[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]





                   THE U.S. GENERAL ACCOUNTING OFFICE

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
                      INFORMATION, AND TECHNOLOGY

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 18, 2000

                               __________

                           Serial No. 106-243

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform

                               __________

                   U.S. GOVERNMENT PRINTING OFFICE
73-593                     WASHINGTON : 2001

_______________________________________________________________________
 For sale by the Superintendent of Documents, U.S. Government Printing 
                                 Office
Internet: bookstore.gpo.gov  Phone: (202) 512-1800  Fax: (202) 512-2250
               Mail: Stop SSOP, Washington, DC 20402-0001


                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
    Carolina                         ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California                             ------
PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont 
HELEN CHENOWETH-HAGE, Idaho              (Independent)
DAVID VITTER, Louisiana


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
                     James C. Wilson, Chief Counsel
                        Robert A. Briggs, Clerk
                 Phil Schiliro, Minority Staff Director
                                 ------                                

   Subcommittee on Government Management, Information, and Technology

                   STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois               JIM TURNER, Texas
THOMAS M. DAVIS, Virginia            PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon                  MAJOR R. OWENS, New York
DOUG OSE, California                 PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin                 CAROLYN B. MALONEY, New York

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
          J. Russell George, Staff Director and Chief Counsel
               Heather Bailey, Professional Staff Member
                           Bryan Sisk, Clerk
                    Trey Henderson, Minority Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 18, 2000....................................     1
Statement of:
    Bowsher, Charles, former Comptroller General of the United 
      States (1981-1996).........................................    65
    Ink, Dwight, president emeritus, Institute of Public 
      Administration.............................................    74
    Staats, Elmer, former Comptroller General of the United 
      States (1966-1981).........................................    63
    Walker, David, Comptroller General of the United States, 
      General Accounting Office, accompanied by Gene Dodaro, 
      Chief Operating Officer....................................     6
Letters, statements, etc., submitted for the record by:
    Bowsher, Charles, former Comptroller General of the United 
      States (1981-1996), prepared statement of..................    67
    Horn, Hon. Stephen, a Representative in Congress from the 
      State of California, prepared statement of.................     3
    Ink, Dwight, president emeritus, Institute of Public 
      Administration, prepared statement of......................    77
    Turner, Hon. Jim, a Representative in Congress from the State 
      of Texas, prepared statement of............................     5
    Walker, David, Comptroller General of the United States, 
      General Accounting Office, accompanied by Gene Dodaro, 
      Chief Operating Officer, prepared statement of.............    13

 
                   THE U.S. GENERAL ACCOUNTING OFFICE

                              ----------                              


                         TUESDAY, JULY 18, 2000

                  House of Representatives,
Subcommittee on Government Management, Information, 
                                    and Technology,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2154, Rayburn House Office Building, Hon. Stephen Horn 
(chairman of the subcommittee) presiding.
    Present: Representatives Horn, Biggert, Ose, Turner, and 
Maloney.
    Staff present: J. Russell George, staff director and chief 
counsel; Heather Bailey, professional staff member; Bonnie 
Heald, director of communications; Bryan Sisk, clerk; Elizabeth 
Seong, staff assistant; Will Ackerly and David Hulfish, 
interns; Trey Henderson, minority counsel; Mark Stephenson, 
minority professional staff member; and Jean Gosa, minority 
assistant clerk.
    Mr. Horn. The subcommittee will come to order.
    Today's hearing on the General Accounting Office is 
especially important because of the agency's vital and unique 
role in the Nation's legislative process and in Congress's 
oversight of government operations. Today, the subcommittee 
will review the GAO's ongoing programs and the agency's vision 
for the future.
    Since its establishment in 1921, the role of the General 
Accounting Office has evolved from one of auditing agency 
vouchers to its present role of providing in-depth studies upon 
which Congress bases its legislative and oversight agenda. The 
GAO is a key investigative resource for the legislative branch 
of government.
    The question naturally arises: How has the GAO transitioned 
from its 20th century functions to those of the 21st century?
    We are very fortunate to have before us today a number of 
witnesses who are in a unique position to answer that question. 
Our first presenter is the current Comptroller General of the 
United States, David Walker. Since assuming this office in 
November 1998, the Comptroller General has initiated a number 
of reforms that we look forward to hearing more about today.
    His testimony will be followed by a panel of witnesses 
whose insights are invaluable to the subcommittee as we 
consider the subject before us. We will hear from the honorable 
Elmer Staats, who served as Comptroller General from 1966 until 
1981. We will also hear from Mr. Staats' successor, former 
Comptroller General Charles Bowsher, who served from 1981 until 
1996. In addition, we are pleased to have before us a familiar 
voice, that of Dwight Ink, president emeritus of Institute for 
Public Administration.
    We welcome all of our witnesses today, and look forward to 
their testimony.
    I am now delighted to give time to the ranking member of 
this subcommittee, the gentleman from Texas, Mr. Turner, who 
has been a wonderful colleague to have with this group. I know 
that he shares the respect for the General Accounting Office 
and the Comptroller Generals that I do. Mr. Turner.
    [The prepared statement of Hon. Stephen Horn follows:]
    [GRAPHIC] [TIFF OMITTED] T3593.001
    
    Mr. Turner. Thank you, Mr. Chairman.
    It is good to have General Walker here this morning and to 
be able to hear from the General Accounting Office. I think we 
share respect for the good work that the GAO has done for us 
throughout the years.
    GAO I know was founded in 1921. Its mission is to help 
Congress oversee Federal programs to ensure accountability to 
the American people. Over the years, Congress has expanded the 
GAO's statutory authority to reflect the growing complexity of 
government and of our society. GAO's evaluators, lawyers, 
economists, public policy analysts, information technology 
specialists and other multidisciplinary professionals seek to 
enhance the economy, the efficiency, the effectiveness and the 
credibility of the Federal Government, both in fact and in the 
eyes of all American people.
    The GAO is able to accomplish its mission through a variety 
of activities, including financial audits, program reviews, 
investigations, legal support, and policy and program analysis.
    I am very pleased to note that for fiscal year 1999 the 
General Accounting Office's work resulted in more than $20 
billion in financial benefits to the Federal Government and 
over 600 actions leading to a more effective government. It is 
without question that the General Accounting Office has been 
extremely helpful to our subcommittee, and I again commend 
General Walker and his staff for the good work that they do on 
behalf of the Congress.
    We are here to learn more about the challenges facing the 
agency and what we in Congress can and should do to ensure that 
we receive the type of credible, unbiased data that the GAO has 
constantly provided us in the past. I commend Chairman Horn for 
calling the hearing, and I welcome each of our witnesses. I 
want to conclude by saying that the General Accounting Office 
is an agency which is truly dedicated to good government, and 
for that I am very appreciative.
    Thank you, Mr. Chairman.
    [The prepared statement of Hon. Jim Turner follows:]

    [GRAPHIC] [TIFF OMITTED] T3593.002
    
    Mr. Horn. I thank the gentleman, and we will now swear in 
the witnesses.
    [Witnesses sworn.]
    Mr. Horn. The clerk will note that the witnesses affirmed 
the oath.
    We will start with the Comptroller General of the United 
States, Mr. Walker, now. And you have a wonderful 40-page, 
single-spaced document which is already headed for the 
Government Printing Office; and I know that you have a very 
good slide presentation. If you can do it in 15 to 20 minutes, 
we would be appreciative, because we would like to have a 
dialog.

 STATEMENT OF DAVID WALKER, COMPTROLLER GENERAL OF THE UNITED 
STATES, GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY GENE DODARO, 
                    CHIEF OPERATING OFFICER

