Category Descriptions

The Audit Operations Directorate provides support to the Office of Audit in the areas of audit reporting and tracking, quality assurance, and policy. In addition, the directorate has staff dedicated to developing and monitoring the Office of Audit’s efforts related to planning, budget, and accountability and a team of experts who provide assistance with validating monetary impacts, statistical sampling, and our automated working paper system. To carry out its mission, Audit Operations performs various data analyses, issues audit reports, establishes and updates audit policies, and manages the closure of significant recommendations and audit resolution processes. In addition, the directorate conducts internal quality assurance reviews to ensure the Office of Audit accomplishes its mission in accordance with applicable professional standards. The directorate also provides information and responds to data requests from Congress, the Office of Management and Budget, and the Council of the Inspectors General on Integrity and Efficiency.

The mission of the Cost, Revenue and Rates team is to ensure that controls over data collection systems and processes can be relied upon in the ratemaking process.

The U.S. Postal Service delivers mail to more than 150 million addresses using city, rural and contractor carriers. The Postal Service strives to continue to improve delivery operations and reduce costs despite the increasing number of delivery points to the network each year and declining First-Class Mail® volume. The Delivery Directorate plans and directs audits and reviews that examine how the Postal Service is addressing the economy, efficiency, and effectiveness of delivery operations.

The U.S. Postal Service develops business systems and mail processing equipment to improve performance, enhance service, and reduce operating costs. The typical development process begins with the identification of a business need. After this identification, management develops a solution, followed by proof of concept, first article tests, and final deployment. The Office of Inspector General’s (OIG’s) work in this area will focus on reviewing Postal Service systems as they develop.
The Engineering Directorate seeks to determine whether technology investments enabled by engineering are providing maximum benefits to the Postal Service. To that end, they plan and direct audits and reviews of new or redesigned Postal Service systems, programs, and operations under development.

The OIG has two groups conducting financial audits.  The Financial Reporting and Field Financial groups conduct audits focusing on the accuracy of the financial statements and supporting the independent public accountants audit opinion and opinion on the effectiveness of the Postal Service’s internal control over financial reporting.  The Financial Reporting group primarily conducts financial-related audits at the accounting service centers and headquarters, and the Field Financial group primarily conducts financial related audits at units, districts, and areas.

The Postal Reorganization Act of 1970 requires an annual audit of the U.S. Postal Service’s financial statements. The Financial Reporting Directorate plans and conducts audits in support of the Board of Governor’s independent public accountants overall opinion on those statements. These audits determine whether the Postal Service fairly presents the financial statements, whether they comply with direct and material laws and regulations, and whether internal controls are in place and effective. We conduct these audits at Postal Service Headquarters and the accounting service centers.

The Postal Accountability and Enhancement Act of 2006 requires compliance with section 404 of the Sarbanes-Oxley (SOX) Act of 2002, which integrates an audit of internal control over financial reporting into the above financial audit. We have primary cognizance over the Office of Inspector General’s SOX responsibilities in support of the independent public accountants’ opinion on the effectiveness of the Postal Service’s internal control over financial reporting.
In addition, the Financial Reporting Directorate audits Postal Service financial statement amounts in support of the Consolidated Financial Report of the U.S. government and conducts other financial audits to identify areas for improvement.

Field Financial (FF) conducts financial-related audits at Postal Service units, districts and areas. Additionally, we conduct audits and reviews of Postal Service Financial Control and Support teams in support of the independent public accounting firm’s overall opinion of the U.S. Postal Service’s financial statements and opinion on the effectiveness of the Postal Service’s internal control over financial reporting. Further, we observe Postal Service data collectors conducting statistical tests of cost, revenue, and volume data at different district locations to verify the accuracy of data used as part of the ratemaking process. Additionally, we developed and maintain two models containing financial data to assess financial risk and performance of Postal Service districts.
Over the past 10 years, FF issued approximately 2,514 reports, which often contained systemic issues and recommendations for operational improvements and policy changes. Further, we initiated hundreds of referrals for investigation and identified more than $6.93 million of monetary impact and $182.6 million in nonmonetary impact related to internal control and financial deficiencies identified during these financial audits. In addition, over the years, FF has conducted special audits requested by Congress and Postal Service management in areas such as morning standard operating procedures, Bank Secrecy Act requirements, aviation mail security procedures, energy and recycling efficiency standards, and Express Mail service for passport applications. We also conducted congressionally requested review of the Postal Service’s relocation benefits, policies, and practices; Postal Service District and Area structure; Postal Accountability and Enhancement Act; and the House of Representatives Mailroom operations.

