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GGD-75-71 1 (1975-02-20)

handle is hein.gao/gaobaaatz0001 and id is 1 raw text is: COMPTROLLER GENERAL OF THE UNITED STATES 2 Pa WASHINGTON, D.C. 20548 0 qsos B-182343 FEB o 1915 The Honorable John L. McClellan - Chairman, Committee on Appropriations United States Senate Dear Mr. Chairman: Your office requested us to (1) set forth the events leading to the Postal Service's current procedures for calculating the amounts due from the Department of Defense (DOD) for mail services and (2) give an opinion on the reliability of current procedures. We were informed that the Committee is concerned about the signif- icant increase in DOD's postage bill for fiscal year 1973--$71.6 million more than the preceding year. I/ This increase was caused by a change in the procedures used to calculate DOD's postal bill. The new procedures, properly applied, appear to provide reasonable estimates of the amounts due from DOD. FORMER PROCEDURES Before the enactment of Public Law 91-375, the Postal Re- organization Act, which became effective on July 1, 1971, reim- bursements to the former Post Office Department for official mail use by Government agencies were tied to agency budget figures. The budget figure was estimated several years in advance, and the agencies made very little effort to relate the estimate to actual use. The Post Office Department developed an estimate of overall Government mail volume which showed that actual volume exceeded that being budgeted for but made little effort to identify individual agency users or to collect the additional amounts due. This method did not cause a financial problem for the Post Office Department since it, unlike the Postal Service, was appropriated funds to meet any shortfall between expense and revenue. The method did, however, understate agency operating costs and, by not relating charges to use, eliminated the incentive for agencies to effectively manage their mail volume. 1/ Fiscal year 1972 billing was $67.8 million, and fiscal year 1973 billing was $139.4 million. SGGD-75-71

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