Breast Cancer Research Stamp
Effective Fund-Raiser but Better Reporting and Cost-Recovery Criteria Needed
Gao ID: GAO-03-1021 September 30, 2003
In America, breast cancer is reported as the second leading cause of cancer deaths among women. Given this statistic, the importance of finding a cure cannot be overemphasized. To supplement the billions of federal dollars being spent on breast cancer research, Congress passed legislation creating the Breast Cancer Research Semipostal (BCRS) to increase public awareness of the disease and allow the public to participate directly in raising funds for such research. Since the BCRS was the first semipostal issued by the Postal Service, Congress mandated, and GAO issued, a report in April 2000 on the BCRS' cost, effectiveness, and appropriateness as a fund-raiser. After the report, Congress extended the BCRS sales period through 2003. As mandated, this report updates GAO's prior work as Congress considers another extension to the BCRS sales period.
Although the U.S. Postal Service (the Service) has not tracked or estimated all costs associated with the BCRS program, it reported that the bulk of BCRS costs, from inception through May 16, 2003, were about $9.5 million. In April 2000, GAO recommended that the Service issue BCRS cost-recovery regulations and make available cost data and analyses to provide postal ratepayers assurance they were not involuntarily subsidizing BCRS costs. The Service issued regulations in July 2000, but it has not yet submitted the recommended data and analyses to Congress. Service officials attributed the lack of providing Congress with this information to administrative oversight and other factors, but said they would provide Congress with this information as soon as practicable. In 2001, the Service amended its BCRS regulations stating that cost-recovery determinations would be made using baseline costs for comparable commemorative stamps. GAO, however, is concerned that the regulations can be interpreted as not requiring the Service to provide for baseline comparisons for certain BCRS costs, e.g., printing, sales, and distribution, although the Stamp Out Breast Cancer Act states that reasonable costs attributable to the BCRS in these areas should be recouped. The Service has not established baseline costs for these categories. Without these baselines, the Service lacks assurance that it is identifying and recouping excess costs from BCRS surcharge revenue. The BCRS continues to be an effective means of raising funds for breast cancer research. Sales have fluctuated, but the BCRS has raised over $30 million for research since it was issued in July 1998. NIH and DOD--recipients of research funds generated by the BCRS--are not subject to the same statutory reporting requirements as agencies that are to receive funds generated by semipostals issued under the Semipostal Authorization Act. Such agencies are required to submit an annual report to Congress on the amount of funds received, how the funds were used, and accomplishments. The public and key stakeholders GAO spoke with believe it is appropriate for the Service to issue semipostals.
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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GAO-03-1021, Breast Cancer Research Stamp: Effective Fund-Raiser but Better Reporting and Cost-Recovery Criteria Needed
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Report to Congressional Committees:
September 2003:
Breast Cancer Research Stamp:
Effective Fund-Raiser, but Better Reporting and Cost-Recovery Criteria
Needed:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-1021]:
GAO Highlights:
Highlights of GAO-03-1021, a report to the Chairmen and Ranking
Minority Members of the Senate Committee on Governmental Affairs, and
the House Committee on Government Reform
Why GAO Did This Study:
In America, breast cancer is reported as the second leading cause of
cancer deaths among women. Given this statistic, the importance of
finding a cure cannot be overemphasized. To supplement the billions of
federal dollars being spent on breast cancer research, Congress passed
legislation creating the Breast Cancer Research Semipostal (BCRS) to
increase public awareness of the disease and allow the public to
participate directly in raising funds for such research.
Since the BCRS was the first semipostal issued by the Postal Service,
Congress mandated, and GAO issued, a report in April 2000 on the BCRS‘
cost, effectiveness, and appropriateness as a fund-raiser. After the
report, Congress extended the BCRS sales period through 2003. As
mandated, this report updates GAO‘s prior work as Congress considers
another extension to the BCRS sales period.
What GAO Found:
Although the U.S. Postal Service (the Service) has not tracked or
estimated all costs associated with the BCRS program, it reported that
the bulk of BCRS costs, from inception through May 16, 2003, were
about $9.5 million. In April 2000, GAO recommended that the Service
issue BCRS cost-recovery regulations and make available cost data and
analyses to provide postal ratepayers assurance they were not
involuntarily subsidizing BCRS costs. The Service issued regulations
in July 2000, but it has not yet submitted the recommended data and
analyses to Congress. Service officials attributed the lack of
providing Congress with this information to administrative oversight
and other factors, but said they would provide Congress with this
information as soon as practicable. In 2001, the Service amended its
BCRS regulations stating that cost-recovery determinations would be
made using baseline costs for comparable commemorative stamps. GAO,
however, is concerned that the regulations can be interpreted as not
requiring the Service to provide for baseline comparisons for certain
BCRS costs, e.g., printing, sales, and distribution, although the
Stamp Out Breast Cancer Act states that reasonable costs attributable
to the BCRS in these areas should be recouped. The Service has not
established baseline costs for these categories. Without these
baselines, the Service lacks assurance that it is identifying and
recouping excess costs from BCRS surcharge revenue.
The BCRS continues to be an effective means of raising funds for
breast cancer research. Sales have fluctuated, but the BCRS has raised
over $30 million for research since it was issued in July 1998. NIH
and DOD”recipients of research funds generated by the BCRS”are not
subject to the same statutory reporting requirements as agencies that
are to receive funds generated by semipostals issued under the
Semipostal Authorization Act. Such agencies are required to submit an
annual report to Congress on the amount of funds received, how the
funds were used, and accomplishments.
The public and key stakeholders GAO spoke with believe it is
appropriate for the Service to issue semipostals.
What GAO Recommends:
GAO recommends that the Service reexamine and, as necessary, revise
its BCRS cost-recovery regulations. Also, should Congress decide to
extend the BCRS sales period, GAO suggests that Congress consider
establishing annual reporting requirements for the National Institutes
of Health (NIH) and the Department of Defense (DOD). In commenting on
a draft of this report, the Service said it would reexamine its BCRS
cost-recovery regulations.
www.gao.gov/cgi-bin/getrpt?GAO-03-1021.
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Bernard L. Ungar on (202) 512-2834 or at
ungarb@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Reported Monetary and Other Resources Devoted to the BCRS Program:
Effectiveness of the BCRS as a Fund-Raiser:
Appropriateness of Using Semipostals as a Means of Fund-Raising:
Conclusions:
Matter for Congressional Consideration:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: National Institutes of Health Breast Cancer Research
Awards Funded with Proceeds from the BCRS' Surcharge Revenue:
Appendix III: Department of Defense Breast Cancer Research Awards
Funded with Proceeds from the BCRS' Surcharge Revenue:
Appendix IV: Comments from the U.S. Postal Service:
Appendix V: Contact and Staff Acknowledgments:
GAO Contact:
Acknowledgments:
Tables:
Table 1: Cost of Operating and Administering the BCRS Program, from
Inception through May 16, 2003, as Reported by the Service:
Table 2: BCRS Costs through May 16, 2003, and the Allocation of Those
Costs between the First-Class Postage Rate and the BCRS' Surcharge
Revenue:
Table 3: Transfers Made to NIH and DOD for Breast Cancer Research:
Table 4: NIH/NCI Breast Cancer Research Awards Funded with Proceeds, as
of April 2003, from BCRS Sales:
Table 5: DOD Breast Cancer Research Awards Funded with Proceeds, as of
April 2003, from BCRS Sales:
Figures:
Figure 1: Reproduction of the Breast Cancer Research Semipostal:
Figure 2: Reproduction of the Heroes of 2001 Semipostal:
Figure 3: Reproduction of the Stop Family Violence Semipostal:
Figure 4: Various Postal Service Sources for Purchasing the BCRS:
Figure 5: Number of BCRS and Heroes Semipostals Sold by Postal Quarter:
Abbreviations:
ASM: Administrative Support Manual:
CPS: Current Population Survey:
BCRS: Breast Cancer Research Semipostal:
DOD: Department of Defense:
ICR: International Communications Research:
NBCC: National Breast Cancer Coalition:
NCI: National Cancer Institute:
NIH: National Institutes of Health:
PQ: Postal Quarter:
RDD: Random Digit Dial:
Letter September 30, 2003:
The Honorable Susan M. Collins
Chairman
The Honorable Joseph I. Lieberman
Ranking Minority Member
Committee on Governmental Affairs
United States Senate:
The Honorable Thomas M. Davis
Chairman
The Honorable Henry A. Waxman
Ranking Minority Member
Committee on Government Reform
House of Representatives:
In the United States, breast cancer is reported as the second leading
cause of cancer deaths among women. There are more than 2 million women
today in the United States who have been diagnosed with breast cancer,
and it has been reported that another 1 million women do not know they
have it. Annually, nearly $7 billion is spent on the treatment of
breast cancer. Given these statistics, the importance of research to
find a cure for breast cancer cannot be over emphasized. In the past 5
years alone, the federal government has spent about $3 billion on
breast cancer research. To supplement these federal dollars, Congress
passed legislation creating the Breast Cancer Research Semipostal
(BCRS) to increase public awareness of the disease and allow the public
to participate directly in raising funds for such research.[Footnote 1]
This report, mandated by Congress, is a follow-up to our April 2000
report on the Postal Service's Breast Cancer Research
Semipostal.[Footnote 2] The Stamp Out Breast Cancer Act, Public Law
105-41, August 13, 1997, mandated our 2000 report. The act required
that we issue a report to Congress on the BCRS's effectiveness and
appropriateness and the U.S. Postal Service's (the Service) costs
associated with carrying out the act. In general, we reported that the
BCRS had been an effective fund-raiser, and most of the public and key
stakeholders viewed the BCRS as an appropriate way of raising funds for
a nonpostal purpose. We expressed some concerns, however, about the
Service's identification and recovery of costs associated with carrying
out the act.
Soon after we issued our April 2000 BCRS report, Congress enacted the
Semipostal Authorization Act, Public Law 106-253, dated July 28, 2000.
Among other things, the act requires that we update Congress on the
BCRS and address at least the same matters we addressed in our earlier
report. This report responds to that mandate and addresses:
* the monetary and other resources the Service has expended in
operating and administering the BCRS program,
* the effectiveness of using the BCRS as a means of fund-raising, and:
* the appropriateness of using the BCRS as a means of fund-raising.
We also provide information on the status of recommendations made to
the Postmaster General in our April 2000 BCRS report. In essence, we
recommended that the Service issue regulations formalizing its criteria
for making BCRS cost-recovery decisions and make BCRS cost data and
analyses available to assure postal ratepayers that they were not
involuntarily contributing funds to breast cancer research.
The BCRS was the first semipostal ever issued by the Postal Service. It
currently sells for 45 cents, and is valid for the 37-cent, First-Class
postage rate, leaving 8 cents as surcharge revenue. The Stamp Out
Breast Cancer Act provides that the Service is to deduct from the
surcharge revenue its reasonable costs incurred in carrying out the
act. In general, the Service has interpreted reasonable costs to mean
costs incurred that are over and above the costs normally incurred with
a comparable commemorative stamp.[Footnote 3] After deducting its
reasonable costs, the Service is to remit the remaining proceeds from
the BCRS surcharge revenue to the National Institutes of Health (NIH)
and the Department of Defense (DOD) for breast cancer research. Seventy
percent of the net proceeds go to NIH, with the remaining 30 percent
going to DOD's medical research program.
The use of semipostals to raise funds for specific purposes is on the
rise. Since our April 2000 BCRS report, Congress has twice extended the
sales period for the BCRS, required the introduction of two more
semipostals, and given the Service specific authority to consider and
issue future semipostals.[Footnote 4] Additionally, as of August 2003,
Congress was considering legislation that would require introduction of
two more semipostals and extend the sales period of the BCRS past its
scheduled end date of December 31, 2003.[Footnote 5]
In doing this work, we reviewed and updated the information included in
our April 2000 BCRS report to reflect the current situation. For this
report, we mainly focused on the Service's efforts to identify and
recoup its reasonable costs from the BCRS surcharge revenue and ensure
that postal ratepayers were not subsidizing the BCRS. We also
identified postal staff resources devoted to the BCRS and interviewed
key stakeholders regarding the effectiveness and appropriateness of
using the BCRS as a means of fund raising. Additionally, we
commissioned a survey to obtain the public's opinion regarding the
BCRS, and semipostals in general; and we interviewed NIH and DOD
officials about how funds generated from BCRS sales are being used for
breast cancer research. Finally, we researched the U.S. Code and Postal
Service regulations to identify changes that have occurred since our
April 2000 report that either affected the BCRS directly or the
semipostal program in general. Appendix I contains more information on
our objectives, scope, and methodology.
We requested comments on a draft of this report from the Postmaster
General. The Service's comments are discussed at the end of this letter
and reprinted in appendix IV.
Results in Brief:
Although the full cost of the BCRS program is not known, the Service
reported that the bulk of BCRS costs from inception through May 16,
2003, were about $9.5 million. The Service does not track BCRS costs
that it considers to be inconsequential, such as invoices less than
$3,000.[Footnote 6] The Service also does not identify costs that it
would have incurred whether or not the BCRS program had been
established, such as overhead. Additionally, the Service reported that
no staff have been hired because of the BCRS program, nor have any
staff been dedicated to work full-time on the program. The Service also
reported that $8.7 million of the $9.5 million in BCRS costs were
recovered through the First-Class postage portion of the BCRS. The
remaining $853,000 in BCRS costs was recouped from the BCRS' surcharge
revenue, and the net surcharge revenue--over $30 million--was to be
used to fund breast cancer research. In response to a recommendation we
made in our April 2000 BCRS report, the Service issued BCRS regulations
in July 2000. Those regulations specified that the Service was to
recover incremental costs from the BCRS' surcharge revenue. The Service
amended those regulations in 2001, stating generally that the Service
would recover from the BCRS' surcharge revenue costs in excess of those
normally incurred with comparable commemorative stamps, i.e., baseline
costs. We are concerned, however, that the regulations can be
interpreted as not requiring the Service to establish baseline
comparisons for certain BCRS costs, e.g., printing, sales, and
distribution, although the Stamp Out Breast Cancer Act specifically
states that reasonable costs in these areas attributable to the BCRS
should be recouped from the surcharge revenue. The Service believes its
2001 amendments to its regulations already provide a means for
recovering all excess costs. To support its view, the Service provided
us with the printing costs for various commemorative stamps. However,
the Service did not provide us with any baseline BCRS cost data.
