Report: USPS must step up audits

The General Accounting Office has criticized the U.S. Postal Service's National Change of Address program for not sufficiently policing the software used by companies that are licensed to access the database of new addresses.

NCOA, based in Memphis, Tenn., is responsible for the database of new addresses collected by the program when people move. The information is protected by the Privacy Act, and NCOA is required to make sure the companies that license the data do not release it to business mailers unless the name on their list matches the name on the NCOA list.

A list of people who have recently moved would be worth a lot of money to business mailers because it could be sold to home improvement companies or other retailers that target new homeowners. But NCOA only releases the data under license, and it is required to audit the licensees' software to ensure that the companies have not violated the public's privacy when the licensee releases names and addresses to business mailers.

The GAO report, issued late last month, said NCOA from 1996 to 1998 did not always conduct the minimum number of audits. NCOA is required to conduct at least three audits annually of the licensed companies. But in 1998, for example, only 17 of 25 companies licensed at the time were audited three times. Two companies were audited only once that year.

"They are doing some audits but not all they are supposed to, and they didn't document some that they did," said Bernard Ungar, director of government business operations issues at GAO.

The GAO report also found that during the same three-year period, NCOA did not quickly reaudit licensees that failed initial audits and did not always suspend licensees that failed successive audits, as required under the license agreement. Ungar said, however, the findings were an improvement over the results of a similar review of the NCOA program in 1996.

An NCOA official did not dispute GAO's findings. The required number of audits were not conducted during the period because NCOA was short-staffed, the official said. "These audits are of a technical nature," the official said. "We've had some turnover of experienced people."

NCOA has increased its staff of auditors to five. During the period reviewed, NCOA had three auditors, the official said, adding that NCOA is taking steps to ensure that the required number of audits is performed every year.

The GAO report has been sent to Rep. John McHugh, (R-N.Y.), chairman of the House Government Reform Committee's Postal Service Subcommittee. A spokesman for the subcommittee said the GAO report would be on the agenda of a subcommittee hearing after the House returns from its current recess.