID: July 2010

R-2 — Reinforce procedures regarding the proper use of no-fee money orders in ready accessible messaging to sales and service 

associates. TID: July 2010

R-3 — Create a change in Point of Service to require supervisory approval in order for a no-fee money order to be issued, or 

develop other controls that would enhance supervisory oversight of the issuance of no-fee money orders. TID: July 2010

R-4 — Instruct local units to maintain supporting documentation for no-fee money order transactions for the required retention 

period. TID: July 2010

DR-AR-10-002 12/18/2009 City Delivery Effi ciency Reviews San Francisco Napoleon Street Station

R-1 — Reduce workhours by 54,975 at the Napoleon Street Station by the end of FY 2014, with an associated economic impact 

of more than $21.3 million over 10 years. TID: December 2012

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

R-1 — Recommend the chief postal inspector, Postal Inspection Service, to coordinate with the vice president, Employee 

Resource Management, to designate as sensitive those positions at the Human Resources Shared Service Center that 

require access to personally identifi able information. TID: December 2010

R-2 — Recommend the chief postal inspector, Postal Inspection Service, initiate appropriate security clearance investigations 

for all employees in sensitive positions at the Human Resources Shared Service Center. TID: September 2010

R-5 — Revise Handbook AS-805, Information Security, to clarify the approval process for wireless access points on the Postal 

Service network. TID: June 2010

R-6 — Coordinate with the director, Information Technology Operations, to ensure proper approval and documentation of all 

wireless access points at the Human Resource Shared Service Center. TID: December 2010
October 1, 2009 – March 31, 2010 | 45 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NL-AR-10-002 12/28/2009 Postal Service Vehicle Service Transportation Routes Cardiss Collins Processing and Distribution Center

R-1 — Ensure Cardiss Collins P&DC managers follow prescribed fl eet management procedures for making postal vehicle service 

schedules effective, including conducting schedule and vehicle utilization. TID: July 2010

R-2 — Eliminate 43,264 workhours already agreed to by local and area management from postal vehicle service trip schedules. 

TID: October 2010

EN-AR-10-001 1/7/2010 Status Report on the Postal Service’s Network Rationalization Initiatives

R-1 — Develop and document specifi c criteria to identify consolidation opportunities in the plant network. TID: December 2010 

R-2 — Develop a periodic (annual) review process using a top-down methodology to ensure consistency in identifying 

consolidation opportunities. TID: March 2011

IS-AR-10-004 1/19/2010 Enterprise Architecture within Information Technology

R-1 — Direct the vice president, Information Technology Solutions, and manager, Information Technology Solutions, and manager, 

Information Technology Strategy and Architecture, to establish and document goals, strategies, and objectives that outline 

sponsorship and commitment to implementing Enterprise Architecture. TID: March 2010

R-3 — Request the Executive Committee to provide the Enterprise Architecture Committee with the level of authority 

commensurate with its responsibility to effectively govern all Postal Service information technology solutions per the 

Enterprise Architecture Policy. TID: June 2010

DA-MA-10-001 1/28/2010 Sustainability: Promoting Energy and Recycling Compliance (FY 2009)

R-1 — Increase the effectiveness of energy and recycling policies by issuing written guidance to installation managers, 

encouraging the use of more remote building management systems. TID: September 2010

R-2 — Issue written guidance to installation managers to provide periodic service talks to employees to reinforce awareness 

of energy and recycling policies. TID: June 2010 

MS-AR-10-001 2/9/2010 Plant-Verifi ed Drop Shipment Controls

R-1 — Update Publication 804, Drop Shipment Procedures for Destination Entry. TID: June 2010

R-2 — Provide scales. TID: June 2010

R-3 — Provide training. TID: December 2010

R-4 — Provide an electronic PS Form 8125, Plant-Verifi ed Drop Shipment (PVDS) Verifi cation and Clearance. TID: December 2012

EN-AR-10-003 2/12/2010 Manasota Processing and Distribution Center Consolidation

R-1 — Ensure the implementation activities of processing and distribution consolidations begin immediately after area mail 

processing proposal approval and require headquarters' approval when implementation is delayed more than 3 months. 

TID: May 2011

HM-AR-10-001 2/18/2010 Postal Service Absenteeism

R-1 — Provide refresher training to supervisors to ensure they are aware of unscheduled leave policies and procedures and the 

importance to follow them. TID: September 2010

R-2 — Establish and implement internal controls to evaluate and ensure supervisor's compliance with unscheduled leave policies and 

procedures (for example, performance and accountability measures of periodic management reviews). TID: July 2010

R-3 — Require supervisors and labor relations specialists to use the Enterprise Resource Management System to record employees'

inability to meet position requirements, corrective actions taken, and grievance data. TID: July 2010

NO-AR-10-003 2/24/2010 Review of the Dallas Processing and Distribution Center Outgoing Mail Consolidation

R-1 — Consolidate the Dallas Processing and Distribution Center (P&DC) outgoing mail operation into the North Texas P&DC by 

FY 2011. This will result in an annual savings of $11,997,208 for a total economic impact of $114,041,172 over 10 years. 

