Management Reform: GAO's Comments on the National Performance Review's
Recommendations (Letter Report, 12/03/93, GAO/OCG-94-1).

The National Performance Review (NPR), done under the direction of the
Vice President, seeks ways to make the government work better and cost
less.  The NPR recommendations are grouped into four areas: cutting red
tape, putting customers first, empowering employees to get results, and
cutting back to basics.  The NPR report contains 384 recommendations
covering 27 federal agencies and 14 government systems, such as
procurement and budgeting.  The NPR report emphasizes many of the basic
themes that GAO has been stressing for years, including the need to
strengthen agency management and to focus management and accountability
on the results of programs.  Accordingly, GAO agrees with virtually all
of the NPR report's recommendations and believes that their successful
implementation will significantly help the government to overcome its
management and programmatic problems.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  OCG-94-1
     TITLE:  Management Reform: GAO's Comments on the National 
             Performance Review's Recommendations
      DATE:  12/03/93
   SUBJECT:  Public administration
             Personnel management
             Accountability
             Program management
             Agency evaluation
             General management reviews
             Oversight by Congress
             Planning
             Financial management
             Interagency relations
IDENTIFIER:  National Performance Review
             GMR
             
**************************************************************************
* This file contains an ASCII representation of the text of a GAO        *
* report.  Delineations within the text indicating chapter titles,       *
* headings, and bullets are preserved.  Major divisions and subdivisions *
* of the text, such as Chapters, Sections, and Appendixes, are           *
* identified by double and single lines.  The numbers on the right end   *
* of these lines indicate the position of each of the subsections in the *
* document outline.  These numbers do NOT correspond with the page       *
* numbers of the printed product.                                        *
*                                                                        *
* No attempt has been made to display graphic images, although figure    *
* captions are reproduced. Tables are included, but may not resemble     *
* those in the printed version.                                          *
*                                                                        *
* A printed copy of this report may be obtained from the GAO Document    *
* Distribution Facility by calling (202) 512-6000, by faxing your        *
* request to (301) 258-4066, or by writing to P.O. Box 6015,             *
* Gaithersburg, MD 20884-6015. We are unable to accept electronic orders *
* for printed documents at this time.                                    *
**************************************************************************


Cover
================================================================ COVER


Report to Congressional Requesters

December 1993

MANAGEMENT REFORM - GAO'S COMMENTS
ON THE NATIONAL PERFORMANCE
REVIEW'S RECOMMENDATIONS

GAO/OCG-94-1

Comments on NPR's Recommendations


Abbreviations
=============================================================== ABBREV

  AID - x
  USDA - x
  DOC - x
  DOD - x
  ED - x
  DOE - x
  EPA - x
  EOP - x
  FEMA - x
  HHS - x
  HUD - x
  INTEL - x
  DOI - x
  DOJ - x
  DOL - x
  NASA - x
  NSF - x
  SBA - x
  DOS - x
  DOT - x
  TRE - x
  DVA - x
  QUAL - x
  SMC - x
  ORG - x
  ICS - x
  BGT - x
  FM - x
  HRM - x
  PROC - x
  SUP - x
  IT - x
  DES - x
  FSL - x
  ENV - x
  REG - x
  GSA - x
  OPM - x

Letter
=============================================================== LETTER


B-255769

December 3, 1993

The Honorable John Conyers, Jr., Chairman
The Honorable William F.  Clinger, Jr., Ranking
 Minority Member
Committee on Government Operations
House of Representatives

The Honorable John Glenn, Chairman
The Honorable William V.  Roth, Jr., Ranking
 Minority Member
Committee on Governmental Affairs
United States Senate

The Honorable William L.  (Bill) Clay
Chairman, Committee on Post Office and Civil Service
House of Representatives

The Honorable John R.  Kasich
Ranking Minority Member
Committee on the Budget
House of Representatives

This report responds to your requests that we comment on the
recommendations contained in the National Performance Review's (NPR)
September 7, 1993, report.\1 The NPR, under the direction of the Vice
President, was a major management reform initiative by the
administration and was intended to identify ways to make the
government work better and cost less.  The NPR report's
recommendations were organized by four key principles:  "cutting red
tape, putting customers first, empowering employees to get results,
and cutting back to basics." The NPR report contained 384 major
recommendations covering 27 federal agencies and 14 government
systems, such as procurement and budgeting. 

This report provides our initial comments on the NPR report's
recommendations on the basis of our work, and is the first part of a
planned long-term body of work on the NPR.  In subsequent work, we
will monitor the degree to which the NPR's recommendations have been
implemented and evaluate the extent to which the recommendations
effectively address the management and programmatic problems the NPR
identified. 


--------------------
\1 From Red Tape to Results:  Creating a Government That Works Better
and Costs Less, report of the National Performance Review, Vice
President Al Gore, September 7, 1993. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

The NPR report emphasized many of the basic themes that we have
stressed for years, including the need to strengthen management
within agencies and to focus management and accountability on the
results of programs.  Accordingly, we generally agree with most of
the NPR report's recommendations and believe that successful
implementation of those recommendations can make an important
contribution in addressing the federal government's management and
programmatic problems. 

The ultimate success of the NPR, however, will depend upon the
detailed strategies and specific actions developed to implement its
recommendations.  The administration must forge a strong, coordinated
partnership with Congress to develop these strategies.  As part of
that partnership, priority attention must be given to improving
agencies' management capacities so that they can assume additional
authority and responsibility contemplated by the NPR and be held
accountable for programmatic outcomes.  A key to improved
accountability is strengthened financial management, including
audited financial statements.  Moreover, the fundamental management
changes that are needed require the active and sustained attention of
the top political and career leadership in the agencies. 

Despite its wide scope, the NPR report contained some recommendations
that were too general for us to comment.  The NPR report also was
silent on a number of critical management and program issues
confronting the federal government that our work has shown need
prompt attention.  These additional areas of concern are detailed in
the individual sections accompanying this letter. 


   EXECUTIVE BRANCH AND CONGRESS
   MUST WORK IN PARTNERSHIP TO
   ADDRESS MANAGEMENT ISSUES
------------------------------------------------------------ Letter :2

The administration must work closely with Congress to develop a
coordinated long-term strategy for implementing the NPR's
recommendations and improving management in the federal agencies. 
Congress has a key role through its legislative and oversight
capacities in establishing, monitoring, and maintaining both
governmentwide and agency specific management reform initiatives. 
Legislative action will be necessary in many cases to implement the
NPR's recommendations.  For example, Congress is considering
legislation that would implement various initiatives to reform the
federal procurement system, including some of those identified by the
NPR.  Congress also is considering legislation to allow "early out"
payments to help agencies downsize. 

In addition to legislative action, Congress also must have input into
the administration's strategies to implement the NPR's
recommendations.  This executive-congressional partnership is
essential to achieve the broad institutional consensus necessary to
make some of the more contentious and difficult changes recommended
by the NPR report, such as consolidating agencies' field operations. 

Congress, in its oversight capacity, can help ensure a long-term
focus on sustaining management reform initiatives throughout
government.  The recently enacted Government Performance and Results
Act of 1993 (GPRA) requires agencies over time to develop strategic
plans, identify outcome goals, and measure and report on progress
toward achieving those goals.  GPRA should, if successfully
implemented, provide Congress with the program results information it
needs to assess the degree to which agencies are meeting their
missions.  It also should highlight the adjustments that need to be
made to improve agencies' effectiveness. 


   AGENCIES NEED ENHANCED
   CAPACITIES TO BE EFFECTIVE
------------------------------------------------------------ Letter :3

Underlying many of the NPR report's recommendations is the assumption
that agencies have the processes, systems, and qualified staff in
place to accept the increased authority and responsibility that come
with the deregulation and decentralization contemplated by the NPR. 
However, our management reviews of 23 large federal agencies and
departments done over the last decade consistently have shown that
many agencies lack the fundamental underpinnings that will be needed
to implement the NPR report's recommendations.  These agencies had
not created a strategic vision of their futures, lacked good systems
to collect and use financial and program information to gauge
operational success and accountability, and did not have the people
with the necessary skills to accomplish their missions. 

For example, the federal government spends over $25 billion annually
on information technology.  However, our work has shown that agency
after agency lacked critical information needed to demonstrate
measurable results, analyze programmatic issues, manage agency
resources, and control expenditures.  Unfortunately, many agencies do
not analyze current processes to learn where they are breaking down
and how technology can be used to restructure those processes to
achieve fundamental, long-term improvements in business practices and
service to the public. 

Concerted attention to agencies' capacities is essential to the
long-term success of the NPR's recommendations.  Top management in
each agency must have the systems, processes, and people in place to
provide a constant flow of information on the degree to which the
agency is effectively carrying out its responsibilities and meeting
its mission.  This information will allow agencies to act upon
management problems before they become full blown crises and thereby
minimize the understandable tendency to enact additional systemwide
controls in response to a specific or episodic--but nevertheless
major--crisis. 

The NPR recommendations show an appreciation for some of these
issues.  For example, consistent with our position, the NPR
recommended effectively implementing the GPRA and using the Chief
Financial Officers (CFO) Act to improve financial services.  Taken
together, these acts establish a framework for making management in
the federal government more results oriented and providing
decisionmakers at all levels with the information they need.  We also
endorse the concept behind the NPR's recommendation to fully
integrate budget, financial, and program information. 

Other NPR recommendations, unless carefully implemented, may make
capacity building efforts difficult to sustain.  For example,
thoughful planning is needed to implement the NPR's recommendations
that would reduce the federal workforce by about 252,000. 
Across-the-board reductions that do not recognize the differing
capabilities of agencies to absorb such cuts could significantly
exacerbate existing gaps in agencies' abilities to meet their
missions.  As the overall level of federal employment is reduced,
downsizing efforts need to allow for adding high quality staff to
those agencies where shortages of properly skilled staff are
hampering their effectiveness. 

Congress and the administration need to work together to ensure that
federal downsizing efforts are part of a coordinated strategy that
does not leave the agencies incapable of achieving their missions. 
The NPR report's recommendation that the President use multiyear
performance agreements with agency heads to guide downsizing efforts
provides a mechanism to help ensure that such efforts are properly
planned. 


   SUSTAINED ATTENTION FROM TOP
   LEADERSHIP IS CRITICAL TO
   SYSTEMIC CHANGE
------------------------------------------------------------ Letter :4

The NPR, in its recommendations on quality leadership and management,
recognized the critical role that top management has in creating and
guiding long-term management improvement efforts.  Our federal
management reviews and reviews of companies that have changed their
organizational cultures and management systems have shown that making
fundamental improvements takes years.  Such improvements also require
the consistent support of the top political and career leadership of
the organization.\2

Time and again, solutions have not been fully implemented to address
management problems, in part because top leadership lacked a strong
and clear commitment to change and, as a consequence, failed to
create an environment in which continuous improvement becomes a way
of life for the organization.  Creating such an environment entails
setting a clear and constant vision of where the organization is
going, communicating that vision throughout the organization, and
teaching people what their role is in accomplishing that vision. 

Political appointees and top career officials need to work together
to create an environment that fosters continuous improvement in
agencies' operations.  Top career officials in the agencies must
assume a leadership role because the fundamental changes needed will
require sustaining improvement efforts well beyond the tenure of
current political appointees. 

Several efforts that are under way should help to provide a top level
commitment to change and create an environment within the agencies
that encourages continuous improvement.  For example, the President
has begun to develop performance agreements with agency heads that
concentrate on the agencies' desired outcomes; this is one very
positive step.  By focusing on outcomes, such agreements can help
agencies focus efforts on achieving programmatic goals and
objectives.  As a next step, senior executive performance agreements
that are directed toward program results need to be developed to help
ensure that a consistent program and management agenda is implemented
throughout the agencies. 

As a second positive step, cabinet departments were directed as part
of the NPR to form "reinvention" teams to lead cultural change and
management improvement efforts in the agencies.  They also were to
designate "reinvention labs"--programs to receive relief from
internal regulations as an experiment to see how to become more
results oriented. 

Congress has key roles in all of these efforts.  First, Congress has
a central role as part of the process to build consensus on what is
expected from agencies and their programs and reviewing the degree to
which agencies achieve expectations.  Second, congressional support
and oversight of agencies' management improvement efforts and
consideration of the potential for governmentwide application of
successful practices in individual agencies is essential. 


--------------------
\2 See, for example, Department of Education:  Long-Standing
Management Problems Hamper Reforms (GAO/HRD-93-47, May 28, 1993);
Management of VA:  Implementing Strategic Management Process Would
Improve Service to Veterans (GAO/HRD-90-109, Aug.  31, 1990); and
Organizational Culture:  Techniques Companies Use to Perpetuate or
Change Beliefs and Values (GAO/NSIAD-92-105, Feb.  27, 1992). 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :5

This initial examination of the NPR report's recommendations had two
objectives.  Our first objective was to review the NPR report's
recommendations.  On the basis of our work, we placed each NPR
recommendation in one of four categories: 

(1) We agree with the NPR recommendation. 

(2) We generally agree with the NPR recommendation. 

(3) We disagree with the NPR recommendation. 

(4) We have insufficient information on which to judge the merits of
the NPR recommendation either because we have not done work in the
specific area addressed by the recommendation or the recommendation
was too vague for us to comment. 

We did not review the NPR's estimated savings from implementing its
recommendations.  The Congressional Budget Office already has
analyzed some of the NPR report's recommendations from that
perspective. 

Our second objective was to identify major management and
programmatic areas of concern that were not addressed in the NPR
report.  We understand that the NPR report's recommendations will be
supplemented by a series of detailed monographs, so some of these
areas may be addressed in the subsequent NPR monographs. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

Since this report is primarily based on our issued reports and
testimonies, we did not obtain comments from the Office of the Vice
President and federal agencies.  We did, however, discuss this
report's contents with senior NPR officials.  In many cases, comments
from agencies and our evaluations of those comments are contained in
the reports cited in the sections dealing with those agencies. 

We are sending copies of this report to other congressional
committees; the Vice President; and the Director, Office of
Management and Budget.  Copies will be made available to other
interested parties upon request. 

If you have any questions about the issues discussed in this report,
please contact the appropriate GAO official listed in the sections
accompanying this letter. 

Charles A.  Bowsher
Comptroller General
of the United States


CONTENTS
============================================================ Chapter 0

                                                                              Pa
                                                                              ge
--------  --------------------------------------------------  --------------  --
Letter                                                                         1

================================================================================
Section   Government agency                                   Abbreviation

1         Agency for International Development                AID             10

2         Department of Agriculture                           USDA            14

3         Department of Commerce                              DOC             22

4         Department of Defense                               DOD             31

5         Department of Education                             ED              41

6         Department of Energy                                DOE             47

7         Environmental Protection Agency                     EPA             54

8         Executive Office of the President                   EOP             61

9         Federal Emergency Management Agency                 FEMA            67

10        Department of Health and Human Services             HHS             70

11        Department of Housing and Urban Development         HUD             81

12        Intelligence Community                              INTEL           88

13        Department of the Interior                          DOI             92

14        Department of Justice                               DOJ             10
                                                                               2

15        Department of Labor                                 DOL             11
                                                                               2

16        National Aeronautics and Space Administration       NASA            12
                                                                               1

17        National Science Foundation/Office of Science and   NSF             12
          Technology Policy                                                    7

18        Small Business Administration                       SBA             13
                                                                               0

19        Department of State/U.S. Information Agency         DOS             13
                                                                               6

20        Department of Transportation                        DOT             14
                                                                               5

21        Department of the Treasury/Resolution Trust         TRE             16
          Corporation                                                          0

22        Department of Veterans Affairs                      DVA             17
                                                                               3
--------------------------------------------------------------------------------

--------  --------------------------------------------------  --------------  --
================================================================================
Section   Government system                                   Abbreviation    Pa
                                                                              ge

23        Creating Quality Leadership and Management          QUAL            18
                                                                               3

24        Streamlining Management Control                     SMC             18
                                                                               8

25        Transforming Organizational Structures              ORG             19
                                                                               3

26        Improving Customer Services                         ICS             19
                                                                               8

27        Mission-Driven, Results-Oriented Budgeting          BGT             20
                                                                               2

28        Improving Financial Management                      FM              20
                                                                               8

29        Reinventing Human Resource Management               HRM             21
                                                                               7

30        Reinventing Federal Procurement                     PROC            23
                                                                               0

31        Reinventing Support Services                        SUP             24
                                                                               3

32        Reengineer Through the Use of Information           IT              25
          Technology                                                           0

33        Rethinking Program Design                           DES             25
                                                                               9

34        Strengthening the Partnership in Intergovernmental  FSL             26
          Service Delivery                                                     2

35        Reinventing Environmental Management                ENV             26
                                                                               6

36        Improving Regulatory Systems                        REG             26
                                                                               9

37        General Services Administration                     GSA             27
                                                                               4

38        Office of Personnel Management                      OPM             27
                                                                               7
--------------------------------------------------------------------------------

AGENCY FOR INTERNATIONAL
DEVELOPMENT (AID)
============================================================ Chapter 1


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 1:0.1

As discussed in our December 1992 transition series report on Foreign
Economic Assistance Issues and our June 1993 general management
review of AID, the Agency for International Development has not had a
clearly articulated strategic mission and has entered the 1990s
unprepared to meet the management challenges before it.  There has
been a lack of consensus among key internal and external groups on
the goals and priorities of the foreign aid program, and as a result,
AID's program expanded in several different directions at once. 
Overall, NPR's recommendations for AID are in line with the thrust of
the improvement actions included in our reports and testimonies over
the last several years.  However, forging a workable consensus on the
future of U.S.  foreign aid will require the active participation of
top level executive branch officials and Congress.  In the past, AID
has shown little leadership in attempting to resolve its problems;
however, this has begun to change. 

In response to criticisms by GAO and others, AID began in mid-1992 to
develop a management improvement plan that calls for specific
management reforms and sets target dates for their implementation. 
However, many of AID's actions are still being planned, and AID has
not completed integrating these activities into a strategic
management process that encompasses all activities of the agency. 


         GAO CONTACT
------------------------------------------------------ Chapter 1:0.1.1

Harold J.  Johnson, Director, International Affairs Issues, National
Security and International Affairs Division, (202) 512-4128. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 1:1

AID01:  Redefine and Focus AID's Mission and Priorities
With the end of the Cold War, AID must rethink how it will operate. 
NPR recommends steps to plan for this new mission and proposes new
authorizing legislation to define its post-Cold War mission and
priorities. 

GAO Comments
GAO strongly agrees that the U.S.  government needs to develop a
coherent foreign aid policy that redefines our national interests and
balances objectives with available resources, and we have recommended
that foreign aid reform begin with the articulation of a clear
strategic direction for AID.  We have noted that over the 30 years
since its enactment, the Foreign Assistance Act of 1961 has been
frequently amended, but neither the foreign assistance goals and
objectives nor the approaches used for providing this assistance have
been fully reexamined. 


-------------------------------------------------------- Chapter 1:1.1

AID03:  Overhaul the AID Personnel System
Recommendations include changes in AID's personnel system to
integrate its multiple systems and review benefits. 

GAO Comments
GAO strongly agrees that AID lacks adequate work force planning and
management systems and has reported that AID has not restructured its
work force to meet the agency's evolution from a hands-on implementor
to supervising the work of others to carry out its programs. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 1:2

AID02:  Reduce Funding, Spending, and Reporting Micromanagement
Eliminate AID's outdated or unduly burdensome reporting requirements
and reduce legislative earmarks to provide greater operating
flexibility. 

GAO Comments
We have reported on AID's extensive reporting requirements and have
recommended the elimination of one such requirement.  We have also
reported on the often divergent views held by the legislative and
executive branches on the degree of flexibility and autonomy AID
should have in pursuing specific goals and objectives.  While we have
not addressed the issue of eliminating legislative earmarks, we have
recommended that AID could increase confidence in its management by
establishing a strategic management system including accountability
and monitoring provisions.  We have also reported that Congress and
AID have worked together effectively when in agreement on a goal,
such as the Development Fund for Africa created in 1987 to provide a
stable source of funding for Africa. 


-------------------------------------------------------- Chapter 1:2.1

AID04:  Manage AID Employees and Consultants as a Unified Work Force
Lift some current personnel restrictions and give managers authority
to manage staff resources more efficiently and effectively. 

GAO Comments
We have reported on the increasing number of AID programs and
projects being implemented through outside parties, such as personal
services contractors, who often perform the same or similar duties as
direct-hire employees.  While we have not addressed the issue of
lifting personnel restrictions, we have recommended that AID develop
a comprehensive work force planning system to recruit, train, and
assign both direct- and nondirect-hire staff. 


-------------------------------------------------------- Chapter 1:2.2

AID07:  Consolidate or Close AID Overseas Missions
AID should regionalize missions and staff services overseas and close
nonessential missions.  It should establish "graduation" criteria for
countries receiving U.S.  assistance. 

GAO Comments
We strongly agree that AID resources are spread among too many
countries to be effective, with programs at some missions so diffuse
that they have had little impact, and we have noted that some
recipient countries may soon be candidates for "graduation." However,
we have not addressed the issue of regional missions nor identified
specific missions for closure. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 1:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 1:4

AID05:  Establish an AID Innovation Capital Fund
Create a capital investment fund to improve information and financial
management systems and customer service. 

GAO Comments
We agree that improvements are needed in AID's information and
financial management systems, but we have not specifically studied
the merits of an innovation capital fund. 


-------------------------------------------------------- Chapter 1:4.1

AID06:  Reengineer Management of AID Projects and Programs
AID should use pilot programs and new approaches to emphasize
flexibility, innovation, customer service, and program results. 

GAO Comments
We agree that missions have not been held accountable for program
results, but we cannot assess this NPR recommendation based on the
information provided. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 1:5

None. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 1:6

Foreign Economic Assistance Issues (GAO/OCG-93-25TR, Dec.  1992)
relates to the overall summary. 

Foreign Assistance:  AID Strategic Direction and Continued Management
Improvements Needed (GAO/NSIAD-93-106, June 11, 1993) relates to
AID01, AID02, AID03, AID04, AID06, and AID07. 

Foreign Assistance:  Reforming the Economic AID Program
(GAO/T-NSIAD-93-20, July 26, 1993) relates to AID01 and AID03. 

Foreign Economic Assistance Issues (GAO/OCG-93-25TR, Dec.  1992)
relates to AID01. 

Foreign Assistance:  Accuracy of AID Statistics on Dollars Flowing
Back to the U.S.  Economy Is Doubtful (GAO/NSIAD-93-196, Aug.  3,
1993) relates to AID02. 

AID Management:  Strategic Management Can Help AID Face Current and
Future Challenges (GAO/NSIAD-92-100, Mar.  6, 1992) relates to AID02. 

Foreign Assistance:  Progress in Implementing the Development Fund
for Africa (GAO/NSIAD-91-127, Apr.  16, 1991) relates to AID02. 

Foreign Assistance:  Management Problems Persist at the Agency for
International Development (GAO/T-NSIAD-92-31, May 1, 1992) relates to
AID03, AID04, AID05, and AID06. 

Foreign Assistance:  AID's Use of Personal Services Contracts
Overseas (GAO/NSIAD-91-237, Sept.  13, 1991) relates to AID04. 

Financial Management:  Inadequate Accounting and System Project
Controls at AID (GAO/AFMD-93-19, May 24, 1993) relates to AID05. 

Information Resources Management:  Initial Steps Taken But More
Improvements Needed in AID's IRM Program (GAO/IMTEC-92-64, Sept.  29,
1992) relates to AID05. 


DEPARTMENT OF AGRICULTURE (USDA)
============================================================ Chapter 2


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 2:0.1

By highlighting the U.S.  Department of Agriculture, NPR has made a
substantive and appropriate choice to focus on opportunities for
reinventing government.  In recommending a reorganization and
streamlining of USDA, NPR took significant steps to identify
management problems in food and agriculture.  Having made such
recommendations in our series of management reviews of USDA, we agree
with NPR on the need to restructure and streamline USDA.  Since the
NPR report was issued, the administration has recommended a single
farm agency and a single food inspection agency.  We support these
consolidations.  Such actions could lead to greater efficiency,
effectiveness, and cost savings.  But the fundamental problem
remains:  how to revitalize USDA so that it is efficient and
effective into the 21st century.  To achieve this goal, Congress and
the administration need to develop a consensus on USDA's missions.  A
critical part of USDA's ongoing efforts to restructure itself must
include a comprehensive reassessment of the Department's mission. 

NPR also made some recommendations concerning commodities by
recommending an end to honey and wool and mohair subsidies.  Programs
like these subsidies, which are outdated and in which a few
participants receive most of the payments, are understandable targets
for elimination or phasing out.  However, there are other farm income
or price support programs--including those for dairy products,
peanuts, and sugar--that could also be reviewed for possible
elimination, phasing out, or change over several years.  These
programs could be reassessed to determine whether (1) they are
meeting their program goals, (2) the programs and goals are
appropriate in today's global marketplace, and (3) the programs are
addressing farmers' needs.  While our work has generally called for
changes in these programs on the basis of our analyses of these
questions, we recognize that some of these questions and their
answers are policy judgments that Congress will have to address. 
Program change resulting from a fresh look at these farm subsidies
could bring substantial dollar savings. 

