July 22, 2015

Background

The Postal Accountability and Enhancement Act of 2006 (Postal Act of 2006) amended 39 U.S.C and revised the cap on total compensation payable to U.S. Postal Service employees. As a result of this revision, the Postal Service could not pay an employee more than $201,700 for calendar year 2014; however, there are two exceptions. Some employees may have annual compensation of up to $233,000 with a bonus or reward program approved by the U.S. Postal Service Board of Governors and employees in critical positions may have annual compensation of up to $279,600.

Compensation includes annual salary, merit lump sum payments, bonuses, awards, and annuity payments.

Our objective was to determine whether the Postal Service complied with applicable provisions of the Postal Act of 2006, Postal Service policies and guidelines, and IRS regulations for calendar year 2014 officer compensation.

What The OIG Found

The Postal Service complied with the applicable provisions of the Postal Act of 2006, its own policies and guidelines, and IRS regulations for calendar year 2014 officer compensation.

Additionally, we noted that one officer was included in the list of employees with compensation in excess of Executive Level I in the fiscal year 2014 Comprehensive Statement on Postal Operations even though the compensation was less than the Executive Level I limit. The officer was unnecessarily included on the list because the Postal Service mistakenly included financial counseling services worth about $2,000 in the officer’s total compensation. Management agreed that the value of non-cash taxable benefits, such as financial counseling services, should not be included as compensation for salary cap purposes.

What The OIG Recommended

Because the Postal Service complied with the applicable provisions of the Postal Act of 2006, its own policies and guidelines, and IRS regulations, we are not making any recommendations. We will continue to monitor management’s compliance with applicable laws, regulations, and policies.

Full Report