Our objective was to evaluate operations and controls over the processing and distribution of Parcel Return Service (PRS) mail in the Los Angeles District.
PRS, introduced in October 2003, is a workshare returns product, with the U.S. Postal Service acting as the mail entry point. It allows a customer to return merchandise using a return mailing label provided by the merchant. Customers can drop off the parcels at any Postal Service facility, give them to a letter carrier or place them in any location identified by the Postal Service for depositing mail, such as a collection box. The Postal Service manually aggregates the parcels by participating partner, performs the required scans, and then tenders them to the partners’ pickup agents at select postal facilities.
In fiscal year (FY) 2017, the Los Angeles District processed 773,700 pieces through their PRS program. However, almost 15 percent of those items were not scanned, as required, to event code 17 or 42, known as “tendered to returns agent.” We selected the Los Angeles District for review because it missed more scans than other districts nationwide.
What the OIG Found
The Los Angeles District has taken measures to enhance PRS operations and controls, including implementation of added oversight and training through teams of subject matter experts. However, opportunities for improvement remain. Specifically, all 15 Return Delivery Units (RDU) and the Return Sectional Center Facility (RSCF) we visited in the Los Angeles District did not adequately account for or safeguard PRS mail. We noted:
- The 15 RDUs and the RSCF did not consistently follow all required scanning procedures, leading to inconsistent scanning counts across the required scan event codes.
- The 15 RDUs did not have the required written documentation authorizing the Postal Service to tender mail to pickup agents.
- Eleven of 15 (73 percent) RDUs did not maintain the dispatch log correctly, including recording the number of pieces tendered to return agents, obtaining required signatures, or completing the logs on a daily basis.
- Two of 15 (13 percent) RDUs and the RSCF greeted PRS pickup agents upon arrival, but allowed them to have unmonitored or unescorted access to PRS mail.
During our audit, we noted that seven of the 15 RDUs (47 percent) improved their scanning performance during January 2018 when compared to the same period last year. This was a result of recent oversight and training by the Los Angeles District.
These conditions occurred because management did not implement sufficient controls to adequately secure and account for PRS mail. As a result, the Postal Service and PRS partners had an increased risk that theft or loss of PRS mail could occur and not be detected.
What the OIG Recommended
We recommend the Los Angeles District Manager implement stand up talks, conduct training, and increase oversight to:
- Improve Parcel Return Service mail scanning procedures;
- Ensure PRS authorization documentation and dispatch logs are up to date and maintained locally at all RDU locations and the RSCF; and
- Improve control procedures to more adequately secure PRS mail.