By Elvina Nawaguna
WASHINGTON (Reuters) - The Postal Service's watchdog is investigating the agency for runaway travel expenses, a lingering problem for the cash-strapped mail carrier even as it tries aggressively to cut costs.
A report from the Postal Service's Office of Inspector General, released in September, found that the agency, which lost almost $16 billion in last year, had overpaid more than $1 million in travel reimbursements to employees during an 18-month period.
The report said the employees improperly claimed refunds or used government-issued travel cards for personal expenses such as hotel stays and purchasing gasoline, among other issues.
The Postal Service agreed to the watchdog's recommendations, including better systems to monitor travel card activity and better written expense policies, but the Office of Inspector General is still probing the issue.
Office of Inspector General spokeswoman Agapi Doulaveris said in an interview that she could not provide details on whether the money had been recovered or any punitive or corrective measures had been taken because the investigations are still active.
In September, David Kosturko, a former Postal Service executive, was convicted of defrauding the agency of more than $17,000. According to a February 2011 report from the Office of Inspector General, the Postal Service overpaid more than $600,000 in travel costs as result of improper claims by employees. In a 2009 report, the office said, employees continued to make "imprudent and unnecessary purchases during a time of severe economic uncertainty in the Postal Service."
The September report found that several employees booked two tickets from the same destination, canceled the more expensive one and took the cheaper flight, but claimed refunds for the higher priced flights. Employees also canceled trips but still collected refunds.
It also found that employees abused government-issued travel cards with excessive cash advances and used the cards for personal expenses, such as a hotel stay in Las Vegas.
Postal Service spokesman David Partenheimer said he could not comment beyond the written response included in the September report, in which the mail agency said it concurred with some of the recommendations and planned to implement them between November 2012 and January 2014.
While the amount of money involved may pale in comparison to other government travel scandals, such as the General Services Administration's opulent Las Vegas convention in 2010, the Postal Service is unique for its financial woes.
The 238-year-old institution has been buckling under the pressure of massive payments for future retiree benefits and dwindling revenue as more people communicate by email.
Lat year the agency ran into its legal borrowing limit and defaulted twice on required payments to the federal government.
It is aggressively trying to cut costs, but is banking on Congress passing legislation to overhaul its operations and put it on sounder financial footing.
So far, Congress, preoccupied by other priorities including budget fights, has not been able to agree on measures such as ending Saturday mail delivery and closing rural post offices across the nation.
Representative Darrell Issa of California, the Republican chairman of the House Oversight Committee and a leading voice on Postal Service reform, said the agency needs to do more to get its travel expense waste under control.
"USPS must take every action within its power to rein in fraud and mismanagement within its travel system in order to cut costs," Issa said in a statement to Reuters.
(Reporting By Elvina Nawaguna; Editing by Karey Wutkowski and Mohammad Zargham)