The Office of Inspector General

The Office of Inspector General (USPS OIG) was established in the Postal Service by 1988 amendments to the Inspector General Act of 1978. The act had created OIGs in 12 federal agencies following a series of public spending scandals to investigate and audit the programs and operations of agencies that, in many cases, had failed to supervise their own spending, to ferret out fraud and misconduct, and to help prevent and end the misuse of funds. The act granted the Inspectors General broad authority to:

 

conduct audits and investigations;

 

access all agency records directly, using subpoenas if necessary;

 

request assistance from other government agencies;

 

administer oaths when taking testimony;

 

hire staff and manage their own resources; and

 

receive and respond to complaints from agency employees, whose confidentiality was to be protected.

 

Inspectors General were not authorized to take corrective action themselves under the rationale that it would be difficult — if not impossible — for Inspectors General to review programs and operations objectively if they were directly involved in carrying them out.

The Inspector General Act Amendments of 1988 created OIGs in 39 additional government agencies and entities, including the Postal Service, but until 1997 the Chief Postal Inspector served as the Postal Service’s Inspector General, reporting to postal management.

Recognizing the importance of a USPS OIG independent from management, in 1996 Congress created the Postal Service’s independent Office of Inspector General to be its eyes and ears to detect and prevent waste, fraud, theft, and misconduct. Although funded by the Postal Service, the Inspector General is appointed by the nine presidentially appointed Governors of the Postal Service and reports twice a year to the Governors and to Congress. The USPS OIG’s independence allows it to more effectively perform its mission, “to increase the efficiency and effectiveness of USPS programs and operations, while eliminating and preventing fraud, waste, and abuse.”69

The Postal Service’s independent Office of Inspector General began with a single employee, Inspector General Karla W. Corcoran, who was sworn in on January 6, 1997. In one year’s time, the office hired 109 employees and set up field offices across the country to audit and investigate Postal Service programs and operations. It also established a hotline number to receive allegations of waste, fraud, and abuse, which received more than 14,000 calls in its second year.

On August 20, 2003, the current Inspector General, David C. Williams, was sworn into office. In 2004, the scope of his office increased when Postmaster General Potter announced the transfer of additional investigative responsibilities from the Postal Inspection Service to the USPS OIG. Beginning February 7, 2005, allegations of postal employee misconduct including embezzlement, record falsification, workers’ compensation fraud, contract fraud, and on-duty narcotics violations, were referred to the USPS OIG. On May 1, 2006, the USPS OIG took over the responsibility for investigating all new allegations of these types. On September 1, 2006, the USPS OIG also began investigating all new allegations of mail theft by postal employees. To handle its increased responsibilities, the USPS OIG hired more than 260 new investigators in 2006.

By the end of 2006, its staff numbered 1,071 and included special agents (federal law enforcement officers authorized to carry firearms, make arrests, and investigate federal criminal violations), auditors (professionals trained in government audit and accounting standards), and others crucial to its mission.

Since it was established, the Office of Inspector General has issued 3,077 audit reports and management advisories accounting for more than $3.7 billion in questioned costs, unrecoverable costs, funds put to better use, and revenue impact. Examples of fraud uncovered by USPS OIG investigations include a trucking contractor defrauding the Postal Service of $1.5 million in fuel rebates; a highway route contractor defrauding the Postal Service of $120,468 for services not rendered; and a construction contractor charging the Postal Service $175,630 for work never done.

During fiscal year 2006 alone, the Office of Inspector General completed 6,357 investigations resulting in 293 arrests, 237 indictments, 209 convictions, and 2,977 administrative actions. Injury compensation fraud investigations saved the Postal Service $105 million in long-term costs, and $20.9 million in fines and restitution went to the Postal Service as a result of investigative work.