OIG: Curbing Workers’ Comp Abuses

From the USPS Office of Inspector General:

uspsoigDisability programs are vital for a nation that supports its citizens. In the United States, federal employees, including postal workers, who suffer employment-related injury or illness are entitled to workers’ compensation under the Federal Employees’ Compensation Act (FECA).

The U.S. Postal Service funds workers’ compensation benefits for employees who sustain job-related injuries. In fiscal year (FY) 2014, the Postal Service incurred over $1.3 billion in workers’ compensation expenses. In addition, the Postal Service estimated its liability for future workers’ compensation costs at nearly $17.1 billion. The U.S. Department of Labor’s Office of Workers’ Compensation Programs (OWCP) administers the workers’ compensation program and then bills the Postal Service for reimbursement.

While most compensation claims are legitimate, fraud and abuse do occur. The U.S. Postal Service Office of Inspector General (OIG) focuses resources on identifying claimants and providers who defraud the system. In FY 2014, OIG investigations saved the Postal Service more than $275 million in future workers’ compensation costs, and arrested 82 individuals for workers’ compensation fraud.

One recent successful case highlights the type of cases our agents investigate:

A postal letter carrier had been receiving workers’ comp benefits since 2001 after claiming total disability from a back injury at work. Investigators, however, discovered he had started a landscaping company shortly after his claimed injury and was routinely working at that company. Agents observed the individual driving a dump truck, operating a riding lawn mower and a tractor, and directing the activities of other individuals at customer properties. Undercover investigators also hired the former carrier to perform landscaping work for them, which they video recorded and presented as evidence to prosecutors and the Department of Labor (DOL). These activities exceeded the former employee’s stated limitations and he failed to inform the DOL of his involvement in this business, both of which resulted in his conviction and the termination of his benefits.

This successful investigation alone saved the Postal Service approximately $664,000 in future workers’ compensation payments. What suggestions do you have for preventing workers’ compensation fraud? And if you suspect fraud by either a Postal Service employee or provider, please contact our office at 888-877-7644.

Source: Curbing Workers’ Comp Abuses | Office of Inspector General

OIG Report Paints Bright Future for Postal Banking

From the American Postal Workers Union:
Clipboard0105/21/2015 – A report by the USPS Office of Inspector General (OIG) released May 21 outlines the next steps for implementing postal banking, in which post offices would offer basic financial services – providing affordable banking transactions to every zip code in the US, while strengthening the Postal Service.

The May 21 report titled, “The Road Ahead for Postal Financial Services,” states that expanding and enhancing existing financial services such as money orders, international money transfers, check cashing and bill payments could be accomplished without an act of Congress.

According to the OIG’s “conservative estimate,” this expansion could bring the Postal Service $1.1 billion in annual revenue within five years while serving  68 million Americans who either who don’t have bank accounts or who “rely on expensive services like payday lending and check cashing.” Some refer to these predatory businesses as “alternative financial services;” APWU President Mark Dimondstein calls them “legal loan sharks.”

While highlighting the impact postal banking would have on the financial health of the Postal Service, the OIG also recommends that the USPS focus on the affordability of the services it could provide.

Among the expanded offerings, post offices “could provide ATMs where recipients of government benefits could withdraw funds without paying a fee,” the report says.

Dimondstein praised the idea.  “It’s a no-brainer,” he said. “The Inspector General’s report confirms that the Postal Service can act now to provide consumers with affordable financial services while strengthening our trusted national treasure, the public Postal Service.

“We look forward to the day when people can get their checks cashed by their trusted neighborhood window clerk,” he said.

The APWU is a member of the Campaign for Postal Banking, a coalition of consumer, worker, financial reform, economic justice, community, civic, and faith-based groups that is organizing support for the concept. For more information, visit www.CampaignForPostalBanking.org.

Source: OIG Report Paints Bright Future for Postal Banking | APWU

NALC statement on OIG’s report regarding USPS financial services

The U.S. Postal Service’s Office of Inspector General (OIG) issued a report today on “The Road Ahead for Postal Financial Services.” Below is a statement from Fredric Rolando, president of the National Association of Letter Carriers:

NALC-LOGOThe OIG’s report contains interesting observations and recommendations on ways the Postal Service can begin to serve the needs of 68 million adults in this country who have either no access or only limited access to basic financial services.

Of particular interest are services that the Postal Service could immediately pursue since it already has the authority to provide such services as money orders, post-office-to-post-office money transfers, bill payment, check cashing, international remittances and automatic teller machine (ATM) access. These basic services would give a much-needed option to those with no alternative available in their communities.

