Fiscal Year 2008 Budget Request: U.S. Government Accountability
Office (19-APR-07, GAO-07-543T).
This testimony is given in support of the fiscal year 2008 budget
request for the U.S. Government Accountability Office (GAO)
before the House Subcommittee on the Legislative Branch,
Committee on Appropriations. The requested funding will help us
continue our support of the Congress in meeting its
constitutional responsibilities and will help improve the
performance and ensure the accountability of the federal
government for the benefit of the American people. GAO is
especially appreciative of the Subcommittee's efforts to help us
avoid a furlough of our staff during fiscal year 2007. Had we not
received additional funds this year and not taken other cost
minimization actions, GAO would have likely been forced to
furlough most staff for up to 5 days without pay. At the same
time, due to funding shortfalls, we were not able to make pay
adjustments retroactive to January 7, 2007. Our testimony today
focuses on key efforts that GAO has undertaken to support the
Congress, our fiscal year 2006 performance results, our budget
request for fiscal year 2008 to support the Congress and serve
the American people, and proposed legislative changes.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-543T
ACCNO: A68644
TITLE: Fiscal Year 2008 Budget Request: U.S. Government
Accountability Office
DATE: 04/19/2007
SUBJECT: Agency missions
Budgets
Federal funds
Budget activities
Budget administration
Human capital planning
Past fiscal year
Performance measures
Strategic planning
Budget requests
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GAO-07-543T
* [1]Key Efforts to Support the Congress
* [2]Performance, Results, and Plans
* [3]Outcomes of Our Work and the Road Ahead
* [4]GAO's Fiscal Year 2008 Request to Support the Congress
* [5]Concluding Remarks
* [6]GAO's Mission
* [7]Obtaining Copies of GAO Reports and Testimony
* [8]Order by Mail or Phone
* [9]To Report Fraud, Waste, and Abuse in Federal Programs
* [10]Congressional Relations
* [11]Public Affairs
Testimony
Before Subcommittee on the Legislative Branch, Committee on
Appropriations, United States House of Representatives
United States Government Accountability Office
GAO
For Release on Delivery Expected at 10:00 a.m. EDT
Thursday, April 19, 2007
FISCAL YEAR 2008 BUDGET REQUEST
U.S. Government Accountability Office
Statement of David M. Walker
Comptroller General of the United States
GAO-07-543T
United States Government Accountability Office
Washington, DC 20548
Madam Chair and Members of the Subcommittee:
I am pleased to appear before the subcommittee today in support of the
fiscal year 2008 budget request for the U.S. Government Accountability
Office (GAO). The requested funding will help us continue our support of
the Congress in meeting its constitutional responsibilities and will help
improve the performance and ensure the accountability of the federal
government for the benefit of the American people. An overview of GAO's
strategic plan for serving the Congress and our core values is included as
appendix I.
I would also like to thank you and your subcommittee for your past support
of GAO. I am especially appreciative of your efforts to help us avoid a
furlough of our staff during fiscal year 2007. Had we not received
additional funds this year and not taken other cost minimization actions,
GAO would have likely been forced to furlough most staff for up to 5 days
without pay. At the same time, due to funding shortfalls, we were not able
to make pay adjustments retroactive to January 7, 2007.
It is through the efforts of our dedicated and capable staff that we were
able to provide the Congress with the professional, objective, fact-based,
nonpartisan, non-ideological, fair, and balanced information it needs to
meet the full range of its constitutional responsibilities. I am extremely
pleased and proud to say that we helped the federal government achieve a
total of $51 billion in financial benefits in fiscal year 2006--a record
high that represents a return on investment of $105 for every dollar the
Congress invested in us. As a result of our work, we also documented 1,342
nonfinancial benefits that helped to improve service to the public, change
laws, and transform government operations. The funding we received in
fiscal year 2006 allowed us to conduct work that addressed many difficult
issues confronting the nation, including U.S. border security, Iraq and
Hurricane Katrina activities, the tax gap and tax reform, and issues
affecting the health and pay of military service members. Our
client-focused performance measures indicate that the Congress valued and
was very pleased with our work overall.
While fiscal year 2006 was a record year, we will be required to constrain
vital support to our staff and engagements in fiscal year 2007 in order to
manage within available funds. Although the additional funding provided by
the subcommittee allows us to avoid a furlough of our staff, we must
implement a number of actions to cancel, reduce, or defer costs in order
to manage within fiscal year 2007 funding constraints. In fact, our fiscal
year 2007 budget for most programs and line items retains funding levels
at or near fiscal year 2006 funding levels--requiring that we absorb
inflationary increases, which in turn reduce our purchasing power, erode
progress toward our strategic goals, and ultimately affect our client
service and employee support. For example, in our travel account--a
critical element in our ability to conduct firsthand evaluation of federal
funding and program activities--we expect transportation costs and per
diem rates to rise (as they do annually). Also, our ability to hire staff
to replace departing staff, address key succession planning challenges and
skill gaps, and maintain a skilled workforce will be adversely affected.
