Postage Meters: Risk of Significant Financial Loss But Controls Are Being
Strengthened (Letter Report, 05/26/94, GAO/GGD-94-148).

In 1993 the Postmaster General disclosed publicly that meter fraud had
caused significant revenue losses. GAO concludes that sustained
management attention to controls over metered mail is needed to reduce
the potential for substantial revenue losses to the Postal Service.
Metered mail represents about 46 cents of every dollar the Postal
Service collects in postage. Meters are used to print postage, which is
a marketable, liquid asset. Much of the control over meter activities,
however, resides with meter manufacturers. The Postal Service recognizes
that it needs to gain greater control over meters and is trying to do so
through several initiatives, including improving aspects of the meter
program, such as meter technology, meter licensing, and the
identification of lost and stolen meters. These efforts appear to have
the potential for improving the meter program in the long run. However,
the effectiveness of the meter program depends on management's sustained
attention to substantially reducing the risk of meter fraud. This
includes maintaining accountability for meter program operations,
ensuring that the technology and security used in meters are effective,
and working to establish and maintain an adequate system of controls for
deterring and detecting meter fraud.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-94-148
     TITLE:  Postage Meters: Risk of Significant Financial Loss But 
             Controls Are Being Strengthened
      DATE:  05/26/94
   SUBJECT:  Losses
             Postal service
             Program management
             Mail fraud
             Crimes or offenses
             Internal controls
             Franking privileges
             Law enforcement
             Investigations by federal agencies
             Office equipment

             
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