The Upcoming Transition: GAO's Efforts to Assist the 111th
Congress and the Next Administration (10-SEP-08, GAO-08-1153T).
The upcoming 2009 transition will be a unique and critical period
for the U.S. government. It marks the first wartime presidential
transition in 40 years. It will also be the first administration
change for the relatively new Department of Homeland Security
operating in the post 9/11 environment. The next administration
will fill thousands of positions across government; there will be
a number of new faces in Congress as well. Making these
transitions as seamlessly as possible is pivotal to effectively
and efficiently help accomplish the federal government's many
essential missions. While the Government Accountability Office
(GAO), as a legislative branch agency, has extensive experience
helping each new Congress, the Presidential Transition Act points
to GAO as a resource to incoming administrations as well. The Act
specifically identifies GAO as a source of briefings and other
materials to help presidential appointees make the leap from
campaigning to governing by informing them of the major
management issues, risks, and challenges they will face. GAO has
traditionally played an important role as a resource for new
Congresses and administrations, providing insight into the issues
where GAO has done work. This testimony provides an overview of
GAO's objectives for assisting the 111th Congress and the next
administration in their all-important transition efforts.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-1153T
ACCNO: A84104
TITLE: The Upcoming Transition: GAO's Efforts to Assist the
111th Congress and the Next Administration
DATE: 09/10/2008
SUBJECT: Agency missions
Congressional/executive relations
Critical infrastructure
Elections
Executive agencies
Financial management
Fiscal policies
Mission essential operations
Needs assessment
Performance management
Performance measures
Policy evaluation
Presidential transition
Risk management
Strategic planning
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GAO-08-1153T
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Testimony:
Before the Subcommittee on Oversight of Government Management, the
Federal Workforce, and the District of Columbia, the Committee on
Homeland Security and Governmental Affairs, U.S. Senate:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 2:30 p.m. EST:
Wednesday, September 10, 2008:
The Upcoming Transition:
GAO's Efforts to Assist the 111th Congress and the Next Administration:
Statement of Gene L. Dodaro Acting Comptroller General of the United
States:
GAO-08-1153T:
GAO Highlights:
Highlights of GAO-08-1153T, a testimony before the Subcommittee on
Oversight of Government Management, the Federal Workforce, and the
District of Columbia, the Committee on Homeland Security and
Governmental Affairs, U.S. Senate.
Why GAO Did This Study:
The upcoming 2009 transition will be a unique and critical period for
the U.S. government. It marks the first wartime presidential transition
in 40 years. It will also be the first administration change for the
relatively new Department of Homeland Security operating in the post
9/11 environment. The next administration will fill thousands of
positions across government; there will be a number of new faces in
Congress as well. Making these transitions as seamlessly as possible is
pivotal to effectively and efficiently help accomplish the federal
government�s many essential missions.
While the Government Accountability Office (GAO), as a legislative
branch agency, has extensive experience helping each new Congress, the
Presidential Transition Act points to GAO as a resource to incoming
administrations as well. The Act specifically identifies GAO as a
source of briefings and other materials to help presidential appointees
make the leap from campaigning to governing by informing them of the
major management issues, risks, and challenges they will face.
GAO has traditionally played an important role as a resource for new
Congresses and administrations, providing insight into the issues where
GAO has done work. This testimony provides an overview of GAO�s
objectives for assisting the 111th Congress and the next administration
in their all-important transition efforts.
What GAO Found:
GAO will highlight issues that the new President, his appointees, and
the Congress will confront from day one. These include immediate
challenges ranging from national and homeland security to oversight of
financial institutions and markets to a range of public health and
safety issues. GAO will synthesize the hundreds of reports and
testimonies it issues every year so that new policy makers can quickly
zero in on critical issues during the first days of the new
administration and Congress. GAO�s analysis, incorporating its
institutional memory across numerous administrations, will be ready by
the time the election results are in and transition teams begin to move
out.
Objectives for GAO�s Transition Efforts:
* Provide insight into pressing national issues.
* Highlight the growing need for innovative, integrated approaches to
solve national and global challenges.
* Document targeted opportunities to conserve resources that can be
applied to new initiatives.
* Underscore critical capacity building needs in individual agencies
that will affect implementation of whatever new priorities are pursued.
* Help inform the management improvement agendas of Congress and the
new administration.
* Monitor the implementation of the Presidential Transition Act
provisions and identify potential improvements for future transitions.
GAO will provide congressional and executive branch policy makers with
a comprehensive snapshot of how things are working across government
and emphasize the need to update some federal activities to better
align them with 21st century realities and bring about government
transformation. In keeping with its mission, GAO will be providing
Congress and the executive branch with clear facts and constructive
options and suggestions that elected officials can use to make policy
choices in this pivotal transition year. GAO believes the nation�s new
and returning leaders will be able to use such information to help meet
both the nation�s urgent issues and long-term challenges so that our
nation stays strong and secure now and for the next generation.
