U.S. Postal Service Mail Recovery Center | USPS Office of Inspector General

target

Our goal was to assess the effectiveness of u.s. postal service mail recovery center (mrc) operations and identify opportunities for improvement.

The MRC is the postal service’s “lost and found” department and performs a vital customer service function by processing undeliverable and lost items. The MRC receives items that are considered “undeliverable” from Postal Service facilities across the country, including post offices, delivery units, and distribution centers. these items may be designated as undeliverable due to incomplete addresses, damaged mailing labels, etc. mrc received around 67 million items in fiscal year (fy) 2019.

mrc staff make preliminary assessments of items arriving at the mrc within a seven-day period and determine how each item will be handled as follows:

  • Returned: Parts that are eligible to be returned to the sender or delivered to the intended recipient. this email could have been incorrectly sent to mrc, or mrc staff could find a sender/recipient after opening and examining the article.
  • Inventory/Stored: For certain shipments where mrc staff cannot initially determine the sender/receiver but believes the item has some material value (for example, packages of sentimental value or worth $25 or more), mrc staff inventory and store these items and wait for customer inquiries. The MRC can store items from 30 days to indefinitely, depending on content, class of mail, or special services purchased. At the end of these designated holding periods, unclaimed items are sold at auction, donated, recycled, or destroyed.
  • Scans more thoroughly: Certain items (such as first-class mail) are screened more thoroughly through automation and manual verification as they may contain cash, checks, gift cards, or money orders postcards.
  • Scrap: Other items, such as those confirmed undeliverable or not eligible for return, delivery, or inventory (for example, marketing mail) are recycled or destroyed.
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We completed our fieldwork prior to the declaration of a national emergency by the President of the United States regarding the novel coronavirus disease (COVID-19) outbreak on March 13, 2020. The results of this audit they do not reflect changes in process or operations. that may have occurred as a result of the pandemic.

findings

mrc processing operations were not always effective. specifically, items received at the mrc were not processed in a timely manner, as the mrc did not meet its seven-day acceptance processing goal from december 2017 to september 2019. we found that some mailings had not been processed for more two months during our January 2020 observations. These delays occurred due to the following:

  • Incorrectly Shipped Items: mrc staff spent more time processing items that should not have been shipped per postal service policy, such as delivered mail, undelivered marketing mail, and recyclable materials (such as batteries). these items were shipped from various postal service facilities across the country.
  • Lack of Accurate Truck Arrival Data: mrc staff were unaware of the number of trucks arriving each day because surface visibility data was not always accurate. Our analysis of data from December 2019 through February 2020 showed that the number of trucks shipped to the MRC did not match the number of trucks that arrived on 90 percent of days. the data problems occurred because personnel at the various source facilities were not accurately entering data in surface visibility. As a result, mrc managers did not have accurate information to allocate staff and resources more efficiently.

handling these inappropriate and unplanned workloads caused inefficient processing and accepting operations on the mrc. These conditions were exacerbated by understaffing at the MRC during fiscal years 2018, 2019, and 2020. For example, the MRC had 84 employees while in November 2019 it had 104 authorized.

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We also determined that mrc staff were not opening and examining all first-class mail that could not be delivered in accordance with postal service policy. After reviewing 200 first-class mail pieces approved by MRC staff for recycling, we found 16 pieces (8 percent) containing cash, checks and gift cards totaling $1,692; these items should have been originally identified when examined by mrc staff. mrc management stated that they were unaware of this policy.

mrc staff also did not effectively dispose of batteries and gift cards in the following manner:

  • batteries: We found 30 containers of batteries improperly stored at the mrc, some for up to two years. Postal Service policy states that batteries must be promptly recycled, but MRC managers said no funds were provided for disposal. While $75,000 was ultimately provided during our audit and the current inventory of batteries was removed by the MRC, uncertain funding mechanisms could result in a future battery buildup that could pose a threat to the safety of MRC staff.
  • gift cards: We found about 39,000 gift cards that were not immediately discarded at the mrc. mrc management attributed these delays to a lack of guidance on how they should be disposed of (eg, auctioned off, sold, destroyed, etc.).

We also noted a variety of opportunities to strengthen internal controls over cash, stored item inventory, and the return of insured items:

  • Cash Reconciliation: mrc employees were not recording all instances of cash when picking up undeliverable mail. neither do the mrc processes validate the full record of funds withdrawn from the mail nor do they allow for a final reconciliation between the funds withdrawn from the mail and those ultimately deposited.
  • inventory: mrc staff did not maintain an accurate physical inventory of items in storage. During our inventory testing, we noted that 20 of 21 (95 percent) high-value watches remained in inventory but were incorrectly marked as “discarded.” the postal service does not have a process for performing periodic inventories where such discrepancies can be identified and resolved.
  • return of insured items: mrc staff returned 63 items to customers for which compensation claims totaling $6,619 had already been paid in fiscal year 2019. these deficiencies occurred because mrc did not have a process to verify whether a compensation claim had already been made. paid for the item (before its return).
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During our audit, mrc’s management established a procedure to limit the number of trucks received daily and fully staffed its operation. as such, we will not make recommendations related to these topics.

recommendations

recommended administration:

  • develop and implement strategies to:

: Identify and prevent postal facilities from incorrectly sending items to the mrc.

– Make sure all trucks sent to the mrc are accurately logged in surface visibility.

– ensure mrc staff are aware of and comply with postal service policy for opening and examining all undeliverable first class mail.

  • Develop and implement a mechanism to secure funding for rapid battery disposal at the mrc.
  • develop and formalize guidance on removal of gift cards in the mrc.
  • establish and implement an additional process to accurately record undeliverable cash withdrawn from the mail and periodically reconcile this amount with the total cash deposited.
  • establish and implement processes to maintain accurate physical inventory and conduct periodic reviews.
  • develop and implement an additional process to verify if a compensation claim has been paid for an item prior to its return.

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