Fiscal Year 2004 Budget Request: U.S. General Accounting Office  
(09-APR-03, GAO-03-622T).					 
                                                                 
GAO is a key source of objective information and analyses and, as
such, plays a crucial role in supporting congressional		 
decision-making and helping improve government for the benefit of
the American people. This testimony focuses on GAO's (1) fiscal  
year 2002 performance and results, (2) efforts to maximize our	 
effectiveness, responsiveness and value, and (3) our budget	 
request for fiscal year 2004 to support the Congress and serve	 
the American public.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-622T					        
    ACCNO:   A06612						        
  TITLE:     Fiscal Year 2004 Budget Request: U.S. General Accounting 
Office								 
     DATE:   04/09/2003 
  SUBJECT:   National preparedness				 
	     Best practices					 
	     Agency missions					 
	     Budget authority					 
	     Internal controls					 
	     Performance measures				 
	     Strategic planning 				 

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GAO-03-622T

Testimony Before the Subcommittee on Legislative Committee on
Appropriations House of Representatives

United States General Accounting Office

GAO For Release on Delivery Expected at 5: 30 p. m. EDT Wednesday, April
9, 2003 FISCAL YEAR 2004

BUDGET REQUEST U. S. General Accounting Office

Statement of David M. Walker Comptroller General of the United States

GAO- 03- 622T

Page 1 GAO- 03- 622T

Mr. Chairman and Members of the Subcommittee: I am pleased to appear
before the Subcommittee today as the Comptroller General of the United
States and head of the U. S. General Accounting Office (GAO). GAO is a key
source of objective information and analyses and, as such, plays a crucial
role in supporting congressional decisionmaking and helping improve
government for the benefit of the American people. My testimony today will
focus on GAO*s (1) fiscal year 2002 performance and results, (2) efforts
to maximize our effectiveness, responsiveness and value, and (3) our
budget request for fiscal year 2004 to support the Congress and serve the
American public. In summary,

 In fiscal year 2002, GAO*s work informed the national debate on a broad
spectrum of issues including helping the Congress answer questions about
the associated costs and program trade- offs of the national preparedness
strategy, including providing perspectives on how best to organize and
manage the new Transportation Security Administration and Department

of Homeland Security. GAO*s efforts helped the Congress and government
leaders achieve $37.7 billion in financial benefits* an $88 return on
every dollar invested in GAO. The return on the public*s investment in GAO

extends beyond dollar savings to improvements in how the government serves
its citizens. This includes a range of accomplishments that serve to
improve safety, enhance security, protect privacy, and increase the

effectiveness of a range of federal programs and activities.  The results
of our work in fiscal year 2002 were possible, in part, because of changes
we have made to transform GAO in order to meet our goal of

being a model federal agency and a world- class professional services
organization. We had already realigned GAO*s structure and resources to
better serve the Congress in its legislative, oversight, appropriations,
and investigative roles. Over the past year, we cultivated and fostered
congressional and agency relations, better refined our strategic and
annual planning and reporting processes, and enhanced our information
technology infrastructure. We also continued to provide priority attention
to our management challenges of human capital, information security, and
physical security. We have made progress in addressing each of these
challenges, but we still have work to do and plan to ask for legislation
to help address some of these issues.

 GAO is requesting budget authority of $473 million for fiscal year 2004.
Our request represents a modest 4.1 percent increase in direct
appropriations, primarily for mandatory pay and uncontrollable costs. This

budget will allow us to maintain current operations for serving the
Congress as outlined in our strategic plan and to continue initiatives to
enhance our human capital, support business processes, and ensure the
safety and security of GAO staff, facilities, and information systems.

Page 2 GAO- 03- 622T

Approximately $4.8 million, or about 1 percent, of our request relates to
several safety and security items that are included in our fiscal year
2003 supplemental request. If this supplemental request is granted, our
fiscal year 2004 request could be reduced accordingly. Fiscal year 2002
was a year of challenges, not just for GAO but also for the

Congress and the nation. The nation*s vulnerabilities were exposed in a
series of events* America*s vulnerability to sophisticated terrorist
networks, bioterrorism waged through mechanisms as mundane as the daily
mail, and corporate misconduct capable of wiping out jobs, pensions, and
investments virtually overnight. As the Congress*s priorities changed to
meet these crises, GAO*s challenge was to respond quickly and effectively
to our congressional clients* changing needs.

