Federal Reports

The U.S. Postal Service has an opportunity to generate additional revenue by offering micro-warehousing and other logistics support services. Its extensive processing, retail, and transportation network – combined with its significant shipping capabilities – could likely meet customers’ demands for one-stop micro-warehousing and logistics solutions to support e-commerce. Foreign suppliers selling goods in the U.S. via e-commerce could be particularly well served by the Postal Service’s entry into this market.

In response to Congressional requests and media reports about whether the terms and conditions of the debit cards that servicers use to deliver Title IV credit balances to students were in the best interest of students, we conducted a review that determined that FSA should take action to better ensure that student interests are served. Among our findings, we noted that (1) Schools that outsourced credit balance delivery gave servicers significant control over the Title IV funds delivery process and relied on them to comply with Title IV regulations but did not routinely monitor servicers’ Title IV compliance or their handling of student complaints; (2) Schools had financial incentives in their contracts with servicers that created the potential for conflicts of interest that could influence school officials’ decisions and actions at the expense of student interests; and (3) Schools provided, or servicers collected, student information that was not needed to deliver credit balances.

The U.S. Postal Service earns revenue when domestic customers send mail to foreign destinations and when foreign postal operators deliver mail from their countries to the U.S. Each postal operator that receives mail has the right to collect payment from the originating post to compensate for costs incurred to deliver that mail; these charges are called terminal dues. To offset the impact of low terminal dues rates, the Postal Service can negotiate separate (bilateral) agreements with countries to exchange international mail at higher rates. Currently, the Postal Service has many different types of bilateral agreements with multiple countries, ranging from comprehensive (multiple mail products) to product-specific. Even with these international bilateral agreements, it is difficult for the Postal Service to cover the costs of delivering inbound market-dominant international mail subject to terminal dues.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements