    High Risk Series: An Update (31-JAN-07, GAO-07-310).

    GAO's audits and evaluations identify federal programs and
    operations that, in some cases, are high risk due to their
    greater vulnerabilities to fraud, waste, abuse, and
    mismanagement. In recent years, GAO also has identified high-risk
    areas to focus on the need for broad-based transformations to
    address major economy, efficiency, or effectiveness challenges.
    Since 1990, GAO has periodically reported on government
    operations it has designated as high risk. In this 2007 update
    for the 110th Congress, GAO presents the status of high-risk
    areas identified in 2005 and new high-risk areas warranting
    attention by Congress and the executive branch. Lasting solutions
    to high-risk problems offer the potential to save billions of
    dollars, dramatically improve service to the public, strengthen
    confidence and trust in the performance and accountability of the
    U.S. government, and ensure the ability of government to deliver
    on its promises.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-07-310
        ACCNO:   A65424
      TITLE:     High Risk Series: An Update
         DATE:   01/31/2007
      SUBJECT:   Accountability
    	     Contracts
    	     Counterterrorism
    	     Defense procurement
    	     Federal procurement
    	     Federal property management
    	     Financial management systems
    	     Homeland security
    	     Housing programs
    	     Interagency relations
    	     Intergovernmental relations
    	     Internal controls
    	     Personnel management
    	     Program management
    	     Transportation
    	     Business planning
    	     High Risk Series 2003
    	     High Risk Series 2005

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    GAO-07-310

         * [1]Historical Perspective
         * [2]High-Risk Designations Removed

              * [3]U.S. Postal Service Transformation Efforts and Long-Term Out
              * [4]HUD Single-Family Mortgage Insurance and Rental Housing Assi

         * [5]New High-Risk Areas

              * [6]Financing the Nation's Transportation System
              * [7]Ensuring the Effective Protection of Technologies Critical t
              * [8]Transforming Federal Oversight of Food Safety

         * [9]Progress Being Made in Other High-Risk Areas
         * [10]Highlights for Each High-Risk Area

              * [11]Order by Mail or Phone

    United States Government Accountability Office

    GAO

    January 2007

    HIGH-RISK SERIES

    An Update

    GAO-07-310

    Contents

    Letter 1

    Historical Perspective 4
    High-Risk Designations Removed 9
    U.S. Postal Service's Transformation Efforts and Long-Term Outlook 9
    HUD's Single-Family Mortgage Insurance and Rental Housing Assistance
    Programs 11
    New High-Risk Areas 16
    Financing the Nation's Transportation System 16
    Ensuring the Effective Protection of Technologies Critical to U.S.
    National Security Interests 20
    Transforming Federal Oversight of Food Safety 26
    Progress Being Made in Other High-Risk Areas 32
    Highlights for Each High-Risk Area 38

    Tables

    Table 1: Changes to GAO's High-Risk List, 1990 to 2007 4
    Table 2: Areas Removed from GAO's High-Risk List, 1990-2007 5
    Table 3: Year That Areas on GAO's 2007 High-Risk List Were Designated as
    High Risk 6
    Table 4: U.S. Government Programs for the Identification and Protection of
    Critical Technologies 21

    Figure

    Figure 1: Current Highway Trust Fund Year-End Balance Forecasts 17

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

    United States Government Accountability Office

    Washington, DC 20548

                                                              Comptroller General

                                                             of the United States

    January 2007

    The President of the Senate
    The Speaker of the House of Representatives

    Since 1990, GAO has periodically reported on government programs and
    operations that it identifies as "high risk." This effort, which is
    supported by the Senate Committee on Homeland Security and Governmental
    Affairs and the House Committee on Oversight and Government Reform, has
    brought a much needed focus to a targeted list of major challenges that
    are impeding effective government and costing the government billions of
    dollars each year. To help improve these high-risk operations, GAO has
    made hundreds of recommendations. Moreover, GAO's focus on high-risk
    problems contributed to Congress enacting a series of governmentwide
    reforms to address critical human capital challenges, strengthen financial
    management, improve information technology practices, and instill a more
    effective, credible, and results-oriented government.

    GAO's high-risk status reports are provided at the start of each new
    Congress to help in setting congressional oversight agendas. These reports
    also help Congress and the executive branch carry out their
    responsibilities while improving the government's performance and
    enhancing its accountability for the benefit of the American people. In
    this regard, I recently provided congressional leadership with a set of
    recommendations based on GAO's work, including work on areas we have
    designated as high risk, for its consideration in developing the oversight
    agenda of the 110th Congress. Together, the high-risk update and the
    recommendations for oversight can help congressional decision makers focus
    on the key management challenges facing the nation.

    The nation also continues to face broader policy challenges associated
    with the current long-term fiscal imbalance and other key sustainability
    challenges, as well as the need to ensure the federal government is
    transparent, economical, efficient, effective, ethical, and equitable.
    Addressing these challenges will require Congress to make tough choices
    that fundamentally re-examine and transform the government to be more
    effective in the 21st century. The infrastructure to support these
    decisions is not fully in place, and focused attention by the legislative
    and executive branches is needed to make progress. In this regard, in the
    coming months, I plan to highlight the set of tools needed to support more
    strategic decision making related to these broader challenges facing our
    nation. These tools will center on expanding the governmentwide focus on
    results; improving transparency through better financial and performance
    management reporting; building structures and processes that facilitate
    more strategic, systemic, and integrated solutions; and transforming
    federal organizations, functions, and operations.

    This report summarizes progress made in correcting high-risk problems,
    actions under way, and further actions that GAO believes are needed. In
    addition, GAO has determined that sufficient progress has been made to
    remove the high-risk designation from two areas: the U.S. Postal Service's
    transformation efforts and long-term outlook, and the Department of
    Housing and Urban Development's single-family mortgage insurance and
    rental housing assistance programs. GAO has also designated three new
    areas as high risk: financing the nation's transportation system, ensuring
    the effective protection of technologies critical to U.S. national
    security interests, and transforming federal oversight of food safety.
    Furthermore, the Department of Defense (DOD) continues to dominate the
    high-risk list. Specifically, DOD has eight of its own high-risk areas and
    shares responsibility for seven governmentwide high-risk areas.

    In recent years, GAO's high-risk program has increasingly focused on those
    major programs and operations that need urgent attention and
    transformation in order to ensure that our national government functions
    in the most economical, efficient, and effective manner possible. Further,
    the administration has looked to GAO's program in shaping governmentwide
    initiatives such as the President's Management Agenda; and more recently,
    the administration undertook an effort to encourage agencies to develop
    corrective action plans for high-risk areas. As in prior GAO high-risk
    update reports, federal programs and operations are also emphasized when
    they are at high risk because of their greater vulnerabilities to fraud,
    waste, abuse, and mismanagement. In addition, some of these high-risk
    agencies, programs, or policies are in need of transformation, and several
    items will require action by both the executive branch and Congress. Our
    objective for the high-risk list is to bring visibility and urgency to
    these areas in order to prompt needed actions sooner rather than later.

    Copies of this update are being sent to the President, the congressional
    leadership, other Members of Congress, the Director of the Office of
    Management and Budget, and the heads of major departments and agencies.

    David M. Walker
    Comptroller General of the United States

    Historical Perspective

    In 1990, GAO began a program to report on government operations that we
    identified as "high risk." Since then, generally coinciding with the start
    of each new Congress, we have periodically reported on the status of
    progress to address high-risk areas and updated our high-risk list. Our
    most recent high-risk update was in January 2005.^1

    Overall, our high-risk program has served to identify and help resolve
    serious weaknesses in areas that involve substantial resources and provide
    critical services to the public. Since our program began, the government
    has taken high-risk problems seriously and has made long-needed progress
    toward correcting them. In some cases, progress has been sufficient for us
    to remove the high-risk designation. A summary of changes to our high-risk
    list over the past 17 years are shown in table 1. Areas removed from the
    high-risk list over that same period are shown in table 2. The areas on
    GAO's 2007 high-risk list, and the year each was designated as high risk,
    are shown in table 3.

    Table 1: Changes to GAO's High-Risk List, 1990 to 2007

                                               Number of areas
    Original high-risk list in 1990                      14
    High-risk areas added since 1990                     33
    High-risk areas removed since 1990                   18
    High-risk areas consolidated since 1990               2
    High-risk list in 2007                               27

    Source: GAO.

    ^1GAO, High-Risk Series: An Update, [12]GAO-05-207 (Washington, D.C.:
    January 2005).

    Table 2: Areas Removed from GAO's High-Risk List, 1990-2007

                                                             Year designated high
    Area                                     Year removed risk
    Federal Transit Administration Grant     1995         1990
    Management
    Pension Benefit Guaranty Corporation     1995         1990
    Resolution Trust Corporation             1995         1990
    State Department Management of Overseas  1995         1990
    Real Property
    Bank Insurance Fund                      1995         1991
    Customs Service Financial Management     1999         1991
    Farm Loan Programs                       2001         1990
    Superfund Program                        2001         1990
    National Weather Service Modernization   2001         1995
    The 2000 Census                          2001         1997
    The Year 2000 Computing Challenge        2001         1997
    Asset Forfeiture Programs                2003         1990
    Supplemental Security Income             2003         1997
    Student Financial Aid Programs           2005         1990
    Federal Aviation Administration          2005         1999
    Financial Management
    Forest Service Financial Management      2005         1999
    HUD Single-Family Mortgage Insurance and 2007         1994
    Rental Housing Assistance Programs
    U.S. Postal Service Transformation       2007         2001
    Efforts and Long-Term Outlook

    Source: GAO.

    Table 3: Year That Areas on GAO's 2007 High-Risk List Were Designated as
    High Risk

                                                             Year designated high
    Area                                                  risk
    Medicare Program                                      1990
    DOD Supply Chain Management                           1990
    DOD Weapon Systems Acquisition                        1990
    DOE Contract Management                               1990
    NASA Contract Management                              1990
    Enforcement of Tax Laws                               1990
    DOD Contract Management                               1992
    DOD Financial Management                              1995
    DOD Business Systems Modernization                    1995
    IRS Business Systems Modernization                    1995
    FAA Air Traffic Control Modernization                 1995
    Protecting the Federal Government's Information       1997
    Systems and the Nation's Critical Infrastructures
    DOD Support Infrastructure Management                 1997
    Strategic Human Capital Management                    2001
    Medicaid Program                                      2003
    Managing Federal Real Property                        2003
    Modernizing Federal Disability Programs               2003
    Implementing and Transforming the Department of       2003
    Homeland Security
    Pension Benefit Guaranty Corporation Single-Employer  2003
    Pension Insurance Program
    Establishing Appropriate and Effective                2005
    Information-Sharing Mechanisms to Improve Homeland
    Security
    DOD Approach to Business Transformation               2005
    DOD Personnel Security Clearance Program              2005
    Management of Interagency Contracting                 2005
    National Flood Insurance Program                      2006
    Financing the Nation's Transportation System          2007
    Ensuring the Effective Protection of Technologies     2007
    Critical to U.S. National Security Interests
    Transforming Federal Oversight of Food Safety         2007

    Source: GAO.

    Over the years, 18 areas have been removed from the high-risk list. Eight
    of these were among the 14 programs and operations we determined to be
    high risk at the outset of our efforts to monitor such programs. These
    results demonstrate that the sustained attention and commitment by
    Congress and agencies to resolve serious, long-standing high-risk problems
    have paid off, as root causes of the government's exposure for more than
    half of our original high-risk list have been successfully addressed.

    Historically, high-risk areas have been so designated because of
    traditional vulnerabilities related to their greater susceptibility to
    fraud, waste, abuse, and mismanagement. As our high-risk program has
    evolved, we have increasingly used the high-risk designation to draw
    attention to areas associated with broad-based transformations needed to
    achieve greater economy, efficiency, effectiveness, accountability, and
    sustainability of selected key government programs and operations.
    Perseverance by the executive branch is needed in implementing our
    recommended solutions for addressing these high-risk areas. Continued
    congressional oversight and, in some cases, additional legislative action
    will also be key to achieving progress, particularly in addressing
    challenges in broad-based transformations.

    To determine which federal government programs and functions should be
    designated high risk, we use our guidance document, Determining
    Performance and Accountability Challenges and High Risks.^2 In determining
    whether a government program or operation is high risk, we consider
    whether it involves national significance or a management function that is
    key to performance and accountability. We also consider whether the risk
    is:

               o an inherent problem, such as may arise when the nature of a
               program creates susceptibility to fraud, waste, and abuse, or

               o a systemic problem, such as may arise when the programmatic;
               management support; or financial systems, policies, and procedures
               established by an agency to carry out a program are ineffective,
               creating a material weakness.

               Further, we consider qualitative factors, such as whether the risk

               o involves public health or safety, service delivery, national
               security, national defense, economic growth, or privacy or
               citizens' rights, or

               o could result in significantly impaired service; program failure;
               injury or loss of life; or significantly reduced economy,
               efficiency, or effectiveness.

               In addition, we also consider the exposure to loss in monetary or
               other quantitative terms. At a minimum, $1 billion must be at risk
               in areas such as the value of major assets being impaired; revenue
               sources not being realized; major agency assets being lost,
               stolen, damaged, wasted, or underutilized; improper payments; and
               contingencies or potential liabilities.

               Before making a high-risk designation, we also consider corrective
               measures planned or under way to resolve a material control
               weakness and the status and effectiveness of these actions.

               When legislative and agency actions, including those in response
               to our recommendations, result in significant and sustainable
               progress toward resolving a high-risk problem, we remove the
               high-risk designation. Key determinants here include a
               demonstrated strong commitment to and top leadership support for
               addressing problems, the capacity to do so, a corrective action
               plan, and demonstrated progress in implementing corrective
               measures.

               The next section discusses how we applied our criteria in
               determining what high-risk designations to remove and what to add
               for our 2007 update.

    			  High-Risk Designations Removed

               For our 2007 high-risk update, we determined that sufficient
               progress has been made to warrant removing two areas from the
               high-risk list: the U.S. Postal Service's transformation efforts
               and long-term outlook and the Department of Housing and Urban
               Development's (HUD) single-family mortgage insurance and rental
               housing assistance programs. As we have with areas previously
               removed from the high-risk list, we will continue to monitor these
               programs, as appropriate, to ensure that the improvements we have
               noted are sustained.

    			  U.S. Postal Service Transformation Efforts and Long-Term Outlook

               In 2001, we designated the Postal Service's (Service)
               transformation efforts and long-term outlook as high risk because
               the Service's financial outlook had deteriorated significantly.
               The Service had a projected deficit of $2 billion to $3 billion,
               severe cash flow pressures, its debt was approaching the statutory
               borrowing limit; cost growth was outpacing revenue increases; and
               productivity gains were limited. Other challenges the Service
               faced included liabilities that exceeded assets by $3 billion at
               the end of fiscal year 2002; major liabilities and obligations
               estimated at close to $100 billion; a restructuring of the
               workforce due to impending retirements and operational changes;
               and long-standing labor-management relations problems. We were
               also concerned that the Service had no comprehensive plan to
               address its financial, operational, or human capital challenges,
               including how it planned to reduce its debt, and it did not have
               adequate financial reporting and transparency that would allow the
               public to understand changes in its financial situation. Thus, we
               recommended that the Service develop a comprehensive plan, in
               conjunction with other stakeholders, that would identify the
               actions needed to address its challenges and provide publicly
               available quarterly financial reports with sufficient information
               to understand the Service's current and projected financial
               condition. As the Service's financial difficulties continued in
               2002, we concluded that the need for a comprehensive
               transformation of the Service was more urgent than ever. The
               Service's basic business model, which assumed that rising mail
               volume would cover rising costs and mitigate rate increases, was
               outmoded as mail volumes stagnated or deteriorated in an
               increasingly competitive environment. We called for Congress to
               act on comprehensive postal reform legislation.

               In our January 2003 high-risk report, we noted that the Service
               had made progress by issuing a Transformation Plan in April 2002
               and was beginning to implement the plan. However, no consensus had
               been reached on the Service's future, and we continued to have
               concerns about its financial outlook. Subsequently, the Service
               gained some financial breathing room primarily because legislation
               enacted in April 2003 reduced the Service's payments for its
               pension obligations, which allowed the Service to achieve record
               net income, repay debt, and delay rate increases until January
               2006. In addition, a presidential commission issued a report in
               July 2003 with a proposed future vision for the Service and
               recommendations to ensure the viability of postal services, and
               Congress considered proposed postal reform legislation.

               Since 2003, the Service has continued to make progress in
               addressing its financial and human capital challenges, it improved
               its financial reporting by instituting quarterly financial
               reports, and it updated its Transformation Plan in September 2005.
               At the end of fiscal year 2005, the Service had paid off its debt.
               In addition, as of the end of fiscal year 2006, it had achieved 7
               consecutive years of productivity gains, positive net income for
               fiscal years 2003 through 2006, more than $5 billion in cost
               savings since 2001, and it reduced its complement by 95,000 since
               2001. Also, in December 2006, the Service reached tentative
               compensation contract agreements, subject to ratification by union
               members, with three of its four major unions. Very importantly,
               significant progress was also made when Congress enacted
               comprehensive postal reform legislation in December 2006, which
               provides a framework for modernizing the Service's rate-setting
               processes and addresses the Service's long-term financial
               obligations by returning responsibility for employees' military
               pension benefits to the U.S. Treasury and establishing a mechanism
               for prefunding retiree health benefits.

