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The U.S. Postal Service has had an impressive track record of success in the face of competing technologies, such as the telegraph, telephone, and computers. Successive predictions of the Postal Service’s demise were greatly exaggerated, to borrow a phrase. But the digital revolution, with its smart devices, and social networking, has proven to be an especially challenging period. Creative destruction is weakening many of the nation’s business sectors and public infrastructures.
The U.S. Postal Service faces significant financial, strategic, and operational challenges. As it presses for comprehensive reform legislation, the Postal Service continues to look for ways to reinvent its business model and adapt to technology. Despite the challenges, the Postal Service remains committed to its goals of improving service, generating income, improving its workforce and the workplace, and corporate responsibility. In its just-released Semiannual Report to Congress, the Office of Inspector General (OIG) highlights work that addresses the Postal Service’s goals and helps to ensure the integrity of postal processes and finances.
This was an historic year for the Postal Service. It was forced to default on two of its prefunding payments into the Retiree Health Benefits Fund due to its liquidity crisis. Without legislative change or other significant action, the Postal Service expects to lose more than $18 billion by 2015. While the situation is desperate, we do not think it is catastrophic. In fact, our work has indicated that the Postal Service has many opportunities to reduce its costs and position itself for new revenue opportunities. The savings from these efforts, some of which would require legislative action, would exceed the Postal Service’s projected shortfalls.
The communications revolution, the digital age, and globalism are having an enormous impact on the Postal Service. The ways in which Americans communicate today are different not just from a decade ago, but from a few years ago – some might argue from a few minutes ago. Social networking and smart devices are changing communications and commerce, as an increasing number of American consumers rely on handheld devices to shop, bank, and interact with businesses.
Not since the mail crisis of the 1960s, when the Chicago Post Office ground to a halt and citizens lost confidence in the mail, has the fate of the nation’s postal system captured the attention of the American public. That crisis 40 years ago provided the impetus for Congress, the administration, and postal management to work toward a massive overhaul of a system steeped in neglect and patronage.
This report, submitted pursuant to the Inspector General Act, outlines our work and activities for the 6-month period ending March 31, 2011. In the first section of this report, we highlight audits and reviews that address risks in the strategic, financial, and operational areas of the Postal Service.