2. MONTHLY REPORTING
With the start of 2004, the Postal Service will begin reporting interim financial results on a calendar month basis.

Currently, the Postal Service reports interim financial results on a four-week accounting-period basis. The accounting period consists of two bi-weekly payroll cycles totaling four weeks. Thirteen accounting periods comprise the entire internal postal fiscal year (PFY), which consists of exactly 52 weeks or 364 days.

The Postal Service has always made its annual financial reports on a government fiscal year (GFY) basis. The GFY runs from October 1 each year through the following September 30. Internally, the Postal Service has used both the postal and government fiscal years but all its interim reporting has been based on the PFY. Because the PFY is only 364 days long, the PFY and GFY have become increasingly misaligned.

The conversion to monthly reporting eliminates confusion about the postal calendar year and will allow comparisons of Postal Service financial results with results of our competitors and customers, and government and other econometric data bases which are most frequently in calendar quarter and monthly formats. This should enhance the transparency of Postal Service financial reporting, consistent with recent Government Accounting Office recommendations.

During 2002, the Postal Service completed a review of all existing information systems and targeted approximately 190 systems that require conversion to monthly reporting. Interim procedures were implemented to enable 2003 data to be reported in an accounting period format during the fiscal year, but to be recast at year’s end into a monthly format. When monthly reporting starts in 2004, a full one-year financial history will be available.