[Senate Hearing 113-]
[From the U.S. Government Publishing Office]



 
         LEGISLATIVE BRANCH APPROPRIATIONS FOR FISCAL YEAR 2015

                              ----------                              


                        TUESDAY, MARCH 11, 2014

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:43 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Jeanne Shaheen (chairwoman) 
presiding.
    Present: Senators Shaheen, Coons, Hoeven, and Boozman.

                    GOVERNMENT ACCOUNTABILITY OFFICE

STATEMENT OF GENE L. DODARO, COMPTROLLER GENERAL


              opening statement of senator jeanne shaheen


    Senator Shaheen. Welcome, everyone. I am sorry to be a 
little late. I was in another committee business meeting. So I 
apologize and at this time want to call the subcommittee to 
order.
    I am very pleased that Ranking Member Hoeven is here for 
the hearing, and we hope to have some additional members coming 
in shortly.
    I have a full statement that I will submit for the record. 
So I will only read excerpts. As you all know, this is the 
subcommittee of the Appropriations Committee on the legislative 
branch, and I am pleased today to kick off the fiscal year 2015 
appropriations cycle for the subcommittee.
    We start this year coming off of a bipartisan and bicameral 
budget compromise that provided caps for appropriations 
spending for both fiscal year 2014 and fiscal year 2015. The 
new budget caps ensure that Federal spending will operate 
within agreed-upon fiscal constraints.
    While I think we would all agree that the budget wasn't 
everything we wanted, it certainly empowers the Appropriations 
Committee to do its job, and that is a very good thing. Our job 
is to allocate resources for individual Federal agencies and 
programs based on the needs of the American people.
    Today, we are going to start by reviewing the fiscal year 
2015 budget request for both the Government Accountability 
Office and the Congressional Budget Office. And I think it is a 
fitting way to begin our work on fiscal year 2015 because both 
GAO and CBO provide critical support to Congress and 
particularly to this committee.
    I want to ensure that both agencies have the resources they 
need to continue conducting your critical work while also 
ensuring that we make the best use of taxpayer dollars in 
accomplishing the missions of Congress.
    So let me welcome our witnesses today. Mr. Gene Dodaro is 
the Comptroller General of the Government Accountability 
Office. Welcome. Thank you for being here.
    And Dr. Douglas Elmendorf is the Director of the 
Congressional Budget Office. Welcome. Thank you for being here.
    For fiscal year 2015, GAO and CBO both share a similar goal 
of returning to normal business after several years of budget 
uncertainty and sequestration. Because both agencies' budgets 
are comprised almost entirely of personnel costs, sequestration 
has forced both GAO and CBO to let staffing levels dwindle and 
defer training.
    For fiscal year 2014, this subcommittee provided a modest 
amount of additional funding to restore many of the staffing 
losses at GAO and CBO. And now for fiscal year 2015, both 
agencies are asking to maintain these new restored staffing 
levels and to return to investing in training and deferred 
needs like IT infrastructure.
    GAO requests $556 million for fiscal year 2015 to continue 
its mission as the audit, evaluation, and investigative arm of 
Congress. The request represents a 2.1 percent increase to the 
2014 level, mainly for adding the full-year costs of new 2014 
hires to the base funding.
    CBO requests $46 million for fiscal year 2015 to continue 
its mission to provide Congress with nonpartisan, objective 
budget analysis. The request represents an increase of less 
than 1 percent, like GAO, mainly for adding the full-year costs 
of new 2014 hires to their base funding.
    I look forward to discussing with both of you your efforts 
to restore the lost expertise that has happened over the last 
few years as the result of sequestration so that we can best 
serve the needs of Congress. And also I look forward to 
discussing any other challenges that you may be facing.
    Now I am going to turn over to my ranking member, Senator 
Hoeven, for his remarks. Senator Hoeven.


                    statement of senator john hoeven


    Senator Hoeven. Thanks. I would like to thank Chairman 
Shaheen for her work on the committee.
    And thanks both to you, Mr. Dodaro, and to you, Dr. 
Elmendorf, for being here and for the work that you do, GAO and 
CBO, two agencies that have tremendous impact on what is done 
here in the Congress, both in terms of making sure that we are 
doing things accurately and understanding exactly what the 
costs of the legislation is and how it impact our citizens in 
terms of the work at GAO, but also then in trying to craft 
legislation and getting it scored from the perspective of CBO. 
Both of you and your agencies have incredible impact on really 
the course of public policy and, therefore, on our country.
    And so, as we work on your budgets, it is important that we 
do everything we can to make sure that you are able to operate 
as effectively as possible because I think the impact of your 
work is truly profound. And of course, it is a very much 
people-driven business, very similar in that respect.
    And I would say that also an IT-driven business, but really 
people. It is really about having sharp, hard-working people 
doing a really good job for the citizens of this great country.
    And so, as we make this evaluation in terms of your budget, 
I think we want to be as helpful as we can. Obviously, we are 
in a resource-constrained environment. But in the case of both 
your agencies, the potential to generate an incredible benefit-
cost relationship is there in a big, big way.
    And so, I am certainly mindful of that. I know our chairman 
is. But really, my hope is, as we work through this budget 
process with you, we do the best job we can to make sure that 
you have the people that you need to do your work because it 
does have such a big, big impact on the public policy that we 
pass. And of course, ultimately then, of course, on the 
citizens of our country.
    So thanks so much for being here.
    Senator Shaheen. Thank you very much, Senator Hoeven.
    I am going to ask you to begin, Mr. Dodaro, followed by Dr. 
Elmendorf. And if I could ask you to limit your spoken remarks 
to about 5 minutes, we will take your full statement for the 
record, and that way, we will have plenty of time for Q&A.
    So, Mr. Dodaro.


                  summary statement of gene l. dodaro


    Mr. Dodaro. Very good. Thank you very much, Chairwoman 
Shaheen and Ranking Member Senator Hoeven.
    Good afternoon to you. The first thing I would like to do 
today is thank you very much for your support for the fiscal 
year 2014 levels. It was much appreciated that you showed trust 
and confidence in us. We will continue to provide a good return 
on that investment.
    In fiscal year 2013, as a result of GAO recommendations, we 
generated financial benefits of over $51 billion, which is 
about a $100 return for every $1 invested in GAO. In addition 
to that, there were billions of dollars in financial benefits 
that were included in the Consolidated Appropriations Act of 
fiscal year 2014, which helped offset the sequester based on 
GAO's work. This involved areas such as raising aviation 
security fees, filling the Strategic Petroleum Reserve more 
efficiently, and increasing the premiums for the Pension 
Benefit Guaranty Corporation, which is on our high-risk list.
    In addition, we had over 1,300 other benefits as a result 
of our work that helped improve the efficiency and 
effectiveness of Federal programs, and improved public health 
and safety. These benefits also provide help to the Congress to 
make informed decisions and provide effective oversight over 
the executive branch activities.
    As you indicated, Chairwoman Shaheen, in your opening 
statement, we are asking for funds for 2015 in order to 
maintain staffing. With the support that you have given us for 
2014, our goal is to increase our full-time equivalent resource 
base from 2,849 to 2,945. So that is an increase of almost 100 
FTE equivalents.
    This is a challenge since we received the appropriation 
about 4 months into the fiscal year. We are trying to revise 
our hiring practices to ensure that we can bring people in on 
time. I am convinced we can bring in quality people. In order 
to get them all onboard and on time, we have got a good plan. 
So I am comfortable that we are going to be able to do that, 
but it will be a challenge.
    Also I am convinced that, ultimately, our full-time 
equivalent level should be around 3,250. This year, recognizing 
the constrained environment, we have asked to maintain staffing 
at the 2,945 level, and I think it is sufficient.
    I have had a number of meetings with the chairs and ranking 
members of the standing committees of the Congress. We serve 
about 95 percent of the standing committees of the Congress and 
two-thirds of the subcommittees, and I try to meet with as many 
subcommittee leaders as I can.
    So based on those meetings and our strategic planning 
efforts with the committees throughout the Congress, our Fiscal 
Year 2015 request will enable us to meet the highest-priority 
needs of the Congress. We will continue to provide a good 
return on investment in areas where cost savings can be 
achieved in a targeted manner that won't have unintended 
consequences and we will also identify opportunities to enhance 
revenue.


                           prepared statement


    I appreciate the opportunity to be here today to discuss 
our request with you. Thank you again for your support, and I 
will be happy to answer questions at the appropriate time.
    [The statement follows:]
                  Prepared Statement of Gene L. Dodaro
                             gao highlights
    Highlights of GAO-14-429T, a testimony before the Subcommittee on 
Legislative Branch, Committee on Appropriations, U.S. Senate.
                               background
    GAO's mission is to support Congress in meeting its constitutional 
responsibilities and to help improve the performance and accountability 
of the Federal Government for the benefit of the American people. GAO 
provides nonpartisan, objective, and reliable information to Congress, 
Federal agencies, and to the public and recommends improvements, when 
appropriate, across the full breadth and scope of the Federal 
Government's responsibilities.
    GAO's work supports a broad range of interests throughout Congress. 
In fiscal year 2013, GAO received requests for our work from 95 percent 
of the standing committees of Congress and almost two-thirds of their 
subcommittees. Additionally, senior GAO officials testified at 114 
hearings on national and international issues, before 60 committees and 
subcommittees that touch on virtually all major Federal agencies.
    GAO remains one of the best investments in the Federal Government, 
and GAO's dedicated staff continues to deliver high quality results. In 
fiscal year 2013 alone, GAO's work yielded $51.5 billion in financial 
benefits--a return of about $100 for every dollar invested in GAO. 
Since fiscal year 2003, GAO's work has resulted in:
  --over \1/2\ trillion dollars in financial benefits; and
  --about 14,500 program and operational benefits that helped to change 
        laws, improve public services, and promote sound management 
        throughout government.
    GAO is requesting a budget of $525.1 million to preserve its staff 
capacity and continue critical information technology and building 
infrastructure investments.
    View GAO-14-429T. For more information, contact Gene L. Dodaro at 
(202) 512-5500 or [email protected].
                    fiscal year 2015 budget request
    GAO's fiscal year (FY) 2015 budget request of $525.1 million seeks 
an increase of 3.9 percent to maintain staff capacity as well as 
continue necessary maintenance and improvements to our information 
technology (IT) and building infrastructure. Additionally, receipts and 
reimbursements, primarily from program and financial audits, and rental 
income, totaling $30.9 million are expected in fiscal year 2015.
    GAO recently issued our draft Strategic Plan for Serving Congress 
in fiscal years 2014-2019. The plan outlines our proposed goals and 
strategies for supporting Congress's top priority. I also have met with 
the chairs and ranking members of many of the standing committees and 
their subcommittees to hear firsthand feedback on our performance, as 
well as prioritize requests for our services to maximize the return on 
investment.
    In order to address congressional priorities, and fulfill GAO's 
mission, a talented, diverse, high-performing, knowledgeable workforce 
is essential. Workforce and succession planning remain a priority for 
GAO. A significant proportion of our employees are currently retirement 
eligible, including 34 percent of our executive leadership and 21 
percent of our supervisory analysts.
    In 2014, through a targeted recruiting strategy to address critical 
skills gaps, GAO plans to boost our employment level for the first time 
in 3 years to 2,945 full-time equivalents (FTE). The requested fiscal 
year 2015 funding level will preserve strides planned for fiscal year 
2014 to increase our staff capacity. In conjunction with the ongoing 
recruiting efforts and planning, we will revive our intern program and 
hire and train an increased number of entry level employees. This will 
reverse the downward staffing trajectory, develop a talented cadre of 
analyst and leaders for the future, achieve progress in reaching an 
optimal FTE level of 3,250 FTE, and assist GAO in meeting the high 
priority needs of Congress.
    We also take great pride in reporting that we continue to be 
recognized as an employer of choice, and have been consistently ranked 
near the top on ``best places to work'' lists.
    Improvements to our aging IT infrastructure will allow GAO to 
further streamline business operations, increase staff efficiency and 
productivity, as well as improve access to information. Planned 
investments in IT will address deferred upgrades and enhance our 
technology infrastructure to support an array of engagement management, 
human capital, and financial management systems.
    We also plan to continue upgrading aging building systems to ensure 
more efficient operations and security. Areas of focus include, 
increasing the energy efficiency and reliability of the heating, 
ventilation, and air conditioning system; enhancing continuity planning 
and emergency preparedness capabilities; and addressing bomb blast 
impact mitigation efforts.
                                 ______
                                 
    Chairwoman Shaheen, Ranking Member Hoeven, and Members of the 
Subcommittee:
    On behalf of the U.S. Government Accountability Office (GAO), I 
appreciate the opportunity to discuss our fiscal year (FY) 2015 budget 
request. I also want to thank the subcommittee for its continued 
support of GAO and the confidence you have shown in our efforts to help 
support the Congress.
    With Congress's support, our fiscal year 2014 funding will allow 
GAO to increase its staff capacity to 2,945 full-time equivalents 
(FTE). This level reverses a downward FTE trajectory and allows us to 
make progress towards our optimal FTE level of 3,250.
    GAO's fiscal year 2015 budget request of $525.1 million represents 
an increase of 3.9 percent that will preserve the 2,945 FTE level 
planned for fiscal year 2014, as well as allow for needed maintenance 
and improvements to our information technology (IT) and building 
infrastructures. This will ensure we have the staff capacity to support 
Congress in carrying out its responsibilities and oversight.
                   assisting congress and the nation
    GAO remains one of the best investments in the Federal Government, 
and our dedicated staff continues to deliver high quality results. In 
fiscal year 2013 alone, GAO provided services that spanned the broad 
range of Federal programs and activities. We received requests for our 
work from 95 percent of the standing committees of Congress and almost 
two-thirds of their subcommittees. We reviewed a wide range of 
Government programs and operations including those that are at high 
risk for fraud, waste, abuse, and mismanagement. GAO also reviewed 
agencies' budgets as requested to help support congressional 
decisionmaking.
    Last year, our work yielded significant results across the 
Government, including $51.5 billion in financial benefits--a return of 
about $100 for every dollar invested in GAO. Also, in fiscal year 2013, 
we issued 709 reports and made 1,430 new recommendations. The findings 
of our work were often cited in House and Senate deliberations and 
committee reports to support congressional action, including improving 
Federal programs on our High Risk list; addressing overlap, 
duplication, and fragmentation; and assessing defense, border security 
and immigration issues. Our findings also supported the Bipartisan 
Budget Act of 2013, in areas such as aviation security fees, 
unemployment insurance, improper payments to inmates, the strategic 
petroleum reserve, and the contractor compensation cap.
    Senior GAO officials also provided testimony 114 times before 60 
committees or subcommittees on a wide range of issues that touched 
virtually all major Federal agencies. A list of selected topics 
addressed is included in Appendix I.
Financial Benefits
    GAO's findings and recommendations produce measurable financial 
benefits through congressional action or agency implementation. 
Examples of fiscal year 2013 financial benefits resulting from 
congressional or Federal agency implementation of GAO recommendations 
include:
  --$8.7 billion from reducing procurement quantities of the Joint 
        Strike Fighter Program: DOD decreased near-term procurement 
        quantities in three successive budget submissions to lessen 
        concurrency and the associated cost risks in light of our 
        numerous recommendations citing the F-35 Joint Strike Fighter 
        program's very aggressive and risky acquisition strategy, 
        including substantial overlap among development, testing, and 
        production activities.
  --$2.6 billion from revising the approach for the Navy's Next 
        Generation Enterprise Network (NGEN) Acquisition: Our 
        recommendations led Navy to revise its NGEN acquisition 
        strategy--which was riskier and potentially costlier than other 
        alternatives identified due to a higher number of contractual 
        relationships--thus significantly reducing program costs 
        between 2013 and 2017.
  --$2.5 billion from eliminating seller-funded payment assistance for 
        FHA-insured mortgages: The Department of Housing and Urban 
        Development and Congress took steps to prohibit seller-funded 
        down payment assistance, citing our findings that losses 
        associated with those loans had substantially higher 
        delinquency and insurance claim rates than similar loans 
        without such assistance, and were contributing to the Federal 
        Housing Administration's deteriorating financial performance.
  --$2.3 billion from consolidating U.S. Forces stationed in Europe: 
        DOD removed two brigade combat teams and support units from 
        Europe, allowing it to further consolidate and close 
        facilities, based in part on our work showing significant costs 
        related to maintaining permanent Army forces in Europe and our 
        recommendations that DOD identify alternatives that might lead 
        to savings.
  --$1.3 billion through improved tax compliance: Our recommendations 
        on the use of information reporting to reduce the tax gap 
        contributed to legislation requiring banks and others to report 
        income that merchants receive through credit cards, third-party 
        networks, and other means to help IRS verify information 
        reported on merchants' income tax returns. The estimated 
        increased revenue through improved tax compliance is expected 
        over the provision's first 3 fiscal years.
    GAO has generated recommendations that save resources, increase 
Government revenue, improve the accountability, operations, and 
services of Government agencies, increase the effectiveness of Federal 
spending as well as provide other benefits. Since fiscal year 2003, 
GAO's work has resulted in substantial financial and other benefits for 
the American people, including:
  --over \1/2\ trillion dollars in financial benefits;
  --about 14,500 program and operational benefits that helped to change 
        laws, improve public services, and promote sound management 
        throughout Government; and
  --about 12,000 reports, testimony, and other GAO products that 
        included over 22,000 recommendations.
Program and Operational Benefits
    In fiscal year 2013, GAO also contributed to 1,314 program and 
operational benefits that helped to change laws, improve public 
services, and promote sound management throughout Government. Thirty 
six percent of these benefits are related to business process and 
management, 31 percent are related to public safety and security, 17 
percent are related to program efficiency and effectiveness, 8 percent 
are related to acquisition and contract management, 5 percent are 
related to public insurance and benefits, and 3 percent are related to 
tax law administration. Examples include:
  --enhancing coordination between DOD and the Social Security 
        Administration (SSA) on the more timely delivery of military 
        medical records through electronic transfer;
  --improving Veterans Affairs (VA) oversight of its medical equipment 
        and supply purchasing;
  --increasing collaboration between the Army and Veterans Affairs 
        through a joint working group to improve management of military 
        cemeteries and help eliminate burial errors and other past 
        problems;
  --updating Federal Emergency Management Administration (FEMA) 
        National Flood Insurance Program contract monitoring policies 
        to reduce the likelihood that contractor performance problems 
        would go unnoticed; and
  --establishing National Oceanic and Atmospheric Administration 
        policies outlining the processes, roles and responsibilities 
        for transitioning tsunami research into operations at tsunami 
        warning centers.
Overlap, Duplication, and Fragmentation
    In fiscal year 2013 GAO issued its third annual report on overlap, 
duplication, and fragmentation. In it, we identified 31 new areas where 
agencies may be able to achieve greater efficiency or effectiveness. 
Within these 31 areas, we identified 81 actions that the executive 
branch and Congress could take to reduce fragmentation, overlap, and 
duplication, as well as other cost savings and revenue enhancement 
opportunities. This work identifies opportunities for the Federal 
Government to save billions of dollars.
    We also maintain a scorecard and action tracker on our external 
website where Congress, Federal agencies, and the public can monitor 
progress in addressing our findings. Federal agencies and Congress have 
made some progress in addressing the 131 areas we identified and taking 
the 300 actions that we recommended in our 2011 and 2012 reports.
High Risk Programs
    In February 2013 GAO issued the biennial update of our High Risk 
report, which focuses attention on Government operations that are at 
high risk of fraud, waste, abuse, and mismanagement, or need 
transformation to address economy, efficiency, or effectiveness 
challenges. This report, which will be updated in 2015, offers 
solutions to 30 identified high-risk problems and the potential to save 
billions of dollars, improve service to the public, and strengthen the 
performance and accountability of the U.S. Government. Our 2013 High 
Risk work produced 164 reports, 35 testimonies, $17 billion in 
financial benefits, and 411 program and operational benefits.
    The major cross-cutting High Risk program areas identified as of 
September 2013 range from transforming DOD program management and 
managing Federal contracting more effectively, to assessing the 
efficiency and effectiveness of tax law administration and modernizing 
and safeguarding insurance and benefit programs.
    The complete list of high-risk areas is shown on Appendix II. 
Details on each high risk area can be found at http://www.gao.gov/
highrisk/overview.
Electronic Protest Docketing System
    GAO's fiscal year 2014 budget request sought statutory authority 
for a new electronic docketing system to be funded by a filing fee 
collected from companies filing bid protests. The sole purpose of the 
filing fee would be to offset the cost of developing, implementing, and 
maintaining the system. We appreciate that the Consolidated 
Appropriations Act, 2014, directed GAO to develop an electronic filing 
and document dissemination system under which persons may 
electronically file bid protests and documents may be electronically 
disseminated to the parties. GAO is making progress in establishing the 
electronic protest docketing system. We have convened an 
interdisciplinary team of experts within GAO to examine matters such as 
technical requirements, the potential for commercially available 
systems, fee structure, cost-benefit analysis, and outreach to 
stakeholders, including representatives from the small business 
community. GAO will be reporting regularly to the House and Senate 
Committees on Appropriations on its progress in implementing the 
system.
Watchdog Website
    In September 2013, GAO launched the Watchdog website, which 
provides information exclusively to Members and congressional staff 
through the House and Senate intranets. The new site is designed to 
provide a more interactive interface for Members and their staff to 
request our assistance and to access our ongoing work. In addition, 
Watchdog can help users quickly find GAO's issued reports and legal 
decisions as well as key contact information.
                  strategic plan for serving congress
    In December 2013, Members and their staff were invited to comment 
on our draft Strategic Plan for Serving Congress in fiscal years 2014-
2019. The draft plan was issued in February 2014 and outlines our 
proposed goals and strategies for supporting Congress's top priorities. 
Our strategic plan framework (Appendix III) summarizes the global 
trends, as well as the strategic goals and objectives that guide our 
work. GAO's strategic goals and objectives are shown in Figure 1.

