Fiscal Year 2007 Budget Request (10-MAR-06, GAO-06-417T).	 
                                                                 
This testimony discusses the fiscal year 2007 budget request for 
the U.S. Government Accountability Office (GAO). This request	 
will help us continue our support of the Congress in meeting its 
constitutional responsibilities and will help improve the	 
performance and ensure the accountability of the federal	 
government for the benefit of the American people. Budget	 
constraints in the federal government grew tighter in fiscal	 
years 2005 and 2006. In developing our fiscal year 2007 budget,  
we considered those constraints consistent with GAO's and the	 
Committee's desire to "lead by example." In fiscal year 2007, we 
are requesting budget authority of $509.4 million, a reasonable 5
percent increase over our fiscal year 2006 revised funding level.
In the event Congress acts to hold federal pay increases to 2.2  
percent, our requested increase will drop to below 5 percent.	 
This request will allow us to continue making improvements in	 
productivity, maintain our progress in technology and other	 
transformation areas, and support a full-time equivalent (FTE)	 
staffing level of 3,267. This represents an increase of 50 FTEs  
over our planned fiscal year 2006 staffing level and will allow  
us to rebuild our workforce to a level that will position us to  
better respond to increasing supply and demand imbalances in	 
areas such as disaster assistance, the global war on terrorism,  
homeland security, forensic auditing, and health care.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-417T					        
    ACCNO:   A48759						        
  TITLE:     Fiscal Year 2007 Budget Request			      
     DATE:   03/10/2006 
  SUBJECT:   Agency missions					 
	     Budget activities					 
	     Budget administration				 
	     Budget authority					 
	     Future budget projections				 
	     Human capital					 
	     Human capital planning				 
	     Past fiscal year					 
	     Performance measures				 
	     Personnel management				 
	     Staff utilization					 
	     Strategic planning 				 
	     Budget requests					 

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GAO-06-417T

     

     * GAO's Fiscal Year 2007 Request to Support the Congress
     * Performance, Results, and Plans
          * Outcomes of Our Work and the Road Ahead
          * GAO's High-Risk Program
     * Concluding Remarks
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Testimony

Before the Committee on Appropriations, House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EST

March 10, 2006

FISCAL YEAR 2007 BUDGET REQUEST

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

GAO-06-417T

                               2001   2002                        2006   2007 
                                             2003   2004   2005               
Performance measures      Actual Actual Actual Actual Actual Target Target 
Results                                                             
Financial benefits         $26.4  $37.7  $35.4  $44.0  $39.6  $39.0  $40.0 
(dollars in billions)                                               
Other benefits               799    906  1,043  1,197  1,409  1,050  1,100 
Past recommendations                                                       
implemented                  79%    79%    82%    83%    85%    80%    80%
New products with                                                          
recommendations              44%    53%    55%    63%    63%    60%    60%
Client                                                              
Testimonies                  151    216    189    217    179    210    185 
Timeliness                   95%    96%    97%    97%    97%    98%    98% 
People                                                              
New hire rate                N/A    96%    98%    98%    94%    97%    97% 
Acceptance rate              N/A    81%    72%    72%    71%    75%    75% 
Retention rate with                                                        
retirements                  91%    91%    92%    90%    90%    90%    91%
Retention rate without                                                     
retirements                  95%    97%    96%    95%    94%    94%    95%
Staff development            N/A    71%    67%    70%    72%    74%    75% 
Staff utilization            N/A    67%    71%    72%    75%    75%    78% 
Leadership                   N/A    75%    78%    79%    80%    80%    80% 
Organizational climate       N/A    67%    71%    74%    76%    75%    76% 

Source: GAO.

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

Note: In fiscal year 2006, we will add two internal operations measures to
our list of performance measures on which we report. These measures will
help us determine how well our internal operations (1) help employees get
their jobs done and (2) improve employees' quality of life in the
workplace.

Mr. Chairman and Members of the Committee:

I am pleased to appear before the Committee today in support of the fiscal
year 2007 budget request for the U.S. Government Accountability Office
(GAO). This request will help us continue our support of the Congress in
meeting its constitutional responsibilities and will help improve the
performance and ensure the accountability of the federal government for
the benefit of the American people.

Budget constraints in the federal government grew tighter in fiscal years
2005 and 2006. In developing our fiscal year 2007 budget, we considered
those constraints consistent with GAO's and the Committee's desire to
"lead by example." In fiscal year 2007, we are requesting budget authority
of $509.4 million, a reasonable 5 percent increase over our fiscal year
2006 revised funding level. In the event Congress acts to hold federal pay
increases to 2.2 percent, our requested increase will drop to below 5
percent. This request will allow us to continue making improvements in
productivity, maintain our progress in technology and other transformation
areas, and support a full-time equivalent (FTE) staffing level of 3,267.
This represents an increase of 50 FTEs over our planned fiscal year 2006
staffing level and will allow us to rebuild our workforce to a level that
will position us to better respond to increasing supply and demand
imbalances in areas such as disaster assistance, the global war on
terrorism, homeland security, forensic auditing, and health care.

I am proud of the work we accomplished this past fiscal year in support of
the Congress and the American people. We provided our congressional
clients with timely, objective, and reliable information on how well
government programs and policies are working and, when needed,
recommendations for improvement. In the years ahead, our support to the
Congress will likely prove to be even more critical because of the
pressures created by our nation's current and projected budget deficit and
growing long-term fiscal imbalance. Indeed, as it considers those fiscal
pressures, the Congress will be grappling with tough choices about what
government does, how it does business, and who should do the government's
business. GAO is a valuable tool for helping the Congress review,
reprioritize, and revise existing mandatory and discretionary spending
programs and tax policies. Additionally, through its involvement
domestically with the federal, state, and local audit community and
internationally with its national audit office counterparts, GAO has
played-and will continue to play-an important role in helping to ensure
the financial integrity of U.S. funds expended at home and abroad. GAO-led
efforts to develop and implement the first-ever strategic plans for the
National Intergovernmental Audit Forum and the International Organization
of Supreme Audit Institutions have helped improve the effectiveness of
these audit organizations and GAO to work more efficiently and
cost-effectively.