    Mr. Walker. I will be happy to do that.
    First, let me say that I am pleased to be here. As you 
know, Mr. Chairman and Ranking Member Turner, I am now one and 
a half years into a 15-year term as Comptroller General, 10 
percent down, 90 percent to go.
    I am proud to be the head of GAO. I believe GAO is one of 
the best agencies in the Federal Government, and one of the 
best accountability organizations in the world, if not the 
best. There is a simple reason for that. We are the best 
because we have the best people. We do, however, have a number 
of people or human capital challenges that I will mention later 
in my testimony that need to be addressed with a matter of 
urgency.
    As you noted, I have submitted my full statement for the 
record; and I am going to cover it in a PowerPoint 
presentation. But, before I do, I would like to note for the 
record that Gene Dodaro, who is Chief Operating Officer, to my 
right, has joined me. Bob Murphy, who is our General Counsel, 
is behind me. Sallyanne Harper, who is our Chief Mission 
Support Officer, is to my right. The four of us make up the 
Executive Committee for GAO.
    In addition to that, I am pleased that we have 10 to 12 
members of the Employee Advisory Council in row two. They 
represent a diverse group of GAO employees. We get together 
periodically to discuss mutual issues of interest and concern, 
and I am pleased to say that we have talked about a number of 
human capital issues together. I look forward to working with 
them on these and other issues.
    If I can, the first slide, please.
    As both of you noted, GAO was formed in 1921 and is headed 
by the Comptroller General of the United States. I am the 
seventh Comptroller General in the approximately 80-year 
history of GAO.
    Every Comptroller General has made noteworthy contributions 
to our agency and to the country. I am especially pleased and 
honored to appear here today with my two immediate 
predecessors, Elmer Staats and Chuck Bowsher. Both made 
significant contributions to GAO and our country, and I have 
noted several of them in my written statement.
    GAO has changed significantly over the years, both as to 
size, scope and focus over the years. The agency almost tripled 
its size in World War II in order to preaudit all government 
payments. The agency was reduced in size after World War II but 
broadened in both its range of services and the scope of skills 
that its staff possessed. The resulting expansion in scope of 
services since World War II served to reinforce the fact that 
we are about accountability, not accounting.
    Most recently, the agency was forced to downsize by 
approximately 40 percent in the 1990's due to budget cuts; and 
there are some scars that resulted from that, which I will 
touch on in a few minutes.
    Next slide.
    As you can see, the size of GAO has changed over the years. 
I have picked three dates for illustrative purposes: 1966, 
which was the first year that Elmer Staats was Comptroller 
General; 1981, which was the first year in which Chuck Bowsher 
was Comptroller General; and 1999, which was the first fiscal 
year in which I served as Comptroller General. And you can see 
the size has fluctuated over the years. When Elmer Staats took 
over GAO, there were just over 4,000 personnel; when Chuck 
Bowsher took over the agency, it had grown to over 5,000; and 
when I took over the agency we had an authorized staff of 
3,275.
    Next slide, please.
    There has been a significant change over the years in the 
mix of GAO's work. It has changed dramatically over time. When 
Elmer Staats took office in 1966, 90 percent of GAO's work was 
research and development or self-initiated work; and there were 
no congressional mandates. When Chuck Bowsher took over the 
office, the percentage of research and development or self-
initiated work had declined to 65 percent; and mandates were 
becoming more common but they were still new on the scene, only 
representing about 2 percent of GAO's work.
    When I took over the Office of Comptroller General in late 
1998 or fiscal year 1999, only 5 percent of our work was R&D or 
self-initiated and 23 percent related to mandates. Stated 
differently, 95 percent of the work that GAO did was either 
based on mandates or specific congressional requests.
    Next slide, please.
    The next slide shows the dramatic decline in our field 
office presence. It has declined dramatically from 46 offices 
in 1984 to 16 today, and effective November 2000 we will go 
down to 11 field offices. This decline is due to a variety of 
reasons, in some cases budget cuts, but also because of 
economy, efficiency, effectiveness and technology reasons.
    Next slide, please.
    As Mr. Turner mentioned, GAO has always provided the 
Congress and the American people with an outstanding return on 
their investment. This slide shows the financial benefits that 
GAO has returned since 1966 on an annual basis as well as the 
4-year average.
    I am pleased to say in fiscal year 1999 we had $20.1 
billion in financial benefits. In some cases, that represents 
costs reduced; in other cases, it is asset recoveries enhanced; 
spending deferred; or reserves reclaimed. There are a number of 
different things that come under the definition of financial 
benefits, and I am happy to answer questions on that if you 
would like. But the bottom line is this: The Congress and the 
American people had a return in 1999 of $57 for every dollar 
invested, probably No. 1 in the world.
    The next slide, please.
    GAO has also made a number of contributions over the years 
in the area of improved government operations. The adoption of 
GAO recommendations not only serve to accrue financial benefits 
but also nonfinancial benefits such as improved government 
operations in the area of computer security, airline safety, 
sustainable development and national security, etc. A number of 
examples are included in our 1999 accountability report, which 
I know has been provided to the committee as well as the 
Congress at large.
    The trend in nonfinancial benefits has been up over the 
last several years, but we did have particularly impressive 
years in 1998 and 1999 due to the Y2K involvement that we had 
and the many, many recommendations associated with that effort. 
The Y2K effort is an example of what government can do if the 
executive branch and the legislative branch work together in a 
concerted and constructive fashion to address a known problem 
with a positive outcome, and hopefully we can learn from that 
in the future.
    The next slide, please.
    One of the basic market tests that we can look to for the 
value of GAO is how many times the Congress requests GAO 
representatives to testify on a wide variety of issues. This 
next chart shows that our numbers have been impressive in that 
regard, that we have, on average, testified over 200 times a 
year before the House and the Senate on a wide variety of 
topics; and I myself typically will testify about 25 times a 
year. We expect for our fiscal year 2000 numbers to exceed the 
1999 level, even though this is an election year and a 
shortened legislative year.
    The next slide, please.
    Timeliness is critical, especially for the Congress. The 
Congress is our client. We have had a concerted effort since 
1996 to significantly enhance the timeliness of the work that 
we do for the Congress, namely to try to be able to deliver 
when we promise that we will deliver, and you can see there has 
been a dramatic improvement in our timeliness. But, 
importantly, it is not just whether or not we deliver when we 
promise that we are going to deliver; it is also whether or not 
we deliver within the timeframes that the Congress needs it in 
order to be able to make informed decisions. So we are looking 
to refine these measures and enhance these measures, as we will 
continue to do in the future.
    The next slide, please.
    Both of you mentioned GAO's mission. GAO exists to support 
the Congress in meeting its constitutional responsibilities and 
to help improve the performance and accountability of the 
Federal Government for the benefit of the American people. We 
are truly about good government; and, in fact, I would say our 
vision is to simply make government work better for all 
Americans.
    The next slide, please.
    In order to do that, we have to do our work in accordance 
with applicable professional standards as well as a specific 
set of core values that I worked with our executive team as 
well as others to come up with shortly after becoming 
Comptroller General. We have three core values that drive 
everything that we do, both internally and externally. The 
first is accountability, the second, integrity; and the third, 
reliability.
    With regard to accountability, that word describes what we 
do. We are called the General Accounting Office, but that is 
really a misnomer. Only about 25 percent of what we do deals 
with traditional accounting and financial management; 75 
percent deals with program evaluation, policy analysis, legal 
research, a whole range of activities, investigations, etc. As 
a result, the common denominator is the word accountability and 
in some ways you can say we are the government accountability 
office is more descriptive of what we do.
    Integrity describes how we must do our work. We must be 
professional, objective, fact-based, nonpartisan, 
nonideological, fair and balanced. We must say what we mean, 
mean what we say, provide the facts and let the elected 
officials decide what to do once they have the facts. We must 
provide those facts in advance before issues reach crisis 
proportions. In fact, I think one of the advantages of having a 
15-year term and an agency being headed by a nonpartisan 
professional is to look longer and broader and to bring matters 
to the attention of Congress before they represent crises. That 
is critically important.
    The third core value is the word reliability which 
describes how we want our work to be received--timely, 
accurate, useful, clear, and candid. Now, I would like to be 
able to add the word concise, Mr. Chairman; and we are working 
on that. That is why we have a PowerPoint executive summary, 
rather than the 40-page written testimony.
    Next slide, please.
    This represents a summary of our strategic plan. This 
represents a framework for everything that we do at GAO, both 
internally and externally. We develop the strategic plan 
through extensive outreach efforts with the Congress. Yes, this 
is GAO's strategic plan, but it is our plan to serve our 
client, the Congress and the American people, and it was put 
together with extensive consultations with our client.
    We voluntarily have complied with GPRA. As you know, we are 
not subject to GPRA, but we believe it makes sound business 
sense to comply with GPRA for a variety of reasons. In 
addition, we believe, as the leading accountability 
organization in the United States, we have a responsibility to 
lead by example. We should be as good or better than anybody 
else we evaluate, otherwise we are hypocrites, and we don't 
ever want to be called a hypocrite. So we have focused on our 
mission.
    We have four goals. The first two goals are tied to the 
Constitution of the United States. We know that there can be a 
lot of disagreement in Washington nowadays, but we believe that 
the Constitution has stood the test of time and to build our 
first two goals on the Constitution is both prudent and 
appropriate. The third goal is based upon a recognition of a 
global trend at Federal and State and local levels, and that is 
to the push for more results-oriented and accountable 
government. And fourth is for us to seek to lead by example, to 
be a model organization, to practice what we preach.
    We have got six themes underneath that that have no 
boundaries. They have no boundaries globally, domestically, or 
within the Congress, within the executive branch or within GAO. 
They deal with issues like changing demographic trends, like 
increased globalization, different quality of life 
considerations, emerging security threats, rapidly evolving 
technology and, again, the move toward a desire for a more 
results-oriented and accountable government.
    We have 17 objectives that tie in most cases very closely 
to the committees and the various departments and agencies. And 
last but not least, as I mentioned before, the foundation of 
everything that we do represents our core values.
    The next slide, please.
    If I can, Mr. Chairman and Mr. Turner, let me now change to 
some of the challenges that we face in the human capital area. 
As I mentioned, people represent our most valuable asset. We 
are a knowledge business. In fact, I would say, with all due 
respect, that there is probably a broader range of skills and 
knowledge in GAO than any organization on Earth, bar none. Let 
me repeat that. There is probably a broader range of skills and 
knowledge in GAO than any organization on Earth and a 
tremendous amount of institutional knowledge that is critically 
important to the Congress and the Nation.
    But the fact of the matter is that we have a number of 
human capital challenges in a post-downsizing era. We are 
smaller and out of shape, as this chart shows. Only 11 percent 
of our personnel are at the lower levels, as compared to about 
27 percent in 1989. In addition, we are heavy in certain other 
areas. We need to address these imbalances over time through a 
variety of management actions and other types of activities. It 
is important that we get in shape for the future. We are in 
shape to do our job today, but we are not well positioned to be 
able to do our job in future years.
    The next slide, please.
    This next chart shows our appropriation and FTE level since 
1992. We have had a significant decline in our budget. We 
experienced that in the mid-1990's. This resulted in an 
approximate 40 percent reduction in the size of GAO. There were 
a number of RIFs that had to be run. Offices were closed, all 
or nothing; and whole units were abolished. The fact of the 
matter is, is that we have not had reasonable resource 
stability for several years. And while last year was the first 
year in 10 years that we received a resource allocation in 
excess of our mandatories, this year again there is a debate as 
to how much resources GAO will receive.
    The House has us for a 2 percent cut without considering 
inflation or other mandatories; the Senate has us for a 2.5 
percent increase. We can live with the Senate number, but the 
House number would force us to run RIFs again or otherwise to 
freeze hiring, which would be totally unacceptable and would 
further mortgage our future. We are hopeful that the Senate 
numbers will prevail in Congress, with all due respect to the 
House.
    It is critically important that we have reasonable 
stability in funding and not have to fight these annual battles 
over what our budget is going to be, especially given the 
return on investment that we are bringing to the taxpayers. 
Having to fight the annual battles and deal with the annual 
uncertainty over what our budget is going to be has an 
extremely deleterious affect on morale as well as our ability 
to attract and retain a qualified work force.
    We had a virtual 5-year hiring freeze from 1993 to 1997. 
This served to mortgage our future in certain ways. The average 
age of GAO has increased 6 years in the last 6 years. The 
average age of GAO is 48. Mr. Chairman, Mr. Turner, that is my 
age. We cannot continue to repeat hiring freezes. That would 
only serve to further mortgage our future.
    The next slide, please.
    We have serious succession planning challenges. We must 
begin to prepare for our future. Thirty-four percent of all of 
GAO personnel are eligible to retire within 4 years--4 years, 
34 percent. Fifty-five percent of our SES members are eligible 
to retire in 4 years. That is a tremendous amount of 
institutional knowledge and expertise. We must become more 
actively involved in succession planning. The combined effect 
of past hiring freezes, budget cuts and the current RIF rules 
have put this agency at risk; and we need to address them.
    The next slide, please.
    GAO contracting. While our FTE levels have gone down, our 
contracting has gone up, in part to recognize that there are 
certain aspects that the private sector can do more effectively 
and, in addition, there are certain areas where we need 
assistance or expert assistance or we are not going to have the 
ability to attract, retain and motivate an adequate number of 
people. So we are going to have to go to the private sector 
from time to time to do that, and we will be prudent about how 
we do that.
    The next slide, please.
    A few summary points.
    What are some of the GAO challenges that we face?
    First, supply and demand imbalances. We have significantly 
increased demand from the Congress and significantly reduced 
supply in the form of human as well as financial resources. We 
have got to work together to achieve a better balance.
    Second, we critically need stability in our annual resource 
levels. Failure to have that undermines our ability to attract 
and retain a motivated and skilled work force. We need to have 
flexibility to do some self-initiated R&D work. It is 
unreasonable to expect that the Congress will identify all of 
the issues that need to be focused on. And, in fact, it is 
important that we be able to look at some issues before they 
reach crisis proportions and to bring those to the attention of 
the Congress before they are immediate crises. Having some type 
of reasonable flexibility to do that is essential in order for 
us to accomplish our mission.
    We both need to work together, meaning the Congress and 
GAO, to reinvigorate and to improve congressional oversight. We 
need to work in a bicameral, nonpartisan manner to form a 
partnership in order to be able to buildupon the management 
reforms of the 1990's, the skills and knowledge and 
institutional expertise of GAO; and we have got some ideas 
about how to do that that we would like to work with you and 
others on.
    We critically need the Congress's help in the area of human 
capital. We need to enact our human capital legislation. It has 
been passed in the Senate. It is scheduled to go to conference 
as part of the appropriations process. Chairman Burton and 
Ranking Member Waxman support the legislation that is in the 
budget process. We critically need that legislation to help 
prepare GAO for the future, but, in addition, we need the 
Congress to consider other areas that we are happy to work with 
you on.
    We need to look at the possibility of debt relief for new 
hires. We already have a compensation differential between the 
private sector options and in the government, but, in addition, 
over half of GAO's employees are Master's and Doctor degree 
candidates. They often come out of college with significant 
debt. They face a double whammy. They face less compensation 
and tremendous debt loads. We need to do something like the 
military to be able to try to deal with that in a reasonable 
manner.
    We need to work to change our pension laws, the 
government's pension laws, to allow people to retreat into 
retirement rather than forcing them to go all or nothing. We 
have a lot of skills and knowledge and expertise. Many people 
want to start working part time and retreat into retirement, 
but then they can't access their pension. We need to figure 
out, just as the private sector is doing, to allow more 
flexibility to retain that knowledge, given work force 
imbalances, skill shortages and other factors.
    We need to move, over time, to a more reasonable 
compensation approach that is focused more on skills and 
knowledge and performance; and we need to look at some things 
that don't sound that significant but they add insult to 
injury. Things like frequent flyer miles. The private sector 
has for years allowed individuals who fly on their own time to 
keep their miles. You know the burdens of flying nowadays--it 
is not a pleasant experience. In times of budget deficits it is 
understandable how you might want to recapture those miles, but 
our people are already underpaid, overtraveled, overworked, and 
now we have a budget surplus. It almost adds insult to injury 
to say you need to give those miles back. We need to revisit 
that policy in order to be more competitive going forward.
    Last, records access issues. More and more of what 
government is doing involves a partnership between Federal, 
State and local levels as well as public private. We are seeing 
more and more that the issues that we are being asked to 
address are requiring us to access records outside the Federal 
Government--at the State and local level, and the private 
sector. This is going to be an issue that is going to be 
increasingly important that we need to work with Congress on 
how best to address with regard to proposed expansion of 
Federal programs. For example, prescription drugs, where a lot 
of research and analysis needs to be done, is not in the 
Federal Government. It is in the private sector, and it is in 
the State and local government areas.
    Mr. Chairman, that concludes my summary. I very much 
appreciate your time, both your time and attention; and I am 
more than happy to answer any questions that you might have. 
Thank you.
    Mr. Horn. Well, we thank you. That is a very fine 
statement.
    [The prepared statement of Mr. Walker follows:]

