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USPS OIG — Enhancing the Value of Mail Follow Up: Discussion Forum Recap

April 7, 2014 Comments off

Enhancing the Value of Mail Follow Up: Discussion Forum Recap
Source: U.S. Postal Service, Office of Inspector General

Hard copy communications, and mail specifically, are not not the relic some claim them to be. Mail can still create a powerful connection with people of all ages. This is especially true when it is well designed and digitally interactive. Although senders pay for mail to be sent, catching recipients’ eyes determines the value of the communication. Without consumer interest in mailpieces like direct mail, catalogs, or bill reminders, the mail value chain breaks down.

The U.S. Postal Service Office of Inspector General (OIG) hosted a discussion forum with marketing, communications, and mail industry experts to discuss ways mail could be made more valuable to the recipient. The forum consisted of three parts. First, the OIG discussed the findings from its whitepaper that spurred the forum, Enhancing Mail for Digital Natives. Then, research highlighting the utility of mail and emotional connection to hard copy communications was illustrated through a number of European studies. Finally, there was a panel discussion among industry leaders about how mail can be made more effective in today’s omnichannel marketing campaigns.

The OIG’s past work shows that Digital Natives, aged 16-25, appreciate mail when it is personalized and has a useful connection to the digital realm. Digital Natives are gaining market power, and will soon outnumber baby boomers. As their influence grows, marketers’ ability to meet their expectations will become increasingly important.

The European research presented showed that hard-copy advertising creates a stronger emotional response than digital advertising. Another European study showed that the total cost of sending hard copy bill reminders through the mail was less than those sent via e-mail.

The panel discussed mail’s role in omnichannel campaign strategies, how personalizing can affect the success of a campaign, and demonstrated new technology like near field communication and augmented reality, which create a seamless integration between physical mail and a digital experience. There is strong interest among printers, marketers, and advertisers to incorporate this technology into traditional direct mail. Companies should take advantage of dropping prices of physical-digital technology and personalizing capabilities to create mailpieces that recipients truly value.

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USPS OIG — Readiness for Package Growth – Customer Service Operations: Management Advisory Report

April 4, 2014 Comments off

Readiness for Package Growth – Customer Service Operations: Management Advisory Report (PDF)
Source: U.S. Postal Service, Office of Inspector General

BACKGROUND:
Strong customer demand for goods purchased over the Internet has driven growth in the package market, despite an otherwise declining mail market. This growing segment provides the U.S. Postal Service an opportunity to expand services and increase revenue. From fiscal year (FY) 2010 to FY 2012, Postal Service package revenue increased by $1.4 billion, or 14 percent, and volume increased by 445 million pieces, or 14 percent. Package volume also increased by 13.7 percent in the first 3 quarters of FY 2013, compared with the same period last year.

The Postal Service’s retail component, Customer Service Operations, processes about 34 percent of its annual package volume during the holiday mailing season (November and December). About 75,000 Customer Service Operations’ employees work at post offices and destination delivery units. Employees accept packages at over 31,000 post offices for dispatch to mail processing facilities and receive them at over 24,000 destination delivery units to sort for final delivery.

This report is one in a series of U.S. Postal Service Office of Inspector General products that addresses the Postal Service’s readiness for growth in the package business. Our objective was to evaluate operational readiness for package growth in Customer Service Operations.

WHAT THE OIG FOUND:
Customer Service Operations has successfully managed periods of package growth, employee workhours, and scan rates at delivery units. However, opportunities exist to enhance readiness by improving acceptance scan rates, decreasing customer wait time in line during the holiday mailing season, enabling the Passive Adaptive Scanning System revenue-protection function, and reducing the number of non-barcoded packages to provide end-to-end tracking for customers. Overcoming these challenges could improve the Postal Service’s competitiveness in the package business.

WHAT THE OIG RECOMMENDED:
We recommended the vice president, Delivery and Post Office Operations, reinforce that Customer Service Operations’ employees perform acceptance scans to support the 100 percent product visibility strategy. We also recommended the vice presidents, Engineering Systems and Product Information, enable the Passive Adaptive Scanning System revenue protection function and implement a comprehensive strategy to reduce non-barcoded packages. Finally, we recommended the vice president, Mail Entry and Payment Technology, define a solution for notification and collection of shortpaid postage for packages.

