Breast Cancer Research Stamp: Effective Fund-Raiser but Better
Reporting and Cost-Recovery Criteria Needed (30-SEP-03,
GAO-03-1021).
In America, breast cancer is reported as the second leading cause
of cancer deaths among women. Given this statistic, the
importance of finding a cure cannot be overemphasized. To
supplement the billions of federal dollars being spent on breast
cancer research, Congress passed legislation creating the Breast
Cancer Research Semipostal (BCRS) to increase public awareness of
the disease and allow the public to participate directly in
raising funds for such research. Since the BCRS was the first
semipostal issued by the Postal Service, Congress mandated, and
GAO issued, a report in April 2000 on the BCRS' cost,
effectiveness, and appropriateness as a fund-raiser. After the
report, Congress extended the BCRS sales period through 2003. As
mandated, this report updates GAO's prior work as Congress
considers another extension to the BCRS sales period.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-1021
ACCNO: A08536
TITLE: Breast Cancer Research Stamp: Effective Fund-Raiser but
Better Reporting and Cost-Recovery Criteria Needed
DATE: 09/30/2003
SUBJECT: Cancer research
Funds management
Research and development costs
Cost effectiveness analysis
Postal service
Reporting requirements
Noncompliance
Postage stamps
USPS Breast Cancer Research Semipostal
Program
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GAO-03-1021
Report to Congressional Committees
September 2003
BREAST CANCER RESEARCH STAMP
Effective Fund-Raiser, but Better Reporting and Cost-Recovery Criteria
Needed
Contents
Tables
Figures
September 30, 2003Letter
The Honorable Susan M. Collins Chairman The Honorable Joseph I. Lieberman
Ranking Minority Member Committee on Governmental Affairs United States
Senate
The Honorable Thomas M. Davis Chairman The Honorable Henry A. Waxman
Ranking Minority Member Committee on Government Reform House of
Representatives
In the United States, breast cancer is reported as the second leading
cause of cancer deaths among women. There are more than 2 million women
today in the United States who have been diagnosed with breast cancer, and
it has been reported that another 1 million women do not know they have
it. Annually, nearly $7 billion is spent on the treatment of breast
cancer. Given these statistics, the importance of research to find a cure
for breast cancer cannot be over emphasized. In the past 5 years alone,
the federal government has spent about $3 billion on breast cancer
research. To supplement these federal dollars, Congress passed legislation
creating the Breast Cancer Research Semipostal (BCRS) to increase public
awareness of the disease and allow the public to participate directly in
raising funds for such research.1
This report, mandated by Congress, is a follow-up to our April 2000 report
on the Postal Service's Breast Cancer Research Semipostal.2 The Stamp Out
Breast Cancer Act, Public Law 105-41, August 13, 1997, mandated our 2000
report. The act required that we issue a report to Congress on the BCRS's
effectiveness and appropriateness and the U.S. Postal Service's (the
Service) costs associated with carrying out the act. In general, we
reported that the BCRS had been an effective fund-raiser, and most of the
public and key stakeholders viewed the BCRS as an appropriate way of
raising funds for a nonpostal purpose. We expressed some concerns,
however, about the Service's identification and recovery of costs
associated with carrying out the act.
Soon after we issued our April 2000 BCRS report, Congress enacted the
Semipostal Authorization Act, Public Law 106-253, dated July 28, 2000.
Among other things, the act requires that we update Congress on the BCRS
and address at least the same matters we addressed in our earlier report.
This report responds to that mandate and addresses
o the monetary and other resources the Service has expended in operating
and administering the BCRS program,
o the effectiveness of using the BCRS as a means of fund-raising, and
o the appropriateness of using the BCRS as a means of fund-raising.
We also provide information on the status of recommendations made to the
Postmaster General in our April 2000 BCRS report. In essence, we
recommended that the Service issue regulations formalizing its criteria
for making BCRS cost-recovery decisions and make BCRS cost data and
analyses available to assure postal ratepayers that they were not
involuntarily contributing funds to breast cancer research.
The BCRS was the first semipostal ever issued by the Postal Service. It
currently sells for 45 cents, and is valid for the 37-cent, First-Class
postage rate, leaving 8 cents as surcharge revenue. The Stamp Out Breast
Cancer Act provides that the Service is to deduct from the surcharge
revenue its reasonable costs incurred in carrying out the act. In general,
the Service has interpreted reasonable costs to mean costs incurred that
are over and above the costs normally incurred with a comparable
commemorative stamp.3 After deducting its reasonable costs, the Service is
to remit the remaining proceeds from the BCRS surcharge revenue to the
National Institutes of Health (NIH) and the Department of Defense (DOD)
for breast cancer research. Seventy percent of the net proceeds go to NIH,
with the remaining 30 percent going to DOD's medical research program.
The use of semipostals to raise funds for specific purposes is on the
rise. Since our April 2000 BCRS report, Congress has twice extended the
sales period for the BCRS, required the introduction of two more
semipostals, and given the Service specific authority to consider and
issue future semipostals.4 Additionally, as of August 2003, Congress was
considering legislation that would require introduction of two more
semipostals and extend the sales period of the BCRS past its scheduled end
date of December 31, 2003.5
In doing this work, we reviewed and updated the information included in
our April 2000 BCRS report to reflect the current situation. For this
report, we mainly focused on the Service's efforts to identify and recoup
its reasonable costs from the BCRS surcharge revenue and ensure that
postal ratepayers were not subsidizing the BCRS. We also identified postal
staff resources devoted to the BCRS and interviewed key stakeholders
regarding the effectiveness and appropriateness of using the BCRS as a
means of fund raising. Additionally, we commissioned a survey to obtain
the public's opinion regarding the BCRS, and semipostals in general; and
we interviewed NIH and DOD officials about how funds generated from BCRS
sales are being used for breast cancer research. Finally, we researched
the U.S. Code and Postal Service regulations to identify changes that have
occurred since our April 2000 report that either affected the BCRS
directly or the semipostal program in general. Appendix I contains more
information on our objectives, scope, and methodology.
We requested comments on a draft of this report from the Postmaster
General. The Service's comments are discussed at the end of this letter
and reprinted in appendix IV.
Results in Brief
Although the full cost of the BCRS program is not known, the Service
reported that the bulk of BCRS costs from inception through May 16, 2003,
were about $9.5 million. The Service does not track BCRS costs that it
considers to be inconsequential, such as invoices less than $3,000.6 The
Service also does not identify costs that it would have incurred whether
or not the BCRS program had been established, such as overhead.
Additionally, the Service reported that no staff have been hired because
of the BCRS program, nor have any staff been dedicated to work full-time
on the program. The Service also reported that $8.7 million of the $9.5
million in BCRS costs were recovered through the First-Class postage
portion of the BCRS. The remaining $853,000 in BCRS costs was recouped
from the BCRS' surcharge revenue, and the net surcharge revenue-over $30
million-was to be used to fund breast cancer research. In response to a
recommendation we made in our April 2000 BCRS report, the Service issued
BCRS regulations in July 2000. Those regulations specified that the
Service was to recover incremental costs from the BCRS' surcharge revenue.
The Service amended those regulations in 2001, stating generally that the
Service would recover from the BCRS' surcharge revenue costs in excess of
those normally incurred with comparable commemorative stamps, i.e.,
baseline costs. We are concerned, however, that the regulations can be
interpreted as not requiring the Service to establish baseline comparisons
for certain BCRS costs, e.g., printing, sales, and distribution, although
the Stamp Out Breast Cancer Act specifically states that reasonable costs
in these areas attributable to the BCRS should be recouped from the
surcharge revenue. The Service believes its 2001 amendments to its
regulations already provide a means for recovering all excess costs. To
support its view, the Service provided us with the printing costs for
various commemorative stamps. However, the Service did not provide us with
any baseline BCRS cost data. Without baselines, the Service lacks
assurance that it is identifying and recouping excess costs from BCRS
surcharge revenue. Additionally, in our April 2000 report, we recommended
that the Service provide Congress with the BCRS cost data and analyses
necessary to provide assurance that postal ratepayers are not
involuntarily contributing funds to breast cancer research. Although the
Service committed to Congress to provide it with the data and analyses,
the Service has not yet done so. Service officials attributed the lack of
providing Congress with this information to administrative oversight and
other factors. Service officials told us that they plan to reexamine their
BCRS regulations and provide Congress with current BCRS cost data and
analyses as soon as practicable.
The BCRS continues to be an effective means of raising funds for breast
cancer research. Also, as provided for by the Stamp Out Breast Cancer Act,
the BCRS has remained voluntary and convenient. It has remained voluntary
because postal patrons have the option to purchase the BCRS at 45 cents or
a regular First-Class stamp at 37 cents. The BCRS has remained convenient
for most of the public, according to our survey. Sales have fluctuated,
but the BCRS has raised over $30 million for breast cancer research, net
of costs, since it was issued in July 1998. Key stakeholders said that for
the most part, they viewed the BCRS as an effective fund-raiser, and the
public's view of the BCRS was generally positive as reflected in the
results from our survey. As of September 2003, the Service had transferred
to NIH and DOD about $30.8 million from funds raised by the BCRS for
breast cancer research. These federal organizations reported to us that
they have established programs to fund innovative breast cancer research
conducted by various research institutions. The Semipostal Authorization
Act, enacted after the Stamp Out Breast Cancer Act, requires that annual
reports be made to Congress by agencies that are to receive funds from
semipostals issued under the Semipostal Authorization Act. These reports
are to include information on the amount of funds received, how the funds
were used, and any accomplishments that were achieved. NIH and DOD are not
subject to similar reporting requirements.
Most key stakeholders we spoke with and, according to our survey, the
members of the public believe it is appropriate for the Service to issue
the BCRS, as well as other semipostals, to raise funds for worthwhile
causes. The Service, although very supportive of the BCRS, remains
generally opposed to the concept of using semipostals as a means of
fund-raising. Since we issued our April 2000 BCRS report, Congress has (1)
twice extended the sales period for the BCRS, (2) authorized two
additional semipostals, and (3) authorized the Service to issue future
semipostals. Also, as of August 2003, Congress was considering legislation
establishing two more semipostals and extending the sales period for the
BCRS until December 31, 2005. As of August 2003, the Service had not
issued any semipostals of its own choosing under the authority of the
Semipostal Authorization Act and had no plans to do so until the sales
periods for congressionally mandated semipostals have ended. We believe
this position is consistent with the discretion afforded the Service under
the Semipostal Authorization Act.
