oversight

Breast Cancer Research Stamp: Effective Fund-Raiser but Better Reporting and Cost-Recovery Criteria Needed

Published by the Government Accountability Office on 2003-09-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Committees




September 2003
                 BREAST CANCER
                 RESEARCH STAMP
                 Effective Fund-Raiser,
                 but Better Reporting
                 and Cost-Recovery
                 Criteria Needed




GAO-03-1021
                 a
                                                September 2003


                                                BREAST CANCER RESEARCH STAMP

                                                Effective Fund-Raiser, but Better
Highlights of GAO-03-1021, a report to the      Reporting and Cost-Recovery Criteria
Chairmen and Ranking Minority Members
of the Senate Committee on                      Needed
Governmental Affairs, and the House
Committee on Government Reform




In America, breast cancer is                    Although the U.S. Postal Service (the Service) has not tracked or estimated
reported as the second leading                  all costs associated with the BCRS program, it reported that the bulk of
cause of cancer deaths among                    BCRS costs, from inception through May 16, 2003, were about $9.5 million.
women. Given this statistic, the                In April 2000, GAO recommended that the Service issue BCRS cost-recovery
importance of finding a cure                    regulations and make available cost data and analyses to provide postal
cannot be overemphasized. To
supplement the billions of federal
                                                ratepayers assurance they were not involuntarily subsidizing BCRS costs.
dollars being spent on breast                   The Service issued regulations in July 2000, but it has not yet submitted the
cancer research, Congress passed                recommended data and analyses to Congress. Service officials attributed the
legislation creating the Breast                 lack of providing Congress with this information to administrative oversight
Cancer Research Semipostal                      and other factors, but said they would provide Congress with this
(BCRS) to increase public                       information as soon as practicable. In 2001, the Service amended its BCRS
awareness of the disease and allow              regulations stating that cost-recovery determinations would be made using
the public to participate directly in           baseline costs for comparable commemorative stamps. GAO, however, is
raising funds for such research.                concerned that the regulations can be interpreted as not requiring the
                                                Service to provide for baseline comparisons for certain BCRS costs, e.g.,
Since the BCRS was the first                    printing, sales, and distribution, although the Stamp Out Breast Cancer Act
semipostal issued by the Postal
Service, Congress mandated, and
                                                states that reasonable costs attributable to the BCRS in these areas should
GAO issued, a report in April 2000              be recouped. The Service has not established baseline costs for these
on the BCRS’ cost, effectiveness,               categories. Without these baselines, the Service lacks assurance that it is
and appropriateness as a fund-                  identifying and recouping excess costs from BCRS surcharge revenue.
raiser. After the report, Congress
extended the BCRS sales period                  The BCRS continues to be an effective means of raising funds for breast
through 2003. As mandated, this                 cancer research. Sales have fluctuated, but the BCRS has raised over $30
report updates GAO’s prior work as              million for research since it was issued in July 1998. NIH and DOD—
Congress considers another                      recipients of research funds generated by the BCRS—are not subject to the
extension to the BCRS sales period.             same statutory reporting requirements as agencies that are to receive funds
                                                generated by semipostals issued under the Semipostal Authorization Act.
                                                Such agencies are required to submit an annual report to Congress on the
GAO recommends that the Service                 amount of funds received, how the funds were used, and accomplishments.
reexamine and, as necessary, revise
its BCRS cost-recovery regulations.             The public and key stakeholders GAO spoke with believe it is appropriate
Also, should Congress decide to                 for the Service to issue semipostals.
extend the BCRS sales period, GAO
suggests that Congress consider
                                                Breast Cancer Research Semipostal
establishing annual reporting
requirements for the National
Institutes of Health (NIH) and the
Department of Defense (DOD). In
commenting on a draft of this
report, the Service said it would
reexamine its BCRS cost-recovery
regulations.
www.gao.gov/cgi-bin/getrpt?GAO-03-1021.

To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Bernard L.
Ungar on (202) 512-2834 or at
ungarb@gao.gov.
Contents



Letter                                                                                                    1
                             Results in Brief                                                             4
                             Background                                                                   6
                             Reported Monetary and Other Resources Devoted to the BCRS
                               Program                                                                   12
                             Effectiveness of the BCRS as a Fund-Raiser                                  22
                             Appropriateness of Using Semipostals as a Means of Fund-
                               Raising                                                                   31
                             Conclusions                                                                 34
                             Matter for Congressional Consideration                                      36
                             Recommendations for Executive Action                                        36
                             Agency Comments and Our Evaluation                                          36


Appendixes
              Appendix I:    Objectives, Scope, and Methodology                                          38
             Appendix II:    National Institutes of Health Breast Cancer Research
                             Awards Funded with Proceeds from the BCRS’ Surcharge
                             Revenue                                                                     45
             Appendix III:   Department of Defense Breast Cancer Research Awards
                             Funded with Proceeds from the BCRS’ Surcharge Revenue                       48
             Appendix IV:    Comments from the U.S. Postal Service                                       49
              Appendix V:    Contact and Staff Acknowledgments                                           51
                             GAO Contact                                                                 51
                             Acknowledgments                                                             51


Tables                       Table 1: Cost of Operating and Administering the BCRS Program,
                                      from Inception through May 16, 2003, as Reported by the
                                      Service                                                            13
                             Table 2: BCRS Costs through May 16, 2003, and the Allocation of
                                      Those Costs between the First-Class Postage Rate and the
                                      BCRS’ Surcharge Revenue                                            15
                             Table 3: Transfers Made to NIH and DOD for Breast Cancer
                                      Research                                                           30
                             Table 4: NIH/NCI Breast Cancer Research Awards Funded with
                                      Proceeds, as of April 2003, from BCRS Sales                        45
                             Table 5: DOD Breast Cancer Research Awards Funded with
                                      Proceeds, as of April 2003, from BCRS Sales                        48




                             Page i                                 GAO-03-1021 Breast Cancer Research Stamp
          Contents




Figures   Figure 1: Reproduction of the Breast Cancer Research
                    Semipostal                                                                    9
          Figure 2: Reproduction of the Heroes of 2001 Semipostal                                10
          Figure 3: Reproduction of the Stop Family Violence Semipostal                          11
          Figure 4: Various Postal Service Sources for Purchasing the
                    BCRS                                                                         23
          Figure 5: Number of BCRS and Heroes Semipostals Sold by Postal
                    Quarter                                                                      25




          Abbreviations

          ASM          Administrative Support Manual
          CPS          Current Population Survey
          BCRS         Breast Cancer Research Semipostal
          DOD          Department of Defense
          ICR          International Communications Research
          NBCC         National Breast Cancer Coalition
          NCI          National Cancer Institute
          NIH          National Institutes of Health
          PQ           Postal Quarter
          RDD          Random Digit Dial




           This is a work of the U.S. government and is not subject to copyright protection in the
           United States. It may be reproduced and distributed in its entirety without further
           permission from GAO. However, because this work may contain copyrighted images or
           other material, permission from the copyright holder may be necessary if you wish to
           reproduce this material separately.




          Page ii                                         GAO-03-1021 Breast Cancer Research Stamp
A
United States General Accounting Office
Washington, D.C. 20548



                                      September 30, 2003                                                                               Leter




                                      The Honorable Susan M. Collins
                                      Chairman
                                      The Honorable Joseph I. Lieberman
                                      Ranking Minority Member
                                      Committee on Governmental Affairs
                                      United States Senate

                                      The Honorable Thomas M. Davis
                                      Chairman
                                      The Honorable Henry A. Waxman
                                      Ranking Minority Member
                                      Committee on Government Reform
                                      House of Representatives

                                      In the United States, breast cancer is reported as the second leading cause
                                      of cancer deaths among women. There are more than 2 million women
                                      today in the United States who have been diagnosed with breast cancer,
                                      and it has been reported that another 1 million women do not know they
                                      have it. Annually, nearly $7 billion is spent on the treatment of breast
                                      cancer. Given these statistics, the importance of research to find a cure for
                                      breast cancer cannot be over emphasized. In the past 5 years alone, the
                                      federal government has spent about $3 billion on breast cancer research.
                                      To supplement these federal dollars, Congress passed legislation creating
                                      the Breast Cancer Research Semipostal (BCRS) to increase public
                                      awareness of the disease and allow the public to participate directly in
                                      raising funds for such research.1

                                      This report, mandated by Congress, is a follow-up to our April 2000 report
                                      on the Postal Service’s Breast Cancer Research Semipostal.2 The Stamp Out
                                      Breast Cancer Act, Public Law 105-41, August 13, 1997, mandated our 2000
                                      report. The act required that we issue a report to Congress on the BCRS’s
                                      effectiveness and appropriateness and the U.S. Postal Service’s (the
                                      Service) costs associated with carrying out the act. In general, we reported


                                      1
                                       A semipostal is a stamp sold at a surcharge over postal value. The additional charge is for a
                                      special purpose, such as for breast cancer research.
                                      2
                                       U.S. General Accounting Office, Breast Cancer Research Stamp: Millions Raised for
                                      Research, but Better Cost Recovery Criteria Needed, GAO/GGD-00-80 (Washington, D.C.:
                                      Apr. 28, 2000).




                                      Page 1                                             GAO-03-1021 Breast Cancer Research Stamp
that the BCRS had been an effective fund-raiser, and most of the public and
key stakeholders viewed the BCRS as an appropriate way of raising funds
for a nonpostal purpose. We expressed some concerns, however, about the
Service’s identification and recovery of costs associated with carrying out
the act.

Soon after we issued our April 2000 BCRS report, Congress enacted the
Semipostal Authorization Act, Public Law 106-253, dated July 28, 2000.
Among other things, the act requires that we update Congress on the BCRS
and address at least the same matters we addressed in our earlier report.
This report responds to that mandate and addresses

• the monetary and other resources the Service has expended in operating
  and administering the BCRS program,

• the effectiveness of using the BCRS as a means of fund-raising, and

• the appropriateness of using the BCRS as a means of fund-raising.

We also provide information on the status of recommendations made to the
Postmaster General in our April 2000 BCRS report. In essence, we
recommended that the Service issue regulations formalizing its criteria for
making BCRS cost-recovery decisions and make BCRS cost data and
analyses available to assure postal ratepayers that they were not
involuntarily contributing funds to breast cancer research.

The BCRS was the first semipostal ever issued by the Postal Service. It
currently sells for 45 cents, and is valid for the 37-cent, First-Class postage
rate, leaving 8 cents as surcharge revenue. The Stamp Out Breast Cancer
Act provides that the Service is to deduct from the surcharge revenue its
reasonable costs incurred in carrying out the act. In general, the Service
has interpreted reasonable costs to mean costs incurred that are over and
above the costs normally incurred with a comparable commemorative
stamp.3 After deducting its reasonable costs, the Service is to remit the
remaining proceeds from the BCRS surcharge revenue to the National
Institutes of Health (NIH) and the Department of Defense (DOD) for breast



3
  A commemorative stamp is a postage stamp that depicts the cultural and historical heritage
of the United States; e.g., important people, events, places, or special subjects of national
appeal or significance.




Page 2                                            GAO-03-1021 Breast Cancer Research Stamp
cancer research. Seventy percent of the net proceeds go to NIH, with the
remaining 30 percent going to DOD’s medical research program.

The use of semipostals to raise funds for specific purposes is on the rise.
Since our April 2000 BCRS report, Congress has twice extended the sales
period for the BCRS, required the introduction of two more semipostals,
and given the Service specific authority to consider and issue future
semipostals.4 Additionally, as of August 2003, Congress was considering
legislation that would require introduction of two more semipostals and
extend the sales period of the BCRS past its scheduled end date of
December 31, 2003.5

In doing this work, we reviewed and updated the information included in
our April 2000 BCRS report to reflect the current situation. For this report,
we mainly focused on the Service’s efforts to identify and recoup its
reasonable costs from the BCRS surcharge revenue and ensure that postal
ratepayers were not subsidizing the BCRS. We also identified postal staff
resources devoted to the BCRS and interviewed key stakeholders regarding
the effectiveness and appropriateness of using the BCRS as a means of
fund raising. Additionally, we commissioned a survey to obtain the public’s
opinion regarding the BCRS, and semipostals in general; and we
interviewed NIH and DOD officials about how funds generated from BCRS
sales are being used for breast cancer research. Finally, we researched the
U.S. Code and Postal Service regulations to identify changes that have
occurred since our April 2000 report that either affected the BCRS directly
or the semipostal program in general. Appendix I contains more
information on our objectives, scope, and methodology.

We requested comments on a draft of this report from the Postmaster
General. The Service’s comments are discussed at the end of this letter and
reprinted in appendix IV.




4
 The Heroes of 2001 semipostal was introduced June 7, 2002; and the Stop Family Violence
semipostal is to be introduced no later than January 1, 2004.
5
 The semipostals currently under consideration are to help promote childhood literacy and
the Peace Corps.