TID: December 2011
46 | Semiannual Report to Congress

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

NL-AR-10-003 3/1/2010 Highway Contract Route Transportation — Greater Chicago

R-1 — Ensure managers follow prescribed contract procedures for making highway contracts effective and economical, including 

the continual monitoring and adjustment of trips based on need. TID: None

R-3 — Verify elimination of the 42 trips within the identifi ed highway contract routes, already agreed to by local and area 

management. TID: None

R-4 — Reassess the remaining 20 trips, and cancel or modify the trips as indicated by the reassessment, or document the 

reasons for retaining the trips. TID: May 2010

FF-MA-10-001 3/10/2010 Vending Operations Closure and Financial Risk

R-1 — Investigate all remaining stamp stock balances and close and zero out the vending accountabilities. TID: February 2010

R-2 — Identify and deposit all undeposited cash associated with the vending accountabilities. TID: None

R-3 — Provide a periodic status to the vice president, Retail Products and Services, and vice president, Delivery and Post Offi ce 

Operations, until all remaining vending accountabilities are closed and zeroed out and cash associated with the vending 

accountabilities is deposited. TID: None

DR-AR-10-003 3/16/2010 Postal Service Christmas Rural Delivery Operations

R-1 — Eliminate the supplemental Christmas Overtime Pay Provision, Article 9.2(k), set forth in the NRLCA Agreement expiring in

November 2010 and any subsequent National Rural Letter Carrier Association (NRLCA) agreements. TID: November 2010

NL-AR-10-004 3/17/2010 Management of Mail Transport Equipment — Eastern Area

R-1 — Reinforce national Mail Transport Equipment (MTE) policies and procedures contained in the Postal Operations Manual

(POM) that require facility managers to provide suffi cient priority, resources, training, and oversight to effectively manage 

MTE, including: Designating and training MTE coordinators or equivalents, ensuring that suffi cient time and resources are 

allocated to perform all of the duties the postal operations manager requires, and ensuring that management establishes 

controls for monitoring MTE coordinators’ or equivalents’ activities and results and conducting weekly “on hand” inventory 

counts of MTE at all major facilities and mailers to promote better management of MTE and provide for the estimated MTE 

inventory within the Eastern Area. TID: July 2010 

R-2 — Develop area standard operating procedures that complement and reinforce the Postal Operations Manual and fully 

address all necessary MTE controls, including addressing accountability controls, such as validating customer MTE needs, 

and tracking and reconciling MTE loaned to mailers and other external customers. TID: June 2010

CRR-AR-10-002 3/19/2010 Management of Special Studies

R-1 — Develop a plan for the timely update of the Postmaster Variability Study. TID: May 2010

IS-AR-10-006 3/24/2010 Windows Access Controls at the Information Technology and Accounting Service Centers — IS General Controls FY 2009

R-3 — Conduct a comprehensive review of the domain controller confi gurations to ensure compliance with applicable Windows 

security standards. TID: April 2010

NO-AR-10-004 3/29/2010 Powered Industrial Vehicle Management System at the Indianapolis Processing and Distribution Center 

R-1 — Use the PIVMS to the fullest extent possible to manage operations and continue to improve mail processing effi ciency 

by reducing 20,000 workhours in tow and forklift operations by FY 2013. TID: September 2013.
October 1, 2009 – March 31, 2010 | 47 

APPENDIX F

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number

TID = Target Implementation Date

DR-MA-09-001 3/26/2009 Management of City Letter Carriers' Street Performance

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

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

TID: October 2011

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

"exceptions" — for example, only actual route times varying from projected route times. TID: October 2011

R-5 — Deploy additional Global Positioning System technology for 400 motorized city routes in the Chicago District for more 

effective monitoring and tracking during street delivery. TID: April 2010

DR-AR-10-004 3/31/2010 Continuing Use of Carrier Sequence Barcode Sorter Machines at Delivery Units

R-1 — Reduce 10 carrier sequence barcode sorters at selected associate offi ces as well as the associated workhours. 

TID: June 2010 

APPENDIX F

Signifi cant Management Decisions in Audit Resolution

For the period October 1, 2009 – March 31, 2010

As required by the IG Act, the following page discusses information concerning any signifi cant management decision with which the Inspector General disagrees 

and is currently in audit resolution.

Plant-Verifi ed Drop Shipment Controls

MS-AR-10-001 2/9/2010

Recommendation 4 Provide an electronic reporting solution whereby Postal Service Form 8125, Plant-Verifi ed Drop Shipment (PVDS) Verifi cation and Clearance, 

information at the destination facility can be compared with the information at the origin location. Discrepancies or incomplete forms should 

be investigated.
48 | Semiannual Report to Congress

APPENDIX G

Investigative Statistics*

For the period October 1, 2009 – March 31, 2010

Investigations 

Completed Arrests

Indictments/ 

Informations

Convictions/ 

Pretrial 

Diversions**

Admin. 

Action 

Taken 

Cost 

Avoidance

Fines, Restitution, 

& Recoveries

Amt. to USPS 

(from previous 

column)***

To Mgmt. 

for Admin. 

Action

Theft, Delay, or Destruction 

of Mail by Employees or 

Contractors

668 187 168 199 368 $1,015,704 $194,813 384

Injury Compensation 

Fraud 1 & 2

379 25 17 21 99 $99,795,914 $1,295,828,533 $17,316,589 154

Offi cial Misconduct 548 47 32 74 321 — $760,096 $80,825 329

Financial Fraud 335 121 120 127 238 $1,000 $3,744,708 $2,845,797 273

Contract Fraud 62 13 13 7 16 $1,336,078 $1,283,300 $1,058,017 23

TOTAL 1,992 393 350 428 1,042 $101,132,992 $1,302,632,341 $21,496,041 1,163

* Statistics include joint investigations with other law enforcement agencies.

