Objectives, Scope, and Methodology

Our objectives were to determine (1) whether there is any basis for an allegation regarding EMCA abuse and (2), if so, what steps the Service is taking and could take to help avoid or minimize EMCA revenue losses. We reviewed data provided by the Service’s collection agency on the amount of EMCA-related postage lost due to invalid EMCAs. Postal employees at post offices and processing plants do not have automated access to valid EMCA numbers—which totaled about 113,000 in February 1996. Some EMCA customers overdrew their EMCA accounts, and the Postal Service continued to accept Express Mail packages from these customers. The Service did not plan to provide the terminals to employees in mail-processing plants who accept Express Mail packages. These employees will still lack access to valid EMCA numbers and current fund balances, and the Service will continue to be vulnerable to revenue losses when customers drop Express Mail packages in collection boxes and include invalid EMCA numbers on the packages. Planned Actions Do Not Fully Address EMCA Control Weaknesses

Although completion of Service actions discussed above should help to improve controls over EMCAs and reduce related revenue losses, control weaknesses will remain. If EMCAs are determined to be a necessary or desirable method, we recommend that the Service (1) establish stronger requirements for opening EMCAs and (2) hold managers and employees accountable for handling EMCA transactions in accordance with the new requirements as well as existing Service policies and procedures for verifying EMCA numbers, closing EMCAs with negative balances, and recording required data for all Express Mail packages accepted. Comments From the U.S.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the U.S. Postal Service's controls over Express Mail Corporate Accounts (EMCA), focusing on: (1) whether there is any basis for the allegation of EMCA abuse; and (2) if so, what steps the Service is taking to help avoid or minimize EMCA revenue losses.

What GAO Found

GAO found that: (1) some mailers obtained Express Mail services using invalid EMCA in fiscal year 1995; (2) the Service did not collect the postage due or verify EMCA which were later determined to be invalid; (3) some EMCA customers overdrew their accounts and carried negative balances; (4) the Service plans to provide post office employees with automated access to valid EMCA numbers and fund balances, but has no plans to provide similar access to employees at mail-processing plants; (5) although the Service's planned actions to improve controls over EMCA operations will take a considerable amount of money and time to complete, they will not have addressed several other EMCA control weaknesses; (6) to determine whether EMCA continue to be necessary or desirable, the Service could evaluate the relative customer convenience, cost-effectiveness, and other relevant factors; and (7) if EMCA are continued, Service employees need to follow new and existing procedures designed to help prevent EMCA revenue losses.