Breast Cancer Research Stamp:

Effective Fund-Raiser but Better Reporting and Cost-Recovery Criteria Needed

GAO-03-1021: Published: Sep 30, 2003. Publicly Released: Sep 30, 2003.

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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.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: In January 2004, Congress amended the Stamp Out Breast Cancer Act by extending the sales period for the BCRS to December 31, 2005, but did not include a requirement that NIH and DOD annually report to Congress on how they used the surcharge revenues.

    Matter: 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 tht 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

  1. Status: Closed - Implemented

    Comments: In June 2004, USPS provided a copy of cost data analysis to both the Congress and GAO in a report titled "United States Postal Service: Response to the General Accounting Office Recommendations on the Breast Cancer Research Stamp". This analysis contained details of the costs associated with the BCRS and USPS' rationale for determining whether the costs should be recouped from the First-Class postage rate or surcharge revenue.

    Recommendation: The Postmaster General should 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.

    Agency Affected: United States Postal Service

  2. Status: Closed - Implemented

    Comments: As of February 2005, USPS had taken the following actions: (1) revised its regulations to clarify USPS cost offset policies and procedures for the Semipostal Program; (2) amended the regulations to delete the word "may" from the cost items recoverable from the surcharge revenue, making the recovery of the costs listed mandatory rather than optional; (3) established a baseline for BCRS cost recovery; and (4) provided a copy of USPS' baseline analysis to both Congress and GAO in a report titled "United States Postal Service: Response to the General Accounting Office Recommendations on the Breast Cancer Research Stamp".

    Recommendation: The Postmaster General should 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 Affected: United States Postal Service

 

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