Semiannual Report on the Audit, 

Investigative, and Security Activities 

of the United States Postal Service

April 1 – September 30, 2009
Cover photos by Gerald Merna at the National Postal Museum in Washington, DC

www.postalmuseum.si.edu
MESSAGE FROM THE INSPECTOR GENERAL 

AND THE CHIEF POSTAL INSPECTOR

In this report, the U.S. Postal Service Offi ce of Inspector General (OIG) and the U.S. Postal 

Inspection Service provide statistics and activities for the 6-month period of April 1 through 

September 30, 2009. New to this issue are fi scal year summary results for October 1, 2008, 

through September 30, 2009.

The fi rst section of the report highlights audits and reviews by the OIG’s Offi ce of Audit (OA) that 

address key Postal Service risks through audit work. 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, OA issued 167 audit reports and 

management advisories, and the Postal Service accepted 87 percent (187 of 216) of the OIG’s 

signifi cant recommendations. 

The second section of the report features investigative work conducted by the Postal Inspection 

Service and the OIG’s Offi ce of Investigations to preserve the sanctity of the mail, protect the 

integrity of postal personnel, and safeguard employees and customers. 

The third section describes the Postal Inspection Service’s security investigations, projects, 

and initiatives addressing protection for all postal employees, customers, facilities, revenue, 

and assets. During this reporting period, Postal Inspectors and Special Agents closed 6,266 

investigations. The investigations led to 3,860 arrests and more than $963 million in fi nes, 

restitutions, and recoveries, of which more than $12.5 million went to the Postal Service. 

Both the OIG and the Postal Inspection Service play a key role in ensuring America’s 

confi dence in the mail and maintaining the integrity and accountability of the postal system, 

revenue, assets, and employees. With the support of the Governors, Congress, and Postal 

Service management they will continue to help ensure that the Postal Service will exist into 

the next decade and beyond. 

David C. Williams

Inspector General

William R. Gilligan

Chief Postal Inspector
SUMMARY OF PERFORMANCE

April 1 – September 30, 2009

AUDIT

Reports issued 167

Signifi cant recommendations issued 216

Total reports with fi nancial impact 71

Funds put to better use $7,665,457,764

Questioned costs1 $1,266,278,769

Revenue Impact $527,010,403

TOTAL2 $9,458,746,936

INVESTIGATIONS3

Investigations completed 6,266

Arrests 3,857

Indictments/informations 2,123

Convictions/pretrial diversions4

 3,928

Administrative actions 1,440

Cost avoidance $112,029,808

Fines, restitutions, and recoveries $963,126,807

Amount to Postal Service5 $12,531,510

OIG HOTLINE CONTACTS

Telephone calls 47,526

E-mail 15,569

Virtual Front Offi ce calls 1,372

Standard Mail 1,183

Voice mail messages 585

Facsimile 318

National Law Enforcement Communications Center 295

TOTAL CONTACTS 66,848

1

 Includes unsupported costs of $50,354,832.

2

 The Postal Service agreed to recommendations or proposed alternative corrective actions that, if implemented, 

could result in nearly $9.5 billion in savings.

3

 Statistics include joint investigations with other law enforcement agencies.

4

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

5

 Amount included in fi nes, restitution, and recoveries.
TABLE OF CONTENTS

AUDIT WORK BY RISK CATEGORY ........................................................ 1

Strategic Risk .............................................................................................................................................................. 1

Financial Risk .............................................................................................................................................................. 3

Operational Risk ........................................................................................................................................................... 5

INVESTIGATIONS ................................................................................. 13

Revenue and Asset Protection ..................................................................................................................................... 13

Workers’ Compensation Fraud .................................................................................................................................... 15

Delay, Destruction, and Theft of Mail ........................................................................................................................... 18

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

Mail Fraud ................................................................................................................................................................. 22

Money Laundering ..................................................................................................................................................... 23

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

Robberies .................................................................................................................................................................. 24

Burglaries .................................................................................................................................................................. 25

Dangerous Mail Investigations..................................................................................................................................... 26

Child Exploitation via the Mail...................................................................................................................................... 28

Narcotics Traffi cking ................................................................................................................................................... 29

Offi cial Misconduct .................................................................................................................................................... 30

Homicides, Assaults, and Threats ................................................................................................................................ 30

Executive Investigations and Internal Affairs ................................................................................................................. 31

SECURITY AND CRIME PREVENTION .................................................. 33

Security ..................................................................................................................................................................... 33

National Preparedness ............................................................................................................................................... 34

Global Security and Investigations ............................................................................................................................... 36

Cyber Intelligence ...................................................................................................................................................... 37

Consumer Education and Fraud Prevention .................................................................................................................. 39

SPECIAL FEATURES............................................................................... 2

Estimate of Postal Service Liability for Retiree Health Care Benefi ts ................................................................................. 2

Operational Effi ciency ................................................................................................................................................. 11

OIG Kicks Off OWCP Fraud Awareness Campaign ........................................................................................................ 15

OIG Establishes a Major Fraud Investigations Division ................................................................................................... 23

APPENDICES ....................................................................................... 43

APPENDIX A — Reports Issued to Postal Service Management .................................................................................... 43

 Reports with Quantifi able Potential Monetary Benefi ts ................................................................................................ 44

 Report Listing .......................................................................................................................................................... 47

APPENDIX B — Findings of Questioned Costs ............................................................................................................. 50

APPENDIX C — Recommendations That Funds Be Put to Better Use ............................................................................. 51

APPENDIX D — Reported Non-monetary Benefi ts ........................................................................................................ 52

APPENDIX E — Reports with Signifi cant Recommendations Pending Corrective Actions ................................................. 53

APPENDIX F — Signifi cant Management Decisions in Audit Resolution ......................................................................... 63

APPENDIX G — Investigative Statistics ........................................................................................................................ 64

APPENDIX H — Summary of U.S. Postal Inspection Service Investigative Activities Under Title 39 USC § 3013 ................ 66

APPENDIX I — Closed Congressional and Board of Governors’ Inquiries ........................................................................ 67

SUPPLEMENTAL INFORMATION ........................................................... 76

Freedom of Information Act ......................................................................................................................................... 76

Workplace Environment .............................................................................................................................................. 76

Jurisdiction and Laws ................................................................................................................................................. 77

Acronym Guide .......................................................................................................................................................... 79
AUDIT WORK BY RISK CATEGORY
April 1 – September 30, 2009 | 1 

STRATEGIC RISK

The Strategic Risk category covers issues that impact the 

Postal Service’s overarching strategic direction. Strategic 

risk factors are those affecting the Postal Service’s 

ability to be effective and effi cient, and ensure that its 

products and services are self-sustaining and balance 

legal considerations and stakeholder views. The following 

white paper and audit work represents examples of work 

performed in this area.

Electrifi cation of Delivery Vehicles

With a large geographically dispersed vehicle fl eet and 

short delivery routes, the Postal Service could serve 

as a test laboratory for technological advancements of 

electric vehicles (EV) sought by President Obama through 

the Department of Energy. Due to the Postal Service’s 

current fi nancial distress, government funds and vehicle 

to grid (V2G) revenue would likely be needed to make this 

transition economically feasible.

In this white paper, OA determined that broad use of EVs 

in the Postal Service delivery fl eet would be operationally 

feasible. Current EV technology would work well with the 

average mail delivery driving distance of about 18 miles 

per day. Previous delivery operation tests, under favorable 

environmental conditions within California, have shown that 

the EV performance levels were adequate for mail delivery 

ranges of up to 40 miles a day and battery technology has 

advanced considerably since then, resulting in signifi cantly 

increased driving distance ranges.

V2G technology establishes a system in which battery 

stored electricity or capacity can be sold to power 

wholesalers when electric vehicles are plugged in for 

recharging. Since most of the Postal Service’s delivery 

vehicles are parked between 5 p.m. and 8 a.m., their 

batteries could be used as grid regulators. This could 

stabilize the electrical grid and generate revenue from 

wholesalers. Since the government investment to 

advance battery technology and V2G technology is in its 

infancy, OA suggests that the Postal Service phase in any 

electrifi cation of its fl eet so that it can capture the greatest 

possible benefi ts.

Energy and Recycling Compliance 

OA used a checklist developed with Postal Service facility, 

energy, and environmental managers to assess and score 

sustainability compliance at fi eld sites. OA found that 

improvements are needed to increase energy awareness 

in the fi eld as only two of the 90 sites visited met basic 

energy standards. Most of the sites can improve by setting 

prescribed building temperatures and installing occupancy 

sensors. The Postal Service could increase energy effi ciency 

by complying with these low to no cost measures, and 

save about $1 million a year. OA also found that the Postal 

Service can improve recycling policy awareness since of the 

90 sites reviewed, only 22 sites met basic standards.

Custodial Maintenance

In fi scal year (FY) 2008, the Postal Service used 

3.4 million cleaning hours more than necessary for the 

436 sites OA reviewed. The use of additional hours was 

prevalent for a variety of processing, customer service, 

and support facilities because the arbitrated custodial 

maintenance standard differed from custodial practices 

at the benchmarked organizations. For example, cleaning 

at benchmark sites was limited to one time per day while 

Postal Service standards, at times, call for cleaning on 

each tour. In addition, many scheduled cleaning tasks 

overlap a lighter form of cleaning called policing, and the 

two are largely duplicative. Sites visited also could not 

validate whether management updated 

their staffi ng justifi cations annually as 

required by Postal Service policy.

Additionally, larger Postal Service 

facilities incur increased costs for 

custodial services because hourly 

rates for full-time Postal Service 

custodial employees nationwide are 

$21 higher than for current contractual 

custodian rates. If management 

reduced cleaning frequencies and 

eliminated the duplication of cleaning 

and policing activities, these sites could 

save $848 million over 10 years, while 

maintaining an acceptable standard of 

cleanliness and safety. 

STRATEGIC RISK

AUDIT WORK BY RISK CATEGORY

The Offi ce of Audit (OA) uses a risk-based planning approach to identify audit work that 

will provide the best value to the Postal Service. This process identifi es key areas to focus 

on, and then assigns work via risk deployment. For this reporting period, OA highlights 

audits and reviews that address risks in the strategic, fi nancial, and operational areas. 

MANAGEMENT

RESPONSE TO 

AUDIT WORK

OA adheres to professional 

audit standards and 

generally presents its 

audit work to management 

for comments prior to 

issuing a fi nal report. 

Unless otherwise noted in 

the selected audit work 

discussed in this report, 

management has agreed or 

partially agreed with OA’s 

recommendations and is 

taking or has already taken 

corrective action to address 

the issues OA raised.

OA determined that broad use of electric vehicles in the 

Postal Service delivery fl eet would be operationally feasible. 

Current EV technology would work well with the average 

mail delivery driving distance of about 18 miles per day. 
2 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

Lastly, the collective bargaining agreement in place restricts 

the use of contract cleaning services to smaller Postal 

Service facilities. By continuing to restrict contracted 

custodial services to small facilities, the Postal Service 

will incur an additional $148 million in costs over the next 

10 years for cleaning services.

Information Technology Security

The following two audits show how the Postal Service can 

strengthen security to further preserve the integrity of its 

information and resources. 

Business Partner Connectivity — Leased Line Firewall.

Business partners are suppliers, service providers, or 

customers that have a contractual relationship with the 

Postal Service, many of which require connectivity to the 

internal network from their respective facility. The Postal 

Service maintains 866 business partner connections 

associated with about 400 business partners. OA’s review 

confi rmed that the business partner leased line fi rewalls 

effectively control access to resources on the Postal Service 

network. However, the Postal Service can improve business 

partner access controls to help ensure the protection of 

information resources. 

External Public Key Infrastructure Services. Public 

Key Infrastructure (PKI) is the combination of software, 

encryption technologies, processes, and services that 

enable an organization to secure its business transactions 

and communications. A PKI relies on the exchange of 

digital certifi cates between authenticated users and trusted 

resources. OA found that the Postal Service generally 

managed its external PKI services in compliance with 

established guidance. 

STRATEGIC RISK

ESTIMATE OF POSTAL SERVICE LIABILITY FOR RETIREE HEALTH 

CARE BENEFITS

The Postal Accountability and Enhancement Act of 2006 (Postal Act of 2006) requires the Postal Service to prefund its 

retiree health care benefi ts by paying an average of $5.6 billion per year for 10 years into a newly-created Department 

of Treasury fund: the Postal Service Retiree Health Benefi ts Fund (PSRHBF). The payments were not based on actuarial 

considerations; they stemmed from the need to be budget neutral over a 10-year period ending in 2016. 

The OIG hired an actuarial consultant (Hay Group) to assess the reasonableness of the Offi ce of Personnel Management’s 

(OPM) assumptions used to estimate the Postal Service’s liability for retiree health care benefi ts. OPM assumed that 

the health care cost infl ation rate will average 7 percent annually for all future years. The Hay Group surveyed Fortune

100 companies, state and local governments, and publicly owned utilities to determine the average health care infl ation 

rate they used when they estimated future retiree health care liabilities. The Hay Group found that the average health 

care infl ation rate used by these sectors was about 5 percent and concluded that the 7 percent OPM assumption was 

unreasonably high. The Hay Group then developed estimates of the Postal Service’s 2016 retiree health care liability 

using both the OPM 7 percent assumption and the 5 percent estimate obtained from their sample and compared them 

to the estimated 2016 value of the PSRHBF. 

Under the OPM assumption, and following the Postal Act of 2006 payment schedule, the Postal Service will have 

an unfunded retiree health care liability of $25.7 billion in 2016 (80 percent funded). Under the 5 percent health 

care infl ation rate assumption, the Postal Service will overfund its retiree health care liability by $13.2 billion (115 

percent funded). 

The Hay Group estimated that with a 5 percent health care infl ation rate, the 2016 $25.7 billion unfunded liability 

could be reached by annual payments of $1.57 billion per year instead of the $5.6 billion required by the Postal Act 

of 2006. This means that the Postal Service could pay about $4 billion less per year and still achieve the same 2016 

PSRHBF funding status as estimated using OPM assumptions. The net present value of the interest savings from the 

reduced payment schedule was $5.95 billion. Using the 5 percent health care infl ation rate in the estimation of the 

Postal Service’s retiree health care liability would greatly assist the Postal Service in dealing with its current fi nancial 

crisis. Management agreed that the savings would be substantial. 

Subsequent to the issuance of OA’s report, Congress passed HR 2918, the Continuing Appropriations Resolution, 

2010 (Public Law 111-68), which provided temporary relief from the payment schedule for one year. This reduced the 

September 30, 2009, payment signifi cantly to $1.4 billion.
April 1 – September 30, 2009 | 3 

FINANCIAL RISK

FINANCIAL RISK

The Financial Risk category includes issues that have a clear 

fi nancial impact, particularly those related to cost control and 

revenue generation. The greatest opportunities to reduce 

fi nancial risks are in the areas of maximizing the costeffectiveness of contracts, and improving internal controls in 

fi nancial systems, processes, and benefi t programs.

The Postal Service faces a critical fi nancial risk as it, like 

other companies, deals with the economic slowdown 

affecting the nation. While the Postal Service made progress 

in reducing costs, the possibility of further declines in 

volume means that it is still confronted by a major challenge 

to fi nd ways to cut costs and increase revenues. 

Maximizing the Cost-Effectiveness 

of Contracts

OA issued 12 contract-related audit reports, which 

identifi ed unsupported and questioned costs of more than 

$20 million. This information was provided to contracting 

offi cers for their consideration in negotiating the best terms 

for the Postal Service. 

An audit of a multi-million dollar fi rm fi xed price proposal 

determined that the entire proposed amount was 

unsupported questioned costs because the contractor 

did not provide adequate cost and pricing data. Another 

audit disclosed more than $3 million in questioned costs. 

A subcontractor analysis showed more current material 

quotes were available and a technical analysis determined 

questionable labor hours.

Additional examples of work in this area include the 

following.

 An audit of a multi-million dollar price proposal for an 

update of a mail processing system disclosed more than 

$3 million in questioned costs. The contractor did not 

consider reductions to subcontract proposed costs that 

would likely be achieved during subcontract negotiations. 

In addition the proposed burden rate was questioned.

 An audit of a $3 million equitable adjustment 

proposal — based on mail sorting ineffi ciencies due to 

nonconforming mail, excess staffi ng during holidays, 

and erratic truck schedules at a Surface Transfer 

Center — disclosed questioned costs of more than 

$2 million. The contractor did not base the entire 

amount of the proposed truck schedule changes on 

an analysis of excess staffi ng and a technical analysis 

determined questionable hours. 

Delegations of Authority Oversight

The Postal Service has the power to issue Delegations of 

Authority (DOA) to give individuals the authority to perform 

contractual actions on its behalf. The Postmaster General 

and Vice President of Supply Management have stressed 

that a rigorous DOA business process is necessary to 

protect the Postal Service’s interest because DOAs allow for 

contracts and agreements to be entered into outside of the 

normal purchasing process. 

Estimated expenditures for goods and services purchased 

through DOAs totaled about $208 million in FYs 2007 and 

2008. OA reviewed the DOA oversight process and found 

that, although the Postal Service established and followed 

procedures for approving DOAs, once contractual authority 

was delegated, the Postal Service did not have adequate 

controls to ensure appropriate fi nancial due diligence and 

that the principles guiding the DOAs were met. 

Prior reviews of individual DOAs reported signifi cant 

weaknesses in administering the associated agreements. 

Since signifi cant disbursements are associated with these 

DOAs and oversight controls are defi cient, OA reported 

$191.2 million as disbursements at risk. Management 

agreed that improvements were needed; however, did not 

agree with OA’s risk assessment. 

Flats Sequencing System 

Contractual Remedies

To automate the sortation of fl at mail, the Postal Service 

is developing the Flats Sequencing System (FSS). OA 

evaluated the adequacy of contractual actions for the FSS 

contracts and determined that management of the contract 

process resulted in increased fi nancial risk.

In one instance, the Postal Service withheld a $500,000 

payment to a contractor for a preproduction machine. The 

Postal Service was supposed to continue to withhold the 

payment until requirements in the Statement of Work were 

met. However, although these requirements were not met, 

Postal Service personnel determined that the withheld 

payment would be used to negotiate preproduction 

machine enhancements that they felt would later benefi t 

the production machine and made the payment. The 

production machine failed to achieve nearly all of the 

performance requirements during fi rst article testing. Per 

the terms of the contract, title to the material purchased 

by the contractor using these funds does not transfer to 

the Postal Service until the Postal Service accepts the 

FSS fi rst article and production machines. Furthermore, 

the Postal Service subjectively increased the amount 

of fi nancial liability by $61.7 million in the event of 

termination for convenience. 
FINANCIAL RISK

4 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

As of March 31, 2009, the Postal Service paid the 

contractor $53.3 million for the preproduction contract 

and $266.7 million for the production contract. They 

spent another $241 million on other FSS related contracts 

bringing the total expenditures on the FSS program to 

about $561 million. 

Management generally agreed with OA’s recommendations, 

but stated that the actions taken were appropriate business 

decisions. They further stated that the actions taken 

were made in collaboration with internal stakeholders, 

executed in the best interest of the Postal Service, and fully 

documented in accordance with their contracting policies. 

Financial Reporting Transparency 

The Postal Act of 2006 created the Postal Regulatory 

Commission (PRC) as an independent regulatory agency 

with oversight of the Postal Service. The PRC was charged 

with developing accounting practices and procedures for 

the Postal Service and assuring transparency through 

periodic reports. Consequently, the Postal Service now fi les 

multiple fi nancial reports — some containing information 

prescribed by the Securities and Exchange Commission 

(SEC) — with the PRC. In April 2009, the PRC issued rules 

requiring the Postal Service to fi le 3 monthly fi nancial 

reports in addition to those already required. 

OA reviewed fi nancial reporting requirements and 

found that in general, the Postal Service provided the 

appropriate amount and type of fi nancial reporting 

information to stakeholders through its annual and 

quarterly SEC-type reports. 

However, for the PRC and other regulatory stakeholders, 

disclosure of certain monthly fi nancial information was not 

appropriate since it does not go through rigorous fi nancial 

reporting processes to ensure the integrity of the fi nancial 

data. In addition, this data is submitted on a more frequent 

basis than is required for similar government agencies and 

publicly traded companies and is more likely to place the 

Postal Service at a competitive disadvantage. Two of these 

monthly reports submitted by the Postal Service to the PRC 

were not posted to the Internet or otherwise made available 

to the general public until August 2009, and, as a result, 

were not subject to the concerns previously discussed. 

However, in August, under a new rule, the Postal Service 

submitted, and the PRC posted, redacted versions of them 

to its website. Due to the expressed concerns, OA believes 

that these reports should also not be disclosed.

Offi cer Compensation 

The passage of the Postal Act of 2006 imposed a new limit 

on total compensation for offi cers of the Postal Service 

and established total compensation to employees at three 

levels. Specifi cally, the fi rst limit provides that no offi cer or 

employee may be paid compensation at a rate in excess 

of the rate for level I of the Executive Schedule. This 

compensation limit was set at $191,300 for calendar year 

(CY) 2008. 

With the approval of the Board, however, the Postal Service 

may develop a program to award a bonus or other reward in 

excess of the above compensation limit; as long as this does 

not cause the total annual compensation paid to the offi cer 

to exceed the total annual compensation payable to the 

Vice President of the United States as of the end of the CY 

in which the bonus or award is paid. In approving any such 

program, the Board must determine that the bonus or award 

is based on a performance appraisal system that makes 

meaningful distinctions based on relative performance. This 

total compensation limit was $221,100 for CY 2008. In 

addition, the Board may allow up to 12 offi cers or employees 

of the Postal Service in critical senior executive or equivalent 

positions to be paid total annual compensation up to 

120 percent of the total annual compensation payable to the 

Vice President of the United States as of the end of the CY 

in which such payment is received. This compensation limit 

was $265,320 for CY 2008.

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To automate the sortation of fl at mail, the Postal Service is developing the Flats Sequencing System (FSS). OA 

evaluated the adequacy of contractual actions for the FSS contracts and determined that management of the 

contract process resulted in increased fi nancial risk.
April 1 – September 30, 2009 | 5 

OPERATIONAL RISK

OA audited compensation paid or deferred to offi cers 

for CY 2008 and found that the Postal Service complied 

with the stated compensation limits. OA also found that 

six of the 49 offi cers were allocated a total of more 

than $480,000 in deferred compensation during 2008. 

The amounts deferred for the six offi cers ranged from 

$702 to $236,264. Offi cers may be granted deferred 

compensation, defi ned as compensation that is paid after 

termination of their employment provided that it does not 

confl ict with either the Federal Employees’ or Civil Service 

Retirement Systems.

Relocation Policy

At the request of Congress, OA audited the Postal Service’s 

relocation policy. In CY 2008, the Postal Service spent 

$73 million in relocation costs related to more than 

2,000 employees. According to the Worldwide Employee 

Relocation Council Relocation Assistance Survey, the 

average cost to relocate a current employee homeowner 

was $76,600 in CY 2007, with many companies paying 

well above $100,000 per home-owning transferee. The 

Postal Service’s average relocation cost for an employee 

homeowner was $45,254 in CY 2008. 

Although the Postal Service’s average cost to relocate an 

employee homeowner is less than the industry average, in 

light of the serious fi nancial diffi culties the Postal Service 

is facing, signifi cant reductions in relocation expenses 

could free up funds for more critical operational purposes. 

Underlying the cost of relocating employees was the fact 

that the Postal Service did not have a national policy for 

determining when it would advertise a vacancy locally 

versus nationally, and whether or not to limit relocation 

expense benefi ts in specifi c circumstances. The Postal 

Service revised their relocation policy effective August 

13, 2009. While the revision did not address all of OA’s 

concerns, it represents a signifi cant effort to reduce overall 

relocation costs and align the Postal Service more closely 

to the rest of the federal government. 

OPERATIONAL RISK

The Operational Risk category focuses on issues related 

to the day-to-day operations of the Postal Service. These 

risk factors potentially affect the Postal Service’s abilities 

to provide timely, reliable delivery and customer service 

across all access points. Operational risk factors involve 

the quality of postal services and the end-to-end service 

performance of all mail, as well as the assurance that 

postal products and services meet customer expectations 

by being responsive, consistent, and easy to use. 

Performance-Based Incentive Programs for 

Sales Employees

OA assessed the Postal Service’s approach to assigning 

sales accounts to employees and the method used 

for assigning revenue to accounts, and found that 

management did not provide guidance on factors that 

fi eld managers should consider in assigning accounts 

to these employees. OA benchmarked sales employees’ 

compensation with other organizations, and found that 

trends for the Postal Service’s performance incentives 

were not comparable to trends and incentives at other 

organizations and did not align with overall business results. 

Finally, managers awarded incentives based on revenue 

that did not result from their sales efforts. Management 

terminated the Sales Compensation Incentive Plan effective 

February 20, 2009, and stated that they are developing a 

new program in consultation with the National Association 

of Postal Supervisors.

OA benchmarked sales employees’ compensation with other organizations, and found that trends for the 

Postal Service’s performance incentives were not comparable to trends and incentives at other organizations 

and did not align with overall business results. Pictured are two Postal Service products being sold.
6 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

Mail Processing Equipment

The Postal Service identifi es one of its most signifi cant 

risks as the loss of revenue. The Postal Service processes 

First-Class Mail letters using mail processing equipment 

(MPE) in processing and distribution centers across the 

country. OA tested some of this equipment and determined 

that the Postal Service is at risk of revenue loss and fraud. 

Working with the Postal Service, OA projected more than 

$100 million a year in revenue loss resulting from postage 

defi ciencies on First-Class Mail single piece letters. 

Aviation Security 

OA audited the Postal Service’s Aviation Security 

(AVSEC) program at critical Postal Service facilities and 

contract postal units (CPU) and identifi ed internal control 

weaknesses that place critical postal service assets at risk. 

OA recommended that the Postal Service issue supplemental 

guidance, establish and implement internal controls, and 

develop performance measures to improve the performance 

and effectiveness of the AVSEC program. OA also 

recommended that the Postal Service provide guidance to 

clarify and communicate contracting offi cer‘s representatives 

(COR) roles and responsibilities; require aviation security 

reviews at CPUs, and ensure proper transition of COR 

responsibilities when changes occur. Management generally 

agreed with the recommendations, but disagreed with the 

methodology used to quantify the assets at risk. 

National Rural Mail Count

Due to the continuing decline in mail volume, Postal 

Service offi cials decided that all rural routes would be 

counted in the 2009 National Rural Mail Count. During 

the mail count, offi cials identify the number and type of 

pieces of mail delivered, collected, or handled on rural 

routes for compensation purposes. OA found that the 

Postal Service generally followed these procedures and 

processes during the 2009 mail count. However, some 

routes were not counted and certain mailpieces were not 

always properly classifi ed. As a result the Postal Service 

could incur unnecessary costs for the remainder of 

FY 2009 and FY 2010.

Customer Complaints

OA found that Postal Service offi cials closed almost all 

customer complaints they received in FY 2008 within 

the established timeframes, but did not always take 

appropriate actions to resolve the complaints. For example, 

OA determined that offi cials did not resolve 50 percent of 

FY 2008 “Did Not Receive Mail” complaints. In addition, 

Postal Service policies instruct employees not to close 

customer complaints until the customer has been contacted 

with the fi nal resolution, but did not instruct employees 

on how to handle resolved cases when customers cannot 

be contacted. Properly resolving customer complaints is 

necessary to prevent customer alienation and adverse 

impact to the Postal Service brand. 

Auditors recommended that management revise the 

customer complaints standard operating procedures (SOP) 

to incorporate a quality control process requiring managers 

to review closed cases to ensure they were properly 

resolved and documented, provide employees guidance on 

how to handle resolved complaints when customers cannot 

be contacted, and reiterate to employees the importance 

of complying with the SOP. Management generally agreed 

with OA’s recommendations; however, they took exception 

to the statement that offi cials did not resolve 50 percent of 

the FY 2008 “Did Not Receive Mail” complaints, asserting 

that they could not verify OA’s projection.

Delivery Operations

About 280,000 city and rural letter carriers, and 6,000 

highway route contractors, delivered 177 billion pieces of 

mail to more than 149 million delivery points in FY 2009. To 

accomplish this monumental task, the Postal Service uses 

various mail processing systems to help reduce operating 

costs, improve accuracy and speed of delivery, and 

contribute to improved customer satisfaction. Two examples 

of audit work in this area follow. 

Delivery Point Sequencing. The Delivery Point 

Sequencing (DPS) system processes and sorts bar-coded 

letter mail at the plants and units so the carrier can take 

the mail directly to the street without manual sorting in the 

offi ce. OA assessed whether the Postal Service adequately 

implemented processes and key oversight controls to 

increase and sustain city delivery DPS percentages and 

reduce costs and found that while the national DPS 

percentage on average increased from 82 percent in 

FY 2007 to 91 percent in FY 2009, management did not 

always implement processes or oversight controls. 

Flats Sequencing System. The FSS is designed to 

perform automatic sequencing function for fl at sized mail 

which includes large envelopes, newspapers, catalogs, 

circulars and magazines. OA assessed the effects of 

FSS testing on delivery operations and operating costs 

at selected Northern Virginia District delivery units. OA 

determined that net cost reductions for the selected 

delivery units totaled about $1.3 million. However, during 

the FSS 6-month testing period, fl at mail volume in these 

selected locations declined by 50 percent, so we could not 

determine how much of the operational gains were due to 

the implementation of FSS. OA did not fi nd any adverse 

effects on delivery operations.

OPERATIONAL RISK
April 1 – September 30, 2009 | 7 

OPERATIONAL RISK

Fuel Management

The Postal Service operates one of the largest civilian 

ground transportation fl eet in the world, with about 

219,000 delivery, transportation, and other vehicles; 

and has highway transportation contracts with more 

than 10,500 suppliers. The Postal Service spends about 

$1.6 billion annually on fuel for their ground transportation 

network. Each year, the Postal Service’s owned and 

contracted surface transportation vehicles travel about 

3 billion miles to transport and deliver mail, and use 

more than 400 million gallons of diesel fuel and gasoline. 

Following are three audits in this area.

Fuel Management Consumption Strategies. 

OA assessed the effectiveness of the Postal Service’s 

consumption strategy for reducing the use of fuel within 

surface network operations. OA determined that the Postal 

Service has taken positive steps to implement a strategy to 

reduce fuel consumption within surface network operations 

mainly by eliminating excess transportation capacity and 

exploring the expanded use of alternate fuel vehicles. 

However, the Postal Service could implement a more 

effective fuel strategy by adopting some key industry best 

practices to increase fuel effi ciency and reduce overall 

fuel use such as, fuel-effi cient advanced aerodynamic 

equipment, proper tire pressure, and truck speed limits. 

OA estimated that the Postal Service could reduce fuel use 

by more than 25 million gallons annually, if these practices 

are implemented, resulting in more than $364 million in 

costs avoided over a 10-year period. Management generally 

agreed with OA’s recommendations but did not agree to 

all monetary impacts, noting that savings will potentially 

change if a full analysis incorporated all fl eet variables. 

Delivery Vehicles Fuel Management. OA assessed 

whether the business case existed to fuel delivery vehicles 

onsite using a mobile fueling contractor rather than 

continuing the current practice of carriers purchasing 

fuel at local retail vendors. OA determined that there is a 

favorable business case for expanding the use of mobile 

fueling to selected delivery units. The expansion of the 

mobile fueling program would reduce carrier time used 

to fuel vehicles, eliminate questionable Voyager card 

fuel expenditures and mitigate mail delays or interrupted 

service due to the unavailability of fuel at local fuel vendors. 

OA recommended that the Postal Service consider the 

expansion of mobile fueling for city and rural delivery 

units with 30 or more routes as part of the National Fuel 

Purchasing Strategy, and reported $21 million in costs 

avoided over a 10-year period. Management questioned 

the validity of the calculations and the ability to capture the 

soft costs for the $21 million cost avoidance. However, they 

agreed to review expanding mobile fueling when and where 

its use is warranted. 

Fuel Management Purchasing Initiatives. OA assessed 

the effectiveness of the Postal Service’s fuel management 

initiatives in controlling fuel costs. The Postal Service 

has taken positive steps in developing a fuel strategy to 

promote effi ciencies and realize cost savings in purchasing 

fuel. However, the Postal Service has not yet fully 

planned and implemented the Postal Service’s National 

Fuel Purchasing Strategy to ensure accomplishment of 

desired outcomes and placed the fuel strategy on hold 

because of its fi nancial condition and other competing 

priorities. As a result, the Postal Service incurred about 

$20 million in unnecessary fuel acquisition costs since 

August 2008. Management did not 

agree to the $20 million in monetary 

impact, stating that they have been 

fully engaged in implementing several 

other strategies where the fi nancial 

benefi ts were greater. 

