GAO Performance and Accountability Report Fiscal Year 2007
(15-NOV-07, GAO-08-1SP).
Presented is GAO's performance and accountability report for
fiscal year 2007. In the spirit of the Government Performance and
Results Act, this annual report informs the Congress and the
American people about what we have achieved on their behalf. The
financial information and the data measuring GAO's performance
contained in this report are complete and reliable.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-1SP
ACCNO: A78170
TITLE: GAO Performance and Accountability Report Fiscal Year
2007
DATE: 11/15/2007
SUBJECT: Accountability
Agency missions
Auditing standards
Performance measures
Strategic planning
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GAO-08-1SP
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GAO:
Performance And Accountability Report:
Fiscal Year 2007:
Serving the Congress and the Nation:
United States Government Accountability Office:
Accountability * Integrity * Reliability:
[See PDF for Image] - graphic text:
Serving the Congress:
Mission:
GAO exists to support the Congress in meeting its constitutional
responsibilities and to help improve the performance and ensure the
accountability of the federal government for the benefit of the
American people.
Accountability:
We help the Congress oversee federal programs and operations to ensure
accountability to the American people. GAO's analysts, auditors,
lawyers, economists, information technology specialists, investigators,
and other multidisciplinary professionals seek to enhance the economy,
efficiency, effectiveness, and credibility of the federal government
both in fact and in the eyes of the American people.
Integrity:
We set high standards for ourselves in the conduct of GAO's work. Our
agency takes a professional, objective, fact-based, nonpartisan,
nonideological, fair, and balanced approach to all activities.
Integrity is the foundation of our reputation, and the GAO approach to
work ensures it.
Reliability:
We at GAO want our work to be viewed by the Congress and the American
public as reliable. We produce high-quality reports, testimonies,
briefings, legal opinions, and other products and services that are
timely, accurate, useful, clear, and candid.
Scope Of Work:
GAO performs a range of oversight-, insight-, and foresight-related
engagements, a vast majority of which are conducted in response to
congressional mandates or requests. GAO's engagements include
evaluations of federal programs and performance, financial and
management audits, policy analyses, legal opinions, bid protest
adjudications, and investigations.
Source: GAO.
[End of Figure]
Table of Contents:
Abbreviations:
How to Use This Report:
Introduction:
From the Comptroller General:
Financial Reporting Assurance Statements:
About GAO:
Mission:
Strategic Planning Management Process:
Organizational Structure:
How We Measure Our Performance:
Part I: Management's Discussion and Analysis:
Promoting a Transparent and Accountable Government by Providing Fact-
Based, Objective Information to the Congress and the Public:
Focusing on Results:
Focusing on Our Client:
Focusing on Our People:
Focusing on Our Internal Operations:
Building and Sustaining Partnerships:
GAO's High-Risk Program:
General Counsel Decisions and Other Legal Work:
Managing Our Resources:
Strategies for Achieving Our Goals:
Internal Management Challenges and Mitigating External Factors That
Could Affect Our Performance:
Part II: Performance Information:
Performance Information by Strategic Goal:
Goal 1 Overview:
Financial Benefits:
Nonfinancial Benefits:
Testimonies:
Goal 2 Overview:
Financial Benefits:
Nonfinancial Benefits:
Testimonies:
Goal 3 Overview:
Financial Benefits:
Nonfinancial Benefits:
Testimonies:
Goal 4 Overview:
Data Quality and Program Evaluation:
Verifying and Validating Performance Data:
Program Evaluation:
Part III: Financial Information:
From the Chief Financial Officer:
Overview of Financial Management and Controls 100:
Financial Systems and Internal Controls:
Audit Advisory Committee's Report:
Independent Auditor's:
Notes to Financial Statements:
Part IV: From the Inspector General:
From the Inspector General:
Part V: Appendixes:
1. Accomplishments and Contributions:
2. GAO's Report on Personnel Flexibilities:
3. GAO's FISMA Efforts:
Image Sources:
Providing Comments on This Report:
Obtaining Copies of GAO Documents:
[End of Table of Contents]
Abbreviations:
ACF: Administration for Children and Families:
BEA: business enterprise architecture:
BMDS: Ballistic Missile Defense System:
CAO: Chief Administrative Officer and Chief Administrative Office:
CBO: Congressional Budget Office:
CBP: Customs and Border Protection:
CDP: collection due process:
CFO: Chief Financial Officer:
CMS: Centers for Medicare & Medicaid Services:
DHS: Department of Homeland Security:
DI: disability insurance:
DOD: Department of Defense:
DOE: Department of Energy:
DOT: Department of Transportation:
DTV: digital television:
EAC: Employee Advisory Council:
EAS: Emergency Alert System:
EBT: electronic benefit transfer:
EEOC: Equal Employment Opportunity Commission:
EPA: Environmental Protection Agency:
ERMS: Electronic Records Management System:
FAA: Federal Aviation Administration:
FAS: Financial Audit System:
FBI: Federal Bureau of Investigation:
FDA: Food and Drug Administration:
FCC: Federal Communications Commission:
FCS: Future Combat System:
FEMA: Federal Emergency Management Agency:
FFMIA: Federal Financial Management Improvement Act:
FHA: Federal Housing Administration:
FICA: Federal Insurance Contributions Act:
FISMA: Federal Information Security Management Act:
FMFIA: Federal Managers' Financial Integrity act:
FOIA: Freedom of Information Act:
FSI: Forensic Audits and Special Investigations:
FTA: Federal Transit Administration:
FTE: full-time equivalent:
FWS: Federal Wage System:
GAO: Government Accountability Office:
GOES-R: Geostationary Operational Environment Satellite-R series:
GS: General Schedule:
HHS: Department of Health and Human Services:
HUD: Department of Housing and Urban Development:
IDP: individual development plan:
IED: improvised explosive device:
IESS: Integrated Electronic Security System:
IG: Inspector General:
IFPTE: International Federation of Professional and Technical
Engineers:
HIP: Individual and Households Program:
INTOSAI: International Organization of Supreme Audit Institutions:
IRS: Internal Revenue Service:
IS: information security:
ISTS: Information Systems and Technology Services:
IT: information technology:
LEP: limited English proficiency:
MCA: managerial cost accounting:
MCC: Millennium Challenge Corporation:
MDA: Missile Defense Agency:
MSA: Metropolitan statistical areas:
NASA: National Aeronautics and Space Administration:
NCMEC: National Center for Missing and Exploited Children:
NextGen: Next Generation Air Transportation System:
NFC: National Finance Center:
NIST: National Institute of Standards and Technology:
NPOESS: National Polar-Orbiting Operational Environment Satellite
System:
NRC: Nuclear Regulatory Commission:
NSPS: National Security Personnel System:
O&M: operations and maintenance:
OASI: Old Age and Survivors Insurance:
OMB: Office of Management and Budget:
OPM: Office of Personnel Management:
PBC: performance-based compensation:
PBGC: Pension Benefit Guaranty Corporation:
PCA: private collection agency:
PEO: Program Executive Office:
PIN: personal identification number:
PPA: Pension Protection Act of 2006:
PRISM: Program Review Instrument for Systems Monitoring:
PT: program and technical:
QCI: Quality and Continuous Improvement:
QDR: Quadrennial Defense Review:
SAN: storage area network:
SBA: Small Business Administration:
SBI: Secure Border Initiative:
SCHIP: State Children's Health Insurance Program:
SEC: Securities and Exchange Commission:
SLI: Space Launch Initiative:
SNF: skilled nursing facility:
SSA: Social Security Administration:
SSI: Supplemental Security Income:
SSN: Social Security number:
TAP: Transition Assistance Program:
TSA: Transportation Security Administration:
TSCA: Toxic Substances Control Act:
TSP: Thrift Savings Plan:
UN: United Nations:
USACE: U.S. Army Corps of Engineers:
USAID: U.S. Agency for International Development:
USDA: United States Department of Agriculture:
USPS: United States Postal Service:
US-VISIT: United States Visitor and Immigrant Status Indicator
Technology:
VA: Department of Veterans Affairs:
[End of Abbreviations]
How to Use This Report:
This report describes the U.S. Government Accountability Office's (GAO)
performance measures, results, and accountability processes for fiscal
year 2007. In assessing our performance, we compared actual results
against targets and goals that were set in our annual performance plan
and performance budget and were developed to help carry out our
strategic plan. Our complete set of strategic planning and performance
and accountability reports is available on our Web site at [hyperlink,
http://www.gao.gov/sp.html].
This report has an introduction, four major parts, and supplementary
appendixes as follows:
Introduction:
This section includes the letter from the Comptroller General and a
statement attesting to the reliability of our performance and financial
data in this report and the effectiveness of our internal control over
our financial reporting. This section also includes a summary
discussion of our mission, strategic planning process, organizational
structure, and process for assessing our performance.
Management's Discussion and Analysis:
This section discusses our agencywide performance results and use of
resources in fiscal year 2007. It also includes information on the
strategies we use to achieve our goals and the management challenges
and external factors that affect our performance.
Performance Information:
This section includes details on our performance results by strategic
goal in fiscal year 2007 and the targets we are aiming for in fiscal
year 2008. It also includes an explanation of how we ensure the
completeness and reliability of the performance data used in this
report.
Financial Information:
This section includes details on our finances in fiscal year 2007,
including a letter from our Chief Financial Officer, audited financial
statements and notes, and the reports from our external auditor and
audit advisory committee. This section also includes information on our
internal controls and an explanation of the kind of information each of
our financial statements conveys.
From the Inspector General:
This section includes our Inspector General's assessment of our
agency's management challenges.
Appendixes:
These sections include detailed write-ups about our most significant
accomplishments and contributions recorded in fiscal year 2007 and
information on certain human capital management flexibilities and on
information security management efforts.
[End of How to Use This Report]
Introduction: From the Comptroller General:
[See PDF for picture of David M. Walker, Comptroller of the United
States]
Source: GAO.
[End of Figure]
November 15, 2007:
I am pleased to present our performance and accountability report for
fiscal year 2007. We accomplished a great deal for the Congress and the
American people with the resources we received. We continued to focus
our efforts on increasing the transparency, efficiency, and
accountability of federal operations by giving the Congress and the
public the information they need to ensure that the federal government
makes prudent decisions now and in the future. We performed our work in
accordance with our strategic plan for serving the Congress, guided by
our core values, and consistent with applicable professional standards.
You can be assured that the information in this report is complete and
reliable and meets our high standards.
In fiscal year 2007 we exceeded the targets for five of our six key
performance measures--financial benefits, nonfinancial benefits, past
recommendations implemented, new products with recommendations, and
testimonies--that gauge how well we produced results and served our
client, the Congress. With this level of performance we were able to
achieve a return on investment for the American people of about $94 for
every dollar the Congress gave us. Specifically, we recorded $45.9
billion in financial benefits from our work and 1,354 nonfinancial
benefits, which helped improve government operations and better serve
the public. We also documented that the Congress and federal agencies
implemented 82 percent of the recommendations we made 4 years ago and
that 66 percent of the new products we issued during the fiscal year
contained recommendations that in time should have a positive impact on
the efficiency and effectiveness of the federal government. Moreover,
this was a banner year for us in testimonies. Our senior executives and
I delivered testimonies at 276 hearings, 36 more hearings than in
fiscal year 2006. In fact, our performance on this measure is the
fourth highest over the last 25 years and an all-time high for us on a
per capita basis. Though we issued our products on time 94 percent of
the time, we fell short on our timeliness measure by 1 percentage
point, just shy of our 95 percent target.
We also met or exceeded five of the eight targets we set for our people
measures--new hire rate, acceptance rate, retention rate with
retirements, retention rate without retirements, and staff development.
While these measures were largely similar to last year's results, we
missed the performance targets for staff utilization, leadership, and
organizational climate by 5 percentage points or less in spite of the
challenges we faced internally. These challenges included meeting tight
deadlines and being responsive to our clients when demand for our work
was extremely high and budgetary and staffing resources were extremely
constrained. During fiscal year 2007, we also had to manage a large
workload in the wake of significant human capital transformation
efforts and other changes within our agency, including a union
organizing campaign.
While supporting the Congress's oversight efforts with more than 1,200
reports and testimonies we issued during the fiscal year, in November
2006, we sent a letter to the incoming leadership of the new Congress
suggesting three dozen areas for additional oversight. In addition, we
welcomed the new congressional Members in January with several special
publications to help them make the transition to their responsibilities
as stewards of the federal purse. All of these publications--Fiscal
Stewardship: A Critical Challenge Facing Our Nation (GAO-07-362SP,
January 2007); Understanding Similarities and Differences between
Accrual and Cash Deficits (GAO-07-117SP, December 2006); and
Understanding the Primary Components of the Annual Financial Report of
the United States Government (GAO-05-958SP, September 2005)--are
available through our Web site at [hyperlink, http://www.gao.gov].
Though we received a clean opinion on our own financial statements, the
federal government's books are not yet in order and will require
focused leadership and sustained attention to get them there,
especially in connection with the Department of Defense.
The Congress needs information to make sound judgments that will
benefit this nation in the short term and over the long run. Thus, to
further assist our client with its oversight function and aid its
insight and foresight, we revised our list of federal programs and
areas at risk of fraud, waste, abuse, and mismanagement and in need of
broad-based transformation and issued our biennial report card called
High-Risk Series: An Update (GAO-07-310, January 2007). We continue to
do this work to bring visibility and urgency to these areas and to
prompt needed actions sooner rather than later. I also continued to
speak around the country about the fiscal condition and long-term
fiscal outlook of our country as part of the Fiscal Wake-Up Tour
sponsored by the Concord Coalition--a nationwide, nonpartisan,
grassroots organization dedicated to educating the public about the
consequences of fiscal deficits and promoting a generationally
responsible fiscal policy. The tour also involves the Brooking
Institution and the Heritage Foundation and a range of other
organizations. To date, the tour has held events in 24 states and the
District of Columbia reaching thousands of people. The purpose of this
effort is to state the facts and speak the truth about the fiscal
challenges that this country faces if we continue to do business in the
same way, increase public awareness about the consequences, and help
create the impetus and support for appropriate federal, state, and
local officials to take much needed and long overdue action.
Closer to home, we updated our strategic plan to guide our own actions
in the near future and ensure that we have the foresight needed to
support the Congress. Our strategic plan includes bodies of work that
address anticipated requests for evaluations of current and emerging
issues and anticipated work related to government transformation
efforts, especially in the areas of homeland security and defense.
Seven broad themes provide the context for our strategic plan and we
describe them in detail in Forces That Will Shape America's Future: The
Themes from GAO's Strategic Plan (GAO-07-467SP, March 2007). We believe
these themes will shape the many requests and mandates we expect to
receive from the Congress over the next 3 years as well as the work we
plan to do under my statutory authority as Comptroller General of the
United States.
An effective, transparent government requires a first-rate workforce
and one of our agencywide goals is to create a model federal agency and
world-class professional services organization. We want to continue to
attract staff from a variety of disciplines who can gather the facts
and develop innovative solutions to both old and new problems
challenging the federal government. Thus, in fiscal year 2007 we
improved our recruiting and hiring practices by clarifying our hiring
goals and making it a priority to aggressively recruit at select
colleges and universities. We also instituted an executive exchange
program to help us tap talent outside of the federal government for
short-term projects. In addition, we began a professional development
program for entry-level administrative and professional support staff
(similar to our development program for analyst staff), initiated a
formal mentoring program, and continued to support employees working
flexible schedules and telecommuting to help them balance the demands
of work and home. I am very proud to say that we rated second among
large federal agencies on the Partnership for Public Service's list of
the Best Places to Work in the Federal Government for 2007, up from
fourth place in 2005. Furthermore, in September 2007 we were named as
one of Washington's top 60 employers by Washingtonian magazine.
However, not all of our human capital initiatives have been easy--or
without controversy, especially the 2006 restructuring of our midlevel
(Band II) analyst workforce. Reforms that affect an employee's pay and
job classification tend to be very controversial and this is
particularly true in a workforce like ours that is highly educated and,
by training and disposition, highly skeptical and analytical. In May
2007 I testified at oversight hearings to discuss changes we made to
many of our human capital policies and procedures over the last several
years and other related issues. For example, employees' pay and
compensation are now more directly tied to the market and to achieving
results--measurable outcomes that further the agency's mission. Also,
jobs for our employees are classified according to employees' roles and
responsibilities, and pay is based on a employees' job as well as
market-based conditions and their performance rather than longevity on
the job. We believe we are the first major federal agency to adopt such
an approach on an agencywide basis. At the same time, due to my concern
regarding the trends in ratings differences associated with our
performance appraisals over time, we also contracted with a private
firm to assess the possible reasons for the differences and make
related recommendations.
For some staff, these changes are unsettling; thus listening and
responding to employees' concerns and comments is particularly
important during this time of change. I and the other executives
encouraged employees to provide their input about the changes taking
place and the direction the agency is headed--and we heard them. During
fiscal year 2007, we made certain adjustments to our annual pay
parameters and I proposed legislation known as the Government
Accountability Act of 2007, which, if passed, will benefit our existing
employees and will serve to further enhance our ability to attract,
retain, and reward a top-flight workforce. For example, under one
provision of the act, employees below the senior executive level would
be able to include the bonus part of their performance awards in their
high-three average salary for retirement purposes, which is not
currently possible.
We hope to work through these human capital issues and our other
management challenges related to physical and information security in
partnership with the agency's recently elected employee's union, the
International Federation of Professional and Technical Engineers, which
will serve as the exclusive representative of entry and midlevel
analysts as well as other employees in dealing with management on
issues related to certain terms and conditions of employment. I and the
rest of management will bargain in good faith with the union and hope
to reach timely agreements on issues of mutual interest and concern.
The challenge before us as servants of the Congress and the nation is
to maintain a government that is effective, transparent, and relevant
for this generation and generations to come. This agency has never
wavered in its belief that the Congress and the public deserve to be
fully informed about all major aspects of government operations. I am
committed to ensuring that we will continue to "lead by example" in
transforming government while providing the most professional,
objective, fact-based, nonpartisan, nonideological, fair, and balanced
information possible to the Congress and the American people.
Signed by:
David M. Walker:
Comptroller General of the United States:
[End of From the Comptroller General]
Financial Reporting Assurance Statements:
November 15, 2007:
We, as GAO's executive committee, are responsible for preparing and
presenting the financial statements and other information included in
this performance and accountability report. The financial statements
included herein are presented in conformity with U.S. generally
accepted accounting principles; incorporate management's reasonable
estimates and judgments, where applicable; and contain appropriate and
adequate disclosures. Based on our knowledge, the financial statements
are presented fairly in all material respects, and other financial
information included in this report is consistent with the financial
statements.
We are also responsible for establishing and maintaining adequate
internal control over financial reporting. We conducted an assessment
of the effectiveness of our internal control over financial reporting
consistent with the criteria in 31 U.S.C. 3512 (c), (d) (commonly
referred to as the Federal Managers' Financial Integrity Act (FMFIA)
and in Appendix A of Office of Management and Budget (OMB) Circular No.
A-123, Management's Responsibility for Internal Control. Based on the
results of this assessment, we have reasonable assurance that internal
control over financial reporting as of September 30, 2007, was
operating effectively and that no material weaknesses exist in the
design or operation of the internal control over financial reporting.
On the basis of our comprehensive management control program, we are
pleased to certify, with reasonable assurance, the following:
* Our financial reporting is reliable--transactions are properly
recorded, processed, and summarized to permit the preparation of
financial statements in conformity with U.S. generally accepted
accounting principles, and assets are safeguarded against loss from
unauthorized acquisition, use, or disposition.
* We are in compliance with all applicable laws and regulations--
transactions are executed in accordance with laws governing the use of
budget authority and other laws and regulations that could have a
direct and material effect on the financial statements.
* Our performance reporting is reliable-- transactions and other data
that support reported performance measures are properly recorded,
processed, and summarized to permit the preparation of performance
information consistent with the criteria set forth in the Government
Performance and Results Act of 1993 and related OMB guidance.
We also believe that (1) these same systems of accounting and internal
controls provide reasonable assurance that we are in compliance with
the spirit of FMFIA and (2) we have implemented and maintained
financial systems that comply substantially with federal financial
management systems requirements, applicable federal accounting
standards, and the U.S. Government Standard General Ledger at the
transaction level consistent with the requirements in the Federal
Financial Management Improvement Act (FFMIA) and OMB guidance. These
are objectives that we set for ourselves even though, as part of the
legislative branch of the federal government, we are not legally
required to do so.
Signed by:
David M. Walker:
Comptroller General of the United States:
Signed by:
Gene L. Dodaro:
Chief Operating Officer:
Signed by:
Sallyanne Harper:
Chief Financial Officer:
Signed by:
Gary L. Kepplinger:
General Counsel:
[End of Financial Reporting Assurance Statements]
About GAO:
We exist to support the Congress in meeting its constitutional
responsibilities and to help improve the performance and ensure the
accountability of the federal government for the benefit of the
American people.
GAO is an independent, nonpartisan, professional services agency in the
legislative branch of the federal government. Commonly known as the
"audit and investigative arm of the Congress" or the "congressional
watchdog," we examine how taxpayer dollars are spent and advise
lawmakers and agency heads on ways to make government work better. As a
legislative branch agency, we are exempt from many laws that apply to
the executive branch agencies. However, we generally hold ourselves to
the spirit of many of the laws, including 31 U.S.C. 3512 (commonly
referred to as the Federal Managers' Financial Integrity Act), the
Government Performance and Results Act of 1993, and the Federal
Financial Management Improvement Act of 1996.[Footnote 1] Accordingly,
this performance and accountability report for fiscal year 2007
supplies what we consider to be information that is at least equivalent
to that supplied by executive branch agencies in their annual
performance and accountability reports.
Mission:
Our mission is to support the Congress in meeting its constitutional
responsibilities and to help improve the performance and ensure the
accountability of the federal government for the benefit of the
American people. The strategies and means that we use to accomplish
this mission are described in the following pages. In short, we
accomplish our mission by providing reliable information and informed
analysis to the Congress, to federal agencies, and to the public, and
we recommend improvements, when appropriate, on a wide variety of
issues. Three core values--accountability, integrity, and reliability-
-form the basis for all of our work, regardless of its origin. These
are described on the inside front cover of this report.
GAO's History:
The Budget and Accounting Act of 1921 required the President to issue
an annual federal budget and established GAO as an independent agency
to investigate how federal dollars are spent. In the early years, we
mainly audited vouchers, but after World War II we started to perform
more comprehensive financial audits that examined the economy and
efficiency of government operations. By the 1960s, GAO had begun to
perform the type of work we are noted for today�program
evaluation�which examines whether government programs are meeting their
objectives.
Strategic Planning and Management Process:
To accomplish our mission, we use a strategic planning and management
process that is based on a hierarchy of four elements (see fig. 1),
beginning at the highest level with the following four strategic goals:
* Strategic Goal 1: Provide Timely, Quality Service to the Congress and
the Federal Government to Address Current and Emerging Challenges to
the Well-Being and Financial Security of the American People:
* Strategic Goal 2: Provide Timely, Quality Service to the Congress and
the Federal Government to Respond to Changing Security Threats and the
Challenges of Global Interdependence:
* Strategic Goal 3: Help Transform the Federal Government's Role and
How It Does Business to Meet 21st Century Challenges:
* Strategic Goal 4: Maximize the Value of GAO by Being a Model Federal
Agency and a World-Class Professional Services Organization:
Figure 1: GAO's Strategic Planning Hierarchy:
[See PDF for Image] - graphic text:
A four step pyramid that shows GAO's strategic planning hierarchy.
Step 1: Strategic Goals (4);
Step 2: Strategic Objectives (21);
Step 3: Performance goals (93);
Step 4: Key Efforts (300+).
Source: GAO.
[End of Figure]
Our audit, evaluation, and investigative work is primarily aligned
under the first three strategic goals, which span issues that are both
domestic and international, affect the lives of all Americans, and
influence the extent to which the federal government serves the
nation's current and future interests (see fig. 2).
Figure 2: Examples of How GAO Assisted the Nation:
A Table listing GAO's strategic goals and what it accomplished to reach
those goals.
Strategic Goal 1:
Description: Provide timely, quality service to the Congress and the
federal government to address current and emerging challenges to the
well being and financial security of the American people:
* highlight ways to address problems affecting the delivery of health
and disability services for injured soldiers and veterans;
* improve the Food and Drug Administration�s process for removing
dangerous drugs from the marketplace;
* identify physician practice patterns to improve efficiency in the
Medicare program;
* encourage the preservation of affordable housing;
* identify Food Stamp Program areas vulnerable to payment errors and
fraud;
* improve the Small Business Administration�s timely delivery of
disaster assistance;
* outline various approaches used in the United States and abroad to
negotiate drug prices;
* assess the housing needs of low-income veterans;
* focus attention on the Pension Benefit Guaranty Corporation�s premium
structure;
* evaluate the Federal Housing Administration�s role and modernizing
efforts;
* increase knowledge sharing about federal and state efforts to improve
older driver safety;
* highlight inadequacies in the management of federal oil and gas
royalties;
* raise awareness about the financial risks to the insurance industry
posed by climate change;
* improve transportation efficiency.
Strategic Goal 2:
Description: Provide timely, quality service to the Congress and the
federal government to respond to changing security threats and the
challenges of global interdependence:
* identify key issues for congressional oversight of U.S. efforts to
stabilize and rebuild Iraq;
* improve the transparency of military compensation costs;
* promote federal efforts to secure sensitive information;
* identify the need for a Chief Management Officer to improve the
Department of Defense�s business processes;
* highlight challenges with securing energy commodity carrying tankers
from terrorist attacks;
* strengthen security at airport passenger screening checkpoints;
* identify shortcomings in the Department of Homeland Security�s
program to track the visa status of visitors and immigrants to the
United States;
* improve licensing procedures for radioactive materials;
* enhance the sharing of federal homeland security information with
states and localities;
* contribute to congressional dialogue on the U.S. food aid provisions
of the 2007 Farm bill;
* improve oversight and procurement practices at the United Nations
improve financial literacy in the United States;
* better protect consumers who purchase title insurance;
* improve the financial supervision of holding companies.
Strategic Goal 3:
Description: Help transform the federal government's role and how it
does business to meet 21st century challenges:
* identify the risks of relying on military and homeland security
contractors;
* alert the Congress to cost and schedule risks affecting major weapon
systems;
* uncover fraud, waste, and abuse in financial assistance payments to
people affected by hurricanes Katrina and Rita;
* promote a coordinated approach to improving standards and educating
professionals in the accountability community;
* identify multiple approaches needed to reduce the tax gap;
* enlighten the public about the nation�s long-term fiscal challenges;
* inform the Congress about the status of recovery and rebuilding
efforts in the aftermath of hurricanes Katrina and Rita;
* enhance national preparedness for an influenza pandemic;
* gauge agencies� progress with implementing the Freedom of Information
Act;
* ensure that individuals� personal information is protected;
* summarize progress and challenges and identify federal financial
implications of rebuilding the Gulf Coast;
* strengthen the Department of Defense�s business systems modernization
program;
* strengthen the oversight of an environmental satellite program.
Strategic Goal 4:
Description: Maximize the value of GAO by being a model federal agency
and a world-class professional services organization;
* inform the Congress and the public through our strategic plan about
the forces that are likely to shape our nation�s future, its place in
the world, and the changing role of the federal government;
* develop and implement the Financial Audit System�an automated tool
used to audit the financial statements of executive branch agencies.
Source: GAO.
[End of Figure]
The fourth goal is our only internal one and is aimed at maximizing our
productivity through such efforts as investing steadily in information
technology (IT) to support our work; ensuring the safety and security
of our people, information, and assets; pursuing human capital
transformation; and leveraging our knowledge and experience. We revisit
the focus and appropriateness of these four strategic goals each time
that we update our strategic plan. We updated our strategic plan in
March 2007.
An Example of Our Strategic Planning Elements:
Strategic Goal 1: Provide Timely, Quality Service to the Congress and
the Federal Government to Address Current and Emerging Challenges to
the Well-Being and Financial Security of the American People;
Strategic Objective: A Safe, Secure, and Effective National Physical
Infrastructure;
Performance Goal: Assess the Federal Government�s Role in Fostering and
Overseeing Telecommunications in the Public Interest;
Key Efforts:
* Assess the federal universal service program in promoting
the availability and affordability of basic and advanced
telecommunications services to all Americans;
* Assess the effectiveness of key federal agencies in managing the
technical resources needed to meet the growing demand for
telecommunications services by government and commercial users;
* Assess the ability of the Federal Communications Commission to
respond to and resolve legal, regulatory, capacity, and policy issues
that affect how the commercial telecommunication industry can develop
and operate.
The four strategic goals are supported by strategic objectives that are
in turn supported by and achieved through numerous performance goals
and key efforts. Our strategic planning framework for serving the
Congress, which lists the strategic objectives under each goal, is
depicted on page 12.
Complete descriptions of the steps in our strategic planning and
management process are included in our strategic plan for fiscal years
2007 through 2012, which is available on our Web site at [hyperlink,
http://www.gao.gov]. This site also provides access to our annual
performance plans since fiscal year 1999 and our performance and
accountability reports since fiscal year 2001.
To ensure that we are well positioned to meet the Congress's current
and future needs, we update our 6-year strategic plan every 3 years,
consulting extensively during the update with our clients on Capitol
Hill and with other experts (see our complete strategic plan on
[hyperlink, http://www.gao.gov/sp/d04534sp.pdf]. Using the plan as a
blueprint, we lay out the areas in which we expect to conduct research,
audits, analyses, and evaluations to meet our clients' needs, and we
allocate the resources we receive from the Congress accordingly. Given
the increasingly fast pace with which crucial issues emerge and evolve,
we design a certain amount of flexibility into our plan and staffing
structure so that we can respond readily to the Congress's changing
priorities. When we revise our plan or our allocation of resources, we
disclose those changes in annual performance plans, which are posted--
like our strategic plan--on the Web for public inspection [hyperlink,
http://www.gao.gov/sp.html].
In fiscal year 2007, we revised our strategic plan for the third time
since we first issued a strategic plan in 2000. The broad goals and
objectives of our strategic plan for 2007-2012 did not change
significantly since our last update, but events such as the continuing
war in Iraq and recent and predicted natural disasters account for some
modification in emphasis. Seven broad issues or "themes" provide the
context for our strategic plan (see GAO's Strategic Plan Framework on
p. 12), many of which were raised repeatedly by our client and other
stakeholders during our outreach efforts and discussions we initiated
while preparing the plan. For more information about the themes see
Forces That Will Shape America's Future: The Themes from GAO's
Strategic Plan (GAO-07-467SP, March 2007).
Figure 3: GAO's Strategic Plan Framework:
[See PDF for Image] - graphic text:
Serving the Congress and the Nation: GAO's Strategic Plan Framework:
Mission:
GAO exists to support the Congress in meeting its constitutional
responsibilities and to help improve the performance and ensure the
accountability of the federal government for the benefit of the
American people.
Themes:
* Changing Security Threats;
* Sustainability Concerns;
* Economic Growth and Competitiveness;
* Global Interdependency;
* Societal Change;
* Quality of Life;
* Science & Technology;
Goals & Objectives:
Provide Timely, Quality Service to the Congress and the Federal
Government to...
Address Current and Emerging Challenges to the Well-being and Financial
Security of the American People related to...
* Health care needs;
* Lifelong learning;
* Work benefits and protections;
* Financial security;
* Effective system of justice;
* Viable communities;
* Natural resources use and environmental protection;
* Physical infrastructure;
Respond to Changing Security Threats and the Challenges of f Global
Interdependence involving...
* Homeland security;
* Military capabilities and readiness;
* Advancement of U.S. interests;
* Global market force;
Help Transform the Federal Government�s Role and How It t Does Business
to Meet 21st Century Challenges by assessing...
* Roles in achieving federal objectives;
* Government transformation;
* Key management challenges and program risks;
* Fiscal position and financing of the government;
Maximize the Value of GAO by Being a Model Federal Agency and d a World-
Class Professional Services Organization in the areas of...
* Client and customer satisfaction;
* Strategic leadership;
* Institutional knowledge and experience;
* Process improvement;
* Employer of choice;
Core Values:
* Accountability;
* Integrity;
* Reliability.
Source: GAO.
[End of GAO's Strategic Plan Framework]
Each year, we hold ourselves accountable to the Congress and to the
American people for our performance, primarily through the annual
performance and accountability report.
We have included some information about future plans in this report to
provide as cohesive a view as possible of what we have done, what we
are doing, and what we expect to do to support the Congress and to
serve the nation. Last year, the Association of Government Accountants
awarded us for the fifth consecutive year its Certificate of Excellence
in Accountability Reporting for our fiscal year 2006 performance and
accountability report. According to the association, this certificate
means that we produced an interesting and informative report that
achieved the goal of complete and fair reporting. We also received an
award from Graphic Design USA for the Highlights version of our fiscal
year 2006 report. (See fig. 4.):
Organizational Structure:
As the Comptroller General of the United States, David M. Walker is the
head of GAO and is serving a 15-year term that began in November 1998.
Three other executives join Comptroller General Walker to form our
Executive Committee: Chief Operating Officer Gene L. Dodaro, Chief
Administrative Officer/Chief Financial Officer Sallyanne Harper, and
General Counsel Gary Kepplinger.
To achieve our strategic goals, our staff is organized as shown in
figure 5. For the most part, our 13 evaluation, audit, and research
teams perform the work that supports strategic goals 1, 2, and 3--our
three external strategic goals--with several of the teams working in
support of more than one strategic goal. Also, our Forensic Audits and
Special Investigations (FSI) unit, within our Financial Management and
Assurance team, provides the Congress with high-quality forensic
audits; investigates fraud, waste, and abuse; evaluates security
vulnerabilities; and conducts other appropriate investigative services
as part of its own assignments or in support of other teams. In
addition, FSI follows up on engagements and referrals from our other
teams when its special services are required to help determine whether
legislative or administrative actions are necessary. FSI is composed of
investigators, auditors who have experience with forensic audits, and
staff in General Counsel who work with FraudNet--our online system
designed to facilitate follow up of allegations of fraud, waste, abuse,
or mismanagement of federal funds.
Senior executives in charge of the teams manage a mix of engagements to
ensure that we meet the Congress's need for information on quickly
emerging issues as we also continue longer-term work efforts that flow
from our strategic plan. To serve the Congress effectively with a
finite set of resources, senior managers consult with our congressional
clients and determine the timing and priority of engagements for which
they are responsible.
As described below, General Counsel supports the work of all of our
teams. In addition, the Applied Research and Methods team assists the
other teams on matters requiring expertise in areas such as economics,
research design, and statistical analysis. Staff in many offices, such
as Strategic Planning and External Liaison, Congressional Relations,
Opportunity and Inclusiveness, Quality and Continuous Improvement,
Public Affairs, and the Chief Administrative Office, support the
efforts of the teams. This collaborative process, which we refer to as
matrixing, increases our effectiveness, flexibility, and efficiency in
using our expertise and resources to meet congressional needs on
complex issues.
Figure 4: GAO's Performance and Accountability Report 2006 Awards:
[See PDF for Image] - graphic text:
Scanned copies of:
1. AGA Certificate of Excellence in Accountability Reported presented
to the U.S. Government Accountability Office.
In recognition of your outstanding efforts preparing GAO's Performance
and Accountability Report for the fiscal year ended September 30, 2006.
A Certificate of Excellence in Accountability is presented by AGA to
federal government agencies whose annual Performance and Accountability
Reports achieve the highest standards demonstrating accountability and
communicating results.
Signed by:
John H Hammel:
Chair, Certificate of Excellence in Accountability Reporting Director:
Signed by:
Relmond R. Van Daniker, Executive Director, AGA:
2. 2007 Graphic Design USA presents an American Inhouse Design Award to
Government Accountability Office for Performance and
Accountability Report 2006.
3. Cover of the Government Accountability Office's Performance and
Accountability Report for Fiscal Year 2006.
4. Cover of the Government Accountability Office's Performance and
Accountability Highlights for Fiscal Year 2006.
Source: GAO.
[End of Figure]
General Counsel is structured to facilitate the delivery of legal
services to the teams and staff offices that support our four strategic
goals. This structure allows General Counsel to (1) provide legal
support to our staff offices and audit teams concerning all matters
related to their work and (2) produce legal decisions and opinions for
the Comptroller General. Specifically, the goal 1, goal 2, and goal 3
groups in General Counsel are organized to provide each of the audit
teams with a corresponding team of attorneys dedicated to supporting
each team's needs for legal services. In addition, these groups prepare
advisory opinions to committees and members of the Congress on agency
adherence to laws applicable to their programs and activities. General
Counsel's Legal Services group provides in-house support to our
management on a wide array of human capital matters and initiatives and
on information management and acquisition matters and defends the
agency in administrative and judicial forums. Finally, attorneys in the
Procurement Law and the Budget and Appropriations Law groups prepare
administrative decisions and opinions adjudicating protests to the
award of government contracts or opining on the availability and use of
appropriated funds.
For strategic goal 4--our fourth and only internal strategic goal--
staff in our Chief Administrative Office take the lead. They are
assisted on specific key efforts by the Applied Research and Methods
team and by staff offices such as Strategic Planning and External
Liaison, Congressional Relations, Opportunity and Inclusiveness,
Quality and Continuous Improvement, and Public Affairs. In addition,
attorneys in General Counsel, primarily in the Legal Services group,
provide legal support for goal 4 efforts.
We maintain a workforce of highly trained professionals with degrees in
many academic disciplines, including accounting, law, engineering,
public and business administration, economics, and the social and
physical sciences. About three-quarters of our approximately 3,200
employees are based at our headquarters in Washington, D.C; the rest
are deployed in 11 field offices across the country. Staff in these
field offices are aligned with our research, audit, and evaluation
teams and perform work in tandem with our headquarters staff in support
of our external strategic goals.
GAO Field Locations:
Atlanta;
Boston;
Chicago;
Dallas;
Dayton;
Denver;
Huntsville;
Los Angeles;
Norfolk;
San Francisco;
Seattle.
Figure 5: Organizational Structure:
[See PDF for Image] - graphic text:
An organization chart showing GAO�s basic structure. The agency�s top
level of organization was the Executive Committee, which includes the
Comptroller General, the Chief Operating Officer, the Chief
Administrative Officer/Chief Financial Officer, and the General
Counsel. Twenty-three units report directly to the Comptroller General
and the Chief Operating Officer. The units included the following staff
offices: Public Affairs, Strategic Planning and External Liaison,
Congressional Relations, Opportunity and Inclusiveness, and Inspector
General, which report to the Comptroller General; and Quality and
Continuous Improvement, which reports to the Chief Operating Officer.
Other units that report to the Chief Operating Officer include teams
and field operations that conduct audits, evaluations, and research.
These teams perform work primarily supporting one of our three external
strategic goals but several teams perform work in support of multiple
strategic goals. Generally the teams fall under the following goals:
Goal 1:
Provide timely, quality service to the Congress and the federal
government to address current and emerging challenges to the well-being
and financial security of the American people.
* Education, Workforce, and Income Security;
* Financial Markets and Community Investment;
* Health Care;
* Homeland Security and Justice;
* Natural Resources and Environment;
* Physical Infrastructure;
Goal 2:
Provide timely, quality service to the Congress and the federal
government to respond to the changing security threats and the
challenges of global interdependence.
* Acquisition and Sourcing Management;
* Defense Capabilities and Management;
* International Affairs and Trade;
Goal 3:
Help transform the federal government�s role and how it does business
to meet 21st century challenges.
* Applied Research and Methods;
* Financial Management and Assurance;
-Forensic Audits and Special Investigations;
* Information Technology;
* Strategic Issues;
-Federal Budget and Intragovernmental Relations;
Goal 4:
Five units that report to the Chief Administrative Officer support our
fourth goal; which is to maximize the value of GAO by being a model
federal agency and a world-class professional services organization.
These are:
* Controller;
* Human Capital Office:
- Chief Human Capital Officer;
* Information Systems and Technology Services:
- Chief Information Officer;
* Knowledge Services:
- Chief Knowledge Services Officer;
* Professional Development Program.
General Counsel's structure largely mirrors the agency's goal
structure, and attorneys assigned to a goal work with teams on specific
engagements. General Counsel has support or advisory relationship with
the goals and teams rather than a direct reporting relationship.
General Counsel provides audit and other legal support services for all
goals and staff offices and manages GAO�s procurement law and bid
protest work.
Source: GAO.
Note: General Counsel's structure largely mirrors the agency's goal
structure, and attorneys who are assigned to goals work with the teams
on specific engagements. Thus, the dotted lines in this figure indicate
General Counsel's support of or advisory relationship with the goals
and teams rather than a direct reporting relationship.
[End of Figure]
[End of Organizational Structure]
How We Measure Our Performance:
We measure our performance using annual quantitative measures.
Together, these indicators help us to determine how well we are meeting
the needs of the Congress and maximizing our value as a world-class
organization.
For several years, we assessed our performance annually using
quantitative performance measures that are related to our work results
and the usefulness of those results to our primary client--the
Congress. We subsequently expanded our focus to include a more balanced
set of performance measures that focus on four key areas--results,
clients, people, and internal operations.[Footnote 2] These categories
of measures are briefly described below.
* Results. Focusing on results and the effectiveness of the processes
needed to achieve them is fundamental to accomplishing our mission. To
assess our results, we measure financial benefits, other (nonfinancial)
benefits, recommendations implemented, and percentage of new products
with recommendations. Financial benefits and nonfinancial benefits
provide quantitative and qualitative information, respectively, on the
outcomes or results that have been achieved from our work. They often
represent outcomes that occurred or are expected to occur over a period
of several years. The remaining measures are intermediate outcomes in
that they often lead to achieving outcomes that are ultimately captured
in our financial and nonfinancial benefits.
For financial benefits and nonfinancial benefits, we first set targets
for the agency as a whole and then we set targets for each of the
external goals--that is, goals 1, 2, and 3--so that the sum of the
targets for the goals equals the agencywide targets. For past
recommendations implemented and percentage of products with
recommendations, we set targets and report performance for the agency
as a whole because we want our performance on these measures to be
consistent across goals. We track our performance by strategic goal in
order to understand why we meet or do not meet the agencywide target.
We also use this information to provide feedback to our teams on the
extent to which they are contributing to the overall target and to help
them identify areas in which they need to improve.
* Clients. To judge how well we are serving our clients, we measure the
number of times we are asked to present expert testimony at
congressional hearings as well as our timeliness in delivering products
to the Congress. Our strategy in this area draws upon a variety of data
sources (e.g., our client feedback survey and in-person discussions
with congressional staff) to obtain information on the services we are
providing to our congressional clients.
We set a target at the agencywide level for the number of testimonies
and then assign a portion of the testimonies as a target for each of
the external goals--that is, goals 1, 2, and 3--based on their expected
contribution to the agencywide total. As in measuring the results of
our work, we track our progress on this measure at the goal level in
order to understand why we met or did not meet the agencywide target.
We set agencywide targets for timeliness because we want our
performance on these measures to be consistent across goals.
* People. As our most important asset, our people define our character
and capacity to perform. A variety of data sources, including an
internal survey, provide information to help us measure how well we are
attracting and retaining high-quality staff and how well we are
developing, supporting, using, and leading staff. We set targets for
these measures at the agencywide level.
* Internal operations. Our mission and people are supported by our
internal administrative services, including information management,
building management, knowledge services, human capital, and financial
management services. Through an internal customer satisfaction survey,
we gather information on how well our internal operations help
employees get their jobs done and improve employees' quality of work
life. Examples of surveyed services include providing secure Internet
access and voice communication systems, performance management, and
benefits information and assistance. Fiscal year 2007 is only the
second year in which we reported how well we performed against the
targets we set for our internal operations measures. We set targets for
these measures at the agencywide level.
Setting Performance Targets:
To establish targets for all of our measures, we examine what we have
been able to achieve in the past (for example, by looking at our 4-year
rolling averages for most of our results measures (see p. 23) and the
external factors that influence our work (see p. 60). The teams and
offices that are directly engaged in the work discuss their views of
what must be accomplished in the upcoming fiscal year with our top
executives, who then establish targets for the performance measures.
Once approved by the Comptroller General, the targets become final and
are presented in our annual performance plan and budget.[Footnote 3] We
may adjust these targets after they are initially published when our
expected future work or level of funding provided warrant doing so. If
we make changes, we include the changed targets in later documents,
such as this performance and accountability report, and annotate that
we have changed them. In part II, we include detailed information on
data sources that we use to assess each of these measures, as well as
the steps we take to verify and validate the data (see pp. 78-95).
On the pages that follow, we assess our performance for fiscal year
2007 against our previously established performance targets. We also
present our financial statements, the independent auditor's report, and
a statement from GAO's Inspector General.
[End of About GAO]
[End of Introduction]
Part I: Management's Discussion and Analysis:
Promoting a Transparent and Accountable Government by Providing Fact-
Based, Objective Information to the Congress and the Public:
The work we did in fiscal year 2007, as well as some of our past work,
contributed greatly to our performance on our results and client
measures shown in table 1. We surpassed our financial benefits target
of $40 billion by almost $6 billion this fiscal year and exceeded our
annual target for nonfinancial benefits by about 23 percent. Our
financial benefits of $45.9 billion represent about a $94 return on
every dollar invested in us. While our financial benefits for fiscal
year 2007 were lower than what we achieved last fiscal year, due to
various reasons such as legislation pending at the close of the fiscal
year, our financial benefits have continued to increase on average over
the last 4 years as shown in table 2. Also, the more than 1,300
nonfinancial benefits resulting from our work helped to improve the
efficiency and effectiveness of government programs that serve the
public. In addition, we exceeded our targets for past recommendations
implemented and new products with recommendations by 2 percentage
points and 6 percentage points, respectively.
We believe we served the Congress very well during fiscal year 2007.
Our senior executives delivered testimony at 276 hearings, exceeding
our target of 185 by 49 percent. Many of these testimonies focused on
Iraq reconstruction and stabilization efforts, fraudulent activity and
mismanagement associated with the Hurricane Katrina relief effort, and
the global war on terrorism (see p. 35 for a list of other topics we
testified on during fiscal year 2007). Though we missed our timeliness
target of 95 percent by 1 percentage point, our performance indicates
that 94 percent of congressional staff responding to our client
feedback survey either strongly or generally agreed that our written
products were delivered on time. We discuss the client feedback survey
in detail part II of this report.
Concerning our eight people measures, we met or exceeded our targets
for five of them--new hire rate, acceptance rate, retention rate with
retirements, retention rate without retirements, and staff development-
-but did not meet the remaining three measures--staff utilization,
leadership, and organizational climate. We missed our target of 78
percent for staff utilization by 5 percentage points. We also missed
our leadership and organizational climate targets by very small
margins--1 and 2 percentage points, respectively.
Table 1: Agencywide Summary of Annual Measures and Targets:
Performance Measure: Results: Financial benefits (dollars in billions);
2003 Actual: $35.4 billion;
2004 Actual: $44.0 billion;
2005 Actual: $39.6 billion;
2006 Actual: $51.0 billion;
2007 Target: $40.0 billion;
2007 Actual: $45.9 billion;
Met/Not Met: Met;
2008 Target: $40.0[A] billion.
Performance Measure: Results: Nonfinancial benefits;
2003 Actual: 1,043;
2004 Actual: 1,197;
2005 Actual: 1,409;
2006 Actual: 1,342;
2007 Target: 1,100;
2007 Actual: 1,354;
Met/Not Met: Met;
2008 Target: 1,150.
Performance Measure: Results: Past recommendations implemented;
2003 Actual: 82%;
2004 Actual: 83%;
2005 Actual: 85%;
2006 Actual: 82%;
2007 Target: 80%;
2007 Actual: 82%;
Met/Not Met: Met;
2008 Target: 80%.
Performance Measure: Results: New products with recommendations;
2003 Actual: 55%;
2004 Actual: 63%;
2005 Actual: 63%;
2006 Actual: 65%;
2007 Target: 60%;
2007 Actual: 66%;
Met/Not Met: Met;
2008 Target: 60%.
Performance Measure: Client: Testimonies;
2003 Actual: 189;
2004 Actual: 217;
2005 Actual: 179;
2006 Actual: 240;
2007 Target: 185;
2007 Actual: 276;
Met/Not Met: Met;
2008 Target: 220.
Performance Measure: Client: Timeliness[B];
2003 Actual: N/A[C];
2004 Actual: 89%;
2005 Actual: 90%;
2006 Actual: 92%;
2007 Target: 95%;
2007 Actual: 94%;
Met/Not Met: Not met;
2008 Target: 95%[C].
Performance Measure: People: New hire rate;
2003 Actual: 98%;
2004 Actual: 98%;
2005 Actual: 94%;
2006 Actual: 94%;
2007 Target: 95%;
2007 Actual: 96%;
Met/Not Met: Met;
2008 Target: 95%.
Performance Measure: People: Acceptance rate;
2003 Actual: 72%;
2004 Actual: 72%;
2005 Actual: 71%;
2006 Actual: 70%;
2007 Target: 72%;
2007 Actual: 72%;
Met/Not Met: Met;
2008 Target: 72%.
Performance Measure: People: Retention rate: with retirements;
2003 Actual: 92%;
2004 Actual: 90%;
2005 Actual: 90%;
2006 Actual: 90%;
2007 Target: 90%;
2007 Actual: 90%;
Met/Not Met: Met;
2008 Target: 90%.
Performance Measure: People: Retention rate: Without retirements;
2003 Actual: 96%;
2004 Actual: 95%;
2005 Actual: 94%;
2006 Actual: 94%;
2007 Target: 94%;
2007 Actual: 94%;
Met/Not Met: Met;
2008 Target: 94%.
Performance Measure: People: Staff development;
2003 Actual: 67%;
2004 Actual: 70%;
2005 Actual: 72%;
2006 Actual: 76%;
2007 Target: 75%;
2007 Actual: 76%;
Met/Not Met: Met;
2008 Target: 76%.
Performance Measure: People: Staff utilization[D];
2003 Actual: 71%;
2004 Actual: 72%;
2005 Actual: 75%;
2006 Actual: 75%;
2007 Target: 78%;
2007 Actual: 73%;
Met/Not Met: Not met;
2008 Target: 75%[E].
Performance Measure: People: Leadership;
2003 Actual: 78%;
2004 Actual: 79%;
2005 Actual: 80%;
2006 Actual: 79%;
2007 Target: 80%;
2007 Actual: 79%;
Met/Not Met: Not met;
2008 Target: 80%.
Performance Measure: People: Organizational climate;
2003 Actual: 71%;
2004 Actual: 74%;
2005 Actual: 76%;
2006 Actual: 73%;
2007 Target: 76%;
2007 Actual: 74%;
Met/Not Met: Not met;
2008 Target: 75%[F].
Performance Measure: Internal operations[G]: Help get job done;
2003 Actual: 3.98;
2004 Actual: 4.01;
2005 Actual: 4.10;
2006: Actual: 4.10;
2007: Target: 4.00;
2007: Actual: N/A[C];
Met/Not Met: N/A[C];
2008 Target: 4.00.
Performance Measure: Internal operations[E]: Quality of work life; 2002
Actual: N/A;
2003 Actual: 3.86;
2004 Actual: 3.96;
2005 Actual: 3.98;
2006 Actual: 4.00;
2007 Target: 4.00;
2007 Actual: N/A;
Met/Not Met: N/A;
2007 Target: 4.00.
Source: GAO.
Note: Information explaining all of the measures included in this table
appears on pages in the Data Quality and Program Evaluations section in
part II of this report.
[A] Our fiscal year 2008 target for financial benefits differs from the
target we reported for this measure in our fiscal year 2008 performance
budget in January 2007. Specifically, we decreased our financial
benefits target by $1._ billion based on (1) our assessment of our past
recommendations that are likely to be implemented by federal agencies
and the Congress in the coming fiscal year and (2) the impact that our
constrained budget could have on the work that leads to financial
benefits. We are currently operating under a continuing resolution
which is only slightly higher than our fiscal year 200_ funding level.
See pages 44 to 48 for more information about our budget.
[B] Since fiscal year 2004 we have collected data from our client
feedback survey on the quality and timeliness of our products, and in
fiscal year 2006 we began to use the independent feedback from this
survey as a basis for determining our timeliness.
[C] N/A indicates that the data are not available yet or are not
applicable because we did not collect the data during this period.
[D] Our employee feedback survey asks staff how often the following
occurred in the last 12 months (1) my job made good use of my skills,
(2) GAO provided me with opportunities to do challenging work, and in
general, I was utilized effectively.
[E] Our fiscal year 2008 target for staff utilization differs from the
target we reported for this measure in our fiscal year 2008 performance
budget in January 2007. We lowered the staff utilization target by 3
percentage points because we determined that, based on our past
performance, the target was unrealistic, and we reset it at a level
that is still challenging but more likely to be achieved.
[F] Our fiscal year 2008 target for organizational climate differs from
the target we reported for this measure in our fiscal year 2008
performance budget in January 2007. We decreased the organizational
climate target by 1 percentage point because we determined that based
on our past performance, the target was unrealistic, and we reset it at
a level that is still challenging but more likely to be achieved.
[G] For our internal operations measures, we will report actual data
for fiscal year 2007 once data from our November 2007 internal customer
satisfaction survey have been analyzed. Information explaining all of
the measures included in this table appears in the Data Quality and
Program Evaluations section in part II of this report.
[End of Table]
Concerning our two internal operations measures, we will assess our
performance related to how well our internal administrative services
(e.g., computer support, mail service, and Internet service) help
employees get their jobs done or improve employees' quality of work
life once data from our November 2007 annual customer satisfaction
survey have been analyzed. These measures are directly related to our
goal 4 strategic objectives of continuously enhancing our business and
management processes and becoming a professional services employer of
choice. There will always be a lag in reporting on this measure because
our customer feedback survey is distributed after we issue the
performance and accountability report. In fiscal year 2006, we exceeded
our target of 4.0 by a tenth of a percentage point for our help get job
done measure and met our 4.0 target for our quality of work life
measure. These scores indicate that our employees were generally very
satisfied with the internal administrative services they used during
their work day. The survey asked staff to rank the importance of each
service to them and indicate their satisfaction with it on a scale from
1 to 5.
To help us examine trends over time, we also look at 4-year averages
for our results and client measures except the percentage of past
recommendations implemented--because it is a composite that is drawn
from a number of years rather than an annual percentage--and
timeliness--because we have no trend data for our current timeliness
measure. Calculating 4-year rolling averages for the other measures
minimizes the effect of an atypical result in any given year. We
consider this calculation, along with other factors, when we set our
performance targets. Table 2 shows that from fiscal year 2003 through
fiscal year 2007 financial benefits, nonfinancial benefits, and new
products with recommendations have increased steadily during this
period. The average number of hearings at which we testified has
climbed since 2004 with a significant increase from fiscal year 2006 to
2007.
Though we consider our 4-year rolling averages and our past performance
when setting our target for the number of hearings at which our senior
executives testify, we base our testimonies target largely on the
cyclical nature of the congressional calendar. Our experience has shown
that during the fiscal year in which an election occurs, generally the
Congress holds fewer hearings, which provide fewer opportunities for us
to be invited to testify, because the congressional members are
reorganizing during the months after the election. However, in fiscal
year 2007--the year after an election--the new Congress held many more
hearings than we anticipated and seemed especially interested in our
work.
Table 2: Four-Year Rolling Averages for Selected GAO Measures:
Performance measure: Results: Financial benefits(billions);
2003: $30.7 billion;
2004: $35.9 billion;
2005: $39.2 billion;
2006: $43.0 billion;
2007: $45.1 billion.
Performance measure: Results: Nonfinancial benefits;
2003: 884;
2004: 986;
2005: 1,139;
2006: 1,248;
2007: 1,325.
Performance measure: Results: New products with recommendations;
2003: 48%;
2004: 54%;
2005: 58%;
2006: 61%;
2007: 64%.
Performance measure: Client: Testimonies;
2003: 205;
2004: 193;
2005: 200;
2006: 206
2007: 228.
Source: GAO.
[End of Table]
Focusing on Results:
Focusing on outcomes and the efficiency of the processes needed to
achieve them is fundamental to accomplishing our mission. The following
four annual measures--financial benefits, nonfinancial benefits, past
recommendations implemented, and new products containing
recommendations--indicate that we have fulfilled our mission and
delivered results that benefit the nation.
Financial Benefits and Nonfinancial Benefits:
We describe many of the results produced by our work as either
financial or nonfinancial benefits. Both types of benefits result from
our efforts to provide information to the Congress that helped to (1)
change laws and regulations, (2) improve services to the public, and
(3) promote sound agency and governmentwide management. In many cases,
the benefits we claimed in fiscal year 2007 are based on work we did in
past years because it often takes the Congress and agencies time to
implement our recommendations or to act on our findings.
To claim either type of benefit, our staff must document the connection
between the benefits reported and the work that we performed. We can
claim benefits within 2 years of when the Congress or an agency takes
action on our recommendations.
