Expands the main menu

Breadcrumb

Audit Reports

  • Image
    Manual Drop Shipments Atlantic Area Cover
Apr
06
2023
Report Number:
22-113-R23
Report Type:
Audit Reports
Category: Retail, Sales & Marketing

Manual Plant Verified Drop Shipments: Atlantic Area

Background

The Plant Verified Drop Shipment (PVDS) process enables payment and mail verification at an originating U.S. Postal Service facility for mail that a customer transports to a destination Postal Service facility. Mailings can be paid and verified using manual processes and forms rather than electronic methods. Such manual processes require Postal Service employees at the originating office to verify payment and the completion of eight critical fields, in triplicate, on Postal Service (PS) Form 8125, Plant Verified Drop Shipment. Postal Service employees verify that the forms, which are to be maintained for one year, are complete and unaltered when they accept the mail at the destination facility. Manually verified mailings are at greater risk of errors and unauthorized alterations when controls are not followed. From December 2021 through April 2022, the Atlantic Area processed 240,000 containers manually.

What We Did

Our objective was to assess Postal Service compliance with manual PVDS controls in the Atlantic Area and identify opportunities for improvement. We randomly selected 183 PS Forms 8125 to analyze for compliance. We reviewed documentation from the origin and destination offices to ensure forms were complete, had not been altered in transit, and were retained, as required. Also, during observations at 12 facilities, we verified whether PS Forms 8125 were retained for one year.

What We Found

We determined that 111 of 183 (61 percent) randomly selected PS Forms 8125 were incomplete, missing, and/or altered. We determined that 47 forms did not contain required information in one or more of eight critical fields — including class of mail, number of pallets, discounts claimed, origin post office, stamp date, or signature of verifying employee — and one of these forms was altered. We also determined an additional 64 forms were missing from either the origin or destination facility. In addition, four of 12 sites did not retain forms in accordance with Postal Service retention policies. These issues occurred because management did not provide adequate oversight and employees were not aware of the form retention policy, resulting in an estimated $5.8 million of revenue at risk for these locations in FY 2022.

Recommendations

We recommended management reinforce PVDS document completion, retention, and verification requirements and improve upon the current oversight process to monitor compliance. We also recommend management evaluate additional controls over PS Forms 8125

Report Recommendations

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

Reinforce Plant Verified Drop Shipment document completion, retention, and verification requirements and improve upon the current oversight process to monitor compliance.

Closed $0 Agree
2

Evaluate financial incentives, provide additional training, or enhance controls over the use of paper forms PS 8125, which could include limits on the number of containers or mailpieces that could be inducted.

Closed $0 Agree