[Senate Hearing 110-]
[From the U.S. Government Publishing Office]



 
         LEGISLATIVE BRANCH APPROPRIATIONS FOR FISCAL YEAR 2008

                              ----------                              


                         FRIDAY, MARCH 16, 2007

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:08 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Mary L. Landrieu (chairman) 
presiding.
    Present: Senator Landrieu.

                    GOVERNMENT ACCOUNTABILITY OFFICE

STATEMENT OF HON. DAVID M. WALKER, COMPTROLLER GENERAL 
            OF THE UNITED STATES
    Senator Landrieu. The subcommittee will come to order. Good 
morning, and welcome to everyone.
    Regrettably, Senator Allard is attending a family funeral 
in Colorado this morning and will not be able to join us. So, 
our thoughts, prayers, and condolences are with him and his 
family this morning.

               PREPARED STATEMENT OF SENATOR WAYNE ALLARD

    But I do understand that he's prepared a statement for the 
record, and, at this time, I will submit it on his behalf.
    [The statement follows:]
               Prepared Statement of Senator Wayne Allard
    Madam Chairman, I regret that I cannot attend this morning's 
hearing with the Government Accountability Office, the Government 
Printing Office, the Congressional Budget Office and the Office of 
Compliance.
    There are many important issues before these agencies, not the 
least of which is the large percentage increase being requested by 
each--especially the Government Printing Office with a 49 percent 
increase over the fiscal year 2007 continuing resolution level.
    The Government Accountability Office is requesting $523.8 million 
for fiscal year 2008, which will return GAO to the fiscal year 2006 
operating level. Thanks to Comptroller General David Walker and his 
staff, our subcommittee has received excellent assistance in overseeing 
legislative branch agencies, particularly the Architect of the Capitol 
and the Capitol Visitor Center, as well as the Capitol Police 
management issues.
    An issue I would like GAO to address is its capacity to continue to 
undertake technology assessment work. I understand there is interest in 
starting up the old Office of Technology Assessment, and frankly I'm 
very concerned about that idea. GAO had a pilot project to do 
technology assessment projects several years ago, which was very 
successful. GAO subsequently completed three additional projects on 
technology assessment which were requested on a bi-partisan and 
bicameral basis, and were well-received as I understand it. I would 
like to know whether GAO can continue to perform such work, on a bi-
partisan, bicameral basis, with appropriate peer review, and whether 
this is consistent with GAO's mission. The notion of starting up a new 
agency at a time when we have extraordinary budget constraints does not 
make sense.
    With respect to the Government Printing Office, I would note that 
Bruce James retired at the end of last year and the Acting Public 
Printer, Bill Turri, has been ably filling his shoes. GPO's request of 
roughly $182 million is a 49 percent increase, as I mentioned earlier. 
I understand that this increase is in part due to the need to re-pay 
the revolving fund for shortfalls in Congressional printing and binding 
costs, and the 2006 updating of the U.S. Code. GPO is able to use the 
revolving fund for these shortfalls, but we must pay those funds back.
    In addition, GPO has numerous information technology improvements 
which have been deferred or are nearing completion and need the final 
infusion of funds to complete. Having said that, we know your full 
request likely will be difficult to fully accommodate, so we look 
forward to seeing a prioritization of your request.
    The Congressional Budget Office has a new director, Dr. Peter 
Orszag, who comes to CBO with excellent credentials and I look forward 
to working with him. CBO is requesting a steady-state budget of almost 
$38 million and 235 employees, but is now asking for additional funds 
for health-care related work. I look forward to getting more 
information on the need for that additional work.
    Finally, the Office of Compliance, represented by Ms. Tamara 
Chrisler, is requesting just over $4 million. The office is in the 
midst of completing a settlement with the Architect of the Capitol on 
the complaint OOC filed over a year ago on the utility tunnels. That is 
a precedent-setting case and that has taken tremendous resources. We 
look forward to that coming to conclusion shortly so that AOC can move 
ahead expeditiously with its repairs and improvements in the tunnels.
    Madam Chairman, this concludes my statement.

             OPENING STATEMENT OF SENATOR MARY L. LANDRIEU

    Senator Landrieu. Today, we meet to take testimony on the 
fiscal year 2008 budgets for the Government Accountability 
Office (GAO), the Government Printing Office (GPO), the 
Congressional Budget Office (CBO), and the Office of Compliance 
(OOC). Since we have four agencies testifying this morning, I 
ask that each of you just present your remarks in summary form. 
I've read all of your statements, and they will be included for 
the record.
    We're looking at some pretty substantial increases in your 
steady budget requests. While I realize the continuing 
resolution held you to 2006 dollars in fiscal year 2007, we 
really need you to think about the priorities that you have as 
we move forward in this process. Priorities in this context may 
mean overall lower dollars that we have to work with, but we 
will explore this as the subcommittee moves forward.
    I want to welcome today's witnesses: David Walker, Bill 
Turri, Peter Orszag, and Tamara Chrisler. Thank you all for 
attending, this morning.
    The Government Accountability Office budget request totals 
$523 million, which is an increase of 8 percent over the 
current year and would fund an increase of 104 full-time 
employees. I appreciate the oversight your agency has provided 
to this subcommittee, on both the Capitol Visitor Center and 
the utility tunnel repair work. I want to particularly thank 
Bernie Ungar, Terry Dorn, and Gloria Jarmon, of your staff, for 
their hard work and assistance to me and to my staff on these 
complicated and time consuming projects.
    I hope to have a detailed conversation with you today, Mr. 
Walker, about a number of workforce issues, including the 
implementation of the GAO Human Capital Act of 2004, 
legislation you requested from Congress. Some of the promises 
that you made have not yet been completely fulfilled, and we'll 
talk about where we are in that process a little later.
    The Government Printing Office budget request totals $182 
million, a 49-percent increase over fiscal year 2007 and would 
include 86 additional employees.
    Mr. Turri, I hope you're prepared to defend this request, 
which is literally doubling your current budget. I understand 
that there are some expansions and changes in technology, and 
we'd like to hear more about that today.
    The Congressional Budget Office budget request totals $38 
million, which is an 8-percent increase over current year, and 
would support the current level of 235 employees. I understand 
the CBO is looking into expanding the scope of their work to 
include identifying and analyzing ways to control healthcare 
spending. I look forward to hearing more about that proposal 
this morning.
    And, finally, the Office of Compliance is requesting $4.1 
million, which is an increase of $1 million, or 32 percent, 
over the current year, and would fund four additional 
employees.
    Ms. Chrisler, I appreciate the fact that your organization 
has had an increased workload over the last year because of the 
problems in the utility tunnels, and I look forward to hearing 
an update on the progress being made by the Architect of the 
Capitol (AOC) in addressing the issues in the complaint filed 
by your agency.

 GAO deg.GOVERNMENT ACCOUNTABILITY OFFICES' FISCAL YEAR 2008 
                             BUDGET REQUEST

    Now, Mr. Walker, if you would begin. And let me thank you 
for your visit to my office. I found it extremely enlightening 
and insightful. I want to begin by commending you on what I 
consider to be an excellent job that you're doing. I want to 
help you to continue to achieve more of the goals that you 
outlined to me. But I'd like to allow you to make your 
statement. We will then question some of the increases in your 
budget.
    Mr. Walker. Sure.
    Senator Landrieu. Thank you.
    Mr. Walker. Thank you, Madam Chair. It's a pleasure to be 
here today to talk about GAO's fiscal year 2008 budget request.
    I would like to thank you and the subcommittee for your 
past support of GAO. I'm especially appreciative of your 
efforts to try to provide us some additional funding above 
fiscal year 2006 levels, rather than just a flat-line 
continuing resolution, which we had been under. That helped us 
to avoid unpaid furloughs, but, as you know, because we still 
had a shortfall, we could only make our pay raises retroactive 
to February 18, 2007, rather than January 7.
    I'm particularly pleased with the results that GAO achieved 
for the Congress and the American people. For fiscal year 2006, 
we returned $105 for every $1 invested in GAO--number one in 
the world. Second place in the world is 24 to 1. I think it's 
important--and I know you believe this--to consider results, 
not just resources, because the U.S. Government needs to do a 
better job, I believe, in linking resources to results.
    While 2006 was a record year for us in many regards, we've 
had to delay and cancel a number of items, because we're 
operating under constrained resource levels. As you undoubtedly 
know, since 2003 GAO's budget has not kept pace with inflation. 
Our purchasing power is down 3 percent since 2003, which 
concerns me because about 80 percent of our budget is for 
payroll costs, and, needless to say, you have to pay people 
more than inflation, especially top performers. The other 20 
percent of our budget is primarily nondiscretionary costs which 
are subject to inflationary increases. So, that's a real 
concern.
    Candidly, Madam Chair, my concern is we've done a lot of 
things to improve our economy, our efficiency, and our 
effectiveness, but they're about played out. I'm very concerned 
that unless we receive a more reasonable resource allocation 
that's better aligned with our results, it's going to start to 
have an adverse effect on employee morale, on our ability to 
serve the Congress, and on our ability to generate the type of 
unparalleled return on investment that we've delivered to the 
Congress and the country in recent years.
    We have, and will continue to take steps to try to deal 
with constrained resource levels. We are asking for about an 8-
percent increase for next year, which is designed to try to 
help deal with some of the deterioration in our purchasing 
power in recent years, and to be able to fund some of the 
projects that we've had to defer for quite a number of years.

 GAO deg.REBUILDING GOVERNMENT ACCOUNTABILITY OFFICE OVER THE 
                              NEXT 6 YEARS

    Looking beyond fiscal 2008 I promised the Congress, when I 
came in, in 1998, that I would do everything that I could to 
improve the economy, efficiency, and effectiveness of GAO. 
Nonetheless I was asked virtually every year, ``What's the 
optimum staffing level for GAO?'' I've always said, ``I'm not 
going to ask for any more, at this point in time, until I 
believe that we've accomplished the first objective.'' I 
believe we've accomplished that objective now. I have 6\1/2\ 
years left until the end of my 15-year term. Based upon 
preliminary estimates, and based upon the many challenges that 
the Congress and the country face, I believe we and the 
Congress need to think about taking GAO, over the next 6 years, 
from about 3,200 personnel to potentially up to about 3,750, 
for a number of reasons, which I will provide in detail as a 
supplement for you to consider in the future. This does not 
relate to our fiscal 2008 budget request. It is an attempt to 
try to look longer-range and to try to help begin the 
discussion over our longer-range role and resources, because I 
think it's important to do so.

                           PREPARED STATEMENT

    Thank you very much, Madam Chair, and I'm happy to answer 
any questions that you may have.
    Senator Landrieu. Thank you very much.
    [The statement follows:]

                 Prepared Statement of David M. Walker

    Mrs. Chairwoman and members of the subcommittee: I am pleased to 
appear before the subcommittee today in support of the fiscal year 2008 
budget request for the U.S. Government Accountability Office (GAO). The 
requested funding will help us continue our support of the Congress in 
meeting its constitutional responsibilities and will help improve the 
performance and ensure the accountability of the Federal Government for 
the benefit of the American people. An overview of GAO's strategic plan 
for serving the Congress and our core values is included as appendix I.
    I would also like to thank you and your subcommittee for your past 
support of GAO. I am especially appreciative of your efforts to help us 
avoid a furlough of our staff during fiscal year 2007. Had we not 
received additional funds this year and not taken other cost 
minimization actions, GAO would have likely been forced to furlough 
most staff for up to 5 days without pay. At the same time, due to 
funding shortfalls, we were not able to make pay adjustments 
retroactive to January 7, 2007.
    It is through the efforts of our dedicated and capable staff that 
we were able to provide the Congress with the professional, objective, 
fact-based, nonpartisan, non-ideological, fair, and balanced 
information it needs to meet the full range of its constitutional 
responsibilities. I am extremely pleased and proud to say that we 
helped the Federal Government achieve a total of $51 billion in 
financial benefits in fiscal year 2006--a record high that represents a 
return on investment of $105 for every dollar the Congress invested in 
us. As a result of our work, we also documented 1,342 nonfinancial 
benefits that helped to improve service to the public, change laws, and 
transform government operations. The funding we received in fiscal year 
2006 allowed us to conduct work that addressed many difficult issues 
confronting the Nation, including U.S. border security, Iraq and 
Hurricane Katrina activities, the tax gap and tax reform, and issues 
affecting the health and pay of military service members. Our client-
focused performance measures indicate that the Congress valued and was 
very pleased with our work overall.
    While fiscal year 2006 was a record year, we will be required to 
constrain vital support to our staff and engagements in fiscal year 
2007 in order to manage within available funds. Although the additional 
funding provided by the subcommittee allows us to avoid a furlough of 
our staff, we must implement a number of actions to cancel, reduce, or 
defer costs in order to manage within fiscal year 2007 funding 
constraints. In fact, our fiscal year 2007 budget for most programs and 
line items retains funding levels at or near fiscal year 2006 funding 
levels--requiring that we absorb inflationary increases, which in turn 
reduce our purchasing power, erode progress toward our strategic goals, 
and ultimately affect our client service and employee support. For 
example, in our travel account--a critical element in our ability to 
conduct firsthand evaluation of federal funding and program 
activities--we expect transportation costs and per diem rates to rise 
(as they do annually). Also, our ability to hire staff to replace 
departing staff, address key succession planning challenges and skill 
gaps, and maintain a skilled workforce will be adversely affected. 
While we must hold some critical employee benefits at last year's 
funding level, such as transit benefits and student loan repayments, 
our pool of employees eligible to retire has increased since last year. 
Also, some other agencies may be offering increased benefits that will 
be attractive to our employees and potential recruits. In addition, we 
have reduced or deferred needed targeted investments and initiatives 
geared to further increasing productivity and effectiveness, achieving 
cost savings, and addressing identified management challenges.
    Unfortunately, we expect that these actions will adversely affect 
our ability to respond to congressional requests, making it even more 
difficult to address supply and demand imbalances in areas such as 
health care, disaster assistance, homeland security, the global ``war 
on terrorism,'' energy and natural resources, and forensic auditing. 
Our diminished capacity will likely, in turn, ultimately result in 
reduced annual financial benefits, findings, and recommendations to the 
Congress and the Nation and necessitate reductions in our
  --ability to provide timely and responsive information to support 
        congressional deliberations;
  --testimonies on the Congress's legislative and oversight agenda;
  --products containing recommendations for improvements in government 
        operations;
  --analyses of executive branch agencies budget justifications to 
        support appropriations decisions;
  --support on reauthorization activities for pending programs, such as 
        the farm bill, Head Start, the Children's Health Insurance 
        Program, and the No Child Left Behind Act; and
  --oversight of legislative branch programs, including the Capitol 
        Visitor Center.
    In an effort to identify areas for potential improvement and help 
ensure accountability, we plan to contract with a public accounting 
firm in fiscal year 2008 to conduct a peer review of our financial 
audit practice and have an international team of auditors conduct an 
external peer review of our performance audit practices. GAO has 
received clean opinions on its previous external peer reviews. 
Consistent with generally accepted governmental auditing standards, 
external peer reviews are conducted on a 3-year cycle and serve to 
validate that the Congress and the American people can rely on our work 
and products.
    In recent years, GAO has worked cooperatively with the 
appropriation committees to submit modest budget requests. During this 
period, and for a variety of reasons, GAO has gone from the largest 
legislative branch agency to the third largest in terms of total 
budgetary resources. Adjusting for inflation, GAO's budget authority 
has declined by 3 percent in constant fiscal year 2006 dollars since 
fiscal year 2003, as shown in figure 1. These modest budget results do 
not adequately recognize the return on investment that GAO has been 
able to generate. In fact, these increases have hampered our progress 
in rebuilding from the downsizing (40 percent reduction in staffing 
levels) and mandated funding reductions that occurred in the 1990s. 
Although GAO's fiscal year 2008 budget request represents a 7 percent 
increase in constant dollar terms over our fiscal year 2007 operating 
plan, it is one of the smallest increases requested in the legislative 
branch.


   Figure 1.--Budget Authority and Full-Time Equivalent (FTE) Usage, 
                         Fiscal Years 1992-2006

    Shortly after I was appointed Comptroller General in November 1998, 
I determined that the agency should undertake a major transformation 
effort. As a result, GAO has become more results-oriented, partnerial, 
and client focused. With your support, we have made strategic 
investments; realigned the organization; streamlined our business 
processes; modernized our performance classification, compensation, and 
reward systems; enhanced our ability to attract, retain and reward top 
talent; enhanced the technology and infrastructure supporting our staff 
and systems; and made other key investments. These transformational 
efforts have allowed GAO to model best practices, lead by example, and 
provide significant support to congressional hearings, while achieving 
record results and very high client satisfaction ratings without 
significant increases in funding.
    We have taken a number of steps to deal with funding shortfalls in 
the past few years; however, we cannot continue to employ the same 
approaches. Our staff has become increasingly stretched and we are 
experiencing backlogs in several areas of critical importance to the 
Congress (e.g., health care, homeland security, energy and natural 
resources). In addition, we have deferred key initiatives and 
technology upgrades (e.g., engagement and administrative process 
upgrades) for several years and it would not be prudent to continue to 
do so. These actions are having an adverse effect on employee morale, 
our ability to produce results, and the return on investment that we 
can generate.
    There is a need for fundamental and dramatic reform to address what 
the government does, how it does business, and who will do the 
government's business. Our support to the Congress will likely prove 
even more critical because of the pressures created by our Nation's 
current and projected budget deficit and growing long-term fiscal 
imbalance. Also, as we face current and projected supply and demand 
imbalance issues and a growing workload over the coming years across a 
wide spectrum of issues, GAO will be unable to respond to congressional 
demands without a significant investment in our future. We have 
exhausted the results that we can achieve based on prior investments. 
Our ability to continue to produce record results and assist the 
Congress in discharging its Constitutional responsibilities relating to 
authorization, appropriations, oversight, and other matters will be 
adversely impacted unless we take action now.
    Therefore, our fiscal year 2008 budget request is designed to 
restore GAO's funding to more reasonable operating levels. 
Specifically, we are requesting fiscal year 2008 budget authority of 
$530 million, an 8.5 percent increase over our fiscal year 2007 funding 
level. The additional funds provided in fiscal year 2007 have helped 
reduce our requested increase for fiscal year 2008 from 9.4 percent to 
8.5 percent. This funding level also represents a reduction below the 
request we submitted to the Office of Management and Budget (OMB) in 
January as a result of targeted adjustments to our planned fiscal year 
2008 hiring plan. Our fiscal year 2008 budget request will allow us to 
achieve our performance goals to support the Congress as outlined in 
our strategic plan \1\ and rebuild our workforce capacity to allow us 
to better respond to supply and demand imbalances in responding to 
congressional requests. This funding will also help us address our 
caseload for bid protest filings, which have increased by more than 10 
percent from fiscal years 2002 through 2006. Our workload for the first 
quarter of fiscal year 2007 suggests a continuation of this upward 
trend in bid protest fillings.
---------------------------------------------------------------------------
    \1\ In the spring of 2007, we plan to issue our updated strategic 
plan covering fiscal years 2007-2012 to reflect the agenda for the 
110th Congress.
---------------------------------------------------------------------------
    We will be seeking your commitment and support to provide the 
funding needed to increase GAO's staffing level to 3,750 over the next 
6 years in order to address critical needs including supply and demand 
imbalances, high-risk areas, 21st century challenges questions, 
technology assessments, and other areas in need of fundamental reform. 
In addition, as we get closer to when GAO may be able to render our 
opinion on the consolidated financial statements of the U.S. government 
and the Department of Defense's financial and related systems, we will 
need to increase our workforce capacity. We will be providing the 
Congress additional information on the basis for and nature of this 
target later this year.
    Importantly, as I noted last year, we also plan to request 
legislation that will assist GAO in performing its mission work, and 
enhance our human capital policies, including addressing certain 
compensation and benefits issues of interest to our employees. We plan 
to submit our proposal to our Senate and House authorization and 
oversight committees in the near future.
    My testimony today will focus on key efforts that GAO has 
undertaken to support the Congress, our fiscal year 2006 performance 
results, our budget request for fiscal year 2008 to support the 
Congress and serve the American people, and proposed legislative 
changes.

