GAO United States

General Accounting Office

Washington, D.C. 20548

General Government Division

B-277565 

July 31, 1997

The Honorable Richard K. Armey

Majority Leader

House of Representatives

The Honorable John Kasich

Chairman, Committee on the Budget

House of Representatives

The Honorable Bob Livingston

Chairman, Committee on Appropriations

House of Representatives

The Honorable Dan Burton

Chairman, Committee on Government Reform

 and Oversight

House of Representatives

The Honorable John M. McHugh

Chairman, Subcommittee on the Postal Service

Committee on Government Reform and Oversight

House of Representatives

Subject: The Results Act: Observations on the Postal Service’s June 1997

Draft Strategic Plan

On June 12, 1997, we were asked by the Majority Leader and Chairmen

Kasich, Livingston, and Burton to review draft strategic plans submitted by

the cabinet departments and selected major agencies for consultation with

Congress as required by the Government Performance and Results Act of

1993 (the Results Act). Chairman McHugh also asked that we include the

U.S. Postal Service’s draft strategic plan in our review. This letter is our

response to the request concerning the U.S. Postal Service.

Objectives, Scope,

and Methodology

Our overall objective was to review and evaluate the latest available

version of the Postal Service’s draft strategic plan. As you requested, we

specifically (1) assessed the draft plan’s compliance with the Results Act’s

requirements and its overall quality, (2) determined whether the Service’s

major statutory responsibilities are reflected in the plan, (3) determined

whether the plan addressed major management problems, (4) reviewed

the Service’s capacity to provide reliable information for measuring

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results, and (5) determined whether the plan evidences input from

consultations and interagency coordination for any cross-cutting

functions.

We reviewed the Postal Service’s June 16, 1997, draft strategic plan.

Specifically, to determine whether the Service’s draft strategic plan

complied with the requirements of the Results Act, we compared the plan

with the Act’s requirements using our May 1997 guidance for congressional

review1

 as a tool. Our overall assessment of the Service’s draft strategic

plan was generally based on our knowledge of the Postal Service’s

operations and programs, and on our numerous reviews of the Service. We

also reviewed the most recent reports on the Service’s financial statements

by the independent, certified public accounting firm of Ernst and Young,

LLP.2

 See Related GAO Products at the end of this letter for a list of our

recent major products related to the Postal Service.

Background The Postal Reorganization Act of 1970 (P.L. 91-375) reorganized the former

U.S. Post Office Department into the U.S. Postal Service, an independent

establishment of the executive branch. It has a public service obligation to

provide postal services to all communities, and it must largely finance its

operations from its own revenue sources.3

 As we recently reported, mail

service is a long-standing part of American culture and business.4

 The

Constitution empowers only Congress to establish post offices,5

 and it is a

federal criminal offense for anyone other than the government to deliver

most letters. The letter mail monopoly was created by Congress to ensure

that the Service has sufficient revenues to carry out its public service

mandates, including providing regular mail delivery service (typically 6

1

See Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional Review

(GAO/GGD-10.1.16, May 1997).

2

The Postal Service is required to obtain an annual certification of the accuracy of its financial

statements from an independent, certified public accounting firm. The Postal Service is unlike many

federal agencies in that it is not subject to the Chief Financial Officers Act or the Federal Managers

Financial Integrity Act.

3

The Postal Service does not depend on appropriations for its basic operations but receives some

funds for, among other things, free and reduced rate mail, such as mail for the blind. In fiscal year

1996, the Service reported $56.4 billion in operating revenues, of which $93.1 million was appropriated

for free and reduced rate mail.

4

Postal Service Reform: Issues Relevant to Changing Restrictions on Private Letter Delivery

(GAO/GGD-96-129A/B, Sept. 12, 1996).

5

As we recently reported, local post offices have long been a part of American culture and business,

and the Postal Reorganization Act of 1970 provides that no small post office can be closed for

economic reasons alone. See U.S. Postal Service: Information on Post Office Closures, Appeals, and

Affected Communities (GAO/GGD-97-38BR, Mar. 11, 1997).

Page 2 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
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days a week) to all communities, providing uniform rates for at least one

class of letter mail, and maintaining a national network of post offices.

