Audit Reports

Objective

The objective of this audit was to determine whether local purchases and payments were valid and properly supported at the Eatontown, NJ, Post Office.

The OIG's Field Financial Risk Model identified the Eatontown, NJ, Post Office made a total of $20,773, or 36 percent, of all local purchases and payments within the South Jersey District. During our review, we identified the Eatontown Post Office had an additional $2,000 of local purchases and payments. These payments were made using no-fee money orders (NFMO) from July 1, 2017 through December 31, 2017.

What the OIG Found

Local purchases and payments were not always valid and supported at the Eatontown, NJ, Post Office. Unit personnel made 25 payments totaling $22,773 for services using NFMOs instead of the Postal Service’s preferred methods of payment. Specifically, the unit’s management made:

• Twelve of the payments using 20 NFMOs totaling $18,613 to one vendor for cleaning services. Although the unit did not qualify for a cleaning contract to pay the vendor, the unit should have used an expense purchase card to make these payments as required by policy. Additionally,

           - 10 of the 12 payments did not have an invoice for support.

           - 7 of the 12 payments were made using multiple NFMOs for payments over $1,000 totaling $14,413.

• Thirteen payments using 13 NFMOs totaling $4,160 to five vendors for various services, which were not emergency one-time expenses and therefore, unit management should have used an expense purchase card

This occurred because the postmaster lacked knowledge regarding the policy for local purchases and payments. The postmaster used NFMOs to pay the vendors for services instead of using an expense purchase card, as required.

Further, unit management did not collect vendor tax data for the 12 payments for cleaning services using 20 NFMOs valued at $18,613, as required by federal law. The postmaster stated he was unaware of the policy to submit the required form for services paid.

When preferred payment methods are not followed, the Postal Service has an increased risk of:

• Unauthorized transactions using NFMOs for services.

• Violating federal law if tax reportable payments are not reported, as required.

From July 1 through December 31, 2017 the Eatontown, NJ Post Office issued $22,773 in questionable local payments because Postal Service policy was not followed.

As a result of this audit, the postmaster completed and submitted the required forms to report the vendor service payments.

What the OIG Recommended

We recommended district management reiterate the policy to all unit management for using the Postal Service's preferred methods of payment.