While we must hold some critical employee benefits at last year's funding
level, such as transit benefits and student loan repayments, our pool of
employees eligible to retire has increased since last year. Also, some
other agencies may be offering increased benefits that will be attractive
to our employees and potential recruits. In addition, we have reduced or
deferred needed targeted investments and initiatives geared to further
increasing productivity and effectiveness, achieving cost savings, and
addressing identified management challenges.
Unfortunately, we expect that these actions will adversely affect our
ability to respond to congressional requests, making it even more
difficult to address supply and demand imbalances in areas such as health
care, homeland security, the global "war on terrorism," energy and natural
resources, and forensic auditing. Our diminished capacity will likely, in
turn, ultimately result in reduced annual financial benefits, findings,
and recommendations to the Congress and the nation and necessitate
reductions in our
o ability to provide timely and responsive information to support
congressional deliberations;
o testimonies on the Congress's legislative and oversight agenda;
o products containing recommendations for improvements in
government operations;
o analyses of executive branch agencies budget justifications to
support appropriations decisions;
o support on reauthorization activities for pending programs, such
as the farm bill, Head Start, the Children's Health Insurance
Program, and the No Child Left Behind Act; and
o oversight of legislative branch programs, including the Capitol
Visitor Center.
In an effort to identify areas for potential improvement and help
ensure accountability, we plan to contract with a public
accounting firm in fiscal year 2008 to conduct a peer review of
our financial audit practice and have an international team of
auditors conduct an external peer review of our performance audit
practices. GAO has received clean opinions on its previous
external peer reviews. Consistent with generally accepted
governmental auditing standards, external peer reviews are
conducted on a 3-year cycle and serve to validate that the
Congress and the American people can rely on our work and
products.
In recent years, GAO has worked cooperatively with the
appropriation committees to submit modest budget requests. During
this period, and for a variety of reasons, GAO has gone from the
largest legislative branch agency to the third largest in terms of
total budgetary resources. Adjusting for inflation, GAO's budget
authority has declined by 3 percent in constant fiscal year 2006
dollars since fiscal year 2003, as shown in figure 1. These modest
budget results do not adequately recognize the return on
investment that GAO has been able to generate. In fact, these
increases have hampered our progress in rebuilding from the
downsizing (40 percent reduction in staffing levels) and mandated
funding reductions that occurred in the 1990s. Although GAO's
fiscal year 2008 budget request represents a 7 percent increase in
constant dollar terms over our fiscal year 2007 operating plan, it
is one of the smallest increases requested in the legislative
branch.
Figure 1: Budget Authority in Fiscal Year 2006 Dollars and Full-Time
Equivalent (FTE) Usage, Fiscal Years 1992-2007
Shortly after I was appointed Comptroller General in November 1998, I
determined that the agency should undertake a major transformation effort.
As a result, GAO has become more results-oriented, partnerial, and client
focused. With your support, we have made strategic investments; realigned
the organization; streamlined our business processes; modernized our
performance classification, compensation, and reward systems; enhanced our
ability to attract, retain and reward top talent; enhanced the technology
and infrastructure supporting our staff and systems; and made other key
investments. These transformational efforts have allowed GAO to model best
practices, lead by example, and provide significant support to
Congressional hearings, while achieving record results and very high
client satisfaction ratings without significant increases in funding.
We have taken a number of steps to deal with funding shortfalls in the
past few years; however, we cannot continue to employ the same approaches.
Our staff has become increasingly stretched and we are experiencing
backlogs in several areas of critical importance to the Congress (e.g.,
health care, homeland security, energy and natural resources). In
addition, we have deferred key initiatives and technology upgrades (e.g.,
engagement and administrative process upgrades) for several years and it
would not be prudent to continue to do so. These actions are having an
adverse effect on employee morale, our ability to produce results, and the
return on investment that we can generate.
There is a need for fundamental and dramatic reform to address what the
government does, how it does business, and who will do the government's
business. Our support to the Congress will likely prove even more critical
because of the pressures created by our nation's current and projected
budget deficit and growing long-term fiscal imbalance. Also, as we face
current and projected supply and demand imbalance issues and a growing
workload over the coming years across a wide spectrum of issues, GAO will
be unable to respond to congressional demands without a significant
investment in our future. We have exhausted the results that we can
achieve based on prior investments. Our ability to continue to produce
record results and assist the Congress in discharging its Constitutional
responsibilities relating to authorization, appropriations, oversight, and
other matters will be adversely impacted unless we take action now.
Therefore, our fiscal year 2008 budget request is designed to restore
GAO's funding to more reasonable operating levels. Specifically, we are
requesting fiscal year 2008 budget authority of $530 million, an 8.5
percent increase over our fiscal year 2007 funding level. The additional
funds provided in fiscal year 2007 have helped reduce our requested
increase for fiscal year 2008 from 9.4 percent to 8.5 percent. This
funding level also represents a reduction below the request we submitted
to the Office of Management and Budget (OMB) in January as a result of
targeted adjustments to our planned fiscal year 2008 hiring plan. Our
fiscal year 2008 budget request will allow us to achieve our performance
goals to support the Congress as outlined in our strategic plan1 and
rebuild our workforce capacity to allow us to better respond to supply and
demand imbalances in responding to congressional requests. This funding
will also help us address our caseload for bid protest filings, which have
increased by more than 10 percent from fiscal years 2002 through 2006. Our
workload for the first quarter of fiscal year 2007 suggests a continuation
of this upward trend in bid protest fillings.