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    Mr. Horn. We are now going to have a dialog between we 
members and you, and it will be 5 minutes between each of us.
    Let me ask you about the institutional memory situation. I 
think that is a very crucial matter.
    What is your intent as to try and get that type of wisdom 
that people have over time? Is it to have opportunities for a 
half load and half retirement or fourth load, fourth 
retirement? Some institutions do that.
    Are we doing oral histories of a lot of people when they 
retire? It seems to me that is a--for historians such as White 
in the 1930's, looking at the administrations from George 
Washington up, it seems to me that would be a very useful file 
for GAO, the archives, the Library of Congress, whatever, to 
have them in the days of disks that you can find any particular 
thing on a disk. That might be one possibility. I just would be 
wondering, what are you thinking of?
    Mr. Walker. We are doing a number of things.
    First, we have embarked on an aggressive succession 
planning effort to try to ascertain how many of our people plan 
to retire and when. I mentioned that 55 percent of our 
executives are eligible to retire within 4 years. We have met 
with each of those executives and covered a number of issues. 
Fortunately, many of those individuals want to work past 
retirement eligibility, and that is great. We need to do the 
same thing at other levels, and we need to tap and understand 
what skills and knowledge that we have.
    We just rolled out an electronic skills and knowledge form 
that every GAO employee will fill out. Therefore, we will have 
electronically what skills and knowledge we have within our 
building and how we can better deploy those skills and 
knowledge and capitalize on it. We need to look at mentoring by 
capturing this institutional knowledge and passing it on to 
others.
    In addition, we need to look at what I mentioned about 
changing the pension laws, about retreating into retirement. We 
can allow people to work part-time right now, and we do, and we 
can experiment with certain policies, but there are real 
economic barriers and disincentives under current law that need 
to be addressed. They are being addressed in the private 
sector. In fact, there is legislation pending in Congress now 
to change the private pension rules. The prospects look good to 
allow in-service distributions for people that work part time 
after a certain age. We need to do the same thing in the public 
sector.
    So these are just a few of the things that I think we can 
and should do, and we will do whatever it takes.
    Mr. Horn. What about the idea of research and development? 
I would be curious in 1966 what do we mean by that and what do 
we need now between the two predecessors and Mr. Staats. It 
went from 90 percent research and development in 1981 to 65 
percent and now 5 percent. How is that defined?
    Mr. Walker. Let me clarify how we define it. You may want 
to ask Comptroller Generals Staats and Bowsher how they define 
it.
    The previous term was self-initiated work. That doesn't 
engender a positive response on behalf of a number of parties; 
and, therefore, we recharacterized it as R&D work. Basically, 
what that says is when Mr. Staats came in as Comptroller 
General, 90 percent of the work that GAO did was at its own 
initiative. It determined what functions needed to be looked at 
and provided to the Congress.
    That, over the years, has changed dramatically. There are 
more and more mandates. Sometimes we are consulted on a 
mandate; sometimes we are not. Sometimes we get the resources 
we need, and sometimes we don't. Sometimes there are 
independent issues that don't get adequately considered. What 
has happened in part is because of increasing congressional 
requests, which is good. We are a client service organization. 
On the other hand, the combination of increased requests and 
the downsizing of the agency has meant that what gives is the 
self-initiated work or the R&D work. That is what is left over, 
and some of that can be critically important. Because, quite 
frankly, many of the challenges that our Nation faces are not 
immediate. They are challenges at the horizon and beyond 
because of changing demographics, because of environmental 
issues and other things that we need to be looking at before 
they become a crisis.
    Mr. Horn. In my last 19 seconds here I am going to ask you, 
on the mandates, were those saved from the appropriators? And 
that was an annual report that you needed to do time and again. 
Does anybody ever ask if they read it or need it? Some of these 
things are stuck automatically in appropriations bills.
    Mr. Walker. I am going to ask Gene Dodaro to comment. 
Because, as our Chief Operating Officer, he is into the details 
on some of these things.
    Mr. Dodaro. We look every week at potential mandates that 
are coming to the forefront in legislation, both in 
appropriations and in the authorizing process. They come in 
both forms.
    Within the last 2 years, we went back and looked at all of 
the preexisting mandates to see if they were still relevant, 
and consulted with the committees; and, in fact, indeed a lot 
of them were sunsetted. Very few of them are dated, although 
some date back, for example, to the 1994 requirement to audit 
the financial statements of the Federal Government. But we are 
trying to work early with committees on potential mandates. 
Most of them fall in areas where we think there are legitimate 
issues and which correspond to items that are actually in our 
strategic plan. Others are event driven, like the Los Alamos 
fires.
    Mr. Horn. I thank you.
    Mr. Turner, 5 minutes for questioning the Comptroller 
General.
    Mr. Turner. It is amazing, General Walker, to notice the 
increase in the number or the percentage of requests from 
Members and from committees. Quantify that for me. How many 
requests do you get a year from committee chairs? How many 
requests do you get from rank-and-file Members?
    Mr. Walker. In a given week, we typically get 40 to 50 
requests a week. Most of our requests are either from the 
chairman or the ranking member of a committee or subcommittee. 
They receive a priority with regard to resource allocation.
    The next priority would be Members that are on a relevant 
committee of jurisdiction, and the last priority would be 
Members who are not on a relevant committee of jurisdiction.
    I think unless something gives we are going to have to 
relook at whether or not we are going to be able to deal with 
individual Members' requests. The statute only requires us to 
deal with mandates and committee requests. We have tried to 
deal with individual Members' requests as we have the resources 
and will continue to, but the squeeze continues.
    Mr. Turner. When you get a request just from a Member--I am 
sure you get all kinds of requests--do you try to work with 
that Member to narrow that request or make it where it is 
something that you can have a little more management control 
over?
    Mr. Walker. We have instituted a new process where we have 
an engagement acceptance meeting, and I will ask Gene if he 
wants to elaborate because he chairs it every week. We look at 
every request--what is it? What are they asking us to do? Is it 
within our scope and competency? What kinds of resources and 
skills will it take? How much risk is associated with the 
assignment, complexity, degree of difficulty, political 
contentiousness, if you will; and in some situations they will 
ask us to do things that we don't think are appropriate. In 
some cases, they will ask us where the scope is too broad; and 
we will work to narrow that scope.
    Yes, we have an ongoing and interactive exchange with both 
committees and Members in conjunction with requests.
    Mr. Dodaro. What we try to do, along the lines that Dave is 
talking about, is that, for many requests that we get from 
individual Members we may already be doing that scope of work 
for a committee. So we try to marry up the requests from the 
Member with the committee. And in some cases they just want 
some help answering a request from a constituent. We will look 
into the matter quickly.
    Also, it might be something that is within the scope of the 
responsibilities of the Inspector General, say, for example, 
looking at a particular contract award at DOD. Our goal is to 
try to help answer a request from every Member in some way, 
manner, shape or form, even if we can't undertake the 
assignment ourselves. But we actively manage that process and 
get back to everybody quickly to try to get a good outcome and 
try to get the information that people need.
    Mr. Turner. I was looking at page 13, human capital 
profile; and it might help if you would explain these bands 
that are listed here, what category of employee is represented 
there. I assume the very top category is the executive staff. 
Where are the researchers?
    Mr. Walker. This represents pay bands. We went to broad 
banding, which is a compensation structure, in the 1990's under 
Comptroller General Bowsher's tenure. Band 3 represents a GS-
15. It is either management personnel or very senior 
specialist. A band 2 represents 14, 13, 12 level. And a band 1 
is below that in a professional category. The other would 
represent the General Counsel's Office or Office of Special 
Investigations. And then the mission support would be just 
that. It would be individuals who contribute to our mission but 
aren't in a line function. They are more in a staff function.
    Mr. Dodaro. Just to give you a benchmark, for example, at 
the SES, a senior executive would be someone like a Joel 
Willemssen; and he leads a whole body of work. And then the 
researchers at the band 2 and band 3 level and band 1 actually 
conduct the audits and the investigations. So the people who 
really do the work and go out and interview people and go 
through the files and records are at the 2 and 1 level. And the 
band 3s are issue area experts. We will have an expert in 
housing, transportation, etc. So we try to maintain expertise 
at the senior level; and the researchers, auditors, and 
investigators are at the band 2 and band 1 level. That is why 
band 1 is so important, because that is where we begin to 
develop good institutional knowledge in the long run. We are 
trying to do a lot of things to retain senior executives, to 
hang on to institutional memory, but there is no substitute for 
having a good pipeline of people coming through the 
organization that are going to be here beyond Dave's tenure and 
mine.
    Mr. Turner. So the chart is designed to show that you would 
prefer to have a profile that looks like the 1989 profile as 
opposed to what you have today?
    Mr. Walker. I think the actual profile is between 1989 and 
1999, but closer to 1989 than 1999; and we need to do that over 
time. We are taking management action, but we need to continue 
to hire and recruit, we need to do succession planning, and we 
also need the human capital legislation.
    Mr. Turner. Thank you. Thank you, Mr. Chairman.
    Mr. Horn. I thank the gentleman. And now 5 minutes for my 
colleague from California, Mr. Ose.
    Mr. Ose. Thank you, Mr. Chairman.
    My question really boils down to one that I have asked 
previously and that is, at least from my experience, there are 
just two irreplaceable assets I have access to, one is GAO and 
the other is CRS. Great resources. In both cases, I am 
concerned about retaining personnel who have been trained, 
level 1, level 2, what have you. Tell us about the challenges 
you face there as it relates to retention of people who have 
started----
    Mr. Walker. Well, we face serious challenges. One of the 
ways that we face a serious challenge is because we don't have 
stability in our budget. Every year there is debate about what 
we are going to get for a budget and whether or not we are 
going to get inflation. That creates instability and 
uncertainty on behalf of our current people regarding RIFs.
    Mr. Ose. Let me take you a slightly different direction. In 
terms of the people who work at GAO, obviously they have 
options from an employment standpoint. Your options might be 
Arthur Andersen, it might be some consulting firm, what have 
you. What kind of competitive environment are you having to 
confront in terms of retaining those people?
    Mr. Walker. An increasingly competitive environment with 
regard to new hires. For example, many of the major public 
policy schools--the Kennedy School at Harvard, the Maxwell 
School at Syracuse, Berkeley, etc.--a significant percentage of 
their graduates who they thought were going to go into public 
service end up going into the private sector, and that is an 
increasing challenge. I think we have to recognize that the 
government will never be competitive from the standpoint of 
compensation. Stated differently, you are always going to be 
able to make more money in the private sector if that is what 
you want to do.
    However, the government does offer some things that the 
private sector can't offer as much of--the challenge, the 
diversity, the ability to make a difference for the country. 
Therefore, what we have to do is identify top-flight people who 
are motivated toward those types of things and to make sure 
that we have the tools available to attract them and to retain 
them. It is also critically important that we get resource 
stability because when we go out to hire a new person, if they 
know that they are the first person that is going to get let 
go, that is a real disincentive for them to come with us.
    Mr. Ose. Do you see a difference--obviously, you are the 
legislative branch people, but do you see a difference in terms 
of our ability to retain people on the legislative side as 
opposed to the executive side?
    Mr. Walker. I think the GAO has a greater ability to retain 
people; and, in fact, statistics show that. We have very low 
turnover. After 3 years, our turnover is about 4 percent a 
year, and that also counts retirements. But for the newer 
people, the first 3 years, the turnover is much higher. It is 
double digit--around 15 to 18 percent a year. The new 
generation, the graduates of today, are more mobile than they 
have been in the past. We have to recognize that and do what we 
can to minimize turnover, but we are going to have more 
turnover. I have a 26-year-old and a 23-year-old, and I can 
assure you that there is going to be more mobility among their 
age group.
    One of the things that GAO has to offer is that you can 
have lifelong learning at GAO. We deal with everything that the 
Federal Government does anywhere in the world and so you can 
move into different areas, different specialties, different 
issues, different geographic areas without having to change 
employers and still be challenged. That is an advantage that 
many government agencies don't have.
    Mr. Dodaro. One of the most critical things for retention, 
particularly of highly skilled people, is additional training. 
They really want to keep their skills current, and we are 
trying to find more money available to provide training to 
them. And that, coupled with the diversity of the work and the 
interesting nature, of assignments really is the key to holding 
people, because they want to be known in the professional 
communities in which they have studied and do the work.
    Mr. Ose. Mr. Chairman, are we going to have a second round?
    Mr. Horn. We are.
    Mr. Ose. Thank you.
    Mr. Horn. Let me ask about the SES staff. I notice on your 
chart, page 13, it represents roughly 2.8 percent and 3.7 
percent of all employees through fiscal year 1989 through 
fiscal year 2000. I wonder to what degree can SES be rotated 
within the executive branch and do you have any difficulties in 
getting them for a year or 2 years or 3 years when you see 
something coming up that they might have the expertise to do. 
Have we had any examples like that?