                  KEY EFFORTS TO SUPPORT THE CONGRESS

    As is the case with each new Congress, we are beginning to have 
discussions with regard to many new requests for GAO's professional, 
objective, fact-based, nonpartisan, and non-ideological information, 
analysis, and recommendations. On November 17, 2006, I was pleased to 
offer three sets of recommendations for your consideration as part of 
the agenda of the 110th Congress. The first recommendation suggests 
targets for near-term oversight; the second proposes policies and 
programs in need of fundamental reform and re-engineering; the third 
lists governing issues. The proposals represent an effort to synthesize 
GAO's institutional knowledge and special expertise and suggest both 
the breadth and the depth of the issues facing the new Congress. We at 
GAO stand ready to assist the 110th Congress in meeting its 
constitutional responsibilities. To be effective, congressional 
hearings and other activities should offer opportunities to share best 
practices, facilitate governmentwide transformation, and promote 
accountability for delivering positive results.
    On January 9, 2007, we presented GAO's assessment of the key 
oversight issues related to Iraq for consideration in developing the 
oversight agenda of the 110th Congress and in analyzing the President's 
revised strategy for Iraq. This assessment was based on our ongoing 
work and the 67 Iraq-related reports and testimonies we have provided 
to the Congress since May 2003. Our work spans the security, political, 
economic, and reconstruction prongs of the U.S. national strategy in 
Iraq. The broad, crosscutting nature of this work helps minimize the 
possibility of overlap and duplication by any individual inspector 
general. Our work has focused on the U.S. strategy and costs of 
operating in Iraq, training and equipping the Iraqi security forces, 
governance and reconstruction issues, the readiness of U.S. military 
forces, and achieving desired acquisition outcomes. Our current work 
draws on our past work and regular site visits to Iraq and the 
surrounding region, such as Jordan and Kuwait. We plan to establish a 
presence in Iraq beginning later this fiscal year to provide additional 
oversight of issues deemed important to the Congress; subject to 
approval by the U.S. Department of State and adequate funding. We have 
requested supplemental fiscal year 2007 funds of $374,000 to support 
this effort.
    In January of this year, we also issued our high-risk series: An 
Update, which identifies federal areas and programs at risk of fraud, 
waste, abuse, and mismanagement and those in need of broad-based 
transformations. The issues affecting many of these areas and programs 
may take years to address, and the report will serve as a useful guide 
for the Congress's future programmatic deliberations and oversight 
activities. Issued to coincide with the start of each new Congress, our 
high-risk update, first issued in 1993, has helped members of the 
Congress who are responsible for oversight and executive branch 
officials who are accountable for performance. Our high-risk program 
focuses on major government programs and operations that need urgent 
attention or transformation to ensure that our government functions in 
the most economical, efficient, and effective manner possible. Overall, 
our high-risk program has served to identify and help resolve a range 
of serious weaknesses that involve substantial resources and provide 
critical services to the public. Table 1 details our 2007 high-risk 
list.

                   TABLE 1.--GAO'S 2007 HIGH-RISK LIST
------------------------------------------------------------------------
                                                               Year
                   2007 High-Risk Area                      Designated
                                                             High Risk
------------------------------------------------------------------------
Addressing challenges in broad-based transformations:
    Strategic Human Capital Management \1\..............            2001
    Managing Federal Real Property \1\..................            2003
    Protecting the Federal Government's Information                 1997
     Systems and the Nation's Critical Infrastructures..
    Implementing and Transforming the Department of                 2003
     Homeland Security..................................
    Establishing Appropriate and Effective Information-             2005
     Sharing Mechanisms to Improve Homeland Security....
    Department of Defense (DOD) Approach to Business                2005
     Transformation \1\.................................
        DOD Business Systems Modernization..............            1995
        DOD Personnel Security Clearance Program........            2005
        DOD Support Infrastructure Management...........            1997
        DOD Financial Management........................            1995
        DOD Supply Chain Management (formerly Inventory             1990
         Management)....................................
        DOD Weapon Systems Acquisition..................            1990
    Federal Aviation Administration Air Traffic Control             1995
     Modernization......................................
    Financing the Nation's Transportation System \1\                2007
     (New)..............................................
    Ensuring the Effective Protection of Technologies               2007
     Critical to U.S. National Security Interests \1\
     (New)..............................................
    Transforming Federal Oversight of Food Safety \1\               2007
     (New)..............................................
Managing Federal Contracting More Effectively:
    DOD Contract Management.............................            1992
    Department of Energy Contract Management............            1990
    National Aeronautics and Space Administration                   1990
     Contract Management................................
    Management of Interagency Contracting...............            2005
Assessing the Efficiency and Effectiveness of Tax Law
 Administration:
    Enforcement of Tax Laws \1\.........................            1990
    Internal Revenue Service (IRS) Business Systems                 1995
     Modernization......................................
Modernizing and Safeguarding Insurance and Benefit
 Programs:
    Modernizing Federal Disability Programs \1\.........            2003
    Pension Benefit Guaranty Corporation Single-Employer            2003
     Insurance Program \1\..............................
    Medicare Program \1\................................            1990
    Medicaid Program \1\................................            2003
    National Flood Insurance Program....................            2006
------------------------------------------------------------------------
\1\ Legislation is likely to be necessary, as a supplement to actions by
  the executive branch, in order to effectively address this high-risk
  area.

Source: GAO.

    In February of this year, we issued a new publication entitled 
Fiscal Stewardship: A Critical Challenge Facing Our Nation that is 
designed to provide the Congress and the American public, in a 
relatively brief and understandable form, selected budget and financial 
information regarding our Nation's current financial condition, long-
term fiscal outlook, and possible ways forward. In the years ahead, our 
support to the Congress will likely prove even more critical because of 
the pressures created by our Nation's current and projected budget 
deficit and growing long-term fiscal imbalance. Indeed, as the Congress 
considers those fiscal pressures, it will be grappling with tough 
choices about what government does, how it does business, and who will 
do the government's business. GAO is an invaluable tool for helping the 
Congress review, reprioritize, and revise existing mandatory and 
discretionary spending programs and tax policies.
    In addition, I have participated in a series of town hall forums 
around the Nation to discuss the Federal Government's current financial 
condition and deteriorating long-term fiscal outlook, including the 
challenges posed by known long-term demographic trends and rising 
health care costs. These forums, popularly referred to as the ``Fiscal 
Wake-up Tour,'' are led by the Concord Coalition and also include the 
Heritage Foundation, the Brookings Institution, and a range of ``good 
government'' groups. The fiscal wake-up tour states the facts regarding 
the Nation's current financial condition and long-term fiscal outlook 
in order to increase public awareness and accelerate actions by 
appropriate Federal, State, and local officials.

                    PERFORMANCE, RESULTS, AND PLANS

    We anticipate that the funds requested for fiscal year 2008 will 
support efforts similar to those just completed in fiscal year 2006. 
The following discussions summarize that work.
    In fiscal year 2006, major events like the Nation's recovery from 
natural disasters, ongoing military conflicts abroad, terrorist 
threats, and potential pandemics repeatedly focused the public eye on 
the Federal Government's ability to operate effectively and efficiently 
and provide services to Americans when needed. Our work during the year 
helped the Congress and the public judge how well the Federal 
Government performed its functions and consider alternative approaches 
for improving operations and laws when performance was less than 
adequate. For example, teams supporting all three of our external 
strategic goals performed work related to every facet of the Hurricane 
Katrina and Rita disasters-preparedness, response, recovery, long-term 
recovery, and mitigation. We developed a coordinated and integrated 
approach to ensure that the Congress's need for factual information 
about disaster preparedness, response, recovery, and reconstruction 
activities along the Gulf Coast was met. We examined how federal funds 
were used during and after the disaster and identified the disaster 
rescue, relief, and rebuilding processes that worked well and not so 
well throughout the effort. To do this, staff drawn from across the 
agency spent time in the hardest hit areas of Louisiana, Mississippi, 
Alabama, and Texas, collecting information from government officials at 
the Federal, State, and local levels as well as from private 
organizations assisting with this emergency management effort. We 
briefed congressional staff on our preliminary observations early in 
fiscal year 2006 and subsequently issued over 30 reports and 
testimonies on Hurricanes Katrina and Rita by fiscal year end, focusing 
on, among other issues, minimizing fraud, waste, and abuse in disaster 
assistance and rebuilding the New Orleans hospital care system.
    The following tables provide summary information on GAO's fiscal 
year 2006 performance and the results achieved in support of the 
Congress and the American people. Additional information on our 
performance results can be found in performance and accountability 
highlights fiscal year 2006 at www.gao.gov.
    Table 2 provides examples of how GAO assisted the Nation in fiscal 
year 2006.

  TABLE 2.--EXAMPLES OF HOW GAO ASSISTED THE NATION IN FISCAL YEAR 2006
------------------------------------------------------------------------
                                          GAO Providing Information That
 Goal             Description                      Helped To--
------------------------------------------------------------------------
     1 Provide timely, quality         Protect Social Security numbers
        service to the Congress and     from abuse; ensure the
        the Federal Government to       effectiveness of federal
        address current and emerging    investments in science,
        challenges to the wellbeing     technology, engineering, and
        and financial security of the   mathematics education
        American people                 programs; identify actions
                                        needed to improve Federal
                                        Emergency Management Agency
                                        and Red Cross coordination for
                                        the 2006 hurricane season;
                                        highlight weaknesses in the
                                        Department of Health and Human
                                        Services' communications with
                                        beneficiaries about the new
                                        Medicare prescription drug
                                        benefit; identify funding and
                                        drug pricing disparities in
                                        the federal AIDS/HIV program;
                                        strengthen the oversight
                                        clinical laboratories;
                                        identify challenges the
                                        Department of Homeland
                                        Security faces in controlling
                                        illegal immigration into the
                                        United States; assess the
                                        thoroughness of the federal
                                        fair housing complaint and
                                        investigation processes;
                                        improve the management of
                                        federal oil and natural gas
                                        royalty revenue; develop a
                                        strategy for managing
                                        wildfires; focus on the short-
                                        and long-term challenges of
                                        financing the Nation's
                                        transportation infrastructure;
                                        and identify outdated mail
                                        delivery performance standards
                                        used by the U.S. Postal
                                        Service.
     2 Provide timely, quality         Identify current and future
        service to the Congress and     funding and cost issues
        the Federal Government to       related to DOD operations in
        respond to changing security    Iraq and Afghanistan;
        threats and the challenges of   highlight inefficiencies that
        global interdependence          could hinder DOD's efforts to
                                        reform its business
                                        operations; improve controls
                                        over the issuance of passports
                                        and vias and increase fraud
                                        prevention; improve
                                        catastrophic disaster
                                        preparedness, response, and
                                        recovery; improve the ability
                                        of federal agencies to cost
                                        effectively acquire goods and
                                        services; improve the
                                        management of payments to U.S.
                                        producers injured financially
                                        by unfairly traded imports;
                                        alert the Congress to
                                        companies that are marketing
                                        costly mutual fund products
                                        with low returns to military
                                        service members; identify
                                        steps needed to overhaul
                                        investment and management
                                        processes supporting major DOD
                                        acquisitions; improve security
                                        at nuclear power plants;
                                        improve the Department of
                                        Homeland Security's ability to
                                        detect nuclear smuggling at
                                        U.S. ports; promote government
                                        efforts to secure sensitive
                                        systems and information; and
                                        highlight the cost concerns of
                                        small public companies that
                                        must comply with internal
                                        control and auditing
                                        provisions of the Sarbanes-
                                        Oxley Act.
     3 Help transform the Federal      Improve congressional oversight
        Government's role and how it    of the process for reviewing
        does business to meet 21st      foreign direct investment;
        century challenges              strengthen DOD's information
                                        systems modernization efforts;
                                        highlight serious technical
                                        and cost challenges affecting
                                        the purchase of a critical
                                        weather satellite; highlight
                                        key practices federal agencies
                                        should adopt to prevent data
                                        breaches and better protect
                                        the personal information of
                                        U.S. citizens; monitor the
                                        development of the 2010
                                        decennial census; identify
                                        strategies to reduce the gap
                                        between the taxes citizens pay
                                        and the taxes actually owed;
                                        focus attention on the revenue
                                        consequences of tax
                                        expenditures; identify fraud,
                                        waste, and abuse in a
                                        component of the Federal
                                        Emergency Management Agency's
                                        disaster assistance program;
                                        emphasize the importance of
                                        reliable cost information for
                                        improving governmentwide cost
                                        efficiency; and expose
                                        government contractors who
                                        used for personal gain federal
                                        payroll taxes withheld from
                                        their employees.
     4 Maximize the value of GAO by    Foster among other federal
        being a model federal agency    agencies GAO's innovative
        and a world-class               human capital practices, such
        professional services           as broad pay bands;
        organization                    performance-based
                                        compensation; workforce
                                        planning and staffing
                                        strategies, policies, and
                                        processes; and share GAO's
                                        model business and management
                                        processes with counterpart
                                        organizations in the United
                                        States and abroad.
------------------------------------------------------------------------
       Source: GAO.

                outcomes of our work and the road ahead
    During fiscal year 2006, we used 16 annual performance measures 
that capture the results of our work; the assistance we provided to the 
Congress; our ability to attract, retain, develop, and lead a highly 
professional workforce; and how well our internal administrative 
services help employees get their jobs done and improve their work life 
(see table 3). We generally exceeded the targets we set for all of our 
performance measures, which indicate our ability to produce results for 
the Nation and serve the Congress.

                           TABLE 3.--AGENCYWIDE SUMMARY OF ANNUAL MEASURES AND TARGETS
----------------------------------------------------------------------------------------------------------------
                                                     2002     2003     2004     2005     2006     2007     2008
               Performance Measures                 Actual   Actual   Actual   Actual   Actual   Target   Target
----------------------------------------------------------------------------------------------------------------
Results:
    Financial benefits (dollars in billions).....    $37.7    $35.4    $44.0    $39.6    $51.0    $40.0    $41.5
    Nonfinancial benefits........................     $906   $1,043   $1,197   $1,409   $1,342   $1,100   $1,150
    Past recommendations implemented (in percent)       79       82       83       85       82       80       80
    New products with recommendations (in               53       55       63       63       65       60       60
     percent)....................................
Client:
    Testimonies..................................      216      189      217      179      240      185      220
    Timeliness (in percent)......................       96       97       97       97       92       95       95
People:
    New hire rate (in percent)...................       96       98       98       94       94       95       95
    Acceptance rate (in percent).................       81       72       72       71       70       72       72
    Retention rate with retirements (in percent).       91       92       90       90       90       90       90
    Retention rate without retirements (in              97       96       95       94       94       94       94
     percent)....................................
    Staff development (in percent)...............       71       67       70       72       76       75       76
    Staff utilization (in percent)...............       67       71       72       75       75       78       78
    Leadership (in percent)......................       75       78       79       80       79       80       80
    Organizational climate (in percent)..........       67       71       74       76       73       76       76
Internal operations:
    Help get job done............................      N/A     3.98     4.01     4.10      4.1      4.0      4.0
    Quality of work life.........................      N/A     3.86     3.96     3.98      4.0      4.0      4.0
----------------------------------------------------------------------------------------------------------------
Source: GAO.

Note: N/A indicates the information is not available.

    In fiscal year 2006, our work generated $51 billion in financial 
benefits, primarily from actions agencies and the Congress took in 
response to our recommendations. Of this amount, about $27 billion 
resulted from changes to laws or regulations, $10 billion resulted from 
agency actions based on our recommendations to improve services to the 
public, and $14 billion resulted from improvements to core business 
processes. See figure 2 for examples of our fiscal year 2006 financial 
benefits.

  FIGURE 2.--GAO'S SELECTED MAJOR FINANCIAL BENEFITS REPORTED IN FISCAL
                                YEAR 2006
                        [In billions of dollars]
------------------------------------------------------------------------
                         Description                             Amount
------------------------------------------------------------------------
Ensured continued monetary benefits from federal spectrum            6.1
 auctions....................................................
Encouraged DOD to identify and reduce unobligated funds in           3.9
 the military services' operations and maintenance budget....
Recommended payment methods that cut Medicare costs for              2.9
 durable medical equipment, orthotics, and prosthetics.......
Helped to ensure that certain U.S. Postal Service retirement-        2.2
 related benefits would be funded............................
Identified recoverable costs for the Tennessee Valley                1.8
 Authority...................................................
Helped to increase collections of civil debt.................        1.6
Encouraged the Department of Housing and Urban Development to        1.4
 take actions to reduce improper payments....................
Supported the Department of Energy's efforts to reduce its           1.2
 carryover funds.............................................
------------------------------------------------------------------------
Source: GAO.

    Many of the benefits that result from our work cannot be measured 
in dollar terms. During fiscal year 2006, we recorded a total of 1,342 
nonfinancial benefits. For example, we documented 61 instances where 
information we provided to the Congress resulted in statutory or 
regulatory changes, 667 instances where federal agencies improved 
services to the public, and 614 instances where agencies improved core 
business processes or governmentwide reforms were advanced. These 
actions spanned the full spectrum of national issues, from identifying 
the adverse tax impact of combat pay and certain tax credits on low-
income military families to improving the Department of State's process 
for developing staffing projections for new embassies. See figure 3 for 
additional examples of GAO's nonfinancial benefits in fiscal year 2006.

    ----------------------------------------------------------------

Nonfinancial benefits that helped to change laws
    Deficit Reduction Act of 2005, Public Law No. 109-171. Our work is 
reflected in this law in different ways.
  --Strengthened Medicaid program integrity.
  --Improved oversight of the States' performance under the Temporary 
        Assistance for Needy Families program.
  --Addressed domestic violence.
  --Improved oversight of schools that are lenders.
    Safe and Timely Interstate Placement of Foster Children Act of 
2006, Public Law No. 109-239.
Nonfinancial Benefits That Helped To Improve Services to the Public
    Strengthened passport and visa issuance processes.
    Identified vulnerabilities in the process to verify personal 
information about new drivers.
    Contributed to the increased visibility of a transportation 
information sharing program for seniors.
    Identified a problem with untimely pay allowances to deployed 
soldiers.
Nonfinancial Benefits That Helped To Promote Sound Agency and 
        Governmentwide Management
    Improved the quality of federal voluntary voting system standards.
    Highlighted weaknesses in the Federal Aviation Administration's 
control over computers and other assets.
    Strengthened oversight of federal personnel actions.
    Encouraged federal agencies to seek savings on purchase cards.
    Identified improper payments in DOD's travel accounts.

    Source: GAO.
Figure 3.--GAO's Selected Nonfinancial Benefits Reported in Fiscal Year 
                                  2006

    ----------------------------------------------------------------

    During fiscal year 2006, experts from our staff testified at 240 
congressional hearings covering a wide range of complex issues (see 
table 4). For example, our senior executives testified on a variety of 
issues, including freight rail rates, AIDS assistance programs, and 
federal contracting. Over 100 of the hearings at which we testified 
were related to areas and programs we designated as high risk.

