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GAO Places USPS Problems on High-Risk List

WASHINGTON — The General Accounting Office has added the U.S. Postal Service and its problems to its high-risk list, which flags government programs that are susceptible to waste, fraud, abuse and mismanagement.

Comptroller general David M. Walker, speaking at a congressional hearing yesterday, said, “We believe that the service's deteriorating financial situation calls for prompt, aggressive action, particularly in the areas of cutting costs and improving productivity.

“Accordingly, we are adding the postal service's transformational efforts and long-term outlook to our high-risk list, effective immediately, so that we and others can focus on its financial, operational and human capital challenges before the situation escalates into a crisis where the options for action may be more limited.”

As a result, Walker said, the following actions must be taken:

• The USPS should develop a comprehensive plan in conjunction with Congress and other postal stakeholders — including the postal unions, management associations, customers and the Postal Rate Commission — to identify the actions needed to address the postal service's problems and to establish a time frame for achieving results.

• The USPS should provide quarterly summary financial reports to Congress and the public. These reports should present detailed information for stakeholders to understand the postal service's current and projected financial condition, how its outlook might have changed since the previous quarter and its progress toward achieving the objectives in its comprehensive plan.

• The GAO will work with Congress and the USPS to help identify improvement options and will continue to analyze and report to Congress on the USPS' financial condition. In consultation with other postal stakeholders, the GAO will review the USPS' financial results, future outlook, progress on cost-cutting and productivity efforts, other countries' experiences, and options for addressing short-term and long-term challenges.

The GAO, a nonpartisan congressional agency, began its high-risk list in 1990. In its January report to Congress, it designated 22 areas as high risk, including information security, program management for Medicare, and the Internal Revenue Service's tax systems modernization and financial management. The GAO removes the high-risk designation when the listed agency makes significant progress toward resolving the problem.

To download a copy of Walker's complete testimony, go to http://www.gao.gov/audit.htm.

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