October 21, 2020

OIG explains USPS service lapse this summer

The USPS Office of Inspector General released a report yesterday in response to an August 7 congressional request.  The Alliance notified its members and sponsors with an Alliance Alert last evening.

The OIG evaluated why on-time mail delivery declined during July and August following the swearing in of Postmaster General DeJoy on June 15; whether USPS complied with internal policies and legal requirements; whether sufficient notice was provided to Congress and customers; and whether the Postmaster General complied with ethical requirements.

The key findings of the report should reassure nonprofit mailers that DeJoy and his team did not, with malice aforethought, intend to slow down mail delivery this summer.  But we remain concerned that the PMG and executive team acted imprudently without sufficient analysis or judgment in implementing these changes at this time.

An over-eager combination of three major Postmaster General initiatives and 57 individual operations cost-saving programs was hastily implemented during a pandemic just prior to a record vote-by-mail national election.  The laundry list of operations initiatives likely was developed in anticipation of the arrival of the new PMG.  (A separate list of initiatives requiring congressional action will be a part of the new ten-year strategic plan to be released by USPS soon.)

We believe the fiasco was a result of all new Governors appointed around the same time they named the first external PMG in 24 years.  (A Governor with relevant USPS experience, former Inspector General David Williams, resigned in protest just as DeJoy was being selected.)  A contributing factor likely was the eagerness of the career executive team to fulfill the goals of their new leadership without urging careful consideration and analysis before execution.  In other words, ready, fire, aim.

Key findings

• PMG DeJoy ordered three initiatives in July and August: elimination of late and extra trips to transport mail; organizational restructuring; and expedited street afternoon sortation.
• DeJoy also approved 57 cost-saving programs conceived by USPS operations executives to achieve FY 2021 financial targets and reduce workhours. These operational change initiatives were developed to achieve an estimated 64 million workhour savings.
• Individually, the initiatives might not have had a significant service impact; but combined in today’s environment, they did.
• USPS did not pilot test or analyze the impact of the initiatives on service.
• The initiatives were communicated poorly to the field, mostly orally, causing confusion.
• Two of the initiatives—removing mail processing equipment and blue collection boxes—were multi-year programs, but the rate of removal was accelerated this summer.
• The Postal Service was in compliance with policies and legal requirements for these types of changes, but they are insufficient. “The PRC’s authority to evaluate service degradation is effectively limited to an after-the-fact evaluation, as a part of the annual compliance determination process.”
• “Although information provided by the Postal Service was generally accurate, the responses to Congress and the public on the extent and impacts of operational changes were incomplete.”
• We already knew that USPS communication with customers about the initiatives was essentially nonexistent.
• “Information the OIG reviewed to date indicates that Mr. DeJoy has met the ethics requirements related to disclosure, recusal, and divestment upon entering the position of Postmaster General. However, we have not yet had the opportunity to review Mr. DeJoy’s [redacted] accounts and that process is ongoing.” (Media have reported that DeJoy divested holdings in XPO Logistics, Inc. on October 9: 350,000 shares and call options for 95,000 shares. A Postal Service spokesperson says DeJoy requested the divestiture certificate on August 14.)
• USPS says the service reduction was temporary and will not affect its ability to process and deliver election mail timely.
• Dejoy has halted removal of sorting equipment and collection boxes until after the election.
• USPS disclosed “that beginning October 1, 2020, the Postal Service would make additional resources available in all areas of operations, including collection, processing, delivery, and transportation to satisfy increased demand and unforeseen circumstances. They also provided clarifying guidance in the areas of overtime, hiring, retail hours, collection boxes, late and extra trips, mail processing, and election mail.”