               The Postal Service's management has demonstrated a commitment to
               implementing the Transformation Plan and addressing many of the
               financial and human capital challenges it faces. Also, the new
               postal reform legislation gives the Service additional pricing
               flexibility and allows it to retain earnings, which provide
               additional mechanisms to address continuing challenges related to
               the Service's increasingly competitive environment, given new and
               emerging technologies. These continuing challenges include (1)
               generating sufficient revenues as First-Class Mail volume declines
               and the changing mail mix provides less revenue contribution than
               First-Class Mail, (2) controlling costs as compensation and
               benefit costs rise, (3) continuing work-hour reductions while
               maintaining service, (4) optimizing its infrastructure and
               workforce to reduce costs and improve operational efficiency, and
               (5) providing reliable data to assess performance.

               Some of the Service's challenges relate to governmentwide
               challenges that remain on our high-risk list, such as strategic
               human capital management and managing federal real property. In
               the human capital area, the Service continues to faces challenges
               related to managing workforce changes due to retirements and
               network consolidations and implementing performance-based
               compensation systems. In the real property area, significant
               challenges remain related to how the Service is planning and
               implementing infrastructure realignment to reduce excess capacity
               as well as reflect changes in operations. Further challenges
               persist related to the Service's identification and disposal of
               excess property. We plan to closely monitor these challenges to
               ensure that they are addressed. We will also monitor the
               implementation of the postal reform legislation to determine how
               the results and impacts compare with legislative intentions.

    			  HUD Single-Family Mortgage Insurance and Rental Housing
    			  Assistance Programs

               In 1994, we designated the U.S. Department of Housing and Urban
               Development (HUD) as high risk because of fundamental management
               and organizational problems that put billions of dollars in
               insured mortgages and housing and community development assistance
               at risk. In 2001, we narrowed the high-risk designation to HUD's
               single-family mortgage insurance and rental housing assistance
               programs because progress was made overall, but significant and
               persistent problems in these two program areas remained.
               Consistent with this designation, four of the five material
               weaknesses cited in the audit report on HUD's fiscal year 2001
               financial statements related to these programs. Under these
               programs, HUD manages more than $400 billion in insured mortgages
               and annually spends about $30 billion to subsidize rents for
               lower-income households. To accomplish this, HUD relies on
               thousands of intermediaries, including lenders, appraisers,
               property management contractors, public housing agencies, and
               multifamily property owners. Historically, weaknesses in HUD's
               oversight of these entities have made the programs vulnerable to
               fraud, waste, and abuse. For example, in prior high-risk updates
               we noted that deficiencies in HUD's approval, monitoring, and
               enforcement efforts for lenders and appraisers increased the risk
               of insurance losses. In the rental assistance program area, we
               reported that problems with HUD's monitoring of public housing
               agencies and multifamily property owners contributed to billions
               of dollars in improper rent subsidy payments (i.e., payments that
               were too high or too low).

               In our January 2005 high-risk update, we reported that HUD had
               demonstrated commitment to and progress in addressing weaknesses
               in the two high-risk program areas but that some of HUD's
               corrective actions were in the early stages of implementation and
               additional steps were needed to resolve ongoing problems. For
               example, in the single-family mortgage insurance area, we reported
               that HUD had improved its oversight of lenders and appraisers and
               issued or proposed regulations to strengthen lender accountability
               and combat predatory lending practices. However, we also noted
               that HUD continued to grant loan underwriting authority to lenders
               that had not met the agency's performance standards, and that
               weaknesses in HUD's process for paying single-family property
               management contractors made the agency vulnerable to questionable
               and potentially fraudulent payments. In the rental housing
               assistance program area, we reported that HUD made progress in
               reducing improper rental assistance payments. However, we also
               noted that HUD had not fully implemented a critical part of its
               efforts to reduce improper rental assistance payments--the
               verification of tenant incomes using a Web-based data system--and
               it was uncertain whether the agency would be able to sustain the
               reductions it had already achieved. HUD had also made progress in
               ensuring that HUD-assisted housing met the agency's physical
               condition standards.

               Since 2005, HUD has continued to demonstrate a commitment to and
               capacity for resolving risks, develop corrective action plans,
               institute programs to monitor and evaluate the effectiveness of
               corrective measures, and demonstrate progress in implementing
               corrective measures. For example, HUD has continued to take
               actions to address long-standing problems in its single-family
               mortgage insurance programs, and has addressed more recently
               identified problems. More specifically:

               o In accordance with our recommendations, HUD has made progress in
               implementing its corrective action plan for improving oversight of
               lenders. Specifically, HUD has developed and implemented new and
               clearer guidance for granting lenders underwriting authority. HUD
               has hired a contractor to review the implementation of the new
               guidance and plans to conduct additional monitoring through
               periodic internal reviews. Additionally, in 2005, HUD modified its
               system for rating the underwriting quality of loans in a way
               intended to focus more on underwriting errors that are likely to
               affect HUD's insurance risk.^3

               o HUD made substantial progress in implementing its corrective
               action plan to address weaknesses we identified in its process for
               paying single-family property management contractors.^4 For
               example, in response to our recommendations, HUD has developed a
               financial control manual that contains internal control procedures
               and policies, including strict documentation requirements, for HUD
               field staff to use in reviewing and approving payments. To ensure
               the effectiveness of these corrective measures, HUD retained an
               independent public accountant to periodically review the
               performance of the property managers and test HUD field offices
               for compliance with the internal control policies and procedures.

               o In September 2005, we reported that HUD consistently
               underestimated the subsidy costs for its single-family mortgage
               insurance program.^5 To more reliably estimate program costs, we
               recommended that HUD study and report in the annual actuarial
               review of its insurance fund the impact of variables not in the
               agency's loan performance models that have been found in other
               studies to influence credit risk. Consistent with our
               recommendation, a HUD contractor incorporated variables for
               down-payment assistance and borrower credit history into the
               actuarial review. According to HUD, the contractor will continue
               to improve the forecasting ability of the models as necessary
               using research and development funds provided for in the contract.
               The audit report on HUD's fiscal year 2006 financial statements
               eliminated the agency's only two outstanding material weaknesses
               because of the improvements HUD made to its process for estimating
               subsidy costs.

               o In an April 2006 report, we cited factors limiting the
               effectiveness of HUD's mortgage scorecard (an automated tool that
               evaluates the default risk of borrowers).^6 In response to our
               recommendations, HUD developed a policy and procedures manual that
               calls for annual (1) monitoring of the scorecard's ability to
               predict loan default, (2) testing of additional predictive
               variables to include in the scorecard, and (3) updating the
               scorecard with recent loan performance data.

               HUD has also taken actions to address the remaining problems in
               its rental housing assistance programs. For example:

               o HUD continued to reduce the amount of improper rent subsidies
               and exceeded goals set in The President's Management Agenda,
               Fiscal Year 2002. HUD's goal for fiscal year 2005 was to reduce
               improper rent subsidies by 50 percent, compared with fiscal year
               2000, when HUD paid an estimated $2.2 billion in improper
               subsidies. HUD exceeded this goal by reducing estimated improper
               subsidies to $925 million in fiscal year 2005, a decline of 58
               percent. Although the amount of improper subsidies is still
               sizable, because of this progress the audit report on HUD's fiscal
               year 2005 financial statements eliminated a long-standing material
               weakness related to oversight and monitoring of subsidy
               calculations. In accordance with the Improper Payments Information
               Act of 2002, HUD plans to continue monitoring the effectiveness of
               its corrective actions by making annual estimates of improper
               payments.

               o In 2006, HUD executed an important part of its plan for reducing
               improper rental assistance payments by implementing a Web-based
               system that provides public housing agencies with an efficient
               method for validating the incomes of families receiving
               assistance. This system, which HUD also plans to implement for
               multifamily property owners, utilizes a database containing wage,
               unemployment, and new hire information compiled by the Department
               of Health and Human Services. HUD expects that the system will
               avoid an estimated $6 billion in improper rent subsidies over 10
               years.

               o In response to our recommendations, HUD made on-site reviews of
               public housing agencies' compliance with policies for determining
               rent subsidies a permanent part of its oversight activities.^7
               Beginning in fiscal year 2006, HUD committed resources to review
               275 public housing agencies annually. HUD also developed and
               implemented a system designed to collect complete and consistent
               information from these reviews to help focus corrective actions
               where needed.

               o HUD has continued to monitor the physical condition of
               HUD-assisted housing, and its assessments indicate a substantial
               level of compliance with the agency's physical standards. HUD
               physical inspections showed that in fiscal years 2005 and 2006,
               about 94 percent of HUD-assisted properties had satisfactory
               inspection scores.

               In addition, HUD has made progress on human capital, acquisition
               management, and information technology issues that in previous
               years we cited as major management challenges contributing to
               HUD's high-risk designation. For example, consistent with our
               recommendations, in 2005 HUD finalized guidance for implementing a
               comprehensive strategic workforce plan that identifies the
               knowledge, skills, and abilities HUD needs and the actions that it
               plans to take to build its workforce for the future.^8 HUD also
               developed a new succession management plan to help ensure that the
               large number of staff expected to retire over the next several
               years are replaced with qualified employees. In the acquisition
               management area, HUD responded to our recommendations by
               developing guidance emphasizing the use of contract administration
               plans and a risk-based approach for overseeing the work of
               contractors.^9 Finally, HUD has made progress in its information
               technology by reducing the number of noncompliant financial
               management systems from 17 in 2003 to 2 in 2006.

               We are removing the high-risk designation from HUD's single-family
               mortgage insurance and rental housing assistance programs because
               of the agency's progress in addressing problems in these areas.
               However, it will be important for HUD to continue to place a high
               priority on efficient and effective management of these programs.
               Proposed program changes could introduce new risks and oversight
               challenges. More specifically, HUD has proposed changes to its
               single-family mortgage insurance program that would increase the
               size of the mortgages the agency could insure, give the agency
               flexibility to set insurance premiums based on the credit risk of
               borrowers, and reduce down-payment requirements from the current 3
               percent to potentially zero. However, to implement this
               legislative proposal, HUD would have to manage new risks and
               accurately estimate the costs of program changes. The
               administration has also made legislative proposals to replace
               HUD's largest rental housing assistance program (the Housing
               Choice Voucher program) with a broader-purpose grant program.
               While such proposals could help control rental subsidy costs and
               increase administrative flexibility for public housing agencies,
               they also could complicate HUD's oversight efforts by eliminating
               the uniformity of the current program.

    			  New High-Risk Areas

               GAO's use of the high-risk designation to draw attention to the
               challenges associated with the economy, efficiency, and
               effectiveness of government programs and operations in need of
               broad-based transformation has led to important progress. We will
               also continue to identify high-risk areas based on the more
               traditional focus on fraud, waste, abuse, and mismanagement. Our
               focus will continue to be on identifying the root causes behind
               vulnerabilities, as well as actions needed on the part of the
               agencies involved and, if appropriate, Congress.

               For 2007, we have designated the following three new areas as high
               risk: financing the nation's transportation system, ensuring the
               effective protection of technologies critical to U.S. national
               security interests, and transforming federal oversight of food
               safety.

    			  Financing the Nation�s Transportation System

               The nation's economic vitality and its citizens' quality of life
               depend significantly on the efficiency of its transportation
               infrastructure. This efficiency is threatened by increasing
               congestion. For example, travel on roads is expected to increase
               by about 25 percent from 2000 to 2010, freight traffic is expected
               to increase by 43 percent from 1998 to 2010, and air traffic is
               expected to triple by 2025. As congestion increases, the federal
               government faces the challenge of providing funds to help maintain
               and expand the nation's transportation system and ensuring that
               these funds are used efficiently. However, revenues from
               traditional funding mechanisms may not keep pace with demand.
               Furthermore, the nation's long-term fiscal challenges limit the
               ability of decision makers to look to other revenue sources that
               are currently funding security and other vital needs, raising
               questions about the ability of federal programs to provide the
               robust growth that many transportation advocates believe is
               required to meet the nation's mobility needs. Compounding these
               funding constraints is the absence of a link between federal grant
               funding levels and specific performance-related goals and
               outcomes, resulting in little assurance that federal funding is
               being channeled to the nation's most critical mobility needs. In
               addition, federal funding is often tied to a single transportation
               mode, which may limit the use of federal funds to finance the
               greatest improvements in mobility.

               Revenues to support the Highway Trust Fund--the major source of
               federal highway and transit funding--are eroding. Receipts for the
               Highway Trust Fund, which are derived from motor fuel and
               truck-related taxes (on truck and trailer sales, truck tires, and
               heavy-vehicle use) are continuing to grow. However, the federal
               motor fuel tax rate of 18.4 cents per gallon has not been
               increased since 1993, and thus the purchasing power of fuel tax
               revenues has eroded with inflation. Furthermore, that erosion will
               continue with the introduction of more fuel-efficient vehicles and
               alternative-fueled vehicles in the coming years, raising the
               question of whether fuel taxes are a sustainable source for
               financing transportation. In addition, funding authorized in the
               recently enacted highway and transit program legislation is
               expected to outstrip the growth in trust fund receipts. As a
               result, the Department of the Treasury and the Congressional
               Budget Office are forecasting that the trust fund balance will
               steadily decline and reach a negative balance by the end of fiscal
               year 2011. (See fig. 1.) On a positive note, the 2005
               reauthorization of the trust fund and its related programs
               established a commission--chaired by the Secretary of
               Transportation and which will report later this year--to recommend
               approaches for placing the trust fund on a sustainable path.

               Figure 1: Current Highway Trust Fund Year-End Balance Forecasts

               In the face of these constraints, state and local governments are
               pursuing alternative mechanisms that have the potential to meet
               mobility and financing needs and help decision makers carry out
               and grow their surface transportation programs. For example, many
               states are pursuing tolling projects that have the promise to
               raise revenues, improve capital investment decisions by better
               targeting spending for new capacity, and enhance private-sector
               investment in public infrastructure. Tolls that vary according to
               the level of congestion (called congestion or value pricing) can
               maintain a predetermined level of service, create incentives for
               drivers to avoid driving alone in congested conditions, and
               encourage drivers to use public transportation or travel at less
               congested times. One state, Oregon, is studying the technical
               feasibility of replacing its motor fuel tax with a per-mile user
               fee.

               Intercity passenger rail service is also at a critical juncture.
               The existing intercity passenger rail system is in poor financial
               condition, and the federal funds provided for it are not targeted
               to the greatest public benefits, such as transportation congestion
               relief. The current service provider (Amtrak) continues to rely
               heavily on federal subsidies--over $1 billion annually in recent
               years--and will require billions more to address deferred
               maintenance and achieve a "state of good repair."^10 This current
               crisis is not unusual; Amtrak has struggled to become financially
               solvent since its inception. We have recommended that Congress
               consider restructuring the nation's intercity passenger rail
               system, which would entail establishing clear goals for the
               system, defining the roles of key stakeholders (including the
               federal government), and developing funding mechanisms that
               include cost sharing between the federal government and other
               beneficiaries.

               The freight railroad industry is projected to grow substantially
               with expected increases in freight traffic, but the industry's
               ability to fund this projected growth is largely uncertain. For
               private companies seeking to maximize returns for shareholders,
               railroad investment poses a substantial risk. But railroad
               investment is critical to freight mobility and economic growth,
               and investments in rail projects can produce public benefits, such
               as reducing highway congestion, strengthening intermodal
               connections and the efficiency of the publicly owned
               transportation system, and enhancing public safety and the
               environment. As a result, the federal and state governments have
               increasingly invested public funds in freight rail projects, such
               as the $100 million that Congress provided in 2005 for rail
               infrastructure improvements in the Chicago area. In the years
               ahead, Congress is likely to receive further requests for funding
               and face additional decisions about potential federal policy
               responses and the federal role in the nation's freight railroad
               infrastructure. In the highly constrained federal funding
               environment, such policy responses need to recognize that the
               freight transportation system functions in a competitive
               marketplace, calling for a mode-neutral approach. Currently, as we
               have reported, the trucking and barge industries have a
               competitive price advantage over railroads because trucks and
               barges use infrastructure that is owned and maintained by the
               government, whereas rail companies use infrastructure that they
               pay to own and maintain.^11 In addition, decision makers will be
               challenged to make investment decisions that reflect public
               priorities and are designed to achieve demonstrable, wide-ranging
               public benefits that warrant the commitment of scarce federal
               funds.

