Under-fire USPS looking to make cost savings

USPS insisted it was making every effort to improve operations and save money, in the wake of last week’s audit reports. The audits by the USPS Office of the Inspector General identified $894m in savings that could be achieved by closing down area or district offices processing less than average mail volumes.

The reports also looked at budget cuts that could be achieved by rethinking benefits for senior employees along with the Postal Service’s purchasing policies.

Spokesperson Sue Brennan told Post&Parcel that the USPS was reviewing the findings of the OIG, but that no decisions had been made on a response.

She said: “What I can tell you, however, is that the Postal Service is looking at every feasible way to increase operational efficiencies and save money.”

Senator Susan Collins, who originally ordered the latest round of audits be carried out, said the conclusions revealed “stunning” levels of financial waste in the Postal Service.

The Republican Senator from Maine had strong words about the “lapses” identified by the OIG in a federal agency that has made a $7.7bn loss in the last 11 months, including a $1.5bn loss last month.

Sen. Collins, ranking member of the Senate Homeland Security and Governmental Affairs Committee, which oversees the USPS, spoke out against the USPS hiring policy and its contract management.

Among the “disturbing deficiencies” she said were uncovered by the OIG audits were the awarding of 359 contracts to former Postal Service executives against no competition. Some 39% of these contract awards “lacked justification”, Sen. Collins said.

In some cases, former executives were hired back at nearly twice their former pay to advise new executives – a practice Sen Collins said “raised serious ethical concerns and hurts employee morale.”

The Senator was also incensed by the 835 senior staff for whom the Postal Service pays 100% of health insurance premiums, which doesn’t happen in other federal agencies.

She said the “expensive perks” were not available to comparable federal employees, and among those benefiting were employees within the main regulators of the USPS – the Postal Regulatory Commission and the Office of the Inspector General itself.

“It is unbelievable to me that the Postal Service – awash in red ink and asking for huge postal rate hikes, service reductions and relief from its financial obligations – is paying the full health care premiums for its top executives,” said Sen. Collins.

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