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B-114874 1 (1974-10-09)

handle is hein.gao/gaobabkuy0001 and id is 1 raw text is: GENERAL OF THE UNITED STATES WASHINGTON. D.C. 20548 T RELEASED 0 q 0 Hl B-114874 OCT 9 1974 The Honorable Edward J. Derwinski House of Representatives Dear Mr. Derwinski: In your letter which we received March 6, 1974, you asked us to define the public services provided by the Postal Service which a business-like organization might not provide or might modify con- siderably. You also requested that we estimate the cost of providing the public services so that the adequacy of the present public service appropriation could be judged. You pointed out that the Postal Service is currently appropriated $920 million annually for public service costs as provided in sections 101(b) and 2401(b)(1) of the Postal Reorganization Act (39 U.S.C. 101). As you noted, it has been alleged that the public service appropriation does not meet public service costs; hence, mail users are making up the fund deficiency through higher postage rates. The Postal Reorganization Act does not identify individual public services whose costs would be reimbursable to the Service through the act's public service costs appropriation provisions (39 U.S.C. 2401). It does provide for reimbursing the Service for public service costs in- curred when providing effective and regular postal service in commu- nities where post offices may not be self-sustaining. Further, the public service cost policy established under 39 U.S.C. 101(b) provides that no small post office shall be closed solely for operating at a defi- cit. Thus, the Service's public service costs are not related to specific types of services but to deficits incurred by post offices which are not self-sustaining. The Service's accounting system does not provide the detailed infor- mation that would be needed to identify any post offices operating at a deficit. To establish whether a post office operated at a loss (or gain), it would be necessary to determine how much of the postage revenue collected on each mail piece is allocable to operational costs, such as for collecting, sorting, transporting, and delivering, and match that assigned revenue to the cost of the operations. A system established to provide this information would be complicated and costly and would involve judgment factors which would be subject to question. In view of the foregoing, it is impossible to define the public ser- vices provided by the Service which a business-like organization might not provide or might modify considerably. Further, the inability to identify public service costs prevents determining the adequacy of the public service appropriation.

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