               Federal aviation programs are also facing growing infrastructure
               demands and constrained resources. To meet the anticipated
               increases in commercial aviation travel, the Federal Aviation
               Administration (FAA) and aviation stakeholders are developing the
               "next-generation air transportation system" (NGATS) to modernize
               the nation's air traffic control (ATC) infrastructure and increase
               capacity. This effort is complex and costly: Under one scenario
               that includes a limited, preliminary cost estimate for NGATS,
               FAA's budget would, on average, exceed FAA's fiscal year 2006
               appropriation level by about $1 billion a year (in today's
               dollars) through 2025. FAA and some stakeholders have raised
               doubts about the ability of the current funding system--the
               Aviation Trust Fund--to generate revenues to meet these budgetary
               needs equitably and efficiently over time. Specifically, FAA and
               some stakeholders are concerned that as FAA's workload (and,
               therefore, costs) rises, there will be no corresponding increase
               in its revenues because of the greater use of smaller aircraft and
               a decline in inflation-adjusted airfares. Trends in these data
               provide support for these concerns. While FAA has a history of
               cost control problems associated with ATC modernization, it has
               made a number of important management improvements. However,
               questions remain about FAA's ability to manage the transition to
               NGATS cost-effectively. However, failing to meet these
               infrastructure challenges in aviation may have significant
               consequences, since aviation is an integral part of the economy.
               FAA is expected to release its proposal to reform the current
               funding system within the next few months.

               Given the common challenges spanning the nation's transportation
               infrastructure, Congress and, for some issues, the Department of
               Transportation should reassess the following issues for all
               transportation modes to better position the federal government to
               address these challenges:

    			  Ensuring the Effective Protection of Technologies Critical to
    			  U.S. National Security Interests

               U.S. military strategy is premised on technological superiority on
               the battlefield. The Department of Defense spends billions of
               dollars each year for the development and production of high
               technology weaponry to maintain superiority. These weapons and
               militarily useful technologies are sold overseas by U.S. companies
               for economic reasons and by the U.S. government for foreign
               policy, security, and economic reasons. Yet, the technologies that
               underpin U.S. military and economic strength continue to be
               targets for theft, espionage, reverse engineering, and illegal
               export. At the same time, the programs the U.S. government has in
               place to protect critical technologies by weighing competing and
               sometimes conflicting national security, foreign policy, and
               economic interests have long been criticized by industry and
               allies for their inability to adapt to a changing world
               environment and their lack of efficiency.

               The U.S. government has a myriad of laws, regulations, policies,
               and processes intended to identify and protect critical
               technologies so they can be transferred to foreign parties in a
               manner consistent with U.S. interests. The government's technology
               protection programs include those that regulate U.S.
               defense-related exports and investigate proposed foreign
               acquisitions of U.S. national security-related companies. (See
               table 4.) Responsibility for administering or overseeing the
               different programs is divided among multiple federal agencies and
               several congressional committees. However, in the decades since
               these programs were put in place, significant forces have
               heightened the U.S. government's challenge of weighing security
               concerns with the desire to reap economic benefits. Most notably,
               in the aftermath of the September 2001 terrorist attacks, the
               threats facing the nation have been redefined. In addition, the
               economy has become increasingly globalized as countries open their
               markets and the pace of technological innovation has quickened
               worldwide. Government programs established decades ago to protect
               critical technologies are ill-equipped to weigh competing U.S.
               interests as these forces continue to evolve in the 21st century.
               Accordingly, we are designating the effective identification and
               protection of critical technologies as a governmentwide high-risk
               area, which warrants a strategic re-examination of existing
               programs to identify needed changes and ensure the advancement of
               U.S. interests.

                            1. the appropriate federal role and strategy in
                            funding, selecting, and evaluating transportation
                            investments;
                            2. mechanisms to seek alternative sources of revenues
                            and, where appropriate, to increase revenues for
                            infrastructure improvements, including user fees and
                            alternatives to stimulate private investment, while
                            considering their impact on the federal budget; and
                            3. funding allocation and monitoring methods to
                            ensure the equity, efficiency, accountability, and
                            performance of transportation investments.

    ^2GAO, Determining Performance and Accountability Challenges and High
    Risks, [13]GAO-01-159SP (Washington, D.C.: November 2000).

    ^3GAO, Single-Family Housing: Progress Made, but Opportunities Exist to
    Improve HUD's Oversight of FHA Lenders, [14]GAO-05-13 (Washington, D.C.:
    Nov. 12, 2004).

    ^4GAO, HUD Single-Family and Multifamily Property Programs: Inadequate
    Controls Resulted in Questionable Payments and Potential Fraud,
    [15]GAO-04-390 (Washington, D.C.: Mar. 3, 2004).

    ^5GAO, Mortgage Financing: FHA's $7 Billion Reestimate Reflects Higher
    Claims and Changing Loan Performance Estimates, [16]GAO-05-875
    (Washington, D.C.: Sept. 2, 2005).

    ^6GAO, Mortgage Financing: HUD Could Realize Additional Benefits from Its
    Mortgage Scorecard, [17]GAO-06-435 (Washington, D.C.: Apr. 13, 2006).

    ^7GAO, HUD Rental Assistance: Progress and Challenges in Measuring and
    Reducing Improper Rent Subsidies, [18]GAO-05-224 (Washington, D.C.: Feb.
    18, 2005).

    ^8GAO, HUD Human Capital Management: Comprehensive Strategic Workforce
    Planning Needed, [19]GAO-02-839 (Washington, D.C.: July 24, 2002).

    ^9GAO, HUD Management: Actions Needed to Improve Acquisition Management,
    [20]GAO-03-157 (Washington, D.C.: Nov. 15, 2002).

    ^10"State of good repair" is the outcome expected from the capital
    investment needed to restore Amtrak's right-of-way (track, signals, and
    auxiliary structures), other infrastructure (e.g., stations), and
    equipment to a condition that requires only routine maintenance.

    ^11As we have reported, the trucking and barge industries pay fees and
    taxes to use this government-funded infrastructure, but their payments
    generally do not cover the costs they impose on highways and waterways.

    Table 4: U.S. Government Programs for the Identification and Protection of
    Critical Technologies

    Program          Agencies          Program's purpose     Legal authority
    Dual-Use Export  Commerce (lead),  Regulate export of    Export
    Control System   State, Central    dual-use items by     Administration
                        Intelligence      U.S. companies after  Act of 1979
                        Agency, Defense,  weighing economic,
                        Energy, Homeland  national security,
                        Security, and     and foreign policy
                        Justice           interests
    Arms Export      State (lead),     Regulate export of    Arms Export
    Control System   Defense, Homeland arms by U.S.          Control Act of
                        Security, and     companies, giving     1976
                        Justice           primacy to national
                                          security and foreign
                                          policy concerns
    Foreign Military State and Defense Provide foreign       Arms Export
    Sales Program    (leads), Homeland governments with U.S. Control Act of
                        Security          defense articles and  1976
                                          services to help
                                          promote
                                          interoperability
                                          while lowering the
                                          unit costs of weapon
                                          systems
    National         State, Defense,   Determine the         National Security
    Disclosure       and intelligence  releasibility of      Decision
    Policy Process   community         classified military   Memorandum 119 of
                                          information,          1971
                                          including classified
                                          weapons and military
                                          technologies, to
                                          foreign governments
    Committee on     Treasury (lead),  Investigate the       Exon-Florio
    Foreign          Commerce,         impact of foreign     Amendment of 1988
    Investment in    Defense, Homeland acquisitions on       to the Defense
    the United       Security,         national security and Production Act of
    States (CFIUS)   Justice, State,   to suspend or         1950
                        and six offices   prohibit acquisitions
                        from the          that might threaten
                        Executive Office  national security
                        of the President
    National         Defense (lead),   Ensure that           Executive Order
    Industrial       applicable to     contractors           No. 12829 of 1993
    Security Program other departments (including those
                        and agencies      under foreign
                                          influence, control,
                                          or ownership)
                                          appropriately
                                          safeguard classified
                                          information in their
                                          possession
    Anti-Tamper      Defense           Establish anti-tamper Defense Policy
    Policy                             techniques on weapons Memorandum, 1999
                                          systems when
                                          warranted as a method
                                          to protect critical
                                          technologies on these
                                          systems
    Militarily       Defense           Identify and assess   Export
    Critical                           technologies that are Administration
    Technologies                       critical for          Act of 1979
    Program                            retaining U.S.
                                          military dominance

    Sources: GAO (analysis); cited legal authorities (data).

    Over the years, we have identified weaknesses in the effectiveness and
    efficiency of government programs designed to protect critical
    technologies while advancing U.S. interests. While each program has its
    own set of challenges, we found that these weaknesses are largely
    attributable to poor coordination within complex interagency processes,
    inefficiencies in program operations, and a lack of systematic evaluations
    for assessing program effectiveness and identifying corrective actions.
    The impacts of these weaknesses are not always visible or immediate but,
    as we have reported, increase the risk of military gains by entities with
    interests contrary to those of the United States and of financial harm to
    U.S. companies. Others, including the Office of the National
    Counterintelligence Executive, congressional committees, and inspectors
    general, have also reported on vulnerabilities in these programs and the
    resulting harm--both actual and potential--to U.S. security and economic
    interests.

    Several of the programs designed to protect critical technologies are
    inherently complex. Multiple departments and agencies representing various
    interests, which at times can be competing and even divergent, participate
    in decisions about the control and protection of critical U.S.
    technologies. However, as exemplified below, poor coordination and
    fundamental disagreements among the departments have had unintended
    consequences for both national security and economic interests.

               o Commerce and State have yet to clearly determine which
               department controls the export of certain missile technology
               items, which increases the risk that these items will fall into
               the wrong hands or creates an unlevel playing field for U.S.
               companies.^12 Since Commerce and State have different restrictions
               on these items, it is important that they define who controls the
               items. Otherwise, the exporter--not the government--is left to
               determine which restrictions apply and the type of governmental
               review.

               o The departments participating in the Committee on Foreign
               Investment in the United States (CFIUS) lack a coordinated
               approach for defining what constitutes a threat to national
               security and what warrants an investigation to ensure that the
               risk of foreign ownership is mitigated.^13 This lack of agreement
               among the members, which limits CFIUS's analyses of proposed and
               completed foreign acquisitions, has been intensified by continued
               economic globalization and by increasingly diffuse threats. Some
               CFIUS members have argued that taking a more traditional and
               narrow view of what constitutes a national security threat can
               limit the protection of critical infrastructure or the
               preservation of technological superiority in the defense arena.
               Recently, member agencies indicated a need for changes to the
               process and some are currently under way.

               o Within Defense, the military services and programs have
               different interpretations of what constitutes military critical
               technologies, which can result in different conclusions about what
               technologies need protection through the application of
               anti-tamper techniques.^14 Defense does not coordinate or oversee
               how the services and programs identify critical technologies
               needing anti-tamper protection. This creates the vulnerability of
               having the same technology protected on one weapon system but not
               on another, thereby exposing both systems to exploitation and
               compromise.

               While government officials responsible for administering the
               programs designed to protect critical technologies may
               appropriately take time to make decisions as they consider the
               multiple interests involved, inefficiencies in the various
               programs have created unnecessary delays in sharing critical
               technologies with allies.

               o Although State has implemented a series of initiatives primarily
               designed to expedite the processing of arms export licenses, we
               found that these initiatives have generally not been
               successful.^15 Most notably, the department designated the
               processing of license applications in support of Operations Iraqi
               Freedom and Enduring Freedom its top priority and established an
               expedited process for reviewing those applications. However, only
               19 percent of the applications submitted through the expedited
               process for these operations were processed within the goals set
               by the department.^16 These included applications for protective
               body armor for U.S. and coalition forces and aircraft defensive
               systems.

               The departments charged with protecting critical technologies have
               not systematically evaluated their respective programs to
               determine whether they are fulfilling their missions in a changing
               environment and whether corrective actions are needed.

               o Given its lack of systematic evaluations, Commerce cannot
               readily identify weaknesses in the dual-use export control system
               or implement needed corrective measures that allow U.S. companies
               to compete in the global marketplace while minimizing the risk to
               other U.S. interests.^17 As we and the Office of Management and
               Budget have reported, Commerce has not established performance
               measures that provide a basis for assessing the effectiveness of
               the dual-use export control system. Instead, Commerce relies on
               narrow measures related to the efficiencies of its processes and
               anecdotal indications to gauge how well the system is functioning.

               o After the September 2001 terrorist attacks, State did not make
               fundamental or significant changes to the arms export control
               system, its objectives, or implementing regulations.^18 State
               officials maintained that such changes are not needed because they
               regard the system as effective in keeping U.S. defense items out
               of enemy hands while ensuring that allies can obtain needed arms.
               However, State's conclusions regarding the system appear without
               basis because State has not provided evidence that it
               systematically assessed the effectiveness of its controls or major
               initiatives that were intended to facilitate sales to allies.
               Further, our reports have documented weaknesses and challenges
               over the years that point to vulnerabilities in the arms export
               control system and its ability to protect U.S. interests.

               o Defense cannot provide assurances that its oversight of foreign
               owned or influenced contractors is sufficient to reduce the risk
               of foreign interests gaining unauthorized access to U.S.
               classified information.^19 Specifically, Defense does not
               systematically collect information to know if contractors are
               reporting certain business transactions, which would enable
               Defense to know when a contractor has come under foreign influence
               and determine what protective measures may be needed to reduce the
               risk of information compromise. For example, one foreign-owned
               contractor appeared to have had access to U.S. classified
               information for at least 6 months before a protective measure was
               implemented. Moreover, Defense neither centrally collects
               information to determine the magnitude of contractors under
               foreign influence nor assesses the effectiveness of its oversight
               so it can identify weaknesses in its protective measures and make
               necessary adjustments.

               We have recommended numerous corrective actions to address these
               weaknesses and inefficiencies, but the departments involved have
               not implemented many of the recommendations that address the most
               fundamental problems affecting the protection of critical
               technologies and the advancement of U.S. interests. Legislation
               has been introduced to modify or reform aspects of the programs
               for protecting critical technologies. For example, legislation was
               introduced in the 109th Congress to reauthorize the Export
               Administration Act.^20 Also, the House of Representatives passed
               legislation in 2005 to create an interagency strategic export
               control board charged with conducting a comprehensive evaluation
               of U.S. export controls and developing recommendations for
               consolidating export control functions. In addition, the House and
               Senate passed two different bills in the last Congress, and new
               legislation has recently been introduced in the House to reform
               CFIUS and its approach to evaluating proposed foreign
               acquisitions. However, to date, legislation has not been enacted
               to overhaul these programs and executive action has not resulted
               in fundamental changes to these programs.

               Implementation of our outstanding recommendations should be an
               interim step in improving the effectiveness and efficiency of
               existing government programs intended to identify and protect
               critical technologies. However, further actions are needed. The
               executive and legislative branches need to re-examine the current
               government programs to determine whether and how they can
               collectively achieve their mission and evaluate alternative
               approaches. The results of these efforts should provide the basis
               for establishing a comprehensive framework with clear
               responsibilities and accountability for identifying and protecting
               critical technologies as global forces continue to reshape U.S.
               national security and economic interests.

    			  Transforming Federal Oversight of Food Safety

               This nation enjoys a plentiful and varied food supply that is
               generally considered to be safe. However, the patchwork nature of
               the federal oversight of food safety calls into question whether
               the government can plan more strategically to inspect food
               production processes, identify and react more quickly to any
               outbreaks of contaminated food, and focus on achieving results to
               promote the safety and integrity of the nation's food supply. This
               challenge is even more urgent since the terrorist attacks of
               September 11, 2001, heightened awareness of agriculture's
               vulnerabilities to terrorism, such as the deliberate contamination
               of food or the introduction of disease to livestock, poultry, and
               crops. Over several years, we have reported on issues that suggest
               that food safety could be designated as a high-risk area because
               of the need for transforming the federal oversight framework to
               reduce risks to public health as well as the economy.

               Either an accidental or deliberate contamination of food or the
               introduction of disease to livestock, poultry, and crops could
               undermine consumer confidence in the government's ability to
               ensure the safety of the U.S. food supply, as well as cause severe
               economic consequences. Each year, about 76 million people contract
               a food-borne illness in the United States; about 325,000 require
               hospitalization; and about 5,000 die, according to the Centers for
               Disease Control and Prevention. In addition, agriculture, as the
               largest industry and employer in the United States, generates more
               than $1 trillion in economic activity annually, or about 13
               percent of the gross domestic product. The value of U.S.
               agricultural exports exceeded $68 billion in fiscal year 2006. An
               introduction of a highly infectious foreign animal disease, such
               as avian influenza or foot-and-mouth disease, would cause severe
               economic disruption, including substantial losses from halted
               exports. Similarly, food contamination, such as the recent E. coli
               outbreaks, can have a detrimental impact on local economies. For
               example, industry representatives estimate losses from the recent
               California spinach E. coli outbreak to range from $37 million to
               $74 million.

