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20 2010 Annual Report United States Postal Service
The role of the Audit and Finance Commit-
tee is to assist the Board of Governors in
fulfi lling its fi duciary responsibilities. Com-
mittee members are selected by the Chairman
of the Board. This year the Committee, whose
current members include Governors Mickey D.
Barnett and Thurgood Marshall, Jr., and me,
met seven times.
The Committee’s primary responsibility is
oversight of the integrity of the Postal Service’s
fi nancial statements and the soundness of its
accounting and internal control practices. The
independent public accounting fi rm engaged
to perform the annual audit of Postal Service
fi nancial statements, Ernst & Young LLP, reports
to the Board through the Committee. The Postal
Inspector General, who reports to the Gover-
nors, is represented at all Committee meetings.
During this fi scal year, the Committee fo-
cused on:
■ Management initiatives to stabilize the Postal
Service’s fi nancial condition through com-
prehensive cost-reduction programs and
revenue-enhancement efforts in response to
continued weakness of the U.S. economy
and the diversion of letter mail to electronic
alternatives;
■ Monitoring progress toward 2010 compliance
with Section 404 of the Sarbanes-Oxley Act
of 2002 (SOX);
■ Reviewing efforts to increase the effi ciency
and effectiveness of internal controls;
■ Successful fi ling of fi nancial reports in compli-
ance with Securities and Exchange Commis-
sion (SEC) reporting rules; and
■ Evaluating analyses from Accenture, Boston
Consulting Group and McKinsey & Company
that contributed to the development of our
ten-year action plan, Ensuring a Viable Postal
Service for America: An Action Plan for the
Future.
The Committee closely reviewed fi nancial
results, forecasts and cash fl ow projections at
each meeting and advised the full Board as to
its conclusions.
The Committee continues to monitor de-
velopments in the cyber-security fi eld as they
relate to Postal Service operations. As informa-
tion technology security is integral to Postal
Service systems and the protection of custom-
er, employee and business data, we continue
to receive regular updates on cyber-security
issues, and to carefully assess these updates
as they come in.
The Committee received regular briefi ngs on
the organization’s efforts to meet SOX require-
ments and progress toward certifi cation. Due
to the comprehensive scope, magnitude and
reach of the Postal Service nationwide, the or-
ganization’s SOX compliance program is one of
the largest and most complex implementations
on record since enactment of the legislation in
2002. The Committee provided oversight on
the strategic direction and guidance on deci-
sions related to readiness, process improve-
ment opportunities and ongoing compliance
initiatives.
We are proud to report that the Postal
Service not only completed its third full fi scal
year in compliance with SEC reporting rules
but also achieved the signifi cant milestone of
successfully implementing full SOX compliance.
The Committee was pleased with the quality
James C. Miller III
Chairman, Audit and Finance
Committee
Message from the
Audit and Finance
Committee