Without baselines, the Service lacks assurance that it is identifying
and recouping excess costs from BCRS surcharge revenue. Additionally,
in our April 2000 report, we recommended that the Service provide
Congress with the BCRS cost data and analyses necessary to provide
assurance that postal ratepayers are not involuntarily contributing
funds to breast cancer research. Although the Service committed to
Congress to provide it with the data and analyses, the Service has not
yet done so. Service officials attributed the lack of providing
Congress with this information to administrative oversight and other
factors. Service officials told us that they plan to reexamine their
BCRS regulations and provide Congress with current BCRS cost data and
analyses as soon as practicable.
The BCRS continues to be an effective means of raising funds for breast
cancer research. Also, as provided for by the Stamp Out Breast Cancer
Act, the BCRS has remained voluntary and convenient. It has remained
voluntary because postal patrons have the option to purchase the BCRS
at 45 cents or a regular First-Class stamp at 37 cents. The BCRS has
remained convenient for most of the public, according to our survey.
Sales have fluctuated, but the BCRS has raised over $30 million for
breast cancer research, net of costs, since it was issued in July 1998.
Key stakeholders said that for the most part, they viewed the BCRS as
an effective fund-raiser, and the public's view of the BCRS was
generally positive as reflected in the results from our survey. As of
September 2003, the Service had transferred to NIH and DOD about $30.8
million from funds raised by the BCRS for breast cancer research. These
federal organizations reported to us that they have established
programs to fund innovative breast cancer research conducted by various
research institutions. The Semipostal Authorization Act, enacted after
the Stamp Out Breast Cancer Act, requires that annual reports be made
to Congress by agencies that are to receive funds from semipostals
issued under the Semipostal Authorization Act. These reports are to
include information on the amount of funds received, how the funds were
used, and any accomplishments that were achieved. NIH and DOD are not
subject to similar reporting requirements.
Most key stakeholders we spoke with and, according to our survey, the
members of the public believe it is appropriate for the Service to
issue the BCRS, as well as other semipostals, to raise funds for
worthwhile causes. The Service, although very supportive of the BCRS,
remains generally opposed to the concept of using semipostals as a
means of fund-raising. Since we issued our April 2000 BCRS report,
Congress has (1) twice extended the sales period for the BCRS, (2)
authorized two additional semipostals, and (3) authorized the Service
to issue future semipostals. Also, as of August 2003, Congress was
considering legislation establishing two more semipostals and extending
the sales period for the BCRS until December 31, 2005. As of August
2003, the Service had not issued any semipostals of its own choosing
under the authority of the Semipostal Authorization Act and had no
plans to do so until the sales periods for congressionally mandated
semipostals have ended. We believe this position is consistent with the
discretion afforded the Service under the Semipostal Authorization Act.
We are offering one matter for Congress to consider as it debates
whether to further extend the sales period for the BCRS. If Congress
extends the BCRS sales period, it may wish to consider establishing
annual reporting requirements for NIH and DOD similar to those required
of any agency that was to receive funds generated from semipostals
issued under the Semipostal Authorization Act. We reaffirm our previous
recommendation that the Service make available BCRS cost data and
analyses, and we also recommend that the Service reexamine and, as
necessary, revise its cost-recovery regulations.
In commenting on a draft of this report, the Service indicated that it
plans to take appropriate actions to address our recommendations. The
Service said that it would reexamine its BCRS regulations with a view
toward proposing revisions about what costs are to be identified and
recouped from surcharge revenues. The Service also said that it would
make available to Congress and us current BCRS cost data and analyses.
Background:
The Stamp Out Breast Cancer Act (Pub. L. No. 105-41, Aug. 13, 1997)
required that the Postal Service issue its first-ever semipostal--the
BCRS. The Service issued the BCRS on July 29, 1998. The act required
that the BCRS be available for sale for 2 years, but Congress has since
extended the sales period through December 31, 2003.
Semipostals are stamps sold with a surcharge above the First-Class
postage rate with the net surcharge amount going to a designated cause.
The act stipulated that the BCRS surcharge was not to exceed 25 percent
of the First-Class postage rate, which, at the time of issuance, was 32
cents. The act further stipulated that after recovering its reasonable
costs, the Service was to transfer 70 percent of the remaining
surcharge revenue to NIH and 30 percent to DOD for breast cancer
research. The Service's presidentially appointed governors initially
set the price of the BCRS at 40 cents--32 cents for First-Class postage
plus the maximum 25-percent surcharge of
8 cents. Since that time, the price of First-Class postage has
increased to 37 cents, and the price of the BCRS is currently 45
cents.[Footnote 7]
On the day the initial sales period for the BCRS was to end, the
Semipostal Authorization Act (Pub. L. No. 106-253, July 28, 2000) was
enacted, which extended the sales period for the BCRS through July 29,
2002, and granted the Service authority to issue future semipostals of
its own choosing. Additionally, the act required that the Service issue
regulations governing future semipostals aside from the BCRS.
Another act, the Breast Cancer Research Stamp Act of 2001 (Pub. L. 107-
67, Nov. 12, 2001) further extended the sales period for the BCRS and
established new requirements governing the sales price of the
BCRS.[Footnote 8] That act extended the BCRS' sales period through
December 31, 2003, and replaced the maximum 25 percent surcharge with a
minimum 15 percent surcharge that, when added to the First-Class
postage rate, is evenly divisible by five. That is, the BCRS must be
sold for an amount evenly divisible by five and must cost at least 15
percent more than First-Class postage. Specifically, the BCRS is
currently sold for 45 cents, which is evenly divisible by 5; with the
8-cent surcharge, it costs about 22 percent more than the 37-cent
First-Class postage rate. Additional legislation is currently pending
that would extend the sales period for the BCRS through December 31,
2005.
Since the BCRS was issued in 1998, Congress has passed legislation
establishing two additional semipostals. One semipostal is to provide
assistance to the families of emergency relief personnel killed or
permanently disabled in the line of duty in connection with the
terrorist attacks against the United States on September 11, 2001--
commonly referred to as the Heroes of 2001 semipostal. The Service
began selling the Heroes of 2001 semipostal on June 7, 2002, and its
sales are scheduled to end no later than December 31, 2004, in
accordance with the semipostal's authorizing legislation.[Footnote 9]
The other semipostal--commonly referred to as the Stop Family Violence
semipostal--is to help fund domestic violence programs. Legislation
requiring introduction of the Stop Family Violence semipostal specifies
that sales are to begin no later than January 1, 2004, and end no later
than December 31, 2006.[Footnote 10] Legislation was also pending in
Congress at the end of August 2003 to establish semipostals to help
promote childhood literacy and the Peace Corps.[Footnote 11] As of
August 2003, the Service had issued no semipostals that had not been
congressionally mandated.
Images of the BCRS, Heroes of 2001, and Stop Family Violence
semipostals are reproduced as figures 1, 2, and 3, respectively. The
Service plans to begin selling the Stop Family Violence semipostal in
November 2003.
Figure 1: Reproduction of the Breast Cancer Research Semipostal:
[See PDF for image]
[End of figure]
Figure 2: Reproduction of the Heroes of 2001 Semipostal:
[See PDF for image]
[End of figure]
Figure 3: Reproduction of the Stop Family Violence Semipostal:
[See PDF for image]
[End of figure]
For more details about the BCRS and its background, see our April 2000
BCRS report.[Footnote 12] That report also includes information on
semipostals issued by foreign postal administrations.
Reported Monetary and Other Resources Devoted to the BCRS Program:
The full cost of the BCRS program is not known. The Service reported
that the bulk of BCRS costs from inception through May 16, 2003, were
about $9.5 million, most of which were recovered through the First-
Class postage portion of the BCRS. The Service does not track BCRS
costs that it considers to be inconsequential, such as invoices less
than $3,000. The Service also does not identify costs that it would
have incurred whether or not the BCRS program had been established,
such as overhead. Additionally, the Service reported that no staff have
been hired because of the BCRS program, nor have any staff been
dedicated to work full-time on the program.
In response to a recommendation in our April 2000 BCRS report, the
Service issued BCRS cost-recovery regulations in July 2000 and reported
using these regulations, and amendments, to track and allocate BCRS
costs. We are concerned, however, that the regulations can be
interpreted as not requiring the Service to provide baseline
comparisons for certain BCRS costs, e.g., printing, sales, and
distribution, although the Stamp Out Breast Cancer Act specifically
states that reasonable costs in these areas attributable to the BCRS
should be recouped from the BCRS' surcharge revenue. Additionally, in
our April 2000 report, we recommended that the Service make available
to Congress the BCRS cost data and analyses necessary to provide
assurance that postal ratepayers are not involuntarily contributing
funds to breast cancer research. Although the Service committed to
Congress to provide it with the data and analyses, Service officials
told us that for a number of reasons the Service has not yet done so.
In August 2003, Service officials said that they plan to reexamine
their BCRS regulations and, as soon as practicable, provide Congress
with current BCRS data and analyses.
Full BCRS Program Costs Unknown:
Although the full cost of the BCRS program is not known, the Service
reported that the bulk of the program's costs, from inception through
May 16, 2003, were about $9.5 million. These costs do not include (1)
direct costs for items the Service considers to be inconsequential,
such as the cost of items that do not exceed $3,000 per invoice and (2)
indirect costs that the Service would have incurred whether or not the
BCRS program had been established, such as overhead. Additionally, the
$9.5 million does not include any staffing-related costs because,
according to postal officials, no staff were hired for the BCRS program
nor were any staff dedicated full-time to work on the program. These
officials told us that all work associated with the BCRS was absorbed
by existing staff and staff budget--i.e., the Service incurred no
additional staffing-related expenses because of the BCRS. They also
told us that the Service, with the exception of the law department, has
not tracked staff hours devoted to the BCRS because it was not cost-
effective to quantify and recoup inconsequential costs associated with
the BCRS. Because all costs associated with the BCRS were not
identified and tracked, the full cost of operating and administering
the BCRS program is not known.
The reported costs of the BCRS through May 16, 2003, are shown in table
1, broken down by type of cost. In addition to these costs, the Service
could incur additional costs associated with the BCRS before its sales
period ends, which is currently scheduled for December 31, 2003.
Table 1: Cost of Operating and Administering the BCRS Program, from
Inception through May 16, 2003, as Reported by the Service:
Cost item: Stamp design (including market research); Reported cost:
$40,000.
Cost item: Stamp production and printing; Reported cost: $3,597,000.
Cost item: Shipping and distribution; Reported cost: $0[A].
Cost item: Training; Reported cost: $612,000.
Cost item: Selling stamps (including employee salaries and benefits);
Reported cost: $0[B].
Cost item: Withdrawing stamps from sale; Reported cost: $0[C].
Cost item: Destroying unsold stamps; Reported cost: $0[C].
Cost item: Advertising; Reported cost: $888,000.
Cost item: Packaging stamps; Reported cost: $2,723,000.
Cost item: Printing flyers and special receipts; Reported cost:
$238,000.
Cost item: Equipment changes; Reported cost: $359,000.
Cost item: Developing and executing marketing and promotional plans;
Reported cost: $1,006,000.
Cost item: Other cost:
Cost item: Legal; Reported cost: $22,000.
Cost item: Market research; Reported cost: $56,000.
Cost item: Consulting; Reported cost: $8,000.
Cost item: Total; Reported cost: $9,549,000.
Source: U.S. Postal Service.
[A] The Service said that it does not attempt to identify these costs
because shipping and distribution costs incurred for a semiposal are no
different from those normally incurred for comparable stamps.
[B] The Service said that it currently does not have a system in place
to track these costs. According to the Service, it would be
extraordinarily difficult and costly to attempt to study, analyze, and
measure these costs in a live environment; and it also would be
difficult to devise a methodology to estimate such costs because BCRS'
are a small percentage of total stamp sales.
[C] The Service said that it believes these costs would be the same as
those incurred for comparable stamps, but it has not yet incurred any
costs associated with withdrawing stamps from sale or destroying unsold
stamps because the BCRS continues to be offered to the public.
[End of table]
Allocation of BCRS Program Costs between the Postage Portion and
Surcharge Revenue:
Under the cost-recovery regulations the Service applies to the BCRS,
the Service determined that $8.7 million, about 91 percent, of the $9.5
million in BCRS costs were recovered through the First-Class postage
rate. The Service also determined that the remaining $853,000 in costs
were not those normally incurred with a comparable commemorative stamp
and therefore were recovered through the BCRS' surcharge revenue. That
is, about 9 percent of BCRS program costs were recovered through the
surcharge revenue. Table 2 identifies, by cost item, the Service's
reported cost of operating and administering the BCRS program, from
inception through May 16, 2003; and the allocation of those costs
between those covered by the First-Class postage rate and costs that
were recouped from the BCRS' surcharge revenue.[Footnote 13]
Table 2: BCRS Costs through May 16, 2003, and the Allocation of Those
Costs between the First-Class Postage Rate and the BCRS' Surcharge
Revenue:
Cost item[A]: Stamp design (including market research); Reported cost:
$40,000; Allocation of reported cost: Amount reported as having been
covered by the First-Class postage rate: $40,000; Allocation of
reported cost: Amount reported as recouped from the BCRS' surcharge
revenue: $0.