GAO�s transition work also will highlight the need to modernize the
machinery of government through better application of information
technology, financial management, human capital, and contracting
practices. GAO also will underscore the need to develop strategies for
addressing the government�s serious long-term fiscal sustainability
challenges, driven on the spending side primarily by escalating health
care costs and changing demographics.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1153T]. For more
information, contact J. Christopher Mihm, Managing Director, Strategic
Issues, at (202) 512-6806 or mihmj@gao.gov.
[End of section]
Chairman Akaka, Senator Voinovich, and Members of the Subcommittee:
I am pleased to be here today to contribute to your hearing on the
upcoming transition. As agreed with the Subcommittee, I will discuss
the preparations under way at the Government Accountability Office
(GAO) to meet our responsibilities under the Presidential Transition
Act to assist the incoming administration as well as the 111th
Congress.
The 2009 presidential transition will be a unique and critical period
for the United States. Our nation faces a wartime presidential
transition for the first time in 40 years. In addition, this will be
the first post-9/11 transition, with a relatively new Department of
Homeland Security (DHS) grappling with the threats we face here at home
while experiencing its first change in administration. The White House
will need to fill thousands of appointments, some of which will be
subject to Senate confirmation, across the federal government. And on
Capitol Hill, with 26 House members and 5 Senators deciding not to seek
reelection, there will also be congressional newcomers.
While as a legislative branch agency GAO has extensive experience
helping each new Congress, the Presidential Transition Act points to
GAO as a resource to incoming administrations as well. The Act
specifically identifies GAO as a source of briefings and other
materials to help inform presidential appointees of the major
management issues, risks, and challenges they will face. The Act's 2000
amendments to clearly bring GAO into the transition picture are
consistent with the role we traditionally have played as an important
resource for Congress and new administrations during transitions. For
example, we update our High-Risk list with the start of each new
Congress to focus attention on areas in need of broad-based
transformation or susceptible to waste, fraud, abuse, and
mismanagement. During the last presidential transition, we identified
for Congress and the then new administration key program and management
issues in the major departments and across government. More recently,
we assisted the 110th Congress by suggesting 36 areas for oversight
based on our work. We take our role under the Presidential Transition
Act very seriously; our planning to effectively perform this role is
well under way. To do this, we will use our institutional knowledge and
broad-based work on matters across the spectrum of government
activities.
My comments today center on the six objectives of our efforts to assist
the upcoming transition as policy makers take on the serious challenges
facing our country.
Objectives for GAO�s Transition Efforts:
* Provide insight into pressing national issues.
* Highlight the growing need for innovative, integrated approaches to
solve national and global challenges.
* Document targeted opportunities to conserve resources that can be
applied to new initiatives.
* Underscore critical capacity building needs in individual agencies
that will affect implementation of whatever new priorities are pursued.
* Help inform the management improvement agendas of Congress and the
new administration.
* Monitor the implementation of the Presidential Transition Act
provisions and identify potential improvements for future transitions.
Provide Insight into Pressing National Issues:
The next Congress and new administration will confront a set of
pressing issues that will demand urgent attention and continuing
oversight to ensure the nation's security and well-being. The goal of
our transition planning is to look across the work we have done and
across the scope and breadth of the federal government's
responsibilities to offer insights into areas needing immediate
attention. A few examples follow:
* Oversight of financial institutions and markets: As events over the
past few days have underscored, oversight over the U.S. housing and
financial markets will certainly be among the priority matters
commanding the attention of the new administration and the 111th
Congress. These sectors of our economy have been going through a period
of significant instability and turmoil. Congress has taken a number of
steps to address some of the immediate effects of the market turmoil
including enactment of the Federal Housing Finance Regulatory Reform
Act of 2008, which, among other things, strengthens regulation of the
housing government-sponsored enterprises (GSE) and provides authority
to the Treasury to purchase any amount of Fannie Mae and Freddie Mac
securities. We are closely monitoring a range of implications of the
current market turmoil including the financial condition of GSEs and
the implications of the Treasury exercising this new authority to
stabilize GSEs. In addition, recent bank failures and growing numbers
of banks on the "Watchlist" raise questions about the impact on the
banking system and future federal exposures as well as on the bank
insurance fund. We have a larger body of work that involves auditing
the Federal Deposit Insurance Corporation, the newly created Federal
Housing Finance Agency, and the consolidated financial statements of
the U.S. government, as well as evaluating ongoing developments in the
housing and financial markets. We will draw on this work to provide
observations and advice, as appropriate, on how best to ensure the
stability of our nation's financial system.
While these serious disruptions require immediate attention and careful
monitoring, ongoing turmoil in the housing and financial markets has
renewed concerns about whether the current system for overseeing and
regulating financial institutions and markets is best suited to meet
the nation's evolving needs and 21st century challenges. Later this
year we plan to issue a report describing the evolution of the current
regulatory structure and how market developments and changes have
introduced challenges for the current system. We believe this
reassessment is needed to ensure that these types of serious
disruptions can be minimized in the future. As part of this work, we
are also developing a framework to assist Congress in evaluating
alternative regulatory reform proposals.
