POSTAL REGULATORY COMMISSION 

FISCAL YEAR 2024 BUDGET REQUEST 

 
TABLE OF CONTENTS 

Letter from Chairman Michael M. Kubayanda 

I. Background ..................................................................................................................... 1

II. FY 2023 Activities and Accomplishments ........................................................................ 4

III. FY 2024 Budget Request ................................................................................................ 7

IV. Budget Line Grouping Details .........................................................................................10

V. Conclusion .....................................................................................................................15
August 1, 2023 

The Honorable Roman Martinez IV 

Chairman, Board of Governors 

United States Postal Service 

Washington, D.C. 20268 

In accordance with title 39, United States Code, section 205, I am submitting the Budget 

Request of the Postal Regulatory Commission for FY 2024. This is the Commission’s second 

Budget Request submitted to the Postal Service Governors under the Postal Service Reform 

Act. The Commission submits this request one month prior to the statutory due date. 

Like the Postal Service, the Commission is in the process of transforming as an agency to fulfill 

its mission in a fast-changing environment. Years of underinvestment and limited funding have 

resulted in massive infrastructure and organizational deficits that require remediation. The 

Commission’s workforce strains to support the additional workload created by the Delivering for 

America (DFA) Plan and the increasing administrative compliance mandates for its operations. 

Since Congress transferred the Commission’s Office of Inspector General (OIG) responsibilities 

to the Postal Service’s OIG last year, there has been a significant increase in OIG audits. Those 

audits are demonstrating that the Commission’s bare bones operations are no longer 

sustainable for compliance with various legal and policy mandates and are out of step with the 

needs of postal stakeholders, including the Postal Service. In terms of its regulatory 

responsibilities, it is difficult to see how the Commission can meet the Postal Service’s calls for 

more timely proceedings on the numerous transformational initiatives under the DFA Plan; deal 

efficiently with day-to-day evaluation of negotiated service agreements and other petitions; and 

fulfill its expanding federal compliance and security obligations, without expanding the 

Commission’s capacity accordingly. 

With the approval of its FY 2023 Budget, the Commission was able to begin implementing its 

strategic initiatives and funding long-deferred operational investments. For one example, a 

minor addition of capacity enabled the Commission to seek and obtain an unprecedented 

second award from the Federal Government’s Technology Modernization Fund (TMF). The two 

TMF awards are funding long-overdue upgrades to our docket system, website, and other IT 

and data management systems. These upgrades, in turn, will enhance functionality for the 

Postal Service and other users. 

The Commission recently received a supplemental TMF award to engage the Department of 

Justice’s Security Operations Center to assist in monitoring ongoing threats to the 

Commission’s IT systems, thereby safeguarding sensitive data held by the Commission, 

including data submitted by the Postal Service and other parties. This critical support 

supplements the Commission’s tiny two-person cybersecurity team which, by itself, could not 

fully counter threats posed by hackers, criminal entities, and foreign powers, some of whom 

may be seeking a backdoor to attack a much larger target in the Postal Service. The awards will 

also allow the Commission to comply with Federal laws governing IT security, as well to begin 
2 

the long process of ascertaining and applying best practices for cybersecurity. In short, investing 

in Commission capacity is cost-effective and has a multiplier effect that benefits the Postal 

Service as well. 

Despite the welcome receipt of additional funding in FY 2023, the prolonged lack of funding over 

time has led to a deterioration of Commission infrastructure, outdated technology, and 

understaffing. To rectify these issues and implement long-deferred investments, the 

Commission requires time to plan and execute strategic changes as outlined in the 

Commission’s FY 2023 – FY 2028 Strategic Plan. Rebuilding infrastructure, modernizing 

systems, and hiring and training qualified personnel all take considerable time and resources. 

While increased funding is a positive step forward, it is essential to recognize that the impact of 

previous financial constraints cannot be undone overnight, and sustained efforts are necessary 

for a comprehensive recovery. 

The Commission requests $23.399 million for FY 2024. The Commission will use these 

resources to cover operating costs, inflationary increases, and investments in staff, 

infrastructure, and technology that will increase regulatory efficiency. The Budget Request 

presents a balanced approach that will provide much-needed capacity by adding five full-time 

equivalent employees to the Commission’s workforce along with the strategic hiring of 

contractors. These employees and contractors will help to close important gaps in internal 

controls and capacity and to enhance the Commission’s ability to conduct effective oversight on 

a timely basis. 

Similar to last year’s request, this request is mitigated by the Commission’s two additional 

funding sources: holdover funding resulting from a “no-year” fund balance and awards from the 

TMF. The resulting application of these funds to the FY 2024 Budget means that the 

Commission’s budget request to the Governors will continue to be lower than its planned overall 

expenses, until the time when the additional funding sources are exhausted. Receiving 

significant TMF awards represents a substantial cost-saving opportunity for the Commission 

and the Postal Service. As noted above, this cost-saving opportunity—outside funding for 

improvements to the Postal Service’s user experience and information security—was enabled 

by the Postal Service’s investment in building the Commission’s capacity through the previous 

year’s budget. 

Sincerely, 

Michael M. Kubayanda 

Chairman 

Michael

Kubayanda

Digitally signed by 

Michael Kubayanda 

Date: 2023.08.01 

16:19:33 -04'00'
I. BACKGROUND 

A. Commission Organization

The Postal Regulatory Commission (Commission) is an independent agency that oversees the 

U.S. Postal Service (Postal Service) and provides analyses of and transparency into postal 

operations to Congress, stakeholders, and the public. All Postal Service requests for pricing and 

product classification changes, among many other matters, must be reviewed by the 

Commission under Title 39 of the U.S. Code. 

The Commission is composed of five commissioners, each appointed by the President, and with 

the advice and consent of the Senate, for terms of 6 years. No more than three of the 

commissioners may be from the same political party. The President designates one of the 

commissioners to serve as chairman. The chairman is the principal executive officer of the 

Commission. 

Commission staff have expertise in economics, finance, statistics, cost accounting, and law, as 

well as public affairs and agency administration. The four offices are: 

• Office of Accountability and Compliance (OAC) 

• Office of the General Counsel (OGC) 

• Office of Public Affairs and Government Relations (PAGR) 

• Office of the Secretary and Administration (OSA) 

B. Operational Landscape

Over the past decade, the Commission has encountered several challenges that have had a 

direct impact on its budgetary requirements. These challenges provide context for its budget 
2 

request, and include the impact of past funding constraints, limited resources, and limited 

technological and data advancements, 

compliance demands, and broad regulatory responsibilities. While the Commission’s 

commitment to its mission is unwavering, it faces many inherent limitations as a small agency 

compared to the Postal Service and its larger Federal agency counterparts. 

1. Past funding constraints 

As shown in Figure 1, the Commission’s appropriated budget from FY 2009 – FY 2022 failed to 

keep pace with inflation. The Commission’s budget increased by 13 percent over a thirteen-year 

period (FY 2009 – FY 2022). During the same period, inflation increased 30 percent. Even the 

Commission’s FY 2023 Budget Request of $20.6 million is less than a FY 2008 inflationadjusted budget would have been in FY 2023 ($21.1m); still less than needed to make up for 

the intervening 15 years’ inflation-adjusted budget cuts. Despite this consistent underfunding, 

the Commission was still able to increase staff to meet the growing needs that resulted from the 

Postal Accountability and Enhancement Act of 2007 and consistently meet its mission. 

However, to support its mission-critical personnel, it had to defer significant investments in its IT 

and operations, as well as limiting expenses for training, travel, and other services.