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

*** Amounts include case results of joint investigations with other OIG, federal, state, and local law enforcement entities.

1

 Amount under Fines, Restitution, and Recoveries includes $1,295,200,100 from one pharmaceutical investigation.

2

 Amount to Postal Service includes $15,075,934 from one pharmaceutical investigation.

APPENDIX G
October 1, 2009 – March 31, 2010 | 49 

APPENDIX H

Administrative Subpoenas Requested by the Postal Inspection Service

There were no requests during the reporting period.

Type of Scheme

Complaints 

Filed

Consent 

Agreements FROs

Cease & 

Desist Orders

Charity 1 — — 1

Contests/Sweepstakes 11 11 — 11

Coupon Fraud 1 1 — 1

False Billings 29 1 5 15

Internet Auction 2 2 — 2

Merchandise:

 Failure to Furnish 6 3 1 4

 Failure to Pay 2 2 — 2

Misrepresentation 6 3 2 5

Miscellaneous 27 31 2 24

Work at Home 8 6 2 5

TOTAL 93 60 12 70

APPENDIX H

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

For the Period October, 1 2009 – March 31, 2010

Financial Reporting on Investigative 

Activities 

Type

Personnel $ 140,376,905

Nonpersonnel 30,898,204 

TOTAL $171,275,109 

Capital obligations ($1,023,726)

Other Administrative Actions

Administrative Action Requests 116

Temporary Restraining Orders Requested 1

Temporary Restraining Orders issued 1

Cases Using Direct Purchase Authority —

Civil Penalties (Section 3012) Imposed — 

Test Purchases —

Withholding Mail Orders Issued 18

Voluntary Discontinuances —
50 | Semiannual Report to Congress

APPENDIX I

APPENDIX I

Closed Congressional and Board of Governors’ Inquiries

For the Period October, 1 2009 – March 31, 2010

This appendix lists the congressional and Board of Governors inquiries the OIG closed during this reporting period. OIG units reviewed or investigated these 

inquiries to resolve allegations and disputes and to help identify systemic issues. Inquiries are listed in the chronological order of receipt. As of January, the OIG 

discontinued processing inquiries on behalf of the Postal Inspection Service.

Inspector General Investigations (46)

Requestor Allegation/Concern Major Findings Closure Date

Senator, Iowa Request for investigation into private entity's offer of a special 

mortgage to the Postmaster General; chief postal inspector 

engaged in various forms of offi cial misconduct.

The investigation was closed after the Senator withdrew request for 

an inquiry into the matter.

10/05/09

Representative 

Maryland

Mail delivery issues. The investigation found no evidence of mail theft or tampering by 

postal employees, but we noted and reported problems with the 

system mail forwarding.

10/29/09

Representative, 

Washington

Complainant never received international mail package. The investigation found no evidence of mail tampering, delay, or theft 

by postal employees. Working with the International Mail and Mail 

Recovery Centers, our agents were unable to trace the package after 

its arrival at the International Service Center.

11/19/09

Representative, 

New York

Postal Service divulged confi dential information about complainant's 

patented biohazard detection process to a competitor, which 

eventually led to a contract award.

The investigation found no evidence of an improper release of 

confi dential information by the Postal Service. We noted that 

infringement claims are resolved through well established patent 

law procedures.

1/22/10

Representative, 

New Hampshire

Management manipulated time and attendance records to avoid 

paying overtime and falsify work hour usage at three locations.

The investigation, widened to fi ve locations, substantiated the 

allegations, fi nding management intentionally changed time and 

attendance records causing postal employees to be underpaid. The 

investigation also revealed a fl aw in the postal time and attendance 

system, causing unintentional short pay. We calculated shortages of 

nearly $30,000. We forwarded management our fi ndings for action.

10/15/09

Representative, 

Maryland

Files on a complainant's union computer were deleted in retaliation 

for the complainant reporting misuse of postal property to the OIG.

An investigation substantiated the allegation of misuse of property; 

we did not substantiate the allegation that computer fi les were 

intentionally deleted, due to absence of controls over the computer 

and its location.

10/14/09

Senator, Virginia Non-receipt of Priority Mail sent from Virginia to New York. The investigation found no evidence of mail tampering, delay, or 

theft by postal employees.

3/15/10

Senator, Virginia Priority Mail sent from Virginia to New York was not received. There was no evidence found of mail tampering, delay, or theft by 

postal employees.

3/15/10

Senator, Washington Non-receipt of a package mailed from Virginia to Texas. Evidence indicated a now-former postal employee could be 

responsible. Agents were unable to the locate the package. 

We forwarded our fi ndings to the U.S. Attorney and management 

for action deemed appropriate.

2/23/10

Representative, Virginia Hostile work environment; unfair employment practices; intentional 

mail delay by management at a Virginia Post Offi ce.

The investigation did not substantiate the allegations. The 

complainant also fi led a grievance through the local union 

regarding the allegedly unfair employment practices, therefore 

the OIG will not interfere with the administrative process.

10/07/09

Senator, California A postal manager sexually harassed an employee and assaulted a 

union president.

The Postal Inspection Service previously investigated and did not 

substantiate the allegations. We conducted an investigative review 

and found no irregularities or failings in the Inspection Service 

investigation. The complainants also fi led Equal Employment 

Opportunity (EEO) complaints, therefore the OIG will not interfere 

in this administrative process.