    Mr. Walker. We have not had that happen with great 
frequency in the past. We have had people come from the 
executive branch to GAO. In particular, when we had our first 
SES candidate development class, we had a number of applicants 
from the executive branch apply because they view GAO as a very 
good place to work.
    One of the things that we need to look at with increasing 
frequency is, not only with regard to the government but also 
the private sector, the opportunity to do rotations and 
fellowships and that type of activity. Obviously, we are going 
to have to be careful, because there are potential conflict 
issues which we need to carefully monitor in that regard. We 
need to look at that more.
    Mr. Horn. Also, on the education aspects, the military does 
a wonderful job in this town of keeping their people moving and 
letting them go off for masters degrees or doctorates. Are you 
thinking of doing that essentially at GAO?
    Mr. Walker. Most of our people already have a masters or 
doctorate, but I think, because of the competitive pressures in 
the marketplace, we may end up having to hire more people with 
a bachelor's degree who may want to obtain a masters. That is 
something I would like to be able to consider as well as the 
personal debt relief, etc. Part of the difficulty is not just 
whether or not we have the authority but whether or not we have 
the resources to do that.
    Mr. Horn. What other things do you think are worthwhile 
that are not always seen when you recruit somebody? It is a 
good environment, you meet a lot of interesting people and so 
forth. Where is the weak spot, if any?
    Mr. Walker. Where is the weak spot? Well, part of the weak 
spot is that a lot of people that come into government come 
into government to make a difference, to learn, lifelong 
learning and for a better quality of life and for better job 
security. The last two have been significantly eroded in the 
last 10 years. We are asking our people to do more and more 
with less and less. In many cases, they are working as many or 
more hours than the private sector dues--and I was a global 
partner with Arthur Andersen for 10 years--with much less 
compensation. The increased uncertainty about what our 
resources are going to be has a deleterious effect. So I would 
say those last two factors, work/family and job security 
considerations that are beyond our control, have declined 
significantly. Something needs to be done about that.
    Mr. Horn. We had, as you know, in the Supreme Court case 
about 20 years ago a sweeping away of about 200 laws that 
permitted the Congress to get into the hair of the executive 
department is I guess putting it bluntly. To what degree do you 
feel that GAO might well be utilized in some type of 
arrangement where the Congress, the executive branch, might 
find that useful? Are there any situations like that that you 
are thinking about?
    Mr. Walker. In what regard, Mr. Chairman?
    Mr. Horn. Advisory board or something like that?
    Mr. Walker. There is an increasing range of activities that 
the Congress is asking either GAO as an institution or the 
Comptroller General as a position to get involved with. For 
example, we have been asked in the past to do--the Comptroller 
General has been asked to chair a panel on the Cost Accounting 
Standards Board. There is now pending legislation to ask the 
Comptroller General to chair a commission on A-76.
    In addition, there are requests from time to time to expand 
our responsibilities to get into regulatory reviews and other 
types of activities. I think there is a lot of things that we 
can do. I think the real key is, A, do we have the resources to 
do it; B, to be able to consider what, if any, independence 
implications there are before Congress acts so that there are 
not any surprises in that regard.
    Mr. Horn. I thank the gentleman.
    We now have the vice chair with us, Mrs. Biggert, the 
gentlewoman from Illinois; 5 minutes for questioning.
    Mrs. Biggert. Thank you.
    Since the time I have been here I certainly appreciate all 
that GAO has done; and I think particularly for this committee 
and walking into something like Y2K and all of the things that 
we had to deal with in that, we certainly got to know Mr. 
Willemssen very well; and he did a great job.
    Mr. Walker. Mr. Willemssen won the gold medal last year on 
congressional hearings, and I had to take the silver because he 
was so popular last year.
    Mrs. Biggert. Mr. Walker, when you get something to do for 
either a Member of Congress or however it comes about, do you 
have any peer review of your work? When you do the oversight 
for some many other----
    Mr. Walker. We have internal quality reviews, and we have 
peer reviews. With regard to all of the work that we have, we 
are moving toward what I would call a second partner review 
where we will have at least one other SES person involved as a 
second set of eyes to take a look at the work. We have 
extensive quality assurance mechanisms with regard to all of 
our work. In addition, in connection with certain types of 
engagements where they are highly technical and complex and 
where we may not have adequate expertise internally, we have 
and will continue from time to time to have expert panels, 
groups of people from the outside who are expert. It has to be 
balanced, and we have to be concerned with any potential 
conflicts.
    We also have a formal peer review in financial auditing. 
KPMG Peat Marwick does that, and we are also looking at working 
with other colleagues, other auditor generals around the world 
to do peer review of our evaluation work. I have met with a 
number of my colleagues within the last 6 months, and we are 
going to try to do a peer review of each other's institutions.
    Mrs. Biggert. Where do the outside experts come from, the 
private sector or other agencies?
    Mr. Walker. It could be a combination. It could be the not-
for-profit sector, it could be the private sector, or other 
agencies. When we do that, we need to be careful that we know 
about whether or not there are any potential conflicts, that we 
have balance from the standpoint of the issue. But sometimes, 
as you can imagine when you are dealing with experts, just like 
when you are dealing with advisory councils, sometimes you will 
get people who are integrally involved with an industry and get 
comfortable with the conflicts and disclose them.
    Mrs. Biggert. Do you tend to go back to the same people 
when you establish a relationship with the expert?
    Mr. Walker. This is one of the things that we are looking 
at right now, and one of the things that I have been pursuing 
since I became Comptroller General. In the past, each unit did 
what they were comfortable with, and one of the things that we 
are doing is looking at these issues. What type of criteria are 
we using as to when we use expert panels? What type of 
procedures do we have in place in order to ensure balance and 
be aware of any potential conflicts? Undoubtedly, in the past, 
there have been situations where individual units might get 
comfortable with certain persons, but we are going to start 
looking at this on an agency-wide basis because I think we need 
to look at GAO as a whole rather than individual units.
    Mrs. Biggert. Do you have to pay a consulting fee to these 
experts?
    Mr. Walker. It varies. Some do it for their country. The 
consulting fee, as you know, is not very high. When I was a 
trustee of Social Security and Medicare, I got paid $300 a day 
which I gave to my firm. Some are pro bono, and some we will 
pay up to around $300 a day.
    Mrs. Biggert. Would there be an impact then of the proposed 
25 percent reduction in appropriations? Would this make any 
change in that?
    Mr. Walker. Right now the only thing that is on the table 
is the Senate has us for a 2.5 percent increase, the House has 
us for a 2 percent cut. We are hopeful that we are going to get 
the Senate number, for obvious reasons. We had a significant 
cut--the 5 percent you are talking about was a 25 percent cut 
that occurred in the 1990's. Obviously, with dramatic 
reductions in resources like that, not only do you have RIFs 
but you have less ability for contracting.
    Mrs. Biggert. What was the impact of that?
    Mr. Walker. It was drastic. It was a tremendous loss of 
institutional knowledge. It was putting us in a position where 
we can get our job done today, but we are at risk of not being 
able to get it done in the future. And cutting back on training 
and enabling technology, things that you will pay a price for 
in the future if you don't reverse it.
    Mrs. Biggert. Thank you.
    Mr. Horn. Mr. Ose, the Member from California, for pursuing 
the questioning.
    Mr. Ose. Thank you, Mr. Chairman.
    I want to go back to the issue on the retention of people 
as it relates to your proposals. Have you had any reaction from 
the executive branch or elsewhere on the hill?
    Mr. Walker. With regard to our legislative proposal?
    Mr. Ose. Yes.
    Mr. Walker. First, OPM is not taking a position on our 
legislation because we are a legislative branch agency, there 
is a separation of powers, plus we are not proposing any 
changes in the Civil Service rules.
    Mr. Ose. OPM did not take a position on their proposal 
because they are a legislative branch. Mr. Chairman, I wonder 
if we can get them to not take a position on anything you and I 
put up because we are legislative, too.
    Mr. Walker. An innovative thought. But they see us as the 
legislative branch. We are not proposing to change the Civil 
Service rules, etc.
    With regard to the Hill, the situation is as follows: We 
have strong bipartisan and bicameral support. We have support 
from the Government Reform Committee, the chair and ranking 
member. We have support from the Governmental Affairs 
Committee, the chair and ranking member. We have support, 
strong bipartisan support, in the Senate Appropriations 
Committees, because the bill is on the Senate bill that passed. 
And we have support in the House as well, and we are very 
hopeful that it will be enacted soon.
    We do have some concerns that have been expressed by 
certain members of the local delegation. That is 
understandable. They have many Federal Government employees as 
their constituents. Some of their concern is because of 
misperceptions. At first, they thought we were talking about 
changing the Civil Service rules. We are not. There is some 
question about veterans preference. We are maintaining that. So 
we are hopeful that we will be able to get everybody on board, 
but we critically need this legislation.
    Mr. Ose. If I understand correctly--and I want to examine a 
couple of these employees' protections. Could you just go 
through some of the protections that are built into your 
proposal that would help the employees or satisfy the 
employees?
    Mr. Walker. I appreciate you asking that question. I think 
it is critically important that management have reasonable 
flexibility, but you also have to have protections to safeguard 
employees. We have several internal appeal processes that 
individuals can go through. I have proposed and I have stated 
publically, since we have to propose regulations, that I would 
add an additional appeal as part of that regulatory process 
where individuals would have an expedited appeal directly to me 
in addition to what their current rights are. In addition, we 
have an independent Personnel Appeals Board comprised of three 
independent attorneys paid for by GAO but with no relationships 
to GAO that individuals can appeal to even after the internal 
appeal process. In addition, for certain types of actions, they 
can go to Federal court. By the way, we pay for the Personnel 
Appeals Board. So there are a number of substantive 
protections.
    Unlike executive branch agencies which are headed by 
political appointees of a particular party, the Comptroller 
General has a 15-year term. He is a nonpartisan professional 
and therefore must suffer the consequences of whatever he does. 
And therefore, given that we are in the people and knowledge 
business, I can assure you that my successors would be prudent, 
because we would pay the price if we weren't. Plus 
congressional oversight obviously serves to keep us in check.
    Mr. Ose. My final question, Mr. Chairman, before I offer 
one observation at the end of the response, would be that a lot 
of what happens up here is either legislative or regulatory. 
Does GAO have any authority right now to issue regulations from 
a regulatory standpoint to handle this rather than pursuing it 
on a legislative basis?
    Mr. Walker. We have the authority to do regulations. 
However, we are talking about adding some criteria, namely, 
skills, knowledge, and increasing the weight of performance 
that could be contested if we tried to do it through the 
regulatory route. Arguably, we could go that route, but there 
are significant litigation risks, my general counsel has told 
me, if we go that route. We believe that we prepared a sound 
business case, that we have got adequate protections, and we 
would respectfully request the support.
    Mr. Ose. The reservation that I mentioned moments ago had 
to do with following up on comments from my good friend from 
Illinois, and that is that Mr. Willemssen has been a star and a 
source of great information for me, at least as a Member, and I 
want to commend his efforts from you.
    Mr. Walker. He received the Comptroller General's Award 
last year, which is the highest award we can give, as well as 
Helen Hsing, who is head of Congressional Affairs. He is an 
outstanding individual.
    Mr. Horn. One of the key things in the results-oriented 
program that we are pushing and that this has been done on a 
bipartisan way 10 years ago, we are trying to make it happen; 
and if it is going to happen, we really need a cadre, and maybe 
you already have it, that can experiment with different 
approaches to how do we measure the effectiveness of Federal 
programs. And I just wonder what your thinking is along that 
line.
    Mr. Walker. It is part of the recent reorganization that I 
announced at GAO. One of the things that I am creating is the 
Strategic Studies Group; and they have the expertise to do some 
of the type of work that you are talking about, Mr. Chairman.
    If I can, I would like to mention one other thing before we 
wrap up. That is we have not had a Deputy Comptroller General 
in GAO for over 20 years. The current statutory framework for 
appointing the Deputy Comptroller General has never worked. It 
is broken. It needs to be fixed. We need to work together. We 
need a Deputy Comptroller General. Gene Dodaro would make an 
outstanding Deputy Comptroller General.
    Mr. Horn. I think we can all testify to that. He has been 
an outstanding witness in the 8 years I have been involved with 
this committee.
    Well, we thank you, and we hope that you will stay with us 
as we get your two predecessors.
    We would like at this time to have Comptroller General 
Staats and Comptroller General Bowsher and Mr. Ink, President 
Emeritus, Institute of Public Administration.
    Mr. Walker, you can remain at the table, by the way.
    We are delighted to have with us today Elmer Staats, who 
has a great reputation in this city, over 40 to 50 years. He 
became a member at the Bureau of the Budget in the 1930's, in 
1939, and was Assistant to the Director and Assistant Director 
of Legislative Reference. I think you followed Roger Jones, I 
believe. Or did you precede him?
    He has been Executive Assistant to the Director of the 
Bureau of the Budget in the late 1940's and Deputy Director in 
the 1950's and in the 1960's. Then he was in private industry 
for awhile and then he was nominated to be Comptroller General 
of the United States and served from 1966 to 1981.
    We would appreciate any comments that you might have. You 
have watched the agency more than any of us. Anything that you 
would like to stay, we would be glad to listen to it.

