Our objective was to determine whether the U.S. Postal Service complied with the applicable maximum total compensation provisions of the Postal Accountability and Enhancement Act of 2006 (PAEA), related Postal Service policies and guidelines, and IRS regulations in calendar year (CY) 2017. The PAEA amended portions of 39 U.S.C. by revising the limits on salary and total compensation paid to Postal Service employees, executives, and officers.
For CY 2017, the annual salary of each Postal Service employee was limited to $207,800. Under a bonus or reward program approved by the U.S. Postal Service Board of Governors, the Postal Service could compensate employees up to $240,100 in total compensation. For individuals designated as critical senior executives, total compensation could reach up to $288,120.
For purposes of the first limit above, total compensation includes only an employee’s salary and federal annuity. The second and third limits also include merit lump sum, incentive, recruitment and executive detail bonuses, and the value of non-cash awards. The value of benefits such as financial or retirement counseling, annual leave exchange, health programs, and transportation services are excluded from total compensation, as are payments due to grievance settlements.
What the OIG Found
The Postal Service complied with the provisions relating to the applicable maximum total compensation provisions of PAEA in CY 2017. They also complied with related internal policies and guidelines and IRS regulations for CY 2017 compensation.
However, the Postal Service overstated in the fiscal year 2017 Comprehensive Statement on Postal Operations the amount by which two executives exceeded the CY 2016 compensation limit. This occurred because the value of financial counseling was improperly identified as a reportable benefit. The overstatements are related only to reporting in the Comprehensive Statement on Postal Operations. We did not identify concerns with Postal Service personnel exceeding appropriate compensation limits.
Because of our audit, management implemented new procedures and quality controls to ensure the value of financial planning benefits is properly documented and excluded from the compensation reported in the Comprehensive Statement on Postal Operations.
What the OIG Recommended
Management corrected the issue identified. Therefore, we are not making a recommendation.