Internal Controls and Transportation Associated With the Atlanta, GA, Mail Transport Equipment Service Center
Background
The U.S. Postal Service’s mail transport equipment service center (MTESC) network is composed of 15 contractor-operated centers that handle, supply, and transport mail transport equipment (MTE) to mail processing facilities and customers. The Atlanta, GA, MTESC spends about $10.4 million annually to service 98 facilities and mailers in the Eastern, Capital Metro, and Southern areas. Our objective was to assess internal controls and dedicated transportation activities associated with the Atlanta MTESC.
What The OIG Found
The Postal Service needs to improve controls over MTE operations and transportation at the Atlanta MTESC and associated processing facilities. Management did not adequately control contractor processing, invoicing, and repair and handling of MTE or monitor contractor performance; and did not always secure its operations. In addition, none of the processing facilities complied with MTE policies and were sending unprocessed and improperly prepared MTE to the Atlanta MTESC. Processing facilities were also not always inspecting MTE for mail before sending it to the Atlanta MTESC, causing delayed or undelivered mail.
These conditions occurred because the Postal Service did not provide sufficient oversight to ensure compliance with its policies. Finally, facilities lacked adequate resources, management prioritized processing mail over managing MTE, and ongoing operational changes and realignment of the processing network caused inefficiencies in MTE transportation.
Because of issues associated with the Atlanta MTESC, the Postal Service incurred an estimated $936,000 and $760,000 in unnecessary costs in fiscal years 2012 and 2013, respectively. It could also avoid about $848,000 annually over the next 2 years by providing adequate oversight and ensuring compliance with policies.
What The OIG Recommended
We recommended the vice presidents, Network Operations and Supply Management, establish adequate controls over contractor performance and ensure MTE is protected. We also recommended the vice president, Network Operations, in coordination with vice presidents, Eastern, Capital Metro, and Southern area operations, ensure compliance with policies for proper ordering, handling, and transporting MTE; and reassess MTE transportation requirements to ensure efficiency.