Figure 1: Historical Commission Budget and FTEs FY 2008 - FY 2023 

Years of underfunding and a budget that failed to keep pace with inflation have had significant 

impacts on the Commission. This funding history has impacted the Commission’s mission 

effectiveness as it currently operates with stretched resources, decreased capacity, outdated 

technology and infrastructure, and limited innovation and growth. Without appropriate budgetary 

resources, the Commission will continue to struggle to adapt to changing circumstances and it 

will operate at increased risk, mainly in areas of cybersecurity and compliance. 

2. Limited Resources 

The Commission is a very small agency with approximately 82 full-time equivalent positions

(FTEs) in FY 2023 and is part of the federal government’s Small Agency Council. Despite its 

mission as the sole regulator of the Postal Service, it still struggles with the unique operational 

59

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

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3 

issues and constraints compared to larger Federal agencies. Due to resource constraints from 

past years of underfunding and its small workforce, the Commission lacks the flexibility to shift 

resources to respond quickly to emerging issues or changes in priorities affecting the Postal 

Service. 

An ever-increasing workload has also stressed its current workforce, leading to a lack of 

capacity to handle various tasks. The enactment of the Postal Service Reform Act (PSRA) on 

April 6, 2022, and the numerous transformational initiatives outlined in the Postal Service’s 

Delivering for America (DFA) Plan have resulted in a significant increase to the Commission’s 

workload. As a regulatory body, the Commission is responsible for the thorough and accurate 

analysis of Postal Service reports on performance, operational, and financial issues to ensure 

that the Postal Service is compliant with the law. In addition to the core regulatory oversight 

provided by the Commission related to compliance, the Commission is statutorily required to 

handle a wide range of other postal issues that differ in scope and complexity. These tasks are 

generally unpredictable and dependent on Postal Service needs, and the Commission must 

always be ready to shift its limited resources to fulfill its responsibilities.

The Commission is also unable to utilize more than a handful of academic and private sector 

experts to supplements its staff, while the Postal Service and the Office of the Inspector General 

utilize some of the largest contractors. Due to its small size, the Commission experiences 

reduced economies of scale that impact its operations and limit its ability to take advantage of 

cost-saving opportunities available to larger agencies. 

3. Limited Technological and Data Advancements 

The Commission is faced with information technology security and management challenges that 

threaten (1) the protection of its IT systems from intrusion or compromise by external or internal 

entities and (2) the planning and acquisition for replacing or upgrading IT infrastructure. The 

Commission, unlike the Postal Service, is required to comply with the Federal Information 

Management Security Act (FISMA) and has the same obligations as other, larger federal entities 

with respect to its IT infrastructure and security, despite operating with only a fraction of other 

agencies’ staff and resources. As a result, the Commission is subject to compliance with 

security and infrastructure obligations that require significant additional investment. The 

Commission operates with only two cybersecurity professionals, and the lack of sufficient and 

sustained funding for its cybersecurity represents the largest threat to Commission operations. 

These limited cybersecurity resources also impact the Postal Service and present risk to the 

Postal Service’s non-public and commercially-sensitive business data that is maintained within 

the Commission’s systems. 

The Commission’s IT systems have been hampered by aging infrastructure, most of which was 

past its useful life and not supported. Its antiquated data environment and analysis tools impede 

the efficiency and effectiveness of staff’s work. The lack of modern data infrastructure and 

management hinders the Commission’s ability to access, process, and analyze Postal data 

efficiently. Data retrieval becomes a cumbersome and time-consuming task, delaying critical 

decision-making processes and impeding the Commission’s ability to respond promptly to 

emerging challenges. 
4 

4. Legal and Regulatory Compliance Obligations 

As a small agency, the Commission is subject to many of the same regulatory and 

administrative burdens as larger agencies, including compliance with additional laws and 

Executive Orders that do not apply to the Postal Service. These compliance obligations include 

reporting due to the Office of Budget and Management, Office of Personnel Management, 

Cybersecurity and Infrastructure Security Agency, Equal Employment Opportunity Commission, 

Department of Homeland Security, National Archives and Records Administration, and more. 

However, the Commission struggles to meet its compliance obligations due to the nature of the 

compliance requirements (designed with the larger CFO Act agencies in mind) and its limited 

resources. 

In addition to its federal compliance obligations, the Commission also has new and extensive 

audit management responsibilities. With the abolishment of the Commission’s Office of 

Inspector General in October 2022, the Commission is now subject to audits by the Postal 

Service OIG. The Commission’s previous inspector general conducted at most, one audit per 

year, and since October 2022, the Postal Service has already completed 2 audits, with 1 audit 

currently ongoing. While the Commission welcomes the oversight and expertise of the Postal 

Service OIG, the work created by additional audits has been difficult for its administrative office 

to absorb, as the Commission does not have a supporting audit office or internal staff dedicated 

to audit management and response within the Commission. In addition to the capacity needed 

to respond to increased OIG oversight, the OIG reports have already highlighted known and 

unknown areas where additional investment in personnel and technology is needed to operate 

effectively and in compliance with applicable laws and best practices. 

II. FY 2023 ACTIVITIES AND ACCOMPLISHMENTS 

Over the past year, the Commission made significant strides in fulfilling its mission and 

delivering on its core objectives. Through prudent financial management and strategic allocation 

of resources, the Commission achieved notable accomplishments that demonstrate the efficacy 

of its FY 2023 budget. Due to its FY 2023 budget approved by the Governors, the Commission 

has achieved ambitious milestones and made significant strides towards building capacity for its 

mission-critical work and services. The following highlights showcase how the allocated funds 

have been well spent, yielding tangible results and positive impacts on the Commission’s 

initiatives. 

A. New Strategic Plan 

In FY 2023, the Commission finalized its FY 2023 – FY 2028 Strategic Plan. The Strategic Plan 

recognizes and anticipates a potentially significant degree of change to the postal system and 

the Postal Service. 

Strategic Goal 1: Anticipate and adapt to an evolving postal system through a 

responsive and trusted regulatory framework 

Strategic Goal 2: Enhance and expand communication of accurate and relevant 

regulatory information to postal stakeholders, policymakers, and the general public 
5 

Strategic Goal 3: Develop an internal infrastructure to support and strengthen our 

regulatory capabilities through adaptive policies, efficient processes, and scalable 

platforms 

Strategic Goal 4: Build an organization that will attract, develop, and retain a diverse 

workforce of experts 

The four Strategic Goals balance an external focus on adapting the Commission’s regulatory 

framework to a transforming Postal Service with an internal focus on strengthening the 

Commission’s capabilities to be an effective and efficient regulator through that transformation. 

In FY 2023, the Commission also began implementing its strategic plan to ensure that these 

goals are achieved and retained the services of a consultant to accelerate its implementation of 

its plan. 

B. Increased Regulatory Activities 

Over the past year, the Commission’s small expert staff handled a significant increase in 

workload and navigated increasingly complex regulatory matters. The increased workload was 

influenced by multiple factors, including additional responsibilities and reporting requirements 

stemming from the PSRA and Congressional oversight, and an increase in regulatory activity 

before the Commission as initiated by the Postal Service and stakeholders. The Commission 

also adjudicated an increasing number of proceedings relating to the Postal Service’s DFA Plan. 

This additional workload demands intensive analysis by the Commission, involves extensive 

public participation, and requires a significant share of the Commission’s already strained 

resources. 

As directed by the PSRA, the Commission accomplished the following: 

x Conducted a study on the causes and effects of inefficiencies with flat-shaped mail, in 

consultation with the USPS OIG and with the assistance of the Postal Service, and 

submitted a report of the Commission’s findings to Congress and the Postmaster 

General on April 6, 2023. As part of the study of flat-shaped mail, the Commission’s data 

analytics team in OAC conducted site visits encompassing several different types of 

Postal Service facilities, including mail processing plants, transportation hubs, and 

delivery units. 

x Oversaw the Postal Service’s development and maintenance of a public service 

performance information dashboard. 

x Initiated review of Postal Service cost attribution guidelines. 

x Determined the effect on cost reporting rules of PSRA changes related to the Postal 

Service’s annual payments toward its retirees’ projected health benefits. In March, OAC 

staff completed the review of separate proposals from the Postal Service and a coalition 

of mailers regarding these PSRA reforms’ impact on Postal Service product costs. 

