Financial Performance of the United States Postal Service

GAO compared the U.S. Postal Service's (USPS) projected and actual fiscal year (FY) 1989 revenues and costs. GAO noted that: (1) USPS accurately projected its FY 1989 revenue requirement of about $38.78 billion; (2) the USPS failure to accomplish anticipated cost reductions was the primary cause of the $1.6-billion FY 1989 cost overrun; (3) although USPS installed labor-saving equipment, mail clerk and handler work hours exceeded estimated costs by $761 million; (4) USPS did not adequately plan its use of the surplus work hours it anticipated from its increased use of automated systems; (5) USPS exceeded its cost estimates for rural mail carriers, administration and regional operations, and depreciation and service-wide expenses by $181.9 million, $447 million, and $105 million, respectively; (6) the Postal Rate Commission did not examine USPS cost savings estimates and assumptions during its review of the USPS request for a general rate increase; (7) the USPS FY 1989 actual profit of $61 million was significantly below its anticipated profit of $600 million; and (8) USPS projected that it would have a $1.6-billion deficit for FY 1990.