by Bob C. Hall

 The Postal Service has the authority to verity a publisher's records on a
periodic basis (at least once a year) to determine if they are in compliance
with second-class mail regulations.
 Laren Busbee, head of the Second Class Mailing Division for Oklahoma,
outlines what you should know and have prepared for the audit (or
verifications, as USPS refers to it) process.

Who Does The Audit?
 Audits are done by mail classification specialists (or in small towns,
postmasters) from a publisher's office of original entry. A publisher
generally is notified several weeks in advance of an audit to allow him or
her time to get their records in order.
 If there is a problem with the audit, officials from the publisher's postal
district center may be called in. The USPS headquarters also have authority
to tell local post offices when a local publisher or publishers may be
audited by an independent auditor.
 Publishers can submit audits by private audit firms like Audit Bureau of
Circulation or Business Publications Audit, as a substitute for a postal
service audit.

What The Postal Service Verifies
 Busbee said the Postal Service needs to verify the following information by
doing an audit:
 1 The number of copies you are printing.

 2  How and to whom your copies are distributed.

 3 If your papers are actually going to the zones listed an your mailing
statement.

 4  That you have a list of legitimate subscribers who have paid above a
nominal subscription price.

Records You Need
 To assist the Postal Service in its audit, Busbee said the following records
should be on hand for inspection:

 1 The number of copies you order from your printer (print orders).

 2 Invoices showing the total number of copies printed (to check the above
information).

 3' Total individual and bulk orders far subscriber and non-subscriber
copies.

 4  Total newsstand sales and returns.
 5 Stubs or copies of receipts issued far subscriptions.
 6 Total vending machine sales and returns.
 7 Total sales records and returns for over-thecounter sales.
 8 Cash books, bank deposit receipts or similar records.
 9 Records of copies of the publication destroyed or retained.
 10 Copies of the publication (to verify editorial/advertising ratio).

 Publishers are required to retain records about each issue for three years
from the date of issue.
 When the auditor arrives, they will first compare copies of your 3541
mailing forms with your mailing records, subscription lists and printing
records to determine that you have been filing accurate mailing statements.

 The issues will also be exmined for correct statements of advertising
percent.
 Finally, the postmaster or audit person will random sample names of people
on your subscription list and ask for proof that they are paid subscribers at
higher than nominal subscription rates. Proof includes stamped receipts,
ledgers with check entered or bank records indicating actual deposit of the
subscription payments. 




Results Of Audit
 The postal official who inspected your records will send you, by certified
mail, notice of any discrepancies or problems with your audit that need to be
corrected, or inform you that all is in order.

Appealing Penalties
 From the time publishers receive notification of a penalty from USPS, they
have 15 working days to file an intent to appeal and 30 working days to file
the actual appeal to the Rates and Classification Center (RCC) with
jurisdiction aver the original entry office. The RCC will review the audit's
findings and publisher's explanations and issue a ruling.

For More Information
 Rules on special audits and second-class publications may be found in the
Domestic Mail Manual, Section E-216, which deals with the maintenance and
verification of the publisher's records.