These changes had substantial effects on the costs reported in the Postal Service’s endof-year Cost and Revenue Analysis report (CRA). 

This work resulting from the PSRA was in addition to the Commission’s core regulatory 

responsibilities, which include conducting rulemakings, advisory opinions, pricing and product 

oversight, public inquiry dockets, and reports required by the PAEA or otherwise requested by 

Congressional oversight bodies. Additional accomplishments include: 
6 

x Review of two market-dominant price changes and three competitive price changes so 

far in FY 2023, as opposed to one and two prior to FY 2022. This significant increase in 

workload stems from Postal Service pricing strategies adopted under the DFA Plan. 

x Issuance of a report prepared by a contractor on the feasibility of restoring service 

standards to 2012 levels as requested by the Joint Explanatory Statement 

accompanying the Consolidated Appropriations Act, 2022 (House of Representatives 

Report 117-79). 

x Review and analysis of an increasing number of negotiated service agreements (NSAs) 

between the Postal Service and its customers. 

x In addition to core regulatory responsibilities, published a fully accessible and userfriendly financial dashboard with downloadable data that provides a visual snapshot of 

key components of its analysis of the Postal Service’s financial reports, including 

balance sheet and mail volume trends from 2007 to 2022. The dashboard tracks trends 

in the Postal Service’s operating expenses and revenue, operating ratio, percent 

changes in market dominant mail volume by categories, and the percent share of 

competitive products contribution to institutional cost. 

With respect to the first three bullets—and all other core regulatory activities—the Commission 

acts solely in response to Postal Service filings and Congressional requests or directives. The 

Commission thus lacks discretion to control the vast majority of its escalating workload. 

C. Added Capacity and Postal Expertise 

Over the past year, the Commission has made strategic and impactful new hires that have 

significantly enhanced its capacity and expertise across various domains. The Commission 

identified critical gaps in its workforce and aligned hiring efforts with the Commission’s strategic 

goals to successfully onboard top talent with specialized skill sets that align with its mission. The 

Commission has added ten new positions in FY 2023, including experts in economics, law, and 

postal data, as well as a Chief Data Officer and the Commission’s first Contracting Officer. 

These new team members bring a wealth of knowledge and experience, providing additional 

capacity which will support the Commission as it continues to tackle complex challenges. 

Their contributions have already proven invaluable in driving innovation, streamlining processes, 

and elevating the overall performance of the Commission. Despite limited resources and 

constraints, its small professional staff demonstrated a level of dedication that has been 

instrumental in successfully managing the surge in responsibilities, ensuring that critical tasks 

were accomplished effectively and efficiently. 

D. IT Modernization 

The Commission is engaged in a multi-year IT infrastructure optimization initiative due to the 

TMF award and support of the TMF Board. Based on this award, the Commission is investing in 

a replacement of its legacy electronic docketing system, a new user-friendly public-facing 

website, development of a data management system, and critical cybersecurity upgrades. In 

addition to its progress on its three critical platforms, the Commission received an additional 

award from the TMF that is targeted to resolve critical cybersecurity issues resulting from longterm underinvestment in cybersecurity at the Commission. 
7 

In June 2023, the Commission deployed its new electronic filing and docketing system called 

eDockets; replacing its legacy filing online system. It also began development on its second key 

platform: a new public-facing website. With its new Chief Data Officer, onboarded in Quarter 2 

of FY 2023, the Commission established a protype data management system that will be used 

to inventory, organize, automate, and serve data received by the Postal Service for use by 

Commission analysts. 

III. FY 2024 BUDGET REQUEST 

This is the Commission’s second Budget Request submitted to the Postal Service Governors, 

consistent with the PSRA. The Commission’s FY 2024 Budget Request matches the 

Commission’s commitment to effectively align its mission resources and comply with the 

additional requirements under the PSRA. 

The Commission requests $23.399 million for FY 2024. This represents an increase of $2.786 

million over the Commission’s FY 2023 budget of $20.613 million. The increase is due to the 

following factors: 

x Increases to fixed costs, including inflationary adjustments to wages and benefits 

x The expiration of rent abatement 

x Addition of 5 full-time equivalent employees 

In FY 2023, the Commission requested a budget of $20.613 million. In addition, it planned to 

apply funds from its prior year balances and TMF award for a total spend of $24.479 million. At 

the time of this request, with two months remaining in FY 2023, the Commission is projected to 

spend $21.0 million. While projected to spend more than the budget approved by the Governors 

at the close of this fiscal year, the Commission under-executed on its planned total expenses 

(i.e., including from prior year balances and TMF awards). Insufficient capacity hindered its 

ability to undertake planned activities and initiatives fully. However, as FY 2023 comes to a 

close, the Commission has diligently ramped up activity execution and implementation of 

planned initiatives. 

The Commission's FY 2024 Budget Request is crucial to address the significant capacity and 

resource gaps that exist between its current operations and the foundational infrastructure 

required to meet evolving regulatory demands. The FY 2024 Budget Request includes a portion 

of the under-executed activities from the previous year, along with the costs of implementing 

new initiatives for FY 2024. As a result, the Commission has increased its use of prior year 

balances from $2.0 million to $4.0 million in FY 2024 to fund under executed activities from FY 

2023. 

While adequate funding will ensure regulatory compliance and safeguard the public interest, it is 

equally vital to support the Postal Service’s business, particularly when expedited reviews and 

approvals are integral to the DFA Plan’s numerous transformational initiatives. Without the 

resources necessary to build capacity in response to its increased workload and remedy longdeferred capital investments, the Commission’s ability to provide timely oversight of the Postal 

Service will be at risk. 
8 

A. Funding Sources

In FY 2024, the Commission has available prior year balances as well as an award from the 

TMF to fund additional spending. As a result of this additional spending, the Commission’s 

planned total budget for FY 2024 is $29.5 million. The application of TMF funds results in 

significant cost savings to the Postal Service, as the Commission will apply $2.1 million of its 

TMF award to offset a portion of planned spending and thereby mitigate the request to the 

Governors. The Commission will also apply $4.0 million of prior year balances to further reduce

its request to the Governors. The prior year balances and TMF award will be used to fund many 

one-time contracting and consulting costs that are targeted to remedy numerous compliance 

and infrastructure deficiencies resulting from past years of underfunding. 

Specifically, the Commission offsets its total planned expenses of $29.5 million by using $4.0 

million of prior year balances and $2.1 million of is TMF award to arrive at its FY 2024 Budget 

Request of $23.4 million. Figure 1 below shows the total spending planned in FY 2024 and the 

proportion allocated by funding source.

Figure 1: FY 2024 Funding Sources ($000)

B. FY 2024 Budget Composition

The majority of the Commission’s FY 2024 Budget Request is allocated to cover personnel 

compensation and lease costs, which collectively form the foundation of the Commission’s 

operations. While these essential expenses are the primary focus, the budget also includes a 

modest increase to fund new hires and limited initiatives that align with the Commission’s 

strategic plan. 

Figure 2 below shows the planned distribution of the Commission’s total expenditures for 

FY 2024 applying all funding sources.

FY 2024 Budget 

Request

$ 23,399 

Restricted 

Cash

 $ 4,000 

TMF

$2,078
9 

Figure 2: FY 2024 Planned Expenditures

As shown in Figure 2, personnel compensation accounts for 67.1 percent of expenditures; rent 

accounts for 6.2 percent of expenditures; and the remaining 26.7 percent of expenditures is for 

all other operating expenses including IT, consulting services, and communications. 

