TWO WEEKS after the Boothwyn Fire Company, in Delaware County, mailed fundraising letters for its volunteer ambulance service last summer, director Tim Murray noticed that no checks were coming in.

The reason?

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His fundraising appeals wound up in the U.S. Postal Service's Southwest Philadelphia distribution plant, where mail goes to slow down, and sometimes to die.

And it wasn't only the fire company. Customers throughout the region have complained of late deliveries and lost mail.

No wonder.

In interviews with the Daily News, postal service employees and a manager have described chaotic conditions in the chronically understaffed plant, which processes nearly six million pieces of mail a day on Lindbergh Boulevard near Island Avenue.

In recent months, a manager and several employees said, unsorted mail sat for weeks in overflowing bins on the plant floor or was stuffed into trailers in the parking lot and - in some cases - even shipped in desperation to other distribution plants, from where it often returned for sorting days later.

In some cases, the mail was destroyed, the employees said.

The postal employees and a manager spoke to the Daily News on condition of anonymity, saying they feared retribution if they spoke publicly.

The workers interviewed by the Daily News said the severe staffing shortages were the result of a year-long overtime ban.

A complaint filed by the postal workers' union with the USPS Office of Inspector General alleges that a senior manager and others ordered clerks to falsify the daily mail report, undercounting the volume by hundreds of thousands of pieces of mail, to save costs and overtime.

"The mail is here. You'd have to be blind not to see it," said a veteran employee.

"What really hurts me is the [possibility] that these [fake] numbers were used in determining how many employees were outsourced in Philadelphia," said Byron Murtaugh, APWU assistant clerk craft director and a 20-year postal employee.

In August, USPS officials here announced that 162 employees are to be transferred in January.

A lead senior manager and other managers received performance bonuses that were "fraudulently obtained, through the systematic falsification of official government reports, the diversion of mail, and the destruction of mail," the union complaint alleged.

"These [are] serious allegations of misconduct," said Nancy B. Lassen, the attorney who filed the complaint on behalf of American Postal Workers Union Local 89. "It is so systemic that it has become institutionalized at the Philadelphia plant."

The complaint also charged that the daily color codes on mail bins were changed to make it appear as if mail was not late.

Several veteran postal clerks told the Daily News that they were aware daily mail reports were being falsified and the daily color codes changed.

A union investigation, initiated by Gwen Ivey, Local 89 president, reached the same conclusion.

It appears the OIG has taken the complaint seriously.

After it was filed, investigators seized the computer assigned to a clerk identified in the complaint as having been directed by a senior manager to falsify the daily mail reports, postal employees and an independent knowledgeable source said.

Agapi Doulaveris, spokeswoman for the Office of Inspector General, said the OIG is conducting an audit of the plant "to see that service and performance standards are being met."

If auditors find wrongdoing, they would notify OIG investigators, Doulaveris said. An audit usually takes about two months.

Doulaveris declined to comment about a seized computer, and had no information about any bonuses managers may have received.

Locally, Postal Service spokeswoman Cathy Yaroski said the Postal Service is "proud of the service its employees are providing its customers," but declined to comment on the allegations of doctored records, and declined to make three managers available for interviews.

The Postal Service's high-tech, $300 million processing center opened on Lindbergh Boulevard in 2006, replacing the central sorting operation at 30th Street.

It was soon plagued with problems, exacerbated by the elimination of jobs and transfer of 656 postal workers.

Last year's delays were documented in a report by the OIG, which concluded that operations had improved earlier this year. The report was released on July 10, as the unsorted mail bins multiplied on the floor, blocking passageways, employees said.

Daily mail reports and corresponding handwritten worksheets reviewed by the Daily News support employees' claims that mail at the plant was being undercounted.

A majority of them showed that a lower volume of mail was processed than indicated by worksheets the reports were drawn from.

On Sept. 28, for example, the daily report understated the mail processed at the plant by about 750,000 pieces.

