Established Remittance Control Procedures Are Not Consistently Followed

The Service’s policies and procedures include a number of remittance control activities that, if properly implemented, would help prevent remittance losses. However, Service employees are not always following established policies and procedures, and Postal Service management does not appear to have taken effective actions to address this problem. The Service’s control activities or procedures include, among others, the requirement that there is to be continuous individual accountability of remittances, including hand-to-hand exchanges at all transfers. We reviewed a number of Postal Inspection Service reports on the results of these reviews, which were completed in fiscal years 1999, 2000, 2001, and 2002. In August 2001, after the theft in Phoenix, the Chief Postal Inspector, who is the head of the Postal Inspection Service, wrote to the Postal Service’s Chief Operating Officer about the Postal Inspection Service’s concern over continuing problems with remittances. Background Checks Not Updated Before Employees Process Remittances

The Service performs background checks for all prospective employees as part of a suitability test to identify applicants who possess the necessary skills, abilities, and qualifications to perform specific jobs in the Postal Service. Training May Not Be Adequate

The Service provides training to its employees who process remittances. The training includes on-the-job training as well as a requirement that the employees complete self-paced training manuals pertaining to their specific responsibilities. Service training manuals have not been updated to address the processing of remittances. Conclusions

The Service has policies and procedures that, if properly implemented, would help to control and physically secure its remittances. Recommendations for Executive Action

We recommend that the Postmaster General   more rigorously reinforce to managers and employees at facilities throughout the Postal Service the importance of following Service policies and procedures for controlling and securing remittances;   hold Service managers and employees accountable for following Service policies and procedures for controlling and securing remittances and correcting the control problems identified by the Postal Inspection Service; include adherence to policies and procedures for securing remittances and minimizing remittance losses in its organizational goals and performance management and pay systems and define and enforce supervisory responsibilities to achieve these reinforcement and accountability objectives; reassess current Service policy of not updating background checks of career employees prior to their being selected to process remittances; and   update applicable training manuals that predate the Service’s adoption of its consolidated banking policy and determine whether additional training for managers and employees on the Service’s policies and procedures for physically controlling and securing remittances is needed and, if so, see that such training is developed and provided.
Why GAO Did This Study

In fiscal year 2001, the United States Postal Service reported that it lost about $6.3 million in remittances (cash and checks) to robberies, internal theft, and mishandling. One particular loss--a June 2001 theft of over $3.2 million from a Phoenix, Arizona, postal facility by a Career Service employee--received considerable media attention. Pursuant to the request of the Chairman, House Committee on Government Reform, we agreed to review Service policies and procedures for the security of remittances by addressing the following questions: (1) Does the Service have reasonable physical controls and security to safeguard its remittances? (2) Does the Service have policies for conducting background checks of employees who process remittances? (3) Does the Service provide training to its employees who process remittances?

What GAO Found

The Service has policies and procedures for physically controlling and securing remittances. These include a number of control activities that, if properly implemented, would be effective in helping to safeguard vulnerable assets, such as cash. The control activities include, among others, requirements for continuous individual accountability of remittances. However, Service management does not always provide appropriate oversight of these activities and Service employees do not always follow the Service's policies, procedures, and activities for controlling and physically securing remittances. The Service requires a background check as part of a suitability test for all prospective new employees. The background check includes a review of any criminal or military records, a fingerprint check by the Federal Bureau of Investigation (FBI), and a drug screening. The Service's training for postal employees who process remittances includes both on-the-job training and the use of self-paced training and development manuals related to the control and security of remittances. However, the Service's training manuals have not been appropriately updated, and in August 2001, the Service's Chief Postal Inspector cited the lack of training as a possible condition leading to the Postal Service's remittance losses.