Page 3                                          GAO-03-1021 Breast Cancer Research Stamp
Results in Brief   Although the full cost of the BCRS program is not known, the Service
                   reported that the bulk of BCRS costs from inception through May 16, 2003,
                   were about $9.5 million. The Service does not track BCRS costs that it
                   considers to be inconsequential, such as invoices less than $3,000.6 The
                   Service also does not identify costs that it would have incurred whether or
                   not the BCRS program had been established, such as overhead.
                   Additionally, the Service reported that no staff have been hired because of
                   the BCRS program, nor have any staff been dedicated to work full-time on
                   the program. The Service also reported that $8.7 million of the $9.5 million
                   in BCRS costs were recovered through the First-Class postage portion of
                   the BCRS. The remaining $853,000 in BCRS costs was recouped from the
                   BCRS’ surcharge revenue, and the net surcharge revenue—over $30
                   million—was to be used to fund breast cancer research. In response to a
                   recommendation we made in our April 2000 BCRS report, the Service
                   issued BCRS regulations in July 2000. Those regulations specified that the
                   Service was to recover incremental costs from the BCRS’ surcharge
                   revenue. The Service amended those regulations in 2001, stating generally
                   that the Service would recover from the BCRS’ surcharge revenue costs in
                   excess of those normally incurred with comparable commemorative
                   stamps, i.e., baseline costs. We are concerned, however, that the
                   regulations can be interpreted as not requiring the Service to establish
                   baseline comparisons for certain BCRS costs, e.g., printing, sales, and
                   distribution, although the Stamp Out Breast Cancer Act specifically states
                   that reasonable costs in these areas attributable to the BCRS should be
                   recouped from the surcharge revenue. The Service believes its 2001
                   amendments to its regulations already provide a means for recovering all
                   excess costs. To support its view, the Service provided us with the printing
                   costs for various commemorative stamps. However, the Service did not
                   provide us with any baseline BCRS cost data. Without baselines, the
                   Service lacks assurance that it is identifying and recouping excess costs
                   from BCRS surcharge revenue. Additionally, in our April 2000 report, we
                   recommended that the Service provide Congress with the BCRS cost data
                   and analyses necessary to provide assurance that postal ratepayers are not
                   involuntarily contributing funds to breast cancer research. Although the
                   Service committed to Congress to provide it with the data and analyses, the
                   Service has not yet done so. Service officials attributed the lack of

                   6
                    An example of such a cost could be a local event that a post office participates in or hosts
                   within its community to support sales of the BCRS. This could include events tied to walk-a-
                   thons, marathons, races, breast cancer awareness month, mammogram screening
                   awareness programs, etc.




                   Page 4                                            GAO-03-1021 Breast Cancer Research Stamp
providing Congress with this information to administrative oversight and
other factors. Service officials told us that they plan to reexamine their
BCRS regulations and provide Congress with current BCRS cost data and
analyses as soon as practicable.

The BCRS continues to be an effective means of raising funds for breast
cancer research. Also, as provided for by the Stamp Out Breast Cancer Act,
the BCRS has remained voluntary and convenient. It has remained
voluntary because postal patrons have the option to purchase the BCRS at
45 cents or a regular First-Class stamp at 37 cents. The BCRS has remained
convenient for most of the public, according to our survey. Sales have
fluctuated, but the BCRS has raised over $30 million for breast cancer
research, net of costs, since it was issued in July 1998. Key stakeholders
said that for the most part, they viewed the BCRS as an effective fund-
raiser, and the public’s view of the BCRS was generally positive as reflected
in the results from our survey. As of September 2003, the Service had
transferred to NIH and DOD about $30.8 million from funds raised by the
BCRS for breast cancer research. These federal organizations reported to
us that they have established programs to fund innovative breast cancer
research conducted by various research institutions. The Semipostal
Authorization Act, enacted after the Stamp Out Breast Cancer Act, requires
that annual reports be made to Congress by agencies that are to receive
funds from semipostals issued under the Semipostal Authorization Act.
These reports are to include information on the amount of funds received,
how the funds were used, and any accomplishments that were achieved.
NIH and DOD are not subject to similar reporting requirements.

Most key stakeholders we spoke with and, according to our survey, the
members of the public believe it is appropriate for the Service to issue the
BCRS, as well as other semipostals, to raise funds for worthwhile causes.
The Service, although very supportive of the BCRS, remains generally
opposed to the concept of using semipostals as a means of fund-raising.
Since we issued our April 2000 BCRS report, Congress has (1) twice
extended the sales period for the BCRS, (2) authorized two additional
semipostals, and (3) authorized the Service to issue future semipostals.
Also, as of August 2003, Congress was considering legislation establishing
two more semipostals and extending the sales period for the BCRS until
December 31, 2005. As of August 2003, the Service had not issued any
semipostals of its own choosing under the authority of the Semipostal
Authorization Act and had no plans to do so until the sales periods for
congressionally mandated semipostals have ended. We believe this position




Page 5                                    GAO-03-1021 Breast Cancer Research Stamp
             is consistent with the discretion afforded the Service under the Semipostal
             Authorization Act.

             We are offering one matter for Congress to consider as it debates whether
             to further extend the sales period for the BCRS. If Congress extends the
             BCRS sales period, it may wish to consider establishing annual reporting
             requirements for NIH and DOD similar to those required of any agency that
             was to receive funds generated from semipostals issued under the
             Semipostal Authorization Act. We reaffirm our previous recommendation
             that the Service make available BCRS cost data and analyses, and we also
             recommend that the Service reexamine and, as necessary, revise its cost-
             recovery regulations.

             In commenting on a draft of this report, the Service indicated that it plans
             to take appropriate actions to address our recommendations. The Service
             said that it would reexamine its BCRS regulations with a view toward
             proposing revisions about what costs are to be identified and recouped
             from surcharge revenues. The Service also said that it would make
             available to Congress and us current BCRS cost data and analyses.



Background   The Stamp Out Breast Cancer Act (Pub. L. No. 105-41, Aug. 13, 1997)
             required that the Postal Service issue its first-ever semipostal—the BCRS.
             The Service issued the BCRS on July 29, 1998. The act required that the
             BCRS be available for sale for 2 years, but Congress has since extended the
             sales period through December 31, 2003.

             Semipostals are stamps sold with a surcharge above the First-Class postage
             rate with the net surcharge amount going to a designated cause. The act
             stipulated that the BCRS surcharge was not to exceed 25 percent of the
             First-Class postage rate, which, at the time of issuance, was 32 cents. The
             act further stipulated that after recovering its reasonable costs, the Service
             was to transfer 70 percent of the remaining surcharge revenue to NIH and
             30 percent to DOD for breast cancer research. The Service’s presidentially
             appointed governors initially set the price of the BCRS at 40 cents—32
             cents for First-Class postage plus the maximum 25-percent surcharge of




             Page 6                                    GAO-03-1021 Breast Cancer Research Stamp
8 cents. Since that time, the price of First-Class postage has increased to 37
cents, and the price of the BCRS is currently 45 cents.7

On the day the initial sales period for the BCRS was to end, the Semipostal
Authorization Act (Pub. L. No. 106-253, July 28, 2000) was enacted, which
extended the sales period for the BCRS through July 29, 2002, and granted
the Service authority to issue future semipostals of its own choosing.
Additionally, the act required that the Service issue regulations governing
future semipostals aside from the BCRS.

Another act, the Breast Cancer Research Stamp Act of 2001 (Pub. L. 107-67,
Nov. 12, 2001) further extended the sales period for the BCRS and
established new requirements governing the sales price of the BCRS.8 That
act extended the BCRS’ sales period through December 31, 2003, and
replaced the maximum 25 percent surcharge with a minimum 15 percent
surcharge that, when added to the First-Class postage rate, is evenly
divisible by five. That is, the BCRS must be sold for an amount evenly
divisible by five and must cost at least 15 percent more than First-Class
postage. Specifically, the BCRS is currently sold for 45 cents, which is
evenly divisible by 5; with the 8-cent surcharge, it costs about 22 percent
more than the 37-cent First-Class postage rate. Additional legislation is
currently pending that would extend the sales period for the BCRS through
December 31, 2005.




7
 The postage rate for letters up to 1 ounce sent by First-Class Mail increased to 33 cents on
January 10, 1999; to 34 cents on January 7, 2001; and to the current 37 cents on June 30,
2002. The BCRS was sold for 40 cents until March 23, 2002, when its sales price was
increased to its current price of 45 cents.
8
The Breast Cancer Research Stamp Act of 2001 was included as part of the Treasury and
General Government Appropriations Act of 2002 (Pub. L. No. 107-67, Nov. 12, 2001).




Page 7                                             GAO-03-1021 Breast Cancer Research Stamp
Since the BCRS was issued in 1998, Congress has passed legislation
establishing two additional semipostals. One semipostal is to provide
assistance to the families of emergency relief personnel killed or
permanently disabled in the line of duty in connection with the terrorist
attacks against the United States on September 11, 2001—commonly
referred to as the Heroes of 2001 semipostal. The Service began selling the
Heroes of 2001 semipostal on June 7, 2002, and its sales are scheduled to
end no later than December 31, 2004, in accordance with the semipostal’s
authorizing legislation.9 The other semipostal—commonly referred to as
the Stop Family Violence semipostal—is to help fund domestic violence
programs. Legislation requiring introduction of the Stop Family Violence
semipostal specifies that sales are to begin no later than January 1, 2004,
and end no later than December 31, 2006.10 Legislation was also pending in
Congress at the end of August 2003 to establish semipostals to help
promote childhood literacy and the Peace Corps.11 As of August 2003, the
Service had issued no semipostals that had not been congressionally
mandated.

Images of the BCRS, Heroes of 2001, and Stop Family Violence semipostals
are reproduced as figures 1, 2, and 3, respectively. The Service plans to
begin selling the Stop Family Violence semipostal in November 2003.




9
 The 9/11 Heroes Stamp Act of 2001 was included as part of the Treasury and General
Government Appropriations Act of 2002 (Pub. L. No. 107-67, Nov. 12, 2001).
10
 The Stamp Out Domestic Violence Act of 2001 was included as part of the Treasury and
General Government Appropriations Act of 2002 (Pub. L. No. 107-67, Nov. 12, 2001).
11
   Legislation to establish a semipostal to help promote childhood literacy was introduced in
the House of Representatives on January 7, 2003 (H.R. 126) and legislation to establish a
semipostal to benefit the Peace Corps was introduced in the House on June 5, 2003 (H.R.
2371).




Page 8                                            GAO-03-1021 Breast Cancer Research Stamp
Figure 1: Reproduction of the Breast Cancer Research Semipostal




Page 9                                     GAO-03-1021 Breast Cancer Research Stamp
Figure 2: Reproduction of the Heroes of 2001 Semipostal




Page 10                                    GAO-03-1021 Breast Cancer Research Stamp
Figure 3: Reproduction of the Stop Family Violence Semipostal




Page 11                                     GAO-03-1021 Breast Cancer Research Stamp
                          For more details about the BCRS and its background, see our April 2000
                          BCRS report.12 That report also includes information on semipostals issued
                          by foreign postal administrations.



Reported Monetary         The full cost of the BCRS program is not known. The Service reported that
                          the bulk of BCRS costs from inception through May 16, 2003, were about
and Other Resources       $9.5 million, most of which were recovered through the First-Class postage
Devoted to the BCRS       portion of the BCRS. The Service does not track BCRS costs that it
                          considers to be inconsequential, such as invoices less than $3,000. The
Program                   Service also does not identify costs that it would have incurred whether or
                          not the BCRS program had been established, such as overhead.
                          Additionally, the Service reported that no staff have been hired because of
                          the BCRS program, nor have any staff been dedicated to work full-time on
                          the program.

                          In response to a recommendation in our April 2000 BCRS report, the
                          Service issued BCRS cost-recovery regulations in July 2000 and reported
                          using these regulations, and amendments, to track and allocate BCRS
                          costs. We are concerned, however, that the regulations can be interpreted
                          as not requiring the Service to provide baseline comparisons for certain
                          BCRS costs, e.g., printing, sales, and distribution, although the Stamp Out
                          Breast Cancer Act specifically states that reasonable costs in these areas
                          attributable to the BCRS should be recouped from the BCRS’ surcharge
                          revenue. Additionally, in our April 2000 report, we recommended that the
                          Service make available to Congress the BCRS cost data and analyses
                          necessary to provide assurance that postal ratepayers are not involuntarily
                          contributing funds to breast cancer research. Although the Service
                          committed to Congress to provide it with the data and analyses, Service
                          officials told us that for a number of reasons the Service has not yet done
                          so. In August 2003, Service officials said that they plan to reexamine their
                          BCRS regulations and, as soon as practicable, provide Congress with
                          current BCRS data and analyses.



Full BCRS Program Costs   Although the full cost of the BCRS program is not known, the Service
Unknown                   reported that the bulk of the program’s costs, from inception through May
                          16, 2003, were about $9.5 million. These costs do not include (1) direct


                          12
                           GAO/GGD-00-80.




                          Page 12                                  GAO-03-1021 Breast Cancer Research Stamp
costs for items the Service considers to be inconsequential, such as the
cost of items that do not exceed $3,000 per invoice and (2) indirect costs
that the Service would have incurred whether or not the BCRS program
had been established, such as overhead. Additionally, the $9.5 million does
not include any staffing-related costs because, according to postal officials,
no staff were hired for the BCRS program nor were any staff dedicated full-
time to work on the program. These officials told us that all work
associated with the BCRS was absorbed by existing staff and staff budget—
i.e., the Service incurred no additional staffing-related expenses because of
the BCRS. They also told us that the Service, with the exception of the law
department, has not tracked staff hours devoted to the BCRS because it
was not cost-effective to quantify and recoup inconsequential costs
associated with the BCRS. Because all costs associated with the BCRS
were not identified and tracked, the full cost of operating and
administering the BCRS program is not known.

The reported costs of the BCRS through May 16, 2003, are shown in table 1,
broken down by type of cost. In addition to these costs, the Service could
incur additional costs associated with the BCRS before its sales period
ends, which is currently scheduled for December 31, 2003.



