[Federal Register Volume 60, Number 147 (Tuesday, August 1, 1995)]
[Notices]
[Pages 39196-39198]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18761]
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POSTAL SERVICE
Verification Procedures for Second-Class Publications
AGENCY: Postal Service.
ACTION: Notice of revised procedures.
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SUMMARY: On January 20, 1995, the Postal Service published a notice for
public comment in the Federal Register (60 FR 4207-4208) concerning
revised procedures for conducting verifications of publications
authorized for mailing at second-class postage rates. Under the revised
procedures, the Postal Service will separate the verification process
into two reviews, one for validating correct postage payment and one
for determining continued eligibility for second-class authorizations.
A postage payment review will be conducted at least once a year for
each authorized second-class publication. An eligibility review will be
conducted as determined by the Postal Service from circulation data
provided by the publisher of an authorized second-class publication.
EFFECTIVE DATE: August 31, 1995.
FOR FURTHER INFORMATION CONTACT: Edward J. Mayhew, (212) 613-8747.
SUPPLEMENTARY INFORMATION: In accordance with its statutory
responsibilities, the Postal Service must ensure that authorized
second-class publications meet all applicable second-class eligibility
requirements and that the proper amount of postage is paid on mailings
of those second-class publications. See 39 U.S.C. 404, 3685.
The physical inspection of mailings of second-class publications
and the examination of records and documentation related to those
mailings have been the principal means used by the Postal Service to
carry out its statutory responsibilities. A long-standing goal of the
Postal Service has been to review all publications on an annual basis.
An annual review of every publication, however, has not always been
possible at all post offices, particularly those offices where large
numbers of different publications are entered at second-class rates.
1. Background
Currently, the Postal Service schedules a second-class publication
for review every 1 to 3 years, depending on the number of second-class
publications authorized original entry at the post office conducting
the review. For the issue of the publication to be examined, the review
centers on these two activities:
a. Substantiating that the publication meets second-class
eligibility requirements, particularly circulation requirements.
b. Verifying that the mailing statement submitted with the mailing
of the publication is complete and the postage payment correct.
After a careful analysis of its review procedures for second-class
publications, the Postal Service determined that the current procedures
no longer promote the most efficient use of postal resources. On one
hand, the Postal Service believes that, for some publications,
eligibility reviews do not serve a significant purpose. Where other
evidence provides assurance that a publication remains eligible for
second-class mailing privileges, an on-site review simply confirms a
fact already known. On the other hand, the Postal Service believes that
annual postage payment reviews for all publications not only confirm
the accuracy of postage payment but also prevent a potential for long-
term accumulations of any revenue deficiency that might be discovered
during the reviews.
Accordingly, the Postal Service proposed revising its review
procedures for second-class publications by separating the procedures
along the lines of the two review activities, each
[[Page 39197]]
with different scheduling criteria as follows:
a. For the eligibility review, an annual review is to be conducted
only for publications with a confirmed legitimate circulation of 60
percent or less on randomly selected issues.
b. For the postage payment review, an annual review is to be
conducted for all publications, regardless of the percentage of
confirmed legitimate circulation.
The proposed changes sought to shift postal personnel and other
resources from verifications that serve limited purposes (that is,
eligibility reviews that only confirm independent assurances of
continued second-class eligibility) to verifications that respond to
concerns about revenue protection (that is, postage payment reviews
that uncover potential revenue deficiencies).
2. Revised Procedures
The revised review procedures will separate the postage payment
review from the eligibility review. Each second-class publication will
receive an annual postage payment review at each post office where
second-class postage is paid. This review will be conducted at the time
of mailing. Publishers claiming automation and presort rates will also
be required, at the time of the postage payment review, to submit
documentation substantiating eligibility for those rates. This
documentation consists of the same documentation already required under
current procedures.
For those publications subject to circulation standards (general,
requester, institutions and societies, and some foreign), the Postal
Service will determine whether to conduct an eligibility review by
using the data provided by the publisher on PS Form 3526, Statement of
Ownership, Management, and Circulation (that is, a review will be
scheduled according to the percentage of paid or requested circulation
shown on the form). The Postal Service still retains its right,
however, to review a publication if a question arises about the
eligibility of that publication for second-class mailing privileges,
regardless of the data provided on PS Form 3526.
When a second-class publication is selected for an eligibility
review, the publisher will be notified by the post office serving the
known office of publication. The publisher will be advised of the issue
to be verified. To conduct the review as quickly and efficiently as
possible, the Postal Service will ask the publisher to provide
circulation information before the review date. For this purpose, the
Postal Service has revised PS Form 3548, Review and Verification of
Circulation.
Accordingly, the original entry post office will mail the publisher
a blank PS Form 3548 with a cover letter asking the publisher to
complete the unshaded parts of the form for a specified publication
issue. The publisher will have 15 days from the receipt of the form to
complete and return the form to the postmaster of the original entry
office.
The unshaded parts of PS Form 3548 filled in by the publisher will
contain information about the total distribution of the issue to be
reviewed. A Postal Service representative will examine the circulation
records at the known office of publication to verify compliance with
circulation requirements.
Publications reviewed by Postal Service-approved independent audit
bureaus will continue to have their eligibility and postage payment
reviews conducted by those bureaus. Consistent with current practice,
the Postal Service still retains the right to review the records of any
publication and to reach its own conclusion about compliance of the
publication with the applicable eligibility requirements. Publications
mailed under the Centralized Postage Payment System will continue to
have postage payment reviews conducted annually by the New York Rates
and Classification Service Center.
