Our objective was to determine whether the U.S. Postal Service is effectively managing capital equipment at the Information Technology Center (ITC) in Eagan, MN.

In January 2021, the Eagan ITC had over 4,300 capital equipment items — such as computer servers — for operations, system enhancements, equipment replacement, or research and development. During calendar years 2019 and 2020, 628 items with an estimated value of $77 million were entered as capital equipment records.

Facility installation heads are responsible and accountable for all material at their facilities, including reporting and transferring inactive assets. At larger installations, the facility head may delegate an employee as a material accountability officer. These officers are responsible for ensuring that all capital property verification and physical inventory procedures are followed, including the prompt and proper redistribution of assets for organizational needs. Postal Service policy defines excess inventory as assets stored over the 6-month retention limit.


The Postal Service did not effectively manage capital equipment at the Eagan ITC. Specifically, management:

  • Held 175 of 230 inactive capital equipment items (76 percent) in storage for between seven and 36 months. The items were not redistributed within the organization or disposed of after six months per the definition of excess. Management did not consider this equipment as excess inventory, stating they stored the equipment for current and future projects. As a result, the Postal Service experienced a reduction in value of about $1.5 million for purchased but stored equipment and incurred nearly $240,000 in costs related to warranties and support services for items in storage.
  • Did not maintain a reliable system for identifying and tracking capital equipment. We determined that 43 of 238 inactive capital equipment items (18 percent) at the facility (including eight items identified by management) did not have corresponding records in one or both of their inventory management tools (Solution for Enterprise Asset Management and Asset Inventory Management System). We also determined that management recorded 99 percent of the stored items we observed as active in the Asset Inventory Management System.
    Further, we randomly selected 207 of 628 capital equipment records and determined that for 114 of those items (55 percent), required capital property labels were kept in folders and not placed on the items because employees were piloting an alternate labeling system.

Compliance with existing policies would provide the information needed to better manage equipment, reduce warranty and support costs, and avoid spending additional funds for capital equipment already available at the facility. Improved inventory management records would reduce the risk of loss or theft of existing items and better enable management to respond to the changing needs of the organization.


We recommended management:

  • Establish procedures to ensure managers comply with Handbook AS-701, Asset Management, definitions for excess equipment and redistribute or dispose of excess capital equipment.
  • Conduct a physical inventory of all stored inactive capital equipment at the Eagan Information Technology Center, affix the required capital property labels, and correct Solution for Enterprise Asset Management System and Asset Inventory Management System records as appropriate.
  • Implement a process to ensure that records for capital assets at the Eagan Information Technology Center are accurately entered and maintained in the Solution for Enterprise Asset Management System and the Asset Inventory Management System with clear designations of the status of equipment items.

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