               A challenge for the 21st century is how several federal agencies
               can integrate the myriad food safety programs and strategically
               manage their portfolios to promote the safety and integrity of the
               nation's food supply.^21 In numerous previous reports, we have
               described the fragmented federal food safety system in which 15
               agencies collectively administer at least 30 laws related to food
               safety. The two primary agencies are the U.S. Department of
               Agriculture (USDA), which is responsible for the safety of meat,
               poultry, and processed egg products and the Food and Drug
               Administration (FDA), which is responsible for virtually all other
               foods. Among other agencies with responsibilities related to food
               safety, the National Marine Fisheries Service in the Department of
               Commerce conducts voluntary, fee-for-service inspections of
               seafood safety and quality; the Environmental Protection Agency
               (EPA) regulates the use of pesticides and maximum allowable
               residue levels on food commodities and animal feed; and the
               Department of Homeland Security (DHS) is responsible for
               coordinating agencies' food security activities.

               The food safety system is further complicated by the subtle
               differences in food products that dictate which agency regulates a
               product as well as the frequency with which inspections occur. For
               example, how a packaged ham-and-cheese sandwich is regulated
               depends on how the sandwich is presented. USDA inspects
               manufacturers of packaged open-face meat or poultry sandwiches
               (e.g., those with one slice of bread), but FDA inspects
               manufacturers of packaged closed-face meat or poultry sandwiches
               (e.g., those with two slices of bread). Although there are no
               differences in the risks posed by these products, USDA inspects
               wholesale manufacturers of open-face sandwiches sold in interstate
               commerce daily, while FDA inspects closed-face sandwiches an
               average of once every 5 years.

               This federal regulatory system for food safety evolved piecemeal,
               typically in response to particular health threats or economic
               crises. During the past 30 years, we have detailed problems with
               the fragmented federal food safety system and reported that the
               system has caused inconsistent oversight, ineffective
               coordination, and inefficient use of resources. Our most recent
               work demonstrates that these challenges persist. Specifically:

               o Existing statutes give agencies different regulatory and
               enforcement authorities. For example, food products under FDA's
               jurisdiction may be marketed without the agency's prior approval.
               On the other hand, food products under USDA's jurisdiction must
               generally be inspected and approved as meeting federal standards
               before being sold to the public. Under current law, USDA
               inspectors maintain continuous inspection at slaughter facilities
               and examine each slaughtered meat and poultry carcass. They also
               visit each processing facility at least once during each operating
               day. For foods under FDA's jurisdiction, however, federal law does
               not mandate the frequency of inspections.^22

               o We reported that federal agencies are spending resources on
               overlapping food safety activities.^23 USDA and FDA both inspect
               shipments of imported food at 18 U.S. ports-of-entry. However,
               these two agencies do not share inspection resources at these
               ports. For example, USDA officials told us that all USDA-import
               inspectors are assigned to and located at USDA-approved import
               inspection facilities and some of these facilities handle and
               store FDA-regulated products. USDA has no jurisdiction over these
               FDA-regulated products. Although USDA maintains a daily presence
               at these facilities, the FDA-regulated products may remain at the
               facilities for some time awaiting FDA inspection. In fiscal year
               2003, USDA spent almost $16 million on imported food inspections,
               and FDA spent more than $115 million.

               o Food recalls are voluntary and federal agencies responsible for
               food safety have no authority to compel companies to carry out
               recalls--with the exception of FDA's authority to require a recall
               for infant formula. USDA and FDA provide guidance to companies for
               carrying out voluntary recalls. We reported that USDA and FDA can
               do a better job in carrying out their food recall programs so they
               can quickly remove potentially unsafe food from the
               marketplace.^24 These agencies do not know how promptly and
               completely companies are carrying out recalls, do not promptly
               verify that recalls have reached all segments of the distribution
               chain, and use procedures to alert consumers to a recall that may
               not be effective.

               o The terrorist attacks of September 11, 2001, have heightened
               concerns about agriculture's vulnerability to terrorism. The
               Homeland Security Act of 2002 assigned DHS the lead coordination
               responsibility for protecting the nation against terrorist
               attacks, including agroterrorism. Subsequent presidential
               directives further define agencies' specific roles in protecting
               agriculture and the food system against terrorist attacks. We
               reported that in carrying out these new responsibilities, agencies
               have taken steps to better manage the risks of agroterrorism,
               including developing national plans and adopting standard
               protocols.^25 However, we also found several management problems
               that can reduce the effectiveness of the agencies' routine efforts
               to protect against agroterrorism. For example, there are
               weaknesses in the flow of critical information among key
               stakeholders and shortcomings in DHS's coordination of federal
               working groups and research efforts.

               o In response to the nation's pressing fiscal challenges, agencies
               may have to explore new approaches to achieve their missions. FDA
               is responsible for ensuring the safety of seafood. More than 80
               percent of the seafood that Americans consume is imported. We
               reported in 2001 that FDA's seafood inspection program did not
               sufficiently protect consumers.^26 For example, FDA tested about 1
               percent of imported seafood products. We subsequently found that
               FDA's program has shown some improvement. More foreign firms are
               inspected, and inspections show that more U.S. seafood importers
               are complying with its requirements.^27 Given FDA officials'
               concerns about limited inspection resources, we also identified
               options, such as using personnel in the National Oceanic and
               Atmospheric Administration's Seafood Inspection Program to augment
               FDA's inspection capacity or state regulatory laboratories for
               analyzing imported seafood. FDA agreed with these options.

               o We reported that in fiscal year 2003, four agencies--USDA, FDA,
               EPA, and the National Marine Fisheries Service--spent $1.7 billion
               on food safety-related activities.^28 USDA and FDA together were
               responsible for nearly 90 percent of federal expenditures for food
               safety. However, these expenditures were not based on the volume
               of foods regulated by the agencies or consumed by the public. The
               majority of federal expenditures for food safety inspection were
               directed toward USDA's programs for ensuring the safety of meat,
               poultry, and egg products; however, USDA is responsible for
               regulating about 20 percent of the food supply. In contrast, FDA,
               which is responsible for regulating about 80 percent of the food
               supply, accounted for only about 24 percent of expenditures.

               Others have called for fundamental changes to the federal food
               safety system overall. In 1998, the National Academy of Sciences
               concluded that the system is not well equipped to meet emerging
               challenges.^29 In response to the academy's report, the President
               established a Council on Food Safety which released a Food Safety
               Strategic Plan in January 2001. The plan recognized the need for a
               comprehensive food safety statute and concluded "the current
               organizational structure makes it more difficult to achieve future
               improvements in efficiency, efficacy, and allocation of resources
               based on risk."

               While many of the recommendations we made have been acted upon, a
               fundamental re-examination of the federal food safety system is
               warranted. Taken as a whole, our work indicates that Congress and
               the executive branch can and should create the environment needed
               to look across the activities of individual programs within
               specific agencies and toward the goals that the federal government
               is trying to achieve. To that end, we have recommended, among
               other things, that Congress enact comprehensive, uniform, and
               risk-based food safety legislation and commission the National
               Academy of Sciences or a blue ribbon panel to conduct a detailed
               analysis of alternative organizational food safety structures.^30
               We have also recommended that the executive branch reconvene the
               President's Council on Food Safety to facilitate interagency
               coordination on food safety regulation and programs.

               These actions can begin to address the fragmentation in the
               federal oversight of food safety. Going forward, to build a
               sustained focus on the safety and the integrity of the nation's
               food supply, Congress and the executive branch can integrate
               various expectations for food safety with congressional oversight
               and through agencies' strategic planning processes. The
               development of a governmentwide performance plan that is
               mission-based, has a results-orientation, and provides a
               cross-agency perspective offers a framework to help ensure
               agencies' goals are complementary and mutually reinforcing.
               Further, with pressing fiscal challenges, this plan can assist
               decision makers in balancing trade-offs and comparing performance
               when resource allocation and restructuring decisions are made.

    ^12GAO, Export Controls: Clarification of Jurisdiction for Missile
    Technology Items Needed, [307]GAO-02-120 (Washington, D.C.: Oct. 9, 2001);
    and Export Controls: Improvements to Commerce's Dual-Use System Needed to
    Ensure Protection of U.S. Interests in the Post-9/11 Environment,
    [308]GAO-06-638 (Washington, D.C.: June 26, 2006).

    ^13GAO, Defense Trade: Enhancements to the Implementation of Exon-Florio
    Could Strengthen the Law's Effectiveness, [309]GAO-05-686 (Washington,
    D.C.: Sept. 28, 2005).

    ^14GAO, Defense Acquisitions: DOD Needs to Better Support Program
    Managers' Implementation of Anti-Tamper Protection, [310]GAO-04-302
    (Washington, D.C.: Mar. 31, 2004).

    ^15GAO, Defense Trade: Arms Export Control System in the Post-9/11
    Environment, [311]GAO-05-234 (Washington, D.C.: Feb. 16, 2005); and
    Defense Trade: Arms Export Control Vulnerabilities and Inefficiencies in
    the Post-9/11 Security Environment, [312]GAO-05-468R (Washington, D.C.:
    Apr. 7, 2005).

    ^16This covers license applications processed between October 1, 2001, and
    April 30, 2004.

    ^17GAO, Export Controls: Improvements to Commerce's Dual-Use System Needed
    to Ensure Protection of U.S. Interests in the Post-9/11 Environment,
    [313]GAO-06-638 (Washington, D.C.: June 26, 2006).

    ^18GAO, Defense Trade: Arms Export Control Vulnerabilities and
    Inefficiencies in the Post-9/11 Security Environment, [314]GAO-05-468R
    (Washington, D.C.: Apr. 7, 2005).

    ^19GAO, Industrial Security: DOD Cannot Ensure Its Oversight of
    Contractors under Foreign Influence Is Sufficient, [315]GAO-05-681
    (Washington, D.C.: July 15, 2005).

    ^20The Export Administration Act is not permanent legislation. When the
    authority granted under the act lapsed in 2001, the controls established
    under the act and the implementing regulations were continued under
    Executive Order 13222, which was issued under the authority provided by
    the International Emergency Economic Powers Act.

    ^21GAO, 21st Century Challenges: Reexamining the Base of the Federal
    Government, [316]GAO-05-325SP (Washington, D.C.: February 2005).

    ^22GAO, Overseeing the U.S. Food Supply: Steps Should Be Taken to Reduce
    Overlapping Inspections and Related Activities, [317]GAO-05-549T
    (Washington, D.C.: May 17, 2004).

    ^23GAO, Oversight of Food Safety Activities: Federal Agencies Should
    Pursue Opportunities to Reduce Overlap and Better Leverage Resources,
    [318]GAO-05-213 (Washington, D.C.: Mar. 30, 2005).

    ^24GAO, Food Safety: USDA and FDA Need to Better Ensure Prompt and
    Complete Recalls of Potentially Unsafe Food, [319]GAO-05-51 (Washington,
    D.C.: Oct. 6, 2004).

    ^25GAO, Homeland Security: Much Is Being Done to Protect Agriculture from
    a Terrorist Attack, but Important Challenges Remain, [320]GAO-05-214
    (Washington, D.C.: Mar. 8, 2005).

    ^26GAO, Food Safety: Federal Oversight of Seafood Does Not Sufficiently
    Protect Consumers, [321]GAO-01-204 (Washington, D.C.: Jan. 31, 2001).

    ^27GAO, Food Safety: FDA's Imported Seafood Safety Program Shows Some
    Progress, but Further Improvements Are Needed, [322]GAO-04-246
    (Washington, D.C.: Jan. 30, 2004).

    ^28GAO, Overseeing the U.S. Food Supply: Steps Should Be Taken to Reduce
    Overlapping Inspections and Related Activities, [323]GAO-05-549T
    (Washington, D.C.: May 17, 2005).

    ^29Institute of Medicine, Ensuring Safe Food from Production to
    Consumption, Washington, D.C.: National Academy Press, 1998.

    ^30GAO, Food Safety and Security: Fundamental Changes Needed to Ensure
    Safe Food, [324]GAO-02-47T (Washington, D.C.: Oct. 10, 2001).

    			  Progress Being Made in Other High-Risk Areas

               For other areas that remain on our 2007 high-risk list, there has
               been important but varying levels of progress, although not yet
               enough progress to remove these areas from the list. Top
               administration officials have expressed their commitment to
               ensuring that high-risk areas receive adequate attention and
               oversight. The Office of Management and Budget (OMB) has led an
               initiative to prompt agencies to develop detailed action plans for
               each area on our high-risk list. These plans are to identify
               specific goals and milestones that address and reduce the risks
               identified by us within each high-risk area. Further, OMB has
               encouraged agencies to consult with us regarding the problems our
               past work has identified, and the many recommendations for
               corrective actions we have made. While progress on developing and
               implementing plans has been mixed, such a concerted effort by
               agencies and ongoing attention by OMB are critical; our experience
               over the past 17 years has shown that perseverance is required to
               fully resolve high-risk areas. Congress, too, will continue to
               play an important role through its oversight and, where
               appropriate, through legislative action targeting both specific
               problems and the high-risk areas overall.

               Examples of progress in other programs or operations that were
               previously designated as high risk are discussed below and in the
               highlights pages that follow this section.

               o The Department of Health and Human Services and its Centers for
               Medicare & Medicaid Services (CMS) have made some progress to
               improve the fiscal integrity and oversight of the Medicaid
               program, which was designated high risk in 2003. For example, CMS
               has taken steps to improve its oversight of certain Medicaid
               financial management activities, including efforts to oversee
               states' financing methods. It also issued a comprehensive 5-year
               plan in July 2006 that outlined initial activities planned for
               implementing the Medicaid Integrity Program required by the
               Deficit Reduction Act of 2005. However, several oversight
               weaknesses previously identified by us have not yet been
               addressed. For example, CMS has not incorporated the use of key
               Medicaid data systems into its oversight of states' Medicaid
               claims, or clarified and communicated its policies in several
               high-risk areas, such as supplemental payment arrangements and
               administrative costs. The results of CMS's actions will need to be
               assessed to determine their effectiveness in improving the
               program's fiscal integrity, and more action is needed before the
               program's high-risk designation can be removed.

               o Regarding the Medicare program, the Centers for Medicare &
               Medicaid Services (CMS) has made some progress in the last 2 years
               in reforming and refining payment methods, enhancing program
               integrity, improving program management, and overseeing patient
               safety and care. For example, CMS is improving how it sets or
               updates rates for hospital services, durable medical equipment,
               and certain drugs and devices supplied in medical facilities.
               Medicare's most recent estimate of its national rate of improper
               payments was 4.4 percent--the lowest since measurement began in
               1996. Nevertheless, Medicare's size, complexity, and vulnerability
               to mismanagement and improper payments suggest that its high-risk
               designation cannot be removed. For example, GAO found weaknesses
               in CMS's information security controls that could make sensitive,
               personally identifiable medical information vulnerable to
               unauthorized access. Similarly, call centers sponsored by the
               agency or private drug plans fell short in providing accurate and
               complete information to callers inquiring about the new
               prescription drug benefit.

               o The administration and real property-holding agencies have made
               progress toward strategically managing federal real property. In
               response to both an executive order aimed at improving real
               property management and the President's Management Agenda
               initiative on real property, agencies have, among other things,
               established asset management plans, standardized data reporting,
               and adopted performance measures. Also, the administration has
               created a Federal Real Property Council and plans to work with
               Congress to provide agencies with tools to better manage real
               property. These actions have addressed our prior concern that a
               strategic governmentwide focus on solving the problems was
               lacking, but the underlying conditions that led to the high-risk
               designation continue to exist.

               o Since the 2005 high-risk update, the Department of Homeland
               Security (DHS) has made progress in addressing major
               transformation, management, and program challenges, which prior
               GAO work has identified as key to successfully transforming 22
               agencies into one department and effectively carrying out its
               homeland security and other missions. DHS has produced a strategic
               plan that contains most elements required by the Government
               Performance and Results Act and the under secretary of management
               is working to integrate some management functions. However, DHS
               has not linked its goals to resource requirements in its strategic
               plan and has not involved all stakeholders in its strategic
               planning process. Moreover, DHS lacks not only a comprehensive
               strategy with overall goals and a timeline but also a dedicated
               management integration team to support its management integration
               efforts. DHS and its components are developing corrective action
               plans to address material weaknesses identified by the financial
               statement auditor, but recent audits found its financial systems
               do not conform to federal requirements, and financial statements
               contain numerous material weaknesses. DHS is working to develop a
               departmentwide framework for managing information but has not
               implemented an effective process for informed decision making by
               senior leadership about competing technology investment options or
               a comprehensive information security program to protect its
               information and systems. DHS has taken some actions to integrate
               the legacy agency workforces that make up its components and has
               made progress in establishing human capital capabilities for the
               US-VISIT program, but DHS has not linked its new human capital
               system to its strategic plan. DHS has made progress in enhancing
               communication among its acquisition organizations through its
               strategic sourcing and small business programs, but some
               components remain exempted from the unified acquisition
               organization, and the chief procurement officer has insufficient
               staff for departmentwide oversight. In addition, DHS has continued
               to form necessary partnerships and has undertaken a number of
               efforts with private entities, but key partnering challenges
               continue as DHS seeks to leverage resources and more effectively
               carry out its homeland security responsibilities. In their program
               activities, DHS and the Transportation Security Administration
               (TSA) have taken numerous actions to strengthen commercial
               aviation security, and the Coast Guard has moved to control costs
               by offering incentives to contractors that attempt to foster
               competition for subcontracts. However, TSA faces the difficult
               task of assessing and allocating resources across all
               transportation modes based on risk, while adapting to changing
               threats within the commercial aviation industry. DHS agencies have
               made progress in activities to refine the screening of foreign
               visitors to the United States, target potentially dangerous cargo,
               and provide the personnel necessary to effectively fulfill border
               security and trade agency missions. However, trade and visitor
               screening systems have weaknesses that must be overcome to better
               ensure border and trade security. DHS has also enhanced the
               efficiency of certain immigration services, reducing the size of
               the backlog of immigration-benefit applications. However, DHS has
               not adopted a comprehensive risk management approach when it comes
               to the detection and investigation of immigration fraud. Finally,
               DHS has made revisions to the National Response Plan to clarify
               federal roles and responsibilities. In response to concerns raised
               by us and others, Congress clarified the roles and
               responsibilities of the Federal Emergency Management Agency (FEMA)
               in the DHS fiscal year 2007 appropriations act and designated the
               FEMA Administrator as the "Principal Advisor" to the President on
               emergency management. However, DHS has yet to develop necessary
               disaster capabilities and to create accountability systems that
               effectively balance the need for fast and flexible response
               against the need to prevent waste, fraud, and abuse.