* U.S. efforts in Iraq and Afghanistan: Policy and implementation
issues will remain on the horizon for these and other international
challenges. Hundreds of billions of dollars have been provided to the
Department of Defense (DOD) for military operations in Iraq and
Afghanistan as well as U.S. efforts to help address security,
stabilization and reconstruction, and capacity-building efforts in
these countries. These efforts include developing security forces,
rebuilding critical infrastructure, and enhancing the countries'
capacity to govern. Since 2003, we have issued more than 175 reports on
military operations and various aspects of U.S. efforts to achieve the
goals in Iraq and Afghanistan. Our transition work will highlight the
major implementation issues that need to be addressed to ensure
accountability and assess progress regardless of what policies are
pursued.
* DOD's readiness and capabilities: Extended operations in Iraq,
Afghanistan, and elsewhere have had significant consequences for
military readiness, particularly with regard to the Army and Marine
Corps. Current operations have required the military to operate at a
persistently high tempo with the added stress of lengthy and repeated
deployments. In addition, because of the significant wear and tear on
equipment, refocusing of training on counterinsurgency operations, and
other factors, rebuilding readiness of U.S. forces is a major challenge
for DOD. At the same time, DOD faces competing demands for resources
given broad-based initiatives to grow, modernize, and transform its
forces. We will offer our perspective on the competing demands DOD
faces and the need to develop sound plans to guide investment
decisions, as it reassesses the condition, size, composition, and
organization of its total force, including contractor support, to
protect the country from current, emerging, and future conventional and
unconventional security threats.
* Protection at home: DHS must remain prepared and vigilant with
respect to securing the homeland, particularly during the transition
period when the nation can be viewed as being particularly vulnerable.
In doing so, it is important that the new administration address key
issues that, as we reported, have impacted and will continue to impact
the nation's security and preparedness, including better securing our
borders, enforcing immigration laws, and serving those applying for
immigration benefits; defining key preparedness and response
capabilities and building and maintaining those capabilities through
effective governmental and external partnerships; and further
strengthening the security and resiliency of critical infrastructure to
acts of terrorism. In achieving its critical mission, we found that DHS
needs to more fully integrate and strengthen its management functions,
including acquisition and human capital management; more fully adopt
risk-based principles in allocating resources to the areas of greatest
need; and enhance the effectiveness of information sharing among
federal agencies and with state and local governments and the private
sector.
* The decennial census: The results of the 2010 census are central to
apportionment, redistricting congressional boundaries, and distributing
hundreds of billions of dollars in federal aid. Soon after taking
office, the new administration will face decisions that will shape the
outcome of this central effort. Next spring the first nationwide field
operation of the 2010 decennial census will begin. During address
canvassing, the Census Bureau will rely, for the first time, on hand-
held computers to verify address and map information. Earlier this
year, we designated the decennial census as a high-risk area, in part,
because of ongoing challenges in managing information technology--
including hand-held computers--and uncertainty over the total cost of
the decennial census and the Bureau's plans for rehearsing its field
operations. The Bureau has taken some important steps to get the census
back on track but did not rehearse its largest and most costly field
operation--non-response follow-up--and has little time for further
course correction as it prepares to carry out the national head count.
While facing pressing issues, the next Congress and new administration
also inherit the federal government's serious long-term fiscal
challenge--driven on the spending side by rising health care costs and
changing demographics. This challenge is complicated by the need to
timely address developments such as the recent economic pressures and
troubles in the housing and financial markets. Ultimately, however, the
new administration and Congress will need to develop a strategy to
address the federal government's long-term unsustainable fiscal path.
Highlight the Growing Need for Innovative, Integrated Approaches to
Solve National and Global Challenges:
Planning for the transition will necessarily need to address the fact
that achieving meaningful national results in many policy and program
areas requires some combination of coordinated efforts among various
actors across federal agencies, often with other governments (for
example, internationally and at state and local levels), non-government
organizations (NGO), for-profit and not for-profit contractors, and the
private sector. In recognition of this fact, recent years have seen the
adoption of a range of national plans and strategies to bring together
decision makers and stakeholders from different locations, types of
organizations, and levels of government. For example, the National
Response Plan is intended to be an all-discipline, all-hazards plan
that establishes a single, comprehensive framework for managing
domestic incidents where involvement is necessary among many levels of
government, the private sector, and nonprofit organizations. The
response and recovery efforts after 9/11 and natural disasters, the
nation's preparations for a possible pandemic influenza, and the need
to address global food insecurity are some of the many public issues
that vividly underscore the critical importance of employing broad
governance perspectives to meet global and national needs. Our
transition work will highlight challenges the new Congress and next
administration face in devising integrated solutions to such multi-
dimensional problems. Some examples follow:
* Care for servicemembers: Over the last several years, more than
30,000 servicemembers have been wounded in action; many with multiple
serious injuries such as amputations, traumatic brain injury, and post-
traumatic stress disorder. We have identified substantial weaknesses in
the health care these wounded warriors are receiving as well as the
complex and cumbersome DOD and VA disability systems they must
navigate. While improvement efforts have started, addressing the
critical continuity of care issues will require sustained attention,
systematic oversight by DOD and VA, and sufficient resources.
