Office of Inspector General (OIG) United States Postal Service

In their own words – “The USPS OIG achieves its mission of helping maintain confidence in the postal system and improving the Postal Service’s bottom line through independent audits and investigations. Audits of postal programs and operations help to determine whether the programs and operations are efficient and cost-effective. Investigations help prevent and detect fraud, waste, and misconduct and have a deterrent effect on postal crimes.”

Below are OIG reports that I found interesting and/or important.  For a direct visit to the OIG web site, click here.

April 3, 2014
Enhancing the Value of Mail Follow-Up: Discussion Forum Recap

March 31, 2014
Readiness for Package Growth – Customer Service Operations  – Management Advisory Report

March 19, 2014
Works Councils: A Better Way of Doing Business?
New words for company union, QWL, EI, popsicle union

March 17, 2014
Controls over Nonprofit Mailing Authorization -  Management Advisory Report

March 13, 2014
Same-Day Delivery: An Opportunity for the Postal Service?

March 13, 2014
Officers’ Travel and Representation Expenses for Fiscal Year 2013 -  Audit Report

March 7, 2014
International Terminal Dues – White Paper

March 7, 2014
U.S. Postal Service’s Delivering Results, Innovation, Value, and Efficiency Initiative 6, Improve Employee Availability – Audit Report
The objective of DRIVE 6 was to increase employee availability through five separate projects. These projects aimed to reduce workers’ compensation costs by $80 million annually; return injured employees to work; and reduce accidents, reportable workplace injuries and illnesses, and reduce sick leave. ”

March 7, 2014
Postal Service Knowledge Management Process -  Audit Report
“The Postal Service does not have a comprehensive knowledge management policy or process or a chief knowledge officer to ensure that knowledge sharing is systematic and collaborative.  Although not well-defined, there are knowledge management elements within several Postal Service systems to capture some tacit and explicit knowledge. In addition, we could not find any of the 49 studies or consultant reports in the Postal Service Headquarters library where they could be shared among all postal departments, as required by policy.

A comprehensive Postal Service knowledge management process would enable management to leverage information from throughout the organization for strategic decision-making and new initiatives. In the near term, knowledge management activities would also mitigate the possible loss of extensive tacit knowledge due to anticipated Postal Service downsizing and the retirement eligibility of about 31 percent of its workforce.”

February 28, 2014
Address Management System Data -  Audit Report
“The Postal Service’s efforts to reduce address database errors were ineffective. The reported address errors increased from 267,478 in fiscal year (FY) 2011 to 430,843 in FY 2013, primarily because carriers did not update edit books consistently and management did not conduct necessary street reviews. The Postal Service reduced its emphasis on ensuring address accuracy by initially reducing the number of address management specialists by nearly 40 percent and then reclassifying the specialist position from non-bargaining to bargaining. Further, the Postal Service did not have a formal standardized training program or a follow-up process to ensure compliance.

We estimated address corrections costing about $14 million were not made to the Address Management System in FYs 2012 and 2013. Effective controls over address corrections would increase delivery efficiency and avoid future costs of about $16 million for FYs 2014 and 2015. Incorrect addresses increase business mailers’ costs to process returned mail. Inaccuracies could also cause mailers to lose confidence in the effectiveness of mail, which could significantly reduce postal revenue.”

February 27, 2014
Revenue Performance to Plan for Fiscal Years 2012 and 2013
“The U.S. Postal Service generated more than $65 billion in operating revenue during both fiscal years (FY) 2012 and 2013. Revenue was mainly derived from two key channels:
(1) commercial—71 percent of operating revenue and (2) retail3—28 percent of operating revenue.   The Postal Service tracks revenue across a host of categories within these revenue channels, including specific products, such as First-Class™ Mail; services, such as Post Office Box rental; and locations, such as walk-in-revenue at retail counters.”

February 24, 2014
Transportation Management Service Provider Shipping Process -  Audit Report
“Twelve of the 13 suppliers using TMSP did not include shipping costs on their invoices. However, the Postal Service could not determine whether one supplier included shipping costs for 80 shipments, valued at $51,550, because the supplier did not itemize all costs on their invoices. The Postal Service took responsibility for all shipping costs on future TMSP shipments and directed the supplier to exclude shipping costs in the future.