  Table 4.--GAO's Selected Testimony Issues by Strategic Goal, Fiscal 
                               Year 2006
Goal 1--Address Challenges to the Well-Being and Financial Security of 
        the American People
Health savings accounts
Guardianships that protect incapacitated seniors
Lake Pontchartrain hurricane protection project
Funds to first responders for 9/11 health problems
Immigration enforcement at work sites
Future air transportation system
Nursing home care for veterans
Passenger rail security issues
Freight railroad rates
AIDS drug assistance programs
Federal Housing Administration reforms
Improving intermodal transportation
Hartford nuclear waste treatment plant
Evaluations of supplemental educational services
Factors affecting gasoline prices
Telecommunication spectrum reform
H-1B visa program
Federal crop insurance program
Goal 2--Respond to Changing Security Threats and the Challenges of 
        Globalization
A comprehensive strategy to rebuild Iraq
Deploying radiation detection equipment in other countries
Protecting military personnel from unscrupulous financial products
Sensitive information at DOD and the Department of Energy
Hurricane Katrina preparedness, response, and recovery
Alternative mortgage products
Global war on terrorism costs
Transportation Security Administration's Secure Flight program
DOD's business systems modernization
U.S. tactical aircraft
National Capital Region Homeland Security Strategic Plan
Polar-orbiting operational environmental satellites
Worldwide AIDS relief plan
Financial stability and management of the National Flood Insurance 
Program
Information security laws
Procurement controls at the United Nations
Goal 3--Help Transform the Federal Government's Role and How It Does 
        Business
Contract management challenges in rebuilding Iraq
DOD's financial and business management transformation
Business tax reform
Astronaut exploration vehicle risks
Improving federal financial management governmentwide
Long-term fiscal challenges
Federal contracting during disasters
Improving tax compliance to reduce the tax gap
Protecting the privacy of personal information
DOD acquisition incentives
Decennial Census costs
Information security weaknesses at the Department of Veterans Affairs
Improper federal payments for Hurricane Katrina relief
Strengthening the Office of Personnel Management's ability to lead 
human capital reform
Public/private recovery plan for the Internet
Tax system abuses by General Services Administration contractors
Compensation for federal executives and judges

         GAO'S FISCAL YEAR 2008 REQUEST TO SUPPORT THE CONGRESS

    Our fiscal year 2008 budget request seeks the resources necessary 
to allow GAO to rebuild and enhance its workforce, knowledge capacity, 
employee programs, and infrastructure. These items are critical to 
ensure that GAO can continue to provide congressional clients with 
timely, objective, and reliable information on how well government 
programs and policies are working and, when needed, recommendations for 
improvement. In the years ahead, our support to the Congress will 
likely prove even more critical because of the pressures created by our 
Nation's current and projected budget deficit and growing long-term 
fiscal imbalance. GAO is an invaluable tool for helping the Congress 
review, reprioritize, and revise existing mandatory and discretionary 
spending programs and tax policies.
    Consistent with our strategic goal to be a model agency, we 
continuously assess our operations to ensure that GAO remains an 
effective, high-performing organization, providing timely, critical 
support to the Congress while being fiscally responsive. Our objective 
is to be an employer of choice; maintain skills/knowledge, performance-
based, and market-oriented compensation systems; adopt best practices; 
benchmark service levels and costs against comparable entities; 
streamline our operations to achieve efficiencies; assess opportunities 
for cross-servicing, outsourcing, or business process re-engineering; 
and leverage technology to increase efficiency, productivity, and 
results. We also continue to partner within and across the legislative 
branch through the legislative branch chief administrative officers, 
financial management, and procurement councils.
    Transformational change and innovation is essential for progress. 
Our fiscal year 2008 budget request includes funds to regain the 
momentum needed to achieve these goals. Our fiscal year 2008 budget 
request will allow GAO to
  --address supply and demand imbalances in responding to congressional 
        requests for studies in areas such as health care, disaster 
        assistance, homeland security, the global ``war on terrorism,'' 
        energy and natural resources, and forensic auditing;
  --address our increasing bid protest workload;
  --be more competitive in the labor markets where GAO competes for 
        talent;
  --address critical human capital components, such as knowledge 
        capacity building, succession planning, and staff skills and 
        competencies;
  --enhance employee recruitment, retention, and development programs;
  --restore program funding levels and regain our purchasing power;
  --undertake critical initiatives necessary to continuously re-
        engineer processes geared to increasing our productivity and 
        effectiveness and addressing identified management challenges; 
        and
  --pursue critical structural and infrastructure maintenance and 
        improvements.
    Our fiscal year 2008 budget request represents an increase of $41.7 
million (or 8.5 percent) over our fiscal year 2007 funding level and 
includes about $523 million in direct appropriations and authority to 
use about $7.5 million in offsetting collections as illustrated in 
table 5. This request reflects a reduction of nearly $5.4 million in 
nonrecurring fiscal year 2007 costs used to offset the fiscal year 2008 
increase.

 TABLE 5.--FISCAL YEAR 2008 BUDGET REQUEST, SUMMARY OF REQUESTED CHANGES
                         [Dollars in thousands]
------------------------------------------------------------------------
                                                             Cumulative
        Budget Category              FTEs        Amount      Percentage
                                                              of Change
------------------------------------------------------------------------
Fiscal year 2007 enacted budget        3,159     $488,627   ............
 authority.....................
Fiscal year 2008 requested       ...........  ............  ............
 changes.......................
    Nonrecurring fiscal year     ...........       (5,374)         (1.1)
     2007 costs................
    Mandatory pay costs........  ...........       19,841           3.0
    Uncontrollable cost          ...........        5,079           4.0
     increases.................
    Rebuild our capacity.......           58       14,826           7.0
    Critical investments in      ...........        7,314           8.5
     technology improvements
     and other transformation
     areas.....................
Net fiscal year 2008 increase..           58       41,686           8.5
Fiscal year 2008 budget                3,217      530,313   ............
 authority.....................
------------------------------------------------------------------------
Source: GAO.

    Mandatory pay and uncontrollable cost increases.--We are requesting 
$24.9 million to cover anticipated mandatory performance-based pay and 
uncontrollable inflationary increases resulting primarily from annual 
across-the-board and performance-based increases, annualization of 
prior fiscal year costs, and an increase in the number of compensable 
days in fiscal year 2008. These costs also include uncontrollable 
inflationary increases imposed by vendors as the cost of doing 
business.
    Rebuilding our capacity.--Our fiscal year 2007 budget request 
sought funds to support an increase of 50 FTEs from 3,217 to 3,267. 
However, in order to manage within expected funding levels in fiscal 
year 2007, we will significantly curtail hiring by about 50 percent 
below the previous year, resulting in a projected FTE utilization of 
3,159--well below our planned level. In fiscal years 2007 and 2008, we 
anticipate attrition of over 600 staff that will result in a 
significant drain on GAO's knowledge capacity or institutional memory. 
Further, almost 20 percent of all GAO staff will be eligible for 
retirement by the end of fiscal year 2008, including almost 45 percent 
of our senior executive service.
    Thus, in fiscal year 2008, we are seeking funds to rebuild our 
staff and knowledge capacity. In fiscal year 2008, we plan to hire 
about 490 staff--the maximum that we could reasonably absorb--
increasing our FTE utilization to 3,217. While we are tempering our 
immediate FTE request, increasingly higher demands are being placed on 
GAO. We are experiencing supply and demand imbalances in several areas 
of critical importance to the Congress (e.g., health care, homeland 
security, and energy and natural resources). We have also seen an 
increase in the number of bid protest filings.
    Also, to remain competitive in the labor markets, we need to 
increase employee benefits in areas such as student loan repayments and 
transit subsidies where funding constraints in fiscal year 2007 limit 
our flexibility. For example, effective in January 2007, the IRS 
increased the monthly benefit for transit subsidies for eligible 
employees who commute using public transportation. GAO, however, is 
unable to extend this increased benefit to staff.
    In addition, we need to ensure that staff have the appropriate 
tools and resources to perform effectively, including training and 
development, travel funds, and technology. And when our staff perform 
well, they should be appropriately rewarded.
    Undertake critical investments.--We are requesting funds to 
undertake critical investments that would allow us to implement 
technology improvements and streamline and re-engineer work processes 
to enhance the productivity and effectiveness of our staff, conduct 
essential investments that have been deferred as the result of funding 
constraints and cannot continue to be deferred, and implement responses 
to changing federal conditions, such as smart card technology. Also, 
during recent years, we reduced, deferred, and slowed the pace of 
critical upgrades (e.g., engagement and administrative process 
upgrades) and deferred nonessential administrative activities. In 
fiscal year 2008, we would like to have sufficient funding to take 
action to protect our current investments and continue to be a model 
agency and lead by example.
    Legislative authority.--We are requesting legislation to establish 
a board of contract appeals at GAO to adjudicate contract claims 
involving contracts awarded by legislative branch agencies. GAO has 
performed this function on an ad hoc basis over the years for appeals 
of claims from decisions of the Architect of the Capitol on contracts 
that it awards. Recently we have agreed to handle claims arising under 
Government Printing Office contracts. The legislative proposal would 
promote efficiency and predictability in the resolution of contractor 
and agency claims by consolidating such work in an established and 
experienced adjudicative component of GAO and would permit GAO to 
recover its costs of providing such adjudicative services from 
legislative branch users of such services.
    We also plan to request legislation that will assist GAO in 
performing its mission work and enhance our human capital policies, 
including addressing certain compensation and benefits issues of 
interest to our employees. While there are a number of important 
provisions, today I will only discuss several of the significant ones. 
Regarding provisions concerned with mission work, we have identified a 
number of legislative mandates that are either no longer meeting the 
purpose intended or should be performed by an entity other than GAO. We 
are working with the cognizant entities and the appropriate 
authorization and oversight committees to discuss the potential impact 
of legislative relief for these issues. Another provision would 
modernize the authority of the Comptroller General to administer oaths 
in performance of the work of the office. To keep the Congress apprized 
of difficulties we have interviewing agency personnel and obtaining 
agency views on matters related to ongoing mission work, we will 
suggest new reporting requirements. When agencies or other entities 
ignore a request by the Comptroller General to have personnel provide 
information under oath, make personnel available for interviews, or 
provide written answers to questions, the Comptroller General would 
report to the Congress as soon as practicable and also include such 
information in the annual report to the Congress.
    In regard to GAO's human capital flexibilities, among other 
provisions, we are proposing a flexibility that allows us to better 
approximate market rates for professional positions by increasing our 
maximum pay for other than the senior executive service and senior 
level from GS-15, step 10, to executive level III. Additionally, under 
our revised and contemporary merit pay system, certain portions of an 
employee's merit increase, below applicable market-based pay caps, are 
not permanent. Since this may impact an employee's high three for 
retirement purposes, another key provision of the bill would enable 
these nonpermanent payments to be included in the retirement 
calculation for all GAO employees, except senior executives and senior 
level personnel.

                           CONCLUDING REMARKS

    In summary, I believe that you will find our budget request 
reasonable, responsible, and well-justified given the important role 
that GAO plays and the unparalleled return on investment that GAO 
generates. We are grateful for the Congress's continued support of our 
mutual effort to improve government and for providing the resources 
that allow us to be a world-class professional services organization. 
We are proud of our record performance and the positive impact we have 
been able to effect in government over the past year and believe an 
investment in GAO will continue to yield substantial returns for the 
Congress and the American people. Our Nation will continue to face 
significant challenges in the years ahead. GAO's expertise and 
involvement in virtually every facet of government positions us to 
provide the Congress with the timely, objective, and reliable 
information it needs to discharge its constitutional responsibilities.
    Mrs. Chairwoman and members of the subcommittee, this concludes my 
prepared statement. At this time, I would be pleased to answer any 
questions that you or other members of the subcommittee may have.

    APPENDIX I: SERVING THE CONGRESS--GAO'S STRATEGIC PLAN FRAMEWORK

    This is a work of the U.S. Government and is not subject to 
copyright protection in the United States. It may be reproduced and 
distributed in its entirety without further permission from GAO. 
However, because this work may contain copyrighted images or other 
material, permission from the copyright holder may be necessary if you 
wish to reproduce this material separately.



                       GOVERNMENT PRINTING OFFICE

STATEMENT OF WILLIAM H. TURRI, ACTING PUBLIC PRINTER
    Senator Landrieu. Mr. Turri.
    Mr. Turri. Good morning. Thank you, Madam Chair.
    It's clear that you have a busy schedule ahead of you 
today, so I'll submit my full remarks for the record and make 
only a few brief comments now.

                    GPO deg.RESULTS OF 2006

    GPO had a successful year in 2006, the second full year 
operating under our strategic vision for the future. We 
increased net income, and we're on the verge of completing 
GPO's transition to a full-service digital information 
provider. We're committed to providing a full range of digital 
and legacy information services to Congress and Federal 
agencies. And last year we made real progress toward that goal.
    With Congress' support, we awarded the key contracts for 
development of our future digital system. This system provides 
the essential technologies that tie input of analog and digital 
materials to output in print and electronic formats. We are on 
schedule for a startup later this year.
    We began production of the e-Passport for the State 
Department, and, following their schedule, we have ramped up 
production to meet the demands of travelers in North America 
and the Caribbean.
    We conducted a pilot project to demonstrate our 
capabilities in digitizing Government documents, taking the 
opportunity to begin digitizing some of the Government's 
considerable retrospective collection. We hope to make this a 
standing operation in the current fiscal year.
    We inaugurated the GPO Express card, which allows 
Government agencies to take their short run printing needs 
directly to local quick-print shops without concern that the 
publication produced will fail to be included in the Depository 
Library Program.
    I know that Senator Allard is not present today, but I am 
aware of his interest in the Government Performance and Results 
Act (GPRA), so I'm pleased to report to you that the GPO has 
begun the process of implementing Government Performance and 
Results Act-like practices into our operations.
    Building on our strategic vision, GPO is implementing a 
balanced scorecard methodology. Not only will the balanced 
scorecard dovetail with our GPRA practices, but will also link 
our strategic goals with our annual performance reviews and 
measure our organization's success with data and outcome.

                GPO deg.APPROPRIATIONS REQUEST

    Fully two-thirds of the funds we are requesting for the 
coming fiscal year is for work we're required to provide, such 
as producing and distributing a new edition of the U.S. Code, 
handling the estimated workload of Congress, including the 
Congressional Record, bills, calendars, and committee reports 
and prints, and distributing Government publications to the 
1,200 congressionally designated libraries in the Federal 
Depository Library Program.
    The balance we're requesting is to recover the shortfall we 
are projected to experience, due to the continuing resolution 
this year, and for investment in projects to continue moving 
the strategic vision of GPO forward. Some of the shortfall 
requirement can be offset with the use of approximately $5 
million in unexpended prior-year funds for that purpose, with 
the approval of the appropriations committees. Our request for 
this authority will be sent to you soon.
    Since 2003, Congress has strongly supported our digital 
transformation, and the benefits have been dramatic: net 
income, instead of losses; increased access to digital and 
other information products, with nearly a 25-percent decrease 
in our workforce; and a strategic vision of the future that is 
not only attainable and sustainable, but which addresses 
longstanding GPO needs, corrects system deficiencies, and 
unlocks this venerable agency's potential for the future.
    I'm asking that you continue to support our forward 
advance. The goal is in sight. As our record demonstrates, 
investment in the GPO results in real and measurable gains for 
Congress, Federal agencies, and the public as a whole.
    Finally, Madam Chair, I would like to thank you for your 
support in providing an additional $1.9 million, in the 
February 15 continuing resolution, to help us with mandatory 
pay increases and retraining.
    In accordance with past practice, we will be sending an 
operating plan to the subcommittee soon.

                           PREPARED STATEMENT

    Madam Chair, this concludes my opening remarks, and I will 
be happy to respond to any questions you may have.
    Senator Landrieu. Thank you, Mr. Turri.
    [The statement follows:]

                 Prepared Statement of William H. Turri

    Madam Chair and members of the subcommittee on Legislative Branch 
Appropriations: It is an honor to be here today to present the 
appropriations request of the U.S. Government Printing Office (GPO) for 
fiscal year 2008.

                       GOVERNMENT PRINTING OFFICE

    As the Nation's printer and disseminator of official Federal 
documents, GPO has a long and rich history as the official producer of 
every great American state paper--and an uncounted number of other 
Government publications--since President Lincoln's time. Where once our 
products and services were confined to ink on paper, today we provide 
capabilities for the production of Federal documents in both electronic 
and conventional formats, utilizing a broad range of information 
technologies.
    By law, GPO is responsible for the production and distribution of 
information products and services for all three branches of the Federal 
Government. Many of the Nation's most important information products, 
such as the Congressional Record and other documents used by the U.S. 
Senate and House of Representatives, are produced at GPO's main plant 
in Washington, DC.
    Working under a longstanding partnership with the printing 
industry, GPO also maintains a pool of private sector vendors 
nationwide to produce the vast range of publications ordered annually 
by Federal agencies.
    GPO's primary responsibility for the dissemination of Federal 
publications traces its roots to an act of the 13th Congress, which 
provided for the distribution of congressional and other government 
documents on a regular basis to libraries and other institutions in 
each State for that Congress and ``every future Congress.'' This 
farsighted act established the antecedent for the Federal Depository 
Library Program, a program funded through GPO's appropriations, which 
today serves millions of Americans through a network of some 1,250 
public, academic, law, and other libraries located in virtually every 
congressional district across the Nation.
    Along with that program, we also provide public access to the 
wealth of official Federal information through public sales, through 
various statutory and reimbursable distribution programs, and--most 
prominently--by posting more than a quarter of a million Federal titles 
online on GPO Access (www.gpo.gov/gpoaccess), our award-winning Web 
site that is used by the public to retrieve more than 40 million 
documents free of charge every month.

                     PREPARING FOR A DIGITAL FUTURE

    Continuing advances in information technologies have transformed 
the ways that Congress, Federal agencies, and the public obtain and 
make use of government publications. As a result, printing is now 
secondary to our broader task of producing and providing access to the 
information products and services produced by the Federal Government, a 
task that today is rooted in digital rather than analog technologies. 
While printing remains an important information technology that 
continues to be required, it has become just one of a range of 
information product and service capabilities that GPO must transform 
itself to support in order to fulfill our mission requirements 
effectively in the digital era.
    This development was confirmed by a June 2004 report of the 
Government Accountability Office (GAO), Actions to Strengthen and 
Sustain GPO's Transformation. The GAO recommended that GPO develop a 
plan to focus our mission on information dissemination as our primary 
goal; demonstrate to our customers the value we can provide; improve 
and extend partnerships with agencies to help establish the GPO as an 
information disseminator; and ensure that our internal operations--
including technology, how we conduct business, information systems, and 
training--are adequate for the efficient and effective management of 
our core business functions and services.
    To that end, in December 2004 we published our strategic vision for 
the 21st century. This document provides a framework for how our 
transformation goals--including the development of a digital content 
system to anchor all future operations, reorganization of the agency 
into new product- and service-oriented business lines along with 
investment in the necessary technologies, adoption of management best 
practices agency-wide including retraining to provide needed skills, 
and the relocation and/or reconfiguration of GPO facilities--will be 
carried out, and since then GPO's operations and programs have been 
conducted in accordance with it.

                            RESULTS OF 2006

    During the past year we made significant progress in carrying out 
the elements of our strategic vision:
  --The core of our future operations will revolve around a GPO-
        developed Future Digital System--currently called FDsys--which 
        is being designed to organize, manage, and output authenticated 
        content of authenticated Federal documents--in text, audio, and 
        even video formats--for any purpose. In 2006 we awarded 
        contracts for master integrator services and equipment 
        acquisition, and this project is on track to begin operations 
        in summer 2007.
  --GPO's own production capabilities are focused in support of what we 
        call the ``Official Journals of Government,'' including the 
        Congressional Record and Federal Register, Congress's 
        requirements, and security and intelligent documents. To 
        improve production efficiency and broaden the range of product 
        and service options for Congress and Federal agencies, we've 
        invested in a variety of new technologies.
  --We continue to work closely with the library community to move the 
        Federal Depository Library Program (FDLP) toward a 
        predominately electronic basis as required by Congress, and 
        today more than 90 percent of all new titles entering the 
        program are electronic. In managing this transition we have 
        taken care to ensure that documents in print formats that are 
        required at this time by some libraries, particularly law 
        libraries, continue to be supplied.
  --We're now working with our customers in Federal agencies more 
        cooperatively, offering them more flexibility in choosing and 
        working directly with vendors, especially with small value 
        purchases and complex purchases involving multiple functions 
        such as data preparation, personalization, and distribution. In 
        2006 we augmented our expert printing procurement services by 
        offering a new capability that provides Federal agencies with 
        innovative, digitally linked convenience duplicating and 
        printing services across the country.
  --Security and intelligent documents--including passports, Federal 
        identification cards, and potentially other documents--today 
        are an increasingly important business line for GPO, and could 
        constitute as much as 50 percent of GPO's business in the 
        future. The major product of this unit is U.S. passports, and 
        in 2006 we began the successful production of the new e-
        passport for the State Department.
  --We've established a Digital Conversion Services Branch within 
        Customer Services to test document scanning services for the 
        FDLP and Federal agencies. In 2006, we began a pilot project to 
        demonstrate our retrospective digitization capabilities and 
        have recently completed that work. We look forward to sharing 
        our results of this pilot project at your earliest convenience.
    In addition to these strategic directions, over the past 4 years we 
have become a more efficient operation, our organizational structure 
has been streamlined for faster decisionmaking, we have implemented 
enterprise-wide planning for our information technology systems, 
redundant facilities across the country have been consolidated or 
closed, and staffing levels have been significantly reduced utilizing 
early retirement authority authorized through Legislative Branch 
Appropriations Acts. We also initiated planning and discussions with 
our oversight and appropriations committees on the future of GPO's 
current buildings on North Capitol Street in Washington, DC.
    Perhaps most important, our finances have been restored to a 
positive basis, reversing a pattern of financial losses that reached 
$100 million in previous years. For fiscal year 2006, we generated a 
net income of $9.8 million from operations, compared with a $6.1 
million gain the year before, the third straight year of positive 
financial results. We also recorded another reduction to our long-term 
liability for the Federal workers' compensation program, freeing 
additional funds for future investment. GPO is now on a solid financial 
footing.