Because post offices are located everywhere—urban centers, suburbs and rural America; not simply located according to profit models—they are a ready-made network for people to come to, to obtain affordable financial services administered by highly trained, experienced and trusted public servants. This infrastructure includes more than 30,000 post offices and is the largest, best-distributed physical network in the country.

This model has been successful in many other countries and has the potential, according to the OIG, to generate at least $1.1 billion of revenue annually, which would allow the Postal Service to continue its innovative efforts.

The OIG’s recommendations are a good place to start, and we urge the Postal Service to take steps to immediately pursue these opportunities to fill the unmet needs of those in underserved communities.

Source: NALC statement on OIG’s report regarding USPS financial services | National Association of Letter Carriers AFL-CIO

Can the USPS do more to profit from online returns?

From the USPS Office of Inspector General:

With all those designer shoes, cutting-edge electronics, and trendy toys shipping into our homes via ecommerce, it’s only logical that sometimes the shoes won’t fit, the electronics won’t work, and the kids will have already moved on to the next hot toy.

The bottom line is that some of the stuff we buy needs to be returned. And that’s known as reverse logistics.

As the offspring of the enormous ecommerce business, domestic shipping returns currently generate about $3 billion annually in revenue for the package delivery industry, and could reach $4 billion by fiscal year 2016. Shipping returns’ first cousin, package forwarding, is also booming as customers increasingly expect more control over when and where their packages will be delivered.

The U.S. Postal Service is active in the returns and forwarding markets, and offers a variety of products and services, such as Parcel Returns Service, Bulk Parcel Return Service, and two Premium Forwarding Services – one for homes and one for businesses. Recently, the Postal Service has been promoting its built-in advantage over other providers – its 6-day-a-week delivery and its free package pick-up service.

But can it do more to get its chunk of the reverse logistics market? We think so. Our recent white paper on the topic found several services the Postal Service could offer to take advantage of its strengths.

Source: Investing in Reverse Logistics: It’s Only Logical | Office of Inspector General

OIG: USPS needs to do more to reduce undeliverable mail

Clipboard01In a new report, the USPS Office of Inspector General says the postal service’s effort to reduce undeliverable as addressed mail (UAA) isn’t effective, and recommends working with mailers to make better use of new technology to solve the problem:

UAA mail is costly, since it must be forwarded, returned, or treated as waste. The Postal Service spent nearly $1.5 billion handling UAA mail in FY 2014, and the mailing industry incurs about $20 billion in UAA costs annually. Continue reading

Pennsylvania rural carrier pleads guilty to theft and destruction of mail

US-Department-Of-Justi_fmtThe United States Attorney’s Office for the Middle District of Pennsylvania announced that Stacie Ann Stevens, age 41, of Hanover, Pennsylvania was charged with destruction of mail in a criminal information filed in U.S. District Court in Harrisburg and pled guilty before Senior United States District Court Judge William C. Caldwell on March 19, 2015.

According to U.S. Attorney Peter Smith, between July and October, 2014, Stevens, a postal carrier, began opening greeting cards and other mail and stealing the cash and gift cards contained inside. The theft was discovered after residents complained about missing or torn mail. In October 2014, Stevens was caught on surveillance video using one of the stolen gift cards at a local store. Stevens faces one year imprisonment and a fine of up to $100,000.

Stevens has resigned from the Postal Service. The Government has filed a plea agreement with the defendant which is subject to approval of the court. As part of the agreement, Stevens agreed to pay restitution to the victims.

This case is being investigated by the United States Postal Service, Office of Inspector General and the Carroll Valley Borough Police Department and is being prosecuted by Assistant United States Attorney Daryl F. Bloom.

OIG says USPS didn’t enforce security requirements for contract drivers

The US Postal Service Office of Inspector General says that USPS management failed to comply with security requirements for contract drivers, with nearly one third of all contractors lacking the required security clearances:

uspsoigPostal Service personnel, including contract drivers, did not always comply with security clearance requirements, and controls over the process were not adequate. Based on our nationwide projection, 4,502 (31 percent) of at least 14,524 contract drivers did not have a valid security clearance. Of the 4,502 contract drivers, security clearances for 2,566 (57 percent) had expired.

This occurred because management did not have sufficient controls in place to track and monitor clearances for contract drivers. In addition, management did not sufficiently oversee or otherwise ensure responsible personnel, including contract drivers, complied with clearance requirements. Further, management did not properly train personnel to obtain screening information from contract drivers. As a result, there are increased safety and security risks to the public, mail, and assets, which could negatively impact the Postal Service’s brand.

View the full report (.pdf file)

Hicksville VMF employees fired for sleeping on the job

Agents from the USPS Office of Inspector General raided the Hicksville NY Vehicle Maintenance Facility early Friday morning after receiving a tip that night shift workers were sleeping on the job. In October a Hicksville VMF employee died in a workplace accident.

