To promote integrity and accountability related to allegations of major fraud that impacts the U.S. Postal Service, in April 2009, the Office of Inspector General (OIG) established a Major Fraud Investigations Division (MFID). The MFID is responsible for investigating all allegations of fraud within the Postal Service’s programs and operations with a contract award price (individual or aggregate) of $250,000 or more, as well as allegations that become national or multi-jurisdictional in nature.
From April 1, 2011 through September 30, 2011, the OIG conducted 85 contract fraud investigations, resulting in 15 arrests and nearly $20 million in monetary benefits to the Postal Service.
The Postal Service expends $11 to $12 billion per year on goods and services and maintains an overall procurement portfolio of close to $42 billion. Applying the Certified Fraud Examiners Association’s professionally recognized “5 percent average of procurement dollars susceptible to fraudulent activity” to Postal Service expenditures means that $600 million in Postal Service funds are potentially lost to fraud each year.
Major contract and health care provider fraud investigations by their nature are time consuming and complex. Outcomes of any significance can take years before they are realized; however, the return on investment for the Postal Service can be even more significant, leading to improved processes, cost avoidances, restitution, recoveries, and the suspension and debarment of companies and individuals.