In an effort to identify areas for potential improvement, GAO underwent
two peer reviews in fiscal year 2005. We obtained a clean opinion on our
performance audit practice from an international team of experienced
auditors-the first time that we have sought such an opinion. The
independent reviewers concluded that we have designed and implemented an
effective system of quality controls to provide reasonable assurance of
complying with generally accepted government auditing standards, which are
designed to ensure that audits of government activities are objective,
independent, and reliable. This opinion validated that the Congress and
the American people can rely on our work and products. Also during fiscal
year 2005, GAO received an unqualified report, or clean opinion, on the
results of the external peer review of its financial audit practice.
External peer reviews are conducted on a 3-year cycle, and this is the
fourth such clean opinion that GAO has received from an external peer
reviewer since the program began in fiscal year 1996. The external peer
reviewer, KPMG LLP, found that the system of quality control for GAO's
financial auditing practice met professional standards and that GAO in
fact complied with the standards.

In fiscal year 2005, we met or exceeded targets for 10 of our 14
performance measures, while setting or matching all-time records for 3
measures. We documented $39.6 billion in financial benefits-a return of
$83 for every dollar we spent-and over 1,400 nonfinancial benefits-a
record for us. Our targets for fiscal years 2006 and 2007 will continue to
challenge the agency in our efforts to support the Congress and serve the
American people. Beginning with fiscal year 2006, we will add 2 internal
operations measures to the list. These 2 new performance measures will
assess how well our mission and people are supported by our infrastructure
operations staff.

In fiscal year 2005, we issued two products that will assist the Congress
as it addresses future challenges. Recognizing the importance and scope of
these reports, we provided a copy to every member of Congress and each
Committee, as well as the White House. Our report entitled 21st Century
Challenges: Reexamining the Base of the Federal Government provides a
series of illustrative questions related to 12 areas of federal activity
as well as our perspective on various strategies and approaches that
should be considered as a possible means to address the issues and
questions raised in the report. Drawing on our institutional knowledge and
extensive program evaluation and performance assessment work for the
Congress, we presented over 200 specific 21st century questions
illustrating the types of hard choices our nation needs to face as it
reexamines what the federal government should do, how it should do it, and
how it should be financed. We also issued our High-Risk Series: An Update,
which identifies federal areas and programs at risk of fraud, waste,
abuse, and mismanagement and those in need of broad-based transformations.
The issues affecting many of these areas and programs may take years to
address, and the report will serve as a useful guide for the Congress's
future programmatic deliberations and oversight activities. The current
administration has looked to our high-risk program in shaping
governmentwide initiatives such as the President's Management Agenda,
which has at its base many of the areas we had previously identified as
high risk. The Office of Management and Budget (OMB), in consultation with
GAO, is currently working to ensure that agencies develop detailed action
plans to address high-risk areas, with the ultimate objective, over time,
of seeing these items removed from our high-risk list.

As in past years, during fiscal year 2005, our work covered a number of
major topics of concern to the nation and, in some cases, the world. For
example, we reported on the nation's long-term fiscal challenges, the
financial condition of the airline industry, spending and reconstruction
activities related to Iraq and Afghanistan, and strengthening the visa
process as an antiterrorism tool. We also examined the Department of
Defense's (DOD's) transformation challenges, base realignment and closure
issues, increasing the strategic focus of federal acquisitions, protecting
against identity theft, the oversight of electricity markets, zero
down-payment mortgages, and immigration enforcement. We testified many
times before the Congress, contributing to the public debate on a variety
of topics that included Social Security reform, pension reform, postal
reform, GSE oversight, wildland fire management, gasoline prices, the flu
vaccine, veterans' health care, benefits for members of the Reserves and
National Guard, digital broadcast television, long-term health care
financing, passport fraud detection, reducing the tax gap, information
security, and a range of financial management and accountability issues.
In addition, we conducted a range of work on a variety of legislative
branch agencies and projects, including the Capitol Visitor's Center, the
Architect of the Capitol, and the U.S. Capitol Police.

This past year we also continued to take steps internally to help us
achieve our goal of being a model federal agency and a world-class
professional services organization. These steps helped us to address our
three major management challenges-human capital, physical security, and
information security. Through the GAO Human Capital Reform Act of 2004,
the Congress granted GAO several additional human capital flexibilities
that will allow us, among other things, to move to an even more
performance-oriented and market-based compensation system. As you have
heard me say many times, our most valuable asset is our people, and the
flexibilities granted in this act will help us to continue to modernize
our people-related policies and strategies, which, in turn, will help
ensure that we are well-equipped to serve the Congress and the American
people in the years to come. As a result, we are continuing to take a
range of actions designed to modernize our human capital policies and
practices. In fiscal year 2005, we adopted a broad pay band approach and a
more performance-oriented pay system for our administrative staff. In
fiscal year 2006, we implemented a more market-based and skills-,
knowledge-, and performance-oriented classification and pay system for all
of our employees.

My testimony today will focus on our budget request for fiscal year 2007
to support the Congress and serve the American people and on our
performance and results with the funding you provided us in fiscal year

2005.

             GAO's Fiscal Year 2007 Request to Support the Congress

Our fiscal year 2007 budget request will provide us the resources
necessary to achieve our performance goals in support of the Congress and
the American people. This request will allow GAO to improve productivity
and maintain progress in technology and other transformation areas. We
continue to streamline GAO, modernize our policies and practices, and
leverage technology so that we can achieve our mission more effectively
and efficiently. These continuing efforts allow us to enhance our
performance without significant increases in funding. Our fiscal year 2007
budget request represents a modest increase of about $25 million (or 5
percent) over our fiscal year 2006 revised funding level-primarily to
cover uncontrollable mandatory pay and price level increases. This request
reflects a reduction of nearly $5.4 million in nonrecurring fiscal year
2006 costs used to offset the fiscal year 2007 increase. This request also
includes about $7 million in one-time fiscal year 2007 costs, which will
not recur in fiscal year 2008, to upgrade our business systems and
processes.

As the Congress addresses the devastation in the Gulf Coast region from
Hurricane Katrina and several other major 2005 hurricanes, GAO is
supporting the Congress by assessing whether federal programs assisting
the people of the Gulf region are efficient and effective and result in a
strong return on investment. In order to address the demands of this work;
better respond to the increasing number of demands being placed on GAO,
including a dramatic increase in health care mandates; and address supply
and demand imbalances in our ability to respond to congressional interest
in areas such as disaster assistance, homeland security, the global war on
terrorism, health care, and forensic auditing, we are seeking your support
to provide the funding to rebuild our staffing level to the levels
requested in previous years. We believe that 3,267 FTEs is an optimal
staffing level for GAO that would allow us to more successfully meet the
needs of the Congress.