USPS OIG — Information Storage Security: Audit Report

April 2, 2014 Comments off

Information Storage Security: Audit Report (PDF)
Source: U.S. Postal Service, Office of Inspector General

The Data Management Services group did not manage the storage environment in accordance with Postal Service security requirements because its managers did not provide adequate oversight of the storage teams. They did not, for example, conduct periodic employee access reviews. The absence of proper security practices and training increases the likelihood of an adverse impact on Postal Service operations, such as an outage of a customerdependent system.

In addition, the Corporate Information Security Office did not provide guidance for storage environments as it has for operating systems, databases, and telecommunication security. Establishing minimum security expectations for storage environments can reduce the likelihood of critical system and application outages throughout Postal Service operations.

USPS OIG — Controls over Nonprofit Mailing Authorization Management — Management Advisory Report

March 28, 2014 Comments off

Controls over Nonprofit Mailing Authorization Management — Management Advisory Report (PDF)
Source: U.S Postal Service, Office of Inspector General

The Postal Service consistently applied its policies and procedures when approving and denying nonprofit mailer applications in compliance with applicable laws and regulations. Pricing and Classification Service Center staff reviewed applications and supporting documents to ensure each applicant provided sufficient evidence that it met one of the categories to qualify it for Nonprofit rate eligibility.

We reviewed 170 approved and 198 denied nonprofit mail applications from FYs 2010 through 2013 and found applications were approved when they met all of the Postal Service criteria, such as documenting proof of nonprofit status. Applications were denied when they failed to meet one or more of the criteria, such as the requirement to respond to requests for additional information. The Pricing and Classification Service Center used the same evaluation process to approve and deny applications.

Postal Service Knowledge Management Process: Audit Report

March 20, 2014 Comments off

Postal Service Knowledge Management Process: Audit Report
Source: U.S. Postal Service, Office of Inspector General

BACKGROUND:
As a result of downsizing in response to declining mail volume and the retirement eligibility of about 31 percent of its workforce (152,000 employees), the U.S. Postal Service is at risk of losing the extensive knowledge required to manage its vast operations. The Postal Service had annual revenue of about $67.3 billion, delivered over 158 billion mailpieces, and managed over 31,700 retail locations in fiscal year (FY) 2013. It also operates one of the largest information technology infrastructures in the world, with an inventory of 795 computer applications. It spent at least $59 million on 49 contracts for studies or consulting services during FYs 2011 through 2013.

Our objective was to assess the Postal Service’s knowledge management practices, systems, roles, and responsibilities. Accordingly, we compared Postal Service knowledge management processes with eight organizations to identify best practices the Postal Service might adopt to optimize its resources and efforts.

WHAT THE OIG FOUND:
The Postal Service does not have a comprehensive knowledge management policy or process or a chief knowledge officer to ensure that knowledge sharing is systematic and collaborative. Although not well-defined, there are knowledge management elements within several Postal Service systems to capture some tacit and explicit knowledge. In addition, we could not find any of the 49 studies or consultant reports in the Postal Service Headquarters library where they could be shared among all postal departments, as required by policy.

A comprehensive Postal Service knowledge management process would enable management to leverage information from throughout the organization for strategic decision- making and new initiatives. In the near term, knowledge management activities would also mitigate the possible loss of extensive tacit knowledge due to anticipated Postal Service downsizing and the retirement eligibility of about 31 percent of its workforce.

WHAT THE OIG RECOMMENDED:
We recommended the vice president, Employee Resource Management, develop a comprehensive Postal Service knowledge management strategy. We also recommended the Postal Service join the Federal Knowledge Management Working Group, which has experts to assist, inform, and support development and implementation of a comprehensive knowledge management strategy.

USPS OIG — Officers’ Travel and Representation Expenses for Fiscal Year 2013: Audit Report

March 20, 2014 Comments off

Officers’ Travel and Representation Expenses for Fiscal Year 2013: Audit Report
Source: U.S. Postal Service, Office of Inspector General

Officers’ travel and representation expenses totaling about $771,000 were properly supported; however, the officers did not always comply with Handbook F-15, Travel and Relocation, which requires that all employees, including officers, adhere to the General Services Administration’s published lodging rates or justify why they chose lodging rates that exceeded the published rates. The Officers’ Travel and Representation Expense Guidelines does not reference this portion of Handbook F-15 or otherwise make it clear that officers should adhere to the General Services Administration’s rates. Rather, officers are directed to “shop around for the best possible rate.”

