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OFFICE OF INSPECTOR
GENERAL
The Postal Service has characterized improving labor management
relations as one of the most important challenges in achieving its
mission in the 21st century. A key Postal Service strategy in the labor
management area is to foster an inclusive, welcoming, and productive
workplace consistent with its values of fairness, opportunity, safety,
and security. With more than 850,000 full and part-time employees
working at nearly 38,000 facilities nationwide, the Postal Service
realizes that to operate effectively, in a rapidly changing environment,
it needs to give employee issues a higher priority and enhance each
employee’s contribution to organizational performance.
Additionally, in light of terrorist attacks, including attacks involving
the transport of anthrax through the mail, the Postal Service must take
appropriate precautions to ensure the safety and well being of its
employees.
The OIG supports the Postal Service in its overall goal to develop a
motivated and productive workforce. The labor management area includes
workplace environment, human resources, and health care. While the OIG
has worked diligently with the Postal Service and Congress to address
these areas of concern, reviewing labor management areas continues to be
one of the OIG’s greatest challenges. In this regard, the OIG has
received 4,052 individual labor management complaints since 1997. During
this reporting period, the OIG completed 12 reviews and 102 inquiries in
the labor management area.
WORKPLACE ENVIRONMENT REVIEWS
The Postal Service has identified signs of workplace stress in many of
its facilities and is developing comprehensive steps to improve the
workplace environment, including improving relations between managers
and employees and aligning human resources with business requirements.
During this reporting period, the OIG has conducted 102 inquiries into
complaints of alleged hostile work environment or other health and
safety issues, some of which are highlighted below:
A confidential reporting
process was created for employees at a Postal Service International
Service Center when allegations surfaced regarding employee mistreatment
from management. The process, called Direct Line, gives employees an
opportunity to raise issues regarding their work environment.
As a result of an OIG review, a Postal Service supervisor was placed
on a performance improvement plan after employees alleged the supervisor
had created a hostile working environment.
Postal Service district management conducted a conflict management
workshop for maintenance shop employees to improve workplace
communications after an OIG review determined that a hostile work
environment may have existed for some employees.
HUMAN RESOURCE PROCESS REVIEWS
Postal Service managers are responsible for
preserving and protecting official records and privacy information. In
addition, managers must avoid conflicts of interest, which could affect
both the public’s trust and confidence in Postal Service human resource
processes. Postal Service managers are also responsible for complying
with existing policies and procedures regarding sexual harassment,
overtime, leave, compensation and benefits, and training. The OIG
conducted the following audit to assess controls over these processes:
REVIEWS OF SEXUAL HARASSMENT PREVENTION
MEASURES
The OIG conducted audits of 18 districts to determine whether adequate
policies and procedures were in place to prevent sexual harassment, and
to see if sexual harassment complaints were effectively addressed.
Sixteen of the eighteen districts had appropriately disciplined or taken
action against employees
responsible for sexual harassment or inappropriate actions/comments. The
review found that all of the districts covered in the evaluation had
adequate policies and procedures. However, some areas needed
improvements, as noted below.
•
Some managers responsible for sexual
harassment or inappropriate actions/comments were not considered for
exclusion from the Pay for Performance Program.
•
Postal management generally agreed
with the recommendation that managers and supervisors engaging in these
activities should be considered for exclusion from pay for performance
and bonus programs.
In some districts, the Equal Employment Opportunity Office received
complaints of sexual harassment or inappropriate actions/comments and
did not notify district management of the complaints. Postal management
generally agreed that the Equal Employment Opportunity office notify
district management when a report of this nature has been received.
Sexual harassment complaints at some districts reviewed were not
effectively addressed. Postal management agreed that all sexual
harassment complaints should be effectively addressed. However, postal
management disagreed that all sexual harassment complaint investigations
be documented. The Postal Service stated this would require management
to depart from Postal Service policy for those complaints that could be
resolved simply and directly between parties without a formal written
record. The OIG plans to address this issue in a capping report.Two
districts did not discipline or take appropriate corrective action
against all employees involved in sexual harassment or inappropriate
actions/comments. Postal management agreed with the OIG’s recommendation
to establish controls to ensure the appropriate disciplinary or
corrective action is taken for sexual harassment or inappropriate
actions/comments.
HEALTH CARE REVIEWS
Controlling workers’ compensation costs
continues to be key to the Postal Service’s financial well being because
the Postal Service self-insured and makes payments out of operating
funds, which directly affect the Postal Service’s net income. In FY
2002, the Postal Service paid over $760 million in workers’ compensation
costs, a $66 million increase over the 694 million paid in FY 2001.