In addition, [redacted] audit process did not provide sufficient controls over the TMSP contract to confirm receipt of shipments. Specifically, [redacted] did not validate whether Postal Service officials received all 87 sampled shipments and did not require all recipients to respond to their proof of delivery surveys. We statistically projected at least $2,566,084 in unsupported questioned costs because officials did not validate receipt of shipments.”

February 18, 2014
What America Wants and Needs from the Postal Service – Summary of Focus Group Research
“Funding: Consistent with our previous survey findings, nearly 70 percent of participants did not realize the Postal Service is self-funded, incorrectly believing that it receives tax dollars for operations. Upon learning it is funded by its own revenue, participants lowered their service level expectations. For Americans to make informed decisions about what they expect from the Postal Service, they must understand its funding structure.

Physical Locations: Most participants valued the Postal Service as an institution. Participants in rural areas considered a Post Office a valued community asset, whereas urban participants placed a higher importance on the convenience of accessing postal services. Rural participants noted security concerns with trusting their mail with nonpostal employees in nonpostal retail locations, such as grocery stores. This often prevailed over the convenience of co-location.

Accessibility: Many participants felt strongly that the existing hours offered at their local Post Office should not be reduced, and focus group participants who worked suggested shifting or expanding the current hours to accommodate their work schedules. Several participants were concerned that reducing their Post Office’s current hours could result in increased wait times, their largest source of dissatisfaction with the Postal Service as reported in a pre-focus group survey.

Delivery: Participants were most likely to compromise on residential delivery location and the number of delivery days.

Digital Services: Participants found it difficult to imagine digital services and accordingly did not think it appropriate for the Postal Service to provide them.

Governmental Services and Other New Products: Similar to the previous survey results, some participants saw the utility of offering governmental or other new products or services at Post Offices. However, the participants revealed that they thought others, rather than themselves, would actually use the services.

Postal Service’s Role in the Future: More than 98 percent of focus group participants stated they would be negatively affected if the Postal Service ceased to exist, but participants could not articulate how their lives would actually be affected.

February 12, 2014
Using the ‘Crowd’ to Deliver Packages
“Who actually agrees to deliver these packages? The profiles of crowdshipping drivers are all over the map. At Zipments, 95 percent of couriers are professional delivery folks with more than 4 years of experience. Other services like RideShip and Deliv use regular people who are just looking for extra work. Some services vet drivers extensively, others don’t at all. Regardless of the model, there’s apparently decent demand for these roles. When Deliv put out ads for drivers, it got more than 30 applicants per position.

There’s also a fair amount of interest from investors in these types of businesses, most of which offer their services in a small number of cities. Last year, Deliv and Zipments raised $7.85 million and $2.25 million, respectively. The expectation is that as soon as a crowdshipper proves the viability of its model, a lot more money will flow into the space, allowing more startups to expand nationwide. As such, this sector seems likely to change quickly and dramatically in the next few years.”

February 12, 2014
Management Alert – Risks Associated With  CB Richard Ellis, Inc. Contract
“The U.S. Postal Service awarded a contract in June 2011 to CB Richard Ellis, Inc. (CBRE) to be the sole provider of Postal Service real estate management services. The Postal Service believed that leveraging the capabilities of a national real estate firm would allow for a more effective use of limited resources. As the largest real estate owner in the world, CBRE has one of the broadest industry platforms. In 2012, CBRE was responsible for more than $189.8 billion in property sales and lease transactions globally and managed more than 3.3 billion square feet of commercial properties and corporate facilities…

As a result of our audit and ongoing concerns surrounding the CBRE contract, we have identified additional information that increases the financial risks to the Postal Service.
Specifically, Postal Service officials modified the contract in June 2012 to allow CBRE to negotiate on behalf of the Postal Service as well as prospective buyers and lessors in the same real estate transaction. Also, CBRE was responsible for soliciting appraisals to determine the fair market value of the properties that it then sells and leases.