Cost item[A]: Stamp production and printing; Reported cost: $3,597,000;
Allocation of reported cost: Amount reported as having been covered by
the First-Class postage rate: $3,597,000; Allocation of reported cost:
Amount reported as recouped from the BCRS' surcharge revenue: $0.
Cost item[A]: Shipping and distribution; Reported cost: $0[B];
Allocation of reported cost: Amount reported as having been covered by
the First-Class postage rate: $0[B]; Allocation of reported cost:
Amount reported as recouped from the BCRS' surcharge revenue: $0[B].
Cost item[A]: Training; Reported cost: $612,000; Allocation of reported
cost: Amount reported as having been covered by the First-Class postage
rate: $612,000; Allocation of reported cost: Amount reported as
recouped from the BCRS' surcharge revenue: $0.
Cost item[A]: Selling stamps (including employee salaries and
benefits); Reported cost: $0[C]; Allocation of reported cost: Amount
reported as having been covered by the First-Class postage rate: $0[C];
Allocation of reported cost: Amount reported as recouped from the BCRS'
surcharge revenue: $0[C].
Cost item[A]: Withdrawing stamps from sale; Reported cost: $0[D];
Allocation of reported cost: Amount reported as having been covered by
the First-Class postage rate: $0[D]; Allocation of reported cost:
Amount reported as recouped from the BCRS' surcharge revenue: $0[D].
Cost item[A]: Destroying unsold stamps; Reported cost: $0[D];
Allocation of reported cost: Amount reported as having been covered by
the First-Class postage rate: $0[D]; Allocation of reported cost:
Amount reported as recouped from the BCRS' surcharge revenue: $0[D].
Cost item[A]: Advertising; Reported cost: $888,000; Allocation of
reported cost: Amount reported as having been covered by the First-
Class postage rate: $888,000; Allocation of reported cost: Amount
reported as recouped from the BCRS' surcharge revenue: $0.
Cost item[A]: Packaging stamps; Reported cost: $2,723,000; Allocation
of reported cost: Amount reported as having been covered by the First-
Class postage rate: $2,476,000; Allocation of reported cost: Amount
reported as recouped from the BCRS' surcharge revenue: $247,000.
Cost item[A]: Printing flyers and special receipts; Reported cost:
$238,000; Allocation of reported cost: Amount reported as having been
covered by the First-Class postage rate: $0; Allocation of reported
cost: Amount reported as recouped from the BCRS' surcharge revenue:
$238,000[E].
Cost item[A]: Equipment changes; Reported cost: $359,000; Allocation of
reported cost: Amount reported as having been covered by the First-
Class postage rate: $176,000; Allocation of reported cost: Amount
reported as recouped from the BCRS' surcharge revenue: $183,000.
Cost item[A]: Developing and executing marketing and promotional plans;
Reported cost: $1,006,000; Allocation of reported cost: Amount reported
as having been covered by the First-Class postage rate: $851,000;
Allocation of reported cost: Amount reported as recouped from the BCRS'
surcharge revenue: $155,000.
Cost item[A]: Other costs:
Cost item[A]: Legal; Reported cost: $22,000; Allocation of reported
cost: Amount reported as having been covered by the First-Class postage
rate: $0; Allocation of reported cost: Amount reported as recouped from
the BCRS' surcharge revenue: $22,000.
Cost item[A]: Market research; Reported cost: $56,000; Allocation of
reported cost: Amount reported as having been covered by the First-
Class postage rate: $56,000; Allocation of reported cost: Amount
reported as recouped from the BCRS' surcharge revenue: $0.
Cost item[A]: Consulting; Reported cost: $8,000; Allocation of reported
cost: Amount reported as having been covered by the First-Class postage
rate: $0; Allocation of reported cost: Amount reported as recouped from
the BCRS' surcharge revenue: $8,000.
Cost item[A]: Total; Reported cost: $9,549,000; Allocation of reported
cost: Amount reported as having been covered by the First-Class postage
rate: $8,696,000; Allocation of reported cost: Amount reported as
recouped from the BCRS' surcharge revenue: $853,000.
Source: U.S. Postal Service.
[A] The Service recast BCRS costs included in our April 2000 BCRS
report into the current cost item categories and updated costs through
May 16, 2003.
[B] The Service said that it does not attempt to identify these costs
because shipping and distribution costs incurred for a semiposal are no
different than those normally incurred for comparable stamps.
[C] The Service said that it currently does not have a system in place
to track these costs. According to the Service, it would be
extraordinarily difficult and costly to attempt to study, analyze, and
measure these costs in a live environment; and it also would be
difficult to devise a methodology to estimate such costs because BCRS'
are a small percentage of total stamp sales.
[D] The Service said that it believes these costs would be the same as
those incurred for comparable stamps, but it has not yet incurred any
costs associated with withdrawing stamps from sale or destroying unsold
stamps because the BCRS continues to be offered to the public.
[E] The Service said that receipts initially used were in a format
different from standard postal receipts, and the costs were recouped
from the BCRS' surcharge revenue. However, according to the Service,
receipts now used are universally supplied to all offices for general
use, and the printing cost is not considered incremental. Therefore,
costs associated with receipts are no longer recouped from the BCRS'
surcharge revenue.
[End of table]
Service's Approach to Cost Recovery Has Evolved:
In response to a recommendation in our April 2000 BCRS report, the
Service issued BCRS cost-recovery regulations in July 2000, which it
subsequently amended in 2001. At the time of our April 2000 report, the
Service was using informal, evolving criteria to make decisions about
which costs would be recouped from the BCRS' surcharge revenue and had
not issued regulations in this area. In July 2000, the Service issued a
revision to its Administrative Support Manual (ASM) that specified a
"Cost Recovery Policy for the Breast Cancer Research Semipostal Stamp."
The ASM provisions, which are viewed by the Service as part of its
regulations, specified that the Service was to recover BCRS costs that
are determined to be incremental costs from its surcharge
revenue.[Footnote 14] The regulations described some types of costs
that the Service had determined to be incremental to the BCRS. Examples
of such costs included (1) design and production costs in excess of the
cost to produce equivalent stamps; (2) packaging costs in excess of the
cost to package equivalent stamps; and (3) printing costs for items
other than stamps that are specific to the BCRS, such as flyers and
special receipts.
In June 2001, the Service published in the Federal Register its
regulations covering semipostals issued under the Semipostal
Authorization Act. Among those regulations was 39 C.F.R. 551.8, which
established procedures for determining costs to be offset from
semipostal differential revenue. On December 27, 2001, the Postal
Service published a similar version of this regulation in section 645
of the ASM. The ASM regulations were made applicable to semipostals
issued under the Semipostal Authorization Act, as well as the BCRS. The
December 2001 revision to the ASM (hereafter referred to as
regulations) no longer refer to "incremental costs," as was done in the
July 2000 version. The December 2001 regulations state that the Service
is to recover BCRS costs that are determined to be in excess of the
costs normally incurred for commemorative stamps having similar sales;
physical characteristics; and marketing, promotional, and public
relations activities. These regulations prescribe that on the basis of
judgment and available information, the Service is to identify stamp(s)
comparable with the BCRS and create a profile of selected cost
characteristics, thereby establishing a baseline for
cost comparison purposes.[Footnote 15] According to the regulations,
BCRS costs that exceed the baseline costs for comparable commemorative
stamps are to be recovered from the BCRS' surcharge revenue. In May
2003, we asked the Service to provide us the baseline costs for the
comparable stamps being used to determine what costs are to be
recovered from the BCRS' surcharge revenue. In July 2003, the Service
provided us with what it referred to as costs above comparable stamp
costs that were recouped from the BCRS' surcharge revenue and updated
that information in August 2003. However, the Service did not provide
us with the actual baselines used in making the determinations about
which costs were to be recouped from the BCRS' surcharge revenue.
The Service's December 2001 regulations provide guidance regarding its
BCRS cost-recovery criteria. The regulations state that cost items
recoverable from the BCRS' surcharge revenue may include, but are not
limited to, the following:
* packaging costs in excess of the cost to package comparable stamps,
* printing costs of flyers and special receipts,
* costs of changes to equipment,
* costs of developing and executing marketing and promotional plans in
excess of the cost for comparable stamps, and:
* other costs specific to the BCRS that would not normally have been
incurred for comparable stamps.
In addition, the Service's regulations state that BCRS costs that meet
the following criteria will not be tracked:
* costs that the Service determines to be inconsequentially small,
which include those cost items not exceeding $3,000 per invoice;
* costs for which the cost of tracking would be burdensome (e.g., costs
for which the cost of tracking exceeds the cost to be tracked);
* costs attributable to mail to which the BCRS is affixed (i.e., costs
that are attributable to the appropriate class and/or subclass of
mail); and:
* administrative and support costs that the Service would have incurred
whether or not the BCRS program had been established.
The regulations further identify the following BCRS costs--those the
Service would normally incur for comparable stamps--as recovered
through the First-Class postage portion of the BCRS stamp price.
Therefore, baselines have not been established for these costs, which
are as follows:
* stamp design (including market research);
* stamp production and printing;
* stamp shipping and distribution;
* estimated training for field staff, except for special training
associated with semipostals;
* stamp sales (including employee salaries and benefits);
* withdrawal of the stamp issue from sale;
* destruction of unsold stamps; and:
* incorporation of semipostal images into advertising for the Postal
Service as an entity.
BCRS Cost-Recovery Regulations May Not Allow the Service to Identify
and Recoup All Costs Attributable to the BCRS:
The Stamp Out Breast Cancer Act specifically recognizes that printing,
sales, and distribution costs attributable to the BCRS are among the
types of reasonable costs the Service should recover from the BCRS'
surcharge revenue. Section 414 (c) (2) of the act states that the
Service must recover from the BCRS' surcharge revenue "an amount
sufficient to cover reasonable costs . . . in carrying out this
section, including those attributable to the printing, sale, and
distribution of stamps under this section." The Service has determined,
and we have no basis to challenge its discretion in this regard, that
"reasonable costs" are costs in excess of those normally incurred for a
comparable stamp. However, we are concerned that the regulations the
Service issued to implement this requirement can be interpreted as not
requiring the Service to provide baseline comparisons for certain BCRS
costs, e.g., printing, sales, and distribution, although the Stamp Out
Breast Cancer Act specifically states that reasonable costs in these
areas attributable to the BCRS should be recouped from the BCRS'
surcharge revenue. Our concerns with the regulations include the
following
BCRS printing costs: The Service's December 2001 regulations can be
interpreted as not requiring baseline comparisons for BCRS printing
costs. The regulations could be interpreted to mean that all BCRS
printing costs are covered by the First-Class postage portion and
comparisons with baseline costs are not necessary. This interpretation
is supported by the fact that, as of August 2003, the Service had not
established a baseline cost for comparable stamps against which to
compare BCRS printing costs. The Service did, however, provide
information showing that the BCRS' printing costs between 1998 and 2003
ranged from $3.35 per thousand stamps to $7.39 per thousand. The
Service also provided information on printing costs for the three
stamps that it considers comparable with the BCRS. The printing costs
for these three stamps ranged from $11.52 per thousand in 1999 to
$14.34 per thousand in 1997. Additionally, the Service provided
printing costs for various commemorative stamps in 1998 through 2002.
That information would tend to support the view that printing costs for
the BCRS have not exceeded the printing costs for other commemoratives.
Nevertheless, the Service did not establish a baseline for making BCRS
printing cost comparisons. Therefore, the Service has not demonstrated
that its regulations establish an adequate process for ensuring that
excess semipostal costs are identified and recouped from surcharge
revenues. Following its regulations, the Service reported that it did
not recoup from the BCRS' surcharge revenue any of the $3,597,000 it
incurred in BCRS printing costs. Without a comparison between actual
BCRS printing costs and the baseline printing costs for comparable
stamps, the Service lacks assurance that it is identifying and
recouping excess costs from BCRS surcharge revenue.
BCRS sales costs: The Service's December 2001 regulations can be
interpreted as not requiring baseline comparisons for BCRS sales costs.
The regulations can be interpreted to mean that all BCRS sales costs
are covered by the First-Class postage portion and comparisons with
baseline costs are not necessary. As of August 2003, the Service had
not established a baseline cost for comparable stamps against which to
compare BCRS sales costs. Unlike BCRS printing costs, the Service
reported that it did not track BCRS sales costs because they were
"minimal," but it was unable to provide documentation supporting this
position. The Service has reported that the BCRS was available for sale
at over 27,000 post offices across the country, where salaries and
benefits for its clerks average about $30 per hour. Service officials
told us that no staff were hired for the BCRS program nor were any
staff dedicated full-time to work on the program. However, the Service
commented in July 2003 that each semipostal generates sales costs that
it would not incur for commemorative stamps, such as time spent
responding to customer questions about the fund-raising involved. In
addition, the Service has reported that stamp sales costs are 24 cents
per dollar for stamps sold at the window, compared with 14 cents for
stamps sold at vending machines. However, the Service has more recently
taken the position that stamp sales costs are substantially less than
previously calculated. In September 2003, the Service was in the
process of reviewing its stamp sales costs, but revised stamp sales
figures were not yet available. Therefore, it is unclear whether the
Service has incurred sales costs for the BCRS that are greater than
those incurred for comparable commemorative stamps. Without a
comparison between actual or estimated BCRS sales costs and the
baseline sales costs for comparable stamps, the Service lacks assurance
that it is identifying and recouping excess costs from surcharge
revenue.
In addition to these examples, we have similar concerns regarding other
BCRS costs that are being handled in a manner similar to that described
for BCRS printing, as well as sales. These other costs include stamp
design, shipping, and distribution; estimated training for field staff,
except for special training associated with the BCRS; withdrawal of the
stamp issue from sale; destruction of unsold stamps; and incorporation
of BCRS images into advertising for the Postal Service as an entity.