12/28/09
October 1, 2009 – March 31, 2010 | 51 

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Senator, Wyoming New information about a reported theft of a registered mail pouch. The Postal Inspection Service conducted an investigation in 2003 

that did not produce determinative evidence of whether the theft 

occurred internally or externally. A new OIG investigation found no 

conclusive evidence to identify a suspect.

10/26/09

Representative, 

California

Non-receipt of mail; employee misconduct. The investigation did not substantiate the allegations. 10/15/09

Representative, Texas Non-receipt of mail addressed to a Post Offi ce box at a Texas 

Post Offi ce.

The investigation found no evidence indicating postal employees 

were responsible for theft of the mail. We referred the allegations 

to the Postal Inspection Service based on indications the theft may 

have occurred externally.

2/26/10

Representative, 

New York

Non-receipt of a package scanned as delivered. The investigation found no evidence indicating postal employees 

stole the package and no evidence of a systemic problem with lost 

or stolen mail in his area.

10/05/10

Representative, 

Pennsylvania

A congressional survey the complainant mailed was defaced 

and returned.

The investigation did not uncover defi nitive evidence that a postal 

employee tampered with the survey. We provided fi ndings to 

management and requested they conduct stand-up talks (training 

reminders) on this type of crime.

10/07/09

Senator, 

Massachusetts

Whistleblower reprisal; the OIG did not respond to complainant's 

prior report of whistleblower reprisal.

The investigation did not substantiate the allegations. 3/12/10

Representative, 

New York

Theft of a parcel mailed internationally. Complaint withdrawn after package arrived at its destination. 10/15/09

Representative, 

Mississippi

Management falsifi ed documents and delayed processing of injury 

compensation claim at a Mississippi Post Offi ce.

The investigation revealed no evidence substantiating the allegations. 

We did not investigate several allegations already addressed through 

the grievance and/or EEO processes.

3/30/10

Representative, Florida Estimated 5,200 pieces of a representative's mail were found among 

the 100,000+ pieces of mail hoarded, rifl ed, and/or destroyed by a 

rural carrier.

We located the mail and briefed the representative of the impact 

within her congressional district.

10/14/09

Representative, 

New York

Theft of a check in the mail and subsequent attempts to compromise 

complainant's account.

The investigation did not substantiate the allegation of internal mail 

theft. Due to indications of external theft, we referred the matter to 

the Postal Inspection Service.

12/03/09

Senator, Illinois Non-receipt of fi nancial statements and checks sent to a Post 

Offi ce Box.

The investigation found no evidence mail had been sent by the 

institutions and there was no evidence of mail theft. 

11/06/09

Representative, Virginia Mail tampering and theft of the contents of a package that was 

opened and resealed.

The investigation did not substantiate the allegations that postal 

employees stole the contents of the package.

11/09/09

Senator, Georgia Non-receipt by intended recipient of an insured package received 

at a South Carolina Post Offi ce.

The investigation found no evidence that postal employees stole the 

package. The Postal Service reimbursed the complainant for the 

insured amount.

3/09/10

Senator, Florida Mail delay and tampering by management at a Florida facility. The investigation did not substantiate the allegation of mail delay 

but found a manager had opened the mail piece. We forwarded our 

fi ndings to management for action deemed appropriate.

12/08/09

Representative, Illinois A package containing personal identifi cation documents were stolen 

from the mail.

We found a letter carrier had stolen multiple items, including the 

complainants. We presented our fi ndings to the U.S. Attorney for 

prosecution and to management for whatever action deemed necessary.

1/26/10

Representative, Illinois Complainant received no commemorative plaque for service after 

separating from the OIG.

A plaque was ordered and shipped to the requestor. 10/28/09

Senator, Idaho A letter carrier mishandled complainant's mail and returned it to 

sender without permission.

The investigation found no evidence of misconduct by the postal 

employee. The postal employee followed postal policy by returning 

mail after complainant's curbside box fi lled to capacity.

1/19/10

Senator, California Package containing prescription drugs was rifl ed and stolen from 

complainant's mailbox.

Investigation found no evidence of mail theft by postal employees. 

We provided the allegations to the Postal Inspection Service because 

of incidents of external mail theft in the area.

11/09/09
52 | Semiannual Report to Congress

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

City Council Vice 

President, Alabama

Non-receipt of money orders mailed to the complainant. Agents determined the money orders had not been negotiated, but 

could not account for their whereabouts; agents found a refund 

was delayed because of incorrect data entered in the Postal Service 

Money Order Imaging System. 

12/22/09

Representative, 

Mississippi

Inconsistent mail delivery. The investigation revealed the mail delivery issues resulted from letter 

carrier's misapplication of Change of Address (COA) policy. The fi ndings 

were forwarded to management for action deemed appropriate.

1/20/10

Senator, Missouri Contents missing from a package mailed by a vendor. Investigation did not fi nd evidence indicating a postal employee stole 

the contents Agents were unable to locate the contents at any of the 

postal facilities that handled the package.

12/22/09

Senator, Maryland Complainant believed she was the subject of an OIG investigation 

of workers' compensation benefi ts use.

Review found no record of a current OIG investigation. 11/17/09

Senator, Colorado Delay of union mail; postal management condoned supervisor's 

threats and intimidation of employees.

The investigation found no evidence of intentional mail delay. The 

Postal Service Human Resource offi ce was already conducting an 

inquiry into the allegations of threats and intimidation, therefore, we 

did not intervene.