In preparing this request and taking into account the effects of the
fiscal year 2006 rescission, we revised our workforce plan to reduce
fiscal year 2005 hiring and initiated a voluntary early retirement
opportunity for staff in January 2006. These actions better support GAO's
strategic plan for serving the Congress, better align GAO's workforce to
meet mission needs, correct selected skill imbalances, and allow us to
increase the number of new hires later in fiscal year 2006. Our revised
hiring plan represents an aggressive hiring level that is significantly
higher than in recent fiscal years, and it is the maximum number of staff
we could absorb during fiscal year 2006. These actions will also position
us to more fully utilize our planned FTE levels of 3,217 and 3,267 in
fiscal years 2006 and 2007, respectively.

Our fiscal year 2007 budget request includes approximately $502 million in
direct appropriations and authority to use about $7 million in estimated
revenue from rental income and reimbursable audit work. Table 1 summarizes
the changes we are requesting in our fiscal year 2007 budget.

Table 1: Fiscal Year 2007 Budget Request, Summary of Requested Changes

Dollars in thousands                                 
                                                        Cumulative percentage 
Budget category                        FTEs   Amount                change 
FY 2006 enacted budget authority      3,217 $489,560 
                                                        
Less: rescission                             (4,896) 
                                                        
FY 2006 revised budget authority            $484,664 
FY 2007 requested changes                            
Nonrecurring fiscal year 2006 costs         ($5,380)                  (1%) 
Mandatory pay costs                      50   18,469                    3% 
Price level changes                            4,073                    4% 
Relatively controllable costs                  7,528 
Adjustment due to rounding                         1 
Subtotal - requested changes             50  $24,691                    5% 
Total FY 2007 budget authority                       
required to support GAO operations    3,267 $509,355 

Source: GAO.

Our fiscal year 2007 budget request supports three broad program areas:
Human Capital, Engagement Support, and Infrastructure Operations.
Consistent with our strategic goal to be a model agency, we have
undertaken a number of initiatives to implement performance-based,
market-oriented compensation systems; adopt best practices; benchmark
service levels and costs; streamline our operations; cross-service and
outsource activities; and leverage technology to increase efficiency,
productivity, and results.

The Human Capital Program provides the resources needed to support a
diverse, highly educated, knowledge-based workforce comprising individuals
with a broad array of technical and program skills and institutional
memory. This workforce represents GAO's human capital-its greatest
asset-and is critical to the agency's success in serving the Congress and
the nation. Human Capital Program costs represent nearly 80 percent of our
requested budget authority.

To further ensure our ability to meet congressional needs, we plan to
allocate approximately $17 million for Engagement Support to:

           o  conduct travel, a critical tool to accomplish our mission of
           following the federal dollar cross the country and throughout the
           world, and to ensure the quality of our work;
           o  contract for expert advice and assistance when needed to meet
           congressional timeframes for a particular audit or engagement; and
           o  ensure a limited presence in the Middle East to provide more
           timely, responsive information on U.S. activities in the area.

In addition, we plan to allocate about $91 million-or about 18 percent of
our total request-for Infrastructure Operations programs and initiatives
to provide the critical infrastructure to support our work. These key
activities include information technology, building management, knowledge
services, human capital operations, and support services.

                        Performance, Results, and Plans

In fiscal year 2005, the Congress focused its attention on a broad array
of challenging issues affecting the safety, health, and well-being of
Americans here and abroad, and we were able to provide the objective,
fact-based information that decision makers needed to stimulate debate,
change laws, and improve federal programs for the betterment of the
nation. For example, as the war in Iraq continued, we examined how DOD
supplied vehicles, body armor, and other materiel to the troops in the
field; contributed to the debate on military compensation; and highlighted
the need to improve health, vocational rehabilitation, and employment
services for seriously injured soldiers transitioning from the battlefield
to civilian life. We kept pace with the Congress's information needs about
ways to better protect America from terrorism by issuing products and
delivering testimonies that addressed issues such as security gaps in the
nation's passport operations that threaten public safety and federal
efforts needed to improve the security of checked baggage at airports and
cargo containers coming through U.S. ports. We also explored the financial
crisis that weakened the airline industry and the impact of this situation
on the traveling public and airline employees' pensions. We performed this
work in accordance with our strategic plan for serving the Congress,
consistent with our professional standards, and guided by our core values
(see appendix 1). See table 2 for examples of how GAO assisted the nation
in fiscal year 2005.

Table 2: Examples of How GAO Assisted the Nation in Fiscal Year 2005

Goal Description                   GAO provided information that helped    
                                      to....                                  
1    Provide timely, quality          o  Improve the transition from       
        service to the Congress and      active duty to civilian status for   
        the federal government to        veterans with serious war-related    
        address current and emerging     injuries                             
        challenges to the well-being     o  Address long-term health care     
        and financial security of the    financing pressures on state and     
        American people.                 local government budgets             
                                         o  Identify challenges associated    
                                         with transferring the Medicare       
                                         appeals process from the Social      
                                         Security Administration and HHS      
                                         o  Improve patient safety at         
                                         Department of Veterans' Affairs      
                                         hospitals                            
                                         o  Improve the security of Social    
                                         Security numbers                     
                                         o  Address the challenges of pension 
                                         reform                               
                                         o  Strengthen the security screening 
                                         process for passengers and checked   
                                         baggage at the nation's airports     
                                         o  Improve the oversight of Federal  
                                         Housing Administration single-family 
                                         and multifamily lenders              
                                         o  Improve the oversight of          
                                         electricity markets by the Federal   
                                         Energy Regulatory Commission         
                                         o  Identify challenges associated    
                                         with the Department of Energy's      
                                         (DOE's) nuclear facility designs     
                                         o  Monitor the growth in the digital 
                                         television market                    
                                         o  Analyze issues contributing to    
                                         the declining financial condition of 
                                         the airline industry                 
2    Provide timely, quality          o  Improve the management of funds   
        service to the Congress and      for the global war on terrorism      
        the federal government to        o  Increase the security of cargo    
        respond to changing security     containers to prevent terrorist      
        threats and the challenges of    activity                             
        global interdependence.          o  Alert the Congress to issues      
                                         affecting the DOD's major weapon     
                                         systems                              
                                         o  Analyze funding options for a new 
                                         federal foreign assistance           
                                         program-the Millennium Challenge     
                                         Account                              
                                         o  Promote government efforts to     
                                         address threats to the security of   
                                         the nation's information systems     
                                         o  Strengthen the visa process as an 
                                         antiterrorism tool                   
                                         o  Improve management of the U.S.    
                                         Coast Guard's Deepwater Program      
                                         o  Shape the debate on improving     
                                         military pay and benefits            
                                         o  Strengthen the U.S. strategic     
                                         export control system                
                                         o  Identify improvements needed to   
                                         secure critical IT systems used by   
                                         U.S. financial markets               
                                         o  Report to the Congress on the     
                                         2005 base realignment and closures   
                                         (BRAC) defense transformation        
3    Help transform the federal       o  Increase the public's             
        government's role and how it     understanding of the federal         
        does business to meet 21st       government's long-term fiscal        
        century challenges.              challenges                           
                                         o  Implement governmentwide civil    
                                         service reforms                      
                                         o  Oversee federal tax policy        
                                         o  Increase debts collected from     
                                         criminals                            
                                         o  Decrease improper payments made   
                                         by the USDA Food Stamp Program and   
                                         other federal agencies               
                                         o  Manage multibillion dollar IT     
                                         modernizations and investments at    
                                         the Department of Homeland Security  
                                         (DHS) and Office of Personnel        
                                         Management                           
                                         o  Improve agencies' strategic       
                                         purchasing practices                 
                                         o  Examine changes in key areas of   
                                         federal activity that could affect   
                                         the federal government's fiscal      
                                         future                               
                                         o  Enhance the knowledge base on     
                                         comprehensive national indicators    
                                         o  Improve postal operations through 
                                         reform legislation                   
4    Maximize the value of GAO by     o  Foster among other federal        
        being a model federal agency     agencies GAO's innovative human      
        and a world-class                capital practices, such as broad pay 
        professional services            bands; performance-based             
        organization.                    compensation; and workforce planning 
                                         and staffing strategies, policies,   
                                         and processes                        
                                         o  Share GAO's model business and    
                                         management processes and other       
                                         transformation-related information   
                                         with counterpart organizations in    
                                         the United States and abroad         