               o During the past 2 years, the Internal Revenue Service (IRS) has
               made progress in its enforcement efforts. Notably, enforcement
               revenue rose from $43.1 billion in fiscal year 2004 to $48.7
               billion in fiscal year 2006. Based on preliminary data, IRS
               increased the overall percentage of tax returns examined between
               fiscal year 2004 and fiscal year 2006 by about 30 percent. IRS
               completed research in 2005 on individual taxpayers' compliance and
               is currently using the results to better target operational
               audits. IRS also set a long-term goal to increase the compliance
               rate. Despite these promising developments, challenges remain.
               IRS's most recent estimate of the gross tax gap (the difference
               between the taxes that should have been paid voluntarily and on
               time and what was actually paid) was $345 billion for tax year
               2001. Although IRS estimates that it would eventually collect $55
               billion of this amount, a net tax gap of $290 billion would
               remain. Given the magnitude of the tax gap, even a relatively
               small percentage reduction in the gap would yield billions of
               dollars in additional revenue for the government. IRS needs
               periodic, if not annual, measurements of compliance to gauge the
               extent to which compliance is changing and to effectively target
               its service and enforcement efforts. Further, IRS lacks a
               data-based plan to improve compliance and reach its long-term
               goal. Real progress in reducing the tax gap will require efforts
               beyond enforcement. IRS will need to develop and execute multiple
               strategies over a sustained period including working with Treasury
               to develop new and innovative solutions to improve compliance.
               Statutory changes will be needed as well to meaningfully reduce
               the gap and we have presented options, such as additional
               withholding for selected parties and additional information
               reporting on the cost basis for securities sales, for Congress to
               consider.

               o We first added the Pension Benefit Guaranty Corporation's (PBGC)
               single-employer pension insurance program as a high-risk area in
               July 2003 because the program's financial health was threatened by
               structural weaknesses in pension funding rules, the program's
               premium structure, and the potential for large bankruptcies among
               sponsors with underfunded plans in weak industries. Since then,
               Congress passed major pension reform legislation that was signed
               into law. The reforms include revisions to the defined benefit
               pension funding rules, changes to the PBGC program's insurance
               premium structure, and other changes aimed at limiting the risk
               that underfunded plans might pose to PBGC. While some of these
               reforms represent progress, their ultimate impact on the
               single-employer program's deficit is unclear. Many of these
               reforms will be phased in gradually, postponing their potentially
               positive effect on plan funding, while other changes could have
               the effect of increasing PBGC's financial exposure.

               o The Federal Aviation Administration (FAA) has made significant
               progress in addressing air traffic control modernization program
               weaknesses since it was designated as high risk in 1995. For
               example, FAA has established a framework for improving its system
               management capabilities and addressed weakness on selected air
               traffic control systems; implemented key components of a cost
               accounting system and established a cost estimating methodology;
               and made progress in establishing an organizational culture that
               supports sound acquisitions. FAA has also developed an action plan
               with the Office of Management and Budget to continue to address
               these issues. Additionally, FAA has reported that it has exceeded
               its targets for delivering selected system acquisitions on cost
               and schedule for the past 3 years. However, FAA-improved system
               management capabilities have yet to be institutionalized, the cost
               estimating methodology has not yet been fully implemented, and
               major systems will be coming on line in the next few years.
               Moreover, FAA still faces many human capital challenges, including
               obtaining the technical and contract management expertise needed
               to define, implement, and integrate numerous complex programs and
               systems. With FAA expecting to spend about $9.4 billion between
               now and the end of fiscal year 2011 to upgrade and replace air
               traffic control systems, these actions are as critical as ever.

               o Since 2005, DOD has taken some positive steps toward addressing
               challenges related to the supply chain management high-risk area.
               For example, in collaboration with OMB, DOD developed a plan to
               address some of the systemic weaknesses in supply chain
               management. The plan encompasses 10 initiatives, such as war
               reserve materiel improvements and the expanded use of radio
               frequency identification, aimed at the three focus areas we have
               identified from our prior work: requirements forecasting, asset
               visibility, and materiel distribution. This plan provides a
               framework for addressing systemic weaknesses and focusing
               long-term efforts to improve supply support to the warfighter. DOD
               has made some progress implementing these initiatives, and DOD
               leadership has demonstrated a commitment to resolving supply chain
               management problems. However, successful resolution of these
               long-standing problems will take several years of continued
               efforts, and the department faces challenges and risks in
               successful implementation of proposed changes. For example, DOD's
               plan generally lacks outcome-focused performance metrics for many
               of its initiatives, making it difficult to track and demonstrate
               progress in improving the three focus areas. Further, DOD's
               ability to make coordinated, systemic improvements that cut across
               the multiple organizations involved in the materiel distribution
               system has been hindered by problems defining who has
               accountability and authority for making such improvements.

    			  Highlights for Each High-Risk Area

               Overall, the government continues to take high-risk problems
               seriously and is making long-needed progress toward correcting
               them. Congress has also acted to address several individual
               high-risk areas through hearings and legislation. Continued
               perseverance in addressing high-risk areas will ultimately yield
               significant benefits. Lasting solutions to high-risk problems
               offer the potential to save billions of dollars, dramatically
               improve service to the American public, strengthen public
               confidence and trust in the performance and accountability of our
               national government, and ensure the ability of government to
               deliver on its promises.

               We have prepared highlights of each of the 27 high-risk areas on
               our updated list, showing (1) why the area is high risk, (2) the
               actions that have been taken and that are under way to address the
               problem since our last update report as well as the issues that
               are yet to be resolved, and (3) what remains to be done to address
               the risk. These highlights are presented on the following pages.

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               Strategic Human Capital Management

               Office of Personnel Management: Key Lessons Learned to Date for
               Strengthening Capacity to Lead and Implement Human Capital
               Reforms. [21]GAO-07-90 . Washington, D.C.: January 19, 2007.

               Human Capital: Aligning Senior Executives' Performance with
               Organizational Results Is an Important Step Toward Governmentwide
               Transformation. [22]GAO-06-1125T . Washington, D.C.: September 26,
               2006.

               Office of Personnel Management: OPM Is Taking Steps to Strengthen
               Its Internal Capacity for Leading Human Capital Reform.
               [23]GAO-06-861T . Washington, D.C.: June 27, 2006.

               Human Capital: Trends in Executive and Judicial Pay.
               [24]GAO-06-708 . Washington, D.C.: June 21, 2006.

               Human Capital: Agencies Are Using Buyouts and Early Outs with
               Increasing Frequency to Help Reshape Their Workforces.
               [25]GAO-06-324 . Washington, D.C.: March 31, 2006.

               Human Capital: Observations on Final Regulations for DOD's
               National Security Personnel System. [26]GAO-06-227T . Washington,
               D.C.: November 17, 2005.

               Human Capital: Designing and Managing Market-Based and More
               Performance-Oriented Pay Systems. [27]GAO-05-1048T . Washington,
               D.C.: September 27, 2005.

               Human Capital: DOD's National Security Personnel System Faces
               Implementation Challenges. [28]GAO-05-730 . Washington, D.C.: July
               14, 2005.

               Human Capital: Agencies Need Leadership and the Supporting
               Infrastructure to Take Advantage of New Flexibilities.
               [29]GAO-05-616T . Washington, D.C.: April 21, 2005.

               Human Capital: Observations on Final DHS Human Capital
               Regulations. [30]GAO-05-391T . Washington, D.C.: March 2, 2005.

               Also see [31]http://www.gao.gov for numerous speeches and
               presentations from the Comptroller General on human capital
               challenges in general and as they apply to specific agencies.

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               DOD's Overseas Infrastructure Master Plans Continue to Evolve.
               [32]GAO-06-913R . Washington, D.C.: August 22, 2006.

               Embassy Construction: State Has Made Progress Constructing New
               Embassies, but Better Planning Is Needed for Operations and
               Maintenance Requirements. [33]GAO-06-641 . Washington, D.C.: June
               30, 2006.

               Federal Real Property: Most Public Benefit Conveyances Used as
               Intended, but Opportunities Exist to Enhance Federal Oversight.
               [34]GAO-06-511 . Washington, D.C.: June 21, 2006.

               Federal Courthouses: Rent Increases Due to New Space and Growing
               Energy and Security Costs Require Better Tracking and Management.
               [35]GAO-06-613 . Washington, D.C.: June 20, 2006.

               Homeland Security: Guidance and Standards Are Needed for Measuring
               the Effectiveness of Agencies' Facility Protection Efforts.
               [36]GAO-06-612 . Washington, D.C.: May 31, 2006.

               Federal Real Property: Excess and Underutilized Property Is an
               Ongoing Problem. [37]GAO-06-248T . Washington, D.C.: February 6,
               2006.

               Federal Real Property: Reliance on Costly Leasing to Meet New
               Space Needs Is an Ongoing Problem. [38]GAO-06-136T . Washington,
               D.C.: October 6, 2005.

               VA Health Care: Key Challenges to Aligning Capital Assets and
               Enhancing Veterans' Care. [39]GAO-05-429 . Washington, D.C.:
               August 5, 2005.

               Military Bases: Analysis of DOD's 2005 Selection Process and
               Recommendations for Base Closures and Realignments. [40]GAO-05-785
               . Washington, D.C.: July 1, 2005.

               Federal Real Property: Further Actions Needed to Address
               Long-standing and Complex Problems. [41]GAO-05-848T . Washington,
               D.C.: June 22, 2005.

               Smithsonian Institution: Facilities Management Reorganization Is
               Progressing, but Funding Remains a Challenge. [42]GAO-05-369 .
               Washington, D.C.: April 25, 2005.

               U.S. Postal Service: The Service's Strategy for Realigning Its
               Mail Processing Infrastructure Lacks Clarity, Criteria, and
               Accountability. [43]GAO-05-261 . Washington, D.C.: April 8, 2005.

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               Information Security: Federal Reserve Needs to Address Treasury
               Auction Systems. [44]GAO-06-659 . Washington, D.C.: August 30,
               2006.

               Information Security: Leadership Needed to Address Weaknesses and
               Privacy Issues at Veterans Affairs. [45]GAO-06-897T . Washington,
               D.C.: June 20, 2006.

               DHS Faces Challenges in Developing a Joint Public/Private Recovery
               Plan, [46]GAO-06-672 . Washington, D.C.: June 16, 2006.

               Information Security: Continued Progress Needed to Strengthen
               Controls at the Internal Revenue Service. [47]GAO-06-328 .
               Washington, D.C.: March 23, 2006.

               Information Sharing: The Federal Government Needs to Establish
               Policies and Processes for Sharing Terrorism-Related and Sensitive
               but Unclassified Information. [48]GAO-06-385 . Washington, D.C.:
               March 17, 2006.

               Information Security: Federal Agencies Show Mixed Progress in
               Implementing Statutory Requirements. [49]GAO-06-527T . Washington,
               D.C.: March 16, 2006.

               Information Security: Department of Health and Human Services
               Needs to Fully Implement Its Program. [50]GAO-06-267 . Washington,
               D.C.: February 24, 2006.

               Information Security: Progress Made, but Federal Aviation
               Administration Needs to Improve Controls over Air Traffic Control
               Systems. [51]GAO-05-712 . Washington, D.C.: August 26, 2005.

               Critical Infrastructure Protection: Department of Homeland
               Security Faces Challenges in Fulfilling Cybersecurity
               Responsibilities, [52]GAO-05-434 . Washington, D.C.: May 26, 2005.

               Information Security: Federal Agencies Need to Improve Controls
               over Wireless Networks. [53]GAO-05-383 . Washington, D.C.: May 17,
               2005.

               Information Security: Emerging Cybersecurity Issues Threaten
               Federal Information Systems. [54]GAO-05-231 . Washington, D.C.:
               May 13, 2005.

               Information Security: Improving Oversight of Access to Federal
               Systems and Data by Contractors Can Reduce Risk. [55]GAO-05-362 .
               Washington, D.C.: April 22, 2005.

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               Aviation Security: TSA Oversight of Checked Baggage Screening
               Procedures Could Be Strengthened. [56]GAO-06-869 . Washington,
               D.C.: July 28, 2006.

               Homeland Security: Challenges in Creating an Effective Acquisition
               Organization. [57]GAO-06-1012T . Washington, D.C.: July 27, 2006.

               Homeland Security: Progress Continues, but Challenges Remain on
               Department's Management of Information Technology. [58]GAO-06-598T
               . Washington, D.C.: March 29, 2006.

               Financial Management Systems: DHS Has an Opportunity to
               Incorporate Best Practices in Modernization Efforts.
               [59]GAO-06-553T . Washington, D.C.: March 29, 2006.

               Emergency Preparedness and Response: Some Issues and Challenges
               Associated with Major Emergency Incidents. [60]GAO-06-467T .
               Washington, D.C.: February 23, 2006.

               Risk Management: Further Refinements Needed to Assess Risks and
               Prioritize Protective Measures at Ports and Other Critical
               Infrastructure. [61]GAO-06-91 . Washington, D.C.: December 15,
               2005.

               Department of Homeland Security: Strategic Management of Training
               Important for Successful Transformation. [62]GAO-05-888 .
               Washington, D.C.: September 23, 2005.

               Results-Oriented Government: Improvements to DHS's Planning
               Process Would Enhance Usefulness and Accountability.
               [63]GAO-05-300 . Washington, D.C.: March 31, 2005.

               Department of Homeland Security: A Comprehensive and Sustained
               Approach Needed to Achieve Management Integration. [64]GAO-05-139
               . Washington, D.C.: March 16, 2005.

               DHS Products

               Major Management Challenges Facing the Department of Homeland
               Security. DHS Office of the Inspector General. OIG-07-12.
               Washington, D.C.: December 2006.

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    			  Establishing Appropriate and Effective Information-Sharing
    			  Mechanisms to Improve Homeland Security

               Managing Sensitive Information: DOJ Needs a More Complete Staffing
               Strategy for Managing Classified Information and a Set of Internal
               Controls for Other Sensitive Information. [65]GAO-07-83 .
               Washington, D.C.: October 20, 2006.

               Critical Infrastructure Protection: Progress Coordinating
               Government and Private Sector Efforts Varies by Sectors'
               Characteristics. [66]GAO-07-39 . Washington, D.C.: October 16,
               2006.

               Terrorist Watch List Screening: Efforts to Help Reduce Adverse
               Effects on the Public. [67]GAO-06-1031 . Washington, D.C.:
               September 29, 2006.

               Critical Infrastructure Protection: DHS Leadership Needed to
               Enhance Cybersecurity. [68]GAO-06-1087T . Washington, D.C.:
               September 13, 2006.

               Maritime Security: Information-Sharing Efforts Are Improving.
               [69]GAO-06-933T . Washington, D.C.: July 10, 2006.

               Managing Sensitive Information: Actions Needed to Ensure Recent
               Changes in DOE Oversight Do Not Weaken an Effective Classification
               System. [70]GAO-06-785 . Washington, D.C.: June 30, 2006.

               Managing Sensitive Information: DOD Can More Effectively Reduce
               the Risk of Classification Errors. [71]GAO-06-706 . Washington,
               D.C.: June 30, 2006.

               Information Sharing: DHS Should Take Steps to Encourage More
               Widespread Use of Its Program to Protect and Share Critical
               Infrastructure Information. [72]GAO-06-383 . Washington, D.C.:
               April 17, 2006.

               Information Sharing: The Federal Government Needs to Establish
               Policies and Processes for Sharing Terrorism-Related and Sensitive
               but Unclassified Information. [73]GAO-06-385 . Washington, D.C.:
               March 17, 2006.

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               Defense Business Transformation: A Comprehensive Plan, Integrated
               Efforts, and Sustained Leadership Are Needed to Ensure Success.
               [74]GAO-07-229T . Washington, D.C.: November 16, 2006.