Table 1: Cost of Operating and Administering the BCRS Program, from Inception
through May 16, 2003, as Reported by the Service

Cost item                                                                Reported cost
Stamp design (including market research)                                        $40,000
Stamp production and printing                                                $3,597,000
Shipping and distribution                                                           $0a
Training                                                                      $612,000
Selling stamps (including employee salaries and benefits)                           $0b
Withdrawing stamps from sale                                                        $0c
Destroying unsold stamps                                                            $0c
Advertising                                                                   $888,000
Packaging stamps                                                             $2,723,000
Printing flyers and special receipts                                          $238,000
Equipment changes                                                             $359,000
Developing and executing marketing and promotional plans                     $1,006,000




Page 13                                         GAO-03-1021 Breast Cancer Research Stamp
                             (Continued From Previous Page)
                             Cost item                                                                             Reported cost
                             Other cost:
                                  Legal                                                                                    $22,000
                                  Market research                                                                          $56,000
                                  Consulting                                                                                $8,000
                             Total                                                                                     $9,549,000
                             Source: U.S. Postal Service.
                             a
                               The Service said that it does not attempt to identify these costs because shipping and distribution
                             costs incurred for a semiposal are no different from those normally incurred for comparable stamps.
                             b
                              The Service said that it currently does not have a system in place to track these costs. According to
                             the Service, it would be extraordinarily difficult and costly to attempt to study, analyze, and measure
                             these costs in a live environment; and it also would be difficult to devise a methodology to estimate
                             such costs because BCRS’ are a small percentage of total stamp sales.
                             c
                               The Service said that it believes these costs would be the same as those incurred for comparable
                             stamps, but it has not yet incurred any costs associated with withdrawing stamps from sale or
                             destroying unsold stamps because the BCRS continues to be offered to the public.




Allocation of BCRS Program   Under the cost-recovery regulations the Service applies to the BCRS, the
Costs between the Postage    Service determined that $8.7 million, about 91 percent, of the $9.5 million in
                             BCRS costs were recovered through the First-Class postage rate. The
Portion and Surcharge
                             Service also determined that the remaining $853,000 in costs were not
Revenue                      those normally incurred with a comparable commemorative stamp and
                             therefore were recovered through the BCRS’ surcharge revenue. That is,
                             about 9 percent of BCRS program costs were recovered through the
                             surcharge revenue. Table 2 identifies, by cost item, the Service’s reported
                             cost of operating and administering the BCRS program, from inception
                             through May 16, 2003; and the allocation of those costs between those
                             covered by the First-Class postage rate and costs that were recouped from
                             the BCRS’ surcharge revenue.13




                             13
                               The Service recast the BCRS costs that we had included in our April 2000 BCRS report
                             using its current cost recovery criteria. Our April 2000 report included BCRS costs from
                             inception through December 31, 1999. Recasting the data did not change the total BCRS
                             costs we reported through December 31, 1999, nor did it change the total costs we reported
                             as being recouped from the BCRS’ surcharge revenue. It did, however, result in the
                             renaming and regrouping of some individual cost items that we previously reported.




                             Page 14                                                 GAO-03-1021 Breast Cancer Research Stamp
Table 2: BCRS Costs through May 16, 2003, and the Allocation of Those Costs between the First-Class Postage Rate and the
BCRS’ Surcharge Revenue

                                                                                                     Allocation of reported cost
                                                                                              Amount reported as             Amount reported as
                                                                                             having been covered              recouped from the
                                                                                                by the First-Class             BCRS’ surcharge
Cost itema                                                           Reported cost                   postage rate                       revenue
Stamp design (including market research)                                      $40,000                        $40,000                               $0
Stamp production and printing                                             $3,597,000                      $3,597,000                               $0
Shipping and distribution                                                          $0b                             $0b                            $0b
Training                                                                    $612,000                        $612,000                               $0
Selling stamps (including employee salaries and
benefits)                                                                           $0c                            $0c                            $0c
                                                                                      d                                 d
Withdrawing stamps from sale                                                       $0                              $0                             $0d
Destroying unsold stamps                                                           $0d                             $0d                            $0d
Advertising                                                                 $888,000                        $888,000                               $0
Packaging stamps                                                          $2,723,000                      $2,476,000                       $247,000
Printing flyers and special receipts                                        $238,000                                $0                    $238,000e
Equipment changes                                                           $359,000                        $176,000                       $183,000
Developing and executing marketing and promotional
plans                                                                     $1,006,000                        $851,000                       $155,000
Other costs:
    Legal                                                                     $22,000                               $0                       $22,000
    Market research                                                           $56,000                        $56,000                               $0
    Consulting                                                                 $8,000                               $0                        $8,000
Total                                                                     $9,549,000                      $8,696,000                       $853,000
Source: U.S. Postal Service.
                                             a
                                               The Service recast BCRS costs included in our April 2000 BCRS report into the current cost item
                                             categories and updated costs through May 16, 2003.
                                             b
                                              The Service said that it does not attempt to identify these costs because shipping and distribution
                                             costs incurred for a semiposal are no different than those normally incurred for comparable stamps.
                                             c
                                               The Service said that it currently does not have a system in place to track these costs. According to
                                             the Service, it would be extraordinarily difficult and costly to attempt to study, analyze, and measure
                                             these costs in a live environment; and it also would be difficult to devise a methodology to estimate
                                             such costs because BCRS’ are a small percentage of total stamp sales.
                                             d
                                              The Service said that it believes these costs would be the same as those incurred for comparable
                                             stamps, but it has not yet incurred any costs associated with withdrawing stamps from sale or
                                             destroying unsold stamps because the BCRS continues to be offered to the public.
                                             e
                                               The Service said that receipts initially used were in a format different from standard postal receipts,
                                             and the costs were recouped from the BCRS’ surcharge revenue. However, according to the Service,
                                             receipts now used are universally supplied to all offices for general use, and the printing cost is not
                                             considered incremental. Therefore, costs associated with receipts are no longer recouped from the
                                             BCRS’ surcharge revenue.




                                             Page 15                                                  GAO-03-1021 Breast Cancer Research Stamp
Service’s Approach to Cost   In response to a recommendation in our April 2000 BCRS report, the
Recovery Has Evolved         Service issued BCRS cost-recovery regulations in July 2000, which it
                             subsequently amended in 2001. At the time of our April 2000 report, the
                             Service was using informal, evolving criteria to make decisions about
                             which costs would be recouped from the BCRS’ surcharge revenue and had
                             not issued regulations in this area. In July 2000, the Service issued a
                             revision to its Administrative Support Manual (ASM) that specified a
                             “Cost Recovery Policy for the Breast Cancer Research Semipostal Stamp.”
                             The ASM provisions, which are viewed by the Service as part of its
                             regulations, specified that the Service was to recover BCRS costs that are
                             determined to be incremental costs from its surcharge revenue.14 The
                             regulations described some types of costs that the Service had determined
                             to be incremental to the BCRS. Examples of such costs included (1) design
                             and production costs in excess of the cost to produce equivalent stamps;
                             (2) packaging costs in excess of the cost to package equivalent stamps; and
                             (3) printing costs for items other than stamps that are specific to the BCRS,
                             such as flyers and special receipts.

                             In June 2001, the Service published in the Federal Register its regulations
                             covering semipostals issued under the Semipostal Authorization Act.
                             Among those regulations was 39 C.F.R. 551.8, which established
                             procedures for determining costs to be offset from semipostal differential
                             revenue. On December 27, 2001, the Postal Service published a similar
                             version of this regulation in section 645 of the ASM. The ASM regulations
                             were made applicable to semipostals issued under the Semipostal
                             Authorization Act, as well as the BCRS. The December 2001 revision to the
                             ASM (hereafter referred to as regulations) no longer refer to “incremental
                             costs,” as was done in the July 2000 version. The December 2001
                             regulations state that the Service is to recover BCRS costs that are
                             determined to be in excess of the costs normally incurred for
                             commemorative stamps having similar sales; physical characteristics; and
                             marketing, promotional, and public relations activities. These regulations
                             prescribe that on the basis of judgment and available information, the
                             Service is to identify stamp(s) comparable with the BCRS and create a
                             profile of selected cost characteristics, thereby establishing a baseline for




                             14
                               Under 39 C.F.R. 211.2, the Service states that the regulations of the Service include the
                             ASM. Accordingly, hereafter, we will refer to the ASM provisions as Postal Service
                             regulations.




                             Page 16                                            GAO-03-1021 Breast Cancer Research Stamp
cost comparison purposes.15 According to the regulations, BCRS costs that
exceed the baseline costs for comparable commemorative stamps are to be
recovered from the BCRS’ surcharge revenue. In May 2003, we asked the
Service to provide us the baseline costs for the comparable stamps being
used to determine what costs are to be recovered from the BCRS’
surcharge revenue. In July 2003, the Service provided us with what it
referred to as costs above comparable stamp costs that were recouped
from the BCRS’ surcharge revenue and updated that information in August
2003. However, the Service did not provide us with the actual baselines
used in making the determinations about which costs were to be recouped
from the BCRS’ surcharge revenue.

The Service’s December 2001 regulations provide guidance regarding its
BCRS cost-recovery criteria. The regulations state that cost items
recoverable from the BCRS’ surcharge revenue may include, but are not
limited to, the following:

• packaging costs in excess of the cost to package comparable stamps,

• printing costs of flyers and special receipts,

• costs of changes to equipment,

• costs of developing and executing marketing and promotional plans in
  excess of the cost for comparable stamps, and

• other costs specific to the BCRS that would not normally have been
  incurred for comparable stamps.

In addition, the Service’s regulations state that BCRS costs that meet the
following criteria will not be tracked:

• costs that the Service determines to be inconsequentially small, which
  include those cost items not exceeding $3,000 per invoice;




15
 In implementing its regulations, the Service reported that it had identified the BCRS’
comparable stamps as the commemorative stamp issues featuring the images of Warner
Brothers characters issued in 1997, 1998, and 1999. These stamp issues included the images
of Bugs Bunny (first issued in 1997), Sylvester and Tweety (1998), and Daffy Duck (1999).




Page 17                                          GAO-03-1021 Breast Cancer Research Stamp
                              • costs for which the cost of tracking would be burdensome (e.g., costs
                                for which the cost of tracking exceeds the cost to be tracked);

                              • costs attributable to mail to which the BCRS is affixed (i.e., costs that
                                are attributable to the appropriate class and/or subclass of mail); and

                              • administrative and support costs that the Service would have incurred
                                whether or not the BCRS program had been established.

                              The regulations further identify the following BCRS costs—those the
                              Service would normally incur for comparable stamps—as recovered
                              through the First-Class postage portion of the BCRS stamp price.
                              Therefore, baselines have not been established for these costs, which are
                              as follows:

                              • stamp design (including market research);

                              • stamp production and printing;

                              • stamp shipping and distribution;

                              • estimated training for field staff, except for special training associated
                                with semipostals;

                              • stamp sales (including employee salaries and benefits);

                              • withdrawal of the stamp issue from sale;

                              • destruction of unsold stamps; and

                              • incorporation of semipostal images into advertising for the Postal
                                Service as an entity.



BCRS Cost-Recovery            The Stamp Out Breast Cancer Act specifically recognizes that printing,
Regulations May Not Allow     sales, and distribution costs attributable to the BCRS are among the types
                              of reasonable costs the Service should recover from the BCRS’ surcharge
the Service to Identify and
                              revenue. Section 414 (c) (2) of the act states that the Service must recover
Recoup All Costs              from the BCRS’ surcharge revenue “an amount sufficient to cover
Attributable to the BCRS      reasonable costs . . . in carrying out this section, including those
                              attributable to the printing, sale, and distribution of stamps under this
                              section.” The Service has determined, and we have no basis to challenge its



                              Page 18                                   GAO-03-1021 Breast Cancer Research Stamp
discretion in this regard, that “reasonable costs” are costs in excess of
those normally incurred for a comparable stamp. However, we are
concerned that the regulations the Service issued to implement this
requirement can be interpreted as not requiring the Service to provide
baseline comparisons for certain BCRS costs, e.g., printing, sales, and
distribution, although the Stamp Out Breast Cancer Act specifically states
that reasonable costs in these areas attributable to the BCRS should be
recouped from the BCRS’ surcharge revenue. Our concerns with the
regulations include the following:

BCRS printing costs: The Service’s December 2001 regulations can be
interpreted as not requiring baseline comparisons for BCRS printing costs.
The regulations could be interpreted to mean that all BCRS printing costs
are covered by the First-Class postage portion and comparisons with
baseline costs are not necessary. This interpretation is supported by the
fact that, as of August 2003, the Service had not established a baseline cost
for comparable stamps against which to compare BCRS printing costs. The
Service did, however, provide information showing that the BCRS’ printing
costs between 1998 and 2003 ranged from $3.35 per thousand stamps to
$7.39 per thousand. The Service also provided information on printing
costs for the three stamps that it considers comparable with the BCRS. The
printing costs for these three stamps ranged from $11.52 per thousand in
1999 to $14.34 per thousand in 1997. Additionally, the Service provided
printing costs for various commemorative stamps in 1998 through 2002.
That information would tend to support the view that printing costs for the
BCRS have not exceeded the printing costs for other commemoratives.
Nevertheless, the Service did not establish a baseline for making BCRS
printing cost comparisons. Therefore, the Service has not demonstrated
that its regulations establish an adequate process for ensuring that excess
semipostal costs are identified and recouped from surcharge revenues.
Following its regulations, the Service reported that it did not recoup from
the BCRS’ surcharge revenue any of the $3,597,000 it incurred in BCRS
printing costs. Without a comparison between actual BCRS printing costs
and the baseline printing costs for comparable stamps, the Service lacks
assurance that it is identifying and recouping excess costs from BCRS
surcharge revenue.