Financial Benefits:
Our findings and recommendations produce measurable financial benefits
for the federal government after the Congress acts on or agencies
implement them and the funds are made available to reduce government
expenditures or are reallocated to other areas. The monetary effect
realized can be the result of
* changes in business operations and activities;
* the structure of federal programs; or entitlements, taxes, or:
* user fees.
Financial benefits result if, for example, the Congress were to reduce
the annual cost of operating a federal program or lessen the cost of a
multiyear program or entitlement. Financial benefits could also result
from increases in federal revenues--because of changes in laws, user
fees, or asset sales--that our work helped to produce.
In fiscal year 2007, our work generated $45.9 billion in financial
benefits (see fig. 6), exceeding our target by about 15 percent. We
exceeded the target primarily as a result of a few unexpected and large
financial accomplishments. Thus, we believe our target of $40.0 billion
for fiscal year 2008 (shown on p. 21) is reasonable and achievable. Of
the total amount documented in fiscal year 2007, about $21.1 billion
(or approximately 46 percent) resulted from changes in laws or
regulations (see fig. 7).
Figure 6: Financial Benefits GAO Recorded in Fiscal Year 2007:
[See PDF for image] - graphic text:
Bar graph with six items:
2003 Actual: $35.4 billion;
2004 Actual: $44.0 billion;
2005 Actual: $39.6 billion;
2006 Actual: $51.0 billion;
2007 Target: $40.0 billion;
2007 Actual: $45.9 billion.
Source: GAO.
[End of Figure]
Figure 7: Types of Financial Benefits Recorded in Fiscal Year 2007 from
Our Work:
[See PDF for image] - graphic text:
Pie chart with three slices, representing a total of $45.9 billion in
financial benefits.
Information GAO provided to the Congress resulted in statutory or
regulatory changes: $21.1 billion (46%);
Agencies acted on GAO information to improve services to the public:
$8.5 billion (18.5%);
Core business processes improved at agencies and governmentwide
management reforms advanced by GAO's work: $16.3 billion (35.5%).
Source: GAO.
[End of Figure]
Financial benefits included in our performance measures are net
benefits--that is, estimates of financial benefits that have been
reduced by the costs associated with taking the action that we
recommended. We convert all estimates involving past and future years
to their net present value and use actual dollars to represent
estimates involving only the current year. Financial benefit amounts
vary depending on the nature of the benefit, and we can claim financial
benefits over multiple years based on a single agency or congressional
action. To ensure conservative estimates of net financial benefits,
reductions in operating cost are typically limited to 2 years of
accrued reductions, but up to 5 fiscal years of financial benefits can
be claimed if the reductions are sustained over a period longer than 2
years. Multiyear reductions in long-term projects, changes in tax laws,
program terminations, or sales of government assets are limited to 5
years. Estimates come from non-GAO sources. These non-GAO sources are
typically the agency that acted on our work, a congressional committee,
or the Congressional Budget Office.
To document financial benefits, our staff complete reports documenting
accomplishments that are linked to specific products or actions. All
accomplishment reports for financial benefits are documented and
reviewed by (1) another GAO staff member not involved in the work and
(2) a senior executive in charge of the work. Also, a separate unit,
our Quality and Continuous Improvement office, reviews all financial
benefits and approves benefits of $100 million or more, which amounted
to about 94 percent of the total dollar value of benefits recorded in
fiscal year 2007. The GAO Inspector General (IG) also performed an
independent review of all accomplishment reports claiming benefits of
$500 million or more in fiscal year 2007.
Figure 8 lists several of our major financial benefits for fiscal year
2007 and briefly describes some of our work contributing to financial
benefits.
Figure 8: GAO's Selected Major Financial Benefits Reported in Fiscal
Year 2007:
Description: Helped to ensure funding for United States Postal Service
(USPS) retirement-related health care benefits. For many years we have
reported on USPS�s significant liabilities and obligations, including
tens of billions of dollars in post-retirement health care benefits
that were not yet funded. In December 2006, the Postal Accountability
and Enhancement Act (Pub. L. No. 109-435) was enacted, which created
the Postal Service Retiree Health Benefits Fund into which USPS is to
make a series of 10 annual payments to fund its retiree health care
obligations. In fiscal year 2007, USPS made the first of its annual
payments into the fund. This $5.4 billion payment, funded through
additional January 2006 and May 2007 postal service rate increases,
helped to avoid requiring the federal government to finance this
substantial obligation. (Goal 3);
Amount: $5.4.
Description: Improved the Internal Revenue Service�s (IRS) methodology
for pursuing delinquent taxes. Our previous financial audit work
determined that IRS did not have systems or procedures in place to
allow it to identify and actively pursue cases with collection
potential. We recommended that IRS improve its capacity
to assess the collectibility of delinquent taxes as a way to better
target debt collection resources. In 2004, IRS began implementing
sophisticated modeling technology to differentiate between more and
less productive cases in order to make better resource allocation
decisions. In 2007, we reported that IRS�s actions
in response to our recommendations increased its collections of
delinquent taxes using approximately the same level of resources by
about $4.2 billion or almost 20 percent in fiscal year 2006 from fiscal
year 2003 levels. (Goal 3);
Amount: $4.2.
Description: Encouraged the National Aeronautics and Space
Administration�s (NASA) decision to terminate the space launch
initiative (SLI). In a September 2002 report, we questioned NASA�s
overall acquisition strategy to develop a new generation of space
transportation vehicles�the SLI. We reported that NASA faced
considerable challenges defining basic requirements for SLI. We also
noted that most of the key technologies under consideration by SLI were
very immature and that management controls necessary to estimate cost
and gauge progress were not in place. We recommended that the NASA
Administrator take several steps, including completing the reassessment
of NASA�s Integrated Space Transportation Plan, before moving forward
with SLI. NASA concurred and in November 2002 took action to delay
decisions regarding future launch vehicles and refocused SLI on
conducting basic research on advanced launch technologies
and developing a vehicle to service the International Space Station. In
2005, NASA terminated the entire SLI program and redirected $3.7
billion in funding originally programmed for SLI toward future
exploration activities. (Goal 3);
Amount: $3.7.
Description: Helped to reduce food stamp fraud and abuse. Since 1994,
we repeatedly reported and testified on reducing fraud and abuse in the
Department of Agriculture�s (USDA) Food Stamp Program by reducing the
trafficking of benefits. In our 1994 and 1995 reports, we found that
USDA�s reliance on paper coupons to provide food stamp benefits had
resulted in fraud and abuse through trafficking, counterfeiting, and
mail theft. To reduce this fraud and abuse, we supported the use of
electronic benefit transfer (EBT) systems to replace the coupon-based
system that states were using. In response, the Congress passed
legislation that required that each state implement EBT for the Food
Stamp Program by October 1, 2002, unless the Secretary
of Agriculture granted a waiver. USDA reported in December 2006 that
the Food Stamp Program�s integrity had substantially improved,
estimating that trafficking had diverted only about $241 million per
year between 2002 and 2005�or about 1 cent of each food stamp
dollar�compared with an estimated $660 million per year�or about 3-1/2
cents of each food stamp dollar�diverted between 1996 and 1998. USDA
found that the decline in food stamp trafficking corresponded with the
increased use of EBT. This will result in an estimated $3.4 billion in
cumulative financial benefits between fiscal years 2005 and 2009. Also,
in fiscal year 2007 we recommended that USDA use its electronic data to
perform risk assessments of retailers most likely to traffic in food
stamp benefits and develop a strategy to increase penalties for this
offense. USDA responded by proposing new penalties and expedited
processes. (Goal 1);
Amount: $3.4.
Description: Recommended that the Department of Housing and Urban
Development (HUD) track and reallocate unspent housing funds. We
recorded about $2.19 billion in financial benefits based on our work
involving the HUD recaptured fiscal year 2005 unexpended balances.
Prior to 2002 HUD did not routinely review its unexpended fund balances
to determine whether these funds could be recaptured. In 2001, we
expressed concerns over unexpended balances in a briefing to the
incoming Administration and testified before the Subcommittee on
Housing and Transportation, Senate Committee on Banking Housing and
Urban Affairs, about long-standing problems HUD had in the management
and oversight of its unexpended balances. Using the Public Housing
Capital fund as an example, we stated, and HUD agreed, that it did not
have the information it needed to routinely quantify unexpended
balances that might be available for recapture. Given the importance of
this information in formulating and justifying budget requests, we
recommended that HUD (1) develop systems that routinely provide timely
and reliable information on the status of its unexpended balances to
quantify amounts available for recapture or rescission, (2) incorporate
this information into the management of its programs, and (3) use this
information in formulating budget requests. In response to our
recommendations, HUD made many operational changes that since 2002 have
enabled the agency to routinely incorporate information on unexpended
balances into the management and operation of its programs and to take
unexpended balances into account in setting forth budget needs. HUD has
routinely recaptured unutilized funds to offset its budget requests.
(Goal 1);
Amount: $2.19.
Description: Helped to increase collections of civil debt. In July
2001, we reported that the Department of Justice�s (Justice) financial
litigation units, which are responsible for both criminal and civil
debt collection, did not have adequate procedures for enforcing
collections. We made a number of recommendations to the Attorney
General to help the units improve criminal debt collections and stem
the growth in reported uncollected criminal debt. One such
recommendation was to reinforce policies and procedures for entering
cases into debt-tracking systems; filing liens; issuing demand letters,
delinquent notices, and default notices; performing asset discovery
work; and using other enforcement techniques. These policies and
procedures are applicable to the units� civil as well as criminal debt
collection efforts. In January 2002, Justice completed actions to
address this recommendation, including providing training materials to
unit staff involved in debt collection. These actions helped it to
increase collections of civil debt in fiscal years 2004 and 2005�the
third and fourth years for which we are claiming financial benefits
over a 5-year period�by a total of about $1.70 billion on a net present
value basis. (Goal 3);
Amount: $1.70.
Description: Recommended that the Congress reduce the Department of
Defense�s (DOD) fiscal year 2007 operations and maintenance budget. The
congressional appropriations committee conferees reduced DOD�s fiscal
year 2007 operations and maintenance appropriations by $1.459 billion
based in part on the analysis we provided identifying fiscal year 2004
and 2005 underexecution of some budget subactivity groups. Staff
members used the analysis of underexecution (designations exceeded
obligations) for fiscal years 2004 and 2005 in part to reduce DOD�s
fiscal year 2007 budget request by $598.8 million for subactivity
groups that have been historically underexecuted. In addition, the
conferees reduced DOD�s fiscal year 2007 budget request by $860.6
million for peacetime training and flying hour offsets also based in
part on our analysis of underexecution in multiple subactivity groups
used to fund these activities. The combined impact�as indicated
above�is about $1.459 billion. (Goal 2);
Amount: $1.46.
Description: Identified an opportunity for DOD to reallocate funds to
cover new initiatives. In a November 2002 report, we suggested that the
Congress consider extending the deadline for the submission of DOD�s
Quadrennial Defense Review in order to provide additional time for DOD
to align its upcoming budget request with its newest strategic thinking
as reflected in the Quadrennial Defense Review. In our view, this extra
time would allow DOD to take full advantage of the review�s results and
shift resources where they would be needed most, that is, provide for a
better allocation of resources, and avoid unnecessary costs of lower
priority programs. The Congress adopted our approach and the 2006
Quadrennial Defense Review is the first to benefit from the extended
deadline and reallocate defense resources in accordance with DOD�s new
strategic plan. As a result, DOD�s fiscal year 2007 budget shifts
resources into new programs advocated by the Quadrennial Defense
Review, including over $1 billion for a special operations initiative
to help fight the war on terror. To pay for these initiatives, DOD
shaved billions of dollars from other programs. The 2006 Quadrennial
Defense Review stated that by shifting the completion date of the
review to coincide with the submission of the President�s fiscal year
2007 budget request, DOD had included a limited number of new
initiatives in the budget submission for fiscal year 2007, rather than
waiting until the fiscal year 2008 budget cycle. The final
congressional action on DOD�s proposal provided a $1.2 billion increase
in funding for Special Operations Forces in fiscal year 2007. (OMB
documents state that DOD made offsetting reductions before the
President�s budget was sent to the Congress.) The financial benefit is
the $1.2 billion made available from the reallocation of resources.
(Goal 2);
Amount: $1.2.
Source: GAO.
[End of Table]
Nonfinancial Benefits:
Many of the benefits that result from our work cannot be measured in
dollar terms. During fiscal year 2007, we recorded a total of 1,354
nonfinancial benefits (see fig. 9). We significantly exceeded our
target because of actions taken by agencies governmentwide on several
of our reports dealing with governmentwide IT and accounting issues. We
believe that we will achieve our fiscal year 2008 target of 1,150
nonfinancial benefits (shown on p. 21) though we do not expect there
will be as many situations similar to fiscal year 2007 where agencies
will take governmentwide actions on our recommendations.
Figure 9: Nonfinancial Benefits GAO Recorded in Fiscal Year 2007:
[See PDF for Image]- graphic text:
Bar graph with six items.
2003 Actual: 1,043;
2004 Actual: 1,197;
2005 Actual: 1,409;
2006 Actual: 1,342.
2007 Target: 1,100;
2007 Actual: 1,354.
Source: GAO.
[End of Figure]
In fiscal year 2007 we documented 646 instances where federal agencies
used our information to improve services to the public, 74 instances
where the information we provided to the Congress resulted in statutory
or regulatory changes, and 634 instances where agencies improved core
business processes or governmentwide reforms as a result of our work.
(See fig. 10.) These actions covered a variety of issues such as
improving the Department of Veteran's Affairs' (VA) ability to process
veteran's claims for disability benefits, identifying weaknesses in
telecommunications data, providing information on the rising cost of
military pay and compensation, and improving the strategic planning of
U.S. diplomacy efforts. In figure 11, we provide examples of some of
the nonfinancial benefits we claimed as accomplishments in fiscal year
2007. The laws that we cite in the first section of this figure were
enacted in fiscal year 2007.
Figure 10: Types of Nonfinancial Benefits Documented in Fiscal Year
2007 from Our Work:
[See PDF for Image]- graphic text:
Pie chart with three slices, representing a total of 1,354 nonfinancial
benefits.
Core business processes improved at agencies and governmentwide
management reforms advances by GAO's work: 634 (46.8%);
Agencies acted on GAO information to improve services to the public:
646 (47.7%);
Information GAO provided to the Congress resulted in statutory or
regulatory changes: 74 (5.5%).
Source: GAO.
[End of Figure]
Figure 11: GAO's Selected Nonfinancial Benefits Reported in Fiscal Year
2007:
Nonfinancial benefits that helped to change laws:
Department of Homeland Security Appropriations Act of 2007, Pub. L. No.
109-295:
Our work is reflected in this law in different ways:
Developing a center to locate children after disasters. After
hurricanes Katrina and Rita, GAO found that the National Center for
Missing and Exploited Children (NCMEC) faced problems getting access to
American Red Cross and Federal Emergency Management Agency (FEMA) data
because of these organizations' concerns about privacy. GAO found that
a lesson learned from these disasters is that agreements for data
sharing between NCMEC and the American Red Cross and FEMA can help
locate missing persons more quickly. We spoke about these concerns
several times with congressional staff. Subsequently, Pub. L. No. 109-
295 provided for a National Emergency Child Locator Center to be
established within NCMEC and requires the FEMA Administrator to
establish procedures to make all relevant information available to the
center in a timely manner to facilitate the expeditious identification
and reunification of children with their families. The law also
requires the center to enter into a cooperative agreement with federal
and state agencies and with other organizations, such as the American
Red Cross, as necessary to implement their missions.
Improving FEMA information on the status of hurricane relief and
recovery funds. In September 2006, we recommended four actions to
improve reporting by FEMA to the appropriations committees on the
status of governmentwide hurricane relief and recovery. These actions
included (1) explicitly recognizing that FEMA's weekly reporting on
mission assignment obligations and expenditures does not reflect the
status from a governmentwide perspective, (2) requesting and including
actual obligation and expenditure data from agencies performing mission
assignments in FEMA reporting at specified intervals, (3) including in
the weekly report amounts reimbursed to other agencies that are in
suspense because FEMA has not yet reviewed and approved the
documentation supporting the expenditures, and (4) reiterating to
agencies performing mission assignments FEMA's policies on (a) the
detailed information required in supporting documentation for
reimbursements and (b) the timeliness of agency billings. As requested,
we provided language that was included in Pub. L. No. 109-295 which
implemented these recommendations.
The John Warner National Defense Authorization Act for Fiscal Year
2007, Pub. L. No. 109-364:
U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq
Accountability Appropriations Act, 2007, Pub. L. No. 110-28:
In December 2005 and January 2007, we reported that DOD and NASA
structured monetary incentives in ways that led to significant
disconnects between the fees paid to contractors and program outcomes.
We made recommendations aimed at strengthening the link between
incentives and outcomes. The Comptroller General testified on this
issue in April 2006 and we briefed multiple congressional committees.
The result has been changes to award and incentive fee policies across
several agencies including DOD, NASA, and the Department of Homeland
Security (DHS). Pub. L. No. 109-364 incorporated our recommendations by
requiring DOD to issue guidance to ensure that award fees are linked to
acquisition outcomes. In addition, Pub. L. No. 110-28 required all DHS
award fees to be linked to successful acquisition outcomes.
Postal Accountability and Enhancement Act, Pub. L. No. 109-435:
In April 2001, we designated USPS's transformation and long-term
outlook as a high-risk area because its financial outlook had
deteriorated significantly and it had no comprehensive plan to address
its financial, operational, or human capital challenges. We concluded
that the need for a comprehensive transformation of USPS was more
urgent than ever and called for the Congress to act on comprehensive
postal reform legislation. Since then, USPS developed a transformation
plan to guide its ongoing efforts related to implementing initiatives
included in its plan and improved its financial outlook. Further, in
December 2006, the Congress enacted comprehensive postal reform
legislation to provide a framework for modernizing USPS's rate-setting
processes and strengthening regulatory oversight and financial
transparency. Thus, in January 2007, we removed USPS transformation and
long-term outlook from our high-risk list.
Foreign Investment and National Security Act of 2007, Pub. L. No. 110-
49:
The Exon-Florio amendment to the Defense Production Act authorizes the
President to conduct investigations and to suspend or prohibit foreign
acquisitions, mergers, or takeovers of U.S. companies that threaten to
impair national security. The President delegated the authority to
investigate transactions to an interagency committee, the Committee on
Foreign Investment in the United States. In our September 2005 report,
we found that some members of the committee have narrowly defined what
constitutes a threat to national security, despite the broad coverage
of the factors listed in Exon-Florio that may be considered in
determining a threat to national security. In one case, this narrow
view resulted in the weakening of enforcement provisions in an
agreement to mitigate national security concerns. In our report, we
suggested that the Congress consider amending Exon-Florio to more
clearly emphasize factors that should be considered in determining the
potential harm to national security. In response to our report and
subsequent events, in 2007 the Congress amended Exon-Florio adding
additional factors to be considered in determining the effect of a
transaction on national security.
Implementing Recommendations of the 9/11 Commission Act of 2007, Pub.
L. No. 110-53:
Our work is reflected in this law in different ways:
Reexamining inspection exemptions for inbound cargo. During our review
of the Transportation Security Administration's (TSA) inbound air cargo
(i.e., cargo bound for the United States from a foreign country)
security procedures, we briefed congressional staff on several
occasions regarding the status of inbound air cargo security and the
challenges that TSA faces to reducing the vulnerability of the air
cargo system to terrorist attack. Based on a subsequent report, we
recommended that TSA establish a time frame for completing an
assessment of whether existing random inspection exemptions for inbound
air cargo pose an unacceptable vulnerability to the security of air
cargo, and take steps, if necessary, to address identified
vulnerabilities. The Congress included a provision in the 9/11
Commission Act consistent with our recommendation which requires DHS to
conduct an assessment of inspection exemptions for cargo transported on
passenger aircraft and an analysis to assess the risk of maintaining
such exemptions no later than 120 days from the enactment of the act.
Reexamining inspection exemptions for domestic air cargo. During our
review of TSA's domestic air cargo (i.e., cargo that is transported
within the United States) security procedures, we briefed congressional
staff regarding the status of domestic air cargo security and the
challenges that TSA faces to reduce the vulnerability of the air cargo
system to terrorist attack. Based on a subsequent report, we
recommended that TSA reexamine the rationale for existing air cargo
inspection exemptions, determine whether such exemptions leave the air
cargo system unacceptably vulnerable to terrorist attack, and make any
needed adjustments to the exemptions. The Congress included a provision
in the 9/11 Commission Act consistent with this recommendation, by
requiring DHS to conduct an assessment of inspection exemptions for
cargo transported on passenger aircraft and an analysis to assess the
risk of maintaining such exemptions no later than 120 days from the
enactment of the act.
Nonfinancial benefits that helped to improve services to the public:
Strengthened screening procedures for all VA health care practitioners:
We identified key screening requirements that VA uses to verify the
professional credentials and personal backgrounds of its health care
practitioners. We found adequate screening requirements for certain
practitioners, such as physicians, for whom all licenses are verified
by contacting state licensing boards. However, screening requirements
for others, such as currently employed nurses and respiratory
therapists, are less stringent because they do not require verification
of all licenses and national certificates. Moreover, they require only
physical inspection of the credential rather than contacting state
licensing boards and national certifying organizations. Physical
inspection alone can be misleading; not all credentials indicate
whether they are restricted, and credentials can be forged. We
recommended that VA expand the verification requirement that facility
officials contact state licensing boards and national certifying
organizations to include all state licenses and national certificates
held by applicants and employed practitioners. In response to our
recommendation, VA directed its medical facilities to document the
verification of all state licenses and national certificates (held by
all practitioners applying for VA positions) with the issuing state
licensing board or national certifying organization. In December 2006,
VA required facility officials to credential all health care
practitioners who claim licensure, registration, or certification
through its electronic credentialing system. In addition, VA required
its facility officials to establish a mechanism to ensure that multiple
licenses, registrations, and/or certifications were held in good
standing by contacting the state boards or issuing organization. VA's
actions will better ensure the safety of veterans receiving health care
at VA medical facilities.
Tightened monitoring criteria in the Environmental Protection Agency's
(EPA) rule on lead in drinking water:
In a January 2006 report, we recommended that EPA should reassess
existing regulations and guidance to ensure the circumstances in which
states approve water systems for reduced monitoring are appropriate and
that systems resume standard monitoring following a major treatment
change. We reported that lead rule implementation experiences to date
have revealed weaknesses in the regulatory framework. In some cases,
corrosion control can be impaired by changes to other water treatment
processes, and controls that would help avoid such impacts may not be
adequate. In July 2006, EPA proposed to change the federal regulations
and disallow water systems that exceed the lead action level from
initiating or remaining on a reduced lead and copper monitoring
schedule based solely on the results of their water quality parameter
monitoring (see Federal Register, 71, FR 40828 (July 18, 2006)). EPA
noted that this change would ensure that reduced monitoring would only
be permitted in instances in which it has been demonstrated that
corrosion control treatment is both effective and reliable. Compliance
with water quality parameters alone may not always indicate that
corrosion control is effective.
Encouraged reporting of nursing home fire safety deficiencies:
As part of our review of nursing home fire safety, we found that
federal oversight of state fire safety activities is inadequate to
ensure that existing standards are being enforced. Specifically, we
found that despite the availability of information on oversight of
nursing home quality through the Center for Medicare and Medicaid
Services' (CMS) Nursing Home Compare Web site, no comparable
information on fire safety was available. Therefore, consumers lack a
complete picture of a nursing home's compliance with federal health and
safety requirements when selecting a facility. To provide the public
with important information about the fire safety status of nursing
homes, we recommended that the Administrator of CMS make fire safety
deficiency data available via the Nursing Home Compare Web site,
including information on whether the facility has automatic sprinklers.
CMS concurred with our recommendation and began posting this
information on the Web site in October 2006.
Improved information security at the Securities and Exchange Commission
(SEC):
In our past work we reported that a publicly accessible workstation
connected to the internal SEC network was not securely configured. We
recommended that SEC develop and implement procedures to ensure that
all publicly-accessible workstations were adequately secured and
configured with the minimum amount of services necessary to accomplish
their purpose. In response to our recommendation, SEC removed the
unsecured workstation and developed procedures to ensure that publicly
located workstations are secure. As a result, SEC has reduced the risk
that network services can be compromised, disrupted, or disabled via
publicly accessible workstations.
Improved coordination to enhance security of nuclear warhead sites in
Russia:
We reported in past work that DOD and the Department of Energy (DOE)
pursued different approaches to securing nuclear warhead sites in
Russia. We found that DOD and DOE did not know how many additional
sites they planned to help secure, had not determined which department
would improve security at sites they both had in their plans, and had
not worked together to standardize the types of security equipment
provided to Russia. As a result, we recommended that DOD and DOE work
more closely together and develop an integrated plan to help secure
Russia's warhead sites. In response, DOD and DOE improved their
coordination mechanisms for sharing information and avoiding
duplication of effort. Under the aegis of National Security Council
(NSC) guidance, the departments agreed on what sites to upgrade and
which department would install the upgrade. They have also developed
common design standards to ensure consistency in the assistance
provided to Russia warhead storage sites. DOD and DOE have also adopted
similar approaches in how they manage the contracts for installing the
security upgrades.
Nonfinancial benefits that helped to promote sound agency and
governmentwide management:
FEMA establishes control to help limit disaster assistance payments to
individuals with invalid Social Security numbers:
As part of our audit of FEMA's Individuals and Households Program (IHP)
to assist the victims of hurricanes Katrina and Rita, we found that
FEMA did not adequately validate the identity of registrants applying
for disaster assistance. We identified payments to thousands of IHP
registrants who provided Social Security numbers that were never issued
or which belonged to deceased individuals. We recommended that FEMA
improve internal controls over identity confirmation to provide
reasonable assurance that disaster assistance payments are made only to
qualified IHP applicants. FEMA subsequently implemented new edit
controls intended to ensure that Social Security numbers and names
submitted by IHP disaster assistance registrants are both appropriately
matched and valid. FEMA's improved control procedures in this area
should improve up-front controls over the registration process to
better ensure that only valid applicants receive IHP payments, thereby
helping to reduce fraudulent IHP payments based on invalid registration
data.
NASA establishes policies for reimbursement by nonofficial travelers on
passenger aircraft:
In previous work we found that while NASA used its passenger aircraft
to transport numerous nonofficial travelers to various events, it did
not have effective procedures in place for collecting reimbursements
from these travelers as required by OMB Circular No. A-126. We
recommended that NASA establish procedures for identifying and
recovering applicable costs associated with transporting these
nonofficial travelers. In response to our recommendations, in fiscal
year 2006, NASA revised its aircraft use policy to include specific
instructions for identifying and obtaining reimbursements from
nonofficial travelers. This policy change establishes necessary
procedures for recovering the applicable costs of providing air
transportation services to nonofficial travelers, and may result in
savings to NASA and the federal government for the cost of transporting
these passengers.
Army requires credit card vendors to conduct credit checks before
issuing individually billed travel cards:
During our audits of the Army's controls over individually billed
travel cards, we found substantial problems with controls over travel
card accounts, including issuing cards to individuals without
conducting credit checks. Credit checks could have revealed travel card
applicants with poor prior credit histories and helped prevent the
substantial delinquencies and amounts charged-off identified in our
audits. GAO recommended that the Army establish policies and procedures
governing the issuance of individual travel cards to military and
civilian employees, including evaluating the feasibility of extended
use of credit checks for all travel card applicants. In response to our
recommendation, pursuant to a revision to DOD's Financial Management
Regulation, the Army now requires its travel card contractor to perform
a credit check on each new card applicant. Under this policy, (1)
applicants who refuse to permit a credit checks may be asked to self-
certify to their creditworthiness in order to obtain restricted travel
cards, and (2) applicants who are denied government travel cards due to
poor credit scores, or inability to meet self-certification
requirements, will be exempt from mandatory use of the individually
billed account travel cards. By implementing these requirements, Army
strengthened management oversight and internal controls over the
individually billed travel card program and reduced the chance that
travel cards will be issued to individuals at high risk of not making
payments or not making payments timely, thus reducing fees and
eliminating substantial resources spent pursuing and collecting past
due accounts.
Source: GAO.
[End of Table]
Past Recommendations Implemented:
One way we measure our effect on improving the government's
accountability, operations, and services is by tracking the percentage
of recommendations that we made 4 years ago that have since been
implemented. At the end of fiscal year 2007, 82 percent of the
recommendations we made in fiscal year 2003 had been implemented (see
fig. 12), primarily by executive branch agencies. Putting these
recommendations into practice generates tangible benefits for the
nation.
Figure 12: Percentage of Past Recommendations Implemented in Fiscal
Year 2007:
[See PDF for Image]- graphic text:
Bar graph with six items.
Four-year implementation rate:
2003 Actual: 82%;
2004 Actual: 83%;
2005 Actual: 85%;
2006 Actual: 82%;
2007: Target: 80%;
2007: Actual: 82%.
Source: GAO.
[End of Figure]
The 82 percent implementation rate for fiscal year 2007 exceeded our
target for the year by 2 percentage points, matching our performance in
fiscal years 2003 and 2006, respectively. Our performance on this
measure declined from 85 percent in fiscal year 2005 to 82 percent in
fiscal years 2006 and 2007 because, in some cases, we were unable to
obtain the agency data that would allow us to fully document that our
recommendations had been implemented. As figure 13 indicates, agencies
need time to act on recommendations. Therefore, we assess
recommendations implemented after 4 years, the point at which
experience has shown that if a recommendation has not been implemented,
it is not likely to be.
Figure 13: Cumulative Implementation Rate for Recommendations Made in
Fiscal Year 2003:
[See PDF for Image]- graphic text:
Bar graph with four items.
After 1 year: 18%;
After 2 years: 32%;
After 3 years: 43%;
After 4 years: 82%.
Source: GAO.
[End of Figure]
New Products Containing Recommendations:
In fiscal year 2007, about 66 percent of the 647 written products we
issued (excluding testimonies) contained recommendations. (See fig.
14.) We track the percentage of new products with recommendations
because we want to encourage staff to develop recommendations that when
implemented by the Congress and agencies, produce financial and
nonfinancial benefits for the nation. We exceeded our target of 60
percent by 6 percentage points because our audit teams are emphasizing
the need to identify possible recommendations as they plan and carry
out their work. However, we set our target again in fiscal year 2008 at
60 percent because we recognize that our products do not always include
recommendations and that the Congress and agencies often find such
informational reports just as useful as those that contain
recommendations. Our informational reports have the same analytical
rigor and meet the same quality standards as those with recommendations
and, similarly, can help to bring about significant financial and
nonfinancial benefits. Hence, this measure allows us ample leeway to
respond to requests that result in reports without recommendations.
Figure 14: Percentage of New Products with Recommendations in Fiscal
Year 2007:
[See PDF for Image]- graphic text:
Bar graph with six items.
2003 Actual: 55%;
2004 Actual: 63%;
2005 Actual: 63%;
2006 Actual: 65%;
2007 Target: 60%;
2007 Actual: 66%.
Source: GAO.
[End of Figure]
Focusing on Our Client:
To fulfill the Congress's information needs, we strive to deliver the
results of our work orally as well as in writing at a time agreed upon
with our client. Our performance this year indicates that we assisted
our client--the Congress--well, by significantly exceeding our target
on the number of hearings we participated in and delivering many of our
products on time based on the feedback from our client.
Testimonies:
Our clients often invite us to testify on our current and past work
when it addresses issues that congressional committees are examining
through the hearing process. During fiscal year 2007, experts from our
staff testified at 276 congressional hearings covering a wide range of
complex issues (see fig. 15). (See fig. 16 for a summary of issues we
testified on by strategic goal in fiscal year 2007.) Over 90 of our
testimonies were related to high-risk areas and programs, which are
discussed on page 40.
In fiscal year 2007, we significantly exceeded our target for
testimonies at 185 hearings and surpassed our performance on this
measure over the last 4 years. In fact, only three times in the last 25
fiscal years have we delivered testimonies at more hearings. The new
Congress that took office in January 2007 was extremely interested in
our past and current work on a variety of issues and asked us to
testify at 91 more hearings than we anticipated even though this was
during a year following an election when historically our testimonies
are lower. The Congress asked our executives to testify more than 10
times this fiscal year on Hurricane Katrina issues and about 20 times
on issues related to both terrorism and the Iraq conflict. Though lower
than our actual performance on this measure in 2007, we believe that
our fiscal year 2008 target of testimonies at 220 hearings is
challenging and reflects a more typical estimate of the number of
hearings we are likely to attend after a very busy first year for this
Congress.
Figure 15: Testimonies:
[See PDF for Image]- graphic text:
Bar graph with six items.
Hearings at which GAO testified:
2003 Actual: 189;
2004 Actual: 217;
2005 Actual: 179;
2006 Actual: 240;
2007 Target: 185;
2007 Actual: 276.
Source: GAO.
[End of Figure]
Figure 16: GAO's Selected Testimony Issues in Fiscal Year 2007:
Selected Testimony Issues:
Fiscal Year 2007:
Goal 1:
Address Challenges to the Well-Being and Financial Security of the
American People:
* Federal oversight of food safety;
* Capacity and service gaps among homeless veterans programs;
* Reauthorizing the State Children's Health Insurance Program;
* Claims processing challenges for veterans' disability benefits;
* FEMA payments on hurricane-damaged properties;
* Nursing home oversight;
* Private pension fees;
* Small Business Administration's disaster preparedness efforts;
* Improved safety for coal miners;
* Federal actions to improve child welfare services;
* Oil and gas royalties;
* Medicare physician payments;
* Effects of seller-funded down payments on home loans;
* Status of the future air traffic control system;
* USPS reform efforts;
* Federal real property issues;
* Emergency management plans for schools.
Goal 2:
Respond to Changing Security Threats and the Challenges of
Globalization:
* Status of benchmarks for Iraqi government;
* DOD's management of systems and assets;
* Improving the military's supply chain;
* Linking defense strategy with military personnel requirements;
* Navy shipbuilding;
* Using best practices for space acquisitions;
* Vulnerabilities in U.S. export control systems;
* Combating nuclear smuggling;
* Securing radiological sources in foreign countries;
* Improving the efficiency of U.S. food aid procedures;
* National strategy to enforce intellectual property rights;
* DHS's major mission and management functions;
* Risk- management principles and homeland security;
* Secure border initiative;
* Bankruptcy reform and credit counseling;
* National strategy to improve financial literacy;
* VA's information security management.
Goal 3:
Help Transform the Federal Government's Role and How It Does Business:
* Contracting and security challenges in Iraq;
* Federal acquisitions and contracting challenges;
* Acquisition challenges at DHS;
* Security vulnerabilities at unmonitored border locations;
* Incomplete reporting of federal improper payments;
* Fiscal stewardship challenges facing the United States;
* Tax abuses by Medicare Part B providers;
* Transforming DHS's financial management systems;
* Challenges facing the polar satellite program;
* Electronic voting;
* Balancing individual privacy with homeland security needs;
* Health information technology and privacy;
* Long-term fiscal challenges;
* Tax compliance;
* Human capital challenges facing the federal government;
* Rebuilding the Gulf Coast;
* Preparations for the 2010 Census.
Source: See Image Sources.
[End of Table]
Timeliness:
To be useful to the Congress, our products must be available when our
client needs them. We used the results of our client feedback survey as
a barometer for how well we are getting our products to our
congressional clients when they need the information. We used this
survey as the primary data source for our external timeliness measure
because the responses come directly from our clients. We tally
responses from the surveys we send to key congressional staff working
for the requesters of our testimony statements and more significant
written products (e.g., engagements assigned an interest level of
"high" by our senior management[Footnote 4] and those requiring an
investment of 500 staff days or more), which represented 95 percent of
the written products we issued in fiscal year 2007. Because our
products usually have multiple requesters, we often survey more than
one congressional staff person per testimony or product. Each survey
asks the client whether the product was provided or delivered on time.
In fiscal year 2007, we had a 28 percent response rate from the
congressional staff surveyed, which provided us with feedback on 54
percent of the products for which we sent surveys.
As shown in figure 17, in fiscal year 2007 we missed our timeliness
target by 1 percentage point. We have always set our target for
timeliness high because it is important for us to meet congressional
needs when they occur, but we have yet to achieve this target. We will
continue to emphasize to our audit teams the importance of
communicating with our clients about when they will need testimony
statements and products and delivering these statements and products
when agreed to allow them enough time to prepare for hearings and other
congressional activities. We anticipate these actions will enable us to
meet our fiscal year 2008 target of 95 percent.
Figure 17: Timeliness:
[See PDF for Image]- graphic text:
Bar graph with six items.
Percentage of products on time.
2003 Actual: N/A;
2004 Actual: 89%;
2005 Actual: 90%;
2006 Actual: 92%;
2007 Target: 95%;
2007 Actual: 94.
Source: GAO.
Note: We pilot tested our client feedback survey beginning in March
2002 and collected actual data on our client's satisfaction with the
timeliness of our products in fiscal year 2004.
[End of Figure]
Focusing on Our People:
Our highly professional, multidisciplinary staff were critical to the
level of performance we demonstrated in fiscal year 2007. Our ability
to hire, develop, retain, and lead staff is a key factor to fulfilling
our mission of serving the Congress and the American people.
Over the last 5 fiscal years, we have refined our processes for
measuring how well we manage our human capital. In fiscal year 2007, we
met or exceeded our targets for five of our eight people measure. All
eight measures are directly linked to our goal 4 strategic objective of
becoming a professional services employer of choice. For more
information about our people measures, see Verifying and Validating
Performance Data on page 78 of this report.
New Hire Rate and Acceptance Rate:
Our new hire rate is the ratio of the number of people hired to the
number we planned to hire. Annually, we develop a workforce plan that
takes into account strategic goals, projected workload changes, and
other changes such as retirements, attrition, promotions, and skill
gaps. The workforce plan for the upcoming year specifies the number of
planned hires and, for each new hire, specifies the pay plan, skill
type, and level. The plan is conveyed to each of our units to guide
hiring throughout the year. Progress toward achieving the workforce
plan is monitored monthly by the Chief Operating Officer and the Chief
Administrative Officer. Adjustments to the workforce plan are made
throughout the year, if necessary, to reflect changing needs and
conditions. In fiscal year 2007, our adjusted plan was to hire 198
staff. However, we were only able to bring on board 187 staff by year-
end. Of the 198 staff positions, 3 positions were carried over to
fiscal year 2008 because the applicants could not start until the new
fiscal year. Our acceptance rate measure is a proxy for our
attractiveness as an employer and an indicator of our competitiveness
in bringing in new talent. It is the ratio of the number of applicants
accepting offers to the number of offers made. Table 3 shows that we
exceeded by 1 percentage point the targets we set for our new hire rate
and met our acceptance rate target of 72 percent. Our calculations for
each of these measures do not include offers extended to applicants for
fiscal year 2007 vacancies who accepted but will not report on duty
until the first quarter of fiscal year 2008. (For more about our
recruitment strategy and performance in fiscal year 2007, see app. 1,
p. 182.):
Table 3: Actual Performance and Targets Related to Our New Hire Rate
and Acceptance Rate Measures:
Performance measures: People: New hire rate;
2003 Actual: 98%;
2004 Actual: 98%;
2005 Actual: 94%;
2006 Actual: 94%;
2007 Target: 95%;
2007 Actual: 96%.
Performance measures: People: Acceptance rate;
2003 Actual: 72%;
2004 Actual: 72%;
2005 Actual: 71%;
2006 Actual: 70%;
2007 Target: 72%;
2007 Actual: 72%.
Source: GAO.
[End of Table]
Retention Rate:
We continuously strive to make GAO a place where people want to work.
Once we have made an investment in hiring and training people, we would
like them to stay with us. This measure is one indicator of whether we
are attaining this objective. We calculate this measure by taking 100
percent minus the attrition rate, where attrition rate is defined as
the number of separations divided by the average on-board strength. We
calculate this measure with and without retirements. Table 4 shows that
both of our retention rate targets have declined 2 percentage points
since fiscal year 2003, but have remained relatively flat during the
intervening years.
Table 4: Actual Performance and Targets Related to Our Retention Rate
Including and Excluding Retirements:
Performance measures: People: Retention rate: With retirements;
2003 Actual: 92%;
2004 Actual: 90%;
2005 Actual: 90%;
2006 Actual: 90%;
2007 Target: 90%;
2007 Actual: 90%.
Performance measures: People: Retention rate: Without retirements;
2003 Actual: 96%;
2004 Actual: 95%;
2005 Actual: 94%;
2006 Actual: 94%;
2007 Target: 94%;
2007 Actual: 94%.
Source: GAO.
[End of Table]
Source: GAO.
Staff Development and Utilization, Leadership, and Organizational
Climate:
One way that we measure how well we are supporting our staff and
providing an environment for professional growth and improvement is
through our annual employee feedback survey. This Web-based survey,
which is conducted by an outside contractor to ensure the
confidentiality of every respondent, is administered to all of our
employees once a year. Through the survey, we encourage our staff to
indicate what they think about our overall operations, work
environment, and organizational culture and how they rate our managers-
-from their immediate supervisors to the Executive Committee--on key
aspects of their leadership styles. The survey consists of over 100
questions.
In fiscal year 2007, about 72 percent of our employees completed the
survey, and we met our target for staff development but missed the
remaining three targets (see table 5). Though we did not meet our
targets for leadership or organizational climate in fiscal year 2007,
the favorable responses were equal to or slightly better than those in
fiscal year 2006. We revised our fiscal year 2008 targets slightly for
leadership and organizational climate and set them at 80 percent and 75
percent, respectively, to be more realistic, but still challenging. We
anticipate continued improvement on these measures. Since fiscal year
2003, favorable responses to our staff utilization measure (see p. 90
for more information on this measure) have generally increased, but
declined in fiscal year 2007. We also adjusted this target slightly and
set it at 75 percent for fiscal year 2008 to ensure that it is
realistic and challenging, and we plan to perform a comprehensive
analysis of the factors associated with staff utilization during the
fiscal year.
Data from our employee feedback survey are also used by by the
Partnership for Public Service to determine our standing in the annual
Best Places to Work in the Federal Government rankings. We were cited
as second on the list of large federal agencies according to rankings
released in April 2007 by this organization. We were also selected by
Washingtonian magazine in September 2007 as a "Great Place to Work"
from more than 225 candidates because of our interesting work, good pay
and benefits, collegial staff, employee development, and flexibility.
Table 5: Actual Performance and Targets Related to Our Measures of
Employee Satisfaction with Staff Development, Staff Utilization,
Leadership, and Organizational Climate:
Performance Measures: People: Staff development;
2003 Actual: 67%;
2004 Actual: 70%;
2005 Actual: 72%;
2006 Actual: 76%;
2007 Target: 75%;
2007 Actual: 76%.
Performance Measures: People: Staff utilization;
2003 Actual: 71%;
2004 Actual: 72%;
2005 Actual: 75%;
2006 Actual: 75%;
2007 Target: 78%;
2007 Actual: 73%.
Performance Measures: People: Leadership;
2003 Actual: 78%;
2004 Actual: 79%;
2005 Actual: 80%;
2006 Actual: 79%;
2007 Target: 80%;
2007 Actual: 79%.
Performance Measures: People: Organizational Climate;
2003 Actual: 71%;
2004 Actual: 74%;
2005 Actual: 76%;
2006 Actual: 73%;
2007 Target: 76%;
2007 Actual: 74%.
Source: GAO.
[End of table]
Focusing on Our Internal Operations:
Our mission and people are supported by our internal administrative
services, including information management, facility management,
knowledge services, human capital, financial management, and other
services. To assess our performance related to how well our internal
administrative services help employees get their jobs done or improve
employees' quality of work life, we use information from our annual
customer satisfaction survey to set targets and assess our performance
for both of these measures, which are shown in table 6 along with
baseline data that we recorded for them in fiscal year 2003 and fiscal
year 2004. We asked staff to rank 31 internal services available to
them and to indicate on a scale from 1 to 5 their satisfaction with
each service. Our internal operations measures are directly related to
our goal 4 strategic objectives of continuously enhancing our business
and management processes and becoming a professional services employer
of choice. The first measure encompasses 21 services that help
employees get their jobs done, such as Internet access, desktop
computer equipment, voice and video communication systems, shared
service centers for copying and courier assistance, travel services,
and report production. The second measure encompasses another 10
services that affect quality of work life, such as assistance related
to pay and benefits, building security and maintenance, and workplace
safety and health. Using survey responses, we calculate a composite
score for each service category that reflects employee ratings for (1)
satisfaction with the service and (2) importance of the service.
Table 6: Actual Performance and Targets Related to Our Internal
Operations Measures:
Performance measures: Internal operations: Help get job done;
2003 Actual: 3.98;
2004 Actual: 4.01;
2005 Actual: 4.1;
2006 Actual: 4.1;
2007 Target: 4.0;
2007 Actual: N/A.
Performance measures: Internal operations: Quality of work life;
2003 Actual: 3.86;
2004 Actual: 3.96;
2005 Actual: 3.98;
2006 Actual: 4.0;
2007 Target: 4.0;
2007 Actual: N/A.
Source: GAO.
Note: We will report actual data for fiscal year 2007 once the data
from our November 2007 internal operations survey have been analyzed.
N/A indicates that the data are not available yet.
[End of Table]
Building and Sustaining Partnerships:
The various societal, economic, and other challenges facing our nation
are becoming increasingly difficult for public agencies to address, in
part because these issues tend to cut across different organizations
and sectors. At the same time, public agencies are being called upon to
address these complex problems in an era of tighter resources, smaller
workforce levels, and other constraints. As a result of these trends,
it will be difficult, if not impossible, for any one agency to address
these challenges on its own. Moreover, evidence suggests that the most
effective solutions arise when organizations join forces to apply their
experience, knowledge, and resources to address common challenges.
We have long recognized the importance of working collaboratively, and
teams and units supporting all four of our strategic goals have
continued their partnerships with a number of organizations, such as
the National Academies of Sciences, the Council for Excellence in
Government, and the International Organization of Supreme Audit
Institutions (INTOSAI). Indeed, our collaborative relationships with
"good government" and other domestic and international organizations
enhance our ability to manage risk, address common challenges, improve
government operations, provide better service to the public, make
meaningful changes to the accountability process, and leverage
available resources, all while maintaining our professional
independence. Simply put, our relationships with our partners and other
affiliates help us and them to carry out our respective missions.
In fiscal year 2006, we began a formal effort to identify indicators
that could help us measure the quality of our collaborative
relationships. This initiative continued in fiscal year 2007, when a
special team was created and tasked with developing a methodology that
would enable us to (1) assess the extent and nature of our
collaborative activities, (2) quantitatively measure the effectiveness
of our collaborative activities, and (3) identify options for improving
those relationships.
Among other actions, the team reviewed available literature for leading
practices on partnering, interviewed our senior executives and partner
organization officials on their collaborative activities, and developed
and pretested a survey of partner organizations designed to elicit
information on how well our collaborative relationships were working.
Moving forward, we expect to finalize the survey and other aspects of
the methodology and survey these organizations in fiscal year 2008.
GAO's High-Risk Program:
Since 1990, our high-risk program has highlighted long-standing
challenges facing the federal government. Increasingly, the program has
focused on those major programs and operations that are in urgent need
of broad-based transformation and congressional as well as executive
branch action, to ensure that our national government functions in the
most economical, efficient, and effective manner possible. Our latest
regular update, released in January 2007, highlights 27 troubled areas
across government. Many of these areas involve critical public service
providers, such as USDA, IRS, and CMS, which provides services to
Medicare and Medicaid recipients.
Issued to coincide with the start of each new Congress, our high-risk
updates have helped sustain attention from Members of the Congress who
are responsible for oversight and from executive branch officials who
are accountable for performance. Our focus on high-risk problems
contributed to the Congress enacting a series of governmentwide reforms
to address critical human capital challenges, strengthen financial
management, improve IT practices, and instill a more results-oriented
government. Overall, our high-risk program has served to identify and
help resolve serious weaknesses in areas that involve substantial
resources and provide critical services to the public.
In fiscal year 2007, we determined that sufficient progress was made to
merit removing the high-risk designation from two areas--the USPS
transformation efforts and long-term outlook and HUD's single-family
mortgage insurance and rental housing assistance programs. We also
designated three new areas as high risk: financing the nation's
transportation system, ensuring the effective protection of
technologies critical to U.S. national security interests, and
transforming federal oversight of food safety.
Since our program began, the government has taken high-risk problems
seriously and has made progress toward correcting them. The original
high-risk list included 14 areas, but over the next 17 years, 33 areas
were added, 18 areas were removed, and 2 were consolidated to reach the
current 27 areas. DOD continues to dominate the list with 8 high-risk
areas of its own and shared responsibility for 7 more. Table 7 lists
each current high-risk area and the year it was placed on the high-risk
list.
Our high-risk list work in fiscal year 2007:
* 221 reports;
* 96 testimonies;
* $13.55 billion in financial benefits.
In fiscal year 2007, we issued 221 reports and delivered 96 testimonies
related to our high-risk areas and documented financial benefits
totaling approximately $13.55 billion. These results included, for
example, reviews we completed in evaluating DOD's weapon system
acquisition process. Some of our significant work in this area includes
reviewing DOD's progress in meeting cost, schedule, and performance
goals for the Joint Strike Fighter--DOD's most expensive aircraft
acquisition program--and assessing the challenges to building a new
type of aircraft carrier, the USS Gerald R. Ford, within budget. Our
work in the DOD's weapons system acquisition area resulted in $2.6
billion in financial benefits. In addition, we examined how IRS could
better enforce tax laws. For example, we made recommendations on how to
increase the tax compliance of sole proprietors and improve the
efficiency in the appeals process used by taxpayers facing liens or
levies. We documented approximately $1.3 billion in financial benefits
from our past work in the enforcement of tax laws area. To learn more
about our work on the high-risk areas or to download our January 2007
high-risk update in full, go to [hyperlink,
http://www.gao.gov/docsearch/featured/highrisk.html].
Table 7: GAO's 2007 High-Risk List:
Addressing Challenges to Broad-Based Transformation:
2007 High-risk area: Strategic Human Capital Management[A];
Year designated high risk: 2001.
2007 High-risk area: Managing Federal Real Property[A];
Year designated high risk: 2003.
2007 High-risk area: Protecting the Federal Government's Information
Systems and the Nation's Critical Infrastructures;
Year designated high risk: 1997.
2007 High-risk area: Implementing and Transforming the Department of
Homeland Security;
Year designated high risk: 2003.
2007 High-risk area: Establishing Appropriate and Effective Information-
Sharing Mechanisms to Improve Homeland Security;
Year designated high risk: 2005.
2007 High-risk area: DOD Approach to Business Transformation[A];
Year designated high risk: 2005.
2007 High-risk area: DOD Business Systems Modernization;
Year designated high risk: 1995.
2007 High-risk area: DOD Personnel Security Clearance Program;
Year designated high risk: 2005.
2007 High-risk area: DOD Support Infrastructure Management;
Year designated high risk: 1997.
2007 High-risk area: DOD Financial Management;
Year designated high risk: 1995;
2007 High-risk area: DOD Supply Chain Management (formerly Inventory
Management);
Year designated high risk: 1990.
2007 High-risk area: DOD Weapon Systems Acquisition;
Year designated high risk: 1990.
2007 High-risk area: FAA Air Traffic Control Modernization;
Year designated high risk: 1995.
2007 High-risk area: Financing the Nation's Transportation System[A]
(New);
Year designated high risk: 2007.
2007 High-risk area: Ensuring the Effective Protection of Technologies
Critical to U.S. National Security Interests[A] (New);
Year designated high risk: 2007.
2007 High-risk area: Transforming Federal Oversight of Food Safety[A]
(New);
Year designated high risk: 2007.
Managing federal contracting more effectively:
2007 High-risk area: DOD Contract Management;
Year designated high risk: 1992.
2007 High-risk area: DOE Contract Management;
Year designated high risk: 1990.
2007 High-risk area: National Aeronautics and Space Administration
Contract Management;
Year designated high risk: 1990.
2007 High-risk area: Management of Interagency Contracting;
Year designated high risk: 2005.
Assessing the efficiency and effectiveness of tax law administration:
2007 High-risk area: Enforcement of Tax Laws[A];
Year designated high risk: 1990.
2007 High-risk area: IRS Business Systems Modernization;
Year designated high risk: 1995.
Modernizing and safeguarding insurance and benefit programs:
2007 High-risk area: Modernizing Federal Disability Programs[A];
Year designated high risk: 2003.
2007 high-risk area: Pension Benefit Guaranty Corporation Single-
Employer Insurance Program[A];
Year designated high risk: 2003.
2007 High-risk area: Medicare Program[A];
Year designated high risk: 1990.
2007 High-risk area: Medicaid Program[A];
Year designated high risk: 2003.
2007 High-risk area: National Flood Insurance Program[A];
Year designated high risk: 2006.
Source: GAO.
[A] Legislation is likely to be necessary as a supplement to actions by
the executive branch, in order to effectively address this high-risk
area.
[End of Table]
General Counsel Decisions and Other Legal Work:
In addition to our audit and evaluation work, the Congress and the
public also benefited from some of our other activities in fiscal year
2007 in the following ways:
* We handled more than 1,000 protests filed by parties who challenged
the way individual federal procurements were conducted or how federal
contracts were awarded, and we issued merit decisions on more than 450
protests addressing a wide range of issues involving compliance with,
and the interpretation of, procurement statutes and regulations. In
fiscal year 2007, we handled numerous protests associated with areas of
significant current interest. For example, we issued decisions
concerning the contract for interpreters and translators for U.S. armed
forces in Iraq as well as the acquisition of major systems, such as the
Air Force's replacement combat search and rescue vehicle.
* We issued appropriations law decisions and opinions on, among other
things, the purposes for which appropriated funds may be used, the
proper disposition of funds received by the government, potential
Antideficiency Act violations, and accountability for the use of
government purchase cards. Three decisions stand out. They addressed
interagency transactions between the DOD and the Department of the
Interior and the agencies' failure to prevent the misuse of expired
appropriations. These three decisions more fully defined the criteria
for valid interagency agreements, enhancing uniformity and consistency
within government.
* For fiscal year 2007, we received 25 Antideficiency Act reports for
our repository and made selected information from these reports
publicly available on our web site. Since the Congress amended the
Antideficiency Act in December 2004 requiring agencies to send us a
copy of reports of Antideficiency Act violations, we have received a
total of 68 reports, of which 20 were for 2005 and 23 were for 2006.
This year's reports, which also report overobligations from earlier
fiscal years, include an overobligation of the TSA appropriation by
$195 million because purchase orders were not properly recorded and a
$126 million violation because of an inaccurate estimation of carryover
appropriations by the Employment and Training Administration.
* In 2007 we issued a report on Presidential Signing Statements to the
Senate Appropriations Committee and the House Judiciary Committee. This
report consisted of a detailed analysis and history of signing
statements, an examination of their use by federal courts, and an
explanation of the grounds on which the President has objected to
various laws in signing statements. The report also included the
results of our investigation into whether agencies were executing as
written 19 provisions of law appearing in the fiscal year 2006
appropriations acts. We found that agencies were not executing the
provisions as written in 6 of the 19 cases.
* Several of our attorneys served on the Contract Appeals Board to
resolve appeals on claims by contractors under contract with the
Government Printing Office as well as with the Architect of the Capitol
involving the Capitol Visitor Center, the West Refrigeration Plant
Expansion, the Longworth House Office Building, and the Supreme Court.
* In 2007 we issued our annual update of volumes 1 and 2 of the Third
Edition of Principles of Federal Appropriations Law, commonly known as
the Red Book. The Red Book is available to the public on our web site
and is considered the primary resource for appropriations law guidance
in the federal financial community. Volumes 1 and 2 of the Red Book
each average more than 15,000 inquiries per week on our web site as
attorneys, budget analysts, financial managers, project managers,
contracting officers, and accountable officers from all three branches
of the government access it to research questions about budget and
appropriations law. The third edition will be complete with publication
of volume 3 in 2008. In addition, General Counsel taught a 2 � day
course on appropriations law 25 times this fiscal year to 12 agencies.
The course provides an analytical framework for analyzing
appropriations law issues to ensure that funds are available for
obligation with regard to purpose, amount and time. To further
communication across agencies, General Counsel hosted its third annual
appropriations law forum in March, with an analysis of significant
decisions and opinions of 2006 and interactive sessions on
indemnification clauses and continuing resolutions.
Managing Our Resources:
Resources Used to Achieve Our Fiscal Year 2007 Performance Goals:
Our financial statements for fiscal year 2007 received an unqualified
opinion from an independent auditor. The auditor found our internal
controls to be effective--which means that no material weaknesses were
identified--and the auditor reported substantial compliance with the
requirements for financial systems in the Federal Financial Management
Improvement Act of 1996. In addition, the auditor also found no
instances of noncompliance with the laws or regulations in the areas
tested. The statements and their accompanying notes, along with the
auditor's report, appear later in this report. Table 8 summarizes key
data. Compared with the statements of large and complex agencies in the
executive branch, our statements present a relatively simple picture of
a small yet very important agency in the legislative branch. We focus
most of our financial activity on the execution of our congressionally
approved budget with most of our resources devoted to the human capital
needed for our mission of supporting the Congress with professional,
objective, fact-based, nonpartisan, nonideological, fair, and balanced
information and analysis.
