United States Government Accountability Office: Supporting the	 
Congress through Oversight, Insight, and Foresight (21-MAR-07,	 
GAO-07-644T).							 
                                                                 
The Committee sought GAO's views on the role GAO has played in	 
assisting congressional oversight and the authorities and	 
resources GAO needs to further improve its assistance to the	 
Congress. Today's testimony discusses some of the ways that GAO  
has helped "set the table" for this Committee, the Congress, the 
executive branch, and the nation to engage in a constructive and 
informed dialogue about the challenges and opportunities our	 
nation is facing in the 21st century. It also discusses the	 
authority and resources GAO will need to address the critical	 
oversight and other needs of the Congress.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-644T					        
    ACCNO:   A67087						        
  TITLE:     United States Government Accountability Office:	      
Supporting the Congress through Oversight, Insight, and Foresight
     DATE:   03/21/2007 
  SUBJECT:   Accountability					 
	     Agency missions					 
	     Congressional oversight				 
	     Federal agencies					 
	     Interagency relations				 
	     Monitoring 					 
	     Strategic planning 				 
	     GAO High Risk Series				 

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GAO-07-644T

   

     * [1]Helping the Congress through Oversight
     * [2]Helping the Congress through Insight
     * [3]Helping the Congress through Foresight
     * [4]Congressional Support to Enhance GAO's Effectiveness
     * [5]GAO's Mission
     * [6]Obtaining Copies of GAO Reports and Testimony

          * [7]Order by Mail or Phone

     * [8]To Report Fraud, Waste, and Abuse in Federal Programs
     * [9]Congressional Relations
     * [10]Public Affairs

Testimony

Before the Committee on Homeland Security and Governmental Affairs, U.S.
Senate

United States Government Accountability Office

GAO

For Release on Delivery
Expected at 9:30 a.m. EDT
Wednesday, March 21, 2007

UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

Supporting the Congress through Oversight, Insight, and Foresight

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

GAO-07-644T

This testimony was amended on March 22, 2007, to correct the legend shown
in Appendix IV. It now correctly reflects FTEs and Budget in FY 2006
dollars. The original testimony reversed the FTE and budget amounts in the
legend.

This testimony was amended on May 16, 2007. The figure in Appendix IV was
updated: the FTE number for FY 2007 was changed to 3,159 from 3,194.

Mr. Chairman, Senator Collins, and Members of the Committee:

I appreciate the invitation to talk with you today about the important
role that GAO plays in supporting the Congress. I believe that GAO is a
key tool for the Congress as it works to improve economy, efficiency,
effectiveness, equity, and ethics within the federal government. I would
like to share with you some of the many ways that GAO has transformed
itself to provide a range of key oversight, insight, and foresight
services to the Congress while "leading by example" in transforming how
government should do business. In this regard, I will highlight some of
the ways that GAO has helped "set the table" for this Committee, the
Congress, the executive branch, and the nation to engage in a constructive
and informed dialogue about the challenges and opportunities we are all
facing in the 21st century.

As this Committee well knows, if the federal government continues on its
current fiscal path it would gradually erode, if not suddenly damage, our
economy, our standard of living, and ultimately even our domestic
tranquility and our national security. To build public awareness of our
fiscal challenges and the hard decisions that must be made, I have engaged
in a number of actions, including participating 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. These
challenges are driven primarily by known long-term demographic trends and
rising health care costs. These town hall forums, and related "outside the
Beltway events," popularly referred to as the "Fiscal Wake-Up Tour," are
led by the Concord Coalition and also include representatives from 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 a
professional and nonpartisan manner in order to increase public awareness
and hopefully accelerate actions by appropriate federal, state, and local
officials.

In addition to the great fiscal challenge we face, the world in which we
live and in which the federal government and the Congress operate is
rapidly changing because of numerous borderless trends, such as
globalization, changing security threats, societal change, and scientific
and technological advancement. These forces are exerting increasing
pressure on the current outmoded state of the federal government,
presenting fundamental and difficult public policy, organizational,
operational, and funding decisions. As such, these trends are driving the
public, the executive branch, and the Congress to engage in a fundamental
reexamination of the government and its priorities. At the center of this
reexamination are basic questions about what the government does, how it
does it, who does it, and how it is financed.

Such a broad and fundamental reexamination of the federal government is
going to test political wills, agency cultures, and oversight frameworks.
As you know, the traditional committee structures loosely aligned with
federal budget categories do not always lend themselves to addressing the
many crosscutting and long-range challenges facing our nation. However,
this Committee is uniquely positioned in the Senate to take the long view
and reach across jurisdictional boundaries to confront the challenges and
capitalize on related opportunities with a unity of spirit and of purpose.
The members of this Committee--and you are not alone in the Congress--have
recognized the importance of oversight in beginning to address our many
21st century challenges. Hearings, investigations, and special studies
that come with oversight can help not only to reveal the underlying causes
of these challenges, but also--importantly--help educate the American
people about the makeup of these challenges so that the nation, and the
Congress, is better prepared to confront them together. In this regard, I
believe that to be effective, congressional oversight needs to be
constructive. For example, related hearings and other activities should
offer opportunities for leading federal agencies to share best practices
and facilitate governmentwide transformation. They should also hold people
accountable for delivering positive results in an economical, efficient,
effective, ethical, and equitable manner. This balanced approach is likely
to help accelerate progress while avoiding a further erosion of the
public's trust and confidence in government.

