US Postal Service 2004 Annual Report Download - page 16
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TheAuditandFinanceCommitteeassiststheBoardofGovernors
infulfillingitsfiduciaryresponsibilities.TheChairmanofthe
BoardselectsthemembersoftheCommitteeforeachcalen-
daryear.GovernorsJamesC.Miller,S.DavidFineman,andI
arethecurrentmembersoftheCommittee.GovernorAlbertV.
CaseyservedontheCommitteeasChairmanuntilhisdeath
onJuly10,2004.GovernorFinemanjoinedtheCommitteeon
July23,2004,andIsucceededGovernorCaseyasCommittee
Chairmananddesignatedfinancialexpertatthattime.
In 2004,theBoardapprovedchangestotheCommittee’s
charterthatmakeitconsistentwithrulesadoptedbytheNew
York Stock Exchange and approved by the Securities and
ExchangeCommission.AttheCommittee’srecommendation,
theBoardupdateditsbylawstomakeclearthatresponsibil-
ityfortheselectionoftheBoard’sindependentauditfirmis
vestedwiththeGovernorsandisappropriatelyinsulatedfrom
management,althoughitshouldbenotedthatthishasalways
beenthecaseinpractice.
Fulfillingitsprimaryresponsibility,oversightoftheintegrityof
PostalServicefinancialstatements,theCommitteeperiodically
reviewsthesoundnessofinternalaccountingandcontrolprac-
ticesandmajorfinancialstatementestimatesandaccruals.
Thecertifiedpublicaccountingfirmresponsiblefortheinde-
pendentauditofPostalServicefinancialstatements,Ernst&
YoungLLP,reportstotheBoardthroughtheCommittee.The
PostalServiceInspectorGeneralreportstotheGovernorsand
isrepresentedatallCommitteemeetings.
TheCommitteemonitorsfinancialperformance,debtlevels
andcashmanagement.Eachyear,theCommitteereviews
analysesofcostandcontributionbymajorcategoryofmail
andspecialservice.Whenomnibusratechangesarerequired,
theCommitteemonitorsmanagement’sdevelopmentofrate
casefilings.
TheCommitteemetfivetimesin2004.Duringtheyear,the
CommitteereviewedthePostalService’suseofthe“savings”
realizedunderPublicLaw108-18(P.L.108-18),thePostalCivil
ServiceRetirementSystemFundingReformActof2003,to
reducedebt,asprescribedbytheLaw.TheCommitteereviewed
PostalService methodologiesfor evaluating the costs and
benefitsofvarioustypesofcapitalinvestmentsaswellasthe
selectionofappropriatediscountratesforcapitalinvestments
andlongtermleases.Alsorelatingtocapitalinvestments,the
Committeedirectedthatpost-implementationreviewsofcapital
investmentsbeprovidedonaregularbasis.Duringtheyear,
theCommitteealsoreviewedtheassumptionsunderlyingesti-
matesofthemagnitudeoflongtermfinancialobligationsto
fundretirementandworkers’compensationprograms.
a message from the audit and finance committee
Thisyear,theCommittee
oversawthecompletionofthe
multiyearmodernizationofmost
postalaccountingsystems.As
recommendedbytheCommittee
andapprovedbytheBoard,the
PostalServicebegantheprocess
ofvoluntaryadherencetothose
provisionsoftheSarbanes-Oxley
Actthatareapplicabletoanon-
publiclytradedcompany.
Robert F. Rider