               Defense Transformation: Accountability Challenges.
    			  [75]GAO-06-1083CG . Washington, D.C.:  August 22, 2006.

               Department of Defense: Sustained Leadership Is Critical to
               Effective Financial and Business Management Transformation.
               [76]GAO-06-1006T . Washington, D.C.: August 3, 2006.

               Business Systems Modernization: DOD Continues to Improve
               Institutional Approach, but Further Steps Needed. [77]GAO-06-658 .
               Washington, D.C.: May 15, 2006.

               GAO High-Risk Program. [78]GAO-06-497T . Washington, D.C.: March
               15, 2006.

               Defense Management: Additional Actions Needed to Enhance DOD's
               Risk-Based Approach for Making Resource Decisions. [79]GAO-06-13 .
               Washington, D.C.: November 15, 2005.

               Defense Management: Foundational Steps Being Taken to Manage DOD
               Business Systems Modernization, but Much Remains to Be
               Accomplished to Effect True Business Transformation.
               [80]GAO-06-234T . Washington, D.C.: November 9, 2005.

               21st Century Challenges: Transforming Government to Meet Current
               and Emerging Challenges. [81]GAO-05-830T . Washington, D.C.: July
               13, 2005.

               DOD Business Transformation: Sustained Leadership Needed to
               Address Long-standing Financial and Business Management Problems.
               [82]GAO-05-723T . Washington, D.C.: June 8, 2005.

               Defense Management: Key Elements Needed to Successfully Transform
               DOD Business Operations. [83]GAO-05-629T . Washington, D.C.: April
               28, 2005.

               Transformation Challenges. presentation to the Defense Business
               Transformation Forum. Queenstown, MD: April 17, 2005.

               Defense Management: Successful Business Transformation Requires
               Sound Strategic Planning and Sustained Leadership. [84]GAO-05-520T
               . Washington, D.C.: April 13, 2005.

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               Department of Defense: Sustained Leadership Is Critical to
               Effective Financial and Business Management Transformation.
               [85]GAO-06-1006T . Washington, D.C.: August 3, 2006.

               Business Systems Modernization: DOD Continues to Improve
               Institutional Approach, but Further Steps Needed. [86]GAO-06-658 .
               Washington, D.C.: May 15, 2006.

               DOD Business Transformation: Defense Travel System Continues to
               Face Implementation Challenges. [87]GAO-06-18 . Washington, D.C.:
               January 18, 2006.

               DOD Systems Modernization: Uncertain Joint Use and Marginal
               Expected Value of Military Asset Deployment System Warrant
               Reassessment of Planned Investment. [88]GAO-06-171 . Washington,
               D.C.: December 15, 2005.

               DOD Systems Modernization: Planned Investment in the Naval
               Tactical Command Support System Needs to Be Reassessed.
               [89]GAO-06-215 . Washington, D.C.: December 5, 2005.

               DOD Business Systems Modernization: Important Progress Made in
               Establishing Foundational Architecture Products and Investment
               Management Practices, but Much Work Remains. [90]GAO-06-219 .
               Washington, D.C.: November 23, 2005.

               Defense Management: Foundational Steps Being Taken to Manage DOD
               Business Systems Modernization, but Much Remains to Be
               Accomplished to Effect True Business Transformation.
               [91]GAO-06-234T . Washington, D.C.: November 9, 2005.

               DOD Business Systems Modernization: Long-standing Weaknesses in
               Enterprise Architecture Development Need to Be Addressed.
               [92]GAO-05-702 . Washington, D.C.: July 22, 2005.

               Army Depot Maintenance: Ineffective Oversight of Depot Maintenance
               Operations and System Implementation Efforts. [93]GAO-05-441 .
               Washington, D.C.: June 30, 2005.

               DOD Business Transformation: Sustained Leadership Needed to
               Address Long-standing Financial and Business Management Problems.
               [94]GAO-05-723T . Washington, D.C.: June 8, 2005.

               DOD Systems Modernization: Management of Integrated Military Human
               Capital Program Needs Additional Improvements. [95]GAO-05-189 .
               Washington, D.C.: February 11, 2005.

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               DOD Personnel Clearances: Additional OMB Actions Are Needed to
               Improve the Security Clearance Process. [96]GAO-06-1070 .
               Washington, D.C.: September 28, 2006.

               DOD Personnel Clearances: Questions and Answers for the Record
               Following the Second in a Series of Hearings on Fixing the
               Security Clearance Process. [97]GAO-06-693R . Washington, D.C.:
               June 14, 2006.

               DOD Personnel Clearances: New Concerns Slow Processing of
               Clearances for Industry Personnel. [98]GAO-06-748T . Washington,
               D.C.: May 17, 2006.

               DOD Personnel Clearances: Funding Challenges and Other Impediments
               Slow Clearances for Industry Personnel. [99]GAO-06-747T .
               Washington, D.C.: May 17, 2006.

               Questions for the Record Related to DOD's Personnel Security
               Clearance Program and the Government Plan for Improving the
               Clearance Process. [100]GAO-06-323R . Washington, D.C.: January
               17, 2006.

               DOD Personnel Clearances: Government Plan Addresses Some
               Long-standing Problems with DOD's Program, But Concerns Remain.
               [101]GAO-06-233T . Washington, D.C.: November 9, 2005.

               Questions for the Record Related to DOD's Personnel Security
               Clearance Program. [102]GAO-05-988R . Washington, D.C.: August 19,
               2005.

               DOD Personnel Clearances: Some Progress Has Been Made but Hurdles
               Remain to Overcome the Challenges That Led to GAO's High-Risk
               Designation. [103]GAO-05-842T . Washington, D.C.: June 28, 2005.

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               Defense Management: Comprehensive Strategy and Annual Reporting
               Are Needed to Measure Progress and Costs of DOD's Global Posture
               Restructuring. [104]GAO-06-852 . Washington, D.C.: September 13,
               2006.

               Defense Infrastructure: Actions Taken to Improve the Management of
               Utility Privatization, but Some Concerns Remain. [105]GAO-06-914 .
               Washington, D.C.: September 5, 2006.

               DOD's Overseas Infrastructure Master Plans Continue to Evolve.
               [106]GAO-06-913R . Washington, D.C.: August 22, 2006.

               Limitations in the Air Force's Proposed Housing Plan for
               Spangdahlem Air Base, Germany. [107]GAO-06-736R . Washington,
               D.C.: May 19, 2006.

               Military Housing: Management Issues Require Attention as the
               Privatization Program Matures. [108]GAO-06-438 . Washington, D.C.:
               April 28, 2006.

               Military Training: Funding Requests for Joint Urban Operations
               Training and Facilities Should Be Based on Sound Strategy and
               Requirements. [109]GAO-06-193 . Washington, D.C.: December 8,
               2005.

               Military Bases: Observations on DOD's 2005 Base Realignment and
               Closure Selection Process and Recommendations.  [110]GAO-05-905 .
               Washington, D.C.: July 18, 2005.

               Military Bases: Analysis of DOD's 2005 Selection Process and
               Recommendations for Base Closures and Realignments.
               [111]GAO-05-785 . Washington, D.C.: July 1, 2005.

               Defense Infrastructure: Issues Need to Be Addressed in Managing
               and Funding Base Operations and Facilities Support.
               [112]GAO-05-556 . Washington, D.C.: June 15, 2005.

               Military Training: Better Planning and Funding Priority Needed to
               Improve Conditions of Military Training Ranges. [113]GAO-05-534 .
               Washington, D.C.: June 10, 2005.

               Defense Infrastructure: Management Issue Requiring Attention in
               Utility Privatization. [114]GAO-05-433 . Washington, D.C.: May 12,
               2005.

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    			  Department of Defense Financial Management

               Defense Travel System: Reported Savings Questionable and
               Implementation Challenges Remain. [115]GAO-06-980 . Washington,
               D.C.: September 26, 2006.

               Financial Management: Improvements Under Way but Serious Financial
               Systems Problems Persist. [116]GAO-06-970 . Washington, D.C.:
               September 26, 2006.

               Department of Defense: Sustained Leadership Is Critical to
               Effective Financial and Business Management Transformation.
               [117]GAO-06-1006T . Washington, D.C.: August 3, 2006.

               Defense Working Capital Fund: Military Services Did Not Calculate
               and Report Carryover Amounts Correctly. [118]GAO-06-530 .
               Washington, D.C.: June 27, 2006.

               Military Pay: Hundreds of Battle-Injured GWOT Soldiers Have
               Struggled to Resolve Military Debts. [119]GAO-06-494 . Washington,
               D.C.: April 27, 2006.

               Environmental Liabilities: Long-Term Fiscal Planning Hampered by
               Control Weaknesses and Uncertainties in the Federal Government's
               Estimates. [120]GAO-06-427 . Washington, D.C.: March 31, 2006.

               Fiscal Year 2005 U.S. Government Financial Statements: Sustained
               Improvement in Federal Financial Management Is Crucial to
               Addressing Our Nation's Financial Condition and Long-Term Fiscal
               Imbalance. [121]GAO-06-406T . Washington, D.C.: March 1, 2006.

               DOD Business Transformation: Defense Travel System Continues to
               Face Implementation Challenges. [122]GAO-06-18 . Washington, D.C.:
               January 18, 2006.

               Global War on Terrorism: DOD Needs to Improve the Reliability of
               Cost Data and Provide Additional Guidance to Control Costs.
               [123]GAO-05-882 . Washington, D.C.: September 21, 2005.

               Army Corps of Engineers: Improved Planning and Financial
               Management Should Replace Reliance on Reprogramming Actions to
               Manage Project Funds. [124]GAO-05-946 . Washington, D.C.:
               September 16, 2005.

               DOD Problem Disbursements: Long-standing Accounting Weaknesses
               Result in Inaccurate Records and Substantial Write-offs.
               [125]GAO-05-521 . Washington, D.C.: June 2, 2005.

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    			  Department of Defense Supply Chain Management

               DOD's High-Risk Areas: Progress Made Implementing Supply Chain
               Management Recommendations, but Full Extent of Improvement
               Unknown. [126]GAO-07-234 . Washington, D.C.: January 17, 2007.

               DOD's High-Risk Areas: Challenges Remain to Achieving and
               Demonstrating Progress in Supply Chain Management.
               [127]GAO-06-983T. Washington, D.C.: July 25, 2006.

               Defense Logistics: Lack of a Synchronized Approach between the
               Marine Corps and Army Affected the Timely Production and
               Installation of Marine Corps Truck Armor.  GAO-06-274. Washington,
               D.C.: June 22, 2006.

               Defense Management: Attention Is Needed to Improve Oversight of
               DLA Prime Vendor Program. [128]GAO-06-739R. Washington, D.C.: June
               19, 2006.

               Defense Inventory: Actions Needed to Improve Inventory Retention
               Management.  GAO-06-512. Washington, D.C.: May 25, 2006.

               Defense Logistics: Several Factors Limited the Production and
               Installation of Army Truck Armor during Current Wartime
               Operations.  GAO-06-160. Washington, D.C.: March 22, 2006.

               DOD's High-Risk Areas: High-Level Commitment and Oversight Needed
               for DOD Supply Chain Plan to Succeed. [129]GAO-06-113T.
               Washington, D.C.: October 6, 2005.

               Defense Logistics: Better Strategic Planning Can Help Ensure DOD's
               Successful Implementation of Passive Radio Frequency
               Identification. [130]GAO-05-345. Washington, D.C.: September 12,
               2005.

               Defense Logistics: DOD Has Begun to Improve Supply Distribution
               Operations, but Further Actions Are Needed to Sustain These
               Efforts. [131]GAO-05-775. Washington, D.C.: August 11, 2005.

               Defense Logistics: Actions Needed to Improve the Availability of
               Critical Items during Current and Future Operations.
               [132]GAO-05-275. Washington, D.C.: April 8, 2005.

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    			  Department of Defense Weapon Systems Acquisition

               Defense Acquisitions: Actions Needed to Get Better Results on
               Weapon Systems Investments. [133]GAO-06-585T . Washington, D.C.:
               April 5, 2006.

               Best Practices

               Best Practices: Stronger Practices Needed to Improve DOD
               Technology Transition Processes. [134]GAO-06-883 . Washington,
               D.C.: September 14, 2006.

               Defense Acquisitions: Major Weapon Systems Continue to Experience
               Cost and Schedule Problems under DOD's Revised Policy.
               [135]GAO-06-368 . Washington, D.C.: April 13, 2006.

               Space Acquisitions: Improvements Needed in Space Systems
               Acquisitions and Keys to Achieving Them. [136]GAO-06-626T .
               Washington, D.C.: April 6, 2006.

               Defense Acquisitions: Assessments of Selected Major Weapon
               Programs. [137]GAO-06-391 . Washington, D.C.: March 31, 2006.

               Best Practices: Better Support of Weapon System Program Managers
               Needed to Improve Outcomes. [138]GAO-06-110 . Washington, D.C.:
               November 30, 2005.

               Weapon System Reviews

               Defense Acquisitions: Restructured JTRS Program Reduces Risk, but
               Significant Challenges Remain. [139]GAO-06-955 . Washington, D.C.:
               September 11, 2006.

               Tactical Aircraft: Questions Concerning the F-22A's Business Case.
               [140]GAO-06-991T . Washington, D.C.: July 25, 2006.

               Space Acquisitions: DOD Needs Additional Knowledge as It Embarks
               on a New Approach for Transformational Satellite Communications
               System. [141]GAO-06-537 . Washington, D.C.: May 24, 2006.

               Electronic Warfare: Option of Upgrading Additional EA-6Bs Could
               Reduce Risk in Development of EA-18G. [142]GAO-06-446 .
               Washington, D.C.: April 26, 2006.

               Joint Strike Fighter: DOD Plans to Enter Production before Testing
               Demonstrates Acceptable Performance. [143]GAO-06-356 . Washington,
               D.C.: March 15, 2006.

               Defense Acquisitions: Missile Defense Agency Fields Initial
               Capability but Falls Short of Original Goals. [144]GAO-06-327 .
               Washington, D.C.: March 15, 2006.

               Defense Acquisitions: Improved Business Case Is Needed for Future
               Combat System's Successful Outcome. [145]GAO-06-367 . Washington,
               D.C.: March 14, 2006.

               Next Generation Air Transportation System: Progress and Challenges
               Associated with the Transformation of the National Airspace
               System. [146]GAO-07-25 . Washington, D.C.: November 13, 2006.

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               National Airspace System Modernization: Observations on Potential
               Funding Options for FAA and the Next Generation Airspace System.
               [147]GAO-06-1114T . Washington, D.C.: September 27, 2006.

               Next Generation Air Transportation System: Preliminary Analysis of
               Progress and Challenges Associated with the Transformation of the
               National Airspace System. [148]GAO-06-915T . Washington, D.C.:
               July 25, 2006.

               Air Traffic Control Modernization: Status of the Current Program
               and Planning for the Next Generation Air Transportation System.
               [149]GAO-06-653T . Washington, D.C.: June 21, 2006.

               Air Traffic Control: Status of the Current Modernization Program
               and Planning for the Next Generation System. [150]GAO-06-738T .
               Washington, D.C.: May 4, 2006.

               Next Generation Air Transportation System: Preliminary Analysis of
               the Joint Planning and Development Office's Planning, Progress,
               and Challenges. [151]GAO-06-574T . Washington, D.C.: March 29,
               2006.

               National Airspace System: Transformation Will Require Cultural
               Change, Balanced Funding Priorities, and Use of All Available
               Management Tools. [152]GAO-06-154 . Washington, D.C.: October 14,
               2005.

               Air Traffic Operations: The Federal Aviation Administration Needs
               to Address Major Air Traffic Operating Cost Control Changes.
               [153]GAO-05-724 . Washington, D.C.: June 23, 2005.

               National Airspace System: FAA Has Made Progress but Continues to
               Face Challenges in Acquiring Major Air Traffic Control Systems.
               [154]GAO-05-331 . Washington, D.C.: June 10, 2005.

               Federal Aviation Administration: Stronger Architecture Program
               Needed to Guide Systems Modernization Efforts. [155]GAO-05-266 .
               Washington, D.C.: April 29, 2005.

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    			  Financing the Nation�s Transportation System

               Intercity Passenger Rail: National Policy and Strategies Needed to
               Maximize Public Benefits from Federal Expenditures. [156]GAO-07-15
               . Washington, D.C.: November 13, 2006.

               Freight Railroads: Industry Health Has Improved, but Concerns
               about Competition and Capacity Should be Addressed. [157]GAO-07-94
               . Washington, D.C.: October 6, 2006.

               Aviation Finance: Observations on Potential FAA Funding Options.
               [158]GAO-06-973 . Washington, D.C.: September 29, 2006.

               National Airspace System Modernization: Observations on Potential
               Funding Options for FAA and the Next Generation Airspace System.
               [159]GAO-06-1114T . Washington, D.C.: September 27, 2006.

               Highway Finance: States' Expanding Use of Tolling Illustrates
               Diverse Challenges and Strategies. [160]GAO-06-554 . Washington,
               D.C.: June 28, 2006.