                FISCAL YEAR 2008 APPROPRIATIONS REQUEST

    For fiscal year 2008, we are requesting a total of $181,979,000, to 
enable us to:
  --Meet projected requirements for GPO's congressional printing and 
        binding and information dissemination operations during fiscal 
        year 2008;
  --recover from the impact of restricted funding for fiscal year 2007 
        under the current continuing resolution;
  --complete the development of our Future Digital System project and 
        implement other improvements to GPO's information technology 
        infrastructure;
  --perform essential maintenance and repairs to our aging buildings; 
        and
  --continue retraining and restructuring GPO's workforce to meet 
        changing technology demands.
    Congressional Printing and Binding Appropriation.--This account 
covers the cost of printing and other information services supporting 
the legislative process in the House of Representatives and the Senate. 
These services include production--in both print and online formats--of 
the daily and permanent Congressional Record, bills, resolutions, and 
amendments, hearings, committee prints and documents, miscellaneous 
printing and binding including stationery and document franks, and 
related products, as authorized by the public printing provisions of 
Title 44, U.S. Code.
    We are requesting $109,541,000 for this account, representing an 
increase of $21,587,000 over the level provided by the current 
continuing resolution. The increase contains two primary components: 
$9,251,000 to adjust this account to projected operating requirements 
for fiscal year 2008, and an extraordinary requirement of $12,336,000 
to fund a projected shortfall for fiscal year 2007 under the current 
continuing resolution.
    For fiscal year 2008, we project the need for $96,460,000 to meet 
anticipated congressional printing and binding requirements known to 
typically occur in a second-session year. The current level of funding, 
or $87,954,000, has remained essentially unchanged since fiscal year 
2005 in spite of increasing costs and changes in workload.
    Under the continuing resolution for fiscal year 2007, we anticipate 
incurring a significant shortfall in congressional printing and binding 
due to the unchanged level of funding since fiscal year 2005, the 
requirement to produce the 2006 edition of the U.S. Code, the need to 
fully fund contractual pay raises, and a projected increase in workload 
consistent with a first-session year, including an anticipated increase 
in days in session under the new congressional leadership. We will be 
able to meet these requirements without disrupting service to Congress 
by temporarily financing the shortfall through GPO's revolving fund. As 
GPO has done in the past (most recently in fiscal year 2001), however, 
we are seeking the restoration of the shortfall through subsequent 
appropriations.
    Under our appropriations bill language, GPO has the authority--with 
the approval of the Committees on Appropriations--to transfer forward 
the unexpended balances of prior year appropriations. This remains an 
option to transfer to GPO's revolving fund up to approximately 
$4,000,000 from the unexpended balance of the Congressional Printing 
and Binding Appropriation remaining from fiscal year 2004 and an 
estimated $1,000,000 remaining from fiscal year 2003. These funds could 
be used to offset part of the anticipated shortfall and if this option 
is exercised it would reduce our requirement for new funding for that 
purpose.

                   CONGRESSIONAL PRINTING AND BINDING
                        [In millions of dollars]
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Fiscal Year 2007 Approved...............................            88.0
Fiscal Year 2007 Request................................           109.5
Change \1\..............................................           21.6
------------------------------------------------------------------------
\1\ Change includes: Mandatory requirements and continuing operations
  and investment requirements.

    Salaries and Expenses Appropriation of the Superintendent of 
Documents.--The largest single component of this appropriation is for 
the Federal Depository Library Program (FDLP). This account also 
provides for the cataloging and indexing of government publications as 
well as the distribution of government publications to international 
exchange libraries and other recipients as authorized by the documents 
provisions of Title 44, U.S. Code.
    We are requesting $45,613,000 for this account, representing an 
increase of $12,517,000 over the level provided by the current 
continuing resolution. The increase is required to cover mandatory pay 
and price level increases, recover from the impact of restricted 
funding for fiscal year 2007 under the current continuing resolution, 
and continue improving public access to government information in 
electronic formats. Of the total increase, $1,885,000 is for mandatory 
pay and price level costs.
    Our requested increase provides $3,250,000 to recover the cost 
impacts of restricted funding under the continuing resolution, 
principally the requirement to distribute the 2006 edition of the U.S. 
Code to depository libraries and cover increased overhead costs--
primarily for information technology services--while striving to 
maintain our responsibility to distribute information products to 
libraries in the formats needed by their users.
    As GPO continues to perform information dissemination through the 
FDLP on a predominately electronic basis, as mandated in the conference 
report accompanying the Legislative Branch Appropriations Act for 
Fiscal Year 1996, we also need to make continuing investments in 
technology infrastructure and supporting systems. Our requested 
increase provides $7,382,000 to cover projects for data migration and 
processing, FDLP program outreach, Web harvesting, data storage, 
authentication, and other modernization.

                          SALARIES AND EXPENSES
                        [In millions of dollars]
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Fiscal Year 2007 Approved...............................            33.1
Fiscal Year 2008 Requested..............................            45.6
Change \1\..............................................           12.5
------------------------------------------------------------------------
\1\ Change includes: Mandatory requirements and continuing operations
  and investment requirements.

    Revolving Fund.--We are requesting $26,825,000 for this account, to 
remain available until expended, to fund essential investments in 
information technology infrastructure and systems development, 
workforce retraining and restructuring, and facilities maintenance and 
repairs.
    The key projects covered by this request include $10,500,000 to 
complete the development of GPO's Future Digital System, which is 
scheduled to go live later this year; $9,375,000 to cover the 
replacement of GPO's 30-year old automated composition system, upgrade 
our Oracle enterprise business systems, and implement other 
improvements to our information technology infrastructure; $3,000,000 
to continue our program for workforce retraining and restructuring; and 
$3,950,000 for maintenance and repairs to GPO's aging buildings.

                             REVOLVING FUND
                        [In millions of dollars]
------------------------------------------------------------------------
                                                              Amount
------------------------------------------------------------------------
Fiscal Year 2007 Approved...............................             1.0
Fiscal Year 2007 Request................................            26.8
Change \1\..............................................           25.8
------------------------------------------------------------------------
\1\ Change includes: Mandatory requirements and continuing operations
  and investment requirements.

    Madam Chair and members of the subcommittee, with your support we 
can continue GPO's record of achievement. We look forward to working 
with you in your review and consideration of our request.

                      CONGRESSIONAL BUDGET OFFICE

STATEMENT OF PETER R. ORSZAG, DIRECTOR
    Senator Landrieu. Peter.
    Dr. Orszag. Thank you very much, Madam Chair.
    As you know, CBO provides the Congress with timely, 
nonpartisan, and objective information about budget and 
economic issues. And I just want to note that I assumed my 
position in January, and look forward to working with you and 
your colleagues throughout the rest of my 4-year term.
    CBO's proposed budget for fiscal year 2008 totals $38 
million, which is a $2.8 million, or 7.9 percent, increase over 
our fiscal year 2007 funding level. After taking into account 
increases in prices and costs, the budget restores CBO to its 
fiscal year 2006 operating level.
    As you may know, our budget is overwhelmingly for people. 
Ninety-one percent of CBO's appropriation is devoted to 
personnel costs, and the bulk of our requested increase, $2.1 
million, is devoted to staff salaries and benefits.
    On that note, I would point out that our staff is 
overwhelmingly very highly skilled. More than three-quarters of 
our professional and management staff have a Ph.D. or master's 
degree, and obviously the market for those kinds of personnel 
has become increasingly competitive, which puts pressure on 
agencies like CBO.
    The remaining 9 percent of our budget is devoted to IT 
equipment, supplies, and small purchases of other items and 
services. The funding for CBO's IT resources increases by a 
little under $500,000. The reason is the rapid increase in IT 
costs necessary to fulfill our various requirements. That IT 
funding would restore CBO's fiscal year--restore IT funding to 
CBO's fiscal year 2006 operating level.

                      CBO deg.HEALTHCARE

    I would also like to mention that various members and 
subcommittee chairmen of the House and Senate have asked CBO to 
expand our ability to assist the Congress in identifying and 
analyzing potential ways to address projected growth in 
healthcare spending. This is perhaps the central long-term 
fiscal challenge facing the Federal Government, and there is no 
other agency that is providing options on what could bend the 
curve on healthcare spending over the long term. Given the 
central importance of this issue to the budget, and given the 
potential role that CBO could play in providing such options, I 
support the initiative to expand CBO's work in this area, and 
we have put together staffing and other resources request that 
would allow us to better meet the needs of the Congress in this 
area. Totaling a little over $500,000, it includes funding for 
an additional health position, visiting fellow, consulting 
support, and the purchase of data that would allow us to 
undertake more analysis.
    Thank you very much.
    Senator Landrieu. Thank you.
    [The statement follows:]

                 Prepared Statement of Peter R. Orszag

    Madam Chair and members of the subcommittee, I am pleased to 
present the fiscal year 2008 budget request for the Congressional 
Budget Office (CBO).
    CBO's mission is to provide the Congress with timely, objective, 
nonpartisan analyses of the budget and the economy and to furnish the 
information and cost estimates required for the congressional budget 
process. That mission is its single ``program.'' Approximately 91 
percent of CBO's appropriation is devoted to personnel, and the 
remaining 9 percent to information technology (IT), equipment, 
supplies, and small purchases of other items.
    CBO's proposed budget for fiscal year 2008 totals $37,972,000, a 
$2.8 million or 7.9 percent increase over the fiscal year 2007 funding 
level. After taking into account increases in prices and costs, this 
budget request restores CBO to its fiscal year 2006 operating level. 
(The continuing resolution for fiscal year 2007 provided funding at 
less than the 2006 current services level for the agency.)
    The requested increase is largely accounted for by $2.1 million for 
increases in staff salaries and benefits, which are estimated to grow 
by 6.3 percent in 2008.
    In the request, funding for CBO's IT resources increases by almost 
40 percent, or $458,200. The reason is the rapid increase in IT costs 
necessary to fulfill CBO's IT requirements; the request does not entail 
any significant increase in those requirements. In other words, the 
increase restores IT funding to CBO's fiscal year 2006 operating level.
    The remainder of CBO's nonpersonnel budget will increase by 18 
percent, or $258,400, which restores funding to normal levels for CBO's 
share of support for the Federal Accounting Standards Advisory Board 
(FASAB), as well as providing for expert consultants, subscription 
services, printing, miscellaneous support by contractors, and travel 
and training requirements.
    CBO assists the Congress in exercising its responsibilities for the 
budget of the U.S. government and other legislation. Under the 1974 
Congressional Budget Act, the primary duty of CBO is to support the 
committees on the Budget of both Houses. Further, the agency supports 
the congressional budget process by providing analyses requested by the 
committees on the Budget; the committees on Appropriations; the 
committee on Ways and Means; the committee on Finance; other 
committees; and, to the extent that resources permit, individual 
members. Contributing in various forms, CBO:
  --Reports on the outlook for the budget and the economy to help the 
        Congress prepare for the legislative year;
  --constructs baseline budget projections to serve as neutral 
        benchmarks for gauging the effects of spending and revenue 
        proposals;
  --assists the committees on the Budget in developing the 
        congressional budget resolution by providing alternative 
        spending and revenue paths and the estimated effects of a 
        variety of policy options;
  --analyzes the likely direct effects that the President's budgetary 
        proposals will have on outlays and revenues; their economic 
        implications, and any budgetary feedback;
  --provides estimates of the cost of all appropriation bills at each 
        stage of the legislative process, including estimates for 
        numerous amendments considered during that annual process;
  --reports on all programs and activities for which authorizations for 
        appropriations were not enacted or are scheduled to expire;
  --estimates the cost of many legislative proposals, including formal 
        cost estimates for all bills reported by committees of the 
        House and Senate and detailed explanations of the components of 
        cost estimates and the estimating methodologies used;
  --estimates the cost of intergovernmental and private-sector mandates 
        in reported bills and other legislative proposals;
  --conducts policy studies of governmental activities having major 
        economic and budgetary impacts;
  --provides testimonies on a broad range of budget and economic issues 
        addressing the agency's own budget projections as well as 
        specific issues related to national security, health care 
        policy, alternative means of financing infrastructure spending, 
        and numerous other program areas;
  --helps the Congress make budgetary choices by providing policy 
        options, but not policy recommendations, for how it might alter 
        federal outlays and receipts in the near term and over the 
        longer term; and
  --constructs statistical, behavioral, and computational models to 
        project short- and long-term costs and revenues of government 
        programs.
    In fiscal year 2008, CBO's request will allow the agency to build 
on current efforts. Specifically, the request:
  --Supports a heavy workload of formal and informal estimates of the 
        costs of proposed or enacted legislation and of mandates 
        included in legislation, analytical reports, other publications 
        and updates, and congressional testimony;
  --supports 235 FTEs (full-time-equivalent positions), including an 
        across-the-board pay adjustment of 3 percent for staff earning 
        a salary of $100,000 or less, which is consistent with the pay 
        adjustment requested by other legislative branch agencies;
  --funds a projected 5.2 percent increase in the cost of benefits and 
        funds a combination of promotions and merit increases for 
        staff;
  --funds CBO's share ($460,575) of FASAB's budget requirement;
  --provides expert consultant and subscription services necessary to 
        fulfilling CBO's mission ($340,100);
  --provides management and professional training at the funding level 
        in fiscal year 2006 ($125,000);
  --provides travel funding at the fiscal year 2006 funding level 
        ($140,000);
  --supports the current level of maintenance and restores software 
        development funding for CBO's financial management system to 
        the 2006 funding level ($102,800);
  --improves disaster recovery capabilities at the Alternate Computing 
        Facility ($70,000);
  --allows for acquiring commercial data necessary for CBO's analyses 
        and studies ($193,000);
  --maintains essential operations for desktop software ($83,000); and
  --provides for replacing obsolete desktop computers and network 
        servers ($130,000).
    CBO has been asked by various members and committee chairmen of the 
House and Senate to expand its ability to assist the Congress in 
identifying and analyzing potential ways to address projected growth in 
health care spending. Continued rapid growth in such spending poses a 
major long-term threat to the Nation's fiscal stability. Responding to 
that request, CBO has identified staffing and other resources that 
would enable the agency to better meet the needs of the Congress in 
this area. Some additional funding would be necessary to augment CBO's 
fiscal year 2008 budget request. Totaling $538,400, it includes funding 
for an additional health position, visiting fellow, consulting support, 
and the purchase of prescription drug and health insurance data, as 
well as minor funding for related IT, office space reconfiguration, 
travel, and training. CBO hopes that the subcommittee will consider 
adding funding to CBO's fiscal year 2008 budget request to cover this 
additional requirement.
    Before I close, I would like to report that CBO received its third 
consecutive clean opinion on the latest audit of its financial 
statements. The agency's fourth audit (of fiscal year 2006 financial 
statements) is ongoing.
    The agency is committed to applying the principles of the 
Government Performance Results Act, as discussed in the Senate's fiscal 
year 2006 report. This past year, the agency developed its first formal 
strategic plan and performance plan. On the basis of those documents, 
CBO will prepare its first performance accountability report, using 
fiscal year 2007 as the baseline.
    Finally, I would like to thank the committee for the funding 
provided this year, including the allowance for a cost-of-living 
adjustment that supplemented the agency's payroll under the continuing 
resolution.

                          OFFICE OF COMPLIANCE

STATEMENT OF TAMARA E. CHRISLER, ACTING EXECUTIVE 
            DIRECTOR
ACCOMPANIED BY:
    PETER A. EVELETH, GENERAL COUNSEL
    BARBARA CAMENS, MEMBER, BOARD OF DIRECTORS

    Senator Landrieu. Ms. Chrisler.
    Ms. Chrisler. Thank you. Good morning, Madam Chair. I'm 
honored to appear before this subcommittee today as the Acting 
Executive Director of the Office of Compliance (OOC).

  OOC deg.OFFICE OF COMPLIANCE STRATEGIC PLAN GUIDES BUDGET 
                                REQUEST

    Our fiscal year 2008 budget request is guided by our newly 
developed strategic plan, which focuses on collaboration and 
communication and increasing our efforts at being a resource to 
the legislative branch.
    The first goal of our strategic plan involves our safety 
and health program, and it's through that program that our 
Office has been heavily engaged in collaborative and 
communication efforts with the Office of Architect of the 
Capitol, in negotiating a mutually acceptable resolution to the 
complaint that was filed in the utility tunnels case.
    It is anticipated that this resolution will involve a 
written settlement agreement, whereby the abatement plan for 
the hazards in the utility tunnels is outlined. We're 
requesting your assistance, and the assistance of the 
subcommittee today, to fund $280,000 approximate for our 
efforts in meeting our obligations under the settlement 
agreement; $120,000 to secure the services of a safety and 
health expert to act as a liaison between our Office and the 
Office of the AOC's liaison, to ensure that the terms of the 
agreement are met. We're also seeking an additional $152,000 to 
secure the expert services of consultants in heat issues and 
egress issues, asbestos, and mold issues. We currently have, on 
staff, contractors who are experts in some of these areas, but 
these contractors' time and attention are devoted to other 
matters, and, in order to meet our obligation under the 
settlement agreement, we're requesting your support.

OOC deg.OFFICE OF COMPLIANCE AS RESOURCE TO LEGISLATIVE BRANCH

    In developing our strategic plan, our office thought, and 
considered, how we can be of help to the legislative branch, 
how we can be a resource in ensuring that work environments are 
safe and healthy environments from the beginning, before 
conditions become hazardous. We recognize that it's education, 
and it's knowledge, and it's preventive measures that are key. 
To this end, we would like to work with Member offices, we 
would like to work with employing offices, and review their 
safety and health plans, and evaluate their safety and health 
programs. We'd like to work with Congress to develop safety 
checklists for State offices, so staff there know how to 
recognize conditions before they become hazardous. It's 
preventive, it's proactive, and it's a cost-efficient way of 
providing services.
    Now, we know we can't act as a resource in a bubble. We 
can't sit in our Office and make determinations as to how to 
provide assistance to the covered community. We know that it 
takes collaboration with stakeholders so that we--our efforts 
are targeted to the areas where our efforts are needed. We know 
that it takes communication with safety and health officers and 
managers so that our office understands the particular needs of 
certain offices. We know that it takes financial resources. And 
that's why we're here today, to ask for your support in this 
endeavor.

     OOC deg.MONITORING ABATEMENT OF MOST SERIOUS HAZARDS

    Last year, I had the privilege of testifying before this 
subcommittee in support of the fiscal year 2007 budget request 
of the Office. In asking our general counsel about abatement of 
specific identified hazards, Senator Allard shared with us his 
experience, his prior experience, as an inspector. And the 
Senator focused on the importance of follow-up in monitoring 
abatement. And we heard the Senator, and we took those comments 
very seriously. We recognize that the fundamental success of 
any safety and health inspection program requires the ability 
to facilitate abatement of identified hazards. And a major 
factor of that facilitation is follow up. It's ensuring that 
steps were taken, and it's making sure everything that was 
supposed to be done has been done. Our Office has never had the 
funding or the staffing to monitor abatement as it should.
    With the large number of violations that were found in the 
109th Congress alone, we know that it's going to take a 
dedicated position to monitor the abatement of the identified 
hazards in the 109th Congress and the other existing hazards. 
And we're asking your support in funding an additional position 
for our Office. That would be a compliance officer, who would 
be dedicated to monitoring the abatement of identified hazards, 
who would be responsible for that follow up and ensuring that 
everything that's supposed to be done has been done.