With work already underway across a spectrum of critical policy and
performance issues, we had a head start toward meeting the Congress* needs
in a year of unexpected and often tumultuous events. For example, in
fiscal year 2002 GAO*s work informed the debate over national preparedness
strategy, helping the Congress determine how best to organize and manage
major new departments, assess key vulnerabilities to homeland defense, and
respond to the events of September 11 in areas such as terrorism insurance
and airline security. GAO*s input also was a major factor in shaping the
Sarbanes- Oxley Act, which created the Public Company Accounting Oversight
Board, as well as new rules to strengthen corporate governance and ensure
auditor independence. Further, GAO*s

work helped the Congress develop and enact election reform legislation in
the form of the Help America Vote Act of 2002 to help restore voter
confidence. In fiscal year 2002, GAO also served the Congress and the
American

people by helping to:  Contribute to a national preparedness strategy at
the federal, state, and

local levels that will make Americans safer from terrorism  Protect
investors through better oversight of the securities industry and

the accounting profession  Ensure a safer national food supply  Expose
the inadequacy of nursing home care  Make income tax collection fair,
effective, and less painful to taxpayers  Strengthen public schools*
accountability for educating children  Keep sensitive American
technologies out of the wrong hands Fiscal Year 2002

Performance and Results

Page 3 GAO- 03- 622T

 Protect American armed forces confronting chemical or biological weapons
 Identify the risks to employees in private pension programs  Identify
factors causing the shortage of children*s vaccines

 Assist the postal system in addressing anthrax and various management
challenges  Identify security risks at ports, airports, and transit
systems  Save billions by bringing sound business practices to the
Department of

Defense  Foster human capital strategic management to create a capable,
effective, well- managed federal workforce

 Ensure that the armed forces are trained and equipped to meet the
nation*s defense commitments  Enhance the safety of Americans and foreign
nationals at U. S. installations wordwide

 Assess ways of improving border security through biometric technologies
and other means  Reduce the international debt problems faced by poor
countries  Reform the way federal agencies manage their finances 
Protect government computer systems from security threats  Enhance the
transition of e- government* the new *electronic connection*

between government and the public During fiscal year 2002, GAO*s analyses
and recommendations contributed to a wide range of legislation considered
by the Congress, as shown in the following table.

Page 4 GAO- 03- 622T

Table 1: Selected Public Laws to Which GAO Contributed During Fiscal Year
2002

 Prescription Drug User Fee Amendments of 2002, P. L. 107- 188

 Best Pharmaceuticals for Children Act, P. L. 107- 1092

 No Child Left Behind Act of 2001, P. L. 107- 110

 Food Stamp Reauthorization Act of 2002, P. L. 107- 171

 Help America Vote Act of 2002, P. L. 107- 252

 Homeland Security Act of 2002, P. L. 107- 296

 Public Health Security and Bioterrorism Preparedness and Response Act of
2002, P. L. 107- 188

 Aviation and Transportation Security Act, P. L. 107- 71

 Department of Defense Appropriation Act, 2003, P. L. 107- 248

 Department of Defense and Emergency Supplemental Appropriations for
Recovery From and Response to Terrorist Attacks on the United States Act,
2002, P. L. 107- 117

 Bob Stump National Defense Authorization Act for Fiscal Year 2003 P. L.
107- 314

 Foreign Relations Authorization Act, Fiscal Year 2003, P. L. 107- 228

 Small Business Paperwork Relief Act of 2002, P. L. 107- 198  Federal
Information Security Management Act of 2002, P. L. 107- 347

 Sarbanes- Oxley Act of 2002, P. L. 107- 204

 National Defense Authorization Act for Fiscal Year 2002, P. L. 107- 107

 Legislative Branch Appropriations, Fiscal Year 2002, P. L. 107- 68

 Improper Payments Information Act of 2002, P. L. 107- 300  Trade Act of
2002, P. L. 107- 210

 Terrorism Risk Insurance Act of 2002, P. L. 107- 297

 E- Government Act of 2002, P. L. 107- 347 Source: GAO. By year*s end, we
had testified 216 times before the Congress, sometimes

on as little as 24 hours* notice, on a range of issues. We had responded
to hundreds of urgent requests for information. We had developed 1,950
recommendations for improving the government*s operations, including, for
example, those we made to the Secretary of State calling for the
development of a governmentwide plan to help other countries combat
nuclear smuggling and those we made to the Chairman of the Federal Energy
Regulatory Commission calling for his agency to develop an action plan for
overseeing competitive energy markets. We also had continued to track the
recommendations we had made in past years, checking to see

that they had been implemented and, if not, whether we needed to do
follow- up work on problem areas. We found, in fact, that 79 percent of
the recommendations we had made in fiscal year 1998 had been implemented,
a significant step when the work we have done for the Congress becomes a
catalyst for creating tangible benefits for the American people.

Page 5 GAO- 03- 622T

Table 2 highlights, by GAO*s three external strategic goals, examples of
issues on which we testified before Congress during fiscal year 2002.