* Health care in an increasingly global market and environment: The
spread of severe acute respiratory syndrome (SARS) from China in 2002,
recent natural disasters, and the persistent threat of an influenza
pandemic all highlight the need to plan for a coordinated response to
large-scale public health emergencies. Federal agencies must work with
one another and with state and local governments, private
organizations, and international partners to identify and assess the
magnitude of threat, develop effective countermeasures (such as
vaccines), and marshal the resources required for an effective public
health response. Our transition work on these topics--including work
related to such emergencies as SARS, Hurricane Katrina, pandemic
influenza, bioterrorism, and TB--will highlight that federal agencies
still face challenges such as coordinating response efforts and
developing the capacity for a medical surge in mass casualty events.
* Food safety: The fragmented nature of the federal food oversight
system undermines the government's ability to plan more strategically
to inspect food production processes, identify and react more quickly
to outbreaks of foodborne illnesses, and focus on promoting the safety
and integrity of the nation's food supply. Fifteen federal agencies
collectively administer at least 30 laws related to food safety. We
have recommended, among other things, that the executive branch
reconvene the President's Council on Food Safety to facilitate
interagency coordination on food safety regulation and programs.
* Surface transportation: The nation's transportation infrastructure--
its aviation, highway, transit, and rail systems--is critical to the
nation's economy and affects the daily lives of most Americans. Despite
large increases in federal spending on America's vital surface
transportation system, this investment has not commensurately improved
the performance of the system. Growing congestion has created by one
estimate a $78 billion annual drain on the economy, and population
growth, technological change, and the increased globalization of the
economy will further strain the system. We have designated
transportation finance a high-risk area and have called for a
fundamental reexamination and restructured approach to our surface
transportation policies, which experts have suggested need to recognize
emerging national and global imperatives, such as reducing the nation's
dependence on foreign fuel sources and minimizing the impact of the
transportation system on the global climate change.
* Disaster response: Hurricane Katrina demonstrated the critical
importance of the capability to implement an effective and coordinated
response to catastrophes that leverages needed resources from across
the nation, including all levels of government as well as
nongovernmental entities. While the federal government has made
progress since Katrina, as shown in the recent response to Hurricane
Gustav, we have reported that the administration still does not have a
comprehensive inventory of the nation's response capabilities or a
systematic, comprehensive process to assess capabilities at the local,
state, and federal levels based on commonly understood and accepted
metrics for measuring those capabilities. We have work under way to
identify the actions that DHS and the Federal Emergency Management
Agency (FEMA) have taken to implement the provisions of the Post-
Katrina Emergency Management Reform Act, which charged FEMA with the
responsibility for leading and supporting the nation in a comprehensive
risk-based emergency management system--a complex task that requires
clear strategic vision, leadership, and the development of effective
partnerships among governmental and nongovernmental entities.
* Cyber critical infrastructures: Cyber critical infrastructures are
systems and assets incorporating information technology--such as the
electric power grid and chemical plants--that are so vital to the
nation that their incapacitation or destruction would have a
debilitating impact on national security, our economy, and public
health and safety. We have made numerous recommendations aimed at
protecting these essential assets and addressing the many challenges
that the federal government faces in working with both the private
sector and state and local governments to do so--such as improving
threat and vulnerability assessments, enhancing cyber analysis and
warning capabilities, securing key systems, and developing recovery
plans. Until these and other areas are effectively addressed, our
nation's cyber critical infrastructure is at risk of the increasing
threats posed by terrorists, foreign intelligence services, and others.
Also, more broadly, the Government Performance and Results Act of 1993
(GPRA) calls for a governmentwide performance plan to help Congress and
the executive branch address critical federal performance and
management issues, including redundancy and other inefficiencies.
Unfortunately, the promise of this important provision has not been
realized. The agency-by-agency focus of the budget does not provide for
the needed strategic, longer range, and integrated perspective of
government performance. A broader performance plan would provide the
President with an opportunity to assess and communicate the
relationship between individual agency goals and outcomes that
transcend federal agencies.
Document Targeted Opportunities to Conserve Resources That Can Be
Applied to New Initiatives:
Our transition work will identify opportunities to limit costs and
reduce waste across a broad spectrum of programs and agencies. While
these opportunities will not eliminate the need to address more
fundamental long-term fiscal challenges the federal government faces,
concerted attention by the new administration could conserve resources
for other priorities and improve the government's image. Examples of
areas we will highlight and for which we will suggest needed action
follow:
* Improper payments: For fiscal year 2007, agencies reported improper
payment estimates of about $55 billion--including programs such as
Medicaid, Food Stamps, Unemployment Insurance, and Medicare. The
governmentwide estimate has steadily increased over the past several
years; yet even the current estimate does not reflect the full scope of
improper payments. Further, major management challenges and internal
control weaknesses continue to plague agency operations and programs
susceptible to significant improper payments. Addressing these
challenges and internal control weaknesses will better ensure the
integrity of payments and minimize the waste of taxpayers' dollars.
