U.S. Postal Service:

Continued Challenges to Maintaining Improved Performance

T-GGD-97-88: Published: Apr 24, 1997. Publicly Released: Apr 24, 1997.

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Bernard L. Ungar
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GAO discussed: (1) the performance of the Postal Service (USPS) and the need for improving internal controls and protecting revenue in an organization that takes in and spends billions of dollars each year; (2) key reform and oversight issues that continue to challenge USPS and Congress as they consider how U.S. mail service will be provided in the future; and (3) its ongoing work relating to labor-management relations at USPS and other issues.

GAO noted that: (1) USPS reported that fiscal year (FY) 1996 represented the second year in a row that its financial performance was profitable and operational performance improved; (2) USPS's 1996 net income was $1.6 billion and it delivered 91 percent of overnight mail on time; (3) additionally, for FY 1996, USPS's volume exceeded 182 billion pieces of mail and generated more than $56 billion in revenue; (4) while these results are encouraging, other performance data suggest that some areas warrant closer scrutiny; (5) last year's delivery of 2-day and 3-day mail, at 80 and 83 percent respectively, did not score as high as overnight delivery; (6) the concern among customers is that USPS's emphasis on overnight delivery is at the expense of 2-day and 3-day mail; (7) additionally, although its mail volume continues to grow, USPS is concerned that customers increasingly are turning to its competitors or alternative communications methods; (8) in 1996, mail volume increased by about one-half of USPS's anticipated increase in volume; (9) containing costs is another key challenge that GAO has reported on previously; (10) GAO has also found several weaknesses in USPS's internal controls that contributed to increased costs; (11) USPS's continued success in both financial and operational performance will depend heavily on controlling operating costs, strengthening internal controls, and ensuring the integrity of its services; (12) the prospect that pending postal legislation may place USPS in a more competitive arena with its private sector counterparts has prompted congressional consideration of some key reform issues; (13) these issues include how proposed changes to the Private Express statutes may affect universal mail service, postal revenues, and rates; (14) another reform issue is the future role of USPS in an increasingly competitive, constantly changing communications market; (15) congressional oversight remains a key tool for improving the organizational performance of USPS; (16) one of the most important areas for oversight is labor-management relations; (17) despite the initiatives that have been established to address them, the long-standing labor-management relations problems GAO identified in 1994 remain unresolved; (18) the Government Performance and Results Act provides an important avenue for stakeholders in reaching a consensus for addressing such problems; and (19) also, USPS's automation efforts will continue to require the attention of both USPS and Congress to ensure that increased productivity and an adequate return on investments are realized.

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