Table 2: Issues on Which GAO Testified During Fiscal Year 2002 Goal 1
Well- Being and Financial Security of the American People

Goal 2 Changing Security Threats and Challenge of Globalization Goal 3

Transforming the Federal Government*s Role

Aviation security Bioterrorism Blood supplies Child welfare Childhood
vaccines Coast Guard*s security missions Customs* cargo inspections
Disability programs EPA cabinet status FBI reorganization Federal property
management reform Food safety Highway trust fund Housing HUD management
reform Identity theft Immigration enforcement Indian tribal recognition
Intercity passenger rail Long- term care Medicare payments

Nuclear waste storage Nursing homes Postal Service challenges

Public health aspects of homeland security Retiree health insurance SBA*s
human capital challenges Social Security reform Transit safety and
security VA health care Welfare reform Wildfire threats

Workforce development A- 76 competitive sourcing

Anthrax vaccine Ballistic missile defense Chemical and biological
preparedness Combating terrorism Compact with Micronesia Conflict diamonds
Debt relief for poor countries Encroachment on training ranges

Export controls Food aid Foreign language needs Gulf War illnesses
Information security aspects of homeland

security International trade Nuclear smuggling Organizational aspects of
homeland security

SEC*s human capital challenges Strategic seaport protection Terrorism
insurance U. S. overseas presence Weapons of mass destruction Contract
management

Contracting for services Corporate governance and accountability Debt
collection DOD financial management

Electronic Government Act of 2002 Electronic- government security
Enterprise architecture Federal budget issues Federal building security
Federal financial management reform Federal rulemaking requirements
Freedom to Manage Act Human capital strategy Illegal tax schemes and scams
Intergovernmental aspects of homeland

security IRS modernization Medicaid financial management NASA*s management
challenges

President*s Management Agenda Purchase card controls Securing America*s
borders U. S. government*s financial statements

Source: GAO. Congress and the executive agencies took a wide range of
actions in fiscal year 2002 to improve government operations, reduce
costs, or better target budget authority based on GAO analyses and
recommendations, as highlighted in the following sections.

Page 6 GAO- 03- 622T

Federal action on GAO*s findings or recommendations produced financial
benefits for the American people: a total of $37.7 billion was achieved by
making government services more efficient, improving the budgeting and
spending of tax dollars, and strengthening the management of federal
resources (see fig. 1). For example, increased funding for improved
safeguards against fraud and abuse helped the Medicare program to better
control improper payments of $8.1 billion over 2 years, and better
policies and controls reduced losses from farm loan programs by about $4.8
billion across 5 years.

Figure 1: Financial Benefits Resulting from GAO*s Work In fiscal year
2002, we also recorded 906 instances in which our work led to improvements
in government operations or programs (see fig. 2). For example, by acting
on GAO*s findings or recommendations, the federal government has taken
important steps toward enhancing aviation safety,

improving pediatric drug labeling based on research, better targeting of
funds to high- poverty school districts, greater accountability in the
federal acquisition process, and more effective delivery of disaster
recovery assistance to other nations, among other achievements.

Page 7 GAO- 03- 622T

Figure 2: GAO*s Work Improving Government Operations and Services As shown
in table 3, we met all of our annual performance targets except our
timeliness target. While we provided 96 percent of our products to their
congressional requesters by the date promised, we missed this measure*s
target of 98 percent on- time delivery. The year*s turbulent events played
a part in our missing the target, causing us to delay work in progress
when higher- priority requests came in from the Congress. We

know we will continue to face factors beyond our control as we strive to
improve our performance in this area. We believe the agency protocols we
are piloting will help clarify aspects of our interactions with the
agencies we evaluate and audit and, thus, expedite our work in ways that
could improve the timeliness of our final products. We also believe that
our continuing investments in human capital and information technology
will improve our timeliness while allowing us to maintain our high level
of productivity and performance overall.

Page 8 GAO- 03- 622T

Table 3: Annual Performance Measures and Targets Fiscal year

Performance measure 1998

Actual 1999

Actual 2000

Actual 2001

Actual 2002 Target

2002 Actual

4- year avg. Actual

2003 Target

2004 Target

Financial benefits (dollars in billions) $19.7 $20.1 $23.2 $26.4 $30.0
$37.7 a $26.9 $32.5 b $35.0 Other benefits 537 607 788 799 770 906 775 800
b 820 Past recommendations implemented 69% 70% 78% 79% 75% 79% N/ A 77%
77% New recommendations made 987 940 1,224 1,563 1,200 1,950 1,419 1,250 b
1,250 New products with recommendations 33% 33% 39% 44% 45% 53% 42% 50%
50% Testimonies 256 229 263 151 200 216 215 180 b 200 Timeliness 93% 96%
96% 95% 98% 96% 96% 98% 98%

Legend: N/ A = not applicable Source: GAO. a Changes GAO made to its
methodology for tabulating financial benefits caused about 11 percent of
the increase in fiscal year 2002.

b Four targets published in GAO*s performance plan for fiscal year 2003
were subsequently revised based on more current information. Two were
raised; two were lowered. The original targets were financial benefits,
$35 billion; other benefits, 785; recommendations made, 1,200; and
testimonies, 210.

