Home > Postal Inspector General Delivers Valuable Results


Postal Inspector General Delivers Valuable Results
By Robert R. Schrum, 1/24/2008
Postmaster General John E. Potter has been vigilant with cost control
throughout his tenure as leader of the United States Postal Service, and he
has earned a reputation for being good at it.  One of his most valuable
assets in this fight has been the agency's Office of Inspector General.  For
the benefit of postal consumers, taxpayers, and dutiful employees alike, the
Postal IG's office has yielded valuable results in the fights against waste,
inefficiency, and misconduct.

In a recent Semiannual Report to Congress, which covered the six-month
period between April and September 2007, USPS Inspector General David C.
Williams identified over $1.35 billion worth of inefficiently used funds and
over $248 million in questioned costs. The report also made 86
recommendations that could save the Postal Service $1.6 billion if enacted.

Findings from an OIG report on employment benefits released in September
2007 could carry significant benefits for the agency's bottom line.  The
report found that the Postal Service contributed an outsized amount to
employee life and health insurance benefits. Where most other government
agencies contributed a third of life insurance premiums and less than
three-quarters of health insurance premiums, the Inspector General revealed
that USPS pays fully for almost all employees' life insurance and for
executives' health benefits.

The Postal Service could save $1.073 billion over 10 years if the reforms in
benefit payment it suggests are enacted, the report observed.  Needless to
say, these findings chagrined some postal labor leaders, who took the
opportunity to launch a new offensive against the IG's efforts.

Among scores of other reports issued last year alone, the office produced
useful findings on such consumer issues as the timeliness of city mail
delivery in Chicago, the effectiveness of mail-sorting in Los Angeles, and
errors that appear to have led to the Postal Service getting short-changed
in the sale of its Philadelphia mail processing and distribution center.

The OIG also enjoyed substantial success in rooting out crime within the
Postal Service. During the above 6 months, over four thousand OIG-led
investigations yielded 282 arrests, 123 indictments, and 370 convictions or
pretrial diversions.  The OIG estimates that these results helped the Postal
Service avoid nearly $88 million in overall losses. Furthermore, the office
recovered over $17 million in fines and restitutions, the lion's share of
which -- $13.2 million-- was returned directly to the Postal Service.

One investigation, targeting a former rural letter carrier fraudulently
claiming workers' compensation, saved the agency over $1 million.  Another
identified a postal operations manager in New Jersey who later pleaded
guilty to conspiracy for steering facilities repair contracts totaling
$600,000 to preferred firms in exchange for kickbacks.  A third OIG
investigation led to a postal clerk in Ohio admitting to stealing $72,000 by
improperly recording stamp sales.

Perhaps the most high-profile example of employee misconduct unearthed
during Inspector General Williams's term of service is the case of a
high-ranking postal executive who was found to have misappropriated
thousands of dollars of official funds over a period of several years. The
list of the executive's questionable expenses is as long as it is lavish,
including deluxe dinners for friends and family and stays at luxury hotels
just a stone's throw from his home.

Such revelations and recommendations have established the Inspector
General's office as a friend to postal consumers and have stood out as
invaluable assets in USPS's mission to serve them more efficiently.  It's
critical that Postal Service management continue to take the OIG's findings
seriously and to act on them with appropriate reform measures.

Robert R. Schrum is a research fellow at the Lexington Institute.


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