 STATEMENT OF ELMER STAATS, FORMER COMPTROLLER GENERAL OF THE 
                   UNITED STATES (1966-1981)

    Mr. Staats. Thank you, Mr. Chairman. I do not have any 
prepared testimony. I came mostly to answer your questions.
    Two things I would like to say: The bottom line for GAO is 
its credibility and that has a lot of implications for the 
length of term of the Comptroller General and the 
bipartisanship. I think that is something that we have to keep 
in mind.
    The other thing I want to say concerns program results and 
program evaluation. President Johnson, when he appointed me, 
thought the job of the Comptroller General to involve those 
activities--and he had been in the House a long time and in the 
Senate a long time. He thought for a moment; and he said, when 
Congress passes a bill and I sign it, it is your job to tell 
both of us whether that law is being carried out as we intended 
it to be carried out. And that is a pretty good definition of 
the job of GAO.
    GAO has changed a lot since the time I joined it in 1966. I 
don't think Comptrollers General could have done all they did 
if they didn't have a 15-year term. It takes a long time to 
make some of these changes, but it has changed a lot.
    When I joined the GAO, the personnel was entirely lawyers 
and accountants, so I had a job of convincing people that we 
could use other disciplines and other backgrounds. That was a 
real problem in recruiting because you have accounting in the 
name of your organization and you have to tell them, no, we are 
an accountability organization. We even thought some about 
changing the name of GAO. If you look at the rest of the world, 
most of the people in comparable jobs are called Comptrollers 
General or auditors general, and so we decided to stick with 
the title General Accounting Office.
    A couple of comments. I think Congress is making a big 
mistake in cutting back on the staff of GAO--an organization 
that is putting more money in instead of taking it out. If you 
look at the cost and benefits of what comes out of GAO--I think 
Congress tends to look at GAO as they would any operating 
agency in the executive branch. There are obvious ways to save 
money. Here you are dealing with an organization whose sole job 
is to try to make government more efficient; and to save money 
and to cut GAO--I think it is a little like a penny-wise/pound-
foolish approach, to be very blunt about it.
    On the whole, I had pretty good success in persuading 
Congress. We were not always happy, but most of the times we 
were. I think Congress tends to look at the GAO from the 
standpoint of an operating agency, like the Pentagon or 
something else, but what can Congress get from the GAO that is 
going to help them do their job, and that is what GAO is about.
    I am little concerned about the fact that GAO has no--has 
less freedom to initiate work of their own. When I was at GAO, 
less than 10 percent of our work was requested by Congress; and 
the answer that I got from Members of Congress was we know that 
GAO is a good organization but not really relevant for what we 
need. From the time I left in 1966 we were up to a little over 
40 percent.
    Now you can look at that both ways. If the GAO keeps in 
touch with the Congress as to its work plans, a lot of its work 
plans will be accommodated to the committees of Congress. So 
part of our objective was we worked to contact all of the 
committees and Members and to see what they thought about, so a 
lot of our priorities were established by consultation, and 
that tended to relieve some of the congressional requests.
    There is always the question, how does GAO decide what it 
is going to work on? I don't think that it is right for 
Congress to deny GAO to initiate its own work. GAO is intended 
to be an independent auditor of the Federal Government. If you 
are an independent auditor, you have to make your judgment as 
to whether or not what you are going to do is going to be the 
correct thing to do. Independence is kind of the keystone of 
what we are talking about. This 15-year term, the fact that GAO 
is given a lot of freedom to initiate work, these are all parts 
of it.
    I think the GAO is always going to be in a position of 
trying to anticipate, I call it early warning, where we can 
look down the road and see what is going to be important before 
it reaches the stage of having legislation or a hearing and so 
on. I think we can--GAO can do a lot of that. But they don't do 
that unless they have a little freedom to do it.
    When I went to GAO, I found that Congress had not mandated 
any work for IRS. We didn't have any authority. We didn't have 
any authority to do anything with respect to the Federal 
Reserve Board. The international lending agencies, those were 
out of our providence. So we had the job of trying to persuade 
Congress that they overlooked something. Generally, we had 
pretty good cooperation from Congress on that.
    I came to Congress to get GAO its own personnel system. It 
didn't make any sense for GAO to be under the rules of the 
executive branch in that respect. I had some opposition to that 
in the executive branch, but it has worked out all right. GAO 
needs that kind of flexibility to write its own rules as far as 
its own work force is concerned.
    There are two or three things that I want to say and then 
maybe answer your questions.
    Mr. Horn. I would like you to confirm or deny the following 
statement. As I remember the LaFollette-Monroney Act that 
created the CRS, the research service for Congress, there was 
also a hope of professionalism on the part of the staffs. 
Before that, they had a clerk that was sort of keeping the show 
running, but they didn't have a professional staff until the 
LaFollette-Monroney Act was recognized in both the office and 
the committee.
    As I remember, there was a role for GAO, and that was to 
get into the programmatic review. And yet your predecessors 
could not implement that because Mr. Rayburn did not think it 
was a good idea; and neither did Clarence Cannon, the chairman 
of the Appropriations Committee. Both of them, I believe, were 
dead before you got there; and I think, under your leadership, 
the GAO moved into programmatic analysis. And I think that is 
exactly what they ought to be doing, along with the fiscal 
debt, and they don't that much. You contract a lot of it out. I 
just wondered, am I correct on that bit of history or am I 
wrong?
    Mr. Staats. The first Comptroller General was under 
President Roosevelt, and he decided a lot of things that 
Roosevelt was doing was illegal.
    Mr. Horn. Wasn't that Mr. McCarl?
    Mr. Staats. Yes. So that the relationship between the 
executive branch and GAO at that time couldn't be worse. But he 
stuck it out for 15 years. He never was convinced that the 
Roosevelt program was the right thing to do. He tried to find 
some way to make it illegal. The GAO does have some authority 
to pass on the legality of funds, there is no question about 
that, but I think he overdid it.
    I think the--in general, the Congress has been very 
supportive of the GAO. I say that as a general statement. I had 
a problem with the budget and their approach to it. GAO is 
different from CRS and the CBO. Their whole job is to help 
Congress. GAO has also the role of being an independent 
auditor. That means you seek out things that need to be done 
and look at it and report to Congress on it. So it is a very 
different relationship. There has to be some coordination 
obviously.
    In general, I would like to say if Congress looks at the 
GAO in the same way it looks at CRS and CBO, I think they 
overlook something.
    Mr. Horn. To what degree do you believe the existence of 
inspectors general that Congress put in everywhere 20 years 
ago, did that, in essence, do some of the work that ordinarily 
the General Accounting Office would take care of?
    Mr. Staats. I was concerned about that when the law was 
passed, but it didn't turn out to be a matter of concern. For 
one thing, the inspectors general are dealing with a lot more 
internal problems than we are. Very rarely do they deal with 
problems of interagency concern or governmentwide concern. They 
were looking primarily at issues pertaining to that agency. It 
didn't turn out to be a real problem. I think, on the whole, it 
has been a good development.
    Mr. Horn. Well, let's call on Mr. Bowsher; and then we will 
have questions from all members of the panel.
    Mr. Bowsher, it is a pleasure to see you. You were also a 
complete 15 years. So it must be a healthy job. It is like 
being President.