The results of our work were possible, in part, because of changes we have
made to maximize the value of GAO. We had already realigned GAO*s
structure and resources to better serve the Congress in its legislative,
oversight, appropriations, and investigative roles. Over the past year, we
cultivated and fostered congressional and agency relations, better refined
our strategic and annual planning and reporting processes, and enhanced
our information technology infrastructure. We also continued to provide
priority attention to our management challenges of human capital,
information security, and physical security. Changes we made in each of
these areas helped enable us to operate in a constantly changing

environment. Over the course of the year, we cultivated and fostered
congressional and agency relations in several ways. On October 23, 2001,
in response to the anthrax incident on Capitol Hill, we opened our doors
to 435 members of the House of Representatives and their staffs. Later in
the year, we continued with our traditional hill outreach meetings and
completed a 7- Maximizing GAO*s

Effectiveness, Responsiveness and Value Congressional and Agency Relations

Page 9 GAO- 03- 622T

month pilot test of a system for obtaining clients* views on the quality
of our testimonies and reports. We also developed agency protocols to
provide clearly defined, consistently applied, well- documented, and
transparent policies for conducting our work with federal agencies. We
have implemented our new reporting product line entitled Highlights* a
one- page summary that provides the key findings and recommendations from
a GAO engagement. We continued our policy of outreach to our congressional
clients, the public, and the press to enhance the accessibility of GAO
products. Our external web site now logs about 100,000 visitors each day
and more than 1 million GAO products are downloaded every month by our
congressional clients, the public, and the press.

In light of certain records access challenges during the past few years
and with concerns about national and homeland security unusually high at
home and abroad, it may become more difficult for us to obtain information
from the Executive Branch and report on certain issues. If this were to
occur, it would hamper our ability to complete congressional requests in a
timely manner. We are updating GAO*s engagement acceptance policies and
practices to address this issue and may recommend legislative changes that
will help to assure that we have reasonable and appropriate information
that we need to conduct our work for the Congress and the country.

GAO*s strategic planning process serves as a model for the federal
government. Our plan aligns GAO*s resources to meet the needs of the
Congress, address emerging challenges and achieve positive results.
Following the spirit of the Government Performance and Results Act, we
established a process that provides for updates with each new Congress,
ongoing analysis of emerging conditions and trends, extensive
consultations with congressional clients and outside experts, and
assessments of our internal capacities and needs. At the beginning of
fiscal year 2002, we updated our strategic plan for

serving the Congress based on substantial congressional input* extending
the plan*s perspective out to fiscal year 2007 and factoring in
developments that had occurred since we first issued it in fiscal year
2000. The updated plan carries forward the four strategic goals we had
already

established as the organizing principles for a body of work that is as
wideranging as the interests and concerns of the Congress itself. Using
the plan as a blueprint, we lay out the areas in which we expect to
conduct research, audits, analyses, and evaluations to meet our clients*
needs, and Strategic and Annual

Planning

Page 10 GAO- 03- 622T

we allocate the resources we receive from the Congress accordingly.
Following is our strategic plan framework. Appendix I of this statement
delineates in a bit more detail our strategic objectives and our
qualitative performance goals for fiscal years 2002 and 2003.

Page 11 GAO- 03- 622T

We issued our 2001 Performance and Accountability Report that combines
information on our past year*s accomplishments and progress in meeting our
strategic goals with our plans for achieving our fiscal year 2003
performance goals. The report earned a Certificate of Excellence in

Accountability Reporting from the Association of Government Accountants.
We issued our fiscal year 2002 Performance and Accountability Report in
January 2003.

Our financial statements, which are integral to our performance and
accountability, received an unqualified opinion for the sixteenth
consecutive year. Furthermore, our external auditors did not identify any
material control weaknesses or compliance issues relating to GAO*s
operations.

During the past year, we acquired new hardware and software and developed
user- friendly systems that enhanced our productivity and responsiveness
to the Congress and helped meet our initial information technology goals.
For example, we replaced aging desktop workstations with notebook
computers that provide greater computing power, speed, and mobility. In
addition, we upgraded key desktop applications, the Windows desktop
operating system, and telecommunications systems to ensure that GAO staff
have modern technology tools to assist them in carrying out their work. We
also developed new, integrated, user- friendly Web- based systems that
eliminate duplicate data entry while ensuring the reusability of existing
data. As the Clinger- Cohen Act requires, GAO has an

enterprise architecture program in place to guide its information
technology planning and decision making. In designing and developing
systems, as well as in acquiring technology tools and services, we have

applied enterprise architecture principles and concepts to ensure sound
information technology investments and the interoperability of systems.