1In March 2007, we issued our updated strategic plan covering fiscal years
2007-2012 to reflect the agenda for the 110th Congress.
We will be seeking your commitment and support to provide the funding
needed to increase GAO's staffing level to a to be determined number not
to exceed 3,750 over the next 6 years in order to address critical needs
including supply and demand imbalances, high-risk areas, 21st Century
Challenges questions, and other areas in need of fundamental reform. Also,
as we get closer to when GAO may be able to render our opinion on the
consolidated financial statements of the U. S. government and the
Department of Defense's financial management and related systems, we will
need to increase our workforce capacity. We will be providing the Congress
additional information on the basis for and nature of this target later
this year.
In addition, should the Congress decide whether and to what extent to
create a technology assessment capability within the legislative branch,
it would be more cost beneficial to establish it within GAO than to create
a new entity with its own support structure. GAO has effectively conducted
some technology assessments, at the request of the Congress, in part to
serve as a beta to determine whether GAO might be an appropriate agency to
do that work. To establish a basic capability to conduct one assessment
annually, GAO would require four additional full-time staff and funding to
obtain contract assistance or provide expertise not readily available
within GAO. For higher demands, additional technology assessment requests
would require incremental additional resources --depending on economies of
scale, timing, and scope of work.
Importantly, as I noted last year, we also plan to request legislation
that will assist GAO in performing its mission work, and enhance our human
capital policies, including addressing certain compensation and benefits
issues of interest to our employees. We plan to submit our proposal to our
Senate and House authorization and oversight committees in the near
future.
My testimony today will focus on key efforts that GAO has undertaken to
support the Congress, our fiscal year 2006 performance results, our budget
request for fiscal year 2008 to support the Congress and serve the
American people, and proposed legislative changes.
Key Efforts to Support the Congress
As is the case with each new Congress, we are beginning to have
discussions with regard to many new requests for GAO's professional,
objective, fact-based, nonpartisan, and non-ideological information,
analysis, and recommendations. On November 17, 2006, I was pleased to
offer three sets of recommendations for your consideration as part of the
agenda of the 110th Congress. The first recommendation suggests targets
for near-term oversight; the second proposes policies and programs in need
of fundamental reform and re-engineering; the third lists governing
issues. The proposals represent an effort to synthesize GAO's
institutional knowledge and special expertise and suggest both the breadth
and the depth of the issues facing the new Congress. We at GAO stand ready
to assist the 110th Congress in meeting its constitutional
responsibilities. To be effective, congressional hearings and other
activities should offer opportunities to share best practices, facilitate
governmentwide transformation, and promote accountability for delivering
positive results.
On January 9, 2007, we presented GAO's assessment of the key oversight
issues related to Iraq for consideration in developing the oversight
agenda of the 110th Congress and in analyzing the President's revised
strategy for Iraq. This assessment was based on our ongoing work and the
67 Iraq-related reports and testimonies we have provided to the Congress
since May 2003. Our work spans the security, political, economic, and
reconstruction prongs of the U.S. national strategy in Iraq. The broad,
crosscutting nature of this work helps minimize the possibility of overlap
and duplication by any individual inspector general. Our work has focused
on the U.S. strategy and costs of operating in Iraq, training and
equipping the Iraqi security forces, governance and reconstruction issues,
the readiness of U.S. military forces, and achieving desired acquisition
outcomes. Our current work draws on our past work and regular site visits
to Iraq and the surrounding region, such as Jordan and Kuwait. We plan to
establish a presence in Iraq beginning later this fiscal year to provide
additional oversight of issues deemed important to the Congress; subject
to approval by the U.S. Department of State and adequate funding. We have
requested supplemental fiscal year 2007 funds of $374,000 to support this
effort.
In January of this year, we also issued our High-Risk Series: An Update,
which identifies federal areas and programs at risk of fraud, waste,
abuse, and mismanagement and those in need of broad-based transformations.
The issues affecting many of these areas and programs may take years to
address, and the report will serve as a useful guide for the Congress's
future programmatic deliberations and oversight activities. Issued to
coincide with the start of each new Congress, our high-risk update, first
issued in 1993, has helped Members of the Congress who are responsible for
oversight and executive branch officials who are accountable for
performance. Our high-risk program focuses on major government programs
and operations that need urgent attention or transformation to ensure that
our government functions in the most economical, efficient, and effective
manner possible. Overall, our high-risk program has served to identify and
help resolve a range of serious weaknesses that involve substantial
resources and provide critical services to the public. Table 1 details our
2007 high-risk list.
