Underused space across USPS facilities could be a hidden drag on modernization and budgets
Interview transcript
Terry Gerton The Office of Inspector General there at the U.S. Postal Service issued a recent report where you flagged excess and underutilized space across USPS facilities. First of all, tell us what initiated the study.
Joshua Bartzen Well, I will say that in terms of, there’s been an overall focus by the federal government on making sure that space is utilized all throughout agencies throughout the federal government. And with the Postal Service having the facility footprint that it has, over 34,000 facilities across the country, varying in size from pretty small post offices to larger processing plants, we figured it was a great time to start a project like this.
Terry Gerton And so as you went through it, what did you uncover about how much space is sitting idle or underutilized?
Joshua Bartzen Terry, it’s a great question. And for us, the first step that we took was try to understand what data is out there to kind of assess this network. So we went into the network and we were pleased at first when we saw that the Postal Services National Facility Database had information on fields that related to excess space or underutilized space or vacant space. So we’re like, okay, we viewed that as a good sign. However, once we started looking at some of the data that was associated and located in that system, I’ll say from an auditor’s perspective, our ears started to perk up a little, our eyes opened up a little and we’re like, okay, there seems to be some reliability, some things, outliers that we’re looking at. So then the crux of our audit, then we started really flushing out and kind of started peeling the layers of the onion back on that data. And we found some pretty concerning reliability issues.
Terry Gerton Well, let’s talk about reliability issues then, especially as it relates to the data. What did you find?
Joshua Bartzen So in terms of the data, some of the things we looked at were, they had incorrect inputs, where some of formulas like in Excel, they weren’t working as properly. They were incorrectly coded, where some space was office space, but it was coded as vacant land or some of the data was inconsistent between some of this system modules. Then we also noted that in certain instances, the data wasn’t even in there. So one of the key findings we had was that over 63% of the properties have not had a kind of data reliability assessment performed, on record. So that was concerning to us because at some point, going out collecting this data and then checking out it periodically, just that lack of data was very concerning for us.
Terry Gerton Whose job is it to keep the data up to date?
Joshua Bartzen Terry, it’s a great question. And honestly, that was kind of one of the things we’re talking with Postal about. Obviously, the Postal Service is a very big organization. There’s different functions. We were dealing primarily with the facilities group, but also the retail group, the processing group, the delivery group, they all have input into this because they’re aware of the day-to-day operations. We kind of attributed it to facilities because they were the kind of, as far as from our view, they were the overseers of this entire facility database and what was in their postal service facilities. Folks may have a little different perspective on that, but from our perspective, that’s where we landed.
Terry Gerton What’s the impact to postal service management of not having good data about the usage of its various kinds of facilities?
Joshua Bartzen But Terry, great question. And we reported that the lack of visibility into this data really, it hinders your ability to drive financially beneficial alternatives, such as if you can repurpose the space, if you can rent it, if you dispose it. So all those types of things, we found that the data issues that we found really hindered anything going forward because at that point, it’s limiting your decision making. And we even highlighted a couple examples in the report in terms of the COVID test kits, when they came out, at some point, you’re trying to find facilities where there can be some space where you can store them and process them, and Postal Service eventually was able to do it. But the data wasn’t as readily available because they had to go ask and kind of re-engineer it going from step one. Similarly, lately, there’s been some increases in packages at certain locations, so much so that they’ve had to put exterior tents outside to kind of store the packages while they’re waiting to be processed. So we were saying, well, this is also another opportunity where if you knew where some available space was in nearby adjacent facilities that could help you out. The third part is there’s a revenue component to this too. And I think this aligns with a lot of the other things from the federal government that we discussed earlier is that, are there ways to either rent the space or dispose of it that can save you money? And in terms of that, we saw some instances where space was coded differently and that limited your ability to rent that, potentially rent that space. So again, financial operational impacts definitely arose from the lack of quality data.
Terry Gerton I’m speaking with Joshua Bartzen. He’s an audit director at the U.S. Postal Service Office of the Inspector General. So we talked a little bit about the finding around insufficient or inaccurate data. What was your second finding here?
Joshua Bartzen The second finding, the second part of that finding had to do with the overall broader strategy related to excess and underutilized space. And we were curious from the Postal Service perspective, did they have a strategy for reducing it or at least for managing it? Because the one reality we do know with the Postal Service is that the operational demands vary throughout the year. Like right now it’s holiday time, so we know that there’s a lot more packages going through the network, so you know you need more space. Do you need that space maybe in the middle of January? Maybe not. But that space can be used then for maybe something else. So the network and the volume variability is what they call it in terms of workflows, ebb and flow. Just being aware of it, having that data and that overall strategy can help you manage those kind of ebbs and flows throughout the year.
Terry Gerton You also noticed that the Postal Service hadn’t been meeting its congressional reporting requirements about facility space.
Joshua Bartzen That’s correct as well. So again, the GAO has placed federal real property management on its high risk list for over 20 years. And some of that continued work decades ago resulted in the passage of one of the federal real property laws that’s out there. We found the Postal Service hadn’t been complying with some of the reporting requirements of that. The Postal service said they weren’t aware of it. And again, they thought maybe it was a one-time reporting requirement, but again, with the move towards a federal government making more and more attention on this we thought it was, you know, us noting that compliance issue, and the Postal Service has agreed with that recommendation related to that compliance.
Terry Gerton You made a total of seven recommendations. How did the Postal Service respond across the board?
Joshua Bartzen I’ll say mixed, they agreed with two of them, and they disagreed with five. And in terms of the five that they disagreed with, most of those all pertain to the data or the strategy issues that we had discussed earlier. From our perspective, the Postal Service had some comments in there about who’s going to be responsible and who should be — and Terry, it’s funny that you mentioned who’s in charge of this — when the Post Service was talking about who is in charge this from an earlier point, Terry, there’s some difference of opinions. From our perspectives, though, At some point, we are auditors and we’re not consultants. So we’re going to tell you what to do, but we’re going to point out the issue. So we are less concerned with what entity within the Postal Service solves, corrects the issues that we brought up, but we noted for those five disagreed recommendations, we still think that they’re very important and they should be resolved.
Terry Gerton What do you think will happen now that you’ve raised awareness of this within the Postal Service? Are you seeing that they’re moving forward to take action, or what do you expect?
Joshua Bartzen We expect, at least from, I’ll go two-fold, just from the recommendation perspective, how those get handled is we have a resolution process with the Postal Service and we work to try to resolve those. So there’s some common agreement because I think collectively, between us and the Postal Service, we want these recommendations to be resolved. From a more global perspective, our report focusing on excess underutilized property is going to be one of many, I’m sure over these next couple of years, the federal focus is not going away, either by us, by GAO, by other federal stakeholders, so at some point, we’re envisioning that emphasis and that priority, the spotlight’s gonna stay. So I think it’s gonna have to be something that they’re gonna have to kind of make sure they’re managing. And to their credit, they’re creating a new data system to help manage some of these properties. Now with us, it’s becoming, hey, let’s make this a priority, make sure we’re doing this on an ongoing basis. Because again, that spotlight’s only gonna shine brighter.
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