GAO also seeks to help provide the insight and foresight to complement the
oversight work we have performed for the Congress for many years. Our
oversight work has focused on ensuring that government entities are
spending funds for their intended purposes; and complying with applicable
laws and regulations, and guarding against fraud, waste, abuse, and
mismanagement. Our work also provides important insight on what programs,
policies and questions are working well; best practices to be shared and
benchmarked; how agencies can improve the horizontal linkages across the
silos of government; and how different levels of government and their
nongovernmental partners can become better aligned to achieve important
outcomes for the nation. Finally, our work can provide the Congress with
foresight by highlighting the long-term implications of today's decisions
and identifying key trends and emerging challenges facing our nation
before they reach crisis proportions.

Our work increasingly brings a combination of oversight, insight, and
foresight to bear on our nation's most pressing and important emerging
issues. The following are two recent examples. First, in January 2007, we
issued a report containing a series of issue papers for the Congress to
consider in developing an oversight agenda for securing, stabilizing, and
rebuilding Iraq.1 Those papers built on our ongoing work and the 67
Iraq-related reports and testimonies we have provided to the Congress
since May 2003. By spanning the security, political, economic, and
reconstruction prongs of the U.S. national strategy in Iraq, our work
helps the Congress maximize the benefits of its oversight dollars by
minimizing the possibility of overlap and duplication by any individual
inspector general. Our Iraq work has focused on keeping the Congress
current and informed on key topics of direct interest, such as the U.S.
strategy and costs of operating in Iraq, training and equipping the Iraqi
security forces, selected governance and reconstruction issues, the
readiness of U.S. military forces, and achieving desired acquisition
outcomes.

Second, also in January of this year, we issued a new publication, titled
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.2 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, who will do the government's business, and how
we should measure success. We strive to continue to be an invaluable tool
for helping the Congress review, reprioritize, and revise existing
mandatory and discretionary spending programs and tax policies.

Although our work often entails multiple elements of oversight, insight,
and foresight, I will use these terms as categories to highlight just some
of the ways that GAO has helped in framing the challenges and
opportunities facing the nation, as well as possible ways forward in
addressing them.

1GAO, Securing, Stabilizing, and Rebuilding Iraq: Key Issues for
Congressional Oversight, [11]GAO-07-308SP (Washington, D.C.: Jan. 9,
2007).

2GAO, Fiscal Stewardship: A Critical Challenge Facing Our Nation,
[12]GAO-07-362SP (Washington, D.C.: Jan. 31, 2007).

Helping the Congress through Oversight

GAO's work helps to facilitate holding agencies accountable for delivering
positive results in an economical, efficient, effective, ethical, and
equitable manner. I would like to highlight just a few of our recent
efforts to assist the Congress in identifying and addressing areas for
continued or additional oversight:

Identifying pressing oversight issues for the Congress: On November 17,
2006, I provided three sets of recommendations for consideration as part
of the agenda of the 110th Congress.3 The first set of recommendations
suggested targets for near-term oversight, such as the need to reduce the
tax gap--the difference between the amounts taxpayers pay voluntarily and
on time and what they should pay under the law. The second proposes
policies and programs in need of fundamental reform and reengineering,
such as reforming Medicare and Medicaid to improve their integrity and
sustainability. The third listed various governance issues that need to be
addressed, such as the need for various budget controls and legislative
process revisions in light of current deficits and our long-range fiscal
imbalance. The proposals, which synthesized GAO's institutional knowledge
and special expertise, point to both the breadth and the depth of the
issues facing the Congress. Appendix I provides a complete list of the 36
recommendations in our letter.

Identifying high-risk areas: We provide updates to our list of government
programs and operations that we identify as "high-risk" at the start of
each new Congress to help in setting congressional oversight agendas.
These reports, which have been produced since the early 1990s, have
brought a much-needed oversight focus to a targeted list of major
challenges that are impeding effective government and costing the
government billions of dollars each year. They help the Congress and the
executive branch carry out their responsibilities while improving the
government's performance and enhancing its accountability. In recent
years, we have also identified several high-risk areas to focus on the
need for broad-based transformations to address major economy, efficiency,
effectiveness, relevance, and relative priority challenges. In fact, our
focus on high-risk challenges contributed to the Congress enacting a
series of governmentwide reforms to strengthen financial management;
improve information technology practices; instill a more effective,
credible, and results-oriented government; and address critical human
capital challenges.

3GAO, Suggested Areas for Oversight for the 110th Congress,
[13]GAO-07-235R (Washington, D.C.: Nov. 17, 2006).

Further, our high-risk program has helped sustain attention from members
of the Congress who are responsible for oversight and from executive
branch officials who are accountable for performance. This Committee has a
particular interest in a number of areas on our latest high-risk list. For
example, implementation and transformation of the Department of Homeland
Security (DHS), protecting the federal government's information systems,
establishing appropriate and effective information-sharing mechanisms to
improve homeland security, and Department of Defense (DOD) supply chain
management. In part because of the oversight and legislative efforts of
the Congress, of the 47 areas that have appeared on our high-risk list
since 1990, 18 improved enough to be removed from the list. Such
leadership can be invaluable in identifying and putting in place the kinds
of change needed to address these often long-standing problems.

