VI. REGULATORY STUDIES AND REPORTING OBLIGATIONS

Several studies and reports are required of the Postal Service and other agencies over the next 10 years as part of the Postal Act of 2006, in addition to those already mentioned. Many have long-term implications for the postal business model, such as recommendations on the postal monopoly and universal service obligations. Some are focused on additional accountability, such as compliance with Sarbanes-Oxley.

1. Implement Sarbanes-Oxley

The Sarbanes-Oxley Act of 2002 (SOX) is an ongoing process to improve corporate governance and enhance the accuracy of financial reporting. Under SOX, corporate leaders are responsible for establishing, evaluating, and monitoring the effectiveness of internal controls over financial reporting. The Postal Act of 2006 now requires the Postal Service to comply with Section 404 of SOX by 2010. A postal-wide effort, SOX involves the support of all functional groups and employees. SOX is about accountability and ownership of internal controls and following established policies and procedures. This will provide an opportunity to further standardize and reengineer processes.

Over the next three years, the Postal Service will follow best practices and guidance published by the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission to achieve compliance by 2010 as shown in the following table. Compliance entails establishing a top-down, risk-based approach to identify, assess and report internal controls affecting financial reporting.

SOX Implementation Timeline