We are offering one matter for Congress to consider as it debates whether
to further extend the sales period for the BCRS. If Congress extends the
BCRS sales period, it may wish to consider establishing annual reporting
requirements for NIH and DOD similar to those required of any agency that
was to receive funds generated from semipostals issued under the
Semipostal Authorization Act. We reaffirm our previous recommendation that
the Service make available BCRS cost data and analyses, and we also
recommend that the Service reexamine and, as necessary, revise its cost-
recovery regulations.
In commenting on a draft of this report, the Service indicated that it
plans to take appropriate actions to address our recommendations. The
Service said that it would reexamine its BCRS regulations with a view
toward proposing revisions about what costs are to be identified and
recouped from surcharge revenues. The Service also said that it would make
available to Congress and us current BCRS cost data and analyses.
Background
The Stamp Out Breast Cancer Act (Pub. L. No. 105-41, Aug. 13, 1997)
required that the Postal Service issue its first-ever semipostal-the BCRS.
The Service issued the BCRS on July 29, 1998. The act required that the
BCRS be available for sale for 2 years, but Congress has since extended
the sales period through December 31, 2003.
Semipostals are stamps sold with a surcharge above the First-Class postage
rate with the net surcharge amount going to a designated cause. The act
stipulated that the BCRS surcharge was not to exceed 25 percent of the
First-Class postage rate, which, at the time of issuance, was 32 cents.
The act further stipulated that after recovering its reasonable costs, the
Service was to transfer 70 percent of the remaining surcharge revenue to
NIH and 30 percent to DOD for breast cancer research. The Service's
presidentially appointed governors initially set the price of the BCRS at
40 cents-32 cents for First-Class postage plus the maximum 25-percent
surcharge of
8 cents. Since that time, the price of First-Class postage has increased
to 37 cents, and the price of the BCRS is currently 45 cents.7
On the day the initial sales period for the BCRS was to end, the
Semipostal Authorization Act (Pub. L. No. 106-253, July 28, 2000) was
enacted, which extended the sales period for the BCRS through July 29,
2002, and granted the Service authority to issue future semipostals of its
own choosing. Additionally, the act required that the Service issue
regulations governing future semipostals aside from the BCRS.
Another act, the Breast Cancer Research Stamp Act of 2001 (Pub. L. 107-67,
Nov. 12, 2001) further extended the sales period for the BCRS and
established new requirements governing the sales price of the BCRS.8 That
act extended the BCRS' sales period through December 31, 2003, and
replaced the maximum 25 percent surcharge with a minimum 15 percent
surcharge that, when added to the First-Class postage rate, is evenly
divisible by five. That is, the BCRS must be sold for an amount evenly
divisible by five and must cost at least 15 percent more than First-Class
postage. Specifically, the BCRS is currently sold for 45 cents, which is
evenly divisible by 5; with the 8-cent surcharge, it costs about 22
percent more than the 37-cent First-Class postage rate. Additional
legislation is currently pending that would extend the sales period for
the BCRS through December 31, 2005.
Since the BCRS was issued in 1998, Congress has passed legislation
establishing two additional semipostals. One semipostal is to provide
assistance to the families of emergency relief personnel killed or
permanently disabled in the line of duty in connection with the terrorist
attacks against the United States on September 11, 2001-commonly referred
to as the Heroes of 2001 semipostal. The Service began selling the Heroes
of 2001 semipostal on June 7, 2002, and its sales are scheduled to end no
later than December 31, 2004, in accordance with the semipostal's
authorizing legislation.9 The other semipostal-commonly referred to as the
Stop Family Violence semipostal-is to help fund domestic violence
programs. Legislation requiring introduction of the Stop Family Violence
semipostal specifies that sales are to begin no later than January 1,
2004, and end no later than December 31, 2006.10 Legislation was also
pending in Congress at the end of August 2003 to establish semipostals to
help promote childhood literacy and the Peace Corps.11 As of August 2003,
the Service had issued no semipostals that had not been congressionally
mandated.
Images of the BCRS, Heroes of 2001, and Stop Family Violence semipostals
are reproduced as figures 1, 2, and 3, respectively. The Service plans to
begin selling the Stop Family Violence semipostal in November 2003.
Figure 1: Reproduction of the Breast Cancer Research Semipostal
Figure 2: Reproduction of the Heroes of 2001 Semipostal
Figure 3: Reproduction of the Stop Family Violence Semipostal
For more details about the BCRS and its background, see our April 2000
BCRS report.12 That report also includes information on semipostals issued
by foreign postal administrations.
Reported Monetary and Other Resources Devoted to the BCRS Program
The full cost of the BCRS program is not known. The Service reported that
the bulk of BCRS costs from inception through May 16, 2003, were about
$9.5 million, most of which were recovered through the First-Class postage
portion of the BCRS. The Service does not track BCRS costs that it
considers to be inconsequential, such as invoices less than $3,000. The
Service also does not identify costs that it would have incurred whether
or not the BCRS program had been established, such as overhead.
Additionally, the Service reported that no staff have been hired because
of the BCRS program, nor have any staff been dedicated to work full-time
on the program.
In response to a recommendation in our April 2000 BCRS report, the Service
issued BCRS cost-recovery regulations in July 2000 and reported using
these regulations, and amendments, to track and allocate BCRS costs. We
are concerned, however, that the regulations can be interpreted as not
requiring the Service to provide baseline comparisons for certain BCRS
costs, e.g., printing, sales, and distribution, although the Stamp Out
Breast Cancer Act specifically states that reasonable costs in these areas
attributable to the BCRS should be recouped from the BCRS' surcharge
revenue. Additionally, in our April 2000 report, we recommended that the
Service make available to Congress the BCRS cost data and analyses
necessary to provide assurance that postal ratepayers are not
involuntarily contributing funds to breast cancer research. Although the
Service committed to Congress to provide it with the data and analyses,
Service officials told us that for a number of reasons the Service has not
yet done so. In August 2003, Service officials said that they plan to
reexamine their BCRS regulations and, as soon as practicable, provide
Congress with current BCRS data and analyses.
Full BCRS Program Costs Unknown
Although the full cost of the BCRS program is not known, the Service
reported that the bulk of the program's costs, from inception through May
16, 2003, were about $9.5 million. These costs do not include (1) direct
costs for items the Service considers to be inconsequential, such as the
cost of items that do not exceed $3,000 per invoice and (2) indirect costs
that the Service would have incurred whether or not the BCRS program had
been established, such as overhead. Additionally, the $9.5 million does
not include any staffing-related costs because, according to postal
officials, no staff were hired for the BCRS program nor were any staff
dedicated full-time to work on the program. These officials told us that
all work associated with the BCRS was absorbed by existing staff and staff
budget-i.e., the Service incurred no additional staffing-related expenses
because of the BCRS. They also told us that the Service, with the
exception of the law department, has not tracked staff hours devoted to
the BCRS because it was not cost-effective to quantify and recoup
inconsequential costs associated with the BCRS. Because all costs
associated with the BCRS were not identified and tracked, the full cost of
operating and administering the BCRS program is not known.
The reported costs of the BCRS through May 16, 2003, are shown in table 1,
broken down by type of cost. In addition to these costs, the Service could
incur additional costs associated with the BCRS before its sales period
ends, which is currently scheduled for December 31, 2003.
Table 1: Cost of Operating and Administering the BCRS Program, from
Inception through May 16, 2003, as Reported by the Service
Cost item Reported cost
Stamp design (including market research) $40,000
Stamp production and printing $3,597,000
Shipping and distribution $0a
Training $612,000
Selling stamps (including employee salaries and benefits) $0b
Withdrawing stamps from sale $0c
Destroying unsold stamps $0c
Advertising $888,000
Packaging stamps $2,723,000
Printing flyers and special receipts $238,000
Equipment changes $359,000
Developing and executing marketing and promotional plans $1,006,000
Cost item Reported cost
Other cost:
Legal $22,000
Market research $56,000
Consulting $8,000
Total $9,549,000
Source: U.S. Postal Service.
aThe Service said that it does not attempt to identify these costs because
shipping and distribution costs incurred for a semiposal are no different
from those normally incurred for comparable stamps.
bThe Service said that it currently does not have a system in place to
track these costs. According to the Service, it would be extraordinarily
difficult and costly to attempt to study, analyze, and measure these costs
in a live environment; and it also would be difficult to devise a
methodology to estimate such costs because BCRS' are a small percentage of
total stamp sales.
cThe Service said that it believes these costs would be the same as those
incurred for comparable stamps, but it has not yet incurred any costs
associated with withdrawing stamps from sale or destroying unsold stamps
because the BCRS continues to be offered to the public.
Allocation of BCRS Program Costs between the Postage Portion and Surcharge
Revenue
Under the cost-recovery regulations the Service applies to the BCRS, the
Service determined that $8.7 million, about 91 percent, of the $9.5
million in BCRS costs were recovered through the First-Class postage rate.
The Service also determined that the remaining $853,000 in costs were not
those normally incurred with a comparable commemorative stamp and
therefore were recovered through the BCRS' surcharge revenue. That is,
about 9 percent of BCRS program costs were recovered through the surcharge
revenue. Table 2 identifies, by cost item, the Service's reported cost of
operating and administering the BCRS program, from inception through May
16, 2003; and the allocation of those costs between those covered by the
First-Class postage rate and costs that were recouped from the BCRS'
surcharge revenue.13
Table 2: BCRS Costs through May 16, 2003, and the Allocation of Those
Costs between the First-Class Postage Rate and the BCRS' Surcharge Revenue
Allocation of
reported cost
Amount reported as Amount reported
Cost itema Reported cost having been covered as recouped from
by the First-Class the BCRS'
postage rate surcharge revenue
Stamp design
(including market $40,000 $40,000 $0
research)
Stamp production and $3,597,000 $3,597,000 $0
printing
Shipping and $0b $0b $0b
distribution
Training $612,000 $612,000 $0
Selling stamps
(including employee $0c $0c $0c
salaries and
benefits)
Withdrawing stamps $0d $0d $0d
from sale
Destroying unsold $0d $0d $0d
stamps
Advertising $888,000 $888,000 $0
Packaging stamps $2,723,000 $2,476,000 $247,000
Printing flyers and $238,000 $0 $238,000e
special receipts
Equipment changes $359,000 $176,000 $183,000
Developing and
executing marketing $1,006,000 $851,000 $155,000
and promotional plans
Other costs:
Legal $22,000 $0 $22,000
Market research $56,000 $56,000 $0
Consulting $8,000 $0 $8,000
Total $9,549,000 $8,696,000 $853,000
Source: U.S. Postal Service.
aThe Service recast BCRS costs included in our April 2000 BCRS report into
the current cost item categories and updated costs through May 16, 2003.
bThe Service said that it does not attempt to identify these costs because
shipping and distribution costs incurred for a semiposal are no different
than those normally incurred for comparable stamps.
cThe Service said that it currently does not have a system in place to
track these costs. According to the Service, it would be extraordinarily
difficult and costly to attempt to study, analyze, and measure these costs
in a live environment; and it also would be difficult to devise a
methodology to estimate such costs because BCRS' are a small percentage of
total stamp sales.
dThe Service said that it believes these costs would be the same as those
incurred for comparable stamps, but it has not yet incurred any costs
associated with withdrawing stamps from sale or destroying unsold stamps
because the BCRS continues to be offered to the public.
eThe Service said that receipts initially used were in a format different
from standard postal receipts, and the costs were recouped from the BCRS'
surcharge revenue. However, according to the Service, receipts now used
are universally supplied to all offices for general use, and the printing
cost is not considered incremental. Therefore, costs associated with
receipts are no longer recouped from the BCRS' surcharge revenue.