There are, however, other opportunities for reinventing USDA and
reassessing its mission through reforms in two areas:  the Farmers
Home Administration (FmHA) farm loan program and crop insurance and
disaster assistance.  Reversing the expansion of--and farmers'
dependency on--these programs should be a priority.  For example,
eliminating FmHA's farm loan continuation policy could provide
opportunities to redirect funds to other rural development
enterprises.  This policy enables borrowers who are delinquent in
their outstanding obligations to incur further obligations.  In
addition, including the disaster assistance program in the federal
budget should be considered as a technique for fully integrating the
disaster assistance and crop insurance programs.  This approach would
result in substantial savings.  We believe that fundamental reforms
in these programs are needed, including redefining the role of the
federal government as a lender and insurance provider for farmers. 
New government management in these areas could also improve risk
management, reduce administrative costs, and improve equity to all
farmers while saving taxpayers and consumers billions of dollars. 


         GAO CONTACT
------------------------------------------------------ Chapter 2:0.1.1

John W.  Harman, Director, Food and Agriculture Issues, Resources,
Community, and Economic Development Division, (202) 512-5138. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 2:1

USDA01:  End the Wool and Mohair Subsidy
The subsidy is no longer needed since wool is no longer a strategic
commodity. 

GAO Comments
Congress has acted to phase out the wool and mohair subsidy over a
2-year period.  This action is expected to save taxpayers $190
million a year.  In our work, we have supported ending the wool and
mohair subsidy because of (1) high program costs, (2) federal budget
constraints, (3) the fact that a small number of beneficiaries were
receiving the bulk of the payments, and (4) the fact that wool has
not been considered a strategic material since 1960. 


-------------------------------------------------------- Chapter 2:1.1

USDA02:  Eliminate Federal Support for Honey
Eliminate the honey subsidy because the program does not serve the
intended purpose of ensuring the availability of honeybees for crop
pollination. 

GAO Comments
Congress has taken action to ban all payments and loans to honey
producers for 1 year.  This action is projected to save about $12
million in 1994.  However, the program has not been terminated.  We
support eliminating the honey subsidy.  In 1985, we reported that the
program--originally justified as ensuring an adequate supply of
honeybees for crop pollination--was unnecessary to ensure
pollination.  We also found that only 1 percent of the nation's
beekeepers participated in the program.  We recommended that the
program be phased out by reducing the price-support level over time
to minimize the impact on the industry. 


-------------------------------------------------------- Chapter 2:1.2

USDA03:  Reorganize the Department of Agriculture to Better
Accomplish Its Mission, Streamline Its Field Structure and Improve
Service to Its Customers
USDA should streamline its field operations to eliminate unnecessary
offices, reduce costs, and better serve farmers. 

GAO Comments
We support the recommendation to reorganize USDA.  In a series of
reports on the organizational structure and management systems of
USDA, we identified structural problems that, if addressed, could
lead to greater efficiency, effectiveness, and cost savings.  USDA is
actively pursuing initiatives to restructure and streamline the
Department.  In September 1993, the Secretary announced a plan to
restructure USDA around 6 key missions and reduce the number of
agencies from 43 to 30.  This restructuring includes consolidating
three farm agencies into a single Farm Service Agency.  The Secretary
plans to streamline the existing USDA field structure by eliminating
at least 1,200 field offices.  The administration estimates that
streamlining and restructuring USDA's headquarters and field
structure could save about $2.3 billion over the next 5 years. 


-------------------------------------------------------- Chapter 2:1.3

USDA06:  Encourage Better Food Package Management Practices and
Facilitate Multi-State Contracts for Infant Food and Formula Cost
Containment in the WIC Program
The recommendation encourages increased competition among infant
formula vendors and manufacturers of other items in USDA's Special
Supplemental Food Program for Women, Infants and Children (WIC). 
Savings accrue to the program. 

GAO Comments
We support the use by states of competitive contracts for the
acquisition of WIC infant formula.  Although we have not reviewed the
potential benefits of multistate contracting, we have found that
competitive bid contracting by individual states generally results in
program savings and a potential increase in the number of recipients
served. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 2:2

USDA04:  Implement a Consolidated Farm Management Plan
The farm management plan proposed by Secretary Espy provides an
opportunity to simplify regulations for farm management and is a good
way to consolidate competing requirements into a single plan for each
farm. 

GAO Comments
Although we have not recommended a consolidated farm management plan,
we agree that the concept provides an excellent opportunity to
simplify regulations and help make government regulations "farmer
friendly." This recommendation also complements NPR's recommendation
to reorganize USDA, streamline its field structure, and improve
service to its customers. 


-------------------------------------------------------- Chapter 2:2.1

USDA05:  Administer the Employment and Training Requirements for Food
Stamp Recipients More Effectively and Efficiently
Redirect funds from an ineffective training program for food stamp
recipients and allow them to participate in programs with proven
results. 

GAO Comments
Although we have not done work on this issue, in our view it makes
good sense to redirect funds from ineffective programs to programs
that have proven results.  That is simply good public policy. 


-------------------------------------------------------- Chapter 2:2.2

USDA07:  Deliver Food Stamp Benefits Via Electronic Benefits Transfer
to Improve Service to Customers While Remaining Cost Effective
Use electronic technology to distribute food stamp benefits, thereby
improving service and reducing the need for current paper stamps. 

GAO Comments
Although we have not done work on the specific issue of delivering
food stamp benefits via electronic technology, we concur that this
technology has the potential to improve service and to reduce the
paperwork burden.  However, other alternatives to the current
coupon-based system are being considered. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 2:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 2:4

None. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 2:5

We are concerned about several fundamental issues that NPR did not
address.  One such issue involves phasing out or changing certain
farm subsidies.  The NPR report highlights two farm subsidies--those
to honey and wool and mohair producers--for elimination.  Congress
has eliminated funding for the honey program for 1 year and is
phasing out the wool and mohair program over 2 years.  There are,
however, several other commodity programs that could be considered
for elimination, phasing out, or change.  For example, subsidies
remain intact for dairy products, peanuts, sugar, and grains.  These
other subsidies could be reassessed as possible candidates for change
or phasing out over a multiyear period.  Are they meeting their
program goals?  Are these programs and goals appropriate in today's
global marketplace?  Are the programs addressing farmers' needs?  We
recognize that some of these questions and their answers are policy
judgments that Congress will have to address.  Program change that
results from a reassessment of these farm subsidies could lead to
substantial dollar savings.  This idea could be viewed as an
extension of the 1985 and 1990 farm bills, which contained provisions
to make some commodity programs more market-oriented. 

Another area of concern involves integrating disaster assistance and
crop insurance programs.  The disaster assistance and crop insurance
programs should be considered together as risk-reduction alternatives
subject to the same budget decision-making process.  One way to do
this is to bring the ad hoc disaster assistance program within the
domestic spending caps; that is, to include it in the federal budget. 
A recent House proposal to integrate the crop insurance and disaster
assistance programs and avoid duplication was rejected because
savings from projected ad hoc disaster assistance programs could not
be considered.  Integration of the disaster and insurance programs
could improve risk management, reduce administrative costs, improve
equity to all farmers, and encourage complementary public-private
risk enterprises.  We estimate savings of hundreds of millions of
dollars yearly from integrating the ad hoc payments and crop
insurance.  These savings could result from the elimination of
duplicate crop insurance payments, more realistic yields, and the
potential reduction in administrative costs. 

A third concern is the lack of centralized servicing for FmHA
single-family housing loans.  FmHA currently services its
single-family housing loans through a decentralized network of
hundreds of county offices throughout the country.  A study
contracted by FmHA has concluded that the government can save about
$100 million in operating costs annually by moving to centralized
mortgage servicing.  Also, a private firm that has centrally serviced
a portion of the FmHA single-family housing portfolio is experiencing
appreciably lower delinquency rates than FmHA.  FmHA estimates that
lower delinquency rates would save millions of dollars by reducing
loan losses.  The private firm credits its increased efficiency to
its highly developed computer system, its escrow capability, and the
specialized skills of its staff.  In addition to potential savings of
more than $100 million, centralized servicing of FmHA's single-family
housing loans would also be an example of true reinvention of
government because it would fundamentally change the way the
government does business. 

We also believe the farm credit program's exposure to risk should be
reduced.  FmHA's farm loan programs are intended to provide temporary
credit for farmers who are unable to obtain funds elsewhere. 
However, reflecting Congress' and FmHA's goal of keeping farmers in
farming, policies often show little regard for cost and are
frequently inconsistent with the prudent management that would
protect taxpayers' interests.  FmHA has evolved into a continuous
source of subsidized credit for nearly half of the agency's
borrowers.  In recent years, FmHA reduced or forgave delinquent debt
totaling about $7.6 billion.  As repeated loan servicing has
increased the debt and reduced the equity of FmHA borrowers, some
borrowers have actually seen their financial condition worsen.  For
example, under a congressionally directed policy, borrowers can
obtain new FmHA direct loans for operating expenses without
demonstrating the ability to pay their existing debt.  This
continuation policy enables borrowers who are delinquent on their
outstanding obligations to incur further obligations.  From fiscal
year 1988 through the first three quarters of fiscal year 1992, FmHA
lent about $107 million to delinquent borrowers.  FmHA first
established this policy in 1982 to assist financially stressed
borrowers during a slump in the agricultural economy.  It rescinded
the policy in 1985 following disclosure that many unsound loans were
being made.  However, in 1987 Congress directed FmHA to reinstate the
policy to prevent farmers from failing.  FmHA officials said, and our
work confirmed, that this policy makes it difficult for them to act
in a fiscally prudent manner.  Rethinking FmHA's mission and
activities in this area could improve risk management, reduce
transaction costs, and improve equity to all farmers while saving the
taxpayers billions of dollars. 

Finally, we believe that benefits provided under the farm bill should
be based on changes in forecast prices.  Seasonal average prices
should be reestimated every 2 years and farm bill benefits adjusted
accordingly.  Currently, Congress uses USDA's 5-year forecasts to
establish the benefits in each farm bill.  The benefits are not
subsequently adjusted on the basis of forecast estimation error, as
they are in other entitlement programs.  As a result, and because
USDA's 5-year forecasts tend to be optimistic, USDA consistently
spends more than it estimates.  If the level of forecast errors
typical during the 1980s continues into the 1990s, the costs for
commodity programs in the 1990 Farm Bill would increase from the
forecast $47 billion to $67 billion. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 2:6

Wool and Mohair Program:  Need for Program Still in Question
(GAO/RCED-90-51, Mar.  6, 1990) relates to USDA01. 

Federal Price Support for Honey Should Be Phased Out
(GAO/RCED-85-107, Aug.  19, 1985) relates to USDA02. 

U.S.  Department of Agriculture:  Revitalizing Structure, Systems,
and Strategies (GAO/RCED-91-168, Sept.  3, 1991) relates to USDA03. 

U.S.  Department of Agriculture:  Farm Agencies' Field Structure
Needs Major Overhaul (GAO/RCED-91-9, Jan.  29, 1991) relates to
USDA03. 

Supplemental Food Program:  Savings From Food Purchases Could
Increase WIC Participation (GAO/RCED-88-183BR, July 25, 1988) relates
to USDA06. 

Supplemental Food Program:  Using Cost Saving Methods Could Increase
Participation (GAO/RCED-88-35BR, Oct.  9, 1987) relates to USDA06. 

U.S.  Department of Agriculture:  Centralized Servicing for FmHA
Single-Family Housing Loans (GAO/RCED-93-231BR, Sept.  23, 1993)
relates to additional areas of GAO concern. 

Sugar Program:  Changing Domestic and International Conditions
Require Program Changes (GAO/RCED-93-84, Apr.  16, 1993) relates to
additional areas of GAO concern. 

Peanut Program:  Changes Are Needed to Make the Program Responsive to
Market Forces (GAO/RCED-93-18, Feb.  8, 1993) relates to additional
areas of GAO concern. 

Farmers Home Administration:  Billions of Dollars in Farm Loans Are
at Risk (GAO/RCED-92-86, Apr.  3, 1992) relates to additional areas
of GAO concern. 

Agriculture Payments:  Effectiveness of Efforts to Reduce Farm
Payments Has Been Limited (GAO/RCED-92-2, Dec.  5, 1991) relates to
additional areas of GAO concern. 

USDA Commodity Forecasts:  Inaccuracies Found May Lead to
Underestimates of Budget Outlays (GAO/PEMD-91-24, Aug.  13, 1991)
relates to additional areas of GAO concern. 

U.S.  Department of Agriculture:  Strategic Marketing Needed to Lead
Agribusiness in International Trade (GAO/RCED-91-22, Jan.  22, 1991)
relates to additional areas of GAO concern. 

Federal Dairy Programs:  Insights Into Their Past Provide
Perspectives on Their Future (GAO/RCED-90-88, Feb.  28, 1990) relates
to additional areas of GAO concern. 


DEPARTMENT OF COMMERCE (DOC)
============================================================ Chapter 3


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 3:0.1

Our December 1992 transition series report on Commerce Issues
discussed matters the Commerce Department needs to focus on to meet
such diverse missions as fostering technology, stimulating and
regulating international trade, promoting commerce, analyzing social
and economic activity, and studying the environment and natural
resources.  Our work over the past several years has focused on key
Commerce programs that cut across core national issues, including
trade, technology, competitiveness, industry, environment, and
economic activity. 

Overall, NPR comments about Commerce are in line with the focus and
direction of reforms we have advocated.  We strongly support the
thrust of its recommendations, which foster such core principles as
better coordination across government in shared program
responsibility, improved customer service through technology
advancement, and enhanced efficiency and effectiveness in operations. 


         GAO CONTACT
------------------------------------------------------ Chapter 3:0.1.1

William M.  Hunt, Director, Federal Management Issues, General
Government Division, (202) 512-8676. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 3:1

DOC01:  Reinvent Federal Economic and Regional Development Efforts
Improve coordination of federal economic development efforts with the
goals of eliminating duplication and better directing federal
resources to improve business conditions. 

GAO Comments
This recommendation is an underlying theme of several of our reports
over the past few years.  We agree with the tenet that better
coordination can help improve efficiency and achieve better results
in federal economic development efforts. 


-------------------------------------------------------- Chapter 3:1.1

DOC02:  Provide Better Coordination to Refocus and Leverage Federal
Export Promotion
This recommendation is designed to improve federal services to U.S. 
businesses competing in the world export markets. 

GAO Comments
We advocate improved federal trade promotion efforts and have
recommended the development of a strategic plan for export promotion. 
Title II of the Export Enhancement Act of 1992 requires the
interagency Trade Promotion Coordinating Committee (TPCC)
specifically to establish governmentwide export promotion priorities
and to prepare a governmentwide export promotion budget reflecting
these priorities.  We believe that with continued support from the
administration and support from Congress for the TPCC strategic plan,
federal efforts to assist exporters can become both more useful to
companies and a better buy for taxpayers. 


-------------------------------------------------------- Chapter 3:1.2

DOC03:  Reform the Federal Export Control System for Commercial Goods
To help ensure leading U.S.  industries are competitive in the global
marketplace, changes should be made in the export control system. 

GAO Comments
Our reports over the last few years have dealt with improving various
aspects of export control programs that would help U.S. 
competitiveness in global markets while protecting national security. 
We supported passage of the Export Enhancement Act of 1992, which,
among other things, led to the first annual TPCC strategic plan that
included reform of export controls. 


-------------------------------------------------------- Chapter 3:1.3

DOC05:  Create Public/Private Competition for the NOAA Fleet
A pilot program is recommended to open the National Oceanic and
Atmospheric Administration fleet to public and private competition to
bolster the aging fleet. 

GAO Comments
NPR's recommendation is consistent with our conclusions in a report
and recent testimony as well as Commerce's Office of Inspector
General recommendations that NOAA adopt a plan to provide long-term
ship support to its users.  This plan should give NOAA the
flexibility to exercise multiyear contracting authority to experiment
with long-term chartering or leasing arrangements to ensure future
mission support. 


-------------------------------------------------------- Chapter 3:1.4

DOC11:  Eliminate Legislative Barriers to the Exchange of Business
Data Among Federal Statistical Agencies
Eliminate legislative barriers to the exchange of business data among
federal agencies (the Census Bureau, Bureau of Labor Statistics, and
Bureau of Economic Analysis) to reduce the reporting burden on
American business. 

GAO Comments
We agree with the need for better data sharing and cooperation among
federal statistical agencies, and we supported the passage of the
Foreign Direct Investment and International Financial Data
Improvements Act of 1990.  This legislation authorized the linking of
data on foreign direct investment in U.S.  companies collected by the
Bureau of Economic Analysis with data on all U.S.  plants collected
by the Bureau of the Census.  We would encourage more business data
sharing while still protecting privacy concerns.  This endorsement is
based on ongoing work evaluating the efficiency and effectiveness of
the Census Bureau, Bureau of Labor Statistics, Bureau of Economic
Analysis, and the National Center for Health Statistics. 


-------------------------------------------------------- Chapter 3:1.5

DOC13:  Use Sampling to Minimize Cost of the Decennial Census
Use sampling rather than more costly methods of counting
nonrespondents to the next decennial census.  (Savings will occur but
are beyond the time frame of this analysis.)

GAO Comments
We agree that the use of statistical sampling would reduce the time
and costly labor-intensive fieldwork required to follow up on census
nonrespondents.  In addition, the census can derive benefits from
sampling in terms of a reduction in the burden on respondents and
potentially increased data quality.  Because of its critical nature
to census planning and the need for operational testing, any possible
legal issues concerning sampling should be resolved as expeditiously
as possible. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 3:2

DOC04:  Strengthen the Tourism Policy Council
Revitalize the Tourism Policy Council and give it greater authority
to coordinate federal tourism promotion efforts. 

GAO Comments
We have not specifically addressed the Tourism Policy Council. 
However, in concert with Commerce's responsibility for promoting
tourism, we have advocated several changes to tourism programs. 
These include coordinating among government agencies to speed
international airport clearance processing and to improve visitor
facilitation.  Given the size and diversity of the tourism industry,
efficient and effective coordination of government and private sector
activities is a prerequisite to successful tourism promotion. 


-------------------------------------------------------- Chapter 3:2.1

DOC09:  Expand the Electronic Availability of Census Data
To increase access to and use of census data, the Census Bureau
should create a computerized census information center. 

GAO Comments
With the exception of compact-disc, read-only-memory (CD-ROM), we
have not studied the Census Bureau's use of new technology to
disseminate information.  However, we do support exploring how
technology might help in better meeting users' federal information
needs. 


-------------------------------------------------------- Chapter 3:2.2

DOC10:  Amend the Omnibus Trade and Competitiveness Act to Increase
the Data Quality of the National Trade Data Bank
This recommendation outlines improvements needed in the quality and
quantity of data in this business-oriented data bank. 

GAO Comments
We agree that data quality and quantity should be a major
consideration of any database.  We suggested in earlier reports that
Commerce could improve the coverage of information in the National
Trade Data Bank by adding several additional databases to it. 
According to Commerce, considerable enhancements have been made to
the database and users are pleased. 


-------------------------------------------------------- Chapter 3:2.3

DOC12:  Establish a Single Civilian Operational Environmental Polar
Satellite Program
To reduce duplication and save taxpayers a billion dollars over the
next decade, various current and proposed polar satellite programs
should be consolidated under NOAA. 

GAO Comments
We have supported the consolidation of polar orbiting meteorological
satellite systems to the maximum extent possible.  We have not,
however, verified the estimated savings and have not taken a position
on which agency should administer the recommended program. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 3:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 3:4

DOC06:  Improve Marine Fisheries Management
To help protect fishing resources and provide new income to the
government, NOAA should collaborate with Congress and fishing
industry representatives to establish appropriate user fees to help
offset management costs for national fisheries zones. 

GAO Comments
We have insufficient information to comment on this recommendation. 
User fees to help offset management costs for national fishery zones
could be a source of additional revenue to the federal government. 
Implementing such user fees should be considered in the context of
their costs and benefits to fishery zones management. 


-------------------------------------------------------- Chapter 3:4.1

DOC07:  Provide EDA Public Works Loan Guarantees for Infrastructure
Assistance
This recommendation would provide the Economic Development
Administration with authority to use part of its funding as a reserve
for loan guarantees for various public economic development projects. 

GAO Comments
We have not reviewed this concept for financing improvements to the
nation's infrastructure. 


-------------------------------------------------------- Chapter 3:4.2

DOC08:  Establish a Manufacturing Technology Data Bank
To help U.S.  manufacturing firms increase their capabilities,
Commerce should create a new database to provide technical
information and contacts. 

GAO Comments
While we do support the concept of providing U.S.  manufacturing
firms with the technical information and contacts needed to improve
their competitiveness, we have not addressed this issue as it relates
to the need to create new databases. 


-------------------------------------------------------- Chapter 3:4.3

DOC14:  Build a Business and Economic Information Node for the
Information Highway
To assist in the distribution of government information to private
citizens, Commerce should build a business and economic information
node to the "information highway."

GAO Comments
While we have only recently started studying issues affecting the
development of a business and economic information node to the
information highway, we have reported on the current and future needs
of federal information users.  Contacts with trade, business, and
commercial organizations revealed an interest in receiving a variety
of federal documents in such electronic formats as electronic mail,
bulletin boards, or on-line databases. 


-------------------------------------------------------- Chapter 3:4.4

DOC15:  Increase Access to Capital for Minority Business
Commerce and SBA should provide the President with recommendations to
improve SBA and Minority Business Development Administration
programs. 

GAO Comments
We have not done any work that looked specifically at the access to
capital issue.  Our work has identified program weaknesses and
improvements needed at MBDA and SBA.  Our recommendations are aimed
at improving the agencies' effectiveness and performance. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 3:5

None. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 3:6

Commerce Issues (GAO/OCG-93-12TR, Dec.  1992) relates to the overall
summary, DOC11, and DOC13. 

Housing and Community Development Issues (GAO/OCG-93-22TR, Dec. 
1992) relates to DOC01. 

Rural Development:  Rural America Faces Many Challenges
(GAO/RCED-93-35, Nov.  20, 1992) relates to DOC01. 

Export Promotion Strategic Plan:  Will it Be a Vehicle for Change? 
(GAO/T-GGD-93-43, July 26, 1993) relates to DOC02 and DOC03. 

Export Promotion:  Initial Assessment of Governmentwide Strategic
Plan (GAO/T-GGD-93-48, Sept.  29, 1993) relates to DOC02 and DOC03. 

Export Promotion:  Governmentwide Plan Contributes to Improvements
(GAO/T-GGD-94-35, Oct.  26, 1993) relates to DOC02 and DOC03. 

Export Promotion:  Problems in the Small Business Administration's
Program (GAO/GGD-92-77, Sept.  2, 1992) relates to DOC02. 

Export Promotion:  A Comparison of Programs in Five Industrialized
Nations (GAO/GGD-92-92, June 22, 1992) relates to DOC02. 

Export Promotion:  Overall U.S.  Strategy Needed (GAO/T-GGD-92-40,
May 20, 1992) relates to DOC02 and DOC03. 

Export Promotion:  Federal Programs Lack Organizational and Funding
Cohesiveness (GAO/NSIAD-92-49, Jan.  10, 1992) relates to DOC02 and
DOC03. 

Foreign Investment:  Analyzing National Security-Related Investments
Under the Exxon-Florio Provision (GAO/T-GGD-92-49, June 4, 1992)
relates to DOC03. 

Foreign Investment:  Concerns in the Banking, Petroleum, Chemical,
and Biotechnology Sectors (GAO/NSIAD-90-129, May 30, 1990) relates to
DOC03. 

Foreign Direct Investment:  Assessment of Commerce's Annual Report
and Data Improvement Efforts (GAO/NSIAD-92-107, Mar.  18, 1992)
relates to DOC03. 

International Trade Administration-Export Promotion Activities
(GAO/T-NSIAD-90-4, Oct.  18, 1989) relates to DOC03. 

International Trade:  Easing Foreign Visitors' Arrival at U.S. 
Airports (GAO/NSIAD-91-6, Mar.  8, 1991) relates to DOC04. 

Foreign Visitor Facilitation (GAO/T-NSIAD-90-56, July 18, 1990)
relates to DOC04. 

Ocean Research Vessels:  NOAA Fleet Modernization Plan
(GAO/T-RCED-94-52, Oct.  21, 1993) relates to DOC05. 

Ocean Research Fleet:  NOAA Needs to Plan for Long-Term Fleet
Requirements (GAO/RCED-90-42, Nov.  13, 1989) relates to DOC05. 

Science and Technology:  Federal Efforts to Collect and Analyze
Information on Foreign Science and Technology (GAO/T-RCED-93-08, Feb. 
23, 1993) relates to DOC08 and DOC14. 

Technology Transfer:  Federal Efforts to Enhance the Competitiveness
of Small Manufacturers (GAO/RCED-92-30, Nov.  22, 1991) relates to
DOC08 and DOC14. 

