U.S. Postal Service

The Postal Service discounts postage rates to customers who barcode and presort their business mail before submitting it in bulk quantities to the Service for processing. GAO reported in 1996 that the Service lacked adequate controls to ensure that customers had properly prepared their business mail and were, in fact, eligible to receive the discounted postal rates. (See GAO/GGD-96-126.) This follow-up report found that the Service made changes to its controls over the acceptance of business mail. These changes are generally along the lines that GAO recommended in 1996, and its controls overall appear to have improved. However, the Service lacks information on how well its controls are working Servicewide and cannot guarantee that it is collecting all the revenue due from its business mail operations.

GAO noted that: (1) the Service made changes to its controls over the acceptance of business mail; (2) those changes are generally along the lines that GAO recommended in 1996 and its controls overall appear to have improved; (3) however, the Service lacks information on how well its controls are working Servicewide and thus cannot ensure that it is collecting all the revenue due from its business mail operations; (4) since GAO's 1996 report, the Service has: (a) developed and implemented a risk-based approach for verifying the eligibility of high-risk customers to receive discounted postage rates; (b) made changes to its presort verification, supervisory review, and documentation requirements to help provide more assurance that these functions are performed; (c) changed its business mail acceptance-control procedures and training guidelines to help supervisors and staff perform their tasks properly and made key tools available to help them more accurately determine customers' eligibility for specific postage discounts; (d) developed information sources for managers to use in evaluating business mail acceptance controls, procedures, staffing, and training; and (e) incorporated reviews of its business mail operations into a Servicewide effort to protect revenue and obtain all compensation due for its services and products; (5) on the basis of GAO's evaluation of the Service's new business mail acceptance control process, discussions with Service officials, observations of acceptance procedures at eight business mail facilities, and review of Postal Inspection Service audit reports, GAO believes that the changes the Service made to its business mail procedures and operations help to prevent revenue losses; (6) however, GAO could not determine whether all of these changes are working Servicewide because data needed to make such a determination were not available; (7) neither the results of GAO's work or the work of the Inspection Service that GAO reviewed can be projected to the universe of Service business mail facilities; and (8) however, there is sufficient evidence that the Service has not fully addressed GAO's 1996 recommendations that it ensure that required supervisory reviews are performed and that it develop information for evaluating the adequacy of its business mail acceptance controls.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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