In our recent January 2007 High-Risk Series update, we added three new
high-risk areas; (1) financing the nation's transportation system, (2)
ensuring the effective protection of technologies critical to U.S.
national security interests, and (3) transforming federal oversight of
food safety. But we also reported that progress had been made in all
existing high-risk areas, and that progress was sufficient in two areas
for us to remove high-risk designation: (1) U.S. Postal Service
transformation efforts and long-term outlook, and (2) HUD single-family
mortgage insurance and rental housing assistance programs. This Committee
has provided valuable leadership to efforts to gain needed improvements in
high-risk areas. In this regard, and, as one example, I want to
acknowledge the key commitment and contribution of this Committee in
passing postal reform legislation last December. This action was one of
the primary reasons we felt that we could take the Postal Service's
transformation and long-term outlook off of our high-risk list in January.
As I have been testifying on the need for comprehensive postal reform
since 2001, I believe that the recently passed legislation will provide
opportunities to build a sound foundation for modernizing the Postal
Service, reassessing the service standards required by the American
people, and ensuring continued affordable universal postal services for
the future. Our work related to areas we have designated as high-risk has
also had a financial impact. In fiscal year 2006 alone, actions by both
the Congress and the executive branch in response to GAO's recommendations
resulted in approximately $22 billion in financial benefits. Appendix II
lists the current high-risk areas.

Identifying systemic federal financial management challenges: As I
testified yesterday, for the 10th consecutive year, GAO was unable to
express an opinion on the federal government's financial statements due to
the government's inability to demonstrate the reliability of significant
portions of the financial statements.4 Federal agencies will need to
overcome three major impediments to our ability to render an opinion on
the federal government's financial statements: (1) resolving serious
weaknesses in DOD's business operations, including pervasive, complex,
long-standing, and deeply rooted financial management weaknesses; (2)
adequately accounting for and reconciling intragovernmental activity and
balances; and (3) developing adequate systems, controls, and procedures to
ensure that the consolidated financial statements are consistent with the
underlying audited agency financial statement, balanced, and in conformity
with generally accepted accounting principles. In testimony earlier this
month,5 I outlined the principal challenges and ideas on how to move
forward to fully realizing world-class financial management in the federal
government. Additionally, I have suggested to the Congress that it may be
time to consider further revisions to the current federal financial
reporting model. Such an effort could address the kind of information that
is most relevant and useful for a sovereign nation; the role of the
balance sheet in federal government reporting; the reporting of items that
are unique to the federal government, such as social insurance commitments
and the power to tax; and the need for additional fiscal sustainability,
intergenerational equity and performance reporting.

Addressing governmentwide acquisition and contracting issues: Acquisition
issues are heavily represented on GAO's list of government high-risk
areas,6 and in the 21st century, the government needs to reexamine and
evaluate both its strategic and tactical approaches to acquisition and
contracting matters. GAO has played an important role in describing the
current state of government contracting, identifying the challenges
agencies face, and recommending specific steps agencies should take to
improve their acquisition and contracting outcomes. I hosted a forum in
July 2006 that brought together experts in the acquisition community from
inside and outside the government to share their insights on challenges
and opportunities for improving federal acquisition outcomes in an
environment of increasing reliance on contractors and severe fiscal
constraint.7 The observations from that forum help frame many of the
federal acquisition workforce challenges that the government is going to
have to wrestle with. In addition, the Congress has assigned GAO the
responsibility for adjudicating protests of agency procurement decisions.
Our bid protest decisions address specific allegations raised by
unsuccessful offerors challenging particular procurement actions as
contrary to procurement laws and regulations. In carrying out this role,
GAO is instrumental not only in resolving the specific cases at hand, but
also helping to focus attention on how various initiatives by both the
Congress and the executive branch are being implemented in practice, and
we provide Congress with assurance of enhanced transparency, performance
and accountability in the federal procurement system.

4GAO, Fiscal Year 2006 U.S. Government Financial Statements: Sustained
Improvement in Federal Financial Management Is Crucial to Addressing Our
Nation's Accountability and Fiscal Stewardship Challenges, [14]GAO-07-607T
(Washington, D.C.: Mar. 20, 2007).

5GAO, Federal Financial Management: Critical Accountability and Fiscal
Stewardship Challenges Facing Our Nation, [15]GAO-07-542T (Washington,
D.C.: Mar. 1, 2007).

6GAO's 2007 high-risk list included contract management at DOD, the
Department of Energy, the National Aeronautics and Space Administration,
and management of interagency contracting.