               Highway Trust Fund: Overview of Highway Trust Fund Estimates.
               [161]GAO-06-572T . Washington, D.C.: April 4, 2006.

               Freight Transportation: Short Sea Shipping Option Shows Importance
               of Systematic Approach to Public Investment Decisions.
               [162]GAO-05-768 . Washington, D.C.: July 29, 2005.

               Highlights of an Expert Panel: The Benefits and Costs of Highway
               and Transit Investments. [163]GAO-05-423SP . Washington, D.C.: May
               6, 2005.

               Highway And Transit Investments: Options for Improving Information
               on Projects' Benefits and Costs and Increasing Accountability for
               Results. [164]GAO-05-172 . Washington, D.C.: January 24, 2005.

               Federal-Aid Highways: Trends, Effect on State Spending, and
               Options for Future Program Design. [165]GAO-04-802 . Washington,
               D.C.: August 31, 2004.

               Surface Transportation: Many Factors Affect Investment Decisions.
               [166]GAO-04-744 . Washington, D.C.: June 30, 2004.

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    			  U.S. National Security Interests

               Export Controls: Challenges Exist in Enforcement of an Inherently
               Complex System. [167]GAO-07-265 . Washington, D.C.: December 20,
               2006.

               Defense Technologies: DOD's Critical Technologies Lists Rarely
               Inform Export Control and Other Policy Decisions. [168]GAO-06-793
               . Washington, D.C.: July 28, 2006.

               DOD Excess Property: Control Breakdowns Present Significant
               Security Risk and Continuing Waste and Inefficiency. [169]
               GAO-06-943 . Washington, D.C.: July 25, 2006.

               President's Justification of the High Performance Computer Control
               Threshold Does Not Fully Address National Defense Authorization
               Act of 1998 Requirements. [170]GAO-06-754R . Washington, D.C.:
               June 30, 2006.

               Export Controls: Improvements to Commerce's Dual-Use System Needed
               to Ensure Protection of U.S. Interests in the Post-9/11
               Environment. [171]GAO-06-638 . Washington, D.C.: June 26, 2006.

               Defense Trade: Enhancements to the Implementation of Exon-Florio
               Could Strengthen the Law's Effectiveness. [172]GAO-05-686 .
               Washington, D.C.: September 28, 2005.

               Industrial Security: DOD Cannot Ensure Its Oversight of
               Contractors under Foreign Influence Is Sufficient. [173]GAO-05-681
               . Washington, D.C.: July 15, 2005.

               Defense Trade: Arms Export Control Vulnerabilities and
               Inefficiencies in the Post-9/11 Security Environment.
               [174]GAO-05-468R . Washington, D.C.: April 7, 2005.

               Defense Trade: Arms Export Control System in the Post-9/11
               Environment. [175]GAO-05-234 . Washington, D.C.: February 16,
               2005.

               Defense Acquisitions: DOD Needs to Better Support Program
               Managers' Implementation of Anti-Tamper Protection.
               [176]GAO-04-302 . Washington, D.C.: March 31, 2004.

               Defense Trade: Better Information Needed to Support Decisions
               Affecting Proposed Weapons Transfers. [177]GAO-03-694 .
               Washington, D.C.: July 11, 2003.

               Export Controls: Clarification of Jurisdiction for Missile
               Technology Items Needed. [178]GAO-02-120 . Washington, D.C.:
    			  October 9, 2001.

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    			  Transforming Federal Oversight of Food Safety

               Homeland Security: Management and Coordination Problems Increase
               the Vulnerability of U.S. Agriculture to Foreign Pests and
               Disease. [179]GAO-06-644 . Washington, D.C.: May 19, 2006.

               Oversight of Food Safety Activities: Federal Agencies Should
               Pursue Opportunities to Reduce Overlap and Better Leverage
               Resources. [180]GAO-05-213 . Washington, D.C.: March 30, 2005.

               Food Safety: Experiences of Seven Countries in Consolidating Their
               Food Safety Systems. [181]GAO-05-212 . Washington, D.C.: February
               22, 2005.

               Food Safety: USDA and FDA Need to Better Ensure Prompt and
               Complete Recalls of Potentially Unsafe Food. [182]GAO-05-51 .
               Washington, D.C.: October 6, 2004.

               Antibiotic Resistance: Federal Agencies Need to Better Focus
               Efforts to Address Risk to Humans from Antibiotic Use in Animals.
               [183]GAO-04-490 . Washington, D.C.: April 22, 2004.

               School Meal Program: Few Instances of Foodborne Outbreaks
               Reported, but Opportunities Exist to Enhance Outbreak Data and
               Food Safety Practices. [184]GAO-03-530 . Washington, D.C.: May 9,
               2003.

               Food-Processing Security: Voluntary Efforts Are Under Way, but
               Federal Agencies Cannot Fully Assess Their Implementation.
               [185]GAO-03-342 . Washington, D.C.: February 14, 2003.

               Meat and Poultry: Better USDA Oversight and Enforcement of Safety
               Rules Needed to Reduce Risk of Foodborne Illnesses.
               [186]GAO-02-902 . Washington, D.C.: August 30, 2002.

               Genetically Modified Foods: Experts View Regimen of Safety Tests
               as Adequate, but FDA's Evaluation Process Could Be Enhanced.
               [187]GAO-02-566 . Washington, D.C.: May 23, 2002.

               Food Safety: Improvements Needed in Overseeing the Safety of
               Dietary Supplements and "Functional Foods." [188]GAO/RCED-00-156 .
               Washington, D.C.: July 11, 2000.

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               Defense Acquisitions: Tailored Approach Needed to Improve Service
               Acquisition Outcomes. [189]GAO-07-20 . Washington, D.C.: November
               9, 2006.

               DOD Contracting: Efforts Needed to Address Commercial Air Force
               Acquisition Risk. [190]GAO-06-995 . Washington, D.C.: September
               29, 2006.

               Rebuilding Iraq: Continued Progress Requires Overcoming Contract
               Management Challenges. [191]GAO-06-1130T . Washington, D.C.:
               September 28, 2006.

               Iraq Contract Costs: DOD Consideration of Defense Contract Audit
               Agency's Findings. [192]GAO-06-1132 . Washington, D.C.: September
               25, 2006.

               Contract Management: Service Contract Approach to Aircraft
               Simulator Training Has Room for Improvement. [193]GAO-06-830 .
               Washington, D.C.: September 22, 2006.

               DOD Acquisitions: Contracting for Better Outcomes.
               [194]GAO-06-800T . Washington, D.C.: September 7, 2006.

               Contract Management: DOD Vulnerabilities to Contracting Fraud,
               Waste, and Abuse. [195]GAO-06-838R . Washington, D.C.: July 7,
               2006.

               Defense Management: Attention Is Needed to Improve Oversight of
               DLA Prime Vendor Program. [196]GAO-06-739R . Washington, D.C.:
               June 19, 2006.

               Hurricane Katrina: Army Corps of Engineers Contract for
               Mississippi Classrooms. [197]GAO-06-454 . Washington, D.C.: May 1,
               2006.

               Contract Security Guards: Army's Guard Program Requires Greater
               Oversight and Reassessment of Acquisition Approach.
               [198]GAO-06-284 . Washington, D.C.: April 3, 2006.

               Defense Acquisitions: DOD Has Paid Billions in Award and Incentive
               Fees Regardless of Acquisition Outcomes. [199]GAO-06-66 .
               Washington, D.C.: December 19, 2005.

               Contract Management: Opportunities to Improve Surveillance on
               Department of Defense Service Contracts. [200]GAO-05-274 .
               Washington, D.C.: March 17, 2005.

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               Nuclear Cleanup of Rocky Flats: DOE Can Use Lessons Learned to
               Improve Oversight of Other Sites' Cleanup Activities.
               [201]GAO-06-352 . Washington, D.C.: July 10, 2006.

               DOE Contracting: Better Performance Measures and Management Needed
               to Address Delays in Awarding Contracts. [202]GAO-06-722 .
               Washington, D.C.: June 30, 2006.

               DOE Contracting: Improved Program Management Could Help Achieve
               Small Business Goal. [203]GAO-06-501 . Washington, D.C.: April 7,
               2006.

               Hanford Waste Treatment Plant: Contractor and DOE Management
               Problems Have Led to Higher Costs, Construction Delays, and Safety
               Concerns. [204]GAO-06-602T . Washington, D.C.: April 6, 2006.

               Yucca Mountain: Quality Assurance at DOE's Planned Nuclear Waste
               Repository Needs Increased Management Attention. [205]GAO-06-313 .
               Washington, D.C.: March 17, 2006.

               Stand-Down of Los Alamos National Laboratory: Total Costs
               Uncertain; Almost All Mission-Critical Programs Were Affected but
               Have Recovered. [206]GAO-06-83 . Washington, D.C.: November 18,
               2005.

               Department of Energy: Improved Guidance, Oversight, and Planning
               Are Needed to Better Identify Cost-Saving Alternatives for
               Managing Low-Level Radioactive Waste. [207]GAO-06-94 . Washington,
               D.C.: October 31, 2005.

               Department of Energy: Additional Opportunities Exist for Reducing
               Laboratory Contractors' Support Costs. [208]GAO-05-897 .
               Washington, D.C.: September 9, 2005.

               Department of Energy: Improved Oversight Could Better Ensure
               Opportunities for Small Business Subcontracting. [209]GAO-05-459 .
               Washington, D.C.: May 13, 2005.

               Department of Energy: Further Actions Are Needed to Strengthen
               Contract Management for Major Projects. [210]GAO-05-123 .
               Washington, D.C.: March 18, 2005.

    			  Related Products

    			  Mational Aeronautics and Space Administration Contract
    			  Management

               NASA: Sound Management and Oversight Key to Addressing Crew
               Exploration Vehicle Project Risks. [211]GAO-06-1127T . September
               28, 2006.

               Enterprise Architecture: Leadership Remains Key to Establishing
               and Leveraging Architectures for Organizational Transformation.
               [212]GAO-06-831 . Washington, D.C.: August 14, 2006.

               NASA: Long-Term Commitment to and Investment in Space Exploration
               Program Requires More Knowledge. [213]GAO-06-817R . Washington,
               D.C.: July 17, 2006.

               NASA's James Webb Space Telescope: Knowledge-Based Acquisition
               Approach Key to Addressing Program Challenges. [214]GAO-06-634 .
               Washington, D.C.: July 14, 2006.

               Financial Management Systems: Additional Efforts Needed to Address
               Key Causes of Modernization Failures. GAO-06-184. Washington,
               D.C.: March 15, 2006.

               NASA: Implementing a Knowledge-Based Acquisition Framework Could
               Lead to Better Investment Decisions and Project Outcomes.
               [215]GAO-06-218 . Washington, D.C.: December 21, 2005.

               NASA: Long-standing Financial Management Challenges Threaten the
               Agency's Ability to Manage Its Programs. [216]GAO-06-216T .
               Washington, D.C.: October 27, 2005.

               Business Modernization: Some Progress Made toward Implementing GAO
               Recommendations Related to NASA's Integrated Financial Management
               Program. [217]GAO-05-799R . Washington, D.C.: September 9, 2005.

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    			  Management of Interagency Contracting

               Interagency Contracting: Improved Guidance, Planning, and
               Oversight Would Enable the Department of Homeland Security to
               Address Risks. [218]GAO-06-996 . Washington, D.C.: September 27,
               2006.

               Homeland Security: Contract Management and Oversight for Visitor
               and Immigrant Status Program Need to Be Strengthened.
               [219]GAO-06-404 . Washington, D.C.: June 9, 2006.

               Department of Energy, Office of Worker Advocacy: Deficient
               Controls Led to Millions of Dollars in Improper and Questionable
               Payments to Contractors. [220]GAO-06-547 . Washington, D.C.: May
               31, 2006.

               Federal Bureau of Investigation: Weak Controls over Trilogy
               Project Led to Payment of Questionable Contractor Costs and
               Missing Assets. [221]GAO-06-306 . Washington, D.C.: February 28,
               2006.

               U.S. Office of Special Counsel: Selected Contracting and Human
               Capital Issues. [222]GAO-06-16 . Washington, D.C.: November 17,
               2005.

               Improvements Needed to the Federal Procurement Data System--Next
               Generation. [223]GAO-05-960R . Washington, D.C.: September 27,
               2005.

               Interagency Contracting: Franchise Funds Provide Convenience, but
               Value to DOD Is Not Demonstrated. [224]GAO-05-456 . Washington,
               D.C.: July 29, 2005.

               Interagency Contracting: Problems with DOD's and Interior's Orders
               to Support Military Operations. [225]GAO-05-201 . Washington,
               D.C.: April 29, 2005.

               Homeland Security: Successes and Challenges in DHS's Efforts to
               Create an Effective Acquisition Organization. [226]GAO-05-179 .
               Washington, D.C.: March 29, 2005.

               Contract Management: Opportunities to Improve Pricing of GSA
               Multiple Award Schedules Contracts. [227]GAO-05-229 . February 11,
               2005.

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    			  Enforcement of Tax Laws

               Tax Debt Collection: IRS Needs to Complete Steps to Help Ensure
               Contracting Out Achieves Desired Results and Best Use of Federal
               Resources. [228]GAO-06-1065 . Washington, D.C.: September 29,
               2006.

               Business Tax Reform: Simplification and Increased Uniformity of
               Taxation Would Yield Benefits. [229]GAO-06-1113T . Washington,
               D.C.: September 20, 2006.

               Individual Income Tax Policy: Streamlining, Simplification, and
               Additional Reforms Are Desirable. [230]GAO-06-1028T . Washington,
               D.C.: August 3, 2006.

               Tax Compliance: Opportunities Exist to Reduce the Tax Gap Using a
               Variety of Approaches. [231]GAO-06-1000T . Washington, D.C.: July
               26, 2006.

               Capital Gains Tax Gap: Requiring Brokers to Report Securities Cost
               Basis Would Improve Compliance if Related Challenges Are
               Addressed. [232]GAO-06-603 . Washington, D.C.: June 13, 2006.

               Tax Compliance: Challenges to Corporate Tax Enforcement and
               Options to Improve Securities Basis Reporting. [233]GAO-06-851T .
               Washington, D.C.: June 13, 2006.

               Business Systems Modernization: IRS Needs to Complete Recent
               Efforts to Develop Policies and Procedures to Guide Requirements
               Development and Management. [234]GAO-06-310 . Washington, D.C.:
               March 20, 2006.

               Financial Management: Thousands of GSA Contractors Abuse the
               Federal Tax System. [235]GAO-06-492T . Washington, D.C.: March 14,
               2006.

               Tax Gap: Making Significant Progress in Improving Tax Compliance
               Rests on Enhancing Current IRS Techniques and Adopting New
               Legislative Actions. [236]GAO-06-453T . Washington, D.C.: February
               15, 2006.

               Tax Gap: Multiple Strategies, Better Compliance Data, and
               Long-Term Goals Are Needed to Improve Taxpayer Compliance.
               [237]GAO-06-208T . Washington, D.C.: October 26, 2005.

               Financial Management: Thousands of Civilian Agency Contractors
               Abuse the Federal Tax System with Little Consequence.
               [238]GAO-05-637 . Washington, D.C.: June 16, 2005.

    			  Related Products

    			  Internal Revenue Service Business Systems Modernization

               Financial Audit: IRS's Fiscal Years 2006 and 2005 Financial
               Statements. [239]GAO-07-136 . Washington, D.C.: November, 9, 2006.

               Internal Revenue Service: Status of Recommendations from Financial
               Audits and Related Management Reports. [240]GAO-06-560 .
               Washington, D.C.: June 6, 2006.

               Management Report: Improvements Needed in IRS's Internal Controls.
               [241]GAO-06-543R . Washington, D.C.: May 12, 2006.

               Internal Revenue Service: Assessment of the Interim Results of the
               2006 Filing Season and Fiscal Year 2007 Budget Request.
               [242]GAO-06-499T . Washington, D.C.: April 27, 2006.

               Internal Revenue Service: Assessment of the Interim Results of the
               2006 Filing Season and Fiscal Year 2007 Budget Request.
               [243]GAO-06-615T . Washington, D.C.: April 6, 2006.

               Business Systems Modernization: IRS Needs to Complete Recent
               Efforts to Develop Policies and Procedures to Guide Requirements
               Development and Management. [244]GAO-06-310 . Washington, D.C.:
               March 20, 2006.

               Business Systems Modernization: Internal Revenue Service's Fiscal
               Year 2006 Expenditure Plan. [245]GAO-06-360 . Washington, D.C.:
               February 21, 2006.

               Financial Audit: IRS's Fiscal Years 2005 and 2004 Financial
               Statements. [246]GAO-06-137 . Washington, D.C.: November 10, 2005.

               Business Systems Modernization: Internal Revenue Service's Fiscal
               Year 2005 Expenditure Plan. [247]GAO-05-774 . Washington, D.C.:
               July 22, 2005.