* DOD cost overruns: Total acquisition cost growth on the 95 major
defense programs in DOD's fiscal year 2007 portfolio is now estimated
at $295 billion, and of the weapon programs we assessed this year, none
had proceeded through development meeting the best practice standards
for mature technologies, stable design, and mature production
processes--all prerequisites for achieving planned cost and schedule
outcomes. DOD expects to invest about $900 billion (fiscal year 2008
dollars) over the next 5 years on development and procurement, with
more than $335 billion, or 37 percent, going specifically for new major
weapon systems. Yet, much of this investment will be used to address
cost overruns rooted in poor planning, execution, and oversight. By
adopting best practices on individual programs and strengthening
oversight and accountability for better outcomes, as we have
consistently recommended, cost and schedule growth could be
significantly reduced.
* DOD secondary inventory: DOD expends considerable resources to
provide logistics support for military forces, and the availability of
spare parts and other critical items provided through DOD's supply
chains affects military readiness and capabilities. DOD officials have
estimated that the level of investment in DOD's supply chains is more
than $150 billion a year, and the value of its supply inventories has
grown by tens of billions of dollars since fiscal year 2001. However,
as we have reported over the years, DOD continues to have substantial
amounts of secondary inventory (spare parts) that are in excess to
requirements. Most recently, in 2007, we reported that more than half
of the Air Force's secondary inventory, worth an average of $31.4
billion, was not needed to support required inventory levels from
fiscal years 2002 through 2005, although increased demand due to
ongoing military operations contributed to slight reductions in the
percentage of inventory on hand and the number of years of supply it
represents. In ongoing reviews of the Navy's and the Army's secondary
inventory, we are finding that these services also continue to have
significant amounts of inventory that exceeds current requirements. To
reduce its investment in spare parts that are in excess of
requirements, DOD will need to strengthen the accountability and
management of its secondary inventory.
* Oil and gas royalties: In fiscal year 2007, the Department of
Interior's Minerals Management Service collected over $9 billion in oil
and gas royalties, but our work on the collection of federal royalties
has found numerous problems with policies, procedures, and internal
controls that raise serious doubts about the accuracy of these
collections. We also found that past implementation of royalty relief
offered some oil and gas companies during years of low oil and gas
prices did not include provisions to remove the royalty relief in the
event that oil and gas prices rose as they have, and this failure to
include such provisions will likely cost the federal government tens of
billions of dollars over the working lives of the affected leases.
Finally, we have found that the federal government ranks lowest among
the nations in terms of the percentage of total oil and gas revenue
accruing to the government. We have ongoing reviews of Interior's oil
and gas leasing and royalty policies and procedures and reports based
on this work should be publicly released within the next few months.
* The tax gap: The tax gap--the difference between taxes legally owed
and taxes paid on time--is a long-standing problem in spite of many
efforts by Congress and the Internal Revenue Service (IRS) to reduce
it. Recently, IRS estimated a net tax gap for tax year 2001 of about
$290 billion. We have identified the need to take multiple approaches
to reduce the tax gap, and specifically have recommended ways for IRS
to improve its administration of the tax laws in many areas, including
payroll taxes, rental real estate income, the tax preparation industry,
income sent offshore, collecting tax debts, and the usefulness of third-
party information reporting.
Ultimately, long-term fiscal pressures and other emerging forces will
test the capacity of the policy process to reexamine and update
priorities and portfolios of federal entitlement programs, policies,
programs, commitments, and revenue approaches. In that regard, the
"base" of government--spending and revenue--also must be reassessed so
that emerging needs can be addressed while outdated and unsustainable
efforts can be either reformed or eliminated. Tax expenditures should
be part of that reassessment. Spending channeled through the tax code
results in forgone federal revenue that summed to an estimated $844
billion in 2007 and has approximated the size of total discretionary
spending in some years. Yet, little is known about the performance of
credits, deductions, and other tax preferences, statutorily defined as
tax expenditures, which are often aimed at policy goals similar to
those of federal spending programs. Because tax expenditures represent
a significant investment of resources, and in some program areas are
the main tool used to accomplish federal goals, this is a significant
gap in the information available to decision makers.
Underscore Critical Capacity Building Needs in Individual Agencies That
Will Affect Implementation of Whatever New Priorities Are Pursued:
While some progress has been made in recent years, agencies still all
too often lack the basic management capabilities needed to address
current and emerging demands. As a result, any new administration will
face challenges in implementing its policy and program agendas because
of shortcomings in agencies' management capabilities. Accordingly, our
transition effort will synthesize our wide range of work and identify
the key management challenges unique to individual departments and
major agencies. Additionally, our transition work will emphasize five
key themes common to virtually every government agency.
* Select a senior leadership team that has the experience needed to run
large, complex organizations: It is vitally important that leadership
skills, abilities, and experience be among the key criteria the new
President uses to select his leadership teams in the agencies. The
Senate's interest in leveraging its role in confirmation hearings as
evidenced by Senator Voinovich's request to us to suggest management-
related confirmation questions and your interest in hearings such as
this one will send a strong message that nominees should have the
requisite skills to deal effectively with the broad array of complex
management challenges they will face. It is also critical that they
work effectively with career executives and agency staff.
