• on Jan 31st, 2011 in Finances: Cost & Revenue | 75 comments
    In 1916, the Federal Employees’ Compensation Act (FECA) was enacted. FECA provides medical, compensation, death, and other benefits, such as vocational rehabilitation, and nursing services to federal employees who sustain injuries, including occupational diseases, as a result of their employment. All Postal Service employees are covered by FECA. The Department of Labor (DOL) administers FECA and makes all decisions regarding the eligibility of injured workers’ to receive workers’ compensation benefits. DOL provides direct compensation to medical providers, claimants, and beneficiaries. The Postal Service reimburses DOL for all workers’ compensation claims in addition to paying an administrative fee. In fiscal year 2009, the Postal Service workers’ compensation expense was approximately $2.2 billion, an 81 percent increase from $1.2 billion in FY 2008. These costs include $55 million in DOL administrative fees for FY 2009. About 72 percent ($718 million) was a non-cash charge related to changes in the estimated discount and inflation rates used to calculate the liability for future payments. At the end of FY 2009, the Postal Service estimated the total liability for future workers’ compensation cost was over $10 billion. One of the contributing factors to the high cost of workers’ compensation payments is that FECA does not mandate a cut-off age for workers’ compensation benefits. Thus, injured workers can continue to receive workers’ compensation benefits well past the legal retirement age of 65, and in some cases employees over the age of 90 are still receiving workers’ compensation benefits. Fraudulent workers’ compensation claims also result in higher overall costs. To combat workers’ compensation fraud the OIG launched its crime prevention and awareness campaign in September 2009 and a joint year-long initiative with the U.S. Postal Inspection Service in February 2010. The successful investigative efforts saved the Postal Service more than $400 million for fiscal years 2009 and 2010 combined. What can the Postal Service do to reduce workers’ compensation costs? This topic is hosted by the OIG’s Human Resources and Security Audit Team.
  • on Jan 10th, 2011 in Finances: Cost & Revenue | 6 comments
    Postage Meters are printing machines or systems for home or office that print postage directly onto mailpieces, or onto an approved label, for mailing. Customers can request refunds on meter mail for a variety of reasons. For example, customers can request refunds when meter mail postage is printed for the wrong denomination, mail is damaged before it is delivered to the Postal Service, or postage is printed but not mailed. For customers to receive a refund, they must take their unused meter mail postage along with the Postal Service Form 3533, (Application for Refund of Fees, Products and Withdrawal of Customer Accounts),to their local post office to request the refund. Once postal employees receive a refund request, they process the request manually by counting each piece of metered postage in question to verify the refund amount. The Postal Service charges a 10 percent fee (up to $350) for each refund processed. If the 10 percent fee is greater than $350, the Postal Service charges the customer a flat fee of $35 an hour to process the refund. Once the local postal employee verifies the refund amount, the post office either issues a no-fee money order (if the refund is less than $500) or forwards the supporting documentation to a disbursement center for refund payment. In Fiscal Year 2010, the Postal Service refunded customers more than $21 million for spoiled and unused meter mail postage. If all associated mailpieces were metered at the First-ClassTM 44-cent stamp rate that would mean postal employees manually counted 47.7 million mailpieces to verify meter mail refunds. The topic is hosted by the Office of Audit Field Financial – West team.
  • on Dec 20th, 2010 in Finances: Cost & Revenue | 1 comment
    The Postal Accountability and Enhancement Act (PAEA) requires the Postal Service to measure service performance and report to the Postal Regulatory Commission (PRC). The PAEA directs that external measurement systems be used for evaluating the Postal Service’s mail delivery performance unless alternate systems have been approved by the PRC. The PRC reviews this data to ensure that delivery performance does not deteriorate under the current rate setting process and to assess customer satisfaction. The Postal Service has approval to use a hybrid measurement system for bulk presorted First-Class and Standard Mail® relying on Intelligent Mail Barcode (IMb) scans to measure arrival at postal facilities (start the clock) and a network of external reporters who record delivery times. The PRC has expressed concern about the accuracy of start-the-clock recordings, noting that Postal Service’s start-the-clock event was based on the first read on mail processing equipment rather than on the documented arrival time. Given limited data availability, the PRC also expressed concern that the IMb service delivery performance measurement is not representative of all presort First-Class and Standard mail. They also recommended the Postal Service continue to work to correct service problems. The Postal Service implemented full-service IMb mailer certification procedures to ensure that mailings meet appropriate business rules. However, this certification process is not mandatory. Do you think that the mailer certification procedures will increase the availability and accuracy of start-the-clock data? Have you experienced problems with the certification procedures? Are there other steps the Postal Service can take to ensure the reliability of IMb-based service performance data? You are also invited to comment on this topic on our Audit Project Pages. The topic is hosted by the Office of Audit Cost, Revenue, and Rates team.

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