A Message from the Audit and Finance Committee

The Audit and Finance Committee assists the Board of Governors in fulfilling its fiduciary responsibilities. The Chairman of the Board affirms the members of the Audit Committee for each calendar year. This year the committee, whose members are Governor Louis J. Giuliano, Governor Carolyn Lewis Gallagher, and I met seven times in conjunction with the regularly scheduled monthly Board meetings.

The certified public accounting firm responsible for the independent audit of the Postal Service financial statements, Ernst & Young, LLP, reports to the Board through the Audit Committee. The Postal Service Inspector General (OIG) also reports to the Governors and is represented at all Committee meetings.

The Audit and Finance Committee’s primary responsibility is oversight of the integrity of the Postal Service’s financial statements. The Committee monitors the Postal Service’s financial reporting processes, the soundness of internal control procedures, as well as postal rate case development, cash management, and overall financial performance of the Postal Service, to ensure the integrity of its financial statements.

During the year, the Committee reviewed its charter, the audit of the Postal Service Cost and Revenue Analysis, the attribution of cost and estimation of revenues by class of mail; discussed the integrated financial plan for 2007; and reviewed the OIG work plan for 2007.

Also during the year, the Committee reviewed workers compensation programs and processes. These programs include a medical bill review program, anti-fraud programs, and safety awareness programs.