Internal Controls Over Stamp Stock Shipments ― Anderson, IN, Post Office
Background
The OIG used data analytics to identify offices with lost or stolen stamp stock shipments. We identified expenses related to stamp stock shipments between May 1, 2016, and April 30 2017, for the Anderson, IN, Post Office, and Anderson Stations B and C, two small finance stations whose stamp stock is shipped to the Anderson Post Office.
Stamp Fulfillment Services, Kansas City, MO, fulfills stamp orders from postal retail units. Retail units are responsible for identifying and locating missing stamp stock shipments. When retail units do not resolve discrepancies timely, Accounting Services records an expense to the units for the difference.
Management advised they are strengthening overall stamp accountability and upgrading financial controls, including:
- Daily financial accountability reconciliations and semi-annual stamp counts at Stamp Fulfillment Services.
- Enhancements to tracking stamp movement and in-transits at Stamp Fulfillment Services; and stamp shipments to individual post offices.
- New tracking process and centralized review of all missing stamp stock shipments, including orders sent to the wrong unit.
- New stamp destruction process that better aligns and tracks inventory discrepancies.
The objective of this audit was to determine whether internal controls over stamp stock shipments were in place and effective at the Anderson Post Office.
What the OIG Found
Internal controls over stamp stock shipments at the Anderson Post Office were not in place and effective. Specifically:
- We could not locate the required forms for stock sent to the unit for two of 65 stamp stock shipments reviewed for the Anderson Post Office, and 41 of 71 stamp stock shipments reviewed for Anderson Station B.
- The Anderson Post Office and Anderson Stations B and C did not have a log with detailed records for all expenses issued to the unit. The Postmaster stated that past stamp stock custodians did not properly file and maintain stamp stock shipment records and, following his appointment in March 2017, the Postmaster did not make document retention a priority. In addition, the Postmaster was not aware of the requirement for a financial differences log.
- Management at the Anderson Post Office and Anderson Stations B and C did not include a witness for any of the 136 stamp stock shipments received during our scope period. In addition, 38 of the 63 receipts of stamp stock shipments for the Anderson Post Office did not have signatures of those receiving the stamp stock. The current stamp stock custodian and the Postmaster stated they were not aware of the requirement to have a witness.
- Management did not monitor or timely resolve a stamp stock discrepancy at Anderson Station C. This unresolved expense went undetected, and Accounting Services expensed the unit after 15 days of no resolution. Further, it impacted subsequent unit reserve stamp stock counts. The prior stamp stock custodian, responsible for the discrepancy and currently a carrier in another office, stated this was an oversight.
When controls over stamp stock shipments are not followed and stamp stock is not timely accounted for, the risk that these stamps could have been lost or stolen increases. Also, unresolved discrepancies impact financial reporting accuracy.
On August 3, 2017, management created a log with detailed records for all expenses issued to the unit. In addition, the Postmaster completed training on closing procedures and daily financial statements, including stamp stock procedures. Further, management now has a supervisor verify and sign the required form after stamp verification has been completed.
What the OIG Recommended
We recommended district management reiterate the retention requirements for stamp stock shipment forms.