U.S. Postal Service:

Stronger Mail Acceptance Controls Could Help Prevent Revenue Losses

GGD-96-126: Published: Jun 25, 1996. Publicly Released: Jul 22, 1996.

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Pursuant to a congressional request, GAO reviewed the U.S. Postal Service's (USPS) controls over postage paid on presorted and barcoded mail, focusing on whether USPS controls ensure that mailer-claimed discounts are earned.

GAO found that during fiscal year 1994: (1) 40 percent of required bulk mail verifications were not performed and postal supervisors did less than 50 percent of required follow-up verifications; (2) rejected mailings were resubmitted and accepted into the mail stream without proper corrections or postage; (3) mail acceptance clerks were not given adequate tools to determine whether increasing volumes of mailer-applied barcodes met USPS standards; and (4) postal management was unable to make informed decisions concerning the adequacy of bulk mail acceptance controls or determine the amount of revenue lost through improperly prepared mailings. GAO also found that: (1) USPS needs to determine the management strategy and financial investment necessary to minimize revenue loss; (2) the random method of selecting bulk business mailings for in-depth verification may not result in the best use of available staff; (3) USPS could better target its verification efforts based on risk by considering such factors as mailer histories and the postage value of mailings; (4) postal managers are developing a bulk business mail acceptance system, updating acceptance handbooks, acquiring barcoding verification equipment, and requesting field units to submit verification reports; and (5) USPS is also exploring a new risk-based approach for in-depth verification, improving revenue controls, and planning to install its new bulk mail system by 1997.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Service reported to the Chairman of the House Subcommittee on the Postal Service in a letter dated September 5, 1997, that risk-based verification procedures were implemented nationwide and that Business Mail Entry reports were being rolled up at the national level.

    Recommendation: The Postmaster General should direct bulk mail acceptance program supervisors and managers to periodically report to appropriate Postal Service levels on operation of the bulk mail acceptance system, initiatives, and the progress and effectiveness of related improvements so management can be reasonably assured that risk becomes the prominent factor in determining mailings to be verified.

    Agency Affected: United States Postal Service

  2. Status: Closed - Implemented

    Comments: The Postal Service implemented various reporting requirements on verifications of mailings, including supervisory reviews of such verifications. Such reports are to be used at several management levels to assess mail acceptance operations.

    Recommendation: The Postmaster General should direct bulk mail acceptance program supervisors and managers to periodically report to appropriate Postal Service levels on operation of the bulk mail acceptance system, initiatives, and the progress and effectiveness of related improvements so management can be reasonably assured that information on the extent and results of verifications, including supervisory reviews, is regularly reported to appropriate levels, including Postal Service headquarters, and that such information is used regularly to assess the adequacy of controls and staffing, training needs, and acceptance procedures.

    Agency Affected: United States Postal Service

  3. Status: Closed - Implemented

    Comments: In a September 5, 1997, letter to the Chairman of the House Subcommittee on the Postal Service, the Postal Service stated that it had just completed refresher training for all Managers, Business Mail Entry, to ensure all available tools are utilized. In addition, the Service reported that risk-based verification procedures had been implemented nationwide and Business Mail Entry reports were being rolled up at the national level.

    Recommendation: The Postmaster General should direct bulk mail acceptance program supervisors and managers to periodically report to appropriate Postal Service levels on operation of the bulk mail acceptance system, initiatives, and the progress and effectiveness of related improvements so management can be reasonably assured that acceptance clerks and supervisors are provided with adequate, up to date procedures, training, and tools necessary to make efficient and objective verification determinations.

    Agency Affected: United States Postal Service

  4. Status: Closed - Implemented

    Comments: The Postal Service said that information on the extent and results of verifications is now available on its internal Executive Information System to allow immediate access by field managers responsible for managing this process. Also, reports of verifications are rolled up at the national level.

    Recommendation: The Postmaster General should direct bulk mail acceptance program supervisors and managers to periodically report to appropriate Postal Service levels on operation of the bulk mail acceptance system, initiatives, and the progress and effectiveness of related improvements so management can be reasonably assured that mailings resubmitted following a failed verification are reverified and errors are corrected.

    Agency Affected: United States Postal Service

  5. Status: Closed - Implemented

    Comments: The Postmaster General advised that the Postal Service has implemented reporting requirements on bulk mail acceptance activities. At the local level, detailed results on verifications of mailers' statements are to be regularly reported. Higher-level management officials are to audit the operations of large acceptance units. Acceptance units are to perform periodic self-audits, and the Postal Inspection Service is doing a National Coordination Audit of the bulk mail acceptance function.

    Recommendation: The Postmaster General should direct bulk mail acceptance program supervisors and managers to periodically report to appropriate Postal Service levels on operation of the bulk mail acceptance system, initiatives, and the progress and effectiveness of related improvements so management can be reasonably assured that required mail verifications, including supervisory reviews, are done and that the results are documented as required.

    Agency Affected: United States Postal Service

  6. Status: Closed - Not Implemented

    Comments: In a letter dated September 5, 1997, the Postal Service stated that rather than developing methodologies to determine systemwide losses, it wanted to focus on identifying systemwide opportunities to improve its revenue protection processes.

    Recommendation: The Postmaster General should direct bulk mail acceptance program managers to develop methodologies that can be used to determine systemwide losses associated with accepting improperly prepared mailings.

    Agency Affected: United States Postal Service

 

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