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Postal Service Consultants Cost $5 Billion

David Williams on December 13, 2016

The United States Postal Service (USPS) is in a deep financial mess that taxpayers will likely end up bailing out if steps aren’t taken immediately to address the serious financial problems. The reported net loss of the USPS for the current fiscal year was $5.6 billion, which marks the tenth straight year of financial losses. While many decry that it is the unreasonable prefunding of retirement benefits that is causing the Postal Service to sink, it is also important to note that the Postal Service is engaging in ongoing wasteful spending.

In October of this year, the USPS Office of the Inspector General (OIG) uncovered wasteful spending and a lack of organization in an audit that was requested by Congress. The audit found that consultants were hired between fiscal years 2009 and 2015, with a total of $5.6 billion spent for external studies on market research, logistics, financial services, and other areas. The USPS was given six weeks to produce 97 studies, of which 30 (31 percent) were unable to be found.

The OIG discovered that there is no organized, formal system or database to store and access all of the external studies. What’s more, there were studies ordered for similar topics, which resulted in an overlap in analysis, and misuse of potentially millions of dollars.

In 2015, the Senate Committee of Homeland Security and Governmental Affairs (HSGA) requested audits from the Inspectors General of 72 government agencies that included the USPS. The OIG stated that USPS employees were uncooperative in providing the requested documentation, and “had to resort to an official demand letter in order to elicit any records from the USPS.”

Postmaster General Megan Brennan chalked it up to “a failure of communication,” and sent the apathetic USPS employees to “training” in hopes that it won’t happen again. But it’s probably safe to say that Brennan’s optimism was unwarranted because this year’s audit took several more weeks after the six week time limit to produce 26 of the 30 missing external studies. There are still four that are unaccounted for, and their dollar values remain unknown because they have been redacted from the report. What we do know is that last year’s uncooperative postal employees cost the Postal Service at least $2.4 million.

The HSGA has yet to release a statement on the audit’s findings, but what can be gleaned from the information is that there is a complete lack of organization at the Postal Service from top to bottom. Large sums of money are spent on consultant work with no oversight.  It is the responsibility of USPS management to have a systemized method of oversight of how money on projects like these is spent. The fact that there are four reports still missing is unacceptable.

The culture of “passing the buck” at the USPS needs to stop, and it begins with Postmaster General Megan Brennan. If the OIG at the USPS can’t get postal workers to do their job, then people shouldn’t be  surprised when packages go missing, or when postal customers complain about the lack of customer service at their local post office.  Holding postal workers accountable is paramount if the USPS hopes to once again make money instead of hemorrhaging billions of dollars every year.



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