Abstract:
In October 2020, the Inspector General of the United States Postal Service (USPS) conducted a survey of the American public and found that despite service challenges largely due to the COVID-19 pandemic—employee absenteeism, mail, and package delays—91% of respondents held a positive opinion of the agency. Indeed, the percentage of respondents who said that the USPS provided excellent customer service rose seven points between 2019 and 2020, from 68% to 75%.
But even as the public expressed its pride, support, and satisfaction with the USPS, the agency posted a $9.2 billion loss in 2020. The General Accountability Office noted that the USPS had lost $69 billion over the previous 11 fiscal years. This, despite steady revenue increases; in 2020, the USPS increased revenues by $2 billion over 2019, to $73 billion, which included new revenue from an 18.8% rise in package delivery.
This case details the history of the USPS and its unique role as an independent agency of the US Federal government, with a focus on the financial, management and policy decisions that have contributed to its precarious position.
Learning Objective:
This introductory financial case, accessible to students without an accounting or financial background, shows how closely finance and mission are intertwined. An organization’s financial viability is only ensured when its stakeholder demands match available resources. Challenges to an organization’s ability to thrive can be better assessed through a financial management lens. Decisions about financial resources shape and constrain managers’ ability to accomplish a public mission.
