Changes in the U.S. Postal Service's Cash Management Practices Could Increase Income and Reduce Cost
GGD-79-67: Published: Jul 13, 1979. Publicly Released: Jul 13, 1979.
- Full Report:
During fiscal year 1978 the Postal Service collected about $22.5 billion through its 40,000 installations and earned over $176 million in interest income from investments in U.S. Treasury securities. While this task may seem overwhelming, the Postal Service's proficiency is widely recognized and highly regarded. As with any system this size and complexity, improvements could be made.
The Postal Service could increase its investment income if its current banking practices were changed to require, where feasible, the same-day deposit of postal receipts, a day earlier than under the present system. Investment income could also be increased if the banking function were better monitored to ensure that postal installations follow established procedures. Some post offices were late in reporting deposits while other post offices retained more cash than authorized by guidelines. Both practices resulted in lost investment income. The competitive selection of banks could result in better control and reduced costs for obtaining bank services. The Postal Service may be exposing itself to financial risks in its commercial bank accounts because of inadequate collateralization of its deposits.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: The Senior Assistant Postmaster General, Finance Group, should require same-day deposit of receipts where possible; and institute competitive bidding for banking services and a system for monitoring the reliability of bank charges. In addition, the Postal Service's banking and accounting functions should be improved.