Breast Cancer Research Stamp:

Millions Raised for Research, but Better Cost Recovery Criteria Needed

GGD-00-80: Published: Apr 28, 2000. Publicly Released: Apr 28, 2000.

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Pursuant to a legislative requirement, GAO provided information on the Postal Service's Breast Cancer Research Stamp, focusing on: (1) how the Service went about identifying and allocating the costs it incurred in developing and marketing the Breast Cancer Research Semipostal (BCRS) and the issues associated with effectiveness; (2) the statutory authorities and constraints associated with the Service's issuance of semipostals, in general, as a means of fund-raising; and (3) the appropriateness of using the BCRS as a means of fund-raising.

GAO noted that: (1) on March 16, 2000, the Service reported that the bulk of its costs to develop and sell the BCRS through December 31, 1999, was $5.9 million; (2) according to the Service, almost all of these costs would have been incurred with any blockbuster commemorative stamp issue and have been recovered through the 33 cents that constitutes the First-Class postage portion of the BCRS; (3) in a March report, the Postal Service Office of Inspector General (OIG) identified $836,000 in costs that it believed were attributable to the BCRS program and not previously identified by the Service; (4) after reviewing a draft of OIG's report, the Service agreed that $488,000 of these costs were incurred exclusively on behalf of the BCRS program, and included them in its reported $5.9 million in BCRS costs; (5) the Service and OIG had not, as of March 31, 2000, resolved their differences over the remaining $348,000 in costs identified by OIG; (6) the Stamp Out Breast Cancer Act did not provide quantitative measures for evaluating the effectiveness of the BCRS as a fund-raiser; (7) however, the act provided that the BCRS would be voluntary and convenient, and it would raise funds for breast cancer research; (8) to these ends, BCRS has been successful; (9) the BCRS had raised about $10 million for breast cancer research by the end of 1999 and is expected to raise more by the time sales are scheduled to conclude; (10) with respect to appropriateness, about 71 percent of adults responding to the public opinion survey GAO commissioned, and most of the key stakeholders GAO spoke with, believed that it is appropriate to use semipostals issued by the Service to raise funds for nonpostal purposes; (11) GAO does not believe that the Service has the authority to issue semipostals on its own volition without specific legislation authorizing it to do so; (12) although the act gave the Service the specific authority to issue the BCRS, it was silent with regard to the appropriateness of the Service issuing additional semipostals for other causes; (13) postal officials have stated that in the absence of statutory authority to issue semipostals, it is unclear whether selling such stamps would be consistent with the underlying statutory and regulatory authorities governing the Service; and (14) GAO does not interpret the Service's underlying statutory authority as authorizing it to establish postage rates and fees for a particular stamp at a level that exceeds its postage value for purposes of generating revenue for contributions to a charitable cause.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: In July 2000, legislation was enacted into law authorizing the Postal Service to issue and sell additional semipostals. That legislation did not amend the Stamp Out Breast Cancer Act to specify any additional costs associated with the BCRS that the Postal Service must recoup, or specify explicit criteria the Service should use in determining costs to be recovered from semipostal surcharge revenue. However, the legislation directed the Postal Service to establish regulations specifically addressing how the costs incurred by the Postal Service are to be computed, recovered, and kept to a minimum.

    Matter: If Congress decides that the Postal Service is not recouping its reasonable costs associated with the BCRS, Congress may wish to consider: (1) amending the Stamp Out Breast Cancer Act to specify any additional costs associated with the BCRS that the Postal Service must recoup; and (2) in any future semipostal legislation, specifying the explicit criteria the Service should use in determining costs to be recouped from the semipostal's surcharge revenue.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: On July 28, 2000, the U.S. Postal Service issued regulations establishing the Service's criteria for determining which costs are to be recouped from the BCRS surcharge and which costs are covered by the First-Class postage rate. Those regulations remained in effect until June 2001, when the Service, pursuant to a requirement in the Semipostal Authorization Act of 2000, issued regulations governing semipostals issued under that Act. According to postal officials, the Service administratively decided that the regulations issued under the Semipostal Authorization Act would apply to all semipostals issued by the Service--including the BCRS. Furthermore, postal officials indicated that cost recovery criteria, as specified in postal regulations, are consistently applied to all cost items associated with semipostals.

    Recommendation: The Postmaster General should promptly issue regulations that clearly state the Service's criteria for determining which costs are to be recouped from the BCRS surcharge revenue and ensure that the criteria are consistently applied to all cost items associated with the BCRS.

    Agency Affected: United States Postal Service

  2. Status: Closed - Implemented

    Comments: In June, 2004, the Postal Service provided data and analysis to its congressional oversight committees, which included the Senate Committee on Governmental Affairs, the House Committee on Government Reform, and the House Special Panel on Postal Reform and Oversight. The material described (1) the Breast Cancer Research Stamp (BCRS) costs recovered through the First-Class Mail postage rate and (2) the BCRS costs specific to the BCRS that were recouped from its surcharge revenue.

    Recommendation: The Postmaster General should direct postal management to make available the data and analysis showing which BCRS costs have been recovered through the 33-cent First-Class postage rate to provide assurance that postal ratepayers are not involuntarily contributing funds to breast cancer research.

    Agency Affected: United States Postal Service

 

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