Thu. Jun 20th, 2024

USPS OIG – Return on Investment for Capital Projects

September 7, 2023 ,
2023 09 07 at 4.47 PM

READ FULL ARTICLE AT » Office of Inspector General OIG

Background

From fiscal years (FY) 2011 through 2020, the U.S. Postal Service spent about $12 billion on capital projects. As part of the Delivering for America plan (DFA), the Postal Service plans to increase its investments to over $40 billion between FYs 2021 and 2030. An additional $3 billion in taxpayer dollars for electric vehicles and associated infrastructure was appropriated by Congress as part of the Inflation Reduction Act of 2022. Capital projects include planned upgrades to the Postal Service’s mail and package processing network, retail and delivery network, and technology necessary to fulfill the mission to provide timely, reliable, secure, and affordable mail and package delivery to the more than 160 million addresses.

What We Did

Our objective was to evaluate the Postal Service’s process for estimating and monitoring the return on investment for capital projects. To accomplish our objective, we reviewed the lifecycle—including evaluation, approval, management, and post-deployment monitoring—for selected capital projects.

What We Found

The Postal Service follows a robust review and approval process before project implementation, including the application of comprehensive policies and procedures and outlined responsibilities to ensure accountability, credibility, and competitiveness. However, the Postal Service has opportunities to improve its tracking and reporting of capital projects following deployment. The unprecedented investment efforts outlined in the DFA plan, which were designed to alleviate years of inadequate investments in facilities, delivery vehicles, mail processing equipment, and information technology infrastructure, offer the Postal Service an opportunity to reexamine its current policies. In addition, the Postal Service could improve its retention of financial supporting documentation, which is needed to validate project performance and its estimated return on investment. Without supporting documentation, management cannot re-calculate or verify a project’s actual return on investment and other key financial metrics, which critically impact stakeholders and public confidence that the Postal Service is properly managing the investments established by the DFA plan.

Recommendations

We recommend management extend the tracking and compliance reporting periods for capital projects, based on asset type and dollar amount, to better assess the project’s success and develop a centralized repository for management’s access to pertinent project documentation for effective tracking and reporting.

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