Table 8: GAO's Financial Highlights: Resource Information (Dollars in
millions):
Total budgetary resources[A];
Fiscal year 2007: $498.9 million;
Fiscal year 2006: $497.2 million.
Total outlays[A];
Fiscal year 2007: $490.5 million;
Fiscal year 2006: $488.1 million.
Net cost of operations: Goal 1: Well-being and Financial security of
the American people;
Fiscal year 2007: $177.4 million;
Fiscal year 2006: $191.9 million.
Net cost of operations: Goal 2: Changing security threats and
challenges of globalization;
Fiscal year 2007: $157.5 million;
Fiscal year 2006: $154.7 million.
Net cost of operations: Goal 3: Transforming the federal government's
role;
Fiscal year 2007: $146.6 million;
Fiscal year 2006: $146.8 million.
Net cost of operations: Goal 4: Maximizing the value of GAO;
Fiscal year 2007: $23.9 million;
Fiscal year 2006: $23.7 million.
Net cost of operations: Less reimbursable services not attributable to
goals;
Fiscal year 2007: ($5.7 million);
Fiscal year 2006: ($5.6 million).
Total net cost of operations[A];
Fiscal year 2007: $499.7 million;
Fiscal year 2006: $511.5 million.
Actual FTEs:
Fiscal year 2007: 3,152;
Fiscal year 2006: 3,194.
Source: GAO.
[A] The net cost of operations figures include nonbudgetary items, such
as imputed pension and depreciation costs, which are not included in
the figures for total budgetary resources or total outlays.
[End of Table]
Our budget consists of an annual appropriation covering salaries and
expenses, and revenue from reimbursable audit work and rental income.
Our total assets were $106.5 million, consisting mostly of property and
equipment (including the headquarters building, land and improvements,
and computer equipment and software) and funds with the U.S. Treasury.
Total liabilities of $94 million were composed largely of employees'
accrued annual leave, amounts owed to other government agencies,
accounts payable, and employees' salaries and benefits. The greatest
change in the liabilities is a decrease of $6.1 million in
intragovernmental accounts payable due to more timely billing from, and
therefore payments to, other government entities. Also, $3.8 million in
vendor financed equipment is recorded on the balance sheet as a note
payable.
The net cost of operating GAO during fiscal year 2007 and fiscal year
2006 was approximately $500 million and $511 million, respectively.
Expenses for salaries and related benefits accounted for 81 and 79
percent of our net cost of operations in fiscal years 2007 and 2006,
respectively. Figure 18 shows how our fiscal year 2007 costs break down
by category.
We report net cost of operations according to our four strategic goals,
consistent with our strategic plan. Overall, our net costs of
operations decreased by $11.8 million, due in part to the change in
workers' compensation methodology in fiscal year 2006, which increased
liabilities and expenses by more than $5.5 million; there was no
similar change in fiscal year 2007.
Our strategic Goal 1 showed a reduction in net costs of $14.5 million
in fiscal year 2007 compared to fiscal year 2006. This decline in Goal
1 costs reflects the continuing shift in our resources towards the
areas of homeland security, national disaster preparedness, and
immigration issues, which reside in our strategic Goal 2.
Figure 18: Use of Fiscal Year 2007 Funds by Category:
[See PDF for Image] - graphic text:
Pie chart with five items.
Percentage of Total Net Costs:
Salaries and benefits: 80.6%;
Building and hardware maintenance services: 10.3%;
Rent (space and hardware): 2.3%;
Depreciation: 2.7%;
Other: 4.1%.
Source: GAO.
[End of Figure]
Figures 19 and 20 show our net costs by goal for fiscal year 2004
through fiscal year 2007. Figure 19 shows costs unadjusted for
inflation, while figure 20 shows the same costs in 2007 dollars, that
is, adjusted for inflation.
Figure 19: Net Cost by Goal, Unadjusted for Inflation:
[See PDF for Image]- graphic text:
Bar chart with 4 groups of 4 items each.
Goal 1;
2004: $194.7 million;
2005: $197.7 million;
2006: $191.9 million;
2007: $177.4 million.
Goal 2;
2004: $131.7 million;
2005: $144.2 million;
2006: $154.7 million;
2007: $157.5 million.
Goal 3;
2004: $145.8 million;
2005: $147.3 million;
2006: $146.8 million;
2007: $146.6 million.
Goal 4;
2004: $23.4 million;
2005: $22.0 million;
2006: $23.7 million;
2007: $23.9 million.
Source: GAO.
[End of Figure]
Figure 20: Net Cost by Goal, Adjusted for Inflation:
[See PDF for Image]- graphic text:
Bar chart with 4 groups of 4 items each.
Goal 1;
2004: $213.2 million;
2005: $209.8 million;
2006: $197.1 million;
2007: $177.4 million.
Goal 2;
2004: $144.2 million;
2005: $153.0 million;
2006: $158.9 million;
2007: $157.5 million.
Goal 3;
2004: $159.7 million;
2005: $156.3 million;
2006: $150.8 million;
2007: $146.6 million.
Goal 4;
2004: $25.6 million;
2005: $23.3 million;
2006: $24.3 million;
2007: $23.9 million.
Source: GAO.
[End of Figure]
Limitation on Financial Statements:
Responsibility for the integrity and objectivity of the financial
information presented in the financial statements in this report rests
with our managers. The statements were prepared to report our financial
position and results of operations, consistent with the requirements of
the Chief Financial Officers Act, as amended (31 U.S.C. 3515). The
statements were prepared from our financial records in accordance with
the formats prescribed in OMB Circular No. A-136, Financial Reporting
Requirements. These financial statements differ from the financial
reports used to monitor and control our budgetary resources. However,
both were prepared from the same financial records.
Our financial statements should be read with the understanding that as
an agency of a sovereign entity, the U.S. government, we cannot
liquidate our liabilities (i.e., pay our bills) without legislation
that provides resources to do so. Although future appropriations to
fund these liabilities are likely and anticipated, they are not
certain.
Planned Resources to Achieve Our Fiscal Year 2008 Performance Goals:
As we go to press on this report, the Congress has not completed action
on our fiscal year 2008 budget request. We, as well as the rest of the
federal government, are operating under a continuing resolution
appropriation at near fiscal year 2006 levels through November 16,
2007, pending enactment of the fiscal year 2008 appropriations bills
for the federal government.
Our fiscal year 2008 budget request to the Congress for about $530
million would allow us to continue to perform a range of oversight-,
insight-, and foresight-related engagements to support the Congress in
meeting the full range of its constitutional responsibilities and to
meet the performance goals outlined in our Strategic Plan. The
requested resources will allow us to rebuild our workforce to a level
that will position us to better respond to increasing supply and demand
imbalances in responding to congressional requests, cover mandatory pay
and uncontrollable cost increases, continue to be regarded as an
employer of choice, undertake critical investments in technology
improvements and other transformational areas, and ensure that we can
effectively support the Congress's legislative agenda. Our request
represents an increase of about 8.5 percent over our fiscal year 2007
funding level. At this time, the House of Representatives has approved
a 4.5 percent increase above 2007. The Senate Appropriations Committee
has proposed a 6 percent increase above fiscal year 2007 funding
levels, but the full Senate has not yet acted on our request. Table 9
reflects our requested funding level and full-time equivalent (FTE)
figures to support the Strategic Plan. We will update our fiscal year
2008 funding and FTE numbers when the final appropriation has been
approved by the Congress.
Table 9: Requested Fiscal Year 2008 Budgetary Resources by Strategic
Goal:
Strategic Goal: Goal 1;
Provide timely, quality service to the Congress and the federal
government to address current and emerging challenges to the well-being
and financial security of the American people;
FTEs: 1,213;
Amount(dollars in millions): $193 million.
Strategic Goal: Goal 2; Provide timely, quality service to the Congress
and the federal government to respond to changing threats and the
challenges of global interdependence;
FTEs: 1,000;
Amount(dollars in millions): $160 million.
Strategic Goal: Goal 3; Help transform the federal government's role
and how it does business to meet 21st century challenges;
FTEs: 860;
Amount(dollars in millions): $137 million.
Strategic Goal: Goal 4; Maximize the value of GAO by being a model
federal agency and a world-class professional services organization;
FTEs: 144;
Amount(dollars in millions): $40 million.
Total;
FTEs: 3,217;
Amount(dollars in millions): $530 million.
Source: GAO.
[End of Table]
Our fiscal year 2008 budget request aligns the budget in support of
three broad program areas, human capital, engagement support and
infrastructure operations. These programs align to all four of our
strategic goals in support of the Congress and the American people. Our
budget request will support activities in the following areas:
* Human capital. Provides resources to support our most important
asset--our employees--and cover salaries and benefits, training and
development, awards and recognition, and recruitment and retention
programs, such as transit subsidy and student loan repayment programs.
Human capital costs represent about 80 percent of our total budgetary
resources. For fiscal year 2008, we are requesting funds to support an
increase to achieve a staffing level of 3,217 FTEs which will allow us
to fill critical vacancies, meet succession-planning needs, rebuild our
capacity, and address supply and demand imbalances in responding to
congressional requests.
* Engagement support. Provides resources for contractual services and
staff travel needed to perform engagements to support the Congress's
legislative agenda, restore travel to more normal levels, and increase
our oversight in the Middle East to provide more timely and responsible
information on U.S. activities in the area.
* Infrastructure operations. Includes resources activities, such as
building maintenance, computer hardware maintenance and software, field
office rent, financial management activities, and targeted initiatives.
We plan to allocate 20 percent of our total budget request for
infrastructure operations and critical infrastructure initiatives
previously deferred during budget shortfalls.
Our fiscal year 2008 budget request seeks necessary resources to
rebuild and enhance our workforce, knowledge capacity, employee
programs, and infrastructure. In the years ahead our support to the
Congress will likely prove even more critical based on pressures
created by our nation's current and projected budget deficit and
growing long-term fiscal imbalances.
Our budget request seeks to maximize our effectiveness and credibility
while achieving three elements essential to increased value and
mitigating risk--incentives, transparency, and accountability. With
these elements in mind we use our resources to address major management
challenges surrounding human capital, information security and physical
security. We capitalized on opportunities that minimize related risks,
while staying mindful of the big picture and the long-term view. Using
long-term perspectives to transform our organization and operations to
better meet today's needs as well as future needs, we are in the
business of helping government work better for and holding it
accountable to the American people.
Strategies for Achieving Our Goals:
The Government Performance and Results Act directs agencies to
articulate not just goals, but also strategies for achieving those
goals. As detailed in the following sections, we emphasize two
overarching strategies for achieving our goals: (1) providing
information from our work to the Congress and the public in a variety
of forms and (2) continuing and strengthening our internal operations.
Specifically, our strategies emphasize the importance of working with
other organizations on crosscutting issues and effectively addressing
the challenges to achieving our agency's goals and recognizing the
internal and external factors that could impair our performance.
Through these strategies, which have proven successful for us for a
number of years, we plan to achieve the level of performance that is
needed to meet our annual performance measures as well as our multiyear
performance goals. (For all four strategic goals, the multiyear
performance goals included in our current strategic plan describe
specific areas of work that we addressed in fiscal year 2007.) This
level of performance, in turn, will allow us to achieve our strategic
goals.
Attaining our three external strategic goals (goals 1, 2, and 3) and
their related objectives rests, for the most part, on providing
professional, objective, fact-based, nonpartisan, nonideological, fair,
and balanced information to support the Congress in carrying out its
constitutional responsibilities. To implement the performance goals and
key efforts related to these three goals, we develop and present
information in a number of ways, including
* evaluations of federal policies, programs, and the performance of
agencies;
* oversight of government operations through financial and other
management audits to determine whether public funds are spent
efficiently, effectively, and in accordance with applicable laws;
* investigations to assess whether illegal or improper activities are
occurring;
* analyses of the financing for government activities;
* constructive engagements in which we work proactively with agencies,
when appropriate, to provide advice that may assist their efforts
toward positive results;
* legal opinions that determine whether agencies are in compliance with
applicable laws and regulations;
* policy analyses to assess needed actions and the implications of
proposed actions; and:
* additional assistance to the Congress in support of its oversight and
decision-making responsibilities.
We conduct specific engagements as a result of requests from
congressional committees and mandates written into legislation,
resolutions, and committee reports. In fiscal year 2007, we devoted 90
percent of our engagement resources to work requested or mandated by
the Congress. We initiated the remaining 10 percent of the engagement
work under the Comptroller General's authority. Much of this work
addressed various challenges that are of broad-based interest to the
Congress, such as the global war on terrorism, the cost and status of
the reconstruction efforts in Iraq, and our reviews related to the 2005
hurricane season.[Footnote 5] Also covered by this work were government
programs and operations that we have identified as at high risk for
fraud, waste, abuse, and mismanagement as well as reviews of agencies'
budget requests to help support congressional decision making. By
making recommendations to improve the accountability, operations, and
services of government agencies, we contribute to increasing the
effectiveness of federal spending and enhancing the taxpayers' trust
and confidence in their government.
Our staff are responsible for following high standards for gathering,
documenting, and supporting the information we collect and analyze.
More often than not, this information is documented in a product that
is made available to the public. In some cases, we develop products
that contain classified or sensitive information that cannot be made
available publicly. We generally issue around 1,200 to 1,300 products
each year, electronically and in printed format. In addition, we
publish about 250 to 350 legal decisions and opinions each year. Our
products include the following:
* letter reports, chapter reports, and written correspondence;
* testimonies and statements for the record, where the former are
delivered orally by one or more of our senior executives at a hearing
and the latter are provided for inclusion in the congressional record;
* oral briefings, which are usually given directly to congressional
staff members; and:
* legal decisions and opinions resolving bid protests and addressing
issues of appropriations law, as well as opinions on the scope and
exercise of authority of federal officers.
We also produce special publications on specific issues of general
interest to all Americans, such as our report on fiscal stewardship and
our series of issue papers to assist the Congress in developing its
oversight agenda for the situation in Iraq.[Footnote 6] Our
publication, Principles of Federal Appropriations Law, is viewed both
within and outside of the government as the primary resource on federal
case law related to the availability, use, and control of federal
funds. In addition, we maintain the government's repository of reports
on Antideficiency Act violations and make available on our Web site
various information extracted from those reports. Collectively, our
products always contain information and often conclusions and
recommendations that allow us to achieve our external strategic goals.
Another means of ensuring that we are achieving our goals is through
examining the impact of our past work and using that information to
shape our future work. Consequently, we evaluate actions taken by
federal agencies and the Congress in response to our past
recommendations. The results of these evaluations are reported in terms
of the financial benefits and nonfinancial benefits that reflect the
value of our work. We actively monitor the status of our open
recommendations--those that remain valid but have not yet been
implemented--and report our findings annually to the Congress and the
public [hyperlink, http://www.gao.gov/openrecs.html].
Similarly, we use our biennial high-risk report, most recently issued
in January 2007, to provide a status report on major government
operations that we consider high risk because they are vulnerable to
fraud, waste, abuse, and mismanagement or are in need of broad-based
transformation. We also use our report on 21st century challenges,
which was issued in February 2005, to alert the nation's leaders to
current and emerging issues facing the nation, including the long-range
budget challenge, the human capital crisis, postal reforms, and the
federal government's financial management efforts. These reports are
valuable planning tools because they help us to identify those areas
where our continued efforts are needed to maintain the focus on
important policy and management issues that the nation faces.
To attain our fourth strategic goal--an internal goal--and its five
related objectives, we conduct surveys of our congressional clients and
internal customers to obtain feedback on our products, processes, and
services, and performed studies and evaluations to identify ways in
which to improve them.
Because achieving our strategic goals and objectives also requires
strategies for coordinating with other organizations with similar or
complementary missions, we:
* use advisory panels and other bodies to inform our strategic and
annual work planning and:
* maintain strategic working relationships with other national and
international government accountability and professional organizations,
including the federal inspectors general, state and local audit
organizations, and other national audit offices.
These two types of strategic working relationships allow us to extend
our institutional knowledge and experience; leverage our resources; and
in turn, improve our service to the Congress and the American people.
Our Strategic Planning and External Liaison office takes the lead and
provides strategic focus for the work with external partner
organizations, while our research, audit, and evaluation teams lead the
work with most of the issue-specific organizations.
Strategic and Annual Work Planning:
Through forums and a number of ongoing advisory boards and panels, we
gather information and perspectives for our strategic and annual
performance planning efforts. In fiscal year 2007, the Comptroller
General convened various experts from the public, private, and
nonprofit sectors in eight forums and panels intended to enhance our
understanding of emerging issues and to identify opportunities for
action. The forums included discussions on options for extending the
working life of older workers, modernizing disability policies and
programs, exploring the feasibility of the Chief Management Officer and
Chief Operations Officer concepts, controlling health care costs,
addressing 21st century transportation challenges, improving financial
market regulation, addressing issues related to environmental
accounting, and closing the tax gap. We also updated our Strategic Plan
for 2007 through 2012. Our update included a significantly revamped
themes section that outlined for the Congress and the public the forces
that will shape our country's future.
We continued our speakers' series Conversations on 21st Century
Challenges, wherein a prominent national leader spoke to our staff on
issues affecting the United States and its place in the world. These
speakers included General Anthony Zinni, USMC (retired); Norman
Ornstein, Resident Scholar, American Enterprise Institute for Public
Policy; Marian Wright Edelman, Founder, Children's Defense Fund; and
Norman Mineta, Vice-Chairman, Hill and Knowlton.
Advisory boards and panels also support our strategic and annual work
planning by alerting us to issues, trends, and lessons learned across
the national and international audit community that we should factor
into our work. These groups include the Comptroller General's Advisory
Board, whose 40 members from the public and private sectors have broad
expertise in areas related to our strategic objectives. Through the
National Intergovernmental Audit Forum, chaired by the Comptroller
General, and 10 regional intergovernmental audit forums, we consult
regularly with federal inspectors general and state and local auditors.
In addition, through the Domestic Working Group, the Comptroller
General and the heads of 18 federal, state, and local audit
organizations exchange information, experiences, and best practices,
and seek opportunities to collaborate. Internationally, the Global
Working Group, comprising of the Comptroller General and 18 heads of
national audit offices, serves the same purpose through its annual
meeting. And our leadership role in INTOSAI provides further
opportunities for us to benefit from international perspectives,
insights, and contacts, and to help strengthen accountability globally
with a special focus on developing countries receiving development
assistance from the United States.
We also work with a number of issue-specific and technical panels to
improve our strategic and annual work planning, including the
following:
* The Advisory Council on Government Auditing Standards provides us
guidance on promulgating auditing standards. These standards articulate
auditors' responsibilities when examining government organizations;
programs; activities; functions; and government assistance received by
contractors, nonprofits, and other nongovernmental organizations. The
council's work helped to ensure that the revised standards would be
generally accepted and feasible. On July 27, 2007, we issued a revision
of the standards. It includes updates of the quality control and peer
review sections.
* The Accountability Advisory Council, made up of experts in the
financial management community, advises us on audits of the U.S.
government's consolidated financial statements and emerging issues
involving financial management and accountability reporting in the
public and private sectors.
* The Executive Council on Information Management and Technology, whose
19 members are experts from the public and private sectors and
representatives of related professional organizations, helps us to
identify high-risk and emerging issues in the IT arena.
* The Comptroller General's Educators Advisory Panel, composed of
deans, professors, and other academics from prominent universities
across the United States, advises us on recruiting, retaining, and
developing staff and on strategic planning matters.
Internationally, we participate in INTOSAI--the professional
organization of the national audit offices of 186 countries. During the
fall of 2004, the INTOSAI Congress unanimously adopted a 5-year
strategic plan--the first in INTOSAI's 50-year history--that was
developed by a 10-nation task force chaired by the Comptroller General.
The plan has provided the foundation for the Governing Board to engage
member institutions in advancing professional audit standards and
promoting knowledge sharing and best practices. In fiscal year 2007, we
made significant contributions to implement the strategic plan and
strengthen INTOSAI as a model international organization by serving as
goal liaison for the organization's capacity-building committee and as
vice-chair of its finance and administration committee. Looking to the
next 5-year period, the Comptroller General has been asked by INTOSAI
to chair a task force to update the current strategic plan.
Collaborating with Others:
By collaborating with others to implement the INTOSAI strategic plan,
we have strengthened professional standards, provided technical
assistance, leveraged resources, and developed best practices. In our
work with INTOSAI, we chair the accounting and reporting subcommittee
and are an active member of INTOSAI's auditing standards, internal
control, and other technical subcommittees. We publish INTOSAI's
quarterly International Journal of Government Auditing in five
languages to foster global understanding of standards, best practices,
and technical issues. An expanded and more robust journal web presence
this year has made the Journal more useful to INTOSAI members, more
accessible to our global readership, and positioned the journal to take
full advantage of technology.
To help ensure that the public sector perspectives are reflected in the
International Federation of Accountants Standards Development project,
we are working as a member of INTOSAI's Professional Standards
Committee as it collaborates closely with the International Auditing
Assurance Standards Board and the World Bank to develop international
auditing standards.
To build capacity in national audit offices around the world, we
conduct an international auditor fellows program for mid-to senior-
level staff from other countries. In 2007, 15 audit fellows from Asia,
Africa, Europe, Latin America, the Caribbean, and the South Pacific
spent about 4 months with us learning how we are organized to do our
work, how we plan our work, and what methodologies we use, particularly
for performance audits. As part of our strategy to promote continuous
learning and sustainability once the fellows return to their countries,
we are working with major donors--such as the World Bank, regional
development banks, and the U.S. Agency for International Development--
to identify or support relevant capacity-building projects in fellows'
institutions. Seven current and eight former auditors general as well
as several deputy auditors general, including the current chair of
INTOSAI, are graduates of this program. This year we forged an
agreement with the World Bank (the Bank would pick up much of the
costs, including transport, subsistence, and interpretation) and the
INTOSAI Development Initiative (IDI) to collaborate on a pilot seminar
in November 2007 involving the heads of 30 national audit offices. The
seminar would focus on knowledge sharing of best practices on
organizational transformation.
Other collaborative activities undertaken by our staff during 2007
included the following:
* Participating in two Domestic Working Group collaborative efforts of
federal, state, and local audit officials to address issues regarding
governance and pandemic preparedness. Collaborative efforts with the
Domestic Working Group and the National Association of State Auditors,
Comptrollers, and Treasurers facilitated our work involving the states
by fostering cooperative working relationships with the state auditors
on almost 20 engagements, including our work on Medicaid and FEMA's
process to estimate funds needed to respond to a disaster.
* Implementing the National Intergovernmental Audit Forum strategic
plan that was adopted in December 2004. This plan was developed by a
task force composed of federal, state, and local auditors and an
independent public accountant. The newly established committees
continue organizing to implement the plan, which seeks to help maximize
the forum's effectiveness in promoting good government and
accountability at all levels of government. In 2007, the forum advanced
its strategic plan through the activities of its knowledge-sharing,
communications, standards liaison, and emerging issues committees. In
addition, 16 regional forum meetings were held, which brought together
auditors at all government levels. These conferences helped advance the
public sector accountability profession's understanding of and ability
to respond to the many challenges facing the nation in the 21st
century.
* Facilitating collaboration between our teams and federal, state,
local, and international auditors, which, among other things, helped us
to minimize duplication of efforts, leverage resources, and gain access
to people and information. We used our database and networks to help
"push out" electronically the revised Yellow Book to the domestic and
international accountability communities.
* Supporting the Comptroller General as part of the Concord Coalition's
initiative to educate the public on America's long-term fiscal
challenges.
* Hosting a series of meetings to "connect people to people" in an
effort to improve our working relationships and better leverage our
resources with our sister agencies and IGs. We participated in the
second coordination meeting between the leadership and senior
executives of the Congressional Research Service and our leadership and
team managing directors. Also, we hosted the second ever meeting
between our leadership and team managing directors with members of the
President's Council on Integrity and Efficiency and the Executive
Council on Integrity and Efficiency, whose respective members are
primarily inspectors general appointed by the President and by agency
heads.
* Receiving about 461 visitors from 71 countries, including officials
from our counterpart organizations, parliaments, and central government
ministries.
* Signing an interagency agreement with the Department of State to fund
the translation of our audit standards (the Yellow Book) into Arabic in
support of the professional development goals of the Iraqi national
audit office and our other audit agency counterparts in the Arabic
speaking world, and to provide a bilateral capacity program for
selected audit staff from our Iraqi counterpart institution.
* Redesigning our external Web page for the auditing and accountability
community to enhance access to information available from us and other
sources. This effort updated both the content and the format of the Web
page to facilitate accessing desired information based on user's
comments. The Web page now highlights what users believe is most
important and provides expanded access to auditing guidance and
methodology not previously available.
* Bringing value to our agency by using various human capital exchange
authorities. For example, we used our network and authority for the
Executive Exchange Program to successfully recruit the first two
participants for this program. It was a win-win situation for both
KPMG, the home organization for the private sector participants, and
us. The participants worked on a number of special projects in our
Financial Management and Assurance Team that included updating
financial audit guidance and developing agency protocols for financial
audits. They were also involved in other leadership development
opportunities. Positive articles on the candidates' experiences while
participating in this program were published by the Federal Times and
the Association of Government Accountants. We also recruited our first
ever Commerce Science Fellow who brought his engineering expertise to
our Applied Research and Methods team.
Using Our Internal Experts:
We coordinated extensively within our own organization on our strategic
and annual performance planning efforts, as well as on the preparation
of our performance and accountability reports. Our efforts are
completed under the overall direction of the Comptroller General and
the Chief Operating Officer. We relied on our Chief Administrative
Officer/Chief Financial Officer and her staff to provide key
information, such as the financial information that is included in part
III of this report. Her staff also coordinated with others throughout
the agency to provide the information on goal 4's results, which
appears in part II of this report, and provided input on other efforts
dealing with issues that include financial management, budgetary
resources, training, and security. We obtained input on all aspects of
our strategic and annual performance planning and reporting efforts
from each of our engagement teams and organizational units through
their respective managing directors, as well as other staff responsible
for planning or engagement activities in the teams. Staff from QCI
prepared the report, ensuring, among other things, that the report was
responsive to comments and suggestions received from AGA and other
reviewers. In short, we involved virtually every part of our agency and
used our internal expertise in our planning and reporting efforts.
Internal Management Challenges and Mitigating External Factors That
Could Affect Our Performance:
At GAO, management challenges are identified by the Comptroller
General, the Executive Committee, and the agency's senior executives
through the agency's strategic planning, management, and budgeting
processes. Our progress in addressing the challenges is monitored
through our annual performance and accountability process. Under
strategic goal 4, we establish performance goals focused on each of our
management challenges, track our progress in completing the key efforts
for those performance goals quarterly, and report each year on our
progress toward meeting the performance goals. Each year we ask our IG
to examine management's assessment of the challenges and the agency's
progress in addressing them. (See part IV for the IG's assessment.)
For fiscal year 2007, we continued to address three management
challenges--physical security, information security, and human capital.
We anticipate that we will continue to need to address all three
challenges in future years because they are evolving and will require
us to continuously identify ways to adapt and improve. We will report
any changes as we monitor and report on our progress in addressing the
challenges through our annual performance and accountability process.
The following sections describe our recent and planned efforts to
address these challenges.
Physical Security Challenge:
We continue to build on our previous efforts and pursue new initiatives
to protect our people and assets and ensure continuity of operations.
The domestic and international climate remains such that we must
constantly assess our physical security profile and continuity of
operations programs and identify and implement improvements to
strengthen them.
During fiscal year 2007, we realigned the Office of Emergency
Preparedness (OEP), first established in the third quarter of fiscal
year 2006. OEP is now under the Chief Information Officer, who has
taken the lead for our continuity of operations and emergency
preparedness operations. Since the realignment, OEP has centralized and
strengthened policies and operations, improved internal and external
communication and information-sharing efforts, and upgraded and
enhanced its technical capabilities.
In its policy and oversight role for emergency planning OEP developed
program policy and documents to help ensure that we can continue to
carry out our functions in the face of natural or man-made disasters or
other disruptions. In addition, OEP centralized all previously
established planning efforts into the "Continuity Program Document" and
"Continuity Program Support Documents" to ensure a more effective
response to any event.
To ensure better communications and information-sharing between
congressional agencies OEP meets regularly with both the Legislative
Branch Continuity of Operations Plan Working Group and the Executive
Branch Continuity of Operations Working Group. In addition, OEP
continues to coordinate with sister agencies in the legislative branch,
executive branch agencies, and local law enforcement for contingency
planning efforts and information/intelligence-sharing purposes. In
fiscal year 2007 we formalized program strategy and concepts of
operations.
OEP enhanced our capability to communicate to staff during emergency
situations by developing and refining the emergency notification system
procured in fiscal year 2006. Specific response groups have been
identified and established in the system for alert when needed. This
fiscal year OEP also further improved its visibility and access to
emergency preparedness information with the launching of an emergency
preparedness Web site on our intranet.
In the area of physical security, we constantly assess our physical
security profile and seek ways to improve it. Our last independent
security assessment was conducted following 9-11 in what was a very
different threat environment. Since that time we have deployed many
physical and procedural security enhancements. Accordingly, we
initiated a contract at the end of fiscal year 2007 for an updated
security assessment to review all security programs, assess recent
enhancements against our current threat environment and revalidate our
planned next steps.
We relocated and activated our Security Operations Center and the
adjacent Emergency Operations Center. Subsequently, we have implemented
incremental improvements to our Integrated Electronic Security System,
including installation of intrusion detection systems and
infrastructure enhancements necessary for continued system upgrades.
We believe that physical security will remain a management challenge in
fiscal year 2008. Some of our planned initiatives will be subject to
collective bargaining as they may affect the terms and conditions of
bargaining unit employees. Some of the most significant efforts planned
to address this challenge in fiscal year 2008 include the following:
* Launching a formal test training and exercise program for continuity
of operations in coordination with the legislative and executive
branches and local law enforcement.
* Refining the emergency notification system and the emergency
preparedness Web site to enhance our internal communications.
* Carrying out a security assessment of our current security programs
and associated risks to personnel, property, and information.
* Installing card readers that comply with Homeland Security
Presidential Directive 12, which requires issuance of secure and
reliable forms of identification to employees and contractors using
U.S. government facilities and information services, allowing both
physical access to facilities as well as logical access to information.
The Information Security Challenge:
Information system security continues to be a critical activity in
ensuring our information system and assets are effectively protected
and free from compromise. While we are not required by law to comply
with the Federal Information Security Management Act (FISMA),[Footnote
7] we have adopted FISMA requirements to help us meet the challenges
posed in ensuring information system security.
In fiscal year 2007, we established a wide range of goals and embarked
on numerous initiatives to address information system security. For
example, we:
* Worked to improve the protection of data on workstations by
identifying a desktop encryption product (which converts all the data
on the hard drive to a form that cannot be read by unauthorized people)
and conducting a limited deployment of it on workstations containing
higher risk data. We expect to deploy this encryption technology on all
workstations throughout the agency in the coming year.
* Enhanced our enterprise Internet security by increasing our
capability to screen Internet traffic against potential threats.
* Improved our ability to effectively monitor and better secure our
computing assets with an enterprise event correlation application
(which allows us to collect and analyze the results of various
monitoring tools) to enhance our centralized auditing of network
servers and devices;
* Refined our procedures for information security in our security
program plan to maintain compliance with new federal guidance on
information security.
* Improved our ability to respond and recover in the event of a
disruption by enhancing communications and restoration capabilities at
our disaster recovery operations to lessen our risks. These and other
efforts are discussed in detail in our report on our FISMA activities
in appendix 3.
While new challenges to information systems security can often be
addressed with technology improvements, an overall information security
program can only be effective when these systems security efforts are
fully integrated with it and with an agency's physical security
program. In recognition of this need for integration, several of our
units--Information Systems and Technology Services, the Office of
Security, the Learning Center, and Knowledge Services--partnered
together to develop an integrated information security awareness
education and training program. In 2007, we produced a video of the
Comptroller General emphasizing our employee's responsibilities
regarding information security and data protection. We also produced a
new information security computer-based training program and required
all personnel to complete it. Our goal has been to ensure that
information protection requirements extend across the life cycle of
documentation: from data collection, report production, data
transmission and storage to the eventual archival and destruction of
data.
Given the constantly evolving nature of threats to information systems
and assets, information security will continue to be a management
challenge for us and all government and private sector entities in the
foreseeable future. Some of our planned initiatives may be subject to
collective bargaining as they may affect the terms and conditions of
employment of bargaining unit employees. Some of the most significant
efforts planned to address the information security challenge in fiscal
year 2008 include:
* focusing on data protection encryption and identity management to
better control access to our internal network and information;
* increasing the centralized auditing and monitoring of network servers
and devices to better secure our computing assets within the agency;
* enhancing our security awareness training for staff that includes
recurring presentations by senior management and focused role-based
instructions;
* responding to new and updated security guidance from the National
Institute of Standards and Technology and OMB;
* refining our security processes and procedures, enhancing our
contingency operations, and improving our overall ability to respond to
the changing threats by implementing appropriate new technologies, such
as smart card technology to reduce or manage risks.
Human Capital Challenge:
Competition for talent among knowledge-based organizations is rising as
the demographics of the workforce shift to a younger and less
experienced workforce and knowledge and skill gaps occur--particularly
at mid and more senior levels--as a result of retirements. The need to
sustain a knowledge and skills-based workforce is critical as it is
this workforce that makes it possible for us to deliver the results and
performance expected by our clients and customers.
Our ability to have the right mix of experienced and knowledgeable
staff to carry out our engagements and meet our client's needs is an
ongoing challenge. We continue to face continuity and succession issues
from downsizing and reduced hiring from the mid to late 1990s and as a
result, are facing continuity and succession issues. At the beginning
of fiscal year 2007, over 42 percent of our analysts and related staff
had fewer than 5 years of agency experience, making learning and
development--as well as leadership--of this staff of paramount
importance. This demographic change has also created some cultural
challenges as our workforce evolves into a multi-generational
workforce, with many diverse interests and needs and with differing
attitudes toward the workplace and a career. This is an area that we
are currently reviewing and plan to focus on as we move forward, given
the potential for changing turnover dynamics and the likelihood of
greater mobility among this workforce.
Not surprisingly, recruiting, rewarding and retaining a highly
qualified, high performing, and diverse workforce also remains one of
our most important challenges. Over the past year, we have begun
implementing enhancements to our recruitment and hiring activities
which were recommended after an extensive review in 2006 of both our
recruiting programs and best practice research. These enhancements are
chiefly focused on recruiting and communications strategies/tools to
ensure consistent and effective approaches for talent acquisition--from
the first meeting on a college campus to the first day of employment.
While we have focused these efforts primarily on our entry level hiring
and student intern programs, we have also extended them to upper level
hiring, as well. All efforts also include a focus on diversity to
ensure that our programs and practices support a diverse workforce and
reinforce our commitment to diversity.
To address learning and development, we continue to offer more courses
electronically and have adopted a blended learning approach mixing
classroom training with web-based training to ensure that all staff
members have access to learning. In fiscal year 2007, a team comprised
of staff and managers from various mission teams and units completed an
evaluation of our leadership development programs and made
recommendations to our Learning Board and Executive Committee for a
comprehensive program to enhance the ability of staff at all levels to
prepare for leadership roles. We plan to implement these
recommendations in fiscal year 2008. In addition, in fiscal year 2007,
we inaugurated a new agencywide mentoring program. We currently have
155 participants in both individual and group mentoring activities and
expect the program to expand over the coming year.
We have been a leader in the federal government in implementing
competency-based performance management, performance-based
compensation, and more recently a market-based pay system in which (1)
pay ranges are set competitive with the labor markets in which we
compete for talent; (2) staff are rewarded based on their performance;
(3) staff have the opportunity to advance to the top of the pay range;
(4) pay ranges provide some overlap to adequately reward expertise,
leadership and performance; and (5) pay policies are grounded on the
principle of equal pay for work of equal value. From a change
management perspective, such major transformational efforts affecting
staff performance and pay, however, can be quite difficult and require
strong leadership and commitment. This was true with the decoupling of
our pay system from the governmentwide annual across-the-board
adjustments, our move to market-based pay, and changes in the analyst
Band II pay band.
Our Office of Opportunity and Inclusiveness performs an annual review
of our employees' performance appraisal data to ensure that the ratings
are fair and unbiased. In 2006, the trend showed that the most
significant differences in performance rating averages were between
African Americans and Caucasians at all mission analysts' band levels,
and that the gap was increasing. To address this challenge, in fiscal
year 2007 we awarded a contract to an external consultant to analyze
the African American and Caucasian performance appraisal data from 2002
through 2006 and to assess and compare the skills, assignments,
engagement roles, training, education, and recruiting practices for
African Americans and Caucasians. In addition, the consultant will
identify best practices internally and externally that might enhance
our performance management systems and assist in reducing the gap.
An organizing campaign by the International Federation of Professional
and Technical Engineers (IFPTE) took place over the last year. On
September 19, 2007, our Band I and Band II analysts elected the IFPTE
as their exclusive representative in dealing with our management on the
terms and conditions of their employment. In accordance with labor
relations law, we postponed work on several initiatives regarding our
current performance and pay programs and also maintained absolute
neutrality during the election period. With the outcome of the union
vote, our management is committed to working constructively with
employee union representatives to forge a positive labor management
relationship and to establish our first collective bargaining
agreement.
Finally, over the past year, the expectations of our clients and
customers have risen as requests for our services have increased,
creating an ever burgeoning workload, and resulting in some supply and
demand imbalances. Our ability to meet expectations and balance these
workload demands is heavily dependent on our annual funding. Because
our workforce costs comprise about 80 percent of our annual
appropriations, only 20 percent of the budget is available to fund all
other agency needs. Without funding to adequately staff the agency,
invest in our people, and reward our top performers, our ability to
deliver the requested services will ultimately to be negatively
impacted.
While we have made much progress, we believe human capital will still
present a management challenge next fiscal year. Some of our planned
initiatives may be subject to collective bargaining as they may affect
the terms and conditions of bargaining unit employees. Some of the most
significant efforts planned in this area for fiscal year 2008 include
the following:
* Working cooperatively and productively with the newly elected labor
union to establish our first collective bargaining agreement;
* Completing the implementation of the recruitment task team
recommendations;
* Implementing an aggressive hiring strategy to rebuild our workforce
and acquire needed talents and skills;
* Implementing a structured leadership development program to prepare
managerial talent;
* Providing more transparency and knowledge of our of market-based
compensation approach;
* Focusing on the workforce impact of cultural issues created by
generational issues as well as diversity in general;
* Instituting better, more comprehensive human capital metrics;
* Developing an action plan for addressing the findings and
recommendations identified in the African American performance
appraisal study;
* Improving the efficiency and effectiveness of the Human Capital
Office in support of these human capital initiatives.
Mitigating External Factors:
Several external factors could affect the achievement of our
performance goals, including the amount of resources we receive, shifts
in the content and volume of our work, and national and international
developments. Limitations imposed on our work by other organizations or
limitations on the ability of other federal agencies to make the
improvements we recommend are additional factors that could affect the
achievement of our goals.
As the Congress focuses on unpredictable events--such as terrorism,
natural disasters, and military conflicts and threats abroad--the mix
of work we are asked to undertake may change, diverting our resources
from some strategic objectives and performance goals. We can and do
mitigate the impact of these events on the achievement of our goals in
various ways. For example in fiscal year 2007, we:
* stayed abreast of current events (such as vulnerabilities in the
nation's food supply system, the quality of health facilities and
services for soldiers returning from military conflicts abroad, and
fraud and abuse plaguing disaster assistance programs) and communicated
frequently with our congressional clients in order to be alert to
possibilities that could shift the Congress's priorities or trigger new
priorities;
* quickly redirected our resources when appropriate (i.e., to respond
to a record number of requests for our senior executives to testify on
our current and past work covering a wide range of topics such as the
Iraq war and the global war on terrorism) so that we could deal with
major changes as they occurred;
* maintained broad-based staff expertise (i.e., in our Social Security,
health care financing, and homeland security areas) so that we could
readily address emerging needs; and:
* initiated evaluations under the Comptroller General's authority on a
limited number of selected topics, including the status of Iraq's
reconstruction efforts and our 21st century challenges and high-risk
work, and fiscal challenges discussions.
We are experiencing heavy demand from the Congress for work in a number
of subject areas, including monitoring the progress of the global war
on terrorism and the continuing challenges it presents; exploring
economic issues facing U.S. financial markets and American consumers,
such as concerns facing the subprime mortgage market; analyzing where
funds are being spent through off-budget vehicles such as tax
expenditures, and continuing our work on disaster relief issues, such
as reviews of the installation of new pumps in New Orleans and the
reconstruction of areas ravaged by hurricanes Katrina and Rita. Yet,
our resources have declined: adjusted for inflation, our budget
authority has declined by 3 percent in constant fiscal year 2006
dollars since fiscal year 2003. Similarly, our FTE usage has declined
by more than 3 percent since fiscal year 2003--from 3,269 to an
estimated 3,152 FTEs. In fiscal year 2007, we worked with 42 fewer FTEs
than last fiscal year. In short, both our budget authority and FTE
usage are at their lowest level since fiscal year 2001. Our ability to
effectively manage this demand could have an impact on our ability to
meet our performance targets and satisfy congressional requests for our
work. We will continue to manage the Congress's requests in order to
minimize any negative impact on our ability to meet its needs. However,
if the Congress continues to rely on us to provide assistance in these
and other areas, the growing imbalance between our workload and our
available resources must be addressed. Over time, the consistently high
performance that the Congress expects of us will simply be
unsustainable if our workload continues to grow while our resources
continue to lag.
Given large current federal budget deficits and the nation's long-range
fiscal imbalance, the Congress is likely to place increasing emphasis
on fiscal constraint. While it is unclear how we will ultimately be
affected, it is reasonable to assume that any attempt to exercise
additional budgetary discipline in the legislative branch will include
our agency. As a result, while we believe that we submit reasonable and
responsible budget requests and we know that the return on investment
that we generate is unparalleled, we must plan and prepare for the
possibility of significant and recurring constraints on the resources
made available to the agency. In addition, as we stated previously,
almost 80 percent of our budget is composed of people-related costs,
and any serious budget situation will have an impact on our human
capital policies and practices. This, in turn, will have an impact on
our ability to serve the Congress and meet our performance targets.
While, as noted above, the nature and extent of any such budget
constraints cannot be determined at the present time, our executive
team is engaged in a range of related planning activities. It is both
appropriate and prudent for us to engage in such planning. At the same
time, we are hopeful that the Congress will recognize that performance-
based budgeting concepts would support providing additional resources
to entities with prudent budget requests and proven performance
results. If the Congress employs such an approach, we should be in a
good position to continue to provide a high rate of return on the
resources invested in the agency.
A growing area for us involves our work on bid protests. As required by
law, our General Counsel's office prepares Comptroller General
procurement law decisions that resolve protests filed by disappointed
bidders. These bidders challenge the way individual federal
procurements are being conducted or how the contracts were awarded. In
recent years, we have experienced an increase in the number of bid
protests that have been filed. For example, the number of protest
filings in fiscal year 2007 was 23 percent higher than the number filed
in fiscal year 2001 and 6 percent higher than the number filed in
fiscal year 2006. In fiscal year 2005 the Congress enacted legislation
that expanded our authority to allow certain representatives of
affected government employees to protest when the private sector wins a
private-public competition. We will continue to monitor our workload in
this area to ensure that we meet our statutory responsibilities with
minimal negative impact on our other work.
Another external factor is the extent to which we can obtain access to
certain types of information. With concerns about operational security
being unusually high at home and abroad, we may have more difficulty
obtaining information and reporting on sensitive issues. Historically,
our auditing and information gathering have been limited whenever the
intelligence community is involved. In addition, we have not had the
authority to access or inspect records or other materials held by other
countries or, generally, by the multinational institutions that the
United States works with to protect its interests. Consequently, our
ability to fully assess the progress being made in addressing national
and homeland security issues may be hampered. Also, we anticipate that
more of our reports may be subject to classification reviews than in
the past, which means that the public dissemination of these products
may be limited. We plan to work with the Congress to identify both
legislative and nonlegislative opportunities for strengthening our
access authority as necessary and appropriate.
[End of Part I: Management's Discussion and Analysis]
Part II: Performance Information:
Performance Information by Strategic Goal:
In the following sections, we discuss how each of our four strategic
goals contributed to our fiscal year 2007 performance results.
Specifically, for goals 1, 2, and 3--our external goals--we present
performance results for the three annual measures that we assess at the
goal level. Most teams and units also contributed toward meeting the
targets for the agencywide measures that were discussed in the previous
part of this report.
Goal 1 Overview: Provide timely quality service to the Congress and the
federal government to address current and emerging challenges to the
well-being and financial security of the American people.
Our first strategic goal upholds our mission to support the Congress in
carrying out its constitutional responsibilities by focusing on work
that helps address the current and emerging challenges affecting the
well-being and financial security of the American people and American
communities. Our multiyear (fiscal years 2007-2012) strategic
objectives under this goal are to provide information that will help
address
* the health needs of an aging and diverse population;
* lifelong learning to enhance U.S. competitiveness;
* benefits and protections for workers, families, and children;
* financial security for an aging population;
* a responsive, fair, and effective system of justice;
* the promotion of viable communities;
* responsible stewardship of natural resources and the environment;
and:
* a safe, secure, and effective national physical infrastructure.
These objectives, along with the performance goals and key efforts that
support them, are discussed fully in our strategic plan, which is
available on our Web site at [hyperlink, http://www.gao.gov]. The work
supporting these objectives was performed primarily by headquarters and
field office staff in the following teams: Education, Workforce, and
Income Security; Financial Markets and Community Investment; Health
Care; Homeland Security and Justice; Natural Resources and Environment;
and Physical Infrastructure. In line with our performance goals and key
efforts, goal 1 staff reviewed a variety of programs affecting the
nation's students and schools, employees and workplaces, health
providers and patients, and social service providers and recipients. In
addition, goal 1 staff performed work for our congressional clients
related to improving the nation's law enforcement systems and federal
agencies' ability to prevent and respond to terrorism and other major
crimes.
Selected Work under Goal 1:
Improving care for veterans transitioning from military service: We
identified the Departments of Defense�s (DOD) and Veteran Affairs� (VA)
inability to electronically share medical records for severely injured
servicemembers transferred from DOD to VA polytrauma facilities. Real-
time access to DOD�s medical records is needed to determine whether
servicemembers are medically stable enough to participate in vigorous
rehabilitation activities. In May 2007, VA reported that three of the
four polytrauma facilities now have access to DOD�s electronic medical
records. (See app. 1, item 1.06.C.):
Identifying financial risks to the federal government caused by a
changing climate: Our work raised awareness that climate change poses
extraordinary fiscal challenges to federal insurance programs. The
Federal Emergency Management Agency (FEMA) and the Department of
Agriculture (USDA), the key federal agencies with potentially
multibillion-dollar insurance liabilities associated with future
climate change impacts, stated that they will report to the Congress on
potential climate change-related losses for FEMA�s National Flood
Insurance Program and USDA�s Federal Crop Insurance Corporation and the
mitigation options they may use to reduce their exposure to loss. (See
app. 1, item 1.31.C.):
[End of Selected Work Under Goal 1]
To accomplish our work under these strategic objectives in fiscal year
2007, we conducted engagements, audits, analyses, and evaluations of
programs at major federal agencies, such as the Departments of
Education, Health and Human Services, Homeland Security,
Transportation, Housing and Urban Development, and the Interior and
developed reports and testimonies on the efficacy and soundness of
programs they administer.
As shown in table 10, we did not meet our fiscal year 2007 performance
targets for financial benefits and nonfinancial benefits but exceeded
our testimonies target for goal 1.
Table 10: Strategic Goal 1's Annual Performance Results and Targets:
Performance measure: Financial benefits (billions of dollars);
2003 Actual: $23.7 billion;
2004 Actual: $26.6 billion;
2005 Actual: $15.6 billion;
2006 Actual: $22.0 billion;
2007 Target: $20.2 billion;
2007 Actual: $12.9 billion;
Met/Not Met: Not met;
2008 Target[A]: $13.8 billion.
Performance measure: Nonfinancial benefits;
2003 Actual: 217;
2004 Actual: 252;
2005 Actual: 277;
2006 Actual: 268;
2007 Target: 256;
2007 Actual; 238;
Met/Not met: Not met;
2008 Target[A]: 238.
Performance measure: Testimonies;
2003 Actual: 80;
2004 Actual: 85;
2005 Actual: 88;
2006 Actual: 97;
2007 Target: 78;
2007 Actual: 125;
Met/Not Met: Met;
2008 Target[A]: 84.
Source: GAO.
[A] Our fiscal year 2008 targets for these three measures differ from
the targets we reported in our fiscal year 2008 performance budget in
January 2007. Specifically, we decreased our target for financial
benefits from $21.2 billion and lowered the number of nonfinancial
benefits and hearings at which we testify from 25 7 and 9 0,
respectively, because we shifted some work previously performed under
goal 1 to goal 2 in our new strategic plan for 2007-2012.
[End of Table]
To help us examine trends for these measures over time, we look at
their 4-year averages, which minimize the effect of an unusual level of
performance in any single year. These averages are shown in table 11.
This table indicates that goal 1 nonfinancial benefits have generally
risen over time, while the number of hearings at which we testify has
exhibited a more wave-like trend during the 5-year period since fiscal
year 2003.
Table 11: Four-Year Rolling Averages for Strategic Goal 1:
Performance measure: Financial benefits(dollars in billions);
2003: $17.7 billion;
2004: $20.8 billion;
2005: $22.5 billion;
2006: $22.0 billion;
2007: $19.3 billion.
Performance measure: Nonfinancial benefits;
2003: 209;
2004: 226;
2005: 243;
2006: 254;
2007: 259.
Performance measure: Testimonies;
2003: 99;
2004: 87;
2005: 91;
2006: 88;
2007: 99.
Source: GAO.
[End of Table]
The following sections describe our performance under goal 1 for each
of these three quantitative performance measures and describe the
targets for fiscal year 2008.
Financial Benefits:
Example of Goal 1�s Financial Benefits:
Our work influenced legislation requiring states to implement
electronic benefit transfer in place of paper coupons to reduce fraud
and abuse in the Food Stamp Program. This action resulted in an
estimated $3.4 billion in cumulative financial benefits from fiscal
years 2005 through 2009. (See app. 1, item 1.25.F.):
[End of Example of Goal 1's Financial Benefits]
The financial benefits reported for this goal in fiscal year 2007
totaled $12.9 billion, which missed the target of $20.2 billion by
about $7.3 billion. This was due in large part to the work in goal 1
supporting goals 2 and 3 and the evermore highly matrixed nature of our
work. For example, a financial benefit for $5.4 billion related to the
United States Postal Service (USPS) payment of post-retirement health
care costs, which is reported in goal 3 (see p. 168), is the result of
a joint effort by our Financial Management and Assurance team in goal 3
and the Physical Infrastructure team in goal 1. While reported in goal
3, this financial benefit could have just as well been reported in goal
1 given the joint nature of the teams' work. We describe goal 1
accomplishments in the goal 1 section of appendix 1.
Because financial benefits often result from work completed in prior
years, we set our fiscal year 2008 target on the basis of our
assessment of the progress agencies are making in implementing our past
recommendations. Our analysis indicates that financial benefits in the
future for goal 1 are likely to increase only slightly. We, therefore,
have set the target for fiscal year 2008 at $13.8 billion, rather than
$21.2 billion as reported in our fiscal year 2008 performance plan.
Nonfinancial Benefits:
Nonfinancial benefits reported for goal 1 in fiscal year 2007 included
214 actions taken by federal agencies to improve their services and
operations in response to our work and another 24 in which information
we provided to the Congress resulted in statutory or regulatory
changes. This total of 238 nonfinancial benefits did not meet our
target of 256. We report some of our major nonfinancial accomplishments
in detail in the goal 1 section of appendix 1. For fiscal year 2008, we
have set a target of 238 for nonfinancial benefits. This target is the
same as what we achieved this fiscal year and is consistent with our
recognition that we are more likely to achieve these benefits under
goals 2 and 3 in the next few years. We decreased this target by 19
compared with the nonfinancial benefits target we reported in our
fiscal year 2008 performance plan.
Examples of Goal 1�s Nonfinancial Benefits:
Improving disclosure of pension plan information to plan participants:
Our work identified ways to improve the transparency of pension plan
information. For example, we recommended requiring that all plan
participants receive information about plan investments and the minimum
benefit amount that the Pension Benefit Guaranty Corporation guarantees
if a plan is terminated. The Pension Protection Act of 2006 addressed
these concerns by, among other things, allowing qualified advisers to
offer investment advice to participants in defined contribution plans
and adding new disclosure requirements. (See app. 1, item 1.18.N.):
Enacting comprehensive postal reform legislation: In 2001, we
designated the USPS transformation as a high-risk area because its
financial outlook had significantly deteriorated and it lacked a
comprehensive plan to address financial, operational, and human capital
challenges. Since then, USPS developed a transformation plan, and the
Congress enacted comprehensive postal reform legislation in the areas
of rate setting, regulatory oversight, and financial transparency. In
2007, we removed the USPS�s transformation from our high-risk list.
(See app.1, item 1.36.N.):
[End of Examples of Goal 1's Nonfinancial Benefits]
Testimonies:
Our witnesses testified at 125 congressional hearings related to this
strategic goal, which exceeded the fiscal year 2007 target by 47
testimonies, about 60 percent. Among the testimonies given were those
related to FEMA payments on hurricane-damaged properties, safety
enhancements for coal miners, federal actions to improve child welfare
services, and USPS reform efforts. (See p. 35 for a list of testimony
topics by goal.) On the basis of our assessment of the potential need
to testify on issues under this goal, we have set a target of
presenting testimony at 84 hearings during fiscal year 2008, which
represents 6 fewer hearings than we reported as our target in our
fiscal year 2008 performance plan.
Example of Goal 1�s Testimonies:
Evaluating the role and modernization of the Federal Housing
Administration (FHA): In a series of testimonies, we examined trends in
the use of FHA-insured mortgages, FHA�s risk management, and the
implications of a legislative proposal to overhaul the agency�s
products and processes. For example, while noting that FHA could be a
vehicle to provide lower-cost and more sustainable mortgage options to
some subprime borrowers, we also emphasized the need for improvements
in risk management to ensure that FHA operates in a financially sound
manner. Our work informed congressional debate on the benefits and
risks of FHA modernization legislation under consideration. (GAO-07-
615T):
[End of Example of Goal 1's Testimonies]
[End of Goal 1]
Goal 2 Overview: Provide timely, quality service to the Congress and
the federal government to respond to changing security threats and the
challenges of global interdependence:
The federal government is working to promote foreign policy goals,
sound trade policies, and other strategies to advance the interests of
the United States and its allies while also seeking to anticipate and
address changing threats to the nation's security and economy. Given
the importance of these efforts, our second strategic goal focuses on
helping the Congress and the federal government respond to various
types of threats to our nation and the challenges of global
interdependency. Our multiyear (fiscal years 2007-2012) strategic
objectives under this goal are to support the congressional and federal
efforts to:
* protect and secure the homeland from threats and disasters,
* ensure military capabilities and readiness,
* advance and protect U.S. international interests, and:
* respond to the impact of global market forces on U.S. economic and
security interests.
These objectives, along with the performance goals and key efforts that
support them, are discussed fully in our strategic plan, which is
available on our Web site at [hyperlink, http://www.gao.gov]. The work
supporting these objectives is performed primarily by headquarters and
field staff in the following teams: Acquisition and Sourcing
Management, Defense Capabilities and Management, and International
Affairs and Trade. In addition, the work supporting some performance
goals and key efforts is performed by headquarters and field staff from
the Information Technology, Homeland Security and Justice, Financial
Markets and Community Investment, and Natural Resources and Environment
teams.
Selected Work under Goal 2:
Improving tanker security: We identified the challenges facing the
federal government in securing the transportation of energy commodities
by tankers from terrorist attacks, including the challenges resulting
from an increase in liquefied natural gas shipments to the United
States. We recommended that the Secretary of Homeland Security direct
the Coast Guard to develop a resource allocation plan to meet these new
liquefied natural gas security requirements with other existing
security responsibilities. The Department of Homeland Security (DHS)
agreed with our recommendation. (See app. 1, item 2.06.C.):
Improving DOD�s management approach to major weapon systems
acquisition: We reported that leading commercial companies achieve
success in product development by using portfolio management, which
addresses product investment collectively from an enterprise level. In
contrast, DOD approves proposed programs with much less consideration
of its overall portfolio. We recommended that DOD establish a portfolio
management approach to ensure delivery of a balanced mix of weapon
systems programs at the right time and cost and establish a single
point for determining which programs are allowed in the portfolio. The
Congress has required DOD to address our recommendations. (See app. 1,
item 2.23.C.):
[End of Selected Work Under Goal 2]
To accomplish our work in fiscal year 2007 under these strategic
objectives, we conducted engagements and audits that involved fieldwork
related to programs that took us across multiple continents, including
Europe, Africa, Asia, South America, and North America. As in the past,
we developed reports, testimonies, and briefings on our work.