Source: GAO.

Outcomes of Our Work and the Road Ahead

During fiscal year 2005 we monitored our performance using 14 annual
performance measures that capture the results of our work; the assistance
we provided to the Congress; and our ability to attract, retain, develop,
and lead a highly professional workforce (see table 3). For example, in
fiscal year 2005 our work generated $39.6 billion in financial benefits,
primarily from actions agencies and the Congress took in response to our
recommendations. Of this amount, about $19 billion resulted from changes
to laws or regulations, $12.8 billion resulted from agency actions based
on our recommendations to improve services to the public, and $7.7 billion
resulted from improvements to core business processes. See figure 1 for
examples of our fiscal year 2005 financial benefits.

Many of the benefits that result from our work cannot be measured in
dollar terms. During fiscal year 2005, we recorded a total of 1,409 other
benefits. For instance, we documented 75 instances where information we
provided to the Congress resulted in statutory or regulatory changes, 595
instances where federal agencies improved services to the public, and 739
instances where agencies improved core business processes or
governmentwide reforms were advanced. These actions spanned the full
spectrum of national issues, from ensuring the safety of commercial
airline passengers to identifying abusive tax shelters. See figure 2 for
additional examples of GAO's other benefits in fiscal year 2005.

One way we measure our effect on improving the government's
accountability, operations, and services is by tracking the percentage of
recommendations that we made 4 years ago that have since been implemented.
At the end of fiscal year 2005, 85 percent of the recommendations we made
in fiscal year 2001 had been implemented, primarily by executive branch
agencies. Putting these recommendations into practice will generate
tangible benefits for the nation over many years.

During fiscal year 2005, experts from our staff testified at 179
congressional hearings covering a wide range of complex issues (see

table 4). For example, our senior executives testified on improving the
security of nuclear material, federal oversight of mutual funds, and the
management and control of DOD's excess property. Over 70 of our
testimonies were related to high-risk areas and programs (see table 5).

