The Postal Service offers no-fee post office (PO) box service to customers who do not receive any form of carrier delivery. Customers apply for the no-fee PO box service by completing an application and providing identification to a Postal Service employee. Retail personnel determine customer eligibility and enter data into the Web Box Activity Tracking System (WebBATS), a web-based application that allows retail personnel to manage PO box inventory.
As of March 1, 2018, the Postal Service had about 21.2 million PO boxes at 33,034 retail units. This included 1.3 million no‑fee PO boxes at 12,556 retail units. We estimated the total rental value of the no-fee PO boxes was about [redacted] million annually.
We visited three retail units in the Western Area to obtain an understanding of the no-fee PO box process. We expanded our coverage by statistically selecting 205 retail units that offered no-fee PO boxes. Using high‑risk analytics, such as multiple boxes assigned to one street address and unpaid fees for additional boxes, we visited an additional 12 retail units from the statistical sample of 205 retail units to validate the data. Finally, per management’s request, we visited an additional two retail units.
In total, we visited 17 retail units and reviewed 1,731 no-fee PO boxes corresponding to those units from October 24, 2017, through January 19, 2018.
Our objective was to determine whether internal controls over no-fee PO boxes were effective to ensure only eligible customers received the service.
What the OIG Found
Controls over no-fee PO boxes were not always effective to ensure that only eligible customers received the service. Specifically, out of 1,731 no-fee PO boxes reviewed, we found:
■ Retail personnel used ineffective methods to determine whether a customer’s street address was eligible for a no-fee PO box. As a result, personnel issued 22 no-fee PO boxes to customers at five retail units whose street addresses were outside the servicing PO’s delivery boundaries.
■ Retail personnel entered invalid or duplicate street addresses in WebBATS. Specifically, personnel issued:
● 996 no-fee PO boxes at two retail units to customers with invalid street addresses;
● 38 additional no-fee PO boxes at four retail units to customers with the same street address without charging the rental fee for the additional PO box.
■ Applications for PO box service and annual verification forms were either missing or incomplete for 171 no-fee PO boxes. Specifically, we found:
● 49 no-fee PO boxes at eight retail units had no source documents to support customer eligibility or data in WebBATS;
● 122 no-fee PO boxes at nine retail units had incomplete information on customer applications or annual verifications.
As a result of the issues identified during our audit, management could not validate or confirm customer eligibility for all no-fee PO boxes.
These issues occurred because the Postal Service did not have consistent guidance to determine delivery boundaries, and WebBATS did not detect invalid or duplicate street addresses. Additionally, the Postal Service does not currently require retail personnel to retain source documents confirming customer eligibility.
Having effective manual and automated controls is critical for managing the no‑fee PO box service, particularly to ensure the service is provided only to eligible customers. We estimated a 1‑year revenue loss to the Postal Service of about [redacted] million, based on the site visits and the value of 1.3 million no-fee PO boxes in inventory as of March 1, 2018.
What the OIG Recommended
We recommended management:
- Develop consistent guidance for retail personnel to determine whether acustomer address is located within the servicing PO’s delivery boundaries.
- Enhance WebBATS to identify different street address formats and disallow invalid addresses.
- Implement procedures to ensure customer application and annual verificationinformation is completely documented and retained, manually or electronically,to support customer eligibility and WebBATS data.