Assessment of Overall Plant 

Effi ciency

Mail processing is an integrated 

group of activities required to sort 

and distribute mail for dispatch and 

eventual delivery. Post offi ces, stations, 

and branches send outgoing mail to 

processing and distribution centers 

(P&DC) for processing and dispatch for 

a designated service area. Effi ciency 

was assessed by benchmarking 

each plant’s productivity (volume 

per workhour) against the median 

productivity level. OA’s assessment 

determined that management has 

not yet fully adjusted workhours in 

response to changes in workload, nor 

achieved all possible effi ciencies in 

mail processing operations provided by 

opportunities such as the introduction 

of additional automation. Nearly 

$1 billion could be saved annually if 

improvements were made in this area. 

Vehicle Maintenance Facilities

The vehicle inventory in FY 2009 

consisted of about 219,000 delivery, 

transport, and administrative vehicles. 

Delivery and collection vehicles 

account for about 197,000 of the 

total fl eet. 

OA’s assessment determined that management has not yet 

fully adjusted workhours in response to changes in workload, 

nor achieved all possible effi ciencies in mail processing 

operations provided by opportunities such as the introduction 

of additional automation. For example, mail staging areas are 

largely empty at the Philadelphia P&DC.

Auditors determined that the Postal Service has taken positive 

steps to implement a strategy to reduce fuel consumption 

within surface network operations mainly by eliminating excess 

transportation capacity and exploring the expanded use of 

alternate fuel vehicles. 
8 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

Scheduled Maintenance Service in the Eastern Area. 

OA assessed whether the Eastern Area accomplished 

all required scheduled maintenance and whether they 

integrated both vehicle maintenance facilities (VMF) and 

local commercial resources for optimum effi ciency. OA 

determined that the Eastern Area completed nearly all 

the required scheduled preventive maintenance (SPM). 

However, the Postal Service could further optimize VMF 

effi ciency through more effective use of VMF and local 

commercial resources. Since the Postal Service does not 

plan to replace its current fl eet of long life vehicles (vehicles 

that are more than 20 years old) until 2018, it is critical that 

these vehicles receive timely SPMs.

Scheduled Maintenance Service National Capping. 

OA assessed the monitoring and managing of VMF 

operations for effective and effi cient use of resources, and 

completeness of cost data impacting 

the overall VMF operational environment 

nationwide. OA determined that VMF 

management effectively completed 

the majority of required scheduled 

maintenances; however, additional 

improvements are necessary to 

ensure that all required maintenance 

is completed and resources are used 

effi ciently. 

Color-Coding of Standard Mail 

and Mail Condition Reporting

Annually, Standard Mail accounts for 

nearly 50 percent of the mail volume 

and 27 percent of the revenue of the 

Postal Service. The Postal Service uses 

a system of color-coding to facilitate 

the timely movement of Standard Mail. 

The color-code process assigns a color to each day of the 

week to enable easy processing of mail via the fi rst-in fi rstout method. 

West Palm Beach and Santa Clarita P&DCs. OA 

assessed whether the West Palm Beach and Santa Clarita 

P&DCs had an adequate mail color-coding process and 

properly counted mail. OA determined that there was a 

generally adequate process for color-coding. However, 

improvements could be made by ensuring tags are 

complete, standard color-code tags are used and all mail 

has the proper color-code tag. In addition, when mail 

bearing different color-codes was processed together, the 

mail was not always properly re-color-coded. Further, OA 

found that not all delayed mail was reported. For example, 

in February 2009, about 1.8 million mailpieces at the 

West Palm Beach P&DC; and in June 2009, about 48,000 

mailpieces at the Santa Clarita P&DC should have been 

reported as delayed mail.

Postal Vehicle Service Transportation Routes

Network transportation has two components: Postal Vehicle 

Services (PVS), which uses Postal Service employees, 

vehicles and facilities; and highway contract routes (HCR), 

which is contracted transportation. Following are two audits 

conducted in this area.

Philadelphia P&DC. OA assessed whether selected PVS 

vehicle operations at the Philadelphia P&DC were effective 

and economical. OA determined that management is 

actively reducing transportation requirements based 

on operational needs and shifting workloads. However, 

the Postal Service could more effectively manage PVS 

transportation processes and schedules, thereby reducing 

driver workhours and associated fuel use and damage 

claims. In addition, management could eliminate 24 trips 

from HCRs. OA recommended that the Postal Service 

follow prescribed fl eet management procedures for making 

PVS schedules effective and eliminate workhours. OA also 

recommended the elimination of underutilized trips from 

HCRs identifi ed during the audit. Management agreed 

with the recommendations, but did not agree with the total 

monetary impact.

Philadelphia Network Distribution Center. OA assessed 

the Philadelphia, PA, Network Distribution Center’s (NDC’s) 

PVS vehicle operations to determine if it was effective and 

economical and concluded that it was effective in moving 

trailers and equipment. However, the NDC workhours 

assigned to yard activities did not match the productivity 

standards for this function. OA recommended that 

management verify the removal of workhours identifi ed 

during the audit; phase out the additional workhours that 

management agreed were in excess of the workload; and 

ensure that managers periodically assess PVS workload 

and staffi ng requirements. Management agreed with 

the recommendations, but did not agree with the total 

monetary impact. 

Powered Industrial Vehicle 

Management System

The Powered Industrial Vehicle Management System 

(PIVMS) consists of intelligent wireless devices installed on 

powered industrial vehicles (PIV) and client-server software 

for access control, utilization analysis, real-time location 

tracking, and many other functions. The Postal Service’s 

intent for the PIVMS is to provide automated measurement, 

control, and compliance reporting of PIV operations within a 

plant, resulting in optimal PIV safety conditions, operations, 

supervision, and associated savings. Following are two 

PIVMS audits conducted in this reporting period.

OPERATIONAL RISK

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Auditors determined that the Eastern Area completed nearly 

all the required scheduled preventive maintenance (SPM). 

However, the Postal Service could more effectively use vehicle 

maintenance facilities (VMFs) and local commercial resources. 

Depicted here are delivery and collection vehicles in VMFs 

ready for SPM.

A chart provides the correct colorcode to label mail at the Santa 

Clarita P&DC. 
April 1 – September 30, 2009 | 9 

OPERATIONAL RISK

Washington Network Distribution Center. OA assessed 

whether the PIVMS at the Washington, DC, NDC was 

functioning as intended and produced effi ciency 

improvements. OA determined that management did not 

use the PIVMS because the system had been intentionally 

damaged causing it to be non-functional and in need 

of extensive repair or replacement. In addition, auditors 

concluded that the Washington NDC reduced workhours in 

tow and forklift operations, but did not implement internal 

controls over vehicle safety, security, and inventory. The 

damage to the PIVMS and to the facility at the Washington 

NDC occurred because management did not effectively 

monitor employees to prevent damage. 

Oakland P&DC. OA assessed whether the PIVMS at the 

Oakland, CA, P&DC was functioning as intended and 

produced effi ciency improvements. OA determined that 

management did not always use the PIVMS as intended 

and consequently did not realize all possible effi ciency 

improvements. OA recommended that the Postal Service 

use the PIVMS System to the fullest extent possible 

to manage operations and continue to improve mail 

processing effi ciency, by reducing workhours in tow and 

forklift operations, decreasing the number of PIVs, and 

providing PIVMS training to all employees that need to 

use the system. OA reported that management could save 

more than $14.5 million over 10 years, if the PIVMS is 

used as intended. 

Timeliness of Mail Delivery

OA conducted the following audits due to service 

complaints and media reports of delayed mail. Since the 

reports came out, signifi cant recommendations have been 

closed, and mail delays have generally been addressed. 

Timeliness of Mail Processing at the Fort Worth P&DC.

OA assessed whether mail at the Fort Worth P&DC was 

processed in a timely manner and determined that delayed 

mail volumes increased signifi cantly from 4 million pieces 

in Quarter 4 FY 2008 to more than 21 million pieces in 

Quarter 1 FY 2009. This delayed mail occurred because 

of staffi ng shortages resulting from excessive leave usage. 

The delayed mail negatively impacted customer service and 

increased customer complaints. 

Timeliness of City Delivery — Albuquerque District.

Auditors assessed whether the Albuquerque, NM, delivery 

unit locations delivered mail in a timely manner. OA 

determined that during Quarter 1 FY 2009, some locations 

had diffi culty delivering mail in a timely manner resulting in 

service declines, customer complaints, and negative media 

attention. This delayed mail occurred because carriers and 

clerks experienced short-term learning diffi culties resulting 

from management changes to route schemes to improve 

effi ciency. OA also noted that certain adjusted route times 

exceeded the expected 8 hours 

and that one of the stations 

experienced major carrier 

attendance issues. 

Airport Mail Centers

The Postal Service maintains 

airport mail centers (AMC) to 

expedite the transfer of mail to 

and from commercial air carriers. 

Following are AMC audits from 

this reporting period.

Chicago O’Hare AMC 

Operations. OA determined 

that the AMC incurred about 

$3.5 million in unnecessary 

costs due to its sack sorter and 

platform operations operating at 

lower effi ciency levels for some operations, as compared 

to national productivity standards or to similar operations 

at other facilities. OA also found that the Chicago AMC 

incurred an additional $7.1 million in unnecessary costs 

due to the misalignment of some workhours with workload 

for Express Mail items and Automated Package Processing 

System (APPS) operations. Management generally agreed 

with OA’s recommendations, but did not agree with the 

fi nding on Express Mail service operational staffi ng.

Boston AMC Outsourcing. In many cases, AMCs have 

excess capacity due to declining mail volumes tendered 

to commercial air carriers. Auditors assessed operational 

and monetary impacts of the Boston AMC outsourcing 

initiative and its compliance with policies. OA determined 

that service scores for overnight and 2- and 3-day service 

have improved since the AMC was closed. However, 

the comparative analysis developed during outsourcing 

planning was overstated. In addition, the Postal Service also 

paid unsupported parking, equipment usage, and port fees. 

Management did not agree with the OA’s fi nding and stated 

that the fi xed price nature of the contract precluded any 

opportunity for the Postal Service to assert entitlement to 

an adjustment in that regard.

Salt Lake City AMC Closure. OA assessed operational 

and monetary impacts of the Salt Lake City AMC closure 

and evaluated its compliance with policies. OA determined 

that this closure decision reduced costs without impacting 

service. However, management did not perform a complete 

analysis to determine all monetary impacts, including how 

the facility would be used after the AMC closed. 

Automated package processing system operation at the 

Chicago AMC.
10 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

Federal Express Transportation Agreement

For FY 2008, the Postal Service made contract payments 

to Federal Express of about $1.7 billion to transport about 

1.37 billion pounds of mail. Auditors assessed whether 

the Postal Service’s use of Federal Express transportation 

was effective and economical in the Southeast Area. From 

October 2006 through September 2008, the Southeast 

Area incurred about $8.6 million in unnecessary costs 

due to using Federal Express to move mail that could 

have been moved on less costly surface transportation or 

passenger airlines; and to paying Federal Express to sort 

mail unnecessarily. The Southeast Area has an opportunity 

to save about $43.4 million over the next 10 years by 

not using Federal Express to transport mail that could be 

transported on surface networks, by transporting First-Class 

Mail on passenger airlines when capacity is available, and 

by sorting the mail before giving it to Federal Express to 

avoid sorting charges. Management agreed to the fi ndings, 

but did not agree to all monetary impacts.

Performance Goals for MarketDominant Products 

The Postal Act of 2006 mandated the establishment of 

modern service standards and performance goals for 

its market-dominant products. Auditors assessed the 

development and implementation processes used to 

establish the performance goals for market-dominant 

products and whether the Postal Service followed 

regulatory requirements. OA determined that the service 

performance goals for First-Class Mail were reasonable; 

however, the process for Standard Mail, Periodicals, and 

package services needs improvement. In addition, the 

Postal Service complied with regulatory requirements for 

establishing service performance goals, though we noted 

some potential operational risks. 

Sunday Mail Processing Operations

The Denver P&DC is a large mail processing facility that 

processes and dispatches part or all of both incoming 

mail and outgoing mail for a designated service area. 

Auditors assessed whether the Denver P&DC Sunday mail 

processing operations could be eliminated or streamlined. 

OA determined that Sunday mail processing operations 

could not be eliminated, but could be streamlined through 

improving operational effi ciencies and processing some 

mail on Monday instead of Sunday, potentially saving more 

than $38 million.

National Trailer Lease

Since FY 2000, the Postal Service entered a 12-year 

contract with Transport International Pool (TIP), Inc., to lease 

4,475 trailers with an anticipated cost of $201 million. 

This contract was renewed in 2006, lowering the daily cost 

and allocating 4,692 trailers to eight Postal Service Areas. 

Following is OA work conducted in this area.

Western Area. Auditors evaluated the National Trailer 

Lease (NTL) renewal in the Western Area. Auditors found 

the NTL renewal was not as effective and economical 

as it could have been because the Western Area did not 

have a comprehensive management plan in place to 

accurately identify its trailer requirements, ensure proper 

trailer use, and adjust trailer inventory based on continued 

need. OA estimated that the Postal Service could save 

about $2.1 million in lease costs over the next 10 years, 

if the Western Area improves its processes for trailer fl eet 

management and returns unneeded trailers. 

OPERATIONAL RISK

From October 2006 through September 2008, the Southeast Area incurred about $8.6 million in 

unnecessary costs due to using Federal Express to move mail that could have been moved on less costly 

surface transportation or passenger airlines; and to paying Federal Express to sort mail unnecessarily.

OA’s audit of the consolidation of the Canton P&DF (pictured here) outgoing mail operation into the Akron 

P&DC found it improved service and reduced costs. 
April 1 – September 30, 2009 | 11 

OPERATIONAL RISK

Capping Report. Since September 2004, OA issued 

eight audit reports under its NTL project covering eight 

Postal Service areas. Auditors worked with Postal Service 

headquarters, area, and plant transportation offi cials to 

improve its management of NTL trailers, and estimated 

$37.9 million in savings over the past 5 years. In addition 

to the area-specifi c NTL audits, OA evaluated management 

processes in the NTL Capping Report. OA identifi ed 

processes to assist the Postal Service in improving 

guidance and oversight from Headquarters, including the 

development of a policy to require areas to determine trailer 

requirements and manage trailer inventory and use, and 

ensure that the supplied NTL trailers are of the appropriate 

age as specifi ed in the lease. 

Canton-Akron Processing and 

Distribution Facility

Responding to a congressional request, Auditors assessed 

the consolidation of the Canton Processing and Distribution 

Facility’s (P&DF) outgoing mail operation to the Akron 

P&DC. OA concluded that consolidating the Canton P&DF 

outgoing mail processing operations into the Akron P&DC 

was a prudent business decision. OA’s analysis showed 

that the consolidation minimally impacted employees, 

improved service, reduced costs through improved 

effi ciency, addressed community concerns, and supported 

the consolidation. Additional audit work is planned for 

FY 2010 addressing similar issues in other locations where 

consolidations are planned or are in process. 

OPERATIONAL EFFICIENCY

Mail volume in FY 2008 totaled 202.7 billion pieces — a decline of 9.5 billion pieces — and it declined even further in FY 2009 to 177 billion pieces. The 

Postal Service is focused on the need for 5-day delivery, greater fl exibility, and the elimination of some network infrastructure. GAO recommended urgent 

action to streamline the mail processing and retail networks, as the Postal Service no longer has suffi cient revenues to cover the cost of maintaining its large 

network of processing and retail facilities.

In many areas, the Postal Service has an excess of equipment, staff, and facilities to process a declining volume of mail. Given the harsh economic conditions 

faced by the Postal Service today, looking at opportunities to cut costs by streamlining or eliminating operations makes good business sense. To its credit, in 

FY 2009 the Postal Service reduced 115 million workhours. And from 2005-2008, the Postal Service had previously made these signifi cant cost reductions:

 Reduced about 89.9 million workhours, the equivalent of 49,900 employees.

 Closed 60 airport mail processing centers/facilities and 9 remote encoding centers.

 Consolidated originating mail operations at 12 P&DCs and closed one P&DC.

 Realigned BMC operations.

 Reduced 37 million HCR miles.

 Eliminated nearly 10 million delivery workhours while absorbing 2.7 million additional delivery points. 

However, there are opportunities to do even more. Working with the Postal Service this period, OA concluded that the Postal Service could save about 

$2.6 billion by reducing costs in the following categories. The details for the work discussed in the table below are provided elsewhere in this report.

Network Optimization Area Operational Focus

Estimated

Savings

Monetary 

Impact Period

Mail Processing Operations Increase processing effi ciency by reducing 23 million workhours. See page 7. $969 million 1 year

Custodial Maintenance Operations Eliminate excessive costs and redundancies by reducing 3.4 million workhours. See page 1. $848 million 10 years

Delivery Operations Maximize the Delivery Point Sequencing system implementation. See page 6. $265 million 2 years 

Fuel Adopt more effective fuel consumption and purchasing strategies. See page 7. $407 million 10 years

Transportation Use more cost effective transportation; optimize highway contract routes, and implement effective 

Postal Vehicle Service productivity standards. See page 8. $64 million 10 years

Infrastructure Reassess facility closure fees and reduce workhours. See page 9. $1.7 million 5 years

TOTAL $2.6 billion
CHAPTER TITLE

12 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

INVESTIGATIONS INVESTIGATIONS INVESTIGATIONS
April 1 – September 30, 2009 | 13 

REVENUE AND ASSET PROTECTION

REVENUE AND ASSET 

PROTECTION

Postal Inspectors investigate revenue fraud committed by 

business mailers, mail preparation fi rms, and individual 

mailers who attempt to counterfeit or manipulate postage. 

Special Agents investigate employee misconduct and 

crimes committed by postal employees involving theft and 

misuse of postal funds or money orders, and theft and 

misuse of postal-issued credit cards. 

Revenue Protection Investigations

Postal Inspectors work directly with Postal Service 

personnel in various functional areas to develop methods 

to identify revenue losses and to improve revenue fraud 

detection. Employing technology to effi ciently identify 

revenue losses is a priority for Postal Service stakeholders 

and has led to new enhancements and the development 

of several revenue fraud detection systems, in particular 

the Information Based Indicia-Revenue Protection (IBI-RP) 

System and WebAPAT, an application developed to review 

data and images from mailpieces processed by the APPS.

The IBI-RP System has yielded positive results, not only 

enabling Postal Inspectors’ early detection of revenue 

fraud resulting from the use of duplicate indicia, but also 

leading to the development of new reports that can identify 

the growing problem with short-paid parcels. WebAPAT, a 

postal application, compares machine images against data 

collected on mailpiece attributes, including size, weight and 

postage, to identify duplicate, counterfeit, and potentially 

short-paid parcels — all essential to detecting postal 

revenue fraud. 

Following are examples of Postal Inspectors’ investigations 

of revenue protection during the reporting period.

 The Chief Executive Offi cer (CEO) of a mailing house in 

Atlanta, GA, which specialized in printing and mailing 

promotional material for advertisers, pled guilty to 

defrauding the Postal Service of nearly $500,000 

through several schemes. Postal Inspectors determined 

the CEO had been falsifying bulk mail records to show 

only a small percentage of the material he was mailing 

at discount rates. In one instance, they found he had 

reported only 3,500 pieces of First-Class Mail when 

he actually had submitted 37,426 pieces. The CEO 

also fraudulently obtained a Postal Service date stamp, 

which he used on a postal form to indicate he had paid 

for bulk mail deliveries from his fi rm — though he had 

not submitted any payments. He pled guilty to mail 

fraud and was sentenced in September to 18 months in 

prison and 3 years’ supervised release, and was ordered 

to pay $378,695 in restitution to the Postal Service. 

 Postal Inspectors investigating fraudulent transactions 

at the Postal Service’s Automated Postal Centers (APC) 

arrested a man in July they had nicknamed “Shades” 

for the sunglasses he wore to conceal his identity. 

The suspect allegedly used numbers from “skimmed” 

(compromised) credit cards to buy nearly $500,000 

in “Forever” stamps from APCs across the country. 

After Postal Inspectors from various states shared 

photos and information on the suspect, they identifi ed 

Shades in surveillances at APCs in Arizona, Illinois, 

Massachusetts, Nevada, and Florida. Postal Inspectors 

tracked him to Colorado, where he fraudulently 

purchased more than $25,000 in “Forever” stamps 

over the Fourth of July weekend; when he returned 

to California and visited an APC in Sun City. Postal 

Inspectors were waiting for him with an arrest warrant. 

He was indicted in August on federal charges of theft, 

fraud, and making false statements. 

 The co-owner of a third-party mailing fi rm, in New 

Jersey, was sentenced in September to 2 years 

and 11 months in prison and 3 years’ probation, 

and was ordered to pay more than $470,000 in 

restitution for cheating 53 postal customers. Postal 

Inspectors learned the co-owner had provided his 

clients fraudulent invoices and mailing statements 

showing higher numbers of mailpieces and postage 

fees than what he reported to the Postal Service. They 

determined he had been billing clients for entire jobs 

but had submitted only portions of the jobs for mailing. 

INVESTIGATIONS

The Postal Service relies on the U.S. Postal Inspection Service and the OIG’s Offi ce 

of Investigations (OI) to help maintain America’s trust in the postal system. As federal 

law enforcement offi cers, U.S. Postal Inspectors and OIG Special Agents protect 

postal employees and customers, secure the mail, safeguard revenue and assets, and 

maintain the integrity of postal personnel.
14 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

Embezzlements and Financial Crimes

Employee 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 Post 

Offi ces experience unusual or signifi cant shortages, Special 

Agents employ various investigative techniques to uncover 

embezzlements, and improper or lax procedures are reported 

to management for corrective action. 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 also may face jail time 

and court-ordered restitution. Following are examples of 

fi nancial fraud cases the OIG investigated.

 In August, a Maryland Sales, Services, and Distribution 

Associate (SSDA) pled guilty to federal charges in a 

$700,000 stamp theft scheme. The scheme began 

unraveling 1 year earlier, when a Postmaster reported 

about $91,000 in stamp stock losses to the OIG. In 

a separate investigation in December 2008, Postal 

Inspectors identifi ed an individual selling large amounts 

of discounted stamp stock on the Internet through 

his eBay store. OIG Special Agents, Postal Inspection 

Service, and Immigration and Customs Enforcement 

(ICE) investigators joined forces when the SSDA’s 

name appeared on an eBay mailing from the Postal 

Inspection Service investigation. A Special Agent 

purchased stamps from eBay and identifi ed them as 

missing stamp stock from Maryland Post Offi ces. The 

investigation revealed the SSDA stole the stamps and 

provided them to the co-conspirator, and others, to 

sell from June 2008 through March 2009. The stamps 

were sold through an account established by the 

co-conspirator on eBay. Both were indicted, pled guilty 

and are awaiting sentencing. The SSDA resigned from 

the Postal Service. 

 An audit of a Texas Post Offi ce uncovered a signifi cant 

shortage. The follow-up investigation by Special 

Agents determined the Postmaster embezzled nearly 

$29,000 in Postal Service funds by disbursing no 

fee money orders and cash and creating fraudulent 

invoices from 2005 to 2008. The invoices were created 

to appear as though payments were being made for 

contract cleaning services. In April, the Postmaster 

pled guilty to misappropriation of postal funds. In July, 

the Postmaster was sentenced to 180 days of home 

confi nement, 3 years’ probation, and ordered to pay 

nearly $30,000 in restitution to the Postal Service. The 

Postmaster was removed from the Postal Service.

 After an investigation by Special Agents, in September, 

a Maryland Sales and Services Associate (SSA) 

was sentenced in federal court to 3 years in prison, 

followed by 10 months of home detention with 

electronic monitoring and ordered to pay more than 

$670,000 in restitution, of which nearly $75,000 

goes to the Postal Service. She was convicted in 

June of embezzling postal funds, and for bank and 

wire fraud in connection with making fraudulent loan 

applications. From October 2004 to June 2005, she 

had embezzled about $75,000 from the Postal Service 

by taking money from intended bank deposits and 

issuing postal money orders to herself without paying 

for them. The SSA applied for loans from a credit union 

and a mortgage lender, falsely claiming income and 

preparing fraudulent income tax returns and bank 

statements to substantiate the largely infl ated income 

she had reported on the loan applications. The Special 

Agent’s investigation revealed the money was used to 

purchase two Porsches for $160,000 and to refi nance 

a $500,000 home mortgage. The SSA resigned from 

the Postal Service.

Financial Fraud — Voyager Credit Card

The Postal Service uses about 219,000 vehicles 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 (PIN) to non-postal 

entities; use the card for personal uses; 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 51 cases of Voyager credit 

card fraud this reporting period, resulting in 13 arrests and 

18 administrative actions. Following is an example of one 

such case.

In September, a Charlotte, NC, Casual Clerk pled guilty 

to the theft of government funds and was sentenced in 

federal court to 19 months imprisonment, followed by 

3 years of supervised release, and ordered to pay nearly 

$100,000 in restitution to the Postal Service. From April 

through September 2008, the Casual Clerk stole Voyager 

cards from the accountable room at a carrier annex and 

used the cards to purchase fuel for himself and others. The 

Postmaster reported that 10 Voyager cards were missing 

from the Post Offi ce and had been used to make fraudulent 

REVENUE AND ASSET PROTECTION
April 1 – September 30, 2009 | 15 

WORKERS’ COMPENSATION FRAUD

charges. Special Agents recovered four of the cards from 

the Casual Clerk. He resigned from the Postal Service.

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 Law Department, Special 

Agents investigate tort claim cases suspected of fraud and 

cases for which the U.S. Attorney’s Offi ce has requested an 

investigation. Following is an example of one such case.

An investigation by Special Agents into an injury claim 

ended up saving the Postal Service $482,000. In July, the 

Postal Service agreed to settle a claim fi led by an HCR 

driver who was reportedly injured while delivering mail to 

a Florida P&DC. The truck driver fi led a $500,000 lawsuit 

claiming a back injury, neck injury, and injuries to both 

shoulders restricted his ability to work. Special Agents 

observed the truck driver exceeding his restrictions on 

many occasions by driving, lifting heavy objects, bending, 

standing, pushing, pulling, performing yard work, utilizing a 

drill, an electronic hacksaw, a hammer, a crowbar, a lawn 

edger and reaching at and above shoulder level among 

other activities. Subsequently, due to the investigation, the 

claim was settled for $18,000 rather than the $500,000. 

WORKERS’ COMPENSATION 

FRAUD

The Postal Service funds workers’ compensation 

benefi ts for employees who sustain job-related injuries. 

The monetary and medical benefi ts paid by the Postal 

Service to workers’ compensation claimants totaled 

nearly $1.1 billion in FY 2009. At the end of FY 2009, the 

Postal Service’s estimated total liability for future workers’ 

compensation costs was nearly $9.1 billion. Administered 

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

Workers’ Compensation Programs (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 

injury 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 and detecting and investigating 

an allegation of a fraudulent claim. The results of OIG 

investigative efforts during this reporting period included 

$97.6 million in cost savings or avoidances, 26 arrests, and 

132 administrative personnel actions, including removals, 

suspensions, and letters of warning.

OIG KICKS OFF OWCP FRAUD AWARENESS 

CAMPAIGN

In September, the OIG launched a crime prevention and awareness campaign to reach 

all postal employees to target a crime costing the Postal Service millions of dollars each 

year — workers’ compensation fraud. The campaign kicked off with a screen saver 

pushed out to Postal Service computers, a paycheck stuffer sent to all employees, 

and a companion poster distributed to more than 30,000 postal facilities for display 

on workroom fl oor bulletin boards. The campaign features a worker who is bragging 

about how he makes “a couple extra bucks” while on workers’ compensation but is 

“too hurt” to work his postal job. Last year, OIG investigations of workers’ compensation 

fraud saved the Postal Service about $200 million in long-term workers’ compensation 

costs. The campaign’s message is clear: faking an injury and collecting benefi ts — or 

working while on workers’ compensation and not reporting the income — are crimes. 

Violators could end up going to jail, losing their benefi ts, and paying back all the money.

The campaign’s message is clear: faking an injury and collecting benefi ts — or working while on 

workers’ compensation and not reporting the income — are crimes.
16 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

WORKERS’ COMPENSATION FRAUD

Injury Compensation — Claimant Fraud

Most employees who receive workers’ compensation 

benefi ts do so because of legitimate job-related injuries. 

However, a small percentage of postal employees and 

healthcare providers abuse the system. These schemes 

cost the Postal Service millions of dollars each year in 

compensation payments, medical costs, administrative 

expenses, and enforcement costs. Special Agents initiate 

criminal investigations when they suspect individuals 

or healthcare providers of defrauding the DOL’s Federal 

Employees’ Compensation Act benefi ts fund. 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 injury compensation 

specialists from the Postal Service on all phases of 

these investigations. Following are examples of injury 

compensation fraud cases investigated.

 In August, Special Agents investigation of a former 

Texas Automotive Technician led to a 10-month 

federal prison sentence and obligation to pay about 

$55,000 in restitution, after a jury found him guilty 

of workers’ compensation fraud. The Technician had 

alleged total disability from a work-related elbow 

injury and received about $54,000 in workers’ 

compensation payments. However, after watching a 

surveillance video showing the Technician replacing 

a radiator in an automobile, clearing yard waste, 

painting his house, and throwing tires into dumpster, 

all with the full use of his elbow, a jury found him 

guilty of 14 felony charges of fi ling false statements 

to obtain workers’ compensation. The DOL removed 

the Technician from the periodic rolls, realizing a cost 

avoidance of about $840,000 for the Postal Service. 

The employee retired from the Postal Service while 

under criminal proceedings.

 In April, a former New Jersey Mail Processing Machine 

Operator was sentenced to 2 years’ probation, 

50 hours of community service, and was ordered 

to pay nearly $15,000 in restitution to the Postal 

Service for not disclosing other employment while 

receiving OWCP benefi ts. The sentencing stemmed 

from a Special Agent investigation that determined 

the former postal employee, who claimed to be totally 

disabled since March 2005 from an on-the-job neck 

injury, was working in a pawn shop. When Special 

Agents showed the Machine Operator video evidence 

of her employment activities, she initially claimed that 

it was volunteer work, but later admitted to receiving 

payment for her work. As a result of this investigation, 

the DOL terminated the Mail Operator’s benefi ts, 

resulting in a cost avoidance of more than $1.5 million 

to the Postal Service. 



A California Customer Service Supervisor pled guilty to charges stemming from a workers’ compensation fraud 

investigation in which Special Agents observed the Supervisor catching and reeling in numerous fi sh, carrying 

luggage, and driving a motor vehicle, all in violation of her medical restrictions.

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t After watching a surveillance video showing a Texas Automotive Technician replacing a radiator in an 

automobile, clearing yard waste, painting his house, and throwing tires into dumpster, all with the full use of his 

elbow, a jury found him guilty of 14 felony charges of fi ling false statements to obtain workers’ compensation.
April 1 – September 30, 2009 | 17 

 After a former California Customer Service Supervisor 

pled no contest to one count of Insurance Fraud, in 

April, a county judge sentenced her to 18 months 

probation and ordered her to pay restitution of 

$10,000. In February 2000, the Supervisor had fi led 

a workers’ compensation claim for an injury sustained 

resulting in a back, shoulder, and neck injury. The 

Supervisor’s plea stemmed from an investigation in 

which Special Agents observed the Supervisor catching 

and reeling in numerous fi sh, carrying luggage, and 

driving a motor vehicle, all in violation of her medical 

restrictions. Subsequent to these activities, the 

Supervisor told a DOL Claims Examiner that she could 

not lift or do anything with her arm, even on a good 

day. In March, the DOL terminated the Supervisor’s 

benefi ts, and as a result of the investigation by 

Special Agents, the Postal Service avoided more than 

$700,000 in future OWCP payments.

OWCP Medical Provider Fraud

Special Agents investigate allegations of fraud committed 

by medical providers who treat Postal Service OWCP 

claimants. Following is one such case.

A case investigated by OIG Special Agents resulted in the 

largest criminal fi ne ever imposed in the United States. 

Multiple qui tam complaints fi led against a New York 

pharmaceutical company were investigated jointly by the 

OI, the Department of Health and Human Services OIG, 

the FBI, the Defense Criminal Investigative Service (DCIS), 

the Food and Drug Administration (FDA) Offi ce of Criminal 

Investigations, the Veterans’ Administration Offi ce of Criminal 

Investigations, the Offi ce of Personnel Management OIG and 

the offi ces of various state Attorneys General. 

The investigation determined that from about February 

2002 through April 2005, the pharmaceutical company 

consistently marketed a drug for a use that was not 

approved by the FDA. The pharmaceutical company 

promoted the sale of the drug for some of the various uses 

and dosages that the FDA had declined to approve and 

about which the FDA had raised specifi c safety concerns. 

