Audit Reports

Objective

The objective of this audit is to determine whether permit postage and fees, and voided Postage Validation Imprinter (PVI) label refunds were properly issued, supported, and processed at the Topeka, KS, Northpark Station. The PVI is a printing device attached to a point-of-sale terminal that produces a postage label for payment of postage and fees.

OIG data analytics identified the Northpark Station had a 93 percent increase in dollars for refunds and voids from April 1 to September 30, 2017, compared to the same period in fiscal year 2016. Of the $24,371 in refunds and voids, $21,469, or 88 percent, were recorded to the refund permit postage and fees account. An additional $2,522, or 10 percent, of the refunds and voids were recorded in the voided PVI labels account.

What the OIG Found

Refunds for permit postage and fees and voided PVI labels were not always properly issued, supported, and processed at the Northpark Station. Specifically, unit personnel:

• Did not properly process all 35 refunds reviewed for permit reply mail returned with postage affixed, totaling $21,469. The supervisor did not witness the destruction of the reply mail or properly verify the refunds.

• Issued 36 refunds totaling $326 for voided PVI labels without a required witness certification or a notation that a witness was unavailable.

• Issued refunds totaling $179 for voided PVI labels on eight of 91 dates without proper supporting documentation.

• Did not review the daily financial report supporting documentation for refund entries during the April 1 to September 30, 2017, timeframe.

Management stated they were unaware of their responsibilities to ensure refunds were properly issued, supported and processed; were assigned for limited hours each day at the Northpark Station; or had other areas of responsibilities at this station.

The Postal Service is at risk for issuing incorrect, invalid, or duplicate refunds when disbursements are not properly witnessed and verified. In addition, improper PVI refunds may not be detected without supervisory review.

As a result of this audit, management informed us that effective March 20,

2018, they implemented procedures to verify the dollar amount of permit reply mail with postage affixed and its destruction. Further, a supervisor is now reviewing the daily financial report supporting documentation for permit postage and PVI refunds.

What the OIG Recommended

Because management took corrective actions, we are not making any recommendations at this time. However, we may follow up in the future as part of our ongoing financial controls audits.