Regulating discretionary spend by line management has always been a source of consternation in large organizations -- especially within non-profit and government agencies. It also quickly becomes newsworthy when that spend appears to be lavish or inappropriate, contributing to cost increases and deficits.
CNN reported last week that "The U.S. Postal Service spent more than $792,000 'without justification' on meals and events in one five-month period even as it reported losing $3.8 billion this year, the agency's inspector general says in a report." CNN goes on to report in its 'hand in the cookie jar' fashion that "Among the purchases were crab cakes, beef Wellington, and scallops at an installation ceremony for one of several postmasters in the United States … two Postal Service districts that purchased movie tickets for $14,140 to give incentives to employees after the postmaster general ‘issued a memo directing a curtailment of spending’ … [and] It also documented the purchase of 30 retirement watches, costing $216 each, in another district.”
The interesting thing about CNN’s reporting in this matter is that is entirely based upon an Audit Report released by the Office of Inspector General, United States Postal Service titled “Imprudent Purchases and Management Instruction on Expenses for Internal and External Events” that concluded, “While overall spending using the SmartPay2® Purchase card has declined in the past year, our audit disclosed non-compliance with the policy on meals and events and continued imprudent purchases during this time of economic uncertainty for the Postal Service. Based on our review of judgmentally selected transactions, we identified over $792,000 in purchases that were not made in accordance with Postal Service policy and over $54,000 in imprudent purchases.” Now that’s spend visibility.
When a whale of an organization like the US Postal Service can drill down in the same fiscal year on internal compliance with stated policies governing this sort of spend, I say hooray. Hopefully they’ll be able to resolve the other 99.98% of their deficit as easily.