The contract modification also requires CBRE to notify the Postal Service of any actual or potential conflicts of interest, such as owning or having an interest in a property that may be part of a Postal Service real estate transaction. To date, CBRE has not notified the Postal Service of any such conflicts. Given the multiple roles CBRE plays within the real estate industry, the Postal Service should take steps to lessen the potential for CBRE to engage in transactions that create conflicts of interest.  CBRE conflicts of interest could lead to financial loss to the Postal Service and decrease public trust in the Postal Service’s brand.”

February 7, 2014
Locality Pay – White Paper
Unlike most national employers, the Postal Service does not adjust wages to reflect local pay rates or cost-of-living differences. **The rest of the federal government offers “locality pay” — adjusting pay based on local or regional labor markets. **The Postal Service spends over $30 billion per year on salaries, so how those salaries are distributed across regions is an important issue.  **The Postal Service should consider locality pay as a means of instituting a more fair system that could save expenses in some areas and enhance the quality and stability of its workforce in others.  **Implementing locality pay would be challenging, but not impossible, and the benefits could be significant. Careful planning and focused attention will be needed.

February 5, 2014
Metro Post Same Day Delivery Pilot – San Francisco District -  Management Advisory Report
“The Postal Service did not properly implement the pilot. They did not have sufficient participation from the six selected retailers to achieve the required daily minimum target of 200 packages per delivery day. Only 95 packages were sent by the six participating retailers over a 5-month period. Implementation in the San Francisco District was based on the expectation of agreements with several large retailers. However, only one large retailer agreed to participate in the pilot, and later withdrew prior to implementation due other operational priorities. The Postal Service was left with small local retailers that could not produce the target daily package volume. As a result, the Postal Service earned $760 and spent $10,288, with a net loss of $9,528 on the pilot.”

February 4, 2014
Officer Compensation for Calendar Year 2012 -  Audit Report
“Although the Postal Service complied with IRS regulations for CY 2012, it did not always comply with annual officer compensation caps as required by the Postal Act of 2006 or its own internal policies and guidelines for leave approval. This occurred because management previously misinterpreted the Postal Act of 2006. We identified three officers whose compensation exceeded the caps.  *The Postal Service asserted that two officers who received base salaries above the pay cap of $199,700 were approved as critical employees by the Board, but their names were not submitted to the Office of Personnel Management and Congress.  *One officer’s annuity was not included in the compensation cap computation. With annuity, this officer’s total compensation exceeded the second cap of $230,700 and the officer was not on the list of critical positions.  As a result, during CY 2012 the Postal Service paid $142,075 above the compensation caps.

According to the Postal Service’s 2012 annual report, officers’ salaries were to remain frozen; however, we identified seven officers who received salary increases while maintaining vice president positions. Also, one officer’s leave request was modified and processed without proper approval.

January 27, 2014
Providing Non-Bank Financial Services for the Underserved – White Paper
One in four U.S. households lives at least partially outside the financial mainstream — without bank accounts or using costly services like payday lenders.

The average underserved household spends $2,412 each year just on interest and fees for alternative financial services.

Postal financial services may appeal to many customers who feel abandoned by major financial institutions. Postal organizations have an unmatched ability to reach consumers from diverse backgrounds.

Many international posts are already garnering significant new revenue and keeping citizens connected by offering financial services.

Financial services have been the single best new opportunity for posts to earn additional revenue. For the Postal Service, this might ultimately translate into $8.9 billion per year.

September 27, 2013
Using U.S. Postal Service-Specific Assumptions for Calculating the Retiree Health Care Liability – Management Advisory

September 27, 2013
Using U.S. Postal Service-Specific Assumptions for Calculating the Federal Employees Retirement System Liability – Management Advisory Report

September 27, 2013
Using U.S. Postal Service-Specific Assumptions for Calculating the Civil Service Retirement System Liability – Management Advisory Report

September 19, 2013
Hearing before the Committee on Homeland Security and Governmental Affairs, United States Senate – Oral Statement
by David C. Williams, Inspector General, United States Postal Service
OIG’s research claims postage increases above CPI are necessary and any mail volume lost will be more than made up with increased revenue.  ”Recent volume losses combined with the price cap imperil the Postal Service’s ability to provide universal service while remaining self-funded. The price cap was intended to protect trapped monopoly customers, but the monopoly has lost much of its value, since there is powerful competition for each type of mail today – advertising, personal communications, business transactions, and parcels. Customers have alternatives, and the diminishing monopoly combined with the universal service requirement is now a growing liability. Our study suggested adjusting the CPI cap to take into consideration volume fluctuations and the revenue generated per delivery point.