A Hicksville postal facility was raided early Friday by U.S. Postal Service special agents in a probe that could lead to criminal charges against some employees, authorities said.

In a meeting with employees Friday, the facility’s manager said all 10 workers on the 11 p.m.-to-7 a.m. shift — who do mechanical and body work — are to be fired for sleeping on the job, according to a worker who attended the meeting.

At the 24-hour maintenance facility on Ludy Street, the misconduct was common knowledge, with graveyard-shift workers often sleeping on bedrolls and blankets in postal trucks or in supervisors’ offices, with windows covered by cardboard, the employee said.

The employee said those workers locked the gates with their own chains and locks so others wouldn’t catch them sleeping.

They’d position a truck near the gates and hang a baby monitor to watch and hear anyone coming, the worker said.At the meeting Friday, facility manager Robert Kasten told employees that surveillance cameras have been installed, the employee said. Kasten told the workers that investigators took pictures during the raid, then "woke them all up," the employee said. "How sad is that?"

Read more: Hicksville postal facility raided in criminal probe of workers, officials say – Newsday.

OIG: USPS may be overpaying $42 million a year in HCR fuel charges

From a new audit by the USPS Office of Inspector General:


uspsoigSince 2005, the U.S. Postal Service has been providing Highway Contract Route (HCR) suppliers with Voyager fleet transaction cards from U.S. Bank Voyager Fleet Systems, Inc. to purchase fuel (known as the HCR Voyager Card Program). In fuel year July 1, 2012–June 30, 2013, the Postal Service paid over $665 million for close to 170 million gallons of fuel under the program.

The Postal Service’s Fuel Management Program document provides policy to suppliers and the Postal Service on the HCR Voyager Card Program. It also includes guidance on pooling authorized fuel. It allows HCR suppliers to combine or “pool” authorized gallons for contracts in rare cases where there is an operational need to do so. Otherwise, suppliers are required to reimburse the Postal Service for all fuel used in excess of the contracted gallons by individual contract route. Our objective was to assess the Postal Service’s fuel pooling practices.

What The OIG Found

The Postal Service has not effectively implemented and managed fuel pooling for HCR suppliers under the HCR Voyager Card Program. It intentionally allowed all HCR suppliers with multiple HCRs to pool their authorized fuel gallons (called aggregate pooling) without regard for supplier operational needs (such as the use of the same equipment on multiple routes) or cost benefits for the Postal Service. This widespread pooling occurred because the policy was relaxed over time and is now inadequate. Also, aggregate pooling became common practice because agreements that would not have allowed it were either missing or lacked consistency.

Consequently, the Postal Service may be paying more in fuel costs than necessary. We estimate the risk of unrecoverable fuel overpayments at $42.5 million annually. Without corrective actions, financial assets of about $42.5 million are also at risk for the July 1, 2014–June 30, 2015, fuel year.

What The OIG Recommended

We recommended management ensure that pooling agreements clearly demonstrate an operational need and that pooling is consistently applied. We also recommended that management eliminate the practice of aggregate pooling. Finally, management should ensure timely identification and recovery of overpayments for the July 1, 2014– June 30, 2015, fuel year and any subsequent periods.

Voyager Card Program for Highway Contract Routes — Pooling Policy Concerns and Related Overpayments | Office of Inspector General.

Footprints on your brain: OIG wants to do neuroscience research

BrainYou might think that the US Postal Service’s Office of Inspector General has enough on its plate, what with investigating employee crimes, auditing financial statements, etc., but it seems the OIG wants to branch out into “neuroscience research to understand the human response to and effectiveness of physical communications”.

Specifically, the OIG would like a contractor to:

Develop a neurophysiological study that illustrates the different human response to hard copy and digital advertising. Proposed methods may include, but are not limited to, traditional self-report, implicit testing, eye tracking, facial coding, core biometrics, EEG, and fMRI, or some combination thereof. The USPS OIG prefers a methodology that is rigorous and cost effective, but is open to discussion on the selection of methods.

The OIG apparently came up with the idea after reading a Royal Mail commissioned study that

… found that physical media left a “deeper footprint” in the brain than digital messages, even after controlling for the increase in sensory processing for tangible items. The study results seem to reveal that all other effects being equal, direct mail-based materials are more concrete and “real” for the brain, internalized more, facilitate emotional processing, and result in more fluent decision-making.

The OIG figures the USPS could

use this information in its ongoing efforts to assist its customers, including SMEs, through its “concierge services” pilot program and other outreach activities such as webinars and communication collateral to help create effective marketing strategies.

I’m sure they could! (Who knew the USPS had concierges?)

Understanding the Effectiveness of Physical Communications – Federal Business Opportunities: Opportunities.