• on Jul 18th, 2011 in OIG | 9 comments
    Contract fraud is a big problem for the federal government and quite possibly for the U.S. Postal Service, which currently manages over 20,000 contracts worth $29 billion. Conservative business estimates project up to 5 percent of contracted dollars are lost to fraud, meaning $1.45 billion of Postal Service funds are potentially at risk. Detecting, stopping, and preventing fraud is a core mission of the Office of Inspector General (OIG) and we need your help. We’ll be using this blog to introduce some common fraud schemes and their warning signs. You don’t need special skills or a badge to fight contract fraud — just know the warning signs and alert the OIG when you see them. Scheme of the Week: False Claims or False Statements With false claims or false statements, a contractor knowingly submits a fraudulent invoice for payment or approval. This includes over-billing, certifying that a product or service meets specifications when it does not, and providing fraudulent documentation, as well as situations where a Postal Service employee knows a claim is false but processes or authorizes it anyway. In one case, an OIG investigation uncovered a phantom cleaning business used in a scheme to fraudulently bill the Postal Service for cleaning services never rendered. In another, a Highway Contract Route contractor submitted more than 337 false or fraudulent fuel use certifications, trying to get paid for unused fuel. The Postal Service recovered $970,000 through a settlement with the contractor and refused to pay an additional $284,000 in improper claims. What to watch for:
    • Documents supporting supplier invoices are inadequate or obviously altered
    • Invoiced quantities and prices differ from contract terms
    • Delivered goods and services do not match invoices
    • Quality of goods or services is poor
    • Test or inspection documentation isn’t provided or is determined not to exist when requested
    • Discrepancies exist between test results and inspection results
    • Supplier repeatedly acknowledges errors when questioned about discrepancies in contract documentation
    • Supplier provides a product or service that doesn’t conform to contract specifications with no variance or requested/approved change
    When to contact the OIG While the warning signs above don’t necessarily mean fraud is occurring, they do warrant further investigation. If you notice these signs, please contact the OIG Hotline, which accepts confidential and anonymous complaints. Do you have any thoughts on preventing and identifying contract fraud, or getting our message out? Let us know in the comment section below! This is the beginning of a series of contract fraud topics hosted by the OIG’s Major Fraud Investigations Division.
  • on May 30th, 2011 in OIG | 8 comments
    au-dit (noun) - a methodical examination and review What is the U.S. Postal Service Office of Inspector General Office of Audit? We’re a team of auditors and evaluators helping to maintain the integrity and accountability of America’s Postal Service, its revenue and assets, and its workforce. We do this by conducting independent audits and reviews of the Postal Service. Each year we develop an audit plan with projects focusing on the perceived risks facing the Postal Service. We also include projects that address stakeholders’ concerns. The overarching goal of our audits is to provide Postal Service management with information on how to best address the challenges they are facing. Why do we blog? To put it simply – we blog to get your ideas on how to make the Postal Service better! We look at our blog as a “virtual think tank” where Postal Service employees, customers, and stakeholders can present their thoughts and solutions for a more efficient and effective Postal Service. We’ve received a wealth of information that has helped us with our audits and has given us ideas for future work. How can you help? Let us know what you think! •What are some critical challenges facing the Postal Service that you would like to see us explore through our audits? •What could the Postal Service do to improve its service to you? •What could the Postal Service do to increase its revenues or reduce its costs? •What other ideas do you have? Would you like to learn more about us? Please visit Reading Room section our website where you can review our published reports to Postal Service management as well as our semiannual reports to Congress or just learn more about us. We also welcome your comments on our upcoming audits and reviews, which we feature on our Audit Projects page. If you have an audit idea and do not see anything related there, please submit your idea to auditprojects[at]uspsoig[dot]gov The Office of Audit’s Audit Operations team is hosting this topic.
  • on Jan 3rd, 2011 in OIG | 15 comments
    It’s that time of year again. Those of us helping on the Office of Inspector General blog have come up with a list of the top 10 postal stories for 2010. Tell us about any stories we missed and add whatever comments you think appropriate. In particular, we would like to get your input on the top story, so take a minute and vote in the poll below. 10. OSHA Fines the Postal Service – At plants across the country, the Postal Service receives sizeable fines for electrical hazards. 9. e-Tipping Point – A flurry of activity in 2010 bolsters the notion that the Digital Revolution has trumped paper-based communications: Apple introduces its iPad tablet computer; all e-reader sales are up nearly 80 percent over last year; the Kindle becomes Amazon’s biggest seller and the company predicts e-books will surpass paper books within a year; Netflix announces that more customers watch streaming videos than DVDs. 8. Congress Takes Notice – Members from both houses of Congress – and both sides of the aisle – introduce legislation to fix the Postal Service’s overpayments to the federal government, which contributed significantly to the Postal Service’s massive net losses over the past few years. 7. America Wakes Up – Widespread mainstream media coverage on a number of postal issues, including 5-day delivery and the financial challenges plaguing the organization, spark a national interest in our postal system. 6. Reports Address Flawed Business Model – The Government Accountability Office confirms that the Postal Service’s business model is ”not viable.” The Postal Service issues its action plan to address declining mail volumes, changing communications habits and other systemic problems. 5. Stakeholders Debate 5-Day Delivery – The Postal Service’s plan to eliminate Saturday delivery generates heated debate, massive press coverage and congressional input. The Postal Regulatory Commission holds a series of public hearings on the topic. 4. PMG Potter Retires – After nearly 10 years as the postmaster general and 32 years with the Postal Service, Jack Potter called it a career and retired on Dec. 3. 3. Postal Service Suffers Largest Net Loss in History – The Postal Service ends FY 2010 with a net loss of $8.5 billion, the largest net loss in its history. Still, it manages to pay all of its bills and remain solvent at the start of FY 2011. 2. OIG Finds $75 Billion Overpayment – A report by the Office of Inspector General finds that the Postal Service has overpaid its Civil Service Retirement System obligations by a staggering $75 billion. Mailing industry unites in its support of a congressional fix. 1. PRC Denies Exigent Rate Request – The Postal Service invokes the exigency clause in the Postal Accountability and Enhancement Act and asks for a price increase above the inflation-based price cap. Mailers unite in their opposition to the request, which the Postal Regulatory Commission officially denies in September. The Postal Service appeals the decision to federal appeals court.

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