Given that management improvements and transformations can take years
to achieve, steps are needed to ensure a continuous focus on those
efforts. Agencies need to develop executive succession and transition-
planning strategies that seek to sustain commitment as individual
leaders depart and new ones arrive. For example, in creating a Chief
Management Officer (CMO) position for DHS, Congress has required the
DHS CMO to develop a transition and succession plan to guide the
transition of management functions with a new administration. More
broadly speaking, though, the creation of a chief operating officer
(COO)/CMO position in selected federal agencies can help elevate,
integrate, and institutionalize responsibility for key management
functions and transformation efforts and provide continuity of
leadership over a long term. For example, because of its long-standing
management weaknesses and high-risk operations, we have long advocated
the need for a COO/CMO for DOD to advance management integration and
business transformation in the department. In the fiscal year 2008
National Defense Authorization Act, Congress designated the Deputy
Secretary of Defense as the department's CMO.
* Strengthen the capacity to manage contractors and recognize related
risks and challenges: Enhancing acquisition and contracting capability
will be a critical challenge for many agencies in the next
administration in part because many agencies (for example, DOD, DHS,
the Department of Energy, and the Centers for Disease Control and
Prevention) are increasingly reliant on contractors to carry out their
basic operations. In fiscal year 2007, federal agencies spent $436
billion on contracts for products and services. At the same time, our
high-risk list areas include acquisition and contract management issues
that collectively expose hundreds of billions of taxpayer dollars to
potential waste and misuse. To improve acquisition outcomes, we have
stated that agencies need a concentrated effort to address existing
problems while facilitating a reexamination of the rules and
regulations that govern the government-contractor relationship in an
increasingly blended workforce. For example, since agencies have turned
to contractor support to augment their capabilities, they need to
ensure that contractors are playing appropriate roles and that the
agencies have retained sufficient in-house workforce capacity to
monitor contractor cost, quality, and performance.
* Better manage information technology (IT) to achieve benefits and
control costs: A major challenge for the federal government is managing
its massive investment in IT--currently more than $70 billion annually.
Our reports have repeatedly shown that agencies and the government as a
whole face challenges in prudently managing major modernization
efforts, ensuring that executives are accountable for IT investments,
instituting key controls to help manage such projects, and ensuring
that computer systems and information have adequate security and
privacy protections.
The Office of Management and Budget (OMB) identifies major projects
that are poorly planned by placing them on a Management Watch List and
requires agencies to identify high-risk projects that are performing
poorly. OMB and federal agencies have identified approximately 413 IT
projects--totaling at least $25.2 billion in expenditures for fiscal
year 2008--as being poorly planned, poorly performing, or both. OMB has
taken steps to improve the identification of the Management Watch List
and high-risk projects since GAO testified last September, including
publicly disclosing reasons for placement on the Management Watch List
and clarifying high-risk project criteria. However, more needs to be
done by both OMB and the agencies to address recommendations GAO has
previously made to improve the planning, management, and oversight of
poorly planned and performing projects so that potentially billions in
taxpayer dollars are not wasted.
* Address human capital challenges: Governmentwide, about one-third of
federal employees on board at the end of fiscal year 2007 will become
eligible to retire on the new administration's watch. Certain
occupations--air traffic controllers and customs and border protection
personnel among them--are projected to have particularly high rates of
retirement eligibility come 2012. As experienced employees retire, they
leave behind critical gaps in leadership and institutional knowledge,
which could adversely affect the government's ability to carry out its
diverse responsibilities. Agencies must recruit and retain employees
able to create, sustain, and thrive in organizations that are flatter,
results-oriented, and externally focused, and who can collaborate with
other governmental entities as well as with the private and nonprofit
sectors to achieve desired outcomes. The Office of Personnel Management
needs to continue to ensure that its own workforce has the skills
needed to successfully guide agency human capital improvements and
agencies must make appropriate use of available authorities to acquire,
develop, motivate, and retain talent.
* Build on the progress of the statutory management framework: Over the
last 2 decades, Congress has put in place a legislative framework for
federal management that includes results-based management, information
technology, and financial management reforms. As a result of this
framework and the efforts of Congress and the Bush and Clinton
administrations, there has been substantial progress in establishing
the basic infrastructure needed to create high-performing organizations
across the federal government. However, work still remains and
sustained attention by Congress and the incoming administration will be
a critical factor in ensuring the continuing and effective
implementation of the statutory management reforms.
Help Inform the Management Improvement Agendas of Congress and the New
Administration:
Initiated in 1990, GAO's high-risk program has brought a much greater
focus to areas in need of broad-based transformations and those
vulnerable to waste, fraud, abuse, and mismanagement. It also has
provided the impetus for the creation of several statutory management
reforms. GAO's current high-risk list covers 28 areas. Our updates to
the list, issued every 2 years at the start of each new incoming
Congress, have helped in setting congressional oversight agendas. The
support of this Subcommittee and others in Congress has been especially
important to the success of this program. Further, administrations have
consistently turned to the high-risk list in framing their management
improvement initiatives. The current administration in particular,
working with this Subcommittee, has provided a valuable and focused
effort in requiring agencies to develop meaningful corrective action
plans for each area that we have designated as high-risk. As a
consequence of efforts by Congress, the agencies, OMB, and others, much
progress has been made in many high-risk areas, but key issues need
continuing attention. Sustained efforts in these areas by the next
Congress and administration will help improve service to the American
public, strengthen public confidence in the government's performance
and accountability, potentially save billions of dollars, and ensure
the ability of government to deliver on its promises.