Service's Approach to Cost Recovery Has Evolved
In response to a recommendation in our April 2000 BCRS report, the Service
issued BCRS cost-recovery regulations in July 2000, which it subsequently
amended in 2001. At the time of our April 2000 report, the Service was
using informal, evolving criteria to make decisions about which costs
would be recouped from the BCRS' surcharge revenue and had not issued
regulations in this area. In July 2000, the Service issued a revision to
its Administrative Support Manual (ASM) that specified a "Cost Recovery
Policy for the Breast Cancer Research Semipostal Stamp." The ASM
provisions, which are viewed by the Service as part of its regulations,
specified that the Service was to recover BCRS costs that are determined
to be incremental costs from its surcharge revenue.14 The regulations
described some types of costs that the Service had determined to be
incremental to the BCRS. Examples of such costs included (1) design and
production costs in excess of the cost to produce equivalent stamps; (2)
packaging costs in excess of the cost to package equivalent stamps; and
(3) printing costs for items other than stamps that are specific to the
BCRS, such as flyers and special receipts.
In June 2001, the Service published in the Federal Register its
regulations covering semipostals issued under the Semipostal Authorization
Act. Among those regulations was 39 C.F.R. 551.8, which established
procedures for determining costs to be offset from semipostal differential
revenue. On December 27, 2001, the Postal Service published a similar
version of this regulation in section 645 of the ASM. The ASM regulations
were made applicable to semipostals issued under the Semipostal
Authorization Act, as well as the BCRS. The December 2001 revision to the
ASM (hereafter referred to as regulations) no longer refer to "incremental
costs," as was done in the July 2000 version. The December 2001
regulations state that the Service is to recover BCRS costs that are
determined to be in excess of the costs normally incurred for
commemorative stamps having similar sales; physical characteristics; and
marketing, promotional, and public relations activities. These regulations
prescribe that on the basis of judgment and available information, the
Service is to identify stamp(s) comparable with the BCRS and create a
profile of selected cost characteristics, thereby establishing a baseline
for
cost comparison purposes.15 According to the regulations, BCRS costs that
exceed the baseline costs for comparable commemorative stamps are to be
recovered from the BCRS' surcharge revenue. In May 2003, we asked the
Service to provide us the baseline costs for the comparable stamps being
used to determine what costs are to be recovered from the BCRS' surcharge
revenue. In July 2003, the Service provided us with what it referred to as
costs above comparable stamp costs that were recouped from the BCRS'
surcharge revenue and updated that information in August 2003. However,
the Service did not provide us with the actual baselines used in making
the determinations about which costs were to be recouped from the BCRS'
surcharge revenue.
The Service's December 2001 regulations provide guidance regarding its
BCRS cost-recovery criteria. The regulations state that cost items
recoverable from the BCRS' surcharge revenue may include, but are not
limited to, the following:
o packaging costs in excess of the cost to package comparable stamps,
o printing costs of flyers and special receipts,
o costs of changes to equipment,
o costs of developing and executing marketing and promotional plans in
excess of the cost for comparable stamps, and
o other costs specific to the BCRS that would not normally have been
incurred for comparable stamps.
In addition, the Service's regulations state that BCRS costs that meet the
following criteria will not be tracked:
o costs that the Service determines to be inconsequentially small, which
include those cost items not exceeding $3,000 per invoice;
o costs for which the cost of tracking would be burdensome (e.g., costs
for which the cost of tracking exceeds the cost to be tracked);
o costs attributable to mail to which the BCRS is affixed (i.e., costs
that are attributable to the appropriate class and/or subclass of mail);
and
o administrative and support costs that the Service would have incurred
whether or not the BCRS program had been established.
The regulations further identify the following BCRS costs-those the
Service would normally incur for comparable stamps-as recovered through
the First-Class postage portion of the BCRS stamp price. Therefore,
baselines have not been established for these costs, which are as follows:
o stamp design (including market research);
o stamp production and printing;
o stamp shipping and distribution;
o estimated training for field staff, except for special training
associated with semipostals;
o stamp sales (including employee salaries and benefits);
o withdrawal of the stamp issue from sale;
o destruction of unsold stamps; and
o incorporation of semipostal images into advertising for the Postal
Service as an entity.
BCRS Cost-Recovery Regulations May Not Allow the Service to Identify and
Recoup All Costs Attributable to the BCRS
The Stamp Out Breast Cancer Act specifically recognizes that printing,
sales, and distribution costs attributable to the BCRS are among the types
of reasonable costs the Service should recover from the BCRS' surcharge
revenue. Section 414 (c) (2) of the act states that the Service must
recover from the BCRS' surcharge revenue "an amount sufficient to cover
reasonable costs . . . in carrying out this section, including those
attributable to the printing, sale, and distribution of stamps under this
section." The Service has determined, and we have no basis to challenge
its discretion in this regard, that "reasonable costs" are costs in excess
of those normally incurred for a comparable stamp. However, we are
concerned that the regulations the Service issued to implement this
requirement can be interpreted as not requiring the Service to provide
baseline comparisons for certain BCRS costs, e.g., printing, sales, and
distribution, although the Stamp Out Breast Cancer Act specifically states
that reasonable costs in these areas attributable to the BCRS should be
recouped from the BCRS' surcharge revenue. Our concerns with the
regulations include the following:
BCRS printing costs: The Service's December 2001 regulations can be
interpreted as not requiring baseline comparisons for BCRS printing costs.
The regulations could be interpreted to mean that all BCRS printing costs
are covered by the First-Class postage portion and comparisons with
baseline costs are not necessary. This interpretation is supported by the
fact that, as of August 2003, the Service had not established a baseline
cost for comparable stamps against which to compare BCRS printing costs.
The Service did, however, provide information showing that the BCRS'
printing costs between 1998 and 2003 ranged from $3.35 per thousand stamps
to $7.39 per thousand. The Service also provided information on printing
costs for the three stamps that it considers comparable with the BCRS. The
printing costs for these three stamps ranged from $11.52 per thousand in
1999 to $14.34 per thousand in 1997. Additionally, the Service provided
printing costs for various commemorative stamps in 1998 through 2002. That
information would tend to support the view that printing costs for the
BCRS have not exceeded the printing costs for other commemoratives.
Nevertheless, the Service did not establish a baseline for making BCRS
printing cost comparisons. Therefore, the Service has not demonstrated
that its regulations establish an adequate process for ensuring that
excess semipostal costs are identified and recouped from surcharge
revenues. Following its regulations, the Service reported that it did not
recoup from the BCRS' surcharge revenue any of the $3,597,000 it incurred
in BCRS printing costs. Without a comparison between actual BCRS printing
costs and the baseline printing costs for comparable stamps, the Service
lacks assurance that it is identifying and recouping excess costs from
BCRS surcharge revenue.
BCRS sales costs: The Service's December 2001 regulations can be
interpreted as not requiring baseline comparisons for BCRS sales costs.
The regulations can be interpreted to mean that all BCRS sales costs are
covered by the First-Class postage portion and comparisons with baseline
costs are not necessary. As of August 2003, the Service had not
established a baseline cost for comparable stamps against which to compare
BCRS sales costs. Unlike BCRS printing costs, the Service reported that it
did not track BCRS sales costs because they were "minimal," but it was
unable to provide documentation supporting this position. The Service has
reported that the BCRS was available for sale at over 27,000 post offices
across the country, where salaries and benefits for its clerks average
about $30 per hour. Service officials told us that no staff were hired for
the BCRS program nor were any staff dedicated full-time to work on the
program. However, the Service commented in July 2003 that each semipostal
generates sales costs that it would not incur for commemorative stamps,
such as time spent responding to customer questions about the fund-raising
involved. In addition, the Service has reported that stamp sales costs are
24 cents per dollar for stamps sold at the window, compared with 14 cents
for stamps sold at vending machines. However, the Service has more
recently taken the position that stamp sales costs are substantially less
than previously calculated. In September 2003, the Service was in the
process of reviewing its stamp sales costs, but revised stamp sales
figures were not yet available. Therefore, it is unclear whether the
Service has incurred sales costs for the BCRS that are greater than those
incurred for comparable commemorative stamps. Without a comparison between
actual or estimated BCRS sales costs and the baseline sales costs for
comparable stamps, the Service lacks assurance that it is identifying and
recouping excess costs from surcharge revenue.
In addition to these examples, we have similar concerns regarding other
BCRS costs that are being handled in a manner similar to that described
for BCRS printing, as well as sales. These other costs include stamp
design, shipping, and distribution; estimated training for field staff,
except for special training associated with the BCRS; withdrawal of the
stamp issue from sale; destruction of unsold stamps; and incorporation of
BCRS images into advertising for the Postal Service as an entity.
We discussed our concerns about the Service's cost-recovery regulations
and their impact with Service officials, especially in light of statements
made by Service officials in June 2001 that the issuance of multiple
semipostals at the same time could significantly increase the
administrative burden on the Service and ultimately burden existing staff
and limited resources. Service officials said that their overriding
concern in developing the cost-recovery regulations was to avoid having to
establish cost-tracking systems that would cost more to develop and
implement than the surcharge revenue to be collected from semipostals,
including the BCRS. We pointed out that the Service already performs a
number of cost-related studies that could possibly be used or modified to
capture or estimate incremental semipostal costs, or that new approaches
to capture or estimate such information might be possible and not be cost
prohibitive. Service officials also said that in developing the
regulations, they had not intended to preclude the Service from recovering
excess costs in the printing, sales, and distribution categories, and they
believe they can do so under the existing regulations. However, we remain
concerned that the regulatory provisions do not require the Service to do
so. In fact, the Service has not established baseline costs that would
allow it to identify and recoup excess costs for printing, sales, and
distribution. Therefore, we continue to believe that a reassessment of the
regulatory provisions would be warranted. In view of our concerns, Service
officials told us, in August 2003, they were planning such a reassessment.
