Prepared by the Pandemic Response Accountability Committee (PRAC)
The objective of this report is to provide insight into the top management challenges facing federal agencies that received pandemic related funding as identified by Offices of Inspector General.
Challenges Facing the U.S. Postal Service
The Postal Service faces several significant challenges in response to the COVID-19 pandemic. Summarized below are three challenges either brought on or exacerbated by the pandemic.
Managing a Large, Essential Workforce with Limited Telework Options
First and foremost, the majority of the 630,000 postal employees are essential workers, who are in plants or out on the street daily to meet the mission of delivering critical items to America. Postal employees need to continue working to ensure mail and packages are processed and delivered, especially as stay-at-home orders and concerns about the virus have created more demand for delivery services. The Postal Service has had to find ways to continue to keep the mail moving while keeping its employees safe. This includes distribution of personal protective equipment, implementing measures at retail and mail processing facilities to ensure appropriate social distancing, and giving carriers guidance on social distancing and changing work practices and processes while delivering the mail.
In addition, the impacts of the pandemic have been felt on the workforce and on mail flows. The Postal Service is facing labor shortages as employees become sick, fear getting sick, or need to take time off to provide dependent care. Over a thousand postal employees have tested positive for the virus, and there have been numerous postal employee deaths. Managing postal operations with an insufficient number of workers could potentially lead to delays in mail processing and delivery in some instances.
Mail Volume Declines Associated with the Economic Crisis
Another critical uncertainty faced by the Postal Service is the impact of the COVID-19 crisis on its financial health. The Postal Service is expected to fund its operations through the revenues it earns from the sale of postal products and services, and it was already facing significant financial problems prior to the pandemic, with cumulative net losses of $83.1 billion from 2007 through mid-2020. The financial challenge pre-pandemic is driven by the loss in letter mail, and the pandemic has worsened this decline. However, the pandemic has also resulted in a surge in parcel volumes for the Postal Service. It is unclear whether this parcel growth is temporary or more long-lasting, and it is difficult to determine how much of the revenue gap from the significant mail volume loss will be compensated for by this surge in parcel revenue.
The CARES Act expanded the Postal Service’s total borrowing authority from $15 billion to $25 billion, and the Postal Service has stated that this continued borrowing authority will allow it to have sufficient liquidity to continue operations until at least May 2021. However, to maintain sufficient liquidity, the Postal Service will likely continue to defer its end-of-the-year retirement benefit-related payments. The combination of additional debt and deferred payments could lead to deeper financial concerns in the long term.
Critical National Infrastructure Impacts
In addition to these broader issues, the Postal Service faces two specific national infrastructure challenges that have arisen due to the COVID-19 pandemic—distribution of the economic impact payments and broader voting by mail. Supporting the U.S. Department of the Treasury in the issuance of billions of dollars in stimulus funding directly to individuals is a critical role of the Postal Service in the response to this pandemic. Ensuring timely and accurate delivery of these payments is a current challenge that the Postal Service is focusing significant attention towards. The Postal Service is also having to address the risk of increased theft of the mail as thieves may target postal carriers that are delivering these checks.
Finally, this election season, the number of voters who request and return ballots via the mail in local, state, and national elections is expected to increase significantly due to the COVID-19 pandemic. This presents several unique challenges for the Postal Service as the Agency must ensure the timely processing and delivery of increased ballot volumes. It also must handle likely increases in political campaign mail associated with these elections. In addition, the Postal Service will have to collaborate more closely with elections officials whose familiarity with postal processes may be limited, and who may not fully understand how to use the Postal Service effectively to mail and receive ballots.