Background
The U.S. Postal Service implemented the Contract Logistics Enterprise Acquisition Resource (CLEAR) system and the Transportation Management System (TMS) in April 2022 to enhance the efficiency and reliability of its transportation network. CLEAR was designed to improve the management of transportation contracts, streamline payment processing, and enhance performance tracking. The TMS provides scheduling details, monitors real-time trip activities, processes payments, and tracks vouchers. The TMS relies on rate information from the CLEAR system to generate accurate trip payments. From April 2022 through March 2024, the Postal Service spent approximately $2.3 billion on dedicated transportation services.
What We Did
Our objective was to evaluate the effectiveness of the CLEAR system and review the accuracy of Highway Contract Route trip payments in the TMS. We reviewed freight payment data for Highway Contract Route trips in CLEAR from April 2022 through March 2024.
What We Found
While we did not evaluate the rate transfers from the old system to the CLEAR system, based on rates identified in CLEAR, supplier payments in the TMS were generally processed effectively. However, we identified opportunities to improve controls over Highway Contract Route supplier payments. Specifically, we found that the Postal Service paid suppliers the full trip rate for trips it canceled, schedules were not updated timely when contracts were terminated, and trips were paid without reliable proof of delivery, resulting in questioned costs of about $1.3 million in fiscal year (FY) 2023 and $37.7 million in FY 2024.
Recommendations and Management’s Comments
We made four recommendations to address these issues, including to partially compensate suppliers for trips canceled with at least four hours’ notice; implement controls to prevent payments to suppliers with terminated contracts; recover inaccurate payments; and review trip payments to validate proof of delivery information. Postal Service management agreed with three of the four recommendations. Management’s comments and our evaluation are at the end of each finding and recommendation. The U.S. Postal Service Office of Inspector General (OIG) considers management’s comments responsive to all recommendations except for recommendation 1, which we will discuss with management during the audit resolution process. For the others, the corrective actions should resolve the issues identified in the report.