1/20/10

Representative, 

Maryland

Non-receipt of mail after fi ling a COA form; mail tampering. The investigation found the complainant was receiving all of his mail 

at his new address. The investigation also determined the tampering 

occurred accidently after a letter was incorrectly delivered to the 

wrong address and accidently opened by a third party.

2/22/10

White House Non-receipt of packages that arrived at a New Jersey Post Offi ce 

according to delivery confi rmation information.

Agents could not investigate the matter fully after multiple 

unsuccessful attempts to reach complainant.

1/27/10

White House Government employee tampered with international mail. Investigation did not substantiate the allegation and found the

damage to mailpieces consistent with damage caused by Postal 

Service sorting machines.

2/22/10

Representative, 

California

Non-receipt of checks mailed to a political organization's Post 

Offi ce box.

An on-going investigation had focused on a postal employee who 

appeared to be intentionally discarding First-Class-Mail. Based 

on box holder information about more than 100 similar cases, we 

expanded our investigation and confi rmed much of the missing 

mail entered the facility during times the employee was on duty. 

We informed management of our fi ndings.

3/12/10

Senator, Ohio Letter carrier stole letters complainant mailed to elected offi cials. The letter carrier was no longer employed with the Postal Service 

for reasons unrelated to the complaint. The complainant experienced 

no mail delivery issues after the employee's departure and the 

investigation found no evidence of systemic delivery problems in 

the area.

1/22/10

Senator, Tennessee Theft of a gift card in the mail; the OIG did not respond to the original 

hotline complaint.

Investigators had conducted a timely investigation, but could not 

determine the identity of the suspect and, therefore, could not 

conclude a postal employee was responsible. 

3/09/10

Representative, 

New Jersey

Postal management made an unauthorized disclosure from the 

complainant's personnel fi le.

The investigation did not substantiate the allegation and we could 

not determine how other parties had received the information.

3/17/10

Representative, Texas Non-receipt of packages that tracking information showed had 

arrived at a Florida Post Offi ce.

Our previous investigation and work with local law enforcement 

agencies did not reveal the location of the package or the reason 

for its disappearance. 

2/23/10

Representative, 

California

Mail tampering and theft of franked mail. The investigation found no evidence of mail tampering or theft by 

postal employees, based on the limited evidence available. 

3/22/10

White House Mail tampering. Investigation found no evidence of mail tampering by postal 

employees, but noted it was part of a large amount of rifl ed, 

abandoned mail and likely the result of external crime.

3/15/10

Representative, Florida Management falsifi ed Express Mail tracking data to infl ate 

performance statistics, and delayed Express Mail delivery.

As in an earlier investigation at the same site, our investigation found 

evidence substantiating the allegations. We again forwarded our 

fi ndings to management.

3/22/10
October 1, 2009 – March 31, 2010 | 53 

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

Pennsylvania

Propriety of OIG agent request for medical documentation on 

a postal employee.

The agent provided offi cial OIG documentation when making a 

request for voluntary production of records. Due to the concern from 

the medical provider, the agent provided a subpoena for the records.

2/23/10

General Counsel (13)

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

New Jersey

Complainant sought assistance returning to work from an extended 

leave status.

Review showed the complainant failed to respond to notices from 

management regarding his extended leave and he was therefore 

not allowed to return to work. Management later agreed to allow 

the complainant to return to his position.

10/19/09

Senator, Ohio Delay of mail at an Ohio facility. Review found the Postal Service district offi ce was working to 

resolve the problem.

10/22/09

State Representative, 

Connecticut

Favoritism in applying the no-smoking policy at a Connecticut facility. Management acknowledged impermissible smoking may have 

occurred, but would not occur again.

11/02/09

Senator, Maryland Maryland facility supervisor improperly changed employee's leave 

status.

Review found the complainant fi led a formal complaint and request 

for pay adjustment with postal management.

11/04/09

Representative, 

Pennsylvania

A postal manager discussed the complainant's medical information 

on the workroom fl oor.

Review found earlier Postal Inspection Service work did not 

substantiate the allegation.

12/29/09

Representative, 

Pennsylvania

Hostile work environment; management failed to effectively resolve 

problems with a disruptive employee.

Review found management took appropriate steps to respond the 

workplace issues.

12/29/09

Senator, Pennsylvania A postal manager discussed the complainant's medical information 

on the workroom fl oor.

Review found earlier Postal Inspection Service work did not 

substantiate the allegation.

12/29/09

Representative, 

Pennsylvania

A tenant paid rent with a counterfeit postal money order. The Postal Service determined the money order was not counterfeit 

and reimbursed the complainant.

10/22/09

Representative, 

Tennessee

Complainant's mail discarded in a fi eld; potential mail theft. Review found no evidence that mail theft or mail box tampering 

had occurred.

12/07/09

White House Mail delivery issues. The correspondence provided was no longer legible. We notifi ed 

the complainant and provided a contact number in case assistance 

was needed.

12/28/09

Representative, 

New York

Request for information about an OIG investigation. We provided the information as requested. 12/18/09

Chairman, House 

Subcommittee

Request for the inspector general's testimony before the 

Subcommittee.

The inspector general testifi ed as requested. 3/25/10

Representative, Texas The OIG wrongfully terminated complainant and denied him a fair 

and neutral hearing.

The complainant earlier elected administrative relief with other 

agencies, in which our agency is fully cooperating.

3/02/10

Representative, 

California

Concerns about the calculation of expense and benefi ts associated 

with the consolidation and relocation of staff and operations from the 

Mojave facility.