The Service Has Not Yet Met Its Commitment to Congress to Provide It with
BCRS Cost Data and Analyses
In our April 2000 BCRS report, we recommended that the Service make
available the data and analysis showing which BCRS costs have been
recovered through the First-Class postage rate to provide assurance that
postal ratepayers are not involuntarily contributing funds to breast
cancer research. In a letter addressed to Chairman John M. McHugh of the
former Subcommittee on the Postal Service, House Committee on Government
Reform,16 the Service committed to provide, within 60 days of the
conclusion of the BCRS' initial 2-year sales period (i.e., September 28,
2000), an analysis of the BCRS costs that the Service recovered through
the base First-Class Mail, single-piece, first-ounce postage rate. The
letter further stated that the analysis would demonstrate that the BCRS'
incremental costs have been recovered solely from the surcharge revenue,
and that its nonincremental costs have been recovered through the base
postage rate.
As of August 12, 2003, the Service had not yet provided the recommended
BCRS cost data and analysis to Congress. Service officials explained that
an administrative oversight, as well as subsequent events, led to the
Service's not making this information available to Congress. The officials
acknowledged that a consultant had drafted an internal paper that
presented and analyzed fiscal year 1999 cost data on the BCRS. However,
the officials noted that this paper had not been reviewed by postal
management and was drafted more than 2 years ago, before the Service
issued its current regulations on BCRS cost recovery. As we previously
recommended, we continue to believe that the Service should prepare and
make available the data and analyses of BCRS costs in order to provide
ratepayers assurance that they are not involuntarily contributing funds to
breast cancer research. Further, we believe that making available current
data and analyses are even more important now than before, given that
additional semipostals have been authorized; and more semipostals are
likely in the future. More specifically, Congress has authorized two
additional semipostals; and in August 2003, it was considering legislation
authorizing two more semipostals and extending the sales period for the
BCRS. Congress has also given the Postal Service specific authority to
issue semipostals of its own choosing. Service officials told us in August
2003 they were planning a reassessment of the earlier BCRS internal paper
and would provide Congress and us with the results of that reassessment as
soon as practicable.
Effectiveness of the BCRS as a Fund-Raiser
The BCRS has continued to be an effective means of raising funds for
breast cancer research. Although neither the Stamp Out Breast Cancer Act
nor amendments to the act provide quantitative measures for evaluating the
effectiveness of the BCRS as a fund-raiser, the act did provide that the
BCRS was to provide the public a voluntary and convenient way of raising
funds for breast cancer research. We reported in April 2000 that the BCRS
had been successful to those ends. Since then, the BCRS has continued to
be a voluntary and convenient way for the public to contribute millions of
dollars for breast cancer research. BCRS sales have fluctuated over time;
however, the BCRS has raised over $30 million for breast cancer research
since it was issued in July 1998. Additionally, most key stakeholders told
us that for the most part, they viewed the BCRS as an effective
fund-raiser; and the public's view of the BCRS was generally positive, as
reflected in the results from our survey. As of September 2003, the
Service had transferred to NIH and DOD about $30.8 million from funds
raised by the BCRS for breast cancer research. These federal organizations
reported to us that they have established programs to fund innovative
breast cancer research conducted by various research institutions. NIH and
DOD are not required to issue reports to Congress detailing how
BCRS-generated funds were used or the accomplishments that resulted from
the BCRS-funded research.
The BCRS Remains Voluntary and Convenient and Has Raised Millions of
Dollars for Research
The BCRS has remained voluntary and convenient, as provided for by the
act, and has raised over $30 million for breast cancer research since it
was issued in July 1998. Postal patrons have the choice of purchasing
regular First-Class postage stamps at 37 cents each or contributing to
breast cancer research by purchasing the BCRS at 45 cents each. The BCRS
remains convenient in that it is available for purchase from a variety of
postal sources, including post offices, although two stakeholders reported
instances when some post offices in their areas did not have the BCRS when
they visited. Figure 4 shows the various sources from which the BCRS can
be purchased.
Figure 4: Various Postal Service Sources for Purchasing the BCRS
Our public opinion surveys-including our current 2003 survey and our
earlier 1999 survey, both conducted by the same firm-indicate that about
70 percent of the public views semipostals as a convenient way to
contribute to designated causes. These and other estimates from our 2003
survey are subject to sampling errors of less than +/- 6 percentage points
(95 percent confidence level), as well as to additional errors of unknown
magnitude due to the 89 percent nonresponse rate for the survey as
discussed in appendix I.
As envisioned by the act, the BCRS has raised a substantial amount of
money for breast cancer research. Postal officials report that since the
BCRS was issued on July 29, 1998, the Service has sold over 450 million of
this semipostal, generating over $30 million, net of costs, for breast
cancer research. If BCRS sales continue at the rate it has been selling in
fiscal year 2003, about 486 million will have been sold by the time BCRS
sales are scheduled to end on December 31, 2003-generating approximately
$35 million in surcharge revenue.
BCRS Sales Have Fluctuated Over Time
Quarterly BCRS sales fluctuated considerably between 1998 and 2003 but
have generally trended lower after reaching a high point of almost 40
million sales in quarter 3, 2000.17 During the early years that the BCRS
was for sale-quarter 4, 1998 through quarter 4, 2000-quarterly sales
varied from a low of 18.3 million to a high of 39.8 million, with average
quarterly sales of 26.4 million. During the latter years-from quarter 1,
2001, through quarter 3, 2003, sales ranged from 14.9 million to 27.8
million, with average quarterly sales of 19.5 million. To help shed
additional light on the continued effectiveness of the BCRS as a means of
fund-raising, we also looked at quarterly sales data for the Heroes of
2001 semipostal to see if there was a discernable decline in BCRS sales
during the quarters when both semipostals were being sold simultaneously.
Although sales of the BCRS trended somewhat lower during the 4 quarters
the Heroes semipostal was for sale, postal officials and other
stakeholders did not believe there was a strong correlation. Postal
officials pointed out that although BCRS sales declined during the period
from quarter 4, 2002, through quarter 2, 2003, they did not drop nearly as
precipitously as the sales of the Heroes semipostal-which fell from 45.4
million in quarter 4, 2002, to 11.0 million in quarter 3, 2003. Also, some
postal officials and other stakeholders believed that over the long term,
postal patrons who repeatedly purchase semipostals tend to support causes
that have organized, nationwide support bases. For example, some postal
officials and other stakeholders believe many people who purchase BCRSs
know someone who is fighting breast cancer or fought it in the past.
Likewise, postal patrons who repeatedly purchase BCRSs are likely to be
aware that the BCRS is supported by many of the national breast cancer
organizations or their affiliates.
However, some postal officials and other stakeholders speculated that the
Heroes of 2001 semipostal may have initially been purchased by a large,
diverse population eager to provide assistance to the families of
emergency relief personnel killed or permanently disabled in connection
with the terrorists attacks on September 11, 2001. However, these postal
officials and other stakeholders suspected that large initial sales
figures for the Heroes semipostal were not sustainable because that
semipostal did not benefit from the support of a long-established,
well-organized, nationwide network of organizations to keep the Heroes
semipostal in the pubic eye. Figure 5 shows the number of BCRSs sold since
date of issuance through quarter 3, 2003, as well as the number of Heroes
of 2001 semipostals sold from date of issuance through quarter 3, 2003.
Figure 5: Number of BCRS and Heroes Semipostals Sold by Postal Quarter
Key Stakeholders Believe the BCRS Has Been an Effective Fund-Raiser
The key stakeholders we spoke with that expressed a view about the
effectiveness of the BCRS believed it had been effective in raising funds
for breast cancer research. Some of the stakeholders who did not express a
view on the effectiveness of the BCRS provided other comments about
semipostals.
Opinions of Key Stakeholders Who Expressed View That the BCRS Has Been an
Effective Fund-Raiser
Key stakeholders who believed the BCRS has been an effective fund-raiser
included the Postal Service; Dr. B.I. Bodai (the individual credited with
conceiving the idea for the BCRS and who, along with Ms. Betsy Mullen,
lobbied Congress for the BCRS); Ms. Betsy Mullen (the Women's Information
Network Against Breast Cancer), the Susan G. Komen Breast Cancer
Foundation; the American Cancer Society; and the American Philatelic
Society.
According to postal officials, the effectiveness of the BCRS as a means of
fund-raising is self-evident for two particular reasons. First, the BCRS
has raised over $30 million for breast cancer research since it was issued
in July 1998. Second, more than 450 million BCRS's had been sold through
quarter 3, 2003, making the BCRS very popular when compared with the
Service's best-selling commemorative stamps. Postal officials note that
although BCRS sales have periodically waxed and waned, yearly sales totals
have remained strong since the BCRS was issued.
Dr. B.I. Bodai believed the BCRS has been a more effective, consistent
fund-raiser than expected. He said no one anticipated that the pennies
generated from the sale of each BCRS across the country would, over time,
total well over $30 million. Dr. Bodai said the BCRS was popular with
families affected by breast cancer, but he believed sales could have been
significantly higher if the Service and the various breast cancer
organizations had even more vigorously and consistently promoted the BCRS
over the past 5 years.
Ms. Betsy Mullen of the Women's Information Network Against Breast Cancer
stated she believed the BCRS had been a very effective fund-raiser.
Further, she noted that the BCRS' effectiveness wasn't just limited to
raising funds, but was also extremely effective at raising awareness of
breast cancer and the fight to eradicate it. Ms. Mullen also stated that
the Women's Information Network Against Breast Cancer had worked very
closely with Congress to ensure that money raised by the BCRS not supplant
congressional appropriations for breast cancer research, and she believed
money raised by the BCRS had not been used to supplant congressional
appropriations to NIH and DOD for breast cancer research. She stated that
from an educational perspective, the BCRS has been "priceless" in its role
of promoting breast cancer awareness as a women's health issue. She said
she believed that because of the BCRS, many more women have gotten
mammograms than otherwise would have, and many lives therefore have been
saved.
The Susan G. Komen Breast Cancer Foundation stated that the BCRS has
consistently been an effective means of raising funds since it was issued
in 1998. The foundation expressed the belief that over the years, the BCRS
has proven to be even more successful than anyone had initially
anticipated. The foundation reiterated its earlier position that the BCRS
has been a unique and innovative fund-raising tool and has raised breast
cancer awareness on a global scale. Further, the foundation stated that if
anything, it has become an even stronger supporter of the BCRS over the
years. The foundation and its 118 affiliates across the country have found
the BCRS to be not only a great means for raising awareness, but also an
excellent promotional tool that has helped stimulate breast cancer
organizations' fund-raising activities-particularly at the local level.
