Fall Semiannual Report
to Congress 2024

April 1 - September 30, 2024

Our Work

We are the U.S. Postal Service Office of Inspector General — we’re charged with ensuring the efficiency, accountability, and integrity of the United States Postal Service and its regulator, the Postal Regulatory Commission (PRC). Our work plays an important role in maintaining the integrity of America’s postal system, its revenue and assets, and its employees.

With only one OIG employee for every 648 postal workers, we are a lean but mighty federal oversight agency. And even with recent budgetary constraints resulting in a reduced workforce, we continue delivering significant results.

In the past six months alone, we issued 82 audit reports, management advisories, and white papers, and identified over $442 million in questioned costs. Postal management agreed with 220 (88%) of our recommendations to improve issues we identified. Our special agents completed 1,393 investigations that led to 401 arrests, 351 convictions, and almost $19 million in fines, restitution, and recoveries, of which more than $11 million was returned to the Postal Service.

The following summary captures the five main areas of our work featured in our 2024 Fall Semiannual Report to Congress.

Mail Theft

Whether you’ve seen it in the news or through personal experience, you know mail theft has been on the rise. And while incidences of mail theft by non-postal employees are higher compared to internal mail theft cases, our Office of Investigation meets the challenge of rooting out bad apples who sully the public’s trust in the Postal Service by stealing, delaying, or destroying the mail.

A commodity that’s in high demand among criminal circles are financial instruments — be it personal or business checks, U.S. Treasury checks, or credit and debit cards. More and more, we’re seeing cases where criminals outside the Postal Service recruit employees to profile and steal these valuables from the mail.

One of our digital stories immerses readers in a case where our special agents took down a 10-person New York City bling ring. Four co-conspirators were postal employees who stole over 1,000 credit cards issued by one of the country’s largest credit card companies. The others would then use the cards to buy luxury items around the Big Apple.

When our special agents and their law enforcement partners closed in on the group, the estimated losses were well over $2 million. All 10 were arrested and charged with various crimes, including identity theft and conspiracy. The government successfully handled all the criminal investigations associated with the case, and the now-defunct bling ring faces restitution of potentially $1.6 million.

Our special agents also stopped a multi-state mail theft conspiracy and brought down a conspiracy to steal fraudulently issued IRS tax refund checks and CARES Act Economic Impact Payment checks. You can find these and other cases, along with a summary of our oversight of USPS’s efforts to combat mail theft in our Semiannual Report.

Narcotics

As in mail theft, criminal organizations are increasingly targeting postal employees due to their access to the vast postal network. We are as committed to bring postal employees who collude with drug trafficking organizations (DTOs) to justice as we are to dismantling these criminal groups.

Our first digital story in our Investigative Case Highlights series takes readers through a case where not everything was as it seemed: Our partners at the Drug Enforcement Administration had information that the ringleader of a DTO in Florida was receiving kilos of cocaine from an unidentified Puerto Rican supplier.

Now, most narcotics cases we work see postal employees as willing participants in a larger, externally run drug trafficking game. But in this investigation, the suspect turned out to be the mastermind — a postal employee who’d been supplying the drugs from Puerto Rico.

Our special agents and their partners successfully dismantled the DTO. Other co-conspirators in the ring were criminally charged and sentenced to 10 months, three years, and more than five years in prison. The kingpin, however — the mail carrier who orchestrated the operation — received the longest sentence of all: seven and a half years in federal prison.

Our Semiannual Report highlights other significant narcotics cases we closed during this reporting period. And if you’d like to learn more about the work our special agents do — not just in mail theft and narcotics, but also in contract, financial, and healthcare fraud — you’ll enjoy reading our Investigative Case Highlights.

Delivering for
America Oversight

Bold Changes Bring Unexpected Challenges

In 2021, the Postal Service announced its Delivering for America (DFA) plan to achieve financial sustainability and service excellence. The plan outlines significant changes to many parts of the agency’s operations, including redesigned processing, transportation, and delivery networks. As the agency has rolled out some of the bigger changes, it has met unexpected challenges.

Notable among these challenges was the implementation of the Atlanta, GA, Regional Processing and Distribution Center (RPDC) — a one-million-square-foot facility designed to consolidate operations from nearby postal facilities. Our auditors visited the facility and found USPS faced serious issues during implementation, which caused an immediate and significant decline in service performance in the region. For example, challenges executing operations under the new plant design resulted in congested dock conditions and truck drivers waiting hours — sometimes up to 13 hours — to unload mail.

Why did this happen? Our auditors found the Postal Service didn’t build on lessons learned from the earlier Richmond, VA, RPDC launch to address similar barriers to success, including staffing, training, and supervision. However, when we audited the launch of the Portland, OR, RPDC, we found the agency implemented several lessons from a past RPDC conversion.

USPS’s Local Transportation Optimization initiative also met challenges when it was rolled out in Richmond, VA. And our audit on the South Houston LPC found management’s implementation of this facility led to hundreds of thousands of delayed packages in the Houston region. Our report has the details.

