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Audit Reports

Apr
12
2013
Report Number:
DR-AR-13-003
Report Type:
Audit Reports
Category: Transportation / Vehicles

Vehicle Parts Inventory Management - Pacific Area

BACKGROUND:

The U.S. Postal Service has 321 vehicle maintenance facilities, or repair garages, nationwide to maintain its vehicle fleet, 37 of which are in the Pacific Area. Officials acquire vehicle parts from two primary national suppliers. These suppliers provide parts to maintain and repair vehicles, ranging from motors, transmissions, tires, and batteries to nuts, bolts, and screws. Facilities can also purchase repair parts locally. In fiscal year 2012, Pacific Area personnel purchased nearly $29 million in vehicle parts.

To maintain vehicle parts, the Postal Service has established stockrooms at every vehicle maintenance facility. Postal Service policies require vehicle maintenance facility personnel to perform regular inventories of its vehicle parts to ensure the inventories are sufficient and accurate. Additionally, personnel must safeguard all assets.

Our objectives were to determine whether vehicle maintenance facility personnel were purchasing and maintaining vehicle parts at appropriate levels and management controls were adequate to safeguard inventory.

WHAT THE OIG FOUND:

Managers at selected Pacific Area vehicle maintenance facilities generally purchased and maintained inventory for parts at appropriate levels. We found that inventory balances for 79 percent of the parts were sufficient and within established levels, with 21 percent below recommended levels. Parts were not at required levels because they were either due in or on back order. Not maintaining established inventory levels could potentially impact vehicle repairs being timely and economical.

Furthermore, managers at some vehicle maintenance facilities did not always safeguard parts and perform mandatory physical inventories because they were not always aware of security risks and policies regarding safeguarding assets and physical inventory. As a result of inadequate controls, vehicle parts valued at $23,125,255 were at risk.

WHAT THE OIG RECOMMENDED:

We recommended the vice president, Pacific Area Operations, require district managers to ensure that vehicle maintenance facility managers maintain established parts inventory levels, re-emphasize the safeguarding of vehicle parts and the proper management of inventories including conducting mandatory inventories, and implement training for stockroom personnel.

Report Recommendations

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

R - 1 -- Ensure that vehicle maintenance facility managers maintain established order point inventory levels to prevent repair delays.

Closed $0 Agree
2

R - 2 -- Re-emphasize stockroom management policies and procedures on physical security and inventory management, including conducting mandatory inventories at vehicle maintenance facilities.

Closed $0 Agree
3

R - 3 -- Implement training for stockroom personnel on security and inventory procedures and processes.

Closed $0 Agree