It also promoted the drug with false and misleading 

claims of safety and effi cacy. When promoting the drug, 

the pharmaceutical company did not inform physicians, 

customers, and others that it had asked the FDA to 

approve the drug for these uses, but instead told its 

stakeholders that the FDA had specifi cally refused to do 

so, in part, because of safety issues. 

In September, the pharmaceutical company pled guilty in a 

Massachusetts Federal court, to distributing a misbranded 

drug. The company will pay a criminal fi ne of $1.195 billion 

and will also forfeit $105 million, for a total criminal 

resolution of $1.3 billion. The company also agreed to 

pay $1 billion to resolve allegations under the Civil False 

Claims Act that the company illegally promoted four drugs 

and caused false claims to be submitted to government 

healthcare programs. In late October, it was determined 

that the portion of the criminal fi ne payable to the Postal 

Service will be nearly $15 million. In addition, the Postal 

Service will receive about $1.5 million for the costs of 

the investigation and civil damages related to payments 

made on behalf of postal employees who received the 

drugs through workers’ compensation benefi ts. The asset 

forfeiture amount payable to the Postal Service has yet to 

be determined. 

Workers’ Compensation Fraud 

Investigative Results

April 1 – September 30, 2009

 585 fraud investigations resolved

 $97.6 million in compensation payments avoided

 26 arrests

 27 indictments

 18 convictions

 132 personnel actions taken by management

DELAY, DESTRUCTION, AND THEFT OF MAIL
18 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

DELAY, DESTRUCTION, AND THEFT OF MAIL

DELAY, DESTRUCTION, AND 

THEFT OF MAIL 

Postal Inspectors investigate mail theft by criminals who 

attack the postal system, including contractors who 

transport mail to postal facilities. OIG Special Agents 

investigate mail theft by postal employees, as well as by 

contractors who deliver mail.

External Mail Theft

Because mail can contain any number of valuables — not 

just jewelry or other expensive items, but personal and 

fi nancial information such as credit card applications — 

criminals will try to steal it. Mail thieves employ an 

endless number of schemes that Postal Inspectors work 

hard to thwart. They take preventive measures to curb 

these criminals, in part by educating postal employees 

and customers about how to protect themselves against 

mail theft.

In the second half of FY 2009, Postal Inspectors arrested 

939 suspects for mail theft, and 1,123 mail theft suspects 

were convicted in cases originating in this and prior 

reporting periods. 

Postal vehicles, collection and relay boxes, apartment 

mailbox panels, cluster box units (CBUs), and 

neighborhood delivery and collection box units (NDCBUs) 

are targeted by thieves seeking large volumes of mail. 

These “volume attacks” constitute a threat to postal 

employees and customers.

Postal Inspectors report that customers' confi dence in the 

mail is justifi ed, as volume mail attacks in this reporting 

period, totaling 1,142, were down nearly 42 percent from 

the same period last year, when 1,968 volume attacks were 

recorded. Postal Inspectors investigate these thefts and 

work closely with Postal Service staff to develop and install 

neighborhood delivery units with stronger security features. 

Following are examples of mail thefts investigated during 

the reporting period. 

 Postal Inspectors arrested an Arizona woman in April 

on charges of allegedly for breaking into apartment 

panel CBUs and stealing mail. Postal Inspectors had 

received numerous theft complaints from customers 

at two apartment complexes in Phoenix. They found 

evidence the woman was responsible for at least 

30 break-ins, stealing roughly 500 pieces of mail in a 

5-month period. 

 Following an investigation by Postal Inspectors, a 

suspect was indicted in April 2009 for stealing mail, 

possession of a fi rearm by a felon, possession of stolen 

mail, counterfeit and forged securities, bank fraud, and 

aggravated identity theft. The investigation found the 

suspect and several co-conspirators had been stealing 

mail from collection boxes, residential mailboxes, and 

apartment panel mailboxes at about 42 apartment 

complexes in Everett, WA. The group altered checks 

stolen from the mail, deposited the proceeds into 

fraudulently opened and existing victim accounts, 

withdrew cash, and enlisted others to negotiate 

checks. Postal Inspectors recovered large amounts 

of stolen mail, counterfeit checks, fraudulent driver’s 

licenses, stolen fi nancial documents, and a loaded 

sawed-off shotgun during a search of the motel room 

where the main suspect was residing.

 A Texas woman pled guilty in July to federal charges 

of possessing stolen mail. Postal Inspectors identifi ed 

more than 140 victims who suffered losses exceeding 

$100,000. Postal Inspectors executed a search 

warrant at a hotel room where the woman was staying 

and seized 165 stolen personal and business checks, 

stolen mail, mail theft devices, chemicals used to alter 

checks, and drug paraphernalia. They determined the 

mail was taken from collection boxes in Grand Prairie, 

Arlington, Euless, and Hurst, TX. The suspect provided 

information implicating co-conspirators in thefts from 

collection boxes in the Dallas-Ft. Worth area, including 

possible locations where the suspects might be 

found. Federal charges are pending for the additional 

suspects as the investigation continues. 

Mail Theft by Contractors

The Postal Service contracts the movement of some of 

the nation’s mail to businesses that work diligently to 

transport mail to postal facilities. Like postal employees, 

M

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Label 33
April 1 – September 30, 2009 | 19 

DELAY, DESTRUCTION, AND THEFT OF MAIL

these individuals take their responsibilities seriously. 

Unfortunately, a small percentage of contractors abuse the 

public’s trust. In this reporting period, Postal Inspectors’ 

investigations of mail theft by contractors who transport 

mail resulted in 32 arrests and 41 convictions. 

Following are examples of investigations of mail theft by 

contractors during the reporting period. 

 Postal Inspectors identifi ed an HCR Driver in 

Youngstown, OH, for allegedly stealing greeting cards 

and DVDs from the mail. The investigation was initiated 

on a tip from local police that several pieces of mail 

had been found along the side of a road. The HCR 

Driver was interviewed by Postal Inspectors, who 

determined he stole more than 500 greeting cards 

and DVDs from the mail since December 2008. His 

employer terminated his contract in April, and the U.S. 

Attorney’s Offi ce accepted the case for prosecution in 

May. The former Driver had no prior convictions on his 

record when he was hired. 

 An East St. Louis, IL, HCR Driver was sentenced in 

July to 2 years’ probation for mail theft and was 

ordered to pay restitution. Postal Inspectors began 

investigating the case in October 2008, when a rifl ed 

mail package was found in a trash dumpster. Inside 

the parcel were the remains of additional rifl ed mail 

from other addresses on the route. They executed a 

search warrant at a location where the HCR Driver was 

residing and seized evidence leading to his arrest. He 

was removed from his Postal Service job.

Employee Mail Theft

The overwhelming majority of Postal Service employees 

work conscientiously to move the nation’s mail to its proper 

destination. Unfortunately, a small number of employees 

abuse the public’s trust. It is the job of Special Agents to 

identify dishonest employees and take proper investigative 

steps to have them prosecuted and removed from the 

Postal Service.

Following are examples of cases in which postal employees 

stole mail for personal gain.

 In July, an Oklahoma SSA pled guilty to delaying mail 

charges. The SSA had been indicted by a federal grand 

jury in June. From December 2008 through March 

2009, at least nine separate Veterans Administration 

(VA) parcels that contained controlled substances were 

reported as missing from the mails. Special Agent 

surveillance revealed the SSA walking off with a VA 

parcel. In an interview with Special Agents, the SSA 

admitted to the theft of numerous VA parcels. The 

SSA was out on Family Medical Leave Act (FMLA) sick 

leave during this time period and came into the Post 

Offi ce after hours to conduct the thefts. Sentencing is 

pending. The SSA resigned from the Postal Service.

 A California P&DC Postage Due Clerk, who also served 

as an acting Supervisor, was sentenced in federal 

court to 2 years in prison and 2 years of supervised 

release after pleading guilty to theft of mail and credit 

card fraud charges. Undercover operations by Special 

Agents with consensual audio and video electronic 

surveillance resulted in the recovery of about 105 debit 

and credit and ATM cards stolen from the mail. The 

Postage Due Clerk was audio recorded making the 

statement, “What I’m doing is illegal, and immoral, but 

mostly (just) illegal.” Search warrants on his residence 

and vehicle resulted in the seizure of 39 credit cards 

and fi ve checks totaling more than $16,000. The 

credit cards seized were enclosed in envelopes affi xed 

with First-Class postage and addressed to various 

recipients. The Postage Due Clerk retired from the 

Postal Service.

 In July, pursuant to a plea agreement, a Baltimore, 

MD, Letter Carrier pled guilty in federal court to 

mail fraud, theft of mail, and aggravated identity 

theft. At sentencing in November, the Letter Carrier 

faces a maximum sentence of 20 years in prison for 

conspiracy to commit mail fraud, 5 years in prison for 

theft of mail by a postal employee, and a mandatory 

2 years in prison consecutive to any other sentence 

imposed for aggravated identity theft. To date, eight 

other defendants have pled guilty to their participation 

in this scheme, three of whom have been sentenced 

to prison for periods between 24 and 51 months. In 

November 2007, the U.S. Department of Treasury OIG 

notifi ed the OIG regarding the theft of U.S. Treasury 

checks from the Baltimore area. The OI’s investigation 

determined that from April 2006 to May 2007, the 

Letter Carrier stole U.S. Treasury checks from about 

50 victims on his delivery route and other routes, and 

provided the checks to non-postal co-conspirators. Two 

of the co-conspirators manufactured and distributed 

false identifi cation cards, bearing the co-conspirators’ 

photographs, and the names and addresses of the 

victims whose mail had been stolen. By using the false 

identifi cations, the defendants negotiated the checks 

and fraudulently obtained about $111,000. The Letter 

Carrier resigned from the Postal Service.

Delay or Destruction of Mail by Employees

Special Agents investigate postal employees who delay, 

desert, or steal mail from the mailstream. The following 

cases were investigated during this period.

 Responding to a congressional inquiry, in May, a North 

Dakota Rural Carrier, who stole more than 36,000 

pieces of mail from his route over a 10-year period, 
20 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

was sentenced on charges of Delay and Destruction of 

the Mail. He was sentenced to 5 years’ probation, and 

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

Postal Service, and resigned while under investigation. 

During the investigation, Special Agents observed the 

Rural Carrier stealing mail and concealing it in his 

residence. A subsequent search of his residence found 

four tons of stolen and rifl ed mail of all classes.

 In August, a Florida HCR Carrier, pled guilty to a federal 

indictment charging her with delaying or destroying 

about 125,000 pieces of various classes of mail. 

While being interviewed by Special Agents, the HCR 

Carrier said that during the last year, she had taken 

undeliverable mail back to her residence and burned 

it. At her residence, Special Agents recovered enough 

mail to fi ll 40 mail containers that took two semitractor trailers to transport back to the Post Offi ce. 

The mail dated as far back as October 2003. The HCR 

Carrier’s contract to carry mail was terminated.

 In July, an Alabama Temporary Relief Carrier (TRC) 

was sentenced to 3 years of probation, after pleading 

guilty to a delaying mail charge. In August 2007, 

management contacted the OIG regarding a customer 

who discovered abandoned mail on their property. The 

OIG investigation focused on the TRC, who admitted 

discarding mail in four different locations on two 

different routes she carried. Special Agents recovered 

more than 980 First-Class Mail letters, periodicals, 

parcels, and Standard Mail mailpieces. The TRC was 

removed from the Postal Service.

DELAY, DESTRUCTION, AND THEFT OF MAIL

After receiving a tip about abandoned mail, Special Agents 

recovered nearly 1,000 mail pieces that an Alabama Temporary 

Relief Carrier had discarded. The Temporary Relief Carrier was 

removed from her job.

A

While being interviewed by Special Agents, a Florida HCR Carrier said that during the last year she had taken 

undeliverable mail back to her residence and burned it. In August, she pled guilty to a federal indictment 

charging her with delaying or destroying about 125,000 pieces of various classes of mail. 





A former North Dakota Rural Carrier — who stole more than 36,000 pieces of mail from his route over a 

10-year period (concealing it in his residence) — was sentenced to 5 years’ probation and ordered to pay 

$16,000 in restitution.
April 1 – September 30, 2009 | 21 

IDENTITY THEFT

Identity theft occurs when a criminal steals someone’s 

identifying information, such as a name, date of birth, or 

Social Security Number (SSN), and uses it to fraudulently 

apply for credit or take over someone’s credit or bank 

accounts. The Postal Inspection Service is the lead agency in 

investigating incidents of identity theft when criminals misuse 

the nation’s postal system to defraud the American public. 

Funded by the Postal Inspection Service, the National 

Identity Crimes Law Enforcement (NICLE) network, based 

in Philadelphia, PA, improves the coordination of identity 

theft investigations between law enforcement agencies. It 

provides a central repository for identity crime information, 

allowing law enforcement agencies to learn immediately 

whether a particular piece of identifi cation — such as a 

SSN or a bank account — was reported stolen or used 

elsewhere in the course of a crime. The data is available to 

local, state, and federal law enforcement agencies, allowing 

them to link related cases across jurisdictions. 

In the second half of FY 2009, Postal Inspectors arrested 

748 suspects, and 761 identity thieves were convicted in 

cases from this and prior reporting periods. 

Following are examples of identity theft cases investigated 

during the reporting period.

 A West Virginia woman pled guilty in July to 

aggravated identity theft. Postal Inspectors found that, 

from 1998 through 2007, she had collected Social 

Security disability benefi ts under her assigned SSN 

and had also worked for 13 different employers under 

a combination of two different SSNs. She failed to 

notify the Social Security Administration of her ability 

to work, causing them to overpay her about $62,000. 

She used the mail to obtain a home mortgage, three 

auto loans, credit cards, bank and utility accounts 

under variations of her name and the SSNs of about 

10 victims. She fraudulently acquired credit, benefi ts, 

and services worth about $490,000 and caused 

businesses and government agencies to sustain 

losses of $310,000. 

 A federal grand jury in Florida indicted two West Palm 

Beach women, in July, for conspiracy, mail fraud, 

wire fraud, bank fraud, and aggravated identity theft. 

Postal Inspectors alleged the women had been stealing 

identities by fi ling false changes of address and 

opening bank accounts online to receive fraudulently 

obtained bank checks. They fraudulently diverted 

ATM cards, debit cards, credit cards, as well as other 

mail to addresses in the St. Lucie County area. Postal 

Inspectors have identifi ed more than 300 victims, with 

losses exceeding $1 million. 

 An Alabama man was sentenced in August to more 

than 6 years in federal prison and 5 years’ supervised 

release for bank fraud and aggravated identity theft; he 

must also pay $172,703 in restitution to victim banks. 

The man will serve the sentence consecutively after 

serving time for a parole violation related to a 2003 

Postal Inspection Service case involving mail fraud 

and identity theft. Postal Inspectors determined he 

was opening fraudulent credit card accounts using his 

parent’s identity. He used the cards until they reached 

the maximum line of credit and then reported the cards 

as lost or stolen. Postal Inspectors served a search 

warrant at his home and seized a fl at-screen TV, 

computers, and cash. 

OIG Special Agents investigate mail theft by postal 

employees. In some instances, these cases may involve 

identity theft. Here are examples of two cases worked in 

this area.

 A $165,000 mail theft and identity theft scheme, 

involving a Maryland Letter Carrier and outside coconspirators, resulted in signifi cant prison sentences 

for those involved. The carrier was sentenced to 

2 years in prison and 3 years’ probation and the 

co-conspirator went to jail for 51 months, followed by 

5 years’ probation. They were jointly ordered to pay 

more than $165,000 in restitution. Special Agents 

investigating the theft of checks from a collection 

box in Maryland identifi ed a Letter Carrier as a 

suspect. Several stolen checks were deposited into 

the Letter Carrier’s personal bank account. Special 

Agents executed a federal search warrant at the 

postal employee’s home and found evidence of his 

involvement in the thefts, including a fi ctitious driver’s 

license and ID card, both bearing the postal employee’s 

photo, but with another name on it. The employee 

admitted to taking checks from the mail and providing 

them to his co-conspirator, receiving compensation in 

return for the stolen checks. The carrier was removed 

from the Postal Service.

 In May, a Texas Letter Carrier was sentenced in 

federal court to 51 months in prison followed by 

3 years’ probation and ordered to pay more than 

$150,000 in restitution regarding his role in a mail 

theft and identity theft scheme. A joint investigation 

with OIG Special Agents, Postal Inspectors, Secret 

Service and Treasury Special Agents uncovered 

evidence that the Letter Carrier stole U.S. Treasury 

checks from the mail during 2006 and 2008 and 

conspired with others to cash the checks using 

fraudulent identifi cation cards. The Letter Carrier 

was indicted and pled guilty to theft of government 

property after resigning from the Postal Service. 

IDENTITY THEFT
22 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

MAIL FRAUD

MAIL FRAUD

Countless illegal schemes violate the nation’s fi rst 

consumer protection law — the Mail Fraud Statute. As the 

agency responsible for fi ghting criminals who misuse the 

postal system to defraud the American public, the Postal 

Inspection Service employs this statute — which remains 

the most effective tool available to fi ght fraud — to the 

maximum extent possible. The objective of the agency’s 

Mail Fraud Program is to ensure public trust in the mail and 

to protect Americans from fraudulent schemes in which the 

mail is used. 

Complex and noteworthy mail fraud cases may include new 

twists on old scams that continue to evolve and scammers’ 

ranges expand via the Internet. The Postal Inspection 

Service requests assistance from other law enforcement 

entities to leverage resources and maximize expertise. 

Postal Inspectors employ civil and administrative remedies 

as necessary to combat deceptive mailing practices.

Postal Inspectors also protect postal customers by 

educating them about mail fraud, which may include 

investment fraud, mortgage fraud, Ponzi schemes, and 

lottery or sweepstakes scams, all of which were prominent 

during the second half of FY 2009.

Postal Inspectors investigated 2,795 fraud cases, and 

Postal Inspection Service analysts prepared more than 

24,060 letters and informative postcards in response to 

mail fraud complaints during this reporting period. Postal 

Inspectors also arrested 534 mail fraud suspects, and 

563 were convicted as a result of investigations conducted 

during this period and in prior fi scal years. In some of the 

cases highlighted below, Postal Inspectors and InspectorAttorneys relied on criminal and administrative remedies 

for resolution.

Following are examples of the variety of mail fraud 

investigations conducted during the reporting period.

Investment Fraud

A certifi ed fi nancial planner in Birmingham, AL, was 

sentenced, in August, to more than 8 years in prison 

and 3 years’ supervised release, and was ordered to pay 

restitution of more than $3 million, plus a $100,000 fi ne, for 

defrauding New Orleans-area investors. She guaranteed her 

clients would earn returns of 13 to 26 percent through highyield investments in two companies — but the companies 

existed only as Post Offi ce boxes in Colorado and Delaware, 

and phone numbers she listed as contacts were set up only 

to take messages. She mailed clients bogus statements 

showing profi table returns on their investments, but she 

never did invest their money; she instead used it to pay for 

clothes, mortgages, and lavish vacations. 

Mortgage Fraud 

The owner and operator of several mortgage lending and 

title services was sentenced in Miami, FL, in January to 

more than 10 years in prison and 3 years’ supervised 

release, and was ordered to pay more than $6 million in 

restitution after pleading guilty to conspiracy to commit 

mail fraud. Postal Inspectors found that the man and four 

principals, plus 14 co-conspirators, ran a multimilliondollar mortgage loan fraud by convincing lenders to 

fund fraudulent loans based on false verifi cations of 

employment, account deposits, and closing-protection 

letters. They fooled lenders through a variety of mortgage 

scams, all of which depended on straw buyers posing as 

legitimate borrowers; they also fraudulently diverted mail 

to addresses they controlled. Overall, Postal Inspectors 

uncovered more than 75 fraudulent loans totaling more 

than $21 million related to 33 properties in south Florida. 

Nineteen co-conspirators have been indicted on charges of 

mail fraud, conspiracy, and wire fraud; one suspect remains 

at large. 

Canadian Cross-Border Fraud Partnerships

Following a joint investigation led by Postal Inspectors 

working with members of other law enforcement agencies, 

four principals and several cohorts were indicted on 

charges of mail fraud, conspiracy, racketeering, and money 

laundering in a scheme that defrauded elderly victims 

in the United States and Jamaica via an illegal lottery 

scam. Members of a complex criminal network residing in 

Steamboat Springs, CO, contacted elderly victims by mail, 

phone, and e-mail advising they had won large sums of 

money in the Australian Lottery; however, to collect their 

winnings, victims were told they fi rst must mail in payment 

to cover taxes and other fees to individuals in Colorado and 

other states. None of the victims received any winnings. 

To date, Postal Inspectors and other agents have identifi ed 

17 victims between 70 and 93 years of age who suffered 

losses of more than $425,000. 

Deceptive Mail 

Eleven Cease and Desist Orders were issued in May 

against an individual and several others in one of the 

largest sweepstakes mailing scams in the United States 

and abroad in the past 40 years. The promoters employed 

“straw owners,” trusts, more than 50 fake businesses, and 

addresses at commercial mail receiving agencies in New 

York to conceal their illegal operation; they also mailed 

sweepstakes newsletters and at least 90 other promotional 

letters to victims, who were led to believe they had won 

large cash prizes. To collect the cash, victims were told they 

had to fi rst mail in payments of $20 to $23. Unfortunately, 

the offer was too good to be true — no one received the 

promised cash. Postal Inspectors determined the promoters 
April 1 – September 30, 2009 | 23 

OIG ESTABLISHES A MAJOR FRAUD INVESTIGATIONS DIVISION

To promote integrity and accountability related to allegations of major fraud that impacts the Postal Service, in April, the OIG established a Major Fraud 

Investigations Division (MFID). The MFID is responsible for investigating all allegations of fraud within the Postal Service’s programs and operations with a 

contract award price (individual or aggregate) of $250,000 or more, as well as allegations that become national or multi-jurisdictional in nature.

The Postal Service expends $11 to $12 billion per year on goods and services and maintains an overall procurement portfolio of close to $42 billion. Applying 

the Certifi ed Fraud Examiners Association’s professionally recognized “5 percent average of procurement dollars susceptible to fraudulent activity” to Postal 

Service expenditures means that $600 million in Postal Service funds are potentially lost to fraud each year.

Major contract and health care provider fraud investigations by their nature are time consuming and complex. Outcomes of any signifi cance can take 

years before they are realized; however, the return on investment for the Postal Service can be even more signifi cant, leading to improved processes, cost 

avoidances, restitution, recoveries, and the suspension and debarment of companies and individuals.

CONTRACT FRAUD

grossed more than $33 million in a recent 21-month 

period. The Postal Inspection Service was assisted in the 

investigation by the Federal Trade Commission. 

MONEY LAUNDERING

The Postal Inspection Service investigates criminals who 

attempt to use postal money orders to launder illicit funds 

and avoid federal reporting requirements in violation of 

the Money Laundering Control Act and the Bank Secrecy 

Act. Illicit proceeds may include money gained through 

narcotic sales, smuggling illegal aliens, tax evasion, or 

selling counterfeit merchandise. During the second half 

of FY 2009, Postal Inspectors arrested 23 suspects on 

charges related to money laundering, and 43 convictions 

were reported during the same period, some of which 

related to cases initiated in prior reporting periods.

In one example from the reporting period, Postal Inspectors 

initiated an investigation of a father and son based on a 

review of the Postal Service’s Bank Secrecy Act database 

and determined that, from 2006 through 2007, the two 

had illegally purchased about 1,600 postal money orders 

worth about $1.5 million in structured transactions. By 

splitting the purchases, the father and son kept each 

transaction below the $3,000 reporting threshold, so no 

fi nancial reports were required; Postal Inspectors alleged 

they made multiple trips to Post Offi ces each day to buy 

the money orders. The two were indicted in New York in 

March on money laundering and structuring charges. Postal 

Inspectors, working with Special Agents from the IRS and 

Drug Enforcement Administration, arrested the son, in April, 

in Staatsburg, NY, following an investigation into his use of 

about $260,000 worth of structured postal money orders 

to launder cash proceeds from marijuana sales. Postal 

Inspectors executed two search warrants at the son’s home 

and seized about $263,000 in cash and four pounds of 

marijuana. The investigation is continuing. 

CONTRACT FRAUD

The Postal Service presently manages billions in 

contracts, ranging from multi-million dollar national 

contracts for services such as transportation networks 

and IT infrastructures, to local contracts for supplies and 

services at individual postal facilities. The sheer volume of 

contracts and the huge dollar value provide opportunities 

for contractors and employees to defraud the Postal 

Service. 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. Contract fraud is defi ned as 

any intentional, unlawful deception designed to deprive 

the federal government of something of value or to secure 

from the United States for individuals a benefi t, privilege, 

allowance, or consideration to which they are not entitled.

During this reporting period, the OIG conducted 80 contract 

fraud investigations, resulting in 14 arrests and more than 

$5 million in funds returned to the Postal Service. Following 

are examples of contract fraud investigations conducted 

during this period.

 In September, a Vehicle Maintenance Facility Manager 

was sentenced in federal court to 22 months in 

prison, 2 years’ probation, 300 hours of community 

service, and ordered to make restitution of $95,000 

to the Postal Service. The Manager was convicted on 

conspiracy and misappropriation of postal funds for his 

involvement in a kickback scam. The OIG investigation 

disclosed the Manager solicited kickbacks on a vehicle 

wash contract and authorized payment for fi ctitious 

invoices for washes and vehicle maintenance work 

never performed. Upon payment, the contractor would 

“kick back” money to the manager. The Manager also 

collected kickbacks on the sales of Postal Service 

vehicles, by not sending the vehicles to auction and 

pricing the vehicles at unreasonable prices on eBay. 

The Manager would sell these vehicles at below 
24 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

CONTRACT FRAUD / ROBBERIES

market value and in turn collect kickbacks on these 

sales. The contractor in this case also pled guilty and 

sentencing is pending. The Manager resigned from the 

Postal Service.

 In May, the OIG was notifi ed by the Department of 

Justice (DOJ) that the Postal Service would receive 

$4.5 million as a result of an anti-trust investigation 

where a $45 million fi ne was imposed against an 

air cargo company. This anti-trust investigation 

was a joint effort by the OIG, FBI, Department of 

Transportation, DCIS, and ICE under the direction 

of the DOJ investigating the international air cargo 

industry. The Postal Service is one of the nation’s 

largest air cargo customers and is the largest 

governmental victim in this antitrust case. In 2006, 

the Postal Service accounted for 37.6 percent of the 

air cargo market share and the Postal Service spends 

about $700 million annually on air cargo costs. The 

investigation centered on allegations that carriers 

were artifi cially increasing profi ts through a price fi xing 

scheme, where air cargo carriers were engaged in a 

conspiracy to fi x the rates and surcharges the carriers 

charged their customers. Dozens of air cargo carriers 

were allegedly involved in the conspiracy that involved 

not only base cargo rates charged per kilogram, but 

also surcharges related to fuel, security, war risk, and 

U.S. Customs fees. The investigation is continuing

ROBBERIES

Robberies not only pose a threat to postal employees, but 

also jeopardize the public's trust in the mail and attack the 

fi nancial integrity of the Postal Service. The mail remains a 

compelling target for larceny, especially in today’s diffi cult 

economy. Robbers who accost letter carriers usually 

are seeking mail containing valuables (such as jewelry, 

illegal drugs, or fi nancial information) or access to mail 

receptacles that give them greater access to even more 

mail. Those who target Postal Service facilities are generally 

after cash, money orders, and stamps. 

In the second half of FY 2009, the Postal Service 

experienced 39 robberies or attempted robberies of postal 

employees or Post Offi ces. Postal Inspectors arrested 

38 suspected robbers and reported 38 convictions, some 

from cases in prior reporting periods. 

The following cases are examples of investigations 

conducted during the reporting period.

 A man stepped up to the counter of the Utica, MS, Post 

Offi ce in February and requested a large envelope. 

As the Postmaster bent down to get it, the man 

lunged forward and struck the 

Postmaster, then jumped over 

the counter, took money from 

the cash drawer, and fl ed on 

foot. Postal Inspectors as well as 

offi cers from the Hinds County 

Sheriff's Department and Utica 

Police Department responded to 

the scene, and the Postmaster 

was transported to the hospital. 

After Postal Inspectors processed 

latent fi nger and shoe prints at 

the scene, local police received an 

anonymous tip as to the location 

of the robber. Postal Inspectors 

and deputies located the suspect, 

who allowed a consent search 

of his home, and found shoes 

matching prints found on the 

Post Offi ce counter, $200 in 

cash under the suspect’s bed, 

and $130 under another bed, 

as well as two large knives; they 

also spoke with the suspect's 

girlfriend, who reported he had given her a large sum 

of cash that day. The couple was arrested on state 

charges of robbery and held at the Hinds County jail; 

in March, they were arrested and presented before 

a federal magistrate in Jackson for their roles in the 

robbery and for theft of postal funds. They each pled 

guilty, and the suspect was sentenced, in August, to 

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In May, the OIG was notifi ed by the Department of Justice that the Postal Service would receive $4.5 million as a result of an anti-trust

investigation where a $45 million fi ne was imposed against an air cargo company. 
April 1 – September 30, 2009 | 25 

BURGLARIES

11 years and 2 months in federal prison for robbing 

the Post Offi ce and assaulting the Postmaster, was 

ordered to pay restitution to the Postal Service, and 

was ordered to pay $8,100 to the Postmaster to cover 

medical bills from the assault. The suspect's girlfriend 

was sentenced to 1 year of federal probation and was 

ordered to pay restitution to the Postal Service. 

 A Georgia man was indicted in July on charges of 

robbing the Riverdale, GA, Post Offi ce after he was 

arrested earlier at his home by Postal Inspectors, 

Special Agents from the Bureau of Alcohol, Tobacco, 

Firearms, and Explosives (ATF), and deputies from 

the U.S. Marshals Service. The robbery occurred on 

September 16, 2008, when an SSA was transporting 

postal funds to a bank and was accosted and robbed of 

the bank bag containing postal funds. Postal Inspectors 

developed a suspect from similar recent robberies 

in the Atlanta area. Subsequently, investigators 

determined that, over the course of 20 years, the 

suspect had been arrested 28 times and sentenced to 

prison fi ve separate times on robbery, illegal drug, and 

weapons charges. At the time of the Riverdale robbery, 

the suspect was on parole after serving 10 years of 

a 15-year sentence for multiple armed robberies in 

the Atlanta area. Due to his extensive criminal history, 

the suspect faces up to 20 years in federal prison, if 

convicted. He is being held in custody without bond 

until a trial date is set. 

 A man brandishing a handgun and wearing a 

handkerchief over his face robbed the Bergen Station, 

NJ, Post Offi ce in May 2008. He entered the Post 

Offi ce from the rear dock and confronted several 

employees, who he forced into an offi ce before 

running off with a substantial amount of cash. Postal 

Inspectors conducted surveillances, interviewed 

suspects and a witness, issued subpoenas, and 

distributed wanted posters before fi nally identifying 

the suspect, who they arrested in August 2008. The 

suspect pled guilty to the robbery and was sentenced 

in May 2009 to nearly 12 years in prison and 5 years’ 

supervised release, and was ordered to make full 

restitution to the Postal Service

BURGLARIES

The Postal Inspection Service has investigative jurisdiction 

over burglaries or attempted burglaries of buildings 

owned or leased by the Postal Service. Postal Inspectors 

immediately respond and devote investigative attention 

to these crimes. Priority attention is given to burglaries 

resulting in substantial losses to the Post Offi ce and believed 

to be the work of “professionals,” and any related fencing 

activity. And, fi nally, Postal Inspectors pursue burglars who 

target postal units located in retail establishments. The 

successful resolution of these cases increases customers’ 

confi dence in the mail and assures accountability for Postal 

Service assets and the assets of its customers. 

The following cases highlight burglary investigations 

conducted during the reporting period.

 The LeBlanc, LA, Post Offi ce was burglarized in June 

2008 when a suspect kicked in the door leading to the 

workroom fl oor from the customer lobby. The burglar 

ransacked the Post Offi ce, stealing mail and rifl ing 

several parcels, which were emptied of their contents. 

Evidence collected at the scene and processed at the 

National Forensic Laboratory turned up a fi ngerprint 

that, when compared to the FBI’s Automated 

Fingerprint Identifi cation System (AFIS), revealed 

a suspect. The man was indicted on one count of 

burglarizing a Post Offi ce. He pled guilty in February 

and was sentenced in July to a year in federal prison 

and 3 years of supervised release, and was ordered to 

pay restitution to the Postal Service for the damage he 

caused to the Post Offi ce. 

