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Bulk-mail postage goes unpaid

Big bulk-business mailers that fill the nation's mailboxes with advertising may be depriving the Postal Service of millions of dollars a year in postage, the General Accounting Office has told Congress.

In a report to be released later this week, the GAO said it was unable to estimate the size of the losses because postal officials have no idea how much money their agency may be spending to process improperly prepared bulk mail.

"However, we believe that sufficient evidence exists for the Postal Service to be concerned that substantial revenue losses may have occurred and gone undetected in the bulk business mail program," the GAO said.

What documentation the GAO said it could find pinpointed losses of $168-million in fiscal 1994. Although the Postal Service long has considered bulk mail to be "a high-risk activity," it has been slow to develop mechanisms for identifying revenue losses resulting from it, the GAO said.

The congressional watchdog agency blamed clerks at bulk-mail centers across the country, saying they were failing to perform "as much as 40 percent" of the required checks on bulk-mail shipments. The clerks are supposed to verify that the mailings contain proper ZIP codes and bar codes and make certain that mailers have paid sufficient postage.

Rep. John M. McHugh, R-N.Y., chairman of the House postal service subcommittee, is expected to use the report to reinforce his call for a separate and independent inspector general to oversee the Postal Service. Currently the chief postal inspector, the agency's top law enforcement officer, also serves as its inspector general.

But the new GAO report notes that the inspection service has not made revenue losses a primary focus of its audits. Having an inspector general who is not also charged with law enforcement duties could help the agency plug revenue losses such as these, McHugh is expected to argue.

The issue of volume mail discounts and an inspector general have been hotly debated in the agency's current push for legislation that would give it increased power to negotiate rates with large mailers. Postmaster General Marvin T. Runyon has argued that he should be allowed to negotiate deeper discounts to bulk mailers who perform tasks, such as applying bar codes to letters, that postal workers would otherwise have to do.