The American Cancer Society believed that time has proven the BCRS to be
an effective means of raising funds for breast cancer research. As we
reported in 2000, the American Cancer Society's position had been that it
was too early to label the BCRS as either effective or ineffective.
However, the society stated that the BCRS has since shown that it has
effectively raised money for breast cancer research. Society officials
recalled that they had previously been concerned that the BCRS might take
momentum away from federal funding for breast cancer research or adversely
affect fund-raising organizations' ability to raise research funds. They
stated, however, that they had seen no evidence, over the past 5 years, to
indicate that the BCRS had taken momentum away from federal funding for
breast cancer research or adversely affected the American Cancer Society's
ability to raise research funds. The society said that it still believes
vigilance is in order to ensure that the BCRS does not affect research
funding or fund-raising, but otherwise it has no concerns about the BCRS.
Society officials said that the BCRS fits well with the society's
goals-one of which is to increase awareness of breast cancer. The society
stated that it supports the BCRS.
American Philatelic Society officials stated that they had been surprised
at stamp collectors' acceptance of the BCRS in particular, and semipostals
in general. As we reported in 2000, the society was opposed to semipostals
and believed they were a tax on the hobby of stamp collecting. Over time,
however, the society has come to believe that the BCRS' strong sales
indicate that semipostals are now widely accepted, making them effective
fund-raisers. Nevertheless, the officials cautioned that although stamp
collectors are now accepting of semipostals, they do not want to see more
than one or two new semipostal issues per year. Otherwise, stamp
collectors would be forced to buy too many of the higher priced semipostal
issues each year in order to maintain complete stamp collections.
Comments Made by Other Key Stakeholders
The National Breast Cancer Coalition (NBCC) stated that its position on
the BCRS had not changed since our April 2000 BCRS report. Officials
stated that NBCC still believes there are more effective ways of raising
money for research than using semipostals. NBCC stated that a better gauge
of the BCRS' effectiveness would be how well the surcharge revenue was
spent on research rather than simply how much money the BCRS raised. NBCC
continues to believe that effectively lobbying Congress holds the most
promise for raising significant amounts of money for breast cancer
research.
The Chairperson of the Citizen's Stamp Advisory Committee stated that it
was outside the scope of the committee's role to evaluate or take a
position on the effectiveness of the BCRS. The Citizen's Stamp Advisory
Committee is a 15-member group of citizens appointed by and serving at the
pleasure of the Postmaster General for the primary purpose of providing
the Postal Service with a "breadth of judgment and depth of experience in
various areas that influence subject matter, character and beauty of
postage stamps." Under Postal Service regulations implementing the
Semipostal Authorization Act, the committee is also responsible for
reviewing eligible semipostal proposals and making recommendations to the
Postmaster General on worthy cause(s) and executive agency(ies) eligible
to receive funds raised by semipostals. The Chairperson emphasized that
Postal Service management decides policy, administrative, and operational
matters related to semipostals-not the Citizen's Stamp Advisory Committee.
She stated that the committee's primary function is to review proposals
for stamps and select subjects for recommendation to the Postmaster
General that are both interesting and educational.
Survey Respondents View Semipostals in a Positive Light
To determine the public's awareness of the BCRS and its view of
semipostals in general, we included pertinent questions in our survey of
the public. We asked the same question about awareness of the BCRS that we
asked in our August 1999 survey to look for evidence about whether the
public had become more aware of the BCRS over time.
The survey results suggest that about 29 percent of adults were aware of
the BCRS at the time of our recent inquiry-which occurred almost 5 years
after the BCRS was issued. About 37 percent of women and about 19 percent
of men were aware of the BCRS. The survey results from our August 1999
survey, which was conducted about 1 year after the BCRS went on sale,
indicated that about 24 percent of adults were aware of the BCRS at that
time. About 29 percent of women and about 18 percent of men were aware of
the BCRS in 1999. We are unable to determine whether the changes in our
awareness estimates are due to genuine changes in awareness or to sampling
errors and other nonsampling errors related to the 89 percent nonresponse
rate, as discussed in appendix I.
To help gauge the public's experience with the BCRS, we also asked the
survey participants whether they had ever purchased a BCRS. About 12
percent report they had purchased the BCRS. We did not ask a similar
question in our 1999 public opinion survey.
Transfers of Surcharge Revenue to NIH and DOD for Breast Cancer Research
As of September 2003, the Service had transferred to NIH and DOD about
$30.8 million from funds raised by the BCRS for breast cancer research.
NIH and DOD reported to us that they have established programs to award
funds for innovative breast cancer research conducted by various research
institutions.
As noted in our April 2000 BCRS report, the act specifies that after
deducting its reasonable costs, the Service is to transfer 70 and 30
percent of the remaining surcharge revenue generated by the BCRS to NIH
and DOD, respectively. The act also specifies that such transfers be made
at least twice yearly under arrangements as agreed to between the Service
and those agencies. Further, the act specifies that NIH and DOD are to use
transferred BCRS surcharge revenues for breast cancer research. Unlike any
agency that was to receive funds generated from semipostals issued under
the Semipostal Authorization Act, NIH and DOD are not subject to annual
reporting requirements. Agencies that receive funds from semipostals
issued under the Semipostal Authorization Act are required to submit
annual reports to Congress that include (1) the total amount of funds
received during the year; (2) an accounting of how the funds were
allocated or otherwise used; and (3) a description of any significant
advances or accomplishments made during the year that were funded, in
whole or in part, out of amounts received.
Information currently reported to Congress on NIH's and DOD's use of
research funds generated by the BCRS does not adequately support
congressional oversight. As mandated, our periodic reports to Congress
focus primarily on the BCRS' costs, effectiveness, and appropriateness;
not on how NIH and DOD use BCRS surcharge revenues for breast cancer
research and the accomplishments resulting from such research. To help
manage their respective BCRS funded research programs, NIH and DOD require
award recipients to provide periodic reports on the progress being made
and breakthroughs achieved. This is the same information that Congress
requires of agencies receiving surcharge revenues generated by semipostals
issued under the Semipostal Authorization Act; and this readily available
information could be, if required, submitted by NIH and DOD to Congress on
an annual basis.
To date, the Service has complied with the requirements in the Stamp Out
Breast Cancer Act regarding the transfers of BCRS surcharge revenue to NIH
and DOD. NIH and DOD are using BCRS surcharge revenue transferred to them
to fund breast cancer research. Table 3 shows the transfers, by fiscal
year, that have been made since the BCRS was issued in July 1998.
Table 3: Transfers Made to NIH and DOD for Breast Cancer Research
Fiscal year Amount transferred Amount transferred Total transferred to NIH
to NIH to DOD and DOD
1999 $4,150,210 $1,778,661 $5,928,871
2000 3,101,033 1,329,014 4,430,047
2001 5,556,225 2,381,240 7,937,465
2002 3,594,621 1,540,552 5,135,173
2003 5,175,938 2,218,259 7,394,197
Total $21,578,027 $9,247,726 $30,825,753
Source: NIH, DOD, and U.S. Postal Service.
Breast Cancer Research Funded with BCRS Surcharge Revenue Transferred to
NIH and DOD
NIH and DOD officials said that, as required by the Stamp Out Breast
Cancer Act, they have been using transferred BCRS surcharge revenue to
fund breast cancer research. NIH officials said that revenue received from
the BCRS surcharge revenue has been used to fund breast cancer research
under the National Cancer Institute's (NCI) "Insight Awards to Stamp Out
Breast Cancer" initiative. The officials said that this program was
designed to fund high-risk exploration by scientists who are employed
outside the federal government and conduct breast cancer research at their
institutions. They reported that 86 awards had been made as of April 2003,
and most of the awards were for 2-year periods with several projects still
alive. Discounting a single, one-time supplement for $4,300, individual
awards ranged from $47,250 to $142,500 and averaged about $111,000. The
officials stated that these insight awards were innovative and high-risk
projects; and many have been successful in leading to new insights and
approaches in the biology, diagnosis, and treatment of breast cancer. The
officials stated that NCI is currently considering additional research
projects to be funded using BCRS surcharge revenue not yet committed.
Detailed information provided by NIH/NCI on breast cancer research awards
funded with proceeds from BCRS surcharge revenue is reprinted in appendix
II.
DOD officials told us that revenue received from the BCRS' surcharge
revenue had been used to fund "DOD Breast Cancer Research Program Idea
Awards," which are administered by the U.S. Army Medical Research and
Materiel Command. Idea Awards are intended to encourage innovative
approaches to breast cancer research. DOD officials told us that 19 awards
had been made as of April 2003. Individual awards ranged from $5,000 to
$578,000 and averaged about $356,500. These awards have focused on
research into such areas as the biology of cancer cell growth and tumor
formation, immunotherapy, and new areas of breast cancer detection. The
officials stated that DOD plans to continue investing money received from
BCRS surcharge revenue into programs that will encourage innovative
approaches to breast cancer research. The officials also stated that about
$256,000 of the transferred funds had been used for management expenses.
Detailed information provided by DOD on breast cancer research awards
funded with proceeds from BCRS surcharge revenue is reprinted in appendix
III.
Appropriateness of Using Semipostals as a Means of Fund-Raising
Most of the key stakeholders we spoke with and the public believe it is
appropriate for the Postal Service to sell the BCRS, as well as other
semipostals, to raise funds for worthwhile causes. When we issued our
April 2000 report, the BCRS was the only semipostal available from the
Postal Service. However, since that time, Congress has passed legislation
mandating two additional semipostals and is currently considering
legislation requiring two more semipostals and extending the sales period
for the BCRS.
Opinions of the Postal Service, Key Stakeholders, and Others Regarding
Appropriateness
The Service, NBCC, and the Citizens Stamps Advisory Committee generally
viewed using semipostals to raise funds for designated causes as
inappropriate; Dr. B.I. Bodai, Ms. Betsy Mullen, the Susan G. Komen Breast
Cancer Foundation, the American Cancer Society, and the American
Philatelic Society viewed using semipostals to raise funds as appropriate.
The public also believes that it is appropriate to use semipostals as
fund-raisers.
Views of the Postal Service and Other Key Stakeholders
The Postal Service has historically been opposed to semipostals. The
Service believes that fund-raising through the sale of semipostals is an
activity outside the scope of the Service's mission as defined by the
Postal Reorganization Act. The Service also remains concerned that the
popularity of the BCRS does not necessarily portend the success of future
semipostals, whether mandated by Congress or initiated by the Postal
Service, and that future semipostals might generate only modest amounts of
revenue while still requiring substantial postal expenditures. Postal
officials are further concerned that too many semipostals not be on the
market at the same time. The BCRS, initially slated for a 2-year sales
period, has been twice extended by Congress and has been on sale for over
5 years. Postal officials worry that if semipostals are mandated but not
retired, the market for semipostals might become oversaturated to the
detriment of individual semipostals as well as the semipostal program in
general.
