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NPA Update: Follow the Money, Which Isn't Always Easy

NPA Update: Follow the Money, Which Isn’t Always Easy
By Dan Mooney
NAPS North Central Area Vice President

As chair of the NAPS Executive Board PFP Committee, I want to pass along some committee information about the FY23 NPA program. The committee has met with Don Flak and Bruce Nicholson from USPS Headquarters this fiscal year at the spring board meeting in late March and on July 5 via Zoom to discuss FY23 NPA.

We got some answers to our questions. But for many questions, we didn’t get answers and still are waiting for answers; this is early September.

As you know, this fiscal year has been full of rate changes, a new service category for parcels and numerous network changes with RPDCs and S&DCs taking place. So, during our NPA meetings with USPS Headquarters, we asked when the rate case, new parcel service category and network changes were established (last fall?) and how all these events were forecasted (i.e., costs, service scores, revenue, etc.).

We were told the Postal Service develops an Integrated Financial Plan (IFP) every fiscal year. Know what? Everything is planned in the IFP in the fall for the upcoming new fiscal year—everything. Really, no matter what happens, it is planned before the year happens. Basically, nothing happens unless it’s planned before the fiscal year in the IFP.

Our NPA committee also was informed that once the IFP is established, it never changes throughout its respective fiscal year. It seems apparent from our NPA meetings that the USPS planned for everything that has happened in this current fiscal year.

Again, it appears the USPS planned last fall for the previous rate case: How much revenue it was going to produce and when it was going to be implemented. The USPS planned last fall for the new ground parcel category: When it was going to be, how much revenue it was going to produce and what the service score goals would be.

They further planned last fall for all the network changes for this fiscal year, including all costs associated with those changes. Again, it appears the USPS had all these initiatives planned and incorporated into its FY23 IFP.

We asked where all the costs associated with changing and converting the network facilities into Regional and Local Processing Centers or developing S&DCs was given. Are those costs to be absorbed by those processing facilities or S&DCs or does it come under a Headquarters tab?

Either way, it’s a TOE expense to someone, either the Field or Headquarters. Both are graded by TOE in NPA. Rest assured, according to the USPS, all those respective costs were planned for in the FY23 IFP. NAPS has yet to receive answers two months later to those many unanswered questions from our recent NPA meetings.

Interestingly, I read mid-year the Postal Service had planned to lose $2.4 billion, but, actually, lost $4.8 billion. That’s a big difference! One would think if you, indeed, had planned and accounted properly for everything, you wouldn’t miss plan by that much.

But if you are doing things such as making multiple, huge network changes that cost money, but weren’t planned, then I can see losing more money than was planned. The problem with that is how are those costs tied to NPA?

If the USPS decides to make numerous, costly, unplanned network facility changes, for instance, how is that accounted for in NPA? Who absorbs that cost? Somewhere, it’s an unplanned cost. It doesn’t seem reasonable or realistic that the USPS can plan for everything a year in advance.

Those are just some of the unanswered questions yet to be answered. In short, follow the money. It will lead you to what you want to know.

However, if the road to the IFP money is not transparent, it’s very hard to follow the money and get truthful answers. Transparency! Without it, you are following with blind trust.

Stay on the high road—the view and the company are much better.