Trade and Economic Data:  Many Federal Agencies Collect and
Disseminate Information (GAO/NSIAD-91-173, May 1, 1991) relates to
DOC08. 

CD-ROM Issues (GAO/GGD-93-57R, July 22, 1993) relates to DOC09. 

Information Dissemination:  Federal CD-ROM Titles--What Are Available
and How They Were Priced (GAO/IMTEC-93-34FS, June 30, 1993) relates
to DOC09. 

Federal Register:  Better Electronic Technology Planning Could
Improve Production and Dissemination (GAO/GGD-93-5, Nov.  10, 1992)
relates to DOC09. 

Geographic Information Systems:  Information on Federal Use and
Coordination (GAO/IMTEC-91-72FS, Sept.  27, 1991) relates to DOC09. 

Federal Information:  Users' Current and Future Technology Needs
(GAO/GGD-89-20FS, Nov.  30, 1988) relates to DOC09 and DOC14. 

Export Promotion:  Problems With Commerce's Commercial Information
Management System (GAO/NSIAD-89-162, Aug.  31, 1989) relates to
DOC10. 

Export Promotion:  Status of Commerce's Worldwide Commercial
Information Management System (GAO/NSIAD-89-100, Jan.  23, 1989)
relates to DOC10. 

Weather Forecasting:  Cost Growth and Delays in Billion-Dollar
Weather Service Modernization (GAO/GGD-9, Aug.  22, 1991) relates to
DOC12. 

Weather Satellites:  Action Needed to Resolve Status of the U.S. 
Geostationary Satellite Program (GAO/NSIAD-91-252, July 24, 1991)
relates to DOC12. 

Weather Satellites:  Cost Growth and Development Delays Jeopardize
U.S.  Forecasting Ability (GAO/NSIAD-89-169, June 30, 1989) relates
to DOC12. 

Weather Satellites:  Economies Available by Converging Government
Meteorological Satellites (GAO/NSIAD-87-107, Apr.  23, 1987) relates
to DOC12. 

Decennial Census:  Test Design Proposals Are Promising, But
Fundamental Reform Is Still at Risk (GAO/T-GGD-94-12, Oct.  7, 1993)
relates to DOC13. 

Decennial Census:  Focused Action Needed Soon to Achieve Fundamental
Breakthroughs (GAO/T-GGD-93-32, May 27, 1993) relates to DOC13. 

Decennial Census:  Fundamental Reform Jeopardized by Lack of Progress
(GAO/T-GGD-93-6, Mar.  2, 1993) relates to DOC13. 

Decennial Census:  1990 Results Show Need for Fundamental Reform
(GAO/GGD-92-94, June 9, 1992) relates to DOC13. 

Decennial Census:  Opportunities for Fundamental Reform
(GAO/T-GGD-92-51, June 10, 1992) relates to DOC13. 

High Performance Computing:  Advanced Research Projects Agency Should
Do More To Foster Program Goals (GAO/IMTEC-93-24, May 17, 1993)
relates to DOC14. 

Minority Business:  Minority Business Development Agency Needs to
Address Program Weaknesses (GAO/RCED-91-114, Apr.  16, 1991) relates
to DOC15. 

Minority Business:  Management Improvements Needed at Minority
Business Development Agency (GAO/RCED-90-69, Jan.  19, 1990) relates
to DOC15. 


DEPARTMENT OF DEFENSE (DOD)
============================================================ Chapter 4


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 4:0.1

The defense budget has been declining from its peak in the mid-1980s. 
The current administration proposes to reduce the Department of
Defense's 5-year spending for the period of fiscal years 1995-99 an
additional $104 billion from the prior administration's estimate. 
However, even deeper defense cuts may be sought by Congress to meet
deficit reduction goals and fund other important federal programs. 
Achieving efficiencies through implementation of the NPR
recommendations will be increasingly important to DOD as federal
budgets become more constrained. 

Many of NPR's recommended improvements to DOD operations are in line
with the thrust of our reports and testimonies presented over the
last several years.  If properly implemented, these actions could
result in substantially greater efficiencies in DOD operations.  When
changing existing operations we believe that it is important to
understand why existing procedures were put in place so as to avoid
the possibility of making costly mistakes.  In addition to the NPR
recommendations, we believe that improvement of DOD's financial
management systems and internal controls as well as its inventory
management is a necessary first step. 


         GAO CONTACT
------------------------------------------------------ Chapter 4:0.1.1

Neal Curtin, Director of Reporting, National Security and
International Affairs Division, (202) 512-6152. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 4:1

DOD01:  Rewrite Policy Directives to Include Better Guidance and
Fewer Procedures
DOD should clarify policy directives and procedures to reduce
administrative burden and unnecessary regulatory controls. 

GAO Comments
We endorse efforts to clarify the policy directives to reduce
unnecessary procedures and controls.  However, there are risks that
must be considered.  Directives were created based on extensive
experience and lessons learned.  Changing existing directives without
adequate consideration of what brought about the original directives
invites a repetition of costly mistakes.  Revisions to existing
directives should ensure that appropriate checks and balances are
maintained. 



-------------------------------------------------------- Chapter 4:1.1

DOD04:  Outsource Non-Core Department of Defense Functions
By contracting out non-core functions (from towing services to
certain information technology functions), DOD will be better able to
focus on its core responsibilities. 

GAO Comments
We agree with this recommendation and would support an approach where
functions are outsourced on a case by case basis.  For example, we
recently reviewed a price comparison of DOD printing operations and
found that like other price comparisons done in the past, the recent
one, drawn largely from DOD facilities in the Washington area, showed
that significant savings could be achieved if more of DOD's printing
and duplicating work were procured commercially rather than being
performed in-house.  We are doing additional price comparisons to
determine the extent to which DOD printing and duplicating savings
can be achieved nationwide.  Similar type studies would be needed on
other functional areas to ensure DOD would get better quality
service, save money, and reduce the administrative burden. 


-------------------------------------------------------- Chapter 4:1.2

DOD07:  Create a Healthy and Safe Environment for Department of
Defense Activities
To create a safe environment, DOD must take action in the areas of
clean-up of hazardous wastes, use of environmental technology, and
pollution prevention. 

GAO Comments
We strongly support actions by DOD and other agencies aimed at a
safer environment.  Cleanup, technology, and pollution prevention are
among the major considerations in an overall program, and our past
reports and ongoing work support an emphasis on them.  Past efforts
to reach environmental protection goals and ensure that limited
resources are used wisely have been hindered by limited guidance and
weaknesses in information systems and financial controls. 


-------------------------------------------------------- Chapter 4:1.3

DOD09:  Maximize the Efficiency of DOD Health Care Operations
Use emerging technology to upgrade care at DOD health care
facilities. 

GAO Comments
We fully support the prudent use of emerging technology to upgrade
and improve health care delivery at DOD health care facilities.  The
primary means for using emerging technology to achieve improvements
in clinical operations is the Composite Health Care System (CHCS)--a
fully integrated hospital information system.  The outpatient and
ancillary portions of the system are nearly ready for worldwide
activation.  The physician inpatient order entry capability requires
redesign.  This system has significant potential. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 4:2

DOD03:  Purchase Best Value Common Supplies and Services
Allow managers and commanders to purchase the best value common
supplies and services from public, private, or nonprofit sources. 

GAO Comments
We have reported that procurement officials are already authorized
under existing procurement law to consider source selection factors
other than price.  We support efforts to implement and simplify "best
value" practices and make them more usable for small dollar value
procurements.  To the extent that the NPR recommendation may seek to
expand contracting authority, this would require further study. 


-------------------------------------------------------- Chapter 4:2.1

DOD06:  Establish and Promote a Productivity-Enhancing Capital
Investment Fund
DOD should be authorized to expand its capital investment fund to
manage its operations in a more business-like manner. 

GAO Comments
We generally agree with the concept of promoting
productivity-enhancing capital investments, provided that the
associated fund is effectively managed.  However, our experience with
DOD's capital asset program, now funded under the Defense Business
Operations Fund, has not been good.  DOD has not established adequate
procedures, including controls over revenues and expenditures and
separate reserve accounts, to accurately track and account for
capital asset revenues, obligations, and expenditures.  These
weaknesses have raised questions about appropriate funding levels,
justification of investment decisions, and accuracy of budget
presentations.  We have ongoing work in this area, including
examining the need and justification for selected capital assets and
the adequacy of oversight and control of the capital program.  Until
DOD has more fully developed its policies and procedures governing
the capital program, we are not in a position to support expansion of
this concept for financing capital improvements. 


-------------------------------------------------------- Chapter 4:2.2

DOD08:  Establish a Defense Quality Workplace
Encourage the use of quality management concepts at all levels in the
Department of Defense. 

GAO Comments
We strongly support the idea of using quality management concepts at
all levels in DOD.  We support DOD using these concepts to pursue an
organizational culture that is devoted to continuous improvement; the
quest for more economic, efficient, and effective operations in all
activities; and the pilot testing and Department-wide implementation
of the best management practices in the public and private sectors. 
While we have not specifically recommended that DOD establish a
"defense quality workplace," we have reported that DOD needs to
change its culture with respect to certain areas, such as increasing
emphasis on economy and efficiency in inventory and supply
management, and particularly training, since training is a key
element in perpetuating cultural change.  We have also recommended
that DOD pilot test a number of commercial practices in an effort to
find ways to improve its operations and reported that most federal
installations that practice Total Quality Management benefit in such
areas as increased productivity and improved quality, timeliness,
attention to customer requirements, and problem solving skills. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 4:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 4:4

DOD02:  Establish a Unified Budget for the Department of Defense
Give commanders greater flexibility to set priorities, solve funding
problems, and resolve unplanned requirements at the lowest
appropriate operating level. 

GAO Comment
We are not familiar with the DOD experiment called the Unified Budget
Test referred to in the NPR report and therefore cannot comment on
this recommendation specifically.  While this overall recommendation
is broadly worded, the elaboration of the recommendation and the
discussion concerning minimizing budget restrictions in the NPR
report as it relates to DOD appear to focus on the operations and
maintenance (O&M) portion of the budget.  DOD's budget is divided
into six major appropriations categories--military personnel; O&M
procurement; research development, test, and evaluation; military
construction; and family housing.  The O&M account represents the
largest portion of the proposed fiscal year 1994 DOD budget--almost
36 percent and $89 billion.  The O&M budget is further subdivided by
DOD components and then again within these components.  This
recommendation is not clear as to how high a level of aggregation of
the O&M budget is desirable or how a unified budget would be affected
by the lack of needed improvements in DOD's financial management
systems and internal controls. 


-------------------------------------------------------- Chapter 4:4.1

DOD05:  Create Incentives for the Department of Defense to Generate
Revenues
This recommendation proposes giving managers and commanders the
ability to generate income at the installation level by allowing the
Corps of Engineers to recover its costs for processing certain
commercial applications and by establishing goals for solid waste
reduction and recycling. 

GAO Comments
We have not done specific work regarding whether the Corps of
Engineers should attempt to generate income to recover costs at the
installation level.  Consequently, we are not in a position to
address this matter. 


-------------------------------------------------------- Chapter 4:4.2

DOD10:  Give Department of Defense Installation Commanders More
Authority and Responsibility Over Installation Management
By giving DOD installation commanders more authority over
installation management, DOD will be better able to manage its
resources, provide services to its employees, and move toward more
entrepreneurial management. 

GAO Comments
Greater empowerment of installation commanders to manage is a
recommendation that on the surface appears to have much merit. 
However, the report does not provide sufficient information to
indicate what additional authorities are intended to be granted
and/or to what extent those authorities might run counter to greater
centralization of management functions evident in recent Defense
Management Review initiatives, such as in the areas of finance and
accounting and printing.  Nor is it clear to what extent such
empowerment could result in the transfer of funding designated for
readiness and training to other uses. 


-------------------------------------------------------- Chapter 4:4.3

DOD11:  Reduce National Guard and Reserve Costs
This recommendation makes two changes in the current costs for
reservists:  (1) to limit compensation of federal employees on
reserve duty to the greater of civilian or reserve compensation or to
allow the reservist to take annual leave; and (2) to limit the basic
allowance for quarters only to reservists who actually bring their
dependents on short-term duty assignments when quarters are not
provided to dependents. 

GAO Comments
This recommendation has merit from the standpoint of eliminating any
perceived inequity between the amount of government pay provided to
federal employees and nonfederal employees on reserve duty.  It also
recognizes that the existing fiscal year impact could grow if
pressures continue to build to increasingly rely on reservists for
periods of extended active duty time.  The recommended change would
require a change in legislation.  However, our prior work in reserve
issues does not put us in a position to gauge the importance of
current legislative provisions to recruiting or to maintaining needed
reserve manning levels, or likewise to estimate the likely effect of
any legislative change. 


-------------------------------------------------------- Chapter 4:4.4

DOD12:  Streamline and Reorganize the U.S.  Army Corps of Engineers
NPR recommends implementing a 1992 reorganization proposal that would
reduce the number of division offices from 11 to 6 and would allow
the Corps to work with OMB and other agencies to make maximum use of
Corps' engineering and technical capabilities. 

GAO Comments
The reduction in the number of Corps of Engineers' division offices
is part of an overall reorganization of the Corps involving all of
its 36 district offices.  If the plan is adopted, the Corps would
reduce its workforce by 2,600 and redistribute 5,000 positions among
its remaining division and district offices.  Since we have not
studied the plan in any detail, we are not in a position to assess
the merits of this recommendation. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 4:5

Improving Financial Management and Internal Controls.  To control
costs in the Department of Defense, it is first necessary for
managers to determine what the costs are.  Currently, DOD is unable
to do this for many of its activities because its financial systems
and practices are out of date, inaccurate, and unreliable. 
Consequently, the kind of relevant, credible financial information
that program managers, commanders, and top executives need to reduce
costs and measure performance is often not available. 

Reforming Weapons System Acquisition.  The manner and process in
which weapons requirements are determined and weapons are acquired
have often proved costly and inefficient--if not wasteful.  The
combination of unrealistic spending plans, costly weapons
requirements, overly optimistic cost estimates, and high-risk
acquisition schedules has resulted in an annual budget cycle of
weapons cost overruns that require increased funding or program
adjustments that reduce, delay, and/or stretch out the programs. 
Past efforts to reform the acquisition process have not eliminated
these problems.  A prevailing culture that depends on generating and
supporting new weapons acquisitions has defeated past reform efforts. 
DOD must rededicate its efforts to improving weapons acquisition. 

Improving Inventory Management.  Another area that is not fully
addressed by NPR but of great concern to us is DOD's inventory
management.  DOD has wasted billions of dollars on excess supplies,
burdened itself with the need to maintain them, and failed to acquire
the tools or expertise to manage them effectively.  DOD needs to
shift its organizational culture toward economical and efficient
inventory practices.  While DOD has begun to address its inventory
management problems, the services continue to develop systems
independently, and plans to link the systems are at different stages
of development.  DOD must continue to work toward instilling the
appropriate priorities, incentives, and attitudes among its supply
managers and users and should consider aggressively adopting modern
commercial inventory practices that have been successfully proven in
the private sector. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 4:6

Export Controls:  Issues in Removing Militarily Sensitive Items From
the Munitions List (GAO/NSIAD-93-76, Mar.  31, 1993) relates to
DOD01. 

Test and Evaluation:  DOD Has Been Slow in Improving Testing of
Software-Intensive Systems (GAO/NSIAD-93-198, Sept.  29, 1993)
relates to DOD01. 

Contract Pricing:  Unallowable Costs Charged to Defense Contracts,
(GAO/NSIAD-93-79, Nov.  20, 1992) relates to DOD01. 

Defense Procurement:  Programs for Considering Vendor's Past
Performance in Awarding Contract (GAO/NSIAD-93-63, June 30, 1993)
relates to DOD03. 

Defense Management:  Printing Operations at the Department of Defense
(GAO/T-NSIAD-93-19, July 15, 1993) relates to DOD04. 

Financial Management:  Opportunities to Strengthen Management of the
Defense Business Operations Fund (GAO/T-AFMD-93-6, June 16, 1993)
relates to DOD06. 

Financial Management:  Status of the Defense Business Operations Fund
(GAO/AFMD-92-79, June 15, 1992) relates to DOD06. 

Industrial Funds:  Weaknesses Remain in the Department of Defense's
Capital Equipment Program (GAO/NSIAD-91-175, Apr.  17, 1991) relates
to DOD06. 

Superfund:  Backlog of Unevaluated Federal Facilities Slows Cleanup
Efforts (GAO/RCED-93-119, July 20, 1993) relates to DOD07. 

Environmental Cleanup:  Unresolved Issues in Reimbursements to DOD
Contractors (GAO/T-NSIAD-93-12, May 20, 1993) relates to DOD07. 

Ozone-Depleting Chemicals:  Increased Priority Needed If DOD Is to
Eliminate Their Use (GAO/NSIAD-92-21, Nov.  13, 1991) relates to
DOD07. 

Hazardous Waste:  Attention to DOD Inventories of Hazardous Materials
Needed (GAO/NSIAD-90-11, Nov.  6, 1989) relates to DOD07. 

Defense Inventory:  Top Management Attention is Crucial
(GAO/NSIAD-90-145, Mar.  26, 1990) relates to DOD08. 

Organizational Culture:  Techniques Companies Use to Perpetuate or
Change Beliefs and Values (GAO/NSIAD-92-105, Feb.  27, 1992) relates
to DOD08. 

Quality Management:  Survey of Federal Organizations (GAO/GGD-93-9BR,
Oct.  1, 1992) relates to DOD08. 

Commercial Practices:  DOD Could Save Millions by Reducing
Maintenance and Repair Inventories (GAO/NSIAD-93-155, June 7, 1993)
relates to DOD08. 

DOD Medical Inventory:  Reductions Can Be Made Through the Use of
Commercial Practices (GAO/NSIAD-92-58, Dec.  5, 1991) relates to
DOD08. 

Defense Inventory:  Applying Commercial Purchasing Practices Should
Help Reduce Supply Costs (GAO/NSIAD-93-112, Aug.  6, 1993) relates to
DOD08. 

Commercial Practices:  Opportunities Exist to Reduce Aircraft Engine
Support Costs (GAO/NSIAD-91-240, June 28, 1991) relates to DOD08. 

Defense Transportation:  Commercial Practices Offer Improvement
Opportunities (NSIAD-94-26, expected publish date in Nov.  1993)
relates to DOD08. 

Weapons Acquisition:  A Rare Opportunity for Lasting Change
(GAO/NSIAD-93-15, Dec.  1992) relates to DOD08 and additional areas
of GAO concern. 

Medical ADP Systems:  Composite Health Care System Operational Test
Extended (GAO/IMTEC-89-30, Apr.  10, 1989) relates to DOD09. 

Medical ADP Systems:  Composite Health Care System Defense Faces a
Difficult Task (GAO/IMTEC-90-42, Mar.  15, 1990) relates to DOD09. 

DOD Medical Inventory:  Reductions Can Be Made Through the Use of
Commercial Practices (GAO/NSIAD-92-58, Dec.  5, 1991) relates to
DOD09. 

Defense's Acquisition of the Composite Health Care System
(GAO/T-IMTEC-90-04, Mar.  15, 1990) relates to DOD09. 

Medical ADP Systems:  Changes in Composite Health Care System's
Development Strategy Are Unwise (GAO/IMTEC-91-47, Sept.  30, 1991)
relates to DOD09. 

Medical ADP Systems:  Composite Health Care Systems Is Not Ready to
Be Deployed (GAO/IMTEC-92-54, May 20, 1992) relates to DOD09. 

Composite Health Care Systems:  Outpatient Capability Is Nearly Ready
for Worldwide Deployment (GAO/IMTEC-93-11, Dec.  15, 1992) relates to
DOD09. 

National Security Issues (GAO/OCG-93-9TR, Dec.  1992) relates to
additional areas of GAO concern. 

Defense Inventory Management (GAO/HR-93-12, Dec.  1992) relates to
additional areas of GAO concern. 


DEPARTMENT OF EDUCATION (ED)
============================================================ Chapter 5


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 5:0.1

As discussed in our December 1992 transition series report on
Education Issues, the Department of Education has a strong leadership
role to play in improving the nation's education system.  However,
Education has had long-standing managerial problems that may hamper
its taking a strong leadership role.  These problems have been
particularly evident in Education's student assistance programs, as
documented in our December 1992 high-risk series report on Guaranteed
Student Loans.  However, problems also exist in overall departmental
management, financial and management information systems, and human
resources management. 

Many of NPR's recommendations to streamline education department
programs, strengthen student aid programs, and improve development
opportunities for Education employees are in line with our reports. 
Implementing such recommendations would better focus Education's
efforts on the challenges of improving the nation's education system. 


         GAO CONTACT
------------------------------------------------------ Chapter 5:0.1.1

Linda G.  Morra, Director, Education and Employment Issues, Human
Resources Division, (202) 512-7014. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 5:1

ED01:  Redesign Chapter 1 of Elementary and Secondary Education Act
Recommendations focus education funds on the neediest students and
simplify requirements on schools receiving federal education aid. 
Existing funds are redirected. 

GAO Comments
We have recommended better targeting of Chapter 1 funds to counties
with the most needy students.  Simplified requirements for schools
receiving federal aid could enable categorical programs to better fit
into school reform efforts, according to our report on systemwide
education reform. 


-------------------------------------------------------- Chapter 5:1.1

ED05:  Streamline and Improve the Department of Education's Grants
Process
Statutory restrictions on the department's rulemaking process should
be removed, flexibility added to certain procedures, and unnecessary
requirements eliminated to shorten the grant award process. 

GAO Comments
We have strongly advocated improving Education's grants process. 
However, we have not made this specific recommendation. 


-------------------------------------------------------- Chapter 5:1.2

ED06:  Provide Incentives for the Department of Education's Debt
Collection Service
This recommendation would allow Education to use a portion of
revenues collected from defaulted student loans to pay for
collections costs, thereby providing an incentive for increased
collections. 

GAO Comments
We agree and have proposed that federal agencies keep a portion of
their increased collections to be used to improve debt collection
systems and practices. 


-------------------------------------------------------- Chapter 5:1.3

ED07:  Simplify and Strengthen Institutional Eligibility and
Certification for Participation in Federal Student Aid
NPR recommends developing ways of measuring default indicators,
creating profiles of high-risk institutions, and removing eligibility
of institutions to participate in federal financial aid programs once
the schools have become ineligible to receive federal student loan
funds. 

GAO Comments
We agree and have reported on problems with Education's school
eligibility and certification process, and we recommended changes and
alternatives for improvement.  The NPR recommendations are consistent
with our position. 


-------------------------------------------------------- Chapter 5:1.4

ED09:  Improve Employee Development Opportunities in Department of
Education
Education should create a full spectrum of activities that can
contribute to career development, including conducting a
departmentwide assessment of training and development needs. 

GAO Comments
We strongly recommend these types of actions, which are necessary to
successfully develop and upgrade the serious skill weaknesses of
Education staff in such areas as accounting, finance, analysis,
writing, and management.  This would also function as part of the
implementation of our recommendation for a strategic vision and
strategic plans for human resources management. 


-------------------------------------------------------- Chapter 5:1.5

ED12:  Develop a Strategy for Technical Assistance and Information
Dissemination
Education should develop a strategy for its $290 million technical
assistance efforts designed to promote the National Goals 2000
themes. 

GAO Comments
We support Education's efforts to improve and focus its technical
assistance and information dissemination.  We found that such actions
could better support systemwide education reform efforts in school
districts.  Development of this type of strategy would also be
consistent with our recommendations for implementing departmentwide
strategic management. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 5:2

ED02:  Reduce the Number of Programs the Department of Education
Administers
Eliminate or consolidate more than 40 existing education grant
programs and free up funds for use in other educational programs. 

GAO Comments
We generally support reducing the administrative burden at federal
and local levels.  Although not speaking directly to education
program consolidation, we have suggested that Congress consider
simplifying current approaches to assist dislocated workers to one
that assists workers regardless of the reason for their dislocation. 
We have also suggested making existing federal categorical education
programs more conducive to systemwide reform while meeting the needs
of at-risk students.  Reducing the number of programs may be one of
many strategies used to do this. 


-------------------------------------------------------- Chapter 5:2.1

ED03:  Consolidate the Eisenhower Math and Science Education Program
with Chapter 2
NPR proposes combining this teacher training program, which is
largely consumed with short-term training, with other ED programs to
create a new program with a more coherent national focus on teacher
training and professional development. 

GAO Comments
We generally agree with the thrust of this recommendation.  In 1992,
we found that short-term teacher training alone is unlikely to
produce major improvements in student academic achievement.  However,
we have not recommended the specific steps seen in this
recommendation. 


-------------------------------------------------------- Chapter 5:2.2

ED11:  Build a Professional, Mission-Driven Structure for Research
NPR recommends establishing a research advisory board, consolidating
and targeting research and development efforts, and establishing an
office to translate research findings into education reform
assistance. 