Given GAO*s role as a key provider of information and analyses to the
Congress, maintaining the right mix of technical knowledge and expertise
as well as general analytical skills is vital to achieving our mission. We
spend about 80 percent of our resources on our people, but without
excellent human capital management, we could still run the risk of being
unable to deliver what the Congress and the nation expect from us. At the
beginning of my term in early fiscal year 1999, we completed a
selfassessment that profiled our human capital workforce and identified a
number of serious challenges facing our workforce, including significant
issues involving succession planning and imbalances in the structure,
Information Technology

Human Capital

Page 12 GAO- 03- 622T

shape, and skills of our workforce. As presented below, through a number
of strategically planned human capital initiatives over the past few
years, we have made significant progress in addressing these issues. For
example, as illustrated in figure 3, by the end of fiscal year 2002, we
had almost a 60 percent increase in the percentage of staff at the entry-
level

(Band I) as compared with fiscal year 1998. Also, the proportion of our
workforce at the mid- level (Band II) decreased by about 8 percent.

Figure 3: GAO*s Human Capital Profile

a Attorneys and criminal investigators b Mission support includes both
mission and mission support offices as discussed in GAO*s budget
submission

Our fiscal year 2002 human capital initiatives included the following: 
In fiscal year 2002, we hired nearly 430 permanent staff and 140 interns.

We also developed and implemented a strategy to place more emphasis on
diversity in campus recruiting.  In fiscal years 2002 and 2003, to help
meet our workforce planning

objectives, we offered voluntary early retirement under authority
established in our October 2000 human capital legislation. Early
retirement was granted to 52 employees in fiscal year 2002 and 24
employees in fiscal year 2003.  To retain staff with critical skills and
staff with less than 3 years of GAO

experience, we implemented legislation authorizing federal agencies to
offer student loan repayments in exchange for certain federal service
commitments.  In fiscal year 2002, GAO implemented a new, modern,
effective, and credible performance appraisal system for analysts and
specialists,

adapted the system for attorneys, and began modifying the system for
administrative professional and support staff.

Page 13 GAO- 03- 622T

 We began developing a new core training curriculum for managers and
staff to provide additional training on the key competencies required to
perform GAO*s work.  We also took steps to achieve a fully
democratically- elected Employee

Advisory Council to work with GAO*s Executive Committee in addressing
issues of mutual interest and concern. The above represent just a few of
many accomplishments in the human

capital area. GAO is the clear leader in the federal government in
designating and implementing 21st century human capital policies and
practices. We also are taking steps to work with the Congress, the Office
of Management and Budget, and the Office of Personnel Management, and
others to *help others help themselves* in the human capital area.

Ensuring information systems security and disaster recovery systems that
allow for continuity of operations is a critical requirement for GAO,
particularly in light of the events of September 11 and the anthrax
incidents. The risk is that our information could be compromised and that
we would be unable to respond to the needs of the Congress in an
emergency. In light of this risk and in keeping with our goal of being a
model federal agency, we are implementing an information security program
consistent with the requirements in the Government Information Security
Reform provisions (commonly referred to as *GISRA*) enacted in the Floyd
D. Spence National Defense Authorization Act for fiscal year 2001. We have
made progress through our efforts to, among other things, implement a
risk- based, agencywide security program; provide security training and
awareness; and develop and implement an enterprise disaster recovery
solution.

In the aftermath of the September 11 terrorist attacks and subsequent
anthrax incidents, our ability to provide a safe and secure workplace
emerged as a challenge for our agency. Protecting our people and our
assets is critical to our ability to meet our mission. We devoted
additional resources to this area and implemented measures such as
reinforcing vehicle and pedestrian entry points, installing an additional
x- ray machine, adding more security guards, and reinforcing windows.

GAO is requesting budget authority of $473 million for fiscal year 2004 to
maintain current operations for serving the Congress as outlined in our
strategic plan and to continue initiatives to enhance our human capital,
Information Security

Physical Security GAO*s Fiscal Year 2004 Budget Request

Page 14 GAO- 03- 622T

support business processes, and ensure the safety and security of GAO
staff, facilities, and information systems. This funding level will allow
us to fund up to 3,269 full- time equivalent personnel. Our request
includes $466.6 million in direct appropriations and authority to use
estimated revenues of $6 million from reimbursable audit work and rental
income. Our requested increase of $18.4 million in direct appropriations
represents a modest 4.1 percent increase, primarily for mandatory pay and
uncontrollable costs. Our budget request also includes savings from
nonrecurring fiscal year 2003 investments in fiscal year 2004 that we
propose to use to fund further one- time investments in critical areas,
such as security and human capital.

We have submitted a request for $4.8 million in supplemental fiscal year
2003 funds to allow us to accelerate implementation of important security
enhancements. Our fiscal year 2004 budget includes $4.8 million for safety
and security needs that are also included in the supplemental. If the
requested fiscal year 2003 supplemental funds are provided, our fiscal
year 2004 budget could be reduced by $4.8 million. Table 4 presents our
fiscal year 2003 and requested fiscal year 2004 resources by funding
source.

