Views of Its Processes, Operations, and Management Controls
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October 1, 19992001 -– MarchMarch 31,31, 20002002 OFFICE OF INSPECTOR GENERAL SemiannualSemiannual ReportReport toto CongressCongress IncludingIncluding Significant Significant Activities Activities of ofthe the Inspection Inspection Service Service A Message from the Inspector General A Time for Reflection and Continued Passion ometimes rocky, sometimes rewarding, always gratifying—that’s how I would describe the journey of establishing this office. Over the past Sfive years, we traveled many miles and forged significant new paths. As I reflect on all we have accomplished, I realize that I could not have done it without the commitment and passion of those who walked the jour- ney with me. In 1997, Congress presented us with a challenge to create a KARLA W. CORCORAN Inspector General totally new organization that would independently investigate and evaluate Postal Service programs and operations. We did it! Together, we built an organization over 700 strong that adds value to Congress, the Postal Service Governors, the Postal Service, and the American public. We turned our passion for the challenge into performance by building an organization that assists the Postal Service through reviews of its processes, operations, and management controls. To date, we have identified over $1.9 billion in potential savings, cost avoidances, unrecoverable costs, fines, penalties, and recoveries related to postal operations. In addition, we have performed hundreds of reviews, audits, and investigations which contribute to a more efficient, effective Postal Service. Our success in identifying areas where the Postal Service can control costs, increase revenues, strengthen labor-management relations, and improve management processes and con- trols is due in large part to our position as an independent, objective organi- zation not subject to influence by Postal Service management. One of my proudest accomplishments during these first five years is our fierce fight to maintain that independence. We fought the battle in the inspector general community, taking the lead and helping to overturn an ini- tiative to take it away. We pursue it every day as we strive to perform our work in an environment of objectivity and impartiality, when we seek to obtain documents that are denied to us, and when we are on the streets conducting investigations and our authority is questioned. Although the Inspector Gen- eral Act has been in existence for almost 25 years, the Postal Service has only had an independent inspector general for five years. The lack of experience with and knowledge of how an independent inspector general works has led to misunderstanding and confusion that we hope will be resolved in the future through our education and outreach efforts. During our 5-year tenure, the Postal Service has faced predictable as well as unforeseen challenges—severe financial losses resulting from controllable and uncontrollable factors, strained labor relations, the devastating events of September 11, 2001, the terror of anthrax in the mail, and now a prolifera- tion of mailbox bombs. We have been with the Postal Service through it all and our commitment to and passion for our mission has not wavered. This, our eleventh Semiannual Report, sets forth the significant activi- ties and accomplishments of this office and the Inspection Service from October 1, 2001, through March 31, 2002. It details our efforts to combat fraud, waste, abuse, and mismanagement within the Postal Service; and ful- fills our reporting requirement under the Inspector General Act and Inspec- tion Service requirements under the Mail Order Consumer Protection Act. In this reporting period, the Office of Inspector General issued 283 audit reports, 102 management advisory reports and other products, and closed 56 investigations. Our efforts resulted in more than 441 written products to strengthen Postal Service programs and operations. During these six months, the Inspection Service experienced a change in leadership when Chief Postal Inspector Kenneth Weaver retired. The Board of Governors also had some changes. We said goodbye to Governor Tirso del Junco, whose term ended in December. We had a few changes in our own leadership team. We bid farewell to Billy Sauls, Assistant Inspector General for Investigations, who left in January to establish a new office for the Federal Reserve Board of Governors, and welcomed Sam Maxey as the new Assistant Inspector General for Investigations. In addition, Gladis Griffith was named Deputy Assistant Inspector General for Congressional, Oversight, and Legal Services; and Mary Demory was named Deputy Assistant Inspector General for Internal Business. We are delighted to add each of them to our team as we move into the future. As we reflect on our past, we can’t help but wonder, “Where will the next five years take us?” While we obviously cannot predict the future, we can say with certainty that we will continue to bring passion and integrity to our work and tackle any future challenges. We know that we have a big job ahead of us in the coming years. Not the least of these chal- lenges before us is examining the Postal Service’s proposed Transformation Plan. In April, the Postal Service presented to Congress their proposal, which includes changes to their existing structure and operating procedures. While these proposed changes are purported to help turn around the Postal Service’s precarious position, reaction to the Plan has been mixed. While we realize drastic mea- sures may be required to bring the Postal Service back to a position of solvency and viability, we Inspector General Karla Corcoran and believe there are many questions to be asked and issues to be addressed for this plan to succeed. We Deputy Inspector General Tom Coogan said goodbye to Assistant Inspector are currently reviewing it to determine its efficacy and will present our findings to Congress, the General for Investigations Billy Sauls Governors, and the Postal Service. in January. In closing, I want to say that I am extremely proud of this agency’s accomplishments and look forward to it adding value to the Postal Service in the coming years. I would like to end with a quote from Aristotle which I believe captures the essence of an inspector general’s often difficult role: “Courage is the most important of the virtues, because without it you can’t practice any of the other virtues consistently.” Sincerely, Karla W. Corcoran April 30, 2002 Inspector General Karla Corcoran and Sam Maxey, new Assistant Inspector General for Investigations, said goodbye to retiring Chief Postal Inspector Kenneth Weaver (left). PAGE 2 A MESSAGE FROM THE INSPECTOR GENERAL Table of Contents EXECUTIVE SUMMARY............................................................................................5 MAJOR MANAGEMENT ISSUES FACING THE POSTAL SERVICE ............................9 RESPONDING TO TERRORISM ..............................................................................17 PERFORMANCE REVIEWS......................................................................................23 Office of Inspector General ........................................................................24 N Accepting and Processing Reviews ........................................................24 N Transportation and Delivery Reviews ....................................................25 N Marketing Reviews ..................................................................................26 N Consulting & Quick Response Reviews ................................................26 N Legislative, Regulatory & Policy Reviews..............................................26 Inspection Service........................................................................................28 FINANCIAL MANAGEMENT REVIEWS ..................................................................29 Office of Inspector General ........................................................................30 N Financial Opinion Audits ......................................................................30 N Financial-Related Reviews......................................................................31 N Contracting and Facilities Reviews ........................................................33 N Legislative, Regulatory & Policy Reviews..............................................37 Inspection Service........................................................................................42 TECHNOLOGY REVIEWS ......................................................................................43 Office of Inspector General ........................................................................44 N Developmental Reviews..........................................................................44 N Information Systems Reviews ................................................................45 N Systems Development Reviews ..............................................................46 N eCommerce Reviews ..............................................................................47 N Computer Intrusion Investigation Activities ........................................48 N Legislative, Regulatory & Policy Reviews..............................................49 Inspection Service........................................................................................51 LABOR MANAGEMENT REVIEWS ........................................................................53 Office of Inspector General ........................................................................54