Facilities Repair and Alteration Process
Background
The U.S. Postal Service’s Facilities group manages repairs and alterations for over 32,000 facilities. Postmasters and officers in charge submit repair and alteration requests to Facilities for completion. Facilities project managers use a national contract with EMCOR, Incorporated to complete repairs and alterations costing $25,000 or less. For repairs costing $10,000 or less, personnel have the option of selecting contractors and paying them with a credit card. In fiscal year (FY) 2013, Facilities completed 49,980 repairs and alterations costing about $86 million using either EMCOR or a credit card.
Our objective was to assess internal controls over the Postal Service’s facilities repairs and alterations paid for using the EMCOR contract or by credit card. We statistically selected 207 of the 49,980 transactions for review. Of our sample, 113 were paid by credit card and 94 were completed using the national contract. We estimated 26,706 of the 49,980 transactions (53.4 percent) totaling $52.9 million were paid for by credit card.
What the OIG Found
While controls over repairs and alterations using the national EMCOR contract were adequate, the Postal Service can improve controls over those paid for by credit card. Postal Service policy did not require project managers to obtain written certification of completion for repairs and alterations paid for by credit card. Consequently, project managers did not obtain written certification for 16 of 27 repairs and alterations costing over $2,000. We estimated the Postal Service paid $22.2 million for repairs and alterations via credit card in FY 2013 with no written certification of work completed.
Also, officials did not perform a detailed review of credit card statement activity and other supporting documentation for all 113 credit card transactions reviewed, valued at $237,224. There was no policy requiring such a review. Finally, the Postal Service could not reconcile all repair and alteration costs from the general ledger to the enterprise Facilities Management System because identifiers such as invoice numbers are not captured in the general ledger.
Without adequate controls over repairs and alterations, the Postal Service is at increased risk of paying for incomplete or faulty work and cannot ensure repair and alteration expenses are properly recorded in its accounting system.
What the OIG Recommended
We recommended management update policies to require written certification of completion for repairs and alterations paid for by credit card and a detailed review of credit card activity. We also recommended management upgrade systems to reconcile general ledger transactions to repair project files.