               IRS Modernization: Continued Progress Requires Addressing Resource
               Management Challenges [248]. GAO-05-707T . Washington, D.C.: May
               19, 2005.

               Internal Revenue Service: Status of Recommendations from Financial
               Audits and Related Management Reports. [249]GAO-05-393 .
               Washington, D.C.: April 29, 2005.

               Management Report: Improvements Needed in IRS's Internal Controls.
               [250]GAO-05-247R . Washington, D.C.: April 27, 2005.

               Management Report: Review of Controls over Safeguarding Taxpayer
               Receipts and Information at the Brookhaven Service Center Campus.
               [251]GAO-05-319R . March 10, 2005.

               Opportunities to Improve Timeliness of IRS Lien Releases.
               [252]GAO-05-26R . Washington, D.C.: January 10, 2005.

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    			  Modernizing Federal Disability Programs

               Social Security Disability Programs: Clearer Guidance Could Help
               SSA Apply the Medical Improvement Standard More Consistently.
               [253]GAO-07-8 . Washington, D.C.: October 3, 2006.

               Social Security Administration: Agency Is Positioning Itself to
               Implement Its New Disability Determination Process, but Key Facets
               Are Still in Development. [254]GAO-06-779T . Washington, D.C.:
               June 15, 2006.

               Veterans' Disability Benefits: VA Should Improve Its Management of
               Individual Unemployability Benefits by Strengthening Criteria,
               Guidance, and Procedures. [255]GAO-06-309 . Washington, D.C.: May
               30, 2006.

               Social Security Administration: Administrative Review Process for
               Adjudicating Initial Disability Claims. [256]GAO-06-640R .
               Washington, D.C.: May 16, 2006.

               VA Disability Benefits: Routine Monitoring of Disability Decisions
               Could Improve Consistency. [257]GAO-06-120T . Washington, D.C.:
               October 20, 2005.

               Computer-Based Patient Records: VA and DOD Made Progress, but Much
               Work Remains to Fully Share Medical Information. [258]GAO-05-1051T
               . Washington, D.C.: September 28, 2005.

               Federal Disability Assistance: Wide Array of Programs Needs to Be
               Examined in Light of 21st Century Challenges. [259]GAO-05-626 .
               Washington, D.C.: June 2, 2005.

               Veterans' Disability Benefits: Claims Processing Problems Persist
               and Major Performance Improvements May Be Difficult.
               [260]GAO-05-749T . Washington, D.C.: May 26, 2005.

               VA Disability Benefits and Health Care: Providing Certain Services
               to the Seriously Injured Poses Challenges. [261]GAO-05-444T .
               Washington, D.C.: March 17, 2005.

               Social Security Administration: Better Planning Could Make the
               Ticket Program More Effective. [262]GAO-05-248 . Washington, D.C.:
               March 2, 2005.

               Vocational Rehabilitation: More VA and DOD Collaboration Needed to
               Expedite Services for Seriously Injured Servicemembers.
               [263]GAO-05-167 . Washington, D.C.: January 14, 2005.

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    			  Pension Benefit Guaranty Corporation Single-Employer Pension
    			  Insurance Program

               Private Pensions: Opportunities Exist to Further Improve the
               Transparency of PBGC's Financial Disclosures. [264]GAO-06-429 .
               Washington, D.C.: March 27, 2006.

               Private Pensions: Information on Cash Balance Pension Plans.
               [265]GAO-06-42 . Washington, D.C.: November 3, 2005.

               Private Pensions: Questions Concerning the Pension Benefit
               Guaranty Corporation's Practices Regarding Single-Employer
               Probable Claims. [266]GAO-05-991R . Washington, D.C.: September 9,
               2005.

               Private Pensions: The Pension Benefit Guaranty Corporation and
               Long-Term Budgetary Challenges. [267]GAO-05-772T . Washington,
               D.C.: June 9, 2005.

               Private Pensions: Revision of Defined Benefit Pension Plan Funding
               Rules Is an Essential Component of Comprehensive Pension Reform.
               [268]GAO-05-794T . Washington, D.C.: June 7, 2005.

               Private Pensions: Government Actions Could Improve the Timeliness
               and Content of Form 5500 Pension Information. [269]GAO-05-491 .
               Washington, D.C.: June 3, 2005.

               Highlights of a GAO Forum: The Future of the Defined Benefit
               System and the Pension Benefit Guaranty Corporation.
               [270]GAO-05-578SP . Washington, D.C.: June 1, 2005.

               Private Pensions: Recent Experiences of Large Defined Benefit
               Plans Illustrate Weaknesses in Funding Rules. [271]GAO-05-294 .
               Washington, D.C.: May 31, 2005.

               Pension Benefit Guaranty Corporation: Structural Problems Limit
               Agency's Ability to Protect Itself from Risk. [272]GAO-05-360T .
               Washington, D.C.: March 2, 2005.

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    			  Medicare Program

               Information Security: The Centers for Medicare & Medicaid Services
               Needs to Improve Controls over Key Communication Network.
               [273]GAO-06-750 . Washington, D.C.: August 30, 2006.

               Medicare: CMS's Proposed Approach to Set Hospital Inpatient
               Payments Appears Promising. [274]GAO-06-880 . Washington, D.C.:
               July 28, 2006.

               Medicare Physician Payments: Trends in Service Utilization,
               Spending, and Fees Prompt Consideration of Alternative Payment
               Approaches. [275]GAO-06-1008T . Washington, D.C.: July 25, 2006.

               Medicare Part B Drugs: CMS Data Source for Setting Payments Is
               Practical but Concerns Remain. [276]GAO-06-971T . Washington,
               D.C.: July 13, 2006.

               Medicare Part D: Prescription Drug Plan Sponsor Call Center
               Responses Were Prompt, but Not Consistently Accurate and Complete.
               [277]GAO-06-710 . Washington, D.C.: June 30, 2006.

               Clinical Lab Quality: CMS and Survey Organization Oversight Should
               Be Strengthened. [278]GAO-06-416 . Washington, D.C.: June 16,
               2006.

               Medicare: Communications to Beneficiaries on the Prescription Drug
               Benefit Could Be Improved. [279]GAO-06-654 . Washington, D.C.: May
               3, 2006.

               Nursing Homes: Despite Increased Oversight, Challenges Remain in
               Ensuring High-Quality Care and Resident Safety. [280]GAO-06-117 .
               Washington, D.C.: December 28, 2005.

               Medicare: Contingency Plans to Address Potential Problems with the
               Transition of Dual-Eligible Beneficiaries from Medicaid to
               Medicare Drug Coverage. [281]GAO-06-278R . Washington, D.C.:
               December 16, 2005.

               Information Technology: Centers for Medicare & Medicaid Services
               Needs to Establish Critical Investment Management Capabilities.
               [282]GAO-06-12 . October 28, 2005.

               Medicare: More Effective Screening and Stronger Enrollment
               Standards Needed for Medical Equipment Suppliers. [283]GAO-05-656
               . Washington, D.C.: September 22, 2005.

               Medicare Contracting Reform: CMS's Plan Has Gaps and Its
               Anticipated Savings Are Uncertain. [284]GAO-05-873 . Washington,
               D.C.: August 17, 2005.

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    			  Medicaid Program

               Medicaid Third-Party Liability: Federal Guidance Needed to Help
               States Address Continuing Problems. [285]GAO-06-862 . Washington,
               D.C.: September 15, 2006.

               Medicaid Financial Management: Steps Taken to Improve Federal
               Oversight but Other Actions Needed to Sustain Efforts.
               [286]GAO-06-705 . Washington, D.C.: June 22, 2006.

               Medicaid Integrity: Implementation of New Program Provides
               Opportunities for Federal Leadership to Combat Fraud, Waste, and
               Abuse. [287]GAO-06-578T . Washington, D.C.: March 28, 2006.

               Medicaid Financing: States' Use of Contingency-Fee Consultants to
               Maximize Federal Reimbursements Highlights Need for Improved
               Federal Oversight. [288]GAO-05-748 . Washington, D.C.: June 28,
               2005.

               Medicaid: States' Efforts to Maximize Federal Reimbursements
               Highlight Need for Improved Federal Oversight.  [289]GAO-05-836T .
               Washington, D.C.: June 28, 2005.

               Medicaid Waivers: HHS Approvals of Pharmacy Plus Demonstrations
               Continue to Raise Cost and Oversight Concerns. [290]GAO-04-480 .
               Washington, D.C.: June 30, 2004.

               Medicaid and SCHIP: Recent HHS Approvals of Demonstration Waiver
               Projects Raise Concerns. [291]GAO-02-817 . Washington, D.C.: July
               12, 2002.

    			  Related Products

    			  National Flood Insurance Program

               GAO's High-Risk Program. [292]GAO-06-497T . Washington, D.C.:
               March 15, 2006.

               Federal Emergency Management Agency: Challenges for the National
               Flood Insurance Program. [293]GAO-06-335T . Washington, D.C.:
               January 25, 2006.

               Federal Emergency Management Agency: Improvements Needed to
               Enhance Oversight and Management of the National Flood Insurance
               Program. [294]GAO-06-119 . Washington, D.C.: October 18, 2005.

               Federal Emergency Management Agency: Oversight and Management of
               the National Flood Insurance Program. [295]GAO-06-183T .
               Washington, D.C.: October 20, 2005.

               Federal Emergency Management Agency: Challenges Facing the
               National Flood Insurance Program. [296]GAO-06-174T . Washington,
               D.C.: October 18, 2005.

               Flood Map Modernization: Federal Emergency Management Agency's
               Implementation of a National Strategy. [297]GAO-05-894T .
               Washington, D.C.: July 12, 2005.

               National Flood Insurance Program: Oversight of Policy Issuance and
               Claims. [298]GAO-05-532T . Washington, D.C.: April 14, 2005.

               Flood Map Modernization: Program Strategy Shows Promise, but
               Challenges Remain. [299]GAO-04-417 . Washington, D.C.: March 31,
               2004.

               National Flood Insurance Program: Actions to Address Repetitive
               Loss Properties. [300]GAO-04-401T . Washington, D.C.: March 25,
               2004.

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    www.gao.gov/cgi-bin/getrpt?[325]GAO-07-310 .

    To view the full product, click on the link above. For more information,
    contact George H. Stalcup at (202) 512-9490 or stalcupg@gao.gov.

    Highlights of [326]GAO-07-310 , a report to Congress on GAO's High-Risk
    Series

    January 2007

    HIGH-RISK SERIES

    An Update

    GAO's audits and evaluations identify federal programs and operations
    that, in some cases, are high risk due to their greater vulnerabilities to
    fraud, waste, abuse, and mismanagement. In recent years, GAO also has
    identified high-risk areas to focus on the need for broad-based
    transformations to address major economy, efficiency, or effectiveness
    challenges. Since 1990, GAO has periodically reported on government
    operations it has designated as high risk. In this 2007 update for the
    110th Congress, GAO presents the status of high-risk areas identified in
    2005 and new high-risk areas warranting attention by Congress and the
    executive branch. Lasting solutions to high-risk problems offer the
    potential to save billions of dollars, dramatically improve service to the
    public, strengthen confidence and trust in the performance and
    accountability of the U.S. government, and ensure the ability of
    government to deliver on its promises.

    This report contains GAO's views on what remains to be done to bring about
    lasting solutions for each high-risk area. Perseverance by the executive
    branch in implementing GAO's recommended solutions and continued oversight
    and action by Congress are both essential to achieving and sustaining
    progress.

    In its January 2005 update, GAO identified 25 high-risk areas and, in
    March 2006, added a 26th area. Since 2005, progress has been made in all
    areas, although the extent varies by area. Both the executive branch and
    Congress have shown a continuing commitment to addressing high-risk
    challenges and taken steps to help correct several of their root causes.
    High-risk areas were also among the suggested areas for oversight for the
    110th Congress that GAO recently provided to congressional leadership.
    Sufficient progress has been made to remove the high-risk designation from
    two areas: U.S. Postal Service transformation efforts and long-term
    outlook and HUD single-family mortgage insurance and rental housing
    assistance programs. Other areas made significant progress, but not enough
    to be removed from the list this cycle. Continued attention from the
    executive branch and Congress is needed to make additional progress in
    other high-risk areas.

    This year, GAO is designating three new high-risk areas. The first new
    area--critical to the nation's economic development--involves
    transportation financing and capacity. Revenues to support federal
    transportation trust funds are eroding at a time when investment is needed
    to expand capacity to address congestion caused by increasing passenger
    and freight travel. Given these problems, Congress and, for some issues,
    the Department of Transportation should reassess the federal role, revenue
    increase mechanisms, and funding allocations to better position the
    federal government to address financing and capacity challenges.

    The second area involves effective protection of technologies critical to
    U.S. national security. Technologies that underpin U.S. economic and
    military strength continue to be targets for theft, espionage, reverse
    engineering, and illegal export. Government programs established decades
    ago to protect critical technologies are ill-equipped to weigh competing
    U.S. interests as the security environment and technological innovation
    continue to evolve in the 21st century. Accordingly, we are designating
    the effective identification and protection of critical technologies as a
    governmentwide high-risk area that warrants a strategic re-examination of
    existing programs to identify needed changes and ensure the advancement of
    U.S. interests.

    The third area being designated as high risk involves federal oversight of
    food safety because of risks to the economy and to public health and
    safety. Agriculture, as the largest industry and employer in the United
    States, generates more than $1 trillion in economic activity annually. Any
    food contamination could undermine consumer confidence in the government's
    ability to ensure the safety of the U.S. food supply, as well as cause
    severe economic consequences. The current fragmented federal system has
    caused inconsistent oversight, ineffective coordination, and inefficient
    use of resources. GAO has recommended that Congress consider a fundamental
    re-examination of the system and other improvements to help ensure the
    rapid detection of and response to any accidental or deliberate
    contamination of food before public health and safety is compromised.

    GAO's 2007 High-Risk List

    2007 High-Risk Areas
    Addressing Challenges In Broad-Based Transformations
    o Strategic Human Capital Management^a
    o Managing Federal Real Property^a
    o Protecting the Federal Government's Information Systems and the Nation's
    Critical Infrastructures
    o Implementing and Transforming the Department of Homeland Security
    o Establishing Appropriate And Effective Information-Sharing Mechanisms to
    Improve Homeland Security
    o DOD Approach to Business Transformation^a
    o DOD Business Systems Modernization
    o DOD Personnel Security Clearance Program
    o DOD Support Infrastructure Management
    o DOD Financial Management
    o DOD Supply Chain Management
    o DOD Weapon Systems Acquisition
    o FAA Air Traffic Control Modernization
    o Financing the Nation's Transportation System ^a (New)
    o Ensuring the Effective Protection of Technologies Critical to U.S.
    National Security Interests^a (New)
    o Transforming Federal Oversight of Food Safety ^a (New)
    Managing Federal Contracting More Effectively
    o DOD Contract Management
    o DOE Contract Management
    o NASA Contract Management
    o Management of Interagency Contracting
    Assessing the Efficiency and Effectiveness of Tax Law Administration
    o Enforcement of Tax Laws^a
    o IRS Business Systems Modernization
    Modernizing and Safeguarding Insurance and Benefit Programs
    o Modernizing Federal Disability Programs^a
    o Pension Benefit Guaranty Corporation Single-Employer Pension Insurance
    Program
    o Medicare Program^a
    o Medicaid Program^a
    o National Flood Insurance Program^a

    Source: GAO.

    aLegislation is likely to be necessary, as a supplement to actions by the
    executive branch, in order to effectively address this high-risk area.

    References

    Visible links
      12.http://www.gao.gov/cgi-bin/getrpt?GAO-05-207
      13.http://www.gao.gov/cgi-bin/getrpt?GAO-01-159SP
      14.http://www.gao.gov/cgi-bin/getrpt?GAO-05-13
      15.http://www.gao.gov/cgi-bin/getrpt?GAO-04-390
      16.http://www.gao.gov/cgi-bin/getrpt?GAO-05-875
      17.http://www.gao.gov/cgi-bin/getrpt?GAO-06-435
      18.http://www.gao.gov/cgi-bin/getrpt?GAO-05-224
      19.http://www.gao.gov/cgi-bin/getrpt?GAO-02-839EUR
      20.http://www.gao.gov/cgi-bin/getrpt?GAO-03-157EUR
      21.http://www.gao.gov/cgi-bin/getrpt?GAO-07-90
      22.http://www.gao.gov/cgi-bin/getrpt?GAO-06-1125T
      23.http://www.gao.gov/cgi-bin/getrpt?GAO-06-861T
      24.http://www.gao.gov/cgi-bin/getrpt?GAO-06-708
      25.http://www.gao.gov/cgi-bin/getrpt?GAO-06-324
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     322.http://www.gao.gov/cgi-bin/getrpt?GAO-04-246
     323.http://www.gao.gov/cgi-bin/getrpt?GAO-05-549T
     324.http://www.gao.gov/cgi-bin/getrpt?GAO-02-47T
     325.http://www.gao.gov/cgi-bin/getrpt?GAO-07-310
     326.http://www.gao.gov/cgi-bin/getrpt?GAO-07-310
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