GAO Comments
We have no work that directly supports this recommendation.  However,
this recommendation is consistent with our recommendations for
implementing departmentwide strategic management. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 5:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 5:4

ED04:  Consolidate National Security Education Act Programs
The NSEA trust fund, administered by the Department of Defense,
should be consolidated with the Center for International Education in
ED to strengthen foreign language study and eliminate duplication of
effort. 

GAO Comments
We have insufficient information to assess this recommendation. 


-------------------------------------------------------- Chapter 5:4.1

ED08:  Create a Single Point of Contact for Program and Grant
Information
ED should create an electronic system that can be used by students,
parents, researchers, and administrators to learn about department
programs, funding opportunities, best practices, and other
information. 

GAO Comments
We have insufficient information to assess this recommendation. 



-------------------------------------------------------- Chapter 5:4.2

ED10:  Eliminate the Grantback Statutory Provision of the General
Education Provisions Act
NPR recommends repealing this provision, which permits the department
to return to a grantee a percentage of funds recovered from the
grantee as a result of an audit. 

GAO Comments
We have insufficient information to assess this recommendation. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 5:5

The Department of Education needs to improve the reliability of the
underlying data that support the Federal Family Education Loan
Program's cost and budget projections so that the National Student
Loan Data System will be supported by reasonable data and the cost of
this program can be better managed.  We have suggested in several
reports that Education expedite its plan for ensuring that these data
are more useful, timely, and accurate. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 5:6

Education Issues (GAO/OCG-93-18TR, Dec.  1992) relates to the overall
summary. 

Guaranteed Student Loans (GAO/HR-93-2, Dec.  1992) relates to the
overall summary and ED07. 

Remedial Education:  Modifying Chapter 1 Formula Would Target More
Funds to Those Most in Need (GAO/HRD-92-16, July 28, 1992) relates to
ED01. 

Systemwide Education Reform:  Federal Leadership Could Facilitate
District-Level Efforts (GAO/HRD-93-97, Apr.  30, 1993) relates to
ED01 and ED12. 

Dislocated Workers:  Trade Adjustment Assistance Program Flawed
(GAO/T-HRD-94-4, Oct.  19, 1993) relates to ED02. 

Department of Education:  Eisenhower Math and Science State Grant
Program (GAO/HRD-93-25, Nov.  10, 1992) relates to ED03. 

Education Grants Management:  Management Actions Initiated to Correct
Material Weaknesses (GAO/HRD-91-72, Feb.  26, 1991) relates to ED05. 

Desegregation Activities:  Administration of Education Grant Funds at
the Cleveland School District (GAO/HRD-89-83, Aug.  29, 1989) relates
to ED05. 

Debt Collection:  Billions Are Owed While Collection and Accounting
Problems Are Unresolved (GAO/AFMD-86-39, May 23, 1986) relates to
ED06. 

Guaranteed Student Loans:  Legislative and Regulatory Changes Needed
to Reduce Default Costs (GAO/HRD-87-76, Sept.  30, 1987) relates to
ED06. 

Department of Education:  Long-Standing Management Problems Hamper
Reforms (GAO/HRD-93-47, May 28, 1993) relates to ED09, ED11, and
ED12. 

Financial Audit:  Guaranteed Student Loan Program's Internal Controls
and Structure Need Improvement (GAO/AFMD-93-20, Mar.  16, 1993)
relates to additional areas of GAO concern. 

Financial Audit:  Federal Family Education Loan Program's Financial
Statements for Fiscal Year 1992 (GAO/AIMD-93-4, June 30, 1993)
relates to additional areas of GAO concern. 


DEPARTMENT OF ENERGY (DOE)
============================================================ Chapter 6


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 6:0.1

As discussed in our December 1992 transition series report entitled
Energy Issues and high-risk series report entitled Department of
Energy Contract Management, the Department of Energy faces monumental
challenges that will require enormous resources and leadership in the
years ahead.  These challenges include

  a massive, $160 billion cleanup of DOE's nuclear weapons
     complex--after nearly 50 years of environmental abuse--with
     billions more dollars needed to reconfigure the aging complex
     once DOE decides how and where future weapons materials can best
     be produced;

  a decision on a new mission and the optimal role for the
     Department's national laboratories, funded at more than $7
     billion yearly and employing 50,000 staff;

  a plan to finally establish a nuclear waste repository, estimated
     to cost up to $30 billion; and

  new initiatives to confront and resolve fundamental weaknesses in
     contract management. 

Several of NPR's recommendations touch on these basic issues and, if
implemented, should contribute to better management practices at DOE. 
Particularly relevant are those recommendations dealing with cleanup
problems at the weapons complex and the Department's practices for
managing contractors.  DOE contracts out most of its mission-related
functions and is the largest civilian contractor agency.  Many of its
past problems can be directly associated with breakdowns related to
contractors.  However, of the remaining challenges confronting the
Department of Energy, many are policy-driven and go well beyond the
economy- and efficiency-oriented solutions that generally
characterize NPR's agenda. 


         GAO CONTACT
------------------------------------------------------ Chapter 6:0.1.1

Victor S.  Rezendes, Director, Energy and Science Issues, Resources,
Community, and Economic Development Division, (202) 512-3841. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 6:1

DOE01:  Improve Environmental Contract Management
NPR proposes improvements in DOE's environmental cleanup contracts to
achieve efficiency. 

GAO Comments
We support improvements in contract management.  We have repeatedly
criticized DOE for failing to properly manage the vast network of
contractors that carry out its missions; contracts for this work
amount to over $15 billion a year.  Contract management problems are
particularly evident in the Environmental Restoration and Waste
Management Program, which was created in 1989 and has grown to
encompass almost one-third of the Department's budget.  Although DOE
has implemented several strategies to increase its control over these
cleanup contractors and adopted new contracting strategies, numerous
problems remain. 


-------------------------------------------------------- Chapter 6:1.1

DOE03:  Make Field Facility Contracts Outcome-Oriented
This recommendation would modify the current DOE contract process at
field facilities to make the contracts more outcome-oriented to
improve efficiency and contractor performance. 

GAO Comments
In our view, contractors should be held liable for improper
performance and accountable for improper behavior.  However, as noted
in our December 1992 report entitled Department of Energy Contract
Management, the needed changes will take both time and commitment. 
As a positive step, the Secretary of Energy recently established a
special Contract Reform Team to, among other things, develop a
framework of performance measurements and incentives for use in DOE's
management and operating contracts. 


-------------------------------------------------------- Chapter 6:1.2

DOE06:  Redirect Energy Laboratories to Post-Cold War Priorities
This recommendation provides guidance for use of DOE energy labs,
focusing on defining new missions, consolidating or eliminating
unneeded facilities, and making their services of greater benefit in
the post-Cold War era. 

GAO Comments
We agree that the mission of the national laboratories needs to be
redefined.  These laboratories--and particularly the three defense
laboratories--represent a significant national resource that may be
redirected toward important national priorities outside of their
traditional defense mission.  Our ongoing work suggests that strong
government leadership is needed to redefine the laboratories'
missions and provide the kind of managerial tools necessary to ensure
a successful transition to new mission areas, such as competitiveness
and environmental technologies.  These are the areas in which experts
believe the greatest contributions can be made. 

We also agree that opportunities exist for consolidating certain
weapons facilities and for sharpening the laboratories' defense
mission in light of changing military priorities.  For example, the
laboratories still have an important role to play in improving the
safety of weapons. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 6:2

DOE02:  Incorporate Land Use Planning in Cleanup
NPR recommends that DOE incorporate land-use planning into the
nuclear facilities cleanup process. 

GAO Comments
We agree with the general direction of NPR's recommendation to
conduct land-use planning for DOE's facilities and to relate the
level of cleanup to expected future uses of the land.  According to
NPR, such an approach can help clarify cleanup objectives and improve
exposure and risk assessments, resulting in better-informed
selections of cleanup remedies.  We have also emphasized that the
Department should acknowledge that some areas of the weapons complex
may be irreversibly contaminated and may thus require long-term
institutional control. 


-------------------------------------------------------- Chapter 6:2.1

DOE05:  Strengthen the Federal Energy Management Program
NPR recommends a number of improvements to this program, designed to
better manage federal energy use. 

GAO Comments
Although NPR did not include information on the specific improvements
it advocates for the Federal Energy Management Program, we think that
certain improvements need to be made.  These changes include a
greater emphasis on energy management by federal agencies and
increased funding for federal energy conservation efforts.  Funding
options could be increased by simplifying the procedures for
financing energy conservation projects through nonfederal sources,
such as contracting based on energy-saving performance and utility
rebate programs. 


-------------------------------------------------------- Chapter 6:2.2

DOE07:  Save Costs Through Private Power Cogeneration
This would allow the private sector to cogenerate power at DOE labs
as a means of saving money.  DOD has similar authority at this time. 

GAO Comments
Although we have not specifically made a recommendation on this
issue, we generally support the idea of using fuel-efficient
cogeneration technology where feasible.  The benefits of using this
technology were recognized by Congress as early as 1978 with passage
of the Public Utilities Regulatory Policies Act, which required
electric utilities to purchase energy from cogenerators and other
power producers. 


-------------------------------------------------------- Chapter 6:2.3

DOE08:  Support the Sale of the Alaska Power Administration
The federal government should divest its interests in the Alaska
Power Administration. 

GAO Comments
We would support such a sale, provided the terms and conditions of
the sale carefully balance the need to protect the Alaska Power
Administration's existing ratepayers and the taxpayers' interests. 
More specifically, the sale should provide for full cost recovery by
the government and reflect the full potential value of the assets to
the purchaser. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 6:3

None. 


   RECOMMENDATION ON WHICH GAO HAS
   INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 6:4

DOE04:  Increase Electrical Power Revenues and Study Rates
NPR proposes increasing federal income by allowing the Power
Marketing Administrations to recover a larger portion of its
operating costs through rate increases or by changing the financing
of the Bonneville Power Administration. 

GAO Comments
We understand that $2.4 billion of the entire $3.6 billion estimated
change in receipts shown in this recommendation relates to changing
the financing of the Bonneville Power Administration (BPA).  In our
view, the proposed refinancing of BPA's appropriated debt is merely
an exchange of Treasury debt for agency debt.  As such, this
transaction produces no receipts and will not reduce the budget
deficit by the estimated $2.4 billion cited.  We expect to assess the
benefits identified as this transaction is finalized.  We have not
reviewed the other components of the recommendation. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 6:5

On the basis of our work, we believe that the following additional
challenges facing DOE and not addressed by NPR may warrant attention: 

  DOE's efforts to clean up the legacy of weapons production have
     been hampered by technological, compliance, and management
     problems that have led, in turn, to missed milestones and
     escalating budgets.  Our work has pointed out the need for DOE
     to improve how it sets funding priorities in order to address
     the more serious environmental problems. 

  DOE has made significant changes to strengthen contract management. 
     Although DOE's progress is noteworthy, new reforms will require
     DOE to substantially upgrade its oversight capabilities. 
     Existing staff must be given the right skills to administer new
     provisions, and information systems must be developed and
     implemented to provide the kinds of data needed for the more
     intensive oversight required as the result of reforms. 

  DOE lacks information essential for making decisions.  DOE spends
     about $1.6 billion annually to provide its executives, managers,
     and staff with information to help them accomplish DOE's
     mission.  Despite this effort, DOE's failure to systematically
     monitor contractors' financial reporting practices has created
     an atmosphere conducive to financial irregularities, such as
     circumventing congressional funding authorization and purchasing
     unauthorized capital equipment. 

These weaknesses, insufficient oversight, lack of essential
information, and contract problems will require wholesale changes
within DOE. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 6:6

Energy Issues (GAO/OCG-93-13TR, Dec.  1992) relates to the overall
summary. 

Department of Energy Contract Management (GAO/HR-93-9, Dec.  1992)
relates to the overall summary, DOE01, DOE03, and DOE06. 

Financial Management:  Energy's Material Financial Management
Weaknesses Require Corrective Action (GAO/AIMD-93-29, Sept.  30,
1993) relates to DOE01. 

Department of Energy:  Management Problems Require a Long-Term
Commitment to Change (GAO/RCED-93-72, Aug.  31, 1993) relates to
DOE01. 

Department of Energy:  Better Information Resources Management Needed
to Accomplish Mission (GAO/IMTEC-92-53, Sept.  29, 1992) relates to
DOE01. 

DOE Management:  Impediments to Environmental Restoration Management
Contracting (GAO/RCED-92-244, Aug.  14, 1992) relates to DOE01. 

Nuclear Weapons Complex:  Improving DOE's Management of the
Environmental Cleanup (GAO/T-RCED-92-43, Mar.  30, 1992) relates to
DOE01 and DOE02. 

Energy Management:  Tightening Fee Process and Contractor
Accountability Will Challenge DOE (GAO/RCED-92-9, Oct.  30, 1991)
relates to DOE01 and DOE03. 

Nuclear Weapons Complex:  Major Safety, Environmental, and
Reconfiguration Issues Facing DOE (GAO/T-RCED-92-31, Feb.  25, 1992)
relates to DOE02. 

Correcting Environmental Problems Facing the Nuclear Weapons Complex
(GAO/T-RCED-90-85, May 17, 1990) relates to DOE02. 

Energy Management:  Vulnerability of DOE's Contracting to Waste,
Fraud, Abuse, and Mismanagement (GAO/RCED-92-101, Apr.  10, 1992)
relates to DOE03. 

GAO Products on Bonneville Power Administration (GAO/RCED-93-133R,
Mar.  31, 1993) relates to DOE04. 

Budget Issues:  Agency Authority to Borrow Should Be Granted More
Selectively (GAO/AFMD-89-4, Sept.  15, 1989) relates to DOE04. 

Policies Governing Bonneville Power Administration's Repayment of
Federal Investment Still Need Revision (GAO/EMD-84-25, Oct.  26,
1983) relates to DOE04. 

Bonneville Power Administration's Repayment of the Federal Investment
(GAO Testimony, 122327, Sept.  14, 1983) relates to DOE04. 

Federal Investment in the Columbia River Power System:  Status of
Repayment (GAO Testimony, 122041, Aug.  3, 1983) relates to DOE04. 

Policies Governing the Bonneville Power Administration's Repayment of
Federal Investments Need Revision (GAO/EMD-81-94, June 16, 1981)
relates to DOE04. 

Barriers to Installing Energy-Efficient Lighting in Federal Buildings
(GAO/T-GGD-90-54, July 11, 1990) relates to DOE05. 

Energy Conservation:  Federal Shared Energy Savings Contracting
(GAO/RCED-89-99, Apr.  17, 1989) relates to DOE05. 

Status of the Federal Energy Management Program (GAO/RCED-84-86, Mar. 
7, 1984) relates to DOE05. 

Department of Energy:  Management Problems Require a Long-Term
Commitment to Change (GAO/RCED-93-72, Aug.  31, 1993) relates to
DOE06. 

Energy Policy:  Changes Needed to Make National Energy Planning More
Useful (GAO/RCED-93-29, Apr.  27, 1993) relates to DOE06. 

Nuclear Weapons Complex:  Issues Surrounding Consolidating Los Alamos
and Lawrence Livermore National Laboratories (GAO/RCED-92-98, Sept. 
24, 1992) relates to DOE06. 

Energy Policy:  Developing Strategies for Energy Policies in the
1990s (GAO/RCED-90-85, June 19, 1990) relates to DOE06. 

Federal Electric Power:  Views on the Sale of Alaska Power
Administration Hydropower Assets (GAO/RCED-90-93, Feb.  22, 1990)
relates to DOE08. 


ENVIRONMENTAL PROTECTION AGENCY
(EPA)
============================================================ Chapter 7


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 7:0.1

Generally, NPR's recommendations for EPA are consistent with our body
of work over the past several years and in line with our December
1992 transition series report entitled Environmental Protection
Issues.  Our work directly supports the majority of NPR's
environmental recommendations and provides relevant information on
most of the other recommendations.  Appropriately, many of the
recommendations implicitly acknowledge the limitations of traditional
"command and control" regulatory schemes and propose alternative
approaches (e.g., economic and market-based approaches) for dealing
with seemingly intractable problems in environmental management. 
Although we support the basic thrust of the recommendations, their
success will be contingent on how well they are implemented. 


         GAO CONTACT
------------------------------------------------------ Chapter 7:0.1.1

Richard L.  Hembra, Director, Environmental Protection Issues,
Resources, Community, and Economic Development Division, (202)
512-6112. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 7:1

EPA03:  Shift EPA's Emphasis Toward Pollution Prevention and Away
From Pollution Control
EPA needs to emphasize pollution prevention by implementing an
effective pollution prevention strategy that includes amending
regulations and motivating the private sector to invest in cleaner,
less polluting technologies and practices. 

GAO Comments
We support pollution prevention strategies.  A central theme running
through much of our work over the past several years has been that it
is far less expensive (and more environmentally beneficial) to reduce
or eliminate pollution at its source rather than treat it at the "end
of the pipe." Although EPA has taken steps towards promoting
pollution prevention, our work has stressed the need for EPA to place
greater emphasis on these efforts. 


-------------------------------------------------------- Chapter 7:1.1

EPA04:  Promote the Use of Economic and Market-Based Approaches to
Reduce Water Pollution
EPA should work with Congress to propose language amending the Clean
Water Act to explicitly encourage market-based approaches to reduce
water pollution.  EPA should also identify wastewater discharge fees
that could be included in the Clean Water Act reauthorization. 

GAO Comments
We support market-based approaches to reducing water pollution and
have asked Congress to consider amending the Clean Water Act to
explicitly authorize pollutant trading.  In addition, we have asked
Congress to consider directing EPA to develop a pollutant-based fee
system for dischargers to generate additional revenues and serve as
an incentive for dischargers to reduce or eliminate toxic discharges. 


-------------------------------------------------------- Chapter 7:1.2

EPA05:  Increase Private Sector Partnerships to Accelerate
Development of Innovative Technologies
NPR recommends that EPA develop an action plan with specific
milestones for improving the regulatory and statutory climate for
innovative technologies. 

GAO Comments
We support improving the climate for innovative technologies. 
Several of our reviews in the Superfund and drinking water/wastewater
areas have identified barriers hindering the wider use of innovative
technologies.  While EPA has attempted to address some of these
barriers in the past, a more systematic and comprehensive approach is
warranted. 


-------------------------------------------------------- Chapter 7:1.3

EPA07:  Establish Measurable Goals, Performance Standards, and
Strategic Planning within EPA
EPA should draft measurable environmental goals for the range of
environmental problems the United States faces.  The agency should
also draft internal goals to provide direction for assessing and
redirecting existing EPA strategies. 

GAO Comments
We concur with the need for measurable environmental goals.  A
central theme of our work over the past several years has been the
need for EPA to establish strategic plans and develop measurable
environmental goals and indicators.  These goals, strategies, and
indicators are critical for EPA to ensure that (1) the most pressing
environmental needs are addressed in an era of limited resources and
(2) progress in these efforts can be tracked and assessed. 


-------------------------------------------------------- Chapter 7:1.4

EPA10:  Promote Quality Science for Quality Decisions
Improvements include establishing guidelines for professional
development of EPA's scientific and technical staff and expanding the
use of peer-review and quality assurance procedures. 

GAO Comments
We support the need to promote quality science.  We have highlighted
the problems associated with poor or questionable science and quality
assurance procedures in several of our reports, and we are currently
assessing EPA's peer-review policies. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 7:2

EPA01:  Improve Environmental Protection Through Increased
Flexibility for Local Government
EPA should amend the regulations it determines are most troublesome
for local governments pursuant to the Regulatory Flexibility Act of
1980.  The goal is to provide alternative, flexible approaches to
meeting environmental mandates. 

GAO Comments
Our work has documented the regulatory burdens many localities face
in meeting environmental requirements.  Accordingly, we support the
goal of providing alternative, flexible approaches to meeting
environmental mandates, including nonregulatory approaches such as
market-based incentives and pollution prevention strategies. 
However, in our view it might be more appropriate to provide such
flexibility by amending the pertinent environmental statutes rather
than by providing it through the Regulatory Flexibility Act. 
Furthermore, in providing local governments with regulatory relief,
care must be taken to ensure that human health and the environment
are adequately protected and to avoid creating environmental
inequities between localities. 


-------------------------------------------------------- Chapter 7:2.1

EPA06:  Stop the Export of Banned Pesticides
EPA should work with Congress to develop legislation to stop the
exportation of banned pesticides from the United States by June 1994. 

GAO Comments
We understand that there are strongly held, different views on this
matter.  We agree that exporting substances banned in this country is
troubling and deserves further examination.  Our recently issued
report entitled Pesticides:  Limited Testing Finds Few Exported
Unregistered Pesticide Violations on Imported Food (1) identified
unregistered pesticides produced in the United States for export and
(2) determined, on the basis of the results of testing by FDA and
USDA, whether these pesticides are returning to the United States as
residues on imported goods.  While we found that FDA's monitoring for
such residues indicated that these problems are rare, we did discover
that FDA lacked sufficient information to provide complete assurance
that the problems were not occurring. 


-------------------------------------------------------- Chapter 7:2.2

EPA08:  Reform EPA's Contract Management Process
NPR recommends reform in EPA's contract management process by
implementing performance standards and by maximizing competition in
the contracting process. 

GAO Comments
We agree that EPA should reform its contract management process. 
However, our work has identified other, more serious problems than
the need to implement performance standards and maximize competition
in the contracting process.  Specifically, we have found that EPA and
other agencies (1) rely extensively on contractors to carry out
agency missions, (2) administer contracts ineffectively, (3)
insufficiently oversee contract auditing, and (4) lack high-level
management attention to and accountability for contract management. 


-------------------------------------------------------- Chapter 7:2.3

EPA09:  Establish a Blueprint for Environmental Justice Through EPA's
Operations
EPA should develop a blueprint of actions that will incorporate
environmental justice consideration into all aspects of EPA
operations. 

GAO Comments
In our view, there is merit in incorporating environmental justice
considerations into all aspects of EPA's operations.  We reviewed a
sample of hazardous waste sites and found that African Americans made
up the majority of the population in three of the four communities
where the sites were located, suggesting a bias in the siting of
these facilities.  On the basis of Congress' and the administration's
strong interest in this issue, we are conducting an ongoing review of
environmental equity in the siting of solid and hazardous waste
facilities. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 7:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 7:4

EPA02:  Streamline EPA's Permit Program
Streamlining efforts include a permit clearinghouse to serve as a
single point of contact and piloting a cross-program permit tracking
system. 

GAO Comments
Although the concept of streamlining the permit process appears to
have merit, we have not to date assessed the benefits (or possible
drawbacks) of establishing a permit clearinghouse or piloting a
cross-program permit tracking system. 


-------------------------------------------------------- Chapter 7:4.1

EPA11:  Reorganize EPA's Office of Enforcement
EPA should initiate a reorganization of its headquarters' enforcement
organization by October 1, 1993. 

GAO Comments
Although we have identified long-standing enforcement problems within
EPA and have examined alternative enforcement organizations for the
agency, we have not made recommendations on preferred options. 
Instead, we examined what would be needed to successfully implement
different options.  For example, if the agency retains the current
organization, it will have to adopt additional measures to ensure
accountability and consistency in enforcement policies and practices. 
Likewise, if enforcement functions are consolidated, some
means--performance ratings, reporting mechanisms, or some other
procedures--will have to be found to ensure accountability for
program results. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 7:5

On the basis of our work, we believe that the following additional
areas--not addressed by NPR--warrant attention: 

  To ensure that high-risk environmental problems receive appropriate
     resources, EPA should work with Congress to find opportunities
     to shift resources among its programs according to the level of
     risk involved. 

  EPA should develop alternative financing approaches to help states
     and localities deal with their growing financial burdens in
     meeting their environmental responsibilities. 

  EPA should review the results of its corrective actions to verify
     that the actions have been successful in ensuring accountability
     and addressing program weaknesses. 

  To help improve the recovery of Superfund costs, EPA should develop
     the necessary information, such as documentation of negotiations
     with responsible parties and costs expended and recovered, to
     assess the adequacy of its efforts to return past expenditures
     to the trust fund. 

  Data that EPA has available are often inadequate and poorly
     managed.  EPA's information systems have been designed largely
     to accommodate EPA's compartmentalized approach to enforcing
     environmental laws.  Nevertheless, some of the agency's highest
     priorities depend on using data in a much more integrated way. 

  In light of long-standing contract management problems and EPA's
     historic heavy reliance upon contractors, EPA should review its
     mix of in-house and contract employees to determine whether this
     mix is in appropriate balance. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 7:6

Environmental Protection Issues (GAO/OCG-93-16TR, Dec.  1992) relates
to the overall summary; EPA07; and the issues of shifting resources
according to level of risk, alternative financing approaches,
verifying corrective actions, and information systems among the
additional areas of GAO concern. 

Environmental Protection:  Meeting Public Expectations With Limited
Resources (GAO/RCED-91-97, June 18, 1991) relates to EPA01, EPA03,
and EPA07. 

