USPS management should revise and implement a plan to integrate highway contract route tracking and payment IT system for its transportation contracts and take into account industry best practices in doing so, the USPS inspector general has said.
Annual HCT contracts generally have fixed prices and automatic prorated monthly recurring payments, and USPS spent about $4.3 billion on them from 2012 – 2014.
In a 2010 audit, the IG found that Postal Service officials did not certify about $4.8 billion in annual HCR payments from 2008 – 2010, due to insufficient oversight of the certification and electronic payment process.
Following that management said it would implement a process to pay HCR suppliers based on actual miles drivenby October 2014, but USPS still needs to improve oversight and missed its goal. A pilot project ran into issues with supplier payment processes and incorporating operational data and service requirements, according to the IG.
It said USPS has no immediate plans to change the current, potentially inaccurate “pay and chase” process. But without matching planned and actual HCR services performed prior to payment, the USPS cannot guarantee the amount paid to suppliers is accurate, the IG concluded, recommending an IT solution (for example, utilizing GPS and other software and processes that match actual mileage to accounting system data) to provide assurance that billions in payments are accurate.