Table 3: Agencywide Summary of Annual Measures and Targets

Figure 1: GAO's Selected Major Financial Benefits Reported in Fiscal Year
2005

Description                                                         Amount 
Reduced funding for a missile defense system. In an April 2003        $4.7 
report, we stated that to successfully develop an effective and     
suitable missile defense system, the Missile Defense Agency must be 
willing to adopt knowledge-based acquisition practices that have    
made other developers successful. Our report acknowledged that the  
agency's development strategy for the Kinetic Energy Interceptor    
Program included knowledge-based practices, but concluded that the  
agency had not implemented two important practices: (1) using       
well-developed technologies during system integration and (2) fully 
testing a system before fielding it. In response, the Missile       
Defense Agency is scaling back development of the Kinetic Energy    
Interceptor Program until technologies are mature. Over a 5-year    
period-from fiscal years 2005 through 2009-program funding will be  
reduced by about $5.2 billion, which has a net present value of     
about $4.7 billion.                                                 
Avoided higher costs associated with a nuclear waste disposal          4.5 
process. In a June 2003 report, we recommended that DOE pursue      
legislative clarification from the Congress because of a legal      
challenge that threatened DOE's ability to proceed with its less    
costly strategy for treating and disposing of radioactive tank      
wastes with lower concentrations of radioactivity. DOE estimated    
that pursuing a more expensive treatment and disposal strategy      
suitable for wastes with higher concentrations of radioactivity     
would increase waste treatment disposal costs by $55 billion to $60 
billion at its Savannah River Site. The Fiscal Year 2005 National   
Defense Authorization Act contained a provision that clarified      
DOE's authority to follow its planned treatment and disposal        
strategy, thus avoiding a more costly process. We calculated that   
the net present value of the cost avoidance for fiscal years 2005   
through 2009 was about $4.5 billion.                                
Improved the Army's force structure. In a report examining the         3.4 
Army's force structure, we recommended that the Army establish      
mission criteria to provide a firmer basis for its Strategic        
Reserve, Domestic Support, and Homeland Defense force requirements. 
Such criteria would help to ensure that the Army had the right      
number and types of soldiers available for these purposes. Rather   
than request additional end strength, the Army reconfigured its     
existing force's structure. In April 2003, DOD reported that the    
Army had included force structure changes in its fiscal year 2004   
budget, which supported increased units for military police;        
military intelligence; special forces; and chemical, civil affairs, 
and psychological operations. Based on this action, the Army has    
been able to rebalance its force structure to create needed units   
with minimal increases in authorized end strength. The amount shown 
represents the net present value of the force structure changes     
over a 5-year period (fiscal years 2004 through 2008).              
Reduced the cost of federally subsidized housing projects. We          2.7 
determined that the Department of Housing and Urban Development     
(HUD) had not developed the systems it needed to track the status   
of unexpended balances in its project-based Section 8 housing       
program and therefore could not use this information to help manage 
the program and formulate budget requests for it. As a result of    
our work, the Congress required HUD to better enforce the           
legislative provisions requiring the recapture of capital funds not 
being utilized by public housing authorities. In fiscal year 2005,  
we documented-using HUD data-that a financial benefit of about $2.7 
billion in current dollars resulted from HUD's recapture of about   
$2.5 billion of fiscal year 2003 dollars.                           
Avoided costs associated with higher payment rates at skilled          2.0 
nursing homes. In 2002, we assessed the impact of a 16.6 percent    
increase in Medicare's daily rate for skilled nursing facilities on 
nurse staffing ratios. Our analysis showed that nurse staffing      
ratios changed little from April 1, 2001, through September 30,     
2002-the period during which the rate increase was in effect. In    
fiscal year 2003, the cost to the federal government of reinstating 
the payment rate increase was approximately $1 billion per year.    
Since we issued our report, the Congress has considered reinstating 
the rate increase, but it has chosen not to, largely on the basis   
of our analysis. The net present value of the annual cost avoidance 
for fiscal years 2004 and 2005 is $2 billion.                       
Increased tax revenues. We reported that the Internal Revenue          1.8 
Service (IRS) did not have systems or procedures in place to allow  
it to identify and actively pursue unpaid tax cases that may have   
some collection potential. Based on our work, IRS has taken action  
to better assess the potential for collecting unpaid tax assessment 
cases and has used that information to better target its collection 
efforts. Specifically, in 2004 IRS began implementing a             
sophisticated modeling technology to identify productive and less   
productive cases to ensure that its resources are devoted to cases  
with a higher likelihood of collection and to help prevent          
premature suspension of collection efforts. IRS's analysis of the   
yield on collection cases after employing this modeling in fiscal   
year 2004 shows that this yield increased by about $1.8 billion (in 
current year dollars), or 8.4 percent from the previous year        
(fiscal year 2003), without significant staffing level increases.   
Ensured continued investment in the General Services                   1.3 
Administration's (GSA) online purchasing system. As of 2003, GSA    
had spent $84 million to develop, implement, and maintain           
Advantage, a system for ordering products and services online.      
However, 5 years after the system was launched, only 35 percent of  
all government-contracted vendors participated in the program, and  
agencies were largely using the system to compare pricing. To       
ensure GSA's level of investment matched customer needs, we         
recommended that the agency develop a business case for a system    
such as Advantage, and in January 2005, GSA selected a new business 
strategy that would significantly enhance the system's capabilities 
to serve as a broker between buyers and suppliers and provide       
agencies with an automated tool for formulating acquisition         
requirements and developing requests for quotes. GSA projects over  
$1.5 billion in financial benefits to result from electronic        
transactions, spend analysis (analysis of expenditures that shows   
how money is spent on goods and services), a searchable procurement 
data repository, and competitive pricing. This financial benefit    
has a net present value of just over $1.3 billion.                  
Reduced Navy and Air Force appropriations. DOD policy requires the     1.3 
Defense Working Capital Fund to maintain cash levels to cover 7 to  
10 days of operational cash and 6 months of capital asset           
disbursements. Our analysis showed that the January 2004 reported   
actual cash balance for the Air Force Working Capital Fund exceeded 
the 10-day cash requirement by about $1.5 billion, and the Navy's   
Working Capital Fund reported actual cash balance exceeded the      
budgeted cash balance by $659 million and $408 million at the end   
of fiscal years 2002 and 2003, respectively. The Congress reduced   
the Navy and Air Force fiscal year 2005 Operation and Maintenance   
appropriations by just under $1.3 billion due to excessive cash     
amounts.                                                            
Eliminated the National Aeronautics and Space Administration's         1.1 
(NASA) Prometheus 1 project. We issued a report questioning whether 
NASA had established the initial justification for its investment   
in the Prometheus 1 project and how the agency planned to ensure    
that critical nuclear power and propulsion system technologies were 
sufficiently developed to support deep space probes like the        
Jupiter Icy Moons Orbiter. We also reported that the approved       
Prometheus 1 funding profile was inadequate to support the planned  
mission-a launch to Jupiter's Icy Moons in 2015. NASA has           
subsequently deferred the Jupiter Icy Moons Orbiter mission         
indefinitely, reducing the agency's funding needs by about $1.22    
billion through fiscal year 2009; the net present value of this     
reduction is over $1.1 billion.                                     
Reduced the budget request for a new foreign assistance program. In    1.0 
March and June 2004, we provided the Congress with information to   
help it assess the President's $2.5 billion fiscal year 2005 budget 
request for the Millennium Challenge Account-a new foreign          
assistance program intended to provide economic assistance to       
countries that demonstrate a commitment to ruling justly, investing 
in people, and encouraging economic freedom. Our work provided the  
Congress with a framework for identifying relationships and         
trade-offs between funding levels, compact length, and number of    
compacts (i.e., agreements). Our analysis indicated that by         
reducing assistance target levels, the length of compacts or both   
with participating countries, the program could operate at a lower  
funding level. We also estimated the effect of funding compacts     
partly from future appropriations. Our work facilitated the         
Congress's decision to reduce the appropriation for the Millennium  
Challenge Account in fiscal year 2005 to $1.5 billion.              

Source: GAO.

Figure 2: GAO's Selected Other (Nonfinancial) Benefits Reported in Fiscal
Year 2005

Other benefits that helped to change laws
Intelligence Reform and     Our work is reflected in this law in different 
Terrorism Prevention Act    ways. In our May 2004 testimony on the use of  
of 2004 (Pub. L. No.        biometrics for aviation security, we reported  
108-458)                    on the need to identify how biometrics will be 
                               used to improve aviation security prior to     
                               making a decision to design, develop, and      
                               implement biometrics. Using information from   
                               our statement, the House introduced a bill on  
                               July 22, 2004, directing the Transportation    
                               Security Administration (TSA) to establish     
                               system requirements and performance standards  
                               for using biometrics, and establish processes  
                               to (1) prevent individuals from using assumed  
                               identities to enroll in a biometric system and 
                               (2) resolve errors. These provisions were      
                               later included in an overall aviation security 
                               bill and were eventually included in the       
                               Intelligence Reform and Terrorism Prevention   
                               Act of 2004, enacted in December 2004.         
                                                                              
