Background
The U.S. Postal Service uses expense purchase cards, which allow Facility and Architect Engineers, also known as project managers (PM), to make local purchases for operational needs. During fiscal years 2021 to 2023, the Postal Service paid approximately $257.6 million in expense purchase card payments to vendors. To support the investment associated with the Postal Service’s facilities modernization efforts, the Postal Service increased the purchase card spending threshold from $10,000 to $25,000 in April 2024. Maintaining effective controls is critical to ensuring expense purchase card transactions are valid and authorized.
What We Did
Our objective was to evaluate expense purchase card usage and controls for facility repair expenses. We assessed compliance with and sufficiency of existing controls.
What We Found
While the Postal Service has internal controls to govern expense purchase card usage, some controls and policies were not effective to ensure transactions for facility repairs complied with those policies. Specifically, credit card approving officials (CCAO) and PMs did not maintain expense purchase card supporting documentation for 252 of 890 transactions (28 percent). We also found PMs processed three split payments and 33 of 40 PMs processed payments in batches, which delayed payments and made it difficult for approvers to identify policy violations. These issues occurred due to (1) the CCAOs inconsistent awareness of document retention policies, (2) a lack of guidance advising PMs where to maintain the documentation, (3) no centralized document repository, (4) management not establishing policy for combining service calls, and (5) no policy prohibiting batched payments. Without supporting documentation, a centralized file storage, and sufficient policy establishment and enforcement, the Postal Service may increase its risk for potential fraud and financial loss. Relatedly, the Office of Inspector General (OIG) has several open investigations of Postal Service purchasers steering work to chosen suppliers in exchange for bribes, kickbacks, and gratuities.
Recommendations and Management’s Comments
We made four recommendations to address control weaknesses identified in the report. Postal Service management agreed with three recommendations and disagreed with one. Management’s comments and our evaluation are at the end of each finding and recommendation. The OIG views the disagreement with recommendation 3 as unresolved and will work with management through the audit resolution process. We consider management’s comments responsive to recommendations 1, 2, and 4, as corrective actions should resolve the issues in the report.