Investing in GAO's forensic investigation capabilities: This committee
actively encouraged and supported the creation within GAO of the
additional capacity provided by our new Forensic Audits and Special
Investigations (FSI) team in May 2005. This unit integrates the strengths
of GAO's investigative, forensic audit, the FraudNet hotline, and analyst
staff. Since its creation, FSI has performed audits and investigations for
numerous congressional committees focused on fraud, waste, and abuse and
homeland and national security issues. Specifically, for this Committee
and the Permanent Subcommittee on Investigations, FSI has delivered
testimonies highlighting billions of dollars of delinquent federal taxes
owed by government contractors, over $1 billion of potentially fraudulent
and improper hurricane Katrina and Rita individual assistance payments,
tens of millions of dollars of waste associated with misuse of premium
class travel at the State Department, and millions more of waste related
to improper use of government aircraft at the National Aeronautics and
Space Administration. FSI also testified that it was able to smuggle
radioactive materials across the northern and southern borders using
counterfeit documents. Recently, FSI hired a senior-level expert in
procurement fraud, waste, and abuse, giving it the capability to do
targeted work in this area. In fact, the first FSI work in this area is
being performed at the request of this Committee and relates to
allegations of fraud, waste, and abuse by contractors involved in recovery
work following hurricanes Katrina and Rita.

7GAO, Highlights of a GAO Forum: Federal Acquisition Challenges and
Opportunities in the 21st Century, [16]GAO-07-45SP (Washington, D.C.: Oct.
6, 2006).

Helping the Congress through Insight

GAO's work helps to identify programs, policies, and practices that are
working well, and opportunities to improve their linkages across agencies,
across all levels of government, and with nongovernmental partners in
order to achieve positive national outcomes. The following are a few
examples of our recent efforts to assist the Congress with such insight:

Providing a comprehensive framework for congressional oversight of
hurricanes Katrina and Rita: We developed a number of crosscutting and
comprehensive reviews of aspects of the preparedness for, response to, and
recovery from the 2005 Gulf Coast hurricanes. In the immediate aftermath
of the storms, 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 examined how federal funds were used
during and after the disaster and identified the rescue, relief, and
rebuilding processes that worked well and not so well throughout the
effort. We issued over 40 related reports and testimonies to date,
focusing on, among other issues, minimizing fraud, waste, and abuse in
disaster assistance; rebuilding the New Orleans hospital care system; and
developing the capabilities needed to respond to and recover from future
catastrophic disasters. Building on this work, we continue to support your
Committee and others through a range of audit and evaluation engagements
to examine federal programs that provide rebuilding assistance to the Gulf
Coast, including the federal government's contribution to the rebuilding
effort and the role it might play over the long term. We are examining
lessons learned from past national emergencies and catastrophic
disasters--both at home and abroad--that may prove useful in identifying
ways to approach rebuilding.

Recommending improved management structures for enhancing performance and
ensuring accountability: We have identified a chief operating officer
(COO)/chief management officer (CMO) position as one approach for building
the necessary leadership and management structure that could be used to
help to elevate, integrate, and institutionalize responsibility for key
functional management initiatives, and provide the continuing, focused
attention essential to successfully completing multiyear, high-risk,
business transformations.8 Such a COO/CMO position could be useful in
selected agencies with significant transformation and integration
challenges, such as DOD, DHS, and the Office of the Director of National
Intelligence (ODNI), and would improve accountability within those
agencies and to the Congress for outstanding business challenges. In that
regard, I was pleased to see that an amendment creating a Deputy Secretary
for Management position at DHS was recently accepted by the Senate as part
of the proposed Improving America's Security Act of 2007, and that a
similar position would be established in DOD with other legislation
recently introduced in the Senate. As you know, in 2005, we reported that
as currently structured, the roles and responsibilities of the DHS Under
Secretary for Management contained some of the characteristics of a
COO/CMO, but we suggested that the Congress should consider whether a
revised organizational arrangement is needed at DHS to fully capture the
roles and responsibilities of a COO/CMO position.9 While I believe that a
COO/CMO position is highly desirable within DHS and ODNI, I believe it is
essential for a successful business transformation effort within DOD.

Developing a framework for human capital reform: In recent years, many
federal agencies, including DOD, DHS, and GAO, have achieved various
legislative flexibilities in the human capital area. Others are seeking
such authorities, and a risk exists that the system relating to civil
servants will fragment over time. In order to help prevent such a
fragmentation and guide human capital reform efforts, we have proposed
that there should be a governmentwide framework. A forum that I hosted in
2004 outlined a set of principles, criteria, and processes that establish
boundaries and checks while also allowing needed flexibility to manage
agency workforces. To help build on this framework, we have provided
information on the statutory human capital authorities that the Congress
has already provided to numerous federal agencies. Given that there is
widespread recognition that a "one size fits all" approach to human
capital management is not appropriate for the challenges and demands
government faces, we have proposed a phased approach to reform--a "show
me" test--that requires agencies to demonstrate institutional readiness
before they are allowed to implement major human capital reforms. That is,
each agency should demonstrate that it has met certain conditions before
it is authorized to undertake significant human capital reforms, such as
linking pay to performance. The Congress used this approach in the
establishment of a new performance management system for the Senior
Executive Service (SES), which required agencies' systems to be certified
before allowing a higher pay range for SES members. Using a governmentwide
framework to advance needed human capital reform should be beneficial as
the federal government continues to transform how it classifies,
compensates, develops, and motivates its employees to achieve maximum
results within available resources and existing authorities.

8GAO, Highlights of a GAO Roundtable: The Chief Operating Officer Concept:
A Potential Strategy to Address Federal Governance Challenges,
[17]GAO-03-192SP (Washington, D.C.: Oct. 4, 2002).