Table 1 below provides further detail of the FY 2024 Budget Request by Budget Line Grouping 

and as compared to FY 2023. 

Salaries, Benefits and 

Employee Awards

67.1%

Rent

6.2%

Information 

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12.6%

Consulting

7.9%

All Other Operating 

Expenses

6.2%
10 

Table 1: FY 2023 Budget Plan and FY 2024 Budget Request ($000)1

Budget Line Grouping 

FY 2023 

Budget2 

(91 FTEs) 

FY 2024 

Budget 

Request 

(96 FTEs) 

Salaries, Benefits, and Employee Awards 18,391 19,782 

Rent, Equipment, Furniture, and Repairs 488 1,820 

Services and Printing 487 821 

Consulting Services 1,444 2,330 

Travel (Domestic and International) 131 280 

Training 190 407 

Communication 229 200 

Information Technology 3,065 3,712 

Supplies and Miscellaneous 54 126 

Total Planned Expenses 24,479 29,477 

Planned Expenses funded from TMF 1,866 2,078 

Planned Usage from Prior Year Balances (Restricted 

Cash) 2,000 4,000 

Postal Regulatory Commission Budget Request 20,613 23,399 

IV. BUDGET LINE GROUPING DETAILS 

The Commission provides a high-level overview of its Budget Request by budget line grouping, 

categories which align with USPS accounting. All information provided in this document is 

supported by data from current recurring expenditures from estimated expenditures for FY 

2024. 

A. Salaries, Benefits and Awards 

The FY 2024 Budget Request includes $19.8 million for Salaries, Benefits, and Awards. This 

number accounts for 67.1 percent of the Commission’s total planned FY 2024 expenses. The 

Commission’s FY 2024 Request, like its FY 2023 Request, is primarily focused on maintaining 

the Commission’s existing FY 2023 employee complement while providing sufficient funding for 

a FY 2024 level of 96 full time equivalent (FTE) staff. 

The primary increase in the salaries, benefits, and awards category is the result of three key 

factors: inflationary increases, performance-based salary adjustments and awards, and 

additional hiring. The budget includes the standard salaries and benefit costs for permanent 

staff, along with the costs of projected salary adjustments and awards. However, the greatest 

impact on the overall increase of the salaries, benefits, and awards group relates to the 

1

 Numbers in table may not add due to rounding. 

2

 The FY 2023 Approved Budget Request differs from what was presented to the Governors in August 2022 because $2.1 million 

was re-categorized from “Consulting Services” to “Information Technology” to be consistent with USPS accounting, which classifies 

Information Technology Contracting as an Information Technology Expense. 
11 

historically high inflationary increases that drive cost-of-living adjustments across the Federal 

government, including the Commission. 

In FY 2024, the Commission intends to increase its personnel complement directly related to 

achieving the Commission’s regulatory mission, as well as operational mission-support 

positions, to reach a level of 96 FTEs. As the Commission does not have the current capability 

to assign or track budget by office, it provides the following information showing the increase in 

number of staff planned for each office across FYs 2023 and 2024:

Table 2: FY 2023 and FY 2024 Full-Time Equivalent Plan3

Office FY 2023 FTE 

Plan 

FY 2024 FTE 

Plan 

Maximum 

Planned 

Positions

Commissioners and 

Commissioner Staff 14 14 16 

Office of Accountability and 

Compliance 29 31 33 

Office of the General Counsel 21 21 23 

Office of Public Affairs and 

Government Relations 4 4 4 

Office of the Secretary and 

Administration 19 22 23 

Office of Finance and Budget4 4 4 7 

Total 91 96 106 

The Commissioners, the Commissioner staff, the Office of Accountability and Compliance 

(OAC), and the Office of the General Counsel (OGC) are the offices directly responsible for 

achieving the Commission’s mission to ensure transparency and accountability of the Postal 

Service and foster a vital and efficient universal mail system. These positions account for 69 

percent of the Commission planned FY 2024 FTEs. The remainder of the positions, 31 percent, 

are within the Office of the Secretary and Administration and the potential new Office of Finance 

and Budget. The expected growth in these offices is needed to account for long-deferred 

administrative needs in information technology, finance, human resources, data, and other 

functions to ensure compliance with applicable laws and best practices.

Office of Accountability and Compliance. OAC is responsible for technical analysis and the 

formulation of policy recommendations for the Commission. OAC includes experts in 

economics, finance, accounting, and other quantitative disciplines with subject matter expertise 

in postal issues. OAC’s rigorous and detailed analyses support Commission reports, orders, 

rate reviews, and advisory opinions. 

3

 Consistent with OMB Circular A-11, FTEs are estimated using “Pay Period Method.” See OMB Circular No. A–11 (2022), at 85-3. 

As a result, the calculation of FTEs reflects the average number of employees over the year and will not line up with the number of 

positions that are planned to be hired throughout the year. 

4

 The Commission is currently in process of conducting a Finance Assessment to determine whether the Office of Finance and 

Budget should be a separate office or continue to be a part of the Office of the Secretary and Administration. In addition, the

assessment will provide recommendations on the appropriate organizational structure and size of the Office of Finance and Budget. 
12 

In FY 2022, the Commission launched a small analytics unit within OAC to utilize modern 

statistical and software-driven approaches for analyzing data and continue to produce rigorous 

reports and orders. In FYs 2023 and 2024, the Commission is working to fully staff OAC and 

build capacity. 

Sufficient staffing in OAC is critical to prevent bottlenecks that slow down the production of 

analytically complex major rulemakings. The speed of such major rulemakings has been cited 

as a concern at the highest levels of the Postal Service, and an adequately-staffed OAC is one 

of best ways to address this concern. The FY 2024 budget estimates 31 FTEs for this office, 

which includes the slow growth of the office between FYs 2022 and 2023; projecting a 

maximum 33 staff members in OAC by the end of FY 2024. 

Office of the General Counsel. OGC is responsible for providing all legal services and legal 

analyses within the Commission. The General Counsel is designated by the Chairman to serve 

as the Commission’s Designated Agency Ethics Official and administers the Commission’s 

ethics program. The Commission has added staff in OGC near the end of FY 2023 by 

leveraging flexibility within its budgeted and reserve funds. For FY 2024, this office will maintain 

its growth from FY 2023, with a maximum staffing level of 23 by the end of FY 2024. 

Office of Public Affairs and Government Relations. PAGR serves as the public face of the 

Commission. PAGR is the Commission’s primary resource in support of public outreach and 

education, media relations, and liaison with Congress, the Postal Service, and other 

government agencies. PAGR provides information for consumers and responds to their 

inquiries. Informal complaints regarding individual rate and service inquiries are referred to the 

Consumer Advocate of the Postal Service. PAGR works closely with Members of Congress and 

their staffs. The FY 2024 projects 4 FTEs for PAGR, with a maximum of 4 positions by the end 

of FY 2024. 

Office of the Secretary and Administration. OSA provides management and staff support to the 

Commission’s operational offices and oversees the Commission’s strategic plan and various 

initiatives of the executive branch. OSA ensures that the Commission has the physical, 

technological, and human capital infrastructure needed to accomplish its mission. OSA currently 

oversees human resources, finance (budget, contracts, procurement, accounting), policy, 

records, health and safety (including COVID-19 response), facilities, compliance, general 

administrative services, and the Commission’s Electronic Docketing System. 

OSA also houses the Commission’s information technology (IT), cybersecurity, data 

management, and data protection functions, which underlie the efficiency of the Commission’s 

daily work. These functions also secure the information produced by the Commission and 

provided to it by stakeholders, primarily the Postal Service. OSA is responsible for compliance 

with federal laws including those related to procurement, personnel, and information security. 

The budget projects to maintain growth from FY 2023 with 21 FTEs for FY 2024, with a 

maximum 23 employees by the end of FY 2024. 