The second study examined how sensitive postal customers are to price increases above CPI. We found that for moderate, predictable price increases,postal products generally have low price elasticity. That means small increases would provide badly needed revenue. As prices are increased, some volume will leave, but the associated revenue loss will be more than offset by revenue from the price increase.”

September 17, 2013
Shortpaid Postage – Information Based Indicia Packages, Southern Area – Audit Report
The Postal Service got ripped off for $70 million nationwide in FY 2012 on postage printed on computers.  The hidden postage feature comprised 60% of computer postage in the Southern Area.
“The Postal Service estimated about (blacked out) in shortpaid postage loss nationwide in fiscal year (FY) 2012 for mailpieces with visible postage. IBI package shortpaid postage accounts for $70 million of the (blacked out) and is the largest area of revenue loss. About $49 million of the (blacked out) was attributed to losses in the Southern Area, of which about $14 million was attributed to IBI package shortpaid postage. Our objective was to determine whether the processes for preventing and detecting IBI package shortpaid postage in the Southern Area are effective. WHAT THE OIG FOUND: The Southern Area’s processes for preventing and detecting shortpaid postage on IBI packages were not effective. We identified a systemic pattern of shortpaid postage in the districts we visited, involving both small and large mailers. Shortpaid postage amounts on individual IBI packages ranged from 8 cents to $290. (blacked out) the Southern Area does not have a comprehensive strategy for identifying and reducing shortpaid postage…

…Customers can also purchase and print online postage from any computer. This type of postage, known as IBI, is digital and includes human readable information and a Postal Service approved two-dimensional barcode or other Postal Service-approved symbology with a digital signature and other required data fields. IBI postage has an added feature where customers can choose whether or not to display the value of the postage on the label. When the value is not displayed, it is considered hidden postage.  According to revenue, pieces, and weight (RPW) data, this type of postage comprised 60 percent of all IBI postage in fiscal year (FY) 2012 in Southern Area.”

September 12, 2013
Limited Duty and Rehabilitation Employees Returned to Work - Audit Report
“As of December 2012, the Postal Service had 16,999 employees receiving workers’ compensation benefits. To reduce these costs, the Postal Service began a return to work initiative focusing on employees receiving workers compensation. As of June 2013, the Postal Service had returned 2,098 employees to work; and the Postal Service and the Department of Labor processed other actions for 1,790 employees that reduced workers compensation costs. In response to a request from the Office of General Counsel, our objective was to determine whether Postal Service officials followed applicable policies and
procedures when returning Limited Duty and Rehabilitation Employees to work.”  The OIG complains that the Post Office was not reviewing case files adequately to make sure all workers capable of working are doing so.  The large mailers are pushing for a reduction of compensation and benefits to workers who were injured on the job.   Investigating and preventing injuries and the discrimination against injured workers is what the OIG should do with their time.

August 26, 2013
Springfield Network Distribution Center – Postal Vehicle Service Operations – Audit Report
The OIG wants the Postal Service to get the 58 drivers at the NDC (BMC) in Springfield, MA to work faster. The OIG is claiming the drivers were making 3.3 trailer moves per hour and wants them to make 5 moves per hour, which they claim to be a standard. Management indicates they will attempt to convert full-time jobs to part-time NTFT jobs during their October annual bid in order to increase productivity and reduce the number of hours at the facility.

August 16, 2013
Use of Postal Support Employees in Customer Service Operations – Audit Report
“The Postal Service incrementally increased its use of PSEs through February 2013, achieving a 19.1 percent national average PSE usage rate. They also achieved significant labor cost savings totaling over $233 million in FY 2012. In October 2011, there were 2,273 PSE positions (2.9 percent of the career employees in customer service operations) and by September 2012, the number of these positions had increased to 7,560 (10.5 percent of career employees). The FY 2012 year-end percentage was well below the National Agreement’s 20 percent cap limit.”