Since 1970, the Postal Service has gained greater commercial freedom, the

scope of its monopoly has been narrowed, and competition has increased

from private delivery companies and electronic communications

alternatives. The mission of the Postal Service and its predecessor has

long been and continues to be debated, including the balance between

fulfilling its public service responsibilities and remaining a viable

self-financing entity. The House Subcommittee on the Postal Service is

currently considering comprehensive postal reform legislation (the Postal

Reform Act of 1997, H.R. 22) intended to grant the Service more flexibility

in setting postal rates and introducing new products and services, while

ensuring that a viable universal mail delivery system at reasonable rates

remains the primary mission of the Postal Service.

To carry out its mission, the Service has a presence in every community

across the country. The Postal Service is the nation’s largest civilian

employer with more than 860,000 employees as of the end of fiscal year

1996. In 1996, the Service maintained over 35,000 postal facilities and

delivered more than 180 billion pieces of mail to nearly 130 million

households and businesses. In fiscal year 1996, the Service raised more in

revenues than those of all but eight U.S. companies. In many respects, the

Postal Service operates much like a business in that it provides products

and services in an increasingly dynamic competitive environment.

The Results Act calls for the Service to submit a strategic plan to the

President and the Congress by September 30, 1997.6

 The Service has

engaged in strategic planning for several years using its current

management system called “CustomerPerfect!”—which is based on

criteria from the Malcolm Baldrige National Quality Award—to make

improvements.7

 This system includes four major phases: (1) establishing

goals, (2) deploying resources toward achievement of those goals,

(3) implementing improvement actions, and (4) reviewing performance

and adjusting actions. We recognize that the strategic planning process is

ongoing and iterative in nature. Therefore, our comments on the June 1997

6

Unlike federal executive branch agencies, the Postal Service is not required to submit its strategic

plan to the Office of Management and Budget (OMB) and is not subject to the provisions of OMB’s

Circular No. A-11, part 2.

7

The Malcolm Baldrige National Quality Award is made annually to recognize U.S. companies for

business excellence. Award recipients need to demonstrate results and results improvement in a wide

range of indicators: customer-related, operational, and financial. Results reported need to address all

stakeholders, including customers, employees, owners, suppliers, and the public.

Page 3 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
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draft plan reflect a snapshot of the current status of the plan. The Postal

Service is continuing work to revise the draft with input from Congress

and other stakeholders.

Results in Brief The Postal Service’s draft strategic plan generally includes the six

components required by the Results Act and provides useful information

on the Service’s vision of its future and how the Service plans to achieve

its desired results. However, the plan’s discussion of some components

could be strengthened to better meet the purposes of the Act. For

example, the mission component of the plan could be more

comprehensive, and the goals and objectives could more completely cover

the Service’s major functions and operations. The plan generally reflects

the Service’s major statutory responsibilities, but it could be more detailed

in discussing how major management problems could affect the

achievement of goals, how the plan reflects input from consultations, and

interagency coordination. The plan also recognizes that the Service is

working to improve its information capacity so that the Service can

measure progress toward all of its goals.

Overall, the draft plan is conceptually consistent with the Results Act’s

concept of a systematic management process that uses results-oriented

goals and strategies as well as performance indicators to measure progress

toward these goals. However, the plan would benefit from a more

complete mission statement that conveys the requirement that the Service

is to fulfill its mandate to bind the nation together while being largely a

self-supporting entity. Also, the general goals and objectives and strategies

to achieve the goals and objectives do not cover some of the Service’s

major functions and operations, specifically those related to providing

universal access to mail services. Further, while the plan contains a useful

chart that helps relate performance measures to general goals/objectives,

the Service acknowledges that it is still in the process of identifying

tangible performance indicators and target levels to measure progress

toward all of its goals.

The draft plan generally reflects the Service’s major statutory

responsibilities and identifies the 1970 Postal Reorganization Act as the

basis for its public service mission. However, the plan could better discuss

how its overall goals, strategies, and performance measures may be

affected by key management problems that have been identified over the

years, such as the need to (1) improve labor-management relations,

(2) strengthen internal controls to protect revenues, and (3) ensure the

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integrity of acquisitions. Finally, the draft plan does not indicate how the

views of stakeholders or others were considered as a result of

consultations or offer evidence of interagency coordination with executive

branch agencies in some areas where coordination might be appropriate,

such as with the U.S. Justice Department, which helps enforce laws

related to postal matters.