Drinking Water:  Stronger Efforts Needed to Protect Areas Around
Public Wells From Contamination (GAO/RCED-93-96, Apr.  14, 1993)
relates to EPA03. 

Water Pollution:  More Emphasis Needed on Prevention in EPA's Efforts
to Protect Groundwater (GAO/RCED-92-47, Dec.  30, 1991) relates to
EPA03. 

Environmental Protection:  Implications of Using Pollution Taxes to
Supplement Regulation (GAO/RCED-93-13, Feb.  17, 1993) relates to
EPA04. 

Water Pollution:  Pollutant Trading Could Reduce Compliance Costs if
Uncertainties Are Resolved (GAO/RCED-92-153, June 15, 1992) relates
to EPA04. 

Water Pollution:  Stronger Efforts Needed by EPA to Control Toxic
Water Pollution (GAO/RCED-91-154, July 19, 1991) relates to EPA04 and
EPA10. 

Superfund:  EPA Needs to Better Focus Cleanup Technology Development
(GAO/T-RCED-93-34, Apr.  28, 1993) relates to EPA05. 

Water Pollution:  Alternative Strategies Needed to Reduce Wastewater
Treatment Costs (GAO/T-RCED-92-84, Aug.  4, 1992) relates to EPA05. 

Pesticides:  Limited Testing Finds Few Exported Unregistered
Pesticide Violations on Imported Food (GAO/RCED-94-1, Oct.  6, 1993)
relates to EPA06. 

Environmental Protection Agency:  Protecting Human Health and the
Environment Through Improved Management (GAO/RCED-88-101, Aug.  16,
1988) relates to EPA07. 

Federal Contracting:  Cost-Effective Contract Management Requires
Sustained Commitment (GAO/T-RCED-93-2, Dec.  3, 1992) relates to
EPA08. 

Siting of Hazardous Waste Landfills and Their Correlation With Racial
and Economic Status of Surrounding Communities (GAO/RCED-83-168, June
1, 1983) relates to EPA09. 

Disinfectants:  EPA Lacks Assurance They Work (GAO/RCED-90-139, Aug. 
30, 1990) relates to EPA10. 

Environmental Enforcement:  EPA Cannot Ensure the Accuracy of
Self-Reported Compliance Monitoring Data (GAO/RCED-93-21, Mar.  31,
1993) relates to EPA10. 

Toxic Substances:  EPA's Chemical Testing Program Has Not Resolved
Safety Concerns (GAO/RCED-91-136, June 19, 1991) relates to EPA10. 

Environmental Enforcement:  Alternative Enforcement Organizations for
EPA (GAO/RCED-92-107, Apr.  14, 1992) relates to EPA11. 

Superfund Program Management (GAO/HR-93-10, Dec.  1992) relates to
the issue of Superfund costs among the additional areas of GAO
concern. 


EXECUTIVE OFFICE OF THE PRESIDENT
(EOP)
============================================================ Chapter 8


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 8:0.1

In general, NPR's recommendations for improvements in the EOP are
consistent with recommendations we have made in earlier reports and,
if implemented, could result in increased productivity and better
customer service and satisfaction throughout the government.  For
example, in our report on OMB's High Risk Program:  Benefits Found
but Greater Oversight Needed we found that while the Office of
Management and Budget's (OMB) high-risk program has provided a needed
focus within the agency on strengthening the operation of federal
programs, there remains a need for a core staff with full-time
responsibilities for overseeing OMB staff and agency efforts to
independently confirm agency-reported progress.  Our general
management review of OMB, Managing the Government:  Revised Approach
Could Improve OMB's Effectiveness, found that OMB's attention to
budget decisions has restricted its ability to effectively address
major problems affecting the delivery of services by executive
departments and agencies. 

Our December 1992 transition series report on International Trade
Issues addressed the increasingly critical role that international
trade plays in the U.S.  economy.  This new economic environment
requires careful examination of how government programs and policies
at all levels affect the competitive position of our economy.  We
generally agree with recommendations for improved coordination and
strategic planning among the various federal and state export
promotion and trade policy agencies.  The Office of the U.S.  Trade
Representative (USTR) is the appropriate focal point for trade policy
issues that often involve government-to-government negotiations. 


         GAO CONTACTS
------------------------------------------------------ Chapter 8:0.1.1

William M.  Hunt, Director, Federal Management Issues, General
Government Division, (202) 512-8676; Allan Mendelowitz, Director,
International Trade, Finance, and Competitiveness Issues, General
Government Division, (202) 512-4812. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 8:1

EOP03:  Strengthen the Office of U.S.  Trade Representative's
Coordination with State and Local Governments
The Trade Representative's Office should examine the trade policy
needs of state and local governments and work with them on relevant
issues. 

GAO Comments
We agree with the need for the USTR to work with state and local
trade officials regarding trade policy interests and priorities in
order to identify the most important areas to pursue in reducing
foreign barriers to U.S.  exports. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 8:2

EOP01:  Delegate Routine Paperwork Review to the Agencies and
Redeploy OMB's Resources More Effectively
These recommendations outline improvements to streamline the
government's paperwork review process and reduce unnecessary burdens
on agencies. 

GAO Comments
We agree that OMB could delegate some routine paperwork reviews to
agencies so that its limited resources could be used more
effectively.  Reducing OMB's paperwork burden could improve its
ability to provide broad management support to agencies.  However, we
need more specific information concerning the standards and
guidelines envisioned for this delegation in order to determine its
overall effect on OMB and the agencies. 


-------------------------------------------------------- Chapter 8:2.1

EOP05:  Reinvent OMB's Management Mission
NPR recommends a series of actions by OMB to redirect resources to
provide better management information for presidential
decisionmaking. 

GAO Comments
We have long advocated OMB's increased attention to its management
role.  OMB's leadership is important for dealing with the difficult
problems within and across agencies.  High level administration
attention to OMB's management mission may result in maximizing OMB's
leadership potential.  However, we would need information on the
actions proposed in order to comment on them. 


-------------------------------------------------------- Chapter 8:2.2

EOP06:  Improve OMB's Relationship With Other Agencies
This recommendation outlines methods by which OMB can work more
effectively with agencies and with states. 

GAO Comments
We clearly agree with this recommendation that OMB work with agencies
to identify the most important management issues and the policies
needed to address them.  Our general management review of OMB found
that the agencies and OMB appear to operate best when a consultative,
cooperative approach has been used in addressing management issues. 


-------------------------------------------------------- Chapter 8:2.3

EOP07:  Strengthen the Office of the U.S.  Trade Representative's
Trade Policy Coordination Process
These recommendations outline ways to improve the interagency trade
policy coordination process. 

GAO Comments
We strongly advocate improved coordination among federal
international trade agencies.  For example, export promotion programs
are spread among several agencies, with little coordination occurring
among them.  The interagency Trade Promotion Coordination Committee
in September 1993 proposed several areas where coordination can be
improved.  Implementing these proposals will require the continued
attention of top policymakers. 


-------------------------------------------------------- Chapter 8:2.4

EOP10:  Conduct Qualitative Self-Reviews of Critical Administrative
Processes
The Assistant to the President for Management and Administration
should establish a formal program of ongoing, internal quality
reviews of administrative processes in the EOP to save money and
improve service. 

GAO Comments
We agree with the need for continual assessments of administrative
processes to improve service at less cost.  However, we have not
addressed this issue specifically in the EOP. 


-------------------------------------------------------- Chapter 8:2.5

EOP11:  Improve the Presidential Transition Process
Past difficulties with the presidential transition should be
corrected by amendment of the Presidential Transition Act and related
actions. 

GAO Comments
We have not looked at this process recently.  However, our past
reviews of presidential transitions have recommended that Congress
may wish to consider amendments to the Presidential Transition Act to
provide for increased guidance on the use of and accountability for
funds. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 8:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 8:4

EOP02:  Modify the OMB Circular System
OMB should reinvigorate the process for the review, updating, and
consolidation of management circulars.  It should also develop
uniform processes for developing circulars and for obtaining input
during their development. 

GAO Comments
We have not done work that addresses this recommendation. 


-------------------------------------------------------- Chapter 8:4.1

EOP04:  Improve Federal Advisory Committee Management
Discontinuing the "anti pass the hat" language annually inserted into
appropriations acts would allow appropriate pooling of executive
resources for certain multiagency projects. 

GAO Comments
Removal of existing or perceived impediments to multiagency problem
solving, which would result in more efficient and economic use of
resources, may be beneficial depending on its applications.  However,
without more detailed information we are unable to consider the
feasibility or effectiveness of this recommendation. 


-------------------------------------------------------- Chapter 8:4.2

EOP08:  Strengthen the Office of the U.S.  Trade Representative's
Negotiation Process
The Office of the USTR should implement various techniques for
upgrading the negotiating skills of its employees and the analysis of
the negotiation process itself. 

GAO Comments
We believe that enhancing skills through training should be an
important management concern.  However, we have not done work to
identify the specific negotiation training needs of USTR employees. 


-------------------------------------------------------- Chapter 8:4.3

EOP09:  Establish a Customer Service Bureau in the EOP
Using available resources, EOP management should establish a small,
one-stop customer service bureau within the EOP. 

GAO Comments
Reducing customer frustration by centralizing information activities
should begin to restore the public's confidence in the government's
ability to meet the public's needs.  We have not, though,
specifically addressed the feasibility of establishing such a
customer service bureau within the EOP. 


-------------------------------------------------------- Chapter 8:4.4

EOP12:  Improve Administrative Processes
This recommendation outlines a series of steps to improve internal
administrative processes within the EOP, including mail processing,
paperwork flow, and supply management. 

GAO Comments
We advocate the use of new technologies to streamline operations and
improve service to the public.  We have not assessed the need for
improvements in mail processing, paperwork flow, and supply
management at the EOP.  However, our recent work at the White House
indicates that improvements in personnel and procurement processes
warranted attention to ensure that appropriate procurement practices
are followed in a timely manner, and that personnel actions are
processed accurately and promptly to avoid unnecessary retroactive
corrections. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 8:5

Another EOP entity--the Office of National Drug Control Policy
(ONDCP)--has had questions raised about its effectiveness.  While we
believe there is a continuing need for a central planning agency to
provide leadership to the nation's drug control efforts, ONDCP needs
to improve its strained relationships with other agencies and develop
better measures for assessing progress under national drug control
strategies. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 8:6

OMB's High Risk Program:  Benefits Found but Greater Oversight Needed
(GAO/AFMD-92-63, Aug.  6, 1992) relates to the overall summary. 

International Trade Issues (GAO/OCG-93-11TR, Dec.  1992) relates to
the overall summary. 

Managing the Government:  Revised Approach Could Improve OMB's
Effectiveness (GAO/GGD-89-65, May 4, 1989) relates to the overall
summary, EOP01, EOP05, and EOP06.. 

Paperwork Reduction:  Mixed Effects on Agency Decision Processes and
Data Availability (GAO/PEMD-89-20, Sept.  7 1989) relates to EOP01. 

Export Promotion:  Initial Assessment of Governmentwide Strategic
Plan (GAO/T-GGD-93-48, Sept.  29, 1993) relates to EOP03 and EOP07. 

Export Promotion Strategic Plan:  Will it Be a Vehicle for Change? 
(GAO/T-GGD-93-43, July 26, 1993) relates to EOP03 and EOP07. 

Export Promotion:  Federal Programs Lack Organizational and
Functional Cohesiveness (GAO/NSIAD-92-49, Jan.  10, 1992) relates to
EOP03 and EOP07. 

Continuous Improvement:  The Quality Challenge (GAO/QMG-93-1, Mar. 
1993) relates to EOP10. 

Presidential Transitions Effectiveness Act of 1988--H.R.  3932
(GAO/T-GGD-88-19, Mar.  16, 1988) relates to EOP11. 

White House:  Acquisition of Automated Resume Processing System
(GAO/GGD-93-117, June 17, 1993) relates to EOP12. 

Personnel Practices:  Retroactive Appointments and Pay Adjustments in
the Executive Office of the President (GAO/GGD-93-148, Sept.  9,
1993; GAO/T-GGD-94-32, Oct.  22, 1993) relates to EOP12. 

Drug Control:  Reauthorization of the Office of National Drug Control
Policy (GAO/GGD-93-144, Sept.  29, 1993) relates to additional areas
of GAO concern. 


FEDERAL EMERGENCY MANAGEMENT
AGENCY (FEMA)
============================================================ Chapter 9


      OVERALL SUMMARY
-------------------------------------------------------- Chapter 9:0.1

NPR's recommendations on FEMA closely correspond to the positions we
have taken in our reviews of federal disaster response in recent
years, as well as to the issues identified in our December 1992
transition series report entitled Housing and Community Development
Issues.  In most disasters and emergencies, state, local, and
volunteer resources are generally adequate to meet the immediate
health and safety needs of the victims.  However, as discussed in our
reports on the federal response to Hurricanes Andrew and Iniki, in
disasters of unusually large magnitude these resources can be
overwhelmed.  In such cases, only the federal government had the
necessary resources to take care of the remaining unmet needs, and we
found the initial federal response to be lacking. 

We have made several recommendations to enhance the federal
government's ability to respond to both catastrophic and
noncatastrophic disasters in a more timely and effective manner and
with the necessary resources.  Concurrently, we think that the
self-sufficiency of state and local governments in disaster response
needs to be maximized, and we have made recommendations to enhance
their preparedness. 


         GAO CONTACT
------------------------------------------------------ Chapter 9:0.1.1

Judy A.  England-Joseph, Director, Housing and Community Development
Issues, Resources, Community, and Economic Development Division,
(202) 512-7631. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
---------------------------------------------------------- Chapter 9:1

FEMA01:  Shift Emphasis to Preparing for and Responding to the
Consequences of All Disasters
FEMA's early focus was on preparedness for nuclear war.  The current
world situation and recent natural disasters highlight the need for
FEMA to continue to shift its resources to respond to all hazards. 

GAO Comments
We support a shift in FEMA's program emphasis to a more all-hazards
approach.  For example, many of the assets and capabilities
previously held for military contingencies in FEMA's former National
Preparedness Directorate have been found to be very useful in other
hazards, such as natural disasters.  Similarly, affording state and
local governments greater flexibility in the use of resources
provided under authority of the Civil Defense Act can also enhance
states' and localities' overall ability to respond to different types
of emergencies. 


-------------------------------------------------------- Chapter 9:1.1

FEMA02:  Develop a More Anticipatory and Customer-Driven Response to
Catastrophic Disasters
These recommendations should make FEMA respond faster and more
effectively to catastrophic disasters. 

GAO Comments
We support a quicker and more proactive federal response to meet the
health and safety needs of victims when disasters are of such
magnitude that the local infrastructure clearly cannot meet all the
needs.  While FEMA and the federal government have a role in the
initial response to many presidentially declared disasters, the
victims' immediate needs can generally be met with state, local, and
volunteer resources.  Unlike the bulk of disasters, catastrophic
disasters overwhelm the ability of state, local, and voluntary
agencies to adequately provide victims with essential services within
12 to 24 hours.  FEMA needs a disaster unit whose primary mission is
planning for and responding to catastrophic disasters.  Among other
things, the units should estimate the extent of damage and relief
needs immediately following a disaster, then advise state and local
officials of federal resources available to address these needs as
well as the extent to which DOD resources will be needed to
supplement the Red Cross in meeting needs for mass care.  FEMA should
also enhance the capacity of state and local governments to respond
to such disasters by upgrading training and exercises in anticipation
of catastrophic disaster and monitoring the states' and localities'
preparedness. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
---------------------------------------------------------- Chapter 9:2

FEMA04:  Develop a Skilled Management Team Among Political Appointees
and Career Staff
Leadership has been the weak link in FEMA's mission as the federal
government's emergency management coordinator.  These recommendations
strive to improve FEMA leadership to successfully implement its new,
all-hazards mission. 

GAO Comments
FEMA has a large number of political appointees relative to its size. 
FEMA's mission of disaster relief demands a uniquely strong
management team with considerable professional experience to deal
effectively with other federal agencies, state and local emergency
managers, and volunteer organizations.  Given the need for a high
level of professionalism and experience, a reduction in the number of
political appointees in key positions could be an important element
in developing an effective management team. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
---------------------------------------------------------- Chapter 9:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
---------------------------------------------------------- Chapter 9:4

FEMA03:  Create Results-Oriented Incentives to Reduce the Costs of a
Disaster
The Midwest floods, Hurricanes Hugo and Andrew and the Loma Prieta
Earthquake all illustrate the enormous costs of disaster to society. 
These recommendations will move toward reducing those costs. 

GAO Comments
Creating results-oriented incentives to reduce the costs of disasters
should be explored.  The cost of federal disaster response and
recovery assistance has increased dramatically in recent years. 
However, there are many possible causes for this increase, as well as
many possible solutions.  We have not reviewed these issues in
sufficient depth to take a formal position. 


   ADDITIONAL AREAS OF GAO CONCERN
---------------------------------------------------------- Chapter 9:5

None. 


   RELATED GAO PRODUCTS
---------------------------------------------------------- Chapter 9:6

Housing and Community Development Issues (GAO/OCG-93-22TR, Dec. 
1992) relates to the overall summary, FEMA01, and FEMA02. 

Disaster Management:  Improving the Nation's Response to Catastrophic
Disasters (GAO/RCED-93-186, July 23, 1993) relates to FEMA01 and
FEMA02. 

Disaster Assistance:  DOD's Support for Hurricanes Andrew and Iniki
and Typhoon Omar (GAO/NSIAD-93-180, June 18, 1993) relates to FEMA01
and FEMA02. 

Disaster Assistance:  Federal, State, and Local Response to Natural
Disasters Need Improvement (GAO/RCED-91-43, Mar.  6, 1991) relates to
FEMA01 and FEMA02. 


DEPARTMENT OF HEALTH AND HUMAN
SERVICES (HHS)
=========================================================== Chapter 10


      OVERALL SUMMARY
------------------------------------------------------- Chapter 10:0.1

As discussed in our December 1992 transition series report on Health
and Human Services Issues, the new administration and the 103rd
Congress will have to begin to deal with several significant social
policy issues.  Of paramount importance to this initiative will be
the large number of HHS programs that are vital to virtually every
American.  Two primary HHS concerns are the delivery of health and
welfare services to individuals; however, since the Clinton
Administration has special, ongoing efforts dealing with these
issues, they were not covered by NPR. 

Over the past 5 years, we have issued a series of reports and
testified on other HHS-related matters covered by NPR
recommendations.  Our intensive focus on the Social Security
Administration (SSA) activities permits us to strongly support NPR
recommendations related to this agency.  With respect to SSA, we have
issued numerous reports on service aspects of SSA programs such as
phone service to the public, payment error rates, claims processing
times, and customer satisfaction.  Also, we have reported several
times on the need for SSA to conduct continuing eligibility reviews
of disability beneficiaries.  Finally, we have issued several reports
on how SSA processes, uses and shares death information to avoid
erroneous payments from various social security trust funds. 

In addition to our work regarding SSA activities, we have issued
other reports that support NPR recommendations related to long-term
care and food safety and quality.  Also, our work on welfare programs
supports NPR recommendations related to service integration. 
Further, our work in the area of management reviews leads to our
support of NPR recommendations related to departmentwide management
and the need to review office structure. 


         GAO CONTACTS
----------------------------------------------------- Chapter 10:0.1.1

Janet L.  Shikles, Assistant Comptroller General, Human Resources
Division, (202) 512-6806; Joseph F.  Delfico, Director, Income
Security Issues, Human Resources Division, (202) 512-7215; and Sally
Jaggar, Director, Health Financing and Policy Issues, Human Resources
Division, (202) 512-7119. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 10:1

HHS01:  Promote Effective, Integrated Service Delivery for Customers
by Increasing Collaborative Efforts
These recommendations outline a number of steps needed to better
integrate and deliver social services to communities and families. 

GAO Comments
On the basis of our work at the Administration on Aging (AOA), we
found that more could be done to improve the long-standing problem of
fragmented services for the elderly.  We recommended that AOA compile
and disseminate a directory of research and demonstration results to
state and local agencies to promote better service integration. 
Furthermore, we recommended that AOA regional offices provide
technical assistance to state and area agencies on aging to reduce
service fragmentation. 

Similarly, on the basis of our work on transportation for the elderly
at AOA and the Department of Transportation (DOT), we found a
persistent need to improve service coordination and collaboration
between HHS and DOT.  We recommended that HHS and DOT expand
dissemination of information through various existing programs and
provide on-site technical assistance to state and local agencies to
help them apply this information to their own transportation
programs. 


------------------------------------------------------- Chapter 10:1.1

HHS02:  Reengineer the HHS Process for Issuing Regulations
HHS should improve the timeliness and quality of regulations issued
and should involve stakeholders in the development of regulations. 

GAO Comments
On the basis of our recent work at the Food and Drug Administration
(FDA), we agree that HHS needs to improve the timeliness of
regulations.  We recommended the development of a single FDA tracking
system to improve management oversight of the process.  FDA agreed
and is currently implementing that recommendation.  Our work,
however, did not analyze the quality of regulations or the degree of
participation of affected interests. 

We discussed problems in the regulatory process in our management
review work at SSA in 1987 and in follow up work in 1989.  SSA took a
variety of actions to address problems caused by its procedures.  We
have done no further work to evaluate the effectiveness of changes
made by SSA.  In addition, other problems in the regulatory process
over which SSA has limited control--complexity of issues and short
effective dates in the law--remain a problem in regulatory
development. 



------------------------------------------------------- Chapter 10:1.2

HHS03:  Develop a National, Uniform Inspection System to Ensure a
Safe Food Supply
Responsibility for food safety should be consolidated into a single
agency, and policies and inspection systems should be implemented on
an objective, scientific basis. 

GAO Comments
In our view, creating a single food-safety agency responsible for
administering a uniform set of laws is the most effective way for the
federal government to resolve long-standing problems, deal with
emerging food-safety issues, and ensure a safe food supply.  The
agency should espouse certain principles:  a clear commitment by the
federal government to consumer protection, adequate resources devoted
to that purpose, and competent and aggressive administration of the
laws.  In addition, the agency needs adequate enforcement powers and
should develop inspection methods that take into account the risk
posed by the product.  We did not take a position as to whether such
consolidated responsibility should rest with FDA, the Department of
Agriculture, or with a new agency. 


------------------------------------------------------- Chapter 10:1.3

HHS06:  Improve Social Security Administration Disability Claims
Processing to Better Serve People with Disabilities and Safeguard
Trust Fund Assets
SSA should apply resources and management tools needed to reduce
backlogs and to avoid paying benefits to individuals who are no
longer disabled. 

GAO Comments
We support this recommendation.  In our view, the administration of
SSA's disability programs has reached a crisis stage.  Service is
poor and billions of dollars in payments to ineligible individuals
will be wasted if mandated continuing disability reviews are not
resumed.  SSA's short-term efforts to reduce the number of pending
claims have been largely unsuccessful.  Further, long-range SSA plans
are uncertain about when and to what extent service will improve. 
However, SSA has begun a major reengineering effort to improve
disability claims processing and staff productivity.  We believe that
the Secretary of HHS needs to act to address this crisis. 


HHS07:  Protect Social Security, Disability and Medicare Trust Fund
Assets by Removing Barriers to Funding Productive Oversight
Activities
HHS should aggressively pursue options to ensure that adequate
investments are made to avoid unnecessary payments from trust funds. 

GAO Comments
We strongly advocate these types of actions.  Over the past several
years, we have issued reports and testimonies discussing Medicare's
declining investment in program safeguard efforts and concluded that
funding declines contributed to hundreds of millions of dollars in
program losses.  We recommended that Congress consider modifying
budget procedures so that Medicare safeguard funding could be
increased without having to cut spending elsewhere.  Under the Budget
Enforcement Act of 1990, Congress provided for increasing
appropriations for Internal Revenue Service (IRS) compliance
activities without necessitating spending cuts elsewhere.  We believe
using IRS' method of funding compliance activities as a model for
Medicare would better enable Congress to appropriate the funding
needed for Medicare's safeguard activities.  Congress enacted our
recommendation in 1992, but the bill was vetoed by the President for
other reasons. 


------------------------------------------------------- Chapter 10:1.4

HHS08:  Coordinate Collection and Dissemination of Social Security
Administration Death Information to Protect Federal Program Assets
SSA's clearinghouse for death information and "best practices" can be
used by dozens of federal and state agencies to reduce federal
program outlays. 

GAO Comments
We agree that SSA should be the clearinghouse for federal death
information.  It is the primary collection point for notices of death
coming from family members and friends of deceased individuals, as
well as a recipient of death reports from the states, the Health Care
Financing Administration, the State Department, and funeral homes
across the country.  This puts SSA in a unique position to provide to
other federal and state programs the most comprehensive death data
base currently available.  We have ongoing work directed at finding
opportunities to improve the completeness and accuracy of SSA's death
records.  This will improve the efficiency and effectiveness of using
this information for other entities to control their benefit
payments. 


