The OIG performed data analytics to identify offices with lost or stolen stamp stock shipments. We identified expenses regarding stamp stock shipments for the Fremont Post Office in Fremont, CA, between May 1, 2016, and April 30, 2017.
Stamp Fulfillment Services (SFS), 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 SFS.
- Enhancements to tracking stamp movement and in-transits at SFS; 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 Fremont Post Office.
What the OIG Found
Internal controls over stamp stock shipments at the Fremont Post Office needed improvement. Management properly scanned and secured stamp stock shipments upon arrival, and performed stamp count verification with a witness prior to recording receipt. However, they did not always adequately order stamps, record stamp stock shipments timely, or research and resolve stamp stock shipment discrepancies.
This occurred because the Postmaster relied on the customer services supervisor and Pacific Area financial specialists to monitor stamp stock inventory and resolve stamp stock shipment discrepancies. The Postmaster is responsible for overall monitoring of field unit operations. When inventory and discrepancies are not monitored, there is an increased risk that stamps could be lost, stolen, or sold without being recorded in inventory; of financial reporting misstatements; and of additional unnecessary costs to research and resolve stamp stock shipment discrepancies.
As a result of this audit, the Postmaster began to properly monitor stamp stock inventory and discrepancies, to include authorizing the ordering of stamps and reviewing daily financial reports.
We referred this information to OIG Office of Investigations for further review.
What the OIG Recommended
Because management took corrective actions, we are not making any recommendations at this time. However, we may follow up in the future as part of our ongoing financial controls audits.