STATEMENT OF CHARLES BOWSHER, FORMER COMPTROLLER GENERAL OF THE 
                   UNITED STATES (1981-1996)

    Mr. Bowsher. It is a very healthy job. My predecessors all 
lived to be into their 80's, and so I have confidence that this 
has been a good job for my health.
    Let me just say that I think the Comptroller General job is 
really one of the great jobs in government. I have been working 
recently with Dave Ruder, who was chairman of the SEC for a 
period of time and was a dean at Northwestern Law School; and 
he always introduces me as having one of the best jobs in 
Washington and the GAO as one of the great agencies in the 
government.
    I think the mission that the GAO has, which is we have to 
look at all of the various programs of the Federal Government 
is something that attracts the outstanding talent that does 
come to GAO; and I know Dave is right at this moment in time, 
because of the competitiveness, the strong economy, the big 
salaries that the private sector is offering that it is harder 
to get talent. But I am sure that GAO will be able to attract 
really talented people and keep them over the years because of 
the mission and the work that they get to do at the GAO.
    I would strongly urge that the Congress give the 
Comptroller General and the GAO budget stability. I had it for 
10 years. The first 10 years I was in office, Vic Fazio was the 
chairman of my subcommittee in the House Appropriations; and 
Jerry Lewis was the ranking person; and they gave me budget 
stability. And I always remember saying to them, if you can do 
that for me I will run a great GAO; and we made a lot of 
progress at the GAO in those 10 years.
    When the budget deficits got so large and we had to take a 
cut, I remember saying to Connie Mack, if you let us do it the 
right way, we will be able to bring the organization down in 
the right way, and that was a big help. I will always be very 
grateful to Senator Connie Mack. And Bill Clinger, too, was 
very helpful at that point.
    But Dave is right. I think today there has to be some 
rebalancing at the GAO for the 21st century, and I would hope 
that the Congress could give them that kind of support.
    The GAO is an agency that is like very few others. It is a 
much smaller agency today than it was years ago, and yet it 
produces so much more, so many more reports and testimony, so 
many more dollars saved. It is a real tribute to this agency 
that they can compare themselves to the best in the private 
sector.
    I remember working with Booz Allen at the end of my 15-year 
term on a management review of another agency, and the managing 
partner at Booz Allen said I never saw an agency in the 
government and very few in the private sector that have a 
better work ethic than the GAO. The people worked hard and did 
it on a timely basis.
    And one time I had Dr. Demming at the GAO on a Saturday. He 
said he would come for nothing if we would meet on Saturday or 
he would charge me $10,000 if it was on a weekday. I said, I'll 
take the Saturday option.
    John Sawhill came, a former partner of McKinsey; and he was 
amazed what a breadth of testimonies and reports that our SES 
members had to handle. He compared it to the partners at 
McKinsey. I was a former partner at Arthur Andersen. I too, 
knew that the leadership of GAO carries a very big load and 
does it extremely well.
    So I think if the Congress can support the current 
Comptroller General and the GAO, I tell you, you are going to 
get a good payoff. I will conclude on that note.
    [The prepared statement of Mr. Bowsher follows:]

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    Mr. Horn. Let's turn to Dwight Ink, who has been a regular 
helper on this subcommittee, president emeritus of the 
Institute of Public Administration and formally in all types of 
roles under numerous presidents.

   STATEMENT OF DWIGHT INK, PRESIDENT EMERITUS, INSTITUTE OF 
                     PUBLIC ADMINISTRATION

    Mr. Ink. Thank you, Mr. Chairman. I did not serve in the 
GAO, which I guess is why I am not listed as honorable on the 
witness list here, but I did serve in the Executive Office of 
the President and a number of other agencies. My perspective is 
from that type of service.
    I certainly think highly of the General Accounting Office. 
It has an extremely important role to play, and it has provided 
strong leadership under both Mr. Staats and Mr. Bowsher in 
improving management. But Congress needs to take great care to 
make sure that its own actions support a highly skilled agency 
that can function effectively in a rapidly changing 
environment, and that is important. I have found the GAO staff 
to be competent, dedicated; and there have been occasions when 
I thought that the GAO was really about the only ally I had in 
addressing management problems and mismanagement in particular.
    Over the years, the General Accounting Office has made a 
particularly enormous contribution in financial management. 
Great as those contributions are, I have on occasion felt that 
they could make an even greater contribution if Congress let 
them be more selective in its work regarding departmental 
management and focus more heavily on basic issues and the root 
causes of these problems. I give some examples in my written 
testimony, in one of which Mr. Bowsher believes I have 
overlooked some early reports by the GAO on the S&L problem. I 
will go back and look at that, Chuck.
    But I have found as I picked up responsibility for various 
agencies and bureaus, very useful GAO reports about their 
accounting systems. But it has been very difficult for the GAO 
to have the resources, particularly now, to devote to the more 
basic problems and issues.
    I mention the Community Service Administration, for 
example, where it was clear that there were financial problems, 
clear that financial management was not good. But the IG 
reports and GAO reports didn't really get to the depth of the 
problems, such as the fact that no program manager was 
permitted to know his or her unobligated balance, which is 
pretty fundamental. No career person was permitted to make 
recommendations with respect to major contracts or grants in 
order to ease the rewarding of political friends. Those are 
basic building blocks for corruption, and it is important that 
GAO be given the kind of flexibility and the ability to 
initiate its own work, so that it can choose these kinds of 
targets early on and devote whatever resources are necessary to 
deal with them.
    With respect to cross-cutting issues among government 
agencies, GAO has not been able to devote the kinds of 
resources I think it needs to address directly issues such as 
the difficulties in the executive branch in implementing 
effectively the Civil Service Reform Act of 1978. Yet that 
legal framework, and the concepts behind the legal provisions, 
are extremely important for effective execution of the laws 
passed by Congress.
    Neither has the GAO been able to look in depth at the 
management performance of the Office of Management and Budget. 
You may recall when this committee asked the GAO to review the 
management impact of the most recent OMB reorganization, the 
GAO declined and opted instead to look just at its effect on 
the budget operations. I would like to see the General 
Accounting Office be in a position to address these very broad 
cross-cutting issues that have such a tremendous impact on 
government operation as a whole.
    I opposed the GAO having to follow the executive branch 
reinventing government policy of reducing staff levels simply 
on the ideological notion that government is too big and the 
best way to reduce it is to make staff cuts without first 
looking at what can be done differently and where such cuts 
might best be applied. Thanks to Mr. Bowsher, there was some 
attention in this instance given to at least alleviating the 
worse impact of these cuts, something which did not occur in 
the executive branch agencies.
    I want to stress the support that I have for the move by 
Mr. Walker to increase training and development within GAO as a 
part of his very welcome emphasis on human capital management. 
Again, this is an area which in the executive branch, outside 
of the military, has declined when it should be increasing. 
With the different roles of the employees and their different 
focus and their different culture, you need greater emphasis, 
not less emphasis, on employee development and training.
    Mr. Chairman, it seems like I am always commending you and 
this committee on holding hearings; and I do it again today. 
The interest that this committee shows in the General 
Accounting Office it is very important, because the interest in 
Congress as a whole is often very much focused on an individual 
problem or individual issue, so that Congress really doesn't 
deal with the health of the General Accounting Office as a 
whole and its overall ability to help and respond to Congress.
    Congress has a responsibility to discipline itself in what 
it asks GAO to do. The large volume of individual and committee 
requests that we have heard this morning has reduced the 
capacity of the General Accounting Office to pursue important 
avenues that it believes needs attention. Its capacity to 
pursue the basic problems and root causes of systemic 
shortcomings such as I have mentioned has been sharply limited 
by a combination of these many congressional requests and the 
ill-advised reduction in staff of several years ago. Congress 
must address both of these issues.
    I suggest this committee work with GAO in exploring ways in 
which individual congressional requests might be better 
screened or required to meet certain conditions. I also urge 
this committee to provide support to the General Accounting 
Office in giving greater priority to those issues which the 
General Accounting Office leadership regards as the most 
serious problems facing the departments and their root causes. 
In other words, permit the General Accounting Office to do more 
self-initiated work as it did through much of its earlier 
history.
    In conclusion, let me reiterate the high regard in which I 
hold the General Accounting Office, its leadership and its 
staff; and I wish Mr. Walker well as he moves ahead with a new 
vision for GAO. Thank you.
    Mr. Horn. Well, we thank you. You've always been a very 
sound voice before the committee.
    [The prepared statement of Mr. Ink follows:]