Table 1: GAO's 2007 High-Risk List
Year designated high
2007 high-risk area risk
Addressing challenges in broad-based transformations
Strategic Human Capital Managementa 2001
Managing Federal Real Propertya 2003
Protecting the Federal Government's Information 1997
Systems and the Nation's Critical Infrastructures
Implementing and Transforming the Department of 2003
Homeland Security
Establishing Appropriate and Effective 2005
Information-Sharing Mechanisms to Improve Homeland
Security
Department of Defense (DOD) Approach to Business 2005
Transformationa
DOD Business Systems Modernization 1995
DOD Personnel Security Clearance Program 2005
DOD Support Infrastructure Management 1997
DOD Financial Management 1995
DOD Supply Chain Management (formerly Inventory 1990
Management)
DOD Weapon Systems Acquisition 1990
Federal Aviation Administration Air Traffic Control 1995
Modernization
Financing the Nation's Transportation Systema (New) 2007
Ensuring the Effective Protection of Technologies 2007
Critical to U.S. National Security Interestsa (New)
Transforming Federal Oversight of Food Safetya (New) 2007
Managing federal contracting more effectively
DOD Contract Management 1992
Department of Energy Contract Management 1990
National Aeronautics and Space Administration 1990
Contract Management
Management of Interagency Contracting 2005
Assessing the efficiency and effectiveness of tax law
administration
Enforcement of Tax Lawsa 1990
Internal Revenue Service (IRS) Business Systems 1995
Modernization
Modernizing and safeguarding insurance and benefit
programs
Modernizing Federal Disability Programsa 2003
Pension Benefit Guaranty Corporation Single-Employer 2003
Insurance Programa
Medicare Programa 1990
Medicaid Programa 2003
National Flood Insurance Program 2006
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.
In February of this year, we issued a new publication entitled Fiscal
Stewardship: A Critical Challenge Facing Our Nation that is designed to
provide the Congress and the American public, in a relatively brief and
understandable form, selected budget and financial information regarding
our nation's current financial condition, long-term fiscal outlook, and
possible ways forward. In the years ahead, our support to the Congress
will likely prove even more critical because of the pressures created by
our nation's current and projected budget deficit and growing long-term
fiscal imbalance. Indeed, as the Congress considers those fiscal
pressures, it will be grappling with tough choices about what government
does, how it does business, and who will do the government's business. GAO
is an invaluable tool for helping the Congress review, reprioritize, and
revise existing mandatory and discretionary spending programs and tax
policies.
In addition, I have participated in a series of town hall forums around
the nation to discuss the federal government's current financial condition
and deteriorating long-term fiscal outlook, including the challenges posed
by known long-term demographic trends and rising health care costs. These
forums, popularly referred to as the "Fiscal Wake-up Tour," are led by the
Concord Coalition and also include the Heritage Foundation, the Brookings
Institution, and a range of "good government" groups. The Fiscal Wake-up
Tour states the facts regarding the nation's current financial condition
and long-term fiscal outlook in order to increase public awareness and
accelerate actions by appropriate federal, state, and local officials.
Performance, Results, and Plans
We anticipate that the funds requested for fiscal year 2008 will support
efforts similar to those just completed in fiscal year 2006. The following
discussions summarize that work.
In fiscal year 2006, major events like the nation's recovery from natural
disasters, ongoing military conflicts abroad, terrorist threats, and
potential pandemics repeatedly focused the public eye on the federal
government's ability to operate effectively and efficiently and provide
services to Americans when needed. Our work during the year helped the
Congress and the public judge how well the federal government performed
its functions and consider alternative approaches for improving operations
and laws when performance was less than adequate. For example, teams
supporting all three of our external strategic goals performed work
related to every facet of the Hurricane Katrina and Rita
disasters--preparedness, response, recovery, long-term recovery, and
mitigation. We developed a coordinated and integrated approach to ensure
that the Congress's need for factual information about disaster
preparedness, response, recovery, and reconstruction activities along the
Gulf Coast was met. We examined how federal funds were used during and
after the disaster and identified the disaster rescue, relief, and
rebuilding processes that worked well and not so well throughout the
effort. To do this, staff drawn from across the agency spent time in the
hardest hit areas of Louisiana, Mississippi, Alabama, and Texas,
collecting information from government officials at the federal, state,
and local levels as well as from private organizations assisting with this
emergency management effort. We briefed congressional staff on our
preliminary observations early in fiscal year 2006 and subsequently issued
over 30 reports and testimonies on Hurricanes Katrina and Rita by fiscal
year end, focusing on, among other issues, minimizing fraud, waste, and
abuse in disaster assistance and rebuilding the New Orleans hospital care
system.
The following tables provide summary information on GAO's fiscal year 2006
performance and the results achieved in support of the Congress and the
American people. Additional information on our performance results can be
found in Performance and Accountability Highlights Fiscal Year 2006 at
www.gao.gov.
Table 2 provides examples of how GAO assisted the nation in fiscal year
2006.
Table 2: Examples of How GAO Assisted the Nation in Fiscal Year 2006
GAO provided information that helped
Goal Description to...