We identified 13 of 60 travel reimbursements filed by 11 officers where lodging costs were between 108 and 239 percent of the published General Services Administration’s lodging rate for the area, totaling about $1,200 in extra costs.

New From the GAO

March 13, 2014 Comments off

New GAO Report and Testimonies
Source: Government Accountability Office

Report

1. Financial Audit: Federal Deposit Insurance Corporation Funds’ 2013 and 2012 Financial Statements. GAO-14-303, March 13.
http://www.gao.gov/products/GAO-14-303
Highlights - http://www.gao.gov/assets/670/661692.pdf

Testimonies

1. Afghanistan: Key Oversight Issues for USAID Development Efforts, by Charles Michael Johnson, Jr., director, international affairs and trade, before the Subcommittee on National Security, House Committee on Oversight and Government Reform. GAO-14-448T, March 13.
http://www.gao.gov/products/GAO-14-448T
Highlights - http://www.gao.gov/assets/670/661699.pdf

2. U.S. Postal Service: Action Needed to Address Unfunded Benefit Liabilities, by Frank Todisco, chief actuary, applied research and methods, before the Subcommittee on Federal Workforce, U.S. Postal Service and the Census, House Committee on Oversight and Government Reform. GAO-14-398T, March 13.
http://www.gao.gov/products/GAO-14-398T
Highlights - http://www.gao.gov/assets/670/661638.pdf

USPS OIG — Using the ‘Crowd’ to Deliver Packages

March 12, 2014 Comments off

Using the ‘Crowd’ to Deliver Packages (PDF)
Source: U.S. Postal Service, Office of Inspector General

You know those cars with goofy-looking pink mustaches attached to their grills? They’re part of the Lyft ride – sharing network , and their fuzzy pink fronts are among the most recognizable emblems of a potentially disruptive shift in the way people and stuff move from here to there . Through Lyft, ordinary drivers can effectively turn their vehicles into taxis, giving inexpensive rides to strangers who find them with a few taps of a smartphone app. Lyft is just one of several similar services that are exploding in popularity and becoming a serious threat to traditional taxi and limous ine services .

A parallel phenomenon is emerging in the package delivery space. Tech – savvy upstarts are rolling out ambitious plans to use amateurs to deliver packages and merchandise more quickly and cheaply than the Postal Service, FedEx, and UPS. Th is new class of logistics , known as crowdshipping or crowdsourced delivery, doesn’t require processing facilities or fleets of trucks, and can be scaled quickly and cheaply. The movement is still in its early stages. As it matures, it may have profound implications for the Postal Service.

USPS OIG — Audit Report: Address Management System Data

March 5, 2014 Comments off

Audit Report: Address Management System Data (PDF)
Source: U.S. Postal Service, Office of Inspector General

BACKGROUND:
The U.S. Postal Service uses Address Management System data to deliver mail to more than 127 million addresses in the U.S. Address information is critical to processing mail through automation to reduce delivery costs. The nation relies on the Postal Service to maintain accurate addresses to enable effective commerce and ensure customers receive quality service.

Carriers help maintain address quality by observing address changes on their routes, noting them in their edit books, and submitting them to update the Address Management System. The Postal Service’s Address Quality Improvement Process identifies routes with address errors requiring review.

Our objective was to assess the effectiveness of efforts to ensure the accuracy of address data in the Postal Service’s Address Management System.

WHAT THE OIG FOUND:
The Postal Service’s efforts to reduce address database errors were ineffective. The reported address errors increased from 267,478 in fiscal year (FY) 2011 to 430,843 in FY 2013, primarily because carriers did not update edit books consistently and management did not conduct necessary street reviews. The Postal Service reduced its emphasis on ensuring address accuracy by initially reducing the number of address management specialists by nearly 40 percent and then reclassifying the specialist position from non-bargaining to bargaining. Further, the Postal Service did not have a formal standardized training program or a follow-up process to ensure compliance.

We estimated address corrections costing about $14 million were not made to the Address Management System in FYs 2012 and 2013. Effective controls over address corrections would increase delivery efficiency and avoid future costs of about $16 million for FYs 2014 and 2015. Incorrect addresses increase business mailers’ costs to process returned mail. Inaccuracies could also cause mailers to lose confidence in the effectiveness of mail, which could significantly reduce postal revenue.