               ADDITIONAL FULL-TIME EQUIVALENT POSITIONS

    Our Office is requesting three additional--outside of the 
compliance officer--three additional full-time equivalent 
positions, as well, two of which were requested in fiscal year 
2007 budget request; those two being the accounts payable 
position, which would bring on staff our accounts payable 
function and allow for separation of duties, as well as a 
management analyst, who would assist in monitoring the projects 
that our Office is involved in, so that our program managers 
can focus on managing their programs.
    The fourth position that we're requesting is an 
administrative position that would be shared between the half-
time receptionist that we currently have, bringing that 
position to full time, and the administrative support of the 
safety and health program that we anticipate--that we 
anticipate with the increased workload.
    Madam Chair, our office is energized about our new 
strategic plan, and we are very excited about further servicing 
the legislative branch as a resource. We want to be a part of 
the preventative measures, and we want to be a part of 
collaborative efforts, and we want to be a part of the 
solution.
    Joining me today is a member of our board of directors, 
Barbara Camens, and, if time permits, I would ask that she be 
allowed to make a brief statement, as well.

                          PREPARED STATEMENTS

    Senator Landrieu. Okay, that may be possible, and thank you 
for your testimony.
    Ms. Chrisler. Thank you.
    [The statements follow:]

                Prepared Statement of Tamara E. Chrisler

    Madam Chair and members of the committee, thank you for the 
opportunity to appear before you today in support of the fiscal year 
2008 budget request of the Office of Compliance.
    Board member Barbara Camens is in attendance with me today to 
express the support of the board of directors for the Office's fiscal 
year 2008 budget request. Also with me today are General Counsel Peter 
Ames Eveleth, Deputy Executive Director Alma Candelaria, and 
Administrative and Budget Officer Beth Hughes Brown.
    As we have in the past, we present our budget request as a 
completely zero based budget, in an effort to provide transparency of 
the office's operations, and to assist the committee in understanding 
from the ground up how the office operates its mandated programs in 
employment dispute resolution, in occupational safety and health and 
ADA public access inspections and enforcement, and in education and 
outreach programs. This year, we have requested a total of $4,106,000 
for fiscal year 2008 operations. A large portion of this request, 
$280,200 (28 percent of the requested increase), is attributed to the 
required abatement monitoring of the utility tunnels case.
    The Office of Compliance (OOC or Office) approaches fiscal year 
2008 with a new strategic plan. Although our plan was implemented at 
the beginning of fiscal year 2007, 2008 will be the first fiscal year 
in which the Office has requested funding in support of this plan. 
Prior to the end of our first 3-year strategic plan in fiscal year 
2006, the Office began preparation for the drafting of our current 
plan. We incorporated input from our entire staff, outlining our major 
goal of focusing on meeting the workplace needs of the legislative 
branch, and positioning ourselves to act as a resource to the covered 
community. Shortly after the beginning of fiscal year 2007, the Office 
finalized a plan which covers fiscal years 2007-2009, with focused 
efforts on communication and collaboration with agencies and employing 
offices, and providing technical guidance as needed. As we strive to 
meet the goals and performance measures of our current strategic plan, 
we face new operational challenges of funding and staffing. We request 
your assistance in overcoming these challenges.

                     OCCUPATIONAL SAFETY AND HEALTH

    The Congressional Accountability Act's (CAA) statutory mandate 
requires that our office conduct a workplace safety and health 
inspection program. The monitoring of remediation of hazards found 
through the Office's inspection program remains a vital part of the 
safety and health program. During fiscal year 2006, the General Counsel 
increased his efforts to remedy two serious violations which posed 
imminent danger to workers, one of which was unabated safety violations 
which existed in the Capitol Power Plant utility tunnels since before 
1999. The Office's filing of our first ever formal complaint led the 
Office of the Architect of the Capitol (AOC) to implement immediate 
interim abatement measures to protect workers in the tunnels from 
imminent harm.
    With that protection in place, the AOC and the Office engaged in 
settlement negotiations to resolve the formal complaint by devising a 
plan which requires abatement of the identified hazards, continued 
interim protection for affected AOC employees until full abatement is 
achieved, and monitoring of the abatement progress by the Office of 
Compliance. In order to ensure the safety and health of workers, this 
monitoring may require the procurement of expertise that the Office 
does not have available on staff. The current staff complement of the 
OOC has been stretched in both FTE resources and contractor funding, 
and we currently do not have available the expertise to address many of 
the specifics involved in the abatement of the tunnels hazards. Our 
fiscal year 2008 budget request includes $120,000 for funding to cover 
the costs of an OOC liaison (a safety and health expert) who will help 
us continuously interface with the AOC's liaison to facilitate 
abatement pursuant to the tunnels settlement agreement. An additional 
$152,000 is requested so that our office may obtain the expertise of 
other expert consultants who can address structural, heat, egress, 
mold, and asbestos issues.
    The monitoring of the utility tunnels as well as the monitoring of 
the nearly 13,000 findings our inspectors detected in our 109th 
Congress biennial inspection will require substantial time and 
resources. Our multi-year plan considers this time and resource 
requirement and will allow for comprehensive abatement. One portion of 
our plan to monitor abatement of the approximate 13,000 findings is the 
acceleration and increase of our follow-up inspections of the most 
critical of those findings. With the number of findings before us, we 
recognize--and the fiscal year 2006 Senate Appropriations Subcommittee 
Chairman reminded us--that it is essential that the Office incorporate 
mechanisms and personnel to better assure efficiency and timeliness in 
its monitoring program. As such, the need for a compliance officer, who 
would be dedicated to monitoring the abatement schedules of employing 
offices and ensure that employing offices have taken appropriate steps 
towards resolution of identified hazards and violations, is most 
critical. We request one FTE to serve as a compliance officer, to 
provide consistent monitoring of abatement of hazards, assure timely 
abatement of OSH hazards identified in the OSH biennial inspections and 
requestor-initiated inspections, and ensure compliance with OSH-related 
citations.
    In our fiscal year 2007 budget request, the Office explained its 
need for a management analyst to perform the administrative tasks that 
our inspectors once performed at a much higher cost. This need became 
so apparent that, while we awaited congressional consideration of our 
request, the Office engaged in a reorganization. Sacrificing the 
support of administrative staff, we reorganized positions and 
reprogrammed contractor funds to allow the duties of the management 
analyst to be performed immediately. As a result of the reorganization, 
inspector efficiency has increased; however, the Office still suffers 
from a lack of clerical/administrative support. We are requesting 
funding to add a 0.5 FTE position to ensure that the attorneys and 
inspectors are able to focus on the substantive nature of their work, 
as opposed to performing accompanying administrative tasks. The 
function of the remaining half of this position is addressed below.
    The large number of findings in our 109th biennial inspections 
contemplates the notion that there may exist deficiencies in the safety 
and health plans and programs of the legislative branch. In an effort 
to be a resource to our covered community, the Office seeks to provide 
technical assistance to member offices as well as employing offices. As 
mentioned in our strategic plan, the Office is prepared to review and 
analyze the covered community's safety plans to determine whether the 
plans meet OSHA requirements. We are requesting funds in support of 
this initiative with the hope that our early technical assistance might 
prevent the occurrence of future hazards.
    Similarly, the Office is committed to providing early assistance to 
State offices as well. The lack of funding has prevented the Office 
from conducting in-person inspections of covered facilities in State 
offices, as mandated by the CAA. However, we are developing a plan by 
which we can assist Congress in assuring worker safety in State 
offices. Through collaboration with stakeholders, we plan to develop 
and pilot self-certification check lists to provide to State offices in 
an effort to educate them on OSHA requirements, and to better equip 
them in assuring that the responsible party (e.g., GSA, private 
landlords) corrects any identified hazards.
    In addition, the anticipated opening of the Capitol Visitor Center 
during fiscal year 2008 has impacted our office as well. The Office 
stands ready to provide preliminary assistance in assessing the safety 
of the CVC prior to its occupancy. Once the CVC is occupied and it is 
added to the Office's inspection cycle, it will add approximately .7 
million square feet to the Office's area of inspection. Thus, we are 
seeking funding to sustain the increased workload.

                         EDUCATION AND OUTREACH
 
   The Office is mandated by Congress to ``carry out a program of 
education for members of Congress and other employing authorities of 
the legislative branch of the Federal Government respecting the laws 
made applicable to them and a program to inform individuals of their 
rights under laws made applicable to the legislative branch of the 
Federal Government. . . .'' 2 U.S.C. 1381(h)(1). The Office continues 
to carry out this core mandate of the act through various educational 
and outreach activities.
    In line with the Office's initiative to act as a resource to 
legislative branch employees and employers, the Office has begun major 
efforts to disseminate a baseline survey to its constituents. We have 
devised a survey instrument to apply initially to House and Senate 
offices, with the intent of applying the same instrument to another 
large group of our constituents in the current fiscal year. The survey 
has been designed to gauge the community's general knowledge of the 
Office, their rights and responsibilities under the CAA, and their 
general satisfaction with the Office. This initiative ultimately will 
result in the first comprehensive evaluation of the Office's education 
efforts and services. The Office anticipates that this initial survey, 
followed by focus groups and additional surveys, will result in 
feedback and pointed data to allow the Office to perform a concentrated 
effort to improve and streamline and more precisely target services to 
fit the needs of the community. With your assistance, we have been able 
to fund phases I and II in the past 2 fiscal years. We are seeking 
additional funding for phase III of our survey activities to establish 
the baseline against which we will measure our success in achieving our 
educational statutory mandate.

                           DISPUTE RESOLUTION

    The Office's employment dispute resolution program provides a 
mechanism for employing offices and employees to address issues 
involving ten different laws of the CAA, ranging from alleged 
discrimination to the alleged failure to pay required overtime. The 
successes of the dispute resolution program remain largely unnoticed 
because of the confidential nature of its administrative phases: 
counseling, mediation, and hearing processes conducted by the Office. 
Hundreds of disputes in nearly all legislative branch agencies, as well 
as in offices of members and committees of both chambers have quietly 
been addressed through our administrative dispute resolution system 
since the Office's inception in 1996. The assistance to employing 
offices and employees provided by this confidential service is 
reinforced through well-trained staff who provide exemplary services to 
employees and through the expertise of contract mediators and hearing 
officers who remain accomplished in their field.
    The need for contracted legal expertise is anticipated to continue 
in fiscal year 2008. Currently, the Office has received a large number 
of complaints which have proceeded to hearing and may proceed to the 
administrative appellate stage before the Office's board of directors. 
During the first quarter of fiscal year 2007, there were pending before 
the board five cases for appellate review. The preparation of these 
decisions, to include legal research, legal writing, and legal 
analysis, requires expert assistance in order to render sound board 
decisions in a timely fashion. The Office currently has staff dedicated 
to this program requirement; however, because complaints continue to be 
filed at a steady pace, and because the Office does not foresee a 
decrease in the number of appeals of hearing officers' decisions, 
assistance from a contract attorney will aid the office in providing 
timely board decisions.

                           MANAGEMENT SUPPORT

    As mentioned above, the Office of Compliance makes extensive use of 
service vendors and personal services contractors to provide many of 
our vital functions, including employment dispute resolution and OSH 
inspections. In general, this practice provides significant cost 
savings and allows this small agency to maintain capacities on an ``as-
needed'' basis. However, some core internal control functions are 
currently also under-served or contracted out due to our limited FTE 
authorization, which at 17 is two less than the agency was authorized 
in fiscal year 1998.
    The Office has just two FTE's dedicated to all IT, HR, general 
administrative support and fiscal management functions. This situation 
has resulted in inefficiencies, work load overages, and the necessity 
to contract out core functions, such as accounts payable. Accounting 
staff is necessary to ensure that a separation of functions can be 
maintained in our fiscal management. HR/project management staff is 
necessary to further the Office's commitment to best practices, 
allowing program managers to concentrate on their areas of expertise. 
General administrative staff is necessary to address workload issues of 
staff who have to perform administrative duties instead of duties in 
their own subject matter areas. As mentioned in our fiscal year 2007 
budget request, we are requesting one analyst FTE to address our HR and 
project management deficit, and an accounting technician FTE to bring 
our basic accounting and other fiscal responsibilities on staff. The 
cost of these FTE's will be partially offset by a reduction in 
contractor expenses. In addition, we are requesting a half-time FTE to 
complete the part-time receptionist position, so that our remaining 
staff can concentrate on performing the duties of their respective 
substantive areas.

                               CONCLUSION

    There are a number of other requests in our budget submission which 
we commend for your consideration. The ones referenced herein are 
presented to highlight a portion of the endeavors which our office 
hopes to undertake with your assistance. On behalf of the board of 
directors, the appointees and the entire staff of the Office of 
Compliance, I thank you for the committee's support of the efforts of 
this agency. I assure you that the Office is committed to the most 
efficient and prudent use of taxpayer money. I respectfully request 
that the committee respond favorably to the Office's fiscal year 2008 
budget request. We will be happy to respond to any questions which you 
may have.
                                 ______
                                 
                  Prepared Statement of Barbara Camens

    Madam Chair and members of the subcommittee, good morning. I am 
Barbara Camens, and I represent the Board of Directors of the Office of 
Compliance. I am honored to be here today to join Acting Executive 
Director Tamara Chrisler in testifying on behalf of the Office's fiscal 
year 2008 budget request.
    Madam Chair, the Board would first like to commend the work of Ms. 
Chrisler, Peter Eveleth, and the entire staff in achieving so many 
goals in the past few years. We now have a new strategic plan for 
fiscal year 2007-2009, with a line of sight to individual work plans. 
We have established and continue to develop protocols to enable us 
better to partner with the agencies for which we have employment law 
and safety and health jurisdiction. We are negotiating a settlement 
agreement of our first safety and health complaint, involving the 
utility tunnels which, if approved, will prevent the matter from 
reaching federal court, will conserve substantial resources, and will 
ensure the immediate and ongoing abatement of the underlying safety 
hazards.
    This record of improvement is the result of the hard work and 
dedication of the four statutory officers who are appointed by the 
Board, and the dedicated staff they have assembled. While the Board 
wholeheartedly supports the entire budget request, we wish to 
underscore the need which the agency has to increase its FTE complement 
to 21. Right now the FTE complement of 17 is two less than the 19 the 
Office was afforded in fiscal year 1998. Over the past several years, 
the agency has concentrated its available resources on enhancing its 
service delivery, particularly in the OSH area. Consequently, there is 
a compelling need for basic operational support staff. I can assure you 
that the Office of Compliance will continue to make the most efficient 
use of every dollar which is appropriated by this committee.
    I would like to call your attention to two statutory changes that 
are of significant interest to Susan Robfogel, the Chair of the Board 
of Directors, as well as the entire Board. The first has to do with 
internal promotion within the Office of Compliance. The Congressional 
Accountability Act requires the Office's statutory appointees to be 
individuals who have not worked within the legislative branch during 
the previous 4 years. This provision makes it impossible to promote 
from within; for example, from Deputy Executive Director to Executive 
Director. Since the Board could be actively contemplating such a 
promotion, we have an immediate interest in changing the prohibitive 
section of the CAA. We have contacted, and plan to work with the 
appropriate oversight committees of both Chambers to expedite this 
change, and would greatly appreciate the support of this subcommittee 
in this effort.
    In addition, the Office has recently contracted with a human 
resources consulting firm that has begun assessing our human capital 
needs. The contractor's report makes recommendations for how various 
office functions could be more efficiently and effectively performed. 
One of the contractor's preliminary recommendations is for ``the Board 
of Directors (to) consider the feasibility of seeking legislative 
change to allow the establishment of senior executive positions in the 
Office of Compliance where these responsibilities warrant.'' We are 
requesting your assistance in enacting this change for the positions of 
Executive Director and General Counsel of the Office of Compliance, and 
if you consider it appropriate for each of the five members of the 
Board of Directors. Please provide us any guidance you deem advisable 
to effect this change in compensation levels.
    I am available to address any questions.

    Senator Landrieu. Let me just begin with questions, if I 
could, to Mr. Walker. Let me say that, although my experience 
on this subcommittee is rather brief, my experience in 
Government is not, and I've been in public office for, now, 
almost 30 years, having started in my own legislature, and then 
working up as State treasurer, and then, of course, being 10 
years in the Senate. I realize, while there are a lot of people 
who spend a lot of time bashing Government, I believe 
Government can do a lot of good, does a lot of good every day. 
I am proud of the fact that this is the finest Government, 
democracy, in the world. It's what many of the issues that 
we're dealing with here and abroad are all about. And, while 
some of your agencies don't get the time and attention they 
need, because they're sort of the mechanical part of making it 
work, it does not go without my notice of the importance of 
what you do every day to just keep the trains running on time 
and to keep this Government operating efficiently, 
transparently, and professionally, which is so rare in the 
world today.
    So, I would think, particularly for the Comptroller's 
office and the Congressional Budget Office, Peter, that you all 
really are the muscle that makes possible a trim and fit 
Government, and we want to run a trim and fit Government to 
meet all the goals and objectives, from the Constitution to 
every law that's written, to fulfill the dreams and hopes of 
the country. So, I hope that people in the room understand that 
this is not just a mechanical accounting exercise for me. I 
really look forward to learning more about your offices. My 
background is not in auditing or investigation. But I would say 
that I really am a true believer in Government working well. 
And--as much as I can help you do your jobs well--I think our 
subcommittee will be making a significant contribution.

GAO deg.JUSTIFICATION FOR INCREASED FUNDING IN THE GOVERNMENT 
                         ACCOUNTABILITY OFFICE

    Mr. Walker, Some in Congress are going to be quite suspect 
and hesitant--as you know, about fighting for extra money. It 
is not going to be easy----
    Mr. Walker. No, I realize that.
    Senator Landrieu [continuing]. Currently, we've got a 
tremendous amount of extremely important calls on funding, both 
domestically and internationally. So, would you spend another 
minute or two, giving your three or four best arguments to the 
skeptics that say, ``What you do is not that important, and we 
don't need to increase your budget.'' Seeing this graph that 
you submitted sort of tells the story. But if you'd add 
something to that.
    Mr. Walker. I'll be happy to provide something for the 
record. And thank you for the opportunity, Madam Chair.
    [The information follows:]

                       Need for Increased Funding

    In recent years, GAO has worked cooperatively with the 
Appropriations Committees to submit modest budget requests. 
Adjusting for inflation, GAO's budget authority has declined by 
3 percent in constant fiscal year 2006 dollars since fiscal 
year 2003. These modest budget results do not adequately 
recognize the return on investment that GAO has been able to 
generate. In fact, these modest increases have hampered our 
progress in rebuilding from the downsizing (40 percent 
reduction in staffing levels) and mandated funding reductions 
that occurred in the 1990s.
    With your support, GAO has become more results-oriented, 
partnerial, and client focused. We have made strategic 
investments; realigned the organization; streamlined our 
business processes; modernized our performance classification, 
compensation, and reward systems; enhanced our ability to 
attract, retain and reward top talent; enhanced the technology 
and infrastructure supporting our staff and systems; and made 
other key investments. These transformational efforts have 
allowed GAO to model best practices, lead by example, and 
provide significant support to Congressional hearings, while 
achieving record results and very high client satisfaction 
ratings without significant increases in funding.
    We have taken a number of steps to deal with funding 
shortfalls in the past few years; however, we cannot continue 
to employ the same approaches. Our staff has become 
increasingly stretched and we are experiencing backlogs in 
several areas of critical importance to the Congress (e.g., 
health care, homeland security, energy and natural resources). 
In addition, we have deferred key initiatives and technology 
upgrades (e.g., engagement and administrative process upgrades) 
for several years and it would not be prudent to continue to do 
so. These actions are having an adverse effect on employee 
morale, our ability to produce results, and the return on 
investment that we can generate.
    There is a need for fundamental and dramatic reform to 
address what the government does, how it does business, and who 
will do the government's business. Our support to the Congress 
will likely prove even more critical because of the pressures 
created by our nation's current and projected budget deficit 
and growing long-term fiscal imbalance. Also, as we face 
current and projected supply and demand imbalance issues and a 
growing workload over the coming years across a wide spectrum 
of issues, GAO will be unable to respond to congressional 
demands without a significant investment in our future. We have 
exhausted the results that we can achieve based on prior 
investments. Our ability to continue to produce record results 
and assist the Congress in discharging its Constitutional 
responsibilities relating to authorization, appropriations, 
oversight, and other matters will be adversely impacted unless 
we take action now.