1 Provide timely, quality service o protect Social Security numbers
to the Congress and the federal from abuse
government to address current o ensure the effectiveness of
and emerging challenges to the federal investments in science,
well-being and financial technology, engineering, and
security of the American people mathematics education programs
o identify actions needed to
improve Federal Emergency
Management Agency and Red Cross
coordination for the 2006
hurricane season
o highlight weaknesses in the
Department of Health and Human
Services' communications with
beneficiaries about the new
Medicare prescription drug benefit
o identify funding formula and
drug pricing disparities in the
federal AIDS/HIV program
o strengthen the oversight of
clinical laboratories
o identify challenges the
Department of Homeland Security
faces in controlling illegal
immigration into the United States
o assess the thoroughness of the
federal fair housing complaint and
investigation processes
o improve the management of
federal oil and natural gas
royalty revenue
o develop a strategy for managing
wildfires
o focus on the short- and
long-term challenges of financing
the nation's transportation
infrastructure
o identify outdated mail delivery
performance standards used by the
U.S. Postal Service
2 Provide timely, quality service o identify current and future
to the Congress and the federal funding and cost issues related to
government to respond to DOD operations in Iraq and
changing security threats and Afghanistan
the challenges of global o highlight inefficiencies that
interdependence could hinder DOD's efforts to
reform its business operations
o improve controls over the
issuance of passports and visas
and increase fraud prevention
o improve catastrophic disaster
preparedness, response, and
recovery
o improve the ability of federal
agencies to cost effectively
acquire goods and services
o improve the management of
payments to U.S. producers injured
financially by unfairly traded
imports
o alert the Congress to companies
that are marketing costly mutual
fund products with low returns to
military service members
o identify steps needed to
overhaul investment and management
processes supporting major DOD
acquisitions
o improve security at nuclear
power plants
o improve the Department of
Homeland Security's ability to
detect nuclear smuggling at U.S.
ports
o promote government efforts to
secure sensitive systems and
information
o highlight the cost concerns of
small public companies that must
comply with internal control and
auditing provisions of the
Sarbanes-Oxley Act
3 Help transform the federal o improve congressional oversight
government's role and how it of the process for reviewing
does business to meet 21st foreign direct investment
century challenges o strengthen DOD's information
systems modernization efforts
o highlight serious technical and
cost challenges affecting the
purchase of a critical weather
satellite
o highlight key practices federal
agencies should adopt to prevent
data breaches and better protect
the personal information of U.S.
citizens
o monitor the development of the
2010 decennial census
o identify strategies to reduce
the gap between the taxes citizens
pay and the taxes actually owed
o focus attention on the revenue
consequences of tax expenditures
o identify fraud, waste, and abuse
in a component of the Federal
Emergency Management Agency's
disaster assistance program
o emphasize the importance of
reliable cost information for
improving governmentwide cost
efficiency
o expose government contractors
who used for personal gain federal
payroll taxes withheld from their
employees
4 Maximize the value of GAO by o foster among other federal
being a model federal agency agencies GAO's innovative human
and a world-class professional capital practices, such as broad
services organization pay bands; performance-based
compensation; and workforce
planning and staffing strategies,
policies, and processes
o share GAO's model business and
management processes with
counterpart organizations in the
United States and abroad
Source: GAO.
Outcomes of Our Work and the Road Ahead
During fiscal year 2006, we used 16 annual performance measures that
capture the results of our work; the assistance we provided to the
Congress; our ability to attract, retain, develop, and lead a highly
professional workforce; and how well our internal administrative services
help employees get their jobs done and improve their work life (see table
3). We generally exceeded the targets we set for all of our performance
measures, which indicate our ability to produce results for the nation and
serve the Congress.
Table 3: Agencywide Summary of Annual Measures and Targets
Performance 2005 2006 2008
measures 2002Actual 2003Actual 2004Actual Actual Actual 2007Target Target
Results
Financial $37.7 $35.4 $44.0 $39.6 $51.0 $40.0 $41.5
benefits
(dollars in
billions)
Nonfinancial 906 1,043 1,197 1,409 1,342 1,100 1,150
benefits
Past 79% 82% 83% 85% 82% 80% 80%
recommendations
implemented
New products 53% 55% 63% 63% 65% 60% 60%
with
recommendations
Client
Testimonies 216 189 217 179 240 185 220
Timeliness 96% 97% 97% 97% 92% 95% 95%
People
New hire rate 96% 98% 98% 94% 94% 95% 95%
Acceptance rate 81% 72% 72% 71% 70% 72% 72%
Retention rate 91% 92% 90% 90% 90% 90% 90%
with
retirements
Retention rate 97% 96% 95% 94% 94% 94% 94%
without
retirements
Staff 71% 67% 70% 72% 76% 75% 76%
development
Staff 67% 71% 72% 75% 75% 78% 78%
utilization
Leadership 75% 78% 79% 80% 79% 80% 80%
Organizational 67% 71% 74% 76% 73% 76% 76%
climate
Internal
operations
Help get job N/A 3.98 4.01 4.10 4.1 4.0 4.0
done
Quality of work N/A 3.86 3.96 3.98 4.0 4.0 4.0
life
Source: GAO.