Monitor the Implementation of the Presidential Transition Act
Provisions and Identify Potential Improvements for Future Transitions:
The world has obviously changed a great deal since the Presidential
Transition Act of 1963. And while there have been periodic amendments
to the Act, neither the Act nor the transition process itself has been
subject to a comprehensive or systematic assessment of whether the Act
is setting transitions up to be as effective as they might be. We will
be monitoring the transition and reaching out to the new
administration, Congress, and outside experts to identify lessons
learned and any needed improvements in the Act's provisions for future
transitions.
In summary, our goal will continue to be to provide congressional and
executive branch policy makers with a comprehensive snapshot of how
things are working across government and to emphasize the need to
update some federal activities to better align them with 21st century
realities and bring about government transformation. In keeping with
our role, we will be providing Congress and the executive branch with
clear facts and constructive options and suggestions that our elected
officials can use to make policy choices in this pivotal transition
year. The nation's new and returning leaders will be able to use such
information to help address both the nation's urgent issues and long-
term challenges so that our nation stays strong and secure now and for
the next generation.
Chairman Akaka, Senator Voinovich, and Members of the Subcommittee,
this concludes my prepared statement. I would be happy to respond to
any questions you may have.
[End of section]
Related GAO Products:
Oversight of Financial Institutions and Markets:
Housing Government-Sponsored Enterprises: A Single Regulator Will
Better Ensure Safety and Soundness and Mission Achievement (GAO-08-
563T, Mar. 6, 2008).
Financial Regulation: Industry Trends Continue to Challenge the Federal
Regulatory Structure (GAO-08-32, Oct. 12, 2007).
U.S. Efforts in Iraq and Afghanistan:
Securing, Stabilizing, and Reconstructing Afghanistan: Key Issues for
Congressional Oversight (GAO-07-801SP, May 24, 2007).
Securing, Stabilizing and Rebuilding Iraq: Progress Report: Some Gains
Made, Updated Strategy Needed (GAO-08-837, June 23, 2008).
DOD's Readiness and Capabilities:
Military Readiness: Impact of Current Operations and Actions Needed to
Rebuild Readiness of U.S. Ground Forces (GAO-08-497T, Feb. 14, 2008).
Force Structure: Restructuring and Rebuilding the Army Will Cost
Billions of Dollars for Equipment but the Total Cost Is Uncertain (GAO-
08-669T, Apr. 10, 2008).
Protecting the Homeland:
Department of Homeland Security: Progress Report on Implementation of
Mission and Management Functions (GAO-07-454, Aug. 17, 2007).
Department of Homeland Security: Progress Made in Implementation of
Management Functions, but More Work Remains (GAO-08-646T, Apr. 9,
2008).
The Decennial Census:
2010 Census: Census Bureau's Decision to Continue with Handheld
Computers for Address Canvassing Makes Planning and Testing Critical
(GAO-08-936, July 31, 2008).
Information Technology: Significant Problems of Critical Automation
Program Contribute to Risks Facing 2010 Census (GAO-08-550T, Mar. 5,
2008).
Long-Term Fiscal Outlook:
The Nation's Long-Term Fiscal Outlook: April 2008 Update (GAO-08-783R,
May 16, 2008).
Budget Issues: Accrual Budgeting Useful in Certain Areas but Does Not
Provide Sufficient Information for Reporting on Our Nation's Longer-
Term Fiscal Challenge (GAO-08-206, Dec. 20, 2007).
Fiscal Exposures: Improving the Budgetary Focus on Long-Term Costs and
Uncertainties (GAO-03-213 (Jan. 24, 2003).
Long-Term Fiscal Outlook: Long-Term Federal Fiscal Challenge Driven
Primarily by Health Care (GAO-08-912T, June 17, 2008).
Wounded Servicemembers:
DOD and VA: Preliminary Observations on Efforts to Improve Care
Management and Disability Evaluations for Servicemembers (GAO-08-514T,
Feb. 27, 2008).
DOD and VA: Preliminary Observations on Efforts to Improve Health Care
and Disability Evaluations for Returning Servicemembers (GAO-07-1256T,
Sept. 26, 2007).
Health Care in an Increasingly Global Market and Environment:
Emergency Preparedness: States are Planning for Medical Surge, but
Could Benefit from Shared Guidance for Allocating Scarce Medical
Resources (GAO-08-668, June 13, 2008).
Influenza Pandemic: Efforts Under Way to Address Constraints on Using
Antivirals and Vaccines to Forestall a Pandemic (GAO-08-92, Dec. 21,
2007).
