Category Archives: GAO
It does not matter how much they improve their services, nor how high they raise their postage stamps from time to time. The US Postal Service is in the tank, to the tune of $3.5 billion, and it might be gone next year-of course, if WE don’t bail them out.
Postal Service Posts Loss: While many companies are reporting upbeat quarterly profits this earnings season, the United States Postal Service isn’t one of them. The quasi-governmental agency Thursday delivered a $3.5 billion loss in its fiscal third quarter, driven down by reduced mail volume and retiree health-benefit costs. USPS said it lost $1.1 billion more than it did in the same quarter a year ago, and warned it could run out of cash next year unless relief sought from Congress is approved.
The question is, how many times does the USPS has to be bailed out? They sought bailout in 2001.
From The Heritage Foundation, back then (boldface mine):
In a comprehensive November 2002 report, the General Accounting Office found significant problems in the Postal Service’s financial reporting.6 It concluded that the USPS had failed to provide sufficient and timely information on its financial condition and outlook.
One sign of trouble at the USPS, noted by the GAO, has been its changing financial estimates. Due to increasing use of e-mail and other electronic alternatives, USPS mail volume has declined in recent years, leading to financial difficulty for the USPS. The Postal Service’s consistent misestimates of expected returns have only made the problem worse. For instance, the Postal Service’s estimate of its FY 2001 budget deficit was $480 million in November 2000 but grew to an estimated $2 billion-$3 billion only three months later. The final deficit was $1.7 billion. The next year, the estimated $1.35 billion deficit for FY 2002 grew to $4.5 billion only six months later.8 The final 2002 deficit was $676 million.
The GAO report concluded that whatever the reason for these and other misestimates, USPS financial reporting provided no way either to anticipate the changes or to judge the reliability of the original estimates. In making its case, the GAO focused on the USPS’s quarterly financial reports.
To add to the problem, they also report their gains and losses in a different way-theirs.
The “Postal Year”
In addition to inadequate reporting of information, the Postal Service uses methods of compiling information that raise artificial barriers to analysis of postal activities. For example, the USPS maintains budget data in a unique 52-week “postal year format” that defies understanding, comparisons, and interpretation. Each “postal year” has the same number of days each year (364). The 364 days are divided into 13 “months” of four seven-day weeks.
The USPS’ financial losses are understandable to a certain degree because of the Internet, plus they got serious competition out there. They are still pretty reliable, and offer good prices for shipping our packages and offering us the extra insurance at an affordable price. If you don’t believe me, try FedEx. But FedEx and UPS are more sophisticated when it comes to tracking. Their technology is better, their employees more dedicated and got the know-how to pursue a lost package.
The USPS lacks that employee dedication to service us, their customers. If you’ve ever been to their mail stations, you know what I am writing about. To track a package, their website is good enough for them. But, they only seem to scan the package when it goes into the plane-not on transit-and not when it’s delivered! In spite of that, they make as much as FedEx and UPS’ employees.
The USPS must adjust to GAO’s rules and not make up their own. They must cut in every single aspect and plan ahead for further downsizing. This agency has to stop looking for bailouts from the government and instead, re-evaluate every employees’ salaries.