BACKGROUND:

Post Office Box™ (box) service is an optional delivery service that consists of delivery to uniquely addressable boxes of various sizes located at U.S. Postal Service facilities. Nationwide, the Postal Service manages more than 21 million boxes, which accounted for $836 million in fee revenue in fiscal year 2012.

A customer rents a box by prepaying the box rent fee for a 3-, 6- or 12-month interval at a window unit, an Automated Postal Center or online. After that term has expired, the customer can renew box service for an additional term by prepaying in the ways previously described. When a customer does not renew a box, the Postal Service places the box into a closed status and then changes the lock or combination before renting the box to a new customer. As of April 2012, more than 1 million boxes nationwide required a lock change.

Our objective was to determine whether the Postal Service was effectively using national box data to manage closed boxes.

WHAT THE OIG FOUND:

The Postal Service did not effectively use national Post Office Box data to manage closed boxes. Specifically, the current management reports do not evaluate units and identify potential risks, such as:

 Loss of revenue due to units with no available boxes for rent but with closed or broken boxes.

 Loss of revenue due to physically available boxes not recorded in the automated systems, thereby preventing them from being rented.

 Non-compliance with box billing procedures. Also, the Postal Service does not require managers to periodically review box national reports to identify potential risks. As a result, we calculated $3 million of annual revenue loss for units showing no boxes available for rent but with closed, broken, or unrecorded physical boxes on site, based on data in the Web Box Activity Tracking System. Additionally, we identified $2.36 million of annual revenue at risk for closed boxes with customer access not blocked.

WHAT THE OIG RECOMMENDED:

We recommended management develop additional data analysis tools and provide them directly to district management to improve Post Office Box oversight. We also recommended district management follow up with all units that have no available boxes to ensure closed boxes are available for rent and all physical boxes are documented and available for rent.