Table 4: Fiscal Years 2003 and 2004 Resources by Funding Source

(Dollars in thousands) Change * FY 2003 to 2004 Funding source FY 2003

Revised FY 2004 Request Amount Percent

Total budget authority Less: offsetting collections b Direct appropriation

$451,202 a (3,000) $448,202

$472,627 (6,006) $466,621

$21,425 (3,006) $18,419 4. 1 Source: GAO. a Excludes request for
supplemental funds of $4. 8 million.

b Offsetting collections include reimbursable audit work and rental
income.

During fiscal year 2004, we plan to sustain our investments in maximizing
the productivity of our workforce by continuing to address the key
management challenges of human capital, and both information and physical
security. We will continue to take steps to *lead by example* within the
federal government in connection with these and other critical management
areas.

Over the next several years, we need to continue to address skill gaps,
maximize staff productivity and effectiveness, and reengineer our human
capital processes to make them more user- friendly. We plan to address

Page 15 GAO- 03- 622T

skill gaps by further refining our recruitment and hiring strategies to
target gaps identified through our workforce planning efforts, while
taking into account the significant percentage of our workforce eligible
for retirement. We will continue to take steps to reengineer our human
capital systems and practices to increase their efficiency and to take
full advantage of technology. We will also ensure that our staff have the
needed skills and training to function in this reengineered environment.
In addition, we are developing competency- based performance appraisal and
broad- banding pay systems for our mission support employees.

To ensure our ability to attract, retain, and reward high- quality staff,
we plan to devote additional resources to our employee training and
development program. We will target resources to continue initiatives to
address skill gaps, maximize staff productivity, and increase staff

effectiveness by updating our training curriculum to address
organizational and technical needs and training new staff. Also, to
enhance our recruitment and retention of staff, we will continue to offer
a student loan repayment program and transit subsidy benefit established
in fiscal year 2002. In addition, we will continue to focus our hiring
efforts in fiscal year 2004 on recruiting talented entry- level staff. To
build on the human capital flexibilities provided by the Congress in

2000, we plan to recommend legislation that would, among other things,
facilitate GAO*s continuing efforts to recruit and retain top talent,
develop a more performance- based compensation system, realign our
workforce, and facilitate our succession planning and knowledge transfer
efforts. In addition, to help attract new recruits, address certain
*expectation gaps* within and outside of the government, and better
describe the modern audit and evaluation entity GAO has become, we will
work with the Congress to explore the possibility of changing the agency*s
name while retaining our well- known acronym and global brand name of
*GAO.*

On the information security front, we need to complete certain key actions
to be better able to detect intruders in our systems, identify our users,
and recover in the event of a disaster. Among our current efforts and
plans for these areas are completing the installation of software that
helps us detect intruders on all our internal servers, completing the
implementation of a

secure user authentication process, and refining the disaster recover plan
we developed last year. We will need the Congress* help to address these
remaining challenges. We also are continuing to make the investments
necessary to enhance the safety and security of our people, facilities,
and other assets for the mutual

Page 16 GAO- 03- 622T

benefit of GAO and the Congress. With our fiscal year 2003 supplemental
funding, if provided, or if not, with fiscal year 2004 funds, we plan to
complete installation of our building access control and intrusion
detection system and supporting infrastructure, and obtain an offsite
facility for use by essential personnel in emergency situations. With the
help of the Congress, we plan to implement these projects over the next
several years.

As a result of the support and resources we have received from this
Subcommittee and the Congress over the past several years, we have been
able to make a difference in government, not only in terms of financial
benefits and improvements in federal programs and operations that have

resulted from our work, but also in strengthening and increasing the
productivity of GAO, and making a real difference for our country and its
citizens. Our budget request for fiscal year 2004 is modest, but necessary

to sustain our current operations, continue key human capital and
information technology initiatives, and ensure the safety and security of
our most valuable asset* our people. We seek your continued support so
that we will be able to effectively and efficiently conduct our work on
behalf of the Congress and the American people. As the Comptroller General
of the United States, I am very proud of how,

in a time of uncertainty, GAO staff responded with a positive attitude and
did whatever their country required and demonstrated an unwavering resolve
to continue their work. Knowing this organization as I do, I was not
surprised. We at GAO look forward to continuing to help the Congress and
the nation meet the current and emerging challenges of the 21st century
Concluding Remarks

Page 17 GAO- 03- 622T

This appendix lists GAO*s strategic goals and the strategic objectives for
each goal. They are part of our updated draft strategic plan (for fiscal
years 2002 through 2007).

Organized below each strategic objective are its qualitative performance
goals. The performance goals lay out the work we plan to do in fiscal
years 2002 and 2003 to help achieve our strategic goals and objectives. We
will evaluate our performance at the end of fiscal year 2003.