     FIGURE 1: GAO STRATEGIC GOALS AND OBJECTIVES--FISCAL YEAR 2014
                        THROUGHPFISCAL YEAR 2019
------------------------------------------------------------------------
                   Goals                             Objectives
------------------------------------------------------------------------
Provide Timely, Quality Service to          _Healthcare needs
 Congress and the Federal Government        _Lifelong learning
to . . .                                    _Benefits and protections
  Address Current and Emerging Challenges    for workers, families and
 to the Well-Being and Financial Security    children
 of the American People related to . . .    _Financial security
                                            _Effective system of justice
                                            _Viable communities
                                            _Stable financial system
                                             consumer protection
                                            _Stewardship of natural
                                             resources the environment
                                            _Infrastructure
------------------------------------------------------------------------
  Respond to Changing Security Threats and  _Homeland security
 the Challenges of Global Interdependence   _Military capabilities
  involving . . .                            readiness
                                            _U.S. foreign policy
                                             interests
                                            _Global market forces
------------------------------------------------------------------------
Help Transform the Federal Government to    _The Government's fiscal
 Address National Challenges by assessing.   position and outlining
                                             options for closing the
                                             fiscal gap
                                            _Fraud, waste, and abuse
                                            _Major management challenges
                                             and program risks
------------------------------------------------------------------------
Maximize the Value of GAO by Enabling       _Efficiency, effectiveness,
 Quality, Timely Service to Congress and     and quality
 Being a Leading Practices Federal Agency   _Diverse and inclusive work
 in the areas of . . .                       environment
                                            _Professional networks
                                             collaboration
                                            _Institutional stewardship
                                             resource management
------------------------------------------------------------------------
Source: GAO.

    The draft strategic plan also summarizes the trends shaping the 
United States and its place in the world. The plan reflects the areas 
of work we plan to undertake, including science and technology, weapons 
systems, the environment, and energy. We also will increase 
collaboration with other national audit offices to get a better handle 
on global issues that directly affect the United States, including 
international financial markets; food safety; and medical and 
pharmaceutical products. These trends include:
  --U.S. National Security Interests;
  --Fiscal Sustainability and Challenges;
  --Global Interdependence and Multinational Cooperation;
  --Science and Technology;
  --Communication Networks and Information Technology;
  --Shifting Roles in Governance and Government; and
  --Demographic and Societal Changes.
    In the upcoming decade, for example, the U.S. will face demographic 
changes that will have significant fiscal impacts both on the Federal 
budget and the economy. The number of baby boomers turning 65 is 
projected to grow from an average of about 7,600 per day in 2011, to 
more than 11,600 per day in 2025, driving spending for major health and 
retirement programs.
    To ensure the updated strategic plan reflects the needs of Congress 
and the nation, we have solicited comments from stakeholders in 
addition to Congress, including GAO advisory entities, the 
Congressional Budget Office, and the Congressional Research Service.
  managing workload by focusing resources on congressional priorities
    To manage our congressional workload, we continue to take steps to 
ensure our work supports congressional legislative and oversight 
priorities and focuses on areas where there is the greatest potential 
for results such as cost savings and improved Government performance. 
Ways that we actively work with congressional committees in advance of 
new statutory mandates \1\ include (1) identifying mandates real time 
as bills are introduced; (2) participating in ongoing discussions with 
congressional staff; and (3) collaborating to ensure that the work is 
properly scoped and is consistent with the committee's highest 
priorities.
---------------------------------------------------------------------------
    \1\ Congressional mandates include requirements directed by 
statutes, congressional resolutions, conference reports, and committee 
reports.
---------------------------------------------------------------------------
    In fiscal year 2013, 35 percent of our audit resources were devoted 
to mandates and 61 percent to congressional requests. I have met with 
the chairs and ranking members of many of the standing committees and 
their subcommittees to hear firsthand feedback on our performance, as 
well as highlight the need to prioritize requests for our services to 
maximize the return on investment.
Repeal or Revision of Mandates
    GAO also appreciates Congress's assistance in repealing or revising 
statutory mandates that are either outdated or need to be revised. This 
helps streamline GAO's workload and ensure we are better able to meet 
current congressional priorities. During the second session of the 
112th Congress, based on our input, 16 of GAO's mandated reporting 
requirements were revised or repealed because over time they had lost 
relevance or usefulness. In addition, GAO worked with responsible 
committees to have 6 more mandates repealed or revised as part of the 
2014 National Defense Authorization Act.
    GAO has identified 11 additional mandates for revision or repeal 
and is currently working with the appropriate committees to implement 
these changes. For example, our request includes language to repeal a 
requirement for GAO to conduct bimonthly reviews of State and local use 
of Recovery Act funds. As the vast majority of Recovery Act funds have 
been spent, GAO's reviews in this area are providing diminishing 
returns for Congress.
Promoting Good Governance and Accountability
    GAO is seeking authority to establish a Center for Audit Excellence 
to improve domestic and international auditing capabilities. The Center 
also will provide an important tool for promoting good governance, 
transparency and accountability. There is a worldwide demand for an 
organization with GAO's expertise and stature to assume a greater 
leadership role in developing institutional capacity in other audit 
offices and provide training and technical assistance throughout the 
domestic and international auditing communities. The proposed Center 
would operate on a fee-basis, generating revenue to sustain its ongoing 
operation, including the cost of personnel and instructors. The Center 
would be primarily staffed with retired GAO and other auditors, and 
thus, would not detract from or impact the service GAO provides to 
Congress.
    In a similar vein, to provide staff from other Federal agencies 
with developmental experiences, GAO is requesting authority to accept 
staff from other agencies on a non-reimbursable basis, who can learn 
about GAO's work. This would allow people to develop expertise and gain 
experience that will enhance their work at their own agencies.
          gao recognized as one of the ``best places to work''
    We take great pride in reporting that we continue to be recognized 
as an employer of choice, and have been consistently ranked near the 
top on ``best places to work'' lists. In 2013, we ranked third overall 
among mid-sized Federal agencies on the Partnership for Public 
Service's ``Best Places to Work'' list, and again ranked number one in 
our support of diversity. Also, in November 2013, Washingtonian 
Magazine named us as one of the ``50 Great Places to Work'' in the 
Washington, D.C. region among public or private entities.
    In addition, earlier this year, O.C. Tanner, a company that 
develops employee recognition programs, cited us in its article, ``Top 
10 Coolest Companies to Work for in Washington, D.C.'' Our management 
continues to work with our union (IFPTE, Local 1921), the Employee 
Advisory Council, and the Diversity Advisory Council to make GAO a 
preferred place to work.
                     fiscal year 2015 requirements
    GAO's fiscal year 2015 budget request will preserve staff capacity 
and continue critical infrastructure investments. Offsetting receipts 
and reimbursements primarily from program and financial audits and 
rental income totaling $30.9 million are expected in fiscal year 2015. 
The requested resources provide the funds necessary to ensure that GAO 
can meet the highest priority needs of Congress and produce results to 
help the Federal Government deal effectively with its serious fiscal 
and other challenges. A summary of GAO's appropriations for our fiscal 
year 2010 baseline and fiscal years 2013 to 2015 is shown in Figure 2.

        FIGURE 2: FISCAL YEAR 2010 BASELINE AND FISCAL YEAR 2013 TO FISCAL YEAR 2015 SUMMARY OF RESOURCES
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                       Fiscal Year 2010   Fiscal Year 2013   Fiscal Year 2014   Fiscal Year 2015
                                            Actual             Actual           Estimated           Request
           Funding Source            ---------------------------------------------------------------------------
                                        FTE     Amount     FTE     Amount     FTE     Amount     FTE     Amount
----------------------------------------------------------------------------------------------------------------
Salaries and Expenses Appropriation.  ......   $556,325  ......   $479,407  ......   $505,383  ......   $525,116
Non-legislative-branchPappropriation  ......     21,804  ......        345  ......         70  ......          _
Reimbursements......................  ......     10,214  ......     13,460  ......     10,980  ......      6,700
Offsetting receipts.................  ......     10,892  ......     25,922  ......     26,950  ......     23,750
Bid protest user fees...............  ......          _  ......          _  ......          _  ......        450
                                     ---------------------------------------------------------------------------
      Total budget authority........   3,347   $599,235   2,849   $519,134   2,945   $543,383   2,945  $556,016
----------------------------------------------------------------------------------------------------------------
Source: GAO.

Staff Capacity
    The requested funding supports a staffing level of 2,945 FTEs, and 
provides funding for mandatory pay costs, staff recognition and 
benefits programs, and activities to support congressional engagements 
and operations. These funds are essential to ensure GAO can address 
succession planning challenges, provide staff meaningful benefits and 
appropriate resources, and compete with other agencies, nonprofit 
institutions, and private firms who offer these benefits to the talent 
GAO seeks.
    In order to address the priorities of Congress, GAO needs a 
talented, diverse, high-performing, knowledgeable workforce. However, a 
significant proportion of our employees are currently retirement 
eligible, including 34 percent of our executive leadership and 21 
percent of our supervisory analysts. Therefore, workforce and 
succession planning remain a priority for GAO.
    Moreover, for the first time in several years our budget allows us 
to replenish the much needed pipeline of entry level and experienced 
analysts to meet future workload challenges. In fiscal year 2014, 
through a targeted recruiting GAO plans to hire entry-level staff and 
student interns, boosting our staff capacity for the first time in 3 
years to 2,945 FTE. This will allow GAO to reverse the downward trend 
in our FTEs and achieve some progress in reaching our optimal staffing 
level of 3,250 FTE, and develop a talent pool for the future.
    Our fiscal year 2015 budget request seeks funding to maintain the 
2,945 FTE level. In fiscal year 2015, pending final OPM guidance, we 
also plan to implement a phased retirement program to incentivize 
potential retirement eligible staff to remain with GAO and assist in 
mentoring and sharing knowledge with staff.
Improving Internal Operations
    Efforts to address challenges related to GAO's internal operations 
primarily relate to our engagement efficiency, information technology 
and building infrastructure needs.
  --Engagement Efficiency
          To better serve Congress and the public, we expanded our 
        presence in digital and social media, releasing GAO iPhone and 
        Android applications, and launching streaming video web chats 
        with the public. During the past year, 7,600 additional people 
        began receiving our reports and legal decisions through our 
        Twitter feed. More than 26,600 people now get our reports, 
        testimonies, and legal decisions daily on Twitter.
          GAO remains focused on improving the efficiency of our 
        engagements through streamlining or standardizing processes 
        without sacrificing quality. In fiscal years 2012 and 2013, we 
        continued our improvements in this area. For example, with 
        active involvement from GAO's managing directors, we identified 
        changes to key steps and decision points in our engagement 
        process and now have a revised engagement process that we began 
        implementing on a pilot basis in January 2014. We also piloted 
        and revised a tool to help teams better estimate expected staff 
        days required for engagements. In fiscal year 2014, we plan to 
        implement a series of process changes that will transform the 
        management of engagements, the use of resources, and message 
        communication.

  --More Efficient Content Creation, Review, and Publication
          GAO will strive to dramatically improve the efficiency of our 
        content creation and management processes by standardizing, 
        automating, and streamlining the currently cumbersome and 
        manually intensive processes for creating, fact-checking, and 
        publishing GAO products. In fiscal year 2014, we plan to 
        request proposals to acquire a technical solution and phase 
        implementation in fiscal years 2014 and 2015. The proposed 
        system will automate document routing and approvals, 
        incorporate management and quality assurance steps, and 
        generate required documentation. To ensure our message is 
        available to both our clients and the public, the proposed 
        system capability will also enable GAO to routinely publish 
        content on GAO.gov, GAO's mobile site, and various social media 
        platforms.

  --Greater Transparency of Engagement Information
          To promote transparency, increase management capabilities, 
        and reduce duplicate data entry and costs, in fiscal year 2014 
        GAO will begin implementing a modernized, one-stop engagement 
        management system. This system automates key business rules and 
        decision points, improves resource management, eliminates 
        rework, and provides increased visibility for all participants. 
        In fiscal year 2015, we will retire legacy databases as the new 
        system becomes fully operational.

  --Infrastructure Improvements
          The fiscal year 2015 budget also provides funds to maintain 
        our information technology (IT) systems, which are a critical 
        element in our goal to maintain efficient and effective 
        business operations and to provide the data needed to inform 
        timely management decisions. Improvements to our aging IT 
        infrastructure will allow GAO to further streamline business 
        operations, reduce redundant efforts, increase staff efficiency 
        and productivity, improve access to information, and enhance 
        our technology infrastructure to support an array of engagement 
        management, human capital, and financial management systems.
          GAO also plans to continue upgrading aging building systems 
        to ensure more efficient operations and security. To support 
        these requirements our fiscal year 2015 budget request includes 
        resources to:
      -- begin upgrading the heating, ventilation, and air conditioning 
            system to increase energy efficiency and reliability;
      -- repair items identified in our long-range asset management 
            plan, such as the water heater, chiller plant, and cooling 
            fans;
      -- enhance continuity planning and emergency preparedness 
            capabilities; and
      -- address bomb blast impact mitigation efforts.
                           concluding remarks
    In conclusion, GAO values the opportunity to provide Congress and 
the Nation with timely, insightful analysis. The fiscal year 2015 
budget requests the resources to ensure that we can continue to address 
the highest priorities of Congress.
    Our request seeks an increase to maintain our staffing level and 
provide employees with the appropriate resources and support needed to 
effectively serve Congress. The funding level will also allow us to 
continue efforts to promote operational efficiency, and begin 
addressing long-deferred investments and maintenance.
    This concludes my prepared statement. I appreciate, as always, your 
continued support and careful consideration of our budget. I look 
forward to discussing our fiscal year 2015 request with you.

    Appendix I: Selected Testimony Topics for Fiscal Year 2013, by 
                             Strategic Goal

Goal 1: Address Current and Emerging Challenges to the Well-being and 
        Financial Security of the American People

Processing Veterans' Disability Benefits
Science, Technology, Engineering, and Mathematics Education
Social Security Administration Management
School Lunch Nutrition Standards
Medicare and Medicaid High Risk Update
Export-Import Bank Management and Reporting
Veteran-owned Small Businesses
Patient Protection and Affordable Care Act
Water Infrastructure
Medicare Highest-Expenditure Part B Drugs
Community Bank Failures: Causes and Consequences
Transportation Issues and Management
Federal Real Property Management
U.S. Postal Service Financial Viability
Private Pensions Multiemployer Plans and PBGC
Chemical Regulation
California High Speed Passenger Rail
Federal Courthouse Construction

Goal 2: Respond to Changing Security Threats and the Challenges of 
        Global Interdependence

Intellectual Property: Effect of Counterfeited and Pirated Goods on 
U.S. Economy
State Department: Diplomatic Security Challenges
DOD's POW/MIA Mission and Challenges
Personnel Security Clearances
DHS at 10 Years: Progress and Remaining Work
TSA Oversight of Alleged Misconduct
DHS's Overstay Enforcement Efforts
DOD Security Cooperation and Capacity Building
Trade Adjustment Assistance for Manufacturers and Service Firms
Naval Acquisition Risks: Littoral Combat Ship
Strategic Sourcing Potential Savings
DOD Acquisition Risks: F-35 Joint Strike Fighter
Modernizing the Nuclear Security Enterprise
Border Security Goals, Measures, and Resources

Goal 3: Help Transform the Federal Government to Address National 
        Challenges

Need for Federal IT Efficiency Implementation Initiatives
Need to Improve National Cybersecurity Strategy
Weaknesses in OPM IT Management and Incremental Improvements
Financial Performance and Management Challenges
GAO's 2013 High-Risk Series Update
VA and DOD Sharing of Electronic Health Records
Improved Mitigation Strategies Needed for Environmental Satellite 
Coverage Gaps
Unknown Extent of Refund Fraud Using Stolen Identities
Progress Made by DHS in Addressing High-Risk Issues
Need to Eliminate Duplicative IT Investments

    Source: GAO.

    Additional information on selected testimonies can be found in Part 
II of the 2013 Performance and Accountability Report at: http://
www.gao.gov/products/GAO-14-2SP.

