potentially impacting the Postal Service’s ability to make informed financial decisions
This management advisory presents the results of our self-initiated review of misclassified training expenses. Our objective was to determine whether the U.S. Postal Service properly classified training expenses within general ledger accounts. See Appendix A for additional information about this review.
The Postal Service relies on monthly, quarterly, and annual financial reports to make informed decisions, which include monitoring training expenses. The Postal Service uses a comprehensive financial accounting data collection and processing system to prepare these reports and provide reliable and meaningful information to manage the organization. A key component is the use of 8-digit account numbers that segregate accounting data into the proper accounts within the chart of accounts.
Postal Service employees use 75 8-digit account numbers to record various types of training expenses. The accounts are designed to enable the Postal Service to make informed financial decisions. Employees charge expenses to the various training expense accounts based on the type of expense. For example, in fiscal years (FYs) 2013 and 2014 (through March 31, 2014), the Postal Service charged $60 million to “Training – Instructor and Fees.” Employees use this account to record tuition and contract or fee-based payments to instructors.
Conclusion
Postal Service employees misclassified $18.9 million of operating expenses all as training expenses. They also misclassified $32.7 million of travel for training costs as training for instruction and fees.1 The misclassifications occurred because a budget memorandum provided incorrect guidance and management did not properly configure the eTravel2 system to identify travel expenses associated with training. As a result, the Postal Service overstated the general ledger expense account balances for “Training – Instructor and Fees” by $51.6 million for FYs 2013 and 2014 (through March 31, 2014), potentially impacting the Postal Service’s ability to make informed financial decisions.
Training Expenses Incorrectly Recorded
In FYs 2013 and 2014 (through March 31, 2014), the Postal Service misclassified $18.9 million of operating expenses from its training center – the National Center for Employee Development (NCED)3 – as “Training – Instructor and Fees” (see Table 1). In 2012, maintenance and human resources training and development, with senior level approval, agreed how to fund the NCED. As a result, the NCED allocates a portion of its annual operating expenses4 monthly to each of the seven Postal Service areas using the “Training – Instructor and Fees” account rather than operating expense accounts. A Postal Service Headquarters budget memorandum established this procedure.5
The Postal Service is responsible for establishing and maintaining a system of management and accounting controls that safeguards its assets. The incorrect procedural memorandum and improperly configured eTravel system led, the Postal Service to overstate the general ledger expense account balances for “Training – Instructor and Fees,” potentially impacting management’s ability to make informed financial decisions. Because the $36.8 million in prior year expenses is not material to the financial statements, and the Postal Service cannot correct the misclassification, we are only recommending an adjustment for FY 2014 expenses.
We recommend the vice president, Controller:
1. Correct the misclassification of the $14.8 million in expenses identified for fiscal year 2014 (through March 31, 2014), and perform an analysis to identify and correct any additional misclassification that occurred after March 31, 2014.
2. Issue a memorandum outlining the correct procedures and general ledger accounts to charge for meetings, conferences, and training.
3. Configure the eTravel system to allocate travel costs to the proper general ledger account based on the employee’s selected reason for travel.
Postal Rates in 2015 Could Rise or Fall — or Do Both
Hmmm, let me see.
I used this much for travel, this much for training and this much to pay the geniuses that make things so complicated that nobody can figure them out.
Stupid is as stupid does!
That’s the best, the post office telling the post office how bad they are. Funny stuff.
just another screw up. When will they get thing right.
What ?
Is this report saying that postal mgmt. knowingly lied and fixed numbers to cover up the truth ?
Gee, I wonder if the same applies to their “sky is falling” financial reports…………
Postal mgmt/eas = liars and thieves.
does the OIG do any actual work that would say, benefit the mission of the Postal Service instead of these mindless reports on esoteric trivia on how the Postal Service runs its business? does it deliver one piece of mail?
“The Postal Service relies on monthly, quarterly, and annual financial reports to make informed decisions…” I worked there 36 years. I must have been off the day someone in management actually made an “informed decision”.
Millions misused by mgmt! Carriers are accountable for units which for the uninitiated is MERE SECONDS. A Fortune 500 Company run by sycophants, uneducated prostittutes AND THIEVES.
If you think this is the only area where the USPS has screwed up its budget, you’re one naive individual. And yes, employees get to share some of the blame when differentiating between travel and training, but as any employee can tell you, the Postal Service is completely submersed in mountains of forms and paperwork that can only turn up missing or ignored, just like all government entities who overkill their management with paperwork that leads potential investigators running around chasing their tails, either by just piss poor organizational lack of skills or by design.
But this is what happens when promotions come from the system the USPS uses to pick its management. True, some are business graduates of one ilk or another, but so many are there just by riding up the ladder, and that is achieved the old fashioned way – nepotism, favortism, falsification of qualifications and generally being a snitch and suck up to the right people.
It’s easy to cast this shadow as a cliche, but sadly it is not. Many of us long time employees know too well the types that get inside management and then climb skyward, and we remember how many of them were terrible craft employees, rats, trouble makers, etc. The USPS doesn’t want productive craft people inside because they depend on those workers to keep up the numbers and productivity. Thus, you run into unqualified poorly trained buffoons being placed in too many sensitive positions, and as a result you get the financial fiascoes, harassment issues and arrogance that hold true progress and reform at bay. But to be fair, the USPS management system is probably the same as just about anywhere else. I have friends in other fields who tell the same stories, the wrong people in positions of authority who know nothing, and have no business being there.
Good luck, OIG, but we know you answer to the same people you issue reports to, so your function is basically pissing into a hurricane.