WHAT THE OIG RECOMMENDED:
We recommended the vice president, Delivery and Post Office Operations, in coordination with the vice president, Product Information, establish deadlines for edit book updates, develop a formal training program, and update supervisor training. We also recommended establishing a follow-up process that ensures that address errors are corrected using Address Quality Improvement Process reports and that necessary street reviews are completed.

USPS OIG — Revenue Performance to Plan for Fiscal Years 2012 and 2013

March 4, 2014 Comments off

Revenue Performance to Plan for Fiscal Years 2012 and 2013 (PDF)
Source: U.S. Postal Service, Office of Inspector General

The U.S. Postal Service generated more than $65 billion in operating revenue1 during both fiscal years (FY) 2012 and 2013. Revenue was mainly derived from two key channels: (1) commercial2—71 percent of operating revenue and (2) retail3—28 percent of operating revenue.4 The Postal Service tracks revenue across a host of categories within these revenue channels, including specific products, such as First-Class™ Mail; services, such as Post Office Box rental; and locations, such as walk-in-revenue at retail counters.

This paper analyzes the Postal Service’s revenue performance for FYs 2012 and 2013. The Postal Service had $65.89 billion in operating revenue in FY 2013, which exceeded its plan by about $1.2 billion. Most notably, the Postal Service exceeded its commercial revenue plan by about $1 billion. These results followed its FY 2012 performance, in which its operating revenue of $65.2 billion exceeded its plan by about $1.4 billion, mostly due to its retail revenue exceeding plan by about $1.4 billion. We are conducting two audits expected to be issued in spring 2014, which will provide additional details related to the Postal Service’s revenue performance. We will be performing a detailed assessment of the Postal Service’s revenue and cost forecasting models later in 2014.

USPS OIG — Inbound China ePacket Costing Methodology

March 3, 2014 Comments off

Inbound China ePacket Costing Methodology (PDF)
Source: U.S. Postal Service, Office of Inspector General

The Postal Service did not isolate the cost of China ePackets, which limits its ability to establish effective pricing strategies. Although China Post sorts and dispatches ePackets separately from other mailpieces, the Postal Service did not calculate ePacket cost data separately from other letter post mailpieces or report it separately in the annual performance report to the Postal Regulatory Commission.

ePacket volume and revenue have increased, but the Postal Service still lost at least $39 million during FYs 2011 and 2012. Until accurate costs for ePackets can be identified and used as a basis for pricing, the risk of revenue loss for ePackets remains high.

The Postal Service could also pursue a product classification change for inbound letter post packets, which could increase revenue from China Post and other business partners in emerging global markets.

USPS OIG: Management Alert – Risks Associated With CB Richard Ellis, Inc. Contract

February 24, 2014 Comments off

USPS OIG: Management Alert – Risks Associated With CB Richard Ellis, Inc. Contract (PDF)
Source: U.S. Postal Service, Office of Inspector General

As a result of our audit and ongoing concerns surrounding the CBRE contract, we have identified additional informa tion that increases the financial risks to the Postal Service . Specifically, Postal Service officials modified the contract in June 2012 to allow CBRE to negotiate on behalf of the Postal Service as well as prospective buyers and lessors in the same real estate transaction . Also, CBRE was responsible for soliciting appraisals to determine the fair market value of the properties that it then sells and leases.

The contract modification also requires CBRE to notify the Postal Service of any actual or potential conflicts of interest, such as owning or having an interest in a property that may be part of a Postal Service real estate transaction. To date, CBRE has not notified the Postal Service of any such conflicts. Given the multiple roles CBRE plays within the real estate industry , the Postal Service should take steps to lessen the potential for CBRE to engage in transactions that create conflicts of interest. CBRE conflicts of interest could lead to financial loss to the Postal Service and decrease public tr ust in the Postal Service’s brand.

New From the GAO

February 10, 2014 Comments off

New From the GAO
Source: Government Accountability Office

Reports

1. Troubled Asset Relief Program: More Efforts Needed on Fair Lending Controls and Access for Non-English Speakers in Housing Programs. GAO-14-117, February 6.
http://www.gao.gov/products/GAO-14-117
Highlights - http://www.gao.gov/assets/670/660711.pdf

2. Economic Development Administration: Documentation of Award Selection Decisions Could Be Improved. GAO-14-131, February 6.
http://www.gao.gov/products/GAO-14-131
Highlights - http://www.gao.gov/assets/670/660724.pdf

