Financial controls at postal retail units (retail units) are established and monitored by the Office of the Controller (Controller). We identified control issues during our past audits at selected retail units related to stamp stock shipments, single drawer accountability, and segmented inventory accountability. As a result of that work, the Controller advised they were strengthening controls over stamp stock accountabilities and upgrading financial controls to resolve the issues.
The objective of our audit was to review the design and effectiveness of internal controls over stamp stock accountabilities used by the Controller to reduce financial control risks at U.S. Postal Service locations. Based on our review, we expanded our objective to include related controls used by other headquarters organizations.
What the OIG Found
The Controller and headquarters organizations adequately designed and implemented controls to address issues identified by prior OIG audits to reduce financial control risks at retail units. Specifically, the Office of the Controller uses the Controller Council National Scorecard to analyze and address financial control risks at post offices. The Controller conducts monthly meetings with Postal Service area personnel to discuss the results of the scorecard and the cause for offices not meeting organizational goals. Prior to the meeting, each area is responsible for taking action on any issue and, during the meeting, informing the Controller of the results.
In addition, the Revenue & Field Accounting organization, which reports to the Office of the Controller, developed facility reviews of financial controls, and each area is responsible for conducting these reviews and immediately remediating any findings. The reviews include seven field controls, including a control for stamp stock and cash accountability. The control documentation also contains criteria and training resources directly associated with the controls.
Further, the retail organization implemented an online certification process that requires field offices to be certified in managing controls over stamp stock accountabilities and stamp stock shipments. On January 10, 2018, 99 percent of the stamp stock accountabilities certifications, and 97 percent of the stamp stock shipment certifications were completed. After all certifications are completed, headquarters will re-evaluate the process to determine whether certifications should be conducted annually or at another frequency, and whether offices that experience a turnover in management need re-certification.
We judgmentally selected three field offices to evaluate the effectiveness of headquarters controls at the field level. We determined internal controls related to stamp stock shipments, single drawer accountability, and segmented inventory accountability at those sites have improved significantly from prior audits. For example, controls related to performing timely counts, maintaining required documentation, separation of duties and timely receipt and use of a witness for stamp stock shipments have all improved.
We also analyzed data from segmented inventory accountability units and found a significant reduction in fiscal year 2017 stamp stock losses compared to prior years. In addition, the number of post offices with stamp stock counts not showing any overages or shortages decreased from 31 to seven.
As a result, we determined the internal controls over stamp stock accountabilities used by the Office of the Controller and headquarters organizations has helped reduce financial control risks at retail units. We plan to continue analyzing controls over stamp stock accountabilities, as appropriate, to ensure these controls remain effective.
What the OIG Recommended
Based on the audit results, we did not make any recommendations.