9GAO, Department of Homeland Security: A Comprehensive and Sustained
Approach Needed to Achieve Management Integration, [18]GAO-05-139
(Washington, D.C.: Mar. 16, 2005).

Key national indicators initiative: A set of key and outcome-based
national indicators can help to assess the overall position and progress
of our nation in key areas, frame strategic issues, support more informed
policy choices, and enhance accountability. A cooperative initiative to
develop a key national indicator system emerged after we, in cooperation
with the National Academies, convened a forum in February 2003.10 This
initiative is attempting to develop a key national indicator system for
the United States.11 In response to congressional interest in building
upon lessons learned from other efforts both around the country and
worldwide, we reported in November 2004 on the current state of the
practice of developing comprehensive key indicator systems, identifying
design features and organizational options for such a system in the United
States. We have also helped increase international understanding and use
of indicator systems, such as through my participation in the Organisation
for Economic Co-operation and Development's (OECD) First World Forum on
Key Indicators in 2004 and through my upcoming participation in OECD's
Second World Forum, Measuring and Fostering the Progress of Societies, in
June 2007. As development of a U.S. key national indicator system
progresses, we expect to continue to be involved, building upon prior
efforts and in response to congressional interests. Finally, in my view
such a key national indicator system is needed, and the Congress should
strongly consider a public/private partnership in order to help it become
a reality.

10GAO, Informing Our Nation: Improving How to Understand and Assess the
USA's Position and Progress, [19]GAO-05-1 (Washington, D.C.: Nov. 10,
2004).

11GAO, Forum on Key National Indicators: Assessing the Nation's Position
and Progress, [20]GAO-03-672SP (Washington, D.C.: May 2003).

Helping the Congress through Foresight

Our products and assistance to the Congress also focus on a wide range of
emerging needs and identify and address governance issues that must be
addressed to respond to a broad range of 21st Century challenges and
opportunities. I would like to highlight just a few of our recent efforts
to assist the Congress with foresight.

Increasing public understanding of the long-term fiscal challenge: Since
1992, we have published long-term fiscal simulations in response to a
bipartisan request from members of the Congress who were concerned about
the long-term effects of our nation's fiscal policy. Our current
simulations continue to show ever-larger deficits resulting in a federal
debt burden that ultimately spirals out of control.12 As the Chief
Accountability Officer of the United States Government, I continue to call
attention to our long-term fiscal challenge and the risks it poses to our
nation's future. I mentioned earlier my participation with the Concord
Coalition, the Brookings Institution, and the Heritage Foundation in the
Fiscal Wake-Up Tour. In our experience, having these people, with quite
different policy views on how to address our long-range imbalance, agree
on the nature, scale, and importance of the issue--and on the need to sit
down and work together on a bipartisan basis and start making tough
choices now--resonates with the audiences. I have long believed that the
American people can accept difficult decisions as long as they understand
why such steps are necessary. The Fiscal Wake-Up Tour has received the
active support and involvement of community leaders, local colleges and
universities, the media, the business community, and both former and
current members of the Congress. We have coordinated town hall meetings in
20 states to date with more planned in the future.

Improving transparency in connection with financial, fiscal, budget, and
selected legislative matters: Washington often suffers from both myopia
and tunnel vision. This can be especially true in the budget debate in
which we focus on one program at a time and the deficit for a single year
or possibly the costs over 5 years without asking about the bigger picture
and whether the long term is getting better or worse. Since at its heart
the budget challenge is a debate about the allocation of limited
resources, the budget process can and should play a key role in helping to
address our long-term fiscal challenge and the broader challenge of
modernizing government for the 21st century. We are helping to increase
the understanding of and focus on the long term in our policy and budget
debates. To that end, I have outlined a number of ideas in a draft
legislative proposal that we refer to as TAB--Transparency in Accounting
and Budgeting. I have been sharing it with selected Members of Congress
and others interested in this issue. The proposal would serve to

12Additional information about the GAO model, its assumptions, data, and
charts can be found at http://www.gao.gov/special.pubs/longterm/ . For
a summary of our most recent results, see The Nation's Long-Term Fiscal
Outlook: January 2007 Update, [22]GAO-07-510R (February 2007).

           o increase transparency in financial and budget reporting as well
           as in the budget and legislative processes to highlight our
           long-term fiscal challenges;
           o require publication of a summary annual report and periodic
           fiscal sustainability reports; and
           o require GAO to report annually on selected financial, fiscal,
           and reporting matters.

I am hopeful that this committee will embrace this proposal and work with
other interested members of Congress toward enactment of legislation
advancing these important goals.

Identifying 21st century challenges: In February 2005 we issued a report
titled 21st Century Challenges: Reexamining the Base of the Federal
Government,13 in which we identified challenges our government--and
nation--face. The report laid out the case for change and identified a
range of challenges and opportunities. It also presented more than 200
illustrative questions that need to be asked and answered. These questions
look across major areas of the budget and federal operations, including
discretionary and mandatory spending and tax policies and programs.
Questions raised specific issues, such as how intelligence and information
on threats can be shared with other levels of government, yet be held
secure, and whether our current federal income-based tax system is
adequate, equitable, competitive, sustainable, and administrable in an
increasingly global economy. I am very pleased to see that this important
report, among other things, is being used by various congressional
committees as they consider which areas of government need particular
attention and reconsideration.

