By Giff Johnson
For Variety

MAJURO — Documents obtained by the Marshall Islands Journal on Friday through the U.S. Freedom of Information Act show that more than $14,000 in U.S. postal money order funds were stolen from the Ebeye Island post office over a three month period in 2005 — more than four years after U.S. Postal Service inspectors made recommendations to Marshall Islands President Kessai Note and Postmaster General Sailass Andrike to fix internal management problems in this central Pacific nation’s postal system.
The USPS investigation reports provided to the newspaper Friday also show that USPS inspectors identified serious management problems in the Marshall Islands postal system as early as June 2001. Government and postal officials in Majuro declined to comment on the reports.
In January 2006, the USPS changed the Marshall Islands and neighboring Federated States of Micronesia from “domestic” mail zone status to international, and eliminated numerous services, including cutting off the sales of US postal money orders by the island post offices — in part because of lack of response from the Marshall Islands government to reports of mismanagement in its post office. The switch to international status and the elimination of money orders and umerous other postal services was implemented as a result of provisions demanded by USPS officials in a revised Compact of Free Association between Washington and the two island nations that went into effect recently.
The USPS investigation reports were provided to the Journal in response to a Freedom of Information Act request the newspaper lodged with the USPS last October.
The 91 pages of documents include a series of reports from the U.S. Postal Inspection Service on the Marshall Islands, Federated States of Micronesia and Palau post offices. Reports released on the other two countries did not indicate instances of theft or mismanagement. The Majuro-based newspaper reported that the USPS withheld an additional 86 pages of documents in part because release of “personnel and similar files would constitute a clearly unwarranted invasion of personal privacy” and because the “disclosure would reveal techniques and procedures for law enforcement investigations or procedures,”
A January 5, 2006 report states that a USPS inspector reviewed Ebeye Island post office postal money order sales and bank deposits on December 1-27, 2005, concluding that $14,325 had been stolen.
The investigation of the Ebeye post office was launched in response to the USPS manager for the Pacific/Micronesia region reporting “financial irregularities” at the Ebeye post office and specifically that Ebeye “was failing to regularly report U.S. Postal Service Money Order sales and was failing to make daily bank deposits of USPS Money Order funds,” the report said.
A U.S. postal inspector flew to Ebeye on December 1, 2005, met Marshall Islands Postmaster General Andrike and then conducted his investigation.
“Review of financial records and bank deposit slips for September, October and November 2005 identified multiple discrepancies between USPS Money Order funds collected by the Ebeye Post Office and USPS Money Order funds deposited into the Bank of Marshall Islands,” the report said.
In an editorial, the newspaper commented that “this three-month study was not an isolated time period for theft, and the assumption is that the $14,000 was merely an indication of how dramatic postal service ineptitude has been.”
More than four years before the Ebeye money order theft was documented, USPS officials conducted an investigation of the Marshall Islands post office in Majuro, and made recommendations for changes to President Note and Postmaster General Andrike.
The USPS inspectors in a report dated June 29, 2001 said they were invited in at the request of President Note “to assist the Marshall Islands postmaster general to improve internal controls and financial reporting.”
The inspectors said that their investigation “did disclose several opportunities for improvement and gross problems with respect to internal controls.” “Internal controls” are the management systems in place to prevent theft and misuse of money and to ensure proper functioning of a department, agency or business.
The USPS inspectors described the internal control problems as including an apparent lack of “separation of duties,” “unannounced/frequent examinations,” and “independent audit by independent, objective external agency.”
The inspectors said that while the review was happening in June 2001, they gave Postmaster General Andrike a verbal report of their findings and recommendations and “will provide the President of the Marshall Islands with his report at a later date.”
The final report was completed and presented on August 7, 2001, they said.
The Marshall Islands lost its domestic postal designation in early 2006, a development that local business leaders say is undermining many of the country’s businesses, which have relied for more than 30 years on importing merchandise from American vendors through the post office. As a result of the loss of insurance, registered and certified mail services, many American companies will no longer ship goods to the Marshall Islands.