BCRS sales costs: The Service’s December 2001 regulations can be
interpreted as not requiring baseline comparisons for BCRS sales costs.
The regulations can be interpreted to mean that all BCRS sales costs are
covered by the First-Class postage portion and comparisons with baseline
costs are not necessary. As of August 2003, the Service had not established



Page 19                                   GAO-03-1021 Breast Cancer Research Stamp
a baseline cost for comparable stamps against which to compare BCRS
sales costs. Unlike BCRS printing costs, the Service reported that it did not
track BCRS sales costs because they were “minimal,” but it was unable to
provide documentation supporting this position. The Service has reported
that the BCRS was available for sale at over 27,000 post offices across the
country, where salaries and benefits for its clerks average about $30 per
hour. Service officials told us that no staff were hired for the BCRS
program nor were any staff dedicated full-time to work on the program.
However, the Service commented in July 2003 that each semipostal
generates sales costs that it would not incur for commemorative stamps,
such as time spent responding to customer questions about the fund-raising
involved. In addition, the Service has reported that stamp sales costs are 24
cents per dollar for stamps sold at the window, compared with 14 cents for
stamps sold at vending machines. However, the Service has more recently
taken the position that stamp sales costs are substantially less than
previously calculated. In September 2003, the Service was in the process of
reviewing its stamp sales costs, but revised stamp sales figures were not
yet available. Therefore, it is unclear whether the Service has incurred sales
costs for the BCRS that are greater than those incurred for comparable
commemorative stamps. Without a comparison between actual or
estimated BCRS sales costs and the baseline sales costs for comparable
stamps, the Service lacks assurance that it is identifying and recouping
excess costs from surcharge revenue.

In addition to these examples, we have similar concerns regarding other
BCRS costs that are being handled in a manner similar to that described for
BCRS printing, as well as sales. These other costs include stamp design,
shipping, and distribution; estimated training for field staff, except for
special training associated with the BCRS; withdrawal of the stamp issue
from sale; destruction of unsold stamps; and incorporation of BCRS images
into advertising for the Postal Service as an entity.

We discussed our concerns about the Service’s cost-recovery regulations
and their impact with Service officials, especially in light of statements
made by Service officials in June 2001 that the issuance of multiple
semipostals at the same time could significantly increase the administrative
burden on the Service and ultimately burden existing staff and limited
resources. Service officials said that their overriding concern in developing
the cost-recovery regulations was to avoid having to establish cost-tracking
systems that would cost more to develop and implement than the
surcharge revenue to be collected from semipostals, including the BCRS.
We pointed out that the Service already performs a number of cost-related



Page 20                                   GAO-03-1021 Breast Cancer Research Stamp
                              studies that could possibly be used or modified to capture or estimate
                              incremental semipostal costs, or that new approaches to capture or
                              estimate such information might be possible and not be cost prohibitive.
                              Service officials also said that in developing the regulations, they had not
                              intended to preclude the Service from recovering excess costs in the
                              printing, sales, and distribution categories, and they believe they can do so
                              under the existing regulations. However, we remain concerned that the
                              regulatory provisions do not require the Service to do so. In fact, the
                              Service has not established baseline costs that would allow it to identify
                              and recoup excess costs for printing, sales, and distribution. Therefore, we
                              continue to believe that a reassessment of the regulatory provisions would
                              be warranted. In view of our concerns, Service officials told us, in August
                              2003, they were planning such a reassessment.



The Service Has Not Yet Met   In our April 2000 BCRS report, we recommended that the Service make
Its Commitment to             available the data and analysis showing which BCRS costs have been
                              recovered through the First-Class postage rate to provide assurance that
Congress to Provide It with
                              postal ratepayers are not involuntarily contributing funds to breast cancer
BCRS Cost Data and            research. In a letter addressed to Chairman John M. McHugh of the former
Analyses                      Subcommittee on the Postal Service, House Committee on Government
                              Reform,16 the Service committed to provide, within 60 days of the
                              conclusion of the BCRS’ initial 2-year sales period (i.e., September 28,
                              2000), an analysis of the BCRS costs that the Service recovered through the
                              base First-Class Mail, single-piece, first-ounce postage rate. The letter
                              further stated that the analysis would demonstrate that the BCRS’
                              incremental costs have been recovered solely from the surcharge revenue,
                              and that its nonincremental costs have been recovered through the base
                              postage rate.

                              As of August 12, 2003, the Service had not yet provided the recommended
                              BCRS cost data and analysis to Congress. Service officials explained that
                              an administrative oversight, as well as subsequent events, led to the
                              Service’s not making this information available to Congress. The officials
                              acknowledged that a consultant had drafted an internal paper that
                              presented and analyzed fiscal year 1999 cost data on the BCRS. However,
                              the officials noted that this paper had not been reviewed by postal
                              management and was drafted more than 2 years ago, before the Service

                              16
                                 Representative McHugh is now Chairman of the Special Panel on Postal Reform and
                              Oversight, House Committee on Government Reform.




                              Page 21                                        GAO-03-1021 Breast Cancer Research Stamp
                        issued its current regulations on BCRS cost recovery. As we previously
                        recommended, we continue to believe that the Service should prepare and
                        make available the data and analyses of BCRS costs in order to provide
                        ratepayers assurance that they are not involuntarily contributing funds to
                        breast cancer research. Further, we believe that making available current
                        data and analyses are even more important now than before, given that
                        additional semipostals have been authorized; and more semipostals are
                        likely in the future. More specifically, Congress has authorized two
                        additional semipostals; and in August 2003, it was considering legislation
                        authorizing two more semipostals and extending the sales period for the
                        BCRS. Congress has also given the Postal Service specific authority to
                        issue semipostals of its own choosing. Service officials told us in August
                        2003 they were planning a reassessment of the earlier BCRS internal paper
                        and would provide Congress and us with the results of that reassessment as
                        soon as practicable.



Effectiveness of the    The BCRS has continued to be an effective means of raising funds for
                        breast cancer research. Although neither the Stamp Out Breast Cancer Act
BCRS as a Fund-Raiser   nor amendments to the act provide quantitative measures for evaluating
                        the effectiveness of the BCRS as a fund-raiser, the act did provide that the
                        BCRS was to provide the public a voluntary and convenient way of raising
                        funds for breast cancer research. We reported in April 2000 that the BCRS
                        had been successful to those ends. Since then, the BCRS has continued to
                        be a voluntary and convenient way for the public to contribute millions of
                        dollars for breast cancer research. BCRS sales have fluctuated over time;
                        however, the BCRS has raised over $30 million for breast cancer research
                        since it was issued in July 1998. Additionally, most key stakeholders told us
                        that for the most part, they viewed the BCRS as an effective fund-raiser;
                        and the public’s view of the BCRS was generally positive, as reflected in the
                        results from our survey. As of September 2003, the Service had transferred
                        to NIH and DOD about $30.8 million from funds raised by the BCRS for
                        breast cancer research. These federal organizations reported to us that
                        they have established programs to fund innovative breast cancer research
                        conducted by various research institutions. NIH and DOD are not required
                        to issue reports to Congress detailing how BCRS-generated funds were
                        used or the accomplishments that resulted from the BCRS-funded
                        research.




                        Page 22                                   GAO-03-1021 Breast Cancer Research Stamp
The BCRS Remains                         The BCRS has remained voluntary and convenient, as provided for by the
Voluntary and Convenient                 act, and has raised over $30 million for breast cancer research since it was
                                         issued in July 1998. Postal patrons have the choice of purchasing regular
and Has Raised Millions of               First-Class postage stamps at 37 cents each or contributing to breast cancer
Dollars for Research                     research by purchasing the BCRS at 45 cents each. The BCRS remains
                                         convenient in that it is available for purchase from a variety of postal
                                         sources, including post offices, although two stakeholders reported
                                         instances when some post offices in their areas did not have the BCRS
                                         when they visited. Figure 4 shows the various sources from which the
                                         BCRS can be purchased.



Figure 4: Various Postal Service Sources for Purchasing the BCRS




                                         Our public opinion surveys—including our current 2003 survey and our
                                         earlier 1999 survey, both conducted by the same firm—indicate that about
                                         70 percent of the public views semipostals as a convenient way to
                                         contribute to designated causes. These and other estimates from our 2003
                                         survey are subject to sampling errors of less than +/- 6 percentage points
                                         (95 percent confidence level), as well as to additional errors of unknown
                                         magnitude due to the 89 percent nonresponse rate for the survey as
                                         discussed in appendix I.

                                         As envisioned by the act, the BCRS has raised a substantial amount of
                                         money for breast cancer research. Postal officials report that since the
                                         BCRS was issued on July 29, 1998, the Service has sold over 450 million of
                                         this semipostal, generating over $30 million, net of costs, for breast cancer
                                         research. If BCRS sales continue at the rate it has been selling in fiscal year
                                         2003, about 486 million will have been sold by the time BCRS sales are




                                         Page 23                                    GAO-03-1021 Breast Cancer Research Stamp
                             scheduled to end on December 31, 2003—generating approximately
                             $35 million in surcharge revenue.

BCRS Sales Have Fluctuated   Quarterly BCRS sales fluctuated considerably between 1998 and 2003 but
Over Time                    have generally trended lower after reaching a high point of almost 40
                             million sales in quarter 3, 2000.17 During the early years that the BCRS was
                             for sale—quarter 4, 1998 through quarter 4, 2000—quarterly sales varied
                             from a low of 18.3 million to a high of 39.8 million, with average quarterly
                             sales of 26.4 million. During the latter years—from quarter 1, 2001, through
                             quarter 3, 2003, sales ranged from 14.9 million to 27.8 million, with average
                             quarterly sales of 19.5 million. To help shed additional light on the
                             continued effectiveness of the BCRS as a means of fund-raising, we also
                             looked at quarterly sales data for the Heroes of 2001 semipostal to see if
                             there was a discernable decline in BCRS sales during the quarters when
                             both semipostals were being sold simultaneously.

                             Although sales of the BCRS trended somewhat lower during the 4 quarters
                             the Heroes semipostal was for sale, postal officials and other stakeholders
                             did not believe there was a strong correlation. Postal officials pointed out
                             that although BCRS sales declined during the period from quarter 4, 2002,
                             through quarter 2, 2003, they did not drop nearly as precipitously as the
                             sales of the Heroes semipostal—which fell from 45.4 million in quarter 4,
                             2002, to 11.0 million in quarter 3, 2003. Also, some postal officials and other
                             stakeholders believed that over the long term, postal patrons who
                             repeatedly purchase semipostals tend to support causes that have
                             organized, nationwide support bases. For example, some postal officials
                             and other stakeholders believe many people who purchase BCRSs know
                             someone who is fighting breast cancer or fought it in the past. Likewise,
                             postal patrons who repeatedly purchase BCRSs are likely to be aware that
                             the BCRS is supported by many of the national breast cancer organizations
                             or their affiliates.

                             However, some postal officials and other stakeholders speculated that the
                             Heroes of 2001 semipostal may have initially been purchased by a large,
                             diverse population eager to provide assistance to the families of emergency
                             relief personnel killed or permanently disabled in connection with the
                             terrorists attacks on September 11, 2001. However, these postal officials


                             17
                               The postal fiscal year consists of 13, 4-week accounting periods. A postal quarter (PQ)
                             consists of three consecutive accounting periods except for PQ 4, which covers the last four
                             accounting periods of the fiscal year.




                             Page 24                                           GAO-03-1021 Breast Cancer Research Stamp
                                        and other stakeholders suspected that large initial sales figures for the
                                        Heroes semipostal were not sustainable because that semipostal did not
                                        benefit from the support of a long-established, well-organized, nationwide
                                        network of organizations to keep the Heroes semipostal in the pubic eye.
                                        Figure 5 shows the number of BCRSs sold since date of issuance through
                                        quarter 3, 2003, as well as the number of Heroes of 2001 semipostals sold
                                        from date of issuance through quarter 3, 2003.



Figure 5: Number of BCRS and Heroes Semipostals Sold by Postal Quarter




Key Stakeholders Believe                The key stakeholders we spoke with that expressed a view about the
the BCRS Has Been an                    effectiveness of the BCRS believed it had been effective in raising funds for
                                        breast cancer research. Some of the stakeholders who did not express a
Effective
                                        view on the effectiveness of the BCRS provided other comments about
Fund-Raiser                             semipostals.




                                        Page 25                                   GAO-03-1021 Breast Cancer Research Stamp
Opinions of Key Stakeholders   Key stakeholders who believed the BCRS has been an effective fund-raiser
Who Expressed View That the    included the Postal Service; Dr. B.I. Bodai (the individual credited with
BCRS Has Been an Effective     conceiving the idea for the BCRS and who, along with Ms. Betsy Mullen,
Fund-Raiser                    lobbied Congress for the BCRS); Ms. Betsy Mullen (the Women’s
                               Information Network Against Breast Cancer), the Susan G. Komen Breast
                               Cancer Foundation; the American Cancer Society; and the American
                               Philatelic Society.

                               According to postal officials, the effectiveness of the BCRS as a means of
                               fund-raising is self-evident for two particular reasons. First, the BCRS has
                               raised over $30 million for breast cancer research since it was issued in
                               July 1998. Second, more than 450 million BCRS’s had been sold through
                               quarter 3, 2003, making the BCRS very popular when compared with the
                               Service’s best-selling commemorative stamps. Postal officials note that
                               although BCRS sales have periodically waxed and waned, yearly sales
                               totals have remained strong since the BCRS was issued.