3. U.S. Postal Service: Actions Needed to Strengthen the Capital Investment Process. GAO-14-155, January 7.
http://www.gao.gov/products/GAO-14-155
Highlights - http://www.gao.gov/assets/670/660032.pdf

Testimonies

1. Border Security: DHS Needs to Strengthen Its Efforts to Modernize Key Enforcement Systems, by David A. Powner, director, information technology management issues, before the Subcommittee on Oversight and Management Efficiency, House Committee on Homeland Security. GAO-14-342T, February 6.
http://www.gao.gov/products/GAO-14-342T
Highlights - http://www.gao.gov/assets/670/660705.pdf

2. Entrepreneurial Assistance: Opportunities Exist to Improve Collaboration and Performance Management for Financial Assistance Programs, by William B. Shear, director, financial markets and community investment, before the Subcommittee on Agriculture, Energy, and Trade, House Committee on Small Business. GAO-14-335T, February 6.
http://www.gao.gov/products/GAO-14-335T
Highlights - http://www.gao.gov/assets/670/660707.pdf

Reissued Report

1. Medicaid Prescription Drugs: CMS Should Implement Revised Federal Upper Limits and Monitor Their Relationship to Retail Pharmacy Acquisition Costs. GAO-14-68, December 19.
http://www.gao.gov/products/GAO-14-68
Highlights – http://www.gao.gov/assets/660/659834.pdf

This report was revised on February 6, 2014 to correct the omission of reprinting written comments from the Department of Health and Human Services (HHS) on a draft report. A copy of the HHS’s written comments was inserted in appendix V.

Providing Non-Bank Financial Services for the Underserved

January 29, 2014 Comments off

Providing Non-Bank Financial Services for the Underserved
Source: U.S. Postal Service, Office of Inspector General

More than a quarter of Americans live partially or completely without access to mainstream financial services and are often forced to rely on costly services like payday loans or check cashing to cover their everyday expenses. These households spent $89 billion in 2012 just on fees and interest – an average of almost 10 percent of their income.

A new Postal Service Office of Inspector General white paper explores how the U.S. Postal Service could offer a suite of non-bank financial services to help the financially underserved gain more financial stability and stay connected to the emerging digital economy. The paper examines how the Postal Service could partner with banks and other organizations to develop such services, which could help banks connect with new customers. The Postal Service already provides non-bank financial services like money orders and international money transfers, and many American families could benefit if the Postal Service expanded its offerings.

Around the world, financial services are the single biggest driver for new revenue for postal operators, and the conditions may be ripe for similar success for the U.S. Postal Service. If just 10 percent of the money underserved Americans currently spend on alternative financial services were instead spent on more affordable products from the Postal Service, it could generate some $8.9 billion in new revenue.

Universal Postal Service in Major Economies

November 26, 2013 Comments off

Universal Postal Service in Major Economies
Source: U.S. Consumer Postal Council

Faced with a changing global marketplace with new technologies and enhanced world-wide connectivity, postal operators are adapting their business models. Where this often uneven evolution has been successful, it is characterized by three primary strategies: 1) liberalization, 2) diversification of revenue sources and 3) rethinking universal service requirements. These three best practices have allowed the world’s largest national posts to remain both relevant and fiscally solvent despite declining service demands and global economic recession.

Declining mail volume, independent of economic growth, has driven changes in business models. One study noted a 5.6 percent annual decline globally in mail volume since 2009, although declines have been uneven across different markets. The United States Postal Service has observed a 38 percent reduction in single-piece first class mail, its highest-profit offering, over the past five years, forcing lawmakers and the Service’s management to reconsider its business plans and look at universal service obligations from a different perspective.

This report outlines major dynamics and strategies characterizing universal service across the world’s largest postal markets, comprising 96 percent of global postal revenues, and 70 percent of domestic mail volume, with an emphasis on how they can be expected to impact consumers.

Every national post faces unique demands, obligations and challenges — and so there is no “silver bullet” for restoring postal financial stability. Some countries are enacting tighter regulations and fees in response to changing mail trends, while others are relaxing regulations and fees. But as this report demonstrates, the experience of other national posts can inform decisions going forward, so that countries can build on past successes and avoid missteps.