 A burglar broke into the Ucon, ID, Post Offi ce in July 

and made off with stamp stock and cash, as well as 

a postal money order imprinter and two 100-count 

Postal Inspectors responded to the scene after a burglar broke into the Ucon, ID, Post Offi ce in July and made 

off with stamp stock and cash, as well as a postal money order imprinter and two 100-count packets of blank 

money orders. They identifi ed a suspect who was convicted in August and now awaits sentencing. 
26 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

DANGEROUS MAIL INVESTIGATIONS

packets of blank money orders. Postal Inspectors 

responded to the scene, along with detectives from 

the Bonneville County Sheriff’s Offi ce, and determined 

it was likely linked to other recent burglaries in the 

area. Based on an image captured by a surveillance 

video, Postal Inspectors and detectives executed a 

search warrant on a suspect’s home and found 11 of 

the postal money orders taken in the burglary, as well 

as items from other area burglaries. Postal Inspectors 

interviewed the suspect, who claimed the idea to 

burglarize a Post Offi ce came from reading Westerns. 

He purportedly was responsible for six other burglaries 

at businesses in Bonneville and Bannack County and 

has served 8 years of federal time for armed bank 

robbery, with other felony convictions for forgery and 

malicious injury. He was convicted for the Post Offi ce 

burglary in August and is awaiting sentencing.

 The Postmaster of the Stebbins, AK, Post Offi ce called 

Anchorage Postal Inspectors after arriving at work 

the morning of February 17 and fi nding rifl ed mail 

stacked against the employee entrance. A Registered 

Mail parcel containing cash, as well as three postal 

money orders, were missing; also, collect on delivery 

(COD) mailpieces, parcels, fl ats, and letters had 

been rifl ed. Postal Inspectors could not immediately 

respond to Stebbins to investigate the burglary due to 

blizzard conditions; the town is about 427 miles from 

Anchorage and is accessible only by airplane. Once in 

Stebbins, Postal Inspectors identifi ed four suspects, 

one of whom is a minor. State charges were fi led 

against the minor in August, and the other suspects 

were indicted in September on federal charges of mail 

theft and burglary of a Post Offi ce.

DANGEROUS MAIL 

INVESTIGATIONS

Dangerous mail refers to mail containing explosives and 

biological, chemical, or radiological substances. Postal 

Inspectors receive specialized training and equipment to 

address these threats and to protect postal employees, 

customers, and the mail system. The Postal Inspection 

Service partners with other agencies in the homeland security 

community and assists with national security programs. 

Postal Inspectors develop protocols for, and coordinate 

responses to, reports of alleged or suspected dangerous 

items in the mail or at mail facilities. Inspectors across the 

country respond to the incidents, resolve alleged and actual 

threats, and conduct investigations of the incidents and any 

related criminal activity.

In the second half of FY 2009, the Dangerous Mail 

Investigations Group recertifi ed 323 Postal Inspectors to 

meet the requirements of the Occupational Safety and 

Health Association for hazwoper certifi cation and conducted 

quality assurance and refresher exercises. The group 

also delivered more than 988 educational seminars to 

employees, business owners, and other law enforcement 

and government agencies addressing mail safety and 

handling protocols. 

The results have been dramatic. Postal Inspectors 

responded to 1,998 incidents involving suspicious items, 

substances, and other restricted nonmailable items 

found in mail or at postal facilities in the past 6 months. 

Nevertheless, Postal Inspection Service efforts reduced the 

number of postal facility evacuations by about 30 percent 

from the same period last year. The change translated to 

reductions in lost workhours (66.6 percent), in delayed 

mail, and in operating costs associated with evacuations. 

Further, unnecessary requests for emergency responses 

by local fi rst responders were reduced, freeing responders 

to be available in the event of other emergencies.

Suspicious Substances in the Mail 

Postal Inspectors respond rapidly to reports of unidentifi ed 

substances in the mail and threats involving chemical or 

biological material. Although the incidents may not involve 

criminal intent, a rapid response ensures that Postal 

Inspectors are on hand at the earliest opportunity when 

mail is intentionally used to convey chemical, biological, 

radiological, or explosive substances. 

Postal Inspectors trained as Dangerous Mail Investigations 

Specialists use established threat-assessment protocols 

along with sophisticated state-of-the-art screening 

equipment to respond to mail and mail facilities reporting 

suspicious substances. They determine whether the 

substances are hazardous and could pose a threat to postal 

employees, customers, or facilities. 

In the second half of FY 2009, Postal Inspectors responded 

to 1,235 incidents nationwide involving unidentifi ed 

suspicious powders and liquids and hoax mailings reported 

by postal employees, customers, or other federal agencies. 

The unidentifi ed substances were found in the Postal 

Service’s critical infrastructure, at postal facilities, or in the 

mail. Postal Inspectors determined that all of the suspicious 

substances reported were nonhazardous material.

The Postal Inspection Service’s screening program has 

proven to be enormously successful for the Postal Service. 

While the majority of incidents involve nonhazardous 

substances, a response by Postal Inspectors ensures 

that employees can depend on having a safe and secure 

workplace and that countless postal facilities are kept open 
April 1 – September 30, 2009 | 27 

DANGEROUS MAIL INVESTIGATIONS

rather than being needlessly evacuated. The result is fewer 

lost workhours, better employee morale and productivity, 

and improved delivery standards for the Postal Service.

Following are examples of suspicious substances 

investigations in the second half of FY 2009.

 In October 2008, Chase Bank locations in eight states, 

Federal Deposit Insurance Corporation offi ces, and 

the Offi ce of Thrift Supervision began receiving letters 

containing written threats and an unknown substance. 

An additional letter was mailed to JPMorgan Chase 

headquarters in New York threatening to “McVeigh” the 

building. The message contained in the 65 mailings 

was that fi nancial institutions were stealing investors’ 

money and should expect repercussions. Due to the 

nature of the crime, Postal Inspectors and FBI Special 

Agents conducted a joint investigation in coordination 

with bank investigators. A suspect was developed 

who had in the past mailed similar communications 

to federal agencies. Following a surveillance of the 

suspect’s home in Albuquerque, NM, the man was 

arrested; the substance found in the letters was 

confi rmed to be insect bait. He pled guilty in March 

to two counts involving threats and false information 

and was sentenced in June to 3 years in prison and 

3 years’ supervised release. He also was ordered to 

pay a fi ne of $5,000 and restitution of $87,734 as 

compensation to emergency responders.

 Postal Inspectors arrested a Chicago man, in January, 

on two counts of mailing articles containing HIVinfected blood with the intent to kill or injure. Their 

investigation found the suspect had mailed three 

First-Class Mail letters (one to President-Elect Obama, 

one to the President’s chief of staff, and a third to 

an Illinois State agency) containing a reddish-orange 

powder and papers containing the man’s HIV-infected 

blood. An initial federal competency hearing was held 

in Springfi eld in April based on the suspect’s belief 

that God or Allah was talking to him and directed him 

to mail the letters, and that a secret bank account in 

Switzerland would resolve the world’s fi nancial crisis. 

The judge ordered the suspect be further evaluated in 

4 months to determine if he will be able to participate 

in his own defense. 

 A woman, currently serving a 6-year sentence, 

appeared before the U.S. Court of Appeals for the 

Third Circuit in early 2009 to appeal her conviction 

for violating the federal chemical weapons statute. On 

September 17, the court announced it had rejected 

her appeal. It is the fi rst conviction upheld under 

the Chemical Weapons Convention Implementation 

Act. The case began in March 2007, when Postal 

Inspectors responded to a call from the Norristown, 

PA, Post Offi ce that a postal customer had found 

red powder in her mailbox and on her mail. Postal 

Inspectors tested the powder and identifi ed it as 

potassium dichromate, a highly toxic substance that, 

if absorbed through the skin, can cause death. Postal 

Inspectors linked the powder to a microbiologist 

employed by a chemical company; she was married 

to a man who had fathered a child with the victim. The 

suspect targeted the victim by placing toxic substances 

on her mail, her car, and the door handles of her 

home. Postal Inspectors conducted surveillance and 

captured images of the suspect placing chemicals 

around the house. They arrested her in June 2007 and, 

after executing a search warrant, found stolen mail 

belonging to the victim, potassium dichromate, and a 

plastic tube containing a substance marked “Glycacil,” 

which is also toxic. In addition to her 6-year sentence, 

the judge ordered she pay restitution of nearly 

$10,000 to the victim. 

Suspicious Items in the Mail 

In addition to responding to reports of dangerous 

substances associated with the mail, Dangerous Mail 

Investigations Specialists respond to reports of suspicious 

items in the mail, such as improvised explosive devices 

(IEDs) and hoax devices. Fortunately, explosive items in the 

mail are rare. Over the past 6 months, Postal Inspectors 

investigated four incidents involving IEDs sent via the mail. 

If an IED detonates, the life and safety of those in the 

vicinity of the explosion are the fi rst priorities of Postal 

Inspectors and other responders. Once these priorities are 

addressed, Postal Inspectors secure the crime scene and 

process the area for evidence. 

In the second half of FY 2009, Postal Inspectors 

responded to 663 incidents of explosive devices placed in 

private mail receptacles, hoax bomb devices, suspicious 

items found in postal facilities or equipment, and 

mailed explosive devices. Their investigations resulted 

in 32 arrests and 27 convictions, some from cases 

originating in other reporting periods. Most of the incidents 

involved harmless items, sometimes inadvertently left 

behind by customers. The remainder involved hoax devices 

or homemade explosives used to vandalize mailboxes. 

Postal Inspectors investigate even the threatened use 

of dangerous material in the mailstream and other 

miscellaneous misuses of the mail. 

Following are examples of suspicious items investigations 

conducted in the second half of FY 2009.

 Postal Inspectors arrested a woman in April for mailing 

threatening communications after eight Post Offi ces 

in southern Minnesota received letters on February 4 
28 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

CHILD EXPLOITATION VIA THE MAIL

threatening that a bomb would be placed at each of 

their facilities. On March 16, eight more Post Offi ces 

in Minnesota received similar letters, and on March 

24, a letter containing a bomb threat was received at 

the Faribault Daily News. All appeared to have been 

written by the same person. On March 27, Postal 

Inspectors identifi ed a woman as a suspect, who 

had recently been released from prison after serving 

a sentence for a similar crime. Postal Inspectors 

interviewed the woman, who claimed she wrote 

the letters to scare people because she had been 

institutionalized her whole life, found life outside of jail 

to be diffi cult, and “just wanted to go back.” She was 

convicted in August. 

 Two brothers were arrested and indicted in June by 

a federal grand jury for their roles in mailing a parcel 

bomb that was opened in February 2004 by a City of 

Scottsdale, AZ, employee. Postal Inspectors determined 

that, from September 2003 to January 2009, the 

brothers conspired to promote racial discord on behalf 

of the “White Aryan Resistance” (WAR). Among other 

overt acts alleged in the indictment, the bomb was 

constructed in a cardboard box made to look like a 

package and was addressed to an employee in Offi ce 

of Diversity and Dialogue. The bomb exploded when the 

victim opened the box, injuring him and another person. 

 On March 11, Postal Inspectors and ATF agents in 

Cleveland, OH, arrested two suspects after executing 

federal search warrants at their homes. The warrants 

were issued from the District of Puerto Rico and 

charged the suspects with several violations involving 

the illegal mailing of fi rearms. The suspects allegedly 

purchased numerous semiautomatic handguns in 

Cleveland and shipped them via Express Mail to San 

Juan. The arrests were based on surveillance videos 

from Post Offi ces, Express Mail records, and fi rearms 

purchase records, which implicated the two suspects 

and possibly another co-conspirator, who is being 

sought for questioning by Postal Inspectors. Postal 

Inspectors have identifi ed 21 Express Mail labels linked 

to this scheme, all mailed from the Cleveland area. The 

investigation is continuing. 

Mail Screening at National Special 

Security Events

Public gatherings are certifi ed as National Special Security 

Events when they are considered attractive targets for 

terrorists or assassins due to their visibility or political 

connection. The Postal Inspection Service’s mail-screening 

program supports the Postal Service’s responsibilities 

dictated by the Department of Homeland Security (DHS) 

Presidential Directives in its National Response Plan. 

The program is supported by the Postal Inspection 

Service’s Mobile Mail Screening Station, a transportable, 

self-suffi cient platform that provides mail-screening for 

chemical, biological, radiological, nuclear, and explosive 

threats. The program also deploys vans equipped with X-ray 

units and fi eld-screening equipment. 

During FY 2009, Postal Inspectors screened mail at 

17 events, including the National Football League’s 

Super Bowl XLIII and the G-20 Economic Summit in 

Pittsburgh, PA. The Postal Inspection Service was tasked 

with providing security for mail and mail-related matter 

at selected sites, and with providing investigative and 

intelligence support during the event.

Postal Inspectors assigned to the events performed these 

activities as part of their work with the FBI’s National Joint 

Terrorism Task Force and its Intelligence Operations Center, 

as well as with DHS’s National Operations Center.

CHILD EXPLOITATION VIA 

THE MAIL

Postal Inspectors arrested 108 suspects and identifi ed 

31 child molesters in this reporting period as part of the 

Postal Inspection Service's continuing efforts to bring to 

justice those who unlawfully use the mail to traffi c in child 

pornography or otherwise sexually exploit children. Postal 

Inspectors also identifi ed and rescued 60 children from 

incidents of sexual abuse and exploitation. 

Because nearly all cases of child exploitation investigated 

by Postal Inspectors involve the Internet as well as the 

mail, the Postal Inspection Service has become an integral 

partner in the DOJ’s Project Safe Childhood initiative. The 

initiative is aimed at preventing the sexual exploitation of 

children through the Internet by using a well-coordinated, 

multi-pronged approach involving federal, state, and local 

law enforcement agencies. 

During the second half of FY 2009, Postal Inspectors 

initiated 121 investigations involving child exploitation. The 

investigations included high-impact, quality casework that 

emphasized the identifi cation and dismantling of major 

commercial distribution enterprises that relied on the 

mail and the Internet to conduct illegal activities. Postal 

Inspectors worked in close cooperation with trial attorneys 

of DOJ’s Child Exploitation and Obscenity Section, where 

a Postal Inspector is assigned full time on all cases of 

national and international signifi cance. 

Following are examples of investigations conducted during 

the reporting period.

 In October 2006, Postal Inspectors were requested 

by the chief investigator of the Sex Offender Civil 

Commitment (SCC) Facility in Washington State to 
April 1 – September 30, 2009 | 29 

NARCOTICS TRAFFICKING

assist with an investigation of suspected contraband 

fl owing into the facility through its mailroom. Although 

residents are allowed to possess computers and 

digital media, they may not access the Internet; 

communications are limited to phone and mail. Postal 

Inspectors uncovered multiple contraband violations 

via the mail, including mailings of child and adult 

pornography, illegal drugs, and alcohol, and they seized 

more than 30 computers from residents suspected of 

harboring pornography. In one case, Postal Inspectors 

determined a resident was receiving DVDs in the mail 

containing child and adult pornography disguised as 

movies from commercial vendors, or on fl ash cards 

sewn into the lining of clothes and carried in by corrupt 

staff. In September 2009, seven SCC residents were 

indicted on charges of possessing child pornography; 

six had previous convictions for molesting children. On 

the following day, Postal Inspectors, FBI special agents, 

Washington State Patrol detectives, SCC investigators, 

and SCC security staff executed federal arrest warrants 

for the seven residents, who were detained pending 

trial. The Postal Inspection Service is the lead agency 

investigating all child pornography allegations at SCC 

involving the mail. 

 A Charlotte, NC, man was sentenced in May to a 

minimum of 115 years and a maximum of 142 years in 

state prison for crimes involving the sexual exploitation 

of a minor. He had refused to plead guilty to six felony 

counts and demanded a trial; however, during a 3-day 

trial — following testimonies from the victim, her 

father, and Postal Inspectors — changed his plea to 

“guilty as charged.” In September 2006, a federal 

search warrant was executed by Postal Inspectors 

after the man accepted a mailing of child pornography 

at his home. He fi rst came to the attention of law 

enforcement when he mailed an undercover Postal 

Inspector a CD of multiple images of sexual abuse 

involving a 7-year-old girl. He mailed another CD to the 

Postal Inspector with images showing him engaging in 

sexual activity with an 8-year-old girl. The investigation 

found the suspect’s brother-in-law and 7-year-old 

niece had moved in with the family after the wife was 

deployed to Iraq with the U.S. Military. He had been 

sexually abusing the child since April 2006 and was 

unable to estimate the number of times it occurred. 

NARCOTICS TRAFFICKING

Postal Inspectors interdict mailings of illegal drugs and 

drug proceeds to protect employees and customers from 

the violence related to drug traffi cking and to preserve 

the integrity of the mail. Postal Inspectors also investigate 

organized narcotic distribution groups and individuals who 

use the mail to traffi c in illegal drugs. 

Often working with other law enforcement offi cials, Postal 

Inspectors arrested 627 suspects for drug traffi cking 

via the mail in this reporting period. Their investigations 

resulted in the seizure of about 21,000 pounds of 

illegal narcotics found in the mail, as well as more than 

$2.79 million in cash and monetary instruments related to 

ongoing investigations. 

Following are examples of narcotics investigations 

conducted during the reporting period.

 When Postal Inspectors in McAllen, TX, began tracking 

a substantial increase in the amount of marijuana 

being mailed from South Texas in 2008, they 

coordinated a national effort from January through 

late May to shut down the criminal operators. Two 

drug traffi cking rings emerged as the main suspects, 

allegedly mailing at least 450 parcels containing an 

estimated 7,700 pounds of marijuana to New York 

and other states over the past year. Coordinating their 

investigation with the local U.S. Attorney’s Offi ce, 

Postal Inspectors arrested eight suspects in May on 

federal charges of possession with intent to distribute 

a controlled substance and use of a communication 

facility to distribute controlled substances. Additional 

arrests are anticipated. 

 As part of a national investigation of major traffi cking 

rings, Postal Inspectors arrested a New York City ring 

member in February after he accepted an Express 

Mail package containing 12 pounds of marijuana. In 

the past month, the suspect had been receiving three 

to fi ve packages of marijuana daily via Express Mail 

service. He had co-conspirators in other states mail 

drugs to apartment addresses; they waited for the 

arrival of the parcels and intercepted them before the 

true addressees received them. The case broke when 

the suspect was acting as a lookout to intercept a 

drug package, spotted law enforcement offi cers down 

the street and fl ed, allowing the unsuspecting female 

addressee to pick up the parcel. When she found the 

drugs she returned the package to the Post Offi ce. The 

suspect appeared at her door several times demanding 

she hand over the package, even brandishing a 

handgun and saying, “You know what will happen if 

I don’t get my box back.” Postal Inspectors arrested 

the suspect the next time he showed up to intercept a 

mailing; he was convicted on August 31 on narcotics 

and fi rearms-related charges and now awaits 

sentencing. Further arrests are expected. 

 Postal Inspectors seized more than 80 pounds of 

marijuana between May and July from six parcels 

linked to a ring in Philadelphia, PA. They arrested 

two suspects for possession of narcotics with intent 

to distribute after receiving complaints from Letter 
30 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

HOMICIDES, ASSAULTS, AND THREATS

Carriers, who reported they had been aggressively 

pursued on their routes by individuals seeking drug 

parcels from Texas, Arizona, and California. One man is 

a suspect in a 2007 homicide investigation.

OFFICIAL MISCONDUCT 

Misconduct on the part of Postal Service employees includes 

misuse of Postal Service computers, destruction or theft of 

Postal Service property, falsifi cation of offi cial documents 

and forgery, theft of funds, abuse of authority, sabotage of 

operations, narcotics usage or sale of drugs while on duty, 

and alcohol abuse. Following is an example of a case the 

OIG investigated involving employee misconduct.

A Mail Handler at the Cleveland P&DC was sentenced in 

court, in August, to 3 years of probation and ordered to 

pay restitution of nearly $6,500 to the Postal Service for 

his conviction on an FMLA scam covering the last 5 years. 

Based on information that the Mail Handler had been 

altering FMLA forms he submitted to receive FMLA leave 

since 2004, Special Agents verifi ed that the forms had 

been photocopied and the dates changed. The forging of 

these documents allowed the Mail Handler to take about 

352 hours of FMLA sick leave, costing the Postal Service 

nearly $6,500. The Mail Handler was removed from the 

Postal Service.

Employee Drug Investigations

Special Agents investigate postal employees selling 

narcotics while on postal property or while on duty. 

Information on the possession or personal use of illegal 

drugs by postal employees is referred through management 

to the Employee Assistance Program for attention. Illegal 

drugs in the workplace can negatively impact employee 

productivity and safety, affect employee judgment and 

increase stress levels, leading 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.

For the 6-month period, Special Agents investigated 

89 cases of postal employees suspected of possessing or 

using illegal drugs on duty, and 47 employees were removed 

from the Postal Service. Following are examples of cases on 

narcotics-related offenses by postal employees.

 While a New Jersey Letter Carrier, a 25-year Postal 

Service employee, was in uniform and in a postal 

vehicle, he engaged in drug transactions with a 

known drug traffi cking organization. The Letter Carrier 

told Special Agents he had been using a controlled 

substance for about 11 years, mostly on his days off 

work. He was sentenced to 1 year of probation after 

pleading guilty to conspiracy as a result of an OIG 

joint investigation with a County Drug Task Force. The 

investigation began in July 2008. The Letter Carrier 

retired from the Postal Service. 

 Three employees at the Cleveland P&DC were 

prosecuted and removed from the Postal Service 

for using illegal drugs while on duty. In May, based 

on allegations and information from another drug 

investigation, Special Agents and sheriff’s deputies 

conducted a K-9 drug sweep and search at the postal 

facility. As a result of the search, two Mail Handlers and 

a Custodian were found with marijuana in their vehicles. 

HOMICIDES, ASSAULTS, 

AND THREATS

A safe working environment is the top priority of the 

Postal Inspection Service’s Workplace Violence Program. 

To achieve its goals, Postal Inspectors respond to and 

investigate Postal Service-related physical assaults and 

credible threats, and all threats and incidents receive 

appropriate review. The Workplace Violence Program offers 

resources and training that focus on preventing violence 

through early intervention and the use of partnerships 

Postal Inspectors around the country are increasing their visibility at Postal Service facilities, visiting postal 

managers and employees as part of their routine assignments. Pictured here is a Postal Inspector speaking 

with a Postmaster and an SSA at a Maryland Post Offi ce. He discussed the threat of assaults and other 

dangers employees may face, such as robberies, unknown substances in the mail, and workplace violence, 

and he provided tips on how to minimize risks by following security protocols and keeping an eye out for 

suspicious activity.
April 1 – September 30, 2009 | 31 

EXECUTIVE INVESTIGATIONS AND INTERNAL AFFAIRS

between Postal Service managers and employees. To 

ensure its employees have a safe place to work, the Postal 

Service employs several proactive strategies and tools for 

reducing workplace violence. Integral to this effort are its 

Threat Assessment Teams (TATs), which operate at each 

postal district. TATs use a cross-functional, multidisciplinary 

approach to assess and manage risks, help reduce 

incidents of inappropriate behavior, and resolve confl icts. 

The cases that follow are examples of investigations in this 

area during the reporting period.

 The Gallatin, TN, Postmaster notifi ed Postal Inspectors 

in August of an alleged sexual assault of a Rural 

Carrier. The Rural Carrier had entered a convenience 

store to deliver mail on her route when the cashier 

came out from behind the counter and embraced her, 

making prolonged contact. The Carrier immediately left 

the store and had just gotten into her long-life vehicle 

(LLV) when the cashier reappeared, entered the LLV, 

and repeated his behavior. The Rural Carrier forced 

him from the LLV and reported the assault. Postal 

Inspectors investigated the incident and identifi ed 

a second victim. A state warrant was issued for 

assault and the subject was arrested. He pled guilty in 

September and was sentenced to 1 year of probation; 

he was also ordered to attend sensitivity training and 

must have no contact with the Rural Carrier. 

 Following his arrest by Postal Inspectors, an East 

St. Louis, IL, man pled guilty in August to assaulting 

a federal employee. The man had attacked a Letter 

Carrier with an ax handle while he was delivering mail 

on his route. The Letter Carrier was able to fend off 

the blows with his mail satchel and was not injured 

in the attack. The suspect claimed the reason for the 

unprovoked attack was that the Letter Carrier was 

wasting his tax dollars by not delivering the mail in a 

timely manner. 

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 Postal Service is not covered by the Whistleblower 

Protection Act, but has its own policy governing 

whistleblower retaliation. The policy prohibits retaliation 

against an employee because the employee (or applicant 

for employment) disclosed information the employee 

reasonably believes concerns: 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.

Generally, the misconduct is a violation of law, rule, or 

regulation, or a direct threat to public interest — fraud, 

health, safety violations, and corruption are just a few 

examples. The employee must reasonably believe his or her 

employer has committed a violation of some law, rule, or 

regulation; testify or commence a legal proceeding on the 

legally protected matter; or refuse to violate the law.

Allegations received: 87

OIG investigations initiated: 22

Investigations closed with no fi nding of retaliation or deferred 

to other adjudicative body: 31

Allegations closed with no action: 79

Open investigations: 12

OIG found reprisal: 1
SECURITY AND CRIME PREVENTION
April 1 – September 30, 2009 | 33 

SECURITY

Security of Postal Assets 

Postal Inspectors and staff from the Postal Service’s Mail 

Transportation Equipment (MTE) offi ce continued to work 

on the Equipment Recovery Project during the second half 

of FY 2009. The goal of the project is to recover stolen 

or misused postal pallets and fl at tubs from nonpostal 

locations across the country. 

In addition to successfully recovering equipment, Postal 

Inspectors aggressively pursued criminal investigations in 

several states related to the illegal sale of stolen pallets and 

tubs. Following are examples of investigations conducted 

during the reporting period.

 The CEO of a pallet company in Miami was sentenced 

in June to 5 months in prison and 1 year of supervised 

release, and was ordered to pay $419,000 in 

restitution to the Postal Service for stealing and 

reselling more than 21,000 plastic postal pallets in 

Pompano Beach and Haines City, FL, and Atlanta, 

GA. The court-ordered restitution covers both 

reimbursement for the pallets and investigative costs 

incurred by the Postal Inspection Service in pursuing 

the case. 

 Postal Inspectors arrested a suspect in July for stealing 

$28,800 worth of postal pallets after they spotted the 

equipment at a recycling company. Their investigation 

revealed the owner of the recycling company had paid 

$2.25 each for about 1,200 pallets, which cost the 

Postal Service more than $20 a piece. The suspect 

regularly scouted the loading docks of Tucson-area 

businesses for pallets he could steal and resell. 

As internal controls for MTE have improved and awareness 

of the problem grows, more postal equipment is being 

located and returned to circulation. In the second half of 

FY 2009, Postal Inspectors recovered 9,751 plastic pallets 

and other postal equipment with an estimated total value of 

more than $279,000. 

Personnel Security 

The Postal Inspection Service initiates background 

investigations and adjudicates security clearances for 

postal employees and contractors. Staff at its Security 

Investigations Service Center (SISC) is tasked with 

digitizing and archiving security fi les for Postal Inspection 

Service personnel and for closed criminal cases. They are 

currently expanding capabilities and resources to support 

active investigations and projects. Digitizing the fi les 

not only facilitates access to archived and active case 

information, but also saves the Postal Service hundreds 

of thousands of dollars in outsourcing, storage, retrieval, 

and supply costs.

The SISC received about 25,000 requests for background 

investigations and security clearances in the second half 

of FY 2009. The majority of the applications came from 

postal contractors, who are required to have some level 

of security clearance before gaining access to mail or 

postal facilities. 

Security Force 

The Postal Inspection Service maintains an armed, uniformed 

Security Force of Postal Police Offi cers (PPOs) who provide 

protection for postal employees, mail, and property. PPOs 

are assigned to facilities considered most at risk for crime. 

Their presence deters criminal activity and creates a safe 

environment for postal employees and customers. 

PPO duties include responses to reports of rifl ed mail, 

burglar alarms, and medical emergencies. For example, 

at the Postal Service’s National Headquarters facility in 

late September, PPOs were contacted when an employee 

complained of chest pains and had diffi culty breathing. 

PPOs responded immediately and provided oxygen, while 

also contacting a local emergency medical unit, which 

transported the employee to a nearby hospital.

SECURITY AND CRIME PREVENTION

As Chief Security Offi cer for the Postal Service, the Chief Postal Inspector is responsible 

for the physical protection of all postal facilities, personnel, and assets, as well as the 

Postal Service’s information security program. The Chief Postal Inspector maintains liaison 

with other investigative and law enforcement agencies, including the DHS, the Federal 

Emergency Management Agency (FEMA), and other national emergency coordinators.

SECURITY
34 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

NATIONAL PREPAREDNESS

Access-Control Protection for Postal Facilities

The Postal Inspection Service teamed with Postal Service 

staff from the Information Technology and Facilities 

offi ces to deploy the Enterprise Physical Access Control 

System (ePACS). ePACS is a security system that links 

the Postal Service’s computerized access control systems 

nationwide through its local area network. When actions 

are taken in one system, such as an employee termination 

or a suspension of access, they are refl ected systemwide. ePACS signifi cantly enhances the security of postal 

employees, facilities, and assets. ePACS is now installed in 

176 facilities nationwide. 

In the second half of FY 2009, the access control system at 

National Headquarters was updated to meet the new ePACS 

standard. The new system will be one of the largest ePACS 

sites nationally, comprising more than 3,500 employees, 

1,000 contractors, and 130 card readers. 

Facility Security Reviews 

Postal Inspectors worked with staff from the Postal 

Service’s Facilities offi ce, during the second half of the 

fi scal year, to conduct risk assessments of new postal 

facilities and postal facilities undergoing renovations. The 

assessments ensure appropriate security measures are 

incorporated into construction plans for the facilities. This 

practice assures that facilities offer appropriate protection 

for postal employees, customers, and assets.

In reviews of existing postal facilities, Postal Inspectors 

identifi ed problems with doors, windows, fencing and 

gates; hardware-related issues, such as damaged fences; 

and procedural issues, such as doors that were propped 

open and employees who were not wearing IDs. Postal 

Inspectors issued recommendations to postal managers to 

correct the problems.

Infrastructure Security Assessment Program 

Security staff conducted reviews under the Infrastructure 

Security Assessment Program throughout FY 2009. The 

program uses standardized methodology to assess security 

and measure compliance with Postal Service and Postal 

Inspection Service security policies at postal installations 

throughout the country.

Postal Inspectors and Homeland Security Coordinators 

visited facilities to gather information from managers 

and use on-site observations of physical security, mail 

security, and internal security to assess compliance. 

At the conclusion of the initial assessments, reviewers 

and facility managers developed improvement plans to 

address security defi ciencies. The reviewers later made 

an unannounced follow-up visit to monitor the progress of 

improvement strategies.

NATIONAL PREPAREDNESS

During the second 6 months of FY 2009, the National 

Preparedness Group continued to perform responsibilities 

related to incident management, infrastructure protection, 

aviation mail security, and emergency performance 

measurement — all key activities in preparing for, 

responding to, and assisting with recovery from major 

incidents affecting postal employees and operations. 

The Postal Inspection Service’s goal is to offer protection 

to employees and customers, provide for the security of 

the mail and the postal infrastructure, and ensure business 

continuity by anticipating threats to the Postal Service. 

Managers at each of the postal areas and Homeland 

Security Coordinators at each district synchronize their 

work with Postal Inspectors nationwide to ensure readiness 

for all hazards, implement risk-mitigation plans and 

procedures, and deliver prompt, effective incident-response 

and recovery operations across the country. To accomplish 

this goal, group staff maintains a high level of national 

preparedness through coordinated planning and oversight. 

The Postal Inspection Service also continued to implement, 

manage, and refi ne resources pertinent to emergency 

responses and incident management. In the past 6 months, 

staff from the National Preparedness Group issued a 

National Preparedness Management Instruction and National 

Preparedness Program Guide. An updated Integrated 

Emergency Management Plan (IEMP) now clearly delineates 

the roles and responsibilities of emergency responders 

during all stages of a response and for all incident types. 

Group staff developed new response-plan templates 

for facilities lacking biohazard detection systems and is 

preparing a Pandemic Plan to address preparation, response, 

and recovery actions needed during pandemic events. 

Maintaining Postal Emergency Programs 

and Systems

Over the past year, National Preparedness staff began 

implementing the consolidated Postal Notifi cation 

Emergency Management System, or PNEMS, which 

combines the existing Watch Desk program and 

Postal Alert Network System (PANS). PNEMS delivers 

automated notifi cations to Postal Inspection Service 

staff and personnel from the Postal Service’s Emergency 

Management Teams (EMTs). 