3. Public Comments
The comment period ended on February 21, 1995, and only three
written comments were received. After thorough consideration of those
comments, the Postal Service adopts the revised procedures as proposed.
The first commenter did not object to the separation of the review
process into eligibility and postage payment reviews but did object to
what the commenter viewed as ``the proposed weakening of current
second-class subscriber verification procedures.'' The commenter
expressed concerns that the Postal Service would determine which
publications to review by relying solely on data provided by publishers
on PS Form 3526, Statement of Ownership, Management, and Circulation.
The commenter asserted that reliance on such data ``is inadequate to
police those who misstate circulation data so as to qualify improperly
for second-class mailing privileges.'' The commenter also objected to
the Postal Service policy concerning the release of second-class
mailing statements under the Freedom of Information Act.
As an initial matter, the Postal Service plans to conduct
eligibility reviews of publications whenever it believes that valid
reasons exist for such reviews, regardless of the data provided by a
publisher on Form 3526. The Postal Service agrees with the commenter
that the vast majority of publishers file honest reports and strongly
believes that this practice will not change with the revised review
procedures. Those publishers tempted to deceive the Postal Service
under the revised procedures can just as readily provide false
information under current procedures. Criminal and civil fraud
provisions, however, provide a strong deterrent to such activity.
As far as the commenter's objection to Postal Service policy on the
release of mailing statements under the Freedom of Information Act, a
response to that objection is outside the scope of this notice.
The second commenter expressed concerns that the Postal Service was
``moving backward'' in its attempt to conduct reviews of authorized
publications. The commenter predicted that, under the revised review
procedures, entry post offices serving publishers' printers and
fulfillment houses would be overwhelmed with publication issues to be
verified. Such a large number of postage payment reviews to be
conducted at one time would, according to the commenter, delay the
processing of publications not having appropriate documentation to
support analyses of zone-rated advertising portions in the
publications.
The Postal Service assures publishers that the revised review
procedures have been tested and that they will not cause congestion or
processing delays at business mail entry units or detached mail units.
The documentation from which the review data will be drawn is the same
documentation required with the mailing of a publication under current
procedures. The Postal Service wishes to remind publishers that
although some shift in the number of reviews will occur at certain post
offices, only one issue of a publication will be reviewed each year and
publishers will receive prior notification of the review date.
The third commenter remarked that the revised procedures are too
burdensome because they impose ``a new level of review on second-class
publications'' and because they eliminate the ``responsibility bulk
mail acceptance clerks have for the information and advice they give
mailers.'' The commenter, while ``agree[ing] with the philosophy'' that
the Postal Service should conduct eligibility reviews ``according to
its judgment of the necessity for the review,'' asserted that some
publishers
[[Page 39198]]
mail publications that do not always qualify for second-class rates and
that revocations of second-class mailing privileges take an average of
10 years, with a minimum of 6 years.
The Postal Service believes that the revised review procedures do
not entail an additional level of review. Postage payment reviews have
been a long-standing part of Postal Service audits of second-class
publications. The revised procedures ensure that all publications are
reviewed on a uniform annual basis in contrast to the current system in
which some publications are reviewed at least three times as often as
others.
The Postal Service also believes that the commenter's concerns that
the procedure will add an extra layer of staff effort and increase
handling costs is unfounded. The revised review procedures simply
reallocate current resources to more productive functions. These
procedures do not lessen the responsibility of acceptance clerks, who
perform an important role at the deposit point in examining the mail
for proper preparation. These clerks cannot be expected, however, to
uncover all possible errors during their reviews. To do so would
require an in-depth scrutiny that increases considerably the cost of
reviews, if done on each mailing, and delays the acceptance and
processing of the mailing.
With respect to the comment about the responsibility of postal
employees providing accurate information, the Postal Service believes
that the commenter is concerned that the revised procedures will
increase revenue deficiency assessments and possibly even criminal
penalties, both of which the commenter finds objectionable in cases
where a postal employee makes an error in calculating postage or
accepting the mail or the employee provides incorrect advice to a
publisher about second-class eligibility requirements. This commenter's
concerns suggest that the Postal Service audit its own acceptance
practices at postal facilities and devote more resources to training
employees.
The commenter's suggestions about examining acceptance procedures
at business mail entry units and improving employee training are well
taken. The Postal Service does, in fact, conduct frequent audits of
mail acceptance procedures at its facilities. The Postal Service also
provides training for postal employees throughout the year, using
classroom and on-the-job instruction to convey the intent of new and
current programs, policies, and procedures.
With respect to the concerns about the imposition of a revenue
deficiency where a mailer has relied on the advice of a postal
employee, the Postal Service notes, as in prior rulemakings, that the
Postal Service is required to collect debts owed to it but will
consider requests for relief or compromise of deficiencies on a case-
by-case basis, consistent with existing policies. See 59 FR 23161-23162
(May 5, 1994).
An annual postage payment review will facilitate the discovery of
preparation problems. Although this review, on occasion, might result
in the assessment of a revenue deficiency, an annual review avoids the
expense and processing delays associated with in-depth reviews of each
mailing. An annual review also ensures that all publishers operate
under the same rules, consistent with the commenter's belief that the
eligibility rules for second-class mailing privileges should be
enforced uniformly.
Although the average revocation action does not approach the age
estimated in the comment, the Postal Service acknowledges that
venerable cases exist. The Postal Service is making efforts to expedite
these cases while complying with its obligation to afford all
publishers due process.
Appropriate procedures to reflect these changes will be implemented
upon publication of this notice.
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 95-18761 Filed 7-31-95; 8:45 am]
BILLING CODE 7710-12-P