The U.S. Postal Service recognizes the strength inherent in their employee workforce. As a result, the Postal Service seeks to leverage this strength to create customer value and profits to invest in continued improvement. Every employee is expected to contribute to the growth and loyalty of customers. Therefore, all employees will be equipped with the skills and support they need to assist the Postal Service in gaining and keeping loyal customers. The Office of Inspector General (OIG) will continue to support the Postal Service in their goal of engaging and motivating the workforce to create greater customer value.
The Human Resources and Security Directorate seeks to determine whether the Postal Service is reducing human capital costs, while they strive to build the business. To accomplish this, they plan and direct audits and reviews focusing on employee development, compensation and benefits, health care issues, and labor relations within the Postal Service. These audits will assist the Postal Service in maintaining a healthy and safe organizational climate for employees and in improving operational economy, efficiency, and effectiveness.
One of the reasons for the amended Inspector General Act was to establish an independent OIG to provide oversight of all U.S. Postal Inspection Service activities, including any Postal Inspection Service investigations. It is essential we hold the Postal Inspection Service, as a law enforcement agency, to the highest standards of conduct to maintain the public’s trust and the Postal Service’s reputation of reliability. In accordance with the Act, the OIG provides objective information and assessments of the activities of the Postal Inspection Service to keep the Board of Governors, Congress, and Postal Service management fully informed of Postal Service law enforcement efforts and to detect and prevent fraud, waste, abuse, and mismanagement.
The Human Resources and Security Directorate determines whether the Postal Service and Postal Inspection Service have adequate controls and processes to efficiently and effectively safeguard employees, customers, and other critical assets. To that end, they plan and direct audits and reviews of the functions and operations of the Postal Inspection Service.

The U.S. Postal Service relies on a complex computer infrastructure to support and protect their critical assets and has initiated information technology projects to enhance efficiency and increase revenue. The Office of Inspector General’s work in this area assists the Postal Service in maintaining and improving computer security to reduce the risk of fraud, inappropriate disclosure of sensitive data, unauthorized disclosure of customer information, and disruption of critical operations and services. The Information Technology Directorate assesses whether Postal Service information resources provide the highest level of security, reliability, and value expected by Postal Service customers. To that end, the teams plan and direct audits and reviews of major Postal Service information systems to determine whether management has properly established general and application controls and designed systems to be secure and provide accurate data to management.

The U.S. Postal Service’s plant and retail networks are among the largest in the world with over 32,000 facilities. The President’s Commission on the Postal Service indicated there was more infrastructure than needed and many assets were not effectively aligned with changing requirements. Postal Service management recognized the need for a comprehensive redesign of their vast network and identified network optimization as a key objective in their Vision 2013, Five-Year Strategic Plan for 2009-2013. The Postal Accountability and Enhancement Act, signed into Law on December 20, 2006, further encourages the Postal Service to continue streamlining their processing and transportation network to eliminate excess costs.
The Network Optimization Directorate seeks to determine whether the Postal Service is creating a flexible network that reduces costs, increases operational effectiveness, and improves service. To accomplish this, we plan and direct audits and reviews focusing on the management and integration of network optimization efforts including the economy, efficiency and effectiveness of various initiatives.