USPS OIG — Noncompetitive Purchasing Practices: Audit Report

September 30, 2013 Comments off

Noncompetitive Purchasing Practices: Audit Report (PDF)
Source: U.S. Postal Service, Office of Inspector General

Background
Contract competition allows the U.S. Postal Service to solicit suppliers to obtain the best quality goods and services at a fair and reasonable price. According to Postal Service policy, when contracts are awarded without competition, a noncompetitive purchase request must justify the reason not to compete. The competition advocate, responsible for challenging barriers to competition, must review such requests valued at $1 million or more. Postal Service contracting officials made 1,682 noncompetitive purchases valued at $1.3 billion during fiscal years 2011 and 2012.

Price and cost analyses are key factors in achieving fair and reasonable prices. Price analysis is evaluating a proposed price without evaluating its separate cost components, while cost analysis is an assessment of the direct and indirect costs leading to the final price. Our objectives were to determine whether Postal Service contracting officials conducted a sufficient price or cost analysis to support the reasonableness of noncompetitive contract prices and to assess the associated noncompetitive justifications.

What the OIG Found
Contracting officials did not provide documentation to support price or cost reasonableness and justifications to award noncompetitive purchases for 21 of 56 purchases (or 38 percent of purchases) valued at $37,064,806. Employees did not maintain sufficient documentation to support price and cost analyses, were unaware of policy, did not explore all alternatives practicable in their justifications not to compete purchases, and did not always obtain required contract documents from international suppliers due to cultural and language barriers. Further, instructions on emergency noncompetitive contracts did not include clear guidelines for contract documentation requirements. If contracting officials do not conduct price or cost analyses and adequately assess noncompetitive justifications, there is an increased risk that the Postal Service will not obtain fair and reasonable prices when purchasing products and services. We statistically projected at least $210 million in unsupported questioned costs.

What the OIG Recommended
We recommended that management instruct employees to include required documentation in contract files, reiterate contracting policy, promote increased competition, clarify guidance on emergency noncompetitive contracts, and explore opportunities to reduce cultural and language barriers with international suppliers.

See also: Postal Service Purchasing Policies’ Impact on Defective Pricing Fraud Cases (PDF)

New From the GAO

September 26, 2013 Comments off

New GAO Reports and Testimonies
Source: Government Accountability Office

Reports

1. Federal Information Security: Mixed Progress in Implementing Program Components; Improved Metrics Needed to Measure Effectiveness. GAO-13-776, September 26.
http://www.gao.gov/products/GAO-13-776
Highlights - http://www.gao.gov/assets/660/658202.pdf

2. Public Transit: Transit Agencies’ Use of Contracting to Provide Service. GAO-13-782, September 26.
http://www.gao.gov/products/GAO-13-782
Highlights - http://www.gao.gov/assets/660/658172.pdf

Related Product

Public Transit: Survey of Public Transit Agency Officials on Contracting Out Public Transit Operations and Other Services. GAO-13-824SP, September 26.
http://www.gao.gov/products/GAO-13-824SP

3. Prepositioned Stocks: Inconsistencies in DOD’s Annual Report Underscore the Need for Overarching Strategic Guidance and Joint Oversight. GAO-13-790, September 26.
http://www.gao.gov/products/GAO-13-790
Highlights - http://www.gao.gov/assets/660/658200.pdf

4. Defense Acquisitions: Navy Strategy for Unmanned Carrier-Based Aircraft System Defers Key Oversight Mechanisms. GAO-13-833, September 26.
http://www.gao.gov/products/GAO-13-833
Highlights - http://www.gao.gov/assets/660/658237.pdf

5. IRS 2014 Budget: Improvements Made to Budget Request and Cost Estimate, but Further Actions Needed. GAO-13-835, September 26.
http://www.gao.gov/products/GAO-13-835
Highlights - http://www.gao.gov/assets/660/658224.pdf

6. U.S. Postal Service: Information on Workforce Injuries Arising During Mail Delivery. GAO-13-847R, September 26.
http://www.gao.gov/products/GAO-13-847R

Testimonies

1. U.S. Postal Service: Health and Pension Benefits Proposals Involve Trade-offs, by Frank Todisco, chief actuary, applied research and methods, and John E. Dicken, director, health care, before the Senate Committee on Homeland Security and Governmental Affairs. GAO-13-872T, September 26.
http://www.gao.gov/products/GAO-13-872T
Highlights - http://www.gao.gov/assets/660/658180.pdf

2. Border Security: Additional Actions Needed to Improve Planning for a Biometric Air Exit System, by Rebecca Gambler, director, homeland security and justice, before the Subcommittee on Border and Maritime Security, House Committee on Homeland Security. GAO-13-853T, September 26.
http://www.gao.gov/products/GAO-13-853T