A Focus on Continuous Improvement

Central to the success of the Postal Service’s 10-year plan is continually improving its programs and initiatives. And high on the list of DFA initiatives is aggregating delivery units into fewer, larger, centrally located sorting and delivery centers (S&DC), which are designed to reduce transportation and mail handling costs.

Our audit on S&DC performance noted several opportunities for improvement. For instance, our auditors found opportunities for S&DCs to more consistently meet their machine throughput (mailpieces per hour) and Post Office Box mail availability goals, and to address overburdened rural routes. A similar audit on the impacts of two S&DCs in the Florida 1 District offered other recommendations to improve performance there.

Our Semiannual Report looks more closely at these audits, as well as audits on other postal programs and initiatives, such as the deployment of Matrix Regional Sorter machines, the cost-saving Freight Auction program, and ways the Postal Service can improve its service performance through accurate service measurement and transparency.

Strengthening the Workforce

Touching on some labor issues the Postal Service is facing, the DFA part of the report highlights a white paper on the postal workforce composition, which contextualizes the agency’s efforts to recruit and retain employees as it has navigated a tightening U.S. labor market in recent years. Looking at the past, the paper notes the postal workforce’s composition has been affected by declining mail volume and a growing share of packages. And looking at the future, it warns USPS may face a retirement wave in the coming years, with over 50 percent of the craft employees analyzed by the OIG eligible to retire within the next decade.

If you enjoy learning about the efforts the Postal Service is making to improve its hiring practices, how it manages employee availability, and how it handles supervisor vacancies, you’ll appreciate the abridged version of those audits in our Semiannual Report.

Looking Ahead

Finally, as the Postal Service looks to the future, it’s important to consider the different laws and regulations that uniquely apply to the U.S. postal model. A white paper and its digital story do just that — they summarize the legal framework that guides and constrains the Postal Service, creating a unique role for the agency as both a business and a public service.

Similarly, it’s useful to consider historical mail volume trends as the background behind broad mail trends and the factors driving declines in different classes of mail, and a white paper provides that context. Finally, an audit on the state of USPS’s financial condition found DFA projections are no longer relevant, and the opportunity exists to revise projections. You’ll find the details in our report.

If you’d like a birds-eye view on DFA initiatives in addition to our Semiannual Report, check out our dedicated DFA webpage or this new report and accompanying digital story from our Office of Audit on our oversight of the Delivering for America plan.

Electric Vehicles

With a fleet of delivery vehicles well past their prime — some well beyond their 24-year lifespan — modernizing the fleet is one of the DFA’s more ambitious initiatives. When Congress passed the Inflation Reduction Act (IRA) in August 2022, it included $3 billion to support the Postal Service’s purchase of zero-emission vehicles and related charging infrastructure.

Recently, the Postal Service has generally combined the rollout of new electric vehicles and charging stations with its efforts to convert plants into consolidated S&DCs. When our auditors looked at the rollouts, they found USPS experienced nationwide charging infrastructure delays. For example, the first 29 activated S&DCs were delayed by an average 219 days compared to the agency’s June 2023 baseline schedule. Early delays jeopardize the Postal Service’s ability to use electric vehicles, achieve aggressive business goals, and drive fleet-related sustainability goals.

Another audit found the Postal Service didn’t participate in incentive programs related to electric vehicles and requisite charging infrastructure. We estimated that had USPS participated in these incentive programs and carbon markets, it could gain an estimated $5.48 million in funds put to better use. Of course, there may be constraints associated with some of the programs’ eligibility requirements and terms and conditions; however, further exploring the feasibility of participating in these programs may provide additional cost savings and revenue opportunities.

For a closer look at these key DFA initiatives, be sure to read our Focus On feature on electric vehicles and related infrastructure.

Election Mail

All eyes were on this year’s general election and, by extension, the Postal Service’s role in the timely delivery of Election and Political Mail. This is especially true as the growth of vote-by-mail options have increased the Postal Service’s role in our nation’s elections.

Our Offices of Audit and Investigations hit the road to visit 1,000 postal facilities in all 50 states and Washington, D.C. for the general election to review processes and controls. The results of this work will be released in the first half of FY 2025.

During this reporting period, our auditors evaluated USPS’s readiness for the timely processing and delivery of Election and Political Mail mail for the 2024 general election by assessing operations during state primary elections. To do this, we visited 15 mail processing facilities and 35 delivery units in 13 states and Puerto Rico. We found postal staff didn’t always comply with policy and procedures, and we identified processes and policies that could pose a risk of delays in the processing and delivery of Election and Political Mail.

We also identified issues related to some Delivering for America plan operational changes that pose more risks to timely processing of Election Mail. You’ll find more details in our Semiannual Report, and you can also learn more about our work in this area on our Election and Political Mail page.

The Postal Service is the only government agency that touches every household and business in America. We are proud to do our part to protect it from fraud, waste, and abuse.

We invite you to read this latest Semiannual Report to Congress to learn more about the topics above, the challenges Postal Service management is facing, as well as our investigations into senior executives and whistleblowers who have alleged reprisals. You can also learn a little more about our newly released five-year Strategic Plan covering FY 2025 through 2029. This digital story is only the beginning.