Office of Finance and Budget. In FY 2023, the Commission requested sufficient funding to 

create an Office of Finance and Budget to provide an independent financial management office 
13 

within the Commission.5 The Commission has engaged the services of a contractor to assist the 

Commission in its review and assessment of the appropriate organizational structure and size of 

the new office to ensure proper financial and internal controls. The budget allows for a 4 FTEs, 

with a maximum of 7 employees in the initial Finance and Budget office by the end of FY 2024. 

B. Rent, Equipment, Furniture, and Repairs 

The FY 2024 Budget Request for Rent, Equipment, Furniture, and Repairs is $1.820 million, 

including $1.7 million in rent payments according to its lease terms. The amount includes an 

increase in lease costs due to the conclusion of a large portion of rent abatement received by 

the Commission.6

 

In FY 2023, the Commission’s normal rent costs were $2.1 million, however due to the rent 

abatement schedule in the Commission’s lease payment structure, it was only charged actual 

rent expenses of $0.5 million. In FY 2024, the Commission’s normal rent costs will be $2.2 

million, and it will receive approximately $0.4 million rent abatement, resulting in rent expense 

increases of $1.3 million. 

C. Services and Printing 

The Commission’s FY 2024 Budget Request includes $0.821 million for Services and Printing. 

This budget group represents a wide variety of services provided to the Commission, including 

the cost of transit benefits, subscriptions, licensing costs for online legal research tools 

(Westlaw and LexisNexis), vacancy announcements for USAjobs.gov, and facility, security, and 

other miscellaneous services. 

The largest expense in this category is the cost of printing charged by the Government Printing 

Office for the Commission’s Federal Register notices. This printing expense is statutorily 

required, and the amount of Federal Register printing required is highly dependent on the 

quantity of filings that the Commission receives from the Postal Service and postal 

stakeholders, which makes it difficult to estimate. 

D. Consulting Services 

The Commission’s FY 2024 Budget Request includes $2.330 million for Consulting Services. 

This budget group includes several one-time consulting contracts, including support for 

5

 The Commission is in the processing of assessing the organizational structure of this office. The Commission anticipates that 

financial functions currently conducted by the Office of the Secretary and Administration regarding budget, accounts payable, 

procurement, accounting and potentially contracting will be transferred to this new office. In addition, the Commission is assessing 

whether it is necessary to expand the capacity of this office to conduct more sophisticated financial analysis, planning, and 

forecasting. 

6

 In the August 24, 2022, letter from Chairman Roman Martinez IV to Chairman Michael M. Kubayanda, Chairman Martinez noted 

that rent abatements were accounted for in the Commission’s FY 2023 budget, and that “[u]nder Generally Accepted Accounting 

Principles, such abatements should be spread over the life of the lease.” With respect to the application of rent abatement, the 

Budget Request reflects the actual amount needed in FY 2024 to pay for the Commission’s lease, which is consistent with how 

other federal agencies report rental costs. According to the accounting standards that govern federal agencies, “[r]ental increases, 

rental decreases, lease incentives, and lease concessions should be recognized by the lessee and lessor when incurred as 

increases/reductions to lease rental expense and income, respectively.” See Federal Accounting Standards Advisory Board, 

Handbook of Federal Accounting Standards and Other Pronouncements, June 30, 2022 (Version 21 as Amended), at 10 (SFFAS 

54). However, as the Commission lease costs are reported within overall Postal Service lease costs, the Commission has provided 

its lease to Postal facilities, which details the lease structure and payment schedule; hence, the Postal Service is aware of the 

structure for the Postal Service’s GAAP reporting requirements. For purposes of the Commission’s Budget Request, the amount 

reflects the funding level needed to meet its FY 2024 obligations. 
14 

economic analysis, administrative assessments, policy development, special studies, 

professional services, and other areas. Many of the consulting services for FY 2024 involve 

assessing and remediating outstanding compliance gaps in the critical areas of financial 

management, human resources and position classifications, and Section 508 of the 

Rehabilitation Act of 1973. 

Most of the contracts in this group represent one-time non-recurring expenses. These expenses 

are planned to be funded using the Commission’s prior year balances (restricted cash). 

E. Travel (Domestic and International) 

The Commission’s FY 2024 Budget Request includes $0.280 million for Travel. While this is a 

$149,000 increase from FY 2023, the increase is due to resuming normal travel activities in the 

post-COVID-19 environment and represents less than 1 percent of the Commission’s planned 

FY 2024 expenses. 

The Travel budget reflects sufficient funding to ensure Commission staff and Commissioners 

can travel for conferences, training opportunities, and the other necessary travel including site 

visits. In addition, the Commission’s Travel budget includes sufficient funding to provide travel 

costs for remote workers to travel to the Commission for in-person meetings. 

F. Training 

The Commission’s FY 2024 Budget Request includes $0.407 million for Training and represents 

1.4 percent of the total planned FY 2024 expenses. This is a $217,000 increase from FY 2023 

and is necessary to continue provide long-deferred training opportunities to staff. 

This amount includes individual training budgets for each of the Commission’s offices, a training 

budget for Commission-wide training, and funding for the annual all-hands Commission retreat. 

G. Communications 

The Commission’s FY 2024 Budget Request includes $0.200 million for Communications, 

representing a $29,000 decrease from FY 2023. This amount includes costs for the 

Commission’s telecommunications services, including internet, MTIPs, and wireless. 

H. Information Technology 

The Information Technology budget for FY 2024 is $3.712 million. From that amount, over 50 

percent will be funded from TMF awards in FY 2024. 

Absent the planned expenses from TMF awards, the Commission’s IT budget reflects an 

increase of $400,000 for video and audio-conferencing hardware installation to support hybrid 

meetings and data management projects for the recently created Chief Data Officer department. 

I. Supplies and Miscellaneous 

The Commission’s FY 2024 Budget Request includes $0.126 million for Supplies and 

Miscellaneous. This amount includes supply budgets for each office within the Commission, 

subscriptions, shipping costs, and other miscellaneous items. 
15 

V. CONCLUSION 

The FY 2024 Budget Request is targeted to increase the Commission’s capacity and 

compliance efforts, remedy long-term organizational deficits, and enable the agency to right-size 

and align its operations to meet the demands of the evolving Postal Service. Beyond being 

responsive to statutory mandates, the increased funding should have multiplier effects that 

benefit the Postal Service and facilitate timely review of DFA Plan initiatives. 
U.S. POSTAL REGULATORY COMMISSION

Washington, DC 20268-0001

Office of the Chairman

The Honorable Roman Mar�nez IV August 17, 2023

Chairman, Board of Governors

United States Postal Service

Washington, D.C. 20268

Chairman Mar�nez,

The Commission’s fiscal year (FY) 2024 Budget Request reflects the best judgement of a bipar�san 

majority as to the resources needed to effec�vely regulate the U.S. Postal Service and carry out our 

congressionally mandated mission to provide transparency and accountability into the Postal Service.

You have requested addi�onal informa�on regarding our FY 2024 Request, which is provided below. 

Addi�onally, you have requested that the Commission revise its request. I invite you and your colleagues 

to meet with the Commission to beter understand how a downward revision of our budget request 

would nega�vely affect the Commission, the Postal Service, and the public.

The Commission has requested a $2.8 million increase in FY 2024 from our FY 2023 request, which is a 

13.5 percent increase. In today’s fiscal climate, I can well understand how this may seem profligate to 

those unfamiliar with the Commission’s finances. However, $2.0 million, or 70 percent of this increase, is 

due to non-controllable increases in our fixed costs. 

• $1.3 million will fund a scheduled increase in our fixed lease costs, which you were alerted to in 

last year’s request, and

• $0.7 million will fund infla�onary increases in compensa�on costs and the related increased cost 

of benefits.

