Internal Controls and Transportation Associated with the Dallas, TX Mail Transport Equipment Service Center
Background
The U.S. Postal Service’s Mail Transport Equipment Service Center (MTESC) network is comprised of 15 contractor-operated centers that handle, supply, and transport mail transport equipment (MTE) to mail processing facilities and customers. The Dallas, TX MTESC spends about $14.4 million annually to service 58 facilities and mailers in the Southern Area.
Our objective was to assess internal controls and dedicated transportation activities associated with the Dallas MTESC.
What the OIG Found
The Postal Service needs to improve controls over MTE operations and transportation at the Dallas MTESC and its processing facilities. Specifically, management did not adequately control contractor processing, invoicing, repair, and handling of MTE; monitor contractor performance; or always secure its operations. Processing facilities did not always comply with MTE policies and were sending unprocessed, improperly prepared MTE and incorrect container types to the Dallas MTESC. In addition, they did not always inspect MTE before sending it to the Dallas MTESC or mailers, causing delays or undelivered mail.
Management also did not reassess transportation needs and requirements in order to reduce transportation costs. Finally, we identified cancellations and additions of MTE transportation that occurred because of ongoing operational changes and realignment of the processing network.
These conditions occurred because the Postal Service did not provide sufficient oversight to ensure compliance with its policies. Further, facilities lacked adequate resources and management prioritized processing mail over managing MTE.
As a result, the Postal Service incurred about $916,000 and $760,000 in unnecessary processing costs in fiscal years 2013 and 2014, respectively. It could also avoid costs of about $838,000 annually over 2 years by providing adequate oversight and ensuring policy compliance.
What the OIG Recommended
We recommended management establish adequate controls over contractor performance and ensure MTE is protected. We also recommended management ensure compliance with policies for proper ordering, handling, and transporting of MTE; and reassess MTE transportation requirements to ensure efficiency