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AUDITING FIXED AND FLEXIBLE
CREDIT ACCOUNTS
Learning Objective: Recall the procedures
for conducting postal audits.
Stamps and postal stationery are issued by a PFO
to MPOs in the form of fixed credit, or by Postmaster,
New York or Postmaster, San Francisco as flexible
credit.
Fixed credit is a fixed amount of monetary credit
extended to a COPE or other postal clerks for
conducting financial services and for ordering stamps
and stamped paper from the USPS.
Flexible credit is an initial amount of credit
extended to a COPE or PFO by the U.S. Postal Service
for ordering accountable paper. A stamp sales
remittance reduces the amount of credit, while stamp
requisitions increase the credit.
The total amount of fixed or flexible credit carried
by an MPO depends upon the estimated number of
persons to be served. As a general guide, this amount is
calculated at a minimum of $25 per person with a
minimum amount of $5,000 for the command’s credit.
For fixed credit accounts, the COPE only keeps enough
of the fixed credit to conduct day-to-day operations.
The rest is held by a reserve custodian and receipted for
on a Consigned Credit Receipt, PS Form 3369. The
COPE keeps the original of the PS Form 3369 and the
reserve custodian is given a duplicate copy. As stamps
are sold, the cash from stamp sales becomes part of the
fixed credit. To replenish stamp stock, the COPE must
submit a stamp requisition once the cash on hand
reaches 25% of the fixed credit. The amount of stamp
stock on hand added to the amount of cash on hand and
requisitions in transit should always equal the total
amount of the command’s fixed credit.
When new stamp stock is ordered for a fixed credit
account, funds are remitted by check to the PFO or
NPFO. Upon receipt, the stamps become a part of the
fixed credit. As the COPE, you must always be able to
produce the full amount of the credit in stamp stock,
in-transit stamp requisitions, and funds during audits.
The flexible accounting system provides more
latitude in stamp requisitioning as funds are not
submitted with requisitions to obtain stamps and
stamped paper. A PFO or COPE’s accountability for
stamps and stamped paper under this system is
reduced, based on stamp sales remittances, and
increased when stamp requisitions are received.
Therefore, the term “FLEXIBLE” rather than
“FIXED” is used to identify this system of
accountability.
Official audits of an MPC’s account are made by
the monies audit board members. However, accounts
used to conduct window sales may also be audited at
any time by the COPE or postal officer.
To conduct a proper inspection and audit, auditors
must be familiar with the DOD Postal Manual, Volume
I, as well as portions of the U.S. Navy Postal
Instruction (OPNAVINST 5ll2.6).
By making these instructions available and by
assisting in every way possible, you will be ensuring an
accurate inspection.
TOLERANCE LIMITS
Once the audit is completed, and all figures are
totaled and verified, there is a chance that the account
may be over or short of the credit amount. Tolerance
limits have been established for this purpose.
Tolerance limits apply only to credits of finance clerks
conducting window transactions with customers.
Tolerance limits for fixed credit accounts, plus or
minus, are as follows:
$300.00 or less—$2.00
$300.01 - $1000.00—$10.00
$1000.01 - $5000.00—$20.00
$5000.01 and above—$40.00
Stamp vending accounts—$20.00
Tolerance limits for flexible credit accounts are
1% of the flexible credit.
Fixed and flexible credits being withdrawn have no
tolerance levels.
AUDIT RESULTS
Overages and shortages within tolerance limits are
carried forward to the next audit. The disposition of
overages and shortages in excess of the tolerance limits
is as follows:
The entire amount of an overage, to include the
tolerance, is collected by the auditor and turned
over to the COPE. The COPE will prepare a PS
Form 1096, Cash Receipt, in duplicate. The
clerk receives the original and the COPE retains
the duplicate copy in the MPO files. For a fixed
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