Internal Controls Over Local Purchases and Payments – Gloucester, VA, Post Office
Background
The U.S. Postal Service Office of Inspector General (OIG) uses data analytics, including predictive risk models and tripwires, to evaluate the U.S. Postal Service's financial information. The analytics seek to target financial anomalies that occur at field units.
The OIG's Field Financial Risk Model and the Office of Investigations' Local Payment Tripwire identified that the Gloucester Post Office made about $33,000 in local purchases and payments using no-fee money orders from October 1, 2015, to September 30, 2016.
The Postal Service prefers to pay for goods and services through its electronic purchasing system. When that is not possible, authorized personnel may use assigned credit cards. Custodial cleaning services exceeding $10,000 annually must be paid through a contract established by the Supply Management Category Management Center (CMC).
The objective of this audit was to determine whether internal controls were in place and effective for making local payments at the Gloucester Post Office in Gloucester, VA.
What the OIG Found
Local payments were not always authorized and internal controls needed improvement. We verified the postmaster made 27 local payments valued at $34,020 for custodial cleaning services from October 1, 2015, to September 30, 2016, without an authorized contract.
The postmaster properly submitted a request for a contract in July 2015; however, due to a staffing transition at the CMC, the request was not reviewed for 8 months and then was closed. The postmaster repeatedly contacted the CMC regarding the status of the request, but was never informed it was closed. In the interim, instead of using the electronic purchasing system, the postmaster paid for cleaning services with no-fee money orders and her assigned credit card to keep the Post Office clean. As a result of this audit, on November 10, 2016, the CMC began to establish a contract for cleaning services.
What the OIG Recommended
We recommended district management implement controls to ensure management uses proper local payment methods, including payments for contract cleaners, when a contract has not been established. We also recommended headquarters management implement procedures to track contract requests and ensure timely notifications of contract request denials or closures during employee transitions.