                               We conducted a body of work assessing the      
                               physical screening of airport passengers and   
                               their checked baggage. We found that the       
                               installation of systems that are in line with  
                               airport baggage conveyor systems may result in 
                               financial benefits, according to TSA estimates 
                               for nine airports. We also found that the      
                               effectiveness of the advance passenger         
                               screening under the process known as Secure    
                               Flight was not certain. TSA agreed to take     
                               corrective actions in these areas, and the     
                               Congress required TSA in the Intelligence      
                               Reform and Terrorism Protection Act to prepare 
                               a plan and guidelines for installing in-line   
                               baggage screening systems, and enacted         
                               measures to promote Secure Flight's            
                               development and implementation.                
Real ID Act of 2005 (Pub.   We reported on the verification of identity    
L. No. 109-13)              documents for drivers' licenses, noting that   
                               visual inspection of key documents lent itself 
                               to possible identity fraud. To demonstrate     
                               this, our investigators were able to obtain    
                               licenses in two states using counterfeit       
                               documents and the Social Security numbers of   
                               deceased persons. The Congress established     
                               federal identification standards for state     
                               drivers' licenses and other such documents and 
                               mandated third-party verification of identity  
                               documents presented to apply for a driver's    
                               license.                                       
Ronald W. Reagan National   We assisted the Congress in crafting major     
Defense Authorization Act   improvements to a program intended to          
for Fiscal Year 2005 (Pub.  compensate individuals who worked in DOE       
L. No. 108-375)             facilities and developed illnesses related to  
                               radiation and hazardous materials exposure. In 
                               a 2004 report, we identified features of the   
                               originally enacted program that would likely   
                               lead to inconsistent benefit outcomes for      
                               claimants, in part because the program         
                               depended on the varying state workers          
                               compensation systems to provide some benefits. 
                               We also presented several options for          
                               improving the consistency of benefit outcomes  
                               and a framework for assessing these options.   
                               When the Congress enacted the Ronald W. Reagan 
                               National Defense Authorization Act for Fiscal  
                               Year 2005, it revamped this energy employees'  
                               benefit program. Among other changes, this law 
                               federalized the payment of worker compensation 
                               benefits for eligible energy contractor        
                               employees and provided a schedule of uniform   
                               benefit payments.                              

Federal Lands Recreation  Our work over the past several years has helped  
Enhancement Act (Pub. L.  the Congress to establish and assess the impacts 
No. 108-447)              of the recreational fee demonstration program.   
                             Under this trial program, the Congress           
                             authorized the National Park Service, the Fish   
                             and Wildlife Service, the Bureau of Land         
                             Management, and the Forest Service to charge     
                             fees to visitors to, among other things, reduce  
                             the maintenance backlog at federal parks and     
                             historic places and protect these lands from     
                             visitor impacts. Since the program's inception   
                             in 1996, we have identified issues that needed   
                             to be addressed to improve the program's         
                             effectiveness that included providing (1) a more 
                             permanent source of funds to enhance stability,  
                             since the current program had to be reauthorized 
                             every 2 years; (2) the participating agencies    
                             with greater flexibility in how and where they   
                             apply fee revenues; and (3) improvements in      
                             interagency coordination in the collection and   
                             use of revenue fees to better serve visitors by  
                             making the payment of fees more convenient and   
                             equitable and reducing visitor confusion about   
                             similar or multiple fees being charged at nearby 
                             or adjacent federal recreational sites. As a     
                             result of this body of work, the Congress        
                             addressed these issues by passing the Federal    
                             Lands Recreation Enhancement Act in December     
                             2004. This act permits federal land management   
                             agencies to continue charging fees at            
                             campgrounds, rental cabins, high-impact          
                             recreation areas, and day-use sites that have    
                             certain facilities. The act also provides for a  
                             nationally consistent interagency program, more  
                             on-the-ground improvements at recreation sites   
                             across the nation, enhanced visitor services, a  
                             new national pass for use across interagency     
                             federal recreation sites and services, and       
                             public involvement in the program.               
Consolidated              Our work is reflected in this law in different   
Appropriations Act, 2005  ways. At the time of our August 2003 report, the 
(Pub. L. No. 108- 447)    original 1999 expiration date for the franchise  
                             fund pilots operating at the Departments of      
                             Commerce, Veterans Affairs, Health and Human     
                             Services, the Interior, and the Treasury and at  
                             the Environmental Protection Agency had been     
                             extended three times. These franchise funds,     
                             authorized by the Government Management Reform   
                             Act of 1994, are part of a group of 34           
                             intragovernmental revolving funds that were      
                             created to provide common administrative support 
                             services required by many federal agencies. For  
                             example, the Commerce Franchise Fund's business  
                             line provides IT infrastructure support services 
                             to the agency. We concluded that increasing the  
                             period of authorization would help ease concerns 
                             of current and potential clients about franchise 
                             fund stability and might allow franchise funds   
                             to add new business lines, and we suggested that 
                             the authorizations be extended for longer        
                             periods. The Congress provided permanent         
                             authority to the Treasury franchise fund in the  
                             Consolidated Appropriations Act, 2005, passed on 
                             December 8, 2004.                                
                                                                              
                             In 2003, we reported that most agencies could    
                             not retain the proceeds from the sale of         
                             unneeded property and this acted as a            
                             disincentive to disposing of unneeded property.  
                             We stated in our high-risk report on federal     
                             real property that it may make sense to permit   
                             agencies to retain proceeds for reinvestment in  
                             real property where a need exists. Subsequently, 
                             in the Consolidated Appropriations Act, 2005,    
                             the Congress authorized the Administrator of GSA 
                             to retain the net proceeds from the conveyance   
                             of real and related personal property. These     
                             proceeds are to be deposited into the Federal    
                             Buildings Fund and are to be used as authorized  
                             for GSA's real property capital needs.           
                                                                              
                             In December 2003, we reported that 184 out of    
                             213 Alaska Native villages are affected, to some 
                             extent, by flooding and erosion. However, these  
                             villages often have difficulty qualifying for    
                             federal assistance to combat their flooding and  
                             erosion problems. In our report, we recommended  
                             that the Denali Commission adopt a policy to     
                             guide investment decisions and project designs   
                             in villages affected by flooding and erosion. In 
                             this legislation, the Congress provided the      
                             Secretary of the Army with the authority to      
                             carry out "structural and non-structural         
                             projects for storm damage prevention and         
                             reduction, coastal erosion, and ice and glacial  
                             damage in Alaska, including relocation of        
                             affected communities and construction of         
                             replacement facilities."                         

