Underperforming Plants: $437M a Year in Questioned Costs
Summary
A self-initiated Postal Service inspector general audit (report 25-091-R26, July 27, 2026) estimates that facilities operating below the national efficiency average generate nearly $437 million a year in questioned costs -- 8.7 million workhours the agency could reclaim by lifting its low-performing plants to a merely average bar. The auditors tie the gap to management practices and workforce culture, not aging machines. Postal management disagreed with the finding and both fixes.
The auditors visited five low-performing and five high-performing districts and found the laggards weren't short on machines -- they were short on management. Low-performing sites ran about 5 to 20 percent below the national processing-efficiency average⧉, leaned harder on overtime (14.0 percent of workhours against 11.8 percent⧉), and left 33.4 percent of their trips late -- nearly double the 17.5 percent at high performers⧉. Turnover ran 14 percent versus 11⧉, and auditors repeatedly couldn't find a supervisor on the workroom floor.
View data as table
| Annual questioned costs from below-average facility efficiency (FY 2025) | 437,000,000 | 's headline estimate: what low-performing plants cost the Postal Service each year by running below the national efficiency average. |
|---|---|---|
| Manager detail-assignment travel (FY 2024-2025) | 55,498,547 | Two-year nationwide travel bill for temporarily shipping managers to struggling plants — 'significant costs with questionable benefits.' |
| Overtime-misassignment grievance payouts (FY 2025) | 26,499,174 | One year of grievances paid because managers skipped overtime desired lists or split overtime inequitably. |
The efficiency gap isn't the only line item. The audit pins about $55.5 million in FY2024-2025 travel⧉ on shuttling managers to struggling plants -- "significant costs with questionable benefits" -- and more than $26 million in one year⧉ on grievances traced to botched overtime assignments. Because labor is 76.4 percent of USPS's $89.5 billion in annual expenses⧉, workplace culture is a cost center. Postal management disagreed with both fixes and the $437 million estimate itself⧉, calling the gaps "normal operational variation"; the , which called its own math conservative, logged the recommendations as unresolved.
- The $437 million is avoidable by the audit's own math -- it is the annual cost of low-performing plants missing a national-average bar, not an unreachable ideal, and the estimate excludes manual sorting, so calls it conservative.
- The diagnosis is management, not machinery: absent floor supervision, heavier overtime, higher turnover, and near-double late-trip rates cluster at the same low-performing sites.
- Postal management rejected the finding, disputing the $437 million estimate and both recommendations as "normal operational variation"; the is pursuing them through formal audit resolution.
Questioned costs are money the says was spent avoidably or without adequate support -- an estimate of savings available, not a confirmed loss. The $437 million is measured against the national-average productivity level as an achievable baseline; management argues that baseline ignores regional workload differences.
Sources(2) ▾
- U.S. Postal Service Office of Inspector General, Operational and Financial Performance Across Postal Service Regions (Audit Report 25-091-R26) (2026-07-27) — Self-initiated performance audit (Project 25-091) that visited five low-performing and five high-performing districts and estimated the annual cost of facilities running below the national processing-efficiency average. Every load-bearing figure below is quoted from the issuer-hosted PDF, read in full with pdftotext -layout. This is a distinct report from the 's grievance-payments audit (25-068-R26) and its postage-coding-error management alert (25-130-2-R26). uspsoig.gov · original document
- Council of the Inspectors General on Integrity and Efficiency (oversight.gov), Operational and Financial Performance Across Postal Service Regions — CIGIE oversight.gov copy (2026-07-27) — Independent federal cross-host copy of the same audit, hosted by on oversight.gov. Its extracted text is byte-for-text identical to the issuer PDF and is used as corroboration — confirming the report number, the July 27, 2026 date, the issuing agency, and the $437 million questioned-cost estimate on a host separate from uspsoig.gov. oversight.gov · original document
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The Postal Service's own inspector general put a price on mediocrity. A self-initiated audit estimates burns nearly $437 million a year in questioned costs simply because some mail-processing facilities run below the national efficiency average⧉. Close that gap -- not to best-in-class, just to the average -- and auditors say the agency reclaims 8.7 million workhours in a single year⧉.