| For Immediate Release | Contact: Mark Carpenter |
| July 10, 2003 | (202) 467-5300 |
(Washington, D.C.) — Citizens Against Government Waste (CAGW) today publicized the results of an audit by the United States Postal Service (USPS) Office of Inspector General (IG) on operations at its approximately 1,400 postal retail operations. The report was obtained by CAGW despite being unavailable on the USPS’ IG website. A postal retail store operates much like a traditional post office except that it features an open display area so that customers can purchase merchandise and stamps without standing in full service lines.
“This report demonstrates that the USPS has no business being in any competitive businesses,” said CAGW Special Projects Director Leslie Paige. “If the postal service can’t even adhere to basic accounting standards or determine the financial viability of its retail stores, it should not be permitted to compete freely in the private sector in other commercial activities.”
The report, dated February 28, 2002, discloses that USPS improperly accounted for key financial data. For example, labor and revenue figures for both the new retail stores and traditional retail post offices were lumped together, making it impossible to determine retail store profitability. Construction cost estimates were also not reliable, the report said, because the USPS did not itemize the costs of building the facilities. Also, managers at postal retail outlets failed to implement management controls over store operations, putting the USPS at high risk for financial losses due to theft.
Some of the report’s specific findings were:
● Open merchandise counters designed to expedite customer service were not staffed at a majority of the visited sites;
● Merchandise was not tracked or inventoried at any of the visited sites; and
● Security systems designed to detect theft of stamps and other merchandise did not sense such items when they passed through sensors.
USPS’ reply to the IG report includes the astonishing assertion that the auditors should not have been trying to determine the stores’ profitability at all because “the vast majority of post offices regardless of format (postal store or traditional) are not profitable, much like component parts of other USPS networks (e.g. individual plants or carrier routes).” Though the auditors agreed with postal management’s assertion that most post offices are not profitable, they stated that it is still important to evaluate financial performance in order to make decisions.
“At the June hearing before the President’s Commission on Postal Reform, Postmaster General Potter reiterated his long-standing desire to have the USPS compete freely in the private sector and retain profits,” stated Paige. “When asked to be specific about what goods USPS would offer, Mr. Potter said the agency should be able to offer anything that makes money, such as beverages, greeting cards, and financial services. This report clearly shows that the USPS has mismanaged its current retail outlets. Such financial incompetence should not be rewarded by giving the USPS more freedom to fail and lose millions more ratepayer dollars.”
Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.