The OIG used data analytics to identify offices with lost or stolen stamp stock shipments. We identified $46,337 of expenses related to lost or stolen stamp stock shipments for the Central Square Post Office, Cambridge, MA, between May 1, 2016, and April 30, 2017.
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 that 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.
- A new tracking process and centralized review of all missing stamp stock shipments, including orders sent to the wrong unit.
- A new stamp destruction process that better aligns and tracks inventory discrepancies.
Our objective was to determine whether internal controls over stamp stock shipments were in place and effective at the Central Square Post Office, Cambridge, MA.
What the OIG Found
Internal controls over stamp stock shipments were not in place and functioning at the Central Square Post Office. Specifically:
- The unit manager was not aware two stamp stock shipments totaling more than $15,000 were missing for 37 and 25 days, respectively.
- Unit personnel did not research and timely resolve $1,300 in stamp stock discrepancies.
This occurred because of:
- Miscommunication among personnel at the local unit regarding receipt and recording of stamp stock shipments.
- Stamp stock was received without the presence of a witness.
- The unit manager did not provide any oversight of the stamp stock process, to include reviewing and confirming the accuracy of stamp inventory transactions recorded.
- Discrepancies were not monitored through resolution.
As a result, stamp stock shipments totaling over $16,000 were not timely accounted for, increasing the risk that these stamps could have been stolen and not detected. Further, unresolved discrepancies impact financial reporting accuracy.
On July 19, 2017, after our departure from the unit, the manager provided the audit team with supporting documentation for six of seven stamp stock discrepancies; however, a $1,300 discrepancy remains unresolved.
What the OIG Recommended
We recommended district management:
- Include appropriate personnel on communications regarding in-transit stamp stock shipments.
- Assign a witness to be present when accepting stamp stock shipments.
- Develop a process to review and confirm the accuracy of recorded stamp inventory.
- Monitor stamp stock discrepancies through resolution.