             GAO deg.LINKING RESOURCES TO RESULTS

    Mr. Walker. We're in the business of improving the 
performance of the Federal Government and ensuring its 
accountability for the benefit of the American people. We 
provide oversight, insight, and foresight work. We help the 
Congress discharge its constitutional responsibilities with 
regard to appropriations, authorization, reauthorization, 
oversight, et cetera.
    The best case I would give you, Madam Chair, is, I think 
the U.S. Government does not do a very good job of linking 
resources to results. We are a shining exception to that 
general rule. We generated, last year, a $105 return in 
financial benefits for every dollar invested in our agency. 
Number two in the world is around 24 to 1. The Congress needs 
to do a better job, in my view, of recognizing that the 
baselines of all budgets are not equal. I'm talking in general, 
not about the legislative branch, but throughout Government. 
The Government needs to start doing a better job of analyzing 
what makes sense and what doesn't make sense for tomorrow, and 
are we targeting our resources to where we're getting results.
    If the Congress does that, our case is clear and 
compelling, and I have no concerns. But if the Congress doesn't 
do that, and if the Congress takes a baseline approach to say, 
``Well, this is where we were last year, and this is how much 
money we have this year,'' and, if it doesn't delve in, get the 
facts, and differentiate, then I'm very concerned, because what 
happens is, agencies like ours, who try to ask for very modest 
budget requests, and to lead by example----
    Senator Landrieu. Get penalized.
    Mr. Walker [continuing]. Get penalized. There are very 
perverse incentives in that. I know you believe, as I do, that 
we need to transform what Government does and how Government 
does business. We are an ally to this Congress in getting that 
done. But we need to have a reasonable level of resources in 
order to be able to do our job.
    Senator Landrieu. Thank you.

          GAO deg.HIRING IN A COMPETITIVE JOB MARKET

    Let me just ask you to comment about the tensions that 
you're finding, or the difficulties, in hiring based on the 
competitiveness of the private market. I'm going to ask you the 
same, Mr. Turri, and also Peter. Because the region that we're 
in here is very competitive. Are you seeing it scale up pretty 
substantially, or has it been this way for several years?
    Mr. Walker. It varies, Madam Chair. Basically, for GAO, 
we're deemed to be an employer of choice. We're deemed to be 
one of the best places to work in the Federal Government. We're 
deemed to be a preferred professional services organization. 
So, in general, we have a lot more people who want to work for 
GAO than we have positions. There are, however, exceptions. We 
experience real supply and demand imbalances in hiring Ph.D. 
economists, healthcare professionals, and information 
technology professionals. Even in areas such as financial 
management and auditing, because of Sarbanes-Oxley and a 
variety of other issues, there are selected areas in which we 
are increasingly competing for talent and having difficulties 
in being able to attract the number of people with the type of 
education and experience that we want. But, in general, we're 
okay. Those areas where we have challenges, but we need to meet 
those challenges, because some of these areas are the ones that 
represent the greatest challenges for Government--healthcare, 
for example.
    Senator Landrieu. And do you think you have the 
flexibility, based on the current authorization laws, to allow 
you to make those differentials in pay that are required to 
attract and retain that kind of talent?
    Mr. Walker. We have more flexibility than most agencies in 
Government, thanks to the actions of the Congress. On three 
different occasions--1980, 2001, and 2003--the Congress has 
given us initial authorities, which we have aggressively used. 
I can assure you that I will not hesitate to let you know if we 
think we need more authorities. I would like to note for the 
record, as is included in my statement, we are planning to 
submit a legislative proposal to our oversight and authorizing 
committees, this year, that does deal with certain human 
capital issues.

     GAO deg.MARKET-BASED COMPENSATION AT THE GOVERNMENT 
                         ACCOUNTABILITY OFFICE

    Senator Landrieu. As I understand, there was a hearing in 
the House on this, last week, that had a couple of questions 
about complaints that they had received about people feeling 
that they might not have been treated fairly. And, of course, I 
wasn't able to read all the testimony of that hearing. Would 
you like to comment, for the record----
    Mr. Walker. Sure.
    Senator Landrieu [continuing]. About some of those----
    Mr. Walker. Yes.
    Senator Landrieu [continuing]. Issues?
    Mr. Walker. Thank you Madam Chair for the opportunity. Let 
me try to provide some contextual sophistication for this, 
because you just get pieces of things that are reported.
    In July 2003, I testified before the Congress, and I asked 
for additional legislative authorities in order to make GAO a 
more market-based, skills-, knowledge-, and performance-
oriented organization with regard to classification and 
compensation systems. Congress granted us that authority in 
July 2004.
    Later in 2004, we received the results of our first-ever 
competitive compensation study for GAO personnel. It was good 
news and bad news. The good news was, the vast majority of our 
people were either compensated fairly, or for a material 
percentage of individuals--Ph.D. economists, attorneys, 
information technology specialists, and a few others--the study 
found that we should raise their pay potential, raise their pay 
ranges; and, in fact, we did do that. There were many more 
positives than negatives. There was, however, one area that it 
was not good news for some of our employees. That study said 
that we had roughly 300 employees that were overpaid, as 
compared to the market. As a result, one had to decide, ``What 
would you do with those individuals?''
    I made the determination that, while I had the authority to 
freeze their pay under the law, I didn't want to do that; I 
wanted to give them some performance incentives. And, in fact, 
we did, and we are still giving them performance incentives, 
even greater performance incentives. But I made the decision 
not to provide them an automatic across-the-board pay increase, 
because, in my view, doing so would be inconsistent with the 
concept of equal pay for work of equal value, and inconsistent 
with the concept of providing competitive compensation levels 
for our people. Candidly, I never promised to give across-the-
board increases to people paid above market, nor have I ever 
been asked to promise to give across-the-board increases to 
people paid above market. To put this in context, in 2007 we're 
talking about roughly 150 people out of 3,200, down from over 
300 in 2006.
    Senator Landrieu. Thank you, Mr. Walker. I think that was 
very well stated. I guess I should say, for the record, that 
I've done the exact same thing in my office. And I have the 
flexibility to do that. And I believe in that kind of approach 
for the 45 people that work for me. So, I don't know all the 
details of this, and I'm not going to prejudge, but I most 
certainly find no fault with the thought and the 
professionalism in which you have addressed this. That is 
exactly what I try to do within the tight budgets that we have, 
to retain the very best staff that I can retain, with the 
skills necessary to do the job I need to do as a Senator.

GAO deg.IMPLEMENTING A TECHNOLOGY ASSESSMENT AT THE GOVERNMENT 
                         ACCOUNTABILITY OFFICE

    Mr. Walker, what are the critical factors in implementing a 
technology assessment function at GAO? Do you see merit in 
creating permanent capability within GAO to study technology 
assessments?
    Mr. Walker. Thank you for that question, Madam Chair.
    The Congress, as you know, for several years, has been 
debating whether, and to what extent, to reestablish a 
technology assessment capability. We have conducted some 
technology assessments, at the request of the Congress, in part 
to serve as a beta to determine whether or not we might be an 
appropriate agency to do that work. In my opinion, the Congress 
does need some additional capability with regard to technology 
assessments. Second, I think we have proven that we've got the 
ability to do that work. Third, I would question whether or not 
it makes sense to create a new legislative branch entity with 
all the different overhead and infrastructure that would have 
to come with that.
    Should the Congress decide to create this capability, and 
to place it at GAO, we would need a few more FTEs, and we would 
need some additional funding, because we're already stretched. 
But I can assure you, it would be a lot more cost beneficial to 
do it at GAO than it would be to start something from scratch, 
a whole new entity, with its own support structure and all the 
other things that would have to come with it.

            GAO deg.RELEVANCE OF EXISTING MANDATES

    Senator Landrieu. And one more question. You've approached 
the subcommittee regarding a number of mandates involving your 
work that you believe should be repealed. Could you reiterate 
those, for the record, and why you think they should be 
repealed?
    Mr. Walker. I'll be happy to provide a list for the record.
    [The information follows:]

  GAO deg.Proposed Repeal and Modification of GAO Reporting 
                              Requirements
    GAO has proposed language that would repeal or modify a number of 
mandates for GAO audits and reports. Most of the mandates impose 
recurring requirements on GAO. While the circumstances of each vary, 
the common theme is that continued audits and reports would provide 
little or no value and consume resources that could be applied to GAO 
work of higher priority to the Congress. Eliminating these mandates 
would conserve resources while preserving the option for congressional 
committees to request GAO work in areas covered by the specific 
mandates.
    (a) Annual Report by GAO on Consistency of IMF Practices With 
Statutory Policies.--Section 504(e) of title V of the Consolidated 
Appropriations Act, 2000 (Public Law 106-113--Appendix E) is repealed.
    (b) Review of Proposed Changes to Export Thresholds for 
Computers.--Section 314 of title III of the Consolidated Appropriations 
Act, 2001 (Public Law 106-554--App. B) is repealed.
    (c) Annual Reports on Waiting Times for Appointments for Specialty 
Care.--Section 604(c) of the Veterans Health Programs Improvement Act 
of 2004 (Public Law 108-422) is amended by striking ``the Comptroller 
General of the United States'' and inserting ``the Inspector General of 
the Department of Veterans Affairs''.
    (d) Audit by GAO.--Paragraph (4)(A) of subsection (f) of section 
4404 of Public Law 107-171 (2 U.S.C. Sec.  1161(f)(4)(A) is amended--
            (1) by striking ``shall'' and inserting ``may''; and
            (2) by striking ``annual''.
    (e) Section 902(k) of the Haitian Refugee Immigration Fairness Act 
of 1998 (Public Law 105-277; 8 U.S.C. 1255 note) is repealed.
    (f) Local Educational Agency Spending Audits.--Section 1904 of the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6574) is 
repealed.
    (g) Audit of Financial Transactions.--Section 11 of the National 
Moment of Remembrance Act (Public Law 106-579; 36 U.S.C. 116 note) is 
repealed.
    (h) Loss Ratios and Refund of Premiums.--Section 1882(r)(5) of the 
Social Security Act (42 U.S.C. 1395ss(r)(5)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``(A) The Comptroller General shall 
                periodically, not less than once every 3 years,'' and 
                inserting ``The Secretary may''; and
                    (B) by striking ``and to the Secretary''; and
            (2) by striking subparagraph (B).
    (i) GAO Reports.--Section 14 of the Radiation Exposure Compensation 
Act (Public Law 101-426; 42 U.S.C. 2210 note) is repealed.
          proposed transfer of comptroller general authorities
    The proposed language would transfer certain functions currently 
performed by GAO to the Department of Labor. GAO performs purely 
ministerial functions under the Davis-Bacon Act and the Contract Work 
Hours and Safety Standards Act. These functions include payment to 
employees and others pursuant to determinations of the Department of 
Labor, and certain ministerial reporting functions. These functions are 
more appropriately performed by the Department of Labor.
    (a) Authority of Comptroller General to Pay Wages and List 
Contractors Violating Contracts.--Section 3144 of title 40, United 
States Code, is amended--
            (1) in the title, by striking ``of Comptroller General'';
            (2) in subsection (a)(1), by striking ``The Comptroller 
        General'' and inserting ``The Secretary of Labor''; and
            (3) in subsection (b)(1), by striking, in both places, 
        ``Comptroller General'' and inserting ``Secretary of Labor''.
    (b) Reports of Violations and Withholding of Amounts for Unpaid 
Wages and Liquidated Damages.--Section 3703 of title 40, United States 
Code, is amended in subsection (b)(3), by
            (1) striking ``The Comptroller General'' in the first 
        sentence and inserting ``The Secretary of Labor'' and
            (2) striking ``the Comptroller General'' in the second 
        sentence and inserting ``The Secretary of Labor''.
    (c) Health and Safety Standards in Building Trades and Construction 
Industry.--Section 3704 of title 40, United States Code, is amended--
            (1) in subsection (c)(1), by
                    (A) striking ``Transmittal of names of repeat 
                violators to Comptroller General'' and inserting 
                ``Findings of repeat violations'', and
                    (B) striking all words after ``effect''.
            (2) in subsection (c)(2), by
                    (A) striking the first sentence and inserting ``Not 
                sooner than 30 days after giving notice of the 
                Secretary of Labor's finding under paragraph (1) to all 
                interested persons, the Secretary shall distribute each 
                name to all agencies of the Federal Government.'';
                    (B) striking ``from the date the name is 
                transmitted to the Comptroller General'' in the second 
                sentence;
                    (C) striking ``whose name was submitted to the 
                Comptroller General'' in the third sentence; and
                    (D) striking the fourth sentence and inserting 
                ``The Secretary shall inform all Government agencies of 
                the Secretary's action''.

    Mr. Walker. But here is the key concept. And it's something 
that we talked about earlier. Government tends to be an 
accumulation and amalgamation of various policies, programs, 
functions, and activities over the years; and, in this 
particular case, of mandates that have come up over the years. 
Some of them make sense, some of them don't make sense; some of 
them are outdated, and some of them don't pass a cost-benefit 
test. So, what we've endeavored to do is, we've gone back, and 
we've looked at all the mandates that currently apply to us, 
and we've tried to work with the Congress in understanding 
which ones are still relevant, which ones have merit, and which 
ones are cost beneficial.
    And so, I'll be happy to provide some more for the record, 
but I--it's kind of a spring cleaning, and spring is coming 
soon, and--I think a lot of people, frankly, need to have a 
spring cleaning.
    Senator Landrieu. My husband would most certainly agree 
with you. He threatens to start one any day. I tell the 
children, ``Move out of the way. You, too, will be thrown out 
of this house.''
    Mr. Turri, we will move now to you. The 49-percent increase 
in your budget is quite substantial. Now, I understand the 
whole argument about starting from a baseline that's too low to 
do the mission, and so a 5 percent or 6 percent isn't going to 
make any difference. But, still, that's fairly significant. So, 
would you mind trying to explain a little bit more in detail 
about that?

          GPO deg.GOVERNMENT PRINTING OFFICE FINANCES

    Mr. Turri. Thank you, Madam Chair.
    Just for clarification, GPO is unique in the way it is 
funded. Of all the revenue that we have in our operation, about 
80 percent of it actually is nonappropriated. It's based on a 
revolving fund that receives most of its revenue from procured 
printing, Federal Register printing, the printing of passports, 
and other products. That area actually funds 80 percent of what 
the agency is all about.
    Senator Landrieu. And how much does that generate annually?
    Mr. Turri. We expect, this year, our total revenue to be 
around $880 million. So, the balance of the 20 percent or so is 
appropriated funds. Of that particular amount, congressional 
printing and binding is a significant part of that operation. 
And this year, what we're asking for is about $21 million plus 
to bring that budget up to where it belongs. In 2005, we were 
appropriated about $88 million for congressional printing and 
binding. That particular year, we were very close to that 
appropriation. It kind of bumped right up to it. In 2006, we 
actually exceeded the appropriated number by $3 million. We 
actually had to use transfers to fund that shortfall.
    This year, with a continuing resolution, we project we are 
going to be in excess of $12 million over the appropriation--
the flat funding that we've had for the last couple of years. 
About $5 million of that is for the U.S. Code. The rest of it 
is for the fact that this year Congress will have increased 
days in session, the fact that we have wage increases that are 
mandatory, and materials costs have increased. Those particular 
items all add up to, as I say, an increased amount. And the 
volume of work that Congress is doing each year has increased, 
and those same arguments will apply to the budget of 2008, once 
again looking at probably about a $9 million increase. Just to 
bring us up to where we belong and the amount of money that we 
are mandated to spend by the work that we do every day, will 
bring our congressional printing and binding budget up by $21 
million. That is something we really have no control over. We 
are just obliged, obviously, every day to print that work.
    Senator Landrieu. Can I ask you this? You have been with 
this office for a short period of time?
    Mr. Turri. I actually have been with the GPO approximately 
4 years as the deputy to Mr. James. In January, I took over as 
Acting Public Printer, as the search for a new Public Printer 
continues.
    Senator Landrieu. Has the agency ever gone through a 
comprehensive review--since you're generating about 80 percent 
of your funding--which is very substantial? I know some of that 
are fees set by Congress for what a passport costs, et cetera--
but have you ever had a review--since you are in sort of a 
business that can actually produce revenue? Is there any 
thought that you could actually produce more than you need and 
get your 80 percent up to 100 or 110 or 120?
    Mr. Turri. Are you talking about----
    Senator Landrieu. Like an outside review of what you do to 
suggest additional revenues without driving up the cost of 
these documents for the users to a point where it would be 
counterproductive?
    Mr. Turri. In my tenure, we haven't undertaken anything 
like that, but it's certainly something, Madam Chair, that----
    Senator Landrieu. We might want to----
    Mr. Turri [continuing]. We could possibly consider.

                   GPO deg.SPECIAL DOCUMENTS

    Senator Landrieu [continuing]. Are all of the new documents 
that are being printed, designed, thought of, for homeland 
security weighing on your office at all?
    Mr. Turri. It's really separate and complete. It's----
    Senator Landrieu [continuing]. Just for homeland security?
    Mr. Turri. No. I would say homeland security, on its own, 
is not necessarily having any significant impact on our 
business.
    Senator Landrieu. You're required to update the U.S. Code 
every 6 years, so that's part of this request?
    Mr. Turri. It's part of this, Madam Chair. We were notified 
that it looks like it might be pushing more into 2008. We 
thought we were going to be required to print it this year, but 
currently, we're still printing supplements for the last U.S. 
Code this year. But, as I say, printing it in 2008 won't 
decrease our overall budgetary needs. It just will push the 
funding requirement into 2008.

                       GPO deg.PASSPORTS

    Senator Landrieu. Okay. And can you give us the status of 
the electronic passport?
    Mr. Turri. Yes, Madam Chair, I'd be delighted to do that.
    The new passport had just begun to be designed when I 
arrived there, about 4 years ago. The last few years have been 
spent in the process of designing and building a system that 
would produce a biometric passport. In February, or just about 
1 year ago, we began to get the realization from the State 
Department that this particular quantity of passports that we 
had been producing, which were about 9 million a year, was 
beginning to jump at a fairly rapid rate, to the point of where 
now it looks they're expecting, this year, to get about 17 
million requests for new passports. That number, as you can 
imagine, is a significant increase over what was expected.
    Madam Chair, in the particular area of passports, we went 
from 30 to 80 employees in the passport division just in the 
last 12 months, which obviously, as you can imagine, requires a 
significant amount of ingest and training into that particular 
operation. We have added eight brand new pieces of equipment, 
which are not pieces of equipment that come off assembly lines, 
they're all predesigned specifically to produce the biometric 
passport. I'm happy to say, though, this particular month that 
we're in, as things ramp up and continue, we will be producing 
approximately 1 million e-Passports along with still producing 
the legacy passports of around 500,000. This will give us about 
1\1/2\ million passports this month, which would take care of 
the 17 million passport requests that----
    Senator Landrieu. Requirement.
    Mr. Turri [continuing]. Might be coming this year. And I'm 
very proud of what we have accomplished, because even in a 
ramp-up mode, we are producing four times as many e-Passports 
as any country in the world. And we expect this to continue.

