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Audit Reports

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Mar
14
2016
Report Number:
FT-AR-16-005
Report Type:
Audit Reports
Category: Finance

Fiscal Year 2015 Postal Service Selected Financial Activities and Accounting Records

Background

The U.S. Postal Service Headquarters Finance group establishes accounting policies and guidelines for recording and reporting financial transactions. The three Accounting Services (Eagan, MN; San Mateo, CA; and St. Louis, MO) are responsible for functions related to accounts payable, capital property, vehicles, transportation, money orders, international mail, and payroll.

The U.S. Postal Service Board of Governors contracted with an independent public accounting firm to express opinions on the Postal Service’s financial statements and internal controls over financial reporting. The firm maintains overall responsibility for testing and reviewing significant accounts and processes. The U.S. Postal Service Office of Inspector General coordinates audit work with the firm to ensure adequate coverage.

Our objectives were to determine whether:

  • Accounting transactions were fairly stated in the general ledger and selected key controls were operating effectively.
  • The Postal Service properly tested, documented, and reported its examination of selected key financial reporting controls related to Postal Service Headquarters and Accounting Services.

What The OIG Found

The Postal Service’s accounting transactions were fairly stated and selected key controls were operating effectively.

We did not propose any adjustments or identify any issues or control deficiencies that were material to the financial statements or that would affect the overall adequacy of internal controls. However, management did not always properly test key controls for highway transportation activity. This occurred because testers were inexperienced and were not adequately monitored. As a result, there is an increased risk that control failures are not detected and reported.

Effective June 8, 2015, management began transitioning most activities required by the Sarbanes-Oxley Act to a third-party contractor. This contractor partnered with the Postal Service for Sarbanes-Oxley program management and expanded its role to include testing of internal controls in fiscal year 2015.

What The OIG Recommended

Management recognized the challenges in fiscal year 2015 and provided oversight, training, and collaboration to the contracted testers prior to starting fiscal year 2016 testing. Therefore, we are not making recommendations.