The Susan G. Komen Breast Cancer Foundation stated that the BCRS was
appropriate when issued and remains appropriate today. The foundation
continues to support the BCRS wholeheartedly. Further, the foundation
believed that the BCRS provides an easy and convenient way for the public
to support and contribute to breast cancer research. The foundation stated
that during the 5 years the BCRS has been for sale, it has become "a
unifying symbol of the fight to find a cure for breast cancer which has
become woven into the fabric of America." When feasible, the foundation
uses the BCRS on both mass mailings and individual pieces of
correspondence.
The American Cancer Society continues to believe that it is appropriate to
use the BCRS as a means of fund-raising. The society has held this opinion
since the BCRS was first issued.
The American Philatelic Society stated that its position on the
appropriateness of the BCRS has moderated over time. The society no longer
believes it is inappropriate for the Service to issue semipostals,
changing its view because of the wide public acceptance of the BCRS.
Society officials also told us that although BCRS costs are not identified
and tracked with precision, they are in the ballpark given the regulations
that the Service has issued for tracking and allocating costs.
NBCC stated that its opinion regarding the appropriateness of using the
BCRS as a means of fund-raising had not changed since our April 2000 BCRS
report. NBCC still had reservations about the appropriateness of the BCRS,
and officials stated that they were still concerned that the BCRS might be
more of a symbolic gesture, on Congress' part, than an all-out commitment
to fund whatever research is needed to eradicate breast cancer in the
shortest possible time.
The Chairperson of the Citizen's Stamp Advisory Committee stated that the
committee's position has always been that semipostals are inappropriate
because fundraising is outside the scope of the Postal Service's mission.
The Chairperson noted that the committee had been against the Semipostal
Authorization Act. The act mandated that the Service establish a
semipostal program, and select causes to be represented by semipostals and
agencies to receive funds raised through the sale of semipostals. The
committee found it interesting that after giving the Service
responsibility for selecting semipostals, Congress has continued to
mandate additional semipostals. The committee is concerned that if
Congress continues to mandate new semipostals without retiring old ones, a
situation could eventually develop where semipostals, which are
essentially commemorative stamps with a surcharge, might begin to "crowd
out" the Service's regular commemorative stamp program. This could present
a nationwide problem in post offices because there is limited space in
window clerks' stamp drawers for different stamp issues. Because the
Service requires that semipostals be available in all post offices at all
times, the number of regular commemorative stamp issues might have to be
limited to accommodate semipostals unless the number of semipostals for
sale at any one time is limited.
Dr. B.I. Bodai reiterated his belief that using the Postal Service to
issue semipostals for worthy, nonpostal causes is very appropriate and is
an example of what good government is all about. Dr. Bodai stated that the
BCRS has not only been appropriate from the standpoint of raising money
for breast cancer research but has also been extremely valuable as a tool
for raising breast cancer awareness on a nationwide basis. He noted that
the BCRS is so popular that some states, such as Georgia, have
incorporated its image into specialty automobile license plates.
Ms. Betsy Mullen of the Women's Information Network Against Breast Cancer
believes that the BCRS is very appropriate, as would be other semipostals
that raise funds for worthwhile causes. Ms. Mullen believes that the
Service can successfully sell two or more semipostals at the same time.
She said that the Service has a long and successful history of
concurrently selling multiple commemorative stamps, and the American
public has demonstrated over the years its philanthropic support for
multiple worthwhile causes. She also said that concurrently selling two or
more semipostals is not a detriment to the semipostal program, but rather
an enhancement because multiple semipostals cross-promote each other's
sales. She noted that the Service is cross-promoting the sale of the BCRS
and Heroes semipostals through its advertisements of these semipostals at
post offices. Finally, she stated that the Women's Information Network
Against Breast Cancer uses the BCRS on all of its correspondence, and,
because of the BCRS, research is now being done that otherwise would not
have been done.
The Public's View
The public continues to believe that it is appropriate to use semipostals
to raise funds for nonpostal purposes. Our public opinion survey conducted
by International Communications Research (ICR) indicated that about 71
percent believe it is very or somewhat appropriate to use semipostals
issued by the Postal Service, such as the BCRS, to raise funds for
nonpostal purposes and about 23 percent believe it is somewhat or very
inappropriate. Six percent had no opinion, said they didn't know, or
volunteered the answer that it would depend on the cause for which the
semipostal was being used to raise money. Statistically, these opinions
about the appropriateness of semipostals are not large enough to be
significantly different from the findings of our 1999 survey.
Statutory Authorities and Constraints
On the legislative front, several laws have been enacted since our April
2000 BCRS report that affect the BCRS specifically or semipostals in
general. These laws have (1) twice extended the sales period for the BCRS,
(2) authorized two additional semipostals, and (3) authorized the Service
to issue future semipostals. Also, as of August 2003, Congress was
considering legislation establishing two more semipostals and extending
the sales period for the BCRS until December 31, 2005. As of August 2003,
the Service had not issued any semipostals of its own choosing and had no
plans to do so until the sales period for congressionally mandated
semipostals have ended. We believe this position is consistent with the
discretion afforded the Service under the Semipostal Authorization Act.
Conclusions
We are concerned that the Service's BCRS regulations can be interpreted as
not requiring the Service to provide baseline comparisons for certain BCRS
costs, e.g., printing, sales, and distribution, although the Stamp Out
Breast Cancer Act specifically states that reasonable costs in these areas
attributable to the BCRS should be recouped from its surcharge revenue.
Although the Service has provided printing costs for various commemorative
stamps, it has not established baseline costs for certain BCRS costs.
Without these baselines, the Service lacks assurance that it is
identifying and recouping excess costs from the BCRS' surcharge revenue.
If the Service does not recoup costs for items that exceed those of
comparable stamps, the Service could be subsidizing BCRS costs.
Furthermore, without having baseline cost information for comparable
stamps for the cost categories that the Service does track for the BCRS,
it is impossible to determine whether the Service has recouped all
reasonable costs of the BCRS that exceed those for comparable stamps in
such cost categories. Further, the Service has not met its commitment to
Congress to provide it with BCRS cost data and analyses, as we had
previously recommended, to assure postal ratepayers that they are not
involuntarily contributing to breast cancer research. Without current BCRS
cost data and analyses, Congress and the public continue to lack assurance
that postal ratepayers are not involuntarily contributing funds to breast
cancer research.
Nearly all of the stakeholders that we spoke with consider the BCRS to be
a success, particularly given its sales performance to date. According to
NIH and DOD, millions of dollars in BCRS surcharge revenue have
contributed to important new insights and approaches in the biology,
diagnosis, and treatment of breast cancer, as well as in other areas of
research. NIH and DOD provided us information regarding their use of BCRS
surcharge revenue as well as advances or accomplishments they achieved.
However, NIH and DOD are not required to submit annual reports to Congress
like agencies that are to receive funds from semipostals issued under the
Semipostal Authorization Act. Congress has twice extended the sales period
for the BCRS and is currently considering a third extension. Therefore,
establishing annual reporting requirements for NIH and DOD, similar to the
statutory reporting requirements established for any agency that would
receive funds from semipostals issued under the Semipostal Authorization
Act, would prove valuable by providing information on the amount of funds
received, how the funds were used, and any accomplishments resulting from
the use of those funds, should Congress decide to further extend the BCRS
sales period.
Matter for Congressional Consideration
If Congress decides to extend the sales period for the BCRS past its
scheduled end date of December 31, 2003, it may wish to consider
establishing a requirement that NIH and DOD annually report to Congress,
similar to the requirement for agencies that are to receive surcharge
revenues generated from semipostals issued under the Semipostal
Authorization Act.
Recommendations for Executive Action
We are reaffirming our recommendation made in April 2000 that the
Postmaster General direct postal management to make available the cost
data and analyses showing which BCRS costs have been recovered through the
First-Class postage rate to provide assurance that postal ratepayers are
not involuntarily contributing funds to breast cancer research.
We also recommend that the Postmaster General reexamine and, as necessary,
revise the Service's December 2001 cost-recovery regulations to ensure
that the Service establishes baseline costs for comparable commemorative
stamps and uses these baselines to identify and recoup excess costs from
the BCRS' surcharge revenue. As part of that process, the Postmaster
General should publish the baseline costs it is using. This would help
provide assurance that the Service is recouping all reasonable costs of
the BCRS from the surcharge revenue.
Agency Comments and Our Evaluation
The Postal Service provided comments on a draft of this report in a letter
from the Senior Vice President, Government Relations dated September 10,
2003. These comments are summarized below and are reprinted as appendix
IV. Postal officials also provided technical and clarifying comments,
which we have incorporated into the report where appropriate.
The Senior Vice President indicated that the Service plans to take
appropriate actions to address our specific recommendations. He stated
that the Service never intended that its BCRS cost-recovery regulations be
interpreted as not requiring establishment of adequate baselines for
comparing certain categories of costs. However, he acknowledged that the
regulations might need to be revised to make the Service's intent clearer.
Regarding the establishment of baselines, he noted that comparisons
between the BCRS and comparable commemoratives could involve different
facets in various areas. For example, he noted that printing cost
comparisons could be difficult because they may involve differing time
periods, different graphic designs, and different print runs. Nonetheless,
he said that the Service would reexamine its semipostal regulations with a
view toward proposing revisions about what costs are to be identified and
recouped from surcharge revenues.
In commenting on our reaffirmed recommendation that the Service make
available BCRS cost data and analyses, the Senior Vice President stated
the Service plans to reassess the earlier analysis it had commissioned on
recovery of BCRS costs through the First-Class Mail postage rate in light
of the cost-recovery issues raised in our report. He stated that the
Service would provide Congress and us with the results of that
reassessment upon completion.
We are sending copies of this report to the Chairman and Ranking Minority
Member, Subcommittee on Health, House Committee on Energy and Commerce;
and to the Chairman and Ranking Minority Member, Subcommittee on National
Security, Emerging Threats, and International Relations, House Committee
on Government Reform because of their involvement in passage of the Stamp
Out Breast Cancer Act. We are also sending copies of this report to
Senator Dianne Feinstein and Representative Joe Baca because of their
expressed interest in the BCRS; the Postmaster General and Chief Executive
Officer, United States Postal Service; the Chairman of the Postal Rate
Commission; and other interested parties. Copies will also be made
available to others upon request. In addition, this report will be
available at our Web site at http://www.gao.gov.
Key contributors to this report are listed in appendix V. If you or your
staffs have any questions about this letter or the appendixes, please
contact me at (202) 512-2834 or E-mail at [email protected].
