The Mailers Council, the nation’s largest coalition of mailers and mailing associations, has published a new white paper that warns of United States Postal Service insolvency without significant new legislative reform. The paper suggests other non-legislative steps to avoid collapse of the nation’s postal system.

The white paper is available on the Mailers Council’s website.

According to Mailers Council Board of Directors President James R. O’Brien, “The mailing industry, and the nearly nine million jobs it represents, and every American who depends on a reliable, affordable postal system, need Congress’ help now. Our research shows that recent legislation offers only temporary relief of the agency’s financial problems. Without more significant measures, such as those outlined in our white paper, the Postal Service will soon be unable to meet its financial obligations.”

The Postal Service was recently put back on the General Accountability Office’s High-Risk List, a reflection that the agency’s future is in jeopardy. It ended FY 2009 with a net loss of $3 billion and is expected to report a nearly $7 billion deficit for FY 2010. Mail volume declined by approximately 26 billion pieces in one year. Next year, the Postal Service will be close to its statutory borrowing limit of $15 billion, with no sign of being able to repay these funds anytime soon.

Legislation approved on September 30 gave the Postal Service a one-year reprieve from the large annual payments required to prefund its retiree obligations. However, because of staggering declines in mail volume, changing communication patterns and the ongoing recession, the USPS may be unable to pay its bills or its employees by the end of FY 2010.

The Mailers Council’s white paper offers these recommendations for addressing the Postal Service’s problems:

1. The Postal Service needs to be allowed to reduce its head count.
2. It must be allowed to close unneeded facilities and consolidate its retail network.
3. The Postal Service needs greater control over compensation.
   It should be allowed to adjust its pre-funding schedule for retiree health benefits when economic conditions dictate.
4. An arbitrator should consider the financial health of the Postal Service when making a decision in the collective bargaining process.
5. The Postal Service should complete its study of five-day-a-week delivery and fully present its findings for further discussion.

The Mailers Council is a coalition of corporations, nonprofit organizations, and major mailing associations. Collectively, the Council accounts for 70% of the nation’s mail volume. The Mailers Council believes that the USPS can be operated more efficiently, supports efforts aimed at lowering postal costs, and has the ultimate objective of containing postal rates without compromising service.

October 15, 2009

The Honorable Paul Hodes
U.S. House of Representatives
Washington, DC 20515

Attention: Sarah Levin

Dear Mr. Hodes:

We received your May 21 letter on behalf of the New Hampshire branch of the National Association of Letter Carriers (NALC). They alleged manipulation of the Time and Attendance Collection System (TACS) by management at the Milford Post Office, Manchester South Station, and Manchester West Station. Specifically, they alleged postal management altered electronic timecards to avoid paying NALC carriers overtime and to falsify the reporting of work hour usage at these facilities.

As background, TACS is the timekeeping system used by the Postal Service to record employees’ work time and to ensure proper payment. TACS also manages budgeted work hours for each facility. Employees are assigned an individual identification card, bearing a magnetic stripe encoded with their personal information. Employees use their cards at an Electronic Badge Reader (EBR). The employees enter the type of clock ring and operation number, if applicable, and then slide their cards through the EBR. This produces a record of the date, time, type of clock ring, and the operation number to TACS.

Every week, postal managers reconcile and download TACS data to the Accounting Service Center (ASC) in Minnesota, which collates this information and uses it to generate employee paychecks. Managers have manual access to the TACS in order to approve overtime and correct timekeeping errors before the information is downloaded to the ASC. Manual access to TACS is individually password protected. When a postal manager makes a manual change, TACS records the nature of the change, the date, time, and the Employee Identification Number of the person making the change.

We conducted an investigation, which included interviews and a review of records and documents. We concluded that management at the Milford Post Office made manual entries to change employees’ clock rings for the period of December 14, 2002, through December 19, 2008. These changes resulted in the removal of straight time, overtime, night differential, and penalty overtime causing, employees to be underpaid. Additionally, we found an apparent flaw in the way that TACS handles hours worked by clerks who also perform carrier work for part of their day. This flaw causes an unintentional loss of pay to employees. We forwarded our findings to postal management for action they deem appropriate.

We concluded that manual entries to change employees’ clock rings were made by management to TACS at the Manchester South Station for the period of December 22, 2007, through June 26, 2009, and at the Manchester West Station for the period of December 23, 2006, through June 26, 2009. These changes resulted in the removal of night differential and overtime causing employees to be underpaid. We forwarded our findings to postal management for action they deem appropriate.

After we began our investigation, we widened our scope to include two other nearby locations, specifically the Somersworth Post Office and the Salem Post Office. Our investigation concluded that at the Somersworth Post Office for the period of the December 22, 2007, through June 12, 2009, and at the Salem Post Office for the period December 22, 2007, through July 1, 2009, manual entries were made to TACS. Management changed employees Move clock rings from one operation number to another, which caused work hours to be posted to operations employees apparently did not perform. These changes resulted in misstatements of budgeted work hour activity at the facilities. These findings were also forwarded to postal management for action.

If you or your staff have any questions related to your inquiry, please contact Betsy Cuthbertson in our Congressional Response unit at (703) 248-2270.