PNEMS supplements existing notifi cation processes 

by providing Postal Inspection Service personnel with 

Essential Crisis Management (ECM), which is incident 

management software, to coordinate activities related to 

emergency responses. ECM improves communications 

between responders and postal management teams during 

critical incidents. 
April 1 – September 30, 2009 | 35 

NATIONAL PREPAREDNESS

National Preparedness staff oversaw the maintenance 

of large generators at numerous postal facilities during 

the reporting period. Group members renewed contracts 

for Emergency Preparedness Response and Recovery 

Services (EPRRS), certifi ed the Critical Reserve Stockpile 

for postal employees, and deployed food and water during 

numerous test exercises held during the reporting period. 

Work continued on updating the Postal Service’s Geospatial 

Information System (GIS) Technologies, which identify 

critical postal facilities in the path of approaching storms, 

provide fl ood-plain modeling and real-time storm updates, 

and help estimate anticipated impacts on postal assets. 

Collectively, these programs and systems ensure the Postal 

Service’s emergency-response capabilities during critical 

incidents. National Preparedness staff also met with postal 

Area personnel, District Managers, and EMT members in 

disaster-prone areas to assess levels of readiness and the 

implementation of protective measures.

Test, Training, and Exercise Program

This program ensures that Postal Service personnel, 

equipment, and procedures are in a constant state of 

readiness to manage an emergency without interrupting 

operations. The Postal Inspection Service conducts, reviews, 

and evaluates training on proper procedures for emergencymanagement personnel and other essential staff. Testing 

ensures that essential equipment and information systems, 

and the processes and procedures needed to use them, are 

viable and conform to proper specifi cations. The exercises 

promote preparedness, improve response capabilities 

for individuals and functions, assure that all systems are 

appropriate, and determine the effectiveness of command, 

control, and communications processes.

The Postal Inspection Service participated in local and 

national emergency response tests during the past 6 months 

to assess the integration of its facilities’ plans with other 

emergency response providers by testing local preparedness 

and continuity-of-operations plans. The activities were 

designed to improve coordination among Postal Service 

functional areas, minimize duplication of planning, and 

establish a standardized emergency management process.

Also in the second half of FY 2009, the Postal Inspection 

Service conducted Tabletop Exercises at more than 42 postal 

locations nationally to test its ability to respond to natural, 

technological, or manmade incidents. The exercises provided 

incident-management instruction and 2- to 4-hour sessions 

of incident simulations. They also tested Postal Inspectors’ 

use of the Incident Command System, communications, 

resources, and strategic and tactical decision-making. 

Staff members helped implement the Federal Emergency 

Management Agency’s National Exercise Schedule (NEXS), 

as the Postal Inspection Service is a stakeholder in the 

National Level Exercise and Principal Level Exercise. 

The Postal Inspection Service partners with other federal 

agencies to collaborate, coordinate, critique, and provide 

essential feedback in support of its national responsereadiness operations.

About 90 personnel from the National Preparedness group 

completed federally mandated training during the reporting 

period to gain national credentials in emergency-response 

training. By partnering with other Postal Inspection Service 

fi eld divisions, staff successfully conducted a “trainthe-trainer” session in Incident Command Systems and 

developed 21 Postal Inspection Service trainers to deliver 

response programs to federal partners nationwide.

Natural and Manmade Disasters 

The Postal Inspection Service responds to emergencies 

related to hurricanes, fl oods, fi res and other incidents 

affecting postal operations. Staff coordinates the 

deployment of emergency equipment and supplies and 

assists with damage assessments and recovery, including 

Postal Inspectors, working with the cooperation of state and local fi rst responders, conducted a full-scale 

biohazard detection system (BDS) drill in August at the Charlotte, NC, P&DC. Following a simulated BDS 

alert, postal employees evacuated the building and a Unifi ed Command was staffed with representatives 

of the Postal Inspection Service, Postal Service, Charlotte Fire Department, Charlotte-Mecklenburg Police 

Department, DHS, and state and county health departments. Volunteers were “decontaminated,” hazwopertrained responders donned approved protective gear, and the simulated BDS item was prepared for 

transportation to a forensic lab. The Postal Emergency Management Team followed response protocols, 

including activating continuation-of-operation plans, accounting for and recalling outgoing mail trucks, and 

rerouting incoming mail trucks. The exercise facilitators deemed the exercise a success.
36 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

GLOBAL SECURITY AND INVESTIGATIONS

hazardous and toxic-material removal. Safely removing 

hazardous materials from the postal system and educating 

employees and customers about nonmailable items are 

priorities of the Postal Inspection Service.

To ensure compliance with security measures, Postal 

Inspectors and National Preparedness staff conducted 

security-assessment reviews at postal facilities nationwide 

in the second half of 2009. Reviews are tailored to meet 

the risks inherent in each geographical region. The staff 

evaluates compliance with security requirements for 

building and vehicle security, accountable mail handling, 

and the local enforcement of employee identifi cation 

requirements. Both before and after disasters, National 

Preparedness staff employs a wide array of tools and 

processes to establish performance measures that will 

ensure effective and cost-effi cient security for employees, 

assets, and business operations. 

During the reporting period, Postal Inspectors and 

Homeland Security Coordinators participated in responses 

to these large-scale events occurring across the country 

and affecting postal employees and customers:

 Flooding in the Midwest in March and April.

 Flooding in north Florida in April.

 Flooding in Ohio and Pennsylvania in July.

 Hoax anthrax threat in south Maine in July.

 Hurricanes Enrique and Felix in August.

Hazardous Material 

Under an interagency agreement, the Postal Inspection 

Service works to ensure that its operations meet 

Department of Transportation program requirements 

regarding the transportation of hazardous materials. 

The Postal Inspection Service’s Hazmat Communications 

Plan promotes awareness of hazmat protocols among postal 

employees and customers, and staff continually reviews 

and re-evaluates communications to ensure they meet 

current needs. In the second half of FY 2009, four articles 

were placed in internal postal communications vehicles to 

publicize the introduction of new civil penalties and remind 

retail employees to ask postal customers hazmat-related 

questions when submitting packages for mailing.

The Postal Inspection Service is responsible for investigating 

incidents related to the enforcement of civil penalties. Four 

incidents involving the mailing of hazardous materials 

are currently under investigation by the Postal Inspection 

Service. Civil penalties may be assessed depending on the 

outcome of investigations against customers who mailed or 

caused to be mailed hazardous material.

GLOBAL SECURITY AND 

INVESTIGATIONS

The mission of the Global Security and Investigations 

Division is to protect the Postal Service’s international and 

military mail operations and related assets worldwide. 

In support of this mission, division personnel conduct 

domestic and international investigations and liaison with 

foreign postal administrations, security personnel, and other 

law enforcement agencies. 

Postal Inspectors engage in mail security and prevention 

initiatives and investigative work in support of this mission. 

Postal Inspectors continue to work closely with the Postal 

Service’s offi ces of Global Business and International Postal 

Affairs, as well as other stakeholders worldwide. Their 

efforts include security consulting and investigations with 

foreign postal administrations through the Postal Security 

Group (PSG) of the Universal Postal Union (UPU) and other 

international postal unions. 

Investigations continue at the fi ve gateway cities, which 

feature the Postal Service’s international service centers 

(ISC): Miami, San Francisco, Los Angeles, Chicago and 

New York, where Postal Inspection Service gateway task 

forces comprising Postal Inspectors and OIG Special Agents 

work together to prevent mail theft, stop revenue loss, 

and ensure the security of international mail. Task force 

investigations have resolved signifi cant security issues both 

in the United States and abroad. 

Following are examples of investigations conducted during 

the reporting period.

 Members of the Miami International Airport Task Force 

arrested a Colombian national, in August, as a result of 

an undercover sting to halt the mailing of stolen U.S. 

and Canadian business checks intended for delivery to 

Colombia. Postal Inspectors investigated the case with 

Colombian law enforcement offi cers and the Colombian 

postal administration. 

 The JFK Gateway Task Force in New York received 

a parcel seized during an interdiction conducted 

under Operation Stamp Out in Memphis, TN (more 

information on Operation Stamp Out appears later 

in this section). The intercepted parcel was mailed 

from Lagos, Nigeria, and contained $324,700 in 

counterfeit postal money orders. Task force members 

delivered the parcel, with Special Agents from the ICE 

and offi cers from the Ramapo, NY, Police Department, 

and arrested a suspect who accepted delivery of the 

parcel on July 21. He was remanded pending a future 

immigration hearing. 
April 1 – September 30, 2009 | 37 

CYBER INTELLIGENCE

 Postal Inspectors on the Chicago Gateway Task Force 

received reports of mail theft, most of which involved 

military mail traveling between Chicago, IL, and 

Frankfurt, Germany. Task force members conducted 

surveillance and testing operations, resulting in the 

detention of 15 airline contract employees. As a 

result of the investigation by Postal Inspectors, the 

contractors’ access badges were confi scated and 

security clearances revoked in January. 

Global Security Initiatives

In a continued proactive effort to protect the revenue 

and assets of the Postal Service, Global Security and 

Investigations staff implemented and maintained a number 

of security initiatives in FY 2009, some of which are 

described below.

Click-N-Ship Initiative. The Postal Service can suffer 

signifi cant losses as well as damage to its brand integrity 

when postal products or services are targeted by criminal 

schemes. Recently, the Postal Service has suffered from 

a barrage of schemes generally referred to as reshipping 

fraud. Criminals involved in reshipping fraud exploit the 

Postal Service’s Click-N-Ship program, its retail facilities 

(known as Postal Stores), and mail processing and dispatch 

systems to fraudulently obtain and use postage to mail 

stolen goods to foreign countries. 

To counter these schemes, Postal Inspectors from the 

Global Security and Investigations Division conducted 

interdictions at each of the Postal Service’s fi ve ISCs, 

seeking parcels bearing fraudulent postage-paid shipping 

labels. To date, Postal Inspectors have seized 1,509 parcels, 

realizing savings to the Postal Service of more than 

$220,000 in fraudulent postage. As a direct result of the 

interdiction, by August 2009 fraudulent sales via Click-NShip fell to less than 1 percent, representing a signifi cant 

improvement and cost-savings to the Postal Service.

Operation Stamp Out. To combat a rise in the importation 

and distribution of counterfeit postal products into the 

United States, the National Intellectual Property Rights 

Coordination Center (IPR Center) worked with the Postal 

Inspection Service to organize Operation Stamp Out. Led 

by the Global Security and Investigations Division, the 

initiative leverages external resources to support overall 

cost-containment goals. Operation Stamp Out combines 

expertise provided by ICE, the Postal Inspection Service, 

and Customs and Border Protection to identify and 

investigate transnational criminal organizations responsible 

for counterfeiting postal money orders, stamps, and meter 

stamps. Since July, interdictions associated with Operation 

Stamp Out have resulted in the seizure of more than 6,400 

counterfeit fi nancial documents with a face value of more 

than $10 million. About $3 million worth of the counterfeits 

were postal money orders.

CYBER INTELLIGENCE

The mission of the Postal Inspectors, Intelligence Analysts, 

and support personnel of the Cyber Intelligence Group is 

to address cyber threats targeting the Postal Service and 

its customers, and to develop solutions that can mitigate 

those threats. In FY 2009, their mission was accomplished 

through these actions:

 Participating as an agency member of the National 

Cyber and Forensic Training Alliance (NCFTA) and the 

Computer Emergency Response Team Coordination 

Center (CERT CC) in Pittsburgh, PA. NCFTA is a nonprofi t group that allies academia, law enforcement, and 

industry groups to combat cyber criminals around the 

globe through joint initiatives addressing signifi cant 

cyber threats.

 Aiming core intelligence work at signifi cant criminal 

targets affecting the Postal Service and its customers. 

 Building relationships with foreign and domestic law 

enforcement and intelligence agencies, businesses, 

and academic institutions.

Under Operation Stamp Out, a Postal Inspection Service initiative begun in FY 2009, Postal Inspectors were 

joined by agents from ICE and Customs and Border Protection to interdict counterfeit postal products coming 

in to the United States from other countries. Authorization was provided to interdict not only U.S. Mail, but also 

mail shipped via FedEx and UPS. Since July, interdictions associated with Operation Stamp Out have resulted 

in the seizure of more than 6,400 counterfeit fi nancial documents with a face value of more than $10 million. 

About $3 million worth of the counterfeits were postal money orders.
38 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

CYBER INTELLIGENCE

 Providing timely, accurate reporting of cyber crime-related 

business risks affecting current and upcoming Postal 

Service operations, customers, and business partners.

 Mitigating criminal risks and fi nancial exposure to 

protect postal revenue.

 Providing comprehensive cyber-security recommendations 

that are associated with the development of new, 

consumer-based e-Commerce products.

Cyber Intelligence staff devotes signifi cant attention 

to protecting the Postal Service’s Intranet and Internet 

networks from criminal activity. Postal Inspectors working 

with NCFTA have been focusing particularly on the 

criminal exploitation of the Postal Service’s Click-N-Ship 

online postage application, available at www.usps.com.

In FY 2009, Cyber Intelligence personnel identifi ed and 

blocked 15,951 stolen credit card numbers being used by 

criminals to establish 30,600 online accounts to illegally 

obtain postage-paid shipping labels. Cyber Intelligence 

staff also share pertinent fraud information with credit 

card companies and Internet payment services to assist 

mailers in protecting their businesses as well, and for good 

reason — when Postal Inspectors identify and share stolen 

credit card data, online payment provider PayPal, a major 

customer of the Postal Service, estimates it saves about 

$10,000 a day. 

Cyber Intelligence Investigations

The Cyber Intelligence group also initiates and conducts 

criminal investigations. Postal Inspectors assigned to 

NCFTA identifi ed a Russian male who was operating a 

variety of schemes in the Virginia Beach area. The schemes 

involved the sale of compromised credit cards, the theft of 

mail, and the fraudulent use of Click-N-Ship products — all 

components of an international counterfeit check scam. 

The 7-month investigation identifi ed the Russian, who 

had been living illegally in the United States for more than 

4 years, as the primary suspect. Postal Inspectors working 

undercover purchased 59 compromised credit cards 

from an online “carding” forum, believed to be run by the 

suspect, with available credit of more than $592,000. After 

reviewing the suspect’s e-mail accounts, they determined 

he was working with accomplices in Russia who were 

operating a check counterfeiting scheme. His accomplices 

mailed him electronic versions of checks and pre-paid 

Express Mail Click-N-Ship labels. He printed the checks, 

signed them, and mailed them (using the pre-paid postage) 

to individuals recruited to negotiate the checks and mail 

the money overseas. He also used stolen credit card 

information to order merchandise from online retailers for 

shipment to U.S. addresses and to buy online postage to 

mail the stolen goods. Postal Inspectors and other federal 

law enforcement offi cials executed a search warrant at 

the suspect’s home in July and arrested him after seizing 

several laptops, cell phones, $2,000 in cash, a pilot’s 

license, several IDs, a U.S. Military IED training manual, and 

stolen mail containing debit cards. He was deemed a fl ight 

risk and, on August 25, agreed to a plea deal that included 

a 2-year prison sentence, the forfeiture of electronic 

equipment, deportation, and testimony on an unrelated 

investigation involving the statutory rape of a 13-year-old 

girl lured to Virginia Beach via the Internet. 

Cyber Intelligence staff also has been actively engaged in 

an ongoing project to redesign the Postal Service’s Internet 

Web site. Many of the applications on the site operate 

independently and use different log-on procedures, user 

authentications, and payment systems; the new project 

will result in a multichannel system that consolidates all 

online transactions into a single interface. The operational 

scope of and anticipated revenue from these services are 

vast and make the Postal Service extremely vulnerable to 

cyber fraud. Long-term goals forecast that a potential 50 

percent of annual postal revenue could be funneled through 

online transactions via millions of user accounts. Revenue 

protection, information security, and Internet-Intranet 

infrastructure stability are vital to the success of the Postal 

Service, and the Cyber Intelligence Group is working to 

ensure that opportunities for criminal exploitation that could 

negatively impact postal revenue, liability, and customer 

confi dence are eliminated.

Securing Data Breaches

Cyber Intelligence staff began developing a Data 

Compromise Response Plan (DCRP), in FY 2009, to provide 

the Postal Service with a strategy to address potential 

breaches of critical data. As a business function and 

asset, the Postal Service holds or processes signifi cant 

records integral to the postal infrastructure, as well 

personal information on employees and customers. Any 

compromise of confi dential or privileged information 

entrusted to the Postal Service would require a rapid, 

comprehensive, and coordinated response. DCRP defi nes 

roles and responsibilities for critical incident response 

team members, defi nes incident severity levels, outlines 

a process fl ow for incident management, and includes 

methodologies for conducting response activities. In 

support of this initiative, the Cyber Intelligence group is 

an active participant in Homeland Security Presidential 

Directive 5, which requires that federal agencies develop 

a comprehensive framework to facilitate coordinated 

responses by government, the private sector, and allies to a 

signifi cant cyber incident.
April 1 – September 30, 2009 | 39 

CONSUMER EDUCATION AND FRAUD PREVENTION

CONSUMER EDUCATION AND 

FRAUD PREVENTION

Postal Inspectors lead anti-fraud projects and work with 

other agencies and groups to teach Americans how to 

protect themselves from fraudulent scams that involve the 

mail. An informed public is the fi rst line of defense against 

con artists, and Postal Inspectors are committed to 

helping Americans learn about fraud prevention. Programs 

led by the Postal Inspection Service, often working 

with Postal Service staff, draw attention to recent fraud 

trends to help postal customers become more aware of 

fraudulent products, materials, and services that may rely 

on the mail, and to improve the public’s knowledge of how 

to combat fraud. 

Fraud-Prevention Information for Postal 

Employees and Customers

The Postal Inspection Service offers consumer-fraud 

information, fraud alerts, wanted and reward posters, 

and related information on its website: www.usps.com/

postalinspectors. Postal customers can report suspected 

identity theft, mail theft or tampering, mailbox vandalism, 

and mail fraud online at the site.

The Postal Inspection Service also publishes brochures 

and publications designed to educate postal customers 

about mail-related crime. Publications on identity fraud, 

sweepstakes scams, and other crimes conducted through 

the mail are available online for viewing and printing at the 

Postal Inspection Service’s Internet Web site.

Partnering With Industry to Deliver Public 

Service Announcements

Microsoft Corporation, in collaboration with the Postal 

Inspection Service, the Federal Trade Commission, and 

Western Union, launched a series of online public service 

announcements (PSAs) in September to help protect 

consumers from scams related to mortgage foreclosure 

rescue offers, bogus promises of credit repair, and 

advance-fee fraud, also known as lottery scams. The 

search advertising-driven PSAs appear on Bing, Microsoft’s 

new search engine, and targets consumers most vulnerable 

to these types of crimes, providing them with valuable and 

trustworthy information. 

The PSAs will be triggered by targeted search terms 

entered on Bing, such as “mortgage fraud,” “lottery,” and 

“money transfer.” Users who click on the sponsored ad will 

be directed to a landing page with guidance on avoiding 

scams and information about how to report a scam, if they 

have been victimized. By tying the information to online 

searches, the group aims to remind consumers to be on 

alert at precisely the moment they may likely be faced 

with scams.

National Preparedness Month

National Preparedness Month is held each September to 

encourage Americans to prepare for emergencies in their 

homes, businesses and communities. This year’s theme 

encouraged people to “Get a kit, make a plan, be informed, 

get involved.”

The Postal Inspection Service sponsored month-long events 

in September to help educate postal employees about 

how to prepare their homes for a hurricane or fl ood, what 

they should include in a basic emergency supply kit, and 

what factors they should consider in advance-planning for 

contacting emergencies.

Employees were encouraged to follow these three steps to 

prepare for potential emergencies:

1. Stock a supply kit with items needed to survive an 

emergency.

2. Make a family plan ahead of time to know what to do 

during an emergency.

3. Be informed about potential emergency situations that 

could occur.

Victim-Witness Assistance 

Program

Federal legislation mandating certain 

rights for victims and witnesses of 

crime was initially passed in 1982. As 

part of the Victim Witness Protection 

Act, Congress instructed the Attorney 

General to assure that all federal law 

enforcement agencies adopt guidelines 

consistent with the purpose of the 

act and related legislation. The Crime 

Victims’ Rights Act of 2004 added the 

most far-reaching legislation to date 

supporting victim rights. 

The Postal Inspection Service works 

with the DOJ and the law enforcement 

community to support the U.S. Attorney 

General’s Guidelines for Victims and 

Witnesses. The Postal Inspection 

Service’s responsibility is to identify 

potential victims related to its criminal 

investigations, provide them with timely 

Victims’ Rights poster.
40 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

CONSUMER EDUCATION AND FRAUD PREVENTION

notifi cation of their rights, and inform them of the services 

available to assist them.

Beyond legal mandates, victims may require the personal 

attention of a trained staff member — which often proves 

to be the service most valued and remembered. By 

identifying victims at the beginning of the investigation, 

the U.S. Attorney’s Offi ce may keep victims apprised of 

signifi cant events during the judicial process. If defendants 

are incarcerated, the Bureau of Prisons continues to keep 

the victims apprised of incarcerated events up to the 

defendant’s release. 

The Postal Inspection Service is only the second federal 

law enforcement agency to gain direct access to DOJ’s 

Victim Notifi cation System. Access was granted due to the 

high volume of Postal Inspection Service investigations that 

impact large numbers of victims.

Victim Outreach Last 6 Months of FY 2009

Notifi cations 41,559

Information and Referrals 406

Criminal Justice Support 975

Identity Theft Assistance 2,632

Senior Assistance 82

Victim Advocacy 900

The backbone of the Postal Inspection Service’s Victim 

and Witness Assistance Program is Publication 308, Know

Your Rights: A Guide for Victims & Witnesses of Federal 

Crimes, which also is available in Spanish. Postal Inspection 

Service staff provides the brochure to potential victims 

and witnesses of crimes when it is the lead investigative 

agency. The brochure informs them of their rights related to 

the investigative process, including notifi cations of arrests 

and other case activity. It advises them on what to do if they 

are threatened or harassed and it informs them of available 

services that provide assistance in recovering from the 

physical and emotional effects of a crime. 

National Crime Victims’ Rights Week 2009 

The Postal Inspection Service teamed with DOJ and the 

National Center for Victims of Crime to showcase “National 

Crime Victims’ Rights Week,” April 26 through May 2. This 

year, the annual campaign honored the Victims of Crime 

Act (VOCA) legislation passed 25 years ago that shaped 

the nation’s response to victims of crime. Prior to passage 

of VOCA, advocates struggled to gain recognition of victim 

rights. After the law’s enactment, victim compensation, 

training, and technical assistance, plus a host of other 

programs, began to reach the public. Posters and 

information cards were distributed to 15,000 Post Offi ces 

and more than 7 million customers who visited these 

facilities through May 2.

A ‘THANK YOU’ LETTER TO POSTAL INSPECTORS — FROM A 

POSTMASTER

[Postal Inspector] Bobby G. looked into my 70-year-old eyes, and very emphatically, very strongly, very determined, 

very respectfully, very compassionately, said, “We are going to keep you safe.” And they have done exactly that. They 

also kept me well informed, almost daily, as the case progressed. I also attended court proceedings. 

I have received many telephone calls from Postal Inspection Service personnel up the chain of command, concerned 

about my needs, both emotional and physical, and my well-being in general. Our side of the Postal Service has been 

just as diligent, concerned, and caring. I even received a personal letter from Mr. Potter. I have known for a long time 

that I worked for the best employer in the world, but the professionalism, dedication, and caring have all pushed the 

Postal Service up a few more notches.
The United States 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/

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
APPENDICES
April 1 – September 30, 2009 | 43 

APPENDIX A

Reports Issued to Postal Service Management

For the period April 1 – September 30, 2009

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

For the period April 1 – September 30, 2009

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

Unsupported 

Questioned Costs Revenue Impact

Strategic 11 $7,072,298,497 $15,313,493 $8,159,472 —

Financial 110 — $21,687,018 $1,091,385 $8,477,380 

Operational 46 $593,159,267 $1,229,278,258 $41,103,975 $518,533,023 

TOTAL 167 $7,665,457,764 $1,266,278,769 $50,354,832 $527,010,403 

Fiscal Year 2009 Summary

For the period October 1, 2008 – September 30, 2009

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

Unsupported 

Questioned Costs Revenue Impact

TOTAL 383 $7,905,486,474 $1,424,258,854 $175,570,839 $771,069,131 

APPENDIX A

APPENDICES

The Inspector General 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 and Postal Inspection Service 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.
44 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

Reports With Quantifi able Potential Monetary Benefi ts

Funds Put to 

Better Use Questioned Costs

Unsupported

Questioned Costs Revenue Impact

STRATEGIC RISK

Engineering

Custodial Maintenance: Nationwide; DA-AR-09-011(R); 8/13/2009 $996,588,215 — — —

Custodial Maintenance: New York District; DA-AR-09-007; 4/7/2009 $48,267,945 — — —

Delivery Bar Code Sorter Maintenance Opportunities; DA-AR-09-009; 7/23/2009 $69,538,189 $8,159,472 $8,159,472 —

Overall Equipment Effectiveness: Delivery Bar Code Sorter; 

DA-AR-09-010; 7/23/2009 $5,076,183 $5,481,804 — —

Sustainability: Promoting Energy and Recycling Compliance; 

DA-MA-09-001; 6/12/2009 $1,946,954 $1,672,217 — —

Network Optimization

Salt Lake City Airport Mail Center Closure; EN-AR-09-004; 9/21/2009 $881,011 — — —

Risk Analysis Research Center

Estimates of Postal Service Liability for Retiree Health Care Benefi ts; 

ESS-MA-09-001(R); 7/22/2009 $5,950,000,000 — — —

FINANCIAL RISK

Field Financial

Fiscal Year 2009 — Negative Master Trust Account Balances; 

FF-AR-09-226; 9/30/2009 — $101,284 $101,284 $45,990 

Fiscal Year 2009 Connecticut District Financial Risk Audit; 

FF-AR-09-225; 9/30/2009 — $63,014 $63,014 $26,260 

Fiscal Year 2009 Kentuckiana District Business Mail Entry Unit Financial Risk Audit; 

FF-AR-09-221; 9/17/2009 — — — $123,560 

Fiscal Year 2009 Phoenix Financial Risk Audit; FF-AR-09-200; 7/24/2009 — $81,502 $66,945 $84,592

Northland District — Business Mail Entry Financial Risk; 

FF-AR-09-224; 9/28/2009 — — — $3,664 

Philadelphia District Post Offi ce Financial Risk Audit; FF-AR-09-223; 9/25/2009 — $704,979 $606,306 $240,508 

Rio Grande District — Vending Operations Risk; FF-AR-09-205; 8/6/2009 — $6,128 $6,128 $9,241 

Fiscal Year 2009 Financial Installation Audit

Anderson Post Offi ce — Anderson, CA; FF-AR-09-164; 5/13/2009 — $1,300 $1,121 — 

Ash Creek Post Offi ce — Urbandale, IA; FF-AR-09-143; 4/15/2009 — $489 $489 $7,489 

Birmingham Main Offi ce Window Unit — Birmingham, AL; 

FF-AR-09-194; 7/10/2009 — $8,782 $1,100 $111,490 

Brooklyn Business Mail Entry Unit — Brooklyn, NY; FF-AR-09-168; 5/18/2009 — — — $9,246 

Calabasas Branch — Woodland Hills, CA; FF-AR-09-137; 4/3/2009 — $1,621 — $2,027 

Camp Hill Post Offi ce — Camp Hill, PA; FF-AR-09-154; 4/30/2009 — — — $14,550 

Conshohocken Post Offi ce — Conshohocken, PA; FF-AR-09-153; 4/28/2009 — $4,740 $4,740 $2,010 

Cornerstone Station — Houston, TX; FF-AR-09-198; 7/15/2009 — $521 $337 $2,266 

El Paso Business Mail Entry Unit — El Paso, TX; FF-AR-09-184; 6/18/2009 — — — $16,243 

Eugene River Road Station — Eugene, OR; FF-AR-09-201; 7/21/2009 — $1,375 $1,375 —

APPENDIX A
April 1 – September 30, 2009 | 45 

Funds Put to 

Better Use Questioned Costs

Unsupported

Questioned Costs Revenue Impact

Gulfport Downtown Station — Gulfport, MS; FF-AR-09-150; 4/27/2009 — $756 $756 $545 

Hales Corners Post Offi ce — Hales Corners, WI; FF-AR-09-166; 5/15/2009 — $26,273 — $560 

Hampden Station — Baltimore, MD; FF-AR-09-155; 5/5/2009 — $5,370 $2,872 $4,573 

Hampton Park Station — Capital Heights, MD; FF-AR-09-202; 7/27/2009 — $27,078 $9,002 —

Highland Springs Branch — Richmond, VA; FF-AR-09-149; 4/29/2009 — $3,799 $3,556 $810 

Hopkins Post Offi ce — Hopkins, MN; FF-AR-09-210; 8/17/2009 — $6,544 — $1,000 

Kensington Post Offi ce — Kensington, MD; FF-AR-09-185; 6/18/2009 — $6,809 $6,809 $1,748 

Kent Downtown Station — Kent, WA; FF-AR-09-139; 4/10/2009 — $2,052 $775 —

Kinston Post Offi ce — Kinston, NC; FF-AR-09-147; 4/30/2009 — $6,794 $4,240 $500 

Lakeville Post Offi ce — Lakeville, MN; FF-AR-09-151; 4/24/2009 — $1,284 — —

Nashville General Mail Facility Window Unit — Nashville, TN; 

FF-AR-09-171; 5/20/2009 — $1,542 $1,542 $4,740 

New Brunswick Business Mail Entry Unit — Edison, NJ; FF-AR-09-182; 6/17/2009 — — — $7,566 

Orlando Main Offi ce Window Unit — Orlando, FL; FF-AR-09-138; 4/6/2009 — $8,308 $8,308 —

Portland Main Post Offi ce — Portland, OR; FF-AR-09-199; 7/16/2009 — $1,864 $1,864 $6,631 

San Francisco Business Mail Entry Unit — San Francisco, CA; 

FF-AR-09-188; 6/24/2009 — — — $3,584 

San Jose Main Post Offi ce — San Jose, CA; FF-AR-09-173; 6/2/2009 — $14,397 $12,715 $546 

South Livingston Post Offi ce — Livingston, NJ; FF-AR-09-203; 7/29/2009 — $1,797 $1,797 —

St. Louis Main Finance Unit Post Offi ce — St. Louis, MO; 

FF-AR-09-209; 8/13/2009 — $65,527 $58,716 $919 

St. Paul Main Offi ce Station — St. Paul, MN; FF-AR-09-152; 4/27/2009 — — — $5,839 

Waseca Business Mail Entry Unit — Waseca, MN; FF-AR-09-190; 6/24/2009 — — — $3,350 

Westminster Post Offi ce — Westminster, MD; FF-AR-09-213; 8/20/2009 — $4,599 $2,592 $1,811 

Supply Management 

Equitable Adjustment Proposal Submitted by Pitney Bowes Government Solutions; 

CA-CAR-09-015; 5/12/2009 — $2,514,232 — —

Firm Fixed Price Proposal Submitted by Evogen, Incorporated; 

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

Firm Fixed Price Proposal Submitted by Western Industrial Contractors, 

Incorporated; CA-CAR-09-016; 6/4/2009 — $8,984,664 — —

Flats Sequencing System Contractual Remedies; CA-AR-09-006; 7/1/2009 — $500,000 — $7,733,522 

Proposal Submitted by IBM Global Business Services, Public Sector/Federal; 

CA-CAR-09-022; 9/10/2009 — $3,941,415 — —

Proposal Submitted by Lockheed Martin Systems Integration, Owego, Distribution 

Technologies; CA-CAR-09-014; 5/5/2009 — $3,013,403 — —

Proposal Submitted by Northrop Grumman Corporation, Electronic Systems 

Company; CA-CAR-09-013; 5/1/2009 — $879,530 $60,871 —

Termination Settlement Proposal Submitted by C.R. Daniels, Incorporated; 

CA-CAR-09-019; 7/24/2009 — $336,849 — —

APPENDIX A
46 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX A

Funds Put to 

Better Use Questioned Costs

Unsupported

Questioned Costs Revenue Impact

OPERATIONAL RISK

Delivery

Delivery Vehicle Fuel Management; DR-AR-09-009; 9/28/2009 $21,423,261 $1,784,914 — —

Management of Delivery Point Sequencing Percentage Increases for City 

Delivery — Nationwide Review; DR-AR-09-010; 9/28/2009 $88,216,079 $177,042,301 — —

Postal Service 2009 National Rural Mail Count — Nationwide Review; 