Let me be clear, a reduc�on in our FY 2024 Budget Request that does not at least fund these increases in 

fixed costs will likely result in a hiring freeze or layoffs in FY 2024 and directly impair our ability to 

consider Postal Service requests, including rate changes, NSAs or other proposals in a �mely manner. We 

therefore ask that you consider $22.6 million to be the baseline of our FY 2024 request.

The remaining $0.8 million of the requested increase would fund the cost of addi�onal staff and 

increased training. The addi�onal staff would increase our analy�cal capabili�es and help with process 

automa�on that would help us achieve our strategic goal of considering rou�ne cases more quickly and 

efficiently. While my colleagues and I do not believe it would be in the best interests of the Commission 

or the Postal Service for the Governors to reduce our investment in these capabili�es, we invite you and 

the rest of the Governors to meet with us and discuss the value of these investments to the USPS and 

the postal system before adjus�ng our budget request.

I understand that approving your regulator’s budget—and indirectly our ability to properly oversee the 

Postal Service—is a fraught task that asks you to balance stewardship of ratepayer dollars with the 

independence of your regulator. My colleagues and I wish to make that process as straigh�orward as 
possible for you. We believe that an easily arranged virtual mee�ng would allow us to have a produc�ve 

dialog and discuss the merits of our proposed budget.

Yours truly,

Chairman Kubayanda
1

Responses to Ques�ons Posed by Members of the Board:

Ques�on 1

“The Governors have in mind the budget negotiation that has occurred for the rest of the federal 

government, in which discretionary spending at non-defense agencies was held to approximately 

1 percent. They would ask the Commissioners to look at that and consider adjusting the 

proposed budget in light of that.”

The Commission presents the following informa�on in response to the Governors’ ques�on with respect 

to considera�on of a 1 percent limita�on. As demonstrated below, this limita�on is not feasible for 

mul�ple reasons, including the exclusion of the Commission and the Postal Service from general 

governmentwide budget limita�ons and the fact that a one-percent increase would fail to cover the 

bare-minimum increases in non-controllable fixed costs the Commission requires to operate. 

The Postal Service and the Commission are both “independent establishment(s) of the execu�ve branch”

and are exempt from “Federal law[s] dealing with public or Federal contracts, property, works, officers, 

employees, budgets, or funds, including the provisions of chapters 5 and 7 of �tle 5[.]” 39 U.S.C. §§ 201,

501, 410. If the referenced government-wide budget nego�a�on applied to the Commission, it would 

apply likewise to the Postal Service. However, it does not. As the Postal Service’s General Counsel 

Thomas Marshall explained to the Office of Management and Budget in 2019, “our governing statute 

clearly indicates that Postal Service and Commission func�ons are not affected by the opera�on (or 

lapse) of Federal budgetary and funding laws.”1 The U.S. Government Accountability Office (GAO) also 

concluded that the Commission’s funds are not subject to general budget limita�ons, such as 

governmentwide recissions.2

In the Postal Service Reform Act of 2022, Congress removed the Commission from the appropria�ons 

process, which was the subject of the referenced budget nego�a�ons, because the appropria�ons 

process had failed to adequately fund the Commission and had nega�ve impacts on the Postal Service

due to lapses in appropria�ons. If Congress had intended us to simply mirror the average increase in 

domes�c discre�onary spending, Congress would not have removed the Commission from the 

appropria�ons process.

Most notably, going back nearly 50 years, the Comptroller General issued a report to the Senate that 

highlighted the poten�al for “abuse by the Postal Service’s Board of Governors of its approval authority 

over the amount the Commission can spend.”3 The GAO recognized that it was unusual for the funds of a 

regulatory agency to be under the control of the regulated en�ty, as it could “provide a means for 

limiting the scope of the Commission’s activities.” GGD-77-20 at 28 (emphasis added). Although the GAO 

stated that there was no reason to believe that the Governors would abuse this power, it highlighted a 

past incident of concern where the Governors nega�vely adjusted the Commission’s budget and opined 

1 Leter from Thomas J. Marshall, General Counsel and Execu�ve Vice President, USPS, to The Honorable Russell T. 

Vought, Ac�ng Director, Office of Management and Budget, January 11, 2019. 2 See Mater of Postal Regulatory Commission- Amounts Appropriated by Transfer from the Postal Service Fund, B327122 (November 30, 2015).

3 The Role of the Postal Rate Commission Should Be Clarified, GD-77-20; B-114874, April 7, 1977.
2

that the “scope of the ac�vi�es of the Commission should not be subject to the percep�ons of the 

Governors or the state of the [Postal] Service’s financial condi�on.” GGD-77-20 at 28. 

The Commission’s FY 2024 Budget Request reflects both its fixed opera�onal costs and addi�onal 

resources necessary to bolster its opera�ons. It is essen�al to view the increase with respect to the 

nature of the expenses required to achieve a state of opera�onal health and in light of the fact that the 

Commission’s request reflects the amount of funding necessary to accomplish its full scope of ac�vi�es 

as a regulator. 

As shown in the table below, due to increases in non-controllable costs, the Commission’s baseline

funding level required to maintain its opera�ons in FY 2024 is $22.613 million.

FY 2024 Budget Request 

Non-Controllable and Controllable Cost Increases

($ millions)

FY 2023 Approved Budget 20.613

Non-Controllable Fixed Costs Increases

Rent 1.300

Infla�onary Salary and Benefits 0.700

Total Non-Controllable Fixed Costs Increases 2.000

Baseline FY 2024 Funding Level 22.613

Controllable Cost Increases 0.786

FY 2024 Budget Request 23.399

In presen�ng the Commission’s Budget Request, it is impera�ve to address that the significant por�on of 

the overall increase stems from fixed, non-controllable costs, which account for approximately 70

percent of the budget increase. While the total increase in budget may appear substan�al at 13.5

percent, it’s essen�al to recognize that less than a third of this increase pertains to controllable

expenses. The remaining increase is atributed to the rise in non-controllable costs that are beyond the 

Commission’s discre�on. This dis�nc�on is crucial as it underscores the need for the Governors to 

approve an increase in funding at least to cover these fixed non-controllable costs. In order to maintain 

financial equilibrium and fund its non-controllable costs, the Commission requires Governor approval of 

a minimum of $22.613 million for FY 2024. As suggested by the Governors, a one percent increase over 

this baseline funding level would be $22.819 million.

To be clear, a one percent increase from the FY 2023 budget ($206,000.00) would fail to fund increases in 

the Commission’s non-controllable fixed costs, compromise its ability to func�on effec�vely and 

efficiently, and undermine its status as an independent regulatory agency.

Limi�ng the Commission to an arbitrary budget increase of only 1% without regard for its actual needs is 

a problema�c approach that will have several nega�ve consequences. As Congress recognized by 

excluding the Postal Service and the Commission from applica�on of general governmentwide budget 

limita�ons, applying a one-size-fits-all approach fails to account for the unique requirements and 

complexity of the Commission’s opera�ons and responsibili�es. A more informed and flexible approach 

to budge�ng is necessary to ensure that the Commission can operate and adapt to changes, invest in 
3

necessary upgrades, and provide the quality of service and oversight that the Postal Service and 

stakeholders rely on.

The Commission’s FY 2024 Budget Request of $23.399 million represents a 3.8 percent increase over its

baseline funding level. Failure to obtain the full 3.8 percent increase over non-controllable fixed costs

requires careful considera�on of the broader ramifica�ons of barely funding the Commission beyond its 

fixed expenses. An insufficient budget alloca�on, which merely covers the minimum or even a 1 percent

increase, risks undermining the Commission’s ability to effec�vely fulfill its regulatory responsibili�es. 

