FLASHBACK: Mail Operational Review Report

Back to our Operational Review Reports today with the report from the Mail Team.

The Operational Review team examining mail has finished its review. Mail operations certainly drive costs in state government to a tune almost $300 million on mail related services in the last five fiscal years. Inefficient mail operations can result in excess spending on postage and equipment. The Review team examined best practices which could be implemented, consolidation and standardization of mail operations, and mail security.

Operational/Cost Efficiency

Current Situation

State Mail Services (SMS) that has positioned itself to start the consolidation of mail operations. SMS is currently providing metering services for over 25 state agencies’ outgoing mail. Since the hiring of the State Mail Manager in August, 2006, SMS has continued to show progress with this initiative.

Increased Postal Services: SMS has begun providing postal services to all agency customers that may not have been available before the consolidation effort. Some of these services include:

• metering of outgoing mail,
• pick-up of mail from Post Office Boxes,
• reducing the number of USPS permits agencies have to purchase,
• electronic USPS special services,
• training regarding postal operations,
• and consultation with agencies about mail issues including envelope or mail piece design.
  

Presort: Streamlining mail operations for smaller state agencies will help the Commonwealth take advantage of the various discount programs offered by the USPS to large mail operations. SMS currently works with a vendor to combine mail volumes from smaller state agencies to allow them to receive discounted postage rates for presorting. Agencies are now processing their mail at $0.41 per piece. Under the SMS presort program, presorted mail can be processed by the USPS at $0.36 or less.

Policy and Procedures: Much headway has been made toward standardization of procedures for processing mail at the Seat of Government. The SMS Mail Services Guide outlines uniform methods for preparing mail at all agencies for which SMS services are provided and is a standard for other state agencies

Recommendations

The following recommendations are offered about Operational/Cost Efficiencies:

• Develop a mechanism to charge for special services. This would allow for the development of special services and accurate cost sharing for these services. With SMS positioning itself to become a full service mail center, a formula must be in place to recover costs for SMS while at the same time saving agencies that utilize the services money.
• Increase presort usage by either obtaining a presort machine and performing this function in-house or by careful oversight of a private vendor.
• Consider print-to-post technology.
• Conduct a current survey of carrier services used by agencies. This may identify opportunities for consolidating services or offering a statewide contract.
• Obtain a better picture of the mail operations of agencies that are not currently utilizing SMS services.
• Look into their reasons for not doing so and address these issues.
• Consolidate USPS permits across agencies to decrease fees and increase postage savings.
• Expand the use of barcodes to increase efficiency in cost accounting of outgoing mail.
• Eliminate costly postage meters and other duplicate equipment used by agencies.
• Physically position the SMS operations closer to the Seat of Government.
• Require agencies to consult with SMS before printing mail pieces or envelopes to ensure the piece is properly designed for USPS standards and efficient processing.
• Standardize envelope size, type, and font to obtain maximum postage discounts and efficiencies.
• Reduce the number of P.O. boxes held by state agencies.
• Standardize the design of inter-agency envelopes to prompt users to fill in all necessary information
• Increase mail runs to encourage more agencies to utilize the services
• Expand the SMS inter-agency routes to increase the network that agencies can send mail for free.
• Further develop best practices and rollout to agencies.
• Continue to consolidate mail operations from smaller agencies.
• Utilize the state contract for presorting abnormal size mail that offers a substantial cost savings over regular USPS rates.
• Increase reliability of SMS mail with scanner equipment to track routes and packages.
• Reduce unwanted mail like promotional mail pieces that costs agencies time to process and handle.
• Educate and take a statewide approach to address cleansing of mailing address lists by looking at software solutions that could be utilized by all agencies.
• Create a centralized drop box(es) for SMS to pick-up mail for agencies that occasionally need a late drop.
• Explore opportunities with colleges and agencies outside of Richmond.

Performance Measures

Any state agency that meters outgoing mail should be required to gather and report data on that operation. The data should be sent monthly to SMS to compile a consolidated report. This data should be broken down into two sections: data from Richmond area offices and data from field offices outside of Richmond. The items listed below need to be a part of any performance measure related to SMS:

• The number of postage meters owned or rented.
• The number of P.O. boxes rented.
• The monthly piece count for incoming mail.
• The monthly piece count for outgoing mail.
• The monthly count of letters that are presorted.
• The amount spent on postage for outgoing mail.
• The number of reportable mail incidents each month as defined by SMS.

A more detailed survey about agency postal operations could be conducted every couple of years to gather additional data.

Mail Security

The second study by Federal Engineering (June 2005), Commonwealth of Virginia Mail Services Initiative, found that the Commonwealth does not have an overall security master plan in place that addresses the current and future security requirements necessary for being considered as an integrated approach to mail security.The Federal Engineering study offered that an effective mail security program must have many objectives, including:

• Protecting employees and building occupants;
• Minimizing the likelihood of workers compensation claims and litigation resulting from providing an unsafe work environment;
• Avoiding unwarranted, costly, and disruptive business efforts and evacuations;
• Preventing the shutdown of facilities related to threats resulting in building damage or contamination;
• Developing and implementing effective security best practices;
• Maintaining a quality oriented employee security awareness training curriculum;
• Providing training to employees on the use of security equipment;
• Having effective and tested occupant emergency plans, communications plans and continuity of operations plans; and
• Establishing facility and systems security standards, specifications and guidelines.

