The Postal Service is not identified as falling under any particular category of government corporation or government-created corporation-like organization. According to the Postal Service, its Board of Governors is comparable to the board of directors of a private sector corporation. To compare the characteristics of the boards of other government-created organizations with those of the Postal Service Board, we developed and sent a matrix to 11 boards, including the Postal Service Board. These organizations were described in a recent Price Waterhouse report as among the most “progressive postal administrations.”
In this report, we highlight differences between the Postal Service and the other government-created organizations as they apply to the four issues most frequently cited by current and former Board members as needing legislative attention. To provide the Subcommittee with additional information on governance issues that might be helpful in its deliberations on postal reform, we reviewed a broad range of available literature affecting both public and private boards. Areas Where a Majority of Interviewees Believed Legislative Attention Is Needed

A majority of the current and former members of the Postal Service Board of Governors whom we interviewed believed legislative attention may be warranted in three areas—the Board’s authority, Board members’ compensation, and Board members’ qualifications. Although there was no consensus among the members on the specific issues within each area of concern, several issues were mentioned frequently, and a number of legislative changes were offered for consideration. The most frequently cited issues were (1) the limitations on the Board’s authority to establish postage rates; (2) the inability of the Board to pay the PMG more than the rate for level I of the Executive Schedule—currently $148,400; (3) the Board’s lack of pay comparability with the private sector; and (4) qualification requirements that are too general to ensure that Board appointees possess the kind of experience necessary to oversee a major government business. Areas Where Some, but Less Than a Majority of, Interviewees Believed Legislative Attention Is Needed

In our discussions with current and former members of the Postal Service Board of Governors, we also identified areas where some, but less than a majority of, interviewees believed legislative attention is needed. Those areas were (1) the Board’s mission and responsibilities, (2) the Board’s relationship with postal management, (3) the Board’s accountability and performance measures, and (4) the Board’s composition and structure. One issue was the Board’s uncertainty as to how far it should go in letting the Postal Service compete and operate like a private sector corporation. The other issue concerned the limited specificity in law concerning the Board’s oversight responsibilities. The most frequently cited issue related to perceptions that the position of Chief Postal Inspector did not have all the independence necessary. The Postal Service’s General Counsel should be appointed by the Board and be directly accountable to the Board—similar to the suggestion concerning the Chief Postal Inspector. Board of Governors.
Why GAO Did This Study

Pursuant to a congressional request, GAO obtained information on Postal Service governance issues, focusing on: (1) any major areas of concern, including specific issues, that current and former members of the Postal Service Board of Governors have about the Board and their suggested legislative changes; (2) major characteristics of the Postal Service's Board of Governors with the characteristics of selected boards of their government-created corporations or corporation-like organization to identity similarities and dissimilarities, particularly as they relate to the major areas of concern identified by current and former Board members; and (3) information on governance issues that might be helpful to the House Committee on Government Reform and Oversight, Postal Service Subcommittee as it deliberates Postal Service reform.

What GAO Found

GAO noted that: (1) a majority of current and former members of the Postal Service Board of Governors GAO interviewed said legislative attention was needed in three broad areas; (2) however, there was not a consensus among the members on what the specific issues were within each area of concern, or what legislative changes should be considered to address their concerns; (3) the major areas of concern were the Board's authority, Board members' compensation, and Board members' qualifications; (4) within these broad areas of concern, the most frequently cited issues were: (a) the limitations on the Board's authority to establish postage rates; (b) the inability of the Board to pay the Postmaster General more than the rate for level I of the Executive Schedule; (c) the Board's lack of pay comparability with the private sector; and (d) qualification requirements that are too general to ensure that Board appointees possess the kind of experience necessary to oversee a major government business; (5) GAO's comparison of the Board of Governors with nine other boards of government-created organizations showed both similarities and dissimilarities; (6) similarities indicate that these boards were created to function much like private-sector corporate boards; (7) dissimilarities, however, reflect the amount of flexibility the boards were given to operate like private sector corporations; (8) GAO also identified four broad areas where some of the interviewees, but less than a majority, believed legislative attention was needed; (9) these areas were the Board's mission and responsibilities, the Board's relationship with Postal management, the Board's accountability and performance measures, and Board composition; (10) the most frequently cited issues in these areas were: (a) uncertainties as to how far the Board should go in letting the Postal Service compete and operate like a private-sector corporation; (b) the limited specificity in law concerning the Board's oversight responsibilities, and (c) perceptions that the Chief Postal Inspector may not have all the independence the position requires; and (11) the interviewees' concerns about many issues, such as Board authority, accountability, and how far to let the Postal Service go in competing and operating like a private sector corporation, are issues being grappled with in the larger context of streamlining government operations.