U.S. Postal Service:

More Consistent Implementation of Policies and Procedures for Cash Security Needed

GAO-03-267: Published: Nov 15, 2002. Publicly Released: Dec 2, 2002.

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In fiscal year 2001, the United States Postal Service reported that it lost about $6.3 million in remittances (cash and checks) to robberies, internal theft, and mishandling. One particular loss--a June 2001 theft of over $3.2 million from a Phoenix, Arizona, postal facility by a Career Service employee--received considerable media attention. Pursuant to the request of the Chairman, House Committee on Government Reform, we agreed to review Service policies and procedures for the security of remittances by addressing the following questions: (1) Does the Service have reasonable physical controls and security to safeguard its remittances? (2) Does the Service have policies for conducting background checks of employees who process remittances? (3) Does the Service provide training to its employees who process remittances?

The Service has policies and procedures for physically controlling and securing remittances. These include a number of control activities that, if properly implemented, would be effective in helping to safeguard vulnerable assets, such as cash. The control activities include, among others, requirements for continuous individual accountability of remittances. However, Service management does not always provide appropriate oversight of these activities and Service employees do not always follow the Service's policies, procedures, and activities for controlling and physically securing remittances. The Service requires a background check as part of a suitability test for all prospective new employees. The background check includes a review of any criminal or military records, a fingerprint check by the Federal Bureau of Investigation (FBI), and a drug screening. The Service's training for postal employees who process remittances includes both on-the-job training and the use of self-paced training and development manuals related to the control and security of remittances. However, the Service's training manuals have not been appropriately updated, and in August 2001, the Service's Chief Postal Inspector cited the lack of training as a possible condition leading to the Postal Service's remittance losses.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The Postmaster General should reassess current Service policy of not updating background checks of career employees prior to their being selected to process remittances.

    Agency Affected: United States Postal Service

    Status: Closed - Not Implemented

    Comments: According to GAO's USPS liaison, this recommendation has not yet been implemented but is continuing to be assessed by the Postal Service. No target date has been set for finalizing action on the recommendation. On 3/7/06, the USPS liaison provided the following email update: "We're actively working on these open recommendations. Debbie Kendall, on temporary assignment to this office, is contacting the Inspection Service, Law Department and Human Resources about GAO-03-267 (U.S. Postal Service: More Consistent Implementation of Policies and Procedures for Cash Security Needed). Our office has been told informally that the Service has reexamined the corrective actions the recommendations envision and in both cases, the Service has determined that it is not cost effective or appropriate to implement the recommendations. This is what we have said all along. Even our response letter to the draft report says that we disagree with the recommendations but that we'll re-evaluate. We are requesting that the relevant organizations generate a response that we can pass back to you that gives our specific reasons for declining to implement the recommendations and giving some further information on what we have done in the meantime to mitigate the risks posed by employees working with remittances who might succumb to the temptation to abscond with some of that money."

    Recommendation: The Postmaster General should include adherence to policies and procedures for securing remittances and minimizing remittance losses in its organizational goals and performance management and pay systems and define and enforce supervisory responsibilities to achieve these reinforcement and accountability objectives.

    Agency Affected: United States Postal Service

    Status: Closed - Not Implemented

    Comments: According to GAO's USPS liaison, this recommendation has not yet been implemented and is still being explored by the Postal Service. As of October 1, 2003, there was no target date for completion. As of May 2005, USPS had not provided GAO with updated information on its implementation efforts. On March 7, 2006, the USPS liaison provided the following email update: "We're actively working on these open recommendations. Debbie Kendall, on temporary assignment to this office, is contacting the Inspection Service, Law Department and Human Resources about GAO-03-267 (U.S. Postal Service: More Consistent Implementation of Policies and Procedures for Cash Security Needed). Our office has been told informally that the Service has reexamined the corrective actions the recommendations envision and in both cases, the Service has determined that it is not cost effective or appropriate to implement the recommendations. This is what we have said all along. Even our response letter to the draft report says that we disagree with the recommendations but that we'll re-evaluate. We are requesting that the relevant organizations generate a response that we can pass back to you that gives our specific reasons for declining to implement the recommendations and giving some further information on what we have done in the meantime to mitigate the risks posed by employees working with remittances who might succumb to the temptation to abscond with some of that money."

    Recommendation: The Postmaster General should hold Service managers and employees accountable for following Service policies and procedures for controlling and securing remittances and correcting the control problems identified by the Postal Inspection Service.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: According to the USPS 60 day letter to the Chairman, House Committee on Government Reform, the Service's Chief Operating Officer sent a memo on the proper handling of remittances to all vice presidents of area operations and to district and plant managers. Also, the Chief Operating Officer reported that the proper handling of remittances is routinely discussed at bimonthly meetings with senior officials.

    Recommendation: The Postal General should more rigorously reinforce to managers and employees at facilities throughout the Postal Service the importance of following Service policies and procedures for controlling and securing remittances.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: According to the USPS 60-day letter to the Chairman of the House Committee on Government Reform, immediate actions to ensure that the Service's policies/procedures for controlling cash remittances were enforced; the Postal Inspection Service observed and reported on remittance operations at field locations between September and December 2002, and its findings were reported to the vice presidents for area operations who were held accountable for immediately correcting the deficiencies. Follow-up inspections were conducted to ensure that identified problems were corrected and that appropriate procedures were being followed.

    Recommendation: The Postmaster General should update applicable training manuals that predate the Service's adoption of its consolidated banking policy and determine whether additional training for managers and employees on the Service's policies and procedures for physically controlling and securing remittances is needed and, if so, see that such training is developed and provided.

    Agency Affected: United States Postal Service

    Status: Closed - Implemented

    Comments: According to the USPS 60-day letter to the Chairman, House Committee on Government Reform, the Service made changes to its Standard Operating Procedures for post offices and mail processing plants where remittances are handled. Specifically, improvements to the Service's remittance handling policies/procedures address changes in how remittances are prepared, transported, safeguarded, and accounted for.

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