Draft Plan Is

Consistent With the

Act’s Focus on Results

but Could Be

Strengthened

The Postal Service’s draft strategic plan is a work in process that provides

much useful information on its future vision. The draft plan shares the

Act’s focus on a single overriding goal: results. The draft plan is

conceptually consistent with the Act’s concept of a systematic

management process that uses results-oriented goals and strategies as well

as quantitative performance indicators to measure progress toward these

goals.8

 Moreover, the draft plan contains an informative discussion of key

external factors, including competitive forces, the general economy, and

proposed postal reform legislation, that could affect the Service’s ability to

achieve its goals. The plan also describes the Service’s “continuous

improvement” efforts, which include systematic reviews to track progress

against goals and identify additional steps needed to ensure achievement

of goals.

Recognizing that the draft plan has many strengths, we believe it could be

strengthened further to better meet the purposes of the Results Act.

Although the draft plan discusses all six components required by the Act,

in some areas, it could be more comprehensive, clear, and consistent.

Mission Statement The Results Act requires the strategic plan to contain a comprehensive

mission statement covering the major functions and operations of the

Service. The mission component of the Postal Service draft plan contains a

mission statement and supplemental explanatory discussion. However,

this component could be more complete and more clearly conveyed.

First, the mission statement could be made more complete by better

conveying the requirement that the Service is to fulfill its mandated

mission to bind the nation together while being a self-supporting entity.

Although the plan recognizes that the Service must depend on its own

revenues to be a viable entity, the mission statement does not specifically

state that the Service fulfills its basic mission while being largely

8

Executive Guide: Effectively Implementing the Government Performance and Results Act

(GAO/GGD-96-118, June 1996).

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self-supporting. Much of the current debate about the Service’s mission

centers on what products and services it should be allowed to provide in

order to remain a self-supporting entity.

Second, the explanatory discussion in the mission component of the plan

could more clearly convey the meaning of the basic mission of the Service

to “bind the Nation together” by “render[ing] postal services to all

communities.” Specifically, the explanatory discussion could better

communicate that fulfilling this mission involves providing all

communities with regular mail delivery and ready access to postal retail

services. It would also be useful if the discussion in the mission

component better defined the nature of the Service’s mission to bind the

nation together. The Postal Service has long provided nationwide mail

delivery and postal retail services to fulfill its mission of providing

universal postal service, and Congress has affirmed the importance of

these functions and operations.

The remainder of the plan also could be more clear and consistent in

defining universal service. For example, while the draft plan states that

First-Class mail is a product that “remains the only public universal

service,”9

 it also states that the Service continues to provide “universal

service” to a periodicals industry10 “that has historically been critical to the

democracy and continues to be so today.” Further, the draft plan indicates

that the Service could deliver electronic commerce and communications

in the 21st century through “a combined electronic/paper universal service

infrastructure.” Greater clarity and more detailed support in this area of

the draft plan would help stakeholders by demonstrating the Service’s

continued commitment to its mission of binding the nation together as

well as indicating whether the Service foresees fundamental changes in

this area.

Goals and Objectives The Results Act requires that the plan contain general goals and

objectives, including outcome-related goals and objectives, for the major

functions and operations of the Service. This draft of the plan moves in the

right direction by laying out a number of specific goals and objectives that

relate to growing the Service’s key businesses. In particular, the plan sets

out three major goals that are intended to improve (1) customer

satisfaction, (2) employee and organizational effectiveness, and

9

The draft plan contains a footnote that explains that “In an age of telecommunications reform, this

distinction could become more important.”

10There is a separate class of mail for delivery of periodicals.

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(3) financial performance. These goals are consistent with the spirit of the

Results Act.

One of the key ways in which the draft plan could be more complete is in

the setting of targets for carrying out the Service’s major functions as a

provider of universal postal service. The plan did not contain goals and

objectives for carrying out the universal service functions that the Service

performs. While the plan contains goals for timely delivery of mail, it does

not set goals for two main universal service functions—providing mail

delivery service to all communities and providing ready access to postal

retail services. Developing explicit goals or subgoals for carrying out these

functions could help demonstrate that the Service is continuing to meet its

public service obligations, as well as help build support for a shared vision

of how the Service will fulfill its universal service mandate in the future.