Sierra Coastal District management’s analyses and business case 

supporting the changes to destinating mail processing operations 

at Mojave were reasonable. Management prepared a business 

case to move most of the destinating mail processing operations 

out of Mojave. We found that several potential service standard 

downgrades could result from the changes, but management stated 

they made operational and transportation changes to ensure no 

service performance downgrades occurred. 

1/22/10

Representatives and 

Senators, Pennsylvania

Concerns about consolidation of two Pennsylvania facilities. The OIG advised audit work has been slated for later this fi scal year. 10/30/09

Representative, 

West Virginia

Fraudulent processes and delays in Priority Mail shipments at a 

West Virginia facility.

The review did not identify any fraudulent or unusual activities 

and noted the transfer of Priority mail processing operations from 

Huntington to Charleston is authorized to improve operational effi ciency. 

11/06/09

Senator, Texas Management at a Texas facility engaged in unfair employment 

practices and violated federal law in the use of stand-by time.

OA reviewed the information provided by complainant for 

consideration in future audit plans in the area of human resources.

12/12/09

State Representative, 

Florida

Closure of retail postal facilities in central Florida. OA has not reviewed the specifi c criteria or processes the Postal 

Service uses to evaluate potential stations for closure. We provided 

information about the Postal Service's criteria which include factors 

such as mail volume and retail transaction trends.

1/04/10
54 | Semiannual Report to Congress

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Chairman, House 

Committee

Request for investigation of an incident involving signifi cant delays in 

the delivery of New York pension checks.

The review found check delays (up to 11 days) resulted from their 

treatment as Standard, not First-Class Mail and that Standard 

Mail was not being timely processed. Review also found the Postal 

Service took immediate action to locate, process, and deliver the 

pension checks as well as to expedite replacement checks and send 

letters to creditors once the matter was noticed.

1/28/10

Inspector General Audits (6)

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

California

Concerns about the calculation of expense and benefi ts associated 

with the consolidation and relocation of staff and operations from the 

Mojave facility.

Sierra Coastal District management’s analyses and business case 

supporting the changes to destinating mail processing operations 

at Mojave were reasonable. Management prepared a business 

case to move most of the destinating mail processing operations 

out of Mojave. We found that several potential service standard 

downgrades could result from the changes, but management stated 

they made operational and transportation changes to ensure no 

service performance downgrades occurred. 

1/22/10

Representatives and 

Senators, Pennsylvania

Concerns about consolidation of two Pennsylvania facilities. The OIG advised audit work has been slated for later this fi scal year. 10/30/09

Representative, 

West Virginia

Fraudulent processes and delays in Priority Mail shipments at a 

West Virginia facility.

The review did not identify any fraudulent or unusual activities 

and noted the transfer of Priority mail processing operations from 

Huntington to Charleston is authorized to improve operational effi ciency. 

11/06/09

Senator, Texas Management at a Texas facility engaged in unfair employment 

practices and violated federal law in the use of stand-by time.

OA reviewed the information provided by complainant for 

consideration in future audit plans in the area of human resources.

12/12/09

State Representative, 

Florida

Closure of retail postal facilities in central Florida. OA has not reviewed the specifi c criteria or processes the Postal 

Service uses to evaluate potential stations for closure. We provided 

information about the Postal Service's criteria which include factors 

such as mail volume and retail transaction trends.

1/04/10

Chairman, House 

Committee

Request for investigation of an incident involving signifi cant delays 

in the delivery of New York pension checks.

The review found check delays (up to 11 days) resulted from their 

treatment as Standard, not First-Class-Mail and that Standard 

Mail was not being timely processed. Review also found the Postal 

Service took immediate action to locate, process, and deliver the 

pension checks as well as to expedite replacement checks and send 

letters to creditors once the matter was noticed.

1/28/10

Postal Inspection Service Investigations (27)

Requestor Allegation/Concern Major Findings Closure Date

Representative, Ohio Fraudulent fi ling of a Change of Address (COA) form. A postal inspector previously reviewed the complaint and found no 

evidence of a fraudulent COA fi ling.

10/15/09

Senator, Virginia Mail fraud scheme. A postal inspector reviewing the allegations found the complainant 

was the victim of an international fraud scheme. The inspector was 

unable to develop viable investigative leads in the continental U.S. 

Should further leads develop, inspectors will revisit the incident.

12/28/09

Senator, Texas Postal employee alleged a coworker's spouse threatened assault; 

alleged improper relationship between a supervisor and employee.

Investigation did not substantiate the allegations, and found postal 

inspectors had addressed the issues and advised complainant before 

he contacted the senator.

10/16/09

Senator, Michigan Complainant requested reinstatement as a postal inspector. Review found complainant voluntarily resigned from the Postal 

Inspection Service; there was a hiring freeze; and complainant 

was not entitled to reinstatement under postal regulations.

10/22/09
October 1, 2009 – March 31, 2010 | 55 

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Senator, Pennsylvania Fraudulent request for wire transfer. Allegations forwarded to Criminal Investigations Service Center 

for review.

10/05/09

Senator, Alaska Theft of a parcel from a Post Offi ce mail box section; surveillance 

system not operating properly.

Inspectors found few leads to pursue; inspectors do not maintain 

a surveillance system.

10/19/09

Representative, Ohio Request for investigation of the death of a postal employee occurring 

during performance of job duties.

Request withdrawn. 12/03/09

Representative, 

Pennsylvania

Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center 

for review.

10/20/09

Senator, Maryland Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center 

for review.