Opera�ng on such a narrow margin, without the benefit of budgetary flexibility or economies of scale, 

could lead to a range of adverse consequences, including limited resources to implement new regulatory 

requirements and ini�a�ves, delayed responses to Postal Service requirements and industry changes, 

and inadequate oversight capabili�es. 

Over the past 15 years, the Commission has faced the challenging reality of opera�ng with budget 

increases that have consistently fallen short of infla�on. A one percent increase would dras�cally 

undermine the Commission’s ability to provide accountability into the Postal Service at a �me when the 

Postal Service is rapidly transforming its business model and prac�ces. As directly experienced by the 

Postal Service throughout the price-cap regime, budgetary limita�ons based solely on infla�onary 

increases are insufficient to enable necessary investments and unsustainable for financial stability of an 

organiza�on. Over the last two years, USPS has addressed its own rising costs and deferred investments 

through rate increases on market dominant products that have gone up by 24.90 percent cumula�vely 

for compensatory classes and 32.09 percent cumula�vely for non-compensatory classes. A�er over 15 

years of below infla�onary increases, the Commission needs a modest increase over the near term to 

adequately fund long neglected areas and respond to infla�onary cost increases. 

Congress made the Commission subject to appropria�ons in the Postal Accountability and Enhancement

Act of 2006 to ensure its independence from the Governors. At the request of the Commission due to 

years of below infla�on-level funding, Congress removed the Commission from the appropria�ons 

process and returned it to the prior Governor-approved budget process in the Postal Reform Act of 2022. 

However, Congress took this ac�on only a�er assurances from both the Commission and the Postal 

Service that this ac�on would not threaten the independence of the Commission. In the 38 years from 

1970 to 2007 when the Governors previously approved Commission budgets, the Governors consistently 

approved the Commission’s requests.

Adherence to a budget nego�a�on wholly unrelated to the Postal Service or the Commission without 

any considera�on of the Commission’s specific circumstances or history would poorly serve the Postal 

Service and the public, as well as undermine Congressional intent to create an independent agency to 

implement postal policy. As demonstrated in its Budget Request, the real budget increase is rather small

due to infla�onary increases and one-�me rent credits that will not reoccur in FY 2024. Reques�ng 3.8

percent increase over fixed costs reflects the Commission’s commitment to maintaining the quality and 

integrity of its regulatory efforts, which in turn safeguards the interests of both the regulated en�ty and 

the industry. The Commission is commited to securing the funding required to fully support its func�ons

and maintain the stability and fairness of the regulatory landscape while also protec�ng the broader 

economic and business environment that the Postal Service relies on for its success. 
4

Ques�on 2

“Several Governors would like to have a more robust explanation for the various line items that 

have year-over-year increases. In other words, I need your help to help them understand the 

differences between the baseline (FY23) and the proposed budget for FY24.”

The Commission’s FY 2024 Budget Request is $2.8 million, or 13.5 percent, more than the Commission’s 

FY 2023 Budget Request of $20.613 million that was approved by the Postal Service Governors. 

Removing the non-controllable pre-planned rent expenses ($1.3 million) and the non-controllable 

infla�onary salary increase ($0.7 million) the Commission’s FY 2024 Budget Request is $0.8 million more 

than the Commission’s FY 2023 Budget Request, or 3.8 percent.

Specifically, the Commission’s FY 2023 $2.8 million budget increase includes:

• $1.4 million in salary and benefits increases (50 percent of $2.8 million increase)

o $0.7 million for non-controllable infla�onary salary increases, and associated benefits 

costs, and

o $0.7 million for salary and benefits costs to incrementally add addi�onal staff 

throughout FY 2024

• $1.3 million in addi�onal non-controllable rent expenses (46 percent of $2.8 million increase) 

due to the expira�on of a large amount of rent abatements. 

• The remaining $0.1 million in increased budget request is to supplement the increasing 

demands of travel and training at the Commission. 

In its FY 2023 Budget Request, the Commission explained that “the Commission’s FY 2023 rent expense 

is offset by a large amount of nego�ated rent abatements in FY 2023 when the Commission enters the 

first year of a new lease term.” FY 2023 Budget Request at 2. As further explained in the Commission’s FY 

2024 Budget Request, “[i]n FY 2023, the Commission’s normal rent costs were $2.1 million, however due 

to the rent abatement schedule in the Commission’s lease payment structure, it was only charged actual 

rent expenses of $0.5 million. In FY 2024, the Commission’s normal rent costs will be $2.2 million, and it 

will receive approximately $0.4 million rent abatement, resul�ng in rent expense increases of $1.3 

million.” FY 2024 Budget Request at 13. It is essen�al to recognize that the expira�on of a significant 

por�on of rent abatement and the subsequent inclusion of the full lease cost in the budget should not 

be considered a genuine increase in budgetary alloca�on. Rather, this adjustment reflects a return to the 

standard opera�onal costs that were temporarily mi�gated by the abatement. As the Commission

communicated those upcoming changes to the Governors in the previous year’s budget, this transi�on 

was a pre-planned, an�cipated event. The Commission also notes that it will experience addi�onal

increases in next year’s rent costs due to further expira�on of rent abatements. 

The Commission’s Budget Request includes an addi�onal $1.4 million for salaries and benefits, which 

includes $0.7 million for infla�onary salary increases, and associated benefits costs, consistent with the 

President’s FY 2024 proposal to give the federal workforce and average pay increase of 5.2 percent, and 

$0.7 million in salary and benefits costs to incrementally add addi�onal staff throughout FY 2024 to 

address the Commission’s lack of capacity in key posi�ons, as described in the Commission’s FY 2024 

Budget Request. 
5

Addi�onal increases in expenses are funded through applica�on of use of its two alternate funding 

sources. The Commission has offset the remainder of its increased expenses in FY 2024 by using its prior 

year balances and Technology Moderniza�on Fund (TMF) awards. It is important to note that the 

Commission atempts to limit the use of these funds to non-recurring expenses to avoid crea�ng 

unfunded obliga�ons in the future. The Commission is proud of its TMF awards as they are merit based 

and the Commission is the first small agency to receive two awards. The TMF awards are helping to fund 

its transi�on to the cloud, significant upgrades to its cybersecurity capabili�es, new database 

capabili�es, and major overhauls of its online docke�ng system and website—all without needing to 

request funds from the ratepayers. While the Commission received two significant awards dedicated to 

technology moderniza�on, the exis�ng state of infrastructure requires addi�onal investments beyond 

what these awards can provide. The TMF awards are a valuable star�ng point, but they are targeted 

towards specific technological upgrades and do not fully address the underlying deficiencies and 

inefficiencies that have accumulated due to years of neglect and deferred maintenance. 

Ques�on 3

“In general, I would say that they were not satisfied with the level of information provided.”

The Commission is disappointed that the Governors were not sa�sfied with the level of informa�on 

provided. The FY 2024 Budget Request is not only significantly more detailed and nearly four-�mes 

longer than the FY 2023 Budget Request; it also proac�vely addressed the helpful and percep�ve 

ques�ons asked by Chairman Mar�nez and the Governors in the FY 2023 Budget Request cycle. With a 

budget less than 0.03 percent of USPS annual revenue and a small number of administra�ve staff who 

perform mul�ple tasks including finance and budget, the Commission likely does not produce finance 

and budget informa�on in a format a larger agency with full-�me accountants would. This is an area we 

are ac�vely working to improve. The approval of the Commission’s FY 2023 budget has allowed us to 

begin a financial assessment that will provide recommenda�ons for modernizing the Commission’s

finance and budget opera�ons and exploring whether hiring a chief financial officer or similar posi�on 

would be appropriate for an agency of its size. The Commission’s FY 2024 Budget Request, if approved, 

would allow the Commission to con�nue to enhance its finance and budget opera�ons by addi�onal 

limited hiring. 

