Agency Oversight

USPS IG warns 10-year plan may not save as much money as agency projects

The Postal Service’s inspector general says parts of the agency’s 10-year reform plan introduced this spring might result in “regional or widespread servi...

Jory Heckman@jheckmanWFED

July 14, 2021 12:14 pm

5 min read

The Postal Service’s inspector general says parts of the agency’s 10-year reform plan introduced this spring might result in “regional or widespread service issues,” and is calling on Congress to boost its budget in the years ahead so her office can track changes in on-time delivery.

The USPS IG office is asking for a $263 million budget in fiscal 2022, a $13 million increase from enacted levels. A majority of the additional funding would go toward increased staffing. USPS IG currently has one employee for every 637 postal workers.

For fiscal 2023, Inspector General Tammy Whitcomb said her office is asking for $17 million to study the impact of USPS plans to reduce service standards for first-class mail and its first-class package service used largely for prescription drugs.

With this money, Whitcomb said her office could stand up an audit group to provide “continuous monitoring” of USPS service.

“The sooner we get these funds, the sooner we can build this capacity to provide more effective and timely oversight. Because the Postal Service is moving quickly to implement some of the network changes, it is critical that our resources grow in tandem with these moves,” Whitcomb told the Senate Appropriations subcommittee on financial services and general government.

These reduced service standards would impact nearly 40% of first-class mail and about a third of first-class packages, as USPS shifts away from air transportation and more toward its ground transportation network.

Postmaster General Louis DeJoy early in his tenure cited IG reports as the basis for his plans to reduce late and extra trips between post offices and mail processing plants. But in this latest round of reforms, Whitcomb warned USPS may not save the kind of money it expects under its 10-year plan.

“Large network changes are complex in nature, and there’s a risk that implementation could result in regional or widespread service issues. Our work has revealed that when the Postal Service implements network changes, it often has not been able to realize the projected cost savings, even when service was reduced,” Whitcomb said.

As part of her team’s audit work on the 10-year plan, Whitcomb said USPS OIG will review the Postal Service’s underlying assumptions about projected cost savings.

“We’re also looking at things like do they have triggers, or tripwires, if they start implementing it, and if something goes wrong — that they can roll back or pull back,” she said.

USPS expects to save $34 billion over 10 years through these “self-help management initiatives.”

Sen. Jerry Moran (R-Kan.) expressed concern with USPS plans to consolidate another 18 mail processing centers under its 10-year reform plan. The agency consolidated 141 facilities between 2012 and 2013, but put the project on hold after pressure from Congress.

“We lost our processing centers before the congressional prohibition against closing those processing centers. I don’t know whether there’s a way to ever get them back, but the consequences to the mail delivery has been dramatic, and dramatic in a negative way,” Moran said.

Whitcomb said that in early fall, her office will launch a targeted look at 10 processing plants with longstanding performance issues, which only accelerated during the COVID-19 pandemic.

“The Postal Service has been one of those places that has been generally resilient when a natural disaster occurs. They can usually come in and recover pretty quickly in the event of a natural disaster that’s localized. COVID really hit them in all the weak spots. Because it was national, they couldn’t move employees from one location to another to deal with issues. They didn’t have the employee bench strength. It’s a very brute force kind of organization, and it relies on its employees. And when those employees aren’t there, it’s very hard to recover in certain locations,” Whitcomb said.

USPS OIG already has teams dedicated to examining delays across the country, including in Chicago, Kansas City and Baltimore.

The IG’s office recently stood up an online dashboard tracking on-time delivery metrics, but Whitcomb said her team’s continuous monitoring effort would be on par with its ground game around the 2020 election, when it sent 500 OIG employees to monitor 2,000 postal facilities.

“The dashboard, it’s data that points us in a direction, but [with] the Postal Service, you have to be out there. It’s a very physical business, you have to go out and actually see what’s happening on the ground. The dashboard gives you indications of where problems occur. But we really need to have boots on the ground, people there in-person to see what’s happening,” Whitcomb said.

In the months leading up to the 2020 election, USPS faced a dozen federal lawsuits that challenged its plans to implement operational changes ahead of a historic volume of mail-in ballots. Judges filed preliminary injunctions blocking USPS from implementing many of these changes.

Whitcomb, summarizing the findings of a USPS IG report from last October, said these operational changes “had a really significant impact of service,” and that a lack of written guidance led to inconsistent implementation.

“Some locations, the management team was saying there is no overtime. Some locations, they were saying no extra trips, no late trips. And other locations, they were saying they could do late trips or extra trips, depending on how severe the situation was. So it was very inconsistently done. There was no clear document provided, and the Postal Service is a very large organization, lots and lots of facilities that you have to roll out guidance to when you’re implementing change,” Whitcomb said.

While USPS OIG receives appropriation from Congress, the annual funding that enables it to do its work comes from the Postal Service. Whitcomb said her office’s budget hasn’t kept up with rising costs over the past decade, and as a result, USPS OIG has reduced full-time staffing by nearly 16% since 2012.

For every dollar Congress invests in the IG’s budget, its auditors flag $30 in cost savings.

Among its impending projects, USPS OIG is evaluating the Postal Service’s preparedness for the upcoming holiday season and readiness for the 2022 midterm elections.

USPS OIG is also looking at the foot traffic in post offices as part of an evaluation of the Postal Service’s plan to offer additional state and local government services at its retail locations.

Whitcomb said her office is also updating its 2012 analysis on USPS electric delivery vehicles. While USPS plans to make electric vehicles at least 10% of its next-generation delivery vehicle fleet, DeJoy told lawmakers that electric vehicles would “unfeasible or impractical” for as many as 12,500 routes nationwide.