We discussed our concerns about the Service's cost-recovery regulations
and their impact with Service officials, especially in light of
statements made by Service officials in June 2001 that the issuance of
multiple semipostals at the same time could significantly increase the
administrative burden on the Service and ultimately burden existing
staff and limited resources. Service officials said that their
overriding concern in developing the cost-recovery regulations was to
avoid having to establish cost-tracking systems that would cost more to
develop and implement than the surcharge revenue to be collected from
semipostals, including the BCRS. We pointed out that the Service
already performs a number of cost-related studies that could possibly
be used or modified to capture or estimate incremental semipostal
costs, or that new approaches to capture or estimate such information
might be possible and not be cost prohibitive. Service officials also
said that in developing the regulations, they had not intended to
preclude the Service from recovering excess costs in the printing,
sales, and distribution categories, and they believe they can do so
under the existing regulations. However, we remain concerned that the
regulatory provisions do not require the Service to do so. In fact, the
Service has not established baseline costs that would allow it to
identify and recoup excess costs for printing, sales, and distribution.
Therefore, we continue to believe that a reassessment of the regulatory
provisions would be warranted. In view of our concerns, Service
officials told us, in August 2003, they were planning such a
reassessment.
The Service Has Not Yet Met Its Commitment to Congress to Provide It
with BCRS Cost Data and Analyses:
In our April 2000 BCRS report, we recommended that the Service make
available the data and analysis showing which BCRS costs have been
recovered through the First-Class postage rate to provide assurance
that postal ratepayers are not involuntarily contributing funds to
breast cancer research. In a letter addressed to Chairman John M.
McHugh of the former Subcommittee on the Postal Service, House
Committee on Government Reform,[Footnote 16] the Service committed to
provide, within 60 days of the conclusion of the BCRS' initial 2-year
sales period (i.e., September 28, 2000), an analysis of the BCRS costs
that the Service recovered through the base First-Class Mail, single-
piece, first-ounce postage rate. The letter further stated that the
analysis would demonstrate that the BCRS' incremental costs have been
recovered solely from the surcharge revenue, and that its
nonincremental costs have been recovered through the base postage rate.
As of August 12, 2003, the Service had not yet provided the recommended
BCRS cost data and analysis to Congress. Service officials explained
that an administrative oversight, as well as subsequent events, led to
the Service's not making this information available to Congress. The
officials acknowledged that a consultant had drafted an internal paper
that presented and analyzed fiscal year 1999 cost data on the BCRS.
However, the officials noted that this paper had not been reviewed by
postal management and was drafted more than 2 years ago, before the
Service issued its current regulations on BCRS cost recovery. As we
previously recommended, we continue to believe that the Service should
prepare and make available the data and analyses of BCRS costs in order
to provide ratepayers assurance that they are not involuntarily
contributing funds to breast cancer research. Further, we believe that
making available current data and analyses are even more important now
than before, given that additional semipostals have been authorized;
and more semipostals are likely in the future. More specifically,
Congress has authorized two additional semipostals; and in August 2003,
it was considering legislation authorizing two more semipostals and
extending the sales period for the BCRS. Congress has also given the
Postal Service specific authority to issue semipostals of its own
choosing. Service officials told us in August 2003 they were planning a
reassessment of the earlier BCRS internal paper and would provide
Congress and us with the results of that reassessment as soon as
practicable.
Effectiveness of the BCRS as a Fund-Raiser:
The BCRS has continued to be an effective means of raising funds for
breast cancer research. Although neither the Stamp Out Breast Cancer
Act nor amendments to the act provide quantitative measures for
evaluating the effectiveness of the BCRS as a fund-raiser, the act did
provide that the BCRS was to provide the public a voluntary and
convenient way of raising funds for breast cancer research. We reported
in April 2000 that the BCRS had been successful to those ends. Since
then, the BCRS has continued to be a voluntary and convenient way for
the public to contribute millions of dollars for breast cancer
research. BCRS sales have fluctuated over time; however, the BCRS has
raised over $30 million for breast cancer research since it was issued
in July 1998. Additionally, most key stakeholders told us that for the
most part, they viewed the BCRS as an effective fund-raiser; and the
public's view of the BCRS was generally positive, as reflected in the
results from our survey. As of September 2003, the Service had
transferred to NIH and DOD about $30.8 million from funds raised by the
BCRS for breast cancer research. These federal organizations reported
to us that they have established programs to fund innovative breast
cancer research conducted by various research institutions. NIH and DOD
are not required to issue reports to Congress detailing how BCRS-
generated funds were used or the accomplishments that resulted from the
BCRS-funded research.
The BCRS Remains Voluntary and Convenient and Has Raised Millions of
Dollars for Research:
The BCRS has remained voluntary and convenient, as provided for by the
act, and has raised over $30 million for breast cancer research since
it was issued in July 1998. Postal patrons have the choice of
purchasing regular First-Class postage stamps at 37 cents each or
contributing to breast cancer research by purchasing the BCRS at 45
cents each. The BCRS remains convenient in that it is available for
purchase from a variety of postal sources, including post offices,
although two stakeholders reported instances when some post offices in
their areas did not have the BCRS when they visited. Figure 4 shows the
various sources from which the BCRS can be purchased.
Figure 4: Various Postal Service Sources for Purchasing the BCRS:
[See PDF for image]
[End of figure]
Our public opinion surveys--including our current 2003 survey and our
earlier 1999 survey, both conducted by the same firm--indicate that
about 70 percent of the public views semipostals as a convenient way to
contribute to designated causes. These and other estimates from our
2003 survey are subject to sampling errors of less than +/-6 percentage
points (95 percent confidence level), as well as to additional errors
of unknown magnitude due to the 89 percent nonresponse rate for the
survey as discussed in appendix I.
As envisioned by the act, the BCRS has raised a substantial amount of
money for breast cancer research. Postal officials report that since
the BCRS was issued on July 29, 1998, the Service has sold over 450
million of this semipostal, generating over $30 million, net of costs,
for breast cancer research. If BCRS sales continue at the rate it has
been selling in fiscal year 2003, about 486 million will have been sold
by the time BCRS sales are scheduled to end on December 31, 2003--
generating approximately $35 million in surcharge revenue.
BCRS Sales Have Fluctuated Over Time:
Quarterly BCRS sales fluctuated considerably between 1998 and 2003 but
have generally trended lower after reaching a high point of almost 40
million sales in quarter 3, 2000.[Footnote 17] During the early years
that the BCRS was for sale--quarter 4, 1998 through quarter 4, 2000--
quarterly sales varied from a low of 18.3 million to a high of 39.8
million, with average quarterly sales of 26.4 million. During the
latter years--from quarter 1, 2001, through quarter 3, 2003, sales
ranged from 14.9 million to 27.8 million, with average quarterly sales
of 19.5 million. To help shed additional light on the continued
effectiveness of the BCRS as a means of fund-raising, we also looked at
quarterly sales data for the Heroes of 2001 semipostal to see if there
was a discernable decline in BCRS sales during the quarters when both
semipostals were being sold simultaneously.
Although sales of the BCRS trended somewhat lower during the 4 quarters
the Heroes semipostal was for sale, postal officials and other
stakeholders did not believe there was a strong correlation. Postal
officials pointed out that although BCRS sales declined during the
period from quarter 4, 2002, through quarter 2, 2003, they did not drop
nearly as precipitously as the sales of the Heroes semipostal--which
fell from 45.4 million in quarter 4, 2002, to 11.0 million in quarter
3, 2003. Also, some postal officials and other stakeholders believed
that over the long term, postal patrons who repeatedly purchase
semipostals tend to support causes that have organized, nationwide
support bases. For example, some postal officials and other
stakeholders believe many people who purchase BCRSs know someone who is
fighting breast cancer or fought it in the past. Likewise, postal
patrons who repeatedly purchase BCRSs are likely to be aware that the
BCRS is supported by many of the national breast cancer organizations
or their affiliates.
However, some postal officials and other stakeholders speculated that
the Heroes of 2001 semipostal may have initially been purchased by a
large, diverse population eager to provide assistance to the families
of emergency relief personnel killed or permanently disabled in
connection with the terrorists attacks on September 11, 2001. However,
these postal officials and other stakeholders suspected that large
initial sales figures for the Heroes semipostal were not sustainable
because that semipostal did not benefit from the support of a long-
established, well-organized, nationwide network of organizations to
keep the Heroes semipostal in the pubic eye. Figure 5 shows the number
of BCRSs sold since date of issuance through quarter 3, 2003, as well
as the number of Heroes of 2001 semipostals sold from date of issuance
through quarter 3, 2003.
Figure 5: Number of BCRS and Heroes Semipostals Sold by Postal Quarter:
[See PDF for image]
[End of figure]
Key Stakeholders Believe the BCRS Has Been an Effective Fund-Raiser:
The key stakeholders we spoke with that expressed a view about the
effectiveness of the BCRS believed it had been effective in raising
funds for breast cancer research. Some of the stakeholders who did not
express a view on the effectiveness of the BCRS provided other comments
about semipostals.
Opinions of Key Stakeholders Who Expressed View That the BCRS Has Been
an Effective Fund-Raiser:
Key stakeholders who believed the BCRS has been an effective fund-
raiser included the Postal Service; Dr. B.I. Bodai (the individual
credited with conceiving the idea for the BCRS and who, along with Ms.
Betsy Mullen, lobbied Congress for the BCRS); Ms. Betsy Mullen (the
Women's Information Network Against Breast Cancer), the Susan G. Komen
Breast Cancer Foundation; the American Cancer Society; and the American
Philatelic Society.
According to postal officials, the effectiveness of the BCRS as a means
of fund-raising is self-evident for two particular reasons. First, the
BCRS has raised over $30 million for breast cancer research since it
was issued in July 1998. Second, more than 450 million BCRS's had been
sold through quarter 3, 2003, making the BCRS very popular when
compared with the Service's best-selling commemorative stamps. Postal
officials note that although BCRS sales have periodically waxed and
waned, yearly sales totals have remained strong since the BCRS was
issued.
Dr. B.I. Bodai believed the BCRS has been a more effective, consistent
fund-raiser than expected. He said no one anticipated that the pennies
generated from the sale of each BCRS across the country would, over
time, total well over $30 million. Dr. Bodai said the BCRS was popular
with families affected by breast cancer, but he believed sales could
have been significantly higher if the Service and the various breast
cancer organizations had even more vigorously and consistently promoted
the BCRS over the past 5 years.
Ms. Betsy Mullen of the Women's Information Network Against Breast
Cancer stated she believed the BCRS had been a very effective fund-
raiser. Further, she noted that the BCRS' effectiveness wasn't just
limited to raising funds, but was also extremely effective at raising
awareness of breast cancer and the fight to eradicate it. Ms. Mullen
also stated that the Women's Information Network Against Breast Cancer
had worked very closely with Congress to ensure that money raised by
the BCRS not supplant congressional appropriations for breast cancer
research, and she believed money raised by the BCRS had not been used
to supplant congressional appropriations to NIH and DOD for breast
cancer research. She stated that from an educational perspective, the
BCRS has been "priceless" in its role of promoting breast cancer
awareness as a women's health issue. She said she believed that because
of the BCRS, many more women have gotten mammograms than otherwise
would have, and many lives therefore have been saved.
The Susan G. Komen Breast Cancer Foundation stated that the BCRS has
consistently been an effective means of raising funds since it was
issued in 1998. The foundation expressed the belief that over the
years, the BCRS has proven to be even more successful than anyone had
initially anticipated. The foundation reiterated its earlier position
that the BCRS has been a unique and innovative fund-raising tool and
has raised breast cancer awareness on a global scale. Further, the
foundation stated that if anything, it has become an even stronger
supporter of the BCRS over the years. The foundation and its 118
affiliates across the country have found the BCRS to be not only a
great means for raising awareness, but also an excellent promotional
tool that has helped stimulate breast cancer organizations' fund-
raising activities--particularly at the local level.
The American Cancer Society believed that time has proven the BCRS to
be an effective means of raising funds for breast cancer research. As
we reported in 2000, the American Cancer Society's position had been
that it was too early to label the BCRS as either effective or
ineffective. However, the society stated that the BCRS has since shown
that it has effectively raised money for breast cancer research.
Society officials recalled that they had previously been concerned that
the BCRS might take momentum away from federal funding for breast
cancer research or adversely affect fund-raising organizations' ability
to raise research funds. They stated, however, that they had seen no
evidence, over the past 5 years, to indicate that the BCRS had taken
momentum away from federal funding for breast cancer research or
adversely affected the American Cancer Society's ability to raise
research funds. The society said that it still believes vigilance is in
order to ensure that the BCRS does not affect research funding or fund-
raising, but otherwise it has no concerns about the BCRS. Society
officials said that the BCRS fits well with the society's goals--one of
which is to increase awareness of breast cancer. The society stated
that it supports the BCRS.
American Philatelic Society officials stated that they had been
surprised at stamp collectors' acceptance of the BCRS in particular,
and semipostals in general. As we reported in 2000, the society was
opposed to semipostals and believed they were a tax on the hobby of
stamp collecting. Over time, however, the society has come to believe
that the BCRS' strong sales indicate that semipostals are now widely
accepted, making them effective fund-raisers. Nevertheless, the
officials cautioned that although stamp collectors are now accepting of
semipostals, they do not want to see more than one or two new
semipostal issues per year. Otherwise, stamp collectors would be forced
to buy too many of the higher priced semipostal issues each year in
order to maintain complete stamp collections.
Comments Made by Other Key Stakeholders:
The National Breast Cancer Coalition (NBCC) stated that its position on
the BCRS had not changed since our April 2000 BCRS report. Officials
stated that NBCC still believes there are more effective ways of
raising money for research than using semipostals. NBCC stated that a
better gauge of the BCRS' effectiveness would be how well the surcharge
revenue was spent on research rather than simply how much money the
BCRS raised. NBCC continues to believe that effectively lobbying
Congress holds the most promise for raising significant amounts of
money for breast cancer research.