                               Dr. B.I. Bodai believed the BCRS has been a more effective, consistent
                               fund-raiser than expected. He said no one anticipated that the pennies
                               generated from the sale of each BCRS across the country would, over time,
                               total well over $30 million. Dr. Bodai said the BCRS was popular with
                               families affected by breast cancer, but he believed sales could have been
                               significantly higher if the Service and the various breast cancer
                               organizations had even more vigorously and consistently promoted the
                               BCRS over the past 5 years.

                               Ms. Betsy Mullen of the Women’s Information Network Against Breast
                               Cancer stated she believed the BCRS had been a very effective fund-raiser.
                               Further, she noted that the BCRS’ effectiveness wasn’t just limited to
                               raising funds, but was also extremely effective at raising awareness of
                               breast cancer and the fight to eradicate it. Ms. Mullen also stated that the
                               Women’s Information Network Against Breast Cancer had worked very
                               closely with Congress to ensure that money raised by the BCRS not
                               supplant congressional appropriations for breast cancer research, and she
                               believed money raised by the BCRS had not been used to supplant
                               congressional appropriations to NIH and DOD for breast cancer research.
                               She stated that from an educational perspective, the BCRS has been
                               “priceless” in its role of promoting breast cancer awareness as a women’s
                               health issue. She said she believed that because of the BCRS, many more
                               women have gotten mammograms than otherwise would have, and many
                               lives therefore have been saved.




                               Page 26                                  GAO-03-1021 Breast Cancer Research Stamp
The Susan G. Komen Breast Cancer Foundation stated that the BCRS has
consistently been an effective means of raising funds since it was issued in
1998. The foundation expressed the belief that over the years, the BCRS has
proven to be even more successful than anyone had initially anticipated.
The foundation reiterated its earlier position that the BCRS has been a
unique and innovative fund-raising tool and has raised breast cancer
awareness on a global scale. Further, the foundation stated that if anything,
it has become an even stronger supporter of the BCRS over the years. The
foundation and its 118 affiliates across the country have found the BCRS to
be not only a great means for raising awareness, but also an excellent
promotional tool that has helped stimulate breast cancer organizations’
fund-raising activities—particularly at the local level.

The American Cancer Society believed that time has proven the BCRS to be
an effective means of raising funds for breast cancer research. As we
reported in 2000, the American Cancer Society’s position had been that it
was too early to label the BCRS as either effective or ineffective. However,
the society stated that the BCRS has since shown that it has effectively
raised money for breast cancer research. Society officials recalled that they
had previously been concerned that the BCRS might take momentum away
from federal funding for breast cancer research or adversely affect fund-
raising organizations’ ability to raise research funds. They stated, however,
that they had seen no evidence, over the past 5 years, to indicate that the
BCRS had taken momentum away from federal funding for breast cancer
research or adversely affected the American Cancer Society’s ability to
raise research funds. The society said that it still believes vigilance is in
order to ensure that the BCRS does not affect research funding or fund-
raising, but otherwise it has no concerns about the BCRS. Society officials
said that the BCRS fits well with the society’s goals—one of which is to
increase awareness of breast cancer. The society stated that it supports the
BCRS.

American Philatelic Society officials stated that they had been surprised at
stamp collectors’ acceptance of the BCRS in particular, and semipostals in
general. As we reported in 2000, the society was opposed to semipostals
and believed they were a tax on the hobby of stamp collecting. Over time,
however, the society has come to believe that the BCRS’ strong sales
indicate that semipostals are now widely accepted, making them effective
fund-raisers. Nevertheless, the officials cautioned that although stamp
collectors are now accepting of semipostals, they do not want to see more
than one or two new semipostal issues per year. Otherwise, stamp




Page 27                                   GAO-03-1021 Breast Cancer Research Stamp
                             collectors would be forced to buy too many of the higher priced semipostal
                             issues each year in order to maintain complete stamp collections.

Comments Made by Other Key   The National Breast Cancer Coalition (NBCC) stated that its position on
Stakeholders                 the BCRS had not changed since our April 2000 BCRS report. Officials
                             stated that NBCC still believes there are more effective ways of raising
                             money for research than using semipostals. NBCC stated that a better
                             gauge of the BCRS’ effectiveness would be how well the surcharge revenue
                             was spent on research rather than simply how much money the BCRS
                             raised. NBCC continues to believe that effectively lobbying Congress holds
                             the most promise for raising significant amounts of money for breast
                             cancer research.

                             The Chairperson of the Citizen’s Stamp Advisory Committee stated that it
                             was outside the scope of the committee’s role to evaluate or take a position
                             on the effectiveness of the BCRS. The Citizen’s Stamp Advisory Committee
                             is a 15-member group of citizens appointed by and serving at the pleasure
                             of the Postmaster General for the primary purpose of providing the Postal
                             Service with a “breadth of judgment and depth of experience in various
                             areas that influence subject matter, character and beauty of postage
                             stamps.” Under Postal Service regulations implementing the Semipostal
                             Authorization Act, the committee is also responsible for reviewing eligible
                             semipostal proposals and making recommendations to the Postmaster
                             General on worthy cause(s) and executive agency(ies) eligible to receive
                             funds raised by semipostals. The Chairperson emphasized that Postal
                             Service management decides policy, administrative, and operational
                             matters related to semipostals—not the Citizen’s Stamp Advisory
                             Committee. She stated that the committee’s primary function is to review
                             proposals for stamps and select subjects for recommendation to the
                             Postmaster General that are both interesting and educational.



Survey Respondents View      To determine the public’s awareness of the BCRS and its view of
Semipostals in a Positive    semipostals in general, we included pertinent questions in our survey of the
                             public. We asked the same question about awareness of the BCRS that we
Light                        asked in our August 1999 survey to look for evidence about whether the
                             public had become more aware of the BCRS over time.

                             The survey results suggest that about 29 percent of adults were aware of
                             the BCRS at the time of our recent inquiry—which occurred almost 5 years
                             after the BCRS was issued. About 37 percent of women and about 19
                             percent of men were aware of the BCRS. The survey results from our



                             Page 28                                  GAO-03-1021 Breast Cancer Research Stamp
                             August 1999 survey, which was conducted about 1 year after the BCRS
                             went on sale, indicated that about 24 percent of adults were aware of the
                             BCRS at that time. About 29 percent of women and about 18 percent of
                             men were aware of the BCRS in 1999. We are unable to determine whether
                             the changes in our awareness estimates are due to genuine changes in
                             awareness or to sampling errors and other nonsampling errors related to
                             the 89 percent nonresponse rate, as discussed in appendix I.

                             To help gauge the public’s experience with the BCRS, we also asked the
                             survey participants whether they had ever purchased a BCRS. About 12
                             percent report they had purchased the BCRS. We did not ask a similar
                             question in our 1999 public opinion survey.



Transfers of Surcharge       As of September 2003, the Service had transferred to NIH and DOD about
Revenue to NIH and DOD       $30.8 million from funds raised by the BCRS for breast cancer research.
                             NIH and DOD reported to us that they have established programs to award
for Breast Cancer Research   funds for innovative breast cancer research conducted by various research
                             institutions.

                             As noted in our April 2000 BCRS report, the act specifies that after
                             deducting its reasonable costs, the Service is to transfer 70 and 30 percent
                             of the remaining surcharge revenue generated by the BCRS to NIH and
                             DOD, respectively. The act also specifies that such transfers be made at
                             least twice yearly under arrangements as agreed to between the Service
                             and those agencies. Further, the act specifies that NIH and DOD are to use
                             transferred BCRS surcharge revenues for breast cancer research. Unlike
                             any agency that was to receive funds generated from semipostals issued
                             under the Semipostal Authorization Act, NIH and DOD are not subject to
                             annual reporting requirements. Agencies that receive funds from
                             semipostals issued under the Semipostal Authorization Act are required to
                             submit annual reports to Congress that include (1) the total amount of
                             funds received during the year; (2) an accounting of how the funds were
                             allocated or otherwise used; and (3) a description of any significant
                             advances or accomplishments made during the year that were funded, in
                             whole or in part, out of amounts received.

                             Information currently reported to Congress on NIH’s and DOD’s use of
                             research funds generated by the BCRS does not adequately support
                             congressional oversight. As mandated, our periodic reports to Congress
                             focus primarily on the BCRS’ costs, effectiveness, and appropriateness; not
                             on how NIH and DOD use BCRS surcharge revenues for breast cancer



                             Page 29                                  GAO-03-1021 Breast Cancer Research Stamp
                                                   research and the accomplishments resulting from such research. To help
                                                   manage their respective BCRS funded research programs, NIH and DOD
                                                   require award recipients to provide periodic reports on the progress being
                                                   made and breakthroughs achieved. This is the same information that
                                                   Congress requires of agencies receiving surcharge revenues generated by
                                                   semipostals issued under the Semipostal Authorization Act; and this readily
                                                   available information could be, if required, submitted by NIH and DOD to
                                                   Congress on an annual basis.

                                                   To date, the Service has complied with the requirements in the Stamp Out
                                                   Breast Cancer Act regarding the transfers of BCRS surcharge revenue to
                                                   NIH and DOD. NIH and DOD are using BCRS surcharge revenue
                                                   transferred to them to fund breast cancer research. Table 3 shows the
                                                   transfers, by fiscal year, that have been made since the BCRS was issued in
                                                   July 1998.



Table 3: Transfers Made to NIH and DOD for Breast Cancer Research

                                                                                                         Total transferred to NIH and
Fiscal year                                  Amount transferred to NIH     Amount transferred to DOD                             DOD
1999                                                          $4,150,210                  $1,778,661                       $5,928,871
2000                                                           3,101,033                   1,329,014                        4,430,047
2001                                                           5,556,225                   2,381,240                        7,937,465
2002                                                           3,594,621                   1,540,552                        5,135,173
2003                                                           5,175,938                   2,218,259                        7,394,197
Total                                                        $21,578,027                  $9,247,726                     $30,825,753
Source: NIH, DOD, and U.S. Postal Service.



Breast Cancer Research Funded                      NIH and DOD officials said that, as required by the Stamp Out Breast
with BCRS Surcharge Revenue                        Cancer Act, they have been using transferred BCRS surcharge revenue to
Transferred to NIH and DOD                         fund breast cancer research. NIH officials said that revenue received from
                                                   the BCRS surcharge revenue has been used to fund breast cancer research
                                                   under the National Cancer Institute’s (NCI) “Insight Awards to Stamp Out
                                                   Breast Cancer” initiative. The officials said that this program was designed
                                                   to fund high-risk exploration by scientists who are employed outside the
                                                   federal government and conduct breast cancer research at their
                                                   institutions. They reported that 86 awards had been made as of April 2003,
                                                   and most of the awards were for 2-year periods with several projects still
                                                   alive. Discounting a single, one-time supplement for $4,300, individual
                                                   awards ranged from $47,250 to $142,500 and averaged about $111,000. The



                                                   Page 30                                    GAO-03-1021 Breast Cancer Research Stamp
                             officials stated that these insight awards were innovative and high-risk
                             projects; and many have been successful in leading to new insights and
                             approaches in the biology, diagnosis, and treatment of breast cancer. The
                             officials stated that NCI is currently considering additional research
                             projects to be funded using BCRS surcharge revenue not yet committed.
                             Detailed information provided by NIH/NCI on breast cancer research
                             awards funded with proceeds from BCRS surcharge revenue is reprinted in
                             appendix II.

                             DOD officials told us that revenue received from the BCRS’ surcharge
                             revenue had been used to fund “DOD Breast Cancer Research Program
                             Idea Awards,” which are administered by the U.S. Army Medical Research
                             and Materiel Command. Idea Awards are intended to encourage innovative
                             approaches to breast cancer research. DOD officials told us that 19 awards
                             had been made as of April 2003. Individual awards ranged from $5,000 to
                             $578,000 and averaged about $356,500. These awards have focused on
                             research into such areas as the biology of cancer cell growth and tumor
                             formation, immunotherapy, and new areas of breast cancer detection. The
                             officials stated that DOD plans to continue investing money received from
                             BCRS surcharge revenue into programs that will encourage innovative
                             approaches to breast cancer research. The officials also stated that about
                             $256,000 of the transferred funds had been used for management expenses.
                             Detailed information provided by DOD on breast cancer research awards
                             funded with proceeds from BCRS surcharge revenue is reprinted in
                             appendix III.



Appropriateness of           Most of the key stakeholders we spoke with and the public believe it is
                             appropriate for the Postal Service to sell the BCRS, as well as other
Using Semipostals as a       semipostals, to raise funds for worthwhile causes. When we issued our
Means of Fund-Raising        April 2000 report, the BCRS was the only semipostal available from the
                             Postal Service. However, since that time, Congress has passed legislation
                             mandating two additional semipostals and is currently considering
                             legislation requiring two more semipostals and extending the sales period
                             for the BCRS.



Opinions of the Postal       The Service, NBCC, and the Citizens Stamps Advisory Committee generally
Service, Key Stakeholders,   viewed using semipostals to raise funds for designated causes as
                             inappropriate; Dr. B.I. Bodai, Ms. Betsy Mullen, the Susan G. Komen Breast
and Others Regarding
                             Cancer Foundation, the American Cancer Society, and the American
Appropriateness


                             Page 31                                 GAO-03-1021 Breast Cancer Research Stamp
                                  Philatelic Society viewed using semipostals to raise funds as appropriate.
                                  The public also believes that it is appropriate to use semipostals as fund-
                                  raisers.

