Background

The Postal Accountability and Enhancement Act of 2006 (PAEA) amended 39 U.S.C. by revising the limits on salary and total compensation paid to U.S. Postal Service employees. For calendar year (CY) 2016, basic annual salary for each employee was limited to $205,700. Under a bonus or reward program approved by the U.S. Postal Service Board of Governors, the Postal Service could compensate senior executive or equivalent positions up to $237,700 in total compensation. For individuals designated as critical senior officers, total compensation could reach up to $285,240.

Total compensation includes salary, federal annuity, merit lump sum, incentive, recruitment and executive detail bonus payments.

Our objective was to determine whether the Postal Service complied with the applicable maximum total compensation provisions of the PAEA in CY 2016, related Postal Service policies and guidelines, and Internal Revenue Service (IRS) regulations.

What the OIG Found

The Postal Service complied with most provisions of the PAEA, related internal polices and guidelines and IRS regulations for CY 2016 compensation. We did not identify any officers that exceeded the maximum total compensation provisions of the PAEA.

However, we determined the Postal Service did not fully comply with a reporting provision of the PAEA. Specifically, the Postal Service did not include the amount of the bonus or other payment, one of three elements required, in its annual report of compensation because they were not fully aware of the requirement.

Our review also disclosed that, for two executives, the amount by which their total compensation exceeded the limit for CY 2015 was overstated in the annual report of compensation. The total of the two overstatements was less than $1,100. The adjustments for one financial counseling session and the return of an award were not identified timely to remove them from the compensation report. We are not making a recommendation for the overstatement due to its insignificance. However, we did discuss this with management.

What the OIG Recommended

We recommended the Postal Service separately report the amount of bonus or other payment made to each individual identified in its annual report of compensation.

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