10/08/09

Senator, Maryland External mail theft fi rst reported in 2007. Complainant advised there are no continuing problems. The 

inspector confi rmed complainant's mailbox was secured and 

functioning properly.

10/20/09

Senator, Maryland Attempt to fraudulently obtain a Post Offi ce box in complainant's 

name.

An inspector reviewed and found no evidence to support the allegation. 11/18/09

Senator, Alaska Receipt of an opened mail piece placed in a plastic bag with 

instructions to contact state troopers.

Returned rifl ed mail included notifi cations of suspected or known 

mail activity. The Postal Inspection Service participated in a multiagency investigation with the Alaska State Troopers into mail theft 

and related crimes, resulting in state prosecution of six individuals 

and pending federal charges against others.

11/30/09

Representative, 

Pennsylvania

Fraudulent billing by a health provider. The matter is considered Medicare fraud rather than mail fraud, 

and the FBI has asserted jurisdiction over these cases.

11/23/09

Representative, 

New York

Mail theft and fraudulent fi ling of COA forms. A postal inspector reviewed and found a local law enforcement 

agency was investigating the matter, and provided additional 

information for that investigation.

11/02/09

State Representative, 

Pennsylvania

Mail fraud scheme. A postal inspector reviewed the mailing. As it originated outside the 

U.S. and resulted in no loss for the complainant, only action will be 

to add to database for systemic review.

10/29/09

Representative, 

Pennsylvania

Threatening mailings from a collection agency for purported debts. Inspectors notifi ed the Federal Trade Commission of the potential Fair 

Debt Collection Practices Act violation and were reviewing potential 

postal jurisdiction over other aspects of the agency activities. 

11/04/09

Representative, 

Wisconsin

Mail fraud scheme. The mail was not used to support the scheme and therefore it is 

outside of Postal Inspection Service jurisdiction. The inspector 

forwarded the allegations to the Federal Trade Commission.

11/17/09

Representative, Indiana Postal inspectors retained documents provided for an investigation. Documents returned. 11/02/09

Representative, 

Pennsylvania

Hundreds of unsolicited magazine subscriptions were entered in 

complainant's name, possibly as a form of harassment.

After declinations of prosecution at the federal and local levels, 

the inspector conducted investigative activity intended to deter 

further harassment.

11/17/09

Representative, 

Wisconsin

A municipal employee attempted to close the complainant's personal 

Post Offi ce box at a Wisconsin Post Offi ce.

A postal inspector reviewed and did not substantiate the allegations. 11/23/09

Senator, Maryland Unsolicited mailing regarding Medicare benefi ts. Review found the mailing came from a company with a valid 

postal permit for commercial mailings. Review did not fi nd 

indications of deceit.

11/16/09

Representative, 

California

Concern about the security and fee associated with the Postal 

Service's Internet-based COA process and non-postal websites 

offering similar services.

The review found several websites offering COA services properly 

represented themselves as offi cial Postal Service websites and 

therefore violated no federal mail fraud laws. A postal inspector 

also noted the $1 fee for Internet COA fi ling is a security measure 

to capture electronic information about the requestor, should any 

issues arise.

11/13/09

Representative, 

Maryland

Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center 

for review.

11/30/09
56 | Semiannual Report to Congress

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

New York

Receipt of threatening mail. A postal inspector reviewed the mailings and determined they did 

not fall within the precise meaning of the threatening mail statute, 

18 USC § 876. Because the mailing was harassing, the Inspector 

suggested fi ling a report with the local law enforcement agency.

12/07/09

Representative, Florida Unauthorized COA fi led. The review showed a temporary COA order was placed and deleted 2 

months later, and the matter was forward to an identity theft team for 

possible criminal investigation. The inspector requested all residual 

mail at the temporary address be returned to the complainant.

11/23/09

Representative, 

California

Mail fraud scheme. A postal inspector reviewed the mailing and noted pending 

complaints against the company.

11/24/09

Representative, 

California

Fraudulent billing by a collection agency. Use of e-mail, rather than U.S. Mail, to advance the scheme appears 

to place it outside Postal Inspection Service jurisdiction.

11/23/09

Referrals (8)

Requestor Allegation/Concern Referred To Closure Date

Representative, 

Pennsylvania

Complainant requests reconsideration of a decision to cancel 

a lease.

Postal Service Government Relations Offi ce 10/19/09

Representative, 

Pennsylvania

External mail theft. Postal Inspection Service 12/30/09

Representative, 

Georgia

Mail fraud. Postal Inspection Service 12/30/09

Senator Georgia Mail fraud. Postal Inspection Service 12/30/09

Senator, California Request for a response to constituent letter to the chief postal 

inspector concerning a threat at a California facility.

Postal Inspection Service 12/14/09

Representative, Indiana Request for information about the consolidation of letter carrier 

routes in a congressional district.

Postal Service Government Relations Offi ce 2/09/10

Senator, California Request for a Postal Inspection Service document. Postal Inspection Service 2/19/10

Representative, 

Maryland

Lack of management response to an OIG investigation into 

employee misconduct.

