Internal Controls Over Stamp Stock Shipments ― James Crews Station, Kansas City, MO
Background
The OIG performed data analytics to identify offices with expenses related to lost or stolen stamp stock shipments. We identified $11,640 of expenses related to stamp stock shipments for the James Crews Station, Leon Mercer Jordan Finance Station, and Northeast Finance Station between May 1, 2016, and April 30 2017.
The James Crews Station, Leon Mercer Jordan Finance Station, and Northeast Finance Station share a finance number for processing financial data. Stamp stock for the Leon Mercer Jordan and Northeast Finance Stations is shipped to James Crews Station.
Stamp Fulfillment Services (SFS), Kansas City, MO, fulfills stamp orders from postal retail units. Retail units are responsible for identifying and locating missing stamp stock shipments. When retail units do not resolve discrepancies timely, Accounting Services records an expense to the units for the difference.
Management advised they are strengthening overall stamp accountability and upgrading financial controls, including:
- Daily financial accountability reconciliations and semi-annual stamp counts at SFS.
- Enhancements to tracking stamp movement and in-transits at SFS; and stamp shipments to individual post offices.
- New tracking process and centralized review of all missing stamp stock shipments, including orders sent to the wrong unit.
- New stamp destruction process that better aligns and tracks inventory discrepancies.
The objective of this audit was to determine whether internal controls over stamp stock shipments were in place and effective at James Crews Station.
What the OIG Found
Internal controls over stamp stock shipments at the James Crews Station, Leon Mercer Jordan Finance Station, and Northeast Finance Station needed improvement. Specifically, the stock custodian did not always:
- Timely receive $1,512 of stamp stock shipments in the retail system or make sure a witness was present when receiving shipments.
- Research and resolve $438.50 of stamp stock discrepancies.
- Maintain all stamp stock shipment documentation as required.
The stock custodian stated due to competing priorities, she is not always able to receive stock at finance stations timely or implement the use of the financial differences log to monitor expenses and ensure timely clearance. In addition, a witness was not always available at the finance stations, and she does not ask for a witness at James Crews Station because she has not implemented all the requirements from the policy. Further, she was unaware why the missing stamp shipment documentation was missing and stated the documentation could be misplaced.
If controls over stamp stock are not followed, there is an increased risk the financial records could be misstated, and the Postal Service cannot ensure that the differences are not a result of theft or fraud.
What the OIG Recommended
We recommended management instruct unit management to develop a procedure to ensure stamp stock shipments for all stamp accountabilities are received timely in the retail system to avoid in-transit adjustments.
We also recommended management reiterate and enforce policies in Handbook F-101, Field Accounting Procedures, for receiving stock; maintaining required stamp stock shipment documentation; and researching and resolving financial discrepancies.