Note: N/A indicates the information is not available.
In fiscal year 2006, our work generated $51 billion in financial benefits,
primarily from actions agencies and the Congress took in response to our
recommendations. Of this amount, about $27 billion resulted from changes
to laws or regulations, $10 billion resulted from agency actions based on
our recommendations to improve services to the public, and $14 billion
resulted from improvements to core business processes. See figure 2 for
examples of our fiscal year 2006 financial benefits.
Figure 2: GAO's Selected Major Financial Benefits Reported in Fiscal Year
2006
Description Amount
Ensured continued monetary benefits from federal spectrum auctions. $6.1
Encouraged DOD to identify and reduce unobligated funds in the 3.9
military services' operations and maintenance budget.
Recommended payment methods that cut Medicare costs for durable 2.9
medical equipment, orthotics, and prosthetics.
Helped to ensure that certain U.S. Postal Service 2.2
retirement-related benefits would be funded.
Identified recoverable costs for the Tennessee Valley Authority. 1.8
Helped to increase collections of civil debt. 1.6
Encouraged the Department of Housing and Urban Development to take 1.4
actions to reduce improper payments.
Supported the Department of Energy's efforts to reduce its 1.2
carryover funds.
Source: GAO.
Many of the benefits that result from our work cannot be measured in
dollar terms. During fiscal year 2006, we recorded a total of 1,342
nonfinancial benefits. For example, we documented 61 instances where
information we provided to the Congress resulted in statutory or
regulatory changes, 667 instances where federal agencies improved services
to the public, and 614 instances where agencies improved core business
processes or governmentwide reforms were advanced. These actions spanned
the full spectrum of national issues, from identifying the adverse tax
impact of combat pay and certain tax credits on low-income military
families to improving the Department of State's process for developing
staffing projections for new embassies. See figure 3 for additional
examples of GAO's nonfinancial benefits in fiscal year 2006.
Figure 3: GAO's Selected Nonfinancial Benefits Reported in Fiscal Year
2006
Nonfinancial benefits that helped to change laws
Deficit Reduction Act of 2005, Pub. L. No. 109-171. Our work is reflected
in this law in different ways.
o Strengthened Medicaid program integrity.
o Improved oversight of the states' performance under the Temporary
Assistance for Needy Families program.
o Addressed domestic violence.
o Improved oversight of schools that are lenders.
Safe and Timely Interstate Placement of Foster Children Act of 2006, Pub.
L. No. 109-239
Nonfinancial benefits that helped to improve services to the public
Strengthened passport and visa issuance processes.
Identified vulnerabilities in the process to verify personal information
about new drivers.
Contributed to the increased visibility of a transportation information
sharing program for seniors.
Identified a problem with untimely pay allowances to deployed soldiers.
Nonfinancial benefits that helped to promote sound agency and
governmentwide management
Improved the quality of federal voluntary voting system standards.
Highlighted weaknesses in the Federal Aviation Administration's control
over computers and other assets.
Strengthened oversight of federal personnel actions.
Encouraged federal agencies to seek savings on purchase cards.
Identified improper payments in DOD's travel accounts.
Source: GAO.
During fiscal year 2006, experts from our staff testified at 240
congressional hearings covering a wide range of complex issues (see table
4). For example, our senior executives testified on a variety of issues,
including freight rail rates, AIDS assistance programs, and federal
contracting. Over 100 of the hearings at which we testified were related
to areas and programs we designated as high risk.
Table 4: GAO's Selected Testimony Issues by Strategic Goal, Fiscal Year
2006
Goal 1: Address Challenges to the Well-Being and Financial Security of the
American People
o Health savings o Nursing home care o Hartford nuclear
accounts for veterans waste treatment plant
o Guardianships o Passenger rail o Evaluations of
that protect security issues supplemental
incapacitated o Freight railroad educational services
seniors rates o Factors affecting
o Lake o AIDS drug gasoline prices
Pontchartrain assistance programs o Telecommunication
hurricane o Federal Housing spectrum reform
protection project Administration o H-1B visa program
o Funds to first reforms o Federal crop
responders for 9/11 o Improving insurance program
health problems intermodal
o Immigration transportation
enforcement at work
o sites
o Future air
transportation
system
Goal 2: Respond to Changing Security Threats and the Challenges of
Globalization
o A comprehensive o Alternative o Polar-orbiting
strategy to rebuild mortgage products operational
Iraq o Global war on environmental
o Deploying terrorism costs satellites
radiation detection o Transportation o Worldwide AIDS relief
equipment in other Security plan
countries Administration's o Financial stability
o Protecting Secure Flight program and management of the
military personnel o DOD's business National Flood
from unscrupulous systems modernization Insurance Program
financial products o U.S. tactical o Information security
o Sensitive aircraft laws
information at DOD o National Capital o Procurement controls
and the Department Region Homeland at the United Nations
of Energy Security Strategic
o Hurricane Katrina Plan
preparedness,
response, and
recovery
Goal 3: Help Transform the Federal Government's Role and How It Does
Business
o Contract o Improving tax o Strengthening the
management compliance to reduce Office of Personnel
challenges in the tax gap Management's ability to
rebuilding Iraq o Protecting the lead human capital
o DOD's financial privacy of personal reform
and business information o Public/private
management o DOD acquisition recovery plan for the
transformation incentives Internet
o Business tax o Decennial Census o Tax system abuses by
reform costs General Services
o Astronaut o Information Administration
exploration vehicle security weaknesses contractors
risks at the Department of o Compensation for
o Improving federal Veterans Affairs federal executives and
financial o Improper federal judges
management payments for
governmentwide Hurricane Katrina
o Long-term fiscal relief
challenges
o Federal
contracting during
disasters
Source: GAO.