Views of the Postal Service and   The Postal Service has historically been opposed to semipostals. The
Other Key Stakeholders            Service believes that fund-raising through the sale of semipostals is an
                                  activity outside the scope of the Service’s mission as defined by the Postal
                                  Reorganization Act. The Service also remains concerned that the
                                  popularity of the BCRS does not necessarily portend the success of future
                                  semipostals, whether mandated by Congress or initiated by the Postal
                                  Service, and that future semipostals might generate only modest amounts
                                  of revenue while still requiring substantial postal expenditures. Postal
                                  officials are further concerned that too many semipostals not be on the
                                  market at the same time. The BCRS, initially slated for a 2-year sales
                                  period, has been twice extended by Congress and has been on sale for over
                                  5 years. Postal officials worry that if semipostals are mandated but not
                                  retired, the market for semipostals might become oversaturated to the
                                  detriment of individual semipostals as well as the semipostal program in
                                  general.

                                  The Susan G. Komen Breast Cancer Foundation stated that the BCRS was
                                  appropriate when issued and remains appropriate today. The foundation
                                  continues to support the BCRS wholeheartedly. Further, the foundation
                                  believed that the BCRS provides an easy and convenient way for the public
                                  to support and contribute to breast cancer research. The foundation stated
                                  that during the 5 years the BCRS has been for sale, it has become “a
                                  unifying symbol of the fight to find a cure for breast cancer which has
                                  become woven into the fabric of America.” When feasible, the foundation
                                  uses the BCRS on both mass mailings and individual pieces of
                                  correspondence.

                                  The American Cancer Society continues to believe that it is appropriate to
                                  use the BCRS as a means of fund-raising. The society has held this opinion
                                  since the BCRS was first issued.

                                  The American Philatelic Society stated that its position on the
                                  appropriateness of the BCRS has moderated over time. The society no
                                  longer believes it is inappropriate for the Service to issue semipostals,
                                  changing its view because of the wide public acceptance of the BCRS.
                                  Society officials also told us that although BCRS costs are not identified
                                  and tracked with precision, they are in the ballpark given the regulations
                                  that the Service has issued for tracking and allocating costs.



                                  Page 32                                  GAO-03-1021 Breast Cancer Research Stamp
NBCC stated that its opinion regarding the appropriateness of using the
BCRS as a means of fund-raising had not changed since our April 2000
BCRS report. NBCC still had reservations about the appropriateness of the
BCRS, and officials stated that they were still concerned that the BCRS
might be more of a symbolic gesture, on Congress’ part, than an all-out
commitment to fund whatever research is needed to eradicate breast
cancer in the shortest possible time.

The Chairperson of the Citizen’s Stamp Advisory Committee stated that the
committee’s position has always been that semipostals are inappropriate
because fundraising is outside the scope of the Postal Service’s mission.
The Chairperson noted that the committee had been against the Semipostal
Authorization Act. The act mandated that the Service establish a
semipostal program, and select causes to be represented by semipostals
and agencies to receive funds raised through the sale of semipostals. The
committee found it interesting that after giving the Service responsibility
for selecting semipostals, Congress has continued to mandate additional
semipostals. The committee is concerned that if Congress continues to
mandate new semipostals without retiring old ones, a situation could
eventually develop where semipostals, which are essentially
commemorative stamps with a surcharge, might begin to “crowd out” the
Service’s regular commemorative stamp program. This could present a
nationwide problem in post offices because there is limited space in
window clerks’ stamp drawers for different stamp issues. Because the
Service requires that semipostals be available in all post offices at all times,
the number of regular commemorative stamp issues might have to be
limited to accommodate semipostals unless the number of semipostals for
sale at any one time is limited.

Dr. B.I. Bodai reiterated his belief that using the Postal Service to issue
semipostals for worthy, nonpostal causes is very appropriate and is an
example of what good government is all about. Dr. Bodai stated that the
BCRS has not only been appropriate from the standpoint of raising money
for breast cancer research but has also been extremely valuable as a tool
for raising breast cancer awareness on a nationwide basis. He noted that
the BCRS is so popular that some states, such as Georgia, have
incorporated its image into specialty automobile license plates.

Ms. Betsy Mullen of the Women’s Information Network Against Breast
Cancer believes that the BCRS is very appropriate, as would be other
semipostals that raise funds for worthwhile causes. Ms. Mullen believes
that the Service can successfully sell two or more semipostals at the same



Page 33                                    GAO-03-1021 Breast Cancer Research Stamp
                            time. She said that the Service has a long and successful history of
                            concurrently selling multiple commemorative stamps, and the American
                            public has demonstrated over the years its philanthropic support for
                            multiple worthwhile causes. She also said that concurrently selling two or
                            more semipostals is not a detriment to the semipostal program, but rather
                            an enhancement because multiple semipostals cross-promote each other’s
                            sales. She noted that the Service is cross-promoting the sale of the BCRS
                            and Heroes semipostals through its advertisements of these semipostals at
                            post offices. Finally, she stated that the Women’s Information Network
                            Against Breast Cancer uses the BCRS on all of its correspondence, and,
                            because of the BCRS, research is now being done that otherwise would not
                            have been done.

The Public’s View           The public continues to believe that it is appropriate to use semipostals to
                            raise funds for nonpostal purposes. Our public opinion survey conducted
                            by International Communications Research (ICR) indicated that about 71
                            percent believe it is very or somewhat appropriate to use semipostals
                            issued by the Postal Service, such as the BCRS, to raise funds for nonpostal
                            purposes and about 23 percent believe it is somewhat or very
                            inappropriate. Six percent had no opinion, said they didn’t know, or
                            volunteered the answer that it would depend on the cause for which the
                            semipostal was being used to raise money. Statistically, these opinions
                            about the appropriateness of semipostals are not large enough to be
                            significantly different from the findings of our 1999 survey.



Statutory Authorities and   On the legislative front, several laws have been enacted since our April
Constraints                 2000 BCRS report that affect the BCRS specifically or semipostals in
                            general. These laws have (1) twice extended the sales period for the BCRS,
                            (2) authorized two additional semipostals, and (3) authorized the Service to
                            issue future semipostals. Also, as of August 2003, Congress was
                            considering legislation establishing two more semipostals and extending
                            the sales period for the BCRS until December 31, 2005. As of August 2003,
                            the Service had not issued any semipostals of its own choosing and had no
                            plans to do so until the sales period for congressionally mandated
                            semipostals have ended. We believe this position is consistent with the
                            discretion afforded the Service under the Semipostal Authorization Act.



Conclusions                 We are concerned that the Service’s BCRS regulations can be interpreted as
                            not requiring the Service to provide baseline comparisons for certain BCRS



                            Page 34                                  GAO-03-1021 Breast Cancer Research Stamp
costs, e.g., printing, sales, and distribution, although the Stamp Out Breast
Cancer Act specifically states that reasonable costs in these areas
attributable to the BCRS should be recouped from its surcharge revenue.
Although the Service has provided printing costs for various
commemorative stamps, it has not established baseline costs for certain
BCRS costs. Without these baselines, the Service lacks assurance that it is
identifying and recouping excess costs from the BCRS’ surcharge revenue.
If the Service does not recoup costs for items that exceed those of
comparable stamps, the Service could be subsidizing BCRS costs.
Furthermore, without having baseline cost information for comparable
stamps for the cost categories that the Service does track for the BCRS, it is
impossible to determine whether the Service has recouped all reasonable
costs of the BCRS that exceed those for comparable stamps in such cost
categories. Further, the Service has not met its commitment to Congress to
provide it with BCRS cost data and analyses, as we had previously
recommended, to assure postal ratepayers that they are not involuntarily
contributing to breast cancer research. Without current BCRS cost data
and analyses, Congress and the public continue to lack assurance that
postal ratepayers are not involuntarily contributing funds to breast cancer
research.

Nearly all of the stakeholders that we spoke with consider the BCRS to be a
success, particularly given its sales performance to date. According to NIH
and DOD, millions of dollars in BCRS surcharge revenue have contributed
to important new insights and approaches in the biology, diagnosis, and
treatment of breast cancer, as well as in other areas of research. NIH and
DOD provided us information regarding their use of BCRS surcharge
revenue as well as advances or accomplishments they achieved. However,
NIH and DOD are not required to submit annual reports to Congress like
agencies that are to receive funds from semipostals issued under the
Semipostal Authorization Act. Congress has twice extended the sales
period for the BCRS and is currently considering a third extension.
Therefore, establishing annual reporting requirements for NIH and DOD,
similar to the statutory reporting requirements established for any agency
that would receive funds from semipostals issued under the Semipostal
Authorization Act, would prove valuable by providing information on the
amount of funds received, how the funds were used, and any
accomplishments resulting from the use of those funds, should Congress
decide to further extend the BCRS sales period.




Page 35                                   GAO-03-1021 Breast Cancer Research Stamp
Matter for            If Congress decides to extend the sales period for the BCRS past its
                      scheduled end date of December 31, 2003, it may wish to consider
Congressional         establishing a requirement that NIH and DOD annually report to Congress,
Consideration         similar to the requirement for agencies that are to receive surcharge
                      revenues generated from semipostals issued under the Semipostal
                      Authorization Act.



Recommendations for   We are reaffirming our recommendation made in April 2000 that the
                      Postmaster General direct postal management to make available the cost
Executive Action      data and analyses showing which BCRS costs have been recovered through
                      the First-Class postage rate to provide assurance that postal ratepayers are
                      not involuntarily contributing funds to breast cancer research.

                      We also recommend that the Postmaster General reexamine and, as
                      necessary, revise the Service’s December 2001 cost-recovery regulations to
                      ensure that the Service establishes baseline costs for comparable
                      commemorative stamps and uses these baselines to identify and recoup
                      excess costs from the BCRS’ surcharge revenue. As part of that process,
                      the Postmaster General should publish the baseline costs it is using. This
                      would help provide assurance that the Service is recouping all reasonable
                      costs of the BCRS from the surcharge revenue.



Agency Comments and   The Postal Service provided comments on a draft of this report in a letter
                      from the Senior Vice President, Government Relations dated September 10,
Our Evaluation        2003. These comments are summarized below and are reprinted as
                      appendix IV. Postal officials also provided technical and clarifying
                      comments, which we have incorporated into the report where appropriate.

                      The Senior Vice President indicated that the Service plans to take
                      appropriate actions to address our specific recommendations. He stated
                      that the Service never intended that its BCRS cost-recovery regulations be
                      interpreted as not requiring establishment of adequate baselines for
                      comparing certain categories of costs. However, he acknowledged that the
                      regulations might need to be revised to make the Service’s intent clearer.
                      Regarding the establishment of baselines, he noted that comparisons
                      between the BCRS and comparable commemoratives could involve
                      different facets in various areas. For example, he noted that printing cost
                      comparisons could be difficult because they may involve differing time
                      periods, different graphic designs, and different print runs. Nonetheless, he


                      Page 36                                   GAO-03-1021 Breast Cancer Research Stamp
said that the Service would reexamine its semipostal regulations with a
view toward proposing revisions about what costs are to be identified and
recouped from surcharge revenues.

In commenting on our reaffirmed recommendation that the Service make
available BCRS cost data and analyses, the Senior Vice President stated the
Service plans to reassess the earlier analysis it had commissioned on
recovery of BCRS costs through the First-Class Mail postage rate in light of
the cost-recovery issues raised in our report. He stated that the Service
would provide Congress and us with the results of that reassessment upon
completion.


We are sending copies of this report to the Chairman and Ranking Minority
Member, Subcommittee on Health, House Committee on Energy and
Commerce; and to the Chairman and Ranking Minority Member,
Subcommittee on National Security, Emerging Threats, and International
Relations, House Committee on Government Reform because of their
involvement in passage of the Stamp Out Breast Cancer Act. We are also
sending copies of this report to Senator Dianne Feinstein and
Representative Joe Baca because of their expressed interest in the BCRS;
the Postmaster General and Chief Executive Officer, United States Postal
Service; the Chairman of the Postal Rate Commission; and other interested
parties. Copies will also be made available to others upon request. In
addition, this report will be available at our Web site at http://www.gao.gov.

Key contributors to this report are listed in appendix V. If you or your staffs
have any questions about this letter or the appendixes, please contact me at
(202) 512-2834 or E-mail at ungarb@gao.gov.




Bernard L. Ungar
Director, Physical Infrastructure Issues




Page 37                                    GAO-03-1021 Breast Cancer Research Stamp
Appendix I

Objectives, Scope, and Methodology                                                            AA
                                                                                               ppp
                                                                                                 ep
                                                                                                  ned
                                                                                                    n
                                                                                                    xid
                                                                                                      e
                                                                                                      Ixsi




              Our objectives for this report were to fulfill our legislative mandate to
              update Congress on (1) the monetary and other resources the Postal
              Service has expended in operating and administering the Breast Cancer
              Research Semipostal (BCRS) program, (2) the effectiveness of using the
              BCRS as a means of fund-raising, and (3) the appropriateness of using the
              BCRS as a means of fund-raising. We also provide information on the status
              of recommendations made to the Postmaster General in our April 2000
              BCRS report. In essence, we recommended that the Service formalize its
              criteria for making BCRS cost recovery decisions and make BCRS cost data
              and analyses available to assure postal ratepayers that they were not
              involuntarily subsidizing BCRS costs.

              To describe the monetary and other resources the Service has expended in
              operating and administering the BCRS program, we updated pertinent
              information presented in our April 2000 report to reflect current
              conditions. To do this, we interviewed officials in the Service’s Offices of
              Stamp Services and Finance responsible for administering the BCRS
              program and tracking its costs. We gathered and analyzed data on the
              surcharge revenue raised by the BCRS as well as data on the costs and
              resources the Service used in operating and administering the BCRS
              program. We also identified and reviewed the Service’s criteria for
              determining which costs are to be recouped from the BCRS’ surcharge
              revenue and, as necessary, discussed with finance officials the application
              of the Service’s criteria for certain cost items.

