A recent Office of Inspector General (OIG) audit shows the U.S. Postal Service, the nation’s second largest employer, made progress in streamlining its mail processing and transportation network during fiscal years 2005 to 2009. The Postal Service slashed an unprecedented 205.2 million work hours – the equivalent of 117,273 employees – mostly from its mail processing and customer service work forces. It cut 37 million miles from its highway contract delivery routes. It closed 68 airport mail centers and 12 remote encoding centers that assist other facilities in processing mail with unreadable addresses. The Postal Service transformed the bulk mail centers into network distribution centers to enhance functions and mail flows.

The OIG determined that, despite these significant accomplishments, the Postal Service still has much to do to successfully right size its network and offset declining mail volumes. Yet, a crippled economy and political resistance to future closings and consolidations threaten to thwart progress. For example, since 2005, the Postal Service has implemented 13 consolidations of its 268 Processing and Distribution Centers (P&DCs) nationwide. Only two consolidations resulted in full facility closures, and the Postal Service cancelled some consolidations without providing rationales. Stakeholder opposition and political resistance to consolidations, and First-Class Mail® service downgrades were the primary factors that delayed or resulted in disapprovals of these consolidation efforts.

The OIG concluded during its review the Postal Service lacks specific criteria with which to identify consolidation opportunities nationwide. Overall, postal management agreed with OIG recommendations to develop and document specific criteria for identifying consolidation opportunities in its plant network, to develop an annual review using a methodology directed from headquarters management to ensure consistency in indentifying consolidation opportunities and to aggressively pursue facilities closures to eliminate excess plant capacity. To read this report in its entirety, click here

The Office of Inspector General (OIG) has investigated many fraudulent workers’ compensation claim cases. Most of these investigations involve postal employees scamming the system. But, employees aren’t the only ones who abuse the system. Sometimes, medical providers used by postal employees injured on the job, defraud and abuse the system. A few seek to take advantage of this program by submitting false bills, colluding with claimants to extend benefits, or falsifying claim documents. But OIG Special Agents, along with the Department of Labor OIG, found an orthopedic surgeon in New Orleans with a scam of his own.

The surgeon, who operated a medical practice in New Orleans, claimed to have performed health care services after Hurricane Katrina when his office was not even open! Forty-seven of the claims involved names of postal employees. The surgeon pled guilty in federal court to fraud and has agreed to pay $750,000.00 in restitution. He also faces a possible maximum sentence of 10 years in prison and a fine of $250,000 at his sentencing in May.

These scammers – employees and providers – are who we are interested in. Last year our investigative efforts saved the Postal Service over $185 million in long-term compensation costs. If you know of someone who is scamming the system, give us a call at 1-888-USPS-OIG. Or drop us an email at HOTLINE@uspsoig.gov.

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A study just released by the U.S. Postal Service’s Office of Inspector General (OIG) shows that the current system of funding the Postal Service’s Civil Service Retirement System pension responsibility is inequitable and has resulted in the Postal Service overpaying $75 billion to the pension fund. The OIG estimates that if the overcharge was used to prepay the Postal Service’s health benefits fund, it would fully meet all of the Postal Service’s accrued retiree health care liabilities and eliminate the need for the required annual payments of more than $5 billion. Also, the health benefits fund could immediately start meeting its intended purpose -- paying the annual payment for current retirees, which was $2 billion in 2009.

The report further illustrates the inequity in the methodology used to determine the Postal Service’s contribution to the CSRS fund. Key findings from the report: Read more