Strategies to Achieve Goals

and Objectives

The Results Act requires the strategic plan to contain a description of how

the goals and objectives are to be achieved, including a description of the

operational processes, skills and technology, and the human, capital,

information, and other resources required to meet these goals and

objectives. The plan contains a section entitled “How Will We Get There?”

that addresses this requirement. The plan also describes the Service’s

operational processes used by management to plan, implement, and

review performance against desired goals and objectives. The plan

summarizes the processes the Service uses to define goals and objectives

as well as the resources in the Postal Service network that will be

employed to meet these goals and objectives. In addition, the plan

contains an informative section on the Service’s process for making capital

investments necessary to meet its goals, along with information on

specific amounts allocated for various capital needs.

Providing multiple goals is a strength of the draft plan because achieving

success on multiple dimensions is necessary for organizational success.

However, setting multiple goals creates the challenge of managing to

achieve these goals simultaneously. As we noted in our recent testimony,11

 while the Postal Service reported improving overnight delivery of local

residential mail to 91 percent during 1996, during the same period, the rate

for on-time delivery of 2-day and 3-day mail—at 80 and 83 percent

respectively—was not as high as that for overnight delivery. Such

performance raised concern that the Postal Service’s emphasis on

11U.S. Postal Service: Continued Challenges to Maintaining Improved Performance (GAO/T-GGD-97-88,

Apr. 24, 1997).

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overnight delivery came at the expense of 2-day and 3-day mail delivery.

The Postal Service faces an even more difficult challenge in successfully

implementing the full set of goals and subgoals in its draft strategic plan.

The draft plan recognizes the challenge of meeting multiple goals, but it

could better explain how postal executives will manage progress toward

multiple priorities.

Relating Annual

Performance

Goals/Measures to General

Goals and Objectives

The Results Act requires the strategic plan to contain a description of how

the performance goals included in the annual performance plan are to be

related to the general goals and objectives in the strategic plan. The

Service’s draft plan meets this requirement, and includes a useful chart

that summarizes the major goals, specific subgoals, performance

indicators, and targets. We consider the chart to be one of the strengths of

the current plan, but we also recognize that the Service has not developed

all of the indicators and targets that it will need.

The draft strategic plan recognizes that the Service will be developing and

submitting annual performance reports to compare results with goals and

objectives. However, as the Service also recognizes in the draft plan, it

currently does not have a complete set of performance indicators to

measure improvement. For example, the Service has developed specific

targets for on-time delivery of First-Class mail, but it has yet to determine

the indicator(s) and targets for meeting its goal of enhancing the

workplace environment to improve relationships with employees.

Key External Factors The Act requires an identification of those key factors external to the

Postal Service, and beyond its control, that could significantly affect the

achievement of its general goals and objectives. The Service’s plan

identifies many external factors, such as the impacts of growing

competition, electronic messaging capabilities, and changing customer

demands. The plan also has an informative discussion of anticipated

economic growth and of how economic and demographic trends could

affect the Service. The plan explicitly addresses external factors by setting

forth a growth strategy designed “to meet the expanding requirements and

specialization demanded by customers today.”

The plan also notes the importance of pending postal reform legislation

that could make changes to the statutory framework governing the Postal

Service. The plan points out that the proposed legislation contains a

significant overhaul of the pricing mechanisms used to set postal rates and

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explains how such a change could help the Service achieve its goals: “By

allowing reasonable pricing changes to occur without extensive regulatory

hearings, the Postal Service would be able to react more quickly to

changing market conditions and focus more directly on the needs of its

customers.” However, the plan could also recognize that many other

aspects of the proposed comprehensive postal reform legislation—such as

provisions establishing a presidential postal employee-management

commission, ending Treasury Department control of Postal Service

banking, limiting the postal monopoly, and establishing a demonstration

project to test relaxing the mailbox restriction—could have implications

for its key functions and operations.

Program Evaluation The Act requires a description of the program evaluations used in

establishing or revising general goals and objectives, with a schedule for

future program evaluations. Under the Act, program evaluation is defined

as an assessment, through objective measurement and systematic analysis,

of the manner and extent to which Postal Service programs achieve

intended objectives. The Service’s plan explains that the Service differs in

fundamental ways from other federal agencies so that classic

governmental program evaluation is less appropriate than other forms of

review used by the Service. The plan describes the Service’s review

processes for evaluating progress towards its goals, but in some areas, the

plan does not indicate how the results of review activities relate to specific

goals and objectives.

The plan describes the Service’s process for systematic review, including

its overall process management review cycle and three specialized review

processes: capital investment review and approval, new product

development, and reviews of new and ongoing activities by the Postal

Service Inspector General and Inspection Service. The plan also states that

the Service plans to conduct another assessment of the Postal Service

based on criteria drawn from the Malcolm Baldrige National Quality

Award assessment process.

