ARLINGTON, Va. - An audit released today by the U.S. Postal Service's Office of Inspector General recommends that the Postal Service bring its bulk fuel program "in-house" to achieve savings of $15.9 million over a 5-year period.

"This audit is a classic example of how we help the Postal Service's bottom line," says Inspector General Karla W. Corcoran. "Our auditing team found that while the Postal Service's plan to purchase fuel in bulk achieves a sizeable cost-avoidance of $18 million, it needs to go one step further by bringing it in-house for maximum savings.

"We are pleased with postal management's positive response to our findings," adds Corcoran, noting that the Postal Service uses more than 200 million gallons of diesel fuel yearly, making it one of the largest consumers of fuel in the United States.

Responding to concerns expressed by Representative John M. McHugh, former chairman of the House Subcommittee on the Postal Service and current member of the House Government Reform Committee, about the Postal Service's Bulk Fuel Purchase Plan, the audit focused on three areas:

" Was the plan the most effective means to manage diesel fuel costs?
" Were cost avoidance projections reasonable?
" Would this plan negatively impact highway contractors or the carrier-route transportation system?

The audit revealed that the Postal Service's Bulk Fuel Program could be brought in-house by purchasing diesel fuel directly and providing it to 60 existing postal fuel facilities for use by highway contractors and postal-owned vehicles. This would save $13.7 million over 5 years, and another $2.2 million, if other alternatives were implemented at high-volume postal sites, including installing or using state-owned fuel facilities.

view the report