GAO adds Postal Service to list of high-risk federal programs

It's official: delivering the mail is a risky business. The General Accounting Office Wednesday added the Postal Service's long-term outlook and its efforts to make significant organizational changes to its "high-risk" list, which identifies government agencies and programs vulnerable to fraud, waste, abuse and mismanagement. "We believe that the service's deteriorating financial situation calls for prompt, aggressive action, particularly in the areas of cutting costs and improving productivity," GAO Comptroller General David Walker told the House Government Reform Committee, adding, "it is not clear how the service will address its mounting financial difficulties and other challenges." Postmaster General William Henderson, who is leaving the agency after 30 years in May, agreed with GAO's decision. He said the agency, faced with declining revenues and increasing costs, could lose between $2 billion and $3 billion this fiscal year. That number could go higher if the economy continues to weaken. To stave off the projected shortfall, the Postal Service is expected this summer to file another rate increase with the Postal Rate Commission. The hike could be as much as 15 percent across-the-board. Rates were raised 4.6 percent in January. The agency also embarked on a series of cost-cutting moves, hoping to save $2.5 billion by 2003. It halted all capital projects for the remainder of the year, saving about $1 billion. That means no new construction, new leasing or expansion projects. More than 800 projects are affected. The agency also plans to reduce total working hours through improved productivity, reduce administrative costs by 25 percent and cut transportation costs by 10 percent over the next five years. But Walker pointed out that the agency has not laid out a plan for achieving those savings. The agency historically has difficulty meeting its projections. In another highly publicized move, the Postal Service is studying what it might save by canceling Saturday mail delivery, and is looking at whether some "poorly performing" post offices should be closed. Henderson, questioned on the subject repeatedly by committee members, said no decision has been made to cut Saturday delivery. Even so, Congress typically includes a provision in the Treasury appropriations bill requiring Saturday delivery. The agency is prohibited by law from closing rural post offices. GAO staff accused the Postal Service of picking at low-hanging fruit rather than taking a serious look at systemic changes to drive down costs. Committee staff and other agency observers wondered if Postal Service officials are playing a dangerous political game: Cut costs in high profile areas to get Congress' attention and thus gain momentum for legislative reform. Henderson said the agency needs more flexibility in how it sets prices, in its ability to rapidly introduce new products and in labor negotiations. Rep. John McHugh, R-N.Y., spent nearly six years trying to get Congress to enact postal reform. His legislation never made it to the full House Government Reform Committee. Postal Service officials never fully supported the legislation. In fact, it wasn't until last December that the Postal Service's board of governors even endorsed the notion of legislative reform. "Well John, it looks like you are the one guy in this room who has the right to say, 'I told you so,'" Committee Chairman Dan Burton, R-Ind., told his colleague. Burton urged all stakeholders to work together to submit a package of legislative reform ideas to the committee. He and ranking member Henry Waxman, D-Calif., pledged to develop a bipartisan reform bill.
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.