However, the plan varies in the way it explains the linkage between

different review processes and the goals and objectives. For example, in

the area of capital investments, the plan has a clear summary of the

four-step process that is used to develop and monitor projects from start

to finish as well as to determine whether the projects achieve intended

goals. In contrast, the plan contains little discussion of how the results of

other systematic reviews, such as performance audits by the Postal

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Service Inspector General, the Postal Inspection Service,12 or the Baldrige

Award assessment process, relate to specific goals, objectives, and other

components of the plan. We believe these sections of the plan could be

made more useful to stakeholders through additional explanation of how

these review processes are linked to the Service’s goals and objectives.

Key Statutory

Authorities Generally

Reflected in the

Service’s Strategic

Plan

To further review the strategic plan’s consistency with the intent of the

Results Act, we were asked to determine whether the draft plan reflects

the Service’s major statutory responsibilities, and whether those

responsibilities are reflected in the plan’s goals. The draft plan generally

reflects the Service’s major statutory responsibilities, although it could be

more detailed. For example, as previously discussed, the mission

component of the plan is focused on the major statutory authority that

serves as the basis for its mission: the 1970 Postal Reorganization Act.

However, the plan does not have specific goals for carrying out the

universal service functions that the Service performs, including providing

national delivery of mail and ready access to postal retail services. In

addition, the plan could place greater emphasis on the statutory

requirement that the Service deliver certain mail at a uniform rate, a

requirement that has long been associated with providing universal

service.

The Draft Plan Could

Address Major

Management

Problems More

Effectively

The Act requires the plan to describe how goals and objectives are to be

achieved, and therefore it is helpful for the plan to address management

problems that could affect the achievement of goals. The draft plan does

address a number of major management challenges, including the need for

the Service to improve customer service, increase productivity, control

costs, and increase revenues. However, the plan does not appear to fully

discuss some other problems that face the Service, such as how

labor-management relations may affect the Service’s ability to achieve

major goals related to improving employee and organizational

effectiveness and to control costs by achieving productivity gains. In

addition, the plan could better address other significant problem areas,

such as weaknesses that we have identified in internal controls that may

reduce revenues and compromise the integrity of certain acquisitions.

12The Postal Inspection Service, which is part of the Postal Service, is responsible for enforcing postal

laws.

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As we have reported, improving labor-management relations is one of the

major management problems facing the Service.13 The plan describes the

Service’s initiatives to improve labor-management relations, but the plan

could more explicitly discuss how labor-management relations could

affect achievement of goals and the strategies to address these potential

impacts. One of the Service’s core strategies is to manage its operating

costs by improving labor productivity and reducing cost per work hour.

However, the Service’s ability to meet its goal of reducing cost per work

hour may be affected by its statutory requirements related to collective

bargaining for wages and other terms and conditions of employment. If

collective bargaining impasses develop, which have occurred as far back

as 1978, binding arbitration by a third party is required. Labor contracts set

wages for bargaining employees. Employee costs comprise most of the

Service’s operating costs, and therefore its ability to control labor costs

largely determines whether the Service meets its cost reduction goals. The

plan could be more useful if it more directly addressed labor-management

issues and their potential effect on the Service’s goals and strategies.

In addition, the draft plan contains little discussion of the need to improve

internal controls, which is an area that we have previously identified as an

important management weakness. We recently testified that improving

internal controls to protect revenue remains a concern.14 We reported in

June 1996 that weaknesses in the Postal Service’s control for accepting

bulk business mail prevented it from having reasonable assurance that all

significant amounts of postage revenue due were received when mailers

claimed presort/barcode discounts.15 The Service plans to improve the

processes used in the verification of bulk mail, which accounts for nearly

half its revenues. However, the draft plan does not mention revenue

protection initiatives for bulk mail.16 Other areas of recent concern have

been the overall integrity of Postal Service acquisitions17 and

13U.S. Postal Service: Labor-Management Problems Persist on the Workroom Floor

(GAO/GGD-94-201A/B, Sept. 29, 1994).

14GAO/T-GGD-97-88.

15U.S. Postal Service: Stronger Mail Acceptance Controls Could Help Prevent Revenue Losses

(GAO/GGD-96-126, June 25, 1996).