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    Mr. Horn. I would like to call on my colleague, Mrs. 
Biggert, the vice chair of the subcommittee and the gentlewoman 
from Illinois.
    Mrs. Biggert. Thank you, Mr. Chairman.
    Mr. Walker had a chart that I believe he went over a little 
bit, but I would like to ask Mr. Bowsher and Mr. Staats about 
it. It looks like in 1966, when Mr. Staats had this office, 
that 90 percent of the work conducted for Congress was research 
and development and then 10 percent was committee and Member 
requests.
    By 1981, when Mr. Bowsher took over, 65 percent research 
and development, 33 percent committee and Member requests, and 
then a small little portion came in there of 2 percent of 
mandates, and then now it is 72 percent committee/Member 
requests and a small portion of research and development and 23 
percent for mandates.
    I guess I am wondering how research and development really 
differed from committee or Member requests and why there was 
such a dramatic change in these charts since the period of time 
that you started, Mr. Staats, and then pretty much of a change 
in 1981 until today when we have 72 percent for committee and 
Member requests? Or what is the difference I guess between 
research and development and committee and Member requests?
    Mr. Staats. I have a little trouble with the research and 
development term as such because the General Accounting Office 
is supposed to take the initiative on anything that it sees 
that needs to be looked at. Research and development, I would 
prefer to call research and development in the training of the 
staff. GAO has done a very limited job in terms of training. 
When I was there, very little was done. We didn't have the 
staff to do the training. So I looked to the consulting firms 
and the public accounting firms. They are spending a lot of 
money, in some cases as much as 25 percent of their total 
budget, on training. That is what I call capital investment. 
That is kind of the key to the diversification that you need 
for the GAO's work. I had actuaries, I had all kinds of 
disciplines, but you have to do a lot of training to accomplish 
that.
    Mrs. Biggert. Mr. Bowsher.
    Mr. Bowsher. When Elmer Staats first came into office, the 
Congress was saying that the GAO is a good organization, but it 
doesn't work on the issues that we find important. He got it 
going in the right direction. When I came into office, GAO was 
working more and more on the important issues in the eyes of 
the Congress, and that trend continued during my tenure.
    Also, a lot of the self-initiated work that had previously 
been done with very little communication with Congress really 
became, lots of times, congressional requests. In other words, 
when we would do our planning in the housing or in the 
agriculture area, then we would come over and show it to the 
committees. They would say, that is good, let me send you a 
request. So I guess I never worried about it getting too high a 
percent as long as I always said to my SES leaders, is there 
any important work that we are not doing right now because we 
have too many congressional requests? And there were a couple 
of times when we had to come to the chairmen of the committees 
and ask them to be more of a referee as to some of the requests 
coming over.
    But, on balance, in my 15 years I thought we were able to 
do the important work. Most of it ended up being congressional 
requests. I think Dwight Ink is right. It is one of the things 
that you have to be concerned about. Because if you are getting 
congressional requests but not doing the important work, that 
is not good.
    The S&L crisis, we did not expect to spend as much time on 
the S&L area as we did for 5 years, so we had to move our 
talent over into that area. And I think we did tremendous work 
in the S&L area. I think the Japanese have found out by not 
addressing the issue directly it has caused a tremendous drag 
on their economy.
    So those are the problems that you face as the Comptroller 
General working I think with the leadership of the Congress, 
but I think it can be worked out. I really do.
    Mrs. Biggert. Then maybe you could just comment on 
mandates. How does that differ from the other work that is 
done? Or what do you do with mandates?
    Mr. Bowsher. Mandates are a little tougher because that 
gets into legislation. If I understand the Comptroller General 
here and his deputy, Mr. Dodaro, they are going to work on that 
to make sure that doesn't get too large and doesn't get too 
repetitive. We did review the mandates every so many years and 
say are there things that were needed at one time and maybe we 
can go back to the committee and not have to provide that on a 
contention basis. So I think mandates to me is more of a 
concern than the other issue.
    Mrs. Biggert. Thank you. Thank you, Mr. Chairman.
    Mr. Horn. We are now delighted to have the ranking member, 
who has been with this committee over the years; and we are 
delighted that she can be here today, the gentlewoman from New 
York, Mrs. Maloney.
    Mrs. Maloney. I made a special point of being here when I 
heard that the Honorable Elmer Staats, who came here during the 
New Deal and watched us progress--it is a great honor to 
welcome you and Mr. Bowsher, with whom I worked when I first 
came to Congress, and now Mr. Walker and Mr. Ink.
    Page 14 shows the number of your staff falling. I am all 
for reinventing government and being more productive, but you 
have to have enough people to get the job done. The last 
hearing I had in this committee, we had one from the McIntosh 
subcommittee which would have GAO doing a cost-benefit analysis 
on the private sector for any changes in bills or regulations. 
That is going to cause your workload to go much higher, and so 
my question really is a budgetary one. I would like to know how 
much is in your budget--and it hasn't gone through the 
appropriations process yet. What is the funding in the Senate? 
What is the funding in the House? Why is your personnel 
dropping?
    With the new demands--I know that I put a lot of them on 
you, Mr. Dan Miller and myself from the Census Committee, we 
have been asking for all kinds of things. Do you have enough 
people to get the job done? I would like to understand your 
staffing.
    I don't know if you have had a chance to review the 
McIntosh bill, and it appears to me that is going to require 
even a greater professional attention from your group.
    I just want to use my 1 second here to congratulate the 
General Accounting Office. I think you do a fantastic job. You 
provide a service to the American people and to both sides of 
the aisle, an impartial, professional analysis so our 
decisionmaking is better. I think you are great.
    But I would like you to comment on your own paperwork here 
and let us know where you are in the budget process. Why is 
your personnel falling?
    Mr. Walker. Mrs. Maloney, thank you for your kind comments. 
The Senate bill has us for a 2 percent increase over our 
current year appropriation level.
    Mrs. Maloney. How much is that?
    Mr. Walker. It is about $380 million.
    The House bill has us for a 2.5 percent decrease over this 
year's budget. We are hopeful, with all due respect to the 
House, that the Senate number will prevail. We think that is 
critical in order for us----
    Mrs. Maloney. What is the dollar amount in the House?
    Mr. Walker. It is about 4.5 percent. It is about $15 
million less, something like that.
    Mrs. Maloney. OK.
    Mr. Walker. I will be happy to provide those numbers for 
you. I think it may go to conference as quickly as this week.
    With regard to staffing, the primary reason we have had a 
significant reduction in staffing is because of budget cuts 
over the 1990's. Eighty-four percent of our budget is for 
people. We don't have a whole lot of flexibility for that other 
16 percent. There are certain things that you just have to pay 
for. It is critically important that we obtain budget 
stability.
    With regard to the McIntosh proposal, clearly we are 
capable of doing that work, but one of the issues that we have 
raised is resources.
    Mrs. Maloney. Do you need more resources to do that work?
    Mr. Walker. Yes. The comparable bill in the Senate provides 
for supplemental resources for us to be able to do that work. 
We think that is important.
    Mrs. Maloney. How much more do you need to do that work?
    Mr. Walker. The Senate has provided $5 million for the 
amount of work that they are requesting that we do. The scope 
and timing are different, and obviously they have provided for 
a resource allocation, so resource only represents one 
difference regarding the specific numbers, the House mark is 
$379 million and the Senate mark is $387 million, for a 
difference of $16 million.
    Mrs. Maloney. Now, is that sufficient to do your work? Is 
that what you requested? Is that what was in the President's 
budget?
    Mr. Walker. No, that is not what we requested. We are in 
the legislative branch, and we requested $399 point something 
million. That is what we felt we needed. The Senate bill, 
obviously, is below that; and it is vastly superior to the 
House proposal. The House proposal notes if we impose another 
hiring freeze we could avoid another reduction in force. We had 
a virtual 5-year freeze in the 1990's. That served to mortgage 
the future. We cannot return to those ways.
    Mrs. Maloney. How is your turnover? Do you keep a 
professional staff? How is your staffing in terms of----
    Mr. Walker. It splits by level of experience. For 
individuals with 3 or more years of experience, we have very 
low turnover. It is about 4 percent a year. That includes 
retirement. But we have a big retirement bulge coming up. 
Younger, it is 15 to 18 percent; and obviously there are 
reasons for that. That is one of the reasons that we are trying 
to focus on human capital.
    Mrs. Maloney. Are you backlogged in your requests for 
analysis?
    Mr. Walker. Constantly--in some areas more than others. 
Health care, we are way oversubscribed in health care. Other 
areas, we don't have as large a backlog, and we are constantly 
trying to set priorities.
    Mr. Horn. We now call on Mr. Ose, the gentleman from 
California, for 5 minutes.
    Mr. Ose. Thank you, Mr. Chairman.
    Mr. Walker, I am confused about something. You testified in 
your verbal testimony about access or problems accessing State 
and local records, and I went through your testimony trying to 
find the written reference, and I couldn't. I am trying to make 
sure that I understand your point there. Could you elaborate on 
that, please?
    Mr. Walker. Basically more and more of the work that we are 
being asked to do involves multiple government agencies, 
multiple levels of government and, as Mr. Staats mentioned, 
sometimes multiple national governments.
    In addition, more and more work is involving both the 
public and private sector. For example, in the health care 
area, much of health care is provided by private sector 
parties, whereas HCFA is a financing mechanism. They don't 
provide the benefits.
    My only point is that----
    Mr. Ose. They don't provide the service?
    Mr. Walker. That is correct. They have a regulatory----
    Mr. Ose. They pay for the benefits?
    Mr. Walker. Right, but they don't provide the service, etc.
    My point is, if you look at our strategic plan going 
forward, we are going to be asked to do more things, not only 
with regard to existing government programs but proposed 
government programs, for example, prescription drugs for 
Medicare, that are going to involve us having to obtain access 
to records that we currently don't have the statutory authority 
to obtain. That is something that we need to work on. We don't 
have express statutory authority. Therefore, we have to rely 
upon cooperation.
    On page 38 of the testimony--and I agree, I didn't 
elaborate significantly in the testimony--but the second from 
the last full paragraph provides just a few--a couple of 
examples that might be helpful.
    Mr. Ose. I knew Mr. Dodaro would find it.
    Mr. Walker. That is why I did an executive summary.
    Mr. Ose. Is it your concern that, in terms of GAO 
performing its statutory duty, when the delivery of the benefit 
is, if you will, block granted out, or whatever the appropriate 
phrase is, when that burden is placed on the local or State 
agency, the only way for GAO to make sure that those agencies 
at the State or local level are complying with Federal intent 
is to have access to the records?
    Mr. Walker. Well, I think in certain regards we will try to 
partner with the State auditors who clearly do have access, and 
we are trying to do that more and more, but there could be 
circumstances when we are not able to do that in that regard. I 
think we need to talk in more detail about what the nature and 
extent of our challenges are. But I see this as an emerging 
issue. I don't think it is critical right now but in the years 
ahead could become so.
    Mr. Ose. I don't like chasing my tail, so my next question 
is, are you suggesting that we need to consider legislation now 
