James C. Miller III
Chairman, Audit and Finance Committee
The role of the Audit and Finance Committee is to assist the Board of Governors in fulfilling its fiduciary responsibilities. Committee members are selected by the Chairman of the Board. This year the Committee, whose current members include Governors Mickey D. Barnett and Thurgood Marshall, Jr., and me, met seven times.
The Committee’s primary responsibility is oversight of the integrity of the Postal Service’s financial statements and the soundness of its accounting and internal control practices. The independent public accounting firm engaged to perform the annual audit of Postal Service financial statements, Ernst & Young LLP, reports to the Board through the Committee. The Postal Inspector General, who reports to the Governors, is represented at all Committee meetings.
During this fiscal year, the Committee focused on:
The Committee closely reviewed financial results, forecasts and cash flow projections at each meeting and advised the full Board as to its conclusions.
The Committee continues to monitor developments in the cyber-security field as they relate to Postal Service operations. As information technology security is integral to Postal Service systems and the protection of customer, employee and business data, we continue to receive regular updates on cyber-security issues, and to carefully assess these updates as they come in.
The Committee received regular briefings on the organization’s efforts to meet SOX requirements and progress toward certification. Due to the comprehensive scope, magnitude and reach of the Postal Service nationwide, the organization’s SOX compliance program is one of the largest and most complex implementations on record since enactment of the legislation in 2002. The Committee provided oversight on the strategic direction and guidance on decisions related to readiness, process improvement opportunities and ongoing compliance initiatives.
We are proud to report that the Postal Service not only completed its third full fiscal year in compliance with SEC reporting rules but also achieved the significant milestone of successfully implementing full SOX compliance. The Committee was pleased with the quality of disclosures in required financial filings each quarter, and commends management for its ongoing commitment to increased transparency and accountability. The successful implementation of SOX, in an organization as large and complex as the Postal Service, is a truly impressive achievement.
In directing the conduct of the 2010 financial statement audit, the Committee met with Ernst & Young LLP, and approved the scope and materiality levels they established in their work plan. The Committee met jointly and independently with Chief Financial Officer Corbett and his staff, Ernst & Young LLP, Inspector General David Williams, and General Counsel Gibbons throughout the year to discuss the progress of the audit and to ensure independence and objectivity in all audit programs.
As a result, the Committee recommended, and the Board approved, the financial statements for 2010.
“The Postal Service not only completed its third full fiscal year in compliance with SEC reporting rules but also achieved the significant milestone of successfully implementing full SOX compliance.”
James C. Miller III
Chairman
Audit and Finance Committee