The Commission is open to any sugges�ons the Governors may have that would assist them in 

considering the Commission’s annual budget requests.

Ques�on 4

“Some Governors would also like a better explanation regarding the funds that are being carried 

over.”

On November 30, 2015, the GAO issued an opinion concluding that funds appropriated by transfer from 

the Postal Service Fund to the Commission (1) remain “no-year funds” that do not revert back to the 

Postal Service Fund at the end of the fiscal year; (2) are not subject to general budget limita�ons 

including government- wide rescissions; and (3) if not already obligated, remain available to fund the 

Commission’s opera�ons in subsequent fiscal years. B-327122. In 2017, the Commission began managing 

its funds as no-year funds going forward.
6

On May 18, 2020, the Commission entered into an agreement with the Postal Service that acknowledged 

and agreed that the Commission should have access to all its available appropriated funds star�ng from 

FY 2009 to the present date. At that �me, the Postal Service and the Commission agreed that based on 

the informa�on provided by the Postal Service, the Commission’s no-year fund balance was

$5,953,130.96 for FY 2009 - 2019. As a result of the Commission’s funds being classified as “no-year 

funds” or funds without fiscal year limita�on, the Commission is allowed to use this surplus across fiscal 

years. 

At the start of FY 2023 the amount of the Commission’s restricted cash balance (formerly termed 

“carryover”) was $5,122,511. Based on current projec�ons, the Commission an�cipates having between 

$4.1 million and $5.1 million of restricted cash balances at the start of FY 2024. The Commission’s FY 

2024 Budget Request assumes the use of $4.0 million from this account to fund one-�me, non-recurring 

expenses. Remaining balances will be used to offset the Commission’s FY 2025 Budget Request. Due to 

the nature of this account, the Commission has generally limited the use of its restricted cash balance to 

non-recurring needs to not create long-term obliga�ons that may not be funded once this account is 

exhausted. Should the Governors seek to have the Commission apply its restricted cash balances to 

cover recurring opera�ons, then the Commission would need to have reassurances that any recurring 

opera�ons funded through restricted cash would be approved as part of its baseline funding levels in 

future years.
7

Ques�on 5

“...on the request for comparisons/explanations “for differences between the baseline (FY23) and 

the proposed budget for FY24,” he would like to see FY23 Budget, FY23 Actual (projected to end 

of year), and FY24 Budget.”

FY 2023 YTD Actuals and Year End Es�mate ($000)

Budget Line Grouping

FY 2023 FY 2023 FY 2023 FY 2024

Budget 

Plan

June 30, 

2023 YTD

Estimated 

Year End

Budget 

Request

(91 FTEs) Actuals (82 FTEs)4 (96 FTEs)

Salaries, Benefits, and Employee Awards 18,391 12,502 17,165 19,782

Rent, Equipment, Furniture, and Repairs 488 391 482 1,820

Services and Printing 487 194 626 821

Consulting Services 1,444 302 894 2,330

Travel (Domestic and International) 131 28 83 280

Training 190 54 129 407

Communication 229 95 209 200

Information Technology 3,065 714 1,593 3,712

Supplies and Miscellaneous 54 21 42 126

Total Planned Expenses 24,479 14,299 21,222 29,477

Planned Expenses funded from TMF 1,866 440 905 2,078

Planned Usage from Prior Year Balances 

(Restricted Cash) 2,000 0 4,000

Budget Request / Estimated Expenses 20,613 20,317 23,399

As explained in the Commission’s FY 2024 Budget Request, insufficient capacity hindered its ability to 

undertake planned ac�vi�es and ini�a�ves fully. New statutory requirements under the Postal Service 

Reform Act of 2022, significantly increased compliance work due to the new Inspector General regime, 

and increased workload from the Delivering for America ini�a�ves, among other issues, also slowed the 

Commission’s ability to undertake ac�vi�es planned for FY 2023. However, as FY 2023 comes to a close, 

the Commission has diligently ramped up ac�vity execu�on and implementa�on of planned ini�a�ves—

greatly assisted by the capacity growth funded in its FY 2023 budget. As many of these ini�a�ves will

now be implemented in FY 2024 rather than FY 2023 as originally planned, the table above reflects these 

expenses being incurred in FY 2024 and the consequent under-execu�on in FY 2023. Because most of 

4 While the Commission is expected to average 82 employees over the fiscal year, by September 30, 2023, the 

Commission an�cipates having 88 employees on board to start FY 2024.
8

the under-executed ac�vi�es were to be funded from the Commission’s restricted cash balances, the

Commission now an�cipates spending $4.0 million in FY 2024 from the restricted cash balances.

The increases in fixed lease costs and salaries and benefits are explained above. The remaining accounts 

with significant increases are detailed below:

• Consul�ng Services increased by $0.9 million, or 61 percent.

o The Human Resource assessment and the Finance Assessment planned for FY 2023 will 

be completed in FY 2024. Consequently, those expenses will not be incurred in FY 2023, 

but will be in FY 2024.

o New consul�ng service expenditures in FY 2024 include: Strategic plan implementa�on 

support and 508 compliance.

o For FY 2024 all consul�ng services are planned to be funded from prior year balances.

• Informa�on Technology increased by $0.7 million, or 21 percent.

o Projects, including many TMF funded projects, ini�ally planned for FY 2023 are now 

projected to be completed in FY 2024 shi�ing those costs from FY 2023 to FY 2024.

o New and con�nuing IT projects funded in the FY 2024 budget include: replacing 

outdated mee�ng technology in conference rooms, data catalog so�ware tools, website

moderniza�on, online docke�ng system enhancements, Security Opera�on Center (SOC) 

services (monitoring, detec�ng, and preven�ng atacks on the Commission’s network) 

provided by the department of Jus�ce, and Security Architecture and Cloud Migra�on.

o $2.078 million of the IT budget, or 56 percent of the planned IT budget will be funded

from the Commission’s TMF award.

• Services and Prin�ng increased by $0.3 million, or 68 percent.

o Addi�onal security through hardware upgrades, increased subscrip�on costs for staff, 

transit costs, and other administra�ve programs and offices such as EEO, records 

management, etc.

• The remaining budget lines (Travel, Training, Communica�ons, Supplies, and Misc.) increased by 

$0.4 million, or 68 percent.

o Provides increased training for Commission staff, which had been limited due to belowinfla�on funding during the years the Commission was funded through appropria�ons.

o Assumes increased travel expenses as pandemic restric�ons are li�ed.
U.S. POSTAL REGULATORY COMMISSION

Washington, DC 20268-0001

Office of the Chairman

The Honorable Roman Mar�nez IV August 29, 2023

Chairman, Board of Governors

United States Postal Service

Washington, D.C. 20268

Chairman Mar�nez,

In lieu of its August 1, 2023, Budget Request, the Commission submits a budget request of $22.613

million for FY 2024. This revised budget request is a result of our correspondence and discussions 

regarding the August 1st request. The revised request was approved unanimously by the Commission and

is the compromise figure I outlined in my August 17th leter to you. This amount reflects a reduc�on of 

$786,000 from its August 1st Request and covers the increase in fixed costs for FY 2024.

Yours truly,

Chairman Kubayanda
1

FY 2024 Budget Request

The Commission’s Budget Request in FY 2024 is $22.613 million. This number reflects the baseline 

funding level required to maintain its opera�ons due to increases in non-controllable costs and funds 

expenses for facili�es, supplies, compensa�on, and employee benefits for FY 2024.

FY 2024 Budget Request: $22.613 million

($ millions)

FY 2023 Approved Budget 20.613

Non-Controllable Fixed Costs Increases

Rent 1.300

Infla�onary Salary and Benefits 0.700

Total Non-Controllable Fixed Costs Increases 2.000

FY 2024 Budget Request 22.613