------------------------------------------------------- Chapter 10:1.5

HHS09:  Take More Aggressive Actions to Collect Outstanding Debts
Owed to the Social Security Trust Fund
SSA should be given the authority to use a full range of debt
collection tools available under the Debt Collection Act of 1982 to
collect debts owed by individuals who are no longer on benefit rolls. 

GAO Comments
We agree that there are several actions SSA could take that would
improve its debt collection activities.  Among these are the use of
all the collection tools included in the Debt Collection Act of 1982,
many of which have been denied to SSA because Congress in the past
was concerned about aggressively collecting overpayments from the
aged and disabled.  We believe that collection agencies can routinely
provide addresses of debtors to SSA and that SSA could apply interest
and penalties to debtors in those situations where repayment will not
be a financial hardship on the debtors.  This would increase the
reserves to the trust funds, create a more equitable situation in
relation to those beneficiaries who do repay their debts, and provide
an incentive for some debtors to repay their debts who currently do
not. 


------------------------------------------------------- Chapter 10:1.6

HHS11:  Redesign SSA Service Delivery and Make Better Use of
Technology to Provide Improved Access and Services to Customers
SSA's organizational structure needs to be updated to reflect
changing customer needs and to take full advantage of emerging
technologies. 

GAO Comments
We agree that SSA needs to redesign its service delivery system to
make it more efficient and to improve public service.  Our work has
shown that SSA needs to produce a service delivery plan that spells
out SSA's preferred methods of future service delivery, including the
facilities it will need, where they should be located, and the human
resources and automation that will be required to staff them.  SSA
agrees with our recommendations, but has not yet produced the needed
plans. 


------------------------------------------------------- Chapter 10:1.7

HHS12:  Strengthen Departmentwide Management
The department should conduct a review of its organizational
structure and management systems to determine an appropriate balance
between centralized and decentralized functions. 

GAO Comments
We agree that the department needs to strengthen its departmentwide
management.  In our management review of HHS, we made a series of
recommendations aimed at strengthening departmental management,
including recommending the establishment of departmentwide strategic
and workforce planning processes that considered the centralization
and decentralization of departmental functions.  Such processes
logically should examine the balance between centralized and
decentralized functions. 


------------------------------------------------------- Chapter 10:1.8

HHS13:  Review the Field and Regional Office Structure of the HHS and
Develop a Plan for Shifting Resources to Match Workload Demands
The review should emphasize customer service, results, and increased
accountability. 

GAO Comments
We agree that HHS needs to review its field and regional office
structures.  A series of reports related to SSA noted that staffing
imbalances existed at its field offices and SSA needed to conduct a
needs assessment and create work standards for its employees.  One
ongoing assignment has identified insufficient regional office staff
to provide effective oversight of and services to states
administering federal social service programs.  Finally, we
recommended in our management review of HHS that the department
establish departmental strategic planning and workforce planning
systems that should include reviewing the field and regional office
structure and identifying a plan to shift resources accordingly. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 10:2

HHS05:  Restructure the Management of Railroad Industry Benefit
Programs
Railroad Retirement Board functions should be integrated into
existing programs administered by federal, state, and private sector
service providers. 

GAO Comments
On the basis of our work in the area of railroad retirement benefits,
we believe this recommendation has some merit.  We believe that the
social security equivalent portion of railroad retirement benefits
should be transferred because presently social security funds are
being used to fund non-social security related private pension
features of railroad retirement.  Also, such a transfer would result
in uniformity in the benefits being provided (presently benefits are
not paid to dependent children under the rail program).  Further, the
private rail portion of railroad retirement benefits is not funded as
are other private industry pensions and is not under the Employee
Retirement Income Security Act, and rail workers are at risk because
of a large unfunded actuarial liability that has resulted in federal
"bailouts" during past periods of financial crisis.  Finally, the
rail unemployment insurance program has experienced financial
problems in the past.  This program is more liberal and subject to
abuse than state programs, and it results in a duplication of an
existing unemployment apparatus. 

HHS10:  Institute and Collect User Fees on FDA's Inspection and
Approval Processes
Food, drug, and medical device manufacturers, processors and
suppliers should be required to pay for FDA services. 

GAO Comments
We have found numerous shortcomings in FDA approval and inspection
procedures with regard to pharmaceuticals, over-the-counter drugs,
and medical devices.  To some extent, these are linked to resource
problems.  However, we have also found that FDA does not always have
a sound basis for requesting and assigning new resources.  As long as
user fees supplement existing appropriations in the context of a
strategic plan, they could provide needed help. 


------------------------------------------------------- Chapter 10:2.1

HHS14:  Amend the Health Care Financing Administration's (HCFA)
Contracting Authority to Allow for Competitive Contracting
HCFA should be authorized to fully and openly compete Medicare claims
processing contracts to reduce costs and eliminate inefficiencies and
conflicts of interest. 

GAO Comments
We have reported that HCFA's current contracting authority, if
properly used, allows for effective program management and provides
sufficient opportunities to achieve administrative efficiencies.  For
a variety of reasons over the past decade, HCFA has made many changes
to its contractor network.  However, its experience with these
changes has been mixed.  The changes have frequently lead to
disruptions in service to beneficiaries and providers, as well as
increases in payment error rates that exceeded administrative
savings.  We have consistently pointed out the importance of
effective claims payment and safeguard activities because benefit
payments represent 98 percent of Medicare expenditures.  On the other
hand, payments to contractors represent only a little more than 1
percent of Medicare costs.  Thus, it is important to consider the
effects a change in contracting methods would have on benefit costs,
not just on administrative costs. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 10:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 10:4

HHS04:  Reconfigure Support for Health Professions Education
Existing programs should be consolidated and/or eliminated. 

GAO Comments
We have two ongoing assignments assessing the impact of federal
programs and medical education practices on the supply of primary
care physicians. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 10:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 10:6

Health and Human Services Issues (GAO/OCG-93-20TR, Dec.  1992)
relates to the overall summary. 

Integrating Human Services:  Linking At-Risk Families with Services
More Successful Than System Reform Efforts (GAO/HRD-92-108, Sept. 
24, 1992) relates to HHS01. 

Administration on Aging:  More Federal Action Needed to Promote
Service Coordination for the Elderly (GAO/HRD-91-45, Apr.  23, 1991)
relates to HHS01 and HHS13. 

Services for the Elderly:  Longstanding Transportation Problems Need
More Federal Attention (GAO/HRD-91-117, Aug.  21, 1992) relates to
HHS01. 

Welfare Programs:  Ineffective Federal Oversight Permits Costly
Automated System Problems (GAO/IMTEC-92-29, May 27, 1992) relates to
HHS01. 

Long Term Care Forum (GAO/HRD-93-1-SP, July 13-14, 1993) relates to
HHS01. 

Social Security:  More Must Be Done to Credit Earnings to
Individuals' Accounts (GAO/HRD-87-52, Sept.  18, 1987) relates to
HHS02. 

Social Security:  Status and Evaluation of Agency Management
Improvement Initiatives (GAO/HRD-89-42, July 24, 1987) relates to
HHS02. 

FDA Regulations:  Sustained Management Attention Needed to Improve
Timely Issuance (GAO/HRD-92-35, Feb.  21, 1992) relates to HHS02. 

Management of HHS:  Using the Office of the Secretary to Enhance
Departmental Effectiveness (GAO/HRD-90-54, Feb.  9, 1990) relates to
HHS02, HHS12, and HHS13. 

Food Safety and Quality:  Uniform, Risk-based Inspection System
Needed to Ensure Safe Food Supply (GAO/RCED-92-152, June 26, 1992)
relates to HHS03. 

Food Safety and Quality:  Salmonella Control Efforts Show Need for
More Coordination (GAO/RCED-92-69, Apr.  21, 1992) relates to HHS03. 

Food Safety and Quality:  Who Does What in the Federal Government
(GAO/RCED-91-19A and 19B, Dec.  21, 1990) related to HHS03. 

Railroad Retirement:  Federal Financial Involvement (GAO/HRD-86-88,
May 9, 1986) relates to HHS05. 

Railroad Retirement:  Future Rail Employment and Trust Fund Solvency
(GAO/HRD-89-30, Apr.  5, 1989) relates to HHS05. 

Social Security Disability:  SSA Needs to Improve Continuing
Disability Review Program (GAO/HRD-93-109, July 8, 1993) relates to
HHS06. 

Social Security:  Rising Disability Rolls Raise Questions That Must
Be Answered (GAO/T-HRD-93-15, Apr.  22, 1993) relates to HHS06. 

Social Security:  SSA Needs to Improve Service for Program
Participants (GAO/T-HRD-93-11, Mar.  15, 1993) relates to HHS06. 

Social Security Disability:  Growing Funding and Administrative
Problems (GAO/T-HRD-92-28, Apr.  27, 1992) relates to HHS06. 

ADP Systems:  SSA Efforts in Implementing Its Field Office
Modernization (GAO/IMTEC-89-45, May 17, 1989) relates to HHS06. 

Social Security:  Increasing Number of Disability Claims and
Deteriorating Service (GAO/HRD-94-11, Nov.  10, 1993) relates to
HHS06. 

Health Insurance:  Vulnerable Payers Lose Billions to Fraud and Abuse
(GAO/HRD-92-69, May 7, 1992) relates to HHS07. 

Social Security:  Reporting and Processing of Death Information
Should Be Improved (GAO/HRD-92-88, Sept.  4, 1992) relates to HHS07
and HHS08. 

Veterans Benefits:  VA Needs Death Information From Social Security
to Avoid Erroneous Payments (GAO/HRD-90-110, July 27, 1990) relates
to HHS08. 

Federal Benefit Payments:  Agencies Need Death Information from
Social Security to Avoid Erroneous Payments (GAO/HRD-91-3, Feb.  6,
1991) relates to HHS08. 

Welfare Benefits:  States Need Social Security's Death Data to Avoid
Payment Error Fraud (GAO/HRD-91-73, Apr.  2, 1991) relates to HHS08. 

Federal Agencies Need SSA's Death Information to Avoid Erroneous
Payments (GAO/T-HRD-91-6, Feb.  6, 1991) relates to HHS08. 

Debt Management:  More Aggressive Actions Needed to Reduce Billions
in Overpayments (GAO/HRD-91-46, July 9, 1991) relates to HHS09. 

Social Security:  Staff Reductions and Service Quality
(GAO/HRD-88-97, May 13, 1988) relates to HHS11. 

Social Security:  Decision to Implement Nationwide 800 Telephone
Service (GAO/HRD-88-120, May 21, 1988) relates to HHS11. 

Welfare Reform:  Alabama's Demonstration Project (GAO/HRD-88-129BR,
Aug.  17, 1989) relates to HHS11. 

Social Security:  Staff Reductions and Service Quality
(GAO/HRD-89-106BR, June 16, 1989) relates to HHS11. 

Social Security Downsizing:  Significant Savings but Some Service
Quality and Operational Problems (GAO/HRD-91-63, Mar.  19, 1991)
relates to HHS11. 

Social Security:  Measure of Telephone Service Accuracy Can Be
Improved (GAO/HRD-91-69, Aug.  30, 1991) relates to HHS11. 

Social Security:  Telephone Busy Signal Rates at Local SSA Field
Office (GAO/HRD-93-49, Mar.  4, 1993) relates to HHS11. 

Social Security:  Need to Improve Post-Entitlement Service to the
Public (GAO/HRD-93-21, May 7, 1993) relates to HHS11. 


DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT (HUD)
=========================================================== Chapter 11


      OVERALL SUMMARY
------------------------------------------------------- Chapter 11:0.1

Our December 1992 transition series report entitled Housing and
Community Development Issues identified major issues that must be
addressed if HUD is to more successfully carry out its mission of
providing decent, safe, and affordable housing to all Americans and
revitalizing the nation's cities.  Our work over the past several
years has centered on assessing HUD's efforts in meeting the agency's
mission and identifying and evaluating alternatives to current
programs. 

Overall, NPR's recommendations are in line with the focus and
direction of reforms we have supported in this area.  As such, we
basically agree with the direction in which NPR is trying to go.  As
we see it, the thrust of the recommendations is built on core
principles such as better resource utilization, improved program
delivery, and streamlined management processes and organizational
structure.  If properly implemented, these initiatives could be of
substantial help to the agency in better meeting its mission. 


         GAO CONTACT
----------------------------------------------------- Chapter 11:0.1.1

Judy England-Joseph, Director, Housing and Community Development
Issues, Resources, Community, and Economic Development Division,
(202) 512-7631. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 11:1

HUD09:  Consolidate Section 8 Certificates and Vouchers
This recommendation would consolidate two overlapping projects to
eliminate duplication. 

GAO Comments
We support the concept of merging these two similar rental housing
subsidy programs that have similar income eligibility criteria,
somewhat similar subsidy mechanisms, and similar reliance on
privately owned housing. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 11:2

HUD01:  Reinvent Public Housing
HUD should create pilot programs to devolve greater authority over
housing funds to sound local agencies.  It should create
demonstrations of mixed-income public housing with portable
subsidies.  HUD should also streamline public housing rules and take
other steps to improve public housing management. 

GAO Comments
We support the creation of pilot programs to allow sound housing
agencies greater authority over their operations.  Similarly,
mixed-income demonstrations would be a first step toward returning
the public housing program to its original concept of serving
mixed-income populations.  Finally, streamlining public housing rules
should benefit well-managed housing agencies.  However, the details
on how this initiative would be implemented are critical.  Therefore,
we have some concerns about how this would be done. 


------------------------------------------------------- Chapter 11:2.1

HUD02:  Improve Multi-Family Asset Management and Disposition
HUD should use public-private partnerships to manage and sell
HUD-held loans and real estate for nonsubsidized housing projects. 
Congress should reduce restrictions on HUD's sale of multifamily
properties, including the use of portable subsidies for tenants when
the Secretary determines that to be best for tenant needs. 

GAO Comments
We support increased flexibility in HUD's multifamily asset
management and disposition programs, including the option to use
public-private partnerships to manage and sell HUD-held loans and
real estate for nonsubsidized housing projects.  There may be
instances, however, in which other methods to perform these actions
are more feasible; for example, demonstration programs with other
federal entities, such as the Resolution Trust Corporation.  We also
generally support the option of disposing of properties by reducing
restrictions on HUD's sale of multifamily housing projects.  However,
the Secretary should use this option on a property-by-property basis,
taking into consideration the needs of the tenants, the physical
condition of the property, and the local housing market.  In
addition, we do not think that HUD should be required to use 15-year
section 8 project-based subsidies for all properties, as is now the
case, because of the significant budgetary costs.  We support other
options, such as using rent restrictions and lowering the sales price
of the property, to dispose of HUD's multifamily properties. 


------------------------------------------------------- Chapter 11:2.2

HUD03:  Improve Single-Family Asset Management and Disposition
HUD should use a combination of early assistance to borrowers having
financial difficulties, contract loan servicing, contract mortgage
assistance programs, and public-private partnerships to streamline
and improve management of HUD-assigned single-family mortgages. 

GAO Comments
On the basis of our ongoing work in this area, we support efforts to
streamline and improve the management of HUD's single-family asset
management and property disposition activities.  This area of HUD's
operations has continually been a problem for the agency. 


------------------------------------------------------- Chapter 11:2.3

HUD04:  Create an Assisted-Housing/Rent Subsidy Demonstration Project
HUD should be authorized to experiment in negotiated restructuring of
privately owned assisted-housing projects to improve management,
promote mixed-income housing, and save taxpayer funds. 

GAO Comments
Allowing HUD to experiment with its assisted-housing program in order
to promote mixed-income housing and save money is worth exploration. 
However, we have no specific information on this recommendation. 


------------------------------------------------------- Chapter 11:2.4

HUD05:  Establish a New Housing Production Program
HUD should stimulate housing production through Federal Housing
Administration (FHA) risk-sharing arrangements with housing finance
agencies, stimulate a secondary market for multifamily properties,
improve access to FHA insurance for first-time home buyers, provide
special FHA programs to revitalize neighborhoods, and improve FHA
management. 

GAO Comments
We support the portion of this recommendation dealing with
multifamily housing.  Providing risk-sharing arrangements for
multifamily housing through FHA (via federal credit enhancements) can
increase the availability of capital by promoting an expanded
secondary market for multifamily mortgages, particularly mortgages
for affordable multifamily housing.  However, we are concerned about
the portion of the recommendation calling for improved access to FHA
for first-time home buyers.  If the intent of this part of the
recommendation is to let buyers who do not currently qualify into the
program, the financial condition of the insurance fund supporting the
program could be undermined. 


------------------------------------------------------- Chapter 11:2.5

HUD06:  Streamline HUD Field Operations
HUD should streamline its Washington, regional and field office
structure and consolidate and reduce its size over time. 

GAO Comments
We support the principle behind this recommendation.  Many studies,
including some GAO studies, have reported on problems with HUD's
organizational structure and resource deployment.  To the extent that
the proposed streamlining results in an organization with better
accountability, coordination, and service delivery, it could address
many of the problems that HUD has historically experienced.  However,
without more details, it is difficult to determine whether and how
the proposal would accomplish this. 


------------------------------------------------------- Chapter 11:2.6

HUD07:  Refinance Section 235 Mortgages
HUD should use incentive contracts to speed savings from refinancing
expensive old mortgages subsidized by HUD. 

GAO Comments
We support efforts to reduce any unnecessary interest rate subsidies
being paid under this program.  It is not clear at this time whether
the incentive contracts referred to in this recommendation are the
best way to accomplish this. 


------------------------------------------------------- Chapter 11:2.7

HUD08:  Reduce Section 8 Contract Rent Payments
HUD should modify its process to reduce unjustified increases in
annual payments to Section 8 projects. 

GAO Comments
We support eliminating unjustified increases in annual payments to
section 8 projects.  However, we have no information on how pervasive
this problem is.  The difficulty will be in determining just what
"unjustified" rental increases are. 


------------------------------------------------------- Chapter 11:2.8

HUD10:  Reduce Operating Subsidies for Vacancies
This recommendation would encourage public housing agencies to make
better use of their assets by reducing subsidies paid for
unjustifiably vacant units. 

GAO Comments
We support the thrust of this recommendation.  In fact, HUD currently
allocates operating subsidies to public housing agencies on a formula
basis and has a policy of reducing subsidies for public housing
agencies with "excess" vacancies.  However, we have no information on
the extent to which this policy is encouraging public housing
agencies to make better use of their assets. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 11:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 11:4

None. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 11:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 11:6

Housing and Community Development Issues (GAO/OCG-93-22TR, Dec. 
1992) relates to the overall summary. 

Public Housing:  Housing Persons With Mental Disabilities With the
Elderly (GAO/RCED-92-81, Aug.  12, 1992) relates to HUD01. 

Assisted Housing:  Utility Allowances Often Fall Short of Actual
Utility Expenses (GAO/RCED-91-40A, Mar.  26, 1991) relates to HUD01. 

Public Housing:  HUD's Approval for Country Creek Housing Project,
Dallas, Texas (GAO/RCED-90-30, Oct.  20, 1989) relates to HUD01. 

Public Housing:  Chicago Housing Authority Taking Steps to Address
Longstanding Problems (GAO/RCED-89-100, June 8, 1989) relates to
HUD01. 

Public Housing:  HUD Oversight of the Annapolis Housing Authority
(GAO/RCED-89-145, June 5, 1989) relates to HUD01. 

Public Housing:  Problems Continue to Plague the Cuyahoga
Metropolitan Housing Authority (GAO/RCED-88-122, Apr.  20, 1988)
relates to HUD01. 

Multifamily Housing:  Impediments to Disposition of Properties Owned
by HUD (GAO/T-RCED-93-37, May 12, 1993) relates to HUD02. 

HUD Reforms:  Progress Made Since the HUD Scandals but Much Work
Remains (GAO/RCED-92-46, Jan.  31, 1992) relates to HUD02, HUD03, and
HUD06. 

HUD Reforms:  Limited Progress Made Since the HUD Scandals
(GAO/T-RCED-91-62, June 12, 1991) relates to HUD02, HUD03, and HUD06. 

Home Ownership:  Loan Policy Changes Made to Strengthen FHA's
Mortgage Insurance Program (GAO/RCED-91-61, Mar.  1, 1991) relates to
HUD03 and HUD05. 

Impact of FHA Loan Policy Changes on Financial Losses and Homebuyers
(GAO/T-RCED-90-95, July 10, 1990) relates to HUD03 and HUD05. 

Impact of FHA Loan Policy Changes on Its Cash Position
(GAO/T-RCED-90-70, June 6, 1990) relates to HUD03 and HUD05. 

Housing Finance:  Expanding Capital for Affordable Multifamily
Housing (GAO/RCED-94-3, Oct.  27, 1993) relates to HUD05. 

Mortgage Credit Enhancements:  Options for FHA in Meeting the Need
for Affordable Multifamily Housing (GAO/T-RCED-92-52, Apr.  3, 1992)
relates to HUD05. 

Increasing the Department of Housing and Urban Development's
Effectiveness Through Improved Management (GAO/RCED-84-9, Jan.  10,
1984) relates to HUD06. 

Rental Housing:  Housing Vouchers Cost More Than Certificates but
Offer Added Benefits (GAO/RCED-89-20, Feb.  16, 1989) relates to
HUD09. 

Public Housing:  Management Issues Pertaining to the Buffalo
Municipal Housing Authority (GAO/RCED-91-70, Mar.  1, 1991) relates
to HUD10. 


INTELLIGENCE COMMUNITY (INTEL)
=========================================================== Chapter 12


      OVERALL SUMMARY
------------------------------------------------------- Chapter 12:0.1

The U.S.  Intelligence Community grew up and matured during the Cold
War years.  However, with the breakup of the Soviet Union and the
dissipation of the threat of global nuclear war, the several
intelligence agencies are facing a difficult, but necessary,
redirection of their scope and resources.  This change in course is
necessary to improve support to customers of intelligence and to
operate efficiently within reduced budgets. 

At this time, few details are available on NPR's seven Intelligence
Community recommendations.  However, the recommendations clearly deal
with the dominant issues that Congress, the National Security
Council, the Director of Central Intelligence, the Secretary of
Defense, and other decisionmakers should address.  If the goals of
NPR's recommendations are achieved, the Intelligence Community and
its customers would be well served. 


         GAO CONTACT
----------------------------------------------------- Chapter 12:0.1.1

Richard Davis, Director, National Security Analysis Issues, National
Security and International Affairs Division, (202) 512-3504. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 12:1

INTEL03:  Reassess Information Collection to Meet New Analytical
Challenges
The analytical issues the Intelligence Community faces are far more
diverse and complex today, requiring new focus and new techniques to
meet the intelligence needs of policymakers. 

GAO Comments
We have performed both classified and unclassified reviews of
specific intelligence systems and portions of the intelligence force
structure.  Our work has shown that DOD has made mixed progress in
adjusting its information collection systems, and opportunities exist
for further adjustments. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 12:2

INTEL02:  Enhance Community Responsiveness to Customers
A 40-year emphasis on the Soviet Union allowed the Intelligence
Community to develop a repertoire which was not dependent on a close
relationship with its customers.  That is no longer the case today,
and NPR makes recommendations for improvements in this area. 

GAO Comments
See comments for INTEL04. 


------------------------------------------------------- Chapter 12:2.1

INTEL04:  Integrate Intelligence Community Information Management
Systems
The Intelligence Community lacks the connectivity and
interoperability in its information systems to do its job efficiently
and effectively. 

GAO Comments
While we have not done work specific to the subjects of INTEL02 and
INTEL04, the overall body of work we have performed lends credence to
the deficiencies highlighted by these recommendations. 


------------------------------------------------------- Chapter 12:2.2

INTEL07:  Improve Support to Ground Troops During Combat Operations
Numerous studies of intelligence support during the Gulf War focused
on agency or service-specific support issues.  This issue outlines a
reinvention lab effort that proposes an integrated approach to
studying support to ground forces during combat operations. 

GAO Comments
On the basis of several GAO reports on specific intelligence programs
that improve support to ground troops during combat operations, and
DOD's lessons learned from Operation Desert Storm, we agree with
NPR's goal of improving intelligence support to combat operations. 
However, we have no knowledge of the particular "reinvention lab
effort" proposed by NPR. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
   NONE. 
--------------------------------------------------------- Chapter 12:3


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 12:4

INTEL01:  Enhance Intelligence Community Integration
The end of the Cold War and the constrained fiscal environment in the
United States create an imperative for the 13 components of the
Intelligence Community to act more effectively and more efficiently
as a team. 

GAO Comments
While we are not in a position to comment on this recommendation, we
have recently begun a review of DOD's reorganization of military
intelligence which will assess DOD's progress in having the several
defense intelligence agencies work more closely together. 


------------------------------------------------------- Chapter 12:4.1

INTEL05:  Develop Integrated Personnel and Training Systems
This recommendation focuses on organizational development and
training issues within the Intelligence Community. 

GAO Comments
We are conducting a classified review of language training and
personnel management issues involving intelligence linguists, which
may provide some insight into the benefits of integrated personnel
and training systems. 