Postal Service Government Relations Offi ce 3/22/10
October 1, 2009 – March 31, 2010 | 57 

FREEDOM OF INFORMATION ACT/ WORKPLACE ENVIRONMENT

Requests Number of Requests

Carryover from prior period 10

Received during period 150

Total on hand during period 160

Actions Number of Requests

Processed during the period 152

Requests denied in full 14

Requests denied in part 59

Requests granted in full 8

No records 11

Requests referred 41

Requests withdrawn 13

Fee-related reasons —

Records not reasonably described —

Not a proper FOIA request for some other reason 5

Not an agency record —

Duplicate request 1

Balance Number of Requests

Balance at the end of the period (pending) 8

Processing Days Number of Days

Median processing days to respond to a FOIA request 9.5

SUPPLEMENTAL INFORMATION

Freedom of Information Act

The Freedom of Information Act (FOIA) Offi ce for the Postal Service Offi ce 

of Inspector General operates independently of, but frequently coordinates 

with, its counterparts at the Postal Service and the Postal Inspection 

Service. The FOIA Offi ce receives requests for records from the public, 

the media, and postal employees. The FOIA, according to the Department 

of Justice, “generally provides that any person has a right, enforceable in 

court, to obtain access to federal agency records, except to the extent that 

such records (or portions of them) are protected from public disclosure by 

one of nine exemptions.”

For the period October 1, 2009 – March 30, 2010

SUPPLEMENTAL INFORMATION

Workplace Environment

The OIG’s Workplace Environment team 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-fi nding 

reports to management or referral for specifi c suggested action, such as 

climate assessments. 

Activities

For the period October 1, 2009 – March 31, 2010

Complaints received Total

Carryover from prior period 37

Complaints received from OIG Hotline, Congress, governors, management, 

internal, and other

293

Total on hand during this period 330

Workplace environment actions Total

Complaints reviewed and closed during the period 302

Referred to Postal Service management 107

Referred to Offi ce of Investigations 25

Referred to Postal Inspection Service 8

Referred to Offi ce of Audit 1

Summary of fi ndings to Congress/BOG/Postal Service management 4

Referred to database for statistical analysis and possible systemic review 157

Complaints pending at the end of the period 83
58 | Semiannual Report to Congress

ACRONYM GUIDE

AMP: area mail processing

APWU: American Postal Workers Union

ASC: Accounting Service Centers

BMC: bulk mail center

BMEU: Business Mail Entry Unit

COR: Carrier Optimal Routing

CSBCS: Carrier Sequence Bar Code Sorter

DBCS: Delivery Bard Code Sorter

DOL: U.S. Department of Labor

FPA: foreign postal administrations

HCR: highway contract route

HRSSC: Human Resources Shared Service Center

ISC: International Service Centers

MPE: mail processing equipment

MTE: mail transport equipment

NALC: National Association of Letter Carriers

NDC: network distribution center

OWCP: Offi ce of Workers’ Compensation 

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) 

PIR: Process Improvement Review

PIVMS: Powered Industrial Vehicle Management System

PSRHBF: Postal Service Retiree Health Benefi t Fund

PVS: Postal Vehicle Services

RDC: regional distribution center

SCR: software change requests

SSA: sales and services associate

SSDA: sales, services, and distribution associate 

SSLP: Supplier Sales Lead Program

TDSN: time-defi nite surface network

Acronym Guide

Here is a quick guide to acronyms used in this reporting period.

The following are among the many trademarks owned by the United States Postal Service: United States Postal Service®, U.S. Postal Service®, USPS®, 

First-Class Mail®, usps.com®, Click-N-Ship®, Automated Postal Center®, APC®, Express Mail®, Priority Mail®, Standard Mail®, Parcel Post®, 

Media Mail®, Customized MarketMail®, Intelligent Mail®, Parcel Select®, Express Mail International®, Quick, Easy, Convenient®, United States Postal 

Service Offi ce of Inspector GeneralTM, Post Offi ceTM, Postal ServiceTM, Signature Confi rmationTM, Certifi ed MailTM, Delivery Confi rmationTM, Registered MailTM, 

ZIP CodeTM, Carrier PickupTM, Priority Mail InternationalTM, First-Class Mail InternationalTM, Premium Forwarding ServiceTM, Forever StampTM and Postmaster 

GeneralTM. The Sonic Eagle Logo, Round Top Collection Box design, Letter Carrier Uniform design, and the Mail Truck design are also trademarks belonging 

to the United States Postal Service.
The U.S. Postal Service has two 

law enforcement agencies with 

distinct areas of investigative

responsibility to serve the needs

of stakeholders, postal employees,

and the American public.

Who do I call?

Postal Inspection Service

■ Security of employees, facilities,

and equipment

■ Revenue and postage fraud

■ International mail security

■ Violent crimes: 

- Threats and assaults of employees

- Burglaries and robberies

■ Mail theft by nonemployees

■ Dangerous mail and bombs

■ Mail fraud

■ Identity theft

■ Narcotics in the mail

■ Child pornography and obscenity

Contact: 877-876-2455

http://postalinspectors.uspis.gov/

Offi ce of Inspector General

■ Theft, delay, or destruction of mail by 

employees and contractors

■ Injury compensation fraud

■ Embezzlements and fi nancial crimes

■ Contract fraud

■ Kickbacks

■ Computer crimes

■ Narcotics

■ Employee misconduct

■ Internal aff airs and executive 

investigations

■ Whistleblower reprisals

Contact: 888-USPS OIG

www.uspsoig.gov
CHAPTER TITLE

60 | Semiannual Report to Congress

U.S. POSTAL SERVICE OFFICE OF INSPECTOR GENERAL

1735 N. Lynn Street, Arlington, VA 22209-2020 

1-888-USPS-OIG (1-888-877-7644) Fax: 703-248-2291 www.uspsoig.gov