                 Appendix II: GAO's 2013 High Risk List

Strengthening the Foundation for Efficiency and Effectiveness
Limiting the Federal Government's Fiscal Exposure by Better Managing 
Climate Change Risks (new)
Management of Federal Oil and Gas Resources
Modernizing the U.S. Financial Regulatory System and Federal Role in 
Housing Finance
Restructuring the U.S. Postal Service to Achieve Sustainable Financial 
Viability
Funding the Nation's Surface Transportation System
Strategic Human Capital Management
Managing Federal Real Property

Transforming DOD Program Management

DOD Approach to Business Transformation
DOD Business Systems Modernization
DOD Support Infrastructure Management
DOD Financial Management
DOD Supply Chain Management
DOD Weapon Systems Acquisition

Ensuring Public Safety and Security

Mitigating Gaps in Weather Satellite Data (new)
Strengthening Department of Homeland Security Management Functions
Establishing Effective Mechanisms for Sharing and Managing Terrorism-
Related Information to Protect the Homeland
Protecting the Federal Government's Information Systems and the 
Nation's Cyber Critical Infrastructures
Ensuring the Effective Protection of Technologies Critical to U.S. 
National Security Interests
Revamping Federal Oversight of Food Safety
Protecting Public Health through Enhanced Oversight of Medical Products
Transforming EPA's Processes for Assessing and Controlling Toxic 
Chemicals

Managing Federal Contracting More Effectively

DOD Contract Management
DOE's Contract Management for the National Nuclear Security 
    Administration & Office of Environmental Management
NASA Acquisition Management

Assessing the Efficiency and Effectiveness of Tax Law Administration

Enforcement of Tax Laws

Modernizing and Safeguarding Insurance and Benefit Programs

Improving and Modernizing Federal Disability Programs
Pension Benefit Guaranty Corporation Insurance Programs
Medicare Program
Medicaid Program
National Flood Insurance Program

    Source: GAO.

              Appendix III: GAO's Strategic Plan Framework

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Senator Shaheen. Thank you very much.
    Dr. Elmendorf.

                      CONGRESSIONAL BUDGET OFFICE

STATEMENT OF DOUGLAS W. ELMENDORF, PH.D., DIRECTOR
    Dr. Elmendorf. Thank you, Madam Chair and Ranking Member 
Hoeven.
    I appreciate the opportunity to present CBO's budget 
request for fiscal year 2015.
    As you mentioned, Madam Chair, we are asking for 
appropriations of $46.1 million, which would be an increase of 
roughly $400,000, or less than 1 percent, from the $45.7 
million provided to CBO for 2014.
    The requested funding would enable us to achieve and 
maintain staffing of 235 full-time equivalent positions. Two 
hundred thirty-five FTEs is the level intended under the 2014 
appropriation. Although we will be unable to fully attain it 
this year, that 235 FTEs is also in line with what was funded 
for CBO between 2004 and 2008.
    For 2009 and 2010, the Congress approved significant 
increases in our budget to support a step-up in staffing to 
more than 250 FTEs. That step-up was intended primarily to 
increase the agency's ability to analyze potential changes in 
Federal healthcare policy while maintaining our capacity to 
provide cost estimates and reports on other topics.
    However, because of the budget constraints of recent years, 
CBO's staffing has dropped to about 220 FTEs currently. With 
the funding provided for 2014, we have sharply increased our 
recruiting efforts in order to return our staffing to the 
traditional level of 235 FTEs as quickly as possible so that we 
can better serve the Congress.
    As an economist, I pay a lot of attention to supply and 
demand. It is not unusual for the demand for CBO's estimates 
and analyses to exceed the quantity we can supply. But the 
mismatch has been more acute than usual in the past several 
years.
    The enactment of the major healthcare legislation of 2010 
has been followed by a high level of congressional interest in 
our analysis of that legislation and also in proposals for 
changes in Federal healthcare policy. In addition, the slow 
recovery from the economic downturn has spurred interest in our 
economic forecasts and in policies that might boost economic 
growth and opportunity in the near term and also in the longer 
term.
    Moreover, the surge in Federal debt and the projected high-
level deficits in the long run have led to efforts to enact 
fundamental changes in spending and tax policies. All of those 
developments have strained CBO's resources, and we consult 
regularly with the key committees and the leadership offices to 
ensure that our resources are focused on the work that is of 
the highest priority to Congress.
    We are very grateful for the Congress' decision to restore 
our staffing to its previous level so that we can say yes to 
more requests and can respond more quickly.
    As you know, our work encompasses the wide array of 
subjects that Congress deals with and takes the form of many 
different kinds of products. We produce regular projections of 
the budget and economy under current law. We produce longer-
term projections. We do analyses of the President's budget each 
year, and we present you with a wide range of options for 
reducing budget deficits.
    We produce about 500 formal written cost estimates each 
year and thousands of preliminary informal estimates as 
committees try to understand the budgetary impact of proposals 
before they formally consider legislation. We produce about 130 
scorekeeping tabulations each year for the appropriations 
committees, including account-level detail for individual 
appropriations acts and various summary tables and running 
totals as the year goes on.
    And we produce dozens of analytical reports and other 
publications each year generally required by law or prepared in 
response to requests from the chairman or ranking member of key 
committees on a broad range of topics, including healthcare, 
policies for increasing economic growth and opportunity, 
changes in benefit programs, defense policy, energy policy, 
infrastructure, and the Government's role in the financial 
system.
    Closing, I want to thank you, on behalf of myself and my 
colleagues, for the support you provided to CBO for many years, 
and we look forward to continuing to provide Congress with 
careful, objective, nonpartisan analysis as you grapple with 
the many challenging issues facing the Nation.

                           PREPARED STATEMENT

    I am happy to answer any questions you have about our 
budget or about the work that we are doing.
    Thank you.
    [The statement follows:]
             Prepared Statement of Dr. Douglas W. Elmendorf
    Madame Chair, Ranking Member Hoeven, and Members of the 
Subcommittee, thank you for the opportunity to present the 
Congressional Budget Office's (CBO's) budget request.
    CBO requests appropriations of $46.1 million for fiscal year 2015. 
That amount represents an increase of roughly $400,000, or less than 1 
percent, from the $45.7 million provided to CBO for 2014.
    The requested funding would enable CBO to achieve and maintain 
staffing of 235 full-time-equivalent positions (FTEs), which is the 
level contemplated in the 2014 appropriation and in line with the FTEs 
funded between 2004 and 2008. After the budget constraints of recent 
years, CBO's staffing dropped from a peak of 250 FTEs in fiscal year 
2010 to about 220 FTEs now, and the agency is currently engaged in an 
intensive effort to use the increased funding to bolster its staff so 
that it can better serve the Congress. Of the requested funding for 
2015, 91 percent would support pay and benefits, 6 percent would be for 
information technology (IT), and 3 percent would go toward purchases of 
data, training, office supplies, and other items.
      cbo's funding history and its effects on staffing and output
    Because such a large share of CBO's budget represents compensation, 
the contours of the agency's budget and staffing levels have been and 
will continue to be closely linked.
    Between fiscal years 2002 and 2008, the number of authorized FTEs 
at CBO held between 232 and 235 (see Figure 1). During that period, 
CBO's budget generally rose slowly, as Federal employees received 
salary increases and the cost of Federal benefits increased. For fiscal 
years 2009 and 2010, the Congress approved larger increases in CBO's 
budget to support a step-up in staffing. That step-up was intended 
primarily to increase the agency's ability to analyze potential changes 
in Federal healthcare policy while maintaining its capacity to provide 
cost estimates and reports on other topics. CBO had sufficient funding 
for 254 FTEs in 2010.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The increase in staffing enabled CBO to engage in analyses of 
particularly complex issues and to provide substantially more estimates 
and other analyses to the Congress. Among the accomplishments that were 
facilitated by the larger staff were a significant expansion of 
healthcare analysis, substantial enhancement of financial analysis, 
considerable improvement in modeling the economic effects of Federal 
tax and spending policies, the issuance of several reports with options 
for changing Federal benefit programs, significant gains in the 
transparency of CBO's analysis, and continued high quality of the 
agency's cost estimates and analyses of numerous other topics.
    However, constraints on CBO's funding (and on discretionary 
appropriations as a whole) caused the agency's staffing to shrink in 
fiscal years 2011 through 2013. The agency's appropriation for 2013 was 
well below the amounts provided to the agency during the preceding 
years (see Figure 2). Those cuts, combined with small increases in 
average pay and rising costs of benefits and other items during those 
years, required a drop in the number of FTEs to only 225 in 2013, the 
lowest level in more than a dozen years. In addition, the agency had to 
defer critical purchases of IT equipment and services and other items.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    CBO's appropriation for 2014 is significantly larger than its 
appropriation for 2013. Accordingly, the agency has sharply increased 
its recruiting efforts in order to return its staffing to the 
traditional level of 235 FTEs as quickly as possible, and it is 
catching up on deferred purchases.
   cbo's funding request and its consequences for staffing and output
    In fiscal year 2015, CBO will continue its mission of providing 
objective, insightful, timely, and clearly presented budgetary and 
economic information to the Congress. Funding of $46.1 million to 
support 235 FTEs would allow CBO to provide the following estimates and 
other analyses to the Congress:
  --Reports presenting the outlook for the budget and the economy, 
        analyses of the President's budget, long-term budget 
        projections, and options for reducing budget deficits;
  --More than 500 formal cost estimates, most of which will include not 
        only estimates of Federal costs but also assessments of the 
        cost of mandates imposed on State, local, and tribal 
        governments or the private sector;
  --Thousands of preliminary, informal cost estimates, the demand for 
        which is very high as committees seek to have a clearer picture 
        of the budgetary impact of proposals and variants of proposals 
        before they formally consider legislation;
  --About 130 scorekeeping tabulations, including account-level detail 
        for individual appropriation acts at all stages of the 
        legislative process and summary tables showing the status of 
        discretionary appropriations (by appropriations subcommittee) 
        and running totals on a year-to-date basis; and
  --Roughly 85 analytical reports and other publications--generally 
        required by law or prepared in response to requests from the 
        chairmen and ranking members of key committees--on a broad 
        range of topics, including healthcare, policies for increasing 
        economic growth and opportunity, changes in benefit programs, 
        defense policy, infrastructure, energy policy, and the 
        Government's role in the financial system.
    Those products would be the result of very hard work by CBO's 
highly dedicated staff. Nevertheless, the agency expects that the 
anticipated volume of estimates and other analyses will fall 
considerably short of the number of congressional requests. The demands 
on CBO remain intense: The enactment of major healthcare legislation in 
2010 has been followed by a high level of congressional interest in 
analysis of that legislation and numerous proposals for further changes 
in Federal healthcare programs. In addition, the slow recovery from the 
economic downturn has spurred interest in the agency's economic 
forecasts and in policies that might boost economic growth and 
opportunity in both the near term and the longer term. Moreover, the 
surge in Federal debt and the high level of projected deficits have led 
to ongoing congressional efforts to enact fundamental changes in 
spending and tax policies, which have strained the agency's resources 
in many areas. CBO regularly consults with committees and congressional 
leadership to ensure that its limited resources are focused on the work 
that is of highest priority to the Congress.
    The requested funds would be used as follows:
  --$31.4 million for pay of personnel--an increase of $1.5 million (5 
        percent) over the amount that will be spent in fiscal year 
        2014--to support the increase in FTEs for a full fiscal year. 
        (The ramp-up of staffing in 2014 will take some time, and CBO 
        anticipates that the agency will average about 225 FTEs for the 
        current year.) The additional staffing would be devoted to 
        analyzing critical budgetary and economic issues of interest to 
        the Congress, including healthcare, policies for increasing 
        economic growth and opportunity, and many other topics. The 
        increase would also cover performance-based salary increases 
        for current staff and an anticipated across-the-board increase 
        of 1.8 percent for employees making less than $100,000 (if such 
        an increase is authorized for executive branch agencies).
  --$10.6 million for benefits of personnel--an increase of $0.6 
        million (6 percent) relative to the amount appropriated in 
        2014, to fund an increase in the cost of Federal benefits as 
        well as the benefits for the added staff members.
  --$4.0 million for other purposes--a decrease of $1.7 million (30 
        percent) from the amount appropriated in 2014. The funds would 
        go toward purchases of information technology, data, training, 
        and other items. A decrease for 2015 is made possible in part 
        by the fact that the 2014 funding will allow CBO to catch up on 
        deferred purchases and to make some purchases this year that 
        will reduce future funding needs.
    In closing, I would like to thank the Committee for the support it 
has provided CBO over many years, enabling the agency to provide 
timely, carefully thought-out nonpartisan budgetary and economic 
analysis to the Congress as it addresses the critical issues facing the 
Nation.

    Senator Shaheen. Thank you both very much for your 
testimony.

                     GAO STAFF LEVELS AND WORKLOAD

    I am going to begin with you, Mr. Dodaro, and we have 7-
minute questioning rounds. Although with just Senator Hoeven 
and I here, we will probably be able to exceed that however 
much we want.
    Mr. Dodaro, one of the things that you point out in your 
testimony is that, ultimately, you would really like to be at 
about 3,250 full-time equivalent staff. And we were able to 
improve staffing levels, as you pointed out, in 2014, but you 
still remain below that desired level of staffing by more than 
200 employees.
    And so, can you talk a little bit about changes that you 
have made there to adapt to this new staffing level and how you 
have tried to maintain the integrity and quality of the work 
product that you produce?
    Mr. Dodaro. Definitely. First of all, I have been very 
clear with the committees that we deal with and this 
subcommittee that we are going to do fewer audits. We are not 
going to reduce the quality of our work nor the integrity of 
our work products. It has been incumbent upon everyone to work 
together, GAO working with the committees, to set proper 
priorities.
    As a result, the number of requests coming into GAO has 
tapered off more commensurate with what we are able to do at 
any given time. In my meetings with all the Committee Chairs 
and Ranking Members, I talk about the need to set priorities, 
to consult with us before mandates are put into law or 
committee or conference reports. Also we track all bills that 
are introduced in Congress with potential mandates for GAO. 
Every week Congress is here, there are plenty of those that 
happen.
    We have also worked to repeal existing mandates that are in 
law that we don't think are good use of our resources or have 
outlived their usefulness. Last year, Congress repealed 16 of 
those mandates. We have identified an additional 10 or 11 that 
we think can be repealed as well.
    So we are trying to manage the workflow better, prioritize 
the work as best we can to get the maximum return on Congress' 
highest priorities and opportunities that we think are 
available for cost savings and revenue enhancements. The big 
missing delta for me is if we had the additional people, we 
could pursue more opportunities for cost savings and revenue 
enhancements and create more recommendations for the Congress.
    It is a matter of being limited by that. There are plenty 
of things for us to do that would result in productive use of 
those resources. I understand the current situation. As the 
auditor of the Federal Government's financial statements, I 
understand full well the Federal Government's financial 
condition.
    We need to do our part, but I think we are meeting the 
highest priorities now. And I have made sure there is no 
diminution of quality of our work by reducing the workload, and 
working on the priorities. For me, that is important. Quality 
is number one for GAO, and it is important for us. Congress 
deserves no less, and neither do the American people.

                        PRIORITIES FOR GAO WORK

    Senator Shaheen. Well, I would certainly agree that quality 
is the top priority. And notwithstanding the efforts to get 
committees to prioritize their needs, are there areas where you 
think we really should have done work over the last several 
years but were not able to because of the resource challenges?
    Mr. Dodaro. I think we could do more work in the area of 
improper payments, as an example. Right now, there is over $100 
billion a year in the latest estimates on improper payments, 
and that is not even a complete estimate. There are several 
programs, such as the Temporary Assistance for Needy Families, 
that are not providing estimates yet.
    I am concerned about the growth in this area in healthcare. 
Roughly half of the $100 billion is in Medicare and Medicaid, 
which are the fastest-growing programs in the Federal 
Government. They are expected to continue to grow at an 
accelerated pace as the aging of our population continues, and 
healthcare costs are still rising faster than the growth in our 
economy.
    Unless those improper payments can be prevented and 
stopped, I expect this number potentially to increase, despite 
the efforts of the administration and Congress. That would be 
one area that I would like to dedicate more resources to as 
just one example.
    Another example is in the tax gap. Right now, according to 
the latest annual estimate, based on 2006 data--IRS 
periodically updates that--the gap between taxes owed and taxes 
paid under our current system is $385 billion. We are still 
only at about 84 percent compliance rate on our taxes.
    We have identified a number of opportunities for IRS to get 
better data to do comparisons and matches and increase 
collections. So those are just two examples. There are many 
other areas where I think we could stop bad investments 
earlier. We do a lot of work in the weapon systems portfolios 
and major IT investments. I would have liked us to be involved 
earlier. I think we could have stopped bad investments and 
prevented wasted funds.

                 IMPLEMENTATION OF GAO RECOMMENDATIONS

    Senator Shaheen. And when you are talking about things like 
improper payments, are there recommendations that GAO has made 
to agencies to try and address that in a way that would improve 
the situation, and what have been the challenges in getting 
those implemented?
    Mr. Dodaro. Yes, one of the challenges is agencies have 
been slow to implement some of the technology recommendations.
    Particularly in the healthcare area, there is a tremendous 
volume of activity with small transactions in Medicare. For 
example, we have an open recommendation that providers, before 
they are enrolled and able to bill the Government, put up a 
surety bond. If there are problems later, the Federal 
Government can recoup the payments, have some money there, and 
they are not just left holding the bag for bad payments that 
have been billed to the Federal Government. That hasn't been 
effectively implemented yet as well.
    Some of the technology tools to detect or prevent improper 
payments are taking too long to be put in place. The training 
is taking too long. However, the agencies are working on this. 
The administration has made it a priority. Congress has passed 
several bills.
    In the mid 1990s, there were no estimates of improper 
payments in the Federal Government until we started doing the 
estimates ourselves as part of the annual financial audits. 
Then Congress legislated the agencies to do it. This is a 
management challenge. There are still areas where we have 
recommendations that they are not doing proper statistical 
sampling, and so the methodologies for doing some estimates 
aren't good.
    Most importantly, they haven't identified a lot of the root 
causes of the problem. That is the area where I think we could 
do more work. We could go in and identify some of the root 
causes of improper payments and try to stop that.
    Also Medicaid and some of these other programs like TANF, 
Temporary Assistance for Needy Families, are administered at 
the State and local level. You have to go out and understand 
the State's programs to really get at some of the root causes, 
and we just can't do that with the resources we have right now.
    Senator Shaheen. Senator Hoeven and I certainly understand 
that challenge.
    Senator Hoeven.
    Mr. Dodaro. Yes, as former Governors, I am sure you do. It 
is a fast-growing problem there, too. States are struggling, as 
you know.

                           GAO BUDGET ISSUES

    Senator Hoeven. Thank you, Madam Chairman.
    I will start with you, Mr. Dodaro. If you have to find 
savings in your budget, where would you do it? Where would you 
go first? If we get a 302(b) that requires us to find more 
savings, where would you go in your budget to try to find some 
savings?
    Mr. Dodaro. We have mined most of that activity in the past 
3 years. Our budget decreased between 2010 and 2013 $80 
million, and half of that we have accomplished through bringing 
down our administrative costs. We have cut 20 percent. Our 
travel costs are down 50 percent, and we have kept both of 
these areas down over a period of time.
    I am now looking at how to increase revenue for us by 
maximizing the building. We have two big assets. One is the 
building that we own. We have reconfigured the space, and we 
have brought a new tenant in, which is giving us $2 million 
more in revenue for maintaining the building.
    I still think there are opportunities. We are trying to 
save money both in the IT area and the building area, but most 
of those savings we are trying to plow back into new 
investments.
    For example, in our IT program, our switches and routers 
are 9 years old, and our laptop computers are over 5 years old. 
They are at the end of their useful lives. When we give one of 
our laptops to new people now, I expect it to have a band-aid 
on it. We need to invest in computer resources for our staff.
    Our building is over 60 years old. It hasn't had a major 
renovation for a quarter of a century. We have been replacing 
parts as they are breaking, and so we have additional repairs 
and investments to make.
    So 81 percent of our costs are personnel costs. If we don't 
get the amount we have requested, we can try to find, and we 
are continuing to try to find cost savings in other 
administrative areas. The ultimate outcome will be less staff 
for GAO.
    Senator Hoeven. Right. Your employee level right now is how 
many?
    Mr. Dodaro. Last year we used 2,849 full-time equivalents.
    Senator Hoeven. And your target is 2,945.
    Mr. Dodaro. Twenty-nine forty-five for this year.
    Senator Hoeven. Other than possibly some IT costs, although 
I hear you because the IT world moves so fast.
    Mr. Dodaro. Right.
    Senator Hoeven. Stuff gets obsolete so quickly now. But it 
just means personnel, right, really?