July 25, 2013
Postal Service Injury Compensation Program – Audit Report
This report could be about the lack of ergonomics and the over abundance of repetition at the Post Office, which causes unnecessary injuries to employees, but it is not.  Instead – “For the 2012 billing period, the Postal Service incurred more than $1.3 billion in workers’ compensation costs and paid more than $68 million in administrative fees ― an increase of more than 25 and 23 percent, respectively, since the 2009 billing period…We recommended management conduct a formal staffing analysis to include using contract nurses for case management, establish district performance measures based on cost reductions, and implement a nationwide work search system, along with district rehabilitation program committees. We also recommended management establish a standardized quick reference guide, provide automated reminders of key tasks, explore the return-to-work benefits of partnerships with non-profit organizations, and evaluate the use of predictive analytics.”

July 9, 2013
Retail Customer Experience Program – Audit Report
The OIG recommends allowing the Postal Service to increase the amount of minutes in the,” no more than 5 minutes waiting in line suggestion,” specifically in those areas where wait times are already longer. Also, useful info – “The U.S. Postal Service’s retail network includes 32,000 facilities and in fiscal year (FY) 2012 it had 840 million customers who conducted 1.7 billion transactions…The Postal Service spent $3.7 million on this contracted service (Mystery Shopper) in FY 2012.”

July 5, 2013
Overtime Use During Fiscal Years 2011 and 2012 – Audit Report
“Overtime hours accounted for 7.4 and 7.8 percent of total workhours in fiscal years (FY) 2011 and 2012, respectively…In FY 1993, the Houston District entered into an indefinite agreement with the local NALC that requires the Postal Service to pay letter carriers $10 per hour for any time worked after 5:15 p.m., in addition to regular or overtime pay. The Postal Service paid $1.78 million and $1.56 million in FYs 2011 and 2012, respectively, for grievance settlements relating to the ‘after 5:15 p.m.’ agreement. In 2012, 2,683 employees received this ‘after 5:15 p.m.’ payout, at an average of $581 per employee. The highest individual payout was $3,238 in 2012, and 550 employees received payouts of more than $1,000.” Bravo for the Houston NALC to work out an agreement to get carriers off the street earlier. Maybe up the penalty so the USPS won’t violate it as much.

June 28, 2013
Virtual Post Office Box Roundtable Discussion Summary
“At its most basic level, the virtual PO box would provide users with an address that could be redirected anywhere they choose. After appropriate identity checks, users could sign up for a virtual PO box address (for example, VPOB #1234) and log into their USPS.COM accounts online or use smart devices to link this address with that of any physical address they choose: a residence, a business, a nearby Post Office, or even a physical PO box. Users could select to have packages automatically sent to a nearby gopost® parcel locker. The Postal Service’s sorting equipment would automatically read the virtual PO box address and route mail and packages to the physical address the user has chosen to link to the virtual PO box. This would allow the virtual PO box to accommodate the flow of mailpieces and parcels just in time. Customers could also be notified immediately via email or by text message when new mailpieces arrive.”

June 24, 2013
Public-Private Partnerships:Best Practices and Opportunities for the Postal Service – White Paper
Learning the privatization ideas from other countries to implement them in the US.

June 20, 2013
Small Business Growth – Audit Report
“The Postal Service could further leverage the status of its postmasters with local businesses by actively funding postmaster memberships to local business organizations, such as Chambers of Commerce.”

June 19, 2013
Political and Election Mail Sales – Audit Report
“We recommended the Postal Service develop a strategy to increase the sale of nonballot election mail products to citizen groups who are eligible to vote but not registered. We also recommended the Postal Service continue to explore secure digital credentialing and its potential for Internet voting.”

June 19, 2013
Delivering Results, Innovation, Value, and Efficiency Management – Audit Report
“The Postal Service uses DRIVE as its program management process to improve business strategy development and execution. Development of the DRIVE process began in June 2011 along with its program portfolios. The Executive Leadership Team (ELT) the Strategic Management Office (SMO), and individual DRIVE program and project managers manage the process…The Postal Service SMO has a contract with Deloitte Consulting to provide program management services as needed.”

June 17, 2013
Oversight of Performance-Based Contracts – Audit Report
“U.S. Postal Service officials did not have adequate controls to oversee performance based contracts. Specifically, contracting officials did not track this contracting method in their data system and did not always take advantage of the benefits of this approach.”