As shown in table 12, we exceeded our fiscal year 2007 performance
targets for financial benefits, nonfinancial benefits, and testimonies
for this goal.
Table 12: Strategic Goal 2's Annual Performance Results and Targets:
Performance measure: Financial benefits(billions of dollars);
2003 Actual: $7.1 billion;
2004 Actual: $9.7 billion;
2005 Actual: $12.9 billion;
2006 Actual: $12.0 billion;
2007 Target: $9.8;
2007 Actual: $10.3;
Met/Not Met: Met;
2008 Target[A]: $11.3 billion.
Performance measure: Nonfinancial benefits;
2003 Actual: 273;
2004 Actual: 369;
2005 Actual: 365;
2006 Actual: 449;
2007 Target: 290;
2007 Actual: 468;
Met/Not Met: Met;
2008 Target[A]: 322.
Performance measure: Testimonies;
2003 Actual: 48;
2004 Actual: 70;
2005 Actual: 42;
2006 Actual: 68;
2007 Target: 52;
2007 Actual: 73;
Met/Not Met: Met;
2008 Target[A]: 69.
Source: GAO.
[A] Our fiscal year 2008 targets for these three measures differ from
the targets we reported in our fiscal year 2008 performance budget in
January 2007. Specifically, we increased our target for financial
benefits from $9.8 billion, nonfinancial benefits from 309, and the
number of hearings at which we testify from 59 because we shifted some
work previously performed under goal 1 to goal 2 in our new strategic
plan for 2007-2012 and anticipate continued congressional interest in
our work on homeland security issues and the Iraq war.
[End of Table]
To help us examine trends for these measures over time, we look at
their 4-year averages, which minimize the effect of an unusual level of
performance in any single year and are shown in table 13. This table
indicates that goal 2 financial benefits, nonfinancial benefits, and
testimonies have steadily increased over the last 5 years.
Table 13: Four-Year Rolling Averages for Strategic Goal 2:
Performance measure: Financial benefits(billions of dollars);
2003: $7.9 billion;
2004: $8.9 billion;
2005: $9.5 billion;
2006: $10.4 billion;
2007: $11.2 billion.
Performance measure: Nonfinancial benefits;
2003: 202;
2004: 262;
2005: 306;
2006: 364;
2007: 413.
Performance measure: Testimonies;
2003: 44;
2004: 48;
2005: 50;
2006: 57;
2007: 63.
Source: GAO.
[End of Table]
The following sections describe our performance under goal 2 for each
of our quantitative performance measures and describe the targets for
fiscal year 2008.
Financial Benefits:
Example of Goal 2's Financial Benefits:
Our work highlighted the risks associated with developing and
implementing the Army�s Future Combat System. Citing the risks we
reported and preserving the ability for DOD to change course, the
Congress cut the system�s budget request by $254 million. (See app. 1,
item 2.17.F.):
[End of Example of Goal 2's Financial Benefits]
The financial benefits reported for this goal in fiscal year 2007
totaled $10.3 billion, exceeding the target of $9.8 billion. Among
other things, these accomplishments stemmed from engagements related to
better allocating resources to fund new military capabilities,
streamlining our embassy presence overseas, and reducing funding for
the Millennium Challenge Corporation, which oversees a foreign
assistance program. We describe these and other accomplishments in the
goal 2 section of appendix 1.
Given the large portion of the U.S. budget that defense spending
consumes, we expect our work under this goal to continue to produce
economies and efficiencies that yield billions of dollars in financial
benefits for the American people each year. We set our fiscal year 2008
target at $11.3 billion based on our assessment of the progress
agencies are making in implementing our past recommendations that might
yield financial benefits.
Nonfinancial Benefits:
The nonfinancial benefits reported for goal 2 in fiscal year 2007
included 432 actions taken by federal agencies to improve their
services and operations in response to our work and another 36 in which
information we provided to the Congress resulted in statutory or
regulatory changes. This total of 468 nonfinancial benefits greatly
exceeded our target of 290. Our success in this area arose from our
increased emphasis on follow-up efforts and increased monitoring of our
progress toward the targets throughout the year. Some of our major
accomplishments are reported in detail in the goal 2 section of
appendix 1.
Looking ahead, our assessments of the executive branch's current
efforts to implement our recommendations made under this goal led us to
set our fiscal year 2008 target at 322. This target is lower than our
fiscal year 2007 actual performance and 4-year average for this measure
because we want to encourage staff to identify significant and
meaningful nonfinancial benefits rather than numerous, narrowly focused
ones that would easily ensure that we meet a higher target. However, we
set this target higher than the one we reported in our fiscal year 2008
performance plan of 309.
Example of Goal 2's Nonfinancial Benefits:
Improving oversight of contractors on the battlefield: Among the
challenges DOD faced in overseeing contractors on the battlefield was
the lack of visibility over the number of contractors supporting
deployed forces and the services that the contractors provide. In
response to our work, DOD implemented a system designed to provide
commanders with this information and appointed a DOD focal point to
improve the agency�s management and oversight of contractors assisting
the troops. (See app. 1, item 2.21.N.):
[End of Example of Goal 2's Nonfinancial Benefits]
Testimonies:
Our witnesses testified at 73 congressional hearings related to this
strategic goal in fiscal year 2007, exceeding our target of presenting
testimony at 52 hearings. Among other things, we testified on
transforming DOD's business practices, combating nuclear smuggling, and
DHS's Secure Border Initiative as well as credit counseling and
financial literacy. (See p. 35 for a list of testimony topics by goal.)
We have set our target for presenting testimony at hearings to 69 for
fiscal year 2008, 10 hearings higher than the target we reported in our
fiscal year 2008 performance plan.
Examples of Goal 2's Testimonies:
Creating a chief management officer at DOD to guide business
transformation efforts: We supported establishing a senior-level
position at DOD with significant authority and a sufficient term to
provide focused and sustained leadership over the department�s business
transformation efforts. At a time of increasing military operations and
growing fiscal constraints, billions of dollars have been wasted
annually because of the lack of adequate transparency and appropriate
accountability across DOD�s business areas. (GAO-07-229T):
Identifying key issues for oversight of U.S. efforts to stabilize and
rebuild Iraq: Our September 2007 bench-mark report and related
testimonies found that the Iraqi government had not met most of its 18
key legislative, security, and economic benchmarks. The Departments of
State and Defense agreed with our recommendations to improve the
quality of information provided to the Congress on the progress being
made in meeting these benchmarks. (GAO-07-1230T):
[End of Examples of Goal 2's Testimonies]
[End of Goal 2]
Goal 3 Overview: Help transform the federal government�s role and how
it does business to meet 21st century challenges:
Our third strategic goal focuses on the collaborative and integrated
elements needed for the federal government to achieve results. The work
under this goal highlights the intergovernmental relationships that are
necessary to achieve national goals. Our multiyear (fiscal years 2007-
2012) strategic objectives under this goal are to:
* reexamine the federal government's role in achieving evolving
national objectives;
* support the transformation to results-oriented, high-performing
government;
* support congressional oversight of key management challenges and
program risks to improve federal operations and ensure accountability;
and:
* analyze the government's fiscal position and strengthen approaches
for addressing the current and projected fiscal gap.
These objectives, along with the performance goals and key efforts that
support them, are discussed fully in our strategic plan, which is
available on our Web site at [hyperlink, http://www.gao.gov]. The work
supporting these objectives is performed primarily by headquarters and
field staff from the Applied Research and Methods, Financial Management
and Assurance, Information Technology, and Strategic Issues teams. In
addition, the work supporting some performance goals and key efforts is
performed by headquarters and field staff from the Acquisition and
Sourcing Management and Natural Resources and Environment teams. This
goal also includes our bid protest and appropriations law work, which
is performed by staff in General Counsel, and our vulnerability
assessments and fraud investigations, which are conducted by staff from
our Forensic Audits and Special Investigations unit within the
Financial Management and Assurance team.
Selected Work under Goal 3:
Ensuring personal privacy in the face of increasing threat: Our work
found that individuals� personal information could be inadequately
protected by DHS and other federal agencies, which may compromise
individuals� privacy rights or expose their information to misuse. For
example, we reported that DHS had not taken sufficient action to assess
privacy risks before developing a sophisticated data mining tool.
Further, we analyzed the lessons learned from a data breach at VA in
making a recommendation regarding assistance to individuals affected by
data breaches at federal agencies. (See app. 1, item 3.12.C.):
Revising Government Auditing Standards: We issued a major revision to
the Government Auditing Standards that organizes, clarifies, and
strengthens the principles for audits of government programs and
entities. The 2007 revision updates and clarifies chapters on financial
audits, performance audits, and attestation engagements. Auditors at
every level of government as well as certified public accountant firms
conducting audits of government programs are currently implementing the
revised standards. (See app. 1, item 3.19.C.):
[End of Selected Work Under Goal 3]
To accomplish our work under these four objectives, we plan to conduct
audits, evaluations, and analyses in response to congressional requests
and to carry out work initiatives under the Comptroller General's
authority. As in the past, we will develop reports, testimonies, and
briefings on our work.
As shown in table 14, we significantly exceeded our fiscal year 2007
performance targets for financial benefits, nonfinancial benefits, and
testimonies for this goal.
Table 14: Strategic Goal 3's Annual Performance Results and Targets:
Performance measure: Financial benefits(dollars in billions);
2003 Actual: $4.7 billion;
2004 Actual: $7.6 billion;
2005 Actual: $11.0 billion;
2006 Actual: $17.0 billion;
2007 Target: $10.0 billion;
2007 Actual: $22.8 billion;
Met/Not Met: Met;
2008 Target[A]: $14.9 billion.
Performance measure: Nonfinancial benefits;
2003 Actual: 553;
2004 Actual: 576;
2005 Actual: 767;
2006 Actual: 625;
2007 Target: 554;
2007 Actual: 648;
Met/Not Met: Met;
2008 Target[A]: 590.
Performance measure: Testimonies;
2003 Actual: 56;
2004 Actual: 60;
2005 Actual: 47;
2006 Actual: 73;
2007 Target: 55;
2007 Actual: 74;
Met/Not Met: Met;
2008 Target[A]: 67.
Source: GAO.
[A] Our fiscal year 2008 targets for these three measures differ from
the targets we reported in our fiscal year 2008 performance budget in
January 2007. Specifically, we increased our targets for financial and
nonfinancial benefits from $10.5 billion and 584, respectively, because
we believe our past work on issues such as improper payments and IT
will allow us to achieve these more challenging targets. However, we
anticipate that though the Congress will continue its interest in our
work on issues such as military contractors and acquisitions, the
number of hearings at which we will be asked to testify will likely
decline slightly.
[End of Table]
To help us examine trends for these measures over time, we look at
their 4-year averages--shown in table 15--which minimize the effect of
an unusual level of performance in any single year. This table
indicates that documentation of financial and nonfinancial benefits
derived from our work under this goal has generally risen during the 5-
year period shown, with a large increase in nonfinancial benefits
recorded in 2006 compared with the previous year. The number of
hearings during which our senior executives testified on goal 3 issues
was relatively flat from fiscal years 2004 to 2006, but increased in
fiscal year 2007.
Table 15: Four-Year Rolling Averages for Strategic Goal 3:
Performance measure: Financial benefits(dollars in billions);
2003: $5.5 billion;
2004: $6.1 billion;
2005: $7.1 billion;
2006: $10.1 billion;
2007: $14.6 billion.
Performance measure: Nonfinancial benefits;
2003: 480;
2004: 498;
2005: 590;
2006: 630;
2007: 654.
Performance measure: Testimonies;
2003: 67;
2004: 56;
2005: 57;
2006: 59;
2007: 64.
Source: GAO.
[End of Table]
The following sections describe our performance under goal 3 for each
of our quantitative performance measures and describe the targets for
fiscal year 2008.
Financial Benefits:
Example of Goal 3's Financial Benefits:
In response to our work, agencies such as DOD, the Department of
Transportation (DOT), and USDA have improved their oversight of
information technology (IT) investments resulting in a reduction in
their planned IT expenditures of more than $1.3 billion. For example,
USDA coordinated its various IT investment boards and narrowed the
scope of information system projects to reduce risk and increase
efficiency. (See app.1, item 3.05.F.):
[End of Example of Goal 3's Financial Benefits]
The financial benefits reported for this goal in fiscal 2007 totaled
$22.8 billion, more than double our target of $10.0 billion. These
efforts included work that led to reductions in planned IT expenditures
at several federal agencies, the termination of the National Aeronautic
and Space Administration (NASA) space launch initiative (SLI), FEMA
taking action to recoup and collect millions of dollars in improper or
fraudulent assistance payments it made following hurricanes Katrina and
Rita, and improved collections of federal nontax and criminal debts. We
describe these and other accomplishments in the goal 3 section of
appendix 1.
Under goal 3, we typically work on core government business processes
and governmentwide management reforms. Our assessments of the executive
branch's current efforts to implement the recommendations we made in
our work under this goal indicate that financial benefits related to
this goal are likely to be in line with our 4-year average.
Consequently, we set the target for financial benefits at $14.9 billion
for fiscal 2008, which is $4.4 billion higher than the target we
reported in our fiscal year 2008 performance plan.
Nonfinancial Benefits:
Examples of Goal 3's Nonfinancial Benefits:
Strengthening the link between contract incentives and outcomes across
government: We reported that DOD and NASA structured monetary
incentives in ways that led to significant disconnects between the
award fees paid to contractors and program outcomes. For example, DOD
paid an estimated $8 billion in award fees on contracts regard-less of
program outcomes. The Congress enacted legislation incorporating most
of our recommendations directed at DOD, which strengthened the link
between award fee criteria and acquisition outcomes. Moving toward more
outcome-based award-fee criteria will give contractors an increased
stake in helping agencies develop more realistic targets up front or
risk receiving fewer award fees when cost, schedule, and performance
targets are not met. (See app. 1, item 3.07.N.):
Improving research and setting goals to reduce the tax gap: We made
several recommendations to the Internal Revenue Service (IRS) to
improve its efforts to reduce the tax gap. For example, we recommended
that IRS set a long-term voluntary compliance goal to help measure the
success of its compliance efforts. In its 2007 budget justification,
IRS established a goal of 85 percent voluntary compliance by 2009. (See
app. 1, item 3.28.N.):
[End of Examples of Goal 3's Nonfinancial Benefits]
Nonfinancial benefits reported for goal 3 in fiscal year 2007 included
634 instances in which agencies' core business processes were improved
or governmentwide management reforms were advanced because of our work.
In addition, there were 14 instances in which information we provided
to the Congress resulted in statutory or regulatory changes. This total
of 648 nonfinancial benefits exceeded our target of 554. The larger
number of nonfinancial benefits occurred mainly in our financial
management and information technology areas where we tend to make
multiple, specific recommendations for change to more than one entity.
We describe some of our major accomplishments in the goal 3 section of
appendix 1.
Looking ahead, our assessments of the executive branch's current
efforts to implement our recommendations made under this goal led us to
set a fiscal year 2008 target of 590 nonfinancial benefits for goal 3.
We recognize that this target is lower than our fiscal year 2007 actual
performance, but we set it at this level because we want to encourage
staff to identify significant and meaningful nonfinancial benefits and
limit the number of narrowly focused ones that would easily ensure that
we meet a higher target.
Testimonies:
Our witnesses testified at 74 congressional hearings related to this
strategic goal in fiscal year 2007, exceeding the target of 55 by about
35 percent. Among the testimonies presented were those related to
contracting and security challenges in Iraq, security vulnerabilities
at unmonitored borders, electronic voting, tax abuses by Medicare
providers, and challenges facing the polar satellite program. (See p.
35 for a list of testimony topics by goal.) For fiscal year 2008, we
have set a target of presenting testimony at 67 hearings because we
expect the level of hearings to be lower than it was in fiscal year
2007.
Example of Goal 3's Testimonies:
Identifying fraud, waste, and abuse in Katrina and Rita financial
assistance payments: Our work related to FEMA�s Individual and
Households Program identified from $600 million to $1.4 billion in
improper or potentially fraudulent financial assistance payments made
by FEMA following hurricanes Katrina and Rita. We referred thousands of
cases we considered potentially improper and fraudulent to the Katrina
Fraud Task Force for appropriate criminal investigation. (See GAO-07-
418T):
[End of Examples of Goal 3's Testimonies]
[End of Goal 3]
Goal 4 Overview: Maximize the value of GAO by being a model federal
agency and a world-class professional services organization:
The focus of our fourth strategic goal is to make us a model
organization. This means that our work is driven by our external
clients and internal customers, our managers exhibit the
characteristics of leadership and management excellence, our employees
are devoted to ensuring quality in our work process and products
through continuous improvement, and our agency is regarded by current
and potential employees as an excellent place to work. Our multiyear
(fiscal years 2007-2012) strategic objectives under this goal are to:
* improve client and customer satisfaction and stakeholder
relationships,
* lead strategically to achieve enhanced results,
* leverage our institutional knowledge and experience,
* enhance our business and management processes, and:
* become a professional services employer of choice.
These objectives, along with the performance goals and key efforts that
support them, are discussed fully in our strategic plan, which is
available on our Web site at [hyperlink, http://www.gao.gov]. The work
supporting these objectives is performed under the direction of the
Chief Administrative Officer with assistance on specific key efforts
being provided by staff from the Applied Research and Methods team and
from offices such as Strategic Planning and External Liaison,
Congressional Relations, Opportunity and Inclusiveness, Quality and
Continuous Improvement, and Public Affairs.
To accomplish our work under these five objectives, we performed
internal studies and completed projects that further the strategic
goal.
Selected Work under Goal 4:
Enhancing client service: We completed a pilot of e-dissemination of
products to our congressional clients to enhance the quality and
timeliness of service. During fiscal year 2007, we avoided
approximately $48,800 in costs for the 51 reports issued. Based on the
cost-effectiveness of e-dissemination and the positive client feedback
we recently fully implemented e-dissemination for the majority of our
products. (See app. 1, item 4.01.C.):
Converting to a new financial management system: We completed
preparations and testing for conversion as of the new fiscal year to
our new financial management system, GAO Delphi. We are able to take
advantage of DOT�s Enterprise Service Center expertise and economies of
scale for select accounting functions, allowing our staff to transition
to a greater focus on analysis and customer service. (See app. 1, item
4.07.C.):
Improving work life programs: We increased our support for several of
our work life programs and services that help our employees to balance
work and personal life. These initiatives included increasing the
capacity of the headquarters day care center through expansion of the
physical facility, enhancing the Student Loan Repayment Program to
support more applicants, and increasing our approval of telework
applications by 200 percent. (See app. 1, item 4.16.C.):
Updating our external Web site: We launched a new and improved version
of [hyperlink, http://www.gao.gov], implementing numerous
recommendations resulting from an independent review. We improved our
navigation and searching capabilities, and incorporated the reviewer�s
principles and methodology into our standards and processes. (See app.
1, item 4.09.C.):
[End of Selected Work under Goal 4]
[End of Goal 4]
Data Quality and Program Evaluation:
Verifying and Validating Performance Data:
Each year, we measure our performance by evaluating our annual
performance on measures that cover the outcomes and outputs related to
our work results, client service, and management of our people. To
assess our performance, we used performance data that were complete and
actual (rather than projected) for almost all of our performance
measures. We believe the data to be reliable because we followed the
verification and validation procedures described here to ensure the
data's quality.
The specific sources of the data for our annual performance measures
and multiyear qualitative performance goals, procedures for
independently verifying and validating these data, and the limitations
of these data are described in table 16.
Table 16: How We Ensure Data Quality for Our Annual Performance
Measures and Multiyear Performance Goals:
Results measures:
Financial benefits: Definition and background;
Our work--including our findings and recommendations--may produce
benefits to the federal government that can be estimated in dollar
terms. These benefits can result in better services to the public,
changes to statutes or regulations, or improved government business
operations. A financial benefit is an estimate of the federal monetary
effect of agency or congressional actions. These financial benefits
generally result from work that we completed over the past several
years. The funds made available as a result of the actions taken in
response to our work may be used to reduce government expenditures,
increase revenues, or reallocate funds to other areas. Financial
benefits included in our performance measures are net benefits--that
is, estimates of financial benefits that have been reduced by the costs
associated with taking the action that we recommended. We convert all
estimates involving past and future years to their net present value
and use actual dollars to represent estimates involving only the
current year. Financial benefit amounts vary depending on the nature of
the benefit, and we can claim financial benefits over multiple years
based on a single agency or congressional action.
Financial benefits are linked to specific recommendations or other
work. To claim that financial benefits have been achieved, our staff
must file an accomplishment report documenting that (1) the actions
taken as a result of our work have been completed or substantially
completed, (2) the actions generally were taken within 2 fiscal years
prior to the filing of the accomplishment report, (3) a cause-and-
effect relationship exists between the benefits reported and our
recommendation or work performed, and (4) estimates of financial
benefits were based on information obtained from non-GAO sources. Prior
to fiscal year 2002, we limited the period over which the benefits from
an accomplishment could be accrued to no more than 2 years. Beginning
in fiscal year 2002, we extended the period to 5 years for certain
types of accomplishments known to have multiyear effects, such as those
associated with multiyear reductions in longer-term projects, changes
embodied in law, program terminations, or sales of government assets
yielding multiyear financial benefits. Financial benefits can be
claimed for past or future years. For financial benefits involving
events that occur on a regular but infrequent basis--such as the
decennial census--we may extend the measurement period until the event
occurs in order to compute the associated financial benefits using our
present value calculator.
Managing directors decide when their staff can claim financial
benefits. A managing director may choose to claim a financial benefit
all in 1 year or decide to claim it over several years, especially if
the benefit spans future years and the managing director wants greater
precision as to the amount of the benefit.
Financial Benefits: Data sources;
Our Accomplishment Reporting System provides the data for this measure.
Teams use this Web-based data system to prepare, review, and approve
accomplishments and forward them to our Quality and Continuous
Improvement office (QCI) for its review. Once accomplishment reports
are approved, they are compiled by QCI, which annually tabulates total
financial benefits agencywide and by goal.
Financial Benefits: Verification and validation;
Our policies and procedures require us to use the Accomplishment
Reporting System to record the financial benefits that result from our
work. They also provide guidance on estimating those financial
benefits. The team identifies when a financial benefit has occurred as
a result of our work. The team develops estimates based on non-GAO
sources, such as the agency that acted on our work, a congressional
committee, or the Congressional Budget Office, and files accomplishment
reports based on those estimates. When non-GAO estimates are not
readily available, teams may use GAO estimates--developed in
consultation with our experts, such as the Chief Economist, Chief
Actuary, or Chief Statistician, and corroborated with a knowledgeable
program official from the executive agency involved. The estimates are
reduced by significant identifiable offsetting costs. The team develops
workpapers to support accomplishments with evidence that meets our
evidence standard, supervisors review the workpapers, and an
independent person within GAO reviews the accomplishment report. The
team's managing director or director is authorized to approve financial
accomplishment reports with benefits of less than $100 million.
The team forwards the report to QCI, which reviews all accomplishment
reports and approves accomplishment reports claiming benefits of $100
million or more. QCI provides summary data on approved financial
benefits to team managers, who check the data on a regular basis to
make sure that approved accomplishments submitted by their staff have
been accurately recorded. Our Engagement Reporting System also contains
accomplishment data for the fiscal year. In fiscal year 2007, QCI
approved accomplishment reports covering 94 percent of the dollar value
of financial benefits we reported.
Every year, our Office of Inspector General (IG) reviews accomplishment
reports that claim benefits of $500 million or more. For fiscal year
2007, the IG reviewed accomplishment reports covering 74 percent of the
dollar value of financial benefits we reported. In addition, on a
periodic basis, the IG independently tests compliance with our process
for claiming financial benefits of less than $500 million. For example,
the IG reviewed fiscal year 2006 financial benefits of $100 million or
more and found our reporting process to be sound overall. However, the
IG recommended improvements to the clarity of certain policies related
to reporting financial accomplishments and the documentation supporting
selected accomplishment reports. We clarified our guidance and updated
our policy manual in fiscal year 2007.
Financial benefits: Data limitations;
Not every financial benefit from our work can be readily estimated or
documented as attributable to our work. As a result, the amount of
financial benefits is a conservative estimate. Estimates are based on
information from non-GAO sources and are based on both objective and
subjective data, and as a result, professional judgment is required in
reviewing accomplishment reports. We feel that the verification and
validation steps that we take minimize any adverse impact from this
limitation.
Nonfinancial benefits: Definition and background;
Our work--including our findings and recommendations--may produce
benefits to the federal government that cannot be estimated in dollar
terms. These nonfinancial benefits can result in better services to the
public, changes to statutes or regulations, or improved government
business operations. Nonfinancial benefits generally result from work
that we completed over the past several years.
Nonfinancial benefits are linked to specific recommendations or other
work that we completed over several years. To claim that nonfinancial
benefits have been achieved, staff must file an accomplishment report
that documents that (1) the actions taken as a result of our work have
been completed or substantially completed, (2) the actions generally
were taken within the past 2 fiscal years of filing the accomplishment
report, and (3) a cause-and-effect relationship exists between the
benefits reported and our recommendation or work performed.
Nonfinancial benefits: Data sources;
Our Accomplishment Reporting System provides the data for this measure.
Teams use this automated system to prepare, review, and approve
accomplishments and forward them to QCI for its review. Once
accomplishment reports are approved, they are compiled by QCI, which
annually tabulates total other (nonfinancial) benefits agencywide and
by goal.
Nonfinancial benefits: Verification and validation;
Our policies and procedures require us to use the Accomplishment
Reporting System to record the nonfinancial benefits that result from
our findings and recommendations. Staff in the teams file
accomplishment reports to claim that benefits have resulted from their
work. The team develops workpapers to support accomplishments with
evidence that meets our evidence standard. Supervisors review the
workpapers; an independent person within GAO reviews the accomplishment
report; and the team's managing director or director approves the
accomplishment report to ensure the appropriateness of the claimed
accomplishment, including attribution to our work.
The team forwards the report to QCI, where it is reviewed for
appropriateness. QCI provides summary data on nonfinancial benefits to
team managers, who check the data on a regular basis to make sure that
approved accomplishments from their staff have been accurately
recorded. Additionally, on a periodic basis, the IG independently tests
compliance with our process for claiming nonfinancial benefits. For
example, the IG tested this process in fiscal year 2005 and found it to
be reasonable. The IG also recommended actions to strengthen
documentation of our nonfinancial benefits and to encourage the timely
processing of the supporting accomplishment reports.
Nonfinancial benefits: Data limitations;
The data may be underreported because we cannot always document a
direct cause-and-effect relationship between our work and benefits it
produced. However, we feel that this is not a significant limitation on
the data because the data represent a conservative measure of our
overall contribution toward improving government.
Percentage of products with recommendations: Definition and background;
We measure the percentage of our written products (chapter and letter
reports and numbered correspondence) issued in the fiscal year that
included at least one recommendation. We make recommendations that
specify actions that can be taken to improve federal operations or
programs. We strive for recommendations that are directed at resolving
the cause of identified problems; that are addressed to parties who
have the authority to act; and that are specific, feasible, and cost-
effective. Some products we issue contain no recommendations and are
strictly informational in nature.
We track the percentage of our written products that are issued during
the fiscal year and contain recommendations. This indicator recognizes
that our products do not always include recommendations and that the
Congress and agencies often find such informational reports just as
useful as those that contain recommendations. For example,
informational reports, which do not contain recommendations, can help
to bring about significant financial and nonfinancial benefits.
Percentage of products with recommendations: Data sources;
Our Documents Database records recommendations as they are issued. The
database is updated daily. As our staff monitor implementation of
recommendations, they submit updated information to the database.
Percentage of products with recommendations: Verification and
validation;
Through a formal process, each team identifies the number of
recommendations included in each product and an external contractor
enters them into a database. We provide our managers with reports on
the recommendations being tracked to help ensure that all
recommendations have been captured and that each recommendation has
been completely and accurately stated. Additionally, on a periodic
basis, the IG independently tests the teams' compliance with our
policies and procedures related to this performance measure. For
example, during fiscal year 2006, the IG tested and determined that our
process for determining the percentage of written products with
recommendations was reasonable. The IG also recommended actions to
improve the process for developing, compiling, and reporting these
statistics. We have implemented the IG's recommendations for fiscal
year 2007. Since then, we have used the same procedures to compute and
report this measure.
Percentage of products with recommendations: Data limitations;
This measure is a conservative estimate of the extent to which we
assist the Congress and federal agencies because not all products and
services we provide lead to recommendations. For example, the Congress
may request information on federal programs that is purely descriptive
or analytical and does not lend itself to recommendations.
Past recommendations implemented: Definition and background;
We make recommendations designed to improve the operations of the
federal government. For our work to produce financial or nonfinancial
benefits, the Congress or federal agencies must implement these
recommendations. As part of our audit responsibilities under generally
accepted government auditing standards, we follow up on recommendations
we have made and report to the Congress on their status. Experience has
shown that it takes time for some recommendations to be implemented.
For this reason, this measure is the percentage rate of implementation
of recommendations made 4 years prior to a given fiscal year (e.g., the
fiscal year 2007 implementation rate is the percentage of
recommendations made in fiscal year 2003 products that were implemented
by the end of fiscal year 2007). Experience has shown that if a
recommendation has not been implemented within 4 years, it is not
likely to be implemented.
This measure assesses action on recommendations made 4 years
previously, rather than the results of our activities during the fiscal
year in which the data are reported. For example, the cumulative
percentage of recommendations made in fiscal year 2003 that were
implemented in the ensuing years is as follows: 18 percent by the end
of the first year (fiscal year 2004), 32 percent by the end of the
second year (fiscal year 2005), 43 percent by the end of the third year
(fiscal year 2006), and 82 percent by the end of the fourth year
(fiscal year 2007).
Percentage of products with recommendations: Data sources;
Our Documents Database records recommendations as they are issued. The
database is updated daily. As our staff monitor implementation of
recommendations, they submit updated information to the database.
Percentage of products with recommendations: Verification and
validation;
Through a formal process, each team identifies the number of
recommendations included in each product, and an external contractor
enters them into a database.
Policies and procedures specify that our staff must verify, with
sufficient supporting documentation, that an agency's reported actions
are adequately being implemented. Staff update the status of the
recommendations on a periodic basis. To accomplish this, our staff may
interview agency officials, obtain agency documents, access agency
databases, or obtain information from an agency's inspector general.
Recommendations that are reported as implemented are reviewed by a
senior executive in the unit and by QCI.
Summary data are provided to the units that issued the recommendations.
The units check the data regularly to make sure that the
recommendations they have reported as implemented have been accurately
recorded. We also provide to the Congress a database with the status of
recommendations that have not been implemented, and we maintain a
publicly available database of open recommendations that is updated
daily.
Additionally, on a periodic basis, the IG independently tests our
process for calculating the percentage of recommendations implemented
for a given fiscal year. For example, the IG determined that our
process was reasonable for calculating the percentage of
recommendations that had been made in our fiscal year 2002 products and
implemented by the end of fiscal year 2006. The IG also recommended
actions to improve the process for developing, compiling, and reporting
this statistic. In fiscal year 2007, we implemented the IG's
recommendation for calculating the percentage of recommendations that
had been made in fiscal year 2003 products and implemented by the end
of fiscal year 2007.
Percentage of products with recommendations: Data limitations;
The data may be underreported because sometimes a recommendation may
require more than 4 years to implement. We also may not count cases in
which a recommendation is partially implemented. However, we feel that
this is not a significant limitation to the data because the data
represent a conservative measure of our overall contribution toward
improving government.
[End of Results measures]
Client measures:
Testimonies: Definition and background;
The Congress may ask us to testify at hearings on various issues, and
these hearings are the basis for this measure. Participation in
hearings is one of our most important forms of communication with the
Congress, and the number of hearings at which we testify reflects the
importance and value of our institutional knowledge in assisting
congressional decision making. When multiple GAO witnesses with
separate testimonies appear at a single hearing, we count this as a
single testimony. We do not count statements submitted for the record
when a GAO witness does not appear.
Testimonies: Data sources;
The data on hearings at which we testified are compiled in our
congressional hearing system managed by staff in Congressional
Relations.
Testimonies: Verification and validation;
The units responding to requests for testimony are responsible for
entering data in the Congressional Hearing System. After a GAO witness
has testified at a hearing, Congressional Relations verifies that the
data in the system are correct and records the hearing as one at which
we testified. Congressional Relations provides weekly status reports to
unit managers, who check to make sure that the data are complete and
accurate. Additionally, on a periodic basis, the IG independently
examines the process for recording the number of hearings at which we
testified. For example, the IG determined that our process for
recording hearings during fiscal year 2006 was reasonable. In fiscal
year 2007, we followed the same process for recording hearings.
Testimonies: Data limitations;
This measure does not include statements for the record that we prepare
for congressional hearings. Also, this measure may be influenced by
factors other than the quality of our performance in any specific year.
The number of hearings held each year depends on the Congress's agenda,
and the number of times we are asked to testify may reflect
congressional interest in work in progress as well as work completed
that year or the previous year. To mitigate this limitation, we try to
adjust our target to reflect cyclical changes in the congressional
schedule. We also outreach to our clients on a continuing basis to
increase their awareness of our readiness to participate in hearings.
Timeliness: Definition and background;
The likelihood that our products will be used is enhanced if they are
delivered when needed to support congressional and agency decision
making. To determine whether our products are timely, we compute the
proportion of favorable responses to questions related to timeliness
from our electronic client feedback survey. Because our products often
have multiple requesters, we often survey more than one congressional
staff person per product. Thus, we base our timeliness result on the
number of surveys sent out during the fiscal year. We send a survey to
key staff working for the requesters of our testimony statements and a
survey to requesters of our more significant written products--
specifically, engagements assigned an interest level of "high" by our
senior management and those requiring an investment of 500 GAO staff
days or more. One question on each survey asks the respondent whether
the product was delivered on time. When a product that meets our survey
criteria is released to the public, we electronically send relevant
congressional staff an e-mail message containing a link to a survey.
When this link is accessed, the survey recipient is asked to respond to
the questions using a five- point scale--strongly agree, generally
agree, neither agree nor disagree, generally disagree, strongly
disagree--or choose "not applicable/no answer." For this measure,
favorable responses are "strongly agree" and "generally agree.".
Timeliness: Data sources;
To identify the products that meet our survey criteria (all testimonies
and other products that are high interest or involve 500 staff days or
more), we run a query against GAO's Documents Database maintained by a
contractor. To identify appropriate recipients of the survey for
products meeting our criteria, we ask the engagement teams to provide
in GAO's Product Numbering Database e-mail addresses for congressional
staff serving as contacts on a product. Relevant information from both
of these databases is fed into our Product by Product Survey Approval
Database that is managed by QCI. This database then combines product,
survey recipient, and data from our Congressional Relations staff and
creates an e-mail message with a Web link to a survey. (Congressional
Relations staff serve as the GAO contacts for survey recipients.) The e-
mail message also contains an embedded client password and unique
client identifier to ensure that a recipient is linked with the
appropriate survey. Our Congressional Feedback Database creates a
survey record with the product title and number and captures the
responses to every survey sent back to us electronically.
Timeliness: Verification and validation;
QCI staff review a hard copy of a released GAO product or access its
electronic version to check the accuracy of the addressee information
in the Product by Product Survey Approval Database. QCI staff also
check the congressional staff directory to ensure that survey
recipients listed in the Product by Product Survey Approval Database
appear there. In addition, our Congressional Relations staff review the
list of survey recipients entered by the engagement teams and identify
the most appropriate congressional staff person to receive a survey for
each requester. Survey e-mail messages that are inadvertently sent with
incorrect e-mail addresses automatically reappear in the survey
approval system. When this happens, QCI staff correct any obvious
typing errors and resend the e- mail message or contact the
congressional staff person directly for the correct e-mail address and
then resend the message. The IG also periodically reviews the
timeliness performance measure and last reviewed it in fiscal year
2005--the last year before we began to use the independent feedback
from the survey as a basis for determining our timeliness.
Timeliness: Data limitations;
We do not measure the timeliness of all of our external products
because we do not wish to place too much burden on busy congressional
staff. Testimonies and written products that meet our criteria for this
measure represent more than 50 percent of the congressionally requested
products we issued during fiscal year 2007. We exclude from our
timeliness measure low and medium interest reports requiring fewer than
500 staff days to complete, reports addressed to agency heads or
commissions, some reports mandated by the Congress, classified reports,
and reports completed under the Comptroller General's authority. Also,
if a requester indicates that he or she does not want to complete any
surveys, we will not send a survey to this person again, even though a
product subsequently requested meets our criteria. The response rate
for our client feedback survey is about 28 percent. We received
comments from one or more people for about 54 percent of the products
for which we sent surveys in fiscal year 2007.
[End of Client measures]
People measures:
New hire rate: Definition and background;
This performance measure is the ratio of the number of people hired to
the number we planned to hire. Annually, we develop a workforce plan
that takes into account projected workload changes, as well as other
changes, such as retirements, other attrition, promotions, and skill
gaps. The workforce plan for the upcoming year specifies the number of
planned hires and, for each new hire, specifies the skill type and
level. The plan is conveyed to each of our units to guide hiring
throughout the year. Progress toward achieving the workforce plan is
monitored monthly by the Chief Operating Officer and the Chief
Administrative Officer. Adjustments to the workforce plan are made
throughout the year, if necessary, to reflect changing needs and
conditions.
New hire rate: Data sources;
The Executive Committee approves the workforce plan. The workforce plan
is coordinated and maintained by the Chief Administrative Office. Data
on accessions--that is, new hires coming on board--is taken from a
database that contains employee data from USDA's National Finance
Center (NFC) database, which handles payroll and personnel data for GAO
and other agencies.
New hire rate: Verification and validation;
The Chief Administrative Office maintains a database that monitors and
tracks all our hiring offers, declinations, and accessions. In
coordination with our Human Capital Office, our Chief Administrative
Office staff input workforce information supporting this measure into
the Chief Administrative Office database. While the database is updated
on a daily basis, monthly reports are provided to the Chief Operating
Officer and the Chief Administrative Officer so that they can monitor
progress by GAO units in achieving workforce plan hiring targets. The
Chief Administrative Office continuously monitors and reviews
accessions maintained in the NFC database against its database to
ensure consistency and to resolve discrepancies. The office follows up
on any discrepancies. In addition, on a periodic basis, the IG examines
our process for calculating the new hire rate. During fiscal year 2004,
the IG independently reviewed this process and found it to be
reasonable. The IG also recommended actions to improve the
documentation of the process used to calculate this measure. We have
implemented the IG's recommendations.
New hire rate: Data limitations;
There is a lag of one to two pay periods (up to 4 weeks) before the NFC
database reflects actual data. We generally allow sufficient time
before requesting data for this measure to ensure that we get accurate
results.
Acceptance rate: Definition and background;
This measure is the ratio of the number of applicants accepting offers
to the number of offers made. Acceptance rate is a proxy for GAO's
attractiveness as an employer and an indicator of our competitiveness
in bringing in new talent.
Acceptance rate: Data sources;
The information required is the number of job offers made (excluding
interns, experts/consultants, and reemployed annuitants), the number of
offers declined, and the number of individuals who come on board. Our
Chief Administrative Office staff maintains a database that contains
the job offers made and accepted or declined. Data on accessions--that
is, new hires coming on board--are taken from a database that contains
employee data from USDA's NFC database, which handles payroll and
personnel data for GAO and other agencies.
Acceptance rate: Verification and validation;
Human capital managers in the Human Capital Office work with the Chief
Administrative Office staff to ensure that each job offer made and its
outcome (declination or acceptance) is noted in the database that is
maintained by Chief Administrative Office staff; periodic checking is
performed to review the accuracy of the database. In addition, on a
periodic basis, the IG examines our process for calculating the
acceptance rate. During fiscal year 2004, the IG independently reviewed
this process and found it to be reasonable. The IG also recommended
actions to improve the documentation of the process used to calculate
this measure and the reporting of this measure. We have implemented the
IG's recommendations.
Acceptance rate: Data limitations;
See New hire rate, Data limitations.
Retention rate: Definition and background;
We continuously strive to make GAO a place where people want to work.
Once we have made an investment in hiring and training people, we would
like to retain them. This measure is one indicator that we are
attaining that objective and is the inverse of attrition. We calculate
this measure by taking 100 percent of the onboard strength minus the
attrition rate, where attrition rate is defined as the number of
separations divided by the average onboard strength. We calculate this
measure with and without retirements.
Retention rate: Data sources;
Data on retention--that is, people who are on board at the beginning of
the fiscal year and are still here at the end of the fiscal year as
well as the average number of people on board during the year--are
taken from a Chief Administrative Office database that contains some
data from the NFC database, which handles payroll and personnel data
for GAO and other agencies.
Retention rate: Verification and validation;
Chief Administrative Office staff continuously monitor and review
accessions and attritions against the contents of their database that
has NFC data and they follow up on any discrepancies. In addition, on a
periodic basis, the IG examines our process for calculating the
retention rate. During fiscal year 2004, the IG reviewed this process
and found it to be reasonable. The IG also recommended actions to
improve the documentation of the process used to calculate this
measure. We have implemented the IG's recommendations.
Data limitations; See New hire rate, Data limitations.
Staff development: Definition and background;
One way that we measure how well we are doing and identify areas for
improvement is through our annual employee feedback survey. This Web-
based survey, which is conducted by an outside contractor to ensure the
confidentiality of every respondent, is administered to all of our
employees once a year. Through the survey, we encourage our staff to
indicate what they think about GAO's overall operations, work
environment, and organizational culture and how they rate our managers--
from the immediate supervisor to the Executive Committee--on key
aspects of their leadership styles. The survey consists of over 100
questions.
This measure is based on staff's favorable responses to three of the
six questions related to staff development on our annual employee
survey. This subset of questions was selected on the basis of senior
management's judgment about the questions' relevance to the measure and
specialists' knowledge about the development of indexes. Staff were
asked to respond to three questions on a five-point scale or choose "no
basis to judge/not applicable" or "no answer.".
Staff development: Data sources;
These data come from our staff's responses to an annual Web-based
survey. The survey questions we used for this measure ask staff how
much positive or negative impact (1) external training and conferences
and (2) on-the-job training had on their ability to do their jobs
during the last 12 months. From the staff who expressed an opinion, we
calculated the percentage of staff selecting the two categories that
indicate satisfaction with or a favorable response to the question. For
this measure, the favorable responses were either "very positive
impact" or "generally positive impact." In addition, the survey
question asked how useful and relevant to your work did you find
internal (Learning Center) training courses. From staff who expressed
an opinion, we calculated the percentage of staff selecting the three
categories that indicate satisfaction with or a favorable response to
the question. For this measure, the favorable responses were "very
greatly useful and relevant," "greatly useful and relevant," and
"moderately useful and relevant.".
Staff development: Verification and validation;
The employee feedback survey gathers staff opinions on a variety of
topics. The survey is password protected, and only the outside
contractor has access to passwords. In addition, when the survey
instrument was developed, extensive focus groups and pretests were
undertaken to refine the questions and provide definitions as needed.
In fiscal year 2007, our response rate to this survey was about 74
percent, which indicates that its results are largely representative of
the GAO population. In addition, many teams and work units conduct
follow-on work to gain a better understanding of the information from
the survey.
In addition, on a periodic basis, the IG independently examines our
process for calculating the percentage of favorable responses for staff
development. The IG examined this process during fiscal year 2004 and
found it to be reasonable. The IG also recommended actions to improve
the documentation of the process used to calculate this measure. We
have implemented the IG's recommendations.
Staff development: Data limitations;
The information contained in the survey is the self- reported opinions
of staff expressed under conditions of confidentiality. Accordingly,
there is no way to further validate those expressions of opinion.
The practical difficulties of conducting any survey may introduce
errors, commonly referred to as nonsampling errors. These errors could
result from, for example, respondents misinterpreting a question or
data entry staff incorrectly entering data into a database used to
analyze the survey responses. Such errors can introduce unwanted
variability into the survey results. We took steps in the development
of the survey to minimize nonsampling errors. Specifically, when we
developed the survey instrument we held extensive focus groups and
pretests to refine the questions and define terms used to decrease the
chances that respondents would misunderstand the questions. We also
limited the chances of introducing nonsampling errors by creating a Web-
based survey for which respondents entered their answers directly into
an electronic questionnaire. This approach eliminated the need to have
the data keyed into a database by someone other than the respondent,
thus removing an additional source of error.
Staff utilization: Definition and background;
This measure is based on staff's favorable responses to three of the
six questions related to staff utilization on our annual employee
survey. This subset of questions was selected on the basis of senior
management's judgment about the questions' relevance to the measure and
specialists' knowledge about the development of indexes. Staff were
asked to respond to these three questions on a five-point scale or
choose "no basis to judge/not applicable" or "no answer." (For
background information about our entire employee feedback survey, see
Staff development.)
Staff utilization: Data sources;
These data come from our staff's responses to an annual Web-based
survey. The survey questions we used for this measure ask staff how
often the following occurred in the last 12 months: (1) my job made
good use of my skills; (2) GAO provided me with opportunities to do
challenging work; and (3) in general, I was utilized effectively. From
the staff who expressed an opinion, we calculated the percentage of
staff selecting the two categories that indicate satisfaction with or a
favorable response to the question. For this measure, the favorable
responses were either "very positive impact" or "generally positive
impact.".
Staff utilization: Verification and validation;
See Staff development, Verification and validation.
Staff utilization: Data limitations;
See Staff development, Data limitations.
Leadership: Definition and background;
This measure is based on staff's favorable responses to 10 of 20
questions related to six areas of leadership on our annual employee
survey. This subset of questions was selected on the basis of senior
management's judgment about the questions' relevance to the measure and
specialists' knowledge about the development of indexes. Specifically,
our calculation included responses to 1 of 4 questions related to
empowerment, 2 of 4 questions related to trust, all 3 questions related
to recognition, 1 of 3 questions related to decisiveness, 2 of 3
questions related to leading by example, and 1 of 3 questions related
to work life. Staff were asked to respond to these 10 questions on a
five-point scale or choose "no basis to judge/not applicable" or "no
answer." (For background information about our entire employee feedback
survey, see Staff development, Definition and background.):
Leadership: Data sources;
These data come from our staff's responses to an annual Web-based
survey. The survey questions we used for this measure ask staff about
empowerment, trust, recognition, decisiveness, leading by example, and
work life as they pertain to the respondent's immediate supervisor.
Specifically the survey asked staff the following questions about their
immediate supervisor during the last 12 months: (1) gave me the
opportunity to do what I do best; (2) treated me fairly; (3) acted with
honesty and integrity toward me; (4) ensured that there was a clear
link between my performance and recognition of it; (5) gave me the
sense that my work is valued; (6) provided me meaningful incentives for
high performance; (7) made decisions in a timely manner; (8)
demonstrated GAO's core values of accountability, integrity, and
reliability; (9) implemented change effectively; and (10) dealt
effectively with equal employment opportunity and discrimination
issues. From the staff who expressed an opinion, we calculated the
percentage of staff selecting the two categories that indicate
satisfaction with or a favorable response to the question. For this
measure, the favorable responses were either "always or almost always"
or "most of the time.".
Leadership: Verification and validation;
See Staff development, Verification and validation.
Leadership: Data limitations;
See Staff development, Data limitations.
Organizational climate: Definition and background;
This measure is based on staff's favorable responses to 5 of the 13
questions related to organizational climate on our annual employee
survey. This subset of questions was selected on the basis of senior
management's judgment about the questions' relevance to the measure and
specialists' knowledge about the development of indexes. Staff were
asked to respond to these 5 questions on a five-point scale or choose
"no basis to judge" or "no answer." (For background information about
our entire employee feedback survey, see Staff development.)
Organizational climate: Data sources;
These data come from our staff's responses to an annual Web-based
survey. The survey questions we used for this measure ask staff to
think back over the last 12 months and indicate how strongly they agree
or disagree with each of the following statements: (1) a spirit of
cooperation and teamwork exists in my work unit; (2) I am treated
fairly and with respect in my work unit; (3) my morale is good; (4)
sufficient effort is made in my work unit to get the opinions and
thinking of people who work here; and (5) overall, I am satisfied with
my job at GAO. From the staff who expressed an opinion, we calculated
the percentage of staff selecting the two categories that indicate
satisfaction with or a favorable response to the question. For this
measure, the favorable responses were either "strongly agree" or
"generally agree.".
Organizational climate: Verification and validation;
See Staff development, Verification and validation.
Organizational climate: Data limitations;
See Staff development, Data limitations.
[End of People measures]
Internal operations measures:
Help get job done and quality of work life: Definition and background;
To measure how well we are doing at delivering internal administrative
services to our employees and identify areas for improvement, we
conduct an annual Web-based survey in November. The customer
satisfaction survey on administrative services, conducted by an outside
contractor to ensure the confidentiality of every respondent, is
administered to all of our employees once a year. Through the survey we
encourage our staff to indicate how satisfied they are with 19 services
that help them get their jobs done and another 10 services that affect
their quality of work life.
As part of the survey, employees are asked to rate, on a scale of 1
(low) to 5 (high), those services that are important to them and that
they have experience with or used recently. Then, for each selected
service, employees are asked to indicate their level of satisfaction
from 1 (low) to 5 (high), and provide a written reason for their rating
and recommendations for improvement if desired. Based on employees'
responses to these questions, we calculate a composite score.
Help get job done and quality of work life: Data sources;
These data come from our staff's responses to an annual Web-based
survey. To determine how satisfied GAO employees are with internal
administrative services, we calculate composite scores for two
measures. One measure reflects the satisfaction with the 19 services
that help employees get their jobs done. These services include
Internet and intranet services, IT customer support, mail services, and
voice communication services. The second measure reflects satisfaction
with another 10 services that affect quality of work life. These
services include assistance related to pay and benefits, building
maintenance and security, and workplace safety and health. The
composite score represents how employees rated their satisfaction with
services in each of these areas relative to how they rated the
importance of those services to them. The importance scores and
satisfaction levels are both rated on a scale of 1 (low) to 5 (high).
Help get job done and quality of work life: Verification and
validation;
The satisfaction survey on administrative services is housed on a Web
site maintained by an outside contractor, and only the contractor has
the ability to link the survey results with individual staff. Our
survey response rate was 48 percent in 2006. To ensure that the results
are largely representative of the GAO population, we analyze the
results by demographic representation (unit, tenure, location, band
level, and job type). Each GAO unit responsible for administrative
services conducts follow-on work, including analyzing written comments
to gain a better understanding of the information from the survey.
In addition, on a periodic basis, the IG independently assesses the
internal operations performance measures. The IG examined the measures
during fiscal year 2007 and found the measures reasonable. The IG also
recommended actions to improve the measures' reliability and
objectivity. We are in the process of implementing the IG's
recommendations.
Help get job done and quality of work life: Data limitations;
The information contained in the survey is the self- reported opinion
of staff expressed under conditions of confidentiality. Accordingly,
there is no way to further validate those expressions of opinion. We do
not plan any actions to remedy this limitation because we feel it would
violate the pledge of confidentiality that we make to our staff
regarding the survey responses.
The practical difficulties of conducting any survey may introduce
errors, commonly referred to as nonsampling errors. These errors could
result from, for example, respondents misinterpreting a question or
entering their data incorrectly. Such errors can introduce unwanted
variability into the survey results. We limit the chances of
introducing nonsampling errors by using a Web-based survey for which
respondents' enter their answers directly into an electronic
questionnaire. This eliminates the need to have the data keyed into a
database by someone other than the respondent.
[End of Internal operations measures]
Source: GAO.
[End of Table]
Program Evaluation:
To assess our progress toward our first three strategic goals and their
objectives and to update them for our strategic plan, we evaluate
actions taken by federal agencies and the Congress in response to our
recommendations. The results of these evaluations are conveyed in this
performance and accountability report as financial benefits and
nonfinancial benefits that reflect the value of our work.
In addition, we actively monitor the status of our open
recommendations--those that remain valid but have not yet been
implemented--and report our findings annually to the Congress and the
public [hyperlink, http://www.gao.gov/openrecs.html]. We use the
results of that analysis to determine the need for further work in
particular areas. For example, if an agency has not implemented a
recommended action that we consider to be worthwhile, we may decide to
pursue further action with agency officials or congressional
committees, or we may decide to undertake additional work on the
matter.
We also use our biennial high-risk update report to provide a status
report on those major government operations considered high risk
because of their vulnerabilities to fraud, waste, abuse, and
mismanagement or the need for broad-based transformation. The report is
a valuable evaluation and planning tool because it helps us to identify
those areas where our continued efforts are needed to maintain the
focus on important policy and management issues that the nation faces.
(See [hyperlink,
http://www.gao.gov/docsearch/featured/highrisk.html].):
To continuously improve the quality of our work supporting strategic
goals 1, 2, and 3 in fiscal year 2007, we performed our annual
inspection of our quality control system for audits completed during
calendar year 2006. The inspection team concluded that our quality
control system was suitably designed and operating effectively to
provide us with reasonable assurance that we (1) conformed in all
material respects with Government Auditing Standards and (2) provided
the Congress and other users of our products with independent,
objective, and reliable information during the year ended December 31,
2006.
The inspection team found that our quality assurance framework includes
the key controls necessary to ensure quality products. The team also
found that engagement teams followed these controls in all material
aspects. The inspection team did not identify any instances where our
work was not reliable or contained material errors. Further, the
inspection team identified a number of noteworthy developments with
respect to our quality control system during this year's inspection.
Many of these developments have broad applicability to our analyst
staff and some represent practices that mission teams may consider
adopting. For example, one team enhanced its review of official
workpapers developed and maintained for each engagement known as
Engagement Management and Product Files to ensure their correct and
timely completion and another team developed a template to ensure
process control in instances where multiple staff are used to check the
facts in a product resulting from an engagement.
We also completed a number of studies and evaluations related to goal
4's strategic objectives. These studies resulted in internal products
or briefings in fiscal year 2007 that are not available publicly.
* Financial management practices and processes. We conducted internal
control reviews as set forth in 31 U.S.C. 3512 (commonly referred to as
the Federal Managers' Financial Integrity Act); Office of Management
and Budget (OMB) Circular No. A-127, Financial Management Systems; and
OMB Circular No. A-123, Management's Responsibility for Internal
Control, Appendix A. Under the Federal Managers' Financial Integrity
Act requirements, we reviewed quarterly payroll transactions and under
A-127, we reviewed three modules--Financial Reporting Requirements;
Preparation, Execution, and Reporting of GAO's Budget in Accordance
With Requirements; and Training and User Support. We assessed our
internal control over financial reporting consistent with A-123 by
testing key cycles, specifically those that represent large- dollar
flows or have high-risk factors, and conducting limited testing on
cycles with low risk or that had few or no remediation actions from
last year. On the basis of the results of these assessments, we
concluded that we had reasonable assurance that internal control over
financial reporting as of September 30, 2007, was operating effectively
and that no material weaknesses exist in the design or operation of the
internal controls over financial reporting.
* Cost- benefit analysis of legislative history digitization project.
To ensure that staff can easily access our legislative histories
electronically, we began an initiative to "digitize" or scan all our
legislative histories into a Web-based database that will allow full-
text searches of the PDF format of this information. We conducted a
digitization pilot and found that the cost of using in-house services
for digitization would far outweigh the benefits. We awarded a no-cost
contract to digitize over the next 4 years all the documents that
constitute the legislative histories of 21,000 public laws from 1921 to
1995 that we have collected in exchange for the contractor's exclusive
right to market and sell access to the digitized versions of these
histories.
* Automated background check system. We piloted the Office of Personnel
Management's automated personnel security background investigation
system known as eQIP. The pilot demonstrated that we could reduce the
processing time for these investigations by an estimated 50 percent at
no additional cost to us. As a result of this successful pilot, we
fully implemented eQIP on October 1, 2007.
* Interest in our in-house mentoring program. We conducted a Web-based
survey to measure the level of staff interest in having a mentor or
being a mentor and to gain an understanding of what staff expect to
gain from a mentoring relationship. Among the 831 employees who
responded to the survey, 637 indicated a desire to participate in the
mentoring program as a mentor or mentee. Both groups expressed an
interest in learning about or helping others to enhance leadership
skills, supervise others, work through difficult situations, plan and
manage a career, and manage work relationships.