                  GAO RENTAL COSTS AND RENT COLLECTED

    Mr. Dodaro. Yes. Eighty-one percent of the costs are 
salaries and benefits. Now bringing down rental costs in the 
field has helped. Last year, I talked about enhancing the pilot 
that we had for telework in our field offices. Eight of the 11 
field offices are on it now.
    We estimate we will save cumulatively $2 million in rental 
costs. We are expanding the pilot to 3 more field offices. So 
all our field offices will be in the telework pilot, and then 
we are going to expand it to headquarters staff as well. But 
there, since we own the building, our goal would be to try to 
reconfigure it and maybe bring in an additional tenant or two.
    Senator Hoeven. Do you get credit for the rent?
    Mr. Dodaro. Yes.
    Senator Hoeven. Or does that just go straight to Treasury 
without it?
    Mr. Dodaro. No, it comes to us.
    Senator Hoeven. You do get it?
    Mr. Dodaro. You have to appropriate it. It comes in 
offsetting collections. Right now, we have $9 million for 2014, 
$2 million from a Department of Justice entity, and the Army 
Corps of Engineers headquarters is in the GAO building as well, 
and their rent is about $7 million.

                      SAVINGS WITHIN CBO'S BUDGET

    Senator Hoeven. Then, Dr. Elmendorf, I would have the same 
question for you.
    Dr. Elmendorf. Well, so, Senator, our budget is more than 
90 percent staff, staff costs.
    Senator Hoeven. Now you can't plagiarize somebody else's 
answer.
    Dr. Elmendorf. No, he is at 80 percent. So I am just 
noting----
    Mr. Dodaro. Eighty-one, Doug.
    Dr. Elmendorf [continuing]. We have even less room to do--
to save money other ways. We have done a great deal of that. We 
have counted how many newspaper subscriptions we need. We have 
stopped ordering things we absolutely do not need.
    But at the same time, it is crucial that we have the IT 
technology to process large datasets that we use in 
constructing cost estimates and other analyses for you. We need 
to be sure that our people are receiving the training to keep 
their skills at the forefront of their fields and to keep them 
knowledgeable about what is happening in Government programs.
    So our ability to save additional money outside of our 
staffing level, I think, has been driven down close to nothing. 
If we end up with less money, we will not move back up to the 
235 FTEs that we are aiming for now.

                         CBO'S PROJECTED HIRING

    Senator Hoeven. Well, you are essentially--aren't you 
staying level pretty much with your FTEs this year?
    Dr. Elmendorf. Well, so the amount of money that we have 
been appropriated this year would pay for 235 FTEs. We are now 
actually at about 220, and we can't fill that gap immediately 
because we need people with a very specialized set of skills.
    We are recruiting very aggressively. We have a number of 
people who have accepted new positions since you provided that 
funding for us. But we are not going to get to 235 in the next 
few months. It will take a little time to get there.
    So we hope to be up to 235 people in order to be at that 
level throughout the next fiscal year, but we are on our upward 
trajectory at this moment. But if you were to suggest that it 
was likely we wouldn't have that higher level of funding for 
next year, the funding to sustain those 235 people for next 
year, then we would scale back our recruiting again and not try 
to lure those people in.
    You know, when we are recruiting, a lot of the recruiting 
that we do is for people, as I said, with very specialized 
skills. A number of the people we hire come out of graduate 
programs. So we hire them now when they are looking for jobs, 
but they will come to us in June or July or August or 
September.
    So we really are now doing the hiring we would need to be 
at this higher level of strength throughout the next fiscal 
year.
    Senator Hoeven. So who do you typically hire? You know, 
just give me a bit of a profile. And then are you getting to 
your work requests in a timely way? Assess that.
    Dr. Elmendorf. So we hire about 80 percent of our staff 
have either master's degrees in public policy or doctorates 
usually in economics. And then we have some lawyers and people 
with other skills. But most of our people, most of our analysts 
have Ph.D.s or master's degrees for the most part. And we have 
very high standards for those people. So we don't just take the 
first people whose applications come in the door when we start 
to recruit.
    Are we keeping up with the requests? No. We are keeping up 
with the things that are most urgent and that are most 
important to the Congress. But there are always unmet requests. 
Most of the estimates that we do are for the chairmen and 
ranking members of committees. We have very little time to do 
estimates for proposals from other members of committees.
    Now that is too bad, and we feel bad that we can't serve 
more members more effectively. But those are just the 
constraints that we face. And moving from 220 up to 235, which 
is what we are in the process of doing now, will help that 
problem. But I don't want to suggest it will solve that 
problem. There will still be many, too many requests that we 
won't be able to respond to appropriately.

                         PRIORITIZING REQUESTS

    Senator Shaheen. Dr. Elmendorf, I want to pick up on that 
line of questioning because it goes to the question that I 
asked Mr. Dodaro, and as you point out, you are not able to 
fulfill all the requests that you get from Congress. And given 
the continued resource constraints that we have in Congress, it 
is probably not going to improve a whole lot in the immediate 
future.
    So how do you prioritize requests, and how do you work with 
the various committees in Congress to try and ensure that they 
also are thinking about that as they put in their request to 
you for the work they'd like to have done?
    Dr. Elmendorf. So we are talking on an ongoing basis with 
the leadership of the committees, both majority and minority, 
and with the leadership of the Senate and, of course, also in 
parallel form on the House side. We respond--our focus is on 
the legislation that is moving through committees or moving to 
the floor of the Senate or the House.
    I think the risk is primarily that we won't do enough of 
the underlying model building and analysis that we need to be 
able to respond to future requests. So a pretty large fraction 
of all the congressional testimonies that we have done this 
year have come to us with very short notice, but been based on 
reports that we wrote last year.
    For example, we have written a set of reports about 
different Federal benefit programs. We have written about the 
SNAP, food stamps. We have written about Social Security 
Disability Insurance. We have written about Pell grants and 
others. But there are other reports--other important benefit 
programs that we have not been able to write.
    We have not been able to go through and help you and your 
colleagues understand the sources of growth in those programs 
and your options for dealing with them as much we would like 
to. So I worry that we will get to next year, and you will ask 
quite legitimately what can we do about a certain program, and 
I will forced to say, ``Well, I am sorry, that wasn't at the 
top of the list. We haven't gotten to it yet.''
    This is especially true in some of the very complicated 
analytical work we do on healthcare and in the Government's 
financial obligations. As I said, we are using more large 
datasets to understand what is happening in the healthcare 
system, partly in terms of people's demand for healthcare 
through health insurance, but also in how providers are 
responding, how their behavior is changing.
    And that is model-building work we need to keep doing to be 
ready to give you accurate estimates of the legislation that 
will come before us in 6 months and 12 months and 18 months and 
2 years from now.

                           ANALYTICAL MODELS

    Senator Shaheen. And so, you are working on those models 
now in anticipation of what may come up in the future with 
healthcare, the economy. Are there other models that you are 
looking at?
    Dr. Elmendorf. Yes, so we use different models for 
different purposes. We have models in healthcare. We have also 
spent a lot of time in the last few years, particularly when we 
had this higher level of staffing a few years ago, in improving 
our modeling of how the Federal taxes and Federal spending 
affect the economy, both in the short term during this very 
weak recovery we are going through, but also later in this 
decade and beyond.
    And again, it is very technical work, but with enough 
people, we can give you a much better sense of how the policy 
choices you are making will effect economic growth and jobs and 
opportunity for people down the road.
    Senator Shaheen. Do you have modeling in the energy area?
    Dr. Elmendorf. We do modeling of most of the topics that 
the Congress considers, of course. If there are budgetary 
implications or significant economic implications, we are doing 
modeling in the area.
    So we work on alternative energy policies. We are doing 
work right now on the effects of fracking on the economy. That 
is a crucial input to our projections of economic growth and, 
thus, the projections of what Federal revenues will be.
    And we have done some work, but that work has not 
proceeded--like many of these things, has not proceeded as 
rapidly as it would have if we had more staff. And I hope that 
with the extra staffing that you have provided for this year, 
we can move along more quickly.

              SCORING ENERGY SAVINGS PERFORMANCE CONTRACTS

    Senator Shaheen. Well, one area that I have been very 
interested in and worked on when I was in the Governor's office 
was the benefits of energy savings performance contracts, also 
referred to as ESPCs. As long as we are in a committee hearing, 
we want to make sure we get all the acronyms in.
    What I have found challenging is trying to figure out how 
CBO scores those ESPCs and why in some cases it is okay to 
actually build in the cost savings from those and why in other 
cases it is not, and how we can make better use of those 
contracts, which I think are very real ways to save taxpayer 
dollars.
    So can you talk a little bit about the scoring of those 
performance contracts and how it can be improved?
    Dr. Elmendorf. Yes, I can. So we understand, Madam Chair, 
why you and many other Members of Congress think that this tool 
can be an important way to cut Federal energy costs. I think 
from the point of view of our estimates, there are two issues 
that often come into play.
    One is that when a contract of this sort is signed, that 
creates a commitment for the Federal Government to make future 
payments, and it is a longstanding part of our estimating 
process to assess a cost when the decision is made, when the 
commitment is made. So the cost of those contracts we would 
generally assess as occurring now.
    The savings would be realized later essentially because 
Congress would be able to appropriate less money to a certain 
agency for energy costs and still have the buildings heated or 
cooled as well and still have the other activities take place. 
But because those appropriations actions are not being taken 
right away, they are kept track of separately in the budget 
process.
    This is not like a particular rule of CBO's. This is a 
longstanding part of how the budget committees work and 
interact with the other committees in Congress.
    I think a second issue that comes up is that, as you know, 
the savings can come over longer periods of time. The 
Department of Energy estimated a few years ago that the average 
payoff time for contracts of this general sort was 17 years. So 
there can be some savings during that time and more savings 
later, and our estimates don't always go out as far as might be 
useful to capture those savings.
    So these are not--you raised the concern that we do 
different things in different circumstances. I would emphasize 
that we have really a quite consistent set of principles that 
we follow. But depending on how legislation is written, there 
can be different budgetary consequences, and we are very happy 
to work with you and your staff at trying to help explain why 
we are doing what we are doing and to help you look for ways to 
design legislation that would have more--that would show more 
directly the budgetary effects you have in mind.
    Senator Shaheen. Well, my time is up. I want to pursue this 
a little more because I still think the underlying concern is 
how do we realize those savings in a way that makes sense for 
us in Federal agencies and yet doesn't violate the budget 
rules. So maybe we need to change the budget rules. But anyway, 
we can pursue that a little bit.
    Senator Hoeven.

              ECONOMIC PROJECTIONS ON HYDRAULIC FRACTURING

    Senator Hoeven. Thanks, Madam Chairman.
    You say you are doing some work on hydraulic fracturing on 
the value to the country? Is that right?
    Dr. Elmendorf. Yes. So our economic projections for the 
next decade and beyond need to take onboard developments that 
are happening in the economy. This is obviously a very 
important development in the last few years, and we are trying 
to be sure that our projections are taking it fully into 
account.
    So we have done some work in this area. We have talked with 
outside experts, and we hope to--and we will use that to inform 
our future economic projections. But we will also, when we 
finish this, which I hope will be soon, lay this out for you 
and your colleagues so you can see our view.
    Senator Hoeven. Well, we will have to get you up to North 
Dakota. Then we can show you hydraulic fracturing.
    Dr. Elmendorf. I would love to come to your State, Senator.

                          TRAINING OF ANALYSTS

    Senator Hoeven. Field trip. I am glad you are working on 
it.
    Just to finish up on the line of questioning, the trail I 
was going down before we stopped here just a minute ago. So you 
hire folks then, and you said mostly public policy master's 
degree. And then----
    Dr. Elmendorf. Or Ph.D.s in economics.
    Senator Hoeven. Or Ph.D. Okay. So I was going to ask that. 
And then do you have a training program? In other words, how do 
you then indoctrinate them into your methodology and your 
modeling and so forth?
    Dr. Elmendorf. So we take the hiring and training of people 
very seriously. We understand that what makes CBO is the skills 
of the people who are there.
    So when we look to hire people, we spread the word very 
wide that we are looking so we get the strongest possible pool 
of applicants.
    Senator Hoeven. And do you get a strong applicant pool for 
your----
    Dr. Elmendorf. We get a strong applicant pool. We are very 
choosy in that pool. We read people's resumes, of course. We 
have them in, and we ask them a lot of hard questions for a 
number of hours. We talk with people who have worked with them, 
their advisers in graduate school or colleagues for people who 
are coming from other jobs.
    And then we bring in the ones who we think can do what we 
need them to do. And if we can't find somebody right away who 
meets our standards, then we don't hire them. We wait until we 
can strengthen the pool in some way, and then we hire them. So 
it is just a nonnegotiable part of this to hire people who are 
above some pretty high standard.
    But then that is not the end of their education. They have 
a lot usually to learn, and they do this in various ways at 
CBO. We do a lot of mentoring of younger analysts from older, 
more experienced analysts, people who have been at CBO for a 
while and seen the work that we do.
    We have a lot of oversight of the estimates and reports 
that we write. You don't see numbers that have not been looked 
at by a number of people at CBO, and through that process, our 
analysts learn to check their own assumptions, to make sure 
they are talking with the right outside people.
    Of course, we talk with a lot of people around the 
Government and in the private sector when we are constructing 
estimates. Our analysts need to learn how to do that 
effectively, how to get the information without falling for 
some particular line that somebody might be trying to push on 
us.
    We send people for formal training in statistical 
techniques, in writing to make sure that our presentations are 
clear. And we send them to conferences and seminars so they can 
understand what people, other people in their fields are 
thinking, what the latest ideas are.
    Senator Hoeven. So is there a primary way of learning the 
methodology and the modeling by working with the mentors?
    Dr. Elmendorf. Primarily learning as they are working, yes. 
I mean, again, as people come with 4 years of college and 
usually 2 or 4 or more years of graduate school beyond that. 
But then, as you say, there is a tremendous amount they need to 
learn about how to apply that education to our specific tasks, 
and people learn that through working with more experienced 
people.
    Senator Hoeven. Right. Because you probably haven't had 
somebody who has spent years out in the oil patch doing 
hydraulic fracturing, right? Or developing the process or----
    Dr. Elmendorf. That is right.
    Senator Hoeven [continuing]. By running an oil company that 
generates that revenue. But they are going to create a model or 
a methodology that is going to determine the value, which is 
going to affect not only the laws that may go directly to the 
energy world, but even to the underlying financial 
underpinnings of what we are doing from a budgetary standpoint.
    So that is what I am asking. So they get that mentoring and 
training and specialized knowledge to develop that modeling and 
come up with a number how? From mentoring primarily?
    Dr. Elmendorf. So the techniques, the modeling techniques, 
to the extent they have not learned them in graduate school, 
they learn them through--mostly through on-the-job training 
with more experienced analysts. But for any given question, I 
mean, our experienced analysts also have not worked in oil 
fields. So for any given question, we reach out very frequently 
to outside experts with a range of views. So, and that is 
across the topics we work on.
    Senator Hoeven. And that means--excuse me. And that means 
not just going to the agency involved, but actually----
    Dr. Elmendorf. Right.
    Senator Hoeven [continuing]. Going outside to the ``real 
world'' or the people that are doing this in private enterprise 
and talking to those experts, right?
    Dr. Elmendorf. Yes.
    Senator Hoeven. And I am just using hydraulic fracturing as 
an example, albeit one I am very interested in. There are many 
others, you know, where you are dealing with something very 
specialized.
    Dr. Elmendorf. Yes. That is absolutely right. So we do 
this----
    Senator Hoeven. You don't just go back to the agency and 
say, ``Hey, you tell us kind of how life is.'' You go beyond 
that?
    Dr. Elmendorf. No, as I said, we talk to people running 
Government programs, and we also talk quite a bit to people in 
the private sector. So it depends on the issue at hand.
    When we are trying to understand what is happening in 
Medicaid, for example, we talk to people who are participating 
and running the Medicaid program, but we also talk to State 
Medicaid directors. When it comes to work on hydraulic 
fracturing, we are talking to people who are analyzing, 
analysts in that area, and also people who are participants in 
that work.
    And that is true across from our work in defense to 
agriculture to water resources to energy to the environment to 
tax policy, across the board.
    Senator Hoeven. Thank you. And again, I am just using that 
as an example. I think it is so important you go beyond just 
the agency you are working with in terms of just, well, what 
does the agency think?
    Good. I understand you have to do that and get that. But I 
really think it is important to go beyond that.
    Dr. Elmendorf. Yes. We do, too, Senator.
    Senator Hoeven. And I would come to Mr. Dodaro. Same thing. 
And I know I am running tight on time, but I am going to ask 
some indulgence from our chairman because I do have to leave 
after this question. So if I could go for just a couple of 
minutes? Because I want to go really down the same line.
    And the question actually that I was going to combine with 
it is so if you had some more resources, what would you do? I 
am thinking, Dr. Elmendorf, you are saying probably more people 
and salary. Roughly correct?
    Dr. Elmendorf. Yes. That is right.

                          GAO'S HIRING PROGRAM

    Senator Hoeven. Okay. So same thing, hiring people, how do 
you train them up? And I know that you go beyond the agency 
because of the way you do things, but where would you put some 
additional resources if you had them?
    Mr. Dodaro. Sure. First, we are a very multidisciplinary 
organization. We hire not only people that have public policy 
degrees, but also accountants for financial auditing. We hire 
economists, as well as people in science and technology areas, 
both information technology and the physical sciences. We are 
trying to hire a couple more actuaries right now.
    We also hire subject area experts in healthcare and 
defense, et cetera. We have a wide range of technical 
disciplines and subject areas. Like CBO, most of our people 
have master's degrees or doctorate degrees in those areas.
    We also have a very robust or at least we did--we are 
trying to reinstitute it now--internship program, where we 
bring people in from colleges and universities. In fact, that 
is how we get about half of our new hires for the entry-level 
program. They come in as interns. They will work on audits, and 
we see how they do. They get a chance to know our methods and 
get some experience, and then we can make offers to them for 
permanent positions.
    We also hire at all levels. We hire people at mid level and 
upper level from the private sector or other agencies with 
specialized experience.
    If we had additional resources, there are several things I 
would do. Number one, we need to continue to replace our entry-
level program. Even though this year we are going to increase 
it, we normally have in years past about 400 people in this 
program.
    It is a structured 2-year training program. They get 
classroom training and on-the-job training. We move them around 
to different areas within GAO's work so they get a breadth of 
experience. We place them in one of our mission teams after the 
2-year program, if they graduate from the program successfully.
    Right now, our pipeline of people entering GAO through this 
program has been depleted. Last year, I mentioned I felt like a 
college football coach where all the seniors were graduating, 
and there were no freshmen and sophomores coming in. But now, 
thanks to your support, in 2014, we will be continuing our 
entry level hiring. But we won't be at the level we need to be.
    Our age profile and demographics are just like the rest of 
the country in that we are going to have a lot of people 
retire. A third of our senior executives are able to retire 
right now and 21 percent of our senior managers. So we need to 
replenish the pipeline going forward.
    Our biggest value to the Congress is deep institutional 
knowledge and experience in these programs. We need to bring 
these people in, give them the training, and move up in the 
critical skill areas.