June 12, 2013
Contracting of Real Estate Management Services – Audit Report
“In June 2011, the U.S. Postal Service awarded a contract to CB Richard Ellis, Inc. to be the sole provider of real estate management services to more effectively use its limited resources. Outsourcing real estate management services to one supplier is a fundamental change from how the Postal Service previously managed its real estate portfolio…Postal Service Facilities officials should improve oversight to mitigate inherent risks associated with the CB Richard Ellis contract. Specifically, there are conflict of interest concerns and no maximum contract value. In addition, the contracting officer did not properly approve contract payments, appoint contracting officer’s representatives to monitor contract performance, or ensure services were provided. As a result, it is difficult for the Postal Service to determine whether the outsourcing effort has been or will be effective in reducing costs.”

June 6, 2013
Management Alert – Accenture Federal Services Contracting Practices
“Accenture Federal Services, LLC (Accenture) is a Postal Service supplier who provides information technology (IT), professional, and training services. Accenture is included on the Postal Service’s list of top 10 suppliers, with payments of about $135 million made in fiscal year (FY) 2012. The Postal Service has four active contracts with Accenture and has paid the supplier over $214 million on these contracts. Accenture is also a supplier in the Postal Service’s Enterprise Technology Services (ETS) program…Accenture’s involvement in several improper contracting practices creates an immediate risk of future fraud and abuse in Postal Service contracts. As a result of prior OIG audits and investigations, DOJ settlements, and the DCAA’s findings of inadequacies in the supplier’s cost-estimating and timekeeping systems, the supplier has demonstrated an absence of business ethics, a lack of transparency, and insufficient internal controls in its business dealings with the Postal Service…The supplier agreed to pay $63.7 million to resolve allegations that it received kickbacks for its recommendations of hardware and software to the government, fraudulently inflated prices, and rigged bids in connection with federal IT contracts. The Postal Service was not included in the $63.7 million settlement because it allowed Accenture to charge handling fees for purchasing third-party hardware and software on its behalf.”

June 3, 2013
The Global Logistics Revolution: A Pivotal Moment for the Postal Service

June 3, 2013
U.S. Postal Service Pay for Performance Program – Management Advisory
“The Postal Service’s PFP Program has been the sole source of annual pay adjustments for about 58,000 non-bargaining unit employees ― which includes all Postal Career Executive Service (PCES) employees and the majority of Executive and Administrative Schedule (EAS) employees. If pay increases are reinstituted in the future, they may once again be used in this capacity.”

May 24, 2013
City Delivery — Street Efficiency Southern, Pacific, and Western Areas – Audit Report
“The Bay-Valley, Dakotas, Houston, Oklahoma, and Portland districts have opportunities for enhanced street delivery efficiency. We determined the districts could use about 7 fewer minutes of street time per day on each carrier route. This would allow for a reduction of 340,499 workhours. We found that management did not always reinforce policies and procedures for supervising city delivery street operations”

May 23, 2013
Management of Detail Assignments- Audit Report
“The Postal Service did not effectively manage detail assignments. Specifically, the Postal Service did not ensure compliance with detail assignment policies and was unable to identify who was on detail and the associated costs. Additionally, the Postal Service did not have consistent polices for detail assignments pertaining to justification and approval. As a result, the Postal Service spends about $34 million annually on travel for detail assignments that were not properly supported.”

May 21, 2013
What America Wants from the Postal Service: A Survey of Internet-connected Americans
“The overwhelming majority of respondents think their life would be affected adversely if the Postal Service did not exist in five years. Most respondents also consider Postal Service delivery a public service that should be maintained, even if it is not profitable. Respondents, however, generally misunderstand how the Postal Service is funded, believing it is funded through tax dollars, rather than postage sale revenue.”

May 17, 2013
Use of Non-Traditional Full-Time and Postal Support Employee Positions in Processing Operations – Audit Report
In Mail Processing, Function 1 – “While Postal Service managers showed improvement in increasing the use of both types of positions in FY 2012, they did not hire to the fullest extent allowed by the contract. For example, in October 2011, there were 507 NTFT positions (.8 percent of total mail processing clerks) and by September 2012, the number of these positions had increased to 3,708 (5.7 percent of clerks). Similarly, the average number of NTFT positions increased from 2,732 in FY 2012 to 3,631 in the first 5 months of FY 2013. However, in spite of this improvement, the use of NTFT employees was still significantly below the amount allowed by the contract, which is 50 percent of total clerks in a district.”

