The rent is too damn high on Postal Service facilities, say auditors
The Postal Service could save millions if it renegotiated leases set to expire that are above market rate, an Oct. 23 USPS inspector general report says.
The Northeast Area spends more than $184 million annually to lease more than 3,300 facilities, the report (.pdf) says. Area officials begin the lease renewal process 12 to 24 months before a lease ends by reviewing lease information provided by the Postal Service's facilities organization.
Auditors identified 1,762 of 3,389 leases in which the service is possibly paying above market rate rent.
USPS could save $6.6 million if it renegotiated facility rates or closed facilities for 250 of those leases that are set to expire in the next two years and are above market rates.
Postal Service policy directs real estate specialists to determine fair market value for expiring leases, the report says. But auditors say an area official told them the service lacks resources for verifying that.
Because of that, USPS lacked negotiation leverage and had to take leases at above market rates, the report says.
- download the report, SM-AR-14-001
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