DR-AR-09-006; 6/26/2009 — $598,593 $598,593 —

Vehicle Maintenance Facilities — Scheduled Maintenance Service in the Eastern 

Area; DR-AR-09-005; 4/23/2009 $10,898,100 — — —

Vehicle Maintenance Facilities Scheduled Maintenance — National Capping Report; 

DR-AR-09-007; 6/30/2009 — $40,505,382 $40,505,382 —

Inspection Service & Facilities 

Postal Service Aviation Security Capping Report; SA-AR-09-008; 9/29/2009 — — — $6,087,840 

Network Optimization 

Assessment of Overall Plant Effi ciency; NO-MA-09-002; 5/8/2009 — $969,495,708 — —

Boston Airport Mail Center Outsourcing; EN-AR-09-003; 5/14/2009 $318,330 $501,466 — —

Powered Industrial Vehicle Management System at the Oakland Processing and 

Distribution Center; NO-AR-09-007; 7/23/2009 $14,598,866 — — —

Sunday Mail Processing Operations; NO-AR-09-012; 9/25/2009 $38,250,365 — — —

Sales and Service 

Mail Processing Equipment’s Ability to Read Postage on First-Class Letters; 

MS-AR-09-008; 5/28/2009 — — — $512,445,183 

Transportation 

Air Networks — Chicago O’Hare Airport Mail Center Operations; 

NL-AR-09-011; 9/30/2009 — $10,588,950 — —

Air Networks — Federal Express Transportation Agreement — Southeast Area; 

NL-AR-09-007; 7/31/2009 $43,387,262 $8,630,104 — —

Fuel Management Consumption Strategies for Surface Network Operations; 

NL-AR-09-010; 9/30/2009 $364,195,083 — — —

Fuel Management Initiatives for Surface Network Operations — Fuel Purchasing 

Strategy; NL-MA-09-001; 8/5/2009 — $20,000,000 — —

Postal Vehicle Service Transportation — Philadelphia Bulk Mail Center; 

NL-AR-09-005; 7/17/2009 $4,336,804 — — —

Postal Vehicle Service Transportation Routes — Philadelphia Processing and 

Distribution Center; NL-AR-09-006; 7/20/2009 $5,386,529 — — —

Vehicle Management — National Trailer Lease Renewal — Western Area; 

NL-AR-09-008; 8/14/2009 $2,148,588 $130,840 — —

TOTAL $7,665,457,764 $1,266,278,769 $50,354,832 $527,010,403
April 1 – September 30, 2009 | 47 

APPENDIX A

STRATEGIC

Engineering

Automated Flats Sorting Machine 100 Images:

Security of Sensitive Customer Data; 

DA-AR-09-008; 4/10/2009

Custodial Maintenance: Nationwide; 

DA-AR-09-011(R); 8/13/2009

Custodial Maintenance: New York District; DAAR-09-007; 4/7/2009

Delivery Bar Code Sorter Maintenance 

Opportunities; DA-AR-09-009; 7/23/2009

Electrifi cation of Postal Service Delivery Vehicles; 

DA-WP-09-001; 8/28/2009

Flats Sequencing System: First Article Retest 

Results; DA-AR-09-012; 9/4/2009

Overall Equipment Effectiveness: Delivery Bar Code 

Sorter; DA-AR-09-010; 7/23/2009

Sustainability: Promoting Energy and Recycling 

Compliance; DA-MA-09-001; 6/12/2009

Network Optimization

Performance Goals for Market-Dominant Products; 

EN-AR-09-005; 9/28/2009

Salt Lake City Airport Mail Center Closure; 

EN-AR-09-004; 9/21/2009

Risk Analysis Research Center

Estimates of Postal Service Liability for Retiree 

Health Care Benefi ts; 

ESS-MA-09-001(R); 7/22/2009

FINANCIAL

Field Financial

Fiscal Year 2009 — Negative Master Trust Account 

Balances; FF-AR-09-226; 9/30/2009

Fiscal Year 2009 Connecticut District Financial Risk 

Audit; FF-AR-09-225; 9/30/2009

Fiscal Year 2009 Kentuckiana District Business 

Mail Entry Unit Financial Risk Audit; 

FF-AR-09-221; 9/17/2009

Fiscal Year 2009 Phoenix Financial Risk Audit; 

FF-AR-09-200; 7/24/2009

Northland District — Business Mail Entry Financial 

Risk; FF-AR-09-224; 9/28/2009

Philadelphia District Post Offi ce Financial Risk 

Audit; FF-AR-09-223; 9/25/2009

Postal Service's Relocation Policy; 

FF-AR-09-211; 8/26/2009

Rio Grande District — Vending Operations Risk; 

FF-AR-09-205; 8/6/2009

Fiscal Year 2009 Financial Installation Audit

Anderson Post Offi ce — Anderson, CA; 

FF-AR-09-164; 5/13/2009

Ash Creek Post Offi ce — Urbandale, IA; 

FF-AR-09-143; 4/15/2009

Ayer Business Mail Entry Unit — Ayer, MA; 

FF-AR-09-157; 5/4/2009

Birmingham Main Offi ce Window Unit — 

Birmingham, AL; FF-AR-09-194; 7/10/2009

Brooklyn Business Mail Entry Unit — Brooklyn, NY; 

FF-AR-09-168; 5/18/2009

Bryan Business Mail Entry Unit — Bryan, TX; 

FF-AR-09-208; 8/10/2009

Calabasas Branch — Woodland Hills, CA; 

FF-AR-09-137; 4/3/2009

Camp Hill Post Offi ce — Camp Hill, PA; 

FF-AR-09-154; 4/30/2009

Chippewa Falls Business Mail Entry Unit — 

Chippewa Falls, WI; FF-AR-09-169; 5/19/2009

Clearwater Beach Station — Clearwater, FL; 

FF-AR-09-140; 4/20/2009

Clearwater Main Post Offi ce — Clearwater, FL; 

FF-AR-09-207; 8/6/2009

Conshohocken Post Offi ce — Conshohocken, PA; 

FF-AR-09-153; 4/28/2009

Cornerstone Station — Houston, TX; 

FF-AR-09-198; 7/15/2009

Des Moines Main Offi ce Station — Des Moines, IA; 

FF-AR-09-193; 7/2/2009

El Paso Business Mail Entry Unit — El Paso, TX; 

FF-AR-09-184; 6/18/2009

Eugene River Road Station — Eugene, OR; 

FF-AR-09-201; 7/21/2009

Evergreen Main Post Offi ce — Evergreen, CO; 

FF-AR-09-189; 6/24/2009

Fairplay Main Post Offi ce — Fairplay, CO; 

FF-AR-09-146; 4/21/2009

Festus Post Offi ce — Festus, MO; 

FF-AR-09-186; 6/19/2009

Fort Dodge Business Mail Entry Unit — Fort 

Dodge, IA; FF-AR-09-142; 4/15/2009

Fort Lauderdale Business Mail Entry Unit — Fort 

Lauderdale, FL; FF-AR-09-181; 6/16/2009

Foxboro Post Offi ce — Foxboro, MA; 

FF-AR-09-156; 5/1/2009

Franklin Post Offi ce — Franklin, TN; 

FF-AR-09-216; 8/21/2009

Front Royal Business Mail Entry Unit — Front 

Royal, VA; FF-AR-09-180; 6/12/2009

Grand Rapids Business Mail Entry Unit — Grand 

Rapids, MI; FF-AR-09-161; 5/7/2009

Gulfport Downtown Station — Gulfport, MS; 

FF-AR-09-150; 4/27/2009

Hales Corners Post Offi ce — Hales Corners, WI; 

FF-AR-09-166; 5/15/2009

Hampden Station — Baltimore, MD; 

FF-AR-09-155; 5/5/2009

Hampton Park Station — Capital Heights, MD; 

FF-AR-09-202; 7/27/2009

Henry Business Mail Entry Unit — Henry, IL; 

FF-AR-09-220; 9/4/2009

Highland Springs Branch — Richmond, VA; 

FF-AR-09-149; 4/29/2009

Hinsdale Branch — Hinsdale, IL; 

FF-AR-09-165; 5/14/2009

Holcomb Post Offi ce — Holcomb, KS; 

FF-AR-09-218; 8/31/2009

Hopkins Post Offi ce — Hopkins, MN; 

FF-AR-09-210; 8/17/2009

Imlay City Business Mail Entry Unit — Imlay City, 

MI; FF-AR-09-175; 6/4/2009

Report Listing

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

For the period April 1 – September 30, 2009
48 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

Jesup Business Mail Entry Unit — Jesup, GA; 

FF-AR-09-196; 7/14/2009

Kennewick Business Mail Entry Unit — Kennewick, 

WA; FF-AR-09-206; 8/6/2009

Kensington Post Offi ce — Kensington, MD; 

FF-AR-09-185; 6/18/2009

Kent Business Mail Entry Unit — Kent, WA; 

FF-AR-09-141; 4/14/2009

Kent Downtown Station — Kent, WA; 

FF-AR-09-139; 4/10/2009

Kinston Post Offi ce — Kinston, NC; 

FF-AR-09-147; 4/30/2009

Ladd Post Offi ce — Ladd, IL; 

FF-AR-09-163; 5/20/2009

Lafayette Plaza Station — Albany, GA; 

FF-AR-09-215; 8/20/2009

Lakeville Post Offi ce — Lakeville, MN; 

FF-AR-09-151; 4/24/2009

Lenoir City Business Mail Entry Unit — Lenoir City, 

TN; FF-AR-09-191; 6/29/2009

Linthicum Heights Post Offi ce — Linthicum, MD; 

FF-AR-09-192; 7/2/2009

Maple Grove Business Mail Entry Unit — Maple 

Grove, MN; FF-AR-09-183; 6/18/2009

Maryville Post Offi ce — Maryville, TN; 

FF-AR-09-167; 5/15/2009

Mathews Main Post Offi ce — Mathews, LA; 

FF-AR-09-212; 8/19/2009

Mobridge Business Mail Entry Unit — Mobridge, 

SD; FF-AR-09-176; 6/5/2009

Nashville General Mail Facility Window Unit — 

Nashville, TN; FF-AR-09-171; 5/20/2009

New Brunswick Business Mail Entry Unit — 

Edison, NJ; FF-AR-09-182; 6/17/2009

Newark Business Mail Entry Unit — Newark, NJ; 

FF-AR-09-158; 5/4/2009

Oconomowoc Post Offi ce — Oconomowoc, WI; 

FF-AR-09-179; 6/12/2009

Orlando Main Offi ce Window Unit — Orlando, FL; 

FF-AR-09-138; 4/6/2009

Oshkosh Post Offi ce — Oshkosh, NE; 

FF-AR-09-204; 7/30/2009

Oviedo Branch — Oviedo, FL; 

FF-AR-09-178; 6/9/2009

Pearl City Business Mail Entry Unit — Pearl City, 

HI; FF-AR-09-145; 4/20/2009

Plantation Station — Bossier City, LA; 

FF-AR-09-217; 8/26/2009 

Pocomoke City Post Offi ce — Pocomoke City, MD; 

FF-AR-09-177; 6/9/2009

Portland Main Post Offi ce — Portland, OR; 

FF-AR-09-199; 7/16/2009

Rando Cordova Business Mail Entry Unit — Rando, 

Cordova, CA; FF-AR-09-174; 6/5/2009

Rembert Post Offi ce — Rembert, SC; 

FF-AR-09-159; 5/5/2009

Rochester Business Mail Entry Unit — Rochester, 

MI; FF-AR-09-148; 4/23/2009

Rockford Business Mail Entry Unit — Rockford, 

MN; FF-AR-09-162; 5/8/2009

San Francisco Business Mail Entry Unit — 

San Francisco, CA; FF-AR-09-188; 6/24/2009

San Jose Main Post Offi ce — San Jose, CA; 

FF-AR-09-173; 6/2/2009

South Livingston Post Offi ce — Livingston, NJ; 

FF-AR-09-203; 7/29/2009

St. Louis Main Finance Unit Post Offi ce — St. 

Louis, MO; FF-AR-09-209; 8/13/2009

St. Paul Main Offi ce Station — St. Paul, MN; 

FF-AR-09-152; 4/27/2009

Stephenville Business Mail Entry Unit — 

Stephenville, TX; FF-AR-09-195; 7/14/2009

Stuttgart Business Mail Entry Unit — Stuttgart, AR; 

FF-AR-09-144; 4/15/2009

Topeka Main Post Offi ce — Topeka, KS; 

FF-AR-09-219; 9/2/2009

Utica Business Mail Entry Unit — Utica, NY; 

FF-AR-09-187; 6/24/2009

Vandalia Business Mail Entry Unit — Vandalia, IL; 

FF-AR-09-222; 9/16/2009

Veedersburg Post Offi ce — Veedersburg, IN; 

FF-AR-09-172; 5/21/2009

Waseca Business Mail Entry Unit — Waseca, MN; 

FF-AR-09-190; 6/24/2009

Westminster Post Offi ce — Westminster, MD; 

FF-AR-09-213; 8/20/2009

Whippany Post Offi ce — Whippany, NJ; 

FF-AR-09-160; 5/6/2009

Wichita Business Mail Entry Unit — Wichita, 

Kansas; FF-AR-09-197; 7/14/2009

Wilton Business Mail Entry Unit — Wilton, IA; 

FF-AR-09-170; 5/20/2009

Woodbridge Business Mail Entry Unit — 

Woodbridge, VA; FF-AR-09-214; 8/20/2009

Financial Reporting

Compliance with the Bank Secrecy Act; 

FT-AR-09-011; 9/22/2009

Financial Reporting Information under the Postal 

Accountability and Enhancement Act of 2006; 

FT-MA-09-003; 9/25/2009 

Independent Report on Withholdings and 

Contributions for Health Benefi ts, Life Insurance, 

Retirement, and Employee Headcount Data; 

FT-AR-09-010; 9/18/2009

Offi cer Compensation for Calendar Year 2008; 

FT-WP-09-002; 6/17/2009

Supply Management

Agreed Upon Procedures Review of Contract 

Number 512582-06-F-0008 with EMCOR Group 

Inc.; CA-CAR-09-012; 4/6/2009

Contractor Purchasing System Review of Siemens 

Energy and Automation Incorporated; 

CA-CAR-09-017; 7/10/2009

Equitable Adjustment Proposal Submitted by Pitney 

Bowes Government Solutions; 

CA-CAR-09-015; 5/12/2009

Firm Fixed Price Proposal Submitted by Evogen, 

Incorporated; CA-CAR-09-020; 7/30/2009

Firm Fixed Price Proposal Submitted by Western 

Industrial Contractors, Incorporated; 

CA-CAR-09-016; 6/4/2009

Fiscal Year 2006 Incurred Costs of Logistics 

Management Institute; CA-CAR-09-018; 7/9/2009

Flats Sequencing System Contractual Remedies; 

CA-AR-09-006; 7/1/2009

Information Technology’s Preferred Portfolio 

Partnering Program; CA-AR-09-007; 9/29/2009

Key Performance Indicators of C.H. Robinson, 

Contract Number 5BMSTR-05-B-3002; 

CA-CAR-09-021; 8/27/2009

Management of Contract Changes: Convergys 

Government Solutions, LLC; 

CA-AR-09-004; 4/9/2009

APPENDIX A
April 1 – September 30, 2009 | 49 

Pre-award Survey of Western Industrial 

Contractors, Inc. Accounting System; 

CA-CAR-09-023; 9/30/2009

Proposal Submitted by IBM Global Business 

Services, Public Sector/Federal; 

CA-CAR-09-022; 9/10/2009

Proposal Submitted by Lockheed Martin Systems 

Integration, Owego, Distribution Technologies; 

CA-CAR-09-014; 5/5/2009

Proposal Submitted by Northrop Grumman 

Corporation, Electronic Systems Company; 

CA-CAR-09-013; 5/1/2009

Supply Management’s Oversight of Delegations of 

Authority; CA-AR-09-005; 6/1/2009

Termination Settlement Proposal Submitted by C.R. 

Daniels, Incorporated; 

CA-CAR-09-019; 7/24/2009

OPERATIONAL 

Cost, Revenue, & Rates

Controls Over the Bulk Mail Revenue, Pieces, and 

Weight System; CRR-AR-09-007; 9/30/2009

Electronic Verifi cation System Rejected 

Transactions; CRR-AR-09-006; 8/19/2009

Follow-up Audit of the Management Operating 

Data System; CRR-AR-09-004; 4/14/2009 

Service Performance Measurement System — 

Delivery Confi rmation; 

CRR-AR-09-005; 8/14/2009

Delivery

Albuquerque District — Albuquerque City Delivery 

Unit Locations; DR-AR-09-008; 7/6/2009

Delivery Vehicle Fuel Management; 

DR-AR-09-009; 9/28/2009

Effects of the Flats Sequencing System on Delivery 

Operations — Northern Virginia District; 

DR-AR-09-011; 9/28/2009

Management of Delivery Point Sequencing 

Percentage Increases for City Delivery — 

Nationwide Review; DR-AR-09-010; 9/28/2009

Postal Service 2009 National Rural Mail Count — 

Nationwide Review; DR-AR-09-006; 6/26/2009

Vehicle Maintenance Facilities — Scheduled 

Maintenance Service in the Eastern Area; 

DR-AR-09-005; 4/23/2009

Vehicle Maintenance Facilities Scheduled 

Maintenance — National Capping Report; 

DR-AR-09-007; 6/30/2009

Human Capital

MVA Reduction Target-Setting Process; 

HM-MA-09-002; 9/1/2009

Suspension of Postmaster Convention Leave 

Benefi t; HM-MA-09-001; 8/24/2009

Information Systems

Address Quality; IS-AR-09-007; 7/30/2009

Business Partner Connectivity — Leased Line 

Firewalls; IS-AR-09-013; 9/29/2009

Chase Insight Application Review; 

IS-AR-09-011; 9/11/2009

Disaster Recovery Capabilities of the Enterprise 

Payment Switch; IS-AR-09-009; 7/30/2009

External Public Key Infrastructure Services — 

Fiscal Year 2009; IS-AR-09-012; 9/18/2009

Physical Access Controls at the Information 

Technology and Accounting Service Centers; 

IS-AR-09-008; 7/28/2009

UNIX Access Controls at the Information 

Technology and Accounting Service Centers; 

IS-AR-09-010; 8/10/2009

Inspection Service & Facilities

Handling of Package at the Eastmont Station; 

SA-AR-09-007; 9/30/2009

Market Rental Rates for 117 Leased Postal Service 

Facilities; SA-MA-09-002; 9/30/2009

Postal Service Aviation Security Capping Report; 

SA-AR-09-008; 9/29/2009

Postal Service Aviation Security Program at 

Contract Postal Units; SA-AR-09-005; 7/7/2009

Postal Service Aviation Security Program at Critical 

Postal Service Facilities; SA-AR-09-004; 6/3/2009

Postal Service Lease Process; 

SA-AR-09-006; 9/29/2009

Network Optimization

Assessment of Overall Plant Effi ciency; 

NO-MA-09-002; 5/8/2009

Boston Airport Mail Center Outsourcing; 

EN-AR-09-003; 5/14/2009

Canton Processing and Distribution Facility 

Outgoing Mail Consolidation; 

NO-AR-09-011; 9/22/2009

Color-Coding of Standard Mail and Mail Condition 

Reporting at the West Palm Beach Processing and 

Distribution Center; NO-AR-09-006; 6/10/2009

Color-Coding of Standard Mail and Mail Condition 

Reporting at the Santa Clarita Processing and 

Distribution Center; NO-AR-09-008; 8/6/2009

Fort Worth Processing and Distribution Center 

Delayed Mail Issues; NO-AR-09-009; 9/14/2009

Powered Industrial Vehicle Management System 

at the Oakland Processing and Distribution Center; 

NO-AR-09-007; 7/23/2009

Powered Industrial Vehicle Management System at 

the Washington Network Distribution Center; 

NO-AR-09-010; 9/22/2009

Sunday Mail Processing Operations; 

NO-AR-09-012; 9/25/2009

Sales and Service

Customer Complaints; MS-AR-09-009; 7/10/2009

Mail Processing Equipment’s Ability to Read 

Postage on First-Class Letters; 

MS-AR-09-008; 5/28/2009

Performance-Based Incentive Programs for Sales 

Employees; MS-AR-09-007; 4/27/2009

Transportation

Air Networks — Chicago O’Hare Airport Mail 

Center Operations; NL-AR-09-011; 9/30/2009

Air Networks — Federal Express Transportation 

Agreement — Southeast Area; 

NL-AR-09-007; 7/31/2009

Fuel Management Consumption Strategies for 

Surface Network Operations; 

NL-AR-09-010; 9/30/2009

Fuel Management Initiatives for Surface Network 

Operations — Fuel Purchasing Strategy; 

NL-MA-09-001; 8/5/2009

Postal Vehicle Service Transportation — 

Philadelphia Bulk Mail Center; 

NL-AR-09-005; 7/17/2009

Postal Vehicle Service Transportation Routes — 

Philadelphia Processing and Distribution Center; 

NL-AR-09-006; 7/20/2009

Vehicle Management — National Trailer Lease 

Renewal — Capping Report; 

NL-AR-09-009; 9/28/2009

Vehicle Management — National Trailer Lease 

Renewal — Western Area; 

NL-AR-09-008; 8/14/2009

APPENDIX A
50 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX B

APPENDIX B

Findings of Questioned Costs

For the period April 1 – September 30, 2009

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

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

Description Number of Reports Questioned Costs

Unsupported Costs 

Included in 

Questioned Costs

Reports for which no management decision was made at the beginning of the reporting period 3 $68,678,225 $67,963,970

Reports requiring management decision that were issued during the reporting period 50 $1,266,278,769 $50,354,832

TOTAL 53 $1,334,956,994 $118,318,802 

Reports for which a management decision was made during the reporting period (i+ii) 49 $1,329,847,011 $118,256,671

(i) Dollar Value of disallowed cost — $1,215,564,997 $50,292,701

(ii) Dollar value of cost not disallowed — $114,282,014 $67,963,970

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

Negotiations are ongoing

4 $5,109,983 $62,131

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

(See Note 1 for a list of individual reports)

1 $475,322 —

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

(See Note 2 for a list of individual reports)

———

Contract reports with signifi cant audit fi nding

(See Note 3 for a list of individual reports)

———

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

Subject Report/Case Number Report Date Questioned Costs

Unsupported Costs Included in 

Questioned Costs

Audit of Portions of a Termination for Convenience 

Settlement Proposal Submitted by Northrop Grumman 

Electronic Systems

CA-CAR-09-011 3/16/2009 $475,322 —

TOTAL $475,322 —

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

None for this report period

Note 3 — Contract reports with a signifi cant audit fi nding:

None for this report period
April 1 – September 30, 2009 | 51 

APPENDIX C

Description Number of Reports Dollar Value

Reports for which no management decision was made at the beginning of the reporting period 2 $2,056,098 

Reports issued during the reporting period 18 $7,665,457,764 

TOTAL 20 $7,667,513,862 

Reports for which a management decision was made during the report period (i&ii) 20 $7,667,513,862 

(i) Value of recommendations agreed to by management $7,219,361,351 

(ii) Value of recommendations that were not agreed to by management $448,152,511 

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 April 1 – September 30, 2009

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.
52 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX D

APPENDIX D

Reported Non-Monetary Benefi ts

For the period April 1 – September 30, 2009

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 29 

Number of customer service audits conducted Number of Audits 17 

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 $149,444,228 

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 17 

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

Information Technology Security

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

of loss

Dollar Value —

Number of data security/IT security audits conducted Number of Audits 14

Revenue at Risk

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

(Mailer seeking alternative solutions for current services)

Dollar Value $16,679,868 

Disbursements at Risk

Dollar value of disbursements made where proper Postal Service internal controls and processes were not followed Dollar Value $423,014,486 

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 16 

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 —

Dollar value of data used to support management decisions that is not fully supported or completely accurate Dollar Value —
April 1 – September 30, 2009 | 53 

APPENDIX E

APPENDIX E

Reports with Signifi cant Recommendations Pending Corrective Actions

For the period April 1 – September 30, 2009

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

FT-AR-06-016 3/31/2006 Postal Service’s Share of Health Insurance Premiums for Retired Employees

R-1 — Establish and communicate policies and procedures to continuously monitor the accuracy of the Postal Service’s share of health

insurance premiums paid for retires and survivors. TID: September 2009

HM-A R-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: February 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: December 2009

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

the area-, district-, and facility-levels. TID: December 2009

R-5 — Develop performance measures to assess the achievement of security goals. TID: December 2009

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

R-2 — Develop app ropriate 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: December 2009

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

DR-MA-07-004 6/14/2007 Management of Retail Work Hours in Relation to the Workload for Mobile Units — Triboro District

R-1 — Revise the Handbook for Retail Operations, to include standard procedures for mobile units. TID: July 2009

R-2 — Distribute the revised Handbook for Retail Operations to Area offi cials for implementation. TID: October 2009

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-AR-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: March 2010

R-4 — Coordinate with the Inspection Service to ensure the proper clearance level is attributed to employees. TID: March 2010
54 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

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: March 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: March 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: December 2009

EN-AR-08-002 2/29/2008 St. Louis Airport Mail Center Outsourcing

R-2 — Establish a post-implementation review program for Airport Mail Centers (AMC) that compares anticipated savings with actual

results. TID: September 2009

R-3 — Conduct a post-implementation review for the St. Louis AMC closure and outsourcing initiative using the guidance established in 

recommendation 2. TID: September 2009 

IS-AR-08-006 3/6/2008 Identity Theft Potential in Postal Service Information Systems

R-1 — Ensure that employees and contractors accessing identifi ed systems have the appropriate security clearance and that the 

clearance status is documented with the access request. TID: June 2009

IS-AR-08-008 3/11/2008 National Accounting Oracle Financials Application Data Encryption Follow-Up

R-2 — Perform verifi cation tests to ensure management identifi es and adequately protects all sensitive information in accordance with 

policy. TID: September 2009

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 pr oper management oversight and instructions to schedule periodic verifi cations when Periodicals mailings are received 

during non-business hours. TID: November 2009 

CRR-AR-08-003 3/31/2008 Application Controls Review of the Electronic Verifi cation System

R-1 — Re-evaluate all warning messages in the Product Tracking System to determine whether they impact the postage calculation.

TID: December 2009

R- 2 — Strengthen the edit rules in the Product Tracking System to enforce the requirements for destination entry discounts. 

TID: March 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: June 2009

DA-AR-08-005 5/21/2008 Status of Intelligent Mail Enabling Infrastructure

R-2 — Ensure contingency plans for the server consolidation program include extended maintenance for micro-computers or provide for 

other appropriate contingency plans, if deployment is delayed beyond 2009. TID: November 2009

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 2009

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: July 2009

R-6 — Validate the supplier’s ability to provide qualifi ed personnel to support Flats Sequencing Systems on all mail processing tours. 

TID: December 2009

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: October 2009
April 1 – September 30, 2009 | 55 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number 

TID = Target Implementation Date

SA-MA-08-002 6/17/2008 Location of Southeast Area Offi ce Space

R-2 — Conduct a detailed analysis to determine the optimal location for the Southeast Area offi ce. TID: September 2009

IS-AR-08-012 6/25/2008 Security Vulnerability Assessment of the Electronic Travel Voucher System

R-5 — Work together to implement Triple Data Encryption Standard cryptography to encrypt credit card numbers stored within the 

Electronic Travel Voucher System. TID: September 2009

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: September 2009

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: December 31, 2009

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

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

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

TID: December 2009

R-2 — Complete continuity of operations training, including Postal Alert and Notifi cation System training. TID: December 2009

R-3 — Identify and prioritize essential functions. TID: December 2009

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: December 2009

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

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

TID: December 2009

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: December 2009

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

ensure alternate facilities can effectively process the primary facilities’ mail. TID: December 2009

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: December 2009

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: March 2010

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

clearance. TID: March 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: September 2009

R-4 — Promptly incorporate edit requirements provided by the end-user into International Reconciliation System functionality. 

TID: September 2009 

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. TID: November 2009 

NO-AR-08-007 9/15/2008 Powered Industrial Vehicle Management System at the Raleigh Processing and Distribution Center

R-1 — Use the Powered Industrial Vehicle Management System to the fullest extent possible to manage operations and continue to 

improve mail processing effi ciency by reducing 9,000 workhours in tow and forklift operations by FY 2010. 

TID: October 2009 
56 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number 

TID = Target Implementation Date

EN-AR-08-007 9/23/2008 Assessment of the Remote Encoding Center Network Consolidation Process

R-1 — Clarify the methodology used to select remote encoding centers for closure in future business cases. TID: February 2010

DR-AR-08-009 9/29/2008 Vehicle Maintenance Facilities — Scheduled Maintenance Service in the Great Lakes Area

R-5 — Maintain the most effi cient combination of vehicle maintenances facility and commercial resources based on geographical 

location and costs; and, make optimal use of the Postal Service’s national vehicle shuttle agreement or other local commercial 

shuttle services, when cost effective, for transporting vehicles to and from maintenance facilities. TID: January 2010

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

MS-AR-09-001 10/10/2008 Shortpaid Postage — Information-Based Indicia Priority Mail

R-2 — Update the Domestic Mail Manual (DMM) and other applicable manuals and handbooks to establish specifi c guidelines and 

assign roles and responsibilities for identifying shortpaid postage on Information-Based Indicia (IBI) Priority Mail, including a 

procedure for identifying counterfeit/duplicate IBI Priority Mail labels at mail entry points. TID: October 2009 

R-3 — Provide formal training to employees who accept and process IBI Priority Mail. TID: October 2009

MS-AR-09-002 10/14/2008 Shortpaid Postage — Information-Based Indicia Parcel Post Mail

R-2 — Update the DMM and other applicable manuals and handbooks to establish specifi c guidelines and assign roles and 

responsibilities for identifying shortpaid postage on Information-Based Indicia (IBI) Post mail, including a procedure for 

identifying counterfeit/duplicate IBI Post mail labels at mail entry points. TID: October 2009

R-3 — Provide formal training to employees who accept and process IBI Parcel Post mail. TID: October 2009

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 

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: November 2009

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: December 2009

R-6 — Update the Administrative Support Manual for securing and retaining Postal Service Form 5659 and Form DS-11. 

TID: December 2009

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: November 2009

NL-AR-09-001 2/13/2009 Postal Vehicle Service Transportation Routes — Minneapolis Processing and Distribution Center

R-3 — Reassess the 9,247 hours and eliminate the hours as indicated by the reassessment or document the reasons for retaining the

hours. TID: November 2009
April 1 – September 30, 2009 | 57 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number 

TID = Target Implementation Date

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: January 2010

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

R-1 — Set expiration dates to match contract expiration dates. TID: December 2009 

R-2 — Utilize eAccess to manage nonstandard access of contractors. TID: December 2009 

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

TID: December 2009

DR-MA-09-001 2/23/2009 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: March 2010 

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: March 2010

R-3 — Reinforce to delivery supervisors and managers the importance of holding performance discussions with city letter carriers,

conducting street observations, and taking corrective actions for misconduct issues. TID: June 2009

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: January 2010

CRR-AR-09-003 3/5/2009 Controls Over International Air Transportation Payments

R-1 — Identify all potential payment defi ciencies in the Surface Air Support System and implement system changes. TID: January 2010 

R-3 — Consult with Supply Management concerning the recovery of contract payments to the initial contractor. TID: June 2009

R-4 — Develop exception reports capable of identifying errors in payments to air carriers. TID: January 2010

R-5 — Implement a reconciliation process to rectify payment errors to international air carriers in a timely manner. TID: January 2010

MS-AR-09-005 3/17/2009 Shortpaid Information-Based Indicia Stealth Postage

R-4 — Provide formal training to employees who accept and process Information-Based Indicia (IBI) stealth mailpieces. 

TID: October 2009

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: September 2009 

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: July 2009

R-3 — Improve awareness of policies and procedures that; require accurate recording of recycling revenues. TID: July 2009

DA-AR-09-006 3/31/2009 New York District Building Equipment Maintenance 

R-1 — Defi ne business requirements for capturing maintenance benefi ts associated with remote building management systems. 

TID: October 2009

R-2 — Update building equipment maintenance staffi ng packages to refl ect current staffi ng requirements and subsequently conduct a 

cost benefi t analysis to reassess the need for labor distribution code 37 positions. TID: October 2009

R-3 — Issue a Maintenance Management Order to clarify requirements for periodically reviewing and updating building equipment 

maintenance staffi ng packages. TID: October 2009

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
58 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number 

TID = Target Implementation Date

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-2 — Prepare an integrated project budget and expenditure tool for future project releases to track costs and provide reports during 

regular status meetings. TID: September 2009

R-4 — Incorporate effort-based work hour 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

SA-AR-09-003 3/31/2009 National Leased Facility Maintenance Responsibility

R-1 — Establish and implement controls to ensure Postal Service personnel are aware of and follow existing written policies and

procedures for lessor maintenance and repairs. TID: Not provided

R-2 — Instruct the Facilities Service Offi ces to seek reimbursement for questioned costs identifi ed during the audit. 