Consolidated Appropriations  To improve the federal government's ability   
Act, 2005 (Pub. L. No. 108-  to collect billions of dollars of outstanding 
447)                         criminal debt, we recommended in a 2001       
                                report, that the Department of Justice work   
                                with other agencies involved in criminal debt 
                                collection, including the Administrative      
                                Office of the U.S. Courts, the Department of  
                                the Treasury (Treasury), and OMB, to develop  
                                a strategic plan that would improve           
                                interagency processes and coordination with   
                                regard to criminal debt collection            
                                activities. The conference report that        
                                accompanied the Consolidated Appropriations   
                                Act, 2005, directed the Attorney General to   
                                assemble an interagency task force for the    
                                purposes of better managing, accounting for,  
                                reporting, and collecting criminal debt.      
Encouraged improvements in   Our report found that the Department of       
the process for ensuring     Education's (Education) system for resolving  
states' compliance with      noncompliance with the Individuals with       
education laws for the       Disabilities in Education Act is protracted.  
disabled                     We found that resolution of noncompliance     
                                cases often takes several years, in part      
                                because Education took a year on average from 
                                the time it identified noncompliance to issue 
                                a report citing the noncompliance. We         
                                therefore recommended that Education improve  
                                its system of resolving noncompliance by      
                                shortening the amount of time it takes to     
                                issue a report of noncompliance and by        
                                tracking changes in response times under the  
                                new monitoring process. In response to our    
                                recommendation, Education has instituted an   
                                improved process for managing and tracking    
                                the various phases of the monitoring process, 
                                which includes the creation of a database to  
                                facilitate this tracking. This new tracking   
                                system will enable Education to better        
                                monitor the status of existing noncompliance, 
                                and thus enable the department to take        
                                appropriate action when states fail to come   
                                into compliance in a timely manner.           
Identified a weakness in     In 2004, we found that the 24-hour            
Medicare's telephone         1-800-MEDICARE help line, operated by the     
assistance service           Centers for Medicare & Medicaid Services      
                                (CMS), did not answer 10 percent of the calls 
                                we placed to test its accuracy, often because 
                                it automatically transferred some calls to    
                                claims administration contractors that were   
                                not open for business at the time of the      
                                call. This call transfer process prohibited   
                                callers from accessing information during     
                                nonbusiness hours, even though 1-800-MEDICARE 
                                operates 24 hours a day. As a result, we      
                                recommended that CMS revise the routing       
                                procedures of 1-800-MEDICARE to ensure that   
                                calls are not transferred or referred to      
                                claims administration contractors' help lines 
                                during nonbusiness hours. In response, CMS    
                                finished converting its call routing          
                                procedures. As a result, calls placed after   
                                normal business hours will be routed to the   
                                main 1-800-MEDICARE help line for assistance. 
Highlighted the need for     United States Department of Agriculture       
increased security at a      scientists at the Plum Island Animal Disease  
federal disease research     Center research contagious animal diseases    
facility                     that have been found in other countries. The  
                                mission of the facility, now administered by  
                                DHS, is to develop strategies for protecting  
                                the nation's animal industries and exports    
                                from these foreign animal diseases. In our    
                                September 2003 report, Combating              
                                Bioterrorism: Actions Needed to Improve       
                                Security at Plum Island Animal Disease        
                                Center, we made several recommendations to    
                                improve security at the facility and reduce   
                                vulnerability to terrorist attacks. Among     
                                other things, we recommended that the         
                                Secretary of Homeland Security, in            
                                consultation with the Secretary of            
                                Agriculture, enhance incident response        
                                capability by increasing the size of the      
                                guard force. DHS has informed us that this    
                                has been completed. According to the Director 
                                of Plum Island, DHS has more than doubled the 
                                number of guards assigned on each shift on    
                                Plum Island.                                  
Other benefits that helped to improve services to the public

Other benefits that helped to promote sound agency and governmentwide
management            
Recommended a process  DOD spending on service contracts approaches $100   
to increase the        billion annually, but DOD's management of services  
efficiency of DOD      procurement is inefficient and ineffective and the  
procurements           dollars are not always well spent. Many private     
                          companies have changed management practices based   
                          on analyzing spending patterns and coordinating     
                          procurement efforts in order to achieve major       
                          savings. We recommended that DOD adopt the          
                          effective spend analysis processes used by these    
                          leading companies and use technology to automate    
                          spend analysis to make it repeatable. In response,  
                          DOD is developing new technology to do that.        
                          According to DOD and contractor project managers,   
                          one phase of the project was completed in December  
                          2004. In March 2005, DOD approved a business case   
                          analysis to seek follow-on funding for developing a 
                          DOD-wide spend analysis system.                     
Improved the Air       As part of our audit of Air Force purchase card     
Force's oversight of   controls, we identified transactions that Air Force 
purchase card          officials acknowledged to be fraudulent as well as  
transactions           potentially fraudulent transactions that the Air    
                          Force had not identified. To improve Air Force      
                          oversight of purchase card activity and facilitate  
                          the identification of systemic weaknesses and       
                          deficiencies in existing internal control and the   
                          development of additional control activities, we    
                          recommended that the Air Force establish an         
                          agencywide database of known purchase card fraud    
                          cases. In lieu of establishing a separate           
                          agencywide database, during fiscal year 2003, the   
                          Air Force Office of Special Investigations          
                          initiated quarterly reporting on its purchase card  
                          investigations to the DOD IG for macro-level        
                          analysis of systemic weaknesses in the program. Our 
                          ongoing collaboration with the DOD IG on DOD's      
                          purchase card program confirmed that the Air        
                          Force's Office of Special Investigations is working 
                          effectively with DOD's IG on data-mining techniques 
                          for detection of potentially improper and           
                          fraudulent purchase card transactions. As a result  
                          of our work, the Air Force has taken action to      
                          reduce the financial risk associated with           
                          undetected fraud and abuse in its purchase card     
                          program.                                            
Encouraged the Census  For the 2000 Census, the United States Census       
Bureau to produce      Bureau (Bureau) printed material used to train      
training materials in  census workers only in English, except in Puerto    
other languages        Rico where training materials were available in     
                          Spanish. However, to better prepare census          
                          workers-some of whom speak Spanish as their first   
                          language-to locate migrant farm workers and other   
                          hard-to-count groups, we recommended that the       
                          Bureau consider providing training materials in     
                          languages other than English to targeted areas. In  
                          response to our recommendation, the Bureau is       
                          researching foreign-language data collection        
                          methods as part of its preparations for the 2006    
                          Census test and, more generally, plans to identify  
                          areas and operations that will require in-language  
                          training materials for areas with very large, new   
                          migrant populations where it will not be possible   
                          to hire bilinguals. Moreover, the Bureau's June     
                          2005 request for proposals for a Field Data         
                          Collection Automation System includes a requirement 
                          for the contractor to provide training applications 
                          and materials in English and Spanish for the        
                          handheld computers enumerators are to use to count  
                          nonrespondents.                                     

Source: GAO.