“In October 2011, there were 5,632 PSE positions (8.5 percent of the mail processing clerks) and, by September 2012, these positions had increased to 7,559 (11.6 percent of the clerks). Beginning in October 2012, hiring of PSEs accelerated and for the first 5 months of FY 2013, the average number of PSEs rose to 10,114 (or 15.4 percent of the clerks). By February 2013, accelerated hiring combined with the reduction in staff resulting from retirement incentives helped the Postal Service reach 12,170 PSE positions, or 19.5 percent of the clerk workforce.”

May 6, 2013
U.S. Postal Service Parcel Delivery Lockers - Management Advisory
Not working out so well, so far.

May 1, 2013
Analysis of Postal Price Elasticities
Don’t believe the hype from the large corporate mailers.  This report shows that postage price increases will raise revenue.  ”The demand for the postal products studied is price inelastic. Price increases will increase revenues. Decreases in postal prices, either through price cuts or widespread use of discounting, will reduce Postal Service revenues.”

April 29, 2013
Domestic Negotiated Service Agreements - Audit Report
Any additional volume brought in through NSAs cannot be linked to the direct result of incentives created by the agreements. “In addition, the data used to calculate rebates, discounts, and mail volume growth were not always accurate. Further, the data reported to the Postal Regulatory Commission did not always agree with data the Postal Service used to calculate discounts and rebates. We identified $1.2 million in incorrect and questionable customer rebates and quarterly price adjustments.”

April 29, 2013
Click-N-Ship For Business – Audit Report
“The Postal Service did not implement sufficient controls to protect revenue associated with the Click-N-Ship For Business application…As a result, we identified about $7 million of annual revenue loss to the Postal Service.” The OIG recommendation and other sections are blacked out (redacted).

April 17, 2013
Virtual Post Office Boxes
“The virtual PO box would bring the same portability to the physical address that already exists for email addresses and telephone numbers. When virtual PO box holders travel or spend time away on business, they could change the destination of their virtual PO box to their temporary address or a nearby Post Office. A virtual PO box would be a dedicated, permanent address that would remain constant, which could reduce complications associated with change of address issues customers may experience after moving.  Change of address requests expire after a certain period of time but if a customer has a virtual PO box, he or she would continue to receive mail regardless of when and to where the customer moves.  In addition to portability, the virtual PO box would offer privacy. Shoppers would have an alternative to providing their personal physical address in online commerce transactions. A virtual PO box could also address the issue of some post offices having an insufficient number of physical PO boxes to rent to customers.”

April 12, 2013
Revisiting the CPI-Only Price Cap Formula
The price cap is not working in a period of declining volume as “the Postal Service has significant institutional costs, estimated to be about 45 percent of total costs. Many of these costs are particularly associated with the network of addresses to which it delivers at no charge to the recipient. As mail volume declines, institutional costs by definition do not decline. In contrast, volume variable costs, such as some mail processing costs, fall as less mail goes through the system. In 2010, about 55 percent of Postal Service costs were volume variable. Because of the significant institutional costs, total Postal Service costs do not decrease in proportion to the decrease in mail volume, while revenues do decrease in proportion to mail volume. Consequently, when volume is decreasing there is a greater burden on each remaining product to cover the network’s institutional costs.

For example, whether a letter carrier is delivering one letter or five letters, the cost of delivering to an address (or more precisely, to a delivery point) remains virtually the same. As volume declines, however, it is harder for one letter to cover the cost of delivery than it is for five letters to cover the cost of delivery. The traditional price cap formula does not recognize that there is more pressure on one letter to pay for the institutional network related costs of delivery than there is for five letters.”

April 11, 2013
Postal Service Product Costing Methodologies – Management Advisory Report
“This review responds to a request from the chief financial officer and executive vice president to provide a description of background, history, and current costing methodologies at the Postal Service. The information presented here provides a baseline for a second review and report, benchmarking Postal Service costing methodologies with those at foreign posts and other entities.”