16The draft plan summarized the Service’s “aggressive ’ease of use’ program” designed to reduce

variations in interpretation and application of rules and regulations as well as to reduce the number

and complexity of these regulations, when possible.

17Postal Service: Conditions Leading to Problems in Some Major Purchases (GAO/GGD-96-59, Jan. 18,

1996).

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strengthening program oversight.18 The Service has taken steps to deal

with these concerns. However, in our view, because internal controls over

revenue protection, the integrity of acquisitions, and oversight of postal

programs will continue to be important concerns, the draft plan could be

enhanced by placing greater emphasis on these areas.

The Service Continues

to Develop

Performance

Indicators and

Information Systems

The Service acknowledges in its draft plan that it currently does not have a

sufficient amount of data and information to completely measure results.

The Service also indicates that it plans to continue developing

(1) performance indicators to allow measures of improvement for all goals

in the plan, and (2) measures called “internal process drivers” that

managers can use to evaluate and improve performance to reach the goals

in the plan. Although we have not reviewed the Service’s information or

internal assessment systems, the Service has emphasized that it is

developing a management system that will allow management to track

progress and take additional steps to ensure the achievement of targets.

Another important issue related to performance measurement is the

accuracy and reliability of the data used to measure results. This issue has

been raised in congressional hearings related to the quality of Service data

used for ratemaking. At the request of the Chairman of the House

Subcommittee on the Postal Service, a review of the quality of the data

used in ratemaking is being conducted by a contractor, whose progress

will be monitored by the Postal Service, the Postal Rate Commission, and

us. This study will examine some of the specific issues that have been

raised about the completeness and accuracy of data used for ratemaking.

Some data, such as financial data that may be used to measure

performance, have been audited by outside parties. For example, the

Service’s financial statements, which relate to the Service’s financial

performance measures, are audited and some aspects of its internal

control structure reviewed annually by its outside auditor, Ernst & Young

LLP. In the Service’s 1996 annual report, Ernst & Young LLP said that the

financial statements presented fairly, in all material respects, the Service’s

financial position at September 30, 1996 and 1995, as well as the results of

its operations and cash flows for each of the 3 years for the period ending

September 30, 1996, in conformity with generally accepted accounting

principles. The Service plans to use financial data, such as net income, as a

18U.S. Postal Service: Improved Oversight Needed to Protect Privacy of Address Changes

(GAO/GGD-96-119, Aug. 13, 1996).

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key performance indicator to measure progress toward its financial

performance goal.

Another key data source discussed in the Service’s plan is its major

information systems. In its strategic plan, the Postal Service included a

plan to enhance information technology capabilities throughout its

network, such as by developing (1) a new integrated, managed network

service, (2) an improved computer system to support retail and delivery

activities, and (3) a delivery confirmation system. The plan does not

discuss how the Service will address two high-risk areas that we have

identified as governmentwide problems: computer security and the need

for computer systems to be changed to accommodate dates beyond

1999—the so-called “year 2000 problem.” Additionally, many of the

Service’s current information systems directly support key mission

functions, such as retail operations, mail processing, delivery, internal

communications, and law enforcement. Although we have not evaluated

the Service’s information systems, they do handle information that needs

to be protected against unauthorized access and disclosure and that may

be vulnerable to problems associated with the year 2000. These issues

have a significant potential impact on all federal agencies’ ability to

effectively conduct operations. Accordingly, we believe a discussion in the

plan of both these issues and the steps the Service has taken, has under

way, or plans to take to address them would be useful to its stakeholders.

Discussion of

Comments Obtained

From Consultations

and Interagency

Coordination Could

Be More Complete

The Results Act requires that in developing its plan, the Service consider

the views and suggestions of those entities potentially affected by or

interested in such a plan. The plan describes how the Service solicited

input from stakeholders, but it does not explain what input was received

or how it was addressed. Although the Service interacts with a number of

agencies in carrying out its operations, such as the enforcing of laws

related to postal matters and the printing of stamps, the plan does not

offer evidence of interagency coordination with executive branch

agencies. Further development of this section would help Congress and

other stakeholders to be more informed about the substance of the

consultations that took place.

The Service’s draft plan does not discuss the substance of the comments

that it received from stakeholders or how the comments were addressed

in the plan. In addition, some concerns were raised that the timing of the

development of the plan did not allow for sufficient stakeholder review

and input on the actual draft. Now that the plan is drafted, the Service has

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an opportunity to continue consultations with Congress and other key

stakeholders to obtain meaningful input on the mission, goals, and

measures in the plan. Such consultations could also help build support for

the plan.