TID: September 2009

DA-AR-09-007 4/7/2009 Custodial Maintenance: New York District

R-1 — Update staffi ng packages to eliminate duplication in cleaning operations, to include an adjustment of cleaning frequencies as 

determined by local conditions. TID: June 2009

R-2 — Review the benefi ts of extending contract eligibility to larger postal facilities for inclusion in the next collective bargaining 

agreement beginning Nov. 21, 2010, and subsequently utilize contract staffi ng to fi ll custodial positions lost through attrition. 

TID: None

 MS-AR-09-007 4/27/2009 Performance-Based Incentive Programs for Sales Employees

R-1 — Revise the business rules to incorporate guidance on factors fi eld management should consider in assigning accounts to sales

employees. TID: September 2009 

R-2 — Communicate the revised business rules to all sales employees. TID: September 2009

R-5 — Align performance incentives with overall business results. TID: October 2009

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 the Semiannual Report to Congress. TID: October 2010 

MS-AR-09-008 5/28/2009 Postal Service Mail Processing Equipment’s Ability To Read Postage On First-Class Letters

R-1 — Develop and disseminate national Standard Operating Procedures for processing and handling Advanced Facer Canceller System

(AFCS) 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 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: January 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 AFCS to read postage amounts. 

TID: January 2010

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 AFCS deployments. TID: January 

2010

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
April 1 – September 30, 2009 | 59 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number 

TID = Target Implementation Date

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

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

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

Best value determinations are performed and documented. 

Annual reports are developed and provided to Supply Management detailing 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: January 2010

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

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

of authority letter minimum control requirements are met. If minimum control requirements are not met, discontinuation should 

be considered, with the results and justifi cation documented in an oversight fi le. TID: January 2010 

DA-MA-09-001 6/12/2009 Sustainability: Promoting Energy and Recycling Compliance

R-1 — Reinforce energy and recycling polices with installation managers. TID: October 2009

R-2 — Require periodic talks to employees on energy and recycling practices. TID: August 2009

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: September 2009 

CA-AR-09-006 7/1/2009 Flats Sequencing System Contractual Remedies

R-3 — Ensure that any contract utilizing milestone payments include the standard clauses for advance or progress payments, as 

appropriate, to limit risk and protect the Postal Service’s interest. TID: November 2009

SA-AR-09-005 7/7/2009 Postal Service Aviation Security Program at Contract Postal Units

R-1 — Provide training to contracting offi cer’s representatives and contract postal unit personnel on their roles and responsibilities to 

ensure aviation security is appropriately implemented at contract postal units. TID: January 2010 

R-2 — Require contracting offi cer’s representatives and homeland security coordinators to coordinate with contract postal units to 

ensure contract postal unit personnel are aware of their aviation security responsibilities. TID: November 2009

R-3 — Ensure contractor offi cer’s representatives notify the contracting offi cer when transitioning their duties; and ensure contracting 

offi cers properly prepare letters of appointment when changes occur. TID: November 2009

R-4 — Establish and implement policies and procedures requiring aviation security reviews, including seeding of test mail packages

at contract postal units, to measure the performance and effectiveness of contract postal units in preventing anonymous and 

potentially dangerous mail from entering the mailstream. TID: November 2009

MS-AR-09-009 7/10/2009 Customer Complaints

Revise the standard operating procedure to incorporate the following:

R-1 — A quality control process that requires District Consumer Affairs offi cials to review closed cases to ensure they are properly

resolved and documented. TID: October 2009

R-2 — Guidance on how District Consumer Affairs offi cials and post offi ce employees should handle resolved complaints when 

customers cannot be contacted. TID: October 2009

R-3 — Reiterate the importance of complying with the Headquarters customer complaints standard operating procedures to District

Consumer Affairs offi cials and post offi ce employees. TID: October 2009

NL-AR-09-006 7/20/2009 Postal Vehicle Service Transportation Routes — Philadelphia Processing and Distribution Center

R-1 — Ensure that Philadelphia Processing and Distribution Center managers follow prescribed fl eet management procedures for 

making Postal Vehicle Service schedules effective, including conducting schedule and vehicle utilization reviews. 

TID: March 2010

R-2 — Verify elimination of the 6,859 workhours already agreed to by local and area management from Postal Vehicle Service trip

schedules. TID: March 2010

R-4 — Verify the elimination of the eight highway contract route trips identifi ed during OA’s audit by local management. 

TID: October 2009

R-5 — Eliminate the 14 highway contract route trips within the identifi ed highway contract routes, already agreed to by local and area 

management. TID: October 2010
60 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number 

TID = Target Implementation Date

DA-AR-09-009 7/23/2009 Delivery Bar Code Sorter Maintenance Opportunities

R-1 — Emphasize adherence to the Maintenance Management Order requirements for production-based maintenance until an 

automated support solution is available. TID: August 2009

R-2 — Request priority funding for a system support solution for production-based maintenance. TID: October 2010

DA-AR-09-010 7/23/2009 Overall Equipment Effectiveness: Delivery Bar Code Sorter

R-1 –Coordinate regularly to minimize maintenance issues and improve Delivery Bar Code Sorter Overall Equipment Effectiveness. 

TID: August 2009

R-2 – Require all machine operators and supervisors to have current Delivery Bar Code Sorter training. TID: December 2009

NO-AR-09-007 7/23/2009 Powered Industrial Vehicle Management System at the Oakland Processing and Distribution Center

R-1 — Use 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: None

IS-AR-09-009 7/30/2009 Disaster Recovery Capabilities for the Enterprise Payment Switch

R-2 — Create a comprehensive application disaster recovery plan for the Enterprise Payment Switch solution. TID: September 2009

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

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: February 2010

R-2 — Transport mail to the maximum extent, possibly using the service-responsive capacity of passenger airlines under contract with 

the Postal Service. TID: February 2010

R-3 — Sort mail into bypass containers as appropriate. TID: February 2010

NL-MA-09-001 8/5/2009 Management Advisory — Fuel Management Initiatives for Surface Network Operations — Fuel Purchasing Strategy

R-1 — Coordinate to assign appropriate accountability and cross-functional authority for the planning, implementation, and success of 

the National Fuel Purchasing Strategy; and provide adequate support from the appropriate Headquarters’ functional areas and 

the nine Postal Service geographical areas. TID: October 2009 

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: October 2009 

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: September 2009

R-2 — Conduct a Lean Six Sigma process improvement initiative in conjunction with the American Postal Workers Union to identify nonvalue tasks in the current custodial standard and negotiate revisions. TID: November 2010
April 1 – September 30, 2009 | 61 

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number 

TID = Target Implementation Date

NL-AR-09-008 8/14/2009 Vehicle Management — National Trailer Lease Renewal — Western Area

R-1 — Develop a comprehensive process to identify trailer requirements and manage trailer inventory and use. TID: September 2009

R-3 — Analyze the number of trailers needed to transport mail and equipment and return unneeded trailers to the Postal Service 

Headquarters for reallocation or return to the leasing contractor, saving the Postal Service about $1.5 million over the next 10

years. TID: September 2009

R-4 — Analyze storage requirements and procure storage space in the most cost-effective manner. TID: September 2009

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

FF-AR-09-211 8/26/2009 Postal Service’s Relocation Policy

R-2 — Clarify when the Postal Service should (1) fi ll vacancies locally versus nationally, (2) decline to pay relocations, and (3) reduce 

benefi ts (in addition to the already proposed relocation policy changes). TID: None (Audit Resolution)

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: September 2009

IS-AR-09-011 9/11/2009 Chase Insight Application Review

R-1 — Develop, fi nalize, and test internal standard operating procedures for processing standard, non-standard, manual, and 

emergency wire transfer requests. TID: December 2009

NO-AR-09-012 9/25/2009 Sunday Mail Processing Operations

R-1 — Reduce 83,000 workhours, based on fi scal year (FY) 2008 usage, by the end of FY 2010 with an associated economic impact 

of approximately $38 million over a 10-year period. TID: None

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-1 — Issue a memorandum to all area and district offi cials re-emphasizing establishment and operation of oversight Delivery Point 

Sequencing (DPS) Improvement Teams. The teams will have all functional staff representation as a critical element in monitoring

operations vital to increasing the city delivery DPS percentage. TID: September 2009

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: October 2009

R-3 — Develop and execute an action plan to mitigate low city DPS percentages in delivery units. 

TID: October 2009

R-4 — Ensure accountability of DPS Improvement Team members for completing assigned tasks to increase and sustain city delivery

DPS percentages and reduce operating costs. TID: October 2009

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: None

R-3 — Ensure future annual service performance goals are published within 30 days after approval. TID: None

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: None 

CA-AR-09-007 9/29/2009 Information Technology’s Preferred Portfolio Partnering Program

R-1 — Require documented justifi cation from IT program offi ce personnel when they are not going to follow contractor 

recommendations regarding the pricing of task order proposals. TID: September 2009

R-2 — Implement industry best practices by moving forward with the award of multiple indefi nite delivery indefi nite quantity contracts 

for IT services that, unless otherwise justifi ed, will provide for competition at the task order level. TID: September 2009
62 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX E

Report Number Issue Date

Report Title, Recommendation Summary

R = Recommendation number 

TID = Target Implementation Date

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: December 2009

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-4 — Track all databases associated with connections on business partner leased line fi rewalls throughout the lifecycle of the database 

and approve only those connections to databases the Network Connectivity Review Board tracks. TID: September 2009

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 — 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 — 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

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 OA’s audit. TID: None

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: None

R-3 — Establish and implement tire infl ation maintenance requirements for its owned heavy-duty vehicle fl eet, as well as its leased, and 

contracted vehicles consistent with industry best practices and adjust contracts as appropriate to account for the reduced fuel

need. TID: None

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: None

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: None

R-2 — Provide adequate supervision over the sack sorter and platform operations to include ensuring that volume and workhour 

reporting requirements are followed. TID: None

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: None

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: None
April 1 – September 30, 2009 | 63 

APPENDIX F

APPENDIX F

Signifi cant Management Decisions in Audit Resolution

For the period April 30 – September 30, 2009

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.

Postal Service’s Relocation Policy

FF-AR-09-211 8/26/2009

Recommendation 2 Clarify when the Postal Service should (1) fi ll vacancies locally versus nationally, (2) decline to pay relocations and 

(3) reduce benefi ts (in addition to the already proposed relocation policy changes).
64 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX G

APPENDIX G

Investigative Statistics (OIG and Postal Inspection Service Combined)*

For the period April 1 – September 30, 2009

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

Mail Theft by Nonemployees 

and Contractors1 1,010 971 361 1,195 23 — — — —

Theft, Delay, or Destruction 

of Mail by Employees or 

Contractors 875 251 207 230 446 — $7,397,917 $165,549 456

Injury Compensation Fraud 585 26 27 18 132 $97,614,154 $902,032,633 $2,388,346 135

Assaults and Threats2

 282 131 21 86 — — $2,260 — —

Offi cial Misconduct 826 79 56 71 524 — $654,836 $302,882 509

Robbery 39 38 19 38 — — $79,845 — —

Burglary 83 45 17 50 — — $65,292 — —

Financial Fraud 453 117 107 129 252 $2,371,550 $1,822,411 $1,774,006 323

Revenue Fraud 24 45 13 40 16 — — — —

Contract Fraud 80 14 14 12 44 $12,044,104 $45,705,417 $5,108,698 57

Mail Fraud 550 534 504 563 — — $1,367,395 $2,029 —

Identity Theft 628 748 406 774 3 — — — —

Suspicious Items3 40 32 5 27 — — — — —

Nonmailable, Restricted, and 

Perishable Matter4 71 42 32 38 — — — — —

Suspicious Substances5 25 4 4 6 — — — — —

Child Exploitation and 

Obscenity6 121 108 78 95 — — $501,475 — —

Mailing of Controlled 

Substances7

 479 627 220 481 — — $2,790,000 $2,790,000 —

Money Laundering8 61 23 24 48 — — $694,920 — —

Vandalism and Arson 34 22 8 27 — — $12,406 $2,087 —

TOTAL 6,266 3,857 2,123 3,928 1,440 $112,029,808 $963,126,807 $12,531,510 1,480

* 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

 Includes theft and possession of stolen mail.

2

 Includes threats and assaults against on-duty postal employees.

3

 Includes non-threatening items, bombs, threats, hoaxes, and explosive material.

4

 Includes fi rearms, weapons, intoxicants, extortion threats, and miscellaneous matter.

5

 Includes non-threatening, hazardous, and hoax CBRN (CBRN refers to chemical, biological, radiological, and nuclear).

6

 Obscenity includes mailing of obscene matter, and sexually oriented advertisements.

7

 Includes narcotics, steroids, drug-related proceeds, and drug paraphernalia.

8

 Includes postal money orders.
April 1 – September 30, 2009 | 65 

APPENDIX G

Investigative Statistics (OIG and Postal Inspection Service Combined)*

For the period October 1, 2008 – September 30, 2009

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

Mail Theft by Nonemployees 

and Contractors1 2,206 2,251 780 2,329 72 — — — —

Theft, Delay, or Destruction 

of Mail by Employees or 

Contractors 1,632 446 384 450 826 — $7,573,928 $195,898 845

Injury Compensation Fraud 1,098 44 47 34 266 $185,909,778 $1,329,450,522 $8,109,978 259

Assaults and Threats2 647 269 32 96 — — $2,260 — —

Offi cial Misconduct 1,793 149 118 137 1,076 — $2,007,057 $610,784 1,051

Robbery 109 74 33 38 — — $79,845 — —

Burglary 115 100 30 51 — — $65,292 — —

Financial Fraud 831 235 228 231 513 $2,401,550 $4,171,414 $4,039,641 610

Revenue Fraud 173 86 39 74 30 — — — —

Contract Fraud 147 19 19 13 69 $16,730,659 $53,732,237 $11,838,699 79

Mail Fraud 1,169 1,084 946 1,147 — — $5,373,116,666 $2,068,529 —

Identity Theft 1,283 1,494 760 1,561 3 — — — —

Suspicious Items3 149 60 7 58 — — — — —

Nonmailable, Restricted, and 

Perishable Matter4 162 98 63 92 — — — — —

Suspicious Substances5 88 12 10 13 — — — — —

Child Exploitation and 

Obscenity6 292 187 141 173 — — $501,475 — —

Mailing of Controlled 

Substances7 933 1,278 394 945 — — $4,740,273 $2,790,000 —

Money Laundering8 124 48 43 101 — — $1,582,590 —

Vandalism and Arson 57 56 16 30 — — $12,406 $2,087 —

TOTAL 13,008 7,990 4,090 7,573 2,855 $205,041,987 $6,777,035,965 $29,655,616 2,844

* 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

 Includes theft and possession of stolen mail.

2

 Includes threats and assaults against on-duty postal employees.

3

 Includes non-threatening items, bombs, threats, hoaxes, and explosive material.

4

 Includes fi rearms, weapons, intoxicants, extortion threats, and miscellaneous matter.

5

 Includes non-threatening, hazardous, and hoax CBRN (CBRN refers to chemical, biological, radiological, and nuclear.)

6

 Obscenity includes mailing of obscene matter, and sexually oriented advertisements.

7

 Includes narcotics, steroids, drug-related proceeds, and drug paraphernalia.

8

 Includes postal money orders.
66 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

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

Advance Fee 2 2 1 2

Charity 1 1 — 1

Contests/Sweepstakes 15 15 — 15

Coupon Fraud 1 1 — 1

False billings 33 2 2 6

Internet Auction 1 1 — 1

Lotteries (Foreign and Domestic) 4 3 1 4

Merchandise: — — — —

Failure to furnish 10 4 1 5

Failure to pay 2 2 — 2

Misrepresentation 2 — — —

Miscellaneous 157 33 5 36

Telemarketing — — — —

Work at home 3 2 1 2

TOTAL 231 66 11 75

APPENDIX H

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

For the period April 1 – September 30, 2009

Financial Reporting on Investigative 

Activities

Type

Personnel $145,620,922

Nonpersonnel 26,340,215

TOTAL $171,961,137

Capital obligations $691,024

Other Administrative Actions

Administrative Action Requests 231

Temporary Restraining Orders Requested 1

Temporary Restraining Orders issued 1

Cases Using Direct Purchase Authority —

Civil Penalties (Section 3012) Imposed $1,000 

Test Purchases —

Withholding Mail Orders Issued 123

Voluntary Discontinuances —
April 1 – September 30, 2009 | 67 

APPENDIX I

APPENDIX I

Closed Congressional and Board of Governors’ Inquiries

For the period April 1 – September 30, 2009

This appendix lists the Congressional and Board of Governors’ inquiries the OIG and the Postal Inspection Service closed during this reporting period. The Joint 

Legal Services Center reviewed these inquiries and coordinated work with Postal Inspection Service and OIG offi ces to resolve allegations and disputes and to 

help identify systemic issues. Inquiries are listed in the chronological order of receipt.

Inspector General Investigations (62)

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

New Mexico

An OIG investigation interfered with the 

complainant's small business, constituting an 

unfair labor practice.

The allegations were not substantiated. Instead, the investigators found the complainant and 

another postal employee colluded to conceal outside employment while collecting workers' 

compensation benefi ts. The investigation was a part of the congressional mandate that the OIG 

protect the integrity and effi ciency of the Postal Service.

5/7/2009

Senator, 

Mississippi

Preferential treatment to a postal manager; misuse 

of postal vehicle.

The investigation did not substantiate the allegations, fi nding personnel actions were consistent 

with Postal Service policy and guidelines. Findings regarding the misuse of a postal vehicle were 

forwarded to management.

5/11/2009

Representative, 

Texas 

Falsifi cation of information during an investigation, 

threats against the subject.

The investigation did not substantiate the allegations. 7/22/2009

Senator, 

Maryland

Mail tampering and theft by postal employees at 

multiple facilities in Maryland.

The investigation found no evidence of mail tampering or theft by postal employees. 5/21/2009

Senator, 

Maryland

Lost or misplaced parcels presented for shipping at 

a Maryland Post Offi ce.

The investigation did not substantiate the allegations, and noted the electronic records for more 

than 50 percent of complainant's mailings showed anomalies indicating tracking numbers 

obtained for parcels were not mailed or mailed at a later date.

5/7/2009

Representative, 

Maryland

Mail tampering and potential identity theft. The investigation did not substantiate the allegations, fi nding tears and rips were consistent with 

the damage caused by mail sorting machines.

4/14/2009

Governor, Florida Mail theft of gift cards. Due to the lack of a tracking number on the package, the investigation did not determine what 

happened to the mail. Special Agents provided information on vendor replacement policy.

4/2/2009

Representative, 

Arizona

Whistleblower reprisal resulting in termination. The investigation revealed the employee was not terminated because of management's 

knowledge of a protected communication; the termination was based on legitimate 

business reasons.

6/25/2009

Representative, 

Florida

Letter carrier's safety compromised when a 

Postal Inspector improperly had him unwittingly 

assist in a controlled delivery of drugs and the 

resulting prosecution.

The investigation substantiated the allegations and noted a prohibition on the use of letter carriers 

for controlled deliveries. Management counseled team leaders and took other corrective steps. 

5/5/2009

Senator, Texas Lost or stolen mail containing books, 

prescription drugs.

The investigation did not substantiate the allegations of internal theft and noted no patterns of 

similar thefts in that area.

4/2/2009

Senator, Texas Delay of mail and mail tampering. The investigation did not substantiate the allegations; all mail pieces provided

by complainant were delivered within postal time standards and showed no signs of tampering.

4/14/2009

Senator, 

Maryland

Internal mail theft. The investigation did not substantiate the allegation of internal mail theft, however, the allegation 

was forwarded to the Postal Inspection Service because it appeared to be external mail theft.

5/1/2009

Senator, 

Maryland

Former postal employee contests responsibility for 

accountability shortages.

We found no evidence to support the employee's assertions and learned he was more 

concerned about administrative relief.

5/13/2009

Senator, 

Maryland

Postal Service should prosecute postal managers 

who lost an Equal Employment Opportunity case.

The investigation found no evidence of behavior warranting criminal or civil action beyond the 

award given by the court.

5/26/2009

Senator, New 

Mexico

Internal mail theft. The investigation did not substantiate the allegation, nor could Special Agents locate the lost 

item with the available tracking information.

6/29/2009

Representative, 

Virginia

Harassment by a Special Agent during an interview. The investigation did not substantiate the allegation. 4/22/2009
68 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Senator, 

Wisconsin 

Theft of coins from the mail. The investigation substantiated the allegations, fi nding an employee was stealing coins, cash, 

and prescription drugs from the mail. The OIG transmitted the fi ndings to management and the 

U.S. Attorney's offi ce for action deemed appropriate.

7/7/2009

Senator, 

Texas

Management intentionally delayed mail and 

ordered employees to discard certain types of 

mail at a Texas Post Offi ce, and a stand-up talk 

implied that such allegations to the OIG Hotline 

are improper.

The investigation substantiated the delayed mail allegations and the fi ndings went to 

management for action; the OIG also noted the stand-up talk did not impart the message that 

the Hotline welcomes employee reports of delayed mail, waste, and misconduct.

6/30/2009

Senator, 

South Dakota

Overcharge or misappropriation of funds on Post 

Offi ce box rental.

The investigation did not substantiate the allegation. 4/28/2009

Senator, 

Maryland

Postal Service should prosecute postal managers 

who lost an Equal Employment Opportunity case.

The investigation found no evidence of behavior warranting criminal or civil action beyond the 

award given by the court.

5/26/2009

Representative, 

South Carolina

Internal mail theft of inaugural ball tickets. The investigation did not substantiate the allegations; Special Agents determined the mailing 

was damaged and then misrouted, but eventually reached its destination. 

5/21/2009

Representative, 

Virginia

Mail tampering, theft, delay; non-delivery; false 

endorsement of mail as "refused" by a carrier.

The investigation substantiated only the allegation that a carrier improperly endorsed the 

mailpiece; fi ndings forwarded to management for action.

6/15/2009

Representative, 

Pennsylvania

Management misconduct; fraudulently reducing 

mail volumes by falsifying mail volume reports; 

diverting mail to other facilities; changing mail 

processing color codes; destruction of mail 

in Philadelphia.

The investigation substantiated allegations of falsifying mail volume reports; partially 

substantiated the allegations of destroying mail; did not substantiate the allegations of diverting 

mail to other facilities and changing mail processing color codes. The OIG reported allegations to 

management for action deemed appropriate.

5/5/2009

Representative, 

Texas 

Carrier stopped delivering mail to a home in 

retaliation for a complaint.

The investigation revealed employees wrongly believed the complainant's mailbox did not 

meet postal standards. Misunderstanding of postal rules, not retaliation, was the basis for the 

suspension.

5/4/2009

State Senator, 

New York

Misdelivery and non-delivery of mail; inadequate 

implementation of an Accurate Delivery Verifi cation 

Card Program at a New York Post Offi ce.

An inaccurate listing of names at a complainant's cluster box, under the control of the 

community association, was a factor; advised Triboro Consumer Affairs Offi ce. 

4/28/2009

Representative, 

Pennsylvania

Management misconduct; fraudulently reducing 

mail volumes by falsifying mail volume reports; 

diverting mail to other facilities; changing mail 

processing color codes; destruction of mail 

in Philadelphia.

The investigation substantiated allegations of falsifying mail volume reports; partially 

substantiated the allegations of destroying mail; did not substantiate the allegations of diverting 

mail to other facilities and changing mail processing color codes. The OIG reported allegations to 

management for action deemed appropriate.

5/5/2009

Representative, 

Oklahoma

Whistleblower reprisal for reporting supervisory 

mismanagement and misconduct.

Complainant requested the OIG suspend its investigation. 5/20/2009

Senator, Texas Mail tampering and theft of gift cards by postal 

employees.

The investigation did not substantiate the allegations, and learned postal employees located two 

envelopes containing gift cards damaged by mail processing equipment and returned them to 

the sender.

5/14/2009

Senator, 

Tennessee

Mismanagement and wasteful spending at a 

Tennessee facility; employees paid to sit in a room 

for hours.

The investigation revealed management at the facility implemented a clerk standby operation, 

which excesses employees based on workload to allow a determination of necessary work 

hours for mail conditions. Management's implementation was consistent with postal policy 

and union contracts.

5/13/2009

Representative, 

New Jersey

Theft of postal money orders. Investigation showed the money orders had not been stolen and were delivered and credited to 

the complainant's account.

7/8/2009

Senator, 

California

Mail tampering, theft, and misdelivery. Investigation did not substantiate the allegations and found no evidence of mail tampering, theft, 

or misdelivery. The intended recipient received compensation from the Postal Service for the 

loss of an insured package.

5/21/2009

Senator, Ohio Delay of mail by employees at an Ohio Post Offi ce. Preliminary review found management took appropriate action regarding the handling of the 

complainant's mail and employee misconduct issues.

4/27/2009

Representative, 

Illinois

Mail tampering and identity theft. Investigation did not substantiate the allegations and found no evidence of mail tampering or

misconduct by postal employees.

6/9/2009
April 1 – September 30, 2009 | 69 

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Senator, Indiana Whistleblower reprisal for cooperation during an 

OIG investigation; management wrongfully took 

disciplinary action against complainant.

An OIG investigation showed the case did not meet the four necessary elements of whistleblower 

reprisal. The complainant failed to show that a protected communication was the basis for the 

disciplinary action. 

8/3/2009

State Senator, 

New York

Non-delivery of political mailings. Inquiry revealed no evidence of misconduct related to the disappearance of the mailings, but

Special Agents noted only fi ve stations maintained proper log books. 

5/5/2009

Representative, 

Ohio

Mail theft of an international Registered Mail parcel 

after an attempted delivery.

Investigation concluded the parcel was mishandled or stolen; however Special Agents did not 

substantiate that a postal employee stole the package.

8/1/2009

Representative, 

Georgia

Delay of mail; letter carrier route deviation. Investigation did not substantiate the allegations; found widespread mail delays due to a 

county-mandated change in street address system which was not properly communicated to 

the Postal Service.

7/15/2009

Representative, 

New York

An OIG Special Agent interfered with 

complainant's medical care, provided under 

Workers' Compensation program.

Special Agents believed they had complainant's permission to contact physician; IG Act provides 

authority for such contact. 

6/10/2009

Representative, 

New York

Mail tampering and theft by postal employees at a 

New York Post Offi ce.

A previous investigation found multiple mailers were sending complainant mail at an 

incorrect address.

4/28/2009

Senator, 

West Virginia

Mail tampering by postal employees at a West 

Virginia Post Offi ce.

Investigation did not substantiate the allegations. Special Agents learned management recovered 

a missing Express Mail piece and complainants assert problems have been resolved.

6/11/2009

Representative, 

Mississippi

Improper processing of a contractor's injury 

report; harassment and discrimination; wrongful 

investigation.

Investigation did not substantiate allegations. Special Agents found management acted 

appropriately in processing the injury report and found no evidence of misconduct by postal 

employees or the OIG towards the complainants.

8/3/2009

Representative, 

Missouri

Harassment from OIG Special Agents through 

repeated surveillance.

Review showed the complainant was never the subject of an OIG or a Postal Inspection 

Service investigation.

6/17/2009

Representative, 

Minnesota

Mail theft and delay. Investigation did not substantiate the allegations. Special Agents found no evidence of mail theft 

or delay by postal employees.

7/22/2009

Representative, 

New York

Postal manager conduct, including the improper 

delay of an IRS stimulus check to the complainant.

Investigation did not substantiate the allegation of intentional delay of a check, fi nding the 

complainant moved without submitting a Change of Address form.

7/2/2009

Governor, Florida Nondelivery after wrongful fi ling of a Change of 

Address form.

Investigation revealed a Change of Address form submitted by a relative indicated all mail 

for family members should be forwarded to a new address. Management corrected and took 

additional steps to ensure the mail for each household was separated and delivered properly.

7/15/2009

Senator, 

California

Request for Postal Inspectors to return property 

confi scated during an investigation or provide 

information on its probable return date; mail 

delivery issues.

Review found the confi scated property was held by a District Attorney as evidence, out of the 

control of the Postal Inspection Service. 

7/13/2009

Senator, Alabama Request for investigation in a Postal Inspection 

Service personnel action.

Investigation did not fi nd evidence of improprieties in the personnel process or actions taken. 6/10/2009

Senator, 

South Dakota

Theft of prescription drugs sent by the Department 

of Veterans Affairs.

The investigation substantiated the allegations, fi nding an employee was stealing coins, cash, 

and prescription drugs from the mail. The OIG transmitted the fi ndings to management and the 

U.S. Attorney's offi ce for action deemed appropriate.

7/7/2009

Senator, Arizona Whistleblower reprisal resulting in reassignment. An OIG investigation showed the reassignment did not result from complainant's disclosure. 6/18/2009

Representative, 

New York

Internal mail theft and identity theft. Investigation did not substantiate the allegations due, in part, to the complainant not retaining for 

OIG examination the damaged, empty envelope he received.

7/8/2009

Representative, 

Illinois

Poor service, delay of mail, mail theft, receipt of 

damaged mail.

Investigation found no evidence of misconduct by postal employees. The damage to the mail was 

consistent with damage normally caused by postal sorting machines. 

7/22/2009

Representative, 

Missouri

Mail tampering and theft by postal manager at a 

Missouri Post Offi ce.

Investigation did not substantiate the allegations, fi nding no evidence of mail tampering or theft 

by postal employees.

6/18/2009

Representative, 

Missouri

Mail delay at a Missouri facility. Investigation found a shortage of staffi ng caused signifi cant delays in the re-wrap section. The 

fi ndings were forwarded to management for action deemed appropriate.

9/2/2009

Representative, 

Alaska

Non-delivery of prescriptions mailed to rural 

residents in Alaska.

Investigation found no evidence of mishandled mail or theft by postal employees. Management 

changed mail handling procedures, which altered the sorting locations of the prescriptions and 

resolved the concerns.

7/22/2009
70 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Senator, 

Minnesota

OIG agents offered to negotiate payment of cost 

overruns on a construction contract; OIG Special 

Agents conducted an investigation in an untimely 

and unprofessional manner.

Investigation showed the complainant was responsible for the costs associated with the land; 

OIG Special Agents did not offer to negotiate with the complainant; the investigation was 

prolonged by the complainant fi ling a revised claim, still seeking reimbursement for land costs.

9/21/2009

Representative, 

New York

OIG investigation tainted employee's reputation; 

management violated of Uniformed Services 

Employment and Reemployment Rights Act of 

1994 (USERRA), including denial of a promotion.

The OIG conducted a 2008 investigation into allegations based upon its responsibility to detect 

fraud, waste, and misconduct in postal programs and operations under the IG Act, and did 

not substantiate the allegations against the complainant. The Department of Labor asserted 

jurisdiction over the complainant's USERRA claims; therefore, the OIG did not investigate the 

related allegations.

6/30/2009

Representative, 

New York

Third-party complaint about an OIG personnel 

action.

No basis for investigative review. 7/14/2009

Senator, 

New Mexico

Objection to an OIG investigation of the 

complainant, who has information that would tend 

to exonerate.

The OIG conducted its investigation into allegations based upon its responsibility to detect fraud, 

waste, and misconduct in postal programs and operations under the Inspector General Act of 

1978. Information provided by the complainant was added to the OIG investigative fi les, pursuant 

to the Privacy Act.

7/14/2009

Senator, 

New York

Mail tampering and identity theft. Investigation did not substantiate the allegations and determined the tampering and theft were

likely external. OIG referred the matter to the Postal Inspection Service.

9/14/2009

Representative, 

Illinois

Postal employee unlawfully opened or stole mail 

sent from Representative's offi ce.

Investigation revealed a postal employee delayed the mailings due to a belief the mailings were 

not permissible as franked mail. The investigation did not determine whether the mail was 

opened by postal employees.

8/14/2009

Representative, 

Virginia

Management falsifi ed time and attendance 

information at a Virginia facility.

Preliminary review found the local union fi led a grievance regarding the matter and a settlement 

was reached.

8/26/2009

Senator, Arizona Status or outcome of an OIG investigation. Review found the Postal Inspection Service and the FBI adequately addressed the allegations. 9/22/2009

Postal Inspection Service Investigations (31)

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

Pennsylvania

Mail fraud. The complainant's actions deterred the attempted fraud. No further investigation planned. 4/1/2009

Representative, 

Virginia

Mail fraud. No jurisdiction over this civil contract dispute. 4/7/2009

Representative, 

California

Potentially fraudulent activity due to receipt of large 

quantities of mail not addressed to the complainant.