GAO's Fiscal Year 2008 Request to Support the Congress
Our fiscal year 2008 budget request seeks the resources necessary to allow
GAO to rebuild and enhance its workforce, knowledge capacity, employee
programs, and infrastructure. These items are critical to ensure that GAO
can continue to provide congressional clients with timely, objective, and
reliable information on how well government programs and policies are
working and, when needed, recommendations for improvement. In the years
ahead, our support to the Congress will likely prove even more critical
because of the pressures created by our nation's current and projected
budget deficit and growing long-term fiscal imbalance. GAO is an
invaluable tool for helping the Congress review, reprioritize, and revise
existing mandatory and discretionary spending programs and tax policies.
Consistent with our strategic goal to be a model agency, we continuously
assess our operations to ensure that GAO remains an effective,
high-performing organization, providing timely, critical support to the
Congress while being fiscally responsive. Our objective is to be an
employer of choice; maintain skills/knowledge, performance-based, and
market-oriented compensation systems; adopt best practices; benchmark
service levels and costs against comparable entities; streamline our
operations to achieve efficiencies; assess opportunities for
cross-servicing, outsourcing, or business process re-engineering; and
leverage technology to increase efficiency, productivity, and results. We
also continue to partner within and across the legislative branch through
the legislative branch Chief Administrative Officers, financial
management, and procurement councils.
Transformational change and innovation is essential for progress. Our
fiscal year 2008 budget request includes funds to regain the momentum
needed to achieve these goals. Our fiscal year 2008 budget request will
allow GAO to
o address supply and demand imbalances in responding to
congressional requests for studies in areas such as health care,
homeland security, the global "war on terrorism," energy and
natural resources, and forensic auditing;
o address our increasing bid protest workload;
o be more competitive in the labor markets where GAO competes for
talent;
o address critical human capital components, such as knowledge
capacity building, succession planning, and staff skills and
competencies;
o enhance employee recruitment, retention, and development
programs;
o restore program funding levels and regain our purchasing power;
o undertake critical initiatives necessary to continuously
re-engineer processes geared to increasing our productivity and
effectiveness and addressing identified management challenges; and
o pursue critical structural and infrastructure maintenance and
improvements.
Our fiscal year 2008 budget request represents an increase of
$41.7 million (or 8.5 percent) over our fiscal year 2007 funding
level and includes about $523 million in direct appropriations and
authority to use about $7.5 million in offsetting collections as
illustrated in table 5. This request reflects a reduction of
nearly $5.4 million in nonrecurring fiscal year 2007 costs used to
offset the fiscal year 2008 increase.
Table 5: Fiscal Year 2008 Budget Request, Summary of Requested
Changes
Dollars in thousands
Cumulative
Budget category FTEs Amount percentage of change
FY 2007 enacted budget authority 3,159 $488,627
FY 2008 requested changes
Nonrecurring FY 2007 costs ($5,374) (1.1%)
Mandatory pay costs 19,841 3.0%
Uncontrollable cost increases 5,079 4.0%
Rebuild our capacity 58 14,826 7.0%
Critical investments in technology
improvements and other
transformationareas 7,314 8.5%
Net FY 2008 increase 58 $41,686 8.5%
FY 2008 budget authority 3,217 $530,313
Source: GAO.
Mandatory pay and uncontrollable cost increases. We are requesting
$24.9 million to cover anticipated mandatory performance-based pay
and uncontrollable inflationary increases resulting primarily from
annual across-the-board and performance-based increases,
annualization of prior fiscal year costs, and an increase in the
number of compensable days in fiscal year 2008. These costs also
include uncontrollable inflationary increases imposed by vendors
as the cost of doing business.
Rebuilding our capacity. Our fiscal year 2007 budget request
sought funds to support an increase of 50 FTEs from 3,217 to
3,267. However, in order to manage within expected funding levels
in fiscal year 2007, we will significantly curtail hiring by about
50 percent below the previous year, resulting in a projected FTE
utilization of 3,159--well below our planned level. In fiscal
years 2007 and 2008, we anticipate attrition of over 600 staff
that will result in a significant drain on GAO's knowledge
capacity or institutional memory. Further, almost 20 percent of
all GAO staff will be eligible for retirement by the end of fiscal
year 2008, including almost 45 percent of our senior executive
service.
