Postal Service:

Preliminary Report on Compliance With 1989 Budget Reduction Mandate

GGD-89-119: Published: Aug 30, 1989. Publicly Released: Aug 30, 1989.

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Pursuant to a legislative requirement, GAO submitted a preliminary report on the U.S. Postal Service's (USPS) compliance with its plan to reduce its fiscal year (FY) 1989 operating budget by $270 million.

GAO found that USPS: (1) projected that its 12 proposed cost-cutting initiatives, involving administrative personnel, travel, training, supplies and services, mail transportation operations, mail processing equipment, compensating, and Sunday mail collection, would save $288 million; (2) reported in March 1989 that it was achieving its estimated savings; (3) achieved $232 million of its estimated savings regarding administrative and transportation costs, elimination of Sunday collection, and salary increases; (4) could not verify $56 million in savings from deployment and upgrading of mail processing equipment, since such factors as work loads and work shifts also affected equipment operations; and (5) may achieve its savings target without including any savings resulting from equipment deployment and upgrade, since the other initiatives will probably exceed their planned savings.

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