------------------------------------------------------- Chapter 12:4.2

INTEL06:  Merge the President's Intelligence Oversight Board with the
President's Foreign Intelligence Advisory Board
The roles of these two oversight bodies are sufficiently similar that
small savings and some efficiencies can be achieved by combining
them. 

GAO Comments
These two boards are part of the internal operations of the White
House.  We have not reviewed their activities and therefore cannot
comment on the merits of this recommendation. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 12:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 12:6

In addition to the reports listed below, we have produced several
classified reports that address the issues raised by NPR's INTEL03
and INTEL07 recommendations. 

Undersea Surveillance:  Navy Continues to Build Ships Designed for
Soviet Threat (GAO/NSIAD-93-53, Dec.  3, 1992) relates to INTEL03. 

Army Force Structure:  The Relocation of the 513th Military
Intelligence Brigade (GAO/NSIAD-94-15, Oct.  7, 1993) relates to
INTEL07. 

Intelligence Programs:  New RC-135 Engines Can Reduce Cost and
Improve Performance (GAO/NSIAD-92-305, Aug.  25, 1992) relates to
INTEL07. 

Defense Management:  Stronger Oversight of Joint Service Imagery
Processing System Needed (GAO/NSIAD-91-164, July 26, 1991) relates to
INTEL07. 

Tactical Intelligence:  Army's Mohawk Surveillance Radar Program
Restructure (GAO/NSIAD-90-156, May 11, 1990) relates to INTEL07. 


DEPARTMENT OF THE INTERIOR (DOI)
=========================================================== Chapter 13


      OVERALL SUMMARY
------------------------------------------------------- Chapter 13:0.1

In our December 1992 transition series report entitled Natural
Resources Management Issues we concluded that the administration
faces a difficult choice:  It must find new sources of funding for
the agencies responsible for managing natural resources or find ways
for these agencies to operate more efficiently, or it must make
further cutbacks in the agencies' services or standards for
maintaining facilities and lands.  We based this conclusion on
findings that (1) the condition of federal lands is deteriorating and
the existing infrastructure on these lands--approaching $200 billion
in value--is in a growing state of disrepair and (2) the agencies'
staffs are being asked to assume increasing responsibilities and to
perform more duties. 

If properly implemented, NPR's recommendations for the Department of
the Interior should not only provide an infusion of new funding for
natural resources management but also allow the responsible agencies
to operate more efficiently.  However, in our view many of these
recommendations--such as promoting entrepreneurial management,
obtaining a fair return for federal resources, rationalizing federal
land ownership, and improving land acquisition policies--also apply
to the U.S.  Department of Agriculture's Forest Service.  Therefore,
we think that in addition to the statutory restrictions identified by
NPR, existing institutional barriers must also be eliminated if
cross-agency activities are to be effectively addressed. 
Implementation of NPR's recommendation to develop cross-agency
ecosystem planning and management (ENV02) may provide an approach for
addressing this issue. 


         GAO CONTACT
----------------------------------------------------- Chapter 13:0.1.1

James Duffus III, Director, Natural Resources Management Issues,
Resources, Community, and Economic Development Division, (202)
512-7756. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 13:1

DOI02:  Redefine Federal Oversight of Coal Mine Regulation
To overcome organizational problems that inhibit an effective
state-federal relationship, federal oversight of coal mine
regulations should be redefined. 

GAO Comments
We endorse a reevaluation of the regulatory structure and the
state-federal relationship.  Because this area has largely been
managed by the states with policy direction by the federal
government, achieving a balanced approach that satisfies the
divergent interests has been difficult. 


------------------------------------------------------- Chapter 13:1.1

DOI03:  Establish a National Spatial Data Infrastructure
By supporting a cross-agency coordinating effort, the federal
government can develop a coherent vision for the national spatial
data infrastructure (NSDI).  (Spatial or geographic data refers to
information that can be placed on a map.) This will allow greatly
improved information analysis in a wide range of areas, including the
analysis of environmental information and the monitoring of
endangered animals and sensitive land areas. 

GAO Comments
We have reported that the use of geographic information systems by
federal agencies is growing.  However, (1) many agencies have neither
official mechanisms nor programs in place to coordinate their
projects or to cooperate with other federal, state, or local agencies
and (2) most agencies have not developed written policies on these
systems or instructions for disposing of spatial data.  Therefore, we
support the development of a coherent vision for the NSDI.  We also
note that DOI has undertaken a research effort called "gap analysis"
that seeks to identify the degree to which all native plant and
animal species and natural communities are or are not represented in
areas that are being managed for the long-term maintenance of these
species. 


------------------------------------------------------- Chapter 13:1.2

DOI04:  Promote Entrepreneurial Management of the National Park
Service
The Park Service should be allowed to raise additional revenues from
appropriate sources and to use a portion of the money for investment
in park infrastructure.  This proposal would increase selected park
entry fees and would increase fees on park concessioners. 

GAO Comments
We endorse the concept of park units' raising additional revenues
that could be used to invest in park infrastructure.  Over the past
several years, we have identified an almost $2 billion cumulative
shortfall in funds for park maintenance, as well as opportunities to
(1) increase the fees that concessioners pay the government and (2)
improve the pricing of user fees at recreational sites.  However, the
need to eliminate the backlog in deferred maintenance, as well as
opportunities to obtain a better return for the sale or use of
natural resources on federal lands, apply to all federal
land-managing agencies.  Therefore, this recommendation should not be
limited to the National Park Service. 


------------------------------------------------------- Chapter 13:1.3

DOI05:  Obtain a Fair Return for Federal Resources
The federal government should institute reforms to guarantee a fair
return for federal resources such as livestock grazing and hardrock
mining.  Some of the programs regulating the commercial sale and use
of natural resources on federal lands operate at a loss to the
taxpayers and fail to provide incentives for good stewardship
practices.  The administration should also develop a new fee schedule
for communications sites on DOI and U.S.  Department of Agriculture
lands. 

GAO Comments
In our view, the federal government should (1) seek a better return
for the sale or use of the mineral, renewable, and other natural
resources on its lands; (2) cover the cost of programs to a
reasonable extent and convert some programs into producers of revenue
rather than contributors to the national debt, as they are now; and
(3) provide a revenue base that can be used to better manage and
improve federal lands so that they will remain a viable public
resource in the future.  In addition to addressing livestock grazing
and hardrock mining issues, we have identified the need to reform
federal policies and practices on water and timber and to change the
basis on which federal land-managing agencies share revenues with
states and counties. 


------------------------------------------------------- Chapter 13:1.4

DOI08:  Improve Mineral Management Service Royalty Collections
Better management of DOI's royalty collection program would increase
revenues and improve efficiency. 

GAO Comments
We endorse better management of DOI's strategy for auditing royalty
payors.  Ideally, such a strategy would consist of systematic and
field-based activities for monitoring and correcting the major
components of the royalty equation.  However, problems with DOI's
automated systems have prevented the Department from ensuring correct
reporting.  Furthermore, its field-based royalty compliance audits do
not provide reasonable assurance that royalty payors comply with
applicable laws, rules, and regulations.  DOI also needs to improve
its verification program for both onshore and offshore oil and gas
production. 


------------------------------------------------------- Chapter 13:1.5

DOI12:  Create a New Mission for the Bureau of Reclamation
The Bureau of Reclamation needs to redefine its mission toward new
environmental priorities and clarify its role in water management. 
The original mission to develop water resources and provide for
economic development of the West is almost complete. 

GAO Comments
We agree that Reclamation's era of dam building is over and support
efforts to downsize the agency or change its mission.  However,
previous proposals to cut Reclamation's workforce have not been
successful, and history has shown that any change must take place
with the full involvement of Congress.  In addition, the development
of a long-term framework for water resources management, development,
and protection must be consistent with DOI's efforts to implement
other NPR recommendations, such as rationalizing federal land
ownership (DOI06) and consolidating administrative and programmatic
functions (DOI10). 


------------------------------------------------------- Chapter 13:1.6

DOI14:  Enhance Environmental Management by Remediating Hazardous
Material Sites
The time is right to integrate skills across bureau boundaries in the
remediation of DOI's hazardous materials sites.  The high cost of
remediation requires DOI to make maximum use of existing resources. 

GAO Comments
The pace of assessing and evaluating federal hazardous waste sites
has been slow.  We think that DOI and EPA should work together to
identify and take action to remediate sites.  The high cost of
remediation makes it imperative that DOI make the best use of its
resources across bureau boundaries. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 13:2

DOI01:  Establish a Hard Rock Mine Reclamation Fund to Restore the
Environment
To address health and safety threats and environmental damage caused
by toxic metal and chemical leaching from abandoned mines, the
federal government should establish a hardrock mine reclamation fund. 

GAO Comments
We endorse the concept of ensuring that threats to health and safety
and environmental damage resulting from hardrock mining are remedied. 
However, we have not addressed the issue of establishing a federal
program and a funding source to ensure that past hardrock mining
problems on federal, state, and private lands are remedied. 


------------------------------------------------------- Chapter 13:2.1

DOI06:  Rationalize Federal Land Ownership
DOI needs to reinvent the way it manages and acquires federal lands. 
Due to historical patterns of settlement and development of this
country, adjoining federal lands often fall under the jurisdiction of
several federal agencies.  To the degree possible, this should be
corrected based on the principle of ecosystem management. 

GAO Comments
We agree with the thrust of this recommendation and note that
management of federal lands has been handicapped by the number and
diversity of agencies involved.  DOI's nine highly decentralized and
autonomous agencies and the USDA's Forest Service often have
overlapping jurisdictions and different and conflicting missions. 
Moreover, there is currently no system for coordinating the
management of federal lands, even when such lands are adjacent to
each other and part of a single ecosystem.  DOI and the Forest
Service need to reassess the way they do business throughout their
fragmented organizations and rethink the traditional functional and
organizational alignment. 


------------------------------------------------------- Chapter 13:2.2

DOI07:  Improve the Land Acquisition Policies of the DOI
The Secretaries of Interior and Agriculture and the Director of the
OMB should modify the process for determining land acquisition
priorities and procedures.  The new system should reflect major
objectives of federal land acquisition, including outdoor recreation
resources, resource protection, and resource and cultural heritage
protection. 

GAO Comments
In our opinion, the funds available each fiscal year for land
acquisition should be allocated to the highest priorities.  This
approach would require not only the establishment of clear goals and
objectives but also a consolidated ranking of proposals from all the
federal land-managing agencies. 


------------------------------------------------------- Chapter 13:2.3

DOI09:  Establish a System of Personnel Exchanges in DOI
A change in management philosophy is needed to address bureaucratic
barriers at DOI.  This recommendation outlines various approaches to
this problem. 

GAO Comments
We support efforts to address the structural barriers among DOI's
nine autonomous bureaus and between these bureaus and the USDA's
Forest Service.  We note that pending legislation to establish a
National Biological Survey within DOI as an independent,
nonregulatory source of information on the nation's biological
resources appears to be a step in this direction.  We hypothesize
that a similar approach could provide greater integration and
increased efficiency in the management of federal lands as well. 


------------------------------------------------------- Chapter 13:2.4

DOI10:  Consolidate Administrative and Programmatic Functions in DOI
To manage its bureaus effectively, DOI needs to reduce duplicative
services.  By consolidating administrative and programmatic
functions, DOI can improve customer service, promote efficiency, and
reduce costs. 

GAO Comments
Although limited in scope, our work on consolidating administrative
and programmatic functions supports this recommendation.  For
example, in a 1988 report we noted that duplication of administrative
functions reduced program efficiency for environmental studies of the
outer continental shelf in Alaska.  We recommended, and DOI
implemented, an alternative that consolidated these functions, saving
about $800,000 in fiscal years 1991 and 1992.  DOI's Inspector
General has found similar instances of duplication and overlap within
DOI's Bureau of Land Management. 


------------------------------------------------------- Chapter 13:2.5

DOI11:  Streamline Management Support Systems in DOI
To create a quality management culture, DOI should streamline its
management support systems, including telecommunications,
procurement, financial management, and paperwork control. 

GAO Comments
We support efforts to improve DOI's management support systems.  Our
previous work has identified instances of long-standing internal
control weaknesses within DOI, and DOI's Inspector General has found
inadequate accountability for the Bureau of Land Management's
personal property. 


------------------------------------------------------- Chapter 13:2.6

DOI13:  Improve the Federal Helium Program
The federal government needs to reexamine its role in the federal
helium program.  The program can be run more efficiently, reducing
outlays by federal helium customers and increasing revenue.  To
obtain maximum benefit from helium operations, the government should
cancel the helium debt, reduce costs, increase efficiencies in helium
operations, and increase sales of crude helium as market conditions
permit. 

GAO Comments
We agree that because conditions have changed since the Helium Act of
1960 was passed, the act's objectives should be reassessed.  We have
recommended canceling the helium debt because doing so would not
adversely affect the federal budget and would allow for a more
realistic assessment of what the federal government's role should be
in meeting federal helium needs.  In addition, we think that before
the act is altered to address the changes that have occurred,
consideration must be given to the interrelationship of the act's
objectives.  For example, a decision to sell the federal helium
inventory would probably put an end to the private crude helium
industry.  We have not examined the efficiency of federal helium
operations. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 13:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 13:4

None. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 13:5

In our view, the Secretary of the Interior and Assistant Secretary
for Indian Affairs need to (1) seek alternatives to reconciliations
of Tribal and Individual Indian Money Trust Fund accounts for periods
for which records are not available and (2) develop a proposal for
satisfactorily resolving trust fund account balances with the account
holders.  Bureau of Indian Affairs management needs to develop a
strategic plan for improving trust fund management, including an
assessment of mission and organization, staffing, and financial
management systems. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 13:6

Natural Resources Management Issues (GAO/OCG-93-17TR, Dec.  1992)
relates to the overall summary, DOI04, and DOI05. 

Mineral Resources:  Hardrock Mining Reclamation (GAO/T-RCED-93-67,
Aug.  5, 1993) relates to DOI01. 

Importance of Financial Guarantees for Ensuring Reclamation of
Federal Lands (GAO/T-RCED-89-13, Mar.  7, 1989) relates to DOI01. 

Federal Land Management:  An Assessment of Hardrock Mining Damage
(GAO/RCED-88-123BR, Apr.  19, 1988) relates to DOI01. 

Public Lands:  Interior Should Ensure Against Abuses From Hardrock
Mining (GAO/RCED-86-48, Mar.  27, 1986) relates to DOI01. 

Abandoned Mine Reclamation:  Interior May Have Approved State Shifts
to Noncoal Projects Prematurely (GAO/RCED-91-162, June 7, 1991)
relates to DOI02. 

Surface Mining:  Office of Surface Mining Response to Management
Review Recommendations (GAO/RCED-89-82FS, Feb.  22, 1989) relates to
DOI02. 

Surface Mining:  States Not Assessing and Collecting Monetary
Penalties (GAO/RCED-87-129, June 5, 1987) relates to DOI02. 

Surface Mining:  Interior Department and States Could Improve
Inspection Programs (GAO/RCED-87-40, Dec.  29, 1986) relates to
DOI02. 

Geographic Information Systems:  Information on Federal Use and
Coordination (GAO/IMTEC-91-72FS, Sept.  27, 1991) relates to DOI03. 

Federal Land:  Little Progress Made in Improving Oversight of
Concessioners (GAO/T-RCED-93-42, May 27, 1993) relates to DOI04. 

Forest Service:  Difficult Choices Face the Future of the Recreation
Program (GAO/RCED-91-115, Apr.  15, 1991) relates to DOI04. 

Recreation Concessioners Operating on Federal Lands
(GAO/T-RCED-91-16, Mar.  21, 1991) relates to DOI04. 

Parks and Recreation:  Park Service Managers Report Shortfalls in
Maintenance Funding (GAO/RCED-88-91BR, Mar.  21, 1988) relates to
DOI04. 

Mineral Resources:  Value of Hardrock Minerals Extracted From and
Remaining on Federal Lands (GAO/RCED-92-192, Aug.  24, 1992) relates
to DOI05. 

Reclamation Law:  Changes Needed Before Water Service Contracts Are
Renewed (GAO/RCED-91-175, Aug.  22, 1991) relates to DOI05. 

Rangeland Management:  Current Formula Keeps Grazing Fees Low
(GAO/RCED-91-185BR, June 11, 1991) relates to DOI05. 

Forest Service Needs to Improve Efforts to Reduce Below-Cost Timber
Sales (GAO/T-RCED-91-43, Apr.  25, 1991) relates to DOI05. 

Federal Land Management:  The Mining Law of 1872 Needs Revision
(GAO/RCED-89-72, Mar.  10, 1989) relates to DOI05. 

Federal Land Acquisition:  Land Exchange Process Working but Can Be
Improved (GAO/RCED-87-9, Feb.  5, 1987) relates to DOI06. 

Royalty Compliance:  Improvements Made in Interior's Audit Strategy,
but More Are Needed (GAO/RCED-93-3, Oct.  29, 1992) relates to DOI08. 

Mineral Revenues:  Progress Has Been Slow in Verifying Offshore Oil
and Gas Production (GAO/RCED-90-193, Aug.  31, 1990) relates to
DOI08. 

Mineral Revenues:  Shortcomings in Onshore Federal Oil and Gas
Production Verification (GAO/RCED-90-99, June 26, 1990) relates to
DOI08. 

Offshore Oil and Gas:  Environmental Studies Program Meets Most User
Needs but Changes Needed (GAO/RCED-88-104, June 29, 1988) relates to
DOI10. 

Bureau of Indian Affairs:  Long-Standing Internal Control Weaknesses
Warrant Congressional Attention (GAO/RCED-92-118, May 8, 1992)
relates to DOI11. 

Management of Artwork:  Steps Taken to Preserve and Protect Bureau of
Reclamation's Collection (GAO/RCED-92-92, Feb.  28, 1992) relates to
DOI11. 

Mineral Resources:  Meeting Federal Needs for Helium
(GAO/T-RCED-93-44, May 20, 1993) relates to DOI13. 

Mineral Resources:  Meeting Federal Needs for Helium (GAO/RCED-93-1,
Oct.  29, 1992) relates to DOI13. 

Mineral Resources:  Federal Helium Purity Should be Maintained
(GAO/RCED-92-44, Nov.  8, 1991) relates to DOI13. 

Superfund:  Backlog of Unevaluated Federal Facilities Slows Cleanup
Efforts (GAO/RCED-93-119, July 20, 1993) relates to DOI14. 

Financial Management:  Creation of Bureau of Indian Affairs' Trust
Fund Special Projects Team (GAO/AIMD-93-74, Sept.  21, 1993) relates
to additional areas of GAO concern. 

Financial Management:  Status of BIA's Efforts to Resolve
Long-Standing Trust Fund Management Problems (GAO/T-AFMD-93-8, June
22, 1993) relates to additional areas of GAO concern. 

Financial Management:  BIA's Management of the Indian Trust Fund
(GAO/T-AIMD-93-4, Sept.  27, 1993) relates to additional areas of GAO
concern. 

Financial Management:  Problems Affecting BIA Trust Fund Financial
Management (GAO/T-AFMD-92-12, July 2, 1992) relates to additional
areas of GAO concern. 

Financial Management:  BIA Has Made Limited Progress in Reconciling
Trust Accounts and Developing a Strategic Plan (GAO/AFMD-92-38, June
18, 1992) relates to additional areas of GAO concern. 


DEPARTMENT OF JUSTICE (DOJ)
=========================================================== Chapter 14


      OVERALL SUMMARY
------------------------------------------------------- Chapter 14:0.1

As discussed in our December 1992 transition series report on Justice
Issues, during the last decade federal, state, and local governments
have substantially increased funding for law enforcement as a result
of mounting public concern over crime (especially drugs and
violence).  Despite committing billions to the criminal justice
system and filling the nation's jails and prisons, the expectation of
reduced vulnerability to crime has not been achieved.  Furthermore,
inaccurate financial data, unrealiable financial and information
systems, and poor internal controls could result in the loss of
millions of dollars.  Given the existing criminal threat and tight
budget environment, government policymakers need to focus on getting
the most from the existing criminal justice system resources by
exploring ways to (1) strengthen the Department of Justice's
leadership and management functions; (2) better investigate and
prosecute white collar crime; (3) make needed immigration policy and
management decisions; (4) respond to a rapid rise in the federal
prison population; and (5) make antidrug efforts more effective. 

NPR's recommendations are targeted to improving the criminal justice
system in each of these five areas.  For example, NPR is seeking to
strengthen the Attorney General's oversight of law enforcement
activities, and consolidate some activities, as a means to improve
the coordination and structure of federal law enforcement.  We
support such efforts, but in the search for increased efficiency and
effectiveness, it should be recognized that some fragmentation and
inefficiencies in the criminal justice system represent a trade-off
for avoiding abuses that history has shown may occur from too much
centralized police authority. 


         GAO CONTACT
----------------------------------------------------- Chapter 14:0.1.1

Henry R.  Wray, Director, Administration of Justice Issues, General
Government Division, (202) 512-5156. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 14:1

DOJ02:  Improve Border Management
Federal border management should be significantly improved.  NPR
recommends a series of actions to be taken by Customs and INS to make
these improvements. 

GAO Comments
Customs and INS have a long history of interagency rivalry, poor
coordination, and ineffective cooperation, despite sharing
responsibility for primary inspections at land border ports of entry. 
We have recommended that OMB, working with the Treasury, Justice, and
State Departments, develop a proposal for ending the dual management
of border inspections. 


------------------------------------------------------- Chapter 14:1.1

DOJ03:  Redirect and Better Coordinate Resources Dedicated to
Interdiction of Drugs
This recommendation outlines changes that can be made to better
coordinate federal programs directed at the air interdiction of
drugs. 

GAO Comments
We agree.  Given worldwide drug production capacity, domestic demand,
and the resourcefulness of drug smugglers to adapt to U.S. 
enforcement initiatives, the overall availability of drugs in this
country has not been diminished despite substantial increases in air
interdiction efforts and related drug seizures.  The commitment of
resources should not be made without considering the potential
effectiveness of alternative efforts, both supply and demand, and
should be based on achieving measurable goals.  Also, to better
coordinate agency efforts, improvements in information system
interoperability, data integrity, security, and overall intelligence
information management are needed. 


------------------------------------------------------- Chapter 14:1.2

DOJ08:  Reinvent the Immigration and Naturalization Service's
Organization and Management
NPR recommends a number of changes in INS organization and management
processes to provide an improved management structure and a strategic
vision for the agency. 

GAO Comments
We concur.  Over the past decade, weak management systems and
inconsistent leadership at INS led to segmented autonomous programs,
each attempting to deal with its own set of problems without much
attention to the impact on other INS programs.  Without coherent
overall direction and basic management reforms, the organization has
been unable to effectively address changing enforcement
responsibilities and long-standing service delivery problems. 
Further, we have recommended the appointment of an Associate
Commissioner for Financial Management as the focal point for
developing an overall financial management plan. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 14:2

DOJ01:  Improve the Coordination and Structure of Federal Law
Enforcement Agencies
NPR recommends the designation of the Attorney General as the
Director of Law Enforcement to coordinate federal law enforcement
efforts.  It also recommends changes in the alignment of federal law
enforcement responsibilities. 

GAO Comments
We support the need for greater coordination of the numerous agencies
involved in federal law enforcement.  The decentralized operations,
including the 94 U.S.  Attorneys and the various investigative
agencies within Justice and Treasury, complicate efforts by the
Department of Justice to coordinate and direct a wide variety of
initiatives and programs to fight crime.  We have not taken a
position as to whether the various law enforcement agencies should be
consolidated into one or more agencies. 


------------------------------------------------------- Chapter 14:2.1

DOJ04:  Improve Department of Justice Debt Collection Efforts
This recommendation would make improvements in the Justice debt
collection effort, including giving the department the ability to
retain a small percentage of debts collected and allowing Justice to
credit its working capital fund with a percentage of debt collections
to be used for the creation of a centralized debt tracking and
information system. 

GAO Comments
We agree that the Department of Justice, as well as the
Administrative Office of the U.S.  Courts, need to improve their debt
collection efforts and financial and other information systems.  Our
analysis has shown that the government had collected less than 5
percent of the fines and restitution ordered in major financial
institution fraud cases.  We have not, however, studied the
alternative financing method recommended by NPR. 


------------------------------------------------------- Chapter 14:2.2

DOJ05:  Improve the Bureau of Prisons Education, Job Training, and
Financial Responsibilities Programs
NPR makes a series of recommendations for improving prison education,
training, and inmate financial responsibility policies. 

GAO Comments
We agree that the Bureau of Prisons should strengthen its inmate
education and training programs.  Many inmates leave prison without
marketable job skills, English language proficiency, or completing a
secondary education, yet are expected to become assimilated into
society, i.e., become law-abiding productive citizens.  We have not
examined inmate financial responsibility policies and have no comment
on those recommendations. 


------------------------------------------------------- Chapter 14:2.3

DOJ06:  Improve the Management of Federal Assets Targeted for
Disposition
Improvements are needed in the methods by which the federal
government disposes of various assets. 