13GAO, 21st Century Challenges: Reexamining the Base of the Federal
Government, [23]GAO-05-325SP (Washington, D.C.: February 2005).

Continuing to apply a strategic framework to GAO's work: We will be
issuing products soon to help communicate the strategic framework we are
using to guide all of our work, in support of the 110th Congress and in
light of the challenges the nation faces. Specifically, we will soon issue
an update of our strategic plan, which describes our goals and strategies
for serving the Congress for fiscal years 2007 through 2012. The broad
goals and objectives of our plan have not altered dramatically since our
last plan, but events such as the continuing war in Iraq and recent
natural disasters account for modifications in emphasis. Appendix III
provides a draft summary of GAO's strategic plan framework for serving the
Congress (2007-2012). To assist policymakers and managers, we are also
issuing separately a part of the strategic plan that contains detailed
descriptions of the key themes and issues framing our strategic plan and
their implications for governance. Those themes are listed in the text box
below. We will also be issuing a report that brings together in one place
the many strategic tools and approaches that we have identified or
proposed that the Congress and others can use to help set priorities and
move forward in addressing the government's challenges.

Themes from GAO's Strategic Plan 2007-2012 
                                              
      o Changing security threats             
      o Sustainability concerns               
      o Economic growth and competitiveness   
      o Global interdependency                
      o Societal change                       
      o Quality of life                       
      o Science and technology                

Congressional Support to Enhance GAO's Effectiveness

Continuously improving on the critical role we play in supporting the
Congress will require modest enhancements to GAO's resources and
authorities that I proposed in our fiscal year 2008 budget request and
discussed in my Senate appropriations hearing.14 Our fiscal year 2008
budget request seeks the resources necessary to allow us to rebuild and
enhance our workforce, knowledge capacity, employee programs, and critical
infrastructure. These items are necessary to ensure that we 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.

14GAO, Fiscal Year 2008 Budget Request: U.S. Government Accountability
Office, [24]GAO-07-547T (Washington, D.C.: Mar. 16, 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, led by myself and many others, GAO has become a more
results-oriented, partnerial, and client-focused organization. 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 us to model best
practices, lead by example, and provide significant support for
congressional hearings, while achieving record results and very high
client satisfaction ratings and high employee feedback ratings without
significant increases in funding. In fact, despite record results, GAO's
budget has declined by 3 percent in purchasing power from 2003 to 2007, as
shown in appendix IV.

Transformational change and innovation is by definition challenging and
controversial, but at the same time is essential for progress. Our fiscal
year 2008 budget request includes funds to regain the momentum needed to
achieve our key goals. Specifically, our fiscal year 2008 budget request
will allow us to

           o address supply and demand imbalances in responding to
           congressional requests for studies in areas such as health care,
           disaster assistance, 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 we compete 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
           reengineer processes aimed at increasing our productivity and
           effectiveness and addressing identified management challenges; and
           o pursue deferred and pending critical structural and
           infrastructure maintenance and improvements.

In my recent testimony, I noted that we would be seeking to increase GAO's
staffing level from 3,159 up to 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, technology assessments, and
other areas in need of fundamental reform. Furthermore, 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 receiving support from the State Department and approval of our
supplemental budget request.

In addition to providing the resources we need to support the Congress, we
will also be seeking enactment of a set of statutory provisions that would
enhance our ability to provide the Congress the information and analysis
it needs to discharge its constitutional responsibilities. Among other
things, we will seek to modernize authority for the Comptroller General
and his/her authorized representatives to administer oaths in performance
of the work of the office. To keep the Congress apprised 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 fail to respond to requests
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. These reporting requirements would be a supplement to
existing GAO statutory authorities.

GAO has authority to audit and access the records of elements of the
Intelligence Community. Nevertheless, over the years, the Justice
Department has questioned our authority in the area. In that regard, the
Congress is considering S.82, The Intelligence Community Audit Act of
2007, sponsored by Senators Akaka and Lautenberg. S.82 would reaffirm
GAO's existing statutory authority to audit and evaluate financial
transactions, programs, and activities of the Intelligence Community. The
success of the Intelligence Community is obviously of enormous importance
to the nation, and it commands significant budget resources. I believe
that there are many areas in which GAO can support the intelligence
committees in their oversight roles and, by extension, the Congress and
the Intelligence Community. For example, we could review human capital
management, including pay for performance systems; information technology
architectures and systems; acquisition and contract management;
information-sharing processes, procedures, and results; and Intelligence
Community transformation efforts, metrics, and progress. I would add that
while GAO personnel with appropriate clearances and accesses have
responsibly reviewed programs that deal with technical sources and methods
of intelligence collection, I am confident that there are very few cases
in which our review of systems, processes, and their applications would
require access to sensitive intelligence sources and methods or names of
individuals.

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 certain professional positions by increasing our maximum pay for
other than the SES and Senior Level from GS-15, step 10, to Executive
Level III. This authority has already been granted to selected other
federal agencies, including DOD. 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 affect 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.

We are also seeking enactment of 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.

Finally, we have identified a number of legislative mandates that are
either no longer meeting the purposes 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.