Sincerely,

Lance Carrington
Deputy Assistant Inspector General for Investigations

WASHINGTON, Oct. 16 — Rep. Paul W. Hodes, D-N.H. (2nd CD), issued the following news release:

Congressman Paul Hodes issued the following statement after the Inspector General of the US Postal Service confirmed New Hampshire postal workers’ concerns that management had altered time cards and withheld payment that the workers had earned. Congressman Hodes had called on the Inspector General to investigate these concerns.

“This is a clear and deliberate violation of workers’ rights,” said Congressman Hodes. “New Hampshire families have suffered as a result of this scheme, and these hard-working postal workers deserve the wages that they have earned. The Postal Service should immediately reimburse these workers for the wages that were taken from them.”

Earlier this year, Congressman Hodes wrote to the Inspector General asking for an investigation into claims that management at the Milford Post Office, Manchester South Station, and Manchester West Station had manipulated time cards to cheat workers out of wages they had earned. Postal workers were concerned that management was manually altering time cards in order to avoid paying workers the wages to which they were entitled.

The Inspector General concluded that management altered time entries which, “resulted in the removal of straight time, overtime night differential and penalty overtime causing employees to be underpaid.” Management engaged in these practices at all three of the post office stations in question, and the Inspector General’s investigation revealed other inconsistencies at the Somersworth Post Office and the Salem Post Office. The investigation also revealed a flaw in the way in which clerks’ hours are recorded, which resulted in an “unintentional loss of pay to employees.”

In a letter posted on the web site of the National Association of Postal Supervisors, USPS Human Resources VP Anthony Vegliante has admitted that the USPS Pay for Performance program will not accurately reflect the contributions of supervisors, postmasters and managers for the fiscal year just ended.

Citing the economic downturn, Vegliante warns that the USPS may end the year with “a corporate NPA score for which the adjective rating would be non-contributor. Employees who worked diligently and contributed to the organizations performance may receive an end of year rating of 3 or less and a personal adjective rating of non-contributor.”

The only solution offered for the program’s failure is the option for evaluators to change the adjective rating of employees receiving a PFP score of 1, 2, or 3 to “contributor”. The score would not change, and the employee would not receive an increase in salary. “This is each evaluator’s decision based solely on the overall performance of the employee throughout the year.”

The following is said to be a copy of a message from League of Postmasters President Charley Mapa to his members, asking that they refuse to participate in the US Postal Service’s Voice of the Employee survey. The survey, which all employees are asked to complete once a year, has been the subject of a boycott by postal unions since the USPS attempted to use favorable survey results in contract negotiations.

Dear Leaguers,

Recently your National Board met and decided that the League would no longer support the VOE survey. While the intent behind the survey may be good, the fact of the matter is that the work situation for Postmasters continues to deteriorate. In so many districts dignity and respect for PMs have ceased to exist. The Postal Service deliberately does not staff in order to pile work hours on to Postmasters. Reports and logs continue to proliferate, thereby stretching a long day into a longer day. Discipline for trivial reasons continues and micromanagement reduces Postmasters to mindless robots. You may not be suffering personally from any of these situations, but thousands of Postmasters nationwide are. I urge you, in support of Postmasters everywhere, to simply not fill out the survey. This is one report that you are not required to complete. Please spread the word; the more of us who refuse to participate, the louder our voice of the employee will be.

Respectfully,

Charley Mapa
President
National League of Postmasters

USPS Press release:

WASHINGTON — The U.S. Postal Service announced today that 371 retail stations and branches remain under consideration for possible consolidation.

Today’s announcement updates a review process begun earlier this summer that examined approximately 3,600 stations and branches in urban and suburban areas across the country, focusing on facilities in relatively close proximity to one another, to determine where consolidations might be feasible, while maintaining customer access to postal services.

With nearly 37,000 Post Offices, stations, branches, contract and community post offices, the Postal Service has the largest retail network in the United States. An additional 56,000 locations such as supermarkets, drug stores, and other retailers sell postage and selected postal services. Nearly 18,000 ATMs also dispense sheets of stamps. But customers do not have to visit a physical building to purchase products and services; postage can be bought at usps.com and printed on personal computers.

The only provider of mail service to every home and business address in the country, the Postal Service is committed to providing reliable, secure, affordable service with convenient access. Unlike most federal agencies, America’s national mail system receives no tax subsidy for operating expenses and relies on the sale of postage, products and services to fund its operations.

Additional efficiency initiatives are continuing. Reducing over-capacity in retail and delivery operations is a good business move. Every effort will be made to maintain and improve customer access to postal services.

Today’s announcement is part of the Station and Branch Optimization and Consolidation initiative that is currently being reviewed by the Postal Regulatory Commission. As part of this proceeding, the Postal Service has filed periodic updates identifying the retail stations and branches that remain under consideration.

The filing does not represent a final decision on consolidation. To date, no facility-specific final decisions have been made as a result of this initiative.

Click here for the list of stations and branches currently being reviewed.

A message on the NAPS member forum says that the postal service has “lifted the suspension of employee recognition and incentive awards”. The message is accompanied by a copy of a letter from HR VP Anthony Vegliante, dated September 28, which also announced that the USPS automated incentive program, eAwards, would be available once again. The incentive program had been suspended when the agency’s financial situation worsened.

Another posting on the NAPS boards suggests changes are imminent for USPS employees involved in Financial Control & Support, Purchasing and Material Management, and Stamp Distribution. Stay tuned.