Our objective was to assess the controls over the management of mechanic undistributed labor in the Capital Metro and Great Lakes Areas.
The Postal Service defines undistributed labor as mechanic and garagemen work order hours that are less than the actual paid hours. The target variance between these metrics is +/- 3 percent of work hours. Time above 3 percent indicates mechanics’ work hours were not captured or identified on work orders. Time below 3 percent indicates mechanics are recording work order hours which exceed timecard hours, indicating mechanics are assigning excess work hours to work orders.
During fiscal year (FY) 2017, vehicle maintenance facilities (VMF) nationwide had a total of 227,765 hours of undistributed labor, representing 2.97 percent of total work hours. The Capital Metro Area fleet group had undistributed labor performance of .42 percent, and the Great Lakes Area fleet group had an undistributed labor performance rate of 3.67 percent. We selected these two areas for review because they represented the lowest and highest undistributed labor performance nationwide according to our Vehicle Maintenance risk model for FY 2017, Quarter 4. We judgmentally selected 12 out of 74 VMFs in the two areas to assess the controls over the management of mechanic undistributed labor.
What the OIG Found
Management controls over mechanic undistributed labor in the 12 selected Capital Metro and Great Lakes VMFs were not always effective to meet the performance target. Specifically:
- Five of the 12 (42 percent) VMFs met the 3 percent undistributed labor performance target; however, timecard hours exceeded mechanic work order hours by over 3,100 hours.
- Four of the 12 (33 percent) VMFs had an average undistributed labor performance of 10 percent, which exceeded the established 3 percent target.
- Three of the 12 (25 percent) VMFs had an average undistributed labor performance of negative 5 percent, indicating work order hours exceeded time card hours.
- Additionally, mechanic work hours were not always recorded on the work orders timely.
These conditions occurred because:
- Four of the 12 VMF managers were not aware of, or trained on, the use of tools such as the Postal Service Employee Roster and Undistributed Labor reports available in the Solution Enterprise Asset Management (SEAM) System to monitor undistributed labor.
- Four of the 12 VMF managers were not trained to investigate, rectify, and address the causes of undistributed labor by correcting inaccurate labor lines, which are tasks entered by the mechanic for a repair; time clock entries; and employee designation and activity codes, as required.
- Postal Service policy does not direct managers to investigate undistributed labor below negative 3 percent.
- Mechanic tracking and recording of work hours was not consistent.
Ineffective management controls over repair and maintenance operations resulted in 62,194 unaccounted for mechanic/garagemen work order hours. Because of the unaccounted hours, we estimated the Great Lakes and Capital Metro areas VMFs incurred questioned costs of $2,989,381.
What the OIG Recommended
We recommended management:
- Ensure managers are aware of and trained on SEAM processes, tools, and reports to improve monitoring and oversight of operations.
- Direct VMF managers to follow guidance in Handbook PO 701, Fleet Management, to rectify and address time charges to ensure timecards and work orders are accurate.
- Issue a directive to VMF managers to investigate, rectify, and address undistributed labor below negative 3 percent.
- Direct VMF managers to review and monitor the entering of work hours onto work orders to ensure hours are recorded accurately.