Updated and corrected 2/17/11 10:16 am ET
If the cash-strapped US Postal Service wants to save money it should ensure that its workers arent booking pricey hotel rooms and airplane tickets or buying pornography, according to a new watchdog report.
Over a two-year period, some postal workers used credit cards meant for travel and lodging expenses to buy family members flights to Spain and Italy, purchase Apple computers and make more than 50 purchases at adult entertainment stores.
The findings, detailed in a Postal Service Inspector General report, also reveal that USPS didnt cancel 2,491 credit cards issued to former employees, including 53 who were listed as deceased. Two former employees were still using their cards after they left, according to the report.
All told, the mail agency could have saved more than $600,000 in excessive travel costs during fiscal 2009 and 2010 if it had cracked down on non-compliant workers, the report said.
Despite the fraud, the Postal Service cut its travel budget by 17 percent in fiscal 2010 to $94.8 million.
USPS employs 583,000 workers and funds itself through the sale of postal products and services instead of taxpayer dollars. It plans on cutting about $2 billion in costs this year — mostly by eliminating 40 million work hours — but still forecasts a $7 billion loss after losing a record $8.5 billion in fiscal 2010. It warned again this week that it will likely run out of money by the end of the fiscal year after exceeding its borrowing limit with the US Treasury.
The report reviewed 155,104 lodging transactions and found that more than 21,000 exceeded government lodging rates established by the General Services Administration. In one case, a worker claimed 326 nights of hotel bills that exceeded government rates by $17,877. Workers who attended the largest postal customer convention in 2009 and 2010 — mostly mid-level executives and sales personnel based in regional offices and Washington headquarters — collectively exceeded lodging rates by almost $89,000.
The inspector generals office further investigated several cases of employee misconduct unearthed by the investigation and some of the workers were later fired, the report said. Investigators also recommended tighter enforcement of the lodging and travel reimbursement policies and suggested USPS retrain workers on the rules.
Responding to the report, Sen. Susan Collins (R-Maine), who closely tracks postal affairs, said she was alarmed by the findings.
It is very frustrating that an organization that was $8.5 billion in the hole last year, has not adopted a frugal culture, she said. The proper controls are not in place to either prevent or uncover frequent credit card abuses.
Sen. Thomas R. Carper (D-Del.), a normally supportive backer of postal leadership, also expressed concern. Ive told the new postmaster general and his predecessor that he and other top postal executives need to do their part as well, Carper said in a statement. If they are going to ask postal employees and customers to make sacrifices to save the Postal Service, then the postal leadership certainly has a responsibility to set a good example when it comes to frugality and basic financial management. In this case, they have clearly failed.
Officials quoted in the report said they wont retrain workers due to the high costs of doing so, but will closely monitor travel transactions and remind workers of the existing policy. A Postal Service spokesman declined to comment further on the report.
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