The Chairperson of the Citizen's Stamp Advisory Committee stated that
it was outside the scope of the committee's role to evaluate or take a
position on the effectiveness of the BCRS. The Citizen's Stamp Advisory
Committee is a 15-member group of citizens appointed by and serving at
the pleasure of the Postmaster General for the primary purpose of
providing the Postal Service with a "breadth of judgment and depth of
experience in various areas that influence subject matter, character
and beauty of postage stamps." Under Postal Service regulations
implementing the Semipostal Authorization Act, the committee is also
responsible for reviewing eligible semipostal proposals and making
recommendations to the Postmaster General on worthy cause(s) and
executive agency(ies) eligible to receive funds raised by semipostals.
The Chairperson emphasized that Postal Service management decides
policy, administrative, and operational matters related to semipostals-
-not the Citizen's Stamp Advisory Committee. She stated that the
committee's primary function is to review proposals for stamps and
select subjects for recommendation to the Postmaster General that are
both interesting and educational.
Survey Respondents View Semipostals in a Positive Light:
To determine the public's awareness of the BCRS and its view of
semipostals in general, we included pertinent questions in our survey
of the public. We asked the same question about awareness of the BCRS
that we asked in our August 1999 survey to look for evidence about
whether the public had become more aware of the BCRS over time.
The survey results suggest that about 29 percent of adults were aware
of the BCRS at the time of our recent inquiry--which occurred almost 5
years after the BCRS was issued. About 37 percent of women and about 19
percent of men were aware of the BCRS. The survey results from our
August 1999 survey, which was conducted about 1 year after the BCRS
went on sale, indicated that about 24 percent of adults were aware of
the BCRS at that time. About 29 percent of women and about 18 percent
of men were aware of the BCRS in 1999. We are unable to determine
whether the changes in our awareness estimates are due to genuine
changes in awareness or to sampling errors and other nonsampling errors
related to the 89 percent nonresponse rate, as discussed in appendix I.
To help gauge the public's experience with the BCRS, we also asked the
survey participants whether they had ever purchased a BCRS. About 12
percent report they had purchased the BCRS. We did not ask a similar
question in our 1999 public opinion survey.
Transfers of Surcharge Revenue to NIH and DOD for Breast Cancer
Research:
As of September 2003, the Service had transferred to NIH and DOD about
$30.8 million from funds raised by the BCRS for breast cancer research.
NIH and DOD reported to us that they have established programs to award
funds for innovative breast cancer research conducted by various
research institutions.
As noted in our April 2000 BCRS report, the act specifies that after
deducting its reasonable costs, the Service is to transfer 70 and 30
percent of the remaining surcharge revenue generated by the BCRS to NIH
and DOD, respectively. The act also specifies that such transfers be
made at least twice yearly under arrangements as agreed to between the
Service and those agencies. Further, the act specifies that NIH and DOD
are to use transferred BCRS surcharge revenues for breast cancer
research. Unlike any agency that was to receive funds generated from
semipostals issued under the Semipostal Authorization Act, NIH and DOD
are not subject to annual reporting requirements. Agencies that receive
funds from semipostals issued under the Semipostal Authorization Act
are required to submit annual reports to Congress that include (1) the
total amount of funds received during the year; (2) an accounting of
how the funds were allocated or otherwise used; and (3) a description
of any significant advances or accomplishments made during the year
that were funded, in whole or in part, out of amounts received.
Information currently reported to Congress on NIH's and DOD's use of
research funds generated by the BCRS does not adequately support
congressional oversight. As mandated, our periodic reports to Congress
focus primarily on the BCRS' costs, effectiveness, and appropriateness;
not on how NIH and DOD use BCRS surcharge revenues for breast cancer
research and the accomplishments resulting from such research. To help
manage their respective BCRS funded research programs, NIH and DOD
require award recipients to provide periodic reports on the progress
being made and breakthroughs achieved. This is the same information
that Congress requires of agencies receiving surcharge revenues
generated by semipostals issued under the Semipostal Authorization Act;
and this readily available information could be, if required, submitted
by NIH and DOD to Congress on an annual basis.
To date, the Service has complied with the requirements in the Stamp
Out Breast Cancer Act regarding the transfers of BCRS surcharge revenue
to NIH and DOD. NIH and DOD are using BCRS surcharge revenue
transferred to them to fund breast cancer research. Table 3 shows the
transfers, by fiscal year, that have been made since the BCRS was
issued in July 1998.
Table 3: Transfers Made to NIH and DOD for Breast Cancer Research:
Fiscal year: 1999; Amount transferred to NIH: $4,150,210; Amount
transferred to DOD: $1,778,661; Total transferred to NIH and DOD:
$5,928,871.
Fiscal year: 2000; Amount transferred to NIH: 3,101,033; Amount
transferred to DOD: 1,329,014; Total transferred to NIH and DOD:
4,430,047.
Fiscal year: 2001; Amount transferred to NIH: 5,556,225; Amount
transferred to DOD: 2,381,240; Total transferred to NIH and DOD:
7,937,465.
Fiscal year: 2002; Amount transferred to NIH: 3,594,621; Amount
transferred to DOD: 1,540,552; Total transferred to NIH and DOD:
5,135,173.
Fiscal year: 2003; Amount transferred to NIH: 5,175,938; Amount
transferred to DOD: 2,218,259; Total transferred to NIH and DOD:
7,394,197.
Fiscal year: Total; Amount transferred to NIH: $21,578,027; Amount
transferred to DOD: $9,247,726; Total transferred to NIH and DOD:
$30,825,753.
Source: NIH, DOD, and U.S. Postal Service.
[End of table]
Breast Cancer Research Funded with BCRS Surcharge Revenue Transferred
to NIH and DOD:
NIH and DOD officials said that, as required by the Stamp Out Breast
Cancer Act, they have been using transferred BCRS surcharge revenue to
fund breast cancer research. NIH officials said that revenue received
from the BCRS surcharge revenue has been used to fund breast cancer
research under the National Cancer Institute's (NCI) "Insight Awards to
Stamp Out Breast Cancer" initiative. The officials said that this
program was designed to fund high-risk exploration by scientists who
are employed outside the federal government and conduct breast cancer
research at their institutions. They reported that 86 awards had been
made as of April 2003, and most of the awards were for 2-year periods
with several projects still alive. Discounting a single, one-time
supplement for $4,300, individual awards ranged from $47,250 to
$142,500 and averaged about $111,000. The officials stated that these
insight awards were innovative and high-risk projects; and many have
been successful in leading to new insights and approaches in the
biology, diagnosis, and treatment of breast cancer. The officials
stated that NCI is currently considering additional research projects
to be funded using BCRS surcharge revenue not yet committed. Detailed
information provided by NIH/NCI on breast cancer research awards funded
with proceeds from BCRS surcharge revenue is reprinted in appendix II.
DOD officials told us that revenue received from the BCRS' surcharge
revenue had been used to fund "DOD Breast Cancer Research Program Idea
Awards," which are administered by the U.S. Army Medical Research and
Materiel Command. Idea Awards are intended to encourage innovative
approaches to breast cancer research. DOD officials told us that 19
awards had been made as of April 2003. Individual awards ranged from
$5,000 to $578,000 and averaged about $356,500. These awards have
focused on research into such areas as the biology of cancer cell
growth and tumor formation, immunotherapy, and new areas of breast
cancer detection. The officials stated that DOD plans to continue
investing money received from BCRS surcharge revenue into programs that
will encourage innovative approaches to breast cancer research. The
officials also stated that about $256,000 of the transferred funds had
been used for management expenses. Detailed information provided by DOD
on breast cancer research awards funded with proceeds from BCRS
surcharge revenue is reprinted in appendix III.
Appropriateness of Using Semipostals as a Means of Fund-Raising:
Most of the key stakeholders we spoke with and the public believe it is
appropriate for the Postal Service to sell the BCRS, as well as other
semipostals, to raise funds for worthwhile causes. When we issued our
April 2000 report, the BCRS was the only semipostal available from the
Postal Service. However, since that time, Congress has passed
legislation mandating two additional semipostals and is currently
considering legislation requiring two more semipostals and extending
the sales period for the BCRS.
Opinions of the Postal Service, Key Stakeholders, and Others Regarding
Appropriateness:
The Service, NBCC, and the Citizens Stamps Advisory Committee generally
viewed using semipostals to raise funds for designated causes as
inappropriate; Dr. B.I. Bodai, Ms. Betsy Mullen, the Susan G. Komen
Breast Cancer Foundation, the American Cancer Society, and the American
Philatelic Society viewed using semipostals to raise funds as
appropriate. The public also believes that it is appropriate to use
semipostals as fund-raisers.
Views of the Postal Service and Other Key Stakeholders:
The Postal Service has historically been opposed to semipostals. The
Service believes that fund-raising through the sale of semipostals is
an activity outside the scope of the Service's mission as defined by
the Postal Reorganization Act. The Service also remains concerned that
the popularity of the BCRS does not necessarily portend the success of
future semipostals, whether mandated by Congress or initiated by the
Postal Service, and that future semipostals might generate only modest
amounts of revenue while still requiring substantial postal
expenditures. Postal officials are further concerned that too many
semipostals not be on the market at the same time. The BCRS, initially
slated for a 2-year sales period, has been twice extended by Congress
and has been on sale for over 5 years. Postal officials worry that if
semipostals are mandated but not retired, the market for semipostals
might become oversaturated to the detriment of individual semipostals
as well as the semipostal program in general.
The Susan G. Komen Breast Cancer Foundation stated that the BCRS was
appropriate when issued and remains appropriate today. The foundation
continues to support the BCRS wholeheartedly. Further, the foundation
believed that the BCRS provides an easy and convenient way for the
public to support and contribute to breast cancer research. The
foundation stated that during the 5 years the BCRS has been for sale,
it has become "a unifying symbol of the fight to find a cure for breast
cancer which has become woven into the fabric of America." When
feasible, the foundation uses the BCRS on both mass mailings and
individual pieces of correspondence.
The American Cancer Society continues to believe that it is appropriate
to use the BCRS as a means of fund-raising. The society has held this
opinion since the BCRS was first issued.
The American Philatelic Society stated that its position on the
appropriateness of the BCRS has moderated over time. The society no
longer believes it is inappropriate for the Service to issue
semipostals, changing its view because of the wide public acceptance of
the BCRS. Society officials also told us that although BCRS costs are
not identified and tracked with precision, they are in the ballpark
given the regulations that the Service has issued for tracking and
allocating costs.
NBCC stated that its opinion regarding the appropriateness of using the
BCRS as a means of fund-raising had not changed since our April 2000
BCRS report. NBCC still had reservations about the appropriateness of
the BCRS, and officials stated that they were still concerned that the
BCRS might be more of a symbolic gesture, on Congress' part, than an
all-out commitment to fund whatever research is needed to eradicate
breast cancer in the shortest possible time.
The Chairperson of the Citizen's Stamp Advisory Committee stated that
the committee's position has always been that semipostals are
inappropriate because fundraising is outside the scope of the Postal
Service's mission. The Chairperson noted that the committee had been
against the Semipostal Authorization Act. The act mandated that the
Service establish a semipostal program, and select causes to be
represented by semipostals and agencies to receive funds raised through
the sale of semipostals. The committee found it interesting that after
giving the Service responsibility for selecting semipostals, Congress
has continued to mandate additional semipostals. The committee is
concerned that if Congress continues to mandate new semipostals without
retiring old ones, a situation could eventually develop where
semipostals, which are essentially commemorative stamps with a
surcharge, might begin to "crowd out" the Service's regular
commemorative stamp program. This could present a nationwide problem in
post offices because there is limited space in window clerks' stamp
drawers for different stamp issues. Because the Service requires that
semipostals be available in all post offices at all times, the number
of regular commemorative stamp issues might have to be limited to
accommodate semipostals unless the number of semipostals for sale at
any one time is limited.
Dr. B.I. Bodai reiterated his belief that using the Postal Service to
issue semipostals for worthy, nonpostal causes is very appropriate and
is an example of what good government is all about. Dr. Bodai stated
that the BCRS has not only been appropriate from the standpoint of
raising money for breast cancer research but has also been extremely
valuable as a tool for raising breast cancer awareness on a nationwide
basis. He noted that the BCRS is so popular that some states, such as
Georgia, have incorporated its image into specialty automobile license
plates.
Ms. Betsy Mullen of the Women's Information Network Against Breast
Cancer believes that the BCRS is very appropriate, as would be other
semipostals that raise funds for worthwhile causes. Ms. Mullen believes
that the Service can successfully sell two or more semipostals at the
same time. She said that the Service has a long and successful history
of concurrently selling multiple commemorative stamps, and the American
public has demonstrated over the years its philanthropic support for
multiple worthwhile causes. She also said that concurrently selling two
or more semipostals is not a detriment to the semipostal program, but
rather an enhancement because multiple semipostals cross-promote each
other's sales. She noted that the Service is cross-promoting the sale
of the BCRS and Heroes semipostals through its advertisements of these
semipostals at post offices. Finally, she stated that the Women's
Information Network Against Breast Cancer uses the BCRS on all of its
correspondence, and, because of the BCRS, research is now being done
that otherwise would not have been done.
The Public's View:
The public continues to believe that it is appropriate to use
semipostals to raise funds for nonpostal purposes. Our public opinion
survey conducted by International Communications Research (ICR)
indicated that about 71 percent believe it is very or somewhat
appropriate to use semipostals issued by the Postal Service, such as
the BCRS, to raise funds for nonpostal purposes and about 23 percent
believe it is somewhat or very inappropriate. Six percent had no
opinion, said they didn't know, or volunteered the answer that it would
depend on the cause for which the semipostal was being used to raise
money. Statistically, these opinions about the appropriateness of
semipostals are not large enough to be significantly different from the
findings of our 1999 survey.
