A Message from the Audit and Finance Committee

The Audit and Finance Committee monitors Postal Service’s financial reporting and internal control procedures to ensure compliance with best corporate practice, promote good governance and enhance transparency.

The Audit and Finance Committee assists the Board of Governors in fulfilling its fiduciary responsibilities. The Chairman of the Board selects the members of the Committee for each calendar year.  Board Chairman James C. Miller III, Governor Louis J. Giuliano, and I are the current members of the Committee.  The certified public accounting firm responsible for the independent audit of Postal Service financial statements, Ernst & Young, LLP, reports to the Board through the Committee.  The Postal Service Inspector General reports to the Governors and is represented at all Committee meetings.

The Committee monitors financial performance, debt levels and cash management on an ongoing basis.  When omnibus rate changes are required, the Committee monitors management’s development of rate case filings.  Fulfilling its primary responsibility, oversight of the integrity of Postal Service financial statements, the Committee periodically reviews the soundness of internal accounting and control practices and major financial statement estimates and accruals.

The Committee met in Washington D.C. four times in 2005. The Committee also held a meeting by conference telephone call on one occasion.  During the year, the Committee updated its charter; reviewed methodologies for attributing cost and estimating revenue by class of mail; discussed issues concerning the integrated financial plan for 2006; and reviewed the development of the Office of the Inspector General’s work plan for 2006.

The Committee monitors Postal Service’s financial reporting and internal control procedures to ensure compliance with best corporate practice, promote good governance and enhance transparency.  The Committee was kept advised of the accelerated production of Postal Service financial statements to comply with a Federally mandated submission of the statements to the Office of Management and Budget by November 18, 2005.  This was an area of major accomplishment in 2005.  This enhancement follows major changes to reporting schedules and formats initiated in 2004.  The Postal Service adopted monthly reporting and began SEC-type financial reporting in formats similar to 8-K, 10-K and 10-Q reports. These improvements in the timeliness and transparency of the Postal Service financial reports flow directly from specific recommendations of the President’s Commission on the United States Postal Service. These reports, as well as current and historical reports on revenues, volumes, costs and annual financial plans are posted on usps.com, the Postal Service’s universal access web site.