                  GPO deg.PRODUCTION FACILITY

    Senator Landrieu. Now, where is this work being done? What 
physical facility?
    Mr. Turri. Currently it is being done in a building 
separate from our regular GPO offices. It's actually across the 
street from our regular buildings.
    Senator Landrieu. And since I don't know where your regular 
building is, help me.
    Mr. Turri. I'm sorry. It's----
    Senator Landrieu [continuing]. Your regular building?
    Mr. Turri [continuing]. It's actually down the street, 
Madam Chair, at 732 North Capitol, not----
    Senator Landrieu. I know where that is.
    Mr. Turri [continuing]. Far from here. We'd love to have 
you come down and visit our operation sometime.
    Senator Landrieu. I want to come see the main building, on 
North Capitol.
    Mr. Turri. Right.
    Senator Landrieu. I'm reminded now of where that is. And 
this other location is right----
    Mr. Turri. Right across the----
    Senator Landrieu [continuing]. Across the street.
    Mr. Turri. It's in a separate building.
    Senator Landrieu. And do you find your facilities adequate? 
Aren't you trying to do some repairs or restoration?
    Mr. Turri. Well, that particular building is the newest of 
our buildings. The essential repairs and restoration that we're 
requesting money for are really needed across the street in our 
regular buildings. What we're looking for, for passports, is a 
remote site facility for security and increased production 
reasons. The idea of having passports produced in one place is 
not----
    Senator Landrieu. Ideal.
    Mr. Turri [continuing]. Correct. We have been searching. 
And we are getting very close, we hope, to identifying 
someplace that may be very close to your home State.
    Senator Landrieu. That would be good.
    It's close to my home State.
    Mr. Turri. Well, close enough that they can come across the 
line.
    Senator Landrieu. But let me say, I know, from the other 
committees that I serve on, there is great deal of interest, 
from many different angles, about these new passports and how 
people are going to get them.
    Mr. Turri. Yes.
    Senator Landrieu. Who gets them, and--et cetera.
    Mr. Turri. Yes.
    Senator Landrieu. I think I would like to plan a field trip 
to the office and----
    Mr. Turri. Well----
    Senator Landrieu [continuing]. I'll take a couple of 
other--try to bring a few Senators with me that are actually 
either on this committee or the Homeland Security Committee, 
because there's a lot of concern about all of this new 
paperwork and documentation that we're going through to try to 
make our borders more secure without hampering travel, et 
cetera. So, I think this is going to be an issue some of the 
Senators are going to be interested in.
    And----
    Mr. Turri. That would----
    Senator Landrieu [continuing]. Finally----
    Mr. Turri. That would be great, Madam Chair. We'd love to 
have you down there.

          GPO deg.FEDERAL DEPOSITORY LIBRARY PROGRAM

    Senator Landrieu. And the Federal Depository Library 
Program, can you tell me where you see this going, because of 
electronic information?
    Mr. Turri. Yes. Part of our request this year is for the 
Federal Depository Library Program. We are requesting an 
increase of approximately $12 million over last year's funding 
for this program. Two million dollars of that is for mandatory 
pay and price increases. A little over $3 million of it is for 
the U.S. Code, printing and distribution, and IT support.
    The balance of the $7 million, Madam Chair, is for projects 
for data migration, data processing, data storage, 
authentication, cataloging, and indexing, along with web 
harvesting. We also have started a program, which we are 
continuing, of what's called outreach, which basically is a 
review for libraries, to go out and see that they're 
maintaining the level of operation that they need to do for 
user satisfaction.
    But every one of these things that I have mentioned, as far 
as the data migration, data storage, et cetera, are all 
necessary for ingest into the future digital system that we're 
requesting budgets for. Without that particular input into the 
future digital system, it would be like having a home without 
any sinks or furniture. So, the two go hand in hand, quite 
frankly.
    Senator Landrieu. Okay. Thank you very much.
    Mr. Turri. You're welcome. Thank you, Madam Chair.

                   CBO deg.HEALTHCARE COSTS

    Senator Landrieu. Dr. Orszag, I understand that Senator 
Conrad has a lot of confidence in your ability, and we'll be 
looking forward to working closely with you. And I know that 
you've worked with Senator Gregg as part of the Budget 
Committee, as well. Your efforts in honing down on some of 
these healthcare costs is commendable, because it's a serious 
problem in our own general budget and a real issue with 
businesses, large and small. And it's, in my view, something we 
just can't sustain, and we have to change course. And finding 
that course has been elusive, to date. But are you going to, 
and how are you going to, coordinate with your sister agencies? 
Or is there any coordination at all? Are you all just striking 
off on your own with this effort?
    Dr. Orszag. Senator, there's a lot of coordination. 
Clearly, GAO does some work in health. MedPAC offers advice and 
options specifically on Medicare. And what we're going to try 
to do is play a role in broader healthcare issues, because I 
believe, and most analysts believe, that it is not possible, 
over the long term, to slow the growth in Medicare and Medicaid 
unless there is overall slower cost growth in the health 
sector, as a whole. And embedded in that, though, is the 
opportunity--because a variety of evidence suggests that we 
could take costs out of the system without actually harming 
American's health. And I think trying to capture that 
opportunity is the central fiscal challenge facing the Federal 
Government, and we will be working with any agency that is 
motivated and interested in the same thing, to be putting 
forward options for you to consider.
    Senator Landrieu. And I know that your focus is right here 
in the capital, as it should be, with the Federal Government, 
but I know that you're aware that there are counterparts of 
yours in all 50 States, and some exceedingly professional 
people in those States that do for the States what you do for 
the Federal Government. Is there any formal or informal 
exchange of information, at any level, that you all go through 
with State fiscal officers or budget folks at the State levels?
    Dr. Orszag. I'm aware of a variety of informal 
interactions. For example, on the Medicaid and SCHIP programs, 
our analysts are in touch with people at the State level, 
because that's what you need to do in order to fully understand 
those programs. And, also, there are, whenever folks come to 
Washington, opportunities for interactions. We have much less 
time, resources, and ability to go out to the States, but there 
is also a little bit of that.

 GAO deg.COORDINATION OF FEDERAL, STATE, AND LOCAL GOVERNMENTS

    Senator Landrieu. Well, I'm going to think through this a 
little bit. But, you know, as I said, I was a member of the 
Appropriations Committee in the House, where I served for 8 
years, and it occurred to me there, people in Washington don't 
realize that. It reminds me of a slogan that I read once that 
said, ``You don't stop dancing with a gorilla until the gorilla 
stops dancing.'' And the Federal Government is a gorilla out 
there. And where we are 50 percent of State budgets now, 60 
percent of State budgets, it's hard for them to get a handle on 
their budget when they don't control 50 to 60 percent of it. At 
least that was the case in Louisiana when I left to come here.
    And I think that sometimes we don't realize--maybe it's 
because we all get this Beltway mentality sometimes, to a 
certain degree or another. And it might be very interesting for 
you to think through that. And I'm going to talk with some of 
the Senators about this and see. It can be done informally. It 
doesn't have to be done formally. But you might be very 
surprised at the ideas that you might find out there.
    And, Mr. Walker, I don't know if you have anything----
    Mr. Walker. Yes, if I might add--it might be helpful to you 
and to Peter. Obviously, they're a lot smaller operation than 
we are. Obviously, they're based solely in Washington, DC, 
whereas we're in 12 cities. But a couple of thoughts.
    One, I totally agree with Peter that the largest fiscal 
challenge for the Federal Government, State governments, and 
the private sector--is healthcare. He and I get along very 
well. We've already started to coordinate efforts. It's going 
to be critical that we coordinate in this healthcare area. As 
you know, I appoint all the MedPAC members, and we do quite a 
bit of healthcare work, too. But I'm confident we'll work 
together on that.
    With regard to Federal, State, and local, you raise an 
excellent point. I chair something called the Intergovernmental 
Audit Forum, which are all the inspector generals, all the 
State auditors, and all the county and city auditors. We also 
have something on an international basis, the International 
Organization of Supreme Audit Institutions. I didn't pick the 
name.
    Senator Landrieu. Quite fancy.
    Mr. Walker. There's a lot to be learned here, through 
coordinating efforts, and we've, in fact, enhanced that 
significantly during my tenure. So, I think you're onto 
something.
    Senator Landrieu. Well--I appreciate that, because I just 
think that that's a whole area that we--you know, our Governors 
should get together with Senators and the House Members, and, 
of course, we have other exchanges. But I think the more staff 
level exchanges, the better.
    Dr. Orszag. If I could add just one other thing, we also 
have responsibility for identifying mandates that are contained 
in legislation that are imposed on State and local governments. 
So, we have people who are actively scouring legislation for 
Federal changes that impose mandates on State and local 
governments.

       CBO deg.OPERATING UNDER THE CONTINUING RESOLUTION

    Senator Landrieu. Okay. Could you just comment on how your 
agency is coping with the continuing resolution, which was 
funded below the 2006 level?
    Dr. Orszag. We're making do, as we--you know, as you need 
to in such situations. But I would identify two things. One is 
information technology. We have delayed investments in 
computers and the normal cycle of replacing equipment, to a 
degree that's not sustainable over time. And the second thing 
is something that you had asked about earlier--again, with 
regard to recruiting, retaining, and motivating our people--the 
current situation, we can get by with for 1 year or maybe, you 
know, a short period of time, but there is this underlying 
pressure, which is that, out of our roughly 235 people, 218 are 
professional or management, and 39 percent of them are Ph.D.'s, 
and 38 percent have a master's degree. The market for those 
people in academia, at the Federal Reserve, and let alone the 
private sector, has taken off over the past several decades. 
And we're obviously operating under a different structure. So, 
that puts pressure on us. And the more that we have very tight 
funding, the more pressure we're under. And we, therefore, have 
to live off of--you know, we're lucky that we have a really 
great reputation and a lot of people want to come work for us, 
and that--despite my kids calling it the ``Congressional Boring 
Office''--most people in Washington think--seem to think it's a 
very exciting place to work. So, we will continue to try to 
uphold that.
    Senator Landrieu. I wish I could share with you what my 
kids say about my job.
    We won't even go there.
    Senator Landrieu. Ms. Chrisler, I don't have any particular 
questions. Actually, I do, but do you want to add anything 
before I get to them? And your testimony was excellent, but is 
there anything you can think you would like to add?

        OOC deg.WORKLOAD DUE TO CAPITOL VISITOR CENTER

    Ms. Chrisler. Thank you for the opportunity. One thing that 
I did not mention that I appreciate being given the opportunity 
to mention at this point is the Capitol Visitor Center. And our 
Office has been involved in the construction of the Capitol 
Visitor Center, and we're appreciative of the opportunity to 
provide technical assistance and technical advice, at this 
point in the construction, prior to occupancy. Once occupancy 
does take place, the Capitol Visitor Center is going to add 0.7 
million square feet of inspection jurisdiction to our Office, 
and there is a portion in our budget request to respond to that 
increased workload.
    So, I thank you for allowing me to present that.

   OOC deg.FIRE ALARM TESTING IN THE CAPITOL VISITOR CENTER

    Senator Landrieu. Do you believe that the amount of testing 
deemed necessary by the Architect of the Capitol and the fire 
marshal for the CVC is adequate? Have you been looking at that, 
the testing for the fire threat?
    Ms. Chrisler. Thank you for the question. We--our Office 
has been involved in discussions regarding the fire testing and 
the fire issues with respect to the Capitol Visitor Center. Our 
General Counsel, Peter Eveleth, is with me today, and he has 
been directly involved in those conversations. And, if I may 
ask your indulgence, I would ask that he be allowed to 
specifically respond to your question.
    Senator Landrieu. Okay, that would be terrific. And then, 
if your board member wants to come forward and just speak for a 
couple of minutes that would be terrific. You all could just 
pull up two additional chairs, if you'd like, or however. Y'all 
have the smallest budget and most people.
    So, David, if you all will just bear with them just for a 
minute. Give them a minute. Just because they're little doesn't 
mean they're not important.
    Mr. Eveleth. Good morning, Madam Chair. My name is Pete 
Eveleth. I'm the General Counsel of the Office of Compliance.
    With respect to the testing of fire alarms and the other 
systems in the CVC, we've been working closely with the fire 
marshal, and we have been reviewing various regulations that 
impact that. And we support the efforts of the fire marshal in 
that regard, that there should be complete 100-percent 
testing--acceptance testing of those alarm systems, given, 
particularly, the location of the facility, because it is 
underground, and a failure of any kind of systems would--could 
result in a catastrophe, given the number of people----
    Senator Landrieu. And we think that's going to take about 6 
months of complete testing? Is that what I've heard?
    Mr. Eveleth. I couldn't tell you exactly how much that's 
going to be. It may be--it may depend on how much pretesting is 
done in advance of the acceptance testing.
    Senator Landrieu. Okay.
    Ms. Camens. Madam Chair, good morning. I'm Barbara Camens, 
and I appreciate the opportunity to speak on behalf of the 
board of directors of the Office.
    I have two brief comments, both of which have to do with 
statutory changes which are sought by the board of directors.
    The first has to do with the issue of internal promotion 
within the Office. Our statute, the Congressional 
Accountability Act, requires that the four statutory positions 
that are appointed by the board be held by individuals who have 
not previously worked within the legislative branch during the 
previous 4 years. This provision essentially makes it 
impossible for any internal promotion within our Office. Our 
Acting Executive Director, Ms. Chrisler, was originally 
appointed by the board to the Deputy Executive Director 
position, and, given that fact, and given the current statutory 
language, the board is precluded from considering her for 
permanent appointment, notwithstanding the confidence that we 
have in her performance. And the issue is broader. Obviously, 
it has an impact on our entire Office staff. The board of 
directors is seeking a statutory change to give us the ability 
to fully access and utilize and reward, through internal 
promotion, the talent and accumulated experience which has been 
developed within our Office. And we do seek your support.
    Second, we are seeking some additional flexibility, in 
terms of compensation within our Office. Specifically, we're 
seeking an amendment to our statute to permit the establishment 
of two senior Executive Service positions, with regard to the 
Executive Director and the General Counsel. Our Office has 
recently undergone a comprehensive human capital needs study, 
and the conclusion of the outside consultant was that these two 
top manager positions share many attributes of SES positions in 
other agencies, and yet, we have a statute which imposes a 
salary cap. We are seeking a legislative change to allow the 
establishment of these SES positions. And we think it's 
crucial, both to the recruitment and the retention of the 
individuals of the high caliber that we need, the sense of 
leadership, the sense of vision that is necessary for leading 
our Office into the future.
    Thank you.
    Senator Landrieu. Thank you very much.

                     ADDITIONAL COMMITTEE QUESTIONS

    My questions have all been answered.
    Do you all have anything else that you want to add for the 
record? And, of course, the record is open, and you can submit 
anything in writing.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

                 Questions Submitted to David M. Walker
            Questions Submitted by Senator Mary L. Landrieu

                                STAFFING

    Question. I understand you would like to increase GAO staffing to 
3,750 over the next 5 or 6 years. Please explain how you arrived at 
this staffing level as the optimal level for GAO, what specific areas 
additional staff would be deployed to, and the results you would 
anticipate.
    Answer. Our initial estimate of this FTE level has been informed by 
(1) the recent update of our Strategic Plan for serving the Congress 
for fiscal years 2007-2012, (2) what we believe would be sufficient to 
minimize the existing and anticipated backlog in areas where we are 
experiencing supply and demand imbalances, and (3) address other 
critical needs. Our Strategic Plan for serving the Congress is updated 
through continuous consultations with the Congress.
    Our request for FTE's is then based on a systematic assessment of 
the workforce that we will need to achieve the strategic goals and 
objectives outlined in our Strategic Plan in support of the Congress 
and the American people. Annually, we develop a workforce plan that 
results from a detailed analysis of staffing considerations. Our 
workforce needs assessment is an essential element in our strategic 
approach to managing GAO--an approach that links human capital and 
performance management with strategic planning, budgeting, and 
performance accountability.
    Specifically, our FTE request is based on a thorough assessment of 
a number of factors including: Congressional requests and interests, 
statutory mandates, strategic priorities, emerging issues, current 
staffing data (FTE usage, attrition, consultant and contract usage, 
staff distribution by level and type), identified skill shortages, 
succession and knowledge retention issues, results achieved with staff 
resources, and budgetary considerations. As part of our workforce 
planning process, GAO managers identify the types of skills and 
experience and the level and numbers of employees needed to accomplish 
our anticipated workload. Relative to current and projected staffing 
data, our managers assess whether GAO has too few or too many staff 
working in each strategic area. Having received this input from our 
managers, the GAO leadership team makes fact-based decisions about our 
FTE needs and the optimal deployment of our staff resources to most 
efficiently accomplish our work.
    The 3,750 represents a preliminary estimate and a not to exceed 
number based on existing and expected workloads. It also assumes an 
increasing role for GAO in a range of areas addressed in our strategic 
plan and our 21st Century Challenges report of February 2005. For 
example, an increase in GAO's staffing level over the next 6 years is 
needed to allow us to address critical needs including supply and 
demand imbalances in areas such as health care, homeland security, the 
global ``war on terrorism,'' energy and natural resources, and forensic 
auditing, technology assessments, and other areas in need of 
fundamental reform. Also, additional staff are needed to support GAO 
efforts to be able to render our opinion on the consolidated financial 
statements of the U.S. government and the Department of Defense's 
financial management and related systems.

