US Postal Service can't account for millions

The U.S. Postal Service can’t account for at least USD 33.4 million in facilities-repair and vehicle expenses last year because of weak controls and lax oversight, two reports from the agency’s inspector general’s office said.

The Postal Service couldn’t assure that any of the USD 27.6 million in maintenance and repair expenses at facilities examined by auditors were used for that purpose, according to one of the reports posted on the agency’s Web site.

Some supervisors weren’t aware that they were responsible for overseeing expenses, that audit found. Other employees with limited knowledge of the repairs certified that they were properly done by contractors.

Without standard procedures, “the safety, security and serviceability of Postal Service facilities, employees and customers are at increased risk,” the March 3 report said. And without established controls over contractors, “there is an increased risk of fraud and abuse,” it said.

The audit covered facilities in all or part of 33 states, including Texas, Pennsylvania and Ohio, Postal Service spokesman David Partenheimer said.

Another audit found that postal vehicles on some city routes in 15 states had more than USD 5.8 million in questionable costs. Some vehicles were logged in as having traveled millions of miles in a single accounting period, while others were recorded as having gone a negative number of miles, the March 4 report said.

The findings come as the Postal Service, a government agency required by law to set rates to cover costs, tries to cope with a possible USD 2 billion loss this year after a USD 5.1 billion deficit last year. Postmaster General Chief Executive John Potter said this month that he’s seeking ways to cut costs. First-class stamps will rise a penny to 42 cents on May 12.

The Postal Service created a new position for a facilities executive who is to develop and implement best repair practices by September 2009, one report said. He is to issue instructions for monitoring finance reports by May 2. With regard to vehicles on city routes, the agency will print instructions on how to record mileage by March 2009, the other report said.

“For both these reports we refer you to management’s comments, which remains our response,” Partenheimer said in an e-mail today.

Other audits released in the past month have identified potential savings. One reported that Postal Service facilities in four states incurred USD 17.8 million in unnecessary costs by using FedEx Corp. aircraft to ship mail.

Another found that the agency undercharged China, India and other countries by millions of dollars because of errors in processing mail at John F. Kennedy International Airport in New York.