New From the GAO

August 19, 2013 Comments off

New GAO Report
Source: Government Accountability Office

U.S. Postal Service: Proposed Health Plan Could Improve Financial Condition, but Impact on Medicare and Other Issues Should Be Weighed before Approval. GAO-13-658, July 18.
http://www.gao.gov/products/GAO-13-658
Highlights - http://www.gao.gov/assets/660/656010.pdf

A Commonsense Solution for a Stronger Postal Service

August 16, 2013 Comments off

A Commonsense Solution for a Stronger Postal Service
Source: Greeting Card Association

The Greeting Card Association’s (GCA) comm onsense solution puts the United States Postal Service (USPS) on a path to solvency without cutting critical services or raising rates. There are more than 100 deficit reduction proposals provided by past U.S. Government Accountability Office (GAO) and Office of the Inspector General (OIG) reports that offer numerous combinations for ending the total structur al deficit of the Postal Service. Using these, the GCA shows that the total Postal Service budget deficit can be fixed in three steps:

First , the Postal Service should immediately implement cluster boxes on a widespread national scale using its existing management authority to do so, and drop politically divisive plans for Congress to end Saturday mail delivery;

Second , the Postal Service should work with Congress to achieve a solution to the Retiree Health Benefits system (RHB) prefunding issue by amending the Postal Accountability and Enhancement Act (PAEA) and get this stand-alone legislation passed before the August recess;

Third , the Postal Service should evaluate the impact of the first two steps during the rest of this year and if more deficit reductions are needed, it should first draw from the list of 53 remaining proposals herein that it can implement under its existing management authority.

Cutting services is not the commonsense soluti on when there are so many other options available. The GCA has had a longstanding policy position that the best way to solve the Postal Service’s structural deficit and return it to so lvency is to identify proposals that maintain universal service at affordable prices for every citizen throughout the country.

This analysis demonstrates that cutting essenti al services such as Saturday delivery is not necessary to fix the Postal Service’s budget deficit. There are more than 100 deficit reduction alternatives from recent GAO and Postal Service OIG reports that can replace ending Saturday delivery, either alone or in combination. None raises rates or cuts service. 54 of these proposals would not require any collective bargaining or legislation by Congress.

Rate increases will only add to the problem. Rate increases are counter-productive and will only add to the structural deficit faced by the Postal Service by driving even more postal volume away to competing products and services. Even a relatively modest rate increase would drive one billion pieces of single piece letter mail out of the system.

CRS — The U.S. Postal Service’s Financial Condition: A Primer (July 24, 2013)

August 5, 2013 Comments off

The U.S. Postal Service’s Financial Condition: A Primer (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Since 1971, the U.S. Postal Service (USPS) has been a self-supporting government agency that covers its operating costs with revenues generated through the sales of postage and related products and services.

The USPS is experiencing significant financial challenges. After running modest profits from FY2003 through FY2006, the USPS lost $41.1 billion between FY2007 and FY2012. Since FY2011, the USPS has defaulted on $11.1 billion in payments to its Retiree Health Benefits Fund (RHBF). The agency has reached its $15 billion borrowing limit and is low on cash. In October 2012, the USPS bolstered its liquidity by withdrawing all of the cash from its competitive products fund. At the end of the first half of FY2013, the USPS’s financial condition showed no appreciable signs of improvement. The agency’s revenues and operating expenses were little changed relative to mid-FY2012.

The USPS’s recent financial difficulties are partially the product of falling revenues. The agency has experienced a 21.4% drop in mail volume during the past 10 years. Additionally, during the past decade the “mail mix” has shifted. A growing portion of the mail is advertising mail, which yields low profits. Concurrently, the annual volume of first-class letters, which are highly profitable, has been dropping steadily, at least in part due to mailers shifting to electronic communications. As a result, the Postal Service’s revenues in FY2012 were lower than they were in FY2003. Additionally, the Postal Service’s liquidity has decreased and its debt has increased because of the statutorily mandated payments that must be made to the RHBF each year.

This report discusses these issues in more detail, and it will be updated after the USPS releases its FY2013 third quarter financial results in early August 2013 and in the interim should there be any significant developments.

This report replaces CRS Report R41024, The U.S. Postal Service’s Financial Condition: Overview and Issues for Congress , by Kevin R. Kosar.

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