                          HUMAN CAPITAL ISSUES

    Question. Over the past few Congresses, you have received 
additional human capital flexibilities through two pieces of targeted 
legislation. How have these pieces of legislation helped GAO to become 
a model federal agency? Given some of the challenges you have faced 
within your agency over the past few years, what else do you believe 
needs to be done in order to improve upon your human capital situation?
    Answer. The GAO Personnel Flexibilities Act of 2000 (Public Law 
106-303), and the GAO Human Capital Reform Act of 2004 (Public Law 108-
271), are the two recent pieces of legislation that were enacted by 
Congress on behalf of GAO. GAO sought this legislation in order to help 
to reshape its workforce and recruit and retain staff with needed 
technical skills. The Comptroller General was granted permanent 
authority to offer voluntary early retirement and separation incentive 
payments to realign the workforce to meet budgetary constraints while 
reducing high-grade, managerial or supervisory positions and correcting 
skill imbalances. In fiscal years 2001 through 2006, GAO has granted 
voluntary early retirement to a total of 177 employees. These early 
retirements helped GAO reshape its workforce by providing retirement to 
mostly high-graded staff and allowed GAO to address succession planning 
and skill imbalance issues in addition to increasing the numbers of 
entry-level staff who can be hired. GAO was also able to establish 
senior level scientific, technical and professional positions with the 
same pay and benefits applicable to the Senior Executive Service. This 
authority has been used to employ GAO's Chief Actuary, Chief 
Statistician and Chief Economist. Another authority in the law allowed 
GAO to provide certain key employees with less than 3 years' service to 
earn 160 hours of annual leave each year rather than 104 hours. This 
has given GAO the ability to recruit individuals with significant work 
experience who might not have otherwise considered joining the federal 
workforce. GAO has just recently recruited 2 individuals under the 
Executive Exchange Program provided for in section 7 of Public Law 108-
371. This partnership will assist us in drawing on the expertise of 
individuals from accounting firms, information technology firms, 
consulting groups and other organizations to develop solutions to 
current and emerging issues. These innovative human capital management 
flexibilities have been instrumental in enabling GAO to become a world-
class professional services organization.
    We have other human capital challenges for which we may seek 
additional assistance from Congress to address:
  --Ensure that the bonus portion of our annual performance based 
        compensation counts for retirement as long as employee's total 
        basic pay plus performance based compensation is below the 
        maximum for his or her position. GAO has implemented a 
        performance-based compensation system that is designed to 
        enhance performance and accountability while helping the agency 
        maintain a competitive advantage in attracting, motivating, 
        retaining, and rewarding a high performing and quality 
        workforce. As part of this modern system, an employee's 
        performance-based compensation is distributed between a base 
        pay increase and a bonus. This latter payment is currently not 
        considered in calculating an employee's basic pay for purposes 
        of his/her annuity.
  --Eliminate GS-15, step 10, cap to allow the Comptroller General to 
        pay employees up to the rate for Executive Level III based on 
        the results of our periodic market pay studies. GAO has a 
        highly diversified and skilled workforce that performs work of 
        the highest level and importance. Presently, employees other 
        than those in the Senior Level or Senior Executive Service are 
        limited by statute to a pay rate that cannot exceed GS-15, step 
        10. According to recent market surveys commissioned by GAO, 
        some of GAO's professionals, such as economists and attorneys, 
        cannot be compensated commensurate with market rates because of 
        this statutory limitation. This is problematic, since GAO must 
        compete for its staff with the private sector and other public 
        agencies that can pay more. For example, the Departments of 
        Defense and Homeland Security, and the Federal Deposit 
        Insurance Corporation and other agencies concerned with 
        financial matters are not subject to the GS-15 limit.
  --Eliminate the prohibitive cost associated with buyouts by amending 
        Public Law 106-303 to remove the requirement, consistent with 
        the rest of the federal government, that GAO make additional 
        contributions to retirement funds in the case of voluntary 
        separation incentive payments (VSIP) to GAO employees. This 
        payment renders this flexibility virtually unusable, especially 
        in these times of budget constraint.
    Question. In 2005 and 2006, GAO conducted a restructuring of Band 
II staff and placed employees in one of two pay levels. What was the 
impetus for this effort? What are you doing to address the concerns 
that have been raised?
    Answer. As part of our overall human capital transformation 
efforts, GAO has developed and implemented a validated competency-based 
appraisal system and modern market-based and skills, knowledge, and 
performance-oriented compensation system. When developing the Analysts' 
competency-based performance system, some Band II staff responded that 
certain activities associated with staff leadership were critical to 
their jobs and others did not. This bimodal response indicated that 
different roles and responsibilities were being performed by staff 
within the band. As a next step in its human capital transformation, 
GAO proceeded to develop a compensation system that would:
  --Enable GAO to attract and retain top talent;
  --Result in equal pay for work of equal value over time;
  --Reflect the roles and responsibilities that staff are expected to 
        perform;
  --Be reasonable, competitive, performance-oriented; and based on 
        skills, knowledge and roles;
  --Be affordable and sustainable based on current and expected 
        resource levels; and
  --Conform to applicable statutory limits.
    The purpose of restructuring the Band II position was to clearly 
distinguish between the roles and responsibilities of those analysts 
who are generally individual contributors and/or sometimes provide 
overall leadership on selected engagements and those who are expected 
to consistently take on a leadership role for a broad range of 
engagements over time. When comparing Band II roles, responsibilities 
and pay to the market, a Watson Wyatt market based compensation study 
supported the CG decision that these two roles should have different 
pay ranges. By better linking roles and responsibilities to the 
appropriate market-based pay ranges, senior analysts will be more 
equitably compensated.
    Since the initial restructuring and placement of staff into the 
Band IIA and IIB pay levels, GAO has conducted 2 competitive placement 
opportunities resulting in the placement of additional staff into Band 
IIB. To address concerns regarding compensation for Band IIA employees, 
we decided for 2007 pay decisions to provide 100 percent of the 
performance based compensation amount to those Band IIA staff whose 
salaries were above the Band IIA maximum rate (i.e., ``transition 
staff''). In 2006, Band IIA transition staff received only 50 percent 
of their performance based compensation.
    Question. It is our understanding that you relied upon the results 
of a market based pay study to establish pay ranges for GAO staff and 
to limit the compensation of those employees who were paid in excess of 
these ranges. CRS has stated that these limitations have had the impact 
of significantly reducing the salary and future pension benefits of 
affected GAO staff. Can you share with the committee the data that GAO 
relied upon to conclude that GAO's Analyst Band II staff were overpaid 
and that such actions were therefore justified?
    Answer. GAO has established market based compensation ranges for 
major occupational groups. These ranges are based on salary surveys 
conducted by Watson Wyatt Worldwide, a leading human capital consulting 
firm. Watson Wyatt's process for developing the ranges entailed meeting 
with GAO occupational experts to develop an understanding of GAO's 
positions, linking these positions to comparable jobs in comparator 
organizations, and collecting salary data from various sources for such 
positions. Among the sources of salary data used by Watson Wyatt were 
the following surveys: Abbot Langer Consulting and Legal, Altman Weil 
Legal, Cordom Not-for-Profit, Mercer IT and Watson Wyatt Data for 
Professional positions and others. We would be happy to brief the 
Committee on the extensive data, if requested, and provide further 
details.
    Question. Federal employees in the Washington, DC area received 
across-the-board and locality adjustments resulting in base pay 
increases of 2.64 percent in January 2007. What increase was provided 
to GAO staff? What was the basis for GAO's increase and why does it 
differ from other federal employees?
    Answer. In 2007, the Comptroller General authorized a 3 percent 
increase in the salary ranges applicable for GAO employees within the 
ranges. A 2.4 percent increase in the annual salary for all employees 
performing at a satisfactory level who were within competitive 
compensation limits was provided. This percentage was based on the 
annual update of competitive compensation trends conducted by Watson 
Wyatt. In addition, GAO employees were also eligible for performance-
based compensation (PBC) adjustments. PBC is based on individual 
performance and is calculated as a percentage of the ``competitive'' or 
market rate for the employee's band and location. An employee with an 
average appraisal would receive a PBC amount equal to 2.15 percent of 
the competitive rate for his or her position as base pay and/or as 
bonus. Except for Band IIB staff subject to the speed bump who received 
their entire PBC amount in the form of a bonus, 100 percent of the 2007 
PBC amount was provided to all other staff as an increase to base pay 
not to exceed the maximum rate applicable to the employee's position.
    The Comptroller General's determination regarding the amount of the 
annual adjustment was based on a consideration of the criteria set 
forth in 31 U.S.C. 732(c)(3). Among the data considered by the 
Comptroller General was salary survey information indicating that 
consulting, professional, scientific and technical services 
organizations actually adjusted ranges by an average of 2.7 percent in 
2006 and projected an adjustment of 3 percent in 2007. Prior to the 
passage of Public Law 108-371, GAO employees' salaries were given the 
same base and locality increase as the General Schedule. As provided in 
31 U.S.C. 732(c)(3), GAO employees' increases were decoupled from the 
General Schedule and the authority to determine the amount of the 
increase was granted to the Comptroller General.
    The average across-the-board increase provided to executive branch 
employees was 2.2 percent nation-wide. In addition, most executive 
branch employees receive within grade increases on a regular basis and 
the annual value of such an increase is approximately 1.6 percent. GAO 
employees received a 2.4 percent across-the-board increase and were 
eligible for additional performance based pay. An employee with an 
average appraisal would receive a performance based pay amount equal to 
2.15 percent of the competitive rate for his or her position.
    Question. Each year, federal employees' pay adjustments are 
effective the first pay period beginning on or after January 1. Our 
understanding is that GAO employees did not receive their pay 
adjustments in January. When did GAO provide its across the board 
increase? Why is the date different than and later than other 
legislative agencies, given that the entire government was subject to 
the same budget uncertainties?
    Answer. The effective date of GAO employees' pay adjustment was 
February 18, 2007. Under 31 U.S.C. 732(c)(3), the Comptroller General 
is authorized to set the date of GAO employees' pay adjustments as well 
as the amount. GAO delayed the annual pay adjustment because we did not 
receive the funding requested, to ensure that we would not negatively 
impact our ability to operate effectively, and to avoid unpaid 
furloughs of our employees.

                       GAO TECHNOLOGY ASSESSMENT

    Question. Mr. Walker, there is interest once again in re-funding 
the old Office of Technology Assessment. In response to such interest 
back in 2002, our Committee established a pilot program for GAO to 
conduct technology assessment. How successful was that effort, and do 
you believe GAO can continue to effectively conduct non-partisan 
forward-looking technology assessment work? GAO has completed 4 
technology assessment jobs in the past couple of years, which were 
requested in a bi-cameral, bi-partisan fashion. Were those work-
products well-received and are the findings being utilized? Can you 
describe GAO's in-house capacity for technology assessment?
    Answer. In response to the committee's direction to establish a 
technology assessment pilot program at GAO, we have completed four 
technology assessment reports.\1\ Our products have been relevant, 
timely, and well-received. For example, we testified before three 
different congressional committees on our findings in our biometrics 
report. As a result of one of these hearings, and using information 
from our biometrics report, a bill was introduced in the House in July 
2004, directing the Transportation Security Administration to establish 
system requirements and performance standards for using biometrics, and 
to establish processes (1) to prevent individuals from using assumed 
identities to enroll in a biometric system and (2) to resolve errors. 
These provisions were later included in an overall aviation security 
bill and were eventually included in the Intelligence Reform and 
Terrorism Prevention Act of 2004, enacted in December 2004. The 
biometrics report is still relevant, even after 4 years, in examining 
the numerous biometrics programs being developed in the federal 
government.
---------------------------------------------------------------------------
    \1\ Technology Assessment: Using Biometrics for Border Security, 
GAO-03-174 (November 15, 2002); Technology Assessment: Cybersecurity 
for Critical Infrastructure Protection, GAO-04-321 (May 28, 2004); 
Technology Assessment: Protecting Structures and Improving 
Communications during Wildland Fires, GAO-05-380 (April 26, 2005); and 
Technology Assessment: Securing the Transport of Cargo Containers, GAO-
06-68SU (January 25, 2006).
---------------------------------------------------------------------------
    GAO has designated cybersecurity as a high-risk area since 1997 and 
the technologies discussed in our technology assessment report on 
cybersecurity play a key role in addressing this area.\2\ In 2005, we 
testified on the findings of our report on technologies that can be 
used to protect structures and improve communications during wildland 
fires. Senator Bingaman sent a letter to the Comptroller General 
thanking us for this report, stating that such studies are important 
tools for understanding the technology implications of policies 
considered by Congress. In March 2006, Senator Bingaman sent another 
letter to the Comptroller General thanking us for our timely, thorough, 
and well-received report on cargo security technologies, which he 
stated will help the Congress perform its oversight functions with 
regard to port and container security.
---------------------------------------------------------------------------
    \2\ High-Risk Series: An Update, GAO-07-310 (January 2007).
---------------------------------------------------------------------------
    A technology assessment function in the legislative branch can be 
beneficial. For congressional decision-makers, an independent 
technology assessment study can make complex scientific and technical 
issues more accessible by analyzing the values and tradeoffs of various 
technologies and presenting them in a public policy context that can be 
applied directly into the legislative process. Should the Congress 
determine the need for this type of analysis and that it would be more 
prudent to place the function in an existing organization rather than 
create a new one, we believe that GAO is qualified to take on this 
function. A GAO line of work on technology assessments would not be a 
departure from its normal mission, but a process of differentiating, 
defining, and implementing new work methods. GAO's focus on producing 
quality reports that are professional, objective, fact-based, fair, 
balanced, nonideological, and nonpartisan is consistent with the needs 
of an independent legislative branch technology assessment function.
    Further, GAO's work already covers virtually every area in which 
the federal government is or may become involved. To accomplish this 
work, GAO maintains a workforce of highly trained professionals with 
degrees in many academic disciplines, including accounting, law, 
engineering, public and business administration, economics, and the 
social and physical sciences. More specifically, GAO's Center for 
Technology and Engineering, which led our pilot program in technology 
assessment, is staffed by engineers and scientists with experience in 
systems engineering, software engineering, real-time systems, computer 
security, cost estimation, and biological technologies. To leverage our 
multidiscipline workforce, we have staffed our technology assessments 
with both staff from the Center for Technology and Engineering and 
analysts in our mission teams, such as Homeland Security and Justice, 
Information Technology, and Natural Resources and Environment.
    While GAO is capable of conducting the work, we believe there are 
critical factors that need to be considered to conduct technology 
assessments on a permanent basis at GAO. First, we would need to define 
an operational concept for this line of work, adapted from current 
tested processes and protocols. At a minimum, this capability would 
require: (1) developing and maintaining relationships with relevant 
congressional committees to facilitate the selection of technology 
assessment topics; (2) keeping congressional committees abreast of the 
results of technology assessments, meeting with members and staff, and 
preparing testimony statements for relevant hearings; (3) developing 
and maintaining relationships with key external experts and 
organizations to remain informed about emerging technologies and 
potential related public policy issues; (4) developing, documenting, 
and refining processes for conducting technology assessments; (5) 
consulting with independent experts and conducting peer review of 
reports; (6) developing standards and procedures for issuing technology 
assessment reports as distinct from our audit products; and (7) 
developing metrics to measure the value of the technology assessment 
capability.
    A second critical factor is the estimation of resources for 
conducting technology assessments. To establish a basic capability to 
conduct one assessment annually, GAO would require four additional 
full-time staff, at an estimated cost of about $723,000 ($573,000 for 
four FTEs and $150,000 to obtain contract assistance or provide 
expertise not readily available within GAO). For higher demands, 
additional technology assessment requests would require--depending on 
economies of scale, timing, and scope of work--incremental additional 
resources.

             GAO OPERATIONS UNDER THE CONTINUING RESOLUTION

    Question. Mr. Walker, according to your statement, GAO has had to 
operate in a constrained manner this year because of resource 
shortfalls under the continuing resolution. Are there significant 
numbers of Congressional requests GAO is turning down, or is it taking 
longer to get work done? What is your current backlog of Congressional 
requests? How does this compare to previous years?
    Answer. We are only a few months into the new Congress and we see 
several trends which lead us to believe that Congress will be 
requesting much more of GAO. For instance, our current backlog as of 
March 2007 has grown above 2005 and 2006 levels. Also, during our 
outreach for our upcoming strategic plan update, we have been told that 
demand will likely increase. We are seeing this in the recent surge in 
requests for GAO testimonies during the Congress's first few months. We 
have been quite fortunate that much of this early testimony has been 
based on previous work. Constraints on FTEs due to the current funding 
situation for the remainder of fiscal year 2007 will likely prevent us 
from being as responsive in the future as Congress begins to request 
new work for the second session.
    More specifically, we are currently experiencing supply and demand 
imbalances in responding to congressional requests in areas such as 
health care, homeland security, the global ``war on terrorism,'' energy 
and natural resources, and forensic auditing. In fiscal year 2007, we 
will experience a reduction of 35 FTEs--from 3,194 to 3,159--from our 
fiscal year 2006 FTE level, which will exacerbate the problem. In 
fiscal year 2008, we are seeking an FTE increase in teams conducting 
work related to homeland security, defense, natural resources and 
energy, and health care to help address these supply and demand 
imbalances. We will also be seeking your commitment and support to 
provide the funding needed to increase GAO's staffing to a to-be-
determined level not to exceed 3,750 over the next 6 years in order to 
address critical needs, including supply and demand imbalances, high-
risk areas, 21st Century Challenges questions and other areas of the 
federal government in need of fundamental reform, and technology 
assessments. In addition, as we get closer to when GAO may be able to 
render our opinion on the consolidated financial statements of the U.S. 
government and the Department of Defense's financial management and 
related systems, we will need to increase our workforce capacity.
    GAO has made significant progress in reducing the very large 
backlog of Congressional requests over the past several years so that 
we can better support the Congress, but this has been very difficult to 
achieve. We are doubtful that it will continue based on our outreach 
efforts with the new Congress and the constrained resource level we 
will be operating at through fiscal year 2007. As of March 31, 2007, we 
had a workload imbalance of 419 requests--a growing increase over the 
last two years. The general result of GAO's initiative to be more 
responsive to the Congress is seen in the following table showing the 
pending requests at the end of each year.

            PENDING REQUESTS AS OF DECEMBER 31ST OF EACH YEAR
------------------------------------------------------------------------
                                                               Requests
------------------------------------------------------------------------
2002.......................................................          463
2003.......................................................          390
2004.......................................................          492
2005.......................................................          358
2006.......................................................          329
2007 \1\...................................................          419
------------------------------------------------------------------------
\1\ As of March 31, 2007

    Last year (fiscal year 2006), we accepted about 85-88 percent of 
the requests received. Of these, roughly one-fourth (22 percent) were 
delayed. Of those not accepted, some were declined, withdrawn, sent to 
an Executive agency, or were pending a decision by GAO on whether we 
are able to accept the request. We also have done and are doing work, 
on such topics as Iraq and Katrina, under the Comptroller General's 
authority because there is such broad congressional interest in them. 
We believe this has also served to limit the number of requests we 
would have received on these issues. Due to the increasing supply and 
demand imbalances, GAO typically has been unable to accept requests 
from individual members in recent years and has worked to merge 
requests so that we can do related work for several requesters.
    Our requested work has also been taking somewhat longer to start--
almost doubling in some areas--resulting in longer timeframes to 
respond to the requester. The table below shows the average number of 
months that it has taken us to start mandates (priority 1), requests 
from Committee chairs and ranking members (priority 2), and requests 
from members (priority 3).

                AVERAGE DURATION TO INITIATE ENGAGEMENTS
                               [In months]
------------------------------------------------------------------------
                                       2004         2005         2006
------------------------------------------------------------------------
Priority:
    1 \1\........................         1.82         2.49         2.74
    2............................         2.93         2.49         3.91
    3............................         2.74         4.41         6.37
------------------------------------------------------------------------
\1\ Prior to the update of GAO's Congressional Protocols in July 2004,
  priority 1 designation included requests from committee chairs and
  ranking minority members.

                            GAO SUPPLEMENTAL

    Question. GAO is requesting $374,000 for oversight work in Iraq. 
Why can't GAO absorb this relatively small amount of funding within its 
$500 million budget?
    Answer. Because about 80 percent of our budget provides funds to 
support our staff--our most important asset--and the balance of our 
budget contains many mandatory operating expenses--such as rent, 
utilities, and contracts for ongoing operations--we have very limited 
flexibility to make adjustments. In fiscal year 2007, we received 
significantly less funding than we had requested. In order to operate 
within the constraints of the fiscal year 2007 joint resolution, our 
Operating Plan holds most of our budget accounts at or below fiscal 
year 2006 funding levels, resulting in reduced operating levels, 
deferred hiring to address succession planning challenges and skill 
gaps, and delayed investments geared to further increasing productivity 
and effectiveness. While we have allocated funds to address needed 
oversight work in Iraq, additional funds are needed to allow us to 
maintain a continuing presence in Baghdad.
    Question. GAO has an extensive array of performance targets and 
measures. Your testimony indicates that you met most of your 
performance targets. How often do you reevaluate those measures to see 
whether they are responsive to GAO and the Congress? Do you have them 
evaluated by an independent party, such as during a peer review?
    Answer. GAO's performance measures include those measures 
traditionally used by auditing and professional services firms. 
Annually, GAO reviews its performance targets and continuously 
reevaluates its performance measures. In fact, it is rare for a year to 
pass without some refinements in our performance indicators to help us 
better manage our agency to support the Congress for the benefit of the 
American people. For example, in the past few years, we have added 
measures to better assess how our support units are doing their jobs; 
changed our measure for determining how timely our products are by 
obtaining feedback directly from our congressional clients; and 
eliminated measures, such as the number of recommendations made, that 
we thought were no longer useful. Further, as we continue to gain more 
experience, we anticipate making additional changes so that we can 
better support the Congress.
    In addition to the continuous evaluations by our Office of Quality 
and Continuous Improvement, we routinely receive suggestions from such 
organizations as (1) GAO's Inspector General, who annually reviews some 
of the measures before they are included in the annual Performance and 
Accountability report, (2) an independent Audit Advisory Committee as 
part of their annual review of GAO's financial statements and 
performance data included in our annual Performance and Accountability 
Report, and (3) independent reviewers for the Association of Government 
Accountants (AGA) as part of their annual process to evaluate 
Performance and Accountability Reports submitted by participating 
executive branch agencies and GAO.
    Specifically, staff in our Inspector General's (IG) office test our 
compliance with procedures related to our performance data on a 
rotating basis over a 3-year period. During fiscal year 2006, the IG 
reviewed accomplishment reports totaling 96 percent of the total dollar 
value reported for financial benefits, including most accomplishment 
reports of $100 million or more, and found that GAO had a reasonable 
basis for claiming these benefits. Their suggestions have also resulted 
in policy clarifications or changes in the performance measures 
reported. For example, the IG's review of fiscal year 2005 qualitative 
measures led to GAO discontinuing public reporting of these measures 
and retaining them for internal use. The 3-member Audit Advisory 
Committee is composed of individuals who are independent of GAO and 
have outstanding reputations in public service or business with 
financial or legal expertise. Two members are former IRS Commissioners 
and the other member is a former Controller of the Office of Federal 
Financial Management in OMB. The comments we receive from the committee 
members have, among other things, helped to ensure transparency in our 
Performance and Accountability Report when we describe our performance 
measurement processes and results. Comments that we receive as part of 
the AGA's Certificate of Excellence in Accountability Reporting program 
also help improve the transparency and clarity of our performance 
reporting.
    GAO also recognizes that our performance measures can be 
supplemented by other information. We do this by taking such actions as 
outreaching for feedback on our performance to our congressional 
clients on an annual basis, participating in periodic oversight 
hearings of GAO's performance and operations, using our audits to 
identify best practices and then applying them to GAO's operations, 
listening closely to Congressional clients who provide unsolicited 
comments throughout the year, and seeking continuous feedback from our 
clients as part of our web-based survey to measure satisfaction with 
our most significant written products and testimonies.

                          SUBCOMMITTEE RECESS

    Senator Landrieu. The subcommittee stands in recess. Thank 
you.
    [Whereupon, at 11:10 a.m., Friday, March 16, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