Thus, in fiscal year 2008, we are seeking funds to rebuild our
staff and knowledge capacity. In fiscal year 2008, we plan to hire
about 490 staff--the maximum that we could reasonably
absorb--increasing our FTE utilization to 3,217. While we are
tempering our immediate FTE request, increasingly higher demands
are being placed on GAO. We are experiencing supply and demand
imbalances in several areas of critical importance to the Congress
(e.g., health care, homeland security, and energy and natural
resources). We have also seen an increase in the number of bid
protest filings.
Also, to remain competitive in the labor markets, we need to
increase employee benefits in areas such as student loan
repayments and transit subsidies where funding constraints in
fiscal year 2007 limit our flexibility. For example, effective in
January 2007, the IRS increased the monthly benefit for transit
subsidies for eligible employees who commute using public
transportation. GAO, however, is unable to extend this increased
benefit to staff.
In addition, we need to ensure that staff have the appropriate
tools and resources to perform effectively, including training and
development, travel funds, and technology. And when our staff
perform well, they should be appropriately rewarded.
Undertake critical investments. We are requesting funds to
undertake critical investments that would allow us to implement
technology improvements and streamline and re-engineer work
processes to enhance the productivity and effectiveness of our
staff, conduct essential investments that have been deferred as
the result of funding constraints and cannot continue to be
deferred, and implement responses to changing federal conditions,
such as smart card technology. Also, during recent years, we
reduced, deferred, and slowed the pace of critical upgrades (e.g.,
engagement and administrative process upgrades) and deferred
nonessential administrative activities. In fiscal year 2008, we
would like to have sufficient funding to take action to protect
our current investments and continue to be a model agency and lead
by example.
Legislative authority. We are requesting legislation to establish
a Board of Contract Appeals at GAO to adjudicate contract claims
involving contracts awarded by legislative branch agencies. GAO
has performed this function on an ad hoc basis over the years for
appeals of claims from decisions of the Architect of the Capitol
on contracts that it awards. Recently we have agreed to handle
claims arising under Government Printing Office contracts. The
legislative proposal would promote efficiency and predictability
in the resolution of contractor and agency claims by consolidating
such work in an established and experienced adjudicative component
of GAO and would permit GAO to recover its costs of providing such
adjudicative services from legislative branch users of such
services.
We also plan to request legislation that will assist GAO in
performing its mission work and enhance our human capital
policies, including addressing certain compensation and benefits
issues of interest to our employees. While there are a number of
important provisions, today I will only discuss several of the
significant ones. Regarding provisions concerned with mission
work, we have identified a number of legislative mandates that are
either no longer meeting the purpose intended or should be
performed by an entity other than GAO. We are working with the
cognizant entities and the appropriate authorization and oversight
committees to discuss the potential impact of legislative relief
for these issues.
Another provision would update the existing authority of the
Comptroller General to administer oaths when appropriate for an
audit or investigation. The Comptroller General has long had the
authority to "administer oaths to witnesses when auditing and
settling accounts".2 Because of the variety of audits and
investigations GAO now performs, we propose the deletion of "when
auditing and settling accounts" so that in those limited
circumstances where appropriate, the Comptroller General may
authorize the administration of oaths to witnesses. To keep the
Congress apprized of difficulties we have interviewing agency
personnel and obtaining agency views on matters related to ongoing
mission work, we will suggest new reporting requirements. When
agencies or other entities ignore a request by the Comptroller
General to have personnel provide information under oath, make
personnel available for interviews, or provide written answers to
questions, the Comptroller General would report to the Congress as
soon as practicable and also include such information in the
annual report to the Congress.
231 U.S.C. 711(4).
In regard to GAO's human capital flexibilities, among other
provisions, we are proposing a flexibility that allows us to
better approximate market rates for professional positions by
increasing our maximum pay for other than the Senior Executive
Service and Senior Level from GS-15, step 10, to Executive Level
III. Additionally, under our revised and contemporary merit pay
system, certain portions of an employee's merit increase, below
applicable market-based pay caps, are not permanent. Since this
may impact an employee's high three for retirement purposes,
another key provision of the bill would enable these nonpermanent
payments to be included in the retirement calculation for all GAO
employees, except senior executives and senior level personnel.
Concluding Remarks
In summary, I believe that you will find our budget request
reasonable, responsible, and well-justified given the important
role that GAO plays and the unparalleled return on investment that
GAO generates. We are grateful for the Congress's continued
support of our mutual effort to improve government and for
providing the resources that allow us to be a world-class
professional services organization. We are proud of our record
performance and the positive impact we have been able to effect in
government over the past year and believe an investment in GAO
will continue to yield substantial returns for the Congress and
the American people. Our nation will continue to face significant
challenges in the years ahead. GAO's expertise and involvement in
virtually every facet of government positions us to provide the
Congress with the timely, objective, and reliable information it
needs to discharge its constitutional responsibilities.
Madam Chair and Members of the Subcommittee, this concludes my
prepared statement. At this time, I would be pleased to answer any
questions that you or other Members of the Subcommittee may have.
GAO�s Mission
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