                    SCIENCE AND TECHNOLOGY CAPACITY

    The other area that I would put more resources in is a new 
center that we have developed for science and technology 
issues. I believe this is the next big evolution of what GAO 
needs to build its capacity in. We are getting asked now to 
look at satellite programs, space programs. Weapon systems are 
becoming more sophisticated.
    For the energy issues and the environmental issues, we need 
people who understand science and technology. You know, not to 
do basic research, but to understand, for example as you are 
saying, in the hydraulic fracturing area, you want to bring 
people in who actually have experience in the field doing these 
things. That is what we have been doing and hope to expand in 
the science and technology area.
    We have just held a forum on nanomanufacturing technology. 
I want to hold one on additive technologies, which hold 
tremendous potential for producing spare parts for DOD, rather 
than to buy spare parts and store them and incur the cost of 
that.
    So there are a lot of developments in science and 
technology that I think are very important for us to be able to 
advise the Congress. This is really important, because the 
Congress used to have an Office of Technology Assessment. That 
office hasn't been funded since the mid 1990s.
    Congress has increasingly turned to us to do technology 
assessments, which we have developed the capability to do. 
Those would be the areas: replenish our entry-level pipeline 
for succession planning purposes as well as target investments 
in science and technology. We would be in much stronger 
position to continue to support the Congress now and in the 
future.
    We just developed our strategic plan for serving the 
Congress from 2014 to 2019, and we identified all these areas 
and trends, including science and technology, national security 
issues and others. Then, after vetting that with the Congress 
and the committees, we use that to shape our workforce for the 
future, and to make sure we have the right talent to deliver 
those type of assessments.
    Senator Hoeven. Again, my thanks to both of you for what 
you do. Appreciate it very much.
    Dr. Elmendorf. Thank you, Senator.
    Mr. Dodaro. Thank you, Senator.
    Senator Shaheen. Thank you very much, Senator Hoeven.
    Mr. Dodaro, you will be interested to know I just visited a 
company in New Hampshire, where they are refurbishing a radar 
system from a ship for DOD to put back on a new installation. 
So it is impressive to see that going on already.

                 ENERGY EFFICIENCY IN THE GAO BUILDING

    Senator Coons.
    Senator Coons. Thank you, Chair Shaheen.
    And let me, if I might, just follow up on some of the areas 
of investment you have laid out, Comptroller General Dodaro. In 
the GAO facilities, if I understand correctly, one of your 
areas of concern is energy efficiency.
    Mr. Dodaro. Right.
    Senator Coons. Have you considered an ESPC as one of the 
vehicles that in the private sector and public sector has been 
shown to be a cost-effective and predictable way to achieve 
savings and energy efficiency?
    Mr. Dodaro. You mean for the GAO building itself?
    Senator Coons. Correct.
    Mr. Dodaro. I know we have consulted with outside 
contractors. I will have to give you the details for the 
record, Senator. I am confident that our people are looking at 
technology to achieve energy efficiency.

    [Note: See in the ``Additional Committee Questions'' at the 
end of the hearing for the Government Accountability Offices's 
response to Senator Coon's question above.]

    One of the things we do in GAO is we are looking at the 
rest of the Federal Government and doing research in the 
private sector. Whatever best practices we find in our audit, 
we plow them back into our internal management areas. So I am--
--

                           ENERGY EFFICIENCY

    Senator Coons. Well, I suspect you will find that one of 
the highest rate of return investments you can make will over 
the short run and the long run be investments in energy 
efficiency. Senator Shaheen earlier highlighted a concern that 
I also share. When I was in the private sector, and this is now 
nearly 20 years ago, as in-house counsel for a manufacturing 
company, we used an energy performance contract to 
significantly save on our operating costs.
    And then when I was a county executive in county 
government, we also--we were trying to balance a capital and an 
operating budget, and we found ways that we were able to 
significantly reduce our capital investment by financing it off 
of future savings, which were legal obligations under the 
contract.
    The broader point I am trying to make is that there are 
billions of dollars in identified savings in energy efficiency 
in Federal buildings, billions, that are not being achieved 
because of how it is scored. And so, some of the frustration or 
concern that you have heard from myself and from Senator 
Shaheen, and I think there were 28 Senators who actually signed 
a bipartisan letter to the President, urging that these 
vehicles, ESPCs, be used by the executive branch.
    There is a little frustration because it, frankly, puts 
Americans to work. Typically, energy efficiency projects employ 
local contractors and servicemen. Typically uses American 
technology and is often some of the easiest ways to save 
operating dollars.
    I understand, Director Elmendorf, your explanation that it 
is dependent on future appropriations for there to be the 
spending on energy against which you will be making savings. 
But I would be grateful if we could figure out a path forward 
where perhaps there is some way, short of amending the budget 
laws. But there has got to be some way to take advantage of 
these tools that are so widely used in the private sector and 
public sector, everywhere but the Federal Government, to 
achieve positive outcomes in terms of employment and savings.
    Dr. Elmendorf. So, Senator, we are happy to talk with you 
and your staff about why we do what we do now and whether there 
are ways that we can be more helpful to the Congress. As I 
mentioned earlier, there is the issue, as you noted, of the 
future appropriations being the place where the savings 
actually occur.
    The other issue I mentioned earlier is that a number--a lot 
of these savings tend to happen over long time horizons, and 
our estimates tend not to go out maybe as far as would be 
useful to show that. But we are happy to work with you.
    We are not trying, obviously, to stand in the way of 
effective management of the Government's resources. And if we 
think that there is information we can provide that would be 
more helpful to you and your colleagues, then we can work to do 
that.

                         10-YEAR BUDGET WINDOW

    Senator Coons. Across a dozen projects that I was directly 
involved in managing, we prioritized those investments that had 
a payback timeline less than 10 years. There are some that go 
out 17 or 20 or more, but you know, typically, in any Federal 
building, any other than the most recently built and any other 
than the most modern, you have got some investments that have a 
payoff timeline of 3 to 7 years. That is, frankly, where the 
sweet spot is in most energy efficiency investments.
    But that leads to another question that I think is of some 
value for all of us. We typically look at a 10-year budget 
window. We look to you for analysis that is very helpful as we 
make decisions, but there are some pernicious consequences to 
having a 10-year window, and you can sometimes see, as we are 
looking at offsets and so forth, you ask a question, well, why 
this? Well, because it really hits in years 11, 12, 13, 14. You 
know, we are trying to strike balances here.
    In the immigration bill, there was a second 10-year window 
added in terms of the scoring, and a lot of the decisions we 
are considering here have a time horizon of fiscal impact that 
significantly accelerates in the second and third decade. What 
sort of opportunities and challenges would there be, in your 
view, in terms of our being able to make fiscally sound 
decisions if we had optional second and third decade scoring 
windows?
    Understandably, the accuracy with which you can make 
predictions on rate of growth of healthcare costs or rate of 
growth in the economy gets weaker and weaker as you go out, and 
you don't want to put out projections that you know are 
unlikely to be sound. But what would be the benefits and what 
would be the risks of having second and third decade 
projections?
    Dr. Elmendorf. So, Senator, I think you summarized them as 
well or better than I can. The advantage of looking out over 
longer periods is to give you and your colleagues a clearer 
sense about what policy will do over time. And immigration was 
an example where the way the bill was structured and the time 
lag for various things to happen, the effects in the second 
decade of the Senate-passed immigration bill were very 
different from the effects in the first decade.
    And so, I think that was an appropriate case for us to look 
further out. But the costs, I guess there were two. One is it 
is simply more time consuming and more complicated. But 
secondly and I think most importantly, as you say, the crystal 
ball that we use gets awfully hazy as you look out further.
    Even over 5 years or 10 years, our estimates have a great 
deal of uncertainty in most cases. And we don't want--as you 
said, we don't want to just give you numbers because we can add 
rows to the spreadsheet. We want to stop at the point where we 
think we don't have more real information to give you.
    But there is nothing magic about 10 in that sense, and 
there are some cases like immigration, like the healthcare 
legislation in 2010 where we did look out to a second decade. 
So I don't view this as a religious matter that we can only 
talk about 10 years, and if there are particular other cases 
where you and your colleagues think it would be more useful for 
us to look out further, we can try to do that.
    But it is important that everybody understand how the 
uncertainty mounts because it is really substantial enough in 
the first decade for the estimates that we do and can be much 
more uncertain as you look further into the future.
    Senator Coons. Well, thank you. I appreciate your answers, 
and while I have other questions, I am going to defer to my 
friend, the Senator from Arkansas.
    Senator Shaheen. Senator Boozman.

                   SKEWED FINDINGS UNDER CURRENT LAWS

    Senator Boozman. Thank you, Madam Chair.
    And we do appreciate both of you all and your hard work.
    Dr. Elmendorf, Senator Coons and Senator Hoeven had 
questions about methodology, whether it was energy or whatever. 
Are there areas that under present law--and I say this in an 
effort to try and be helpful. Are there areas under current law 
that make it such that the law is such that it does skew your 
findings?
    Dr. Elmendorf. I don't think our--I don't know of cases 
where our findings are skewed, Senator. What I would say 
instead is that we don't--if we had more time and more people 
and could do more analysis, we would give you more accurate 
estimates. We would be able to keep track of more different 
repercussions of legislation that you are considering.
    If we think there is a reason we are going to not be in the 
middle of the distribution, that is crucial for us to try to 
correct as best we can. I am more worried about all the various 
ways in which legislation can matter in the world that we just 
can't keep track of.
    Senator Boozman. So it is not a methodology problem then 
that we make you do. It is just that sometimes you don't have 
the resources to or the knowledge perhaps and personnel in 
certain areas----
    Dr. Elmendorf. I think that is right, Senator. I mean, 
there are--as you know, there are conventions of our estimates. 
For example, longstanding convention to keep track separately 
of mandatory spending, mostly of benefit programs, and of 
discretionary spending, which is appropriated every year. But 
that distinction comes from a fundamental difference in how the 
Congress works.
    Some programs are set in place for longer periods of time, 
and some things you vote on each year. So that is not--and our 
conventions are not created by us. They are created really by 
the budget committees many, many years ago to try to meet the 
way the--to help us line up with the way the Congress is making 
these decisions.
    And I think where there are particular cases where we think 
that some convention might be misleading, then we try to step 
outside that. So the immigration legislation was an example of 
that, and some of our healthcare work has been an example of 
that.
    So although we focus on 10 years, if we think there is some 
clear reason to expect that the second decade might have rather 
different effects because of the way a law would be unfolding, 
then we will try to give you information about that second 
decade. It is usually explicitly a rougher approximation.
    Senator Boozman. Sure.
    Dr. Elmendorf. But we try to do that. So we try to make 
sure we are giving you real information and not being--not just 
being hung up on particular rules.
    Senator Boozman. When you have major changes by executive 
order, like the ability to keep your plan or delaying 
implementation, do you score that? I mean, does that become 
part of the baseline then going forward?
    Dr. Elmendorf. It becomes part of our baseline going 
forward. We don't generally produce separate estimates of 
administrative actions. There are many, many of them. And our 
way we use them and our focus is on estimating the effects of 
legislation that you and your colleagues are considering.
    But every time we produce a new baseline, that will take 
onboard all of the administrative actions to date. And in fact, 
when the administration----
    Senator Boozman. So that is factored in then as you make 
predictions?
    Dr. Elmendorf. That is right. That is right. And in fact, 
when the administration makes an action, that immediately will 
affect our scoring of--if it is a formal change, that 
immediately affects our scoring of legislation. So the recent 
decision by the administration to put forward this proposal for 
changing the way Medicare Part D works in some ways, and then 
their decision more recently to not make those changes----
    Senator Boozman. Right.
    Dr. Elmendorf [continuing]. That affects our estimate of 
legislation that I think the House was taking up today, an 
estimate we provided last night.

                 IMPLEMENTATION OF GAO RECOMMENDATIONS

    Senator Boozman. Good. That is good to know.
    Mr. Dodaro, you all do a lot of great work in coming up 
with recommended actions to help us save money and make 
agencies more efficient. What are some of the obstacles, and 
how can we help as far as actually getting those very valuable 
recommendations, valuable in every sense of the word.
    How can we help you in actually getting some of those 
things? A lot of them are done, but how can we be helpful in 
getting implementation?
    Mr. Dodaro. Well, first of all, on average, about 80 
percent of our recommendations are adopted by the executive 
branch or by the Congress in law. So I think the most important 
thing is providing venues in the Congress for oversight and 
allowing us to come forward in areas where the executive branch 
in particular hasn't voluntarily agreed to implement the 
recommendation, and then to elevate that to a matter for 
congressional consideration.
    We have done that in these annual reports we now do on 
overlap and duplication in the Federal Government. We have made 
389 specific recommendations over the first 3 years. We are 
getting ready to issue our fourth report. About 323 of those 
recommendations have gone to the executive branch, but about 66 
have gone to Congress.
    Congress so far has acted upon about 15 percent of those 
recommendations. So I keep mentioning it to the committees, and 
we have a public scorecard we keep for overlap and duplication. 
The extent to which you can provide additional support for the 
open recommendations that haven't been acted upon yet, that 
would be very helpful.
    And of course, you know, providing necessary funding for us 
to keep replenishing those recommendations. We try to have--
usually, we have about 1,500, in some cases maybe 2,000 new 
recommendations every year.

                       PRIORITIZATION OF GAO WORK

    Senator Boozman. How do you determine the time sensitive? 
What is your mechanism for deciding how to go forward with 
time-sensitive requests?
    Mr. Dodaro. Well, we will----
    Senator Boozman. There is what we perceive as time 
sensitive and what you perceive is different. I guess, that 
is----
    Mr. Dodaro. One way is to have good communication with the 
committees on which are their most important priorities. We try 
to get at this several ways. One is by planning ahead. I 
mentioned earlier we have a strategic plan for work we are 
going to do from 2014 to 2019 that we just issued last month. 
That was based upon consultation with the committees.
    We try to start that work that is time sensitive as best as 
committee people can tell. That way we are ready when the 
Congress is ready to take up reauthorizations or to take up 
specific issues.
    Secondly, if a request from Congress comes in that is new 
that wasn't anticipated, we will talk to the committees about 
reprioritizing the work we are already doing for them. In some 
cases, we will stop some of the work and begin other work. In 
other cases, depending upon the issue, we may have already done 
a lot of work. So we will be able to meet time-sensitive 
requests that way.
    And lastly, I would say we can phase the work that we are 
doing to meet the most time-sensitive needs as the work 
proceeds and keeping people well informed in briefings. So we 
are very sensitive to that.
    Senator Boozman. Thank you. Thank you, Madam Chair.
    Senator Shaheen. Thank you.
    Senator Coons has to leave for another meeting. So I am 
going to turn it over to him for a final question before I go 
back to asking a series of questions that I have.
    Senator.

            DEBT-FINANCED INVESTMENTS AND OPERATING BUDGETS

    Senator Coons. Thank you very much, Madam Chair. I 
appreciate your graciousness and your leadership of this 
subcommittee.
    And I will just for the record, the bipartisan letter I 
referenced from more than 20 Senators, it was Senator Boozman 
who was the co-leader, which I should have recognized before. 
There is broad interest here on ESPCs and scoring and how to 
make them apply.
    Now many of us have prior service in the State or county 
government, and we are used to having a capital and an 
operating budget. We are used to having debt-financed 
investments in things that lasted for long periods of time and 
operating budgets that balanced.
    What are the reasons, what are the barriers to moving in 
that direction for the Federal budget? I think any of us, as 
new legislators here, are puzzled by the complexities of 
explaining to folks having the capital and the operating 
intertwined.
    And frankly, our deficits are so significant, it is much 
easier to articulate to the general public why we are borrowing 
money overseas or why we are borrowing money in the bond 
markets to build a library or a sewer system or facilities that 
will last for 20 years. It is much harder to explain to anyone 
why we are borrowing at a record clip simply to fund the 
ongoing operations of Government.
    Dr. Elmendorf. So, Senator, I understand that point. I have 
trouble explaining that myself to people. I think the--and this 
is not an issue in which CBO has an official position. We don't 
make recommendations about this.
    I think people who have considered capital budgets before, 
people who have been opposed to the Federal Government moving 
in that direction have mentioned a number of issues. One is the 
difficulty of defining what constitutes a capital expenditure 
and what isn't.
    So some things are pretty clear. If you build a bridge, 
that seemed like a piece of capital. If you invest in 
somebody's education through Pell grants, for example, does 
that count as investment or not?
    And one can tell a story in economic terms about that is an 
investment in what economists call ``human capital,'' and one 
can tell the story in which that is not investment. But the 
Congress would need to decide, and it would need to then 
presumably enforce efforts to take things that are not, in some 
people's judgment, capital investments and have them be called 
capital investments in order for them to receive a different 
budgetary treatment.
    I think a second issue that people have raised is concerns 
about the transparency of the Federal budget. Almost all of the 
Federal budget operates on a cash basis, and that is not the 
way most entities would keep track of some of those flows, but 
it has the virtue of being comparatively transparent. Money 
that comes in counts as revenues or, in some cases, collections 
of other sorts. And the money goes out as spending.
    And the exceptions to this cash treatment are quite limited 
primarily in Federal credit programs, where there is a more 
complicated accounting. So I think some people have worried 
about making the Federal budget more of a black box if there 
were more different budget categories.
    I am not suggesting that those are--those are the winning 
arguments necessarily, but those are some of the arguments that 
have been raised in the past for why moving to a capital budget 
would not be a good idea, despite the advantages that you have 
mentioned.
    Senator Coons. Well, thank you.
    If there has been a GAO study on the subject in the past, I 
would certainly welcome it. I am grateful for your work in 
identifying high-risk and high-reward areas and look forward to 
working with you on that and to working on manufacturing and on 
areas where we could reduce duplication manufacturing.
    And Madam Chair, again I want to thank you for 
accommodating my request. Thank you.
    Senator Shaheen. Thank you very much.
    Dr. Elmendorf, I think there are a lot of people who might 
disagree with the idea that the Federal budget is transparent. 
But I understand the point you are making, and I am not 
engaging here----
    Dr. Elmendorf. On relative terms, Madam Chair.
    Senator Shaheen. Yes, I don't want to be argumentative.

