The Present State of the U.S. Postal Service

GAO discussed issues pertinent to the operation and management of the U.S. Postal Service. GAO believes that, for the Postal Service to remain at the break-even point or better, a rate increase will be necessary in 1984, which will be consistent with the policy of maintaining a 2- or 3-year interval between rate increases. GAO discussed prior reports concerning employee absences, overtime compensation, and automated mail processing. GAO believes that labor costs will continue to be the most significant influence on the financial condition of the Postal Service. The Postal Service has taken steps to improve controls over employee absences, but it has not fully implemented GAO recommendations on overtime controls. Rather than including overtime as a budget control item, as recommended, the Postal Service will concentrate on giving managers better information to make effective overtime decisions. GAO believes that, if identified problems can be overcome, automated mail processing will save much work, but uncertainties about equipment performance need to be resolved. In addition, controls over the protection of revenue may be needed to ensure that the Postal Service does not lose significant revenue by erroneously granting rate reductions under its rate incentive program.