Postal Service:

Final Report on Compliance With 1989 Budget Reduction Mandate

GGD-90-26: Published: Oct 31, 1989. Publicly Released: Oct 31, 1989.

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Pursuant to a legislative requirement, GAO submitted a final report on the Postal Service's (USPS) compliance with Omnibus Budget Reconciliation Act of 1987 requirements to: (1) reduce 1989 operating costs by $270 million; and (2) pay 1989 cost savings into the Federal Employees Health Benefits Fund.

GAO found that: (1) USPS exceeded the required $270 million in savings, although GAO could not determine the individual cost-reduction initiatives' effectiveness; (2) USPS estimated savings totalling $288 million from six initiatives it began in 1988, and six initiatives it added in 1989; (3) although overall USPS costs exceeded its budget, USPS reduced operating costs in certain areas by about $293 million; (4) it could not verify a USPS-estimated $37.6-million saving from automated mail processing equipment, because the corresponding employee work-hour reductions did not account for hours shifted to other work; (5) USPS complied with a legislative requirement prohibiting borrowing of funds for 1989 Health Benefits Fund payments; and (6) overall, USPS complied with legislative requirements in 1989.

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