The objective of our audit was to assess the effectiveness of the U.S. Postal Service’s National Recycling Program (NRP).
In fiscal year (FY) 2014, the Postal Service approved $33 million for the NRP as part of an overarching initiative to drive waste and cost out of operations, generate revenue, and provide better stewardship for the environment. The goal of the NRP is to reduce trash disposal costs; and increase recycling revenue from office mixed paper, undeliverable standard mail, and discarded lobby mail by maximizing the value of the existing network.
As of September 2017, the Postal Service has implemented the NRP at 149 of 178 planned sites, with full implementation targeted for March 2019. As part of this audit, we assessed recycling operations at 12 sites in the Greensboro and Suncoast districts and Postal Service Headquarters (HQ) oversight.
What the OIG Found
The Postal Service did not effectively manage the NRP to ensure prescribed goals and objectives were achieved. Specifically, as of September 2017:
- Trash reduction savings were $5.1 million of the projected $32.8 million, or 16 percent of the goal.
- Recycling revenue generated was $3.4 million of the projected $14.3 million, or 24 percent of the goal.
In addition, facility employees did not accurately record recycling revenue and expenses within the designated general ledger accounts.
These issues occurred because there was ineffective monitoring at the HQ level, the program execution plan was not fully rolled out, and there were no controls to ensure accurate recording of revenue/cost activity.
As a result: (1) the program is not meeting projected financial goals through its first four years; therefore, increasing the risk the program will not meet its long‑term financial goals, (2) the program has missed its trash disposal savings goal by $28 million and recycling revenue goal by $11 million; (3) recycling revenue and expenses were understated by $205,179 at the six sites we assessed, and (4) the Raleigh Processing & Distribution Center was underpaid $16,477 in recycling revenue.
What the OIG Recommended
We recommended management strengthen controls over program operations, implement financial monitoring and operational oversight responsibilities over the facilities to the district, and reassess and adjust program goals as necessary.
We also recommended management implement a control to validate accuracy of general ledger account entries, reiterate standard operating procedures to appropriate personnel, and provide additional general ledger account entry training, as necessary.