Federal Reports

Our objective was to assess the effectiveness of internal controls over Voyager fleet cards used in delivery operations in the Great Lakes Area.U.S. Bank manages the Voyager Fleet Systems credit card program for the U.S. Postal Service, and actively monitors transactions to identify potentially fraudulent use of credit cards. Every Postal Service-owned vehicle is assigned a Voyager card to pay for fuel, oil, and routine vehicle maintenance. Monthly, site managers are responsible for reconciling card transactions identified as high-risk, such as purchases that exceed the fuel purchase limit.The Great Lakes Area has 1,411 sites with 32,808 Voyager cards. The total amount charged to these cards in fiscal year (FY) 2016 was $67,005,537; transactions totaling $3,506,684 were flagged as high risk, requiring reconciliation. We selected the Great Lakes Area for audit based on the high fleet card costs and number of exception transactions.

Our audit objectives were to assess whether key contract provisions aimed at mitigating legal and financial risks were included in high-value, high-risk active contracts, and to assess the company’s contract record-keeping practices to identify opportunities, if any, for improvement. We have redacted the sensitive data from the report.Our work showed that all 20 of the high-value, high-risk company contracts we reviewed contained key contract provisions that successful organizations commonly use to mitigate risks - such as warranties, insurance, indemnifications, and bonds. However, we found that internal controls for managing contracts are weak because the company lacks a contract management system.To address an identified internal control weakness and reduce its financial and legal risks, we recommended that the company document and initiate a plan for the timely completion of the steps necessary to fully define user requirements for a contract management system, determine how best to meet those requirements, establish roles and accountability for system implementation, secure the needed resources, and establish a project monitoring process to implement a cost-effective solution for enhancing the management and oversight of its contracts.In commenting on a draft of this report, the company’s Vice President, Senior Managing Deputy General Counsel, stated that the company agreed with our recommendation.