Postal Service Operations

GAO summarized its recent and current work on the U.S. Postal Service (USPS) and USPS budget and financial issues. GAO will be working on USPS: (1) procedures to acquire land for new post offices; (2) budget estimates for new construction and how actual construction costs compare with initial estimates; (3) proposals to contract for postage stamp production; (4) employee administration policies and compensation programs; and (5) efforts to improve mail service in Northern Virginia. GAO found that: (1) in response to its recommendations, USPS developed procedures for managing the aftermath of traumatic events affecting employees and customers and strengthened its employee screening procedures and personnel management practices; (2) USPS complied with the budget reduction mandate to reduce its operating cost by $160 million and make corresponding payments to the Federal Employees Health Benefits Fund; and (3) it agreed with proposed legislation to restructure and remove USPS from the federal budget and increase the Fund's borrowing authority to $30 million. GAO also found that: (1) the Omnibus Budget Reconciliation Act of 1987 significantly reduced the USPS operating capital investment program, which limited USPS capital commitments to $1.995 billion; (2) USPS had committed $464 million of its capital budget by February 1989; (3) if USPS fulfills its plans to upgrade facilities and equipment by 1993, it will need to raise its borrowing cap or use current operation funds; and (4) the USPS agenda to lengthen the rate cycle and provide the best service would place severe demands on management and labor.