               GAO'S COORDINATION WITH INSPECTOR GENERAL

    Mr. Dodaro, the Congress has tasked GAO with producing a 
biannual report on Federal agencies and programs that are most 
vulnerable to fraud, waste, abuse, and mismanagement and also 
known as the ``high-risk list.'' And one of those agencies that 
has been regularly on that high-risk list is DOD's contract 
management programs.
    I have to say I had the benefit of chairing a subcommittee 
last week in the Armed Services Committee on readiness, where 
we had someone from GAO talking about the IT dashboard, and the 
benefits that it provides. Can you talk about how you view that 
high-risk list and the intersection of that and work that the 
special inspectors general are doing or have done in Iraq and 
now in Afghanistan? And how they overlap or if they overlap, 
and what kind of benefits there are from your perspective in 
the work that goes on by the special inspectors general?
    Mr. Dodaro. Yes. First of all, I place a high priority on 
making sure we are coordinating our work with all the inspector 
generals, including the special inspector generals. In fact, 
last week, I hosted our annual coordination meeting that we 
have, and over 50 of the IGs were there. And we talked about 
common challenges and other issues.
    We coordinate all our work with them. I mean, both in a 
work planning standpoint and before we start each engagement.
    Senator Shaheen. Can I just ask you to----
    Mr. Dodaro. Sure. Yes.
    Senator Shaheen [continuing]. Expand on that a little bit? 
When you say you coordinate your work with them, do you meet 
regularly? Do you share information on a regular basis? How do 
you do that coordination?
    Mr. Dodaro. Yes. Well, each of our teams that has 
responsibility for our relationship with individual departments 
and agencies meets with the inspector general offices on a 
regular basis. Some of them do it annually. Some of them do it 
quarterly.
    Also when we start each engagement, we make sure when we 
get a request from the Congress, that we have checked with the 
IGs to make sure they are not already doing something or plan 
to do something. If so, then we have a dialogue with the 
committees about that issue.
    That is the type of regular coordination that goes on all 
the time, both from a planning standpoint of a work plan for 
the next year and also on an engagement-by-engagement basis as 
we get requests from the Congress and start our work.
    The big difference between GAO and the Inspectors General 
at large, but also particularly the special IGs, is they have a 
greater proportion of their work on investigations and criminal 
investigations. We have a very small investigative operation 
that covers the entire Federal Government. They have thousands 
of people that do that. We have fewer than 20 investigators.
    We do more program audits, and more of our work now covers 
multiple agencies at the same time, where we are looking 
Governmentwide or we may be looking at the relationship between 
DOD programs and State Department/USAID programs, for example. 
Therefore we have more of a cross-cutting nature in most of the 
work that we do, although we do work in individual departments 
and agencies, too, and our skill sets are a little broader than 
the IGs. As I mentioned, the multidisciplinary workforce that 
we have, most of the inspectors general don't have anywhere 
near the range of disciplines and expertise that we have across 
the breadth of what the Federal Government does.

             CHALLENGES TO IMPLEMENTING GAO RECOMMENDATIONS

    Senator Shaheen. You make recommendations for more 
efficient and effective operation of Government, and short of 
congressional oversight to pick up on those recommendations, 
there isn't any real opportunity to go back to those agencies 
and say, ``Okay, GAO made these 20 recommendations, and they 
have adopted 3 of them. Who is doing the other 17, and why 
haven't they been done?''
    Mr. Dodaro. Right. Sometimes I notice a pattern, for 
example, as we did at the Veterans Administration, where they 
actually agreed with a lot of the recommendations, but they 
weren't implementing them as fast we thought they should.
    I met with Secretary Shinseki, and we talked about that, 
and we put in place a dialogue between our two agencies. I do 
outreach with the committee chairs and ranking members. I also 
do outreach with the top leadership in the executive 
departments and the agencies and try to encourage them to 
implement some of those recommendations.
    That is another avenue that I use. Really, the Congress is 
the most important part of it because of the continuity, 
particularly in the appropriations process, to get some things 
in place that will get the agency's attention. And so, we share 
our open recommendations as much as we can with the committees.
    But if they are not going to voluntarily implement our 
recommendations, and they are not going to take congressional 
direction through the appropriations and oversight committees, 
you have really run out of tools at that point. I try to 
convince them as much as we can with the power of our work.
    Senator Shaheen. Sure.
    Mr. Dodaro. Having the Congress' support behind our work is 
really the difference. There is no compulsory requirement that 
agencies implement our recommendations. They do have to provide 
Congress with regular reports on what they are doing, and we 
follow up on all the recommendations.
    That is why, for this work we are doing annually now on 
overlap and duplication, we have a public Web site that tracks 
the status of all the recommendations so that the public has a 
view, as well as having that information available to the 
Congress.

           DOD AND VA'S NEW INTEGRATED HEALTH RECORDS SYSTEM

    Senator Shaheen. It is interesting that you mention DOD and 
the VA because that is one area where, obviously, there have 
been a number of issues that have been raised, and the fact 
that both the VA and DOD are now scheduled to deploy a new 
system to deal with their integrated records, health records is 
an example of where we have not done a very good job in the 
Government. And it has led to a lot of concerns in the public 
with veterans with backlog.
    Given that this is one area that you have been working on, 
do you feel like they are back on track at this point to 
address the goal of trying to make sure they have got an 
integrated health record system between DOD and the VA?
    Dr. Dodaro. We have real doubt about that. We just issued a 
report basically saying that DOD and VA haven't provided enough 
of a business case to say that this new direction that they are 
going in is going to be better than the integrated approach 
they were pursuing previously.
    So we have been tracking this for a number of years. I know 
it is very frustrating. It has been frustrating to us as well 
as the Congress. I do think they need to provide better 
justification for the approaches that they are taking. We have 
been very explicit in questioning whether they have the 
business case to justify how they are going to pursue separate 
efforts and still have them interoperable at the time.
    The track record here is not very good.
    Senator Shaheen. Thank you.
    Senator Boozman.

                        REQUIREMENTS BY STATUTE

    Senator Boozman. Thank you, Madam Chair.
    Dr. Elmendorf, I know you all have a lot of things that you 
have to update by statute, a lot of requests. Is there the 
opportunity that perhaps we could help by--help reduce your 
workload by sunsetting some of this stuff that we all agree has 
just been there forever and it has always been done, but really 
isn't either of use anymore or simply not being utilized?
    Dr. Elmendorf. So, Senator, I think we have been in some 
cases in that situation, but the Congress actually did relieve 
some of that burden. There were reports that we were doing on 
the effects of the Recovery Act of 2009 and on the effects of 
the TARP. The Congress reduced the frequency, really cut back a 
lot on what we had to do. So that was very useful for us.
    Senator Boozman. And that is big stuff. Have you got a lot 
of little stuff in that regard, or is that really not much of a 
factor?
    Dr. Elmendorf. No, that isn't that much of a factor. The 
number of things that are required of us by statute are 
actually fairly limited. The challenge for us is simply that 
you and your colleagues have a whole range of very interesting 
and complicated ideas for legislation that we need to run fast 
to try to keep up with or not fall even further behind of.
    But it is not so much the things that are in law. It is 
just the range of interests and the complexity of a lot of the 
analysis of the proposals that you and your colleagues are 
bringing to us.

                            WORKLOAD BALANCE

    Senator Boozman. How do you balance your workload? I know 
towards the end of the year this year we have got an election, 
and then at some point, it might be right before the election, 
maybe after the election, that we put together lots of 
budgeting aspects and stuff, which is really going to be a 
very, very busy time for you.
    Is there a mechanism that you have of kind of looking 
forward? Do you try and--what do you do, I guess, is what I am 
saying. It is kind of like the storm that is going to come in 
for you all. You know it is going to come. There is various 
times of the year.
    Dr. Elmendorf. Right.
    Senator Boozman. What do you do to put in place to try and 
alleviate that?
    Dr. Elmendorf. Well, we sit down with the managers at the 
CBO in each area once a quarter to review systematically all 
the projects that are under way in that area and to make sure 
that they are the highest priority projects and that we are 
making sufficient progress on them to be ready for whatever we 
view as the next storm in some area. And that can come because 
particular programs are due for reauthorization, because the 
fiscal year is ending and new appropriations will be made, 
because a new Congress is coming in. So we are very sensitive 
to all of those things.
    On an ongoing basis, I mean literally every week, we are in 
touch with leadership in the Senate and the House and with the 
leadership of the key committees to be sure that we are doing 
the things that are right now--they are necessary right now.
    But then we also take pains to be sure we are building the 
tools that we will need, doing analysis we will need for you 
all at the end of the year or next year or after that. And it 
is very important for us to devote significant energy to that 
so that we are ready.
    And I mentioned at some point earlier that a fair number of 
the testimonies that we have done to Congress this year have 
been--have come on very short notice, but we had done the work 
previously. We had written the report we could then draw on 
when it was needed by Congress, and it is our job to be in 
close enough touch with the committees and leadership to know 
not just where you are going this month and next month, but 
later this year and next year.
    Having said that, there is only so much we can do. We can 
build the analytic tools to be ready. But nonetheless, when the 
storm comes and there are many proposals to be looked at--at 
once, we need to do that work then. And my colleagues are 
extremely committed to serving the Congress as best we can, and 
we work very hard all the time, and we work whatever hours are 
needed when the Congress needs us to deal with legislation that 
it has to push through.

                          FEDERAL IT PROJECTS

    Senator Boozman. Mr. Dodaro, why is IT such a challenge for 
the Government?
    Mr. Dodaro. Well, there are a couple factors. One is that 
the agencies have great difficulty defining the requirements 
that they want. The requirements are always changing, which 
creates a lot of problems. We have identified that whether we 
are talking about weapon system or information system, the 
requirement-setting process is continually changing, and that 
creates difficulty.
    Second, there are not well-disciplined best practices put 
in place on a routine basis. One way to make better decisions 
on a regular basis is to use modular development, where 
agencies are learning and developing the projects over a long 
time, as opposed to trying to design a big system. There is an 
endgame, including interim projects and demonstrations of 
functionality throughout project development.
    This is particularly true in weapon systems. New 
technologies aren't mature enough to be ready to put into 
production and deployment, and we have sort of raised our hand 
and said we don't think you are ready yet. There is a lot of 
concurrent production and technology development going on that 
leads to later problems and suboptimal investments.
    There are not good disciplined approaches in place. 
Congress has passed legislation requiring best practices to be 
implemented. Many agencies have them embedded in their policies 
and principles but don't effectively implement them over time.
    As you know, I mentioned earlier if we had additional 
resources, I think we could stop more of these investments 
earlier. That has been our goal to try to make sure we get 
involved early.
    You can tell where the warning signs are and where things 
are going to be off track if you have the time to go in and 
look up front. There are clear ways to do this properly, and 
there are many examples of where good practices are not being 
followed.
    Senator Boozman. Again, thank you all. That is really all I 
have, Madam Chair.
    But I do want to thank you all. I know that you and your 
agencies work really hard in a very nonpartisan way to try and 
get the information that we need. And it is very, very helpful, 
and we do appreciate your hard work, and I hope that we can 
communicate back and forth so that we can give you the 
resources that you need.
    Thank you.
    Mr. Dodaro. Thank you, Senator.
    Dr. Elmendorf. Thank you, Senator.
    Senator Shaheen. Thank you, Senator Boozman.
    And thank you especially for that IT question because I 
think that is a puzzle that all of us share, why we can't get 
better at those IT contracts.
    I have lots more questions and we could go on a lot longer, 
but unfortunately, I also have to leave shortly. But I do have 
a couple of final questions that I would like to pose to both 
of you.
    One is following up on the accountability and transparency 
and oversight that I think all of us would like to see within 
Federal programs. One of the areas where I think we have got to 
do a better job is with the budget process.
    As we have seen, as you all have experienced pretty 
dramatically, over the last several years, we have been 
operating on continuing resolutions. Too often it has created 
uncertainty, which has affected the economy. It has made it 
difficult to operate at the Federal level, and one of the 
things that I have looked at with Senator Isakson is the idea 
of changing our budget process from an annual to a biannual 
budget.
    Now I am not going to ask either of you to comment on 
whether you think that is a good idea or not, but I want to ask 
you, Mr. Dodaro, is whether you think under the current budget 
process that we have in place, whether Congress adequately is 
able to focus on recommendations that GAO offers on a regular 
basis and whether you think we could do that better if we were 
able to devote more time to that oversight piece?
    Mr. Dodaro. We provide all of our information in formal 
reports. We also provide the appropriation committees services 
evaluating the agencies' budget requests and have a way to 
provide them with our recommendations in that process. We are 
in a pretty regular pattern working with the appropriations 
committees.
    Now, of course, they have been a little disadvantaged 
because the President's budget submission has been late, and so 
that gets the whole process off to a late start. So I think we 
have good communications with the appropriations committees and 
the authorizing committees when they have reauthorizations to 
approve, particularly in the defense area, and a lot of our 
requirements for our work come through the defense 
authorization bills and the appropriation bills for work that 
they want done in time for next year's cycle to be considered 
over a period of time.
    The Federal Government's budget used to be on a June to 
July--or July to June basis, like a lot of the States are. They 
couldn't get the budget passed on time there. So they decided 
to move it until September to have more time to be able to get 
it in place.
    There is really no set process. We haven't had a budget 
resolution every year to guide the appropriation decisions. We 
have gotten behind.
    So I think a lot of things would be better if we were able 
to stick to regular order with regard to budgets and 
appropriations. If it works the way it is supposed to work, our 
work is synced to provide Congress with the right type of 
information at the right time for them to consider those 
findings.
    Senator Shaheen. I certainly think all of us would 
appreciate going back to regular order. I think the challenge 
is how to do that. And given that we are in a situation where 
we have only really passed two budgets according to our annual 
process since Ronald Reagan was President, I question whether 
we are actually ever going to get back to a point where we can 
get the budgets done in a way that provides that certainty for 
regular order.
    Mr. Dodaro. I agree with you. But on the other hand, I am 
saying there is an allure of going to a different approach, 
which we have done many times. You know, most of the last 30 
years have had continuing resolutions. But if the Congress 
doesn't stick with whatever new process they are going to come 
up with, there will be other types of problems that will come 
up, in my opinion.
    Now I have been watching this for over 40 years now, and 
the real issue is sticking with what the Congress has put in 
place as the process. It is just like a reorganization issue. 
Some people think if you reorganize, you are going to solve 
your problem. And sometimes you do, but many times you really 
don't.
    And so, I think it is just a matter of discipline and 
sticking with the process. I know what the difficulties have 
been, but I don't think changing the process will be a 
particular solution to solving that particular problem.

                   CHANGING BUDGET PROJECTIONS' RULES

    Senator Shaheen. No. I certainly agree that there is no 
magic solution, but I do think it would provide more time for 
oversight in a way that would be very helpful as we look at how 
to address some of the inefficiencies, some of the 
recommendations that GAO has made for improving the operations 
of Government.
    Dr. Elmendorf, I wonder, I think it was Mr. Dodaro who said 
that the rules around how we operate--or maybe it was you--were 
set some time ago, and given that, are there areas where we 
should be reviewing and considering changing the rules around 
how we do budget projections? We are in a much different world 
now than we were 10, 15, 20 years ago.
    Dr. Elmendorf. So I think this--so you are right. Of 
course, a lot of specific issues have evolved. It is not 
evident to me that the scorekeeping rules, the rules governing 
baseline projections that we follow need to be changed. I 
wanted to emphasize before that these are not things that we 
have invented now, that they were following longstanding 
custom.
    I don't want to suggest that that is necessarily perfect, 
the things that were set in place before. But I don't think 
that the fundamental issues that you and your colleagues face 
are really around, at least in general around those procedural 
issues.
    I mean, we have--as you well understand, we have a 
fundamental disconnect between the benefits that the Government 
has committed to pay under current law, the cost of those 
things, given the aging of the population and rising cost for 
healthcare, a disconnect between that and the revenues that we 
are used to collecting.
    And specific ways we do projections would change some 
details of that, but the basic problem I think is actually 
fairly clear. It is difficult, though, to make the policy 
changes to address it.
    So I don't want to sound like we were against changes in 
procedures, but I don't--when I wake up at night worrying, it 
is not about the procedures. It is really about the underlying 
issues that you and your colleagues face.

                            MEDICARE SAVINGS

    Senator Shaheen. On the other hand, in Medicare, for 
example, there are projections now of hundreds of billions of 
dollars in savings to the cost of Medicare because of 
healthcare costs leveling out, and yet we are not able to 
capture those savings as we look at how we score Medicare in 
the future, as I understand. Maybe I am incorrect about that?
    Dr. Elmendorf. Well, so, Senator, we have brought down our 
projections of Medicare spending considerably over the past few 
years. Relative to our projections of 4 years ago, we have 
lowered Medicare, projected Medicare spending in, say, 2020 by 
about 15 percent, and we have lowered projected Medicaid 
spending in 2020 by about 15 percent.
    We brought down our projection of the cost of the coverage 
expansion of the Affordable Care Act for that reason, although 
there are other factors that matter as well. So we are 
certainly very attentive to new evidence necessarily.
    We did ourselves a very thorough examination of what is 
happening in Medicare far beyond anything that anybody outside 
of CBO has done in that area. And based on that evidence is 
partly why we brought down our projections.
    So we are very attentive to that, but the world is a very 
uncertain place. And there have been past slowdowns in 
healthcare cost growth that have not--that have lasted for a 
little while, and then growth rates have picked up again.
    So we don't want to be too far behind the news, but we also 
don't want to take a few years and extrapolate them 
indefinitely. In the case of healthcare now, the slowdown has 
been sufficiently long lasting and pervasive across Medicare 
and Medicaid, in the private sector and within Medicare, across 
regions of the country, across high- and low-cost patients, 
across types of procedures and so on that something very 
important is going on, we think, and we have made significant 
changes in our projections.
    But as I say, we don't want to extrapolate 10 years, 20 
years beyond based on the experience of half a dozen years. So 
we are taking it seriously but trying not to overreact at the 
same time.
    Senator Shaheen. Well, thank you. Thank you both very much.
    As I said, I am sure we could spend another couple of 
hours, but I appreciate not only your testimony today, but the 
work that you and your agencies do to try and ensure that 
Government operates more effectively for taxpayers.
    And I know that, Mr. Dodaro, you have referred to this a 
couple of times, and I think you did, too, Dr. Elmendorf, that 
one of the things you are trying to do also is to make the work 
that you do more transparent for people in this country. And I 
think that is also very important.
    So thank you very much.

