Testimony issued by the General Accounting Office with an abstract that begins "The U.S. Postal Service continues to face financial and transformation challenges. Since GAO placed the Service's long-term outlook and transformation efforts on its high-risk list, the Service's financial situation has continued to decline, and its operational challenges have increased. The Service took a good first step when it issued its Transformation Plan. The plan provides information about the Service's challenges, identifies many actions the Service plans to take under its existing authority, and outlines steps that would require congressional action. The plan does not, however, adequately address some key issues or include an action plan with key milestones. The catastrophic events of September 11 and subsequent anthrax scares, coupled with the recent economic slowdown, have decreased mail volumes and revenues. However, the Service's financial difficulties are not just a cyclical phenomenon that will fade as the economy recovers. The Service's basic business model, which assumes that rising mail volume will cover rising costs and mitigate rate increases, is questionable as mail volumes stagnate or deteriorate in an increasingly competitive environment. The Service's Transformation Plan recognizes that postal costs are rising faster than revenues and identifies many actions that …

A letter report issued by the General Accounting Office with an abstract that begins "The U.S. Customs Service has requested $206.9 million for its Automated Commercial Environment (ACE)--a new import processing system. Customs' second expenditure plan provides for (1) meeting the Office of Management and Budget's capital planning and investment control review requirements; (2) complying with Customs' enterprise architecture; and (3) complying with federal acquisition rules, requirements, guidelines, and systems acquisition management practices. ACE will fundamentally change Customs' and many other organizations' business processes by introducing new system capabilities. ACE will be available around the clock to support important commercial and enforcement systems. Customs did not meet key commitments made in its first ACE expenditure plan because of underestimating funding requirements. Actual requirements were 90 percent higher than estimated. This history casts uncertainty on Customs' ability to reliably estimate costs and meet future commitments. GAO found that Customs lacks management controls in four areas: enterprise architecture, human capital, software acquisition management, and cost estimation. Because Customs has compressed its ACE acquisition plans from five to four years, the degree of overlap of program increments has increased. This may increase the risk that ACE capabilities will not be delivered on time …