To accept and deliver more than 177 billion pieces of mail annually, the U.S. Postal Service developed a large processing infrastructure, which includes 599 mail processing facilities and more than 130,000 employees. The Office of Inspector General’s work in this area helps the Postal Service ensure timely and accurate delivery of mail and explore ways to enhance accepting and processing mail.
The Network Processing Directorate seeks to determine whether the Postal Service is efficiently processing mail and effectively streamlining the existing mail processing network and reducing costs. To that end, they plan and direct audits and reviews focusing on the economy, efficiency, and effectiveness of mail processing operations, as well as logistics activities supporting these operations.

The Sales and Service Directorate assesses whether the Postal Service’s marketing and retail efforts are effective in providing world-class customer service, increasing customer value in core products and services, and increasing operational efficiency through standardization and process improvement. To that end, the Sales and Service reviews focus on several areas, including strategic planning, marketing, retail, and postal ratemaking.
The Postal Service operates in a globally competitive environment and its ability to maintain or increase its market share of the $900 billion mailing industry is essential to providing universal service at affordable rates. Therefore, the Postal Service designs its marketing products and services to build customer awareness and loyalty. The Postal Service also wants to ensure its services are available at places where customers choose to do business. The OIG’s work in this area will focus on evaluating marketing strategies and programs to assist the Postal Service in improving products and services for their customers.

The Postal Service manages contracts with commitment values totaling over $26 billion annually for its goods, transportation, and facilities related services. Over the past several years, the Postal Service implemented the supply chain management philosophy to maximize the effectiveness and efficiency of these expenditures. The OIG’s audit work will focus on the Postal Service’s challenge in this area to control and reduce costs yet maintain efficient acquisition practices with effective controls to prevent fraud, waste, and abuse.
Supply Management provides strategically aligned leadership to the Postal Service’s supply chain partners. The Supply Management Directorate seeks to determine whether the Postal Service can achieve supply chain management excellence and reduce acquisition costs. To that end, they plan and direct audits and reviews of purchasing, contracting, and supply management activities. In addition, the OIG oversees Defense Contract Audit Agency (DCAA) and Defense Contract Management Agency (DCMA) audits. The OIG is also responsible for contract audits designed to assist Postal Service contracting officers in determining fair and reasonable contract prices, as well as to provide them with reviews of contractors’ financial systems.

The U.S. Postal Service’s national transportation network is intertwined with all of the Postal Service’s core operations and is one of the largest transportation networks in the world. Transportation activities can be separated into several major functions, covering air transportation, surface transportation, and logistical support activities. The Postal Service uses a complex transportation system that depends on the nation’s air, rail, highway, and maritime infrastructure to move about 175 billion pieces of mail worldwide. Postal Service transportation is supported by more than 17,300 commercially contracted highway transportation routes; about 219,000 Postal Service owned vehicles; more than 12,300 leased vehicles; transportation contracts with passenger and freight airlines; and agreements with FedEx, UPS, and other commercial shipping operators. Major logistical activities support the movement of mail and include mail transport equipment management, fuel procurement and consumption, vehicle acquisition and management, airport mail centers, information technology, and various supplies. The Postal Service strives to continue to optimize its transportation network and reduce network costs. Transportation costs the Postal Service about $8.5 billion annually.
The Transportation Audit Directorate seeks to determine whether transportation network operations and logistics are effective, efficient, and secure as well as to determine whether opportunities exist to save money. The Transportation Audit Directorate accomplishes mission requirements through continual risk assessment; data modeling and analysis; continuous evaluation of data reliability and management control; on-going dialog with senior Postal Service officials and other stakeholders; and rapid response to high-risk conditions. Our work involves performance auditing of operations, procurements, information technology, investments, logistical support systems, and related programs, and examines how the Postal Service is addressing the economy, effectiveness and efficiency of its transportation network.

The Planning and Strategic Studies directorate’s focus is on strategic issues and innovation.  The directorate is responsible for strategic planning, innovation projects, and reviewing Postal Headquarters level capital investments.  It also assists the inspector general with testimony.  Pricing simplification and Postal Service strategic project management are other work that this directorate performs.