Federal Reports

The Postal Reorganization Act of 1970 requires annual audits of the U.S. Postal Service’s financial statements. In addition, the Postal Accountability and Enhancement Act of 2006 requires the Postal Service to comply with Section 404 of the Sarbanes-Oxley Act. This section requires the Postal Service to report the scope and adequacy of its internal control structure and procedures and assess their effectiveness.The U.S. Postal Service Board of Governors contracted with an independent public accounting (IPA) firm to express audit opinions on the Postal Service’s fiscal year 2021 financial statements and internal controls over financial reporting (an integrated audit). The IPA firm maintained overall responsibility for testing and reviewing significant Postal Service accounts, processes, and internal controls. We coordinated audit efforts with the IPA firm to ensure adequate coverage.

Following is a summary of internal control deficiencies for your attention that we determined did not constitute a significant deficiency or material weakness, see Appendix A for the full descriptions:Undelivered OrdersIt was determined that EEOC's balance in undelivered orders (UDOs) as of September 30, 2021, as calculated by EEOC personnel, included amounts that should have been de-obligated and not included in the year-end amount. This misstatement was caused by EEOC not consistently applying review procedures to the UDO balance. EEOC should ensure the existing UDO policy is followed and documentation of the process is reviewed by the CFO or their designee on a quarterly basis.The purpose of this communication, which is an integral part of our audit, is to describe, for management and those charged with governance, the scope of our testing of internal control and the results of that testing. Accordingly, this communication is not intended to be and should not be used for any other purpose.

We evaluated the SBA’s handling of the grant to train small businesses on federal resources available in the wake of the Coronavirus Disease 2019 (COVID-19) pandemic. The Coronavirus Aid Relief and Economic Security (CARES) Act authorized funds up to $25 million for SBA to administer a grant to an association or associations representing resource partner centers to establish a single centralized hub for COVID-19 information.We found SBA did not ensure the grant recipient developed and implemented an effective marketing and outreach strategy to ensure the hub successfully achieved the legislative purpose of the CARES Act. In addition, neither SBA nor the grant recipient set targets for any of the performance goals.SBA awarded $18.6 million for the informational and training hub. In the critical first year of the disaster response and launching the hub, less than 1 percent of the 30 million small businesses it was intended to help used it and only 62 of about 14,000 resource partner counselors and mentors completed any of the training modules. We found the grant recipient awarded contracts without assessing the reasonableness of contract costs in accordance with federal procurement requirements. We also questioned $14.8 million in costs that either did not adhere to procurement requirements or were not properly supported. We made five recommendations to improve the SBA’s oversight.SBA agreed or partially agreed with three of the five recommendations. The agency plans to implement corrective actions that will align performance goals with agency goals. It will also enhance oversight of the grant recipient’s compliance with award terms and federal requirements. Management disagreed with recommendations 4 and 5.

In fiscal year (FY) 2020, the U.S. Postal Service had about 133,000 rural letter carriers and associates delivering mail on over 79,500 rural routes. A rural route can be a government owned vehicle (GOV) route where the Postal Service provides the delivery vehicle, or an equipment maintenance allowance (EMA) route where the carrier provides the vehicle and receives fuel and maintenance reimbursement. That same year, the Postal Service paid rural letter carriers almost $583 million for more than 36,900 EMA routes. Our objective was to assess the Postal Service’s strategy for assigning GOVs to EMA routes.

FLRA's Compliance with the PIIA in the FY 2021 PAR