in anticipation of this challenge?
    Mr. Walker. I am suggesting that what we ought to do is 
have the staff for the committee, for the subcommittee, get 
together with our staff to explore this issue further to make 
sure that there is an understanding of the nature and extent 
and timing of the challenge, and while we may not need it today 
we may well need it in the not-too-distant future.
    Mr. Ose. And you are saying current statutory authority 
does not give you the ability to obtain this information?
    Mr. Walker. That's correct. We can request it, and in many 
cases we are successful, but not in all.
    Another example is, to the extent that you are talking 
about prescription drugs and to the extent that we are trying 
to analyze the cost of prescription drugs, the cost of 
prescription drugs through VA versus DOD versus Medicaid versus 
the Federal health plan versus other nonFederal payers, and 
trying to understand whether or not the Federal Government is 
getting the best price which it is supposed to get under 
certain contracts, it is tough to do that if you don't have 
access to records that are nonFederal payers.
    Mr. Ose. Does GAO have the ability to subpoena such 
information?
    Mr. Walker. No, we do not. We do not at the present point 
in time.
    Mr. Ose. Thank you, Mr. Chairman.
    Mr. Horn. That is a very good question that you just asked, 
and that is one I was going to use. To what sense do you feel, 
now that you are in there a couple of years, that GAO sometimes 
does not really want to press the executive agency, feeling 
that they might not be given information, than other times? 
What can we do about that?
    Mr. Walker. One of the things that we are doing at GAO is 
we are looking at records access under current law. We do have 
certain statutory authorities right now. For example, I can 
issue as Comptroller General a demand letter which is very 
similar to a subpoena in its effect.
    I have found over the years that many times we have had 
difficulties obtaining records from existing executive branch 
agencies where we do have the authority to obtain it and there 
is resistance to try to push them. We have implemented a 
process where that gets surfaced a lot quicker, and we make 
conscious decisions whether we are going to escalate it to 
higher levels within the respective department and agency and 
under what circumstances we would issue a demand letter.
    I have already had personal conversations with either the 
secretary or deputy secretary of three Cabinet departments that 
were reluctant to provide us information and provided it within 
a short timeframe after I got on the phone with them.
    I don't like issuing demand letters. I think it should be a 
last resort. But we need to have mechanisms in place where we 
can get it within a reasonable period of time so we can meet 
our client's needs.
    Mr. Horn. Looking at the Inspectors General and their role, 
do you feel they get the information when they do internal 
studies? Some of them are very critical, and I just wondered, 
do you feel that you are both being treated the same way or 
does the inspector general have an edge on GAO?
    Mr. Walker. Candidly, Mr. Chairman, I am not in a great 
position to answer that. I would need to outreach more on that 
specific area.
    I will tell you that we are taking a number of steps to 
increase our coordination and cooperation with the inspector 
general community and the State and local audit community. 
Because, to me, where we can have the most value is cross 
governmental and intergovernmental areas as well as longer-
range issues, and that requires more coordination, and so I 
will followup on that.
    Mr. Ink. Mr. Chairman, I think you will find that this 
varies considerably from agency to agency, in part because of 
different types of leadership. Some agencies have a better 
understanding of the role and the importance of providing this 
kind of information to GAO and inspectors general. Also, there 
is considerable difference among the inspectors general and how 
they use that information. Some of them use it more responsibly 
than others. I think the General Accounting Office is a much 
more stable organization, and resulting in more consistency in 
the way in which the agencies deal with the GAO.
    Mr. Walker. Mr. Chairman, I would agree. It is clear, based 
on my experience to date, that there is a significant 
difference between different offices of Inspector General and 
how they approach their work and whether or not they are likely 
to have problems.
    I would like to add for the record, as you know, we have 
recently published some congressional protocols which are now 
in the trial stage where we set our priorities and note what 
our obligations are with regard to our client. We plan to do 
the same thing with regard to departments and agencies, and 
records access will be part of that as to what our policies 
will be with regard to that.
    Mr. Staats. I would like to comment on the access to 
records, Mr. Chairman.
    It is true that agencies, unless they cooperate, can almost 
turn off your water. I think they have to have a feeling that 
you are dealing with them fairly and openly and giving them 
access to your draft reports and have an opportunity to present 
their own views alongside the GAO. If you do that, I don't 
think that you are going to have problems. But, legally, GAO 
can still take agencies into court to get access to records if 
they need them.
    Mr. Horn. I am glad to hear that, because I think that is 
what they ought to do.
    The gentleman from California, do you have any more 
questions?
    Mr. Ose. Thank you, Mr. Chairman. I do have one on the 
issue.
    As I move from being a young man to a confused middle-aged 
man, I have often wondered where is my path going to take me as 
I move into more senior years. If I look beyond my longer term 
in office, I am curious what the panel's perspective might be 
what GAO might evolve into?
    Let me just construct a particular situation or scenario. 
With the advancement in information technology, there are 
people in my office who may very well have access to records 
they have never had access to before, and they may come to my 
office with training of a nature that might otherwise have 
previously qualified them to only work at GAO, in other words, 
a very refined set of qualifications. Twenty-five or 50 years 
from now, I would appreciate your perspective on what your view 
on what GAO might be--their role or status or construction, 
what have you?
    Mr. Walker. Let me take a shot, and I am sure my colleagues 
would like to add to that.
    I think our role should be the same, but how we do our role 
will evolve. We are about maximizing government performance and 
accountability. I think we will do work on two sides, what 
government does and how government does business. I think 
technology clearly will play a major role.
    But let me articulate why I think GAO is going to be more 
important in the years ahead. Right now, there is an absolute 
information overload. You can obtain information that would 
absolutely drown you. There are unlimited assertions on the 
Internet, and that is exactly what they are. They are 
assertions--unvalidated assertions. There is an infinite amount 
of information on the Internet.
    On the other hand, what GAO does in a vast array of areas 
is to convert assertions and information into facts and 
knowledge such that Congress can make informed judgments about 
what government should do, what is working, what isn't and how 
it should be changed and how government should do business.
    I believe today we are a multidisciplinary professional 
services organization. We are a wholly owned subsidiary of the 
Congress. We will have to do business differently, but I think 
we are going to be more important, and that is because more and 
more issues we have to address involve multiple skills and 
multiple governmental entities, multiple perspectives, and we 
can pull it all together.
    Mr. Ose. Mr. Bowsher.
    Mr. Bowsher. I also believe that one of the great problems 
in government and has been for a number of years is the budget 
process. The budget systems are very antiquated and people hold 
back information thinking that it gives them power. In other 
words, I won't show you my numbers until later on and things 
like that. And that works all of the way.
    I served as Assistant Secretary of the Navy for 4 years, I 
was the Chief Financial Officer of the Navy, and one of the 
problems was getting the information up through the system. I 
remember working with John Chafee and John Warner. They were 
the Secretary and Under Secretary. They couldn't believe how 
that information would get buried and then all of a sudden 
popped up, and the same in relation to the Congress.
    I have always felt in this modern day and age of computers 
and communications that one of the things that government has 
to do is to modernize the budget and accounting system to the 
point that everybody can have the information on their PC and 
therefore get away from all of the waste of time that there is 
meetings, debating the numbers and also the waste of time for 
the auditors to sort it all out. So, in addition to what Dave 
is saying, which I think is right on the mark for GAO, I think 
one of the great things for government in total is this 
modernization of the Government and Accounting Act so the 
Federal Government looks like a modern corporation. They just 
don't spend that kind of time massaging all of the numbers that 
the government does.
    Mr. Walker. One quick point on that. One of the biggest 
challenges we face in the Nation is the fact that today--and 
CBO just came out at 9 this morning with a revised budget 
forecast which shows higher estimated surpluses for a longer 
period of time. But our budget simulations show that, because 
of known demographic trends, the fact that we have gone from 16 
workers paying into Social Security to 1 in 1950 to 3.3 to 1 
today, and we are going down to 2 to 1 by 2025, we are going to 
have renewed budget deficits as sure as the sun rises in the 
morning, especially if we end up spending the on-budget 
surplus, and it looks like that is going to happen sooner or 
later, a variety of different ways.
    We need to look at our budgeting system so people can make 
more informed judgments about not just whether or not we can 
afford things today but can we afford it tomorrow because we 
have mortgaged the future. If we are not careful, we will 
reload the debt.
    Mr. Staats. One thing which would be helpful is getting the 
committees to more clearly articulate what they want in 
legislation. We would have to go back in committee reports and 
see what Congress intended to do. Sometimes the House had one 
idea and the Senate had a different idea. It is hard to 
evaluate a program unless you know what Congress intended.
    Mr. Ose. Mr. Staats, the Senate is wrong in those 
situations.
    Mr. Staats. I remember in one case the committee said, if 
we had any idea what we were doing, we wouldn't have done it.
    Mr. Ose. Mr. Ink.
    Mr. Ink. Being a non-GAO person, I won't try to predict 
where it will be 50 years from now.
    Another handicap which has not been mentioned, however. GAO 
would be well served if it had a much stronger partner in OMB 
possessing more effective managerial component. A great deal of 
information can be shared back and forth, which is available 
now on only a very limited basis because the OMB has such a 
very limited management capacity to address broad problems.
    When Mr. Staats was Comptroller General, we in Bureau of 
the Budger had conversations with him going on all the time. We 
had meetings going on all of the time. Remember, Elmer, we met 
with Senator Proxmire; and that is what led to the productivity 
program getting going. The real initiative came from Mr. 
Staats, the Comptroller General. I, representing the President, 
took the leadership in moving forward with implementing it. 
That degree of cooperation is very difficult today. The 
initiative of Mr. Horn for an office of management would be 
very helpful in that respect.
    Mr. Ose. Thank you. Thank you, Mr. Chairman.
    Mr. Horn. We thank you.
    Let me thank the staff that have put this fine hearing 
together.
    On my left, your right, J. Russell George, the staff 
director and chief counsel of the subcommittee. In back of him 
is Heather Bailey, professional staff member; Bonnie Heald, 
director of communications; Bryan Sisk, our clerk; Elizabeth 
Seong, staff assistant; Will Ackerly, a faithful intern; and 
Davidson Hulfish, a faithful intern. This is the summer, when 
we get free labor and bright people.
    For minority staff, we have Trey Henderson, counsel, and 
Jean Gosa, minority clerk.
    And Doreen Dotzler, the court reporter, who is getting an 
education in government sitting with this committee.
    We thank you all, and we thank you all for coming. We are 
adjourned.
    [Whereupon, at 12:03 p.m., the subcommittee was adjourned.]

                                  
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