Provide Timely, Quality Service to the Congress and the Federal Government
to Address Current and Emerging Challenges to the WellBeing and Financial
Security of the American People

To achieve this goal, we will provide information and recommendations on
the following:

the Health Care Needs of an Aging and Diverse Population  evaluate
Medicare reform, financing, and operations;  assess trends and issues in
private health insurance coverage;  assess actions and options for
improving the Department of Veterans

Affairs* and the Department of Defense*s (DOD) health care services; 
evaluate the effectiveness of federal programs to promote and protect the

public health;  evaluate the effectiveness of federal programs to improve
the nation*s

preparedness for the public health and medical consequences of
bioterrorism;  evaluate federal and state program strategies for
financing and overseeing chronic and long- term health care; and

 assess states* experiences in providing health insurance coverage for
lowincome populations.

the Education and Protection of the Nation*s Children  analyze the
effectiveness and efficiency of early childhood education and

care programs in serving their target populations;  assess options for
federal programs to effectively address the educational and nutritional
needs of elementary and secondary students and their

schools;  determine the effectiveness and efficiency of child support
enforcement

and child welfare programs in serving their target populations; and
Appendix I: GAO*s Qualitative Performance

Goals for Fiscal Years 2002 and 2003 Strategic Goal 1

Page 18 GAO- 03- 622T

 identify opportunities to better manage postsecondary, vocational, and
adult education programs and deliver more effective services. the
Promotion of Work Opportunities and the Protection of Workers  assess the
effectiveness of federal efforts to help adults enter the

workforce and to assist low- income workers;  analyze the impact of
programs designed to maintain a skilled workforce

and ensure employers have the workers they need;  assess the success of
various enforcement strategies to protect workers

while minimizing employers* burden in the changing environment of work;
and  identify ways to improve federal support for people with
disabilities.

a Secure Retirement for Older Americans  assess the implications of
various Social Security reform proposals;  identify opportunities to
foster greater pension coverage, increase

personal saving, and ensure adequate and secure retirement income; and 
identify opportunities to improve the ability of federal agencies to
administer and protect workers* retirement benefits. an Effective System
of Justice  identify ways to improve federal agencies* ability to prevent
and respond

to major crimes, including terrorism;  assess the effectiveness of
federal programs to control illegal drug use;  identify ways to
administer the nation*s immigration laws to better secure the nation*s
borders and promote appropriate treatment of legal residents; and

 assess the administrative efficiency and effectiveness of the federal
court and prison systems.

the Promotion of Viable Communities  assess federal economic development
assistance and its impact on

communities;  assess how the federal government can balance the promotion
of home

ownership with financial risk;  assess the effectiveness of federal
initiatives to assist small and minorityowned businesses;  assess federal
efforts to enhance national preparedness and capacity to

respond to and recover from natural and man- made disasters; and

Page 19 GAO- 03- 622T

 assess how well federally supported housing programs meet their
objectives and affect the well- being of recipient households and
communities.

Responsible Stewardship of Natural Resources and the Environment  assess
the nation*s ability to ensure reliable and environmentally sound

energy for current and future generations;  assess federal strategies for
managing land and water resources in a

sustainable fashion for multiple uses;  assess federal programs* ability
to ensure a plentiful and safe food supply, provide economic security for
farmers, and minimize agricultural environmental damage;  assess federal
pollution prevention and control strategies; and  assess efforts to
reduce the threats posed by hazardous and nuclear

wastes. a Secure and Effective National Physical Infrastructure  assess
strategies for identifying, evaluating, prioritizing, financing, and

implementing integrated solutions to the nation*s infrastructure needs; 
assess the impact of transportation and telecommunications policies and
practices on competition and consumers;

 assess efforts to improve safety and security in all transportation
modes;  assess the U. S. Postal Service*s transformation efforts to
ensure its

viability and accomplish its mission; and  assess federal efforts to plan
for, acquire, manage, maintain, secure, and

dispose of the government*s real property assets.

Provide Timely, Quality Service to the Congress and the Federal Government
to Respond to Changing Security Threats and the Challenges of Global
Interdependence To achieve this goal, we will provide information and
recommendations on

the following: Respond to Diffuse Threats to National and Global Security
 analyze the effectiveness of the federal government*s approach to

providing for homeland security;  assess U. S. efforts to protect
computer and telecommunications systems

supporting critical infrastructures in business and government; and
Strategic Goal 2

Page 20 GAO- 03- 622T

 assess the effectiveness of U. S. and international efforts to prevent
the proliferation of nuclear, biological, chemical, and conventional
weapons and sensitive technologies.