Bernard L. Ungar Director, Physical Infrastructure Issues
Objectives, Scope, and MethodologyAppendix I
Our objectives for this report were to fulfill our legislative mandate to
update Congress on (1) the monetary and other resources the Postal Service
has expended in operating and administering the Breast Cancer Research
Semipostal (BCRS) program, (2) the effectiveness of using the BCRS as a
means of fund-raising, and (3) the appropriateness of using the BCRS as a
means of fund-raising. We also provide information on the status of
recommendations made to the Postmaster General in our April 2000 BCRS
report. In essence, we recommended that the Service formalize its criteria
for making BCRS cost recovery decisions and make BCRS cost data and
analyses available to assure postal ratepayers that they were not
involuntarily subsidizing BCRS costs.
To describe the monetary and other resources the Service has expended in
operating and administering the BCRS program, we updated pertinent
information presented in our April 2000 report to reflect current
conditions. To do this, we interviewed officials in the Service's Offices
of Stamp Services and Finance responsible for administering the BCRS
program and tracking its costs. We gathered and analyzed data on the
surcharge revenue raised by the BCRS as well as data on the costs and
resources the Service used in operating and administering the BCRS
program. We also identified and reviewed the Service's criteria for
determining which costs are to be recouped from the BCRS' surcharge
revenue and, as necessary, discussed with finance officials the
application of the Service's criteria for certain cost items.
To determine if the BCRS has been an effective means of fund-raising, we
obtained and analyzed BCRS sales data and discussed with finance and stamp
services officials how certain events may have affected sales. We obtained
similar information for the Heroes of 2001 semipostal and compared sales
for the two semipostals. We also obtained information on how much BCRS
generated funds had been transferred to the National Institutes of Health
(NIH) and Department of Defense (DOD) for breast cancer research, and
obtained information on how the money was being used to further breast
cancer research. We did not evaluate or assess NIH's and DOD's process for
determining who would be awarded BCRS research funds, nor did we evaluate
any of the individual awards. Additionally, we did not independently
verify any of the financial data provided by NIH and DOD. Further, we
interviewed all but one of the key stakeholders that we had interviewed
for our April 2000 report to determine if their views on the BCRS'
effectiveness as a fund-raiser have changed since our last report. The key
stakeholders interviewed included representatives of (1) the American
Cancer Society, (2) the National Breast Cancer Coalition (NBCC), (3) the
Susan G. Komen Breast Cancer Foundation, (4) Dr. B. I. Bodai, and (5) the
American Philatelic Society. We did not interview the current Curator of
the Smithsonian Institution's National Philatelic Collection for this
report. We had interviewed the former Curator for our April 2000 report,
but the current Curator said that it was not within his personal expertise
to evaluate the effectiveness or appropriateness of the BCRS, or
semipostals in general, and it would not be proper for him to comment in
his role as an official of the Postal Museum. For this report, we also
interviewed Betsy Mullen, who is the founder of the Women's Information
Network Against Breast Cancer, and who, along with Dr. B.I. Bodai, lobbied
Congress to pass legislation creating the BCRS. Further, we interviewed
the Chairperson of the Citizens Stamp Advisory Committee because, since
our last BCRS report, the committee has been given the responsibility for
reviewing semipostal candidates and making recommendations to the
Postmaster General. We did not update the information included in our
April 2000 report on foreign postal administration's semipostal activities
because of the time and resources that such work would have required and
the limited new information that it likely would have yielded.
To determine if the BCRS has been an appropriate means of fund-raising, we
interviewed the same key stakeholders identified above to solicit their
current views on the appropriateness of using the BCRS to raise funds. We
also researched and analyzed applicable sections of the U. S. Code and
Postal Service regulations to identify changes that have occurred since
our April 2000 report that either affected the BCRS directly or the
semipostal program in general. Additionally, we identified and analyzed
pending legislation that would affect the Service's semipostal program.
We conducted our review at Postal Service Headquarters in Washington,
D.C., from February through August 2003 in accordance with generally
accepted government auditing standards.
Public Opinion Survey
To obtain the public's opinion of the BCRS in 2003, we contracted with
International Communications Research (ICR) of Media, Pa. ICR included
five questions about the BCRS and semipostals in its national omnibus
telephone survey, conducted on 5 days, from June 27 and July 1, 2003
(Friday through Tuesday). Omnibus surveys of this type also collect
demographic information and include questions for other clients on other
topics. For our previous survey in 1999, ICR followed the same survey
procedures when it asked four of the five questions that we used in 2003.
In 2003, interviews were completed with respondents at 1,038 of the
estimated 9,046 eligible sampled households, for a response rate of about
11 percent1. These survey procedures yield a nonprobability sample of
members of the population of the contiguous United States (48 states and
the District of Columbia) who are 18 years or older, speak English, and
reside in a household with a residential, land-based telephone. The 89
percent nonresponse rate means that estimates in the report are subject to
nonsampling errors of unknown magnitude.
Selection of Households and Respondents
Random digit dial (RDD) equal probability selection methods were followed
to identify telephone numbers using the GENESYS Sampling System. The
GENESYS system draws numbers from those active banks of telephone
exchanges that have at least two household numbers listed and are accessed
through land lines. Exchanges assigned to cellular telephones are not
included.
The interviewers selected a member from each household, using a mixture of
random and systematic procedures. Because adult males are more difficult
to contact and interview in telephone surveys, ICR took the following
measures to meet the specification of at least 500 completed male
interviews, or approximately half of the sample. An interviewer first
attempted to interview the adult male (aged 18 or older) with the most
recent birthday. If that male was not present in the household at the time
of the telephone call, then any other male present in the household at
that time was selected; if no male was present, then an adult female was
selected, with first preference being for the female present with the most
recent birthday. Because the specifications were still not met, only males
were interviewed during the closing phase of the survey. Although routine
procedures specify five attempts to locate a respondent in each household,
many households did not receive five calls and had not been contacted by
the end of the interview period after one or more calls ended in a busy
signal, no answer, or inability to complete a callback attempt. The
respondent selection procedures eliminated interviewer judgment from the
selection process, but did not yield a random, probability sample of the
U.S. population. For example, these procedures exclude females who are
present in households at the time when a willing male is present. The
procedures also exclude any household members who are not at home at the
time the interviewer contacts the household.
Survey respondents are weighted in our analyses so that age, sex,
education, and regional estimates from our survey will match U.S. data
from the March 2002 Current Population Survey (CPS) on these demographic
characteristics for the adult population (18 years of age and older) of
the 48 contiguous states and the District of Columbia. The number of
telephone numbers in the household and number of household members were
also considered in the weighting process.
Sampling Errors
As with all sample surveys, this survey is subject to both sampling and
nonsampling errors. The effects of sampling errors, due to the selection
of a sample from a larger population, can be expressed as confidence
intervals based on statistical theory. The effects of nonsampling errors,
such as nonresponse and errors in measurement, may be of greater or lesser
importance, but cannot be quantified on the basis of the available data.
Sampling errors occur because we use a sample to draw conclusions about a
much larger population. The survey's sample of telephone numbers is based
on a probability selection procedure. As a result, the sample was only one
of a large number of samples that might have been drawn from the total
telephone exchanges throughout the country. If a different sample had been
taken, the results might have been different. To recognize the possibility
that other samples might have yielded other results, we express our
confidence in the precision of our particular sample's results as a 95
percent confidence interval. For all the percentages presented in this
report, we are 95-percent confident that when only sampling errors are
considered, the results we obtained are within +/- 6 percentage points or
less of what we would have obtained if we had surveyed the entire study
population. For example, our survey estimates that 70 percent of the
population feels that it is very or somewhat convenient to use special
stamps to raise funds. The 95 percent confidence interval due to solely
sampling errors for this estimate is between approximately 66 percent and
73 percent.
Nonsampling Errors
In addition to the reported sampling errors, the practical difficulties of
conducting any survey introduce other types of errors, commonly referred
to as nonsampling errors. For example, questions may be misinterpreted,
some types of people may be more likely to be excluded from the study,
errors could be made in recording the questionnaire responses into the
computer-assisted telephone interview software, and the respondents'
opinions may differ from those of people in the sampled households we did
not successfully interview.
For this survey, the 11 percent response rate is a potential source of
nonsampling error; we do not know if the respondents' answers are
different from the 89 percent who did not respond. With the available
information we cannot estimate the impact of the nonresponse on our
results. Our results will be biased to the extent that the people at the
89 percent of the telephone numbers that did not yield an interview have
different opinions about or experiences with the BCRS than did the 11
percent of our sample who responded.
Once a respondent agreed to participate, the nonresponse for any
particular item was low. Unless otherwise noted, less than 4 percent of
the weighted answers to each question are in the category of not knowing
an answer or refusing to answer the particular question.
BCRS Questionnaire
The section of the questionnaire that obtained information on BCRS issues,
including the introduction and the five survey questions, follows:
Since 1998, at the direction of Congress, the U.S. Postal Service has been
selling a Breast Cancer Research stamp at a price above the First-Class
postage rate. The stamp currently sells for 45 cents, with 37 cents
covering the First-Class postage rate and most of the remaining 8 cents
going to breast cancer research. This stamp is available at post offices,
postal stores, special breast cancer fund-raising events, and from rural
carriers and some postal vending machines. In order to provide the
Congress with the public's views on this topic, we would like to ask you
some questions.
BC-1. Prior to hearing what I just told you about the 45-cent Breast
Cancer Research stamp, were you aware that the Postal Service was selling
such a stamp?
1 Yes 2 No D (DO NOT READ) Don't Know R (DO NOT READ) Refused
BC-2. In your opinion are special stamps with an added cost-such as the
45-cent Breast Cancer Research stamp-a convenient way for you to
contribute to a special purpose?
(READ LIST. ENTER ONE ONLY)
4 Definitely yes 3 Probably yes 2 Probably no 1 Definitely no D (DO NOT
READ) Don't know/No opinion R (DO NOT READ) Refused
BC-3. In your opinion, how appropriate or inappropriate is it to use
special stamps issued by the Postal Service to raise funds nonpostal
purposes? (READ LIST. ENTER ONE ONLY)
4 Very appropriate 3 Somewhat appropriate 2 Somewhat inappropriate 1 Very
inappropriate 5 (DO NOT READ) Would depend on cause/purpose D (DO NOT
READ) Don't know/No opinion R (DO NOT READ) Refused
(IF Q 3 = SOMEWHAT INAPPROPRIATE OR VERY INAPPROPRIATE, CONTINUE; ELSE
SKIP TO Q 5)
BC-4. Please briefly explain why you believe it is inappropriate to use
special stamps issued by the Postal Service to raise funds for nonpostal
purposes. (TYPE IN RESPONSE; PROBE FOR CLARITY AND TO THE NEGATIVE)
1. Response Given D Don't Know R Refused
BC-5. Have you ever purchased a Breast Cancer Research Stamp?
