In 1997, the U.S. Postal Inspection Service, in coordination with the Department of Justice, established the Consumer Fraud Fund (CFF) to receive proceeds recovered in fraudulent cases when it is not feasible to return proceeds to the victims. The purpose of the CFF is to supplement Postal Inspection Service consumer education initiatives and consumer fraud investigations. In fiscal year (FY) 2016, the CFF’s balance was $44 million.

The Postal Inspection Service is subject to U.S. Postal Service procurement and purchasing guidelines for all expenditures charged to the CFF. In addition, the Postal Inspection Service has an internal guide that provides instructions on requesting funds for consumer fraud or asset forfeiture funded projects.

Our objective was to determine whether the Postal Inspection Service complied with applicable policies and procedures for CFF deposits and expenditures and, specifically, determine whether CFF funds were properly received and accounted for and whether expenditures were appropriate for FYs 2014 through 2016.

What the OIG Found

The Postal Inspection Service generally complied with applicable policies and procedures in managing CFF deposits and expenditures for FYs 2014 to 2016. In addition, all six deposits were accurately recorded and supported by court decrees, fines, settlement agreements or judgements. Of the $38 million in expenditures reviewed, all expenditures met the criteria for using the CFF and were accurately recorded and supported by invoices and source documents; however, all CFF funding requests did not always include the six required elements to support the request.

Additionally, opportunities exist to improve CFF processes and procedures. Specifically, goods and services funded by the CFF did not always have measurable performance goals to evaluate effectiveness. For example, five suppliers who were paid $7.4 million did not have performance goals or a measure for performance progress. In addition, the Postal Inspection Service did not develop written procedures to track, monitor, and reconcile expenditures.

These conditions occurred because there is no requirement to evaluate the effectiveness of CFF expenditures using measurable performance goals; and the internal guide was not comprehensive to include processes for requesting CFF funding or for tracking, monitoring, and reconciling expenditures.

Formal written procedures for management of the CFF would help ensure consistency and accountability in how the Postal Service documents and approves CFF requests. Further, without written procedures, there is a risk that expenditures and adjustments will not be reported correctly. An effective control system consisting of well-defined processes and procedures is critical to ensuring consistent process application, retaining institutional knowledge, and protecting the Postal Service brand.

What the OIG Recommended

We recommended management develop a requirement to evaluate the effectiveness of CFF expenditures using measurable performance goals; and develop formal written procedures for managing CFF requests and for tracking, monitoring, and reconciling expenditures.

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Comments (4)

  • anon

    Recently we received a fraudulent check and wiring instructions for a mystery shopper. It was suggested that we contact the USPS with the information. Please advise as to how we go about reporting this scam. Thank you.

    Oct 12, 2017
  • anon

    I sent two items to Nigeria. The packages contained money for my son's airfare home. Neither item reached the person who I had sent the package to. He was told that they were being sent back to the sender. Both packages were sent in May and neither have been seen since. I've tried wiring money and was asked to pick the funds up. The most recent I sent through FedEx. Customs helped themselves to the money contained in the package and are refusing to release the payment back through FedEx to me. I have lost a total of $6000 and my son is still waiting for me to bring him home. I am now very concerned about his safety and I don't believe that country is safe for him. He's been in boarding school while his father is working for the UN on a Peacekeeping Tour. Unfortunately I have no more money to send and can't afford to leave the US to go and get him. My sincerest respect, Cynthia Homan

    Sep 03, 2017
  • anon

    Hi Cynthia, thank you for reaching out to the Office of Inspector General. To best address your issue, please contact the U.S. Postal Service Domestic & International Tracking department at (800) 222-1811. They will be able to assist you in this matter.

    Sep 05, 2017
  • anon

    My address was fraudently changed to a temporary address from 8/1/17 until I discovered a problem about 10 days later. in that time the thieves opened several credit cards in my name and received my banking info and passed fraudulent checks in my name. I have reported this to the USPS and requested my address not be allowed to be changed again. the USPS says that they DO NOT place this restriction on addresses and DO NOT require any security measures to prevent this from happening again. This needs to be remedied. If this has happened to me it is happening everywhere. And there is nothing I can do to prevent it from occurring again.

    Sep 02, 2017