After a three-month probe, the OIG's audit and investigation units also partially substantiated seven allegations that the Daily News reported and did not confirm 10 others.
The report noted, however, that investigators didn't begin interviews until Dec. 8, a week after the allegations began appearing in the Daily News.
But the report took seriously 18 allegations, which were reported from Dec. 1 through Dec. 19 and some of which were included in a complaint filed last fall by the Philadelphia American Postal Workers Union (APWU).
Among the partially confirmed allegations were:
* A small amount of first-class mail, periodicals and circulars were destroyed, as was reported in the paper, but the destruction was not intentional.
* Mail delivery was delayed to customers more than the national average, but investigators could not determine the extent of the delays.
* Mail was shipped to other plants but was returned unsorted. Miscommunication was blamed in one instance, but OIG could not confirm that management routinely rerouted mail elsewhere to reduce the mail count.
* Prescription drugs, periodicals, laboratory samples and flat envelopes were delayed, but investigators could not confirm that it took weeks for delivery, as several customers told the Daily News. Some lab samples were mislabeled.
* Damaged packages and missing contents were caused by equipment failures.
* Delivery of first-class mail and business-reply envelopes were delayed. OIG confirmed a problem with one business customer, although the Daily News gave examples of other customers who said they'd encountered problems with the Postal Service.
The OIG denied allegations of chronic understaffing and a ban on overtime, and said there was no evidence that mail-volume reports had been falsified so management could receive performance bonuses.
Supervisors, however, told the Daily News that they could not get overtime approved in some instances.
The Daily News reported that hundreds of bins of overflowing unprocessed mail sat for weeks in late summer and early fall, as a result of vacations and the inability of supervisors to authorize overtime to process it, according to supervisor and employees.
The day after the first Daily News story ran on Dec. 1, a trucking firm removed 19 tons of unprocessed mail, before regional vice president Megan J. Brennan arrived that day and six days before OIG investigators arrived.
"We can not attest to any incidents that may have occurred before [Dec. 8 when the investigation began] that could have affected our conclusions," stated the OIG report.
"Once they knew they were being investigated, they cleaned up the plant," said Gwen Ivey, president of the local APWU, which represents 2,200 members in the Philadelphia area. "So how could OIG know what was going on in prior months?
"But some employees and managers at the Lindbergh facility, in my opinion, knew what was going on."
The APWU complaint, filed in October, identified a plant official and an employee who allegedly participated in falsifying the daily mail-condition reports, although other employees were later identified as participants.
Asked about specific managers and employees, Postal Service spokeswoman Cathy Yarosky said: "We don't discuss internal personnel matters."
"They buried how high [mismanagement] went," said APWU attorney Nancy B. Lassen, who filed the union complaint.
However, regional director Frank Neri, who was overseeing a crackdown on overtime and the budget last fall, was transferred to another USPS job in Washington and was replaced by Gallagher five days after the first Daily News story.
And assistant plant manager William Taddei was escorted from the Lindbergh mail-processing facility and has not returned to work, but the Daily News was unable to learn his status.
Two union clerks who collected mail counts were questioned and allowed to return to work after a brief absence, Ivey said. *