1. SARBANES-OXLEY
February 12, 2011

2. What is Sarbanes-Oxley?
Myth: It is an additional workload.
Fact: It is simply following the processes and procedures that exist.
Myth: Only pertains to retail transactions
Fact: It is all financial transactions
Myth: Only for customer services
Fact: It is everyone’s responsibility
Key Points:
Compliance with SOX is not a one-time event. Improving corporate governance and reducing opportunity for fraudulent practices changes the way a company does business and how they are perceived in the public’s eye.
The Securities and Exchange Commission (SEC) administers the SOX program and has published guidance on best practices for implementing a SOX compliance program.
However, the Postal Service reports to the Postal Regulatory Commission (PRC), not the SEC. 2

3. Accurate Timely Authorized
SOX Buzz words
What are the three buzz words for SOX, that if you follow, you will usually be in compliance?
Accurate
Timely
Authorized

4. FY 11 will be BMA/DMU, PVDS, PRU, Voyager, Smartpay and BRM
USPS is testing the effectiveness of financial controls at postal facilities across the country. This phase is an important step as USPS works toward Oct 1, 2010, when its finances will be subject to the terms of the Sarbanes-Oxley (SOX) Act. (USPS News Link Sept 23)
Need to be at least 95% compliance in all financial aspects
FY 10 Focused on BMA/DMU and PVDS
FY 11 will be BMA/DMU, PVDS, PRU, Voyager, Smartpay and BRM

5. In Compliance Success: BMEU and BRM – Negative balances
Inactive Accounts
Late Mailing Statements
Voyager-
Reconciling statements
Audits-
Clerk cash counts
SIA retail floor audits
Purchasing-
Smartpay card
eBUY
BRM FY08 South florida district $5.2 mil vs FY 09 $5.2 New area FY 08 $2.2 mil VS $2.2 mil

6. SOX Tips of the Week PS FORM 3971 Detailed information can be found in
Field Finance Training: Timekeeping
PS Form 3971, Request for or Notification of Absence: A PS Form 3971 must be completed for every period of leave taken. This is the supporting documentation for the leave entered.
Unscheduled Leave: Employee’s time card is attached to the PS Form 3971 and kept in the Supervisor/Manager office. Employee meets with Supervisor to retrieve their time badge and signs the PS Form Supervisor finalizes the form and files it in the centralized location in the unit by employee name.
Scheduled Leave: Except for emergencies and unexpected illness or injury, leave for all employees must be requested and approved in advance by the appropriate supervisor on a PS Form Sufficient leave balance to cover the period requested should be verified.

7. SOX Tips of the Week PS FORM 3971
Detailed information can be found in
Field Finance Training: Timekeeping
Future leave:
PS Forms 3971 for future leave are kept in a central location in each unit and Plant. The Plants file by tour by date and the Units file by date. Supervisor verifies the leave slips when making the schedule for the following week, inputs the leave into eRMS and finalizes the PS Form The form is then filed in the central location by employee name.
****see next slide for a properly completed PS Form 3971****

8. Completing Time and Attendance Forms
PS Form 3971, Request for or Notification of Absence

9. Steps Necessary for Compliance
Communication
Follow policies and procedures
Continue to be aware of policy and procedures changes
Promote good business practices; reinforce accountability
Ensure processes are in place
Provide oversight and follow up

10. Daily SOX BMEU Certification
Daily Certification
Daily SOX BMEU Certification
Not just a writing exercise
Must be completed same day
Effective Oct 1st , this will be included in the escalation process
Daily SOX Certification
Certifying you are completing the checklists and items
Tracks the employee who was logged in compares to name typed in

11. Reviewing documentation
Money orders
Clerk found guilty of converting money orders for personal use $42,000.
PS Form 3533 Refunds
Clerk issues false refunds
Converting Postal Funds for personal use
Clerk does not input each transaction and pockets the funds
Not conducting actual audits
Hides shortages

12. Financial transactions
eTRAVEL
Local travel
Duplicate payments
Within 5 days of return
Purchasing
eBuy
Smartpay Card
Invoices
Timekeeping
PS Form 3971
PS 1017A & B
PS Form 1723
Clock rings

13. Importance of Key Financial Activities
Fully performing the financial activities will help prevent loss of revenue
Activities ensure timely and appropriate revenue and expense recognition
The absence of any one or a combination of key financial activities could result in a material weakness.

14. Benefits of Compliance
Reinforces public trust in our financial reporting
Standardization and streamlining of processes and systems
Increased accountability and ownership of controls
Improved structure to solve operational issues by working together across functions
Consistent documentation of processes and systems
Key Points: 14