Our objective was to assess the effectiveness of the Postal Service’s extra trip process for Highway Contract Routes (HCRs) in the Mid-Carolinas District.
The Postal Service uses contracted supplier operated routes, or HCRs, to transport mail and equipment between plants, post offices, or other designated points that receive or dispatch mail. An extra trip is an infrequent, additional trip for an existing route and results in increased transportation cost. Extra trips should not be scheduled unless necessary to prevent serious delay of preferential mail — such as Express Mail and Priority Mail — or justified because of high mail volume.
We selected the Mid-Carolinas District because it had the second highest extra service costs for fiscal year (FY) 2017 of $6.5 million with a total number of over 12,400 recorded extra trips. We reviewed a statistical sample of 190 PS Form 5429 (e5429), Certification of Exceptional Contract Service Performed representing 84 HCR routes and over 3,900 extra HCR trips in FY 2017. We also conducted site visits or interviews to review the extra trips process at the Processing and Distribution Centers (P&DCs) in Asheville, Charlotte, and Fayetteville, NC, and Greenville, SC.
The Postal Service (PS) Form 5397, Contract Route Extra Trip Authorization, is used to initiate an extra trip. PS Form 5397 includes trip details such as time, date, mileage, trip justification, and the approving signature. Once an extra trip is completed, the designated HCR Administrative Official (AO) is required to verify the accuracy and completeness of the PS Form 5397 and ensure that a network specialist records the extra trip in Surface Visibility (SV). SV is a system that helps the Postal Service optimize its surface transportation network by improving dock productivity tracking and performance.
Every month a network specialist enters all extra trip information into the electronic PS Form 5429 (e5429), for the processing and approval of payment in the electronic Service Change Request (eSCR) system for the HCR supplier. The specialist also uploads all supporting documentation (extra trip authorizations) into the eSCR system. The AO approves the e5429 for payment after reviewing all supporting documentation for accuracy and completeness.
What the OIG Found
We found that the extra trips process in the Mid-Carolinas District was not effective. We identified the following compliance issues with the 190 sampled e5429 transactions:
- 74 (or about 39 percent) representing over 2,900 extra trips did not have the authorization form (PS Form 5397) uploaded in the eSCR system as required by Postal Service policy and Sarbanes Oxley requirements. We reviewed hardcopy PS Form 5397s for 68 of the 74 e5429 transactions and noted forms were generally inaccurate and incomplete. For example, at the Fayetteville P&DC we found 30 e5429 transactions representing 668 PS Form 5397s with incomplete information such as departure times, dates, mileage, trip justification, and approval signatures. Additionally, PS Form 5397s for the remaining six e5429 transactions could not be provided.
- 51 (or about 27 percent) representing almost 280 extra trips were not recorded in SV.
- Ten HCR routes had over 9,600 recurring extra trips costing about $2.9 million. This represents 77 percent of the extra trips and 45 percent of the total costs of the extra trips.
- 1,270 extra trips had missing entries on required documentation for departure time, date, mileage, trip justification, and approval signature.
This occurred because the AOs did not provide adequate oversight and authorizing officials were not familiar with process requirements. Additionally, the Asheville P&DC did not have an AO on-site to oversee the extra trip approval process. The Greenville P&DC in the Greater South Carolina District processed and paid extra trips for the Asheville P&DC in the Mid-Carolina District.
As a result of not having the authorization forms (PS Forms 5397) in the eSCR system, the Mid-Carolinas District incurred over $2.5 million dollars in unsupported questioned costs in FY 2017.
What the OIG Recommended
We recommended management:
- Ensure authorizing and administrative officials receive training to comply with Management Instruction, PO-530-2017-1, Highway Contract Route Exceptional Service Performance Payment Reconciliation, requirements.
- Assign HCR AO official duties for the Asheville facility to the Mid-Carolinas District.
- Evaluate recurring extra trips for modification to regular service.