Current Mail Security Practices

Currently, a limited number of large state agencies and institutions practice some form of mail security and have procedures in place to provide such security. It is believed that these measures vary widely and only a few agencies have adequate procedures in place to alert mail personnel to a potential problem with incoming mail. The large majority of other agencies have no such procedures or training in place. For the most part, these agencies rely on the USPS mail screening.

The 2006 Virginia Acts of Assembly charged the Department of General Services’ State Mail Services (SMS) with the task of enhancing and implementing a more uniform mail security program within state government. As a result, SMS has made mail security a top priority. SMS has created the Commonwealth Mail Security Guide as a uniform resource to assist state agencies and their employees in keeping the mail stream safe and secure.

The Commonwealth Mail Security Guide provides best practice guidance for the following issues:

• Recognizing suspicious mail and knowing how to handle it, including prevention of exposure, development of administrative controls, use of protective equipment, and engineering controls;
• Developing a strong mail center security plan, supplemented with regular training exercises, rehearsals, and reviews helps instill a culture that emphasizes the importance of security;
• Conducting a threat assessment that identifies: the assets and missions that must be protected; potential threats; vulnerability of agency assets and missions; impact or consequences if that asset was lost, damaged, destroyed or otherwise prevents the agency from performing its mission; and the risk level for each asset or mission;
• Developing comprehensive incoming mail procedures to include: limiting access to individuals who deliver mail to the mail center; making personal protection equipment available to employees; requiring employees to wear photo identification; instructing employees to challenge any unknown person in the facility; considering beneficial equipment such as X-ray machines which can enhance security; inspecting mail for suspicious characteristics; giving extra care to letters and packages to senior officials whose names or positions give them higher public visibility; and establishing procedures for handling unexplained or suspicious packages;
• Developing a loss prevention plan that prevents the theft of supplies, postage, mail and valuable information contained in sensitive mail;
• Developing physical security in a mail center focused on the location and design of the mail center to mitigate threats;
• Testing and training mail center employees in order to develop a culture of security awareness to enable them to handle threats and reduce the risk of an incident.

The following recommendations are offered about Mail Security:

• The Commonwealth Mail Security Guide should be distributed to all agency heads and their mail center managers. Agency management should include mail security as a top priority to demonstrate to all employees that management is committed to their safety.
• This Guide should be distributed by the Office of Commonwealth Preparedness and posted to their website.
• Upon completion of a mail security risk assessment all agency and institution mail centers should develop a comprehensive mail screening and training program for their mail center personnel based on the Guide. Such training should be made mandatory for mail center personnel. The Department of Human Resource Management (DHRM) maintains an internet-based Learning Management System (LMS) with a number of educational and training programs for Commonwealth employees. SMS should work in concert with DHRM to make use of this training system by developing a mail security program as one of the modules of the LMS for training staff throughout the Commonwealth
• Based on the risk assessment and development of a mail security plan, agencies and institutions should request sufficient funds in their budget to bring their mail operations up to a level deemed appropriate to mitigate identified risks. Agencies should consult SMS before purchasing equipment to make sure it is appropriate and opportunities for collaboration are not overlooked. SMS should geographically distribute available X-ray equipment to major mail centers. This equipment should be available to multiple agencies to reduce duplication.
• SMS should work toward centralizing all incoming mail in the Richmond area in a remote facility for agencies and institutions that do not have the means to secure incoming mail at the level deemed appropriate to mitigate risk.
• In addition to notifying the proper authorities (i.e. Virginia State Police) in regard to any mail incident or threat, agency and institutions should be required to track and report such security issues and incidents to SMS on the form provided in the Guide.
• Agency and institution mail security plans should be incorporated in their COOP plans.
• The Mail Security Guide encourages individual agencies to perform threat assessments. The Commonwealth should conduct a centralized/coordinated assessment across all mail operations.

Communication and Education

The complete report also addresses the need to educate agencies on consolidation, presorting, and security.

Mail Reduction

At one time, the Department of Taxation mailed an individual income tax booklet to every eligible taxpayer in Virginia so that they would have the applicable forms and instructions necessary to complete and file their income tax return (approximately three million). Over the years, as taxpayers and tax practitioners began using software to prepare and file the tax returns, the department decided to cease sending tax booklets to taxpayers that had filed a return electronically or had sent in a paper tax return that was printed from computer-generated software. The idea being that they did not need paper returns and instructions because these taxpayers used a computer and had access to all the information online. This shift dramatically lowered printing and mailing costs for the Department of Taxation and today less than 500,000 tax booklets are mailed.

There are potentially many areas where mail can be reduced, saving on postage as well as printing and paper.

Thanks to everyone who made this Operational Review possible.

Co-Team Leader: Senator Ryan McDougle
Co-Team Leader: Delegate Mark Sickles
Coordinator: Bobby Myers, Department of General Services
Gerald Henson, Department of General Services
Patti Higgins, Department of Taxation
Adam Jackson, Department of General Services
David McGreevy, Department of General Services
Harold Moore, Department of the Treasury
Jennifer Parker, Senate of Virginia
Thomas Rozman, Department of Labor & Industry
Robert Young, Department of the Treasury