I appreciate your support for our efforts to provide the best professional
products and services to the Congress. GAO, of course, is not alone in
helping the Congress. For example, the inspectors general of the various
agencies and departments are essential partners in carrying out
congressional oversight. In addition, the Congressional Research Service
and Congressional Budget Office have important roles to play. However, GAO
is uniquely positioned to provide the Congress with the timely, objective,
reliable, and original research information it needs to discharge its
constitutional responsibilities, especially in connection with oversight
matters. We look forward to continuing to work with you on near-term
oversight, fundamental review of the base of government, and approaches to
this century's governance challenges and opportunities.

This concludes my prepared statement. I would be happy to respond to any
questions the members of the Committee may have.

Appendix I: GAO's Suggested Areas for Oversight for the 110th Congress

Targets for Near-Term Oversight                                            
      1. Reduce the Tax Gap                                                   
      2. Address Governmentwide Acquisition and Contracting Issues            
      3. Transform the Business Operations of the Department of Defense,      
      Including Addressing All Related "High-Risk" Areas                      
      4. Ensure the Effective Integration and Transformation of the           
      Department of Homeland Security                                         
      5. Enhance Information Sharing, Accelerate Transformation, and Improve  
      Oversight Related to the Nation's Intelligence Agencies                 
      6. Enhance Border Security and Enforcement of Existing Immigration Laws 
      7. Ensure the Safety and Security of All Modes of Transportation and    
      the Adequacy of Related Funding Mechanisms                              
      8. Strengthen Efforts to Prevent the Proliferation of Nuclear,          
      Chemical, and Biological Weapons and Their Delivery Systems (Missiles)  
      9. Ensure a Successful Transformation of the Nuclear Weapons Complex    
      10. Enhance Computer Security and Deter Identity Theft                  
      11. Ensure a Cost-Effective and Reliable 2010 Census                    
      12. Transform the Postal Service's Business Model                       
      13. Ensure Fair Value Collection of Oil Royalties Produced from Federal 
      Lands                                                                   
      14. Ensure the Effectiveness and Coordination of U.S. International     
      Counterterrorism Efforts                                                
      15. Review the Effectiveness of Strategies to Ensure Workplace Safety   
Policies and Programs That Are in Need of Fundamental Reform and           
Reengineering                                                              
      1. Review U.S. and Coalition Efforts to Stabilize and Rebuild Iraq and  
      Afghanistan                                                             
      2. Ensure a Strategic and Integrated Approach to Prepare for, Respond   
      to, Recover, and Rebuild from Catastrophic Events                       
      3. Reform the Tax Code, Including Reviewing the Performance of Tax      
      Preferences                                                             
      4. Reform Medicare and Medicaid to Improve Their Integrity and          
      Sustainability                                                          
      5. Ensure the Adequacy of National Energy Supplies and Related          
      Infrastructure                                                          
      6. Reform Immigration Policy to Ensure Equity and Economic              
      Competitiveness                                                         
      7. Assess Overall Military Readiness, Transformation Efforts, and       
      Existing Plans to Assure the Sustainability of the All-Volunteer Force  
      8. Assure the Quality and Competitiveness of the U.S. Education System  
      9. Strengthen Retirement Security Through Reforming Social Security,    
      Increasing Pension Saving and Promoting Financial Literacy              
      10. Examine the Costs, Benefits, and Risks of Key Environmental Issues  
      11. Reform Federal Housing Programs and Related Financing and           
      Regulatory Structures                                                   
      12. Ensure the Integrity and Equity of Existing Farm Programs           
      13. Review Federal Efforts to Improve the Image of the United States    
Governance Issues That Should be Addressed to Help Ensure an Economical,   
Efficient, Effective, Ethical, and Equitable Federal Government Capable of 
Responding to the Various Challenges and Capitalizing on Related           
Opportunities in the 21st Century                                          
      1. Review the Need for Various Budget Controls and Legislative Process  
      Revisions in Light of Current Deficits and Our Long-Range Fiscal        
      Imbalance                                                               
      2. Pursue the Development of Key National Indicators                    
      3. Review the Impact and Effectiveness of Various Management Reforms    
      Enacted in Recent Years (e.g., GPRA, CFO Act, FFMIA, Clinger-Cohen,     
      etc.)                                                                   
      4. Review the Effectiveness of the Federal Audit and Accountability     
      Community, Including the Oversight, Structure, and Division of          
      Responsibility                                                          
      5. Modernize the Federal Government's Organizational and Human Capital  
      Models                                                                  
      6. Reexamine the Presidential (Political) Appointment Process           
      7. Ensure Transparency over Executive Policies and Operations           
      8. Monitor and Assess Corporate Financial Reporting and Related         
      Standards for Public Companies Accountability                           

Source: GAO, Suggested Areas for Oversight for the 110th Congress,
[25]GAO-07-235R (Washington, D.C.: Nov. 17, 2006).

