	Background

USPS’s current field-office structure includes 7 area offices and 67 district  offices. Mail-processing network: USPS plans to downsize its mail- processing network and reduce costs in its transportation network for  potential savings of $4.1 billion annually beginning in 2016.this effort, USPS anticipates closing or consolidating about half of its  mail-processing facilities and reducing the number of its employees. As part of this effort,  USPS plans to eliminate and consolidate approximately 20,000 out of  its 144,000 city routes. Since 2006, USPS has taken several actions to reduce its costs by  improving the operational efficiency of its mail-processing network. Area and district employees have key roles in realigning city delivery  routes. Revenue-Generating Efforts

As with USPS’s cost reduction efforts, area and district employees have a  significant role in several aspects of USPS’s efforts to generate additional  revenue through three of the Postmaster General’s four core business  strategies: (1) strengthening the value of mail to businesses, (2)  improving its retail customers’ experience, and (3) competing for the  package business. Improving the retail customer experience means maintaining and growing  the customer base through improved customer service. Overall, USPS reduced its field offices positions by 1,946, or  26 percent. Area and District Officials’ Concerns about the 2011 Consolidation

			Concerns about the Ability to Carry Out Key USPS Efforts

Several area and district officials expressed concern about how staff  reductions and the allocation of field resources could affect their ability to  manage ongoing and planned cost-reduction and revenue-generation  efforts. In particular,  OIG officials told us that the document addresses recommendations to  USPS to develop a plan which (1) periodically evaluates area and district  offices for possible consolidation, (2) guides decisions on future field- office consolidations, and (3) considers factors such as an office’s mail  volume, workload, and proximity to other offices. USPS’s December 2011 plan specifies that it will take numerous steps to  evaluate field offices for possible consolidation, including:  conducting periodic evaluations of area and district offices to assess  the need for consolidations; developing a business case, which includes expected cost savings  and benefits, for proposed field-office consolidations: using reliable data sources to evaluate area and district offices for adequately documenting all analyses and data used to make  conducting post-consolidation reviews to identify key achievements  and actual cost savings, and document lessons learned. According to headquarters officials, USPS  does not plan to initiate these evaluations until after the completion of  cost-reduction efforts in its retail, mail-processing, and delivery networks,  efforts that USPS intends to complete in 2016. If USPS decides to move forward with future  field-office evaluations, its plan for doing so should address past concerns  about inadequate documentation and transparency and lead to  postconsolidation reviews to assess lessons learned and to measure  actual savings. USPS had no comments. According to USPS officials at the center, centralizing this work resulted  in about $13 million in cost savings as of fiscal year 2011. Postal Service’s (USPS) cost-savings and  revenue-generation efforts and (2) USPS’s actions to consolidate its field  office structure in 2011 and the impact of these actions. To describe the role of field office employees in implementing USPS’s  cost-savings and revenue-generation efforts, we reviewed USPS  documents describing USPS’s strategic goals and the role of area and  district employees in carrying out potential consolidations of retail, mail-  processing, and delivery networks. To describe USPS’s actions to  consolidate its area and district offices in 2011 and the impact of this  consolidation we reviewed a 2010 OIG report on the 2009 consolidation,  which included recommendations for USPS related to future field-office  consolidation actions, and a variety of USPS documents, including  USPS’s (1) statements on the expectations and goals for the 2011  consolidation, (2) 2011 Annual Report, (3) Form 10-K filing with the  Securities and Exchange Commission on its 2011 Annual Report, (4) plan  issued in December 2011 entitled Area and District Office Structure  Evaluations Strategy, Policy and Process, and (5) 5-Year Business Plan  issued in February 2012.
Why GAO Did This Study

USPS has lost $25.3 billion over the last 5 years and expects to lose another $83.2 billion through fiscal year 2016 unless it takes action to reduce its costs and improve its operational efficiency. USPS has cut costs in its retail, mail processing, and delivery networks, as well as in its field office structure, which includes 7 area offices and 67 district offices, and plans other cost-cutting actions throughout the organization. As requested, this report discusses (1) the role of area and district employees in implementing USPSs cost-savings and revenue-generation efforts and (2) USPSs actions to consolidate its field office structure in 2011, and the impact of this consolidation.
GAO analyzed USPS documents describing the role of field staff in carrying out USPSs cost-saving and revenue-generation efforts; information on the impact of the 2011 consolidation, including anticipated cost savings; and USPSs plan, issued in December 2011, for evaluating and implementing possible field office consolidations. GAO also interviewed USPS officials at headquarters and at four area and six district offices selected based on several factors, including geographic dispersion throughout the U.S.

What GAO Found

Field employees have key roles in the U.S. Postal Services (USPS) efforts to reduce costs and generate revenue. For example, these employees evaluate the feasibility of closing or consolidating facilities, such as post offices and mail- processing facilities; carry out the closures and consolidations of these facilities; and evaluate and consolidate delivery routes. These roles support USPSs plans to save, by 2016, about $9 billion annually by improving its operational efficiency and realigning its retail, mail processing, and delivery networks with declining mail use. These plans include evaluating about half of its approximately 31,000 post offices to identify cost-reduction opportunities, closing or reducing operations at about half of its 461 mail-processing facilities, and consolidating about 20,000 of its 144,000 city delivery routes. Area and district employees also have a significant role in USPSs efforts to generate additional revenue by (1) promoting the value of mail to businesses, (2) maintaining and increasing its customer base through customer service, and (3) growing the package business.
In 2011, USPS consolidated its field office structure by, among other actions, closing one area office and seven district offices and eliminating 1,946 positionsactions that it estimated would save about $150 million annually. However, several area and district officials expressed concern that this consolidation could lessen their ability to carry out ongoing and future cost-savings and revenue-generation initiatives, and to recruit and retain future managers. In December 2011, USPS issued a plan on how it would evaluate additional field offices for possible consolidation and address concerns that the USPS Office of Inspector General identified in past field office consolidations. These concerns included the need to develop a plan to guide future field office consolidations and to consider factors such as workload and proximity to other offices. According to USPS officials, the plan also addressed past concerns about inadequate documentation and transparency and will lead to post-consolidation reviews to assess lessons learned and measure actual savings. Although USPS has a plan to guide future consolidations, according to USPS officials, it does not plan additional field office consolidations until it has completed ongoing cost-reduction efforts in its retail, mail processing, and delivery networks.

What GAO Recommends

GAO is not making recommendations in this report. USPS had no comments on a draft of this report.