• on Aug 25th, 2014 in OIG | 1 comment

    About 90 percent of the data in the world today has been created in the past 2 years alone, according to IBM. Yes, we live in the era of Big Data.

    Data is vital to our work as an OIG. We use data analytics – including data mining, risk assessment models, and predictive analytics – to help focus our audits and investigations on high-risk areas of the U.S. Postal Service that yield the largest financial impact and/or efficiency improvements. For our organization, data analytics is a game-changer. Using a single data interface, investigators no longer have to comb through different programs and network folders, saving considerable time. Our predictive model lets us identify cases involving a high probability of fraud, before beginning an investigation.

    While the data game is rapidly evolving, federal laws governing data use have moved at a slower pace. The recently enacted DATA Act provides a powerful weapon in combatting fraud and waste in government by standardizing and opening up federal spending information for all to see. But agencies still face bottlenecks in uncovering fraud and abuse. Notably, the Computer Matching and Privacy Protection Act of 1988 – written before Big Data and intended as an extension of the Privacy Act – added procedural steps that agencies must follow when matching federal, state, and local electronic databases.

    Say an agency wanted to check its payroll data against the Department of Labor’s (DOL) workers’ compensation records to determine if an individual is collecting both a paycheck and a workers’ compensation check. Under the 1988 law, the requesting agency would need to draft a formal matching agreement to be reviewed by the data integrity boards at both the requesting and responding agencies (in this example, DOL). The complicated process can take 6 months or more, during which time fraud can continue.

    The Computer Matching Act was passed at a time when people were unfamiliar with computers and worried about their privacy. Privacy is still a major concern, but is privacy protection inadvertently skewed in favor of criminals? Data analytics allows investigators to root out fraud and abuse early and find those responsible before they can make a long-term habit of it. But the most effective uses of data analytics are often obstructed with administrative hurdles.

    What is the right balance between protecting federal employees’ privacy and equipping agencies to quickly detect fraud and abuse? If you accept money from the government – such as a paycheck, disability check, grant award, or contractor payment – should you expect more scrutiny? Would you be willing to share your data to help combat fraud? Or is an overabundance of protection necessary in this age of Big Data? 

  • on May 26th, 2014 in Labor | 8 comments

    Offering workplace benefits such as health and retirement programs and paid vacations is a well established way to attract and retain talented workers. But the structure of these offerings has been changing in the public and private sectors over the past 20 to 30 years for several reasons, including rising pension debts; a more mobile workforce; and a move towards simplified administration of benefits.

    Employers have been looking to shed excessive pension expenses and give workers more control over their own retirement programs. Increasingly, private, local, and state employers are moving away from defined benefits plans that generally pay a guaranteed sum based on wages and years of service. They are increasingly favoring defined contribution plans, such as the 401(k) plan, a pretax fund built on employee and employer contributions. Meanwhile, retirement benefits plans for federal workers, including postal employees, have generally remained unchanged since the Federal Employees Retirement System was enacted in 1987.

    Similarly, the U.S. Postal Service’s leave benefits have stayed primarily the same for decades. Days off are organized into categories – annual, personal, sick, military (if applicable), and federal holiday – and the rate of leave accrual depends on the category. When taking leave, a postal employee has to indicate which category the leave falls into. But many companies are moving toward fewer categories, such as just vacation days and sick days. This simplified approach cuts down on administrative costs.

    As the Postal Service looks for ways to tighten its belt, it is considering changes in benefits, such as a new retirement program for future workers. But it is in a bit of a Catch-22. It is required to offer compensation and benefits that are comparable to those in the private sector, but it cannot change its benefits programs unilaterally, due to legal requirements and union agreements.

    At the request of the Postal Service, we issued two white papers that benchmarked its benefit programs against those of several comparable organizations. Specifically, we looked at retirement benefits and leave policies. We found many similarities in benefit offerings, but key differences, too. For example, retirement expenses make up a larger portion of total benefits for the Postal Service than for the other organizations we studied. Also, postal employees can carry over 55 or more days of annual leave each leave year and an unlimited number of sick days. But the other organizations had far more restrictive leave carryover.

    Share your thoughts or experiences on leave programs that consolidate all days off into one comprehensive plan. Might such a program for postal employees offer flexible benefits while reducing costs? Or does the current system work well? What changes, if any, are needed to the Postal Service’s retirement plans? 

  • on Jan 20th, 2014 in Post Offices & Retail Network | 4 comments

    Add “upkeep of postal facilities” to the list of tasks that get increasingly difficult to do under a budget crunch. Yet, Americans are passionate about their post offices, so it seems maintenance should be a priority.

    However, the U.S. Postal Service’s financial challenges have made it hard to maintain facilities. During fiscal years 2009-2012, the Postal Service experienced a $382 million decrease in its budget for facility repairs, alterations, and capital improvements, resulting in incomplete repairs or unmet capital improvements. Our recent audit report found about half of the incomplete repairs represent safety or security issues and potential future major repairs. 

    Future costs for these unfunded repairs could reach $1.4 billion. In addition, our work determined that some of these repairs were potential Occupational Safety and Health Administration violations.

    The Postal Service operates 32,000 facilities throughout the country with 280 million square feet of space, and it includes post offices, mail processing facilities, and annexes. The Postal Service’s Facilities Department says employees and customers are not in danger, as it prioritizes repairs based on the safety and security of Postal Service property. Still, the Postal Service’s capital spending freeze initiated in 2009 has clearly had an impact on the ability to upgrade and repair facilities. The Postal Service spent 29 percent below the industry average on facility repairs in FY 2012. Lower priority repairs and improvements are less likely to occur, potentially leading to a longer-term cost.

    Our audit found the Postal Service lacking in developing a strategy to complete all necessary repairs and it did not always accurately prioritize repairs. We recommended it develop a strategy, reallocate funds to complete repairs, and reconcile its prioritization list annually.

    We welcome your thoughts.

    • How best can the Postal Service make the necessary repairs to its facilities while operating under budget constraints?
    • Will people be interested in buying or leasing Postal Service buildings that haven't been well maintained? Or could it affect the value of the properties?
    • Are there issues other than decreased funding that prevent the Postal Service from completing necessary repairs? 

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