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USPS OIG – Competitive Products Billing Determinants: Priority Mail

May 17, 2023

READ FULL ARTICLE AT » Office of Inspector General OIG


The Postal Accountability and Enhancement Act of 2006 (PAEA) requires the U.S. Postal Service to produce an Annual Compliance Report (ACR) and provide the report to the Postal Regulatory Commission (PRC) within 90 days of the end of each fiscal year. The ACR analyzes cost, revenue, pricing, and quality of service for all products. In preparation for the ACR, Postal Service employees manually prepare billing determinant spreadsheets to calculate and report revenue, volume, and weight for every mail product. The competitive billing determinant volumes are indirect inputs used to ensure the Postal Service does not exceed its price-cap for market dominant products nor its price-floor for competitive products. We performed this audit as part of our mandate under PAEA to regularly audit Postal Service data collection systems and procedures used in collecting information to prepare the ACR.

What We Did

Our objective was to assess the competitive billing determinant process for fiscal year (FY) 2020 through FY 2022. Our review focused on the Priority Mail product billing determinants. Specifically, we recalculated the Priority Mail billing determinants for FY 2020 through FY 2022 using the Postal Service price list, Special Weights Reports, and the Domestic Negotiated Service Agreements Revenue, Pieces, and Weights Report.

What We Found

The Priority Mail billing determinants were generally accurate and complete. However, we identified some exceptions, primarily in the FY 2021 billing determinants related to calculation errors and the use of outdated data sources.

These exceptions occurred because manual processes are inherently susceptible to errors, and the Postal Service did not have updated standard procedures to guide the process. While the Postal Service developed billing determinant procedures in 2017, the procedures were not updated. The billing determinants process has evolved, and personnel changes within the billing determinants preparer group made it difficult to transfer organizational knowledge.


We recommended management (1) develop procedures to ensure Priority Mail billing determinants are produced using documented repeatable processes that include regular updates to ensure the accuracy of volume and revenue calculations and (2) consult with the Office of General Counsel to determine whether to file corrected FY 2021 billing determinants to the Postal Regulatory Commission.

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