Food Safety:
Federal Oversight of Food Safety: High-Risk Designation Can Bring
Needed Attention to Fragmented System (GAO-07-449T, Feb. 8, 2007).
Federal Oversight of Food Safety: FDA's Food Protection Plan Proposes
Positive First Steps, but Capacity to Carry Them Out Is Critical (GAO-
08-435T, Jan. 29, 2008).
Surface Transportation:
Surface Transportation Programs: Proposals Highlight Key Issues and
Challenges in Restructuring the Programs (GAO-08-843R, July 29, 2008).
Surface Transportation: Restructured Federal Approach Needed for More
Focused, Performance-Based, and Sustainable Programs (GAO-08-400, Mar.
6, 2008).
Disaster Response:
Catastrophic Disasters: Enhanced Leadership, Capabilities, and
Accountability Controls Will Improve the Effectiveness of the Nation's
Preparedness, Response, and Recovery System (GAO-06-618, Sept. 6,
2006).
Emergency Management: Observations on DHS's Preparedness for
Catastrophic Disasters (GAO-08-868T, June 11, 2008).
Cyber Critical Infrastructure Protection:
Critical Infrastructure Protection: Sector-Specific Plans' Coverage of
Key Cyber Security Elements Varies (GAO-08-113, Oct. 31, 2007).
Critical Infrastructure Protection: Multiple Efforts to Secure Control
Systems Are Under Way, but Challenges Remain (GAO-07-1036, Sept. 10,
2007).
Improper Payments:
Improper Payments: Status of Agencies' Efforts to Address Improper
Payment and Recovery Auditing Requirements (GAO-08-438T, Jan. 31,
2008).
Fiscal Year 2007 U.S. Government Financial Statements: Sustained
Improvement in Financial Management Is Crucial to Improving
Accountability and Addressing the Long-Term Fiscal Challenges (GAO-08-
847T, June 5, 2008).
DOD Cost Overruns:
Defense Acquisitions: Better Weapon Program Outcomes Require
Discipline, Accountability, and Fundamental Changes in the Acquisition
Environment (GAO-08-782T, June 3, 2008).
Defense Acquisitions: Assessments of Selected Weapon Programs. (GAO-08-
467SP, Mar. 31, 2008).
DOD Supply Chain Management:
DOD's High-Risk Areas: Efforts to Improve Supply Chain Can Be Enhanced
by Linkage to Outcomes, Progress in Transforming Business Operations,
and Reexamination of Logistics Governance and Strategy (GAO-07-1064T,
July 10, 2007).
Defense Inventory: Opportunities Exist to Save Billions by Reducing Air
Force's Unneeded Spare Parts Inventory (GAO-07-232, Apr. 27, 2007).
Oil and Gas Royalties:
Oil and Gas Royalties: A Comparison of the Share of Revenue Received
from Oil and Gas Production by the Federal Government and Other
Resource Owners (GAO-07-676R, May 1, 2007).
Oil and Gas Royalties: Litigation over Royalty Relief Could Cost the
Federal Government Billions of Dollars (GAO-08-792R, June 5, 2008).
The Tax Gap:
Highlights of the Joint Forum on Tax Compliance: Options for
Improvement and Their Budgetary Potential (GAO-08-703SP, June 2008).
Tax Compliance: Multiple Approaches Are Needed to Reduce the Tax Gap
(GAO-07-488T, Feb. 16, 2007).
Tax Expenditures:
Government Performance and Accountability: Tax Expenditures Represent a
Substantial Federal Commitment and Need to Be Reexamined (GAO-05-690,
Sept. 23, 2005).
Higher Education: Multiple Higher Education Tax Incentives Create
Opportunities for Taxpayers to Make Costly Mistakes (GAO-08-717T, May
1, 2008).
Senior Leadership Team:
Organizational Transformation: Implementing Chief Operating Officer/
Chief Management Officer Positions in Federal Agencies (GAO-08-34, Nov.
1, 2007).
Contract Management:
Defense Management: DOD Needs to Reexamine Its Extensive Reliance on
Contractors and Continue to Improve Management and Oversight (GAO-08-
572T, Mar. 11, 2008).
Federal Acquisitions and Contracting: Systemic Challenges Need
Attention (GAO-07-1098T, July 17, 2007).
Information Technology Management:
Information Technology: OMB and Agencies Need to Improve Planning,
Management, and Oversight of Projects Totaling Billions of Dollars (GAO-
08-1051T, July 31, 2008).
Information Security: Progress Reported, but Weaknesses at Federal
Agencies Persist (GAO-08-571T, Mar. 12, 2008).
Human Capital:
Office of Personnel Management: Opportunities Exist to Build on Recent
Progress in Internal Human Capital Capacity (GAO-08-11, Oct. 31, 2007).
Human Capital: Transforming Federal Recruiting and Hiring Efforts (GAO-
08-762T, May 8, 2008).
High-Risk Series:
High-Risk Series: An Update (GAO-07-310, Jan. 31, 2007).
Oversight Letter:
Suggested Areas for Oversight for the 110th Congress (GAO-07-235R, Nov.
17, 2006).
[End of section]
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