Although the Postal Service plays a largely unique role in the federal

government, it does interact with a number of federal agencies. However,

the draft strategic plan does not evidence interagency coordination with

executive branch agencies, such as with (1) the U.S. Justice Department,

which helps enforce laws relating to postal matters; (2) the Bureau of

Engraving and Printing, which prints many stamps; and (3) the Census

Bureau, which works with the Postal Service to develop the address list

for the decennial census. To the extent that the Service’s relationships

with other agencies could affect achievement of the Service’s goals, a

discussion of interagency coordination would be helpful.

Agency Comments On July 29, 1997, we met with, and obtained oral comments on a draft of

this letter from, Postal Service officials, including the Vice President,

Controller; and the Vice President, Strategic Planning. They stated that

they found our observations to be helpful and said they would address our

suggested improvements in the August 1997 draft of their plan and in their

planning for fiscal year 1999 along with suggestions they have received

from others. In addition, they said that they would include additional

specificity on goals and performance measures in the annual performance

plans. They also noted, and we agree, that the Postal Service’s

“CustomerPerfect!” management system provided a good foundation for

the Service to address Results Act requirements.

We will send copies of this report to the Minority Leader of the House of

Representatives; Ranking Minority Members of your Committees and

Subcommittees; the Chairman and Ranking Minority Member of the

Subcommittee on International Security, Proliferation and Federal

Services, Senate Committee on Governmental Affairs; the Postmaster

General; and other interested parties. Copies will also be made available to

others upon request.

Page 14 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
B-277565 

Major contributors to this letter are listed in the enclosure. If you have any

questions, please call me on (202) 512-4232.

Bernard L. Ungar

Director, Government Business

 Operations Issues

Enclosure

Page 15 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
Enclosure 

Major Contributors to This Report

General Government

Division, Washington,

D.C.

Teresa Anderson, Assistant Director

Kenneth E. John, Senior Social Science Analyst

Accounting and

Information

Management Division

Nancy W. Kong, Auditor

Office of the General

Counsel

Alan N. Belkin, Assistant General Counsel

Jill P. Sayre, Senior Attorney

Page 16 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
Page 17 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
Page 18 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
Page 19 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
Related GAO Products

U.S. Postal Service: Information About Restrictions on Mailbox Access

(GAO/GGD-97-85, May 30, 1997).

U.S. Postal Service: Continued Challenges to Maintaining Improved

Performance (GAO/T-GGD-97-88, Apr. 24, 1997).

U.S. Postal Service: Information on Emergency Suspensions of Operations

at Post Offices (GAO/GGD-97-70R, Apr. 23, 1997).

U.S. Postal Service: Information on Post Office Closures, Appeals, and

Affected Communities (GAO/GGD-97-38BR, Mar. 11, 1997).

Postal Reform in Canada: Canada Post Corporation’s Universal Service

and Ratemaking (GAO/GGD-97-45BR, Mar. 5, 1997).

U.S. Postal Service: Revenue Losses From Express Mail Accounts Have

Grown (GAO/GGD-97-3, Oct. 24, 1996).

Postal Service Controls Over Postage Meters (GAO/GGD-96-194R, Sept. 26,

1996).

Inspectors General: A Comparison of Certain Activities of the Postal IG

and Other IGs (GAO/AIMD-96-150, Sept. 20, 1996).

Postal Service Reform: Issues Relevant to Changing Restrictions on

Private Letter Delivery (GAO/GGD-96-129A/B, Sept. 12, 1996).

U.S. Postal Service: Improved Oversight Needed to Protect Privacy of

Address Changes (GAO/GGD-96-119, Aug. 13, 1996).

U.S. Postal Service: Stronger Mail Acceptance Controls Could Help

Prevent Revenue Losses (GAO/GGD-96-126, June 25, 1996).

U.S. Postal Service: Unresolved Issues in the International Mail Market

(GAO/GGD-96-51, Mar. 11, 1996).

Postal Service: Conditions Leading to Problems in Some Major Purchases

(GAO/GGD-96-59, Jan. 18, 1996).

(240257) Page 20 GAO/GGD-97-163R The Postal Service’s Draft Strategic Plan
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