The OIG assists in protecting the health and welfare of the Postal
Service’s workforce by conducting audits and investigations to prevent
and detect fraud, waste, abuse, and mismanagement related to Postal
Service health care program costs. Involvement in health care fraud
investigations is vital to controlling costs related to Postal Service
health care premiums. enhance these efforts, the OIG has partnered with
the Department of Labor Office of Inspector General to conduct joint
investigations of workers’ compensation programs. On December 7, 2002,
the OIG assumed responsibility for all new allegations of employee
workers’ compensation fraud within the Capital Metro Area as part of a
pilot program. This new area of responsibility is in addition to OIG’s
jurisdiction over investigations of fraud committed by health care
providers. In addition, the OIG was asked to participate in a Postal
Service task force on workers’ compensation costs chaired by the Deputy
Postmaster General. The OIG investigates allegations of fraud involving
health care providers who are paid by, on behalf of, the Postal Service
for medical services rendered to Postal Service employees related to:
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Federal Employees’ Compensation Act.
This act is administered by the Department of Labor with costs charged
back to the Postal Service.
•
Postal Service-contracted doctors
and facilities. Approximately 1,500 physicians and facilities are
contracted and paid directly by the Postal Service to provide medical
services to its employees.
Federal Employees Health Benefits Program. The Postal Service pays 80
percent of over 850,000 employees’ insurance premiums. In the past 6
months, the OIG completed 7 projects and 25 investigations in this area,
which resulted in 6 convictions. The investigations identified federal
and state violations of money laundering, conspiracy, racketeering,
grand theft, and mail fraud by licensed or unlicensed health care
providers. In addition, the OIG conducted 3 reviews of health
care-related issues. Some of the OIG’s more significant investigations
and reviews are highlighted below:
The OIG joined with the Postal Inspection Service, the Defense Criminal
Investigative Service, the Department of Labor OIG, and the Florida
Department of Insurance Fraud to investigative fraudulent medical claims
submitted by fictitious medical providers to the Federal Employees
Health Benefits Program, TRICARE, and private medical insurance
companies. During this reporting period, four individuals were convicted
of violating Florida State laws ranging from conspiracy and money
laundering to racketeering and grand theft in a fraudulent health care
billing scheme. Three of the four individuals were ordered to make
restitution totaling approximately $990,000 to the victims’ health care
plans. Two of the four individuals were sentenced to serve a combined
prison term of 66 months.
During this reporting period, two siblings were convicted for their
involvement in a health care fraud scheme involving durable medical
equipment. The defendants, who owned and operated a telemarketing
company, contacted disabled people and offered to provide them free
medical equipment if the equipment was
covered under their insurance policy and their doctor submitted a
prescription.
The defendants then used customers’ information to file insurance
claims, including claims on behalf of Postal Service Service employees.
The defendants were sentenced to 9 months and 21 months in prison,
respectively, 3 years supervised release, and both were ordered to pay
restitution to the victims in an amount exceeding $78,000. An OIG
investigation was initiated based on a Hotline allegation received from
an Injury Compensation Manager in a district office. The OIG partnered
with the Department of Labor and identified a significant number of
questionable billing transactions in the Office of Workers’ Compensation
Program. Further investigation by the OIG disclosed four overpayments
totaling over $105,000, which has since been repaid. Additional
administrative recoveries are pending.
OIG HEALTH CARE FRAUD DATABASE ASSISTS PROACTIVE INITIATIVES
The Postal Injury Compensation System is the OIG database that
contains over 7 years of billing history for medical services provided
to Postal Service employees with workers’ compensation claims for
job-related injuries. The system provides data to support health care
fraud criminal investigations and for complex trend analysis to identify
potential proactive initiatives.
The OIG is taking this system to the next level in creating a new,
more comprehensive and flexible system, that will provide users the
ability to analyze a large volume of data and reduce or eliminate the
need for manual review
and data analysis. The OIG is constructing the Healthcare Internal Data
Analysis System, a detailed data analysis tool and automated reporting
system to identify potentially fraudulent billing schemes. This database
system will valuable in developing proactive initiatives and assisting
investigations.
ARRANGEMENT WITH A PREFERRED PROVIDER NEEDS ENHANCEMENT
An OIG audit revealed the Postal Service did not use appropriate
contracting practices in establishing an agreement for a pilot program
with a preferred health care provider. The OIG found inadequate contract
documentation, unfavorable provisions, and a lack of standard Postal
Service clauses and provisions. As a
result, the contract exposed the Postal Service to unnecessary risks
from legal claims, protests, adjustments, and contract termination. The
OIG recommended postal management instruct the contracting officer to
continue efforts developing contract documentation, including
documenting negotiations, providing justifications for non-competitive
purchase and analyses, and renegotiating contracts to increase its
percentage of medical cost savings.
Postal management generally disagreed with the report’s findings.
However, they generally agreed with all of the OIG’s recommendations and
the current contracting officer is working to revise the contract to
ensure maximum benefits and protections for the Postal Service.