[End of Part II: Performance Information]
Part III: Financial Information:
From the Chief Financial Officer:
[See PDF for picture of Sallyanne Harper, Chief Financial Officer]
November 15, 2007:
I am pleased to report that during fiscal year 2007 the U.S. Government
Accountability Office continued to lead by example in government
financial management. For the 21st consecutive year, independent
auditors gave our financial statements an unqualified opinion with no
material weaknesses and no major compliance problems. The financial
statements that follow were prepared, audited, and made publicly
available as an integral part of this performance and accountability
report 45 days after the end of the fiscal year. Our fiscal year 2006
report received a certificate of excellence in accountability reporting
from the Association of Government Accountants (AGA). Our annual
reports have received this AGA honor each year since we first applied
with our fiscal year 2001 performance and accountability report.
In fiscal year 2007 we institutionalized the rigorous process of
documenting, updating, and reviewing internal controls after
successfully implementing the Office of Management and Budget's (OMB)
revised Circular No. A-123, Appendix A last fiscal year. As a result of
these efforts we have been able to improve on and strengthen the design
and implementation of our internal control practices throughout the
financial management process. This year we continued to address those
minor weaknesses identified in fiscal year 2006 testing that remained
outstanding by fiscal year end. We instituted a rotating testing
schedule of the major cycles so that our A-123 testing team reviews,
updates, and tests the designated cycles at least once every 3 years.
This fiscal year we also focused many of our resources on preparing for
our new financial management system. The software solution is the
Department of Transportation Enterprise Service Center's (ESC) Delphi,
Oracle Federal Financials. Implementation of our new financial
management system, GAO Delphi, followed widely accepted best industry
practices for project management including independent verification and
validation of our interfaces, test approach, and cutover and
contingency plans. In addition to the normal testing prior to
implementation, we built in a 2-month parallel processing phase to
further validate our production readiness and ensure that GAO Delphi
would meet agency business needs and internal and external reporting
requirements. We plan to take advantage of ESC's expertise and
economies of scale as our service provider for select accounting
functions, particularly those involving transaction data entry, while
our staff will maintain appropriate control and oversight of the cross-
serviced processes. Reducing the amount of data entry done in-house
will allow our financial management staff to focus more on analysis and
customer service. As fiscal year 2008 began, we successfully converted
to the new system. Future phases include implementation of an
integrated workforce planning and budget formulation solution and an E-
Gov travel solution.
In addition to our extensive efforts on our financial systems, we have
enhanced our product, business, and management processes to streamline
operations and save the taxpayer money. During fiscal year 2007 we
successfully completed our extended pilot of the electronic
dissemination of our print engagement-related products avoiding $48,800
in costs, and we project future annual savings of about $300,000
annually in printing-related costs. The pilot showed that we can
provide products more quickly to our client in electronic format while
maintaining a high level of customer satisfaction. In tandem with this
e-dissemination effort we have implemented a new digital printing
contract which will provide the option to print only the quantity of
the product needed for distribution to the requester and key recipients
instead of the 150-copy minimum requested by outside contract print
companies. To further improve our analysts' business processes, we have
enhanced our internal electronic audit system, the Financial Audit
System (FAS), which enables our staff to more comprehensively and
accurately audit the financial statements of executive branch agencies.
In addition to enabling us to provide an improved consolidated
financial statement to our clients, we expect the improvements we have
implemented will allow us to: reduce travel costs by increasing remote
access capability; increase the efficiency of our audit work through
enhanced automated analysis capabilities and project management tools;
and minimize the effort required for audit start-ups through automated
planning, staffing, and audit documentation tools.
The coming fiscal year promises many challenges including
institutionalizing the day-to-day use of the new financial management
system. We expect to see our hard work pay off with a smooth transition
as we begin providing more meaningful management reporting throughout
the organization and by taking advantage of our service provider's
services in entering accounting data. As always, we remain focused on
our role in the legislative branch to support the Congress in meeting
its constitutional responsibilities, to help improve the performance
and ensure the accountability of the government for the benefit of the
American people, and to continue to focus on and enhance our internal
operations and services to better achieve our strategic goal of being a
model federal agency.
Signed by:
Sallyanne Harper:
Chief Financial Officer:
Overview of Financial Management and Controls:
Our financial statements and accompanying notes begin on page
108.[Footnote 8] Our financial statements for the fiscal years ended
September 30, 2007 and 2006, were audited by an independent auditor,
Clifton Gunderson, LLP. Clifton Gunderson, LLP, rendered an unqualified
opinion on our financial statements and an unqualified opinion on the
effectiveness of our internal controls over financial reporting and
compliance with laws and regulations. The auditor also reported that we
have substantially complied with the applicable requirements of the
Federal Financial Management Improvement Act of 1996 (Improvement Act)
and found no reportable instances of noncompliance with selected
provisions of laws and regulations. In the opinion of the independent
auditor, the financial statements are presented fairly in all material
respects and are in conformity with generally accepted accounting
principles.
Financial Systems and Internal Controls:
We recognize the importance of strong financial systems and internal
controls to ensure our accountability, integrity, and reliability. To
achieve a high level of quality, management maintains a quality control
program and seeks advice and evaluation from both internal and external
sources.
We complied with the spirit and intent of Appendix A, OMB Circular No.
A-123, Management's Responsibility for Internal Control, which provides
guidance for agencies' assessments of internal control over financial
reporting. We performed this assessment by identifying, analyzing, and
testing internal controls for key business processes. Based on the
results of the assessment, we have reasonable assurance that internal
control over financial reporting, as of September 30, 2007, was
operating effectively and that no material control weaknesses exist in
the design or operation of the internal controls over financial
reporting. Additionally, our independent auditor found that we
maintained effective internal controls over financial reporting and
compliance with laws and regulations. Consistent with our assessment,
the auditor found no material internal control weaknesses.
We are also committed to fulfilling the internal control objectives of
31 U.S.C. 3512, commonly referred to as the Federal Managers' Financial
Integrity Act (Integrity Act). Although we are not subject to the act,
we comply voluntarily with its requirements. Our internal controls are
designed to provide reasonable assurance that obligations and costs are
in compliance with applicable laws and regulations; funds, property,
and other assets are safeguarded against loss from unauthorized
acquisition, use, or disposition; and revenues and expenditures
applicable to our operations are properly recorded and accounted for to
enable our agency to prepare reliable financial reports and maintain
accountability over our assets.
In addition, we are committed to fulfilling the objectives of the
Improvement Act, which is also covered within 31 U.S.C. 3512. Although
not subject to the act, we voluntarily comply with its requirements. We
believe that we have implemented and maintained financial systems that
comply substantially with federal financial management systems
requirements, applicable federal accounting standards, and the United
States Government Standard General Ledger at the transaction level as
of September 30, 2007. We made this assessment based on criteria
established under the Improvement Act and guidance issued by OMB. Also,
our auditor reported that we had substantially complied with the
applicable requirements of the Improvement Act as of September 30,
2007.
GAO's Inspector General (IG) also conducts audits and investigations
that are internally focused, functions as an independent fact-gathering
adviser to the Comptroller General, and reviews all accomplishment
reports totaling $500 million or more. During fiscal year 2007, the IG
examined compliance with our policy and procedures for conflict-of-
interest determinations and conducted reviews of the Comptroller
General's vouchers for the official representation account, the
compensatory time for travel program, and our information security
program. In addition, the IG implemented and managed an internal
hotline for use by our employees and contractors to report potential
fraud, waste, and abuse in our operations. Finally, the IG
independently tests our compliance with procedures related to our
performance data on a rotating basis over a 3-year period; these
actions are specifically identified in the table that begins on page
79. No material weaknesses were reported by the IG. During fiscal year
2007, we completed actions related to seven IG recommendations, none of
which affected the financial statements. There are no unresolved
issues.
Our Audit Advisory Committee assists the Comptroller General in
overseeing the effectiveness of our financial reporting and audit
processes, internal controls over financial operations, and processes
that ensure compliance with laws and regulations relevant to our
financial operations. The committee is composed of individuals who are
independent of GAO and have outstanding reputations in public service
or business with financial or legal expertise. The current members of
the committee are as follows:
* Sheldon S. Cohen (Chairman), a certified public accountant and
practicing attorney in Washington, D.C; a former Commissioner and Chief
Counsel of the Internal Revenue Service; and a Senior Fellow of the
National Academy of Public Administration.
* Edward J. Mazur, CPA; Senior Advisor for Governmental Financial
Management at Cherry, Bekaert & Holland, LLP; past member of the
Governmental Accounting Standards Board; former State Comptroller of
Virginia; and a former Controller of the Office of Federal Financial
Management in the Office of Management and Budget.
* Charles O. Rossotti, senior advisor at The Carlyle Group; former
Commissioner of the Internal Revenue Service; and founder and former
Chief Executive Officer and Chairman of American Management Systems,
Inc., an international business and information technology consulting
firm.
The committee's report and that of our independent auditors are
included on the following pages.
Audit Advisory Committee's Report:
The Audit Advisory Committee (the Committee) assists the Comptroller
General in overseeing the U.S. Government Accountability Office's (GAO)
financial operations. As part of that responsibility, the Committee
meets with agency management and its internal and external auditors to
review and discuss GAO's external financial audit coverage, the
effectiveness of GAO's internal controls over its financial operations,
and its compliance with certain laws and regulations that could
materially impact GAO's financial statements. GAO's external auditors
are responsible for expressing an opinion on the conformity of GAO's
audited financial statements with the U.S. generally accepted
accounting principles. The Committee reviews the findings of the
internal and external auditors, and GAO's responses to those findings,
to ensure that GAO's plan for corrective action includes appropriate
and timely follow-up measures. In addition, the Committee reviews the
draft Performance and Accountability Report, including its financial
statements, and provides comments to management who have primary
responsibility for the Performance and Accountability Report. The
Committee met twice with respect to its responsibilities as described
above. During these sessions, the Committee met with the internal and
external auditors without GAO management being present and discussed
with the external auditors the matters that are required to be
discussed by generally accepted auditing standards. Based on procedures
performed as outlined above, we recommend that GAO's audited statements
and footnotes be included in the 2007 Performance and Accountability
Report.
Signed by:
Sheldon S. Cohen:
Chairman:
Audit Advisory Committee:
[End of Audit Advisory Committee's Report]
Independent Auditor's Report:
Clifton Gunderson LLP:
Certified Public Accountants and Consultants:
11710 Beltsville Drive, Suite 300:
Calverton, Maryland 20705-3106:
telephone: 301-931-2050:
fax: 301-931-1710:
[hyperlink, http://www.cliftoncpa.com]
Independent Auditor's Report:
Comptroller General of the United States:
In our audits of Government Accountability Office (GAO) for fiscal
years 2007 and 2006, we found:
* The financial statements are presented fairly, in all material
respects, in conformity with accounting principles generally accepted
in the United States of America.
* GAO had effective internal control over financial reporting
(including safeguarding assets) and compliance with laws and
regulations.
* GAO's financial management systems substantially complied with the
applicable requirements of the Federal Financial Management Improvement
Act of 1996 (FFMIA).
* No reportable noncompliance with laws and regulations we tested.
The following sections discuss in more detail (1) these conclusions,
(2) our conclusions on Management's Discussion and Analysis and other
supplementary information, and (3) our objectives, scope and
methodology.
Opinion on Financial Statements:
In our opinion, the financial statements including the accompanying
notes present fairly, in all material respects, in conformity with
accounting principles generally accepted in the United States of
America, GAO's assets, liabilities and net position as of September 30,
2007 and 2006, and net costs; changes in net position; and budgetary
resources for the years then ended.
Opinion on Internal Control:
In our opinion, GAO maintained, in all material respects, effective
internal control over financial reporting (including safeguarding
assets) and compliance as of September 30, 2007, that provided
reasonable assurance that misstatements, losses, or noncompliance
material in relation to the financial statements would be prevented or
detected on a timely basis. Our opinion is based on criteria
established under 31 U.S.C. 3512 (c), (d), the Federal Managers'
Financial Integrity Act, and the Office of Management and Budget (OMB)
Circular A-123, Management's Responsibility for Internal Control.
We noted other nonreportable matters involving internal control and its
operation that we will communicate in a separate management letter.
Opinion on FFMIA Compliance:
In our opinion, GAO's financial management systems, as of September 30,
2007, substantially complied with the following requirements of FFMIA:
(1) federal financial management systems requirements, (2) federal
accounting standards, and (3) the United States Government Standard
Genera/ Ledger (SGL) at the transaction level. Our opinion is based on
criteria established under FFMIA, OMB Circular No. A-127, Financial
Management Systems (which includes the Joint Financial Management
Improvement Program/Office of' Federal Financial Management series of
system requirements documents), accounting principles generally
accepted in the United States of America, and the SGL.
Compliance with Laws and Regulations:
Our tests for compliance with selected provisions of laws and
regulations disclosed no instances of noncompliance that would he
reportable under Government Auditing Standards or OMB audit guidance.
However, the objective of our audit was not to provide an opinion on
overall compliance with laws and regulations. Accordingly, we do not
express such an opinion.
This conclusion is intended solely for the use of the management of
GAO, OMB, and Congress and is not intended to be, and should not be,
used by anyone other that these specified parties.
Consistency of Other Information:
The Management's Discussion and Analysis (MD&A) included as Part I is
not a required part of the financial statements but is supplementary
information required by accounting principles generally accepted in the
United States of America. We have applied certain limited procedures,
which consisted principally of' inquiries of management regarding the
methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no
opinion on it.
The introductory information, performance information and appendixes
listed in the table of contents are presented for additional analysis
and are not a required part of the financial statements. Such
information has not been subjected to the auditing procedures applied
in the audit of the financial statements and, accordingly, we express
no opinion on them.
Objectives, Scope, and Methodology:
Management is responsible for (1) preparing the financial statements in
conformity with accounting principles generally accepted in the United
States of America, (2) establishing, maintaining, and assessing
internal control to provide reasonable assurance that the broad control
objectives of FMFIA are met, (3) ensuring that GAO's financial
management systems substantially comply with FFMIA requirements, and
(4) complying with applicable laws and regulations.
We are responsible for planning and performing our audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We are responsible for planning and performing our examination to
obtain reasonable assurance about whether management maintained
effective internal control over financial reporting (including
safeguarding of assets) and compliance with applicable laws and
regulations based on criteria established under 31 U.S.C. 3512 (c),
(d), the Federal Managers' Financial Integrity Act, and OMB Circular A-
123, Management's Responsibility for Internal Control. Our examination
included obtaining an understanding of internal control related to
financial reporting (including safeguarding assets) and compliance with
laws and regulations (including execution of transactions in accordance
with budget authority); testing relevant internal controls over
financial reporting (including safeguarding assets) and compliance,
evaluating the design and operating effectiveness of internal control;
and performing such other procedures as we considered necessary in the
circumstances. We did not test all internal controls relevant to
operating objectives as broadly defined by the Federal Managers'
Financial Integrity Act.
With respect to internal control related to significant performance
measures included in the MD&A, we obtained an understanding of the
design of the internal control relating to the existence and
completeness assertions and determined whether they had been placed in
operation, as required by OMB Bulletin No. 07-04. Our procedures were
not designed to provide assurance on internal control over reported
performance measures and, accordingly, we do not express an opinion on
such control.
Because of inherent limitations in any internal control, misstatements
due to error or fraud may occur and not be detected. Also, projections
of any evaluation of the internal control to future periods are subject
to the risk that the internal control may become inadequate because of
changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
We are responsible for planning and performing our examination to
obtain reasonable assurance about whether GAO's financial management
systems substantially complied with the three FFMIA requirements. We
examined, on a test basis, evidence about GAO's substantial compliance
with those requirements. and performed such other procedures as we
considered necessary in the circumstances.
We are also responsible for testing compliance with selected provisions
of laws and regulations that have a direct and material effect on the
financial statements. We did not test compliance with all laws and
regulations applicable to GAO. We limited our tests of compliance to
those laws and regulations required by OMB audit guidance that we
deemed applicable to the financial statements for the fiscal year ended
September 30, 2007. We caution that noncompliance may occur and not be
detected by these tests and that such testing may not be sufficient for
other purposes.
We conducted our audit and examinations in accordance with auditing
standards generally accepted in the United States of America;
Government Auditing Standards, issued by the Comptroller General of the
United States; attestation standards established by the American
Institute of Certified Public Accountants; and OMB Bulletin No. 07-04,
Audit Requirements fair Federal Financial Statements. We believe that
our audit and examinations provide a reasonable basis for our opinions.
Signed by:
Clifton Gunderson:
Calverton, Maryland:
November 7, 2007:
Purpose of Each Financial Statement:
The financial statements on the next four pages present the following
information:
* The balance sheet presents the combined amounts we had available to
use (assets) versus the amounts we owed (liabilities) and the residual
amounts after liabilities were subtracted from assets (net position).
* The statement of net cost presents the annual cost of our operations.
The gross cost less any offsetting revenue earned from our activities
is used to arrive at the net cost of work performed under our four
strategic goals.
* The statement of changes in net position presents the accounting
items that caused the net position section of the balance sheet to
change from the beginning to the end of the fiscal year.
* The statement of budgetary resources presents how budgetary resources
were made available to us during the fiscal year and the status of
those resources at the end of the fiscal year.
Financial Statements:
U.S. Government Accountability Office:
Balance Sheets as of September 30, 2007 and 2006:
(Dollars in thousands):
Assets:
Intragovernmental: Funds with the U.S. Treasury and cash (Note 3);
2007: $63,626;
2006: $63,919.
Intragovernmental: Accounts receivable;
2007: $977;
2006: $1,022.
Total Intragovernmental;
2007: $64,603;
2006: $64,941.
Property and equipment, net (Note 4);
2007: $41,566;
2006: $40,293.
Other;
2007: $372;
2006: $358.
Total Assets;
2007: $106,541;
2006: $105,592.
Liabilities:
Intragovernmental: Accounts payable;
2007: $6,232;
2006: $12,068.
Intragovernmental: Employee benefits (Note 6);
2007: $2,968;
2006: $2,379.
Intragovernmental: Workers' compensation (Note 7);
2007: $2,364;
2006: $2,337.
Total Intragovernmental;
2007: $11,564;
2006: $16,784.
Accounts payable;
2007: $11,280;
2006: $10,815.
Salaries and benefits;
2007: $16,827;
2006: $16,852.
Accrued annual leave and other (Note 5);
2007: $29,572;
2006: $30,299.
Workers' compensation (Note 7);
2007: $16,368;
2006: $15,910.
Capital leases (Note 9);
2007: $4,542;
2006: $6,872.
Note Payable (Note 5);
2007: 3,779;
2006: -.
Total Liabilities;
2007: $93,932;
2006: $97,532.
Net Position: Unexpended appropriations;
2007: $30,562;
2006: $25,951.
Net Position: Cumulative results of operations;
2007: ($17,953);
2006: ($17,891).
Total Net Position (Note 13);
2007: $12,609;
2006: $8,060.
Total Liabilities and Net Position;
2007: $106,541;
2006: $105,592.
The accompanying notes are an integral part of these statements:
[End of balance sheets]
Financial Statements:
U.S. Government Accountability Office:
Statements of Net Cost For Fiscal Years Ended September 30, 2007 and
2006.
(Dollars in thousands):
Net Costs by Goal (Note 2).
Goal 1: Well-Being/Financial Security of American People;
2007: $177,376;
2006: $191,880.
Less: reimbursable services;
2007: -;
2006: -.
Net goal costs;
2007: $177,376;
2006: $191,880.
Goal 2: Changing Security Threats/Challenges of Global Interdependence;
2007: $157,568;
2006: $154,727.
Less: reimbursable services;
2007: -;
2006: -.
Net goal costs;
2007: $157,568;
2006: $154,727.
Goal 3: Transforming the Federal Government's Role;
2007: $148,959;
2006: $149,913.
Less: reimbursable services;
2007: ($2,391);
2006: ($3,144).
Net goal costs;
2007: $146,568;
2006: $146,769.
Goal 4: Maximize the Value of GAO;
2007: $23,924;
2006: $23,664.
Less: reimbursable services;
2007: -;
2006: -.
Net goal costs;
2007: $23,924;
2006: $23,664.
Less: reimbursable services not attributable to goals;
2007: ($5,730);
2006: ($5,561).
Net Cost of Operations (Note 10);
2007: $499,706;
2006: $511,479.
The accompanying notes are an integral part of these statements.
[End of Statements of Net Cost]
Financial Statements:
U.S. Government Accountability Office:
Statements of Changes in Net Position For Fiscal Years Ended September
30, 2007 and 2006.
(Dollars in thousands):
Cumulative Results of Operations, Beginning of fiscal year;
2007: ($17,891);
2006: ($7,556).
Budgetary Financing Sources - Appropriations used;
2007: $474,925;
2006: $476,081.
Other Financing Sources: Intragovernmental transfer of property and
equipment;
2007: ($27);
2006: ($61).
Other Financing Sources: Federal employee retirement benefit costs paid
by OPM and imputed to GAO (Note 6);
2007: $24,746;
2006: $25,124.
Total Financing Sources;
2007: $499,644;
2006: $501,144.
Net Cost of Operations;
2007: ($499,706);
2006: ($511,479).
Net Change;
2007: ($62);
2006: ($10,335).
Cumulative Results of Operations, End of fiscal year;
2007: ($17,953);
2006: ($17,891).
Unexpended Appropriations, Beginning of fiscal year;
2007: $25,951;
2006: $27,003.
Budgetary Financing Sources and Uses: Current year appropriations;
2007: $485,894;
2006: $482,395.
Budgetary Financing Sources and Uses: Appropriations transferred in;
2007: -;
2006: $250.
Budgetary Financing Sources and Uses: Permanently not available;
2007: ($6,358);
2006: ($7,616).
Budgetary Financing Sources and Uses: Appropriations used;
2007: ($474,925);
2006: ($476,081).
Total unexpended appropriations, End of fiscal year;
2007: $30,562;
2006: $25,951.
Net Position;
2007: $12,609;
2006: $8,060.
The accompanying notes are an integral part of these statements.
[End of Statements of changes in net position]
Financial Statements:
U.S. Government Accountability Office:
Statements of Budgetary Resources For Fiscal Years Ended September 30,
2007 and 2006:
(Dollars in thousands):
Budgetary Resources (Note 11): Unobligated balance, beginning of fiscal
year;
2007: $8,492;
2006: $11,080.
Budgetary Resources (Note 11): Budget authority: Appropriations;
2007: $485,894;
2006: $482,395.
Budgetary Resources (Note 11): Budget authority: Spending authority
from offsetting collections: Earned and collected;
2007: $10,698;
2006: $10,930.
Budgetary Resources (Note 11): Budget authority: Spending authority
from offsetting collections: Changes in unfilled customer orders-
advance received;
2007: $136;
2006: $189.
Budgetary Resources (Note 11): Budget authority: Spending authority
from offsetting collections: Subtotal;
2007: $496,728;
2006: $493,514.
Budgetary Resources (Note 11): Nonexpenditure transfers, net and
actual;
2007: -;
2006: $250.
Budgetary Resources (Note 11): Permanently not available;
2007: ($6,358);
2006: ($7,616).
Total Budgetary Resources;
2007: $498,862;
2006: $497,228.
Status of Budgetary Resources: Obligations incurred: Direct;
2007: $480,731;
2006: $479,842.
Status of Budgetary Resources: Obligations incurred: Reimbursable;
2007: $8,121;
2006: $8,705.
Status of Budgetary Resources: Obligations incurred: Subtotal;
2007: $488,852;
2006: $488,547.
Status of Budgetary Resources: Unobligated balance-Apportioned;
2007: $3,170;
2006: $1,089.
Status of Budgetary Resources: Unobligated balance not available;
2007: $6,840;
2006: $7,592.
Total Status of Budgetary Resources;
2007: $498,862;
2006: $497,228.
Change in Unpaid Obligated Balance: Unpaid Obligated balance, beginning
of fiscal year;
2007: $55,238;
2006: $54,798.
Change in Unpaid Obligated Balance: Obligations incurred;
2007: $488,852;
2006: $488,547.
Change in Unpaid Obligated Balance: Less: Gross Outlays;
2007: ($490,474);
2006: ($488,107).
Change in Unpaid Obligated Balance: Unpaid Obligated balance, end of
fiscal year;
2007: $53,616;
2006: $55,238.
Net Outlays: Gross outlays;
2007: $490,474;
2006: $488,107.
Net Outlays: Less: Offsetting collections;
2007: ($10,645);
2006: ($11,119).
Net outlays;
2007: $479,829;
2006: $476,988.
The accompanying notes are an integral part of these statements:
[End of Statements of Budgetary Resources]
[End of Financial Statements]
Notes to Financial Statements:
Note 1. Summary of Significant Accounting Policies:
Reporting Entity:
The accompanying financial statements present the financial position,
net cost of operations, changes in net position, and budgetary
resources of the United States Government Accountability Office (GAO).
GAO, an agency in the legislative branch of the federal government,
supports the Congress in carrying out its constitutional
responsibilities. GAO carries out its mission primarily by conducting
audits, evaluations, analyses, research, and investigations and
providing the information from that work to the Congress and the public
in a variety of forms. The financial activity presented relates
primarily to the execution of GAO's congressionally approved budget.
GAO's budget consists of an annual appropriation covering salaries and
expenses and revenue from reimbursable audit work and rental income.
The revenue from audit services and rental income is included on the
Statement of Budgetary Resources as "reimbursable services." The
financial statements, except for federal employee benefit costs paid by
OPM and imputed to GAO, do not include the effects of centrally
administered assets and liabilities related to the federal government
as a whole, such as interest on the federal debt, which may in part be
attributable to GAO; they also do not include activity related to GAO's
trust function described in Note 14.
Basis of Accounting:
GAO's financial statements have been prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles
for the federal government. Accordingly, revenues are recognized when
earned and expenses are recognized when incurred, without regard to the
receipt or payment of cash. These principles differ from budgetary
reporting principles. The differences relate primarily to the
capitalization and depreciation of property and equipment, as well as
the recognition of other long-term assets and liabilities. The
statements were also prepared in conformity with OMB Circular No. A-
136, Financial Reporting Requirements.
Assets:
Intragovernmental assets are those assets that arise from transactions
with other federal entities. Funds with the U.S. Treasury comprise the
majority of intragovernmental assets on GAO's balance sheet.
Funds with the U.S. Treasury:
The U.S. Treasury processes GAO's receipts and disbursements. Funds
with the U.S. Treasury represent appropriated funds Treasury will
provide to pay liabilities and to finance authorized purchase
commitments.
Accounts Receivable:
GAO's accounts receivable are due principally from federal agencies for
reimbursable services; therefore, GAO has not established an allowance
for doubtful accounts.
Property and Equipment:
The GAO headquarters building qualifies as a multiuse heritage asset,
is GAO's only heritage asset, and is reported with property and
equipment on the balance sheet. The designation of multiuse heritage
asset is a result of both being listed in the National Register of
Historic Places and being used in general government operations.
Statement of Federal Financial Accounting Standards No. 29 requires
accounting for multiuse heritage assets as general property, plant, and
equipment to be included in the balance sheet and depreciated.
Maintenance of the building has been kept on a current basis. The
building is depreciated on a straight-line basis over 25 years.
Generally, property and equipment individually costing more than
$15,000 are capitalized at cost. Building improvements and leasehold
improvements are capitalized when the cost is $25,000 or greater. Bulk
purchases of lesser-value items that aggregate more than $150,000 are
also capitalized at cost. Assets are depreciated on a straight-line
basis over the estimated useful life of the property as follows:
building improvements, 10 years; computer equipment, software, and
capital lease assets, ranging from 3 to 6 years; leasehold
improvements, 5 years; and other equipment, ranging from 5 to 20 years.
GAO's property and equipment have no restrictions as to use or
convertibility except for the restrictions related to the GAO
building's classification as a multiuse heritage asset.
Liabilities:
Liabilities represent amounts that are likely to be paid by GAO as a
result of transactions that have already occurred.
Accounts Payable:
Accounts payable consists of amounts owed to federal agencies and
commercial vendors for goods and services received.
Federal Employee Benefits:
GAO recognizes its share of the cost of providing future pension
benefits to eligible employees over the period of time that they render
services to GAO. The pension expense recognized in the financial
statements equals the current service cost for GAO's employees for the
accounting period less the amount contributed by the employees. OPM,
the administrator of the plan, supplies GAO with factors to apply in
the calculation of the service cost. These factors are derived through
actuarial cost methods and assumptions. The excess of the recognized
pension expense over the amount contributed by GAO and employees
represents the amount being financed directly through the Civil Service
Retirement and Disability Fund administered by OPM. This amount is
considered imputed financing to GAO (see Note 6).
FECA provides income and medical cost protection to covered federal
civilian employees injured on the job, employees who have incurred a
work-related occupational disease, and beneficiaries of employees whose
deaths are attributable to job-related injuries or occupational
diseases. Claims incurred for benefits for GAO employees under FECA are
administered by the Department of Labor (Labor) and are paid,
ultimately, by GAO (see Note 7).
GAO recognizes a current-period expense for the future cost of post
retirement health benefits and life insurance for its employees while
they are still working. GAO accounts for and reports this expense in
its financial statements in a manner similar to that used for pensions,
with the exception that employees and GAO do not make current
contributions to fund these future benefits.
Federal employee benefit costs paid by OPM and imputed to GAO are
reported on the Statement of Changes in Net Position and are also
included as a component of net cost by goal on the Statement of Net
Cost.
Annual, Sick, and Other Leave:
Annual leave is recognized as an expense and a liability as it is
earned; the liability is reduced as leave is taken. The accrued leave
liability is principally long-term in nature. Sick leave and other
types of leave are expensed as leave is taken. All leave is funded when
expensed.
Contingencies:
GAO has certain claims and lawsuits pending against it. Provision is
included in GAO's financial statements for any losses considered
probable and estimable. Management believes that losses from certain
other claims and lawsuits are reasonably possible but are not material
to the fair presentation of GAO's financial statements, and provision
for these losses is not included in the financial statements.
Estimates:
Management has made certain estimates and assumptions when reporting
assets, liabilities, revenue, expenses, and in the note disclosures.
Actual results could differ from these estimates.
[End of Note 1]
Note 2. Intragovernmental Costs and Exchange Revenue:
Intragovernmental costs arise from exchange transactions made between
two reporting entities within the federal government in contrast with
public costs which arise from exchange transactions made with a
nonfederal entity. Intragovernmental costs and exchange revenue for the
years ended September 30, 2007 and 2006, are as follows:
Dollars in thousands:
Goal 1:
Intragovernmental costs;
2007: $16,930;
2006: $19,857.
Public costs;
2007: $160,446;
2006: $172,023.
Total goal 1 costs;
2007: $177,376;
2006: $191,880.
Goal 2:
Intragovernmental costs;
2007: $15,040;
2006: $16,012.
Public costs;
2007: $142,528;
2006: $138,715.
Total goal 2 costs;
2007: $157,568;
2006: $154,727.
Goal 3:
Intragovernmental costs;
2007: $14,218;
2006: $15,513.
Public costs;
2007: $134,741;
2006: $134,400.
Total goal 3 costs;
2007: $148,959;
2006: $149,913.
Goal 3 intragovernmental earned revenue;
2007: ($2,391);
2006: ($3,144).
Net goal 3 costs;
2007: $146,568;
2006: $146,769.
Goal 4:
Intragovernmental costs;
2007: $2,284;
2006: $2,449.
Public costs;
2007: $21,640;
2006: $21,215.
Total goal 4 costs;
2007: 23,924;
2006: 23,664.
Earned revenue not attributable to goals: Intragovernmental;
2007: ($5,640);
2006: ($5,492).
Earned revenue not attributable to goals: Public;
2007: ($90);
2006: ($69).
Total earned revenue not attributable to goals;
2007: ($5,730);
2006: ($5,561).
[End of Table]
Goals 1, 2, and 4 have no associated intragovernmental revenue and all
public earned revenue collected is not attributable to goals. GAO's
pricing policy for reimbursable services is to seek reimbursement for
actual costs incurred, including overhead costs where allowed by law.
Therefore, revenues, as listed above, and costs that generated those
revenues are equivalent.
[End of Note 2]
Note 3. Funds with the U.S. Treasury and Cash:
GAO's funds with the U.S. Treasury consist of only appropriated funds.
GAO also maintains cash imprest funds for use in daily operations. The
status of these funds as of September 30, 2007 and 2006, is as follows:
Dollars in thousands:
Unobligated balance: Available;
2007: $3,168;
2006: $1,087.
Unobligated balance: Unavailable;
2007: $6,840;
2006: $7,592.
Obligated balances not yet disbursed;
2007: $53,616;
2006: $55,238.
Total funds with U.S. Treasury;
2007: $63,624;
2006: $63,917.
Cash;
2007: 2;
2006: 2.
Total funds with U.S. Treasury and cash;
2007: $63,626;
2006: $63,919.
[End of Table]
[End of Note 3]
Note 4. Property and Equipment, Net:
The composition of property and equipment as of September 30, 2007, is
as follows:
Dollars in thousands:
Classes of property and equipment: Building;
Acquisition value: $15,664;
Accumulated depreciation: $11,905;
Book value: $3,759.
Classes of property and equipment: Land;
Acquisition value: $1,191;
Accumulated depreciation: -;
Book value: $1,191.
Classes of property and equipment: Building improvements;
Acquisition value: $106,565;
Accumulated depreciation: $90,152;
Book value: $16,413.
Classes of property and equipment: Computer and other equipment and
software;
Acquisition value: $40,575;
Accumulated depreciation: $27,032;
Book value: $13,543.
Classes of property and equipment: Leasehold improvements;
Acquisition value: $6,125;
Accumulated depreciation: $5,540;
Book value: $585.
Classes of property and equipment: Assets under capital lease;
Acquisition value: $23,762;
Accumulated depreciation: $17,687;
Book value: $6,075.
Classes of property and equipment: Total property and equipment;
Acquisition value: $193,882;
Accumulated depreciation: $152,316;
Book value: $41,566.
[End of Table]
The composition of property and equipment as of September 30, 2006, is
as follows:
Dollars in thousands:
Classes of property and equipment: Building;
Acquisition value: $15,664;
Accumulated depreciation: $11,278;
Book value: $4,386.
Classes of property and equipment: Land;
Acquisition value: $1,191;
Accumulated depreciation: -;
Book value: $1,191.
Classes of property and equipment: Building improvements;
Acquisition value: $115,048;
Accumulated depreciation: $98,246;
Book value: $16,802.
Classes of property and equipment: Computer and other equipment and
software;
Acquisition value: $34,791;
Accumulated depreciation: $24,502;
Book value: $10,289.
Classes of property and equipment: Leasehold improvements;
Acquisition value: $6,237;
Accumulated depreciation: $5,432;
Book value: $805.
Classes of property and equipment: Assets under capital lease;
Acquisition value: $23,014;
Accumulated depreciation: $16,194;
Book value: $6,820.
Classes of property and equipment: Total property and equipment;
Acquisition value: $195,945;
Accumulated depreciation: $155,652;
Book value: $40,293.
[End of Table]
[End of Note 4]
Note 5. Liabilities Not Covered by Budgetary Resources:
The liabilities on GAO's Balance Sheets as of September 30, 2007 and
2006 include liabilities not covered by budgetary resources, which are
liabilities for which congressional action is needed before budgetary
resources can be provided. Although future appropriations to fund these
liabilities are likely and anticipated, it is not certain that
appropriations will be enacted to fund these liabilities. The
composition of liabilities not covered by budgetary resources as of
September 30, 2007 and 2006, is as follows:
Dollars in thousands:
Intragovernmental liabilities-Workers' compensation;
2007: $2,364;
2006: $2,337.
Salaries and benefits-Comptrollers' General retirement plan;
2007: $3,113;
2006: $2,982.
Accrued annual leave and other;
2007: $29,572;
2006: $30,299.
Workers' compensation;
2007: $16,368;
2006: $15,910.
Capital leases;
2007: $4,542;
2006: $6,872.
Note payable;
2007: $3,779;
2006: -.
Total liabilities not covered by budgetary resources;
2007: $59,738;
2006: $58,400.
[End of Table]
The majority of the note payable represents financing for
telecommunications equipment purchased in fiscal year 2007 with an
interest rate of 8.75 percent and future principle payments as follows:
fiscal year 2008, $786,000; fiscal year 2009, $858,000; fiscal year
2010, $936,000; fiscal year 2011, $1,021,000.
[End of Note 5]
Note 6. Federal Employee Benefits:
All permanent employees participate in the contributory Civil Service
Retirement System (CSRS) or the Federal Employees Retirement System
(FERS). Temporary employees and employees participating in FERS are
covered under the Federal Insurance Contributions Act (FICA). To the
extent that employees are covered by FICA, the taxes they pay to the
program and the benefits they will eventually receive are not
recognized in GAO's financial statements. GAO makes contributions to
CSRS, FERS, and FICA and matches certain employee contributions to the
thrift savings component of FERS. All of these payments are recognized
as operating expenses.
In addition, all permanent employees are eligible to participate in the
contributory Federal Employees Health Benefit Program (FEHBP) and
Federal Employees Group Life Insurance Program (FEGLIP) and may
continue to participate after retirement. GAO makes contributions
through OPM to FEHBP and FEGLIP for active employees to pay for their
current benefits. GAO's contributions for active employees are
recognized as operating expenses. Using the cost factors supplied by
OPM, GAO has also recognized an expense in its financial statements for
the estimated future cost of postretirement health benefits and life
insurance for its employees. These costs are financed by OPM and
imputed to GAO.
Amounts owed to OPM and Treasury as of September 30, 2007 and 2006, are
$2,968,000 and $2,379,000, respectively, for FEHBP, FEGLIP, FICA, FERS,
and CSRS contributions and are shown on the Balance Sheet as an
employee benefits liability.
Details of the major components of GAO's federal employee benefit costs
for the years ended September 30, 2007 and 2006, are as follows:
Dollars in thousands:
Federal Employee Benefits Costs: Federal employee retirement benefit
costs paid by OPM and imputed to GAO: Estimated future pension
costs(CSRS/FERS);
2007: $9,115;
2006: $10,369.
Federal Employee Benefits Costs: Federal employee retirement benefit
costs paid by OPM and imputed to GAO: Estimated future postretirement
health and life insurance (FEHBP/FEGLIP);
2007: $15,631;
2006: $14,755.
Federal Employee Benefits Costs: Federal employee retirement benefit
costs paid by OPM and imputed to GAO: Total;
2007: $24,746;
2006: $25,124.
Federal Employee Benefits Costs: Pension expenses(CSRS/FERS);
2007: $29,895;
2006: $29,145.
Federal Employee Benefits Costs: Health and life insurance expenses
(FEHBP/FEGLIP);
2007: $16,100;
2006: $15,765.
Federal Employee Benefits Costs: FICA payment made by GAO;
2007: $16,581;
2006: $15,882.
Federal Employee Benefits Costs: Thrift Savings Plan-matching
contribution by GAO;
2007: $9,596;
2006: $8,836.
[End of Table]
Comptrollers General and their surviving beneficiaries who qualify and
so elect to participate are paid retirement benefits by GAO under a
separate retirement plan. These benefits are paid from current year
appropriations. Because GAO is responsible for future payments under
this plan, the estimated present value of accumulated plan benefits of
$3,113,000 as of September 30, 2007, and $2,982,000 as of September 30,
2006, is included as a component of salary and benefit liabilities on
GAO's Balance Sheet.
[End of Note 6]
Note 7. Workers' Compensation:
GAO utilizes the services of an independent actuarial firm to calculate
its FECA liability. GAO recorded an estimated liability for claims
incurred but not reported as of September 30, 2007 and 2006, which is
expected to be paid in future periods. This estimated liability of
$16,368,000 and $15,910,000 as of September 30, 2007 and 2006,
respectively, is reported on GAO's Balance Sheet. GAO also recorded a
liability for amounts paid to claimants by Labor as of September 30,
2007 and 2006, of $2,364,000 and $2,337,000, respectively, but not yet
reimbursed to Labor by GAO. The amount owed to Labor is reported on
GAO's Balance Sheet as an intragovernmental liability.
[End of Note 7]
Note 8. Building Lease Revenue:
In fiscal year 2000 the U.S. Army Corps of Engineers (USACE) entered
into an agreement with GAO to lease the entire third floor of the GAO
building. USACE provided all funding for the third floor renovation.
Occupancy began August 3, 2000, for an initial period of 3 years, with
options to renew on an annual basis for 7 additional years. Total
rental revenue to GAO includes a base rent, which remains constant for
the entire 10-year period, plus operating expense reimbursements at a
fixed amount for the first 3 years, with escalation clauses from year 4
through year 10 if the option years are exercised. Beginning in fiscal
year 2002, USACE leased additional space on the sixth floor with
occupancy lasting through the original lease term.
Rent received by GAO for fiscal year 2007 and 2006 was $4,978,000 and
$4,916,000, respectively. These amounts are included in reimbursable
services shown on the Statement of Net Costs. Total rental revenue for
the remaining period of the 10-year lease is as follows:
Dollars in thousands:
Fiscal year ending September 30: 2008;
Total rental revenue*: $5,045.
Fiscal year ending September 30: 2009;
Total rental revenue*: $5,111.
Fiscal year ending September 30: 2010;
Total rental revenue*: $5,179.
Fiscal year ending September 30: Total;
Total rental revenue*: $15,335.
* If option years are exercised.
[End of Table]
[End of Note 8]
Note 9. Leases:
Capital Leases:
GAO has entered into capital leases for office equipment and computer
equipment under which the ownership of the equipment covered under the
leases transfers to GAO when the leases expire. When GAO enters into
these leases, the present value of the future lease payments is
capitalized, net of imputed interest, and recorded as a liability. The
acquisition value and accumulated depreciation of GAO's capital leases
are shown in Note 4, Property and Equipment, Net. As of September 30,
2007 and 2006, the capital lease liability was $4,542,000 and
$6,872,000, respectively.
These lease agreements are written as contracts with a base year and
option years. The option years are subject to the availability of
funds. Early termination of the leases for reasons other than default
is subject to a negotiation between the parties. These leases are lease-
to-ownership agreements. GAO's leases are short term in nature and no
liability exists beyond the years shown in the table below. GAO's
estimated future minimum lease payments under the terms of the leases
are as follows:
Dollars in thousands:
Fiscal year ending September 30: 2008;
Total: $2,755.
Fiscal year ending September 30: 2009;
Total: $1,361.
Fiscal year ending September 30: 2010;
Total: $776.
Fiscal year ending September 30: 2011;
Total: $186.
Fiscal year ending September 30: 2012;
Total: $2.
Fiscal year ending September 30: Total estimated future lease payments;
Total: $5,080.
Fiscal year ending September 30: Less: imputed interest;
Total: ($538).
Fiscal year ending September 30: Net capital lease liability;
Total: $4,542.
[End of Table]
Operating Leases:
GAO leases office space, predominately for field offices, from the
General Services Administration and has entered into various other
operating leases for office communication and computer equipment. Lease
costs for office space and equipment for fiscal year 2007 and fiscal
year 2006 amounted to approximately $13,629,000 and $11,477,000,
respectively. Leases for equipment under operating leases are generally
less than 1 year, therefore there are no associated future minimum
lease payments. Estimated future minimum lease payments for field
office space under the terms of the leases are as follows:
Dollars in thousands:
Fiscal year ending September 30: 2008;
Total: $6,073.
Fiscal year ending September 30: 2009;
Total: $3,818.
Fiscal year ending September 30: 2010;
Total: $3,819.
Fiscal year ending September 30: 2011;
Total: $3,176.
Fiscal year ending September 30: 2012;
Total: $2,916.
Fiscal year ending September 30: 2013 and thereafter;
Total: $4,787.
Fiscal year ending September 30: Total estimated future lease payments;
Total: $24,589.
[End of Table]
Leased property and equipment must be capitalized if certain criteria
are met (see Capital Leases description). Because property and
equipment covered under GAO's operating leases do not satisfy these
criteria, GAO's operating leases are not reflected on the Balance
Sheet. However, annual lease costs under the operating leases are
included as components of net cost by goal in the Statement of Net
Cost.
[End of Note 9]
Note 10. Net Cost of Operations:
Expenses for salaries and related benefits for fiscal year 2007 and
fiscal year 2006 amounted to $402,772,000 and $405,199,000,
respectively, which were about 81 percent of GAO's annual net cost of
operations in fiscal year 2007 and 79 percent in fiscal year 2006.
Included in the net cost of operations are federal employee benefit
costs paid by OPM and imputed to GAO of $24,746,000 in fiscal year 2007
and $25,124,000 in fiscal year 2006.
Revenues from reimbursable services are shown as an offset against the
full cost of the goal to arrive at its net cost. Earned revenues that
are insignificant or cannot be associated with a major goal are shown
in total, the largest component of which is rental revenue from the
lease of space in the GAO building. Revenues from reimbursable services
for fiscal year 2007 and fiscal year 2006 amounted to $8,121,000 and
$8,705,000, respectively. Further details of the intragovernmental
components are provided in Note 2.
The net cost of operations represents GAO's operating costs that must
be funded by financing sources other than revenues earned from
reimbursable services. These financing sources are presented in the
Statement of Changes in Net Position.
[End of Note 10]
Note 11. Budgetary Resources:
Budgetary resources made available to GAO include current
appropriations, spending authority from budget transfers, prior years'
unobligated appropriations, and reimbursements arising from both
revenues earned by GAO from providing goods and services to other
federal entities for a price (reimbursable services) and cost-sharing
and pass-through contract arrangements with other federal entities.
Reimbursements from cost-sharing and pass-through contract arrangements
consisted primarily of collections from other federal entities 1) for
the support of Federal Accounting Standards Advisory Board and 2) to
utilize GAO contracts to obtain services. The costs and reimbursements
for these activities are not included in the Statement of Net Cost.
For fiscal year 2006, budget transfer consisted of budget authority
transferred from USAID for the analysis of U.S.-funded international
basics education programs. There were no transfers of budgetary
authority for fiscal year 2007.
Comparison of GAO's fiscal year 2006 Statement of Budgetary Resources
with the corresponding information presented in the 2008 President's
Budget is as follows:
Dollars in thousands:
Fiscal year 2006 Statement of Budgetary Resources;
Budgetary Resources: $497,228;
Obligations Incurred: $488,547.
Expired unobligated balances;
Budgetary Resources: ($5,489);
Obligations Incurred: -.
Unobligated balances apportioned for future periods;
Budgetary Resources: ($1,627);
Obligations Incurred: -.
Rounding differences;
Budgetary Resources: ($112);
Obligations Incurred: ($547).
2008 President's Budget;
Budgetary Resources: $490,000;
Obligations Incurred: $488,000.
[End of Table]
As the fiscal year 2009 President's Budget will not be published until
February 2008, a comparison between the fiscal year 2007 data reflected
on the Statement of Budgetary Resources and fiscal year 2007 data in
the President's Budget cannot be performed, though we expect similar
differences will exist. The fiscal year 2009 President's Budget will be
available on OMB's Web site and directly from the Government Printing
Office.
Budgetary resources obligated for undelivered orders at the end of
fiscal years 2007 and 2006 totaled $20,550,000 and $17,459,000,
respectively. GAO's apportionments fall under Category A, quarterly
apportionment. Apportionment categories of obligations incurred for
fiscal years 2007 and 2006 are as follows:
Dollars in thousands:
Fiscal year ending September 30: Direct-Category A;
2007: $480,731;
2006: $479,842.
Fiscal year ending September 30: Reimbursable-Category A;
2007: $8,121;
2006: $8,705.
Fiscal year ending September 30: Total obligations incurred;
2007: $488,852;
2006: $488,547.
[End of Table]
[End of Note 11]
Note 12. Reconciliation of Net Costs of Operations to Budget:
In fiscal year 2006 this reconciliation was presented as a fifth
statement, the statement of financing. In accordance with OMB Circular
A-136, revised June 2007, presentation requirement for this information
is now a footnote disclosure. Details of the relationship between
budgetary resources obligated and the net costs of operations for the
fiscal years ending September 30 are as follows:
Dollars in thousands:
Fiscal year ending September 30: Resources Used to Finance Activities:
Budgetary Resources Obligated: Obligation incurred;
2007: $488,852;
2006: $488,547.
Fiscal year ending September 30: Resources Used to Finance Activities:
Budgetary Resources Obligated: Less: Reimbursable services;
2007: ($8,121);
2006: ($8,705).
Fiscal year ending September 30: Resources Used to Finance Activities:
Budgetary Resources Obligated: Cost Sharing and pass-through contract
reimbursements;
2007: ($2,577);
2006: ($2,225).
Fiscal year ending September 30: Resources Used to Finance Activities:
Budgetary Resources Obligated: Net Obligations;
2007: $478,154;
2006: $477,617.
Fiscal year ending September 30: Resources Used to Finance Activities:
Non-budgetary Resources: Intragovernmental transfer of property and
equipment;
2007: ($27);
2006: ($61).
Fiscal year ending September 30: Resources Used to Finance Activities:
Non-budgetary Resources: Federal Employee retirement benefit costs paid
by OPM imputed to GAO;
2007: $24,746;
2006: $25,124.
Fiscal year ending September 30: Resources Used to Finance Activities:
Non-budgetary Resources: Net non-budgetary resources used to finance
activities;
2007: $24,719;
2006: $25,063.
Fiscal year ending September 30: Resources Used to Finance Activities:
Non-budgetary Resources: Total resources used to finance activities;
2007: $502,873;
2006: $502,680.
Fiscal year ending September 30: Resources used that do not fund Net
Cost of Operations: Net increase in unliquidated obligations;
2007: ($3,091);
2006: ($1,536).
Fiscal year ending September 30: Resources used that do not fund Net
Cost of Operations: Assets capitalized;
2007: ($14,631);
2006: ($8,939).
Fiscal year ending September 30: Resources used that do not fund Net
Cost of Operations: Total resources that do not fund Net Cost of
Operations;
2007: ($17,722);
2006: ($10,475).
Fiscal year ending September 30: Resources used that do not fund Net
Cost of Operations: Total resources used to finance Net Cost of
Operations;
2007: $485,151;
2006: $492,205.
Fiscal year ending September 30: Components of Net Costs that Require
Resources in Future Periods: Increase in workers' compensation;
2007: $485;
2006: $5,770.
Fiscal year ending September 30: Components of Net Costs that Require
Resources in Future Periods: (Decrease)/Increase in accrued annual
leave;
2007: ($340);
2006: $119.
Fiscal year ending September 30: Components of Net Costs that Require
Resources in Future Periods: Increase/(Decrease) in other liabilities;
2007: $101;
2006: ($125).
Fiscal year ending September 30: Components of Net Costs that Require
Resources in Future Periods: Total Components of Net Cost that Require
budgetary resources in future periods;
2007: $246;
2006: $5,764.
Fiscal year ending September 30: Costs that do not Require Resources:
Depreciation;
2007: $14,309;
2006: $13,510.
Fiscal year ending September 30: Net Cost of Operations;
2007: $499,706;
2006: $511,479.
[End of Table]
[End of Note 12]
Note 13. Net Position:
Net position on the Balance Sheets comprises unexpended appropriations
and cumulative results of operations. Unexpended appropriations is the
sum of the total unobligated appropriations and undelivered goods and
services. Cumulative results of operations represent the excess of
financing sources over expenses since inception. Details of the
components of GAO's cumulative results of operations for the years
ended September 30, 2007 and 2006, are as follows:
Dollars in thousands:
Investment in property and equipment, net;
2007: $41,566;
2006: $40,293.
Other-supplies inventory;
2007: $219;
2006: $216.
Liabilities not covered by budgetary resources;
2007: ($59,738);
2006: ($58,400).
Cumulative results of operations;
2006: ($17,953);
2005: ($17,891).
[End of Table]
Liabilities not covered by budgetary resources are liabilities for
which congressional action is needed before budgetary resources can be
provided. See Note 5 for components.
[End of Note 13]
Note 14. Davis-Bacon Act Trust Function:
GAO is responsible for administering for the federal government the
trust function of the Davis-Bacon Act receipts and payments and
publishes separate, audited financial statements for this fund. GAO
maintains this fund to pay claims relating to violations of the Davis-
Bacon Act and Contract Work Hours and Safety Standards Act. Under these
acts, Labor investigates violation allegations to determine if federal
contractors owe additional wages to covered employees. If Labor
concludes that a violation has occurred, GAO collects the amount owed
from the contracting federal agency, deposits the funds into an account
with the U.S. Treasury, and remits payment to the employee. GAO is
accountable to the Congress and to the public for the proper
administration of the assets held in the trust. Trust assets under
GAO's administration as of September 30, 2007 and 2006, totaled
approximately $4,151,000 and $4,485,000, respectively. These assets are
not the assets of GAO nor the federal government and are held for
distribution to appropriate claimants. During fiscal years 2007 and
2006, receipts in the trust amounted to $373,000 and $774,000 and
disbursements amounted to $708,000 and $954,000, respectively. Because
the trust assets and related liabilities are not assets and liabilities
of GAO, they are not included in the accompanying financial statements.
[End of Note 14]
[End of Notes to Financial Statements]
[End of Part III]
Part IV: From the Inspector General:
From the Inspector General:
Memorandum:
Date: October 26, 2007:
From: Inspector General - Francis Gardia [Signature]
Subject: GAO Management Challenges and Performance Measures:
We have examined management's assessment of the management challenges.
Based on our work and institutional knowledge, we agree that physical
security, information security, and human capital continue to be
management challenges that may affect GAO's performance. We also agree
with management's assessment of progress made in addressing these
challenges.
During fiscal year 2007, we reviewed all accomplishment reports of $500
million or more, which totaled 74 percent of the total dollar value
reported. Based on our reviews, we believe that GAO had a reasonable
basis for claiming these benefits. In addition, we assessed GAO's
fiscal year 2006 performance measures for how well its internal
administrative services help employees get their jobs done and improve
the quality of their work life. Overall, we found that these measures
were reasonable and that methods used to measure performance were
appropriate, but we also made recommendations to help improve their
objectivity and reliability.
[End of letter from the Inspector General]
[End of Part IV]
Part V: Appendixes:
1. Accomplishments and Contributions:
In pursuing our strategic goals during fiscal year 2007, we recorded
hundreds of accomplishments and made numerous other contributions. This
appendix provides details on the most significant of these. In
reporting financial benefits, nonfinancial benefits, and contributions
(designated by an F, N, or C in the item number below), we are holding
ourselves accountable for the resources we received to implement our
strategic plan.
Typically, the accomplishments describe work we completed in prior
fiscal years because it takes time to implement recommendations,
realize benefits, and record them. The other contributions, which often
refer to work completed in fiscal year 2007, describe instances in
which we provided information or recommendations that aided
congressional decision making or informed the public debate to a
significant degree. At the end of each accomplishment and contribution
summary, we list the reference numbers for products associated with the
work discussed. In the online PDF version of this document, readers can
link directly to these products if they want additional information.
Strategic Goal 1:
Provide timely, quality service to the Congress and the federal
government to address current and emerging challenges to the well-being
and financial security of the American people.
The health needs of an aging and diverse population:
1.01.F. Avoiding an Increase in Medicare Payment for Skilled Nursing
Facilities (SNF): In 2000, the Congress increased the nursing portion
of Medicare's daily rate for SNFs by 16.66 percent for 2 years, and
also directed us to assess the impact of the increase on nursing staff
ratios and recommend whether it should continue. Our analysis of
available data showed that, in aggregate, SNFs' nurse staffing ratios
changed little after the payment increase took effect. We suggested in
November 2002 that the Congress consider our finding that the payment
increase was not effective in raising nurse staffing when determining
whether the increase should continue. Our work influenced the Congress
in its 2003 decision not to include an increase in subsequent
legislation, despite strong opposition from the nursing facility
industry. In 2007, Medicare reduced its costs by an estimated $1
billion by avoiding this increase in the SNF payment rate. (GAO-03-
176):
1.02.F. Avoiding Making a Permanent Add-on to Medicare Payment for
SNFs: The Congress required the Centers for Medicare & Medicaid
Services (CMS) to temporarily raise Medicare payment rates for SNFs by
4 percent from October 1, 2000, through September 30, 2002. Prior to
and after the expiration of this add-on, provider representatives
argued that it should be made permanent, citing payment shortfalls from
other payers. However, our 2002 report on payment adequacy found that
most freestanding SNFs had payments that exceeded their costs of caring
for Medicare beneficiaries, leaving them with a Medicare margin of
almost 19 percent in 2000. Our work contributed to the congressional
decision in 2003 not to make the 4 percent payment increase permanent.
This allowed Medicare to reduce its costs by an estimated $600 million
in 2007. (GAO-03-183):
1.03.F. Limiting States Claiming of Medicaid Matching Funds for
Targeted Case Management: In 2005, we reported that there were risks
associated with Medicaid's provision of targeted case management--a
service to help beneficiaries gain access to needed medical, social,
educational, and other services. We highlighted instances where states
were using targeted case management services to inappropriately
increase federal reimbursement by claiming services that should not be
paid by Medicaid funds and made a recommendation to establish and
clarify federal policy on payment for these services. Based in part on
information we provided, the Deficit Reduction Act of 2005 clarified
the definition of targeted case management services and specified when
federal funding could be used for them. Based on a Congressional Budget
Office (CBO) estimate, these provisions will result in financial
benefits of $768.6 million in the first 5 years of implementation. (GAO-
05-748, GAO-05- 836T):
1.04.C. Identifying Options for Changes in Medicare Physician Payment
Methods: Since 2002, we have conducted a substantial body of work to
identify options for the Congress to consider in improving Medicare's
fee-for- service physician payment system. Some of our work has focused
on technical issues, such as adjusting payments for geographic
variations in the cost of running a medical practice and the amounts
paid for specific types of care, such as therapy and imaging services.
We have also focused more broadly on Medicare's system of updating
payments for physician services and on Medicare beneficiary access to,
and utilization of, such services. Most recently, our report and
testimonies on profiling physician practices to improve the efficiency
of Medicare have received considerable attention by the Congress and
may become a part of legislated changes currently being debated by the
committees with jurisdiction over Medicare. (GAO-07-862T, GAO-07-307,
GAO-06-1008T, GAO-05-119, GAO-05-326T):
1.05.C. Assisting the Congress with Information to Reauthorize the Food
and Drug Administration (FDA) Legislation: We conducted a body of work,
including reports and testimonies, that assisted the Congress in
developing a bill to reauthorize industry user fees for FDA and reform
many FDA activities. For example, our reports identified deficiencies
in FDA's oversight of marketed drugs and in FDA's monitoring of direct-
to- consumer advertising of prescription drugs, discussed barriers to
the development of new drugs, reported that the Best Pharmaceuticals
for Children Act has led to improved labeling for pediatric drugs, and
found that there are barriers to the use of accredited organizations
outside of FDA to conduct inspections of medical device manufacturing
facilities. The Food and Drug Administration Amendments Act of 2007
(Pub. L. No. 110-85), which became law on September 27, 2007, addresses
many of the concerns we raised. For example, the law gives FDA the
authority to require pharmaceutical firms to conduct studies of their
marketed drugs when FDA identifies the need for information about a
possible safety issue. The law also directs that funds from user fees
be used to improve the monitoring of drug advertisements, requires
establishment of a foundation to help modernize the development of new
drugs, and reauthorizes the act. (GAO-06-402, GAO-07-54, GAO-07-49, GAO-
07-157, GAO-07-557):
1.06.C. Improving Care for Veterans Transitioning from Military
Service: We rapidly responded to congressional concerns about
unsanitary living conditions at Walter Reed Medical Center by
testifying twice on a body of work showing that servicemembers injured
in combat face an array of significant medical and financial challenges
as they begin their recovery process in the Departments of Defense's
(DOD) and Veterans Affairs' (VA) care systems. For example, we
identified DOD's and VA's inability to electronically share medical
records for severely injured servicemembers--those with traumatic brain
injuries or other complex trauma, such as missing limbs--that were
transferred from DOD to one of four VA polytrauma facilities. We found
during visits to polytrauma facilities in 2005 that none of the
facilities had real-time access to the injured servicemembers' DOD
electronic medical records, which is needed to determine whether
servicemembers are medically stable enough to participate in vigorous
rehabilitation activities. Subsequent to that report, in May 2007, VA
reported that three of the four polytrauma facilities now have access
to DOD's electronic medical records. Our January 2005 report found that
servicemembers whose disabilities are definitely or likely to result in
military separation may not be able to benefit from early intervention
for rehabilitation by VA health care because DOD and VA sometimes
worked at cross purposes. For example, DOD was concerned that VA's
outreach to provide early intervention rehabilitation services to
wounded servicemembers who had not yet been discharged conflicted with
the military's retention goals. Finally, we reported in May 2006 that
despite DOD's efforts, it cannot provide reasonable assurance that
servicemembers who need referrals for mental health examinations
receive them. (GAO-07-589T, GAO-07-606T, GAO-06- 794R, GAO-05-167, GAO-
06-397):
1.07.C. Enrolling Dual Eligible Beneficiaries in Medicare Prescription
Drug Plans: In a series of reports and testimonies, we identified
shortcomings in CMS's process and policy for enrolling dual-eligible
beneficiaries before and since the implementation of the Medicare drug
benefit on January 1, 2006. Our 2005 report cautioned that potential
problems may leave some dual- eligible beneficiaries facing
difficulties in immediately obtaining necessary drugs. We noted that
some individuals may not be identified for automatic enrollment in a
drug plan due to potential inaccuracies in state or federal data, and
that beneficiaries' prescription drugs may not be on their assigned
drug plan's formulary. We alerted CMS that its contingency plans to
address potential transition problems may not be effective. In our 2007
report, we reported that CMS's enrollment procedures and implementation
of its Part D coverage policy generate challenges for some dual-
eligible beneficiaries, pharmacies, and the Medicare program. Medicare
pays drug plans to provide these beneficiaries with several months of
retroactive coverage, but until March 2007, CMS did not inform
beneficiaries of their right to be reimbursed for drug costs incurred
during these periods. We estimated that Medicare paid plans millions of
dollars in 2006 for coverage during periods for which dual-eligible
beneficiaries may not have sought reimbursement for their drug costs.
In response to our recommendation, CMS has added language to enrollment
notices indicating that beneficiaries may be eligible for reimbursement
of some drug costs. (GAO-07-272, GAO-07-1022T, GAO-07-824T, GAO-06-
278R):
1.08.C. Reauthorizing the State Children's Health Insurance Program
(SCHIP): In November and December of 2006, we conducted discussions
with staff members of the Senate Committee on Finance regarding the
reauthorization of SCHIP. In particular, the committee was interested
in having us conduct a review of SCHIP over its 10-year period and
testify on issues facing the Congress as it considers reauthorization.
We delivered testimony before the Senate Committee on Finance and then
subsequently before the Subcommittee on Health, Committee on Energy and
Commerce. Our testimony focused on the growth in enrollment and program
spending, the current design of states' programs, and issues identified
for consideration during SCHIP reauthorization. Both testimonies helped
set the stage for the reauthorization debate and raised key issues that
required resolution among Members of the Congress. In particular, our
work on adult coverage, states' eligibility levels for children, and
spending trends raised issues that were important to provide an
informed basis for the debate and final SCHIP legislation. (GAO-07-
447T, GAO-07-501T, GAO-07-558T):
Lifelong learning to enhance U.S. competitiveness:
1.09.N. Enhancing Oversight of Head Start Grantees: We found weaknesses
in the Program Review Instrument for Systems Monitoring (PRISM) system
for assessing Head Start grantees, which is administered by the
Department of Health and Human Services' Administration for Children
and Families (ACF). ACF had no process in place to ensure that its
reviewers consistently followed on-site review standards, so we
recommended that it develop a way to assess the results of PRISM
reviews and ensure consistent treatment of grantees with similar
problems. ACF corroborated our findings and implemented a standardized
set of performance indicators and a uniform review protocol. Although
ACF began training staff for PRISM reviews, we found that it was
unclear whether training on the PRISM process alone would adequately
equip reviewers to assess the management of Head Start grantees and
recommended that ACF ensure that training and certification is provided
for all PRISM reviewers. ACF subsequently offered additional training
for its PRISM reviewers and implemented a certification process to
verify credentials and ensure the quality of reviewers. Finally, we
identified concerns with the independence and credibility of PRISM
review team leaders who reviewed grantees within their home regions.
ACF changed its process to ensure that leaders only review grantees
outside of their home regions. (GAO-06-167):
1.10.N. Improving Services to Students with Limited English
Proficiency: In a review of services for students with limited English
proficiency (LEP), we found that state academic assessments may not
produce valid and reliable results for these students and that some
states may need more technical assistance to develop valid tests for
them. We recommended that the Department of Education (Education)
determine what additional technical assistance states need to assess
the academic knowledge of LEP students in a valid manner and provide
the identified additional assistance. We also determined that while
most states offer some accommodations to LEP students to improve
assessment results in elementary and secondary grades, there was a lack
of research on what specific accommodations are appropriate for LEP
students and their effectiveness in improving the validity of
assessment results. We recommended that the agency support additional
research in this area and disseminate the results to states. Addressing
these concerns, Education announced an LEP Partnership initiative to
provide technical assistance to help states develop more valid and
reliable assessments for these students. The agency and the partnership
launched several technical assistance projects, such as developing
guides for simplified assessments and conducting translations of them.
They are also preparing a handbook on appropriate accommodations for
LEP students. In addition, an Education-funded study on accommodations
for LEP students was published in October 2006, which is available as a
resource on Education's Web site. (GAO-06-815):
1.11.N. Increasing Supplemental Education Services to Students: The No
Child Left Behind Act requires districts with Title I-funded schools
that have not met state performance goals for 3 consecutive years to
offer their low-income students supplemental educational services, such
as tutoring. States and districts share responsibility for providing
these services through a state-approved provider. In August 2006, we
reported that states and districts sought the flexibility to use
Education's pilot program that allowed districts in need of improvement
to act as providers of these services. Having districts serve as
providers could increase access to students in rural districts and
increase participation by lowering costs. We recommended that Education
consider expanding this pilot. After we provided our findings and
recommendations to Education, the agency announced the expansion of the
pilot to include additional districts and the continuation of the pilot
for other districts. As a result, more students are likely to receive
supplemental education services. (GAO-06-758):
Benefits and protections for workers, families, and children:
1.12.F. Denying Benefits to Fugitive Felons: We determined the scope of
the Social Security Administration's (SSA) authority to deny benefits
to fugitive felons and to release information about Old Age and
Survivors Insurance (OASI) and Disability Insurance (DI) beneficiaries
who are fugitive felons. Although fugitive felons are ineligible for
Supplemental Security Income (SSI) benefits, it was not clear whether
SSA also had the authority to deny other benefits. SSA will, upon
request, provide law enforcement agencies with the current addresses
and Social Security numbers (SSN) of fugitive felons who are SSI
recipients. We concluded that SSA did not have the authority to deny
OASI and DI benefits to fugitive felons and that the Congress would
have to amend Title II of the Social Security Act to explicitly
disqualify fugitive felons from receiving these benefits. In the Social
Security Protection Act of 2004 (Public Law 108-203), the Congress
subsequently amended the Social Security Act to deny these benefits to
fugitive felons. Payment of these benefits was prohibited as of January
1, 2005, resulting in a savings over the fiscal year 2005-2007 period
of over $180 million. (GAO-02-459R):
1.13.N. Meeting the Needs of Reserves and National Guard Members: We
found that members of the Reserves and National Guard returning from
active duty got less help with transitioning to new jobs than other
separating military personnel due to the time constraints of
demobilization. Though many reservists and guard members have jobs
before they leave for active duty, their employers may not hold their
jobs for them until they return as regulated by law or their companies
may have gone out of business or into bankruptcy in their absence.
Moreover, other reservists and guard members who are self-employed or
desire better jobs when they return to civilian life may also need job
assistance. We recommended that the DOD work with its partners to
explore options to enhance their participation in the transition
assistance program (TAP). DOD reported to the Congress in May 2006 that
it would address these issues. In 2007, DOD launched a new Web site,
accessible even after demobilization, that provides information covered
by TAP and allows members to create individualized plans that are
accessible for their lifetimes, translate their military skills into
civilian language, develop r�sum�s, and conduct job searches in their
local areas. In addition, we found that VA had no data on the
participation of separating military personnel in its disabled
transition assistance program and TAP briefings and no data on the
number and location of the program sessions it provided. After we
recommended that VA develop a tracking system, VA implemented a new
reporting system to provide such data, including participation by
military service and by status as full-time active duty personnel or by
Reserves or National Guard members on active duty. (GAO-05-544):
1.14.N. Improving Disability Programs: Our many reports and testimonies
on disability programs had a significant impact on congressional policy
making, helped frame the current debate surrounding disability services
and benefits for veterans and injured servicemembers, and prompted
agencies to take action. In the Congress, members relied on our many VA
testimonies, citing our recommendations for improving VA and DOD
disability systems in support of future appropriations and proposed
legislation. We briefed congressional committees and participated in a
national roundtable on disability issues, including VA's inability to
process veterans' claims for disability benefits in a timely, accurate,
and consistent manner. The President's Commission on Care for America's
Returning Wounded Warriors took our briefing and recommendations into
account when developing its own plan for improving DOD and VA
disability systems. In addition, in response to our recommendations,
SSA improved its disability review and evaluation processes and took
steps to enhance the cost-effectiveness and integrity of continuing
disability reviews. Finally, we convened a Comptroller General's forum
to address some of the key issues related to modernizing federal
disability policy. Forum participants, including federal officials,
researchers, employers, and advocate groups, suggested a number of
steps that could be taken by stakeholders to inform the debate and to
help move current policy toward achieving a 21st century disability
policy. (GAO-07-906R, GAO-07-98, GAO-07-562T, GAO-07-934SP, GAO-07-
512T):
1.15.N. Establishing a Child Locator Center for Disasters: After
hurricanes Katrina and Rita, we found that the National Center for
Missing and Exploited Children (NCMEC) faced problems getting access to
American Red Cross and Federal Emergency Management Agency (FEMA) data
because of these organizations' concerns about privacy. We determined
that agreements for data sharing between NCMEC and the American Red
Cross and FEMA can help locate missing persons more quickly in
disasters. We expressed our concerns and as a result legislation was
introduced and later enacted in 2006 as part of the Department of
Homeland Security Appropriations Act of 2007 (Pub. L. No. 109-295).
This legislation provides for a National Emergency Child Locator Center
to be established within NCMEC. According to the act, the FEMA
Administrator will establish procedures to make all relevant
information available to the center in a timely manner to facilitate
the expeditious identification and reunification of children with their
families. The law also requires that the center enter into cooperative
agreements with federal and state agencies and organizations, such as
the American Red Cross, to implement its mission. (GAO-06-680R):
Financial security for an aging population:
1.16.F. Reforming the Pension System: Our reports and testimonies on
pension reform had an impact on pension reform legislation and saved
billions of dollars. We recommended that the Congress consider pension
reform as a way to improve the financial viability of the Pension
Benefit Guaranty Corporation's (PBGC) single-employer program--a
program that we designated as high risk in 2003. Specifically, we
suggested that PBGC's premium structure should be reexamined to see
whether premiums could better reflect the risk posed by various plans
to the pension system. We also suggested increasing the flat-rate
premium--the per-participant premium paid by sponsors of PBGC-insured
plans--and restructuring the variable rate premium--the premium paid by
sponsors of certain underfunded plans. The Deficit Reduction Act,
enacted in 2006 (Pub. L. No. 109-171), included provisions to increase
the flat-rate premium and index it to wage growth starting in 2007. CBO
estimated that this would increase premium payments by $5.8 billion
from 2006 to 2015. The Pension Protection Act of 2006 (PPA) (Pub. L.
No. 109-280) changed the variable rate premium structure so that PBGC's
variable rate premiums are now paid on 100 percent of a plan's
underfunding. Previously, certain plans that were 90 percent funded
could be exempted from variable rate premiums. PPA also changed the
variable rate premium for small employers with plan underfunding. The
combined effects of these variable rate premium changes, as estimated
by CBO, will increase PBGC's premium collections by $5 billion over the
2007-2016 period. We estimate that the federal government will realize
a financial benefit of $756 million for fiscal years 2006 and 2007 as a
result of our work on these two pension reform laws. (GAO-07-794T, GAO-
06-429, GAO-05-578SP, GAO-05-360T, GAO-04-90):
1.17.N. Enhancing the Security of the Thrift Savings Plan (TSP)
WebSite: During a review of customer service provided by TSP, including
service provided through its Web site, we identified a lack of key
security features typically used by financial services firms. For
example, the Web site included the use of SSNs as account numbers, four-
character numeric personal identification numbers (PIN), and no lock-
out feature to lock participants' accounts after a certain number of
unsuccessful login attempts. After we reported this to TSP officials, a
lock-out feature was added, a longer alphanumeric PIN was implemented,
and TSP switched to non-SSN-based user names. SSNs are no longer used
on the TSP Web site. (GAO-05-38):
1.18.N. Improving Disclosure of Pension Plan Information to Plan
Participants: Our reports and testimonies on pensions identified ways
to improve the transparency of pension plan information. We recommended
requiring that all plan participants receive information about plan
investments and the minimum benefit amount that PBGC guarantees, if
their plans are terminated. We also recommended that the Congress
consider proposals to restructure program guarantees for shutdown
benefits. PPA (Pub. L. No. 109-280) addressed these concerns. It
provides for qualified advisers to offer investment advice to
participants in defined contribution plans and added new disclosure
requirements. For instance, the act expanded the annual funding notice
requirement to include multiemployer plans, not just single-employer
plans, and required single-employer plans to include a summary of the
PBGC rules governing plan termination. More plan information must be
provided by both multiemployer and single-employer plans, such as
information on the plan's funding and asset allocation policy, any plan
amendment, and how to obtain a copy of the plan's annual report. The
act speeds up the time when notices must be provided. It limits the
ability of certain plans to make lump-sum payments or to increase
benefits, requires certain plans to freeze normal benefit increases,
and prohibits plans from paying benefits for unpredictable contingent
events, such as shutdown benefits to workers in facilities that are
closed. Further, shutdown benefits must now be treated like other plan
amendments with phase-in 5 years before termination. (GAO-06-285, GAO-
04-90):
A responsive, fair, and effective system of justice:
1.19.N. Addressing Federal Law Enforcement Coordination and Management:
In 2007 we reported on several federal law enforcement coordination and
management issues. We reported that the Departments of Homeland
Security, Justice, Commerce, and State were not effectively
coordinating with each other to enforce export control laws and
regulations. In response to our recommendation, the Department of
Justice (Justice) began providing the Departments of Commerce
(Commerce) and State (State) quarterly reports on the outcomes of
criminal cases for export control violations. We also reported that to
combat human trafficking crimes, the Department of Homeland Security
(DHS) and Justice needed to expand collaboration and develop and
implement a strategic framework to coordinate efforts to investigate
and prosecute these crimes. In addition, in response to our
recommendations regarding management concerns, the Director of the
Federal Bureau of Investigation (FBI) announced the creation of the
Associate Deputy Director position to oversee key management functions,
which is comparable to the Chief Operating Officer/Chief Management
Officer position we recommended in 2002, and began addressing strategic
human capital needs for managing the FBI's information technology
programs, particularly the FBI's Sentinel intelligence analysis and
investigative support modernization program. (GAO-07-19, GAO-07-265,
GAO-07-915):
1.20.N. Addressing Federal Law Enforcement Training Needs: In 2007, we
reported the results of our surveys of 105 federal civilian law
enforcement agencies on their specific authorities to carry out certain
functions and on their mandatory basic training programs; 81 agencies
reported using the Federal Law Enforcement Training Center. We had
reported in 2003 that the center faced an increasing demand for its
facilities in the post-9/11 security environment and recommended it
address capacity constraints and planning challenges. By 2007 the
center had developed contingency planning, an approach for estimating
future construction needs, and an automated scheduling system. (GAO-07-
121, GAO-07-815):
The promotion of viable communities:
1.21.C. Improving the Small Business Administration's (SBA) Capacity to
Provide Timely Disaster Assistance: In a February 2007 report, we found
that SBA engaged in limited disaster planning prior to the Gulf Coast
hurricanes, such as Hurricane Katrina, which likely contributed to the
initial challenges that the agency faced in processing the related
surge in disaster loan applications on a timely basis. We recommended
that SBA take several steps to enhance its disaster planning process,
such as assessing whether the use of disaster simulations or
catastrophe models would enhance its disaster planning process. We also
recommended that SBA establish time frames for completing key elements
of its disaster plan, such as cross training agency staff not typically
involved in disaster relief efforts to provide backup support and a
long-term strategy for acquiring adequate office space in case of an
emergency. SBA agreed to implement these recommendations, which should
enhance the agency's capacity to provide critical disaster assistance
on a timely basis in a future disaster. (GAO-07-114):
1.22.C. Evaluating the Role and Modernization of the Federal Housing
Administration(FHA): In two June 2007 reports and a series of
testimonies, we examined trends in the use of FHA-insured mortgages,
FHA's risk management, and the implications of a legislative proposal
to overhaul the agency's products and processes. Our analysis showed
that FHA's share of the market for home purchase mortgages dropped
sharply from 1996 through 2005, most significantly among minority
borrowers who accounted for a growing share of subprime loans in that
period. While noting that FHA could be a vehicle to provide lower-cost
and more sustainable mortgage options to some subprime borrowers, we
also emphasized the need for continued improvements in risk management
to ensure that FHA operates in a financially sound manner in the face
of potential program changes. Additionally, we analyzed how the
proposed changes could affect the demand for FHA-insured loans, the
cost and availability of insurance to borrowers, and the budgetary
costs of the insurance program. Our reports and testimonies informed
congressional debate on the benefits and risks of FHA modernization
legislation under consideration by this Congress. (GAO-07-645, GAO-07-
708, GAO-07-1109T, GAO-07-1033T, GAO-07-615T):
1.23.C. Improving the Preservation of Affordable Housing: In light of
the pressing need for rental housing affordable to low-income
households and concerns that the Department of Housing and Urban
Development (HUD) may not be committed to maintaining its housing
stock, in April 2007 we recommended that HUD modify its one-for-one
replacement policy for project-based Section 8 units and address
property owners' concerns about operating cost reimbursements in high-
cost areas. We found that although the majority of owners leave the
program for economic or market reasons, growing owner frustration could
upset the balance, causing more owners to consider opting out even when
economic conditions could be overcome or mitigated. HUD generally
agreed with our recommendations and stated that it would be considering
a more flexible policy to better accommodate market demand and would be
working with the industry to improve its preservation efforts. In
addition, the 2008 House Appropriations Committee Report stated that it
encouraged HUD to implement the reforms we suggested and that the
committee was looking forward to discussing the reforms with HUD. (GAO-
07-290):
1.24.C. Assessing the Housing Needs of Low-Income Veterans: Through a
first- ever analysis of combined data from the U.S. Census Bureau, VA,
and HUD, we provided comprehensive data on low-income military veterans
who rent. Our analysis showed that over half of veteran renter
households, representing an estimated 2.3 million such households, were
low income in 2005 (their household incomes were 80 percent or less of
their areas' median household incomes). Further, an estimated 1.3
million of these low-income veteran households had housing
affordability problems--that is, their rental costs exceeded 30 percent
of their incomes--but only a small percentage lived in overcrowded or
inadequate housing. By some measures better off than their nonveteran
counterparts, veteran low-income households were less likely to receive
HUD rental assistance. Factors potentially contributing to this low
level of assistance included differences in the extent of housing needs
among veteran and other households and preferences that are used by
public housing authorities and property owners that administer the
programs. Our work provided important data to inform debate on proposed
legislation to provide additional rental housing benefits to veterans.
(GAO-07-1012):
Responsible stewardship of natural resources and the environment:
1.25.F. Reducing Food Stamp Fraud and Abuse: Since 1994, we repeatedly
reported and testified on reducing fraud and abuse in the Department of
Agriculture's (USDA) Food Stamp Program by reducing the trafficking of
benefits. In our 1994 and 1995 reports, we found that USDA's reliance
on paper coupons to provide food stamp benefits had resulted in fraud
and abuse through trafficking, counterfeiting, and mail theft. To
reduce this fraud and abuse, we supported the use of electronic benefit
transfer (EBT) systems to replace the coupon-based system that states
were using. EBT cards require users to enter PINs to authorize
transactions. This makes it more difficult to traffic in food stamp
coupons and provides a wealth of electronic data that helps USDA's Food
and Nutrition Service detect suspicious patterns of transactions by
users and retailers. In response, the Congress passed legislation that
required that each state implement EBT for the Food Stamp Program's by
October 1, 2002, unless the Secretary of Agriculture granted a waiver.
USDA reported in December 2006 that the Food Stamp Program' integrity
had substantially improved, estimating that trafficking had diverted
only about $241 million per year from 2002 to 2005--or about 1 cent of
each food stamp dollar--compared with an estimated $660 million per
year--or about 3-1/2 cents of each food stamp dollar--diverted from
1996 to 1998. USDA found that the decline in Food Stamp trafficking
corresponded with the increased use of EBT. This will result in an
estimated $3.4 billion in cumulative financial benefits from fiscal
years 2005 to 2009. Also, in fiscal year 2007 we recommended that USDA
use its electronic data to perform risk assessments of retailers most
likely to traffic in food stamp benefits and develop a strategy to
increase penalties for this offense. USDA responded by proposing new
penalties and expedited processes. (GAO-07-422T, GAO-07-53, GAO-02-
332, GAO/RCED-00-61, GAO/OGC-95-1, GAO/T-RCED-94-125):
1.26.N. Restoring the Chesapeake Bay: In response to concerns about the
deterioration of the Chesapeake Bay, the nation's largest estuary, in
1983 the Congress established the Chesapeake Bay Program (bay program)
within the Environmental Protection Agency (EPA) to direct and conduct
the restoration of the bay. In October 2005, we reported that
deficiencies in the bay program's strategies for assessing, reporting,
and managing restoration progress were undermining the success of the
restoration effort. Acting on our findings, in its reports on the
Department of the Interior, Environment, and Related Agencies for
fiscal year 2007 and 2008, the Senate Appropriations Committee directed
the Bay Program to immediately implement all of the recommendations
contained in our report. In response to our recommendations, the bay
program (1) has adopted an initial integrated approach for assessing
bay health and management actions taken to restore the bay, (2) has
developed a new reporting format that describes the bay's current
health and the progress made in implementing management actions, (3)
has instituted an independent review process to ensure the scientific
integrity of its reports, (4) has adopted a funding priority framework,
and (5) is developing a strategic implementation plan that will
integrate and unify all its various planning documents and work plans.
When complete, the bay program will be better able to move the
restoration forward in a more strategic and well-coordinated manner.
(GAO-06-96):
1.27.C. Improving Management of Federal Oil and Natural Gas Royalty
Revenue: In response to congressional concerns about the amount of oil
and natural gas royalties collected by the federal government during a
period of high energy prices and industry profits, we reported and
testified on royalties management, the costs of royalty relief, and the
share of revenue received by the federal government for oil and natural
gas production. We testified regarding the Minerals Management
Service's inadequacies in negotiating price thresholds with lessees,
implementing internal controls for the royalty in-kind program, and
accurately collecting royalty data. We also updated previous work on
the provisions for royalty relief for leases issued under the Outer
Continental Shelf Deep Water Royalty Relief Act of 1995, concluding
that these provisions could cost the government over $10 billion.
Further, because the final costs have yet to be determined, we
recommended that the service report future forgone royalties to the
Congress. The Congress is now actively considering changing and
clarifying those royalty relief provisions so that these significant
royalty revenues are collected in the future. In addition, we provided
the Congress with information indicating that the total revenue
received by the federal government from industry for the rights to
develop oil and gas on federal lands and within federal waters is among
the lowest in the world. The Congress is also using information from
this report as it considers new oil and gas tax legislation. (GAO-07-
369T, GAO-07-590R, GAO-07-682T):
1.28.C. Bringing Needed Attention to the Federal Oversight of Food
Safety: While this nation enjoys a plentiful and varied food supply
that is generally considered to be safe, we have found over the past
decade that the federal oversight of food safety is fragmented, with 15
agencies collectively administering at least 30 laws related to food
safety. Recent outbreaks of E. coli in spinach and salmonella in peanut
butter, along with contamination in pet food, have highlighted the
risks posed by accidental food contamination. In January 2007, we
designated the federal oversight of food safety as a high-risk area
because of the need to transform this system to reduce risks to public
health as well as the economy. In addition, in February 2007 and April
2007, we testified on the fragmented federal food safety system and on
the limitations in the government's food recall programs, respectively.
In our testimonies, we reported that USDA and FDA could do a better job
carrying out their food recall programs so that they can quickly remove
potentially unsafe food from the marketplace. As a result of our work,
the Office of Management and Budget (OMB) has recently asked us to help
it, USDA, and FDA develop action plans that will address shortcomings
in the federal oversight of food safety. (GAO-07-785T, GAO-07-449T, GAO-
07-310):
1.29.C. Informing Congressional Oversight of Federal Wildland Fire
Management Activities: Since 1999, we have reported on the need for
federal agencies to develop a cohesive, long-term strategy to address
costly and destructive wildland fires. In response to our past
recommendations, in 2006 the Subcommittee on Interior, House Committee
on Appropriations, directed the Forest Service and Department of the
Interior to develop such a cohesive, long-term strategy. Congressional
interest and involvement in this issue remained strong and, during
fiscal year 2007, we reported and testified on this and other issues
before a number of congressional committees associated with federal
agencies' management of wildland fires, such as cost containment and
prioritizing hazardous fuel reduction funds. In its fiscal year 2008
report, the Subcommittee on Interior, House Committee on
Appropriations, citing preliminary findings from our review of the
agencies' allocation of hazardous fuel reduction funds and selection of
fuel reduction projects, directed federal agencies to take actions to
improve their processes for allocating their hazardous fuel reduction
funds. (GAO-07-427T, GAO-07- 655, GAO-07-1017T, GAO-06-671R, GAO-05-
147):
1.30.C. Improving Planning and Financial Management Practices at the
U.S. Army Corps of Engineers (the Corps): The Corps has traditionally
managed its nearly $4 billion civil works budget using a "just-in-time"
strategy where it allocated and moved funds among projects based on
perceived need rather than on a set of formal, standardized criteria
and priorities. As a result, we found that the Corps was moving
billions of dollars among hundreds of projects each year, sometimes
unnecessarily. This approach for managing its civil works
appropriations had become the Corps' substitute for an effective and
fiscally prudent planning and financial management system. Also, the
way that the Corps categorized the movement of funds among projects
limited congressional oversight of some projects. In September 2005, we
recommended that the Corps place greater emphasis on the use of
financial planning approaches and priority-setting mechanisms for
managing its civil works projects. We also recommended that the Corps
establish guidance on what actions would be subject to congressional
oversight, change the way that it allocates funds from an annual basis
to a more frequent basis to reflect actual project needs, periodically
review project schedules and performance and revise project allocations
as needed, and establish priorities for when the movement of funds
among projects is warranted. Based on our work, the Congress provided
new guidance to the Corps on when and how it could move funds among
civil works projects and, in December 2005, the Corps issued a new
engineering circular for managing its civil works program that
incorporated the congressional direction and implemented our
recommendations. (GAO-05 -946):
1.31.C. Identifying Financial Risks to the Federal Government Caused by
a Changing Climate: Our March 2007 report, Climate Change: Financial
Risks to Federal and Private Insurers in Coming Decades Are Potentially
Significant, raised awareness among the Congress and the administration
that while climate change is now widely accepted as a serious
environmental threat, it also poses extraordinary fiscal challenges to
federal insurance programs and the insurance industry. After our
testimony before key congressional committees and discussions with FEMA
and USDA--the key federal agencies with potentially multibillion-dollar
insurance liabilities associated with future climate change impacts--
the two agencies provided assurances that they will implement our
recommendation that they analyze and report to the Congress on (1)
potential climate change-related losses to their key insurance programs
(FEMA's National Flood Insurance Program and USDA's Federal Crop
Insurance Corporation) and (2) alternative mitigation options they may
use to reduce their exposure to loss. (GAO-07-285, GAO-07-760T):
1.32.C. Reducing Risks Posed by Toxic Substances: In response to
congressional concerns about EPA's ability to identify and control
risks to human health and the environment from chemicals, we provided a
series of reports to the Congress over the past several years that
identified potential revisions to the Toxic Substances Control Act
(TSCA) in order to make the act more effective. EPA is currently acting
on a series of recommendations we made to improve the agency's ability
to protect human health and the environment from chemical risks through
its efforts to (1) prioritize chemicals produced at high volumes for
further review, (2) initiate actions to require chemical companies to
more fully justify their claims of confidentiality concerning
information on the chemicals they produce, and (3) evaluate and improve
regulatory environmental models used to identify harmful health and
environmental effects of chemicals used in commerce. In addition, our
most recent report on chemical regulation provides congressional
leaders, who are currently considering potential changes to TSCA, with
a comparative analysis of TSCA and the European Union's recently
enacted chemical control legislation--highlighting areas in which the
European approach would address some of the long-term problems that we
have identified in implementing TSCA. (GAO-07-825, GAO-06-217R, GAO-06-
1032T, GAO-05-458):
1.33.C. Reducing Improper Farm Program Payments: Farmers receive about
$20 billion annually in federal farm program payments for crop
subsidies, conservation practices, and disasters. In July 2007, we
reported that USDA is not conducting annual eligibility determinations
of estates of deceased individuals receiving farm program payments, as
required by its regulations. The determinations are either not done or
not done thoroughly. As a result, USDA cannot be assured that the
payments made to these estates are proper. In addition, we reported
that USDA made $1.1 billion in farm program payments to 172,801
deceased individuals from 1999 through 2005. Of this $1.1 billion, 40
percent was made to individuals deceased for 3 or more years and 19
percent to individuals deceased for 7 or more years. Because USDA lacks
adequate management controls, such as cross-matching its payment data
with SSA's Death Master File, USDA was unaware that it was making
payments to deceased individuals. We testified on these issues in July
2007. We recommended that USDA conduct all required annual eligibility
determinations, cross-match its data with the Death Master File, and if
improper payments were made, recover the appropriate amounts. In
response, USDA directed its field offices to review all estates open
for more than 2 years that will receive 2007 program payments. It also
is working with SSA to obtain access to its Death Master File. USDA
plans to cross- match its data with this file annually. (GAO-07-818,
GAO-07-1137T):
A safe, secure, and effective national physical infrastructure:
1.34.N. Identifying Weaknesses in Telecommunications Data: In a series
of reports issued in 2006, we identified weaknesses in data-gathering
efforts at the Federal Communications Commission (FCC). These data-
gathering weaknesses hinder the ability of the government to adequately
assess the impact of federal policies and programs and to target
federal assistance. We found these weaknesses in a variety of
commission efforts, including deployment of broadband service,
competition for dedicated-access services, and telecommunications
services for Native Americans on tribal lands. As a result, we
recommended that FCC determine what data are necessary and the costs
and burdens associated with gathering those data. In February 2007, FCC
adopted a Notice of Proposed Rule-making that invoked our report and
recommendation that it assess its efforts at gathering data on
broadband deployment. In the notice, which sought comments about how it
could acquire the data that it needs to assess broadband service, the
commission noted that broadband service is critical to the nation's
present and future prosperity and acknowledged that broadband data are
essential for it to assess the success of its policies. (GAO-07-80, GAO-
06-189, GAO-06-426):
1.35.N. Helping People Make More Informed Decisions When They Move
Their Household Goods: In 2001, we found that the Federal Motor Carrier
Safety Administration--the federal regulator for the interstate
household goods moving industry--had done little to stem the growth of
consumer problems in the industry. Among other things, we recommended
that the agency make general information on the number and the nature
of consumer complaints against individual moving companies available to
the public so that the public could better protect itself, particularly
against unscrupulous moving companies. In July 2007, the Federal Motor
Carrier Safety Administration included on its Web site complaint data
about individual household goods movers that are prominent, easily
accessible, and searchable by consumers. This action, as a result of
our work, directly touches Americans who are looking to safeguard their
cherished personal possessions and improves their chances of doing so.
(GAO-01-318):
1.36.N. Enacting Comprehensive Postal Reform Legislation: In April
2001, we designated the U.S. Postal Service's (USPS) transformation and
long- term outlook as a high-risk area because the Service's financial
outlook had deteriorated significantly and it had no comprehensive plan
to address its financial, operational, or human capital challenges. We
concluded that the need for a comprehensive transformation of USPS was
more urgent than ever and called for the Congress to act on
comprehensive postal reform legislation. Since then, USPS has developed
a transformation plan to guide its ongoing efforts related to
implementing initiatives included in its plan. Further, in December
2006, the Congress enacted comprehensive postal reform legislation to
provide a framework for modernizing USPS's rate-setting processes and
strengthening regulatory oversight and financial transparency. Thus, in
January 2007, we removed USPS's transformation and long-term outlook
from our high-risk list. (GAO-07-684T, GAO-07-685T, GAO-04-108T, GAO-
01-598T):
1.37.C. Addressing Congestion in the National Airspace System:
According to the Federal Aviation Administration (FAA), by 2015 the
national airspace system will need to accommodate 1 billion passengers
per year--260 million more than in 2006. FAA also predicts that 10,000
traditional business jets, turboprops, and very light jets will be
added to the fleet by 2017. In a series of testimonies, we reported on
FAA's efforts to plan and begin implementing the Next Generation Air
Transportation System (NextGen), which is intended to make use of new
technologies and procedures to meet these increasing demands for system
capacity. We informed the Congress that although much progress has been
made in planning NextGen, a number of important issues remain
unresolved. For example, we recommended that FAA explore the extent to
which its staff possesses the necessary technical and contract
management expertise to implement NextGen. In response to our
recommendation, FAA has contracted with the National Academy of Public
Administration to conduct an independent assessment of FAA's skill
sets. Other unresolved issues include identifying the precise content
and associated costs of NextGen infrastructure and determining which
entities will fund and conduct some of the necessary research,
development, demonstration projects, and training that will be needed
to achieve certain NextGen capabilities. (GAO-07-25, GAO-07-693T, GAO-
07-784T):
1.38.C. Improving the Effectiveness of the Emergency Alert System(EAS):
Effective emergency warnings via various telecommunications modes allow
people to take actions that save lives, reduce damage, and reduce human
suffering. Hurricane Katrina and the terrorist attacks of September 11,
2001, highlighted the need for timely, accurate emergency information
and underscored the vulnerability of America's emergency response
infrastructure. While a wide-reaching public alert system is critical
to the public safety, in March 2007, we reported that the current EAS
faces a range of technical, cultural, and other challenges, such as
interfacing with newer communications technologies and issuing alerts
in multiple languages. Further, we identified a lack of ongoing testing
of the distribution system used to disseminate national-level emergency
alerts. Additionally, we found challenges to the development of an
integrated alert system, including gaining collaboration among EAS
stakeholders to ensure that all elements of the system can work
together and providing adequate training for EAS participants. We
recommended that FEMA and FCC develop and implement a plan to verify
the dependability and effectiveness of the distribution system and
establish a forum to discuss emerging and other issues related to the
implementation of an integrated public alert and warning system. DHS
concurred with the intent of our recommendations, and FCC is taking
steps to improve EAS capabilities and coordination. These actions will
help ensure that EAS is capable of operating as intended and that
coordination with a variety of stakeholders on the implementation of an
integrated public alert and warning system exists. (GAO-07-411):
1.39.C. Improving Access to Transportation for Disadvantaged
Communities: We identified needed improvements to federal efforts to
provide access to transportation for disadvantaged communities. For
example, we testified that the Department of Transportation (DOT)
should examine the results of its grants to increase air service to
small communities to improve aviation programs' ability to connect
small communities to the national air system. In other work we found
that gaps in federal evacuation assistance to state and local
governments hindered many local governments' ability to evacuate
transportation-disadvantaged populations in the face of disasters like
Hurricane Katrina. As we recommended, DHS is updating its National
Response Plan to clarify the roles and responsibilities of cognizant
agencies and taking other steps give greater consideration to the needs
of transportation-disadvantaged populations. Finally, we reviewed the
Federal Transit Administration's (FTA) Job Access and Reverse Commute
program that improves mobility of low-income persons seeking work and
recommended that FTA update its oversight processes to help it evaluate
and oversee the program. By the time we completed our work, FTA
officials indicated that they were already taking steps to incorporate
the program in their existing review processes. (GAO-07-793T, GAO-07-
44, GAO-07-43):
1.40.C. Improving Transportation Efficiency: We continue to study ways
to improve the efficiency of our nation's transportation system.
Intermodal transportation, which enables freight and passengers to
cross different modes of transportation, can improve mobility, reduce
congestion, and cut costs. We identified actions DOT could take to
address barriers to intermodal transportation--including increasing
collaboration between operating administrations. DOT officials stated
that our work provided a starting point for constructive discussions
between the executive branch and the Congress on innovative solutions
to intermodal challenges. We also identified techniques to efficiently
use existing infrastructure--such as improving operations--and ways to
fund infrastructure refinements and monitor efficiency, such as user
fees and performance measures, respectively. Finally, we identified
ways to reduce fuel use. For example, we found that raising current
fuel economy standards for cars and light trucks, reforming the
program, or both could increase fuel savings. This work is informing
the current national debate about how to reduce fuel use. Based on work
done by the Transportation Research Board, the Department of Energy
estimated that underinflated tires negatively affect safety and
increase fuel use--about 1.2 billion gallons by cars and light trucks
in 2005. We reviewed federal policies on tire inflation and identified
a number of technologies used to reduce tire underinflation that have
the potential to increase safety and fuel economy when used properly.
The federal government is addressing this inefficiency by providing
information for both the public and federal fleet managers. (GAO-07-
921, GAO-07-246R, GAO-07-718, GAO-07-920):
1.41.C. Improving Knowledge Sharing on Older Driver Safety Issues Among
States: Older drivers are more likely to suffer injuries or die in
crashes than drivers in most other age groups. Older driver safety will
become an increasingly significant safety issue as our population ages--
by 2030 the number of licensed drivers aged 65 and older is expected to
nearly double to about 57 million. In April 2007, we reported that (1)
states have, to varying degrees, adopted federally recommended road
design and construction practices to make roadways easier for older
drivers to navigate; (2) while more than half of the states have
implemented licensing requirements for older drivers that are more
stringent than requirements for younger drivers, states' assessment
practices are not comprehensive; and (3) although some states have
implemented key practices to improve older driver safety, knowledge
sharing among states is limited. Consequently, we recommended that DOT
establish a communication mechanism to share information that would
help states improve older driver safety, including information on the
effectiveness of road design and construction practices to improve the
driving environment, comprehensive practices to assess driver fitness,
and leading practices implemented by states. In response, the
department is enhancing existing Web sites and communication methods to
provide more comprehensive and up-to-date information on both federal
and state efforts to improve older driver safety. (GAO-07-413):
1.42.C. Influencing Legislation to Reauthorize the Funding Structure
for FAA: The administration proposed sweeping change to FAA's funding
structure that would change it from one based largely on excise taxes
and a General Fund contribution to one based on user fees. We testified
that although the viability of the funding structure would be
influenced by such factors as the availability of the General Fund
contribution, structural changes in the aviation industry, and certain
policy choices, the current funding structure could potentially fund
planned FAA operations. Our testimonies were major factors in the
decisions of the Senate and House authorizing committees to propose
legislation to largely maintain the current funding structure for FAA.
(GAO-07-25, GAO-07-885, GAO-07-625T, GAO-07-636T, GAO-07-1163T):
1.43.C. Improving Motor Carrier Safety: About 5,500 people are killed
and another 160,000 are injured each year in crashes involving large
commercial trucks and buses. While the Federal Motor Carrier Safety
Administration does a good job in identifying interstate commercial
carriers that pose high crash risks, we identified ways that it can
improve. The agency employs a decision model that uses its expert
judgment to weight carriers' crashes and safety violations for the
purposes of identifying high-risk carriers. We found that the agency
could easily improve the identification by 9 percent (identifying
carriers that experienced about twice as many crashes) if it employed a
statistical regression model approach. We also found that the agency
could identify more high-risk crashes using its current model if it
gives more attention to carriers that experienced crashes because our
work showed that the incidence of past crashes is the strongest
predictor of whether a carrier will have crashes in the future. In
response to these reports, the Federal Motor Carrier Safety
Administration noted that our report provided useful insights and
offered a potential avenue for further improving the effectiveness of
its efforts to reduce crashes involving motor carriers. Adopting either
of these approaches should allow the Federal Motor Carrier Safety
Administration to better target its enforcement efforts to improve
safety and reduce crashes that can lead to deaths and injuries, which
is especially important because it can only review about 2 percent of
the nation's motor carriers each year. (GAO-07-585, GAO-07-584):
[End of Strategic Goal 1]
Strategic Goal 2:
Provide timely, quality service to the Congress and the federal
government to respond to changing security threats and the challenges
of global interdependence:
Protect and secure the homeland from threats and disasters:
2.01.N. Assessing Security Vulnerabilities in the Nuclear Regulatory
Commission's (NRC) Nuclear Materials Licensing Program: In 2003, we
reported that weaknesses in the NRC licensing program could allow
terrorists to obtain radioactive materials that could be used in "dirty
bombs." NRC issued new licensing guidance in December 2006. However,
our 2007 covert investigation demonstrated that the new guidance was
ineffective. Specifically, our investigators were able to obtain a
license to obtain radioactive materials from NRC by using a bogus
company whose address was a rented post office box. Once we received
the NRC license, we sought to purchase radioactive material and could
have acquired enough to reach a level that NRC considers to be
dangerous. When notified of our operation, NRC immediately suspended
its licensing program and within days issued supplemental interim
licensing guidance. The new guidance generally requires that NRC
conduct a site visit or face-to-face meeting prior to issuing a new
license--making it more difficult for someone with malevolent
intentions to obtain an NRC radioactive materials license. We also
recommended additional actions to further strengthen controls in this
area in our July 2007 testimony. (GAO-07-1038T, GAO-03-804):
2.02.N. Improving Homeland Defense: As a result of prior work, we are
seeing improvements in homeland defense, particularly in the protection
of U.S. airspace. Our 2005 testimony and classified report on the
interagency management of violations to restricted airspace prompted
the June 2006 requirement in national security and homeland security
presidential directives--NSPD-47 and HSPD-16--for a national strategy
for aviation security. The national strategy was issued on March 26,
2007, and called for interagency collaboration to develop several
supporting plans to address specific threats and challenges identified
in the presidential directives. Since our testimony and report were
issued, the agencies have also implemented most of our recommendations,
resulting in significant changes in how the interagency community
manages the protection of restricted airspace and leading to
improvements in interagency information sharing and national-level
planning for protection of all U.S. restricted airspace. For example,
FAA is now sharing vital information from its pilot deviations database
with DOD, and common definitions between the several agencies that
participate in the protection of U.S. airspace are facilitating the
coordination and communication vital to protecting U.S. airspace. The
interagency participants have also established information-sharing
requirements and protocols, addressed security clearance issues, and
reviewed interagency command and control processes that are followed
during a violation of restricted airspace. (GAO-05-928T):
2.03.N. Reducing Risks Associated with a Component of the Secure Border
Initiative (SBI): DHS's SBI is a multiyear, multibillion-dollar program
to secure U.S. borders. One element of SBI is SBInet--the U.S. Customs
and Border Protection program responsible for developing a
comprehensive border protection system through a mix of technology,
infrastructure, and personnel. In fiscal year 2007, the Congress
appropriated $1.2 billion for the program and asked us to review the
SBInet expenditure plan. As part of our review, we identified a
significant risk to the program's schedule and costs because of its
reliance on concurrent and interdependent tasks. We found that DHS
planned to install SBInet technology in multiple sectors along the
southwest border before lessons could be learned from the pilot
deployment project. We pointed out that the greater the degree of
concurrency, the greater a program's exposure to cost, schedule, and
performance risks. Among other things, we recommended that DHS
reexamine the level of concurrency and appropriately adjust the
acquisition strategy. In March 2007, DHS submitted a revised SBInet
expenditure plan for fiscal year 2007 to the Congress. In response to
our recommendation, the new plan delayed some technology deployment
and, in its place, accelerated tactical infrastructure construction,
thus reducing the risk of program inefficiencies and consequent cost
escalation and schedule delays. (GAO-07-309):
2.04.C. Enhancing Federal Homeland Security Information Sharing with
States and Localities: In an April 2007 report and a May 2007
testimony, we highlighted information-sharing and duplication of effort
risks that DHS faced in developing its primary information-sharing
information technology (IT) application, the Homeland Security
Information Network. Our work showed that DHS had not worked
effectively with a key state and local information-sharing program that
is operated and managed by state and local officials nationwide with
the goal of providing homeland security and related information
services to law enforcement, emergency responders, and other public
safety officials. In particular, we found that DHS had not coordinated
with this program to fully develop joint strategies and policies,
procedures, and other means to operate across agency boundaries, which
are key practices for effective coordination and collaboration and a
means to enhance information sharing and avoid duplication of effort.
One major consequence of DHS not fully adhering to these practices has
been that the network and the state and local program are duplicative
in that they target similar user groups, such as emergency management
agencies, and have similar features, such as electronic bulletin
boards, collaboration tools, and document libraries. We made several
recommendations to help DHS ensure that the network is effectively
coordinated with all key state and local information-sharing
initiatives and that duplicative efforts are avoided. DHS agreed with
all of our recommendations and has actions planned and under way to
implement them. (GAO-07-455, GAO-07-822T):
2.05.C. Promoting Government Efforts to Secure Sensitive Systems and
Information: Our continued work in fiscal year 2007 helped agencies
identify needed information security (IS) improvements and helped to
inform the public debate on the need for the federal government to
effectively protect personally identifiable information. We testified
that despite agencies' reported progress in implementing IS
requirements, recently reported incidents involving data loss or theft,
computer intrusions, and privacy breaches underscore the need for
further improvements. Our work highlighted the need to effectively
implement IS at numerous agencies--including DHS, the FBI, the Internal
Revenue Service (IRS), the Securities and Exchange Commission (SEC),
and VA--and offered recommendations to improve security over government
programs, such as correcting security weaknesses at DHS that affect the
program to manage the entry and exit of foreign nationals and at the
FBI that affect critical networks transmitting sensitive law
enforcement information. We also emphasized the need to strengthen
governmentwide guidance and reporting on agencies' periodic testing of
security controls, so that agencies are aware of weaknesses in their
systems. Based on our prior recommendations, agencies--including IRS,
SEC, the Federal Reserve, and USDA--took action to strengthen security
that included improvements to agencies' IS programs that aid in
understanding risks and selecting and properly implementing needed
controls, access controls that limit access to information to
authorized individuals only, and service continuity controls that
protect computer-dependent operations from disruptions. (GAO-07-65, GAO-
07 -368, GAO-07 -870, GAO-07-751T, GAO-07- 1264T):
2.06.C. Improving Tanker Security: In fiscal year 2007, we identified
challenges the federal government faced in securing the transportation
of energy commodities by tankers from terrorist attacks. These
challenges exist throughout the supply chain, from where the tankers
load their cargo, through their ocean voyages, and into the ports where
they unload. Because the government has its greatest ability to reduce
risks to tankers in U.S. waters and ports, we paid particular attention
to governmental activity in these locations. We found that to meet
these challenges federal agencies, and particularly the U.S. Coast
Guard, had taken significant actions. For example, the Coast Guard had
set security standards to guide local Coast Guard units and enlisted
the help of state and local governments in its efforts. However, given
the Coast Guard's inability to meet its own security requirements in
some locations, increases in liquified natural gas shipments to the
United States, and the potential consequences of a terrorists attack on
liquified natural gas tankers, we recommended that the Secretary of
Homeland Security direct the Coast Guard to develop a resource
allocation plan that balances the need to meet new liquified natural
gas security responsibilities with other existing security
responsibilities and other Coast Guard missions. DHS agreed with our
recommendation, and since the report was issued DHS has continued to
recognize the need to identify the resources necessary to manage risk
in the maritime environment. (GAO-07-316, GAO-07-840T, and a sensitive
but unclassified report also issued in fiscal year 2007. The public
version of this document will be available shortly.):
2.07.C. Strengthening Security at Airport Passenger Screening
Checkpoints: In a series of reports, testimonies, and briefings to the
Congress, we reported on the Transportation Security Administration's
(TSA) passenger checkpoint screening procedures, which have been
scrutinized and questioned by the traveling public and the Congress in
recent years. For example, in December 2005, TSA allowed passengers to
carry small scissors and small tools onto aircraft, resulting in
concern among Members of the Congressional and industry
representatives. In addition, following the alleged August 2006 liquid
explosives terrorist plot, TSA modified passenger screening procedures
several times in an effort to defend against the threat of terrorists'
use of liquid explosives onboard commercial aircraft. We determined
that TSA implemented a reasonable approach to modifying passenger
checkpoint screening procedures, in part by making efforts to balance
security, efficiency, and customer concerns. We made recommendations
for improving documentation and evaluation of proposed changes to
passenger screening procedures. TSA officials generally agreed with our
recommendations and have taken actions to improve the documentation for
substantive proposed procedural changes and to strengthen the agency's
evaluation of proposed procedures. These actions, when fully
implemented will enable TSA to better justify its passenger screening
procedure modifications to the Congress and the traveling public. (GAO-
07-634, GAO-07-623R, GAO-07-448T, GAO-07-375, GAO-06-371T):
2.08.C. Assessing Federal and Private Sector Efforts to Develop
Infrastructure Protection Plans: Through a series of reports,
testimonies, and member briefings, we provided the Congress with a look
at collaboration efforts between DHS and other federal agencies with
private sector infrastructure owners and operators to ensure that the
nation's most critical infrastructure assets and key resources are
protected from terrorists and natural disasters. We called attention to
the disparity in the progress infrastructure sectors had made in
developing plans designed to protect key infrastructure, as well as the
comprehensiveness of the plans. As a result, the Congress has asked us
to launch several engagements to further explore these issues. (GAO-07-
1075T, GAO-07-706R, GAO-07-626T, GAO-07-39):
2.09.C. Assessing DHS's Methodology for Using Risk Assessments to
Allocate Home land Security Grant Funds: For the second successive
year, in response to a congressional mandate, we analyzed DHS's
methodology for considering and applying risk assessments in allocating
over $1.7 billion in fiscal 2007 homeland security grant funds. We
provided multiple briefings to Members of the Congress and
congressional staff on the methodology, the changes in the methodology
from 2006 to 2007, and the potential impact of changes in specific
variables used to assess the risk from terrorism for potential grant
applicants, such as urban areas within the United States. Our work was
also the focus of a House Appropriations Committee hearing, and the
Senate-passed version of the fiscal year 2008 appropriations bill for
DHS includes a mandate for us to assess the methodology to be used for
the 2008 grant allocation process. Our work has enhanced congressional
oversight by providing clear, objective information on and analysis of
DHS's methodology for 2006 and 2007 and provided information DHS could
use to maximize the efficiency and effectiveness of the grant program
and make the most of increasingly limited homeland security funds.
Partly as the result of our work, DHS is undertaking a more detailed
analysis of the impact of changes in the use of specific variables.
(GAO-07-381R):
2.10.C. Identifying Shortcomings in DHS's Operation of the United
States Visitor and Immigrant Status Indicator Technology (US-VISIT) at
Land Ports of Entry: We identified continuing challenges to the
effective implementation of the US-VISIT program at land ports of
entry, for both incoming and exiting persons required to participate in
US-VISIT, which involves biometric identification of foreign visitors
using digital fingerprints and photographs. Although intended to record
both the entry and subsequent exit of foreign visitors--and to
highlight those who overstayed their visas--we found that there was no
current technology that would provide a timely and reliable method by
which to record the exit of all visitors at land ports of entry. In
response, DHS subsequently suspended its plans to implement an exit
component until a viable capability can be deployed at land ports of
entry. However, DHS has yet to explain how US-VISIT is to (1) establish
a comprehensive biometric identification system to record individuals'
arrival and departure at land ports and identify those who have
overstayed their visas and (2) strategically align with other border
security initiatives that are intended to enhance border security and
prevent illegal immigration. Also, with regard to entry, our work
showed that US-VISIT had improved DHS's ability to process visitors and
verify identities, but management controls in place to identify
computer processing problems and evaluate operations were insufficient
and inconsistently administered. As a result, DHS was not in the best
position to identify and quantify problems, evaluate alternatives,
allocate resources, track progress, and learn from any mistakes that
may have been made while deploying and operating US-VISIT at land ports
of entry. (GAO-07-248, GAO-07-378T):
2.11.C. Analyzing DHS Budget Justifications for Fiscal Year 2007: We
provided technical assistance to the Congress in reviewing the
President's justification for requests for funds. This work was done to
provide the Congress with information to evaluate the support for and
adequacy of the President's justification for requests. For example,
our prior work had shown that within the aviation security area,
programs such as Secure Flight--which is to match passenger information
against terrorist watch lists--had experienced implementation
challenges that raised questions about the program future funding
needs. We suggested that the committees consider restricting the Secure
Flight budget request until TSA provides an expenditure plan that
includes detailed descriptions of key goals, objectives, requirements,
and milestones. We also suggested that funds be restricted for the
Science & Technology Directorate because of serious financial
management deficiencies, among other things. The Congress, in the DHS
appropriations bill for fiscal year 2007 and the accompanying
conference report, adopted a number of our suggested budget actions
resulting in reductions and restrictions of about $1 billion to help
ensure that homeland security investments are appropriately focused.
(No product issued.):
2.12.C. Improving the Deepwater Program: In a series of testimonies and
a report, we identified the key challenges affecting (1) new Deepwater
asset deployment and (2) management of the Deepwater program and the
Coast Guard's efforts to address these challenges. We reported that
while the Coast Guard has made progress with the design, acquisition,
and delivery of some Deepwater assets, ongoing problems with other
assets raise questions about the Coast Guard's ability to maintain a
system-of-systems approach in which the retirement of legacy assets is
to be synchronized with the introduction of new Deepwater assets. We
also noted that as problems are encountered and delivery dates for new
Deepwater assets slip, the overall operational capabilities of
Deepwater assets and the system-of-systems could be reduced, especially
in the short term. Further, we reported that because of problems with
program management, contractor accountability, and cost controls, the
Coast Guard has taken on more direct responsibility for the acquisition
management and support for key Deepwater assets. However, we noted that
until the Coast Guard has sufficient staff with the requisite skills
and abilities to carry out these expanding responsibilities, the
Deepwater program will remain at risk in terms of getting what is
needed on time and at a fair price. Our work provided the Congress with
timely information on the status of the program at a time when it was
increasing its oversight of the cost, schedule, and performance of the
program. (GAO-07-874, GAO-07-575T, GAO-07-460T, GAO-07-446T, GAO-07-
453T):
2.13.C. Assessing the Federal Response to In-flight Security Threats: We reported on the procedures that more than 15 federal agencies and
entities follow to coordinate their responses to security threats that
occur onboard commercial aircraft in flight. We identified the nature
and extent of each agency's involvement in addressing different types
of threats (i.e., high-risk or suspicious passengers, etc.), the tools
they use to communicate about the threats, and a four-stage process
that they follow to resolve incidents, including identifying the
threat, sharing pertinent information to collaboratively assess its
severity, deciding on and implementing the appropriate in-flight
response, and if necessary, completing the law enforcement response. No
comprehensive summary or assessment of these procedures existed prior
to the completion of our work, and articulating these procedures has
allowed agencies to better understand each others' roles and
responsibilities and coordinate their responses to identified threats.
We recommended that (1) the involved agencies develop a concept of
operations plan that outlines the general interagency coordination
strategy and delineates lines of communication among them, (2) each
involved agency document its internal standard operating procedures and
establish mechanisms for sharing these procedures with other agencies,
and (3) key agencies involved in interagency exercises fully document
and disseminate the results of the exercises to ensure that follow-up
action items are addressed as appropriate. (GAO-07-891 R):
2.14.C. Assessing DHS's Mission and Management Progress Its First 4
Years: In response to a bipartisan and bicameral request, we assessed
DHS's progress by identifying a total of 171 performance expectations
within 14 mission and management areas (e.g., border security and
immigration enforcement or financial and acquisition management).
Analyzing our and the DHS Office of Inspector General's prior work and
updated information provided by DHS, we determined the extent to which
DHS has taken actions to generally achieve each performance
expectation. Using these analyses, we then assessed whether DHS has
made limited, modest, moderate, or substantial progress in each area.
We found that after 4 years, DHS has attained some level of progress in
all of its major mission and management areas but the rate of progress
among these areas varies. For example, progress in surface and aviation
transportation security has been moderate while IT and human capital
management progress has been limited. Our work shows that it will be
essential for the department to address how key underlying themes have
affected DHS's implementation efforts--agency transformation, strategic
planning and results management, risk management, information sharing,
and partnerships and coordination--as it moves forward. By
comprehensively summarizing and updating 4 years of our work, our
report provides congressional and other stakeholders with a broad view
of DHS's progress, and highlights areas for future oversight and
review. (GAO- 07-454):
Ensure military capabilities and readiness:
2.15.F. Transforming Defense Forces by Better Allocating Resources to
Fund New Capabilities: In a November 2002 report, we asked the Congress
to consider extending the deadline for the submission of DOD's
Quadrennial Defense Review (QDR) in order to provide additional time
for DOD to align its upcoming budget request with its newest strategic
thinking as reflected in the QDR. In our view, this extra time would
allow DOD to take full advantage of QDR results and shift resources
where they would be needed most, that is, provide for a better
allocation of resources, and avoid unnecessary costs of lower priority
programs. The Congress adopted our suggestion, and DOD's 2006 QDR is
the first to benefit from the extended deadline and better allocation
of defense resources to implement DOD's new strategic plan. As a
result, DOD's fiscal year 2007 budget shifts resources into new
programs advocated by the QDR, to include a $1 billion special
operations initiative to help fight the war on terrorism, rather than
having to wait until the fiscal year 2008 budget cycle. To pay for
these initiatives, OMB stated that DOD had shaved billions of dollars
from other lower priority programs. The DOD Comptroller's office has
confirmed that final congressional action on DOD's proposal was to
provide a $1.2 billion increase in funding for Special Operations
Forces in fiscal year 2007. (GAO-03-13):
2.16.F. Contributing to Properly Funding the Military's Needs: We
reviewed the reasonableness of DOD's fiscal year 2007 budget request
and identified billions of dollars in potential costs that could be
avoided and opportunities for DOD to improve its internal oversight of
the use and tracking of funds. Overall, our work contributed to
multiple actions that resulted in total financial benefits of about
$3.2 billion. The Congress used our analyses of unobligated balances;
operations and maintenance execution trends; and active, reserve, and
civilian personnel expenditures for fiscal year 2006 to reduce the
fiscal year 2007 budget. We also reported on ways for DOD to improve
its cost reporting for the global war on terrorism. As a result of our
report and briefings, DOD adjusted its cost reports, revised cost
reporting procedures to expand reporting categories, and implemented
steps intended to improve reliability. (GAO-07-76):
2.17.F. Reducing Cost, Schedule, and Performance Risks for the Army's
Future Comb at System(FCS): The Army's FCS is a program characterized
by bold goals and innovative concepts--transformational capabilities, a
system-of- systems approach, new technologies, a first-of-a-kind
information network, and a total investment cost of more than $200
billion. As such, the program is considered high risk and in need of
special oversight and review. Since 2004, we have pointed out that the
Army has far less knowledge about FCS and its potential for success
than is needed to fulfill the basic elements of a business case. For
example, the Army has yet to fully define FCS requirements, mature key
technologies, and fully estimate costs. In response to our
recommendations, the Congress has acted to reduce risk and increase
oversight for FCS. For example, the Congress has directed DOD to
conduct and report on the results of a milestone "go/no-go" review of
the FCS program, following its preliminary design review with the aim
of ensuring that there is a business case for continuing the program.
In addition, citing risks that we reported and the need for DOD to
preserve its ability to change course, the House Committee on Armed
Services recommended a budget cut of $325.8 million in fiscal year
2007. Ultimately, the conference committee cut the FCS budget request
by $254 million. In response to our recommendations, the Army has also
made several adjustments to the program, including revising production
rates to more affordable levels. (GAO-06-367, GAO-06-478T, GAO-06-
564T):
2.18.N. Strengthening Security of Forces and Military Presence
Restructuring: Our evaluations of DOD's antiterrorism program and
global posture strategy have resulted in actions that can lead to more
a more effective application of force protection resources at military
installations and facilitate congressional oversight responsibilities.
We reported that service headquarters and commands did not use a
comprehensive results-oriented management framework to guide their
efforts to improve the security of forces at military installations.
Therefore, DOD and the Congress would not be able to determine if the
billions being invested to improve force protection at installations
were being applied efficiently and effectively. In 2005, each military
service responded to our recommendations and developed strategic
planning and program implementation tools to guide their efforts and
prioritize funding requirements. In September 2006, we also reported on
DOD's strategy to restructure the size and location of U.S. military
forces overseas, and identified several challenges DOD faces in
implementing this strategy that add to the uncertainty of the costs and
potential outcomes of DOD's efforts. We concluded that Congress may not
have a clear understanding of the extent to which objectives are being
achieved or whether resources are being efficiently and effectively
applied, and recommended that the Congress require DOD to periodically
report on its progress. As a result of the issues raised in our work,
the Senate Committee on Appropriations directed DOD to provide an
updated report on the Global Posture Initiative to better inform the
Congress of its efforts. (GAO-06-852, GAO-03-14):
2.19.N. Improving Transparency over Military Compensation Costs: Our
work has shed light on how rapidly military compensation costs have
been growing, providing decision makers better information about the
total costs of personnel and the implications of adding deferred
benefits. Active duty and reserve compensation costs grew 32 percent
and 47 percent, respectively, from fiscal years 2000 to 2006. However,
we found that military compensation costs were scattered across
multiple federal agencies, so a true picture of total costs was not
available. Consistent with our recommendations, the President's budget
request for fiscal 2007 contained an exhibit that depicted total active
duty compensation costs and their allocation to cash, noncash, and
deferred benefits--an important first step in improving transparency.
(GAO-07- 828, GAO-05-798):
2.20.N. Enhancing DOD's Evaluation of Its National Security Personnel
System (NS PS): In June 2005, we evaluated DOD's efforts to design and
implement its new civilian personnel management system--NSPS. We
determined that evaluating the impact of NSPS would be an ongoing
challenge for DOD. We recommended that the NSPS Program Executive
Office (PEO) develop procedures for evaluating NSPS that contain
results-oriented performance measures and reporting requirements. These
evaluation procedures could be broadly modeled on the evaluation
requirements of the Office of Personnel Management (OPM) demonstration
projects. In response to our recommendation, the NSPS PEO developed an
NSPS evaluation plan that provides documentation of the nature, rigor,
and intent of the evaluation. The plan also includes measurable goals
or objectives; expected results or outcomes; a description of the
procedures, methods, and techniques that will be used to show whether
the objectives have been achieved; and a description of the data
collection and analysis procedures to be used to assess the program's
success or failure from a qualitative and quantitative standpoint. This
action will improve the department's visibility and oversight needed to
benchmark progress, make system improvements, and provide the Congress
with the assessments needed to determine whether NSPS is truly the
model for governmentwide transformation in human capital management.
(GAO-07-851):
2.21.N. Improving Oversight of Contractors on the Battlefield: We have
issued a series of reports focused on contract management and the
oversight challenges faced by DOD as it increases its dependence on
contractors on the battlefield. Among the challenges DOD faced was the
lack of visibility over the number of contractors supporting deployed
forces and the services the contractors provide and a lack of senior
leadership to resolve the challenges. Our December 2006 report made
recommendations to address these challenges and DOD has implemented
them. For example, in January 2007, DOD implemented a system designed
to provide commanders with greater visibility over the number of
contractors supporting deployed forces and the services being provided
by the contractors. Additionally, in response to our recommendation
that the Secretary of Defense appoint a focal point dedicated to
leading DOD's efforts to improve contract management and oversight, the
Office of the Assistant Secretary of Defense (Program Support) was
established to act as the focal point. The Congress has also used our
work to direct the department to make managing contractors who support
deployed forces a higher priority at DOD. For example, the House
Appropriations Committee withheld 15 percent of the fiscal year 2007
DOD supplemental operation and maintenance appropriations until DOD was
able to provide information on the number and types of contractors in
Iraq and Afghanistan. This provision was included in the legislation
after we testified before the House Appropriations Committee's
Subcommittee on Defense that DOD did not know the number of contractors
in Iraq. (GAO-07-145, GAO-07-525T):
2.22.C. Supporting the Congress in Oversight of Intelligence
Acquisitions: Our support to the Congress this past year helped to
expand and strengthen its oversight of intelligence acquisitions. For
example, we briefed committees on findings related to the development
of a new satellite system equipped with radar sensors. We found that
while the program was attempting to adopt best practices for technology
development, important agreements on requirements, funding, and system
usage had not been worked out, and it was questionable whether the
system--which is projected to be one of the most expensive satellite
development efforts ever--was affordable. Our work supported the
decisions made by the Senate Select Committees on Intelligence and the
Senate Committee on Armed Services to make dramatic cuts to the program
so that investments could be more focused on necessary technology
development. Our work was also used by the Senate Intelligence
Committees in drafting legislation aimed at reforming acquisition
processes and requiring the intelligence community to institute more
disciplined management and oversight controls. In addition, we were
requested to brief committees on the results of our work on the use of
risky contracting techniques by intelligence agencies. (GAO-07-273, GAO-
07-559, GAO-07-1029R):
2.23.C. Improving DOD's Management Approach to Major Weapon Systems
Acquisitions: Over the next several years, DOD plans to invest $1.4
trillion in major weapons programs. Although DOD produces the best
weapons in the world, it fails to deliver weapon systems on time,
within budget, and with desired capabilities. This year, we reported
that leading commercial companies achieve success in product
development by using an integrated portfolio management approach to
prioritize market needs and allocate resources through a strong
governance structure. Through portfolio management, all of a company's
product investments are addressed collectively from an enterprise
level, rather than as independent and unrelated initiatives. In
contrast, DOD approves proposed programs with much less consideration
of its overall portfolio and commits to them earlier and with less
knowledge of cost and feasibility. While DOD has taken steps to
identify warfighting needs through a joint requirements process, its
service-centric structure and fragmented decision-making processes do
not allow for the portfolio management approach used by successful
commercial companies. We recommended that DOD establish such an
approach to ensure delivery of a balanced mix of weapon system programs
at the right time and right cost and establish a single point of
accountability for determining which acquisition programs are allowed
in the portfolio. As a result, the Congress has required DOD to address
our recommendations for improvements in its portfolio management
process and has urged DOD to expand its use of portfolio management
initiatives already under way to include additional portfolios. (GAO-07-
388):
2.24.C. Improving Transparency, Accountability, and Oversight of
Ballistic Missile Defense: Over the next 5 years, DOD plans to invest
an additional $49 billion, or 13 percent of its research and
development budget, to develop and field the Ballistic Missile Defense
System (BMDS). The Missile Defense Agency (MDA) began developing the
BMDS in 2002 in 2- year blocks, with each block increasing the number
of fielded assets and enhancing the existing system. To field the BMDS
quickly, DOD granted MDA authority to defer entry of the BMDS into
DOD's acquisition cycle until management of the system is handed over
to a military service. Therefore, the BMDS never formally entered the
acquisition phase that triggers compliance with certain acquisition
laws that provide transparency into program progress and decisions. In
annual missile defense reports, we have pointed out that because MDA is
not required to seek higher-level approval of its program goals or have
program cost or system operational effectiveness and suitability
independently verified, the agency has operated with considerable
autonomy to change goals and plans. This has made it difficult to
reconcile program outcomes with original expectations and to determine
the actual cost of each block of individual BMDS assets. Based on our
reporting of these issues, MDA is implementing a new acquisition
strategy that includes setting firm program goals for each block,
reporting variances against those goals, and accounting for cost in a
manner that ensures each block's full cost is transparent to decision
makers. (GAO-07-387, GAO-06-327):
2.25.C. Transforming Defense Forces by Improving Reserves' Mission
Capabilities: Our work on the changing roles and missions of the
National Guard supported the work of the Commission on the National
Guard and Reserves as well as congressional oversight. We reported on
the changing roles of the reserves, the negative effects of the heavy
use of the reserve components for their future missions, and the lack
of validated requirements for the National Guard's civil support
missions. The Congress created the commission in 2005 to conduct a
comprehensive examination of roles of the Guard and Reserves and to
recommend any needed changes in laws and policies governing the
National Guard and Reserves. We testified twice before the commission,
highlighting the need to align the Reserves' business model with their
21st century roles and other issues, including reserve component
equipment and personnel readiness, DOD's initiatives to improve reserve
readiness, recruiting and retention challenges, and reserve pay and
compensation. The commission based several key recommendations to the
Congress in its March 2007 report on our reports and testimonies. In
addition, the House Armed Services Committee included a requirement in
its 2008 defense authorization bill that would require DOD to report on
National Guard readiness for its civil support missions. (GAO-07-397T,
GAO-07- 709, GAO-07-984):
2.26.C. Creating a Chief Management Officer at DOD to Guide Business
Transformation Efforts: During fiscal year 2007, we recommended that
DOD develop a planning process that results in a comprehensive,
integrated, enterprisewide plan or set of plans to guide DOD's business
transformation efforts. We also suggested that the Congress consider
enacting legislation to establish a separate, full-time Chief
Management Officer position at DOD with significant authority,
experience, and a sufficient term to provide focused and sustained
leadership over the department's business transformation efforts. At a
time of increasing military operations and growing fiscal constraints,
billions of dollars have been wasted annually because of the lack of
adequate transparency and appropriate accountability across DOD's
business areas. DOD's lack of a comprehensive enterprisewide business
transformation plan linked with performance goals, objectives, and
rewards for all key business areas has been a continuing weakness. DOD
also continues to lack the sustained leadership at the right level to
achieve successful and lasting transformation. In addition, as of
October 2007, both the House and Senate Armed Services Committees had
proposed language in their respective versions of the National Defense
Authorization Act for Fiscal Year 2008 that calls for the Secretary of
Defense to either assign responsibilities to a high-level official to
address management issues within the department (House version) or to
establish a Chief Management Officer (Senate version). As a result of
our work, DOD is taking steps to improve its planning process. (GAO-07-
1072, GAO-07-310, GAO-07-229T):
2.27.C. Providing Oversight of Military Operations in Iraq and
Afghanistan: Our continued work in evaluating U.S. military operations
in Iraq and Afghanistan has led to key congressional actions to provide
enhanced oversight and helped frame significant issues for
congressional and public debate. Our work has included numerous reports
and testimonies on such topics as DOD's ability to provide trained and
ready forces for ongoing operations and timely force protection
solutions to support deployed troops, to secure Iraqi munitions storage
sites, and to help train and develop the logistics capabilities of
Iraq's security forces. Specifically, the Congress has used our ongoing
work reviewing the department's efforts to defeat improvised explosive
devices (IED) in directing actions, through legislation, to improve
strategic planning and operations at the newly established Joint IED
Defeat Organization. Our work and testimony examining logistics
capabilities of Iraq's security forces has also enhanced congressional
oversight and, along with work on U.S. military trainers, supported the
House Armed Services Committee's efforts to prepare its own public
report on the status of Iraq's security forces. Our work on the
department's efforts to repair and replace equipment used in current
operations raised the Congress's awareness that its oversight of reset
programs may be limited because the Army and Marine Corps are not fully
capturing and reporting how they are investing reset funds, totaling
about $49 billion since fiscal year 2002. Our work has also prompted
the Congress to take legislative action to require DOD to address
readiness issues. (GAO-07-503R, GAO- 07-582T, GAO-07-439T):
2.28.C. Improving the Army's Management of Its Pre-Positioned
Equipment: Our work in evaluating the status, readiness, and employment
of the Army's pre-positioned equipment sets around the world has
identified significant pre-positioned equipment shortages, readiness
concerns, management challenges, and maintenance problems. Our work has
also identified significant corrosion issues that have adversely
affected the readiness and usability of pre-positioned equipment assets
in storage. More recently, our ongoing work has identified that the
Army has downloaded and issued to units much of its afloat and ground-
based pre-positioned equipment, which has resulted in low fill rates
among the pre-positioned equipment sets and concerns within the
Congress and DOD regarding the lack of availability of pre-positioned
equipment for potential future contingencies. As a result of our work
in this area, the Congress has enacted several pieces of legislation
designed to improve the management, readiness, employment, and future
accessibility of Army pre-positioned equipment. (GAO-07-144, GAO-06-
709):
Advance and protect U.S. international interests:
2.29.F. Streamlining the U.S. Overseas Presence through Embassy
Rightsizing: In June 2002, we developed a rightsizing methodology for
linking overseas staffing needs to the security, mission, and operating
costs of U.S. embassies and consulates. In April 2003, we reported that
the size and construction costs for embassy and consulate construction
projects are directly related to the number of staff who would use
those facilities and that the process for developing such staffing
projections lacked a systematic approach or comprehensive rightsizing
analysis; thus, the U.S. government risks building new embassy
compounds designed for the wrong number of staff. We recommended that
State develop a formal, standard, and comprehensive process for
establishing staffing projections for new embassy compounds. In June
2003, State implemented a new process for projecting long-term staffing
needs when planning and designing new embassy compounds, which included
a mandatory rightsizing analysis, along with procedures for
documenting, vetting, and approving the projections. From June 2006
through February 2007, State reported that comprehensive rightsizing
reviews significantly reduced the project scopes and construction costs
of 25 new facilities, resulting, overall, in the reduction of more than
1,300 positions, as well as a $93.8 million savings in capital
construction costs, $170.4 million savings in annual operating costs,
$1.3 million annual savings from reduced maintenance requirements, and
$21 million in other annual savings derived from a reduction in Capital
Security Cost Sharing fees for State and other agencies. (GAO-03-411,
GAO-02-780):
2.30.F. Reducing the Fiscal Year 2007 Appropriation for the Millennium
Challenge Corporation (MCC): Our work contributed to the Congress's
appropriating $1.77 billion for MCC for fiscal year 2007--$1.23 billion
less than the President requested. MCC oversees a foreign assistance
program intended to provide economic assistance to countries
demonstrating a commitment to ruling justly, investing in people, and
encouraging economic freedom. MCC is authorized to provide assistance
to countries that enter into public compacts with the United States. In
February 2006, to assist in the fiscal year 2007 budget deliberations,
we published correspondence providing estimates of future MCC
obligations under two illustrative scenarios. In a constrained budget
environment, our work provided a framework for identifying the trade-
offs between different funding levels and the numbers and sizes of
compacts that MCC could support, and showed that MCC could operate with
a smaller fiscal year 2007 appropriation than requested because it
would most likely not obligate the balance of its prior years'
appropriations until late in fiscal year 2007. Our work informed and
supported the appropriations, budget, and authorizing committees'
decisions about MCC funding for fiscal year 2007. For example, the
House and Senate authorizing committees cited our report in their views
and estimates to the House and Senate budget committees for the fiscal
year 2007 budget request for foreign operations. In addition, MCC
officials said our analysis was used by corporation officials and
congressional appropriators to frame key discussions about the
potential impact of various appropriations levels on compact
assistance. (GAO-06-466R):
2.31.N. Improving Strategic Planning of U.S. Public Diplomacy Efforts:
Since 2003, we have issued a series of reports on U.S. public diplomacy
efforts that are led by State and supported by the communication
activities of other key agencies such as the U.S. Agency for
International Development (USAID), DOD, and the Broadcasting Board of
Governors. We have reported, among other things, that government
communication efforts are not supported by an interagency strategy and
face a number of practical challenges, including insufficient resources
and staff, shortfalls in foreign language capabilities, burdensome
administrative requirements, security concerns that limit embassy
staff's ability to interact with local populations, and a general
absence of in-depth research. We have made recommendations in each of
these areas and actions have been taken. Most notably, in June 2007, an
interagency policy coordinating committee, headed by State, released a
U.S. National Strategy for Public Diplomacy and Communication. The
release of this strategy addresses our concern that the lack of an
interagency strategy complicated the task of conveying consistent
messages, increased the risk of communication mistakes, and lessened
the likelihood that the United States would achieve mutually
reinforcing benefits from the communication activities of involved
agencies. (GAO-07-904, GAO-05-323, GAO-03-951):
2.32.N. Depositing Antidumping and Countervailing Duties in the
U.S. Treasury: In 2005, we reported on the Continued Dumping and
Subsidy Offset Act (the Byrd Amendment), which provided funding from
import duties to U.S. companies deemed injured by unfair trade. In the
program's first 4 years, Customs and Border Protection (CBP) disbursed
about $1 billion to U.S. producers injured by unfairly traded (dumped
or subsidized) imports, with just five of these producers receiving
about half the total amount. After an active debate in which our report
figured prominently in congressional remarks, the Congress passed and
the President signed legislation in early 2006 to phase out the
amendment so that antidumping and countervailing duties collected would
go to the U.S. Treasury. The phaseout began on September 30, 2007.
Also, following our report's recommendations, CBP has taken steps to
improve program management and accountability for disbursements. (GAO-
05-979):
2.33.C. Improving the Efficiency and Effectiveness of U.S. Food Aid:
Our work contributed significantly to the Congress's dialogue on its
reauthorization of the food aid provisions of the 2007 Farm Bill. Since
2002, the Congress has appropriated an average of $2 billion per year
for U.S. food aid programs to needy countries, which delivered an
average of 4 million metric tons of agricultural commodities per year.
Despite growing demand for food aid, delivery requires an average of 4
to 6 months, and rising business and transportation costs have
contributed to a 43 percent decline in average tonnages delivered over
the last 5 years. For the largest U.S. food aid program, these costs
represent approximately 65 percent of total food aid expenditures. We
found that multiple challenges hinder the efficiency and effective use
of U.S. food aid, and U.S. agencies do not adequately monitor food aid
programs. As a result, the programs are vulnerable to not getting the
right food to the right people at the right time. To improve efficiency
of food aid delivery, we made several recommendations in areas such as
logistical planning, transportation contracting, food quality, and
monetization. The Administrator of USAID and the Secretary of
Transportation generally agreed with our recommendations and are
addressing our concerns. We also recommended improving the effective
use food aid by enhancing the monitoring of programs, the reliability
and use of needs assessments, the use of nonfood resources, and
interagency coordination in updating food products and specifications.
The Administrator of USAID generally agreed with our recommendations
and is working to address them. (GAO-07-560, GAO-07-616T, GAO-07-905T):
2.34.C. Identifying Key Issues for Oversight of U.S. Efforts to
Stabilize and Rebuild Iraq: Our work informed the Congress about the
challenges faced in stabilizing and rebuilding Iraq. Our January 2007
compendium identified oversight issues and recommendations from our
recent reports. We recommended that the United States develop a
national strategy to address the political, security, and economic
challenges it faces in Iraq and to identify U.S. costs. We found that
DOD does not provide the Congress with information on the readiness of
each Iraqi unit, which hinders congressional oversight. Our May 2007
report described challenges faced in rebuilding Iraq's oil and
electricity sectors and recommended that the United States work with
those ministries to craft a strategic plan to restore the sectors. We
recommended installing a metering system to improve accountability in
Iraq's oil sector and developing comprehensive hydrocarbon legislation
to improve Iraq's legal environment and attract investment. We also
reported that DOD could not account for thousands of weapons provided
to the Iraqi security forces. DOD endorsed our recommendations to
determine what accountability procedures apply to the equipment
distributed and to ensure that staff and resources meet the new
requirements. Our September 2007 benchmark report found that the Iraqi
government had not met most of its 18 key legislative, security, and
economic benchmarks. State and DOD agreed with our recommendations to
improve the quality of information provided to the Congress on the
progress being made in meeting these benchmarks. (GAO-07-426T, GAO-07-
612T, GAO-07-637T, GAO- 07-677, GAO-07-711):
2.35.C. Reforming Procurement and Oversight at the United Nations(UN):
In 2006 and 2007 we issued several reports and testified before the
Congress on the UN's vulnerability to fraud, waste, abuse, and
mismanagement due to weaknesses in oversight and procurement practices.
We found that UN funding arrangements constrained the ability of the
Secretariat's internal oversight unit to operate independently and
direct resources toward high-risk areas as needed. The UN Secretariat
has taken actions that address some of our recommendations on oversight
and have been reported to the General Assembly, including establishing
an Independent Audit Advisory Committee that is expected to be
operational in early 2008. We also reviewed the internal oversight
functions at six other UN organizations and found that their internal
audit and evaluation offices had not fully implemented international
auditing or UN evaluation standards. Three of the six UN organizations
we reviewed have endorsed our recommendations to improve oversight and
consider establishing independent audit committees accountable to their
governing bodies. For procurement, we found serious weaknesses in
internal controls. Specifically, the UN lacks an effective
organizational structure for managing procurement, has not demonstrated
a commitment to improving its procurement workforce, and has not
adopted specific ethics guidance. State endorsed our recommendation
that it work with member states to address UN procurement weaknesses,
and the UN subsequently announced actions to address some of these
weaknesses, including efforts to ensure proper accountability and
training of all involved in procurement. (GAO-07-597, GAO-07-14, GAO-
06-577, GAO-06-575, GAO-06-226T):
2.36.C. Strengthening Anti-Human Trafficking Interventions: Our first
report on human trafficking drew attention to several key concerns,
including that (1) the estimates of the number of trafficking victims
are questionable and (2) State's annual report assessing foreign
governments' compliance with minimum standards to eliminate human
trafficking has incomplete explanations about its ranking decisions and
is not used consistently to develop antitrafficking programs. Baseline
estimates of the number of trafficking victims provide benchmarks for
measuring the impact of certain antitrafficking interventions. The lack
of such reliable baseline estimates has made it difficult to ensure
that organizations fund antitrafficking interventions with the greatest
impact. Our follow-up review on human trafficking found that
governments, international organizations, and nongovernmental
organizations must overcome challenges that have impeded collaboration
in the past for their efforts to be successful. It also found that U.S.
government-funded antitrafficking projects often lack important
elements that allow projects to be monitored, and little is known about
project impact due to difficulties in conducting evaluations. In
addition, we convened a panel of experts who identified and discussed
ways to address the factors that make it difficult to monitor and
evaluate antitrafficking projects; their suggestions included improving
information on the nature and severity of human trafficking and
addressing monitoring and evaluation weaknesses in the design of
antitrafficking projects. (GAO-07-1034):
2.37.C. Highlighting Afghanistan Oversight Issues for the Congress: In
2007 the United States accelerated its efforts to secure, stabilize,
and rebuild Afghanistan. In May 2007 we provided to the Congress a
compendium of key oversight issues. This product was based on our
continuing and prior work on Afghanistan, which, since 2003, has
addressed food and agricultural assistance, reconstruction assistance,
efforts to establish Afghan national security forces, and drug control
programs. Through this work we identified needed programmatic
improvements and obstacles that have limited success. For most U.S.
efforts, we identified the need for improved planning, including the
development of strategic plans that have measurable goals, specific
time frames, cost estimates, and identification of external factors
that could significantly affect efforts. Some additional needed
improvements we identified included better coordination among the
United States and other donor nations, more flexible options for
program implementation, and timelier project implementation. We also
concluded that several obstacles, especially deteriorating security and
the limited institutional capacity of the Afghan government, challenged
the effectiveness of U.S. efforts. In this compendium, we suggested
that the Congress review a number of issues. (GAO-07-801SP):
Respond to the impact of global market forces on U.S. economic and
security interests:
2.38.C. Preventing Identify Theft: In a June 2007 report on data
breaches and identity theft, we provided the Congress with information
to help assess the need for a federal statutory requirement to notify
individuals whose personal information has been breached. We found that
according to information from government agencies, trade associations,
and news media, breaches of sensitive personal data by companies,
government agencies, and a wide variety of other organizations have
occurred frequently in recent years. Additionally, we found that it is
not well known how often such breaches have led to identity theft, but
available data indicated that most breaches had not resulted in
detected incidents of identity theft. We reported that requiring
affected consumers to be notified of a data breach may encourage better
security practices and help prevent or mitigate identity theft, but
would also pose certain costs and challenges, such as expenses to
develop incident response plans and identify and notify affected
individuals. We concluded that should the Congress choose to enact a
federal notification requirement, a risk-based notification standard--
designed to alert consumers only when a risk of harm exists--could
avoid undue burden on organizations and unnecessary and
counterproductive notifications of breaches that present little risk.
(GAO-07-737):
2.39.C. Raising Awareness of Vulnerabilities in the Export Control
System: For over a decade, we have identified weaknesses in the
effectiveness and efficiency of the export control system and other
government programs designed to protect technologies critical to
national security-- prompting us to designate this as a new high-risk
area. In 2006, our reports revealed newly identified shortcomings in
the export control system's ability to protect the export of controlled
information. Specifically, we determined that State and Commerce, which
regulate defense-related exports, had less oversight of exports of
controlled information than they did of controlled goods. Our work
further determined that the departments had not fully assessed the
risks associated with the variety of means, such as e-mails and foreign
participation in research efforts, used to transfer controlled
information to foreign nationals at both companies and universities.
This vulnerability is exacerbated in an era of rapid advances in
communication and increased globalization. Our past and ongoing work
has laid out a framework for addressing weaknesses and reexamining the
fundamentals of the export control system. Recently, this work formed
the basis for a congressional hearing in July 2007, attracted
international press coverage, and prompted calls for fundamental reform
of the system. (GAO-07-1135T, GAO-07-69, GAO-07-70):
2.40.C. Improving Americans' Financial Literacy: In a December 2006
report, we found that the federal National Strategy for Financial
Literacy lacked certain key elements needed for it to play a meaningful
role in guiding federal efforts to improve Americans' financial
literacy. We recommended that the Financial Literacy and Education
Commission modify this strategy to, among other things, incorporate
specific goals and benchmarks and concretely define financial literacy.
We also identified opportunities for ensuring that the commission's Web
site best served consumers, as well as for ensuring that the
commission's reviews of federal financial literacy activities were
meaningful and independent. In response to our work, the commission's
April 2007 report to the Congress provided a concrete definition of
financial literacy to guide its work. The commission also said that by
2009 it would follow our recommendations to conduct usability testing
and measure customer satisfaction with its Web site. Further, the
commission began taking measures recommended in our report to ensure
that its reviews of federal financial literacy activities are conducted
by an independent third party. (GAO-07-100, GAO-07-777T):
2.41.C. Improving Financial Supervision of Holding Companies:
Responding to the dramatic changes in the financial services industry,
the Federal Reserve, the Office of Thrift Supervision, and SEC oversee
the risk management practices of holding companies on a consolidated
basis. Consolidated supervision recognizes the increased importance of
enterprise risk management by large, complex financial services firms,
and enables supervisors to oversee the risks of financial services
firms on the same level that the firms manage those risks. In response
to our report, SEC restructured its consolidated supervision program to
strengthen the prudential goals of the program. SEC is also
implementing our recommendation that it develop and make publicly
available a description of the program in order to foster greater
transparency. Also following our report, the office proposed changes in
its consolidated supervision framework to more explicitly and
transparently focus its supervision of holding company risk-management
strategies. We had recommended such changes to facilitate consistency
with other supervisory agencies as well as consistent treatment of the
office diverse population of holding companies. (GAO-07-154):
2.42.C. Improving the Transparency of the Regulatory Process for the
Base II Frame work: In a February 2007 report, we identified numerous
challenges that banking regulators and banks were facing in moving to
implement the new Basel II capital framework. We determined that
increased transparency going forward could help reduce ambiguity and
respond to questions and concerns among banks and industry stakeholders
about how the rules will be applied, their ultimate impact on capital,
and the regulators' ability to oversee their implementation. We
concluded that with safeguards in place, it was appropriate for U.S.
banking regulators to proceed with finalizing Basel II and begin the
transition period, but we identified ways to help reduce the
uncertainty about the impact of Basel II on required levels of
regulatory capital, improve the transparency of the process, and
address the impediments regulators were facing. Consistent with our
recommendations, the regulators have developed a process to assess the
performance of proposed rules, which they believe will provide a
structured and prudent framework for managing the implementation of
Basel II in the United States. (GAO-07- 253):
2.43.C. Improving Consumer Protections When Purchasing Title Insurance:
In an April 2007 report, we identified characteristics of the current
title insurance market--including weaknesses in state and federal
regulatory efforts and alleged illegal kickbacks paid by title agents
to realtors, builders, and mortgage brokers--that raised questions
about the prices paid by consumers for title insurance, which is a
required part of almost all home purchases or mortgage refinancings. We
reported that in order to better protect consumers and increase their
ability to comparison shop for title insurance, HUD and state insurance
regulators should strengthen their oversight of title agents,
especially those owned by realtors or mortgage brokers that have a
financial interest in referring consumers to a particular title agent.
In response to the issues identified by our work, HUD has made plans to
improve its consumer education efforts, and state insurance regulators
and title industry officials have begun planning ways to better detect
and deter illegal kickbacks as well as to promote price competition
beneficial to consumers. (GAO-07-401):
2.44.C. Improving SEC Enforcement Operations: We found that while SEC's
Division of Enforcement (Enforcement) is planning improvements to its
investigation management processes and information systems, these
planned changes may not address all existing limitations. For example,
Enforcement has not established written processes and criteria for its
new centralized approach for reviewing and approving new
investigations, which could limit the effectiveness of this new
approach. Additionally, Enforcement has not taken sufficient steps to
ensure the reliability of data that will be entered into a new
investigation management system. We also found that Enforcement's
decentralized approach to managing the Fair Fund program, under which
funds are returned to investors who suffered losses due to violations
of securities laws or regulations, had contributed to distribution
delays. We recommended that SEC and Enforcement take several actions to
improve Enforcement's capacity to manage the investigative process and
the Fair Fund program, which SEC has agreed to implement. As a result,
Enforcement should be better positioned to identify and punish
violations of the securities laws and regulations and compensate
investors for their losses. (GAO-07-830):
[End of Strategic Goal 2]
Strategic Goal 3:
Help transform the federal government�s role and how it does business
to meet 21st century challenges:
Reexamine the federal government's role in achieving evolving national
objectives:
3.01.F. Developing Common Cross-Agency Grant Reporting Systems: In our
2005 report, we found that efforts toward common electronic systems for
reporting financial and performance information for financial
assistance (primarily grants) had not been developed, although they
were required under Pub. L. No. 106-107, the Federal Financial
Assistance Management Improvement Act. The report concluded that the
lack of continuity toward meeting Pub. L. No. 106-107's requirement to
develop a common reporting system for similar programs could prevent
agencies from reaching the act's goals. We recommended that OMB ensure
that efforts to develop common grant-reporting systems are undertaken
on a schedule that would result in significant progress by the time
Pub. L. No. 106-107 sunsets in November 2007. The co-chair of the cross-
agency team established by OMB to oversee the reforms said that the
report raised the issue to the team's attention and helped it focus on
what needed to be done and make faster progress. Following the report's
release, it was discussed in several forums, and those working on the
initiative drafted a detailed business case that included plans for
implementation. The updated 2007 business plan estimated the net
present value of cumulative financial benefits after deducting the
system costs through fiscal year 2008 to be $127.4 million from
eliminating or reducing the costs associated with multiple agencies
developing and maintaining grants management systems and financial
benefits through fiscal year 2015 of $3.4 billion (with a net present
value of $1.5 billion). (GAO-06-566, GAO-05-335):
3.02.C. Rebuilding the Gulf Coast in the Aftermath of Hurricanes
Katrina and Rita: Our work on Gulf Coast rebuilding has informed the
Congress on the status of recovery and rebuilding efforts in the wake
of hurricanes Katrina and Rita, and has helped to provide a framework
for congressional oversight in this area. We have testified on
challenges facing the rebuilding effort, as well as potential financial
implications for the federal government. Our work has also focused on
identifying good practices and potential reforms to assist the nation
in responding to, and rebuilding from, future catastrophic disasters.
For example, we reported on the use of state-to-state emergency
management compacts and developed several recommendations to help
federal agencies better leverage state and local resources in the
future. The Congress, the media, policy and research institutions,
community planning groups, and the senior leadership of DHS's Office of
the Federal Coordinator for Gulf Coast Rebuilding have all made use of
our work to better understand the scope of the resources needed and to
improve coordination and cooperation between the government and
nongovernmental organizations involved in the ongoing rebuilding
effort. (GAO-07-1079T, GAO-07-809R, GAO-07-854, GAO-07-574T):
3.03.C. Enhancing National Preparedness for a Potential Influenza
Pandemic: Our work helped inform the Congress and highlighted
opportunities for federal agencies to improve the nation's preparedness
for and response to a potential influenza pandemic. Agencies have
agreed to follow our recommendations in several areas. DHS and the
Department of Health and Human Services agreed to develop rigorous
testing, training, and exercises for pandemic influenza to ensure that
federal leadership roles and responsibilities are clearly defined,
understood, and work effectively. FEMA plans to work with OPM to
formally define the role of federal executive boards (which are
interagency coordinating groups designed to strengthen management and
intergovernmental relations) in emergency planning and response. USDA
agreed to develop a response plan that identifies critical tasks and
related capabilities, develop standard criteria for state response
plans; work with states on how to overcome potential problems, and
determine the amount of antiviral medications needed and how to supply
them to workers responding to an outbreak of highly pathogenic avian
influenza among poultry. DHS and USDA agreed that further clarification
of the roles during certain emergencies is needed. DOD agreed to take
steps to clarify roles and responsibilities within the department and
with the combatant commands, better communicate with its own personnel,
improve planning, link funding and performance measures with goals, and
identify the resources that combatant commands need. Financial market
regulators have set dates by which organizations critical to the
operation of the securities markets should complete their pandemic
response plans. (GAO- 07-781, GAO-07-696, GAO-07-652, GAO-07-604, GAO-
07-515):
Support the transformation to results-oriented, high-performing
government:
3.04.F. Monitoring the Development and Operation of the 2010 Census:
Through a series of testimonies and reports, we have continued to
monitor the development and operation of the 2010 Census for our
congressional clients. Specifically, we recommended that the U.S.
Census Bureau (Bureau) thoroughly test the second or replacement
questionnaire mailing to recipients who did not return the initial
census form. The second mailing would boost the mail-back response rate
by several percentage points, which in turn would reduce the number of
costly personal visits enumerators would need to make to collect the
information in person from each nonresponding household. Bureau
officials agreed, tested the replacement mailing in 2006, and have told
us that they are firmly committed to including the replacement mailing
in the 2010 Census. On a net present value basis, the use of a
replacement mailing should reduce the cost of the decennial census by
about $436 million. (GAO-05-9, GAO-07-1132T, GAO-07-1106T, GAO-07-
1063T, GAO-07-361):
3.05.F. Realizing Financial Benefits from Implementing IT Management
Practices: In response to our recommendations and best practices
guides, federal agencies such as DOD, DOT, the National Aeronautics and
Space Administration (NASA), VA, and USDA have taken steps to enhance
their capability to oversee IT investments and improve IT investment
decision making. For example, USDA has improved its capability to (1)
align and coordinate the responsibilities of the department's various
IT investment management boards for decision making related to IT
investments, including crosscutting investments; (2) ensure that
proposed IT investments support work processes that have been
simplified or redesigned to reduce costs and improve effectiveness, and
make maximum use of commercial-off-the-shelf software; and (3)
structure information systems investments into manageable projects as
narrow in scope and brief in duration as practicable to reduce risk,
promote flexibility and interoperability, increase accountability, and
better correlate mission need with current technology and market
conditions. Taking these and similar steps to implement a more robust
IT investment management process and more effective IT investment
decision making helped to enable USDA and the other agencies to reduce
a total of more than $1.3 billion in planned IT expenditures from their
annual IT portfolios. (GAO-04-49, GAO/AIMD-10.1.13):
3.06.F. Improving Federal Agency Modernization Blueprints: Over the
last several years, we have reported on efforts across the federal
government to advance the state of department and agency modernization
blueprints, or enterprise architectures, and have made a range of
recommendations. This work has continued to result in improvements to
both enterprise architecture content and use in federal department's
and agencies. Specifically, in 2007, we reported that DOD's departments
corporate Business Enterprise Architecture (BEA) had addressed the core
elements in our Enterprise Architecture Management Maturity Framework,
better positioning the department to realize the transformational value
of its BEA, and that DHS had continued to evolve its enterprise
architecture, including making progress in addressing our
recommendations. Among other things, DHS's efforts have resulted in a
cost avoidance of $93.1 million from using its enterprise architecture
to consolidate multiple existing geospatial programs. (GAO-07-564, GAO-
07-733, GAO-06-831, GAO-04-777):
3.07.N. Strengthening the Link between Contract Incentives and Outcomes
across Government: In December 2005 and January 2007, we reported that
DOD and NASA structured monetary incentives in ways that led to
significant disconnects between the fees paid to contractors and
program outcomes. For instance, DOD paid an estimated $8 billion in
award fees on contracts regardless of outcomes. In both reports, we
made recommendations aimed at strengthening the link between incentives
and outcomes. The Comptroller General testified on this issue in April
2006 and we briefed multiple congressional committees. The result has
been changes to award and incentive fee policies across several
agencies, including DOD, NASA, and DHS. DOD and NASA have emphasized
the need to link award fee criteria to acquisition outcomes. The
Congress also enacted legislation incorporating most of our
recommendations directed at DOD, and the emergency supplemental
appropriation law for 2007 required all DHS award fees to be linked to
successful acquisition outcomes. Further, legislation encouraging the
Director of National Intelligence to make similar changes has been
introduced in the Congress. Moving toward more outcome-based award fee
criteria will give contractors an increased stake in helping agencies
develop more realistic targets up front or risk receiving less fee when
unrealistic cost, schedule, and performance targets are not met. Once
these steps are implemented, the agencies have the potential to realize
significant cost savings as a result of better acquisition outcomes or
lower fee payments to contractors. (GAO-07-58, GAO-06-66, GAO-06-409T):
3.08.C. Providing a Road Map for Fundamental Procurement Reform in the
District of Columbia: The District's history of procurement problems--
which include poor planning, excessive use of sole-source contracts,
and unauthorized personnel committing government resources--is well
documented. Our January 2007 report compared the District's procurement
law, processes, and management and oversight practices to guiding
principles of public procurement and to reform efforts of other cities
faced with similar challenges. We found that the District's procurement
contained numerous exceptions to its uniform procurement law and did
not provide the right structure and authority to manage and oversee the
entire acquisition function across all entities. To better ensure that
every dollar of its more than $1.8 billion procurement investment is
well spent, we outlined a comprehensive road map with a number of
recommendations to the Mayor and Chief Financial Officer (CFO) that
included submitting a plan to the Congress to reform the procurement
law and system to better promote transparency, accountability, and
competition, and minimize fraud, waste, and abuse. We were called to
testify before the City Council and, citing our report as the impetus
for change, the Council committed to moving the District forward with
procurement reform in line with our numerous recommendations. The Mayor
has since submitted a plan to the Congress that reflects our
recommendations, and has recently nominated a Chief Procurement Officer
with extensive public procurement experience. The CFO is also revising
a financial order to address our concerns about unauthorized
commitments. (GAO-07-159):
3.09.C. Strengthening Oversight of Costly Yet Critical Environmental
Satellite Programs: In recent years, we have provided assistance to the
Congress by helping oversee the government's acquisition of major
satellite programs: the $12.5 billion National Polar-orbiting
Operational Environmental Satellite System (NPOESS) program, which is
to replace two existing polar-orbiting systems, and the planned $7
billion Geostationary Operational Environmental Satellite-R series
(GOES-R) program, which is to replace the current series that will
reach the end of its useful life in approximately 2014. Both are
considered critical to the United States' ability to maintain the
continuity of data required for weather forecasting and global climate
monitoring through the years 2026 and 2028, respectively. Since 2002,
we have issued multiple reports and testimonies identifying risks
facing NPOESS and, more recently, GOES-R. Most recently, we reported on
the NPOESS program's serious technical challenges and actions required
for program success, and on the lessons the GOES-R program would have
to learn to ensure its success--and recommended increasing and
improving program management and mitigating serious risks on both
programs. We testified in September 2006 on GOES-R, in June 2007 on
NPOESS, and in July 2007 on both programs. Our work has helped focus
congressional, agency, and public attention on these important programs
and has led to ongoing changes in the management structure of the
satellite program offices, more active oversight by high-level agency
officials, and more awareness of the technical and managerial issues
facing the programs by the Congress. (GAO-07-498, GAO-07-910T, GAO-07-
1099T, GAO-06-993, GAO- 06-1129T):
3.10.C. Strengthening DOD Business Systems Modernization Management:
For decades, DOD has been challenged in modernizing its timeworn
business systems. In 1995, we designated DOD's business systems
modernization program as high risk, and we continue to designate it as
such today. From May 2001 through May 2007, our body of work on DOD's
institutional approach to modernizing its business systems, coupled
with our reviews of specific business system investments, has produced
recommendations that provide an impetus and framework for modernization
success. The Congress has embraced these recommendations in legislative
mandates to DOD, such as those in the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005, and the department has largely
agreed and taken actions to implement them. To its credit, the
department continues to make progress in establishing corporate
management controls, such as its BEA, corporate investment structures
and processes, and increased oversight and life management discipline
on its largest business system investments. Key to success in going
forward will be ensuring that these approaches and abilities are
extended to and employed on component organizations' (military
departments and defense agencies) business system modernization
efforts. As in the past, our continued efforts to monitor DOD's
progress on establishing and implementing the full range of system
modernization and maintenance controls will be beneficial in helping
the department make further positive strides on this highly important
initiative. (GAO-07-229T, GAO-07-538, GAO-07-733, GAO-06-171, GAO-06-
215):
3.11.C. Improving the Government's Approach to Interoperable
Communications: In reviewing a key e-government initiative intended to
improve communications interoperability among first responders, we
reported on progress with the over $2 billion in federal grants awarded
to states and localities and highlighted the need for DHS to take a
more strategic approach to improving interoperable communications among
federal, state, and local first responders. More recently, as mandated
by the Congress, DHS has been working to develop a new office that is
responsible for making such improvements across all levels of
government. In addition, as a result of our report, the Senate
Committee on Homeland Security and Governmental Affairs sent a letter
to the Secretary of the Department of Homeland Security reinforcing the
importance of the issues identified in our report and encouraging DHS
to implement our recommendations. (GAO-07-301):
3.12.C. Ensuring Personal Privacy in the Face of Increasing Threats: We
helped the Congress address increasing concerns that individuals'
personal information could be inadequately protected by DHS and other
federal agencies, potentially compromising individuals privacy rights
or exposing their information to misuse, such as through identity
theft. For example, in February 2007, we reported that DHS had not
taken sufficient action to assess privacy risks before developing a
sophisticated data-mining tool. Because of the prominence of our
findings, a hearing was held to discuss the report, which also received
significant media coverage. We also reported on the progress and
accomplishments of the DHS Chief Privacy Officer, citing several areas
for improvement that were subsequently discussed at a separate hearing.
Beyond DHS, we analyzed lessons learned from the well-publicized data
breaches at VA and other agencies to develop a key recommendation
regarding assistance to individuals affected by data breaches at
federal agencies. (GAO-07-293, GAO-07-630T, GAO-07-522, GAO-07-1024T,
GAO-07-657):
3.13.C. Helping to Gauge Agency Progress in Implementing the Freedom of
Information Act(FOIA): We assisted the Congress by analyzing FOIA
request processing at major agencies and describing trends, which
include a small but steady rise in reported requests pending at the end
of each fiscal year. We also analyzed the FOIA improvement plans that
these agencies developed in response to an executive order, comparing
them with the major areas of focus in the order. We presented these
results at a hearing in February 2007 and in a March report. As a
result of our FOIA work, we were consulted on the development of
several bills intended to strengthen FOIA, and our analysis provided a
basis of discussion and debate for congressional decision makers. This
work is part of our ongoing body of work on FOIA implementation and
improvement, on which both the Congress and the press have come to rely
in gauging agencies' progress in this area. (GAO-07-441, GAO-07-491T):
Support congressional oversight of key management challenges and
program risks to improving federal operations and ensuring
accountability:
3.14.F. Informing the Termination of the Space Launch Initiative: In a
September 2002 report, we questioned NASA's overall acquisition
strategy to develop a new generation of space transportation vehicles-
-the Space Launch Initiative (SLI). We reported that NASA faced
considerable challenges defining basic requirements for SLI. We also
noted that most of the key technologies under consideration by SLI were
very immature and that management controls necessary to estimate cost
and gauge progress were not in place. We concluded that NASA's goal of
defining SLI requirements by the November 2002 time frame may not be
realistic and that the agency must determine whether developing a
second generation vehicle was still worthwhile given plans to extend
the life of the Space Shuttle and reduce the capabilities of the
International Space Station. We recommended that the NASA Administrator
take several steps, including completing the reassessment of NASA's
Integrated Space Transportation Plan, before moving forward with SLI.
NASA concurred and, in November 2002, took action to delay decisions
regarding future launch vehicles and refocused SLI on conducting basic
research on advanced launch technologies and developing a vehicle to
serve the International Space Station. Two years later, NASA finalized
its decisions regarding new launch vehicles and adopted a new
overarching strategy for all space transportation, known as the Vision
for Space Exploration. In 2005, NASA terminated the entire SLI program
and redirected $3.7 billion in funding originally programmed for SLI
toward future exploration activities. (GAO-02-1020):
3.15.F. Identifying Improper or Potentially Fraudulent Hurricane
Disaster Assistance Payments: Our audit and investigative work related
to FEMA's Individual and Households Program (IHP) estimated that it
made from $600 million to $1.4 billion in improper or potentially
fraudulent financial assistance payments following hurricanes Katrina
and Rita. We referred over 22,000 potential fraud cases to the Katrina
Fraud Task Force for appropriate criminal investigation. These cases
included (1) duplicate payments to individuals who registered and
received assistance twice using the same SSN and address of damaged
property, (2) individuals who obtained IHP assistance using invalid
SSNs (e.g., those belonging to deceased or other individuals), (3)
individuals who received multiple emergency assistance payments (in
violation of the Stafford Act), and (4) rental assistance payments to
federal and state prisoners incarcerated at the time of the hurricanes.
As of May 2007, FEMA reported that it had begun actions to recoup $700
million--and collected $16 million--in improper financial assistance
payments. (GAO- 07-252T, GAO-07-300, GAO-07-418T, GAO-06-655):
3.16.F. Funding USPS Postretirement Health Care Obligations: OPM
analyzed the funding of USPS's retirement plans and reported in 2002
that the current level of pension fund contributions would result in a
surplus of funds and that this surplus would adequately cover future
pension benefit obligations. At the request of the Congress, we
reviewed OPM's analysis and a proposal by the administration to change
the funding formula. We emphasized to the Congress that even though
USPS had a projected pension surplus, at the time we conducted our
review USPS had not yet funded $40 billion to $50 billion in
postretirement health care benefits. In response, the Congress passed
Pub. L. No. 108-18, the Postal Civil Service Retirement System Funding
Reform Act of 2003, which, among other things, required that any
savings accruing to USPS after fiscal year 2005 as a result of the
enactment of the act be held in an escrow account until further
legislation was enacted that would resolve the disposition of these
funds. The Congress wanted the funds made available from any pension
payment reductions to be used to address, among other things, USPS's
unfunded postretirement health care obligations. USPS responded by
raising postal rates effective January 2006 solely to fund the escrow
requirement. In December 2006, the Congress passed Pub. L. No. 109-435,
the Postal Accountability and Enhancement Act, that required USPS to
make a series of 10 annual payments into the newly created Postal
Service Retiree Health Benefits Fund for fiscal years 2007 through 2016
to help fund USPS's unfunded retiree health care obligations. The first
of these payments totaled $5.4 billion--a financial benefit to the
federal government resulting from our work. (GAO-04-238, GAO-03-448R,
GAO-02-170):
3.17.F. Reducing Federal Improper Payments: Since fiscal year 2000, our
recommendations have been aimed at raising the level of attention given
to improper payments and contributed to the Congress passing the
Improper Payments Information Act of 2002. The provisions of this
legislation coincide with our recommendations that agencies take
actions to estimate, reduce, and publicly report improper payments.
Fiscal year 2006 marked the third year that federal agencies
governmentwide were required to report improper payment information
under the act in their performance and accountability reports. For
fiscal year 2006, 19 agencies consisting of 60 programs reported
improper payment estimates totaling about $42 billion, including 15
newly reported programs or activities. Agencies also have made progress
in reducing their improper payments. In fiscal year 2007, we estimated
that our improper payments work resulted in a reduction of improper
payments of about $1 billion (present value) during fiscal year 2006.
(GAO-07-635T, GAO-07-92, GAO-06-581T, GAO-05-245, GAO-02-749):
3.18.C. Exposing the Risks Posed by the Government's Increasing
Reliance on Contractors: Commercial firms are playing an increasing
role in performing Government work. For example, contractors are
performing as system integrators for major development projects, like
weapons and ships. In this role, a commercial firm performs a broader
range of activities than a traditional contractor, including activities
once performed by the government. Also, commercial services are being
substituted for government labor. In DOD alone, contracts for such
services have increased over 70 percent in the last 10 years. In the
last year, we have reported and testified several times on the
oversight risks posed by this increased reliance on contractors.
Specifically, we reported that the large growth in service acquisitions
by DOD had not been a managed outcome and that the department did not
have a sense of where it wanted such acquisitions to be in the future.
We reported concerns over the Coast Guard's management and oversight of
its largest acquisition, the $24 billion Deepwater program, in part due
to its inability to effectively oversee and hold the system integrator
accountable. We also reported that the Army's relationship with the
contractor serving as system integrator for its $200 billion FCS
program posed risks for the Army's ability to provide oversight over
the long term. As a result, H.R. 2722 contains restrictions on DHS's
use of lead system integrators and H.R. 1585 prohibits DOD's use of
lead system integrators after October 1, 2011. (GAO-07-20, GAO-07-380,
GAO-07-874, GAO-07-672T, GAO-07-359T):
3.19.C. Revising Government Auditing Standards: In 2007, we issued a
major revision to the Government Auditing Standards that organizes,
clarifies, and strengthens the standards for audits of government
programs and entities. The 2007 revision achieves increased harmony of
Government Auditing Standards with other U.S. and international
standards, sets out fundamental ethical principles, strengthens the
emphasis on audit quality, and highlights the importance of auditing in
promoting public sector accountability and providing information for
improving government operations. The 2007 revision also updates and
clarifies chapters on financial audits, performance audits, and
attestation engagements. Overall, our 2007 revision is aimed at helping
government accountability professionals rise to the challenge of
producing high-quality audits that lead to better government. Auditors
in federal, state, and local governments, as well as certified public
accountant (CPA) firms conducting audits of government programs, are
currently implementing our revised standards. (GAO-07-731G):
3.20.C. Transforming the Accountability Profession: Throughout 2007, we
joined with standard setters both domestically and internationally to
promote a coordinated approach to transformation of the accountability
profession to meet the rapid pace of technological advance and
globalization, and the widespread influence of the Sarbanes-Oxley Act.
With executives, managers, auditors, investigators, and others in the
accountability process eager to stay up-to-date on Government Auditing
Standards revisions and current accountability issues, we gave dozens
of presentations across the country and abroad to help educate and
train a body of professionals who are informed on the issues and able
to apply current standards effectively. We continued to work for
stronger and more congruent standards through letters of comment to
other standard setters and coordination with the three other principal
standard setters that make up the Auditing Standards Coordinating
Forum. We helped shape the accountability agenda through our
participation in an advisory group for the Public Companies Accounting
Oversight Board, presented our views on Sarbanes-Oxley guidance to SEC,
and worked with the International Organization of Supreme Audit
Institutions (INTOSAI) to draft international guidance to help public
sector auditors ensure the accountability of government programs and
financial management to the people they serve. (Based on
presentations):
3.21.C. Identifying Potential Fraud in the Federal Transit Benefits
Program: We conducted forensic audit and investigative work concerning
the largest portion of the federal transit benefits program, the
National Capital Region's $140 million program. As a result of our
work, we estimated that federal employees in the National Capital
Region claimed at least $17 million in potentially fraudulent transit
benefits during 2006. We found instances in which National Capital
Region federal employees improperly sold transit benefits on the
Internet auction site eBay and the community Web site Craigslist and
claimed benefits they did not need. Based on the potentially fraudulent
activities uncovered by our work, on May 14, 2007, OMB issued a
memorandum to the heads of departments and agencies requiring them to
implement specific additional internal controls to better ensure that
only qualified applicants receive federal transit benefits. In
addition, we referred the cases we identified of potential federal
employee fraud to the inspectors general for potential criminal
prosecution or other appropriate administrative disciplinary action.
(GAO-07-724T):
Analyze the government's fiscal position and strengthen approaches for
addressing the current and projected fiscal gap:
3.22.F. Improving Collection of Federal Nontax and Criminal Debts: Over
the past several years, we have rigorously promoted federal agencies'
use of key debt collection processes and procedures to improve
collections of delinquent federal nontax civil debts (most of which
were over 6 months delinquent) and criminal debts owed to the federal
government and victims of crime. In fiscal year 2006, reported
delinquent federal nontax civil debts totaled about $65 billion, and
criminal debts totaled about $35 billion. Education, Justice, and the
Department of the Treasury (Treasury) have continued to take steps to
improve collection of these debts based largely on our recommendations.
In fiscal year 2007, we estimated that improved collections have added
$2.2 billion to a steady stream of debt recoveries. (GAO-04-338, GAO-
02-313, GAO-01-664):
3.23.F. Improving IRS Methodology for Pursuing Delinquent Taxes: Our
previous financial audit work determined that IRS did not have systems
or procedures in place to allow it to identify and actively pursue
cases with collection potential. We recommended that IRS improve its
capacity to assess the collectibility of delinquent taxes as a way to
better target debt collection resources. In 2004, IRS began
implementing sophisticated modeling technology to differentiate between
more and less productive cases in order to make better resource
allocation decisions. In 2007, we reported that IRS's actions in
response to our previous recommendations increased its collections of
delinquent taxes using approximately the same level of resources by
about $4.2 billion or almost 20 percent in fiscal year 2006 from fiscal
year 2003 levels. (GAO-01-42):
3.24.F. Modifying Collection Due Process Appeals: The Congress twice
modified the Collection Due Process (CDP) program based on our October
2006 report. First, we found that on average businesses that requested
a CDP appeal for failure to pay employment taxes were delinquent for
nearly 1-1/2 years and had a median tax liability of more than $30,000.
Citing our report, the Senate Finance Committee proposed modifying CDP
procedures for employment tax cases to deny a prelevy CDP hearing,
authorize IRS to continue collection activity, and provide for a
postlevy CDP hearing. The change was enacted in the Small Business and
Work Opportunity Tax Act of 2007. The Joint Committee on Taxation
estimated that the change will increase tax collections by about $146.3
million (net present value) over a 5-year period. Second, we estimated
that 5 percent of taxpayers who requested a CDP hearing raised
frivolous arguments (arguments without a legal basis). IRS had
repeatedly submitted proposals to increase the frivolous submissions
penalty from $500 to $5,000. The increase was enacted in the Tax Relief
and Health Care Act of 2006. Committee staff said our work confirmed
the need for legislative action. The committee estimated that
collections will increase by about $13.7 million (net present value)
over 5 years due to this change. (GAO-07-112):
3.25.F. Collecting Delinquent Taxes by Contracting with Private
Collection Agencies (PCA): We reviewed IRS's preparations to implement
a proposal being considered by the Congress to authorize IRS to
contract with PCAs to collect delinquent tax debts. Committee and
conference reports on the proposed law referred to our report
conclusion that "If Congress does authorize PCA use, IRS's planning and
preparations to address the critical success factors for PCA
contracting provide greater assurance that the PCA program is heading
in the right direction to meet its goals and achieve desired results."
The Congress subsequently enacted the law authorizing IRS to implement
the program which, in fiscal years 2007 through 2011, is expected to
yield about $408 million ($365 million in present value) in net revenue
to the federal government. (GAO-04-492):
3.26.F. Increasing Tax Collections by Revising IRS's Withholding
Compliance Program: In November 2003, we recommended that IRS assess
the value of its Questionable Form W-4 program and determine whether
the program should continue in its current form. An IRS task force
acted on our recommendation and concluded that the program was not
operating effectively. Subsequently, IRS eliminated the Questionable
Form W-4 program and said it would enhance its withholding compliance
program by making more effective use of information reported on the
Form W-2 wage and tax statements to ensure that employees have enough
federal income taxes withheld from their wages. The enhanced
withholding compliance program has better ensured proper withholding
from employees' wages. Based on IRS's data and assumptions, we
conservatively estimated that the new program has resulted in the
collection of $423 million (net present value) in additional income
taxes for fiscal years 2005 and 2006. (GAO-04-79R, GAO-03-913R):
3.27.N. Improving Federal Financial Reporting: For the 10th consecutive
year, we were unable to express an opinion on the U.S. government's
fiscal year 2006 consolidated financial statements because of ongoing
material weaknesses in internal control and financial reporting issues.
Nonetheless, through our continuing efforts as the principal auditor of
the U.S. government's consolidated financial statements, we were able
to effect a number of significant improvements to the understandability
and utility of federal financial reporting during 2007. For example,
because of our recommendations, Treasury took action to increase the
understandability and utility of these statements by adding important
contextual information in the Management's Discussion and Analysis
section of the U.S. government's fiscal year 2006 financial report. In
addition, Treasury improved compliance with generally accepted
accounting principles and disclosure of required information in several
areas, including the federal employee and veteran benefits payable;
earmarked funds; and property, plant, and equipment. Further, our
January 2007 special product, Fiscal Stewardship: A Critical Challenge
Facing Our Nation, used the results of our financial statement audit
work as a foundation for a high-level summary of the nation's current
financial condition, long-term fiscal outlook, and possible ways
forward. (GAO-07-362SP):
3.28.N. Improving Research and Setting Goals to Reduce the Tax Gap: In
July 2005, we made various recommendations to IRS to improve its
efforts to reduce the tax gap. One recommendation was that IRS develop
plans to periodically measure tax compliance for areas of the tax gap
that have been previously measured (e.g., individual taxpayers) and
study ways to cost effectively measure compliance for other parts of
the tax gap. IRS agreed with our recommendation and in June 2007
announced its plans to launch a new compliance study of individual
taxpayers that will be part of a series of annual studies of such
taxpayers. Another recommendation was that IRS set a long-term
voluntary compliance goal to help measure the success of its compliance
efforts and focus on achieving results. In its 2007 budget
justification, IRS established a goal of 85 percent voluntary
compliance by 2009. (GAO-05-753):
3.29.C. Addressing Our Nation's Long-term Fiscal Challenge: We
continued our effort in fiscal year 2007 to help members of the
Congress and the public better understand the implications of current
policies and the long-term fiscal challenges facing our nation. In
particular, the Comptroller General continued and expanded GAO's
participation in the Fiscal Wake-Up Tour sponsored by the Concord
Coalition. In this effort--which grew out of our forum on the long-term
fiscal challenge-- analysts from the Brookings Institution and the
Heritage Foundation join the Concord Coalition and the Comptroller
General in town hall meetings and forums around the nation. The focus
of our education effort is simple: long-term simulations show ever-
larger deficits resulting in a federal debt burden that ultimately
spirals out of control--continuing on our current unsustainable fiscal
path will gradually erode, if not suddenly damage, our economy, our
standard of living, and ultimately our national security. This message
has also been reinforced in the Comptroller General's testimonies,
speeches, and presentations. Another contribution to the effort was
publication of Fiscal Stewardship: A Critical Challenge Facing Our
Nation in late January 2007; this publication was designed to present
selected financial statement and budget information together in a
manner accessible to the general public. The success of this public
education effort in increasing public awareness of the nation's fiscal
challenges is evidenced by (1) increased media coverage, including a 60
Minutes segment, an appearance by the Comptroller General on The
Colbert Report television show, and editorials calling attention to
this problem and the need for action, and (2) a large increase in
requests for Fiscal Wake-Up Tour town hall meetings by members of the
Congress and local community leaders. (GAO-07-1144T, GAO-07 -1261R, GAO-
07-389T, GAO-07- 362SP, GAO-07-1164CG):
[End of Strategic Goal 3]
Strategic Goal 4:
Maximize the value of GAO by being a model federal agency and a world-
class professional services organization
Improve client and customer satisfaction and stakeholder relationships:
4.01.C. Strengthening Communication with Our Congressional Clients and
Measuring Congressional Satisfaction with Our Work: We explored and
implemented technology solutions in several areas that facilitate our
staff's ability to meet the clients' needs and enhance the quality and
timeliness of client service. We continued our pilot of e-dissemination
of our products to congressional clients to more fully understand the
nuances involved in implementation on a larger scale. We avoided
approximately $48,800 in costs for the 51 reports issued during fiscal
year 2007. Based on the cost-effectiveness of e-dissemination and the
positive response from our clients, we recently have fully implemented
E-dissemination for the vast majority of our products, both for our
client and internally. The advantages include the following:
* Almost instant availability of a completed product to our client.
* Capability to search, excerpt, and forward the product to others
electronically.
* Streamlining of our publication process due to elimination of
printing time.
* Estimated annual savings of about $300,000 in printing costs.
* Possibility for future electronic enhancements in information
presentation such as color and multimedia elements and Internet-only
presentation of Web-based survey results and tables that summarize
information from databases.
To maximize our ability to gauge client satisfaction with our products
and determine improvements needed, we implemented several strategies
including the development of electronic surveys that can be responded
to via Blackberry devices, alerting recipients of upcoming surveys by e-
mail or telephone, and following up with nonrespondents by e-mail or
telephone.
4.02.C. Assessing Internal Customer Satisfaction with Our Services and
Processes and Implementing and Measuring Improvement Efforts: The 4th
annual GAO Customer Satisfaction Survey was conducted in November 2006
where 1,500 of our staff provided input on their satisfaction with our
administrative services. We measured (1) 19 services that help
employees get their jobs done (e.g., IT, report production, and travel)
and (2) 10 services that improve employees' quality of work life (e.g.,
benefits and transit subsidies). For the first time we met or exceeded
our target of 4.0 for both measures. The score for services that help
employees get their jobs done remained the same at 4.1, and the score
for services that affect quality of work life increased from 3.98 to
4.0. Chief Administrative Office units reviewed the results, developed
action plans to address customer issues and recommendations, and
implemented several improvements. Examples include launching the
Information Systems and Technology Services (ISTS) Solutions Center
(described below); automating the distribution of transit benefits;
upgrading Internet Protocol Television, a technology that allows video
to be viewed over the Web, to provide direct broadcasts to all our
field locations; redesigning the GAO Library Services Web site; and
assigning office move responsibility to our Commercial Facilities
Management contractor for better coordination and service to our
customers.
In the IT services area--which was identified by our customers as the
most important service in getting their jobs done and considered "Best-
In-Class" in comparison to other professional services peer
organizations--we developed and launched the ISTS Solutions Center, a
searchable knowledge base for guidance, instruction, and tips regarding
our computing environment; and an IT Service Metrics Dashboard to
provide monthly update information on the status of our IT systems and
service, such as outages, support calls, hardware/software security,
remote access, and videoconferencing. As a result, we are providing
more readily accessible, comprehensive information to our customer,
saving time and increasing productivity for our customer and our ISTS
staff; increasing transparency with our customers; and providing
additional opportunity for customer feedback.
To supplement the GAO Customer Satisfaction Survey, we gathered
additional customer feedback on our knowledge services through the
Product Assistance Group Customer Satisfaction Survey, Shared Services
Centers comment boxes, and Library Research Survey. We began and
completed several initiatives to improve services and enhance customer
knowledge, including
* increasing library training efforts on authenticating Internet
resources, advanced Internet searching, and using various online
databases;
* developing a new brochure to better explain the revised publishing
process;
* improving customer service procedures and notification processes;
and:
* improving copier/printer availability for customers.
4.03.C. Strengthening Relationships with our Stakeholders: We leveraged
our resources to improve institutional capacity building and transform
the accounting profession internationally through negotiations with
State, the World Bank, and INTOSAI. An interagency agreement with State
was signed to fund translation of the Government Auditing Standards
into Arabic and provide training for our Iraqi counterparts. We also
negotiated a memorandum of understanding with the World Bank and the
INTOSAI Development Initiative to jointly sponsor the first Supreme
Audit Institution Transformation Seminar.
Domestically, we held the second annual meeting with the inspectors
general that brought together GAO, the President's Council on Integrity
and Efficiency, and the Executive Council on Integrity Efficiency and
resulted in a consensus to meet annually as well as a proposal to
improve collaboration, coordination, and communication between GAO and
the inspectors general. We also developed an operations manual to guide
teams in convening and reporting on the results of Comptroller General
forums and roundtables.
Lead strategically to achieve enhanced results:
To achieve our strategic goal of being a model federal agency, we must
ensure that our strategic leadership is focused on achieving results.
We continued to strengthen and further integrate our strategic planning
and our performance, financial, and IT management to maximize results,
manage risks, enhance responsiveness, and ensure exemplary practices
and procedures. To accomplish this, we built on our established base of
strong strategic planning, workforce and succession planning, sound
financial management, and targeted performance measures.
4.04.C. Ensuring a Seamless Strategic Planning, Workforce Planning, and
Budget Process to Maximize Results and Manage Risks with Current and
Expected Resources: This fiscal year we issued an update to our
Strategic Plan for 2007- 2012. To facilitate the update, we engaged
with our client, the Congress, and leveraged the Comptroller General's
Advisory Board, the Domestic Working Group, and the Global Working
Group to help determine global and national forces and trends shaping
our work for the next 5 years, resulting in a substantially revised
themes document.
During a very difficult budget year, we successfully demonstrated
enhancements to our overall resources planning and decision making
through continued integration of our budget, workforce planning, and
human capital programs. Through integrated planning and sophisticated
analysis and modeling, we identified budgetary options to maximize
results and manage risks within current and expected resources,
providing the Comptroller General and the Executive Committee with
viable options to make informed, complex, and timely decisions in the
best interest of the organization and its people.
To better align staff learning and development with succession
planning, we created a new feature in the workforce planning call for
managing directors to indicate their interest and needs for unit-
dedicated services from the Learning Center for their teams and offices
in the upcoming year. These services include workshops on performance
management issues, team-building activities, group facilitation
assistance, assistance in creating Web-based tutorials or e-learning
products, assistance in creating instructor-led learning or knowledge-
sharing programs, assistance in identifying training resources for
staff, supervisory training, and 360-degree and upward feedback
assessments.
4.05.C. Achieving External Recognition: We received several notable
external recognitions this year:
* For the sixth time, the Association of Government Accountants awarded
our performance and accountability report the Certificate of Excellence
in Accountability Reporting.
* The Federal Section of the International Public Management
Association for Human Relations selected GAO to receive one of the two
Leading Edge Awards it bestows each year, recognizing small and large
federal organizations that have demonstrated progress toward effective
alignment of their human capital strategies with agency mission and
goals. Our award was in the small agency category and recognizes our
work in addressing human capital challenges in our overall
transformation efforts.
* We received a 2007 second place ranking among large agencies in the
Best Places to Work Survey conducted by the Partnership for Public
Service and the Institute for the Study of Public Policy Implementation
at American University.
* We are again included in CIO Magazine's "CIO 100" list in recognition
of our effective use of information technology innovation to meet
critical business needs.
* Two of our products--the 2006 Performance and Accountability
Highlights (GAO-07-3SP, January 2007) and Fiscal Stewardship: A
Critical Challenge Facing the Nation (GAO-07-362SP, January 2007)--were
among the 800 documents selected from more than 4,000 national and
international entries from the public and private sectors that received
American Inhouse Design Awards.
* We received the 2007 Archivist's Award in Records Management this
year for our Electronic Records Management System (ERMS), a system
designed to enable us to use electronic records to conduct agency
business and to comply with the Federal Records Act and records
management regulations.
4.06.C. Strengthening Our Strategic Human Capital Management to Achieve
Enhanced Results: Building on the work of a 2006 recruiting and hiring
task team, we made great progress in our efforts to further enhance our
recruiting and hiring processes. We implemented recommendations that
resulted in:
* enhanced communication and coordination with our service management
team on hiring and staffing issues;
* a fully revised, competency-driven application form and process;
* an aggressive and diversified hiring strategy focused on year-round
hiring;
* a more user- friendly and informative Web presence;
* a more coordinated and focused diversity outreach effort; and:
* better coordination and understanding of Human Capital Office (HCO)
services.
In performing its annual analysis of our performance appraisal data,
our Office of Opportunity and Inclusiveness discovered a growing gap
between performance rating averages for African American and Caucasian
analysts. To address this gap we contracted with an external consultant
to analyze African American and Caucasian performance appraisal data
from 2002 through 2006 and make recommendations for reversing this
trend.
We successfully implemented our Executive Exchange Program this year.
As a result, we were able to leverage our resources and promote
understanding of agency-level auditors' work and use of consistent
approaches, enabling auditors to use the work of other CPAs. We hosted
two private sector accounting firm executives for 4 months, having them
work on projects relating to federal agency audits and agency financial
statement issues and developing protocols for staff working on the
consolidated financial audit. The participants were able to make a
major contribution to our organization by developing protocols that
will assist our staff in understanding the work of agency-level
auditors and promote the use of consistent approaches so that auditors
can use the work of other CPAs. Our management, the two executives, and
their employer all felt this was a valuable experience and a way to
gain perspectives on how GAO and the private sector operate.
Our market-and performance-based compensation system (PBC), which was
fully implemented in 2006, was refined based on analysis and feedback
from the fiscal year 2006 pay adjustments, and a series of fact sheets
explaining all aspects of the system were developed and disseminated.
The following modifications were made and implemented as of January
2007:
* All staff receive 100 percent of their PBC amount.
* The distribution of the PBC amount between a base pay increase and
bonus requires that a minimum of 50 percent be provided as base pay up
to the applicable competitive compensation limit of the Band with the
actual percentage to be determined annually by the Comptroller General.
* The Band III speed bump was eliminated.
* A minimum bonus amount of $100 was established.
* A communications analyst pay process was established that parallels
the Professional Development Program and provides for appraisals and
pay adjustments for Band I CAs every 26 weeks for the first 2 years of
service.
4.07.C. Ensuring Sound Financial Practices and Robust Systems in Our
Fiscal Operations: We had a very active, productive, and challenging
year as we converted to a new financial management system. The new
system will ensure that (1) our people and processes are enabled
through technology and sound fiscal operations practices and systems
and (2) our decision- making capabilities are enhanced. For a more in-
depth discussion of the system, see "From the Chief Financial Officer"
in part III, Financial Information.
We successfully completed our fiscal year 2007 OMB Circular No. A-123
and No. A-127 reviews, which resulted in no finding of material
nonconformance. As a result, we reported an assurance statement on our
internal control over financial reporting as of September 30, 2007.
We provided leadership in legislative branch agencies' collaborative
efforts on crosscutting technology and policy matters to improve the
efficiency and effectiveness of government. Our efforts helped define
standard budget formulation practices and processes, identify economy
of scale opportunities through cross-servicing financial and business
services in the legislative branch, and share internal control best
practices.
We built on our successful launching last year of the Financial Audit
System (FAS) by implementing several enhancements to integrate FAS with
our ERMS. This enabled us to upload over 3,500 documents to ERMS in
less than 15 minutes, eliminating the need for staff to inventory,
pack, and ship to storage hard copy documents; saving the cost of off-
site storage and retrieval; and freeing up physical storage space in
headquarters used for storage of prior year audit documents.
Leverage our institutional knowledge and experience:
4.08.C. Maximizing the Collection, Use, and Retention of Essential
Organizational Knowledge: We further enhanced ERMS, a vital system for
enabling our staff to use electronic records to conduct agency business
and to comply with the Federal Records Act and records management
regulations. We developed and disseminated protocols and guidance for
organizing documents more easily, and briefed and trained our staff,
thus improving our staff's abilities to appropriately share documents
through ERMS and increasing our knowledge-sharing capabilities.
We implemented several improvements to our primary internal
communications process, the Notices weekly e-mail and archival and
searchable Web site, thereby enhancing staff's ability to easily access
accurate and complete information in a timely manner. We added
capability to highlight communications from the Comptroller General,
and to distinguish between notices geared to all staff or for
headquarters staff only. We also reorganized the listing of notices on
the intranet homepage to mirror the organization by category of the
weekly Notices e-mail, and added a link at the end of each Notice to
link users to related notices.
To further enhance our communications and address a need not covered by
Notices, we developed a desktop electronic bulletin board for sharing
information agencywide on a variety of activities or events not related
to the official business of the agency but of interest and importance
to our employees. We are currently testing and will be launching it
early next fiscal year.
4.09.C. Increasing Our Knowledge-Sharing Capability: We redesigned the
GAO Libraries Web site and portal this fiscal year to enhance
information sharing and accessibility. We made available to all our
staff an information portal that provides an access point for more than
200 databases, including [hyperlink, http://www.Lexis.com]. The portal
more prominently features our libraries' catalog, making it easier to
determine what books the libraries own and what journals, magazines,
and newspapers our staff can access electronically and in print.
We launched a new intranet site for our Office of Opportunity and
Inclusiveness that provides our employees convenient access to
information about the office's services and policies. The site provides
information and resources on diversity efforts, conflict resolution and
mediation, the discrimination complaint process, sexual harassment, and
interpreting services, as well as a link to the No FEAR Act that
requires federal agencies, among other things, to inform their current,
past, and prospective employees about their rights and protections
under federal antidiscrimination and whistleblower protection laws.
Acting on recommendations from an independent review of our external
Web site by the Nielsen Norman Group, we launched a new and improved
version of the site, [hyperlink, http://www.gao.gov], during the fourth
quarter. This new version implements 40 of the 51 recommendations from
the group, including improved navigation and searching, and
incorporates the group's principles and methodology into our standards
and processes. We will address the remaining 11 recommendations in the
upcoming year.
4.10.C. Enhancing Knowledge Sharing with National and International
Accountability and Professional Organizations: To enhance knowledge
sharing and capacity building among the members of INTOSAI and the
wider accountability community, we launched a new Web site for the
INTOSAI International Journal of Government Auditing. The Web site is
user- friendly and provides ready access to more readers worldwide. In
addition, it provides the platform for the next transformation phase,
which will focus on best practices and benchmarking studies, and
facilitate interaction among supreme audit institutions through
discussion groups and communities of practice.
Enhance our business and management processes:
4.11.C. Streamlining the Engagement Process and Improving Engagement
Services: To enhance our engagement services, we instituted
clarifications to our quality assurance policies and procedures. These
clarifications should better prepare us for an upcoming external peer
review of our quality assurance policies and procedures related to
government auditing standards and our compliance with these standards
in conducting our work. Some of the clarifications included:
* updating our policy manual and clarifying other existing policies;
* assessing the needs of new hires and providing them with quality
assurance and peer review training;
* implementing early critical sections of the revised Yellow Book; and:
* developing and communicating a preparation strategy to leadership and
assigned staff.
We also implemented several improvements to the annual inspection
program that resulted in increased efficiency of the process, improved
process documentation, and greater understanding across the GAO audit
community. These changes included revising inspection terminology and
doctrine to reflect audit community practice, refining the deliberative
and analytic processes, and reducing the number of forms and required
signatures.
We continued to advance our strategy enhancements in the economy and
efficiency of our publishing and printing processes by implementing
several changes, including:
* negotiating and implementing a new digital printing contract, which
enhances our move to e-dissemination and the capability to print only
the quantity of our product needed for planned distribution to the
requester and key recipients instead of the 150- copy minimum required
when sent to an outside contract printer;
* implementing preflight and quality reviews earlier in the publication
process to ensure file correctness and functionality far in advance of
final processing, allow earlier quality assurance staff involvement,
and reduce errors in products;
* revising our quality checklist forms used before the product goes to
final production;
* successfully establishing a contract vehicle to utilize off- site
contract editing support for peak periods, enabling the production
department to meet critical editing needs when production levels are
greater than existing resources can handle; and:
* more clearly defining the publishing process by creating and posting
on our intranet a publishing process chart, Product Assistance Group
brochure, and standardized guidance for the use of management-tracking
information.
We also implemented improvements for e-supplements and technical
appendixes to our products that make them easier for staff to find and
use. We issued guidance in the Electronic Assistance Guide for Leading
Engagements so that staff have a single official location to obtain
guidance on when and how to create e-supplements and technical
appendixes. In addition, we created an efficient technology solution to
make the results of non-Web-based surveys available as e-supplements,
so that the presentation of results is consistent and clearer to the
reader.
4.12.C. Improving our Administrative and Management Processes and Using
Enabling Technology to Improve Crosscutting Processes: We improved our
administrative and management processes by streamlining, applying
enabling technology, and implementing cost and program efficiencies.
These efforts increased the efficiency, timeliness, and effectiveness
of our services to our customers. These improvements included upgrades
to Web-based applications and sites, a number of cost-saving measures,
and enhancements to our performance management system and our
suggestion program.
Through upgrades and additions to our Web-based applications and Web
sites, we increased the efficiency and effectiveness of several mission
support operations. Examples of these improvements include:
* providing automatic self-certification for the Learning Center course
evaluation;
* automatic routing of telework application e-mails to decision makers;
* developing a GAO-wide Honor Awards site for managers and staff to
enter nominations and the honor awards screening committee to enter the
committee's recommendations to the Executive Committee, and a site for
GAO-wide Honor Award recipients to schedule photography appointments;
* creating new Web sites for (1) the mentoring program, (2) the staff
and contractor exit system, (3) external GAO Web site usability
testing, (4) staff applications to "Dine with Dave," (5) a location to
address requests or inquiries from the general public as a security
measure for our mission work site, (6) the financial disclosure
information and process, and (7) the Program and Technical Development
Program; and:
* upgrading 100 Web sites with the latest versions of PHP, a scripting
language that converts a static Web site into a dynamic one, and MySQL,
an open source database, to support our Web surveys.
We instituted several cost-saving procedures/systems this fiscal year
to improve the efficiency of our administrative systems:
* Installed a toll-free ISTS Help Desk telephone number, eliminating
long-distance charges for staff teleworking or traveling outside the
D.C. Metro area who need IT assistance.
* Modified the procedures for shipping supplies and IT equipment to the
field offices, including direct shipment of ink cartridges, and use of
UPS Next Day Air Saver services for shipment of IT equipment, for a 20
percent cost saving per shipment.
* Automated the van scheduling system, reducing the human resources
required for the function and providing automatic verification and
confirmation information to the requester.
* Awarded a no-cost contract to digitize the documents that constitute
the legislative histories of 21,000 public laws from 1921 to 1995 in
exchange for the contractor's exclusive right to market and sell access
to the digitized versions of these histories, thus preserving the
integrity of these files and improving the searchability of this
valuable information resource.
To enhance our performance management system, we upgraded and enhanced
the automated Individual Development Plan (IDP) based on feedback we
received during the pilot. These changes reinforce our professional
development requirement; facilitate all levels of IDP review; establish
the capability to capture, review, communicate, update an IDP
throughout the appraisal cycle; link IDPs with appraisals; and provide
reports to managers and HCO.
Become a Professional Services Employer of Choice:
4.13.C. Promoting an Environment That Is Fair and Unbiased and That
Values Opportunity and Inclusiveness: We inaugurated our first
agencywide mentoring program in fiscal year 2007. The program crosses
all bands and career tracks to provide facilitated career discussion,
online learning resources, group mentoring, and one-to-one mentoring
for staff. We have 75 individuals currently participating in the one-to-
one mentoring, and another 80 participating in the seven mentoring
groups that have been formed.
We significantly strengthened our summer intern program this year to
ensure that interns experience a more structured and consistent program
in terms of their team experience, training, and feedback.
Specifically, we improved the program's operating guidance, enhanced
training and responsibility for intern coordinators, revised the intern
evaluation form, and implemented a structure for independent review of
the interns' work experience and conversion process. Feedback from the
interns has been very positive; the program changes will be fully
evaluated after intern conversion offers are considered for fiscal year
2008 entry-level hiring, and additional improvements will be identified
for the fiscal year 2008 intern cycle.
4.14.C. Providing Tools, Technology, and a World-class Working
Environment: To provide an attractive and productive environment in our
Atlanta, Denver, and Seattle field offices, we contracted for
additional space. The space was used to accommodate new staff, and
provide additional conference and team rooms, secure rooms, and video
conferencing rooms.
We successfully awarded a consolidated facilities management contract
to ensure effective and efficient operations and maintenance of our
headquarters building and provide support services to the legislative
branch. We were able to consolidate other contracts into the
consolidated facilities management contract to eliminate duplicative
costs for administration and management of the contracts.
We completed the installation and configuration of a storage area
network (SAN) in the GAO headquarters LAN Operations Center.
Installation of the SAN has allowed us to reduce backup time, reduce
the time it takes to put a file server into production, and improve
system availability through less intrusive backup methods and storage
availability, and has improved the speed of response to requests for
data restores. In addition, the SAN upgrade has improved our disaster
recovery and continuity capabilities and positioned us to support
future infrastructure enhancements.
4.15.C. Providing a Safe and Secure Workplace: We piloted the OPM
automated system for personnel security background investigations,
eQIP, and implemented the system on October 1, 2007, at no cost to the
agency, based on the pilot results showing an estimated 50 percent
reduction in processing time. eQIP allows personnel security background
investigation forms to be completed, encrypted, and transmitted to the
OPM servers over the Internet. In addition, we began scanning field
office fingerprint charts, reducing the number of rejections by OPM by
an estimated 30 percent.
We made substantial progress in upgrading our security systems, and
hence, our security posture. With our completion of Phase I of our
Integrated Electronic Security System (IESS), we also established
contingency planning alternatives in case of emergency and laid the
groundwork for implementation of an agencywide automated entry control
system and the integration of the field office security systems.
Specific accomplishments include:
* relocating the Security Operations Center to a more secure location,
* constructing a new Emergency Operations Center,
* upgrading the access control system,
* creating a GAO Security Local Area Network, and:
* converting to an upgraded IESS server, database, and software.
To increase our employees' awareness of IS issues, we aggressively
pursued initiatives to improve and better coordinate the IS awareness
program, completing the following actions:
* developed an awareness briefing delivered to all staff by the
Comptroller General,
* developed and offered computer-based training that consolidates
information and IS awareness training requirements, and:
* delivered customized security awareness briefings to nearly 1,800
employees directly involved in external engagements.
4.16.C. Enhancing Employee Views about GAO: Results from our Employee
Feedback Survey show that our staff's satisfaction with the support
supervisors provide for programs to balance work and personal life has
continued to increase year after year. This year, 87.2 percent of
respondents strongly or generally agreed that their current supervisor
supported these programs, up from 86.8 percent in fiscal year 2006.
We enhanced several of our work life programs and services to better
meet the needs of our employees. Two noteworthy examples are:
* increasing the capacity of the headquarters daycare center through
expansion and:
* providing more supportive and private accommodations for nursing
mothers in field offices.
Our student loan repayment program, under which we will repay a portion
of an eligible employee's student loan debt, is intended to help us
retain highly qualified individuals with critical knowledge and skills,
especially those recently hired. An employee or a candidate for
employment must sign a service agreement under which the individual
agrees to a specified period of employment with us of not less than 3
years in return for repayments toward a student loan previously
obtained by the candidate or employee. The program continued to be an
important and popular one for our staff. From fiscal year 2006 to
fiscal year 2007 the number of applicants increased from 324 to 363, we
increased our program budget from $1.4 million to $1.7 million, and the
number of recipients increased from 285 to 320. The amounts provided
were $4,500 per employee for general category recipients and $7,500 for
special category recipients.
Our telework program also continues to be a valuable tool for both
managers and employees in balancing work requirements and personal
needs. In fiscal year 2007 there were 1,718 more telework agreements
than in the previous year, a 200 percent increase. We had 2,370
employees participating in the telework program on short-term,
episodic, or continuing agreements. Currently more than 75 percent of
our staff are enrolled in the telework program, far exceeding the
estimated 39 percent enrollment for the entire federal government. In
addition, we improved our telework program application process with
implementation of a web-based application and approval system. We also
conducted a survey on the telework program to determine customer
satisfaction and possible improvement opportunities, and will identify
opportunities for improvement in fiscal year 2008. The survey also
showed that 97 percent of our employees consider telework to be
extremely important or very important, and 98 percent of our employees
would recommend it to other employees.
4.17.C. Improving the Development and Experiences of Newly Hired Staff:
We successfully launched a new professional development program for our
entry-level program and technical specialists. The program was
developed to maximize productivity, enhance job satisfaction, increase
staff retention, and serve as an effective recruitment tool. This 2-
year program helps newly hired or assigned specialists acquire or
enhance job competencies and gain work experiences to help them succeed
in our organization. This is particularly important from a succession
planning perspective since 60 percent of our administrative
professional and support staff managers and leaders are currently
eligible or are within 5 years of being eligible to retire. The
program, which is modeled after the analyst professional development
program, provides orientation, targeted job experiences and
assignments, enhanced guidance and supervision, almost 100 hours of
required training, and progress and salary reviews every 26 weeks.
We also implemented a new approach to ensure that 100 percent of newly
hired staff receive all their mandatory training in a timely and
organized fashion. Under the learning hub concept, introduced last
fall, cohorts of field-based Band I analysts travel to a specified
field office where they receive their mandatory training during a
series of 2-1/2-to-3-day "bundles."
[End of Strategic Goal 4]
2. GAO's Report on Personnel Flexibilities:
As required by section 11 of the GAO Human Capital Reform Act of 2004
(Pub. L. No. 108-271), GAO is reporting actions that have been taken in
fiscal year 2007 under sections 2, 3, 4, 6, 7, 9, and 10.
Section 2 of this act made permanent GAO's authority to offer voluntary
early retirement and voluntary separation incentive payments. During
fiscal year 2007, 16 employees applied for voluntary early retirement,
13 of these applications were approved and 12 employees ultimately
separated during the reporting period. Thirteen of the 16 applicants
applied for voluntary early retirement during an agencywide
opportunity, which was open for 36 days, from October 17, 2006, through
November 22, 2006. Applicants were required to retire between November
28 and December 10, 2006. Of the 13 applications submitted during this
agencywide opportunity, 10 were approved and 3 were denied;
subsequently, 9 of the approved applicants separated. The additional 3
applicants retired under the provision in our implementing regulations
allowing employees to request a voluntary early retirement outside of
an announced opportunity. The use of this authority in this fiscal year
and over the past several years has supported GAO's overall efforts to
reshape our workforce to ensure that we have the appropriate numbers
and levels of staff with those skills and knowledge that will allow us
to accomplish our mission to support the Congress and to help improve
the performance and ensure the accountability of the federal government
for the benefit of the American people.
As noted in prior reports, GAO has not authorized any voluntary
separation incentive payments because of the high cost associated with
the required contribution to the retirement fund. For each separation,
GAO must pay the retirement fund at least 45 percent of the employee's
final basic pay. This is simply too costly. GAO recently submitted
draft legislation to the Congress that would eliminate this payment,
which is not applicable to most executive branch agencies that have
voluntary separation incentive authority.
Section 3 of the act authorizes the Comptroller General to determine
the amount of annual pay adjustments for employees of GAO who are
performing at a satisfactory level, and prescribes the factors to be
considered in making those determinations. In fiscal year 2007, the
Comptroller General authorized a 2.4 percent base pay increase
effective February 18, 2007, for all employees covered by GAO's banded
performance-based compensation (PBC) systems who were performing at a
satisfactory level and who were paid within competitive compensation
limits. In addition to this adjustment, employees were eligible for PBC
using a budget factor of 2.15 percent.
For purposes of the annual adjustment, employees (with the exception of
Band IIB analysts with salaries above the "speed bump") were considered
to be performing at a satisfactory level if they were rated at meets
expectations or higher on all competencies. Thirteen employees were
rated below expectations on one or more competencies and did not
receive the annual adjustment. In the case of Band IIB analysts, in
addition to meeting expectations on all competencies, Band IIB analysts
were also required to have an appraisal average in the top 50 percent
of their comparison groups if their salaries exceeded the Band IIB
"speed bump" (i.e., $121,600 in Washington, D.C.) Two Band IIB
employees did not receive the annual adjustment because their appraisal
averages were not in the top 50 percent, and another 4 received a
partial adjustment.
Finally, 30 Band I employees and 106 Band IIA employees in the
"transition range" had salaries in excess of competitive compensation
limits and therefore did not receive annual adjustments.
As noted above, GAO employees were also eligible for PBC using a budget
factor of 2.15 percent. GAO's compensation regulations for the fiscal
year 2006 appraisal cycle (paid in 2007) were modified from the prior
year's after notice and comment. Among other changes, the revised
regulations allowed all employees, regardless of whether they were over
the competitive compensation limit, to receive 100 percent of their PBC
as an adjustment to their base pay up to the applicable cap with any
remaining amounts provided as lump-sum bonuses. The Band III "speed
bump" was also eliminated in fiscal year 2007.
Consistent with section 31 U.S.C. 732 (c)(3), the Comptroller General
considered various data to determine the amount of GAO's compensation
adjustments, including:
* salary planning data reported by the professional services, public
administration and general industry organizations,
* the General Schedule adjustment,
* purchasing power indices,
* additional PBC amounts and the appropriate distribution of funds
between these two components, and:
* GAO's funding levels.
As to GAO's funding levels, GAO submitted its fiscal year 2007 budget
request on January 13, 2006. In recognition of the fiscal constraints
facing the federal government, GAO held its requested increase to 5
percent over fiscal year 2006. GAO requested funds to support an
increase of 50 full time equivalents to help meet supply and demand
imbalances in supporting congressional requests. The Comptroller
General, in his oral remarks before the House Appropriations Committee
in March 2006, requested the committee's support for our request,
considering our track record of accomplishments.
Our budget request estimated the January 2007 annual adjustment at 2.7
percent based on guidance from the Appropriations Committee and the
Legislative Branch Financial Managers' Council and assumed that pay
parity between the military and civilian work-forces would be
maintained. Our estimate for performance-based merit increases included
a 1.65 percent budget factor and assumed a 65/35 split between base pay
increases and cash bonuses, though not specifically stated in our
budget request.
From October 2006 to February 2007, GAO and other agencies operated
under a series of continuing resolutions, which provided funding at
fiscal year 2006 levels. Language contained in the continuing
resolutions, precluded agencies from using furloughs as an option to
help manage funding constraints. On February 15, 2007, the Congress
enacted a joint resolution, which provided funding for the balance of
the fiscal year. The joint resolution provided GAO funding at a level
slightly above fiscal year 2006 levels, that is, the rescission-reduced
fiscal year 2006 level plus 50 percent of the estimated cost of the
January 2007 annual pay adjustment. GAO submitted its operating plan to
the House and Senate Appropriations Committees on March 16, 2007, and
estimated the annual pay adjustment at 2.4 percent and PBC increases,
which GAO calculated using a budget factor of 2.15 percent, with 100
percent base pay increases up to the maximum.
During the period leading up to the enactment of the joint resolution,
GAO prepared several impact statements for the House and Senate
Appropriations Committees indicating the adverse consequences if GAO
were required to operate in fiscal year 2007 at or near the rescission-
reduced fiscal year 2006 funding level. In the fiscal year 2008 budget
submitted on January 26, 2007, and related testimony, the Comptroller
General reiterated the negative consequences of operating at these
levels.
Thus, while most GAO employees received both an annual adjustment and
PBC, budget considerations necessitated some action on the part of the
Comptroller General, including deferring the increases for three pay
periods until February 18, 2007. Although the 2.4 percent increase was
less than the 2.64 percent provided to Washington, D.C., employees paid
under the General Schedule, virtually all GAO employees were eligible
for additional PBC that could greatly increase the amount of permanent
pay provided them. By contrast, in the executive branch, while all
employees receive an annual adjustment, many employees receive step
increases only every 2 or 3 years and may in fact be capped with no
opportunity for lump-sum bonuses. The average pay adjustment in
February 2007 for analyst and attorney staff who were covered by the
annual PBC process was slightly over 4 percent.
GAO's Senior Executive Service and senior level staff received the same
1.7 percent increase authorized for Senior Executive Service positions
in the executive branch, although the date was deferred to February 18,
2007, as it was for other GAO staff. GAO, however, did not increase the
maximum pay rate for Senior Executives and senior level staff in order
not to have them paid in excess of the pay of a member of the Congress.
GAO's Personnel Appeals Board and student employees are paid by
reference to the General Schedule (GS), and GAO's wage grade employees
are paid by reference to the Federal Wage System (FWS) salary rates.
These employees received the same percentage across-the-board
adjustment on the same effective date as the increases authorized for
GS and FWS employees. Likewise, the pay ranges for these employees
incorporated the changes made to the comparable executive branch pay
ranges.
There is one Administrative Professional and Support Staff (APSS)
employee who is on pay retention under the GAO pay retention
regulations established in January 2006 under the authority of section
4 of the act. This employee has been subject to pay retention
provisions continuously since prior to passage of Pub L. No. 108-271.
Under section 6, certain key employees with less than 3 years service
for purposes of leave accrual may be treated as if they had 3 years of
federal service. Therefore, they would earn 160 hours on an annual
basis instead of 104 hours. These key employees must be occupying
positions that are difficult to fill or have unique or unusually high
qualifications and would be difficult to recruit without additional
incentives. Four employees received this benefit during fiscal year
2007.
Section 7 authorized GAO to establish an Executive Exchange Program.
During fiscal year 2007, this authority was used to bring in two
executives from private industry, each for a period of 4 months. At
GAO, the executives worked on several special projects related to
federal agency audits and agency financial statement issues. In
addition to helping revise the GAO/PCIE Financial Audit Manual, they
used their experience as auditors of agency financial statements to
help develop protocols to help GAO interact with the agency-level
auditors (inspectors general as well as public accounting firms) during
GAO's audit of the U.S. government's consolidated financial statement.
This program was considered a success from GAO's standpoint and it met
the expectation of the private industry employer that was involved. It
is anticipated that this authority will continue to be used on a
sporadic basis.
Section 9 relates to GAO's performance management system and, among
other things, requires a link between the performance management system
and the agency's strategic plan, adequate training on the
implementation and operation of the system, and a process for ensuring
ongoing performance feedback. Even before the imposition of these
requirements, GAO's performance management system was in conformity
with the statutory requirements of section 9. GAO continues to comply
with these requirements and conducts ongoing reviews and analysis of
the performance appraisal system. An evaluation of the fiscal year 2006
appraisal and pay cycle was deferred pending the outcome of the then
ongoing union election.
Section 10 requires the Comptroller General to consult with any
interested groups or associations representing officers and employees
of GAO before implementing any changes under the act. During this
reporting period, changes to GAO's compensation regulations were issued
for notice and comment. However, even prior to the passage of the act,
the Comptroller General and other relevant agency officials were
meeting periodically with the Employee Advisory Council (EAC) to
discuss current and emerging issues of mutual interest and concern,
especially those in the human capital area. GAO also uses employee
forums focus groups, and other mechanisms to obtain employee input on
major proposals. GAO provides all employees with advance copies of
draft orders concerning proposed policies and regulations for their
comments prior to publication in final form. These steps were taken in
regard to the promulgation of all policies and regulations implementing
the provisions of the Human Capital Reform Act of 2004. The Executive
Committee considered all input from EAC members and other GAO employees
before implementing any changes.
In regard to human capital management at GAO, sections 2, 3, 4, 6, 7,
9, and 10 have provided GAO with valuable tools to reshape its
workforce and acquire and retain the necessary talent to carry out its
mission, meet its performance goals, and fulfill its strategic plan.
These sections collectively are an important component of GAO's overall
human capital management. These and other human capital tools and
flexibilities support the achievement of GAO's strategic objective to
be a world-class professional services organization and model federal
agency. Without these provisions, GAO would have difficulty attracting
and retaining top-flight talent in adequate numbers to properly support
the Congress and serve the American people within current and expected
resource levels.
3.GAO's FISMA Efforts:
A significant effort for GAO is the protection of data and access to
information. Although not obligated by law to comply with the Federal
Information Security Management Act (FISMA) under the EGovernment Act
of 2002, we have adopted FISMA requirements to strengthen our
information security program and demonstrate our ongoing commitment to
lead by example. The intentional and inadvertent threats to the
security of IT systems and information assets have steadily increased
requiring constant vigilance over the GAO network. In addition, the
federal IT security policies and practices, as defined by the National
Institute of Standards and Technology (NIST) 800 series guidance and in
Federal Information Processing Standards (FIPS) publications, continue
to evolve in response to this changing landscape of IT security. As
existing NIST guidance has been updated and new guidance disseminated,
we have adjusted our internal IT security policies and procedures, as
well as expanded our efforts to effectively integrate these government-
wide policies and practices into our IT processes.
During the past year, we continued our efforts to improve our
information security program by implementing key requirements set forth
in the recently published NIST Special Publication 800-53, Recommended
Security Controls for Federal Information Systems. We have instituted a
wide range of programs and processes to assess the status of our
information security program on a recurring basis. These efforts
include using the results of internal reviews by program offices, the
GAO Inspector General, and security staff. For example, our Inspector
General independently evaluates our information security program
annually, consistent with FISMA requirements, and identifies any
weaknesses in our implementation of FISMA while offering additional
recommendations to further strengthen our IT security program. As a
consequence, we follow the standard practice of using a public
accounting firm, as well as other external sources, to provide
independent external evaluations and testing of IT controls on our
major applications. And, in the last quarter of fiscal year 2007, we
contracted for the system test of a select group of our information
systems to further assess the effectiveness of our security policies
and practices.
By putting into practice security requirements consistent with FISMA,
we have substantially elevated information systems security
consciousness at GAO through our efforts to:
* implement and refine an enterprisewide, risk-based security program;
* develop and update essential policies, procedures, and reporting
mechanisms to ensure that our security program is integrated into every
aspect of IT system life cycle planning and maintenance;
* provide recurring security training and awareness to all of our
staff;
* integrate security into our Capital Planning and Investment Control
and project management processes; and:
* implement and refine an enterprise disaster recovery solution.
We have also defined security initiatives that focus on changes in our
technology infrastructure, as well as on new security tools and
appliances. Among the projects undertaken during fiscal year 2007 that
have significantly improved our information security program are the
following:
* Security Program Plan. The dynamic nature of security threats
requires that our Information Systems Security Group constantly monitor
activities and adjust to thwart these challenges and meet the needs of
GAO. Therefore, we have refined our Security Program Plan that provides
the road map of activities over the next few years to improve both the
program and technical components of our network security and to reflect
new IT security requirements and challenges. We have conducted monthly
IT security working group, users group, and remediation group sessions
to effectively support security education and remediation activities.
We established and held our third annual FISMA Month in August 2007 to
focus staff on the annual FISMA assessment. And we continue to excel in
our robust security awareness training program with over 98 percent
completion for all GAO staff.
* Enterprise FISMA support. We have completed the upgrade of our
automated tool to support our FISMA tracking efforts to reflect the
controls required by NIST Special Publication 800-53. Using this tool,
we now have an integrated source for managing audit findings and
remediation efforts, for documenting annual assessments, and for
tracking certification and accreditation progress. By integrating these
tracking methods into a single program, the tool allows us to achieve
consistency in monitoring risks and remediation efforts and improving
security within and across our information systems.
* Certification and accreditation of information systems. We have
implemented two key updates to our certification and accreditation
process which include a comprehensive initial security assessment and a
continuous monitoring process. The initial security assessment
documents key aspects of an information system with respect to data
classification, system boundaries and network interactions, privacy
information, and associated risk to GAO. The initial security
assessment is an integrated component of our IT project management
process, serving as a check and balance for project advancement, and
establishes the foundation for our processes to certify and accredit
information systems that we support. In addition, we have updated the
system security plan template to reflect the 17 families of security
controls for information systems in NIST Special Publication 800-53. In
implementing a continuous monitoring process, we have updated the
annual reviews performed under NIST Special Publication 800-26, Guide
for Information Security Program Assessments to meet the requirements
of the NIST 800-53 system controls. Finally, we have updated our
existing risk assessments and system security plans, accomplished
system tests and evaluations to ensure that the appropriate security
controls have been implemented, documented the continuous monitoring of
each system and ensured that the system documentation is up-to-date
supporting annual financial assessments.
* Enterprise event correlation application. A core component of our
capability to monitor our diverse network traffic is the implementation
of an event correlation engine. We have increased that vast amount of
data being monitored with the upgrade to our internal network intrusion
detection systems. This upgrade provides additional insight of the
traffic between our servers and applications by establishing a baseline
of system communications. Integrating this tool with the event
correlation engine provides an integration of security events that
identify potential threats to our network environment. The event
correlation engine enables the integration and automation of security
event auditing, which in turn affords the effective use of limited
resources, minimizing risk to GAO while vigilantly monitoring network
activities.
* Enterprise workstation security. To enhance our enterprise
workstation security solution, we have started adding desktop
encryption as a means to protect data at the desktop and mobile media
devices. Our previous solution standard included two-factor
authentication, anti-spyware, anti-virus, and a personal firewall
application as part of the standard desktop image. These enterprise
applications provide the controls for access and remediation of
security threats to the workstation while providing centralized policy
management and control. They automatically monitor and remediate
various types of threats to the workstation by preventing intrusion and
monitoring programs, such as Adware and Trojan viruses, to prevent
desktops from becoming infected with malware, and protect data from
unauthorized access. The implementation of this integrated solution has
significantly reduced risk to GAO.
* Enterprise Internet screening. Our requirements for access to
information on the Internet are vast. Our pilot implementation of an
Internet screening tool provides antivirus and antispyware protection
to our Web-based services. This tool is capable of implementing GAO's
Internet access policy by blocking non-business-related sites. It has
already provided added security for our Internet access to Web sites
and applications by improving the overall security posture for GAO's
network.
* Vulnerability assessment. Consistent with the requirements cited in
FISMA, we continue with a standard process using an enterprise
assessment tool of scanning all network systems, devices, and
workstations for vulnerabilities in order to ensure secure services and
system standardization and to meet our updated network security
guidelines. Weekly scans are conducted to verify weaknesses in our
information systems and validate that security patches for known
vulnerabilities have been applied to these systems and devices. The
ISTS leadership is briefed on scan results with corrective actions
identified and tracked.
* Application vulnerability assessment. As a standard process, we have
integrated a vulnerability assessment tool into our Web application
development process. This tool complements our overall network
vulnerability process and ensures a process to validate potential risks
in commercial off-the-shelf packages and in-house- developed
applications. This application assessment process assists in validating
the code and coding practices used in our applications and allows for
remediation prior to deploying an application. Moreover, since
implementing this security process into our current coding methodology,
it has reduced the time needed to develop in-house applications by the
development of secure coding practices that are reusable.
* Wired network protocol implementation. In an effort to limit access
to the GAO network, we have implemented the Institute of Electrical and
Electronics Engineers 802.1x protocol to restrict network access in our
team and conference rooms to GAO notebooks only. The validation process
ensures computer equipment that connects to our network is, in fact,
GAO equipment, removing the potential risk for non-GAO equipment to
have uncontrolled access to our network resources. As the network
infrastructure is updated, we will examine how to expand the use of
this technology beyond conference rooms in fiscal year 2008.
* Classified processing upgrade. We completed the expansion of our
Secret Internet Protocol Router Network, known as SIPRNet to 10 GAO
field office sites, providing each site with a secure computing
facility and new equipment and communications links to process
classified information. This network allows our staff to obtain
specific classified data directly from agency officials via secure e-
mail, improves efficiency of our research through direct access to
classified information, posts our classified reports for review and
dissemination, electronically transmits our classified reports to
agencies for comments, and reduces the necessity of using certified
mail for classified data. We completed the upgrades to the
communications links to all field offices and headquarters, improving
transmission capabilities to meet the increased demand for classified
information.
* Disaster recovery. The successful implementation of our alternative
computing facility hosted by the legislative branch is complete. The
move has both improved our security posture and aligned our activities
with those of our legislative branch counterparts, while reducing the
cost of our operations. Last year, we enhanced our emergency
notification system to improve communications support to GAO staff.
This year, we continued to expand our capabilities at the facility by
implementing a high speed connection between GAO headquarters and the
facility to better enable us to provide critical IT services in the
event of a disaster. The high speed link provides for failover
connections between headquarters, field offices and the facility.
Image Sources:
This section contains credit and copyright information for images and
graphics in this product, as appropriate, when that information was not
listed adjacent to the image or graphic.
Front cover and pages i, 1, 19, 63, 97, 125, and 127: GAO (flag,
Capitol balcony), Corbis (Statue of Thomas Jefferson and Inscription of
his Words at the Jefferson Memorial, Capitol dome interior,
Contemplation of Justice statue):
Page 25: GAO (flag), PhotoDisc (bills):
Page 29: GAO (flag), PhotoDisc (cogs):
Page 35: PhotoDisc (bills), GAO (Capitol):
Page 65 and 129: GAO (flag), Corbis (statue of Thomas Jefferson and
inscription of his words at the Jefferson Memorial):
Page 69 and 145: GAO (flag), Corbis (Contemplation of Justice statue):
Page 73 and 163: GAO (flag), Corbis (Capitol dome interior):
Page 77 and 174: GAO (flag, Capitol balcony):
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Footnotes:
[1] The Federal Managers' Financial Integrity Act requires ongoing
evaluations and annual reports on the adequacy of the systems of
internal accounting and administrative control of each agency. The
Government Performance and Results Act seeks to improve public
confidence in federal agency performance by requiring that federally
funded agencies develop and implement accountability systems based on
performance measurement, including setting goals and objectives and
measuring progress toward achieving them. The Federal Financial
Management Improvement Act emphasizes the need to improve federal
financial management by requiring that federal agencies implement and
maintain financial management systems that comply with federal
financial management systems requirements, applicable federal
accounting standards, and the U.S. Government Standard General Ledger
at the transaction level.
[2] In addition, we are continuing to explore measures that could help
us assess how well we develop mutually beneficial relationships with
other accountability organizations. Such partnerships are important
because they (1) create opportunities for collaboration and cooperation
that help all organizations involved address common challenges and
enhance their ability to improve government operations and serve the
public better, (2) allow us and other organizations to make meaningful
changes in our internal accountability processes and policies, and (3)
allow us to better leverage available resources. In part I of this
report, the section on Building and Sustaining Partnerships describes
our progress with measuring the quality of our partnerships and the
section on Strategies for Achieving Our Goals provides additional
information about the partnerships we established or continued in
fiscal year 2007.
[3] Our most recent performance plan is available on our Web site at
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?rptno=GAO-07-421SP].
[4] As part of our risk-based engagement management process, we
identify a new engagement as high interest if the work we need to
perform will likely require a large investment of our resources,
involve a complex methodology, or examine controversial or sensitive
issues.
[5] In fiscal years 2005 and 2006, the work performed under the
Comptroller General's authority represented 13 percent and 15 percent,
respectively, of our engagement efforts.
[6] Fiscal Stewardship: A Critical Challenge Facing Our Nation (GAO- 07-
362SP, January 2007) and Securing, Stabilizing, and Rebuilding Iraq:
Key Issues for Congressional Oversight (GAO-07-308SP, January 2007).
[7] FISMA was signed into law as part of the E-Government Act of 2002
(Pub. L. No. 107-347) and its goals include the development of a
comprehensive framework to protect the federal government's
information, operations, and assets. To ensure the adequacy and
effectiveness of information security controls, FISMA requires agency
program officials, Chief Information Officers, and Inspectors General
to conduct annual reviews of an agency's information security program
and report the results to OMB.
[8] Note 14 to the financial statements describes our Davis- Bacon Act
trust function. For more detailed Davis-Bacon Act financial
information, contact our General Counsel.
[End of Performance and Accountability Report 2006]
*** End of document. ***