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Audit Reports

Apr
07
2015
Report Number:
MS-AR-15-004
Report Type:
Audit Reports
Category: Strategy & Investments

Seamless Acceptance Implementation

Background

Commercial mail accounted for most of the U.S. Postal Service’s revenue – 70 percent ($47 billion) – in fiscal year 2014. In 2006, the Postal Service began to automate commercial mail entry, verification, and induction. This process included planning and investing in systems and infrastructure to support the future transition to Seamless Acceptance (SA). SA uses electronic documentation from the mailer, intelligent mail barcodes, and various scanning devices to verify that letter and flat mail meet applicable acceptance thresholds and that proper postage is collected. These results are presented in the “mailer’s scorecard,” which summarizes mail entry-related performance indicators.

Twenty-nine major mailers currently volunteered to participate in SA, tendering about 1.7 billion mailpieces per month. Another 288 mailers volunteered to participate in the preparatory phase of the program known as Seamless Parallel, which helps introduce mailers to key aspects of SA.

The Postal Service estimated that it would complete its SA infrastructure by January 2009 and planned to finalize the SA program in September 2014. While the Postal Service has reported progress in implementing SA, delays continue. The Postal Service also faces Sarbanes-Oxley-related control deficiencies for verifying SA mailings. The Postal Service continues to rely on manual verification of business mailings until the automated controls for SA are functioning.

The Postal Service planned to finish automating the process for identifying mail quality errors in January 2015 and postage assessments in April 2015, the new timeframe is now April 2015 and July 2015, respectively.

Mailers continue to raise major concerns about the accuracy and reliability of SA data. The Postal Service recently postponed a key information system update expected to address some SA data issues.

Our audit objective was to assess SA implementation.

What The OIG Found

SA implementation is hampered by ongoing data integrity, customer service, and communication issues. First, data is inaccurate and unreliable as the Postal Service struggles to link mail flow data across multiple information systems. The Postal Service identified 31 data-related SA scorecard issues in August 2014 and eight additional data issues after a major SA-related system (PostalOne!) update in August 2014. The Postal Service also delayed the early November 2014 PostalOne! release to address scorecard data issues. The Postal Service subsequently notified mailers in early December 2014 that scorecard data would not be reliable until mid-December.

Second, customer service is not always effective because Postal Service staff responsible for resolving customer issues Highlights 1 Seamless Acceptance Implementation Report Number MS-AR-15-004 have limited access to related data. For example, these staff members do not have access to extensive mail processing data, and must rely on contractor assistance for this information. PostalOne! help desk staff also does not have experience in responding to complex SA mailer issues.

Third, communication is inconsistent between SA business mailer support analysts and participating mailers. For example, some SA mailers we interviewed said they were not always made aware of data issues until they spent hours reviewing the scorecard data and then contacted the Postal Service.

The lack of a comprehensive plan contributed to these issues. Such a plan could have improved implementation through strategies and mechanisms to promote effective data integrity, customer service, and communication While we recognize the progress in implementing a system as complex as SA, additional delays and challenges could have significant financial implications for the Postal Service. We estimated $1.9 million of SA funds committed but unspent and $89.8 million in potential cost savings from the program over the next two years are at risk if corrective actions are not taken.

What The OIG Recommended

We recommended the Postal Service develop a comprehensive plan to effectively integrate the various information systems that support the move to SA; ensure staff has appropriate access to applicable SA reports and data to effectively respond to customer inquiries; and provide periodic communications with all mailer participants.

Report Recommendations

# Recommendation Status Value Initial Management Response USPS Proposed Resolution OIG Response Final Resolution
1

R - 1 -- Enhance Seamless Acceptance implementation by developing a comprehensive plan that effectively integrates the various information systems that support the move to Seamless Acceptance (SA), ensures staff has appropriate access to applicable SA reports and data to effectively respond to customer inquiries, and provides periodic communication with all SA mailer participants.

Closed $0 Agree