April 4, 2013
Supervisor Workhours and Span of Control – Management Advisory
“Although the Postal Service generally reduced supervisor workhours in relation to craft employee workhours, it did not always achieve its span of control target. Specifically, we found that, based on the 1:25 span of control target, there was a shortage of 412 regular supervisors nationwide and an excess of 1.8 million replacement supervisor workhours used in fiscal year (FY) 2012. Replacement supervisors are craft employees used to backfill supervisors.” Note: the 1.8 million replacement hours make up more than twice the number of 412 supervisors allegedly short.

April 3, 2013
Primer on Postal Challenges
“This document is not intended to advocate for adoption of one option over another, but rather to give the reader an understanding of the Postal Service’s current financial and operational challenges, as well as possible future directions (ha) …If decision-makers determine the Postal Service should adapt to the changing market, its survival will be dependent on:• Minimizing some of its universal service obligations and societal obligations that it cannot afford to sustain, • The ability to reduce its networks to meet shrinking demand, • Relief from health and pension prefunding demands that it cannot pay,• The flexibility to set prices that cover its costs, and • Flexibility to meet its mission in alternative ways, such as offering digital services.”

April 1, 2013
The Untold Story of the ZIP Code
Lots of various information. One interesting issue is geocoding. “Geocoding is the process of associating precise geographic latitude and longitude coordinates with physical addresses, including street addresses and ZIP Code boundaries. As of December, 2012, the AMS had not been geocoded, and there were no plans to incorporate geocoding technologies…Some benefits are already realized with the current ZIP Code and addressing system, but geocoding would allow the construction of more meaningful geographical groupings. For example, real estate values in the United States, currently, are largely grouped by ZIP Code so analysis is limited to this restriction. Adding geocodes (available in the UK) allows for more precise analysis across grouping boundaries…The ZIP Code has frequently and successfully been used as a means to organize consumer demographic information. For example, marketing companies often send mass mailings to households in high-income ZIP Codes. This ability to communicate with a higher percentage of their target audience is valuable to companies and other organizations, and could be enhanced further. Utilizing average measures for each ZIP Code can unfortunately ignore the heterogeneity (diversity) contained in each ZIP Code, as seen with the previously discussed real estate values example from Figure 4 above. The most useful way to draw demographic boundaries may be to collect and organize data by more precise clusters. A larger number of homogeneous groupings of demographic data (like groupings of rich people) will help raise the ROI (return on investment) potential for all direct mail by better matching recipients with information they desire. This variety of grouping could be done in multiple ways – by carrier route, ZIP+4’s, or even geocodes.” (info in parenthesis mine)

March 31, 2013
Office of Inspector General Semiannual Report to Congress – October 1, 2012 — March 31, 2013
“This report, submitted pursuant to the Inspector General Act, outlines our work and activities for the 6-month period ending March 31, 2013. In the first section of this issue, we highlight audits and reviews that address the Postal Service’s goals of improving service, generating net income, and improving the workforce and workplace. We also include work that reviewed Postal Service efforts in meeting regulatory requirements and reporting obligations. The second section highlights investigations conducted during this reporting period that contributed to safeguarding the Postal Service’s revenue and assets and helped deter postal crimes.”

March 29, 2013
Postal Service Performance During the Fiscal Year 2013 Fall Mailing Season – Audit Report
“Generally, the U.S. Postal Service’s performance is impacted in the fall by higher than normal Standard Mail® volume in response to increased back-to-school and winter holiday advertising. In fiscal year (FY) 2012, some Postal Service mailers expressed concern about a greater amount of delayed mail during the fall mailing season which occurs from October through December each year…Service performance achievement scores measure the time from when mail is picked up at the collection box to when its delivered. These scores rose to 90.71 percent during the 2013 fall mailing season from 81.20 percent during the same period last year (as among other changes, cutoff times for collection boxes were simply changed to earlier in the day) …We found that mail was not always properly staged for first-in first-out processing due to floor congestion caused by excess mail transportation equipment, such as mail tubs and trays (which contradicts arguments that there is excess capacity in plants). As a result, the Postal Service cannot ensure the timely processing, dispatch, and delivery of Standard Mail.” (info in parenthesis mine)