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The USPS and Sarbanes-Oxley

I rarely engage in political discussions, but for Public Law 107-204—better known as the Sarbanes-Oxley (SOX) Act—I’ll make an exception. The excessive burden placed by SOX on the Postal Service™ (and consequently on mailers) is just the latest example of a government “cure” that is worse than the disease.
SOX was written with the seemingly noblest of intentions—an effort to show the public that giant corporations would no longer be allowed to abuse loopholes that pad their owners’ pockets at the expense of the rest of us. The merits of the law have been hotly debated since it was enacted in 2002, but one thing seems inarguable: It should never have been applied to the Postal Service, which is not a public company, uses no taxpayer funds and has no investors in need of protection.
And yet the Postal Accountability and Enforcement Act (PAEA) of 2006 shackled the USPS to the most onerous aspects of SOX, with increased government oversight that could not have come at a worse time for the agency. Just when financial circumstances are pushing the USPS more than ever to behave like a customer-focused business, SOX compliance is encouraging it to operate as a bureaucracy.
For instance, SOX has been used to justify tightening Intelligent Mail (IM) barcode requirements, with senior officials suggesting that fast-tracking electronic acceptance is the only way to meet the requirements of the law. But the absence of sufficient experiential data makes it difficult for mailers to properly analyze the risks of implementing the IM barcode. Consequently, mailers are being pressured to quickly transition to Intelligent Mail even as they face a substantial risk by doing so.
Additionally, the USPS has stated that because of SOX they must “lock down” all of their financial systems for six months beginning in March 2010. That includes software for PostalOne!, which is at the heart of Intelligent Mail process. At a time when postal systems must be at their most agile, SOX is actually fostering a lack of flexibility.
The economic downturn and increases in electronic communication certainly deserve some “credit” for the recent decrease in mail volume and USPS revenue losses. But in the bigger picture, mailing itself is becoming an increasingly risky and complicated business with greater workshare burdens placed on the customer without commensurate increases in discount. The Postal Service quest for SOX compliance only increases the confusion and risk to mailers.
In the course of everyday operations, it’s easy to let the blame for postal regulations and chaos rest on the clearly identifiable agency with which we must all work. But it’s important to remember that the USPS is in a vise, too—caught between its Congressional overseers and a user population desperate for relief. The more we can do to work together and be pro-active in times like these, the greater the opportunity for all of us to prosper.