Appendix II: GAO's 2007 High-Risk List

2007 High-Risk Areas                                                       
Addressing Challenges In Broad-Based Transformations                       
      o Strategic Human Capital Managementa                                   
      o Managing Federal Real Propertya                                       
      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 Transformationa                              
      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 Systema (New)                   
      o Ensuring the Effective Protection of Technologies Critical to U.S.    
      National Security Interestsa (New)                                      
      o Transforming Federal Oversight of Food Safetya (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 Lawsa                                              
      o IRS Business Systems Modernization                                    
Modernizing and Safeguarding Insurance and Benefit Programs                
      o Modernizing Federal Disability Programsa                              
      o Pension Benefit Guaranty Corporation Single-Employer Pension          
      Insurance Program                                                       
      o Medicare Programa                                                     
      o Medicaid Programa                                                     
      o National Flood Insurance Programa                                     

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.

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

Appendix IV: Budget Authority in Fiscal Year 2006 Dollars and Full-Time
Equivalent Usage, Fiscal Years 1992 - 2007

(450579)

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www.gao.gov/cgi-bin/getrpt?GAO-07-644T .

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Highlights of [33]GAO-07-644T , a testimony before the Committee on
Homeland Security and Governmental Affairs, U.S. Senate

March 21, 2007

UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

Supporting the Congress through Oversight, Insight, and Foresight

The Committee sought GAO's views on the role GAO has played in assisting
congressional oversight and the authorities and resources GAO needs to
further improve its assistance to the Congress.

Today's testimony discusses some of the ways that GAO has helped "set the
table" for this Committee, the Congress, the executive branch, and the
nation to engage in a constructive and informed dialogue about the
challenges and opportunities our nation is facing in the 21st century. It
also discusses the authority and resources GAO will need to address the
critical oversight and other needs of the Congress.

[34]What GAO Recommends

This statement summarizes a comprehensive body of GAO's published work in
support of the Congress, much of which offered recommendations to address
specific issues. As such, this statement makes no new recommendations.

GAO is a key tool for the Congress as it works to improve economy,
efficiency, effectiveness, equity, and ethics within the federal
government. To better meet the needs of the Congress, GAO has transformed
itself to provide a range of key oversight, insight, and foresight
services while "leading by example" in transforming how government should
do business.

GAO's oversight work has traditionally focused on ensuring government
entities are spending funds as intended by the Congress and complying with
applicable laws and regulations, while guarding against fraud, waste,
abuse, and mismanagement. For example, since the early 1990s, GAO has
updated its list of government programs and operations across government
that it identifies as "high risk." It has contributed to the Congress
enacting a series of governmentwide reforms and achieving tens of billions
of dollars in financial benefits. Last November, GAO issued
recommendations for oversight in the 110th Congress ranging from Iraq, to
food safety, to the tax gap.

GAO work also provides important insight into what programs, policies, and
operations are working well; best practices to be shared and benchmarked;
how agencies can improve the linkages across the silos of government; and
how different levels of government and their nongovernmental partners can
be better aligned to achieve important outcomes for the nation. For
example, GAO developed a number of crosscutting and comprehensive reviews
of the preparedness for, response to, and recovery from the 2005 Gulf
Coast hurricanes. GAO has issued over 40 related reports and testimonies,
and in work for this Committee and others GAO is examining lessons learned
from past national emergencies and catastrophic disasters--both at home
and abroad--that may prove useful in identifying ways to approach
rebuilding.

Finally, GAO's work can provide the Congress with foresight by
highlighting the long-term implications of today's decisions and
identifying key trends and emerging challenges facing our nation before
they reach crisis proportions. As the Chief Accountability Officer of the
United States Government, the Comptroller General continues to call
attention to the nation's long-term fiscal challenge and the risks it
poses to our nation's future.

Continuously improving on the critical role GAO plays in supporting the
Congress will require enhancements to GAO's resources and authorities.
GAO's fiscal year 2008 budget request seeks resources to allow it to
rebuild and enhance its workforce, knowledge capacity, employee programs,
and infrastructure. GAO will be proposing changes to its authority, such
as the ability to administer oaths in conducting its work, relief from
certain mandated reviews, additional human capital flexibilities, and the
creation of a Board of Contract Appeals at GAO. Finally, the Comptroller
General has noted that GAO should be increased in size over the next 6
years to address the current and anticipated needs of the Congress.

References

Visible links
  11. http://www.gao.gov/cgi-bin/getrpt?GAO-07-308SP
  12. http://www.gao.gov/cgi-bin/getrpt?GAO-07-362SP
  13. http://www.gao.gov/cgi-bin/getrpt?GAO-07-235R
  14. http://www.gao.gov/cgi-bin/getrpt?GAO-07-607T
  15. http://www.gao.gov/cgi-bin/getrpt?GAO-07-542T
  16. http://www.gao.gov/cgi-bin/getrpt?GAO-07-45SP
  17. http://www.gao.gov/cgi-bin/getrpt?GAO-03-192SP
  18. http://www.gao.gov/cgi-bin/getrpt?GAO-05-139
  19. http://www.gao.gov/cgi-bin/getrpt?GAO-05-1
  20. http://www.gao.gov/cgi-bin/getrpt?GAO-03-672SP
  22. http://www.gao.gov/cgi-bin/getrpt?GAO-07-510R
  23. http://www.gao.gov/cgi-bin/getrpt?GAO-05-325SP
  24. http://www.gao.gov/cgi-bin/getrpt?GAO-07-547T
  25. http://www.gao.gov/cgi-bin/getrpt?GAO-07-235R
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