Statutory Authorities and Constraints:
On the legislative front, several laws have been enacted since our
April 2000 BCRS report that affect the BCRS specifically or semipostals
in general. These laws have (1) twice extended the sales period for the
BCRS, (2) authorized two additional semipostals, and (3) authorized the
Service to issue future semipostals. Also, as of August 2003, Congress
was considering legislation establishing two more semipostals and
extending the sales period for the BCRS until December 31, 2005. As of
August 2003, the Service had not issued any semipostals of its own
choosing and had no plans to do so until the sales period for
congressionally mandated semipostals have ended. We believe this
position is consistent with the discretion afforded the Service under
the Semipostal Authorization Act.
Conclusions:
We are concerned that the Service's BCRS regulations can be interpreted
as not requiring the Service to provide baseline comparisons for
certain BCRS costs, e.g., printing, sales, and distribution, although
the Stamp Out Breast Cancer Act specifically states that reasonable
costs in these areas attributable to the BCRS should be recouped from
its surcharge revenue. Although the Service has provided printing costs
for various commemorative stamps, it has not established baseline costs
for certain BCRS costs. Without these baselines, the Service lacks
assurance that it is identifying and recouping excess costs from the
BCRS' surcharge revenue. If the Service does not recoup costs for items
that exceed those of comparable stamps, the Service could be
subsidizing BCRS costs. Furthermore, without having baseline cost
information for comparable stamps for the cost categories that the
Service does track for the BCRS, it is impossible to determine whether
the Service has recouped all reasonable costs of the BCRS that exceed
those for comparable stamps in such cost categories. Further, the
Service has not met its commitment to Congress to provide it with BCRS
cost data and analyses, as we had previously recommended, to assure
postal ratepayers that they are not involuntarily contributing to
breast cancer research. Without current BCRS cost data and analyses,
Congress and the public continue to lack assurance that postal
ratepayers are not involuntarily contributing funds to breast cancer
research.
Nearly all of the stakeholders that we spoke with consider the BCRS to
be a success, particularly given its sales performance to date.
According to NIH and DOD, millions of dollars in BCRS surcharge revenue
have contributed to important new insights and approaches in the
biology, diagnosis, and treatment of breast cancer, as well as in other
areas of research. NIH and DOD provided us information regarding their
use of BCRS surcharge revenue as well as advances or accomplishments
they achieved. However, NIH and DOD are not required to submit annual
reports to Congress like agencies that are to receive funds from
semipostals issued under the Semipostal Authorization Act. Congress has
twice extended the sales period for the BCRS and is currently
considering a third extension. Therefore, establishing annual reporting
requirements for NIH and DOD, similar to the statutory reporting
requirements established for any agency that would receive funds from
semipostals issued under the Semipostal Authorization Act, would prove
valuable by providing information on the amount of funds received, how
the funds were used, and any accomplishments resulting from the use of
those funds, should Congress decide to further extend the BCRS sales
period.
Matter for Congressional Consideration:
If Congress decides to extend the sales period for the BCRS past its
scheduled end date of December 31, 2003, it may wish to consider
establishing a requirement that NIH and DOD annually report to
Congress, similar to the requirement for agencies that are to receive
surcharge revenues generated from semipostals issued under the
Semipostal Authorization Act.
Recommendations for Executive Action:
We are reaffirming our recommendation made in April 2000 that the
Postmaster General direct postal management to make available the cost
data and analyses showing which BCRS costs have been recovered through
the First-Class postage rate to provide assurance that postal
ratepayers are not involuntarily contributing funds to breast cancer
research.
We also recommend that the Postmaster General reexamine and, as
necessary, revise the Service's December 2001 cost-recovery regulations
to ensure that the Service establishes baseline costs for comparable
commemorative stamps and uses these baselines to identify and recoup
excess costs from the BCRS' surcharge revenue. As part of that process,
the Postmaster General should publish the baseline costs it is using.
This would help provide assurance that the Service is recouping all
reasonable costs of the BCRS from the surcharge revenue.
Agency Comments and Our Evaluation:
The Postal Service provided comments on a draft of this report in a
letter from the Senior Vice President, Government Relations dated
September 10, 2003. These comments are summarized below and are
reprinted as appendix IV. Postal officials also provided technical and
clarifying comments, which we have incorporated into the report where
appropriate.
The Senior Vice President indicated that the Service plans to take
appropriate actions to address our specific recommendations. He stated
that the Service never intended that its BCRS cost-recovery regulations
be interpreted as not requiring establishment of adequate baselines for
comparing certain categories of costs. However, he acknowledged that
the regulations might need to be revised to make the Service's intent
clearer. Regarding the establishment of baselines, he noted that
comparisons between the BCRS and comparable commemoratives could
involve different facets in various areas. For example, he noted that
printing cost comparisons could be difficult because they may involve
differing time periods, different graphic designs, and different print
runs. Nonetheless, he said that the Service would reexamine its
semipostal regulations with a view toward proposing revisions about
what costs are to be identified and recouped from surcharge revenues.
In commenting on our reaffirmed recommendation that the Service make
available BCRS cost data and analyses, the Senior Vice President stated
the Service plans to reassess the earlier analysis it had commissioned
on recovery of BCRS costs through the First-Class Mail postage rate in
light of the cost-recovery issues raised in our report. He stated that
the Service would provide Congress and us with the results of that
reassessment upon completion.
:
We are sending copies of this report to the Chairman and Ranking
Minority Member, Subcommittee on Health, House Committee on Energy and
Commerce; and to the Chairman and Ranking Minority Member, Subcommittee
on National Security, Emerging Threats, and International Relations,
House Committee on Government Reform because of their involvement in
passage of the Stamp Out Breast Cancer Act. We are also sending copies
of this report to Senator Dianne Feinstein and Representative Joe Baca
because of their expressed interest in the BCRS; the Postmaster General
and Chief Executive Officer, United States Postal Service; the Chairman
of the Postal Rate Commission; and other interested parties. Copies
will also be made available to others upon request. In addition, this
report will be available at our Web site at [Hyperlink, http://
www.gao.gov] h [Hyperlink, http://www.gao.gov] ttp://www.gao.gov.
Key contributors to this report are listed in appendix V. If you or
your staffs have any questions about this letter or the appendixes,
please contact me at (202) 512-2834 or E-mail at [Hyperlink,
ungarb@gao.gov.]
Bernard L. Ungar
Director, Physical Infrastructure Issues:
Signed by Bernard L. Ungar:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Our objectives for this report were to fulfill our legislative mandate
to update Congress on (1) the monetary and other resources the Postal
Service has expended in operating and administering the Breast Cancer
Research Semipostal (BCRS) program, (2) the effectiveness of using the
BCRS as a means of fund-raising, and (3) the appropriateness of using
the BCRS as a means of fund-raising. We also provide information on the
status of recommendations made to the Postmaster General in our April
2000 BCRS report. In essence, we recommended that the Service formalize
its criteria for making BCRS cost recovery decisions and make BCRS cost
data and analyses available to assure postal ratepayers that they were
not involuntarily subsidizing BCRS costs.
To describe the monetary and other resources the Service has expended
in operating and administering the BCRS program, we updated pertinent
information presented in our April 2000 report to reflect current
conditions. To do this, we interviewed officials in the Service's
Offices of Stamp Services and Finance responsible for administering the
BCRS program and tracking its costs. We gathered and analyzed data on
the surcharge revenue raised by the BCRS as well as data on the costs
and resources the Service used in operating and administering the BCRS
program. We also identified and reviewed the Service's criteria for
determining which costs are to be recouped from the BCRS' surcharge
revenue and, as necessary, discussed with finance officials the
application of the Service's criteria for certain cost items.
To determine if the BCRS has been an effective means of fund-raising,
we obtained and analyzed BCRS sales data and discussed with finance and
stamp services officials how certain events may have affected sales. We
obtained similar information for the Heroes of 2001 semipostal and
compared sales for the two semipostals. We also obtained information on
how much BCRS generated funds had been transferred to the National
Institutes of Health (NIH) and Department of Defense (DOD) for breast
cancer research, and obtained information on how the money was being
used to further breast cancer research. We did not evaluate or assess
NIH's and DOD's process for determining who would be awarded BCRS
research funds, nor did we evaluate any of the individual awards.
Additionally, we did not independently verify any of the financial data
provided by NIH and DOD. Further, we interviewed all but one of the key
stakeholders that we had interviewed for our April 2000 report to
determine if their views on the BCRS' effectiveness as a fund-raiser
have changed since our last report. The key stakeholders interviewed
included representatives of (1) the American Cancer Society, (2) the
National Breast Cancer Coalition (NBCC), (3) the Susan G. Komen Breast
Cancer Foundation, (4) Dr. B. I. Bodai, and (5) the American Philatelic
Society. We did not interview the current Curator of the Smithsonian
Institution's National Philatelic Collection for this report. We had
interviewed the former Curator for our April 2000 report, but the
current Curator said that it was not within his personal expertise to
evaluate the effectiveness or appropriateness of the BCRS, or
semipostals in general, and it would not be proper for him to comment
in his role as an official of the Postal Museum. For this report, we
also interviewed Betsy Mullen, who is the founder of the Women's
Information Network Against Breast Cancer, and who, along with Dr. B.I.
Bodai, lobbied Congress to pass legislation creating the BCRS. Further,
we interviewed the Chairperson of the Citizens Stamp Advisory Committee
because, since our last BCRS report, the committee has been given the
responsibility for reviewing semipostal candidates and making
recommendations to the Postmaster General. We did not update the
information included in our April 2000 report on foreign postal
administration's semipostal activities because of the time and
resources that such work would have required and the limited new
information that it likely would have yielded.
To determine if the BCRS has been an appropriate means of fund-raising,
we interviewed the same key stakeholders identified above to solicit
their current views on the appropriateness of using the BCRS to raise
funds. We also researched and analyzed applicable sections of the U. S.
Code and Postal Service regulations to identify changes that have
occurred since our April 2000 report that either affected the BCRS
directly or the semipostal program in general. Additionally, we
identified and analyzed pending legislation that would affect the
Service's semipostal program.
We conducted our review at Postal Service Headquarters in Washington,
D.C., from February through August 2003 in accordance with generally
accepted government auditing standards.
Public Opinion Survey:
To obtain the public's opinion of the BCRS in 2003, we contracted with
International Communications Research (ICR) of Media, Pa. ICR included
five questions about the BCRS and semipostals in its national omnibus
telephone survey, conducted on 5 days, from June 27 and July 1, 2003
(Friday through Tuesday). Omnibus surveys of this type also collect
demographic information and include questions for other clients on
other topics. For our previous survey in 1999, ICR followed the same
survey procedures when it asked four of the five questions that we used
in 2003. In 2003, interviews were completed with respondents at 1,038
of the estimated 9,046 eligible sampled households, for a response rate
of about 11 percent[Footnote 18]. These survey procedures yield a
nonprobability sample of members of the population of the contiguous
United States (48 states and the District of Columbia) who are 18 years
or older, speak English, and reside in a household with a residential,
land-based telephone. The 89 percent nonresponse rate means that
estimates in the report are subject to nonsampling errors of unknown
magnitude.
Selection of Households and Respondents:
Random digit dial (RDD) equal probability selection methods were
followed to identify telephone numbers using the GENESYS Sampling
System. The GENESYS system draws numbers from those active banks of
telephone exchanges that have at least two household numbers listed and
are accessed through land lines. Exchanges assigned to cellular
telephones are not included.
The interviewers selected a member from each household, using a mixture
of random and systematic procedures. Because adult males are more
difficult to contact and interview in telephone surveys, ICR took the
following measures to meet the specification of at least 500 completed
male interviews, or approximately half of the sample. An interviewer
first attempted to interview the adult male (aged 18 or older) with the
most recent birthday. If that male was not present in the household at
the time of the telephone call, then any other male present in the
household at that time was selected; if no male was present, then an
adult female was selected, with first preference being for the female
present with the most recent birthday. Because the specifications were
still not met, only males were interviewed during the closing phase of
the survey. Although routine procedures specify five attempts to locate
a respondent in each household, many households did not receive five
calls and had not been contacted by the end of the interview period
after one or more calls ended in a busy signal, no answer, or inability
to complete a callback attempt. The respondent selection procedures
eliminated interviewer judgment from the selection process, but did not
yield a random, probability sample of the U.S. population. For example,
these procedures exclude females who are present in households at the
time when a willing male is present. The procedures also exclude any
household members who are not at home at the time the interviewer
contacts the household.
Survey respondents are weighted in our analyses so that age, sex,
education, and regional estimates from our survey will match U.S. data
from the March 2002 Current Population Survey (CPS) on these
demographic characteristics for the adult population (18 years of age
and older) of the 48 contiguous states and the District of Columbia.
The number of telephone numbers in the household and number of
household members were also considered in the weighting process.
Sampling Errors:
As with all sample surveys, this survey is subject to both sampling and
nonsampling errors. The effects of sampling errors, due to the
selection of a sample from a larger population, can be expressed as
confidence intervals based on statistical theory. The effects of
nonsampling errors, such as nonresponse and errors in measurement, may
be of greater or lesser importance, but cannot be quantified on the
basis of the available data.
Sampling errors occur because we use a sample to draw conclusions about
a much larger population. The survey's sample of telephone numbers is
based on a probability selection procedure. As a result, the sample was
only one of a large number of samples that might have been drawn from
the total telephone exchanges throughout the country. If a different
sample had been taken, the results might have been different. To
recognize the possibility that other samples might have yielded other
results, we express our confidence in the precision of our particular
sample's results as a 95 percent confidence interval. For all the
percentages presented in this report, we are 95-percent confident that
when only sampling errors are considered, the results we obtained are
within +/-6 percentage points or less of what we would have obtained if
we had surveyed the entire study population. For example, our survey
estimates that 70 percent of the population feels that it is very or
somewhat convenient to use special stamps to raise funds. The 95
percent confidence interval due to solely sampling errors for this
estimate is between approximately 66 percent and 73 percent.
