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Chapter 2
postal operations

3. Customer Notification Letter and Move Validation Letter

In April 1996 the Postal Service implemented a process to circumvent the fraudulent submission of Change of Address orders. When a customer submits PS Form 3575, Change of Address Order, a move validation letter is mailed to the customer's old address. This letter alerts the resident that a forwarding request has been made. After the individual moves, a customer notification letter (CNL) is mailed to the new address. Both letters include details of the COA order, providing customers an opportunity to verify the COA information. If a potentially fraudulent situation exists, the customer is instructed to contact the local Post Office location for assistance. There is also information on how customers may notify others of their new address, and a reminder to register or re-register to vote. Nearly 48 million letters were mailed in 2004.

e. Certification and Information Services

In addition to address quality services, the National Customer Support Center (NCSC) provides a variety of services to support customer preparation of mail. The Barcode Certification program certifies the ability of hardware and software to produce barcodes that meet automation requirements. The Presort Accuracy Validation Evaluation (PAVE) program evaluates presort software and determines its accuracy in sorting address files according to the Domestic Mail Manual (DMM) standards. The Rapid Information Bulletin Board Systems (RIBBS) provides online access to a variety of information, including DMM labeling lists, certified vendor information customer support rulings, and weather and natural disaster condition reports.

N. Financial Management

1. Activity-Based Costing

Activity-Based Costing (ABC) is designed to assist managers in reducing expenses by assigning both direct and overhead costs to an organizational unit's activities and outputs. The Postal Service has implemented an ABC model that provides information about the costs of activities at each major mail processing plant. Postal Service managers and staff access these reports at the ABC Web site on the intranet.

In 2004 ABC converted to a monthly reporting format, and the model was expanded to include seven new activities and three new maintenance cost categories. A key objective during 2004 was to refine ABC reports to better meet user needs. As a result, several new reports will be made available to managers in 2005.

A bulk mail center ABC model has been developed and will be piloted in 2005.

2. Financial Reporting

In 2004 the Postal Service further enhanced its financial reporting and transparency. As of the first quarter of 2004, the Postal Service has voluntarily complied with the Securities and Exchange Commission (SEC) financial reporting requirements to the extent that those requirements reasonably can be applied to a non-publicly traded, government-owned entity with a breakeven mandate.

In 2004, Postal Service quarterly reports conform to SEC Form 10-Q type reporting requirements and includes an enhanced management discussion and analysis section, with business segment reporting by major product and function and expanded financial statements.

Since October 2003, when the Postal Service changed from accounting period to monthly reporting, the quarterly reports have been aligned with traditional calendar quarters. This facilitates comparison of Postal Service financial reports with those of other federal agencies and of private sector competitors. Since December 2003 the Postal Service has provided public notice of significant actions and events that could impact finances. These notices, posted on the Web site,, are comparable to SEC Form 8-K reporting.

To increase ease-of-access to financial information, the financial pages at were redesigned and expanded. These pages are now more user-friendly, and the breadth of accessible reports is greatly expanded. The Financials Web page provides traditional financial reports for both current and prior years, including: monthly reports (previously accounting period reports); quarterly financial reports; Annual Reports, and financial press releases. Additional Postal Service financial documents on the Web page include: annual Cost and Revenue Analysis reports; annual Cost Segment and Components reports; quarterly and annual Revenue, Pieces, and Weights reports; the annual Comprehensive Statement on Postal Operations, and the annual Integrated Financial Plan.

In addition to financial information provided pursuant to SEC regulations, the Postal Service also provides substantial financial information in response to PRC reporting requirements. Examples of reports publicly disclosed on the PRC Web page,, include: the National Consolidated Trial Balance; audit adjustment vouchers; the monthly National Payroll Hours Summary Reports; the monthly Active Employee Statistical Summary report; the monthly On-Roll and Paid Employee Statistics report; annual city and rural delivery statistics; reports by product on Billing Determinants, and a variety of additional reports addressing accrual analyses, special studies, and results of experimental product offerings.