(HK-AR-03-001)
WORKERS’ COMPENSATION PROGRAM NEEDS LEGISLATIVE
REFORM
An OIG audit of the Postal Service employees on the workers’
compensation periodic rolls disclosed 49 percent, or over 6,500, of the
Postal Service employees on the periodic rolls are at the age at which
some federal employees are eligible for voluntary retirement. In
addition, 70 percent, or over 9,300, of the Postal Service’s employees
on the workers’ compensation periodic rolls are totally disabled with
little or no future reemployment potential, or whose reemployment has
not been determined. In the past, concerns have been raised that the
Federal Employees’ Compensation Act has become, in effect, a retirement
system for some workers’ compensation employees. For example, the OIG’s
review found one employee has been on the workers’ compensation rolls
for 45 years. This employee and others may be eligible for voluntary
retirement under existing federal retirement programs.
The OIG found Postal Service’s workers’ compensation costs account
for 35 percent of the total program costs. The Postal Service pays
workers’ compensation costs out of its operating revenue and these costs
have been increasing each year. Therefore, legislative reform that will
allow eligible employees to retire under an applicable retirement
program may give the Postal Service financial relief. In addition, the
Postal Service’s administrative fees have increased 137 percent from $19
million in FY 1997 to $45 million in FY 2002. The OIG recommended the
Postal Service pursue whether congressional assistance should be sought
to pay administrative fees to the Office of Workers’ Compensation
Programs. Postal Service management was responsive to the OIG’s
recommendation and has actions planned to address the concerns.
(HK-MA-03-001)
LEGISLATIVE, REGULATORY, & POLICY REVIEWS
During this reporting period, the OIG identified and reviewed
legislation, regulations, and policies affecting Postal Service labor
management. One policy is highlighted below:
ENACTED POLICY
Employee and Labor Relations Manual, Section 650, Nonbargaining
Disciplinary,
Grievance, and Appeal Procedures Effective March 20, 2003, the internal
disciplinary appeal process for Postal Service employees was modified to
include mediation and neutral hearing officers in the process. The
Postal Service designated two former Postal Service managers to function
as hearing officers. The OIG believes that overall, the new procedures
will result in a strengthened process for employees.
INSPECTION SERVICE
Postal Inspectors investigate a number labor management areas, including
workplace safety, workers’ compensation, postal robberies, and drugs in
the workplace. The Inspection Service regards the prevention of
robberies as one of its highest organizational priorities and affords
task force attention to facility, letter carrier, and other postal
robberies to deter these attacks on employees. Letter carrier robberies
are generally committed for the purpose of stealing mail and postal keys
to mail receptacles, while robberies of facilities are committed for
cash and money orders. Postal Inspectors investigate the possession,
personal use, and sale of narcotics by Postal Service employees or
others while on postal property. Postal Inspectors also partner with
Postal Service management and employee groups in early interventions and
other efforts to prevent violence in the workplace. During this period,
there were 199 arrests and 144 convictions for assaults and threats, and
27 arrests and 37 convictions related to robberies. In addition, 16
individuals were arrested and 16 convicted for the sale of drugs on
postal property. The Inspection Service investigates fraudulent claims
and receipt of workers’ compensation benefits by individual employees.
Prosecution of workers’ compensation fraud serves as a deterrent and
prevents future benefit payments from being made to violators. During
this period, 17 individuals were arrested and 20 were convicted for
workers’ compensation fraud. Examples of workers’ compensation fraud
cases worked by the Inspection Service are highlighted below:
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A former New Jersey clerk was sentenced to 1-year probation and
ordered to pay over $5,000 restitution for mail fraud. The employee
claimed total disability as a result from a fall while on the job. The
investigation disclosed the individual was self-employed as a massage
therapist while alleging total disability and failed to report the job
or ability to work to the Department of Labor. As a result of the
Inspection Service investigation, over $21,000 in workers’ compensation
funds was recovered and the Postal Service received a future cost
savings of over $1
million.
•
A former Postal Service employee in Rhode Island was sentenced for
making false statements to obtain federal workers’ compensation. The
former employee was the operations manager for a postal highway contract
trucking company, managing the business from a home office. The Postal
Service manager was responsible for the $3 million contract and
coordinated other non-postal contracts. The investigation revealed the
manager was driving a contract route, refueling company vehicles, and
transporting drivers. The employee resigned from the Postal Service and
was sentenced to 4 months of home confinement with electronic
monitoring, 2 years probation, 50 hours of community service, a $100
special assessment and restitution over $42,000. The former Postal
Service employee is permanently debarred from receiving future workers’
compensation benefits. As a result, future cost savings to the Postal
Service are over $517,000.
•
A former letter carrier from Oregon was sentenced to 3 months
incarceration, 3 months home detention, 5 years probation, court ordered
restitution of over $29,000 and a special assessment of $1,300 for
workers’ compensation fraud. The individual claimed total disability
after falling from his postal vehicle. The investigation revealed the
individual participated in activities inconsistent with the alleged
physical limitations. As a result, future cost savings to the Postal
Service are over $915,000.
source: Office of
Inspector General
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