Nonsampling Errors:
In addition to the reported sampling errors, the practical difficulties
of conducting any survey introduce other types of errors, commonly
referred to as nonsampling errors. For example, questions may be
misinterpreted, some types of people may be more likely to be excluded
from the study, errors could be made in recording the questionnaire
responses into the computer-assisted telephone interview software, and
the respondents' opinions may differ from those of people in the
sampled households we did not successfully interview.
For this survey, the 11 percent response rate is a potential source of
nonsampling error; we do not know if the respondents' answers are
different from the 89 percent who did not respond. With the available
information we cannot estimate the impact of the nonresponse on our
results. Our results will be biased to the extent that the people at
the 89 percent of the telephone numbers that did not yield an interview
have different opinions about or experiences with the BCRS than did the
11 percent of our sample who responded.
Once a respondent agreed to participate, the nonresponse for any
particular item was low. Unless otherwise noted, less than 4 percent of
the weighted answers to each question are in the category of not
knowing an answer or refusing to answer the particular question.
BCRS Questionnaire:
The section of the questionnaire that obtained information on BCRS
issues, including the introduction and the five survey questions,
follows:
Since 1998, at the direction of Congress, the U.S. Postal Service has
been selling a Breast Cancer Research stamp at a price above the First-
Class postage rate. The stamp currently sells for 45 cents, with 37
cents covering the First-Class postage rate and most of the remaining 8
cents going to breast cancer research. This stamp is available at post
offices, postal stores, special breast cancer fund-raising events, and
from rural carriers and some postal vending machines. In order to
provide the Congress with the public's views on this topic, we would
like to ask you some questions.
BC-1. Prior to hearing what I just told you about the 45-cent Breast
Cancer Research stamp, were you aware that the Postal Service was
selling such a stamp?
[See PDF for image]
[End of figure]
[End of section]
Appendix II: National Institutes of Health Breast Cancer Research
Awards Funded with Proceeds from the BCRS' Surcharge Revenue:
As of April 2003, the National Cancer Institute (NCI) reported that it
had funded 86 breast cancer research awards using money transferred to
NIH by the Postal Service from the BCRS' surcharge revenue. The awards
totaled about $9.5 million and covered research areas that included
prevention, nutrition, biology, diagnosis, treatment, prognosis,
metastasis, tumorigenesis, and mutagenesis. Discounting a single, one-
time supplement for $4,300, individual awards ranged from $47,250 to
$142,500 and averaged $111,395. Thirty-two of the 86 awards were
noncompetitive continuations of previous BCRS funded awards. According
to NIH officials, they were in the process of awarding the remaining
funds that had been transferred to NIH for breast cancer research.
Table 4 identifies pertinent information about each award, including
the amount of the award, research area, principal investigator,
sponsoring institution, and the fiscal year of the award.
Table 4: NIH/NCI Breast Cancer Research Awards Funded with Proceeds, as
of April 2003, from BCRS Sales:
Fiscal year: 2000; Institution: Hadassah University Hospital; Principal
investigator: Vlodavsky; Research area: Metastasis; Amount: $61,000.
Fiscal year: 2000; Institution: Clemson University; Principal
investigator: Chen; Research area: Biology/metastasis; Amount:
$105,000.
Fiscal year: 2000; Institution: Mount Sinai School of Medicine;
Principal investigator: Kretzschmar; Research area: Metastasis;
Amount: $125,387.
Fiscal year: 2000; Institution: Institute for Cancer Research;
Principal investigator: Yeung; Research area: Prevention/biology;
Amount: $126,866.
Fiscal year: 2000; Institution: University of Pennsylvania; Principal
investigator: Lemmon; Research area: Biology/treatment; Amount:
$118,875.
Fiscal year: 2000; Institution: University of California, Irvine;
Principal investigator: Blumberg; Research area: Treatment; Amount:
$105,946.
Fiscal year: 2000; Institution: Fox Chase Cancer Center; Principal
investigator: Russo; Research area: Tumorigenesis; Amount: $126,866.
Fiscal year: 2000; Institution: University of Melbourne; Principal
investigator: Thompson; Research area: Metastasis; Amount: $75,000.
Fiscal year: 2000; Institution: University of Hawaii; Principal
investigator: Gotay; Research area: Treatment; Amount: $101,000.
Fiscal year: 2000; Institution: University of Pennsylvania; Principal
investigator: Radice; Research area: Metastasis; Amount: $118,875.
Fiscal year: 2000; Institution: Wake Forest University; Principal
investigator: Shelness; Research area: Treatment; Amount: $108,750.
Fiscal year: 2000; Institution: Henry M. Jackson Foundation; Principal
investigator: Lechleider; Research area: Biology/metastasis; Amount:
$74,000.
Fiscal year: 2000; Institution: Virginia Mason Research Center;
Principal investigator: Nelson; Research area: Biology/treatment;
Amount: $47,250.
Fiscal year: 2000; Institution: Georgetown University; Principal
investigator: Wong; Research area: Biology/diagnosis; Amount:
$116,950.
Fiscal year: 2000; Institution: Columbia University; Principal
investigator: Swergold; Research area: Mutagenesis; Amount: $127,875.
Fiscal year: 2000; Institution: Baylor College of Medicine; Principal
investigator: Rosen; Research area: Metastasis; Amount: $78,488.
Fiscal year: 2000; Institution: Thomas Jefferson University; Principal
investigator: Sauter; Research area: Diagnosis; Amount: $81,089.
Fiscal year: 2000; Institution: Center for Molecular Medicine and
Immunology/Garden State Cancer Center; Principal investigator:
Blumenthal; Research area: Treatment; Amount: $142,500.
Fiscal year: 2000; Institution: University of Pittsburgh; Principal
investigator: Nichols; Research area: Biology/treatment; Amount:
$112,500.
Fiscal year: 2000; Institution: University of Illinois at Chicago;
Principal investigator: Westbrook; Research area: Metastasis; Amount:
$116,475.
Fiscal year: 2000; Institution: Dana-Farber Cancer Institute; Principal
investigator: Kufe; Research area: Biology/tumorigenesis; Amount:
$119,915.
Fiscal year: 2000; Institution: Albany Medical College; Principal
investigator: Bennett; Research area: Treatment; Amount: $116,250.
Fiscal year: 2000; Institution: Yale University; Principal
investigator: Zhang; Research area: Biology/tumorigenesis; Amount:
$122,625.
Fiscal year: 2000; Institution: Long Island Jewish Medical Center;
Principal investigator: Shi; Research area: Treatment/nutrition;
Amount: $116,616.
Fiscal year: 2000; Institution: University of California, San
Francisco; Principal investigator: Collins; Research area: Treatment;
Amount: $110,625.
Fiscal year: 2000; Institution: University of Massachusetts, Amherst;
Principal investigator: Jerry; Research area: Biology/tumorigenesis;
Amount: $115,125.
Fiscal year: 2000; Institution: University of Vermont; Principal
investigator: Krag; Research area: Treatment; Amount: $113,250.
Fiscal year: 2000; Institution: State University of New York; Principal
investigator: Muti; Research area: Treatment/nutrition; Amount:
$77,000.
Fiscal year: 2000; Institution: University of Utah; Principal
investigator: Grissom; Research area: Treatment; Amount: $112,125.
Fiscal year: 2000; Institution: Schepens Eye Research Institute;
Principal investigator: D'Amore; Research area: Biology/tumorigenesis;
Amount: $121,500.
Fiscal year: 2000; Institution: Massachusetts General Hospital;
Principal investigator: Haber; Research area: Tumorigenesis; Amount:
$129,500.
Fiscal year: 2000; Institution: Beth Israel Deaconess Medical Center;
Principal investigator: Junghans; Research area: Biology; Amount:
$130,500.
Fiscal year: 2001; Institution: Whitehead Institute for Biomedical
Research; Principal investigator: Weinberg; Research area: Biology;
Amount: $116,250.
Fiscal year: 2001; Institution: Medical Diagnostic Research Foundation;
Principal investigator: Chance; Research area: Diagnosis; Amount:
$92,500.
Fiscal year: 2001; Institution: Columbia University Health Sciences;
Principal investigator: Fisher; Research area: Treatment; Amount:
$127,875.
Fiscal year: 2001; Institution: Georgetown University; Principal
investigator: Dickson; Research area: Tumorigenesis; Amount: $116,600.
Fiscal year: 2001; Institution: University of Minnesota, Twin Cities;
Principal investigator: Sheaff; Research area: Biology/prevention;
Amount: $111,375.
Fiscal year: 2001; Institution: Dana-Farber Cancer Institute; Principal
investigator: Garber; Research area: Prevention; Amount: $128,750.
Fiscal year: 2001; Institution: Johns Hopkins University; Principal
investigator: Fedarko; Research area: Metastasis; Amount: $122,750.
Fiscal year: 2001; Institution: Northwestern University; Principal
investigator: Jordan; Research area: Prevention; Amount: $110,250.
Fiscal year: 2001; Institution: Stanford University; Principal
investigator: Contag; Research area: Diagnosis/metastasis; Amount:
$119,597.
Fiscal year: 2001; Institution: University of California, Irvine;
Principal investigator: Radany; Research area: Biology; Amount:
$112,800.
Fiscal year: 2001; Institution: Georgetown University; Principal
investigator: Byers; Research area: Prognosis/biology; Amount:
$116,550.
Fiscal year: 2001; Institution: Wayne State University; Principal
investigator: Fernandez-Madri; Research area: Diagnosis; Amount:
$111,750.
Fiscal year: 2001; Institution: Hadassah University Hospital; Principal
investigator: Vlodavsky; Research area: Metastasis; Amount: $61,000.
Fiscal year: 2001; Institution: Clemson University; Principal
investigator: Chen; Research area: Biology/metastasis; Amount:
$105,000.
Fiscal year: 2001; Institution: Mount Sinai School of Medicine of New
York University; Principal investigator: Kretzschmar; Research area:
Metastasis; Amount: $127,125.
Fiscal year: 2001; Institution: Institute for Cancer Research;
Principal investigator: Yeung; Research area: Prevention/biology;
Amount: $126,133.
Fiscal year: 2001; Institution: University of Pennsylvania; Principal
investigator: Lemmon; Research area: Biology/treatment; Amount:
$118,875.
Fiscal year: 2001; Institution: University of California, Irvine;
Principal investigator: Blumberg; Research area: Treatment; Amount:
$112,800.
Fiscal year: 2001; Institution: Fox Chase Cancer Center; Principal
investigator: Russo; Research area: Tumorigenesis; Amount: $126,133.
Fiscal year: 2001; Institution: University of Melbourne; Principal
investigator: Thompson; Research area: Metastasis; Amount: $75,000.
Fiscal year: 2001; Institution: University of Hawaii, Manoa; Principal
investigator: Gotay; Research area: Treatment; Amount: $101,000.
Fiscal year: 2001; Institution: University of Pennsylvania; Principal
investigator: Radice; Research area: Metastasis; Amount: $118,875.
Fiscal year: 2001; Institution: Wake Forest University; Principal
investigator: Shelness; Research area: Treatment; Amount: $108,375.
Fiscal year: 2001; Institution: Henry M. Jackson Foundation for the
Advancement of Military Medicine; Principal investigator: Lechleider;
Research area: Biology/metastasis; Amount: $74,000.
Fiscal year: 2001; Institution: Virginia Mason Research Center;
Principal investigator: Nelson; Research area: Biology/treatment;
Amount: $47,250.
Fiscal year: 2001; Institution: Georgetown University; Principal
investigator: Wong; Research area: Biology/diagnosis; Amount:
$116,400.
Fiscal year: 2001; Institution: Columbia University Health Sciences;
Principal investigator: Swergold; Research area: Mutagenesis; Amount:
$127,875.
Fiscal year: 2001; Institution: Baylor College of Medicine; Principal
investigator: Rosen; Research area: Metastasis; Amount: $109,322.
Fiscal year: 2001; Institution: Thomas Jefferson University; Principal
investigator: Sauter; Research area: Diagnosis; Amount: $119,148.
Fiscal year: 2001; Institution: Garden State Cancer Center; Principal
investigator: Blumenthal; Research area: Treatment; Amount: $142,500.
Fiscal year: 2001; Institution: University of Pittsburgh; Principal
investigator: Nichols; Research area: Biology/treatment; Amount:
$112,500.
Fiscal year: 2001; Institution: University of Illinois; Principal
investigator: Westbrook; Research area: Metastasis; Amount: $116,475.
Fiscal year: 2001; Institution: Dana-Farber Cancer Institute; Principal
investigator: Kufe; Research area: Biology/tumorigenesis; Amount:
$125,862.
Fiscal year: 2001; Institution: Albany Medical College of Union
University; Principal investigator: Bennett; Research area: Treatment;
Amount: $116,250.
Fiscal year: 2001; Institution: Yale University; Principal
investigator: Zhang; Research area: Biology/tumorigenesis; Amount:
$122,625.
Fiscal year: 2001; Institution: Long Island Jewish Medical Center;
Principal investigator: Shi; Research area: Treatment/nutrition;
Amount: $117,050.
Fiscal year: 2001; Institution: University of California, San
Francisco; Principal investigator: Collins; Research area: Treatment;
Amount: $110,625.
Fiscal year: 2001; Institution: University of Massachusetts, Amherst;
Principal investigator: Jerry; Research area: Biology/tumorigenesis;
Amount: $115,125.
Fiscal year: 2001; Institution: University of Vermont and State
Agricultural College; Principal investigator: Krag; Research area:
Treatment; Amount: $113,250.