A new letter carrier was instructed to halt such deliveries, which stemmed from a Change 

of Address order fi led by a former resident of a nearby homeless shelter. Postal Inspectors 

attempted to fi nd the fi ler. No fraud detected.

4/9/2009

Representative, 

Virginia

Mail theft of a government check. Postal Inspectors determined the check intended for the complainant was stolen and cashed. 

Due to a lack information regarding the check, Postal Inspectors could not determine the identity 

of the person responsible.

5/13/2009

Senator, 

Arkansas

Unsolicited mail; potential scam. The mailing, which we confi rmed concerned a program authorized by federal statute, was 

forwarded to the Criminal Investigations Service Center for review. 

4/16/2009

Representative, 

Pennsylvania

Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center for review. 4/17/2009

City Council 

Member, 

New York

Mail fraud scheme. The Criminal Investigations Service Center entered the information provided by the complainant 

into the Fraud Complaint System for monitoring.

4/16/2009

Representative, 

Virginia

Sweepstakes mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center for review. 4/24/2009

Senator, Virginia Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center for review. 4/27/2009

Senator, Virginia Unsolicited mail; potential scam. Allegations forwarded to Criminal Investigations Service Center for review. 4/29/2009

Senator, 

Maryland

Unsolicited mail; potential scam. Allegations forwarded to Criminal Investigations Service Center for review. 4/29/2006
April 1 – September 30, 2009 | 71 

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

Pennsylvania

Potentially threatening letter. Allegations forwarded to Criminal Investigations Service Center for review. 5/6/2009

Representative, 

Colorado

Mail fraud allegations against an employer. Postal Inspectors could not complete an investigation due to lack of information provided by 

the complainant.

5/21/2009

Senator, 

Pennsylvania

Potentially fraudulent and objectionable mailing. Postal Inspectors determined the mailing was not non-mailable as a matter of law. 6/11/2009

Representative, 

Virginia

Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center for review. 5/29/2009

Senator, 

Louisiana

Mail fraud. Allegations forwarded to Criminal Investigations Service Center for review. 6/4/2009

Representative, 

Pennsylvania

Mail fraud. Allegations forwarded to Criminal Investigations Service Center for review. 6/4/2009

Representative, 

Pennsylvania

Mail fraud. Allegations forwarded to Criminal Investigations Service Center for review. 6/15/2009

Representative, 

Florida

Mail fraud. Allegations forwarded to Criminal Investigations Service Center for review. 6/16/2009

Senator, 

Louisiana

Unauthorized change of address by an unknown 

person; identity theft.

Postal Inspectors found complainant's address was changed without permission. Inspectors 

advise was to place a fraud alert on credit reports.

8/25/2009

Representative, 

Georgia

A box of trash, rather than an item purchased 

on-line, arrived in mail.

Postal Inspectors contacted the sender, who sent another package with the items purchased. 8/26/2009

Senator, 

Tennessee

Mail fraud. Postal Inspectors determined the issue was a civil matter. 8/3/2009

Representative, 

California

Illegitimate unsolicited mailings. Postal Inspectors learned the sender was under investigation by a California agency. Inspectors 

advised how to register for the Mail Preference Service to prevent receipt of similar mailings in 

the future.

7/22/2009

Representative, 

Virginia

Postal Service discontinued residential mail service. Consistent with postal policy, the local Postmaster discontinued service because there were 

no dwellings on the property associated with the addresses claimed by complainant. Postal 

Inspectors facilitated a meeting with management and the complainant, which resulted in an 

agreement allowing him to appeal to the District Consumer Affairs Offi ce.

8/6/2009

Representative, 

California

Concerns about unsolicited mailings and 

complainant's unsuccessful attempts to opt out.

A Postal Inspector determined the customer service department of the company could remove 

the complainant from the mailing list. No fraud detected.

7/27/2009

Senator, 

Pennsylvania

Mail withheld and destroyed by offi cials at a 

county prison.

Postal Inspectors reviewed and found no evidence of offi cials withholding, delaying, or 

destroying the complainant's mail.

9/17/2009

Representative, 

Minnesota

Foreign lottery mail fraud scheme. Postal Inspectors are working with U.S. Customs and Border Protection to shut down 

such schemes. 

8/26/2009

Representative, 

Pennsylvania

False representation in a scheme promising 

assistance in applying for housing grants.

Postal Inspectors conducted an investigation resulting in the closure of the mailbox used in the 

scheme. The Postal Service issued a Cease and Desist Order; restitution is unlikely because of 

off-shore cashing practices the company used.

9/8/2009

Representative, 

Pennsylvania

Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center for review. 8/31/2009

Representative, 

Virginia

Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center for review. 9/14/2009

Representative, 

Pennsylvania

Mail fraud scheme. Allegations forwarded to Criminal Investigations Service Center for review. 9/23/2009
72 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX I

Joint Legal Services Center (42)

Requestor Allegation/Concern Major Findings Closure Date

Senator, 

Massachusetts 

Lack of information on progress of a mail fraud 

case.

The case was thoroughly investigated by the Postal Inspection Service and referred to the Offi ce 

of the U.S. Attorney, for status information.

5/1/2009

Representative, 

Texas

Harassment, racism, favoritism, and falsifi cation of 

records by management at a Texas facility.

JLSC review found the workplace environment was stressful but did not substantiate allegations 

of racism and favoritism. JLSC noted District management was already actively involved in 

reviews of the facility's workplace.

5/20/2009

Senator, Virginia Inadequate Postal Inspection Service investigation 

of a complaint.

Review showed the Postal Inspector acted properly during the course of the investigation and its 

presentation for prosecution.

5/7/2009

Representative, 

Arizona

Hostile work environment; abuse of authority. Review showed management did not abuse authority but did reveal some indicators 

that employees were unhappy with management in general, and transmitted the fi ndings 

to management.

6/18/2009

Representative, 

North Carolina

Back pay owed to a postal employee for overtime 

worked.

 We could not substantiate any shortage of pay, in part because of our lack of access to records; 

management was requested to review the pay system for errors.

6/17/2009

Senator, Florida Obstruction of mail by a court clerk not delivering 

complainant's letter to a Justice.

The clerk handled the mail as authorized in his offi cial employment capacity. 4/9/2009

Senator, Vermont Misdelivery of mail; mail improperly opened and 

disseminated by a third party.

Review showed a mail piece was delivered to a municipality because the complainant's address 

seemed to indicate he was a local offi cial. The inadvertent misdelivery led to its dissemination in 

a public forum during a municipal business session. The dissemination is not actionable as the 

Postal Service lost jurisdiction over the mail upon delivery; the U.S. Attorney's offi ce therefore 

declined prosecution.

4/20/2009

Senator, Texas Harassment; violation of Postal policy; obstruction 

of the EEO process by management at a Texas 

Post Offi ce.

Review did not substantiate allegations. 5/29/2009

Representative, 

Illinois

Employee transfer denied because of racial 

discrimination.

Review declined so as not to interfere in pending litigation. 5/6/2009

Ranking 

Member, House 

Subcommittee

The OIG ignored Hotline complaints regarding 

delivery and customer service issues nationwide, 

waste, fraud, and abuse including racial 

discrimination, and labor contract violations at a 

Texas facility.

Advised Subcommittee of previous audit, investigative, and workplace environment reviews 

responsive to the issues raised.

4/21/2009

Representative, 

New Jersey

Discrimination and unfair employment practices by 

management at a New Jersey Post Offi ce.

Complainant declined to speak with OIG Special Agents under the advice of his attorney. 6/9/2009

Representative, 

Arkansas

FOIA request for an investigative fi le. Two pages of records were released to the Member on behalf of his constituent. 5/14/2009

Representative, 

North Carolina

Inspection Service mail theft investigation should 

have gone to prosecution.

Privacy interests barred release of information from the case fi le; matter of prosecution is left to 

the discretion of other federal or local agencies.

5/5/2009

Representative, 

New Jersey

Availability of leave under the Family Medical Leave 

Act (FMLA) for an employee injured on the job.

Review found no misapplication of rules or laws. Managers, as the law requires, designated 

the 2008 leave as FMLA when complainant provided information about injuries; this affected 

complainant's FMLA eligibility in the next calendar year.

9/17/2009

Representative, 

New York

Complainant observed Letter Carrier harassment 

by a manager.

OIG reviewed this allegation. Privacy interests bar the release of information to third parties. 6/10/2009

Senator, Vermont Management misconduct and interference 

with a State Police investigation; hostile work 

environment; privacy violations.

Investigators and workplace evaluators did not substantiate allegations. 8/25/2009

Senator, Georgia Mailing received included pornographic material. Postal Inspectors determined the mailing, objectionable to the complainant, was not nonmailable as a matter of law; they provided information about enrolling in a Postal Service 

program which will bar mailer from sending additional sexually explicit items.

6/10/2009

Representative, 

New York

Complainant observed Letter Carrier harassment 

by a manager.

OIG reviewed this allegation. Privacy interests bar the release of information to third parties. 5/27/2009

Representative, 

New York

Complainant observed Letter Carrier harassment 

by a manager.

OIG reviewed this allegation. Privacy interests bar the release of information to third parties. 5/27/2009
April 1 – September 30, 2009 | 73 

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Senator, Illinois Suggestions for improving postal leave accounting 

policies for drivers.

Management expressed interest but noted suggested changes would violate union contract; best 

course of action would be to approach the union.

8/14/2009

Representative, 

California

Information on how to fi le mail fraud complaints. Form and fi ling instructions provided. 6/4/2009

Senator, Florida Request for transfer due to hostile work 

environment created by a postal employee; 

management failed to alert the Postal Inspection 

Service of an assault on postal property; 

management failed to follow postal policy.

Management confi rmed an assault occurred but provided no evidence that they informed Postal 

Inspectors at the time as required by postal rules. Workplace unit brought the matter to the 

attention of cognizant District managers and Inspectors. The complainant's transfer request was 

the subject of an EEO fi ling with which the workplace unit will not interfere.

8/25/2009

Senator, Florida Request for transfer due to hostile work 

environment created by a postal employee; 

management failed to alert the Postal Inspection 

Service of an assault on postal property; 

management failed to follow postal policy.

Management confi rmed an assault occurred but provided no evidence that they informed Postal 

Inspectors at the time as required by postal rules. Workplace unit brought the matter to the 

attention of cognizant District managers and Inspectors. The complainant's transfer request was 

the subject of an EEO fi ling with which the workplace unit will not interfere.

8/25/2009

Senator, 

Michigan

Improper change of address. Review showed change of address was fi led with the local tax offi ce, outside of postal 

jurisdiction.

6/15/09

Representative, 

Oregon

Unsolicited mail. Review showed no indication the mailing had fraudulent intent or that the mailer issued it as part 

of a mail fraud scheme.

6/23/2009

Representative, 

Pennsylvania

Potentially fraudulent solicitation in the mail. Review showed no indication the mailing had fraudulent intent or that the mailer issued it as part 

of a mail fraud scheme.

6/23/2009

Representative, 

Texas

Request for OIG surveillance video. FOIA review determined release would be improper without a waiver from a third party in 

the video.

7/20/2009

Senator, Alabama False representations in mailings used to solicit 

funds.

Postal Inspectors investigated thoroughly, but found no support for prosecution by the U.S. 

Attorney's Offi ce or the Federal Trade Commission.

7/22/2009

Representative, 

Pennsylvania

Compensation issues for Postal Police Offi cers, 

including locality and availability pay; workplace 

environment issues.

Contrary to complainant's assertion, the Postal Reform Act did not change PPO eligibility for 

locality and availability pay. Legal counsel did not substantiate workplace allegations. 

7/17/2009

Representative, 

New Jersey

Mail handler positions are being abolished, causing 

workplace stress.

Management confi rmed several post offi ces are reposting jobs, but complainant has not lost 

his job. This process is part of a broad realignment effort to deal with unprecedented economic 

challenges, and the workplace unit found no basis to intervene.

8/12/2009

Representative, 

Pennsylvania

Request for assistance locating a certifi ed letter. Retrievable information on such a mailing is available only if the sender purchased delivery 

confi rmation; if so, information is available on the postal public website.

7/20/2009

Senator, Montana Involuntary transfer. The matter is the subject of pending EEO claim, and OIG will confi ne its activity to that process. 8/6/2009

Senator, 

Pennsylvania

Request for assistance locating a certifi ed letter. Retrievable information on such a mailing is available only if the sender purchased delivery 

confi rmation; if so, information is available on the postal public website.

7/29/2009

Representative, 

Pennsylvania

Questions about the validity of a mailing. Review showed no indication the mailing had fraudulent intent or that the mailer issued it as part 

of a mail fraud scheme.

8/4/2009

Senator, Texas Failure to accommodate employee's serviceconnected disability and uses medical information 

against him in an attempt to force him to retire.

Employee chose to fi le an EEO complaint on the same issues; workplace review found no 

overriding climate issues warranting further inquiry.

9/3/2009

Representative, 

Pennsylvania

Mail theft. Report had been entered in the Criminal Investigations Service Center database; Postal 

Inspectors contacted local police to advise on procedures.

8/26/2009

Representative, 

Pennsylvania

Mail fraud. Allegations forwarded to Criminal Investigations Service Center for review. 8/25/2009

Senator, 

New York

Mail tampering. Case closed after complainants declined to speak with Postal Inspectors. 9/14/2009

Representative, 

Ohio

Request for information about crimes involving 

the mail.

Staff were directed to the Postal Inspection Service Legal Handbook discussion of "When Is It No 

Longer Considered 'Mail.'"

9/8/2009
74 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

APPENDIX I

Requestor Allegation/Concern Major Findings Closure Date

Representative, 

Florida

Presentation of additional evidence from victims of 

investment fraud scheme investigation.

Complainant directed to the Federal Bureau of Investigation and U.S. Attorney, where 

prosecution is under consideration.

9/23/2009

Senator, Ohio Interference with mail delivery. Postal Inspectors attributed delivery problems to complainant fi ling multiple change of address 

forms and worked with local postal offi cials to resolve the issue.

9/22/2009

Representative, 

Illinois

Rate of compensation for postal spouse on 

Reserve duty.

Directed complainant to Human Resources personnel for discussion of benefi ts. 9/29/2009

Inspector General Audits (15)

Requestor Allegation/Concern Major Findings Closure Date

Ranking 

Member, Senate 

Committee

Violations of the Postal Service's relocation 

benefi ts program.

Investigation did not substantiate that relocation rules were violated. Concurrent audit work 

benchmarking comparable programs is discussed in the OA section of this publication. 

5/12/2009

Ranking 

Member, Senate 

Committee

Violations of the Postal Service's relocation 

benefi ts program.

Investigation did not substantiate that relocation rules were violated. Concurrent audit work 

benchmarking comparable programs is discussed in the OA section of this publication. 

5/12/2009

Chairman, House 

Subcommittee

OIG studies on Postal Service use of alternative 

fuel vehicles; infrastructure considerations.

OA has not yet conducted reviews specifi cally on effi cacy of the Postal Service's alternative fuel 

vehicles. Infrastructure is an important consideration, including energy storage and transfer; 

vehicle usage needs and patterns, operating maintenance requirements, and network planning.

4/22/2009

Senator, Ohio Consolidation at two Ohio facilities. The OIG provided information regarding plans for future audit work regarding the facilities. 4/28/2009

Chairman, House 

Subcommittee

Violations of the Postal Service's relocation 

benefi ts program.

Investigation did not substantiate that relocation rules were violated. Concurrent audit work 

benchmarking comparable programs is discussed in the OA section of this publication. 

5/12/2009

Ranking 

Member, House 

Committee

Report all open recommendations from prior audits 

and monetary benefi ts associated with them; 

estimate how quickly each recommendation can 

be implemented.

The OIG provided information as requested. 5/1/2009

Representative, 

California

Requested a copy of an OIG audit report. The OIG provided a redacted report. 4/29/2006

Representative, 

Ohio

Concerns about consolidation of two Ohio facilities. The OIG provided information regarding plans for future audit work regarding the facilities in 

question.

5/15/2009

Representative, 

Florida

Concerns about consolidation of two Florida 

facilities.

The OIG provided information regarding plans for future audit work regarding the facilities. 6/15/2009

Chairman, House 

Subcommittee

OIG provide information about the feasibility and 

economics of a Postal Service fl eet of electric 

plug-in delivery vehicles.

The Postal Service makes a particularly interesting national laboratory for testing technological 

advancements of Electric Vehicles (EVs). Our study determined that use of EVs for Postal Service 

deliveries is operationally feasible and could provide a valuable opportunity for the nation to test 

EV technology. 

8/28/2009

Senator, Iowa Cost effectiveness of Postal Service contracts for 

forensic laboratory services.

Review found the Postal Service used contractors to address a backlog of work which was 

at least as cost effective as hiring additional employees and allowed the labs to complete an 

important and time-sensitive project while reducing the backlog.

6/29/2009

Representative, 

Florida

Concerns about consolidation of two Florida 

facilities.

The OIG provided information regarding plans for future audit work regarding the facilities. 7/10/2009

Representative, 

Texas

Concerns about consolidation of two Texas 

facilities.

The OIG provided information regarding plans for future audit work regarding the facilities. 8/14/2009

Senator, 

Pennsylvania

Concerns about consolidation plans for a 

Pennsylvania facility.

The OIG provided information regarding plans for future audit work regarding the facilities. 9/23/2009

Representative, 

Pennsylvania

Concerns about consolidation plans for a 

Pennsylvania facility.

The OIG provided information regarding plans for future audit work regarding the facilities. 9/24/2009
April 1 – September 30, 2009 | 75 

APPENDIX I

Referrals (12)

Requestor Allegation/Concern Referred To Closure Date

Representative, 

Colorado

Mail delivery and customer service issues. Colorado Consumer Affairs Offi ce. 4/27/2009

Representative, 

Texas

Whether information provided to the Federal 

Bureau of Investigation regarding the Anthrax 

investigation was properly investigated.

FBI. 5/13/2009

Representative, 

New Jersey

Mail delivery and customer service issues. South Jersey Consumer Affairs Offi ce. 6/3/2009

Representative, 

New Jersey

Postal employee termination. Postal Service Government Relations Offi ce. 7/1/2009

Representative, 

New Jersey

Benefi ciary access to postal benefi ts. Postal Service Government Relations Offi ce. 7/9/2009

Senator, Texas Work schedule adjustments in a Texas district. Postal Service Government Relations Offi ce. 7/13/2009

Representative, 

California

Return to duty following on-the-job injury. Postal Service Government Relations Offi ce. 7/29.2009

Representative, 

Pennsylvania

Validity of a mailing concerning elder law changes. We could not confi rm the existence of the organization named in the mailing and forwarded the 

inquiry to the Criminal Investigations Service Center for further review.

8/24/2009

Representative, 

North Carolina

Postal Service incorrectly deducted complainant's 

leave while on active duty.

Postal Service Government Relations Offi ce. 8/17/2009

Representative, 

New Jersey

Assistance with a Family and Medical Leave Act 

claim.

Postal Service Government Relations Offi ce. 8/18/2009

Senator, 

New York

Mail delivery issues. Triboro Consumer Affairs Offi ce. 9/21/2009

Senator, 

Maryland

Postal Service sale of address information violates 

privacy rights.

Postal Service Government Relations Offi ce. 9/23/2009
76 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

FREEDOM OF INFORMATION ACT/ WORKPLACE ENVIRONMENT

Requests Number of Requests

Carryover from prior period 38

Received during period 345

Total on hand during period 383

OIG Actions Number of Requests

Processed during the period 351

Requests denied in full 32

Requests denied in part 123

Requests Granted in Full 22

No records 39

Requests referred 65

Requests withdrawn 14

Fee-related reasons 1

Records not reasonably described 2

Not a proper FOIA request for some other reason 39

Not an agency record 5

Duplicate request 9

Balance Number of Requests

Balance at the end of the period (pending) 32

Processing Days Number of Days

Median processing days to respond to a FOIA request 8

SUPPLEMENTAL INFORMATION

Freedom of Information Act

Beginning in fi scal year 2009, the Freedom of Information Act (FOIA) 

functions for the Postal Inspection Service and Postal Service OIG were 

combined under the Joint Legal Services Center. The offi ce operates 

independently of, but frequently coordinates with, its counterpart at the 

Postal Service. The FOIA Offi ce receives requests for records from the 

public, the media, and Postal Service employees. The FOIA, according to 

the Department of Justice, “generally provides that any person has a right, 

enforceable in court, to obtain access to federal agency records, except to 

the extent that such records (or portions of them) are protected from public 

disclosure by one of nine exemptions.”

For the period April 1 – September 30, 2009

SUPPLEMENTAL INFORMATION

Workplace Environment

The Joint Legal Services Center Workplace Environment unit reviews 

workplace environment and operational issues that may affect workplace 

climate in postal facilities through the country. The OIG Hotline is the 

usual source for the complaints, but occasionally members of Congress, 

the Governors, and postal management will raise concerns or forward 

complaints appropriate for review by the unit. Complaint topics range from 

sexual harassment and discrimination to workplace safety. Workplace 

Environment reviews are designed to identify systemic, rather than 

individual, issues and foster postal management efforts toward providing 

employees a stress-and adversity-free work environment.

The unit accepts complaints from any postal employee, including OIG and 

Postal Inspection Service staff, providing an alternative to grievance and 

Equal Employment Opportunity processes. 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 April 1 – September 30, 2009

Complaints received Total

Carryover from prior period 34

Complaints received from OIG Hotline, Congress, Governors, 

Management, Internal, and 

Other

262

—

Total on hand during this period 296

Workplace environment actions Total

Complaints closed during this period 267

 Referred to Postal Service management 90

 Referred to Offi ce of Investigations 18

 Referred to Postal Inspection Service 6

 Referred to the Joint Legal Services Center —

 Referred to Offi ce of Audit 2

 Referred to Stakeholder Relations 1

 Summary of fi ndings to Congress/BOG/Postal 

 Service management 12

 Referred to database for statistical analysis and possible 

 systemic review 137

 Fact-fi nding reports issued to OIG management 1

Referrals pending at the end of the period 29
April 1 – September 30, 2009 | 77 

JURISDICTION AND LAWS

Jurisdiction and Laws

More than 200 federal laws are enforced by Postal 

Inspectors and OIG Special Agents through investigations 

of crimes that impact the Postal Service. A wide array of 

federal statutes are used to ferret out fraud, waste and 

misconduct in government agencies, including the Postal 

Service. Generally, crimes related to the U.S. Mail are 

covered in Title 18, United States Code, Sections 1691-

1737, while others affecting the Postal Service are codifi ed 

under Title 39. Shown here are some of the most important 

areas of jurisdiction. 

Assaults (18 USC 111, 1114)

The protection of Postal Service employees is one of the 

Postal Inspection Service’s most important responsibilities. 

Postal Inspectors promptly investigate assaults and threats 

that occur while postal employees are performing offi cial 

duties or as a result of their employment.

Bombs (18 USC 1716)

Although a rare crime, Postal Inspectors give high 

investigative priority to the mailing of bombs, due to the 

severe impact it can have on postal customers, employees, 

and operations.

Burglary (18 USC 2115) 

Postal Inspectors respond to and investigate burglary 

incidents.

Child Exploitation

(18 USC 1470, 2251- 2254, 2422-2425) 

The Postal Inspection Service is recognized as one of 

the leading federal law enforcement agencies combating 

the production, distribution, receipt, and possession of 

child pornography and other crimes related to the sexual 

exploitation of children through the mail and the Internet.

Contract Fraud (18 USC 201, 440, 441) 

The OIG aids the Postal Service by aggressively 

investigating allegations of fraud, waste, misconduct 

and other contract improprieties in the thousands of 

postal contracts.

Credit Card Fraud

(15 USC 1644; Access Device Fraud: 18 USC 1029) 

Both agencies investigate credit card fraud, and often work 

jointly on cases involving postal employees and outsiders. 

Special Agents investigate postal employees who misuse 

government credit cards or steal cards from the mail 

and use them or sell them to others. Postal Inspectors 

investigate cards stolen from the mail by outsiders. 

Narcotics and Controlled Substances

(21 USC 841, 843, 844; 18 USC 1716) 

Postal Inspectors initiate investigations related to 

transporting and distributing narcotics through the 

mail when employees are not involved. Special Agents 

investigate the sale or distribution of illegal narcotics by 

employees in the postal workplace or while on duty.

Delay, Destruction or Obstruction of Mail

(18 USC 1700, 1701, 1702, 1703) 

Both agencies uphold federal statutes aimed at securing 

customers’ mail, including statutes related to the 

desertion, obstruction, delay, or destruction of mail. 

Special Agents investigate incidents involving postal 

employees and contractors. Postal Inspectors investigate 

incidents involving outsiders.

Electronic Crimes

(18 USC 1029, 1030, 1037, 1343, 2701) 

Both agencies investigate electronic or “cybercrimes.” 

Postal Inspectors protect customers from fraud schemes 

and other crimes that may occur online and involve the 

misuse of the mail or of the Postal Service. Special Agents 

investigate intrusions into the Postal Service computer 

networks or misuse of those systems by postal employees. 

Embezzlement, Theft or Destruction of Public Money, 

Property or Records (18 USC 641, 1711) 

The OIG investigates theft or embezzlement of postal funds 

by postal employees.

Extortion (18 USC 873, 876, 877) 

Postal Inspectors investigate extortion and blackmail when 

demands for ransoms or rewards are sent through the mail. 

False Statements (18 USC 1001) 

Both agencies use this statute in their investigations. 

Forfeiture (18 USC 981, 982) 

Agents from both agencies use criminal and civil forfeiture 

statutes, when appropriate, to seize assets associated with 

criminal acts.

Identity Fraud (18 USC 1028) 

Identity fraud victimizes millions of Americans each year. 

Both agencies play a role in investigating this crime. The 

Postal Inspection Service investigates identity theft and 

account takeovers when there is a nexus to the mail or the 

Postal Service. Special Agents investigate cases where a 

postal employee steals mail to obtain personal information.
78 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

JURISDICTION AND LAWS

Injury Compensation Fraud (18 USC 287, 1919, 1920) 

Schemes by healthcare providers and postal employees 

to defraud the workers’ compensation system cost the 

Postal Service millions of dollars annually. Special Agents’ 

investigative work saves the Postal Service millions in longterm costs and deters others from abusing the system. 

Kickbacks, Bribes and Gratuities

(41 USC 51-53; 18 USC 201) 

Special Agents investigate contract irregularities and 

frauds — including kickbacks, bribes, and gratuities to 

postal employees.

Lotteries (18 USC 1301, 1302, 1303 and 39 USC 3005) 

Postal Inspectors protect consumers by strictly enforcing 

all laws related to importing, transporting, and mailing 

lottery tickets. Under the false representations and lottery 

statute (3005), Postal Inspectors are authorized to instruct 

Postmasters to withhold from delivery and return to sender 

any mail that violates the law.

Mail Fraud

(18 USC 1341, 1342, 1345 and 39 USC 3005, 3007) 

The Postal Inspection Service is committed to protecting 

postal customers from being defrauded through the mail. 

Postal Inspectors place special emphasis on mail fraud 

scams related to advance fees, boiler rooms, health care, 

insurance, investments, deceptive mailings, and other 

consumer fraud — especially when it targets the elderly or 

other vulnerable groups. 

Mail or Mailbox Destruction (18 USC 1705) 

The Postal Inspection Service is committed to ensuring the 

safety of the nation’s mail by securing letter boxes or other 

receptacles for U.S. Mail. To this end, Postal Inspectors 

aggressively pursue individuals who willfully or maliciously 

injure or destroy such receptacles.

Money Laundering (18 USC 1956, 1957) 

Special Agents and Postal Inspectors investigate criminals 

who attempt to conceal the proceeds of illegal acts through 

monetary transactions. They identify and seize criminals’ 

assets, denying violators the proceeds of their crimes. 

Money Orders, Counterfeit Stamps, and Related 

Crimes (18 USC 500, 501, 503, 1720) 

Postal Inspectors pursue criminals who forge, alter, or 

counterfeit postal money orders, postage stamps, and other 

stamp products. Special Agents investigate employees who 

manipulate postal money orders or funds. 

Obscenity and Sexually Oriented Advertising

(18 USC 1461, 1463, 1735 and 39 USC 3010) 

Postal Inspectors follow court-established guidelines to 

uphold obscenity standards, which prohibit “obscene, 

lascivious, indecent, fi lthy, or vile” mailings. Customers who 

wish to halt mailings of sexually oriented advertisements 

or similar solicitations may complete and submit PS Form 

1500, available at Post Offi ces or online.

Robbery (18 USC 2114) 

Postal Inspectors respond promptly to robberies of postal 

employees, facilities, vehicles and postal contractors. 

Theft of Mail (18 USC 1708, 1709)

Theft of mail is a primary investigative responsibility of both 

agencies. Postal Inspectors investigate external incidents, 

including Postal Service contractors who transport mail to 

postal facilities. Special Agents investigate thefts by postal 

employees and contractors. 

Theft of Postal Property (18 USC 1707)

Misconduct by postal employees is investigated by Special 

Agents and includes theft, destruction, or misuse of Postal 

Service property or equipment.

Whistleblower Protection

(Employee and Labor Relations Manual 666.18, 666.3 et. seq.)

This rule protects postal employees from reprisal resulting 

from disclosure of information evidencing a violation of law 

or regulation; waste, mismanagement, or abuse; or danger 

to public health or safety. Special Agents investigate 

reprisal allegations.
April 1 – September 30, 2009 | 79 

ACRONYM GUIDE

AFIS Automated Fingerprint 

Identifi cation System

AMC Airport mail center

APC Automated Postal Center

APPS Automated Package Processing 

System

ATF Bureau of Alcohol, Tobacco, 

Firearms, and Explosives

AVSEC Postal Service’s Aviation 

Security

CBU Cluster Box Unit

CEO Chief Executive Offi cer

CERT CC Computer Emergency 

Response Team Coordination 

Center

COD Collect on Delivery

COR Contracting Offi cer 

Representative

CPU Contract Postal Unit

CY Calendar Year

DCIS Defense Criminal Investigative 

Service

DHS Department of Homeland 

Security

DOA Delegations of Authority

DOJ Department of Justice

DOL U.S. Department of Labor

DPS Delivery Point Sequencing

ECM Essential Crisis Management

ePACS Enterprise Physical Access 

Control System

EPRRS Emergency Preparedness 

Response and Recovery Services

EV Electric Vehicles

FDA Food and Drug Administration

FMLA Family Medical Leave Act

FSS Flats Sequencing System

FY Fiscal Year 

GIS Geospatial Information System

HCR Highway Contract Route

IBI-RP Information Based IndiciaRevenue Protection 

ICE Immigration and Customs 

Enforcement

IED Improvised Explosive Device

IEMP Integrated Emergency 

Management Plan

IPR Center National Intellectual 

Property Rights Coordination Center

ISC International Service Center

LLV Long-Life Vehicle

MFID Major Fraud Investigations 

Division

MPE Mail Processing Equipment

NCFTA National Cyber and Forensic 

Training Alliance

NDC Network Distribution Center

NDCBU Neighborhood Delivery and 

Collection Box Unit

NEXS National Exercise Schedule

NICLE National Identity Crimes Law 

Enforcement

NTL National Trailer Lease

OA Offi ce of Audit

OI Offi ce of Investigations

OIG Offi ce of Inspector General

OPM Offi ce of Personnel 

Management’s

OWCP Offi ce of Workers’ 

Compensation Program

P&DC Processing and Distribution 

Center

P&DF Processing and Distribution 

Facility

PANS Postal Alert Network System

PIN Personal Identifi cation Number

PKI Public Key Infrastructure

PNEMS Postal Notifi cation Emergency 

Management System 

Postal Act of 2006 Postal 

Accountability and Enhancement 

Act of 2006

PPO Postal Police Offi cers

PRC Postal Regulatory Commission

PSA Public Service Announcement

PSG Postal Security Group

PSRHBF Postal Service Retiree Health 

Benefi ts Fund

Public Law 111-68 Continuing 

Appropriations Resolution, 2010

PVS Postal Vehicle Services

SEC Securities and Exchange 

Commission

SISC Security Investigations Service 

Center

SOP Standard Operating Procedures

SPM Scheduled Preventive 

Maintenance

SSA Sales and Services Associate

SSN Social Security Number

TAT Threat Assessment Team

TRC Temporary Relief Carrier

UPU Universal Postal Union

V2G Vehicle to Grid

VMF Vehicle maintenance facilities

VOCA Victims of Crime Act

WAR White Aryan Resistance

Acronym Guide
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.

CHAPTER TITLE

82 | Semiannual Report on the Audit, Investigative, and Security Activities of the United States Postal Service

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

U.S. POSTAL INSPECTION SERVICE

475 L’Enfant Plaza SW, Washington, DC 20260-2112

1.877.876.2455 http://postalinspectors.uspis.gov/