Ensure Military Capabilities and Readiness  assess the ability of DOD to
maintain adequate readiness levels while

addressing the force structure changes needed in the 21st century; 
assess overall human capital management practices to ensure a highquality
total force;  identify ways to improve the economy, efficiency, and
effectiveness of

DOD*s support infrastructure and business systems and processes;  assess
the National Nuclear Security Administration*s efforts to maintain a

safe and reliable nuclear weapons stockpile;  analyze and support DOD*s
efforts to improve budget analyses and

performance management;  assess whether DOD and the services have
developed integrated

procedures and systems to operate effectively together on the battlefield;
and  assess the ability of weapon system acquisition programs and
processes

to achieve desired outcomes. Advance and Protect U. S. International
Interests  analyze the plans, strategies, costs, and results of the U. S.
role in conflict

interventions;  analyze the effectiveness and management of foreign aid
programs and

the tools used to carry them out;  analyze the costs and implications of
changing U. S. strategic interests;  evaluate the efficiency and
accountability of multilateral organizations

and the extent to which they are serving U. S. interests; and  assess the
strategies and management practices for U. S. foreign affairs

functions and activities. Respond to the Impact of Global Market Forces on
U. S. Economic and Security Interests

 analyze how trade agreements and programs serve U. S. interests; 
improve understanding of the effects of defense industry globalization; 
assess how the United States can influence improvements in the world

financial system;  assess the ability of the financial services industry
and its regulators to

maintain a stable and efficient global financial system;

Page 21 GAO- 03- 622T

 evaluate how prepared financial regulators are to respond to change and
innovation; and  assess the effectiveness of regulatory programs and
policies in ensuring

access to financial services and deterring fraud and abuse in financial
markets.

Help Transform the Government*s Role and How It Does Business to Meet 21st
Century Challenges

To achieve this goal, we will provide information and recommendations on
the following:

Analyze the Implications of the Increased Role of Public and Private
Parties in Achieving Federal Objectives

 analyze the modern service- delivery system environment and the
complexity and interaction of service- delivery mechanisms;  assess how
involvement of state and local governments and

nongovernmental organizations affect federal program implementation and
achievement of national goals; and  assess the effectiveness of
regulatory administration and reforms in

achieving government objectives. Assess the Government*s Human Capital and
Other Capacity for Serving the Public

 identify and facilitate the implementation of human capital practices
that will improve federal economy, efficiency, and effectiveness; 
identify ways to improve the financial management infrastructure

capacity to provide useful information to manage for results and costs day
to day;  assess the government*s capacity to manage information
technology to

improve performance;  assess efforts to manage the collection, use, and
dissemination of

government information in an era of rapidly changing technology;  assess
the effectiveness of the Federal Statistical System in providing

relevant, reliable, and timely information that meets federal program
needs; and  identify more businesslike approaches that can be used by
federal

agencies in acquiring goods and services. Strategic Goal 3

Page 22 GAO- 03- 622T

Support Congressional Oversight of the Federal Government*s Progress
toward Being More Results- Oriented, Accountable, and Relevant to
Society*s Needs

 analyze and support efforts to instill results- oriented management
across the government;  highlight the federal programs and operations at
highest risk and the

major performance and management challenges confronting agencies; 
identify ways to strengthen accountability for the federal government*s

assets and operations;  promote accountability in the federal acquisition
process;  assess the management and results of the federal investment in
science

and technology and the effectiveness of efforts to protect intellectual
property; and  identify ways to improve the quality of evaluative
information.  develop new resources and approaches that can be used in
measuring

performance and progress on the nations 21 st century challenges Analyze
the Government*s Fiscal Position and Approaches for Financing the
Government

 analyze the long- term fiscal position of the federal government; 
analyze the structure and information for budgetary choices and explore

alternatives for improvement;  contribute to congressional deliberations
on tax policy;  support congressional oversight of the Internal Revenue
Service*s

modernization and reform efforts; and  assess the reliability of
financial information on the government*s fiscal

position and financing sources.

Maximize the Value of GAO by Being a Model Federal Agency and a World-
Class Professional Services Organization

To achieve this goal, we will do the following: Sharpen GAO*s Focus on
Clients* and Customers* Requirements  continuously update client
requirements;  develop and implement stakeholder protocols and refine
client protocols;

and  identify and refine customer requirements and measures. Strategic
Goal 4

Page 23 GAO- 03- 622T

Enhance Leadership and Promote Management Excellence  foster an attitude
of stewardship to ensure a commitment to GAO*s mission and core values; 
implement an integrated approach to strategic management;  continue to
provide leadership in strategic human capital management

planning and execution;  maintain integrity in financial management; 
use enabling technology to improve GAO*s crosscutting business

processes; and  provide a safe and secure workplace.

Leverage GAO*s Institutional Knowledge and Experience  improve GAO*s use
of Web- based knowledge tools;  develop a framework to manage the
collection, use, distribution, and

retention of organizational knowledge; and  strengthen relationships with
other national and international accountability and professional
organizations.

Continuously Improve GAO*s Business and Management Processes  improve
internal business and administrative processes;  improve GAO*s product
and service lines; and  improve GAO*s job management processes.

Become the Professional Services Employer of Choice  maintain an
environment that is fair, unbiased, family- friendly, and

promotes and values opportunity and inclusiveness;  improve compensation
and performance management systems;  develop and implement a training and
professional development strategy

targeted toward competencies; and  provide GAO*s people with tools,
technology, and a working environment

that is world- class.

(847004)
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