Summary: The Postal Service derived almost half ($23 billion) of its total mail revenue from bulk business mail in fiscal year 1994. Mailers compute the postage owed on each bulk business mailing. To guard against accepting improperly prepared mailings, Postal Service clerks are supposed to verify the accuracy of bulk business mailings. Because of weak controls for accepting bulk business mail, however, the Postal Service cannot be sure that significant amounts of postal revenue due are received when mailers claim presort/barcode discounts. The Postal Service took steps in 1989 and 1990 to manage its bulk mail acceptance system more effectively. However, the system deteriorated after a 1992 reorganization. With an estimated $8 billion in discounts allowed in fiscal year 1994, and larger amounts expected as the Postal Service reclassifies its postage rates and moves closer to full automation in 1997, sustained top-level management attention is needed to establish and maintain adequate controls over bulk business mail acceptance. Recently, the Postal Service launched several initiatives to improve the bulk business mail acceptance system. Although it is too soon to know whether these initiatives will correct the Postal Service's internal control problems, GAO believes that if they are implemented as planned and monitored appropriately, the initiatives can improve bulk mail acceptance operations.
