GAO: Financial Outlook Is Bleak for USPSRising costs and falling mail volume are giving the U.S. Postal Service an increasingly bleak financial outlook, according to a General Accounting Office report made public late Wednesday.
The USPS has continuing deficits, severe cash-flow pressures, rising debt and liabilities that exceed its assets, the report said, while lacking sufficient income to fund its capital asset needs for safety, maintenance, expansion and modernization.
The report was requested by the Senate Governmental Affairs Committee.
In April 2001, the GAO placed the USPS on its list of government agencies most at risk of serious financial mismanagement. In May, the committee adopted the GAO's recommendation that the postal service submit a "transformation plan" that will enable it to continue providing universal mail delivery and reasonable postal rates. That plan is due to the committee in early April.
The USPS reported a $1.68 billion deficit in its 2001 fiscal year, up from a $199 million deficit the preceding fiscal year, according to the GAO. Further, the postal service budgeted for a $1.35 billion deficit in fiscal year 2002 before Sept. 11 and the anthrax attacks caused mail volumes to decline even more.
The report recommended that:
· The USPS Board of Governors and postmaster general provide proactive leadership for transformation by informing employees, Congress, stakeholders and the public about the need for change and by identifying it in its forthcoming transformation plan.
· The USPS improve the transparency of its financial data by posting monthly and quarterly financial reports on its Web site in a timelier manner.
· Congress act promptly on legislative changes that would provide the USPS with additional flexibility.
Four members of the Governmental Affairs Committee responded to the report by urging the USPS to send them a workable plan.
Committee chairman Joe Lieberman, D-CT; ranking Republican Fred Thompson, R-TN; and Sens. Daniel Akaka, D-HI, and Thad Cochran, R-MS, issued a statement responding to the report.
"This report underscores the urgent need to address what GAO calls the postal service's 'unsustainable business model,' " Akaka said. "Evolving technology and the recent terrorist attacks have changed the way that information is delivered. Even before Sept. 11, the postal service was experiencing a decline in volume, which has had a significant impact on revenue."