US Postal Service 2011 Annual Report Download - page 64

2011 Report on Form 10-K United States Postal Service - 62 -
Report of Independent Registered Public Accounting Firm
The Board of Governors of the United States Postal Service
We have audited the accompanying balance sheets of the United States Postal Service as of September 30, 2011 and 2010, and the
related statements of operations, changes in net deficiency, and cash flows for each of the three years in the period ended
September 30, 2011. These financial statements are the responsibility of the United States Postal Service’ s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States)
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the
United States Postal Service at September 30, 2011 and 2010, and the results of its operations and its cash flows for each of the
three years in the period ended September 30, 2011, in conformity with US generally accepted accounting principles.
As discussed more fully in Note 2 to the financial statements, the United States Postal Service, an independent establishment of
the executive branch of the Government of the United States, is dependent upon future actions of the Government to continue its
operations in the ordinary course as a result of increasing operating losses and near term statutory funding requirements for
employee benefit obligations. Losses in recent periods have increased primarily due to sustained declines in mail volume, and
statutory and regulatory restrictions have constrained the ability of the Postal Service to implement strategies to improve
efficiency, reduce costs and increase revenues. On September 30, 2011, legislation was enacted that changed the due date of a
$5.5 billion payment required by Public Law 109-435, the Postal Accountability and Enhancement Act, to not later than
November 18, 2011. The Postal Service does not expect to have sufficient cash to meet this obligation and a related additional
obligation due by September 30, 2012 for $5.6 billion. Accordingly, management expects, but no assurances can be given, that
additional legislation will be enacted in fiscal year 2012 to address the short-term funding requirements of the United States Postal
Service.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
United States Postal Service's internal control over financial reporting as of September 30, 2011, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and
our report dated November 15, 2011 expressed an unqualified opinion thereon.
In accordance with Government Auditing Standards, we also have issued our report dated November 15, 2011 on our
consideration of the United States Postal Service’ s internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on
internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be considered in assessing the results of our audit.
/s/ Ernst & Young LLP
McLean, Virginia
November 15, 2011