              To determine if the BCRS has been an effective means of fund-raising, we
              obtained and analyzed BCRS sales data and discussed with finance and
              stamp services officials how certain events may have affected sales. We
              obtained similar information for the Heroes of 2001 semipostal and
              compared sales for the two semipostals. We also obtained information on
              how much BCRS generated funds had been transferred to the National
              Institutes of Health (NIH) and Department of Defense (DOD) for breast
              cancer research, and obtained information on how the money was being
              used to further breast cancer research. We did not evaluate or assess NIH’s
              and DOD’s process for determining who would be awarded BCRS research
              funds, nor did we evaluate any of the individual awards. Additionally, we
              did not independently verify any of the financial data provided by NIH and
              DOD. Further, we interviewed all but one of the key stakeholders that we
              had interviewed for our April 2000 report to determine if their views on the
              BCRS’ effectiveness as a fund-raiser have changed since our last report.
              The key stakeholders interviewed included representatives of (1) the
              American Cancer Society, (2) the National Breast Cancer Coalition



              Page 38                                  GAO-03-1021 Breast Cancer Research Stamp
                        Appendix I
                        Objectives, Scope, and Methodology




                        (NBCC), (3) the Susan G. Komen Breast Cancer Foundation, (4) Dr. B. I.
                        Bodai, and (5) the American Philatelic Society. We did not interview the
                        current Curator of the Smithsonian Institution’s National Philatelic
                        Collection for this report. We had interviewed the former Curator for our
                        April 2000 report, but the current Curator said that it was not within his
                        personal expertise to evaluate the effectiveness or appropriateness of the
                        BCRS, or semipostals in general, and it would not be proper for him to
                        comment in his role as an official of the Postal Museum. For this report, we
                        also interviewed Betsy Mullen, who is the founder of the Women’s
                        Information Network Against Breast Cancer, and who, along with Dr. B.I.
                        Bodai, lobbied Congress to pass legislation creating the BCRS. Further, we
                        interviewed the Chairperson of the Citizens Stamp Advisory Committee
                        because, since our last BCRS report, the committee has been given the
                        responsibility for reviewing semipostal candidates and making
                        recommendations to the Postmaster General. We did not update the
                        information included in our April 2000 report on foreign postal
                        administration’s semipostal activities because of the time and resources
                        that such work would have required and the limited new information that it
                        likely would have yielded.

                        To determine if the BCRS has been an appropriate means of fund-raising,
                        we interviewed the same key stakeholders identified above to solicit their
                        current views on the appropriateness of using the BCRS to raise funds. We
                        also researched and analyzed applicable sections of the U. S. Code and
                        Postal Service regulations to identify changes that have occurred since our
                        April 2000 report that either affected the BCRS directly or the semipostal
                        program in general. Additionally, we identified and analyzed pending
                        legislation that would affect the Service’s semipostal program.

                        We conducted our review at Postal Service Headquarters in Washington,
                        D.C., from February through August 2003 in accordance with generally
                        accepted government auditing standards.



Public Opinion Survey   To obtain the public’s opinion of the BCRS in 2003, we contracted with
                        International Communications Research (ICR) of Media, Pa. ICR included
                        five questions about the BCRS and semipostals in its national omnibus
                        telephone survey, conducted on 5 days, from June 27 and July 1, 2003
                        (Friday through Tuesday). Omnibus surveys of this type also collect
                        demographic information and include questions for other clients on other
                        topics. For our previous survey in 1999, ICR followed the same survey
                        procedures when it asked four of the five questions that we used in 2003. In



                        Page 39                                  GAO-03-1021 Breast Cancer Research Stamp
                              Appendix I
                              Objectives, Scope, and Methodology




                              2003, interviews were completed with respondents at 1,038 of the
                              estimated 9,046 eligible sampled households, for a response rate of about
                              11 percent1. These survey procedures yield a nonprobability sample of
                              members of the population of the contiguous United States (48 states and
                              the District of Columbia) who are 18 years or older, speak English, and
                              reside in a household with a residential, land-based telephone. The 89
                              percent nonresponse rate means that estimates in the report are subject to
                              nonsampling errors of unknown magnitude.

Selection of Households and   Random digit dial (RDD) equal probability selection methods were
Respondents                   followed to identify telephone numbers using the GENESYS Sampling
                              System. The GENESYS system draws numbers from those active banks of
                              telephone exchanges that have at least two household numbers listed and
                              are accessed through land lines. Exchanges assigned to cellular telephones
                              are not included.

                              The interviewers selected a member from each household, using a mixture
                              of random and systematic procedures. Because adult males are more
                              difficult to contact and interview in telephone surveys, ICR took the
                              following measures to meet the specification of at least 500 completed
                              male interviews, or approximately half of the sample. An interviewer first
                              attempted to interview the adult male (aged 18 or older) with the most
                              recent birthday. If that male was not present in the household at the time of
                              the telephone call, then any other male present in the household at that
                              time was selected; if no male was present, then an adult female was
                              selected, with first preference being for the female present with the most
                              recent birthday. Because the specifications were still not met, only males
                              were interviewed during the closing phase of the survey. Although routine
                              procedures specify five attempts to locate a respondent in each household,
                              many households did not receive five calls and had not been contacted by
                              the end of the interview period after one or more calls ended in a busy
                              signal, no answer, or inability to complete a callback attempt. The
                              respondent selection procedures eliminated interviewer judgment from the
                              selection process, but did not yield a random, probability sample of the U.S.
                              population. For example, these procedures exclude females who are

                              1
                               This is based on the Response Rate 3 (RR3) convention defined by the American
                              Association of Public Opinion Research:
                              http://www.aapor.org/default.asp?page=survey_methods/standards_and_best_practices/sta
                              ndard_definitions. This response rate is calculated on the assumption that telephone numbers
                              that were never contacted would have yielded eligible households at the same rate (24.8
                              percent) as that experienced with the contacted households.




                              Page 40                                            GAO-03-1021 Breast Cancer Research Stamp
                     Appendix I
                     Objectives, Scope, and Methodology




                     present in households at the time when a willing male is present. The
                     procedures also exclude any household members who are not at home at
                     the time the interviewer contacts the household.

                     Survey respondents are weighted in our analyses so that age, sex,
                     education, and regional estimates from our survey will match U.S. data
                     from the March 2002 Current Population Survey (CPS) on these
                     demographic characteristics for the adult population (18 years of age and
                     older) of the 48 contiguous states and the District of Columbia. The number
                     of telephone numbers in the household and number of household members
                     were also considered in the weighting process.

Sampling Errors      As with all sample surveys, this survey is subject to both sampling and
                     nonsampling errors. The effects of sampling errors, due to the selection of
                     a sample from a larger population, can be expressed as confidence
                     intervals based on statistical theory. The effects of nonsampling errors,
                     such as nonresponse and errors in measurement, may be of greater or
                     lesser importance, but cannot be quantified on the basis of the available
                     data.

                     Sampling errors occur because we use a sample to draw conclusions about
                     a much larger population. The survey’s sample of telephone numbers is
                     based on a probability selection procedure. As a result, the sample was
                     only one of a large number of samples that might have been drawn from the
                     total telephone exchanges throughout the country. If a different sample had
                     been taken, the results might have been different. To recognize the
                     possibility that other samples might have yielded other results, we express
                     our confidence in the precision of our particular sample’s results as a 95
                     percent confidence interval. For all the percentages presented in this
                     report, we are 95-percent confident that when only sampling errors are
                     considered, the results we obtained are within +/- 6 percentage points or
                     less of what we would have obtained if we had surveyed the entire study
                     population. For example, our survey estimates that 70 percent of the
                     population feels that it is very or somewhat convenient to use special
                     stamps to raise funds. The 95 percent confidence interval due to solely
                     sampling errors for this estimate is between approximately 66 percent and
                     73 percent.

Nonsampling Errors   In addition to the reported sampling errors, the practical difficulties of
                     conducting any survey introduce other types of errors, commonly referred
                     to as nonsampling errors. For example, questions may be misinterpreted,
                     some types of people may be more likely to be excluded from the study,



                     Page 41                                  GAO-03-1021 Breast Cancer Research Stamp
                     Appendix I
                     Objectives, Scope, and Methodology




                     errors could be made in recording the questionnaire responses into the
                     computer-assisted telephone interview software, and the respondents’
                     opinions may differ from those of people in the sampled households we did
                     not successfully interview.

                     For this survey, the 11 percent response rate is a potential source of
                     nonsampling error; we do not know if the respondents’ answers are
                     different from the 89 percent who did not respond. With the available
                     information we cannot estimate the impact of the nonresponse on our
                     results. Our results will be biased to the extent that the people at the 89
                     percent of the telephone numbers that did not yield an interview have
                     different opinions about or experiences with the BCRS than did the 11
                     percent of our sample who responded.

                     Once a respondent agreed to participate, the nonresponse for any
                     particular item was low. Unless otherwise noted, less than 4 percent of the
                     weighted answers to each question are in the category of not knowing an
                     answer or refusing to answer the particular question.

BCRS Questionnaire   The section of the questionnaire that obtained information on BCRS issues,
                     including the introduction and the five survey questions, follows:

                     Since 1998, at the direction of Congress, the U.S. Postal Service has been
                     selling a Breast Cancer Research stamp at a price above the First-Class
                     postage rate. The stamp currently sells for 45 cents, with 37 cents covering
                     the First-Class postage rate and most of the remaining 8 cents going to
                     breast cancer research. This stamp is available at post offices, postal
                     stores, special breast cancer fund-raising events, and from rural carriers
                     and some postal vending machines. In order to provide the Congress with
                     the public’s views on this topic, we would like to ask you some questions.

                     BC-1. Prior to hearing what I just told you about the 45-cent Breast Cancer
                     Research stamp, were you aware that the Postal Service was selling such a
                     stamp?

                     1   Yes
                     2   No
                     D   (DO NOT READ) Don’t Know
                     R   (DO NOT READ) Refused




                     Page 42                                   GAO-03-1021 Breast Cancer Research Stamp
Appendix I
Objectives, Scope, and Methodology




BC-2. In your opinion are special stamps with an added cost—such as the
45-cent Breast Cancer Research stamp—a convenient way for you to
contribute to a special purpose?

(READ LIST. ENTER ONE ONLY)

4 Definitely yes
3 Probably yes
2 Probably no
1 Definitely no
D (DO NOT READ) Don’t know/No opinion
R (DO NOT READ) Refused

BC-3. In your opinion, how appropriate or inappropriate is it to use special
stamps issued by the Postal Service to raise funds nonpostal purposes?
(READ LIST. ENTER ONE ONLY)

4 Very appropriate
3 Somewhat appropriate
2 Somewhat inappropriate
1 Very inappropriate
5 (DO NOT READ) Would depend on cause/purpose
D (DO NOT READ) Don’t know/No opinion
R (DO NOT READ) Refused

(IF Q 3 = SOMEWHAT INAPPROPRIATE OR VERY INAPPROPRIATE,
CONTINUE; ELSE SKIP TO Q 5)

BC-4. Please briefly explain why you believe it is inappropriate to use
special stamps issued by the Postal Service to raise funds for nonpostal
purposes.
(TYPE IN RESPONSE; PROBE FOR CLARITY AND TO THE NEGATIVE)

1. Response Given
D Don’t Know
R Refused




Page 43                                  GAO-03-1021 Breast Cancer Research Stamp
Appendix I
Objectives, Scope, and Methodology




BC-5. Have you ever purchased a Breast Cancer Research Stamp?

1 Yes
2 No
D (DO NOT READ) Don’t Know
R (DO NOT READ) Refused




Page 44                               GAO-03-1021 Breast Cancer Research Stamp
Appendix II

National Institutes of Health Breast Cancer
Research Awards Funded with Proceeds from
the BCRS’ Surcharge Revenue                                                                                                         Append
                                                                                                                                         Ixi




                                                 As of April 2003, the National Cancer Institute (NCI) reported that it had
                                                 funded 86 breast cancer research awards using money transferred to NIH
                                                 by the Postal Service from the BCRS’ surcharge revenue. The awards
                                                 totaled about $9.5 million and covered research areas that included
                                                 prevention, nutrition, biology, diagnosis, treatment, prognosis, metastasis,
                                                 tumorigenesis, and mutagenesis. Discounting a single, one-time
                                                 supplement for $4,300, individual awards ranged from $47,250 to $142,500
                                                 and averaged $111,395. Thirty-two of the 86 awards were noncompetitive
                                                 continuations of previous BCRS funded awards. According to NIH officials,
                                                 they were in the process of awarding the remaining funds that had been
                                                 transferred to NIH for breast cancer research. Table 4 identifies pertinent
                                                 information about each award, including the amount of the award, research
                                                 area, principal investigator, sponsoring institution, and the fiscal year of the
                                                 award.