Table 4: Selected Testimony Issues, Fiscal Year 2005

Goal 1: Address Challenges to the Well-Being and Financial Security of the
                                American People
      o  Head Start grants    o  Preparing for         o  Overseeing the U.S. 
      management              influenza pandemic       food supply            
      o  Retirement           o  Long-term health      o  Energy demand in    
      options for seniors     care costs and           the 21st century       
      o  Postal service       government budgets       o  Social Security     
      reform legislation      o  Veterans'             reform                 
      o  Wildland fire        disability claims        o  Meeting the future  
      management              o  Medicaid financing    demand for energy in   
      o  National air         issues                   the United States      
      traffic system          o  Amtrak's Acela        o  Protecting nuclear  
      o  Providing            train                    material handled at    
      services to             o  Rural housing         science and            
      seriously injured       service                  environmental sites    
      veterans                o  Federal oversight     o  Federal real        
      o  Endangered           of the E-rate program    property               
      Species Act                                   
       Goal 2: Respond to Changing Security Threats and the Challenges of
                                 Globalization
      o  Army's modular       o  U.S. passport         o  Cargo security      
      forces                  fraud                    strategies             
      o  Acquisition          o  Tactical aircraft     o  DOD security        
      challenges facing       modernization            clearances             
      the Navy's DD(X)        o  Unmanned aerial       o  Condition of Coast  
      destroyer program       vehicles                 Guard aircraft and     
      o  Oil for Food         o  Federal oversight     ships used in deep     
      program                 of mutual funds to       waters                 
      o  Managing             ensure investor          o  Port security       
      violations of           security                 o  Transportation      
      restricted air space    o  DOD's business        security issues        
      o  Protecting U.S.      transformation           o  Acquisition         
      officials overseas      o  DOD's national        challenges facing the  
      from terrorist          security personnel       Army's future combat   
      attacks                 system                   systems                
      o  Implementing laws                          
      that protect the                              
      security of                                   
      information                                   
      Goal 3: Help Transform the Federal Government's Role and How it Does
                                    Business
      o  Long-term fiscal     o  Gaps in military      o  21st century        
      issues affecting the    pay and benefits         challenges for the     
      federal government      o  Human capital         federal government     
      o  Air Force            transformation at DHS    o  Preparing for       
      procurement protests    o  Reducing the tax      emergencies at federal 
      o  Space shuttle        gap                      agencies               
      workforce issues        o  Pricing federal       o  U.S. government     
      o  Management and       multiple award           financial statements   
      control of DOD's        contracts                o  Performance         
      excess property         o  Army National         budgeting              
      o  High-risk federal    Guard travel             o  Space acquisitions  
      programs                reimbursement issues     and investment         
      o  Improper Payments    o  Agencies'             planning               
      Information Act         continuity of            o  DHS's Student and   
                              operations plans         Exchange Visitor       
                                                       Information System     

Source: GAO.

GAO's High-Risk Program

Issued to coincide with the start of each new Congress, our high-risk
update, first used in 1993, has helped Members of the Congress who are
responsible for oversight and executive branch officials who are
accountable for performance. Our high-risk program focuses on major
government programs and operations that need urgent attention or
transformation to ensure that our government functions in the most
economical, efficient, and effective manner possible. Overall, our
high-risk program has served to identify and help resolve a range of
serious weaknesses that involve substantial resources and provide critical
services to the public. Table 5 details our 2005 high-risk list.

Table 5: GAO's 2005 High-Risk List

                                                         Year designated high 
2005 high-risk area                                                   risk 
Addressing challenges in broad-based transformations  
Strategic Human Capital Management a                                  2001 
U.S. Postal Service Transformation Efforts and                        2001 
Long-Term Outlook a                                   
Managing Federal Real Property a                                      2003 
Protecting the Federal Government's Information                       1997 
Systems and the Nation's Critical Infrastructures     
Implementing and Transforming the Department of                       2003 
Homeland Security                                     
Establishing Appropriate and Effective                                2005 
Information-Sharing Mechanisms to Improve Homeland    
                                                         
Security                                              
DOD Approach to Business Transformation a                             2005 
DOD Business Systems Modernization                                    1995 
DOD Personnel Security Clearance Program                              2005 
DOD Support Infrastructure Management                                 1997 
DOD Financial Management                                              1995 
DOD Supply Chain Management (formerly Inventory                       1990 
Management)                                           
DOD Weapon Systems Acquisition                                        1990 
Managing federal contracting more effectively         
DOD Contract Management                                               1992 

2005 high-risk area                              Year designated high risk 
DOE Contract Management                                               1990 
NASA Contract Management                                              1990 
Management of Interagency Contracting                                 2005 
Assessing the efficiency and effectiveness of   
tax law administration                          
Enforcement of Tax Laws a,b                                           1990 
IRS Business Systems Modernization c                                  1995 
Modernizing and safeguarding insurance and      
benefit programs                                
Modernizing Federal Disability Programs a                             2003 
Pension Benefit Guaranty Corporation                                  2003 
Single-Employer Insurance Program a             
Medicare Program a                                                    1990 
Medicaid Program a                                                    2003 
HUD Single-Family Mortgage Insurance and Rental                       1994 
Housing Assistance Programs                     
Other                                           
Federal Aviation Administration (FAA) Air                             1995 
Traffic Control Modernization                   
Source: GAO.                                    
                                                   
a Legislation is likely to be necessary, as a supplement to actions by the
executive branch, in order to effectively address this high-risk area.
                                                   
b Two high-risk areas-collection of unpaid taxes and earned income credit
noncompliance-have been consolidated to make this area.
                                                   
c The IRS financial management high-risk area has been incorporated in
this high-risk area.                            

                               Concluding Remarks

We are grateful for the Congress's continued support of our joint effort
to improve government and for providing the resources that allow us to be
a world-class professional services organization. We are proud of the
positive impact we have been able to affect in government over the past
year and believe an investment in GAO will continue to yield substantial
returns for the Congress and the American people. Our nation will continue
to face significant challenges in the years ahead. GAO's expertise and
involvement in virtually every facet of government positions us to provide
the Congress with the timely, objective, and reliable information it needs
to discharge its constitutional responsibilities.

This concludes my statement. I would be pleased to answer any questions
the Members of the Committee may have.

Appendix I: Serving the Congress-GAO's Strategic Plan Framework

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Government Accountability Office, 441 G Street NW, Room 7125 Washington,
D.C. 20548

Public Affairs

Paul Anderson, Managing Director, [email protected] (202) 512-3823 U.S.
Government Accountability Office, 441 G Street NW, Room 7149A Washington,
D.C. 20548
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