Audit Reports

Background

The U.S. Postal Service uses significant quantities of cardboard mail transport equipment (MTE) for transportation of mail and packages. In its Delivering for America 2.0 strategic plan, the Postal Service aims to divert 75 percent of waste from landfills by fiscal year (FY) 2030. In FY 2024, the Postal Service diverted 66 percent of its total waste from landfills, with cardboard waste accounting for 31 percent of this diversion. This initiative helped the Postal Service avoid over $10.8 million in costs related to cardboard MTE trash services. Despite incurred costs of approximately $11.8 million, they generated about $6.5 million in revenue from recycled materials, yielding net savings of $5.5 million. Efficient recycling and reuse practices for materials such as cardboard MTE, reduce waste and support the Postal Service’s sustainability target.

What We Did

Our objective was to assess the efficiency of the Postal Service’s purchasing and recycling of cardboard MTE. We conducted observations at 11 mail processing facilities and interviewed facility management. We also reviewed contracts and data for purchasing and recycling of cardboard MTE from FY 2022 through FY 2024.

What We Found

We identified opportunities for the Postal Service to improve efficiency in purchasing and recycling cardboard MTE, which it partly manages through several contracts. Specifically, the lack of a monthly reconciliation process to verify the accuracy of contractor-reported data led to questioned costs of about $10 million in FY 2023 and $11.8 million in FY 2024. As a result, the Postal Service was vulnerable to fraud, waste, and abuse and at risk of making improper payments. Additionally, facility management inconsistently managed and reported their cardboard inventory, facilities were not efficiently utilizing cardboard MTE consistently, and recycling operations were not maximizing the amount of cardboard MTE loaded on trucks.

Recommendations and Management’s Comments

We made five recommendations to address the issues identified in the report. Postal Service management agreed with four of the five recommendations. Management’s comments and our evaluation are at the end of each finding and recommendation. The U.S. Postal Service Office of Inspector General considers management’s comments responsive to all recommendations except for recommendation five, which we will discuss with management during the audit resolution process. For the others, the corrective actions should resolve the issues identified in the report.