Table 4: NIH/NCI Breast Cancer Research Awards Funded with Proceeds, as of April 2003, from BCRS Sales

Fiscal year   Institution                                       Principal investigator   Research area                      Amount
2000          Hadassah University Hospital                      Vlodavsky                Metastasis                          $61,000
2000          Clemson University                                Chen                     Biology/metastasis                $105,000
2000          Mount Sinai School of Medicine                    Kretzschmar              Metastasis                        $125,387
2000          Institute for Cancer Research                     Yeung                    Prevention/biology                $126,866
2000          University of Pennsylvania                        Lemmon                   Biology/treatment                 $118,875
2000          University of California, Irvine                  Blumberg                 Treatment                         $105,946
2000          Fox Chase Cancer Center                           Russo                    Tumorigenesis                     $126,866
2000          University of Melbourne                           Thompson                 Metastasis                          $75,000
2000          University of Hawaii                              Gotay                    Treatment                         $101,000
2000          University of Pennsylvania                        Radice                   Metastasis                        $118,875
2000          Wake Forest University                            Shelness                 Treatment                         $108,750
2000          Henry M. Jackson Foundation                       Lechleider               Biology/metastasis                  $74,000
2000          Virginia Mason Research Center                    Nelson                   Biology/treatment                   $47,250
2000          Georgetown University                             Wong                     Biology/diagnosis                 $116,950
2000          Columbia University                               Swergold                 Mutagenesis                       $127,875
2000          Baylor College of Medicine                        Rosen                    Metastasis                          $78,488
2000          Thomas Jefferson University                       Sauter                   Diagnosis                           $81,089
2000          Center for Molecular Medicine and                 Blumenthal               Treatment                         $142,500
              Immunology/Garden State Cancer Center
2000          University of Pittsburgh                          Nichols                  Biology/treatment                 $112,500




                                                 Page 45                                     GAO-03-1021 Breast Cancer Research Stamp
                                                  Appendix II
                                                  National Institutes of Health Breast Cancer
                                                  Research Awards Funded with Proceeds from
                                                  the BCRS’ Surcharge Revenue




(Continued From Previous Page)
Fiscal year    Institution                                         Principal investigator       Research area                       Amount
2000           University of Illinois at Chicago                   Westbrook                    Metastasis                         $116,475
2000           Dana-Farber Cancer Institute                        Kufe                         Biology/tumorigenesis              $119,915
2000           Albany Medical College                              Bennett                      Treatment                          $116,250
2000           Yale University                                     Zhang                        Biology/tumorigenesis              $122,625
2000           Long Island Jewish Medical Center                   Shi                          Treatment/nutrition                $116,616
2000           University of California, San Francisco             Collins                      Treatment                          $110,625
2000           University of Massachusetts, Amherst                Jerry                        Biology/tumorigenesis              $115,125
2000           University of Vermont                               Krag                         Treatment                          $113,250
2000           State University of New York                        Muti                         Treatment/nutrition                  $77,000
2000           University of Utah                                  Grissom                      Treatment                          $112,125
2000           Schepens Eye Research Institute                     D’Amore                      Biology/tumorigenesis              $121,500
2000           Massachusetts General Hospital                      Haber                        Tumorigenesis                      $129,500
2000           Beth Israel Deaconess Medical Center                Junghans                     Biology                            $130,500
2001           Whitehead Institute for Biomedical Research         Weinberg                     Biology                            $116,250
2001           Medical Diagnostic Research Foundation              Chance                       Diagnosis                            $92,500
2001           Columbia University Health Sciences                 Fisher                       Treatment                          $127,875
2001           Georgetown University                               Dickson                      Tumorigenesis                      $116,600
2001           University of Minnesota, Twin Cities                Sheaff                       Biology/prevention                 $111,375
2001           Dana-Farber Cancer Institute                        Garber                       Prevention                         $128,750
2001           Johns Hopkins University                            Fedarko                      Metastasis                         $122,750
2001           Northwestern University                             Jordan                       Prevention                         $110,250
2001           Stanford University                                 Contag                       Diagnosis/metastasis               $119,597
2001           University of California, Irvine                    Radany                       Biology                            $112,800
2001           Georgetown University                               Byers                        Prognosis/biology                  $116,550
2001           Wayne State University                              Fernandez-Madri              Diagnosis                          $111,750
2001           Hadassah University Hospital                        Vlodavsky                    Metastasis                           $61,000
2001           Clemson University                                  Chen                         Biology/metastasis                 $105,000
2001           Mount Sinai School of Medicine of New York          Kretzschmar                  Metastasis                         $127,125
               University
2001           Institute for Cancer Research                       Yeung                        Prevention/biology                 $126,133
2001           University of Pennsylvania                          Lemmon                       Biology/treatment                  $118,875
2001           University of California, Irvine                    Blumberg                     Treatment                          $112,800
2001           Fox Chase Cancer Center                             Russo                        Tumorigenesis                      $126,133
2001           University of Melbourne                             Thompson                     Metastasis                           $75,000
2001           University of Hawaii, Manoa                         Gotay                        Treatment                          $101,000
2001           University of Pennsylvania                          Radice                       Metastasis                         $118,875
2001           Wake Forest University                              Shelness                     Treatment                          $108,375




                                                  Page 46                                            GAO-03-1021 Breast Cancer Research Stamp
                                                       Appendix II
                                                       National Institutes of Health Breast Cancer
                                                       Research Awards Funded with Proceeds from
                                                       the BCRS’ Surcharge Revenue




(Continued From Previous Page)
Fiscal year         Institution                                         Principal investigator       Research area                       Amount
2001                Henry M. Jackson Foundation for the                 Lechleider                   Biology/metastasis                   $74,000
                    Advancement of Military Medicine
2001                Virginia Mason Research Center                      Nelson                       Biology/treatment                    $47,250
2001                Georgetown University                               Wong                         Biology/diagnosis                  $116,400
2001                Columbia University Health Sciences                 Swergold                     Mutagenesis                        $127,875
2001                Baylor College of Medicine                          Rosen                        Metastasis                         $109,322
2001                Thomas Jefferson University                         Sauter                       Diagnosis                          $119,148
2001                Garden State Cancer Center                          Blumenthal                   Treatment                          $142,500
2001                University of Pittsburgh                            Nichols                      Biology/treatment                  $112,500
2001                University of Illinois                              Westbrook                    Metastasis                         $116,475
2001                Dana-Farber Cancer Institute                        Kufe                         Biology/tumorigenesis              $125,862
2001                Albany Medical College of Union University          Bennett                      Treatment                          $116,250
2001                Yale University                                     Zhang                        Biology/tumorigenesis              $122,625
2001                Long Island Jewish Medical Center                   Shi                          Treatment/nutrition                $117,050
2001                University of California, San Francisco             Collins                      Treatment                          $110,625
2001                University of Massachusetts, Amherst                Jerry                        Biology/tumorigenesis              $115,125
2001                University of Vermont and State Agricultural        Krag                         Treatment                          $113,250
                    College
2001                University of Utah                                  Grissom                      Treatment                          $112,500
2001                Schepens Eye Research Institute                     D’Amore                      Biology/tumorigenesis              $121,500
2001                Massachusetts General Hospital                      Haber                        Tumorigenesis                      $127,500
2001                Beth Israel Deaconess Medical Center                Junghans                     Biology                            $130,500
2002                Fox Chase Cancer Center                             Russo                        Tumorigenesis                         $4,300
2002                Whitehead Institute for Biomedical Research         Weinberg                     Biology                            $116,250
2002                Medical Diagnostic Research Foundation              Chance                       Diagnosis                          $103,350
2002                Columbia University Health Sciences                 Fisher                       Treatment                          $127,875
2002                Georgetown University                               Dickson                      Tumorigenesis                      $116,400
2002                University of Minnesota, Twin Cities                Sheaff                       Biology/prevention                 $111,375
2002                Dana-Farber Cancer Institute                        Garber                       Prevention                         $128,375
2002                Johns Hopkins University                            Fedarko                      Metastasis                         $122,625
2002                University of California, Irvine                    Radany                       Biology                            $112,800
2002                Georgetown University                               Byers                        Prognosis/biology                  $116,400
2002                Wayne State University                              Fernandez-Madrid             Diagnosis                          $111,750
Total                                                                                                                                  $9,472,843
Source: NCI, NIH.




                                                       Page 47                                            GAO-03-1021 Breast Cancer Research Stamp
Appendix III

Department of Defense Breast Cancer
Research Awards Funded with Proceeds from
the BCRS’ Surcharge Revenue                                                                                                                        Append
                                                                                                                                                        Ixi




                                                                As of April 2003, the U.S. Army Medical Research and Materiel Command
                                                                reported that it had funded 19 breast cancer research awards using money
                                                                transferred to DOD by the Postal Service from the BCRS’ surcharge
                                                                revenue. The awards totaled about $6.8 million and covered research areas
                                                                that included genetics, imaging, biology, epidemiology, immunology, and
                                                                therapy. Individual awards ranged from $5,000 to $578,183 and averaged
                                                                $356,478. According to DOD officials, about $256,000 of the transferred
                                                                funds had been used for management expenses, and DOD was in the
                                                                process of awarding the remaining funds. Table 5 identifies pertinent
                                                                information about each award, including the amount of the award, research
                                                                area, principal investigator, sponsoring institution, and the fiscal year of the
                                                                award.



Table 5: DOD Breast Cancer Research Awards Funded with Proceeds, as of April 2003, from BCRS Sales

Fiscal year             Institution                                           Principal investigator   Research area                       Amount
1999                    Garvan Institute                                      Daly                     Cell biology                       $283,649
1999                    Scripps Institute                                     Deuel                    Molecular biology                     $5,000
1999                    University of California, Davis                       Heyer                    Molecular biology                  $111,444
1999                    Garvan Institute                                      Musgrove                 Cell biology                       $222,652
1999                    University of Arkansas                                Shah                     Cell biology                       $279,000
1999                    Texas A&M University                                  Wang                     Imaging                            $317,510
1999                    University of Texas, SW Medical Center                White                    Molecular biology                  $334,094
1999                    Tel Aviv University                                   Wreschner                Cell biology                       $225,000
2000                    Burnham Institute                                     Adamson                  Cell biology                       $578,183
2000                    University of Arizona                                 Akporiaye                Immunology                         $454,500
2000                    University of Toronto                                 Penn                     Molecular biology                  $296,142
2001                    Vanderbilt University                                 Cai                      Epidemiology/genetics              $560,144
2001                    University of California, Davis                       Carraway                 Cell biology                       $427,225
2001                    University of Texas, SW Medical Center                Chaudhary                Cell biology                       $312,434
2001                    Purdue University                                     Geahlen                  Cell biology                       $425,425
2001                    St. Luke’s-Roosevelt Hospital Center                  Rosner                   Cell biology                       $454,181
2002                    University of South Florida                           Dou                      Therapy                            $491,999
2002                    Fox Chase Cancer Center                               Godwin                   Genetics                           $504,000
2002                    Yale University                                       Perkins                  Genetics                           $490,500
Total                                                                                                                                    $6,773,082
Source: U.S. Army Medical Research and Materiel Command, DOD.




                                                                Page 48                                     GAO-03-1021 Breast Cancer Research Stamp
Appendix IV

Comments from the U.S. Postal Service                                Append
                                                                          V
                                                                          Ixi




              Page 49         GAO-03-1021 Breast Cancer Research Stamp
Appendix IV
Comments from the U.S. Postal Service




Page 50                                 GAO-03-1021 Breast Cancer Research Stamp
Appendix V

Contact and Staff Acknowledgments                                                                 Append
                                                                                                       V
                                                                                                       xi




GAO Contact       Gerald P. Barnes (202) 512-2834



Acknowledgments   Alan N. Belkin, Kathleen A. Gilhooly, Kenneth E. John, Stuart M. Kaufman,
                  Roger L. Lively, Jill P. Sayre, and Charles F. Wicker made key contributions
                  to this report.




(543052)          Page 51                                  GAO-03-1021 Breast Cancer Research Stamp
GAO’s Mission            The General Accounting Office, the audit, evaluation and investigative arm of
                         Congress, exists to support Congress in meeting its constitutional responsibilities
                         and to help improve the performance and accountability of the federal government
                         for the American people. GAO examines the use of public funds; evaluates federal
                         programs and policies; and provides analyses, recommendations, and other
                         assistance to help Congress make informed oversight, policy, and funding
                         decisions. GAO’s commitment to good government is reflected in its core values of
                         accountability, integrity, and reliability.


Obtaining Copies of      The fastest and easiest way to obtain copies of GAO documents at no cost is
                         through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and full-
GAO Reports and          text files of current reports and testimony and an expanding archive of older
                         products. The Web site features a search engine to help you locate documents
Testimony                using key words and phrases. You can print these documents in their entirety,
                         including charts and other graphics.
                         Each day, GAO issues a list of newly released reports, testimony, and
                         correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site
                         daily. The list contains links to the full-text document files. To have GAO e-mail this
                         list to you every afternoon, go to www.gao.gov and select “Subscribe to
                         e-mail alerts” under the “Order GAO Products” heading.


Order by Mail or Phone   The first copy of each printed report is free. Additional copies are $2 each. A check
                         or money order should be made out to the Superintendent of Documents. GAO
                         also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a single
                         address are discounted 25 percent. Orders should be sent to:
                         U.S. General Accounting Office
                         441 G Street NW, Room LM
                         Washington, D.C. 20548
                         To order by Phone:     Voice: (202) 512-6000
                                                TDD: (202) 512-2537
                                                Fax: (202) 512-6061


To Report Fraud,         Contact:
                         Web site: www.gao.gov/fraudnet/fraudnet.htm
Waste, and Abuse in      E-mail: fraudnet@gao.gov
Federal Programs         Automated answering system: (800) 424-5454 or (202) 512-7470



Public Affairs           Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800
                         U.S. General Accounting Office, 441 G Street NW, Room 7149
                         Washington, D.C. 20548
United States                  Presorted Standard
General Accounting Office      Postage & Fees Paid
Washington, D.C. 20548-0001           GAO
                                 Permit No. GI00
Official Business
Penalty for Private Use $300
Address Service Requested