                     ADDITIONAL COMMITTEE QUESTIONS

    We will leave the record open until a week from today at 
noon for any other questions or comments that might be 
submitted by members of the committee or other Senators for the 
record.
    [The following questions were not asked at the hearing, but 
were submitted to the Departments for response subsequent to 
the hearing:]
                 Questions Submitted to Gene L. Dodaro
             Questions Submitted by Senator Jeanne Shaheen
    Question. The Government Accountability Office (GAO) is currently 
in the process of developing a fee-based system to offset the cost of 
GAO's reviews of ``bid protests.'' Considering the limited resources of 
small businesses, how does GAO plan to ensure that small businesses 
maintain a level playing field in bid protests?
    Answer. On March 18, GAO provided a status report to the committee, 
as required by report language associated with the Consolidated 
Appropriations Act, 2014, and we plan to submit an update in late June. 
GAO has convened an interdisciplinary team within GAO to examine 
functional requirements, acquisition strategy, and fee structure, and 
to conduct outreach to stakeholders. Our outreach to stakeholders is 
ongoing and, with regard to small businesses, includes congressional 
committees with jurisdiction regarding small businesses, the Small 
Business Administration, and organizations representing small 
businesses. GAO has made progress in each of these areas, and has 
released a Request for Information to industry in order to complete our 
analysis of potential options for this system and their costs. Since 
the proposed filing fee is to offset the cost of a system that has not 
yet been established, we do not yet have information that will allow us 
to predict the amount of a fee.
    We are conscious of the potential effects of the system on small 
business and we will carefully consider the amount of the proposed fees 
in that context. We are also focused on assuring that the filing system 
will be easy for all parties involved in a bid protest to use. We will 
continue to consult with the appropriations committees as our team 
makes decisions about how to implement the docketing system
    Question. How does GAO ensure its work is up to industry 
standards--that is, who audits the auditors? And how often?
    Answer. For GAO, the industry standard is embodied in the Generally 
Accepted Government Auditing Standards. These standards, along with our 
audit and reporting policies, are consistent with international 
auditing standards.
    The standards require that, in addition to a rigorous annual 
internal monitoring program, audit entities undergo an external peer 
review every 3 years. To assure independence, GAO's peer reviews have 
been conducted by international teams made up of representatives from 
national audit offices.
    Peer review is a comprehensive examination of GAO's system of 
quality control. It is conducted to assess whether GAO's quality 
assurance system is suitably designed and operating effectively. This 
comprehensive examination consists of:
  --interviews with senior leaders to establish their commitment to 
        quality;
  --interviews with staff to establish their knowledge of standards and 
        policy; and
  --a detailed examination of a sample of engagements and reports.
    GAO has received clean opinions in our three successive peer 
reviews (for 2004, 2007, and 2010 work). We post the reports from these 
peer reviews on our Web site. In addition to the clean opinions, all of 
the reports have cited a number of exemplary practices at GAO. For 
example, the 2010 report cited--among other things--GAO's strong 
corporate culture that supports quality and contributes to its 
effectiveness in improving Government operations. In essence, these 
reviews serve to assure the Congress and the American people that they 
can have confidence that GAO's work is independent, objective, and 
reliable.
    The current peer review of our 2013 work is underway--led by Norway 
and supported by Canada, the United Kingdom, Denmark, and the Bahamas. 
The peer review is scheduled for completion by September 30, 2014.
    Question. How does GAO ensure that GAO materials are readily 
accessible to the public, beyond posting reports on the GAO Web site?
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our Web site, anyone can sign up for daily emails that list and provide 
links to GAO's new reports--either all reports or reports on specific 
subjects. For social media, we use Twitter to share daily report 
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page, we try to provide a glimpse into at least one of the reports 
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the message. We also use Facebook to announce events such as our 
AskGAOLive webchats. For example, we recently had a webchat between the 
report's author and the public regarding our report on veterans' use of 
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announcements, as well as other employment-related content.
    The digital media we use include platforms such as YouTube and 
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podcasts--in which we interview GAO officials on significant issues or 
recent reports--and these can be downloaded or listened to from our Web 
site.
    Because we recognize that our audiences are often on the go, we 
have also developed apps for Android and Apple devices, which are 
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share GAO content with their readers by using our sharing widgets.
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digital media platforms will make it easier for our audiences to find 
and use the results of our work.
    Question. Does GAO conduct a review of each report to make sure it 
is understandable for a general audience, rather than just for subject 
matter experts?
    Answer. GAO audits often require in-depth research and 
sophisticated analyses of complex and technically challenging issues. 
In reporting on the results, GAO tries to strike the appropriate 
balance between the needs of the informed lay reader and subject matter 
experts. To achieve this objective, GAO assigns experts in written and 
visual communication to each report to enhance clarity of presentation. 
We also provide regular training in written communication to our 
analysts. Our inclusion of a Highlights page that summarizes key 
findings and recommendations also enhances the accessibility of our 
reports to a variety of audiences.
    We use a two-step senior executive level review for each product. 
The Senior Executive who has directed the engagement, and who will sign 
the report and serve as the primary contact, assesses the draft 
report's responsiveness to stated objectives; consistency with 
reporting standards; completeness and clarity of presentation; 
soundness of the evidence, logic, and balance leading to findings, 
conclusions, and recommendations; and adequacy in treating affected 
party comments. To the extent these Senior Executives have any 
concerns, they work with GAO staff to revise the draft report and 
resolve them. These Senior Executives then approve the draft report for 
final review.
    A Senior Executive in GAO's Audit Policy and Quality Assurance 
Office provides a final check of the draft report and reexamines the 
First Partner's judgment. Approval is given to issue the report when 
that Senior Executive is satisfied that the product is consistent with 
professional standards and GAO's core values.
    Question. Are there common hurdles GAO and Inspector Generals (IGs) 
face in obtaining the information and access you need from Federal 
agencies and other entities to conduct a thorough analysis and make 
realistic recommendations? How can we work to reduce those hurdles?
    Answer. GAO and the IGs face some common hurdles in access to data 
from Federal agencies. We also are conscious of making the best use of 
our resources with regard to supporting Congress and making 
recommendations to Federal agencies and coordinate to try to assure our 
work is complementary.
    With regard to GAO's access to information, it is essential to our 
ability to report on issues of importance to the Congress and the 
American people. Executive departments and agencies are generally very 
cooperative in providing access. It is somewhat rare for an agency to 
deny us access to information, and rarer for an agency to refuse to 
work toward an accommodation that will allow us to carry out our work. 
We devote a high level of attention to monitoring and aggressively 
pursuing access issues as they arise. We appreciate the interest of 
Congress in helping to ensure that we obtain access to information and 
the efforts by agencies to cooperate with our requests.
    However, over time we have experienced access issues at certain 
departments and agencies. We actively pursue access issues as they 
arise and we are engaged in discussions across the executive branch to 
enhance our access. For example, the Department of Justice (DOJ), in 
consultation with GAO, instituted new protocols that were designed to 
improve DOJ's timeliness in responding to our requests for information, 
and to improve communication between DOJ and GAO. The protocols include 
target timeframes for providing documents and scheduling meetings, 
among other things.
    Another issue related to access to information is in the context of 
the intelligence community (IC). The Director of National Intelligence, 
in consultation with the Comptroller General, issued a written 
directive in 2011 governing our access to information from elements of 
the intelligence community, known as Intelligence Community Directive 
(ICD) 114. ICD 114 is designed to address the historic challenges that 
GAO has faced in gaining access to information in the IC and contains 
provisions promoting constructive interaction such as establishing a 
presumption of cooperation between the IC and GAO. It is crucial that 
these terms and the overall Directive be carefully implemented and 
monitored to ensure we are able the assist the Congress in its 
oversight responsibilities, including requests from the Committees on 
Appropriations, Armed Services, Judiciary, Homeland Security and 
Government Affairs, as well as the Intelligence Committees.
    We have experienced other access issues at certain agencies due to 
long-standing and erroneous interpretations of our statutory access 
authority. In some cases agencies have interpreted language in program 
statutes that limit disclosure of certain information as also 
restricting GAO's access. Legislation passed in the House this session 
(H.R. 1162) and that is currently pending in the Senate would confirm 
our access rights in these instances.
    In terms of common hurdles for GAO and the IGs, we do work together 
to identify and address them. For example, last year we convened a 
Joint Forum on Data Analytics for Oversight and Law Enforcement which 
involved the Council of Inspectors General for Integrity and Efficiency 
(CIGIE) and the Recovery Board. The Forum focused on the importance of 
access to agency databases and the use of data-matching in reviewing 
programs and identifying errors and fraud.
    We also have an annual coordination meeting between CIGIE and GAO 
that identifies and addresses issues of common concern, including any 
access issues. CIGIE is represented, along with GAO, in a number of 
other cross-cutting activities and organizations, such as the National 
Intergovernmental Audit Forum--an annual conference of Federal, State, 
and local auditors focused on emerging issues and opportunities for 
coordination. Finally, coordination with IGs is a standard practice as 
GAO begins all of our engagements.
    Question. As part of GAO's fiscal year 2015 budget, GAO requests 
authority to establish a ``Center for Audit Excellence.''
        (a).  Comptroller General Dodaro's testimony stated that there 
        is a large demand for GAO's expertise--both domestically and 
        internationally. Who does GAO receive requests from, and how 
        often?
    Answer. The global demand for GAO's assistance is evident in the 
requests we receive for international study visits to GAO, of various 
length and composition, totaling 383 in fiscal year 2013, as well as 
multiple requests for GAO staff to help train the staff of our 
international counterparts either at GAO or in their home countries. 
Many look to GAO as a model, and request our knowledge and experience 
as they try to strengthen their respective audit capacities. Some 
specific, recent examples include:
  --A request for assistance in establishing a training center for a 
        National Audit Office in Africa;
  --A request from an Asian National Audit Office asking to send its 
        new staff to GAO for two-week entry-level training;
  --A request to send an expert on capacity building efforts to another 
        National Audit Office in Asia to help them improve staff 
        capabilities;
  --A request for comparative best practices and benchmarking 
        information by a National Audit Office in planning a 
        performance audit; and
  --A request for a GAO executive from our Forensic Audit and 
        Investigative Service team to visit a National Audit Office in 
        the Middle East to share knowledge and experience.
    There are also other indicators that demand is high for capacity 
building support of GAO's counterpart national audit offices, commonly 
referred to as supreme audit institutions (SAIs). In 2010, a survey of 
192 SAIs sought to obtain a broad understanding of the nature and 
extent of needs across its community, and received a 90 percent 
response rate. Seventy-two percent of the respondents identified 
capacity development support needs as medium to high. The survey also 
identified that there is substantial demand by SAIs for high quality 
support from their peers, and that there is an added value in receiving 
peer support as compared to other service providers.
    A Global Call for Proposals in 2011 focused on the needs of SAIs in 
developing countries. Fifty-five proposals were submitted, underscoring 
the magnitude of the capacity development needs in the international 
audit community as identified in the 2010 survey. Just under half of 
the 55 proposals had funding approved or were at the implementing stage 
as of the fall, 2013, with the assistance of the International 
Organization of Supreme Audit Institutions (INTOSAI--which includes 
most SAIs). A second call for proposals was launched in 2013 and 
preliminary response indicates a similar number of proposals being 
submitted.
    GAO is also called upon domestically for assistance at the State 
and local levels of government auditing. For example, we recently 
received a request for assistance in building performance auditing 
capacity in a State audit office. Similarly, a local audit office 
sought report writing assistance and training. Given that GAO 
promulgates both Generally Accepted Government Auditing Standards 
(GAGAS) and standards for internal control in the Federal Government, 
we are often called upon for training specific to the standards as they 
are applied in Government and also in the private sector for those that 
receive Government awards.
    Question. As part of GAO's fiscal year 2015 budget, GAO requests 
authority to establish a ``Center for Audit Excellence.''
        (b).  Comptroller Dodaro's testimony states that the Center 
        would operate entirely on fees, with no cost to the taxpayer. 
        However, staffing the Center would require a time commitment 
        from existing GAO staff. How would GAO ensure that the new 
        Center would not detract from GAO's service to Congress?
    Answer. GAO intends to staff the Center by using the fees charged 
for training and technical assistance to hire staff expressly for the 
purpose of providing these services. Under current law we cannot accept 
or retain such fees. Other than the initial startup and planning for 
the Center, as a general rule we do not plan to use our existing staff 
for the purpose of staffing the Center or providing services, and thus 
do not anticipate that the Center will detract from GAO's service to 
Congress.
                                 ______
                                 
           Question Submitted by Senator Christopher A. Coons
    [Note.--The question below was asked during the hearing by Senator 
Coons to Mr. Dodaro. No response was given by Mr. Dodaro at that time. 
Below is the response that was later given by the Government 
Accountability Office to the Senate Subcommittee on the Legislative 
Branch of the Committee on Appropriations.]
    Question. Does the Government Accountability Office (GAO) have an 
Energy Saving Performance Contract (ESPC), in connection with an energy 
improvements, and if not, please provide a few sentences on other 
efforts or investments GAO has undertaken to improve energy efficiency.
    Answer. GAO does not currently have an ESPC but considers their use 
when developing energy efficiency projects. In 2010, GAO used a Utility 
Energy Service Contract (UESC), similar to an ESPC, to fund a $3.7 
million project to install gas powered boilers.
    GAO regularly conducts energy audits to help identify areas for 
potential energy savings. The last energy audit was conducted in 2012 
and the next energy audit will be conducted in 2014. GAO has undertaken 
several energy efficiency projects in the last few years, including 
lighting and system upgrades. GAO is currently replacing eight of the 
building's original air handlers with five new high efficiency units. 
GAO has reduced the energy consumption of its building by 13 percent 
compared with the 2003 baseline of the Energy Act. This energy 
reduction provided GAO a cost avoidance in fiscal year 2013 of an 
estimated $1 million.
                                 ______
                                 
               Questions Submitted by Senator John Hoeven
                     progress of bid protest system
    Question. In the fiscal year 2014 omnibus, Government 
Accountability Office (GAO) was allowed authority for a new electronic 
docketing system financed by fees charged to companies filing bid 
protests. GAO has been meeting with small business holders and other 
technical representatives to examine commercially available IT systems, 
cost-benefit analysis and fee structure.
    In fiscal year 2015, you anticipate $450,000 in bid protest fees. 
What is the current progress of the bid protest system and what is 
being done to mitigate the financial costs to small businesses?
    Answer. On March 18, GAO provided a status report to the committee, 
as required by report language associated with the Consolidated 
Appropriations Act, 2014, and we plan to submit an update in late June. 
GAO has convened an interdisciplinary team within GAO to examine 
functional requirements, acquisition strategy, and fee structure, and 
to conduct outreach to stakeholders. Our outreach to stakeholders is 
ongoing and includes congressional committees with jurisdiction 
regarding small businesses, the Small Business Administration, and 
organizations representing small businesses. GAO has made progress in 
each of these areas, and has released a Request for Information to 
industry in order to complete our analysis of potential options for 
this system and their costs, including whether to implement the system 
internally, or to contract for a system as a service. Since the 
proposed filing fee is to offset the cost of a system that has not yet 
been established, we do not yet have information that will allow us to 
predict the amount of a fee.
    We are conscious of the potential effects of the system on small 
business and we will carefully consider the amount of the proposed fees 
in that context. We are also focused on assuring that the filing system 
will be easy for all parties involved in a bid protest to use. We will 
continue to consult with the appropriations committees as our team 
makes decisions about how to implement the docketing system.
                               workforce
    Question. The fiscal year 2014 omnibus was enacted a quarter into 
the fiscal year. Many agencies have reported difficulties in hiring up 
to the original full-time employee (FTE) goal derived at the beginning 
of the fiscal year. They cite the lengthy cycle time of the Government 
hiring process.
    Your FTE target for fiscal year 2014 is 2,945. Do you anticipate 
meeting the fiscal year 2014 target?
    Answer. Since receiving our appropriation in mid-January 2014, we 
have been pursuing a multi-pronged approach to hire about 300 permanent 
staff and 200 interns. Because we were already a quarter into the year, 
we do not anticipate burning 2,945 FTE this fiscal year. However, we 
are hiring as quickly as we can to attain 3,030 staff on board by 
August 2014, and importantly, position ourselves to hit the 2,945 FTE 
target for fiscal year 2015. GAO's Executive Committee is actively 
monitoring hiring and other workforce activity to ensure that we 
achieve our goals.
    Question. Should you not meet your goal, how will you use the funds 
originally planned for salaries?
    Answer. GAO would pursue targeted investments which have been 
deferred for several years, including upgrading aged information 
technology (IT) equipment, replacing computers and work stations, and 
addressing inefficient building systems. GAO's current laptops and 
workstations, which were first deployed in 2008, have reached the end 
of life. These investments will help preserve our infrastructure, 
increase operational reliability, and enhance the effectiveness and 
efficiency of our staff and work processes.
    Question. With the increase in FTEs from the fiscal year 2013 
level, what capabilities will be enhanced?
    Answer. The increase from fiscal year 2013 to fiscal year 2015 will 
allow GAO to bolster our staff capacity, provide an appropriate mix of 
staffing levels to support our work, rebuild our entry level 
Professional Development Program, and address succession planning. We 
will reinvigorate our student intern program, which serves as an 
important source of entry-level staff in the following years.
    GAO will also build capacity in science and technology, and replace 
critical skills gaps lost over the last several years due to limited 
hiring in areas, including:
  --Auditors/Accountants in our financial audit work,
  --Information Technology specialists/analysts in related audits and 
        operations,
  --Economists with expertise in financial and domestic programs, and
  --Attorneys that provide legal support to all audits and evaluations 
        and the procurement law area, to handle bid protest.
    Question. Will you be able to fulfill more congressional requests?
    Answer. Yes. The planned increase in GAO's staff capacity will 
enhance our ability to meet the demand from Congress, including 
reducing the delay in starting work on congressional requests; 
enhancing our ability to provide more timely responses and analyses to 
support congressional oversight; and increasing the number of requests 
that we can undertake. It should be noted, however, that the resources 
needed to fulfill an individual congressional request can vary 
significantly depending upon the scope of the request, the complexity 
of the issues, the number and areas of expertise of the staff needed to 
conduct the engagement, and the extent of GAO's existing body of work 
related to the topic.
                          workload management
    Question. GAO sets and follows the standards for conducting high 
quality audits. Conducting these thorough reviews could take up to a 
year to complete. GAO provides other options that can be conducted in a 
shorter timeframe, including technical guidance and congressional 
briefings.
    How does GAO manage requests that are time-sensitive? The very 
nature of GAO's rigorous standards requires time for thorough analysis.
    Answer. GAO uses several approaches to manage time-sensitive 
requests while assuring that our reports meet quality standards as 
established in the Generally Accepted Government Auditing Standards and 
related GAO policies.
    First, GAO's Congressional Protocols establish a priority for 
assigning resources. The top priority is requirements established in 
statute, or Conference or Committee reports. These requirements 
frequently establish a date by which GAO must communicate the results 
of our work, and thus, can be time-sensitive. GAO works closely with 
the committees to agree on an appropriate scope of work that can be 
accomplished within the required deadline. Depending on the complexity 
and scope of required work, in some cases GAO meets these due dates 
through briefings to the relevant House and Senate committees, with a 
report to follow.
    Second, our next priority in the Congressional Protocols is 
requests from senior congressional leaders and committee and 
subcommittee leaders. When the request is time-sensitive, GAO managers 
will discuss with committee leaders the scope of the work and whether 
it can be appropriately completed within the desired timeframe while 
also meeting quality standards. If not, we may recommend a different 
scope of work or another source of information. GAO's Congressional 
Protocols also contemplate requests from individual members, but we 
have not had the resources to devote to these requests in recent years.
    Third, GAO also works with committee leaders to establish their 
priorities when they have submitted multiple requests or statutory 
requirements. We will discuss which reports are most time-sensitive, 
and sequence our work through agreement with the committee leaders and 
staff.
    For those instances where GAO cannot issue a report which would 
meet the timing needs of Congress while also upholding quality 
standards, we often find that GAO's previous reports provide 
information that is useful and relevant. In those cases, we offer to 
brief on those reports and make our program experts available to answer 
questions. We may also be able to provide quick followup on our 
previous work and provide those results as technical assistance.
                                 ______
                                 
