Postal Service needs tighter controls over relocation benefits, IG says

While the U.S. Postal Service has made strides to improve its relocation benefits program, loopholes remain, according to a recent audit by the agency's inspector general. In her fifth report on the relocation program, the IG found that the Postal Service offered far more generous relocation packages to executives than were offered by 24 Fortune 500 companies and seven nonappropriated federal agencies. The IG also found that the program was only offered to a small number of eligible employees. The IG noted, however, that the Postal Service has taken steps to better educate employees about the program, eligibility and its requirements. Established in 1989, the shared real estate appreciation program allows the Postal Service to relocate officials to high-cost areas without lowering their standard of living. Under the program, the Postal Service buys houses for executives, who then pay equity from the sale of their prior home. The executives owe the Postal Service a mortgage equal to the amount of the loans they had been paying previously. None of the private sector companies the IG benchmarked operated as the lien holder for their executives. "The Postal Service carries the home as an asset on their financial statements," the IG reported. "A portion of the asset is owned by the Postal Service and does not require a monthly payment." Between January 1997 and October 2000, 48 executives participated in the program. About 1,000 employees are eligible. Because of "inadequate" controls, however, 10 executives who were not eligible participated in the program and benefits were paid for moves to cities that were not deemed high-cost. "This occurred because the program was administered based on informal policies that did not address granting program exceptions or establishing adequate documentation for loan information," the IG reported. "Without adequate controls, the shared real estate appreciation loan program may be used inconsistently and inappropriately." Since the review took place nearly two years ago, the agency has implemented new guidelines to ensure that all approvals made under the real estate program are well documented, said Judy DeTorok, a spokeswoman for the agency. She added that the program is a valuable tool in recruiting and retaining qualified personnel. "It's about ensuring that we can have the right people in the right place at the right time," she said.