Expands the main menu

Breadcrumb

Audit Reports

Dec
12
2014
Report Number:
NO-AR-15-002
Report Type:
Audit Reports

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.

Report Recommendations

# Recommendation Status Value Initial Management Response USPS Proposed Resolution OIG Response Final Resolution
1

R - 1 -- Establish and implement adequate controls over contractor performance and ensure there are adequate resources for effective oversight and monitoring of contractor operations at the Atlanta, GA Mail Transport Equipment Service Center, including the processing, invoicing, repairing, and handling of mail transport equipment.

Closed $0 Agree
2

R - 2 -- Ensure the contractor at the Atlanta, GA Mail Transport Equipment Service Center provides adequate security and access control to ground and trailer parking areas, including access control of inbound and outbound trailers.

Closed $0 Agree
3

R - 3 -- Ensure management monitors compliance with established mail transport equipment policies and procedures to minimize risk of accidents and injuries to personnel handling this equipment and ensure proper dispatching and use of over-the-road containers.

Closed $0 Agree
4

R - 4 -- Reinforce the requirement that processing facilities thoroughly inspect mail transport equipment before it is sent to the Atlanta, GA Mail Transport Equipment Service Center to ensure it contains no mail.

Closed $0 Agree
5

R - 5 -- Reassess mail transport equipment standing orders and transportation schedules for all processing facilities to ensure they are up-to-date and efficient given the operational changes and imbalance of mail transport equipment flow.

Closed $0 Agree