Postal Service

In sponsoring the 1992 Olympic Games, the U.S. Postal Service made a concerted effort to track Olympic revenue and costs. Olympic sponsorship activities were so intertwined and overlapped with other Postal Service operations, however, that GAO could not verify the accuracy of key revenues and costs attributed to the sponsorship. Because certain amounts could not be measured precisely, Postal Service officials and the Postal Inspection Service could not agree on the bottom line. Whether Olympic advertising generated $43.2 million in expedited mail revenue is unknown because there is no generally accepted way to measure the specific effect of advertising on sales revenue. The Postal Service claimed $73.8 million in Olympic stamp revenue from 10 issues sold from 1990 through 1992 that contained the Olympic rings in their design. Not all of this revenue, however, should be attributed to the sponsorship. At least three of the stamps would have been issued anyway without rings, and the value added by the rings is unknown. Two others commemorated the winter and summer games, traditional stamp issues that in the past have had no connection to sponsorship. The Postal Service decided not to charge significant Olympic advertising costs to the sponsorship program. Funds in other advertising budgets that were established or planned when the sponsorship was approved were later used for Olympic advertising but not charged to the program on the basis that this money would have been spent on advertising anyway. Because the amounts at issue are unknown, GAO could not determine whether the Olympic sponsorship produced a profit or loss.

GAO found that: (1) the Postal Service projected that revenues from its Olympic sponsorship would be $177 million, of which 55 percent would be from increased express and priority mail generated from advertising before and during the Olympics and the sale of Olympics stamps; (2) express and priority mail and stamp revenues comprised 86 percent of USPS actual revenues because of problems with other revenue-producing plans; (3) although USPS express and priority mail net revenues increased during its Olympic sponsorship, USPS could not attribute revenue increases or decreases with advertising budgets; (4) revenues from express mail and Olympic stamp sales were overstated; (5) USPS did not charge all Olympic-related costs to the sponsorship; and (6) USPS could not determine whether its Olympic sponsorship had a profit or loss due to the lack of available and accurate data.