"In the past, the mail was curbed a little, but not by a million pieces," said an employee. Senior managers "are more concerned about their bonuses than the customers."

USPS records reviewed by the Daily News also showed a steep decline in overtime at the plant this year.

The backlog grew worse during employees' summer vacations, creating what a manager called "a snowball effect."

"I feel bad the mail is sitting there," said the manager, who was unaware of the alleged undercounting. "It's not fair to customers."

Veteran employee and union steward Nick Caselli, who worked on the dock, said some nights he's seen from two to four trailers parked, stuffed with mail that should have been unloaded and processed.

During the day, another employee said, as many as six to 13 trailers were parked on the lot. If mail is in a trailer, it's not included in the daily count.

In September, Caselli said, three 38-foot trailers of unprocessed mail were diverted to a distribution plant in Horsham, only to return unprocessed two days later.

In addition, some first-class mail was left in unsorted "waste bins" with second- and third-class, including time-sensitive periodicals and circulars, employees said.

After these sat for weeks, the mail was destroyed, say employees and a manager.

In a written response, Yaroski, the USPS spokeswoman, said the Postal Service has "procedures in place to ensure our mail is processed timely and delivery standards are met."

Yaroski noted that a study conducted for the processing center showed that 96 percent of first-class mail arrives within one day, though she acknowledged the survey didn't say how late the other 4 percent might be.

Asked about on-time performance of second- and third-class mail - the main problem at the plant - Yaroski said the USPS recently began collecting that data, but none is available for release.

While workers at the southwest plant struggled to cope with the chaos, customers in the 191- and 190- zip codes in the Philadelphia area were paying a high price, with late deliveries, delayed bill payments, missed department store sales circulars and even lost wedding invitations.

An Oct. 21 regional USPS memo reported that Philadelphia ranked dead last in the country in delivery times for J.C. Penney mail, for example.

Publications, such as
Time, TV Guide, and the Catholic Standard and Times, were chronically late, and time-sensitive circulars from supermarkets and other businesses were sometimes destroyed, the manager and employees told the Daily News.

When the Boothwyn Fire Company's Tim Murray complained to the Postal Service about his missing fundraising letters in August, he got nowhere.

"It wasn't until after I contacted [U.S. Rep.] Joe Sestak's office that some of the mailing started arriving," Murray said. "It finally showed up five and a half weeks after we mailed it, but it was only part of it."

About the time the Boothwyn mailing disappeared last summer, overtime at the plant was virtually prohibited, despite 30 or more employees on vacation each week, according to a manager and employees.

Murray always includes a mailing to himself. It finally arrived in November, four months late.

The fiasco cost the ambulance company between $4,000 and $6,000 in lost revenue, not to mention the $500 cost of the mailing.

Others have reported mail problems: A Philadelphia plumber whose payment from a customer arrived a month after it was postmarked; a well-wisher whose get-well card was returned three months after it was sent; a lawyer who sent invitations to a reception that arrived eight days later, after the event had occurred.

A manager explained that "third-class, or standard, mail backs up mostly - sale circulars, advertisements, credit card offers . . ."

Companies "pay money to send time-sensitive offers, and they get discounts for bulk mail. But if the mail sits, that's false advertising," the manager said. "They are not getting the delivery standard they expect.

"A lot of times, it isn't getting to homes until two, three weeks later, and a lot of times [homes] are not getting it at all," the manager added.

Chip Lillie, a senior vice president at Elwyn-based Choice Marketing Inc., said he's become so frustrated with delays at the Philadelphia plant that he now takes mail shipments to the Postal Service Center in Bellmawr, N.J.

"Mysteriously, mail headed to Philadelphia-area addresses seem to get delivered from there without much delay," he said.

Some companies track their mail on a computer, the manager said.

"They throw a fit when it's not on time. Those companies know how to put a fire under somebody to get mail delivered." *