Upcoming Audit Work

As part of their Delivering for America plan, the Postal Service is investing $40 billion for network modernization, based around Regional Processing and Distribution Centers (RPDCs), Local Processing Centers (LPCs), and Sorting and Distribution Centers (SDCs). Overall, the Postal Service will establish 60 RPDCs to consolidate mail processing operations and create fewer points in the processing and transportation networks. Each RPDC processes mail and packages originating in its service area and has one or more LPCs associated with it. This audit will focus on the network transformation and consolidation of operations at Indianapolis, IN RPDC.

The Postal Inspection Service, an investigative agency within the Postal Service, reported that since 2020, there has been a major increase in the creation, sale, and use of counterfeit postage. Counterfeit postage labels are being sold on eCommerce platforms and websites at heavily discounted prices, and it is estimated that the Postal Service incurs monetary losses of $600 million per year as a result. The Postal Service, in collaboration with the Postal Inspection Service, works to prevent, detect, and respond to the use and sale of counterfeit postage and reduce monetary losses. Our objective is: To evaluate the Postal Service and Postal Inspection Service's efforts to address counterfeit postage. 

Over the past 20 years, the Postal Service has recorded net losses in 18 of the past 20 years, however they have maintained sufficient cash to continue operations and perform their mandated service. This white paper will examine the historical events, legislative enactments and operational performance that have shaped the Postal Service’s financial outcomes over the last two decades. Through appropriations from Congress, issuing debt, raising prices, and leaving future retirement benefits unfunded, the Postal Service has remained solvent and mitigated the challenges associated with the Universal Service Obligation (USO) and the trend of customers shifting to digital communication.

This audit supports the Independent Public Accounting (IPA) firm's integrated audits of the Postal Service's financial statements and internal controls over financial reporting. We test and re-perform selected financial controls as agreed upon with the IPA. In addition, we also select and test additional controls to support our own year-end audit work. Our audit objectives are to determine whether 1) selected accounting transactions in the general ledger are fairly stated and whether selected key financial reporting controls surrounding those transactions were operating effectively and 2) selected key financial reporting controls were designed and operating effectively.

Priority Mail Express (PME) is the Postal Service’s fastest mail service, offering 1-day or 2-day delivery by 6 p.m., with a money-back guarantee. However, with the implementation of Local Transportation Optimization (LTO) in October 2023, most optimized post offices within the 16 LTO regions can no longer offer overnight PME. To support this initiative, the Postal Service announced in October 2024, changes to PME service, adding an extra delivery day in some cases. This audit will evaluate the Postal Service’s initial implementation of the new PME service.