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Audit Reports

Sep
28
2015
Report Number:
NO-AR-15-010
Report Type:
Audit Reports
Category: Transportation / Vehicles

Use of Leased Trailers - Western Area

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Background

The U.S. Postal Service leases more than 8,000 trailers nationwide for its operations. It procures trailers to meet local transportation needs and assigns them to specific facilities. Each Postal Service area is responsible for its own trailer use and requirements. As of October 2014, 1,600 trailers were leased in the Western Area. 

Our objective was to assess the use of leased trailers in the Western Area. 

What the OIG Found 

Opportunities exist for the Western Area to improve management of leased trailers, return unneeded trailers, and reduce lease costs. The Western Area returned about 140 unneeded leased trailers to suppliers in fiscal year (FY) 2014. As of the end of FY 2014, the Postal Service reported a total of 1,674 leased trailers in the Western Area. 

However, we found an additional 84 trailers in FY 2013, and 78 trailers in FY 2014 that were underused. These trailers were considered underused because they did not comply with the Postal Service’s guidance for showing that a trailer is needed. That guidance prescribes at least one trailer move every 7 days, or about 52 moves per year. Of the 84 underused trailers in FY 2013, data showed that 15 percent never moved and 85 percent moved less than once per week, on average. 

Of the 78 underused trailers in FY 2014, data showed 27 percent never moved and 73 percent moved less than once per week, on average. These conditions occurred because the Postal Service did not have controls or a standard operating procedure requiring local officials to assess the need for leased trailers based on use and return unneeded trailers to suppliers. Further, the Postal Service did not have an accurate and effective inventory system for recording, monitoring, and tracking leased trailers. 

As a result, the Western Area incurred unnecessary trailer lease costs of about $275,000 in FY 2013, and about $254,000 in FY 2014. We also concluded it could avoid about $264,000 annually over 2 years if it were to return the remaining underused trailers. 

In FY 2015, the Postal Service issued a new trailer lease policy and began developing requirements for a trailer management module in its Solutions for Enterprise Asset Management application to help manage leased trailers. The scheduled completion is extended to May 2016, due to data issues. 

What the OIG Recommended 

We recommended management enforce new leased trailer policies, thoroughly assess trailer needs, and return any unneeded leased trailers to suppliers.

Report Recommendations

# Recommendation Status Value Management Response OIG Response USPS Proposed Resolution
1

R - 1 -- Ensure compliance with the newly established trailer policy.

Closed $0 Agree
2

R - 2 -- Assess leased trailer needs and return any underused or unneeded leased trailers to suppliers.

Closed $0 Agree