            Questions Submitted to Dr. Douglas W. Elmendorf
             Questions Submitted by Senator Jeanne Shaheen
    Question. Does Congressional Budget Office (CBO) routinely look 
back at previous cost estimates and compare those to actual outcomes?
    Answer. Yes, CBO routinely monitors the budgetary effects of 
enacted legislation to help improve projections of spending and 
receipts under current law, as well as to improve cost estimates for 
new legislative proposals. However, it is often difficult or impossible 
to determine, even in retrospect, the incremental impact on the budget 
of a particular piece of legislation. CBO regularly prepares cost 
estimates for legislation when bills are reported by committees of the 
House of Representatives or the Senate. In some cases, such legislation 
is changed before enactment. Although CBO often provides updated cost 
estimates (especially for direct spending provisions) prior to the 
enactment of legislation, proposals are sometimes amended after cost 
estimates are prepared. Moreover, in many cases the actual costs or 
savings resulting from enacting legislation cannot be identified; they 
may be a small part of a large budget account or revenue stream, and 
there may be no way to know for certain what would have happened if the 
legislation was not enacted. In fact, most of the cost estimates that 
CBO completes are for legislative proposals that are not enacted, so it 
is not possible to determine their accuracy.
    Nonetheless, CBO attempts to look back at previous estimates to 
discern as much as possible how such estimates compare with actual 
outcomes after legislation is enacted. A description of the agency's 
process and a few specific examples are provided below.
    A Regular Review Process. Because it is often not possible to 
determine how close the impact of a particular piece of legislation is 
to CBO's initial projections, it is hard to make a general statement 
about the accuracy of the agency's estimates. Nonetheless, CBO analysts 
undertake a detailed review of Treasury-reported outlays and receipts 
after the end of each fiscal year to learn as much as possible about 
how those actual results compare with both the original cost estimates 
for individual pieces of legislation (when possible) and the current-
law baseline projections (which reflect all legislation previously 
enacted). In addition, CBO updates its baseline projections a few times 
each year, and during those exercises, the agency carefully tracks and 
reports on changes from the previous baseline by separately 
categorizing and explaining changes derived from legislation, economic 
revisions, and other (technical) adjustments.
    That annual process is useful in helping CBO prepare better 
projections going forward, even though it is sometimes not possible to 
discern exactly how much of a given year's estimating error for a given 
program is directly attributable to a specific piece of legislation. 
Following are a few examples of cases in which it is possible to match 
up results with earlier projections for particular pieces of 
legislation.
    Medicare Part D. The prescription drug program known as Medicare 
Part D is a relatively rare example in which actual spending can be 
directly compared with the projections contained in the CBO cost 
estimate. In most cases, legislation modifies existing programs; it is 
often not possible after enactment of such legislation to determine how 
spending for a modified program has changed specifically as a result of 
that legislation, or how much of future spending would have occurred 
even without the change in law. In contrast, the legislation that 
created Part D established a new component of Medicare with a system of 
new benefit payments, associated administrative costs, and payments 
from premiums and States.
    The actual net cost of Medicare Part D has been much lower than CBO 
originally projected. For example, in its 2003 cost estimate for the 
legislation creating the program, CBO projected that Part D costs 
through 2013 would be $552 billion (the administration's estimate at 
that time was higher), whereas the agency now estimates those costs 
totaled $354 billion through 2013. The roughly 35 percent difference 
between the initial projection and actual results recorded thus far 
arises largely because, in preparing the estimate, CBO observed that 
recent growth rates for drug spending had been higher than the long-
term trend and anticipated that growth would remain above the long-term 
trend for most of the 10-year period following the creation of Part D. 
However, that growth rate dropped below its prior long-term average 
even before the new program was implemented in 2006--probably because 
patents expired for a substantial number of brand-name drugs (so 
consumption of those drugs shifted to lower-priced generic versions) 
and relatively few new brand-name drugs were introduced. In addition, 
enrollment in Part D has been lower than what CBO initially projected.
    Over the past several years, as actual data have been reported, CBO 
has significantly reduced its baseline projections of future spending 
for the Part D benefit, and its cost estimates for new legislation 
related to Part D have similarly reflected experience with actual 
spending under the program.
    Recovery Act Spending. The American Recovery and Reinvestment Act 
of 2009 (ARRA) provided funding for a broad range of new and existing 
Federal programs and reduced revenues through changes in Federal tax 
law. Most of ARRA's effects on Federal spending and revenues have now 
occurred, and they have been roughly in line with the original 
estimates prepared by CBO and the staff of the Joint Committee on 
Taxation (JCT) at the time the legislation was considered by the 
Congress in early 2009.
    CBO has closely monitored actual spending under ARRA for the past 5 
years to help determine where the agency's estimates of outlays 
(including their timing) were too high or too low--both in total and 
for individual years and programs. Estimates for many of the individual 
years following the enactment of the Recovery Act were generally quite 
accurate. For example, the actual spending in 2009 of funds provided by 
ARRA differed by only 1 percent from CBO's estimate for that year.
    Through fiscal year 2013, the outlays resulting from ARRA totaled 
$596 billion, about $49 billion (or 9 percent) above CBO's original 
estimate of $546 billion for the 2009-2013 period. (Additional spending 
will occur over the next several years. In addition, JCT estimated that 
ARRA would reduce Federal revenues by about $210 billion over 10 years, 
with most of that impact falling in 2009 and 2010.) Most of the 
underestimate in spending under ARRA is accounted for by provisions 
related to unemployment insurance, nutrition assistance, and refundable 
tax credits; those costs were boosted by the weaker-than-expected 
economic recovery.
    Some estimates were particularly close to the recorded results for 
the 5 years following the enactment of ARRA. For example, spending for 
the Department of Health and Human Services totaled $130 billion 
through 2013, which is about 1 percent below CBO's original estimate 
for that period. Estimates of education and transportation spending 
under ARRA were within 4 percent and 6 percent, respectively, of the 
actual five-year totals (which were $94 billion for the Department of 
Education and $40 billion for the Department of Transportation).
    Spectrum Auction Receipts. Legislation enacted in the past 20 years 
directed the Federal Communications Commission (FCC) to use competitive 
bidding (auctions) for licenses to use the electromagnetic spectrum 
when more than one party seeks such licenses. Spectrum auctions under 
such legislation have generated more than $50 billion in net offsetting 
receipts to the Treasury since 1994.
    CBO's estimates of spectrum auction proceeds under legislation 
enacted over the past two decades have sometimes been too high and 
sometimes too low. When estimating the budgetary impact of the Balanced 
Budget Act of 1997, for example, CBO projected that FCC auctions would 
generate about $25 billion in proceeds. Actual collections resulting 
from that legislation were about one-third less than projected. CBO 
also estimated spectrum receipts of about $25 billion from the auctions 
authorized by the Deficit Reduction Act of 2005, but the agency 
underestimated receipts for that legislation: Collections resulting 
from the 2005 act have been about 30 percent higher than the estimate.
    Spectrum values fluctuate for several reasons, including changes in 
technology, market conditions, and the financial and strategic 
interests of individual wireless companies. Projections of receipts 
also reflect uncertainty about the quantity of spectrum that will be 
available for auction. CBO's estimates attempt to reflect those 
uncertainties by representing the middle of the range of most likely 
outcomes.
    Spending for Unemployment Insurance. In 2008, lawmakers enacted the 
Emergency Unemployment Compensation program (EUC), which has been 
altered numerous times over the past several years. Under current law, 
that program expires at the end of December 2013. The EUC program 
expired at the end of 2013. Adding together its estimates for the 12 
laws that enacted and subsequently expanded and extended EUC, CBO 
estimated that benefits under the program would total $228 billion 
through December 2013. According to the Department of Labor, the actual 
cost of EUC benefits has been $230 billion through December 2013, a 
difference of less than 1 percent.
    The relatively low net error overall reflects both overestimates 
and underestimates in CBO's original cost estimates for the many pieces 
of EUC legislation enacted in recent years. In general, estimates for 
EUC tended to be lower than the actual outlays in 2009 and 2010 because 
the effects of the recession turned out to be much worse than CBO 
anticipated. During that time, the unemployment rate rose sharply and 
stayed higher than the rate CBO used for estimating the costs of 
legislation. In addition, people remained unemployed much longer than 
they had in previous recessions, thus increasing the time that people 
collected benefits, adding to the total costs of such benefits. In more 
recent years, the opposite has been true: the unemployment rate has 
fallen at a slightly faster pace than CBO projected; hence, more recent 
estimates of benefit payments have tended to be higher than actual 
costs. In addition, actual benefit payments were reduced by mandatory 
sequestration, the effects of which were not reflected in the original 
estimates.
    Question. Does CBO adjust or inform its methodologies in response 
to lessons learned from previous estimates?
    Answer. When spending for a Government program turns out to be 
higher or lower than CBO had expected after a legislative change, it is 
generally unclear whether the error should be attributed to the 
previous baseline projection for spending under that program or to the 
agency's estimate of the effects of the new legislation. Nonetheless, 
CBO carefully scrutinizes errors in its projections, reviews data on 
the spending patterns for Federal programs, and consults with outside 
experts on those programs in order to improve its estimating 
methodologies.
    As noted in the previous answer, CBO conducts a thorough review of 
actual outlays and revenues each year (as reported by the Department of 
the Treasury). The direct result of that review is a continual fine-
tuning of estimates in the forward-looking baseline projections. That 
process begins late in the fall of each year, and updated estimates are 
reflected in the Budget and Economic Outlook that is published early in 
the next calendar year. Moreover, CBO then uses the updated estimating 
assumptions that underlie such baseline projections when it prepares 
cost estimates for new legislation considered during the ongoing 
congressional session.
    Similarly, when CBO is presented with new legislation to estimate, 
it generally begins that process by reviewing available data for 
historical spending patterns stemming from prior legislation. In 
addition, when appropriate, it modifies the methodology that was used 
for previous estimates to reflect any lessons learned from observing 
how programs created or changed in prior legislation unfolded over 
time. For example, sometimes funds appropriated for a given program 
have been spent more slowly or more quickly than CBO had estimated, so 
when new proposals for additional funding for the program arise, the 
agency may adjust its estimates of the pace of such spending.
    In other cases, CBO may learn that agencies or States participating 
in a program have been implementing the program somewhat differently 
than it had expected when preparing a previous estimate. As above, CBO 
takes such information into account in estimating the cost of new 
legislation that would affect that program.
    Question. Does CBO share its cost methodologies with academic and 
financial researchers, or other experts, for independent evaluation? 
What about other budget offices at the local, State, or international 
level that have similar responsibilities in terms of projections and 
cost estimates?
    Answer. CBO considers the transparency of its analyses to be a 
basic value of the agency. Although much of the analysis that CBO 
undertakes is very technical in nature, the agency works hard to 
explain the basis for its findings so that Members of Congress, their 
staff, and outside analysts can understand the results and question the 
methodologies used.
    To that end, CBO discloses its methodology and the reliability of 
its methodology in numerous ways:
  --The agency makes its cost estimates for public pieces of 
        legislation and reports presenting other analyses available 
        immediately on the website to all Members of Congress, their 
        staff, and the public.
  --The agency`s normal cost estimates include descriptions of the 
        basis for the estimates.
  --Many of the agency`s reports include substantial discussions of the 
        relevant research literature and CBO's modeling approaches--in 
        the text, in special boxes, or in appendixes. Examples include 
        the following:
    --Analyses of the economic impact of the President's budget, 
            released annually.
    --The projections of long-term growth in the costs of healthcare 
            used for the Long-Term Budget Outlook, released annually.
    --Estimates of the effects on output and employment of the American 
            Recovery and Reinvestment Act.
    --Reports on the distribution of household income and Federal 
            taxes, released periodically.
    --Updated estimates for the insurance coverage provisions of the 
            Affordable Care Act, released periodically.
    --Estimates of the economic impact of alternative fiscal policies.
    --A report on the budgetary effects of raising the cigarette tax.
    --A report on the effects of raising the minimum wage.
  --The regular updates to the agency`s baseline budget projections 
        include an accounting and explanation of the sources of 
        revisions to those projections.
  --The agency releases data and other technical information with some 
        of the key reports. Examples include extensive spreadsheets 
        released with the thrice-annual budget projections and with the 
        annual report on the long-term budget outlook, as well as with 
        a report on the fair-value cost of Federal credit programs.
  --The agency releases regular analyses of the accuracy of its 
        economic forecasts.
  --The agency releases background reports to provide details about its 
        analyses for nonexperts, and working papers to provide 
        technical descriptions of its analyses for experts. Some 
        examples include these:
    --A background paper, a working paper, and another working paper 
            describing the agency's analysis of the responsiveness of 
            the labor supply to changes in tax rates.
    --A background report describing the main features of the 
            microsimulation model used for long-term analysis of Social 
            Security.
    --A working paper on the tax elasticity of capital gains.
    --A working paper on the short-term effects on output of changes in 
            Federal fiscal policies.
    --A report on how CBO projects income.
    --Working papers on wages and on benefits and total compensation in 
            the Federal Government and private sector.
    --Working papers on Medicare`s demonstration projects on disease 
            management and on value-based payment.
  --The agency undertakes and publishes analyses of the sensitivity of 
        its estimates to key parameters. For example, the analyses of 
        the economic effects of fiscal policies include alternative 
        estimates based on ranges of assumptions about the short-term 
        stimulus from lower taxes or higher Government spending, the 
        response of the labor supply to changes in tax rates, and the 
        effects of budget deficits on private saving and international 
        capital flows. The agency`s report on employment-based health 
        insurance under the Affordable Care Act showed how alternative 
        assumptions would alter the estimates.
  --When the agency revises its view of key aspects of its analyses, it 
        explains the rationale for those revisions. Examples include 
        reports explaining the agency's revised view of the effects of 
        several policy options: the effectiveness of malpractice reform 
        in reducing healthcare costs, the effect of prescription drug 
        use on Medicare's spending for other healthcare services, and 
        the effect of raising the age of eligibility for Medicare to 67 
        on the budget deficit.
  --The agency responds to letters from Members of Congress requesting 
        additional information on methodology. Examples include reviews 
        of how CBO views the budgetary impact of long-term agreements 
        by the Federal Government to purchase electric power and the 
        budgetary impact of opening more Federal lands to oil and gas 
        leasing.
  --Members of CBO`s staff present information about how the agency 
        does its analyses and the results of those analyses at academic 
        and professional conferences so as to encourage input from 
        outside experts.
  --CBO`s analysts spend a great deal of time explaining details 
        underlying the cost estimates and reports in phone calls and 
        meetings with interested Members of Congress and their staff.
    CBO also seeks input from outside experts, including professors, 
analysts at think tanks, private-sector experts, and employees at 
various government agencies when reports and analyses are being 
prepared. Some of those consultations occur during regular meetings of 
CBO's Panel of Economic Advisers (which reviews the agency's economic 
forecast) and Panel of Health Advisers; many more consultations occur 
on an informal, ongoing basis.
    For cost estimates, for example, CBO staff routinely consult with 
knowledgeable program staff at Federal agencies that would be involved 
in implementing a legislative proposal. In many cases, that 
consultation extends to officials in State and local governments. For 
example, legislation in the areas of healthcare, income security 
programs, environmental regulation, education assistance, and 
infrastructure spending is often implemented (at least in part) at the 
State level, and CBO staff can and do learn a great deal by discussing 
estimating methodologies, program parameters, and historical data with 
staff in State agencies (as well as local governments as appropriate).
    CBO's analysts frequently contact outside experts in academia and 
elsewhere to obtain their insight about the potential effects of 
legislation, to obtain useful data, or to discuss estimating 
methodologies. For example, when developing models involving insurance 
risks to the Federal Government that are similar to those faced by the 
private sector, CBO consults with academic researchers and private-
sector experts to understand the concepts involved in estimating 
insured losses. CBO has prepared several cost estimates for proposals 
related to the authorization of terrorism risk insurance that relied 
heavily on information from insurance industry actuaries and models 
used by private-sector firms for the terrorism component of property 
and casualty insurance that they offer. CBO also consults outside 
experts in the agriculture community (including Federal, academic, and 
private-sector experts) by holding an annual baseline review conference 
to seek input and feedback on the agency's preliminary projections of 
supply and demand for various agricultural commodities.
    More generally, CBO staff review the work of others' independent 
analyses and conduct literature reviews to identify relevant research 
findings that can inform their estimating methodologies.
    At the international level, CBO staff have participated in annual 
meetings of parliamentary budget officials organized by the 
Organisation for Economic Co-operation and Development, as well as 
meetings of other international groups. Those forums have provided an 
avenue for exchange of information, including learning about the 
analytical methodology and budgeting approaches taken by governments in 
different countries. CBO also frequently hosts visiting delegations 
from other countries to discuss the work that it does for the U.S. 
Congress and to learn about budget-related experiences in other 
countries.
                                 ______
                                 
               Questions Submitted by Senator John Hoeven
                       full-time employees (ftes)
    Question. Last year, Dr. Elmendorf testified that if the 
Congressional Budget Office's (CBO's) budget request of $45.7 million 
was met, the agency would be able to hire 235 full-time equivalents 
(FTEs). Since the omnibus was enacted mid-year, many agencies may not 
be able to reach their goal FTE. As a result, there may be money left 
over from their initial estimates.
    What is the current level of FTEs at CBO, and do you expect to 
reach 235 FTEs by the end of the current fiscal year? If you are not 
able to reach that goal, how will money designated for salaries be 
reallocated?
    Answer. CBO is currently operating with about 222 FTEs. After the 
2014 appropriation was set, we began an aggressive recruitment effort 
to bolster the staff, and we have made offers to, and received 
acceptances from, another 10 people. We are continuing to recruit for 
other positions. Taking into account some anticipated attrition, we 
expect to end fiscal year 2014 with about 230 employees on board. As a 
result, some of the funds allocated in the budget request for payroll 
will not be spent for that purpose; as reflected in our 2015 budget 
request, we reallocated such funds to cover the cost of information 
technology purchases that had been deferred from previous years.
                               work load
    Question. One of CBO's priorities for fiscal year 2014 was for 
deferred information technology (IT) purchases. In fiscal year 2015, 
CBO indicates that they will need less money for IT. Since scoring 
legislation involves complex calculations, IT systems may assist 
analysts.
    Last year, you mentioned that under sequestration, it forced 
deferment of IT purchases. Have those needs been addressed, and if so, 
how are they assisting CBO with the current workload?
    Answer. Yes, CBO's pressing needs for information technology were 
addressed by the 2014 appropriation. For example, the funding enabled 
us to acquire greater storage capacity and advanced servers designed 
for sophisticated statistical analysis and modeling undertaken by an 
increasingly wide swath of the agency. The funding also enabled us to 
replace aging computers and other hardware and to enhance remote access 
capabilities for CBO staff, made necessary by increasingly compressed 
legislative timeframes. Finally, the funding allowed us to buy software 
that will improve our analytical capabilities.

                          SUBCOMMITTEE RECESS

    Senator Shaheen. So thank you very much.
    I declare this hearing adjourned.
    Mr. Dodaro. Thank you.
    Dr. Elmendorf. Thank you, Madam Chair.
    [Whereupon, at 4:11 p.m., Tuesday, March 11, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]