1 Yes 2 No D (DO NOT READ) Don't Know R (DO NOT READ) Refused
National Institutes of Health Breast Cancer Research Awards Funded with
Proceeds from the BCRS' Surcharge RevenueAppendix II
As of April 2003, the National Cancer Institute (NCI) reported that it had
funded 86 breast cancer research awards using money transferred to NIH by
the Postal Service from the BCRS' surcharge revenue. The awards totaled
about $9.5 million and covered research areas that included prevention,
nutrition, biology, diagnosis, treatment, prognosis, metastasis,
tumorigenesis, and mutagenesis. Discounting a single, one-time supplement
for $4,300, individual awards ranged from $47,250 to $142,500 and averaged
$111,395. Thirty-two of the 86 awards were noncompetitive continuations of
previous BCRS funded awards. According to NIH officials, they were in the
process of awarding the remaining funds that had been transferred to NIH
for breast cancer research. Table 4 identifies pertinent information about
each award, including the amount of the award, research area, principal
investigator, sponsoring institution, and the fiscal year of the award.
Table 4: NIH/NCI Breast Cancer Research Awards Funded with Proceeds, as of
April 2003, from BCRS Sales
Fiscal Institution Principal Research area Amount
year investigator
Hadassah
2000 University Vlodavsky Metastasis $61,000
Hospital
2000 Clemson Chen Biology/metastasis $105,000
University
Mount Sinai
2000 School of Kretzschmar Metastasis $125,387
Medicine
2000 Institute for Yeung Prevention/biology $126,866
Cancer Research
2000 University of Lemmon Biology/treatment $118,875
Pennsylvania
University of
2000 California, Blumberg Treatment $105,946
Irvine
2000 Fox Chase Cancer Russo Tumorigenesis $126,866
Center
2000 University of Thompson Metastasis $75,000
Melbourne
2000 University of Gotay Treatment $101,000
Hawaii
2000 University of Radice Metastasis $118,875
Pennsylvania
2000 Wake Forest Shelness Treatment $108,750
University
2000 Henry M. Jackson Lechleider Biology/metastasis $74,000
Foundation
2000 Virginia Mason Nelson Biology/treatment $47,250
Research Center
2000 Georgetown Wong Biology/diagnosis $116,950
University
2000 Columbia Swergold Mutagenesis $127,875
University
2000 Baylor College of Rosen Metastasis $78,488
Medicine
2000 Thomas Jefferson Sauter Diagnosis $81,089
University
Center for
Molecular
2000 Medicine and Blumenthal Treatment $142,500
Immunology/Garden
State Cancer
Center
2000 University of Nichols Biology/treatment $112,500
Pittsburgh
Fiscal Institution Principal Research area Amount
year investigator
University of
2000 Illinois at Westbrook Metastasis $116,475
Chicago
2000 Dana-Farber Kufe Biology/tumorigenesis $119,915
Cancer Institute
2000 Albany Medical Bennett Treatment $116,250
College
2000 Yale University Zhang Biology/tumorigenesis $122,625
Long Island
2000 Jewish Medical Shi Treatment/nutrition $116,616
Center
University of
2000 California, San Collins Treatment $110,625
Francisco
University of
2000 Massachusetts, Jerry Biology/tumorigenesis $115,125
Amherst
2000 University of Krag Treatment $113,250
Vermont
2000 State University Muti Treatment/nutrition $77,000
of New York
2000 University of Grissom Treatment $112,125
Utah
Schepens Eye
2000 Research D'Amore Biology/tumorigenesis $121,500
Institute
2000 Massachusetts Haber Tumorigenesis $129,500
General Hospital
Beth Israel
2000 Deaconess Medical Junghans Biology $130,500
Center
Whitehead
2001 Institute for Weinberg Biology $116,250
Biomedical
Research
Medical
2001 Diagnostic Chance Diagnosis $92,500
Research
Foundation
Columbia
2001 University Health Fisher Treatment $127,875
Sciences
2001 Georgetown Dickson Tumorigenesis $116,600
University
University of
2001 Minnesota, Twin Sheaff Biology/prevention $111,375
Cities
2001 Dana-Farber Garber Prevention $128,750
Cancer Institute
2001 Johns Hopkins Fedarko Metastasis $122,750
University
2001 Northwestern Jordan Prevention $110,250
University
2001 Stanford Contag Diagnosis/metastasis $119,597
University
University of
2001 California, Radany Biology $112,800
Irvine
2001 Georgetown Byers Prognosis/biology $116,550
University
2001 Wayne State Fernandez-Madri Diagnosis $111,750
University
Hadassah
2001 University Vlodavsky Metastasis $61,000
Hospital
2001 Clemson Chen Biology/metastasis $105,000
University
Mount Sinai
2001 School of Kretzschmar Metastasis $127,125
Medicine of New
York University
2001 Institute for Yeung Prevention/biology $126,133
Cancer Research
2001 University of Lemmon Biology/treatment $118,875
Pennsylvania
University of
2001 California, Blumberg Treatment $112,800
Irvine
2001 Fox Chase Cancer Russo Tumorigenesis $126,133
Center
2001 University of Thompson Metastasis $75,000
Melbourne
2001 University of Gotay Treatment $101,000
Hawaii, Manoa
2001 University of Radice Metastasis $118,875
Pennsylvania
2001 Wake Forest Shelness Treatment $108,375
University
Fiscal Institution Principal Research area Amount
year investigator
Henry M. Jackson
Foundation for
2001 the Advancement Lechleider Biology/metastasis $74,000
of Military
Medicine
2001 Virginia Mason Nelson Biology/treatment $47,250
Research Center
2001 Georgetown Wong Biology/diagnosis $116,400
University
Columbia
2001 University Health Swergold Mutagenesis $127,875
Sciences
2001 Baylor College of Rosen Metastasis $109,322
Medicine
2001 Thomas Jefferson Sauter Diagnosis $119,148
University
2001 Garden State Blumenthal Treatment $142,500
Cancer Center
2001 University of Nichols Biology/treatment $112,500
Pittsburgh
2001 University of Westbrook Metastasis $116,475
Illinois
2001 Dana-Farber Kufe Biology/tumorigenesis $125,862
Cancer Institute
Albany Medical
2001 College of Union Bennett Treatment $116,250
University
2001 Yale University Zhang Biology/tumorigenesis $122,625
Long Island
2001 Jewish Medical Shi Treatment/nutrition $117,050
Center
University of
2001 California, San Collins Treatment $110,625
Francisco
University of
2001 Massachusetts, Jerry Biology/tumorigenesis $115,125
Amherst
University of
2001 Vermont and State Krag Treatment $113,250
Agricultural
College
2001 University of Grissom Treatment $112,500
Utah
Schepens Eye
2001 Research D'Amore Biology/tumorigenesis $121,500
Institute
2001 Massachusetts Haber Tumorigenesis $127,500
General Hospital
Beth Israel
2001 Deaconess Medical Junghans Biology $130,500
Center
2002 Fox Chase Cancer Russo Tumorigenesis $4,300
Center
Whitehead
2002 Institute for Weinberg Biology $116,250
Biomedical
Research
Medical
2002 Diagnostic Chance Diagnosis $103,350
Research
Foundation
Columbia
2002 University Health Fisher Treatment $127,875
Sciences
2002 Georgetown Dickson Tumorigenesis $116,400
University
University of
2002 Minnesota, Twin Sheaff Biology/prevention $111,375
Cities
2002 Dana-Farber Garber Prevention $128,375
Cancer Institute
2002 Johns Hopkins Fedarko Metastasis $122,625
University
University of
2002 California, Radany Biology $112,800
Irvine
2002 Georgetown Byers Prognosis/biology $116,400
University
2002 Wayne State Fernandez-Madrid Diagnosis $111,750
University
Total $9,472,843
Source: NCI, NIH.
Department of Defense Breast Cancer Research Awards Funded with Proceeds
from the BCRS' Surcharge RevenueAppendix III
As of April 2003, the U.S. Army Medical Research and Materiel Command
reported that it had funded 19 breast cancer research awards using money
transferred to DOD by the Postal Service from the BCRS' surcharge revenue.
The awards totaled about $6.8 million and covered research areas that
included genetics, imaging, biology, epidemiology, immunology, and
therapy. Individual awards ranged from $5,000 to $578,183 and averaged
$356,478. According to DOD officials, about $256,000 of the transferred
funds had been used for management expenses, and DOD was in the process of
awarding the remaining funds. Table 5 identifies pertinent information
about each award, including the amount of the award, research area,
principal investigator, sponsoring institution, and the fiscal year of the
award.
Table 5: DOD Breast Cancer Research Awards Funded with Proceeds, as of
April 2003, from BCRS Sales
Fiscal Institution Principal Research area Amount
year investigator
1999 Garvan Institute Daly Cell biology $283,649
1999 Scripps Institute Deuel Molecular biology $5,000
1999 University of Heyer Molecular biology $111,444
California, Davis
1999 Garvan Institute Musgrove Cell biology $222,652
1999 University of Shah Cell biology $279,000
Arkansas
1999 Texas A&M University Wang Imaging $317,510
1999 University of Texas, White Molecular biology $334,094
SW Medical Center
1999 Tel Aviv University Wreschner Cell biology $225,000
2000 Burnham Institute Adamson Cell biology $578,183
2000 University of Arizona Akporiaye Immunology $454,500
2000 University of Toronto Penn Molecular biology $296,142
2001 Vanderbilt University Cai Epidemiology/genetics $560,144
2001 University of Carraway Cell biology $427,225
California, Davis
2001 University of Texas, Chaudhary Cell biology $312,434
SW Medical Center
2001 Purdue University Geahlen Cell biology $425,425
2001 St. Luke's-Roosevelt Rosner Cell biology $454,181
Hospital Center
2002 University of South Dou Therapy $491,999
Florida
2002 Fox Chase Cancer Godwin Genetics $504,000
Center
2002 Yale University Perkins Genetics $490,500
Total $6,773,082
Source: U.S. Army Medical Research and Materiel Command, DOD.
Comments from the U.S. Postal ServiceAppendix IV
Contact and Staff AcknowledgmentsAppendix V
GAO Contact
Gerald P. Barnes (202) 512-2834
Acknowledgments
Alan N. Belkin, Kathleen A. Gilhooly, Kenneth E. John, Stuart M. Kaufman,
Roger L. Lively, Jill P. Sayre, and Charles F. Wicker made key
contributions to this report.
(543052)
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