Postal Service, now under fire, vastly overspent on its employee relocation program

The Golden Horseshoe is a weekly designation from Just the News intended to highlight egregious examples of wasteful taxpayer spending by the government. The award is named for the horseshoe-shaped toilet seats for military airplanes that cost the Pentagon a whopping $640 each back in the 1980s.

This week, our award is going to the United States Postal Service for spending in excess of $1 million extra on the relocation costs and benefits of employees who transfer to a new duty station, move to start a new position, or are moving for a final time on retirement.

According to a new report from the USPS Office of the Inspector General, the postal service spent $21 million on relocation costs between February 2019 and May 2020. The postal service outsources the management of its relocation program to an outside management firm, which "provides guidance to relocating employees on Postal Service policies and processes, ensures prompt payment of authorized expenses, and assists with arrangements for moving and storing household goods," according to the report.

The report found that the relocation management firm (RMF) that the USPS contracted with between 2018 and 2020 "did not always comply with contractual requirements and properly pay all relocations benefits."

"In addition, the Postal Service did not effectively manage the program," continued the audit. In fact, the Postal Service did not even have access to all of the documents in the RMF's online database, which the report determines it would have needed to have in order to effectively manage the program.

The report also found that, of a randomly sampled pool of employees who had been relocated between February 2019 and March 2020, 16% were not paid the correct amount in relocation benefits. In several instances, the RMF miscalculated the amount to be paid out by the Postal Service for things like lodging expenses, meals and incidentals, and travel expenses not related to the employee's relocation.

By and large, these errors consistently occurred, according to the IG, because the Postal Service "did not have adequate policies and procedures to monitor the program." The USPS also discussed but failed to document any guidelines pertaining to the "application of relocation policy."

Moreover, the audit found that the Postal Service is overpaying for their employees to be moved around. The standard Federal Travel Regulation (FTR) miscellaneous expense allowance payment for relocated employees is $1,300. The USPS, by contrast, provides its employees $2,500 for their miscellaneous expense allowances.

The report determines that, had the USPS — whose finances have recently come under fire for being badly mismanaged — stuck to a more standard FTR payment plan, it would have saved more than $1 million between February 2019 and March 2020. Not only that, but the Postal Service does not require or check receipts for relocation allowance payments, meaning they have no reliable way of knowing whether or not their employees are even spending the money for its intended purpose.