The Office of Inspector General is tasked with ensuring efficiency, accountability, and integrity in the U.S. Postal Service. We also have the distinct mission of helping to maintain confidence in the mail and postal system, as well as to improve the Postal Service's bottom line. We use audits and investigations to help protect the integrity of the Postal Service. Our Semiannual Report to Congress presents a snapshot of the work we did to fulfill our mission for the 6-month period ending March 31, 2016. Our dynamic report format provides readers with easy access to facts and information, as well as succinct summaries of the work by area. Links are provided to the full reports featured in this report, as well as to the appendices.
A Message from the Acting Inspector General
The Office of Inspector General – with the support of the Governors, Congress, and U.S. Postal Service management – plays a key role in maintaining the integrity and accountability of America's Postal Service, its revenue and assets, and its employees. The OIG also helps to maintain confidence in the postal system and to improve the Postal Service's bottom line through independent audits and investigations.
This report, submitted pursuant to the Inspector General Act, outlines our work and activities for the 6-month period ending March 31, 2016. During this period, we issued 83 audit reports, management advisories, and PARIS risk models, and the Postal Service accepted 94 percent of our significant recommendations. We completed 2,069 investigations that led to 391 arrests and $21.1 million in fines, restitutions, and recoveries, $5.28 million of which was turned over to the Postal Service.
To fulfill our mission, we increasingly rely on data mining, risk assessments, and predictive analytics to synthesize data in ways that help us detect fraud and misconduct. Data analytics also help us identify root causes of problems and develop solutions to those problems.
In this period, our audit report on compounding pharmacies illustrates how data tools and collaboration can result in major financial savings, improved efficiency, and risk mitigation. The report highlighted the huge increase in the Postal Service's workers' compensation costs for compound drugs, which are created when licensed physicians or pharmacists combine, mix, or alter ingredients of drugs to tailor them to individual patients.
It was a data analytics tool that alerted us to a compounding medication scheme. From there, we opened an investigation, which then prompted a review by our Office of Audit on the current cost to the Postal Service and the potential long-term financial impact. We found the Postal Service's compound drug costs have increased almost 2,000 percent, growing from about $5 million to nearly $100 million from July 2010 to June 2015. For the last 6 months of calendar year 2015 (July through December), the Postal Service incurred $85.7 million in
compound drug costs, with another $71 million forecasted through the following 6 months. We determined the long-term cost to be $1.2 billion.
We will continue working with the Governors, Congress, and Postal Service management as we address the challenges ahead.
Tammy L. Whitcomb
Acting Inspector General