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Chapter 2
Postal Operations

Telephone Change of Address (TCOA) service, introduced in 2004, allows customers to change their addresses via the Postal Service call center. The TCOA function standardizes and adds ZIP+4 codes to the old and new address using Postal Service databases. In 2005, 175 thousand address changes were filed using TCOA.

When a customer submits PS Form 3575, Change of Address Order, the Postal Service mails a move validation letter to the customer's old address. This step, which alerts the resident that a forwarding request has been made, circumvents fraudulent COAs. After the individual moves, a customer notification letter is also mailed to the new address. Both letters include details of the COA order, providing customers an opportunity to verify the information. They also contain advice for customers on notifying others of their new address and a reminder to register or re-register to vote. Nearly 51 million letters were mailed in 2005.


The National Customer Support Center provides a number of services to support customer mail preparation. The Barcode Certification program certifies the ability of hardware and software to produce barcodes that meet automation requirements. The Presort Accuracy Validation and Evaluation program evaluates presort software and determines its accuracy in sorting address files according to DMM standards.

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 and bulk mail center (BMC). Reports are available to postal managers and staff on the internal ABC Web site.

New activities and cost categories were added to the ABC model in 2005. Reports were enhanced in 2005 to provide more detailed cost reporting. A BMC ABC model was piloted in 2005 and representatives from 19 of the 21 BMCs received training on the use of the model.

2. Financial Reporting

Since 2004 the Postal Service has complied voluntarily 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 that sets prices to cover costs. Voluntarily complying with SEC financial reporting requirements has further enhanced the Postal Service's financial reporting and transparency.

Postal Service quarterly reports conform to SEC Form 10-Q reporting requirements and include an enhanced management discussion and analysis section as well as reporting of revenue by major product and expense by function.

Since October 2003, when the Postal Service changed from accounting period to monthly reporting, the Postal Service has aligned its quarterly reports 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 as Financial News Releases on the Postal Service's public access Web site at, are comparable to SEC Form 8-K reporting.

The Financials section of the Postal Service's publicly accessible Web site provides in-depth reporting on the organization's financial performance. This section provides traditional financial reports for both current and some prior years, including monthly reports; quarterly financial reports; annual reports, annual cost and revenue analysis reports; annual cost segment and components reports; quarterly and annual revenue, pieces, and weights reports; annual comprehensive statements on postal operations; and annual Integrated Financial Plan.

Additional Postal Service reporting is available to the public on the PRC Web site at

3. Bank Secrecy Act Compliance

In order to combat money laundering and terrorism, Congress enacted a series of laws from 1970 through 2001 that require banks and financial service firms to detect, deter, track, and report certain cash transactions to the U.S. Department of the Treasury. This legislation and amendments, which have become known as the Bank Secrecy Act (BSA), further mandate that financial institutions monitor and ensure their employees' compliance with the BSA. The Postal Service, which sells postal money orders and provides international funds transfers with its Sure Money product, is specifically named in the BSA and must meet all of the requirements of the law.

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