Fiscal year: 2001; Institution: University of Utah; Principal
investigator: Grissom; Research area: Treatment; Amount: $112,500.
Fiscal year: 2001; Institution: Schepens Eye Research Institute;
Principal investigator: D'Amore; Research area: Biology/tumorigenesis;
Amount: $121,500.
Fiscal year: 2001; Institution: Massachusetts General Hospital;
Principal investigator: Haber; Research area: Tumorigenesis; Amount:
$127,500.
Fiscal year: 2001; Institution: Beth Israel Deaconess Medical Center;
Principal investigator: Junghans; Research area: Biology; Amount:
$130,500.
Fiscal year: 2002; Institution: Fox Chase Cancer Center; Principal
investigator: Russo; Research area: Tumorigenesis; Amount: $4,300.
Fiscal year: 2002; Institution: Whitehead Institute for Biomedical
Research; Principal investigator: Weinberg; Research area: Biology;
Amount: $116,250.
Fiscal year: 2002; Institution: Medical Diagnostic Research Foundation;
Principal investigator: Chance; Research area: Diagnosis; Amount:
$103,350.
Fiscal year: 2002; Institution: Columbia University Health Sciences;
Principal investigator: Fisher; Research area: Treatment; Amount:
$127,875.
Fiscal year: 2002; Institution: Georgetown University; Principal
investigator: Dickson; Research area: Tumorigenesis; Amount: $116,400.
Fiscal year: 2002; Institution: University of Minnesota, Twin Cities;
Principal investigator: Sheaff; Research area: Biology/prevention;
Amount: $111,375.
Fiscal year: 2002; Institution: Dana-Farber Cancer Institute; Principal
investigator: Garber; Research area: Prevention; Amount: $128,375.
Fiscal year: 2002; Institution: Johns Hopkins University; Principal
investigator: Fedarko; Research area: Metastasis; Amount: $122,625.
Fiscal year: 2002; Institution: University of California, Irvine;
Principal investigator: Radany; Research area: Biology; Amount:
$112,800.
Fiscal year: 2002; Institution: Georgetown University; Principal
investigator: Byers; Research area: Prognosis/biology; Amount:
$116,400.
Fiscal year: 2002; Institution: Wayne State University; Principal
investigator: Fernandez-Madrid; Research area: Diagnosis; Amount:
$111,750.
Fiscal year: Total: Amount: $9,472,843.
Source: NCI, NIH.
[End of table]
[End of section]
Appendix III: Department of Defense Breast Cancer Research Awards Funded
with Proceeds from the BCRS' Surcharge Revenue:
As of April 2003, the U.S. Army Medical Research and Materiel Command
reported that it had funded 19 breast cancer research awards using
money transferred to DOD by the Postal Service from the BCRS' surcharge
revenue. The awards totaled about $6.8 million and covered research
areas that included genetics, imaging, biology, epidemiology,
immunology, and therapy. Individual awards ranged from $5,000 to
$578,183 and averaged $356,478. According to DOD officials, about
$256,000 of the transferred funds had been used for management
expenses, and DOD was in the process of awarding the remaining funds.
Table 5 identifies pertinent information about each award, including
the amount of the award, research area, principal investigator,
sponsoring institution, and the fiscal year of the award.
Table 5: DOD Breast Cancer Research Awards Funded with Proceeds, as of
April 2003, from BCRS Sales:
Fiscal year: 1999; Institution: Garvan Institute; Principal
investigator: Daly; Research area: Cell biology; Amount: $283,649.
Fiscal year: 1999; Institution: Scripps Institute; Principal
investigator: Deuel; Research area: Molecular biology; Amount: $5,000.
Fiscal year: 1999; Institution: University of California, Davis;
Principal investigator: Heyer; Research area: Molecular biology;
Amount: $111,444.
Fiscal year: 1999; Institution: Garvan Institute; Principal
investigator: Musgrove; Research area: Cell biology; Amount: $222,652.
Fiscal year: 1999; Institution: University of Arkansas; Principal
investigator: Shah; Research area: Cell biology; Amount: $279,000.
Fiscal year: 1999; Institution: Texas A&M University; Principal
investigator: Wang; Research area: Imaging; Amount: $317,510.
Fiscal year: 1999; Institution: University of Texas, SW Medical Center;
Principal investigator: White; Research area: Molecular biology;
Amount: $334,094.
Fiscal year: 1999; Institution: Tel Aviv University; Principal
investigator: Wreschner; Research area: Cell biology; Amount: $225,000.
Fiscal year: 2000; Institution: Burnham Institute; Principal
investigator: Adamson; Research area: Cell biology; Amount: $578,183.
Fiscal year: 2000; Institution: University of Arizona; Principal
investigator: Akporiaye; Research area: Immunology; Amount: $454,500.
Fiscal year: 2000; Institution: University of Toronto; Principal
investigator: Penn; Research area: Molecular biology; Amount: $296,142.
Fiscal year: 2001; Institution: Vanderbilt University; Principal
investigator: Cai; Research area: Epidemiology/genetics; Amount:
$560,144.
Fiscal year: 2001; Institution: University of California, Davis;
Principal investigator: Carraway; Research area: Cell biology; Amount:
$427,225.
Fiscal year: 2001; Institution: University of Texas, SW Medical Center;
Principal investigator: Chaudhary; Research area: Cell biology; Amount:
$312,434.
Fiscal year: 2001; Institution: Purdue University; Principal
investigator: Geahlen; Research area: Cell biology; Amount: $425,425.
Fiscal year: 2001; Institution: St. Luke's-Roosevelt Hospital Center;
Principal investigator: Rosner; Research area: Cell biology; Amount:
$454,181.
Fiscal year: 2002; Institution: University of South Florida; Principal
investigator: Dou; Research area: Therapy; Amount: $491,999.
Fiscal year: 2002; Institution: Fox Chase Cancer Center; Principal
investigator: Godwin; Research area: Genetics; Amount: $504,000.
Fiscal year: 2002; Institution: Yale University; Principal
investigator: Perkins; Research area: Genetics; Amount: $490,500.
Fiscal year: Total; Amount: $6,773,082.
Source: U.S. Army Medical Research and Materiel Command, DOD.
[End of table]
[End of section]
Appendix IV: Comments from the U.S. Postal Service:
RALPH J. MODEN SENIOR VICE PRESIDENT GOVERNMENT RELATIONS:
UNITED STATES POSTAL SERVICE:
September 10, 2003:
Mr. Bernard L. Ungar:
Director, Physical Infrastructure Issues United States General
Accounting Office Washington, DC 20548-0001:
Dear Mr. Ungar:
Thank you for providing the U.S. Postal Service the opportunity to
review and comment on the General Accounting Office (GAO) draft report,
Breast Cancer Research Stamp: Effective Fund-Raiser, but Better
Reporting and Cost Recovery Criteria Needed. This report follows up on
GAO's April 2000 report on the Breast Cancer Research Stamp (BCRS).
The GAO report indicated that the BCRS continues to be an effective
fund-raiser for breast cancer research. Despite concerns expressed by
the Postal Service and other stakeholders regarding the appropriateness
of using semipostals to raise funds for designated causes, the Postal
Service will faithfully execute its responsibilities under applicable
law regarding the BCRS as well as the Heroes of 2001 and the planned
Stop Family Violence stamps.
We note that the GAO report raised a number of issues concerning the
costs being recouped from the BCRS surcharge revenue. As GAO has
recognized, the Postal Service's approach to cost recovery has evolved
since the BCRS was first issued. The Postal Service has determined that
the reasonable costs to be recovered from the surcharge revenue for any
semipostal stamp are the costs in excess of those normally incurred for
comparable commemorative stamps. It is our belief, and the GAO report
seems to concur, that the Postal Service has discretion under the law
to make this determination.
GAO concludes, however, that the Postal Service's regulations can be
read as not requiring establishment of adequate baselines for
comparison for certain categories of costs and that, in some instances,
the Postal Service has not adequately tracked the costs to be recouped.
In particular, GAO has expressed concerns about costs associated with
BCRS printing, sales, and distribution. In addition, the GAO report
notes that while the Postal Service commissioned an analysis of BCRS
costs recovered through the First-Class postage rate in response to a
recommendation in the GAO's April 2000 report, and agreed to provide
that information to Congress, to date the Postal Service has not
provided such information.
As the GAO report indicates, the Postal Service never intended the
interpretation that GAO suggests might be ascribed to our regulations.
We acknowledge, however, that the regulations may need to be revised to
make our intent clearer. Regarding the establishment of baselines, it
should be noted that comparisons can involve different facets in
different areas. For example, comparisons between the BCRS and
comparable commemoratives in the area of printing costs
involve differing time periods (and concomitant increases or decreases
in industry costs associated with technology), different graphic
designs, and different print runs. We also note that our concern in
adequately tracking and recouping costs from semipostal surcharge
revenue continues to be, as stated in the GAO report, that the time and
effort needed to research, develop, implement, and monitor tracking
mechanisms for certain types of costs could significantly reduce or
even eliminate funds remaining to be donated from the surcharge
revenue.
Mindful of these concerns, the Postal Service, nonetheless, plans to
take appropriate actions in response to GAO's specific recommendations.
The Postal Service plans to reassess the earlier analysis it had
commissioned on recovery of BCRS costs through the First-Class Mail
postage rate in light of the cost recovery issues raised in this
report. We will provide both the Congress and GAO with the results of
that reassessment upon completion. In addition, the Postal Service will
reexamine its semipostal regulations with a view toward proposing
revisions that will clarify what costs are to be identified and
recouped from surcharge revenues.
If you or your staff would like to discuss any of these comments, I am
available at your convenience.
Sincerely,
Ralph J. Moden
Signed by Ralph J. Moden:
[End of section]
Appendix V: Contact and Staff Acknowledgments:
GAO Contact:
Gerald P. Barnes (202) 512-2834:
Acknowledgments:
Alan N. Belkin, Kathleen A. Gilhooly, Kenneth E. John, Stuart M.
Kaufman, Roger L. Lively, Jill P. Sayre, and Charles F. Wicker made key
contributions to this report.
(543052):
FOOTNOTES
[1] A semipostal is a stamp sold at a surcharge over postal value. The
additional charge is for a special purpose, such as for breast cancer
research.
[2] U.S. General Accounting Office, Breast Cancer Research Stamp:
Millions Raised for Research, but Better Cost Recovery Criteria Needed,
GAO/GGD-00-80 (Washington, D.C.: Apr. 28, 2000).
[3] A commemorative stamp is a postage stamp that depicts the cultural
and historical heritage of the United States; e.g., important people,
events, places, or special subjects of national appeal or significance.
[4] The Heroes of 2001 semipostal was introduced June 7, 2002; and the
Stop Family Violence semipostal is to be introduced no later than
January 1, 2004.
[5] The semipostals currently under consideration are to help promote
childhood literacy and the Peace Corps.
[6] An example of such a cost could be a local event that a post office
participates in or hosts within its community to support sales of the
BCRS. This could include events tied to walk-a-thons, marathons, races,
breast cancer awareness month, mammogram screening awareness programs,
etc.
[7] The postage rate for letters up to 1 ounce sent by First-Class Mail
increased to 33 cents on January 10, 1999; to 34 cents on January 7,
2001; and to the current 37 cents on June 30, 2002. The BCRS was sold
for 40 cents until March 23, 2002, when its sales price was increased
to its current price of 45 cents.
[8] The Breast Cancer Research Stamp Act of 2001 was included as part
of the Treasury and General Government Appropriations Act of 2002 (Pub.
L. No. 107-67, Nov. 12, 2001).
[9] The 9/11 Heroes Stamp Act of 2001 was included as part of the
Treasury and General Government Appropriations Act of 2002 (Pub. L. No.
107-67, Nov. 12, 2001).
[10] The Stamp Out Domestic Violence Act of 2001 was included as part
of the Treasury and General Government Appropriations Act of 2002 (Pub.
L. No. 107-67, Nov. 12, 2001).
[11] Legislation to establish a semipostal to help promote childhood
literacy was introduced in the House of Representatives on January 7,
2003 (H.R. 126) and legislation to establish a semipostal to benefit
the Peace Corps was introduced in the House on June 5, 2003 (H.R.
2371).
[12] GAO/GGD-00-80.
[13] The Service recast the BCRS costs that we had included in our
April 2000 BCRS report using its current cost recovery criteria. Our
April 2000 report included BCRS costs from inception through December
31, 1999. Recasting the data did not change the total BCRS costs we
reported through December 31, 1999, nor did it change the total costs
we reported as being recouped from the BCRS' surcharge revenue. It did,
however, result in the renaming and regrouping of some individual cost
items that we previously reported.
[14] Under 39 C.F.R. 211.2, the Service states that the regulations of
the Service include the ASM. Accordingly, hereafter, we will refer to
the ASM provisions as Postal Service regulations.
[15] In implementing its regulations, the Service reported that it had
identified the BCRS' comparable stamps as the commemorative stamp
issues featuring the images of Warner Brothers characters issued in
1997, 1998, and 1999. These stamp issues included the images of Bugs
Bunny (first issued in 1997), Sylvester and Tweety (1998), and Daffy
Duck (1999).
[16] Representative McHugh is now Chairman of the Special Panel on
Postal Reform and Oversight, House Committee on Government Reform.
[17] The postal fiscal year consists of 13, 4-week accounting periods.
A postal quarter (PQ) consists of three consecutive accounting periods
except for PQ 4, which covers the last four accounting periods of the
fiscal year.
[18] This is based on the Response Rate 3 (RR3) convention defined by
the American Association of Public Opinion Research: http://
www.aapor.org/default.asp?page=survey_methods/
standards_and_best_practices/standard_definitions. This response rate
is calculated on the assumption that telephone numbers that were never
contacted would have yielded eligible households at the same rate (24.8
percent) as that experienced with the contacted households.
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