GAO Comments
We have assessed the asset disposition activities of selected
agencies--General Services Administration, Resolution Trust
Corporation, Customs Service, Marshals Service, and Internal Revenue
Service--and have identified the need for improvements by these
agencies.  We have recommended that the Attorney General and the
Secretary of the Treasury continue to pursue consolidating the
management and disposition of noncash seized property inventories. 
We have also initiated work to evaluate asset disposition practices
on a governmentwide basis, but as yet do not have enough information
to comment on the recommendation from this broader perspective. 


------------------------------------------------------- Chapter 14:2.4

DOJ07:  Reduce the Duplication of Drug Intelligence Systems and
Improve Computer Security
NPR recommends several changes to eliminate duplication in the
federal drug intelligence system. 

GAO Comments
We agree in principle but are uncertain as to the specifics of the
recommendation.  Fragmentation and duplication in the intelligence
area are an outgrowth of the overlap in responsibilities among the
numerous law enforcement and defense agencies involved in countering
drug-trafficking activities.  We have also reported on inadequate
physical and operational controls over computer security, absence of
contingency plans, and lack of computer security training at the
Department of Justice.  We believe that strong leadership, such as by
the Office of National Drug Control Policy (the office responsible
for overseeing the implementation of national drug policies) is a key
factor in streamlining the intelligence effort without compromising
security. 


------------------------------------------------------- Chapter 14:2.5

DOJ12:  Streamline Background Investigations for Federal Employees
The current method of completing background examinations on federal
employees is time-consuming and inefficient.  This recommendation
outlines improvements to streamline the process without sacrificing
thoroughness. 

GAO Comments
We have not specifically reviewed this issue with respect to Justice
employees.  But, given our past work at other agencies, we endorse
the concept of streamlining background investigations provided that
thoroughness is not jeopardized, particularly with respect to the
investigation of employees for sensitive positions such as those in
law enforcement. 


------------------------------------------------------- Chapter 14:2.6

DOJ16:  Develop Lower Cost Solutions to Federal Prison Space Problems
This recommendation describes approaches to solving existing prison
space problems. 

GAO Comments
We agree that lower cost solutions need to be pursued, and
implemented where feasible, but it is not yet clear whether NPR's
recommendation will be limited to lowering the cost of prison design
and construction or encompass options for reducing the number of
persons sent to prison.  Between fiscal years 1986 and 1992, the
federal inmate population grew from 41,500 to more than 89,000, in
part reflecting changes in sentencing policies.  Absent a change in
those policies, the rapid growth in the federal prison population can
be expected to continue, requiring additional prison capacity. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 14:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 14:4

DOJ09:  Make the Department of Justice Operate More Effectively as
the U.S.  Government Law Firm
Justice should undertake several improvements in the way it manages
its litigation functions to improve service to its customers and
better manage its case load. 

GAO Comments
We believe that improving litigation service to customers is a goal
that should be pursued by the Department.  We have reported on the
need for uniform and accurate litigative case management data and on
weaknesses in ADP management and operations, most notably in the area
of ADP security.  We have not made an in-depth evaluation of other
alternatives to existing litigation practices. 


------------------------------------------------------- Chapter 14:4.1

DOJ10:  Improve White Collar Fraud Civil Enforcement
Civil fraud recovery should be established as a priority and the
department should take steps to improve its white collar fraud
enforcement. 

GAO Comments
We recognize that civil fraud recoveries are an important aspect of
white collar fraud enforcement.  See our comments on related
recommendation DOJ04.  We have not studied other alternatives to
existing practices. 


------------------------------------------------------- Chapter 14:4.2

DOJ11:  Reduce the Duplication of Law Enforcement Training Facilities
Overlap and duplication in the provision of federal law enforcement
training facilities should be examined.  Multi-agency training needs
should be accommodated through existing facilities in lieu of the
construction of new facilities by individual agencies. 

GAO Comments
Although we have not studied this issue, this is an area where we
would agree that further examination could prove worthwhile.  Law
enforcement agencies, while having unique missions that require
individualized training, frequently have overlapping jurisdictions
and perform functions that require similar or identical knowledge and
skills. 


------------------------------------------------------- Chapter 14:4.3

DOJ13:  Adjust Civil Monetary Penalties to the Inflation Index
Civil monetary penalties have not been adjusted to keep up with
inflation.  Under this recommendation, a "catch-up" adjustment would
be made and the need for additional inflation adjustments would be
automatically reassessed every four years. 

GAO Comments
At this time we have insufficient information to assess the basis for
or desirability of this recommendation.  Our work on civil debt and
criminal fines indicates that a major problem is collecting the
criminal and civil fines and penalties now imposed.  Recent Justice
estimates indicate that the total amount of unpaid criminal debt
exceeded $1.6 billion, and the balance continues to grow. 


------------------------------------------------------- Chapter 14:4.4

DOJ14:  Improve Federal Courthouse Security
This recommendation is intended to address concerns of the U.S. 
Marshals Service concerning security at federal courthouses. 

GAO Comments
We recognize that federal courthouses need to be secure and Marshals
Service resources need to be targeted at the greatest security needs
based on systematic assessments of potential risk.  We have not yet
completed our ongoing review of courthouse and judicial security
issues and thus have not taken a position on these matters. 


------------------------------------------------------- Chapter 14:4.5

DOJ15:  Improve the Professionalism of the U.S.  Marshals Service
U.S.  Marshals should be selected based on merit by the Director of
the U.S.  Marshals Service and reduce some positions. 

GAO Comments
While we endorse the concept of improving the professionalism of the
Marshals Service and reducing unnecessary positions where feasible,
we have not studied this issue and thus do not have sufficient
information on which to take a position. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 14:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 14:6

Justice Issues (GAO/OCG-93-23TR, Dec.  1992) relates to the overall
summary and DOJ01. 

Justice Department:  Coordination Between DEA and the FBI
(GAO/GGD-90-59, Mar.  21, 1990) relates to DOJ01. 

Bank and Thrift Criminal Fraud:  The Federal Commitment Could Be
Broadened (GAO/GGD-93-48, Jan.  8, 1993) relates to DOJ01 and DOJ04. 

Bank and Thrift Fraud:  Overview of the Federal Government's Response
(GAO/T-GGD-92-12, Feb.  6, 1992) relates to DOJ01 and DOJ04. 

War on Drugs:  Information Management Poses Formidable Challenges
(GAO/IMTEC-91-40, May 31, 1991) relates to DOJ01, DOJ03, and DOJ07. 

Customs Service and INS:  Dual Management Structure for Border
Inspections Should Be Ended (GAO/GGD-93-111, June 30, 1993) relates
to DOJ02. 

Drug Control:  Heavy Investment in Military Surveillance Is Not
Paying Off (GAO/NSIAD-93-220, Sept.  1, 1993) relates to DOJ03. 

Drug Interdiction:  Funding Continues to Increase but Program
Effectiveness Is Unknown (GAO/GGD-91-10, Dec.  11, 1990) relates to
DOJ03. 

Drug Control:  Anti-Drug Efforts in the Bahamas (GAO/GGD-90-42, Mar. 
8, 1990) relates to DOJ03. 

Drug Smuggling:  Capabilities for Interdicting Private Aircraft Are
Limited and Costly (GAO/GGD-89-93, June 9, 1989) relates to DOJ03. 

Financial Management:  INS Lacks Accountability and Controls Over Its
Resources (GAO/AFMD-91-20, Jan.  24, 1991) relates to DOJ04 and
DOJ08. 

U.S.  Department of Justice:  Overview of Civil and Criminal Debt
Collection Efforts (GAO/T-GGD-90-62, July 31, 1990) relates to DOJ04,
DOJ10, and DOJ13. 

Federal Prisons:  Inmate and Staff Views on Education and Work
Training Programs (GAO/GGD-93-33, Jan.  19, 1993) relates to DOJ05. 

Asset Forfeiture Programs (GAO/HR-93-17, Dec.  1992) relates to
DOJ06. 

Resolution Trust Corporation (GAO/HR-93-4, Dec.  1992) relates to
DOJ06. 

Drug Control:  Reauthorization of the Office of National Drug Control
Policy (GAO/T-GGD-94-7, Oct.  5, 1993) relates to DOJ07. 

Drug Control:  Coordination of Intelligence Activities
(GAO/GGD-93-83BR, Apr.  2, 1993) relates to DOJ07. 

Computer Security:  DEA's Handling of Sensitive Drug Enforcement and
National Security Information Is Inadequate (GAO/T-IMTEC-92-24, Sept. 
30, 1992) relates to DOJ07. 

Drug Control:  Inadequate Guidance Results in Duplicate Intelligence
Production Efforts (GAO/NSIAD-92-153, Apr.  14, 1992) relates to
DOJ07. 

Immigration Management:  Strong Leadership and Management Reforms
Needed to Address Serious Problems (GAO/GGD-91-28, Jan.  23, 1991)
relates to DOJ08. 

Information Management:  Immigration and Naturalization Service Lacks
Ready Access to Essential Data (GAO/IMTEC-90-75, Sept.  27, 1990)
relates to DOJ08. 

Justice:  IRM and Project Eagle (GAO/IMTEC-93-7R, Dec.  9, 1992)
relates to DOJ09. 

Employee Background Checks (GAO/GGD-93-62R, Sept.  2, 1993) relates
to DOJ12. 

Nuclear Security:  DOE's Progress on Reducing Its Security Clearance
Work Load (GAO/RCED-93-183, Aug.  12, 1993) relates to DOJ12. 

Personnel Security:  Efforts by DOD and DOE to Eliminate Duplicate
Background Investigations (GAO/RCED-93-23, May 10, 1993) relates to
DOJ12. 

OPM Revolving Fund:  Benchmarking Could Aid OPM's Efforts to Improve
Customer Service (GAO/GGD-92-18, Jan.  21, 1992) relates to DOJ12. 

National Fine Center:  Expectations High, but Development Behind
Schedule (GAO/GGD-93-95, Aug.  10, 1993) relates to DOJ13. 

Program Fraud:  Implementation of the Program Fraud Civil Remedies
Act of 1986 (GAO/AFMD-91-73, Sept.  16, 1991) relates to DOJ13. 

Intensive Probation Supervision:  Crime-Control and Cost-Saving
Effectiveness (GAO/PEMD-93-23, June 4, 1993) relates to DOJ16. 

Prison Boot Camps:  Short-Term Prison Costs Reduced, but Long-Term
Impact Uncertain (GAO/GGD-93-69, Apr.  29, 1993) relates to DOJ16. 

Prison Alternatives:  Crowded Federal Prisons Can Transfer More
Inmates to Halfway Houses (GAO/GGD-92-5, Nov.  14, 1991) relates to
DOJ16. 

Prison Costs:  Opportunities Exist to Lower the Cost of Building
Federal Prisons (GAO/GGD-92-3, Oct.  25, 1991) relates to DOJ16. 

Federal Prisons:  Revised Design Standards Could Save Expansion Funds
(GAO/GGD-91-54, Mar.  14, 1991) relates to DOJ16. 

Intermediate Sanctions:  Their Impacts on Prison Crowding, Costs, and
Recidivism Are Still Unclear (GAO/PEMD-90-21, Sept.  7, 1990) relates
to DOJ16. 


DEPARTMENT OF LABOR (DOL)
=========================================================== Chapter 15


      OVERALL SUMMARY
------------------------------------------------------- Chapter 15:0.1

As discussed in our December 1992 transition series report on Labor
Issues, we believe that how to respond to the changing economy and
increased international competition is a major challenge facing the
United States' employment training policy.  However, the United
States lacks a comprehensive employment training strategy.  Instead,
the country has a fragmented nonsystem of over 150 federally funded
job training funding streams.  We believe that several of the NPR
recommendations pertaining to DOL are a step in the right direction
for addressing this and other important employment issues. 

We also noted in the Labor Issues transition report the need for OSHA
and states that operate workplace safety and health programs to find
innovative solutions for ensuring that workplaces are safe and
healthful.  We believe that OSHA needs to find ways to expedite the
setting of safety and health standards and improve the effectiveness
of its inspection and hazard abatement programs.  There are some NPR
recommendations aimed at this, but we do not have sufficient
information on the details of the recommendations to judge them at
this time. 

Our work also has identified problems in the administration of the
Employee Retirement Income Security Act (ERISA), and we generally
agree with the NPR recommendations pertaining to ERISA. 

Finally, we believe that the Pension Benefit Guaranty Corporation
(PBGC), a "high risk" agency because of its significant management
and operations problems, deserves attention.  However, there are no
NPR recommendations aimed at the PBGC high risk problems we
identified. 


         GAO CONTACT
----------------------------------------------------- Chapter 15:0.1.1

Linda G.  Morra, Director, Education and Employment Issues, Human
Resources Division, (202) 512-7014. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 15:1

DOL01:  Enhance Reemployment Programs for Occupationally Disabled
Federal Employees
These recommendations would help occupationally disabled federal
employees return to productive careers by expanding DOL's
return-to-work program.  This saves money by reducing long-term
benefit costs to the government. 

GAO Comments
We agree that considerable improvement is possible in returning
workers compensation beneficiaries to work by increasing the
reemployment assistance to injured federal workers.  However, we have
not evaluated the potential savings. 


------------------------------------------------------- Chapter 15:1.1

DOL02:  Develop a Single Comprehensive Worker Adjustment Strategy
Improve services to the unemployed--and those at risk of
dislocation--and make better use of resources available for
assistance by developing a new worker adjustment strategy. 

GAO Comments
We believe that a new worker adjustment strategy is needed to help
dislocated workers.  The current categorical approach is inequitable,
slow, limited in the mix of services provided, and unaccountable for
results.  We have suggested consideration of a simplified approach
that helps dislocated workers regardless of the reason for the
dislocation. 


------------------------------------------------------- Chapter 15:1.2

DOL16:  Increase Assistance to States in Collecting Delinquent
Unemployment Insurance Trust Fund Contributions
This recommendation outlines ways of improving state collections of
delinquent unemployment insurance contributions. 

GAO Comments
We have recommended a number of federal actions that could be taken
to improve states' unemployment insurance tax collection systems,
including providing guidance to states in establishing judicial and
administrative procedures to minimize delinquent contributions and
identify nonfilers. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 15:2

DOL05:  Automate the Processing of ERISA Annual Financial Reports
(Forms 5500) to Cut Costs and Delays in Obtaining Employee Benefit
Plan Data
Automating the filing and processing of annual financial reports
required of pension and benefit plan administrators (ERISA Forms
5500) would reduce costs and delays. 

GAO Comments
We view electronic filing of the Form 5500 as a desirable method of
reducing the cost of processing (shared by DOL and IRS) and reducing
the nearly 3 years it takes to obtain usable data from an annual
filing.  However, we have only just started a review of the Form 5500
processing system and have issued no product related to this issue. 


------------------------------------------------------- Chapter 15:2.1

DOL06:  Amend the ERISA Requirement for Summary Plan Descriptions
The filing of summary plan descriptions by employee benefit plan
administrators with DOL is intended to make the plans more readily
available for participants and beneficiaries.  Since requests for
copies are received on only about one percent, the cost to maintain
the system and the administrative burden on employers far outweighs
the public benefit. 

GAO Comments
Our work indicates that DOL could reduce costs by reducing or
eliminating storage of Summary Plan Descriptions (SPD) hard copies
while continuing to provide electronic access to SPDs.  The SPD is a
very important and valuable document for beneficiaries of pension and
welfare benefit plans.  It is supposed to explain, in plain English,
the provisions of the plan and is to be made available to each
participant. 


------------------------------------------------------- Chapter 15:2.2

DOL08:  Create One-Stop Centers for Career Management
Establishing one-stop centers for career management would create a
customer-driven workforce system, empowering Americans to make
informed career choices and providing the means to achieve those
goals. 

GAO Comments
We generally agree with the need to streamline the employment
training system, and one-stop centers could be a step in that
direction.  However, we do not believe one-stop centers should be the
ultimate goal.  We believe the consolidation of similar programs
serving the same general target populations would go further to
simplify the system. 


------------------------------------------------------- Chapter 15:2.3

DOL21:  Change the Focus of the Unemployment Insurance Benefits
Quality Control Program to Improve Performance
Re-examining the present mix of systems to shift the focus of this
program from error measurement to a constructive use of the results
would allow DOL to improve benefit payment quality and more
effectively achieve the program's goals. 

GAO Comments
We found that Labor's unemployment insurance performance indicators
are weak and do not constitute an effective quality monitoring
system.  While we have not evaluated the NPR proposal, we believe
this is a step in the direction of improving unemployment insurance
performance. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 15:3

DOL09:  Create a Boundary-Spanning Work Force Development Council
Because the greatest barriers to creating an integrated work force
development system are the categorical nature of federal funds and
structural fragmentation of various federal programs, this issue
proposes to coordinate work force development efforts by convening a
multi-agency Work Force Development Council and implementing
"bottom-up grant consolidation" for states and localities. 

GAO Comments
We do not believe the establishment of coordinating councils will
help improve the delivery of employment training services to those
who need them.  Instead, we believe the large number of federal
employment training programs should be consolidated to eliminate the
costly duplication of services or the special arrangements to
coordinate services that also add to the administrative burden of the
programs. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 15:4

DOL03:  Expand Negotiated Rulemaking and Improve Up-front Teamwork on
Regulations
DOL should provide administrative guidance more quickly and cheaply
through negotiated rulemaking and a streamlined team approach to the
rules development process. 

GAO Comments
Our work on OSHA indicates that an improvement in the rulemaking
process is needed and that negotiated rulemaking would be one option
to consider.  However, we have not studied whether negotiated
rulemaking would in fact speed up the process. 


------------------------------------------------------- Chapter 15:4.1

DOL04:  Expand the Use of Alternative Dispute Resolution by the
Department of Labor
The increased use of alternative dispute resolution could reduce
litigation and produce significant long-term savings. 

GAO Comments
Our work at EEOC has shown that alternative dispute resolution could
streamline the handling of cases, but we have not studied this issue
in the context of DOL cases. 


------------------------------------------------------- Chapter 15:4.2

DOL07:  Redirect the Mine Safety and Health Administration's Role in
Mine Equipment Regulation
Shifting the Mine Safety and Health Administration's regulatory role
from one of in-house testing to one of on-site quality assurance
would provide increased economic benefits to the mining industry and
would allow DOL to redirect resources. 

GAO Comments
We have insufficient information to assess this recommendation. 


------------------------------------------------------- Chapter 15:4.3

DOL10:  Refocus the Responsibility for Ensuring Workplace Safety and
Health
This recommendation proposes to shift responsibility for workplace
safety and health to employers by issuing regulations requiring
self-inspections and implementing a sliding scale of incentives and
penalties to ensure safety standards are met. 

GAO Comments
We have recommended that OSHA require employers in certain industries
to institute worksite safety and health programs.  We have also
explored the advantages and disadvantages of permitting private
sector consultations to substitute for certain programmed OSHA
inspections.  However, we have not examined explicit proposals
mandating employer self-inspections and modifying existing OSHA
penalty schedules. 


------------------------------------------------------- Chapter 15:4.4

DOL11:  Open the Civilian Conservation Centers to Private and Public
Competition
A long-term reduction in costs is possible through expanded
competition for contracts to operate Job Corps Civilian Conservation
Centers. 

GAO Comments
Our work has shown that public centers incur higher costs because
they generally provide higher skill training.  However, the public
centers have higher placement rates and wages.  We have no basis to
judge whether open competition for contracts to operate those centers
at specified training levels would result in savings. 


------------------------------------------------------- Chapter 15:4.5

DOL12:  Partially Fund Mine Safety and Health Enforcement Through
Service Fees
Charge for services to put the mining industry on a comparable
footing with other industries which bear the cost of their
regulation.  This proposes to partially fund enforcement of mine
safety regulations through service fees. 

GAO Comments
We have insufficient information to assess this recommendation. 


------------------------------------------------------- Chapter 15:4.6

DOL13:  Integrate Enforcement Activities within the Department of
Labor
Introduce greater coordination and flexibility in the DOL enforcement
agencies to project a consistent message to customers and integrate
approaches to common issues. 

GAO Comments
We have insufficient information to assess this recommendation. 


------------------------------------------------------- Chapter 15:4.7

DOL14:  Apply Information Technology to Expedite Wage Determinations
for Federal Contracts
Developing an electronic data interchange/data mapping system which
is integrated into the Service Contract Act process should eliminate
delays both in the delivery of wage determinations and in procurement
when caused by determination delays. 

GAO Comments
We have ongoing work on prevailing wage determinations under the
related Davis-Bacon Act assessing the potential impact of similar
technological changes on the wage determination process.  Until that
work is completed, we would have no basis to judge this
recommendation. 


------------------------------------------------------- Chapter 15:4.8

DOL15:  Provide Research and Development Authority for the DOL's Mine
Safety and Health Program
Granting the Mine Safety and Health Administration authority to
procure services and goods directly would improve the mine safety
program by expediting the acquisition process for new and improved
technology. 

GAO Comments
We have insufficient information to assess this recommendation. 
However, we support the development of a single worker adjustment
strategy, and the consolidation of various programs appears
consistent with that objective. 


------------------------------------------------------- Chapter 15:4.9

DOL17:  Revise and Update the Consumer Price Index
The consumer price index has important consequences for both public
and private decisions.  This important measure should be updated to
reflect recent inflation trends. 

GAO Comments
Our General Government Division, together with the Office of the
Chief Economist, has work under way as part of our review of the
"Economic Statistics Initiative" that will look at the need to revise
and update economic statistics including the CPI. 


------------------------------------------------------ Chapter 15:4.10

DOL18:  Improve the Delivery of Legal Services by the Office of the
Solicitor in the Department of Labor
The delivery of legal services by the Office of the Solicitor can be
improved by using cooperative agreements, coordinated budgeting and
better use of resources. 

GAO Comments
We have insufficient information to assess this recommendation. 


------------------------------------------------------ Chapter 15:4.11

DOL19:  Transfer the Veterans' Employment and Training Service to the
Employment and Training Administration
The DOL can improve service delivery to veterans and save money by
consolidating administration of this function. 

GAO Comments
We have insufficient information to assess this recommendation. 
However, we support the development of a single worker adjustment
strategy, and the consolidation of various programs appears
consistent with that objective. 


------------------------------------------------------ Chapter 15:4.12

DOL20:  Reduce Federal Employees' Compensation Act Fraud
Congress needs to amend several sections of the United States Code to
enable DOL to eliminate benefits to persons who have been convicted
of defrauding the program. 

GAO Comments
This may be warranted, but we have not done work to determine whether
the population of convicted fraud perpetrators is relatively small or
large.  Thus, it is not clear to us that the projected savings are
achievable. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 15:5

NPR did not address any issues involving PBGC, one of the high-risk
areas we have studied.  PBGC has significant accounting and
management deficiencies that we have addressed in numerous reports,
yet no proposals to "reinvent" PBGC were forthcoming. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 15:6

Labor Issues (GAO/OCG-93-19TR, Dec.  1992) relates to the overall
summary. 

Federal Employees' Compensation Act:  Need to Increase Rehabilitation
and Reemployment of Injured Workers (GAO/GGD-92-30, Feb.  2, 1992)
relates to DOL01. 

Federal Workforce:  Federal Employees Compensation Act Cost Growth
and Workplace Safety (GAO/GGD-89-4, Oct.  20, 1988) relates to DOL01. 

Dislocated Workers:  Comparison of Assistance Programs
(GAO/HRD-92-153BR, Sept.  10, 1992) relates to DOL02. 

Dislocated Workers:  Comparison of Programs (GAO/T-HRD-92-57, Sept. 
10, 1992) relates to DOL02. 

Dislocated Workers:  Trade Adjustment Assistance Program Flawed
(GAO/T-HRD-94-4, Oct.  19, 1993) relates to DOL02. 

Multiple Employment Programs:  National Employment Training Strategy
Needed (GAO/T-HRD-93-27, June 18, 1993) relates to DOL08 and DOL09. 

Occupational Safety and Health:  Worksite Safety and Health Programs
Show Promise (GAO/HRD-92-68, May 19, 1992) relates to DOL10. 

Occupational Safety and Health:  Option for Improving Safety and
Health in the Workplace (GAO/HRD-90-66BR, Aug.  24, 1990) relates to
DOL10. 

Job Corps Costs and Outcomes (GAO/HRD-93-16R, Feb.  19, 1993) relates
to DOL11. 

Job Corps:  Its Costs, Employment Outcomes, and Service to the Public
(GAO/HRD-86-112BR, July 30, 1986) relates to DOL11. 

Unemployment Insurance:  Opportunities to Strengthen the Tax
Collection Process (GAO/HRD-89-5, June 8, 1989) relates to DOL16. 

Unemployment Insurance:  Administrative Funding Is a Growing Problem
for State Programs (GAO/HRD-89-72BR, May 24, 1989) relates to DOL21. 

Pension Benefit Guaranty Corporation (GAO/HRD-93-5, Dec.  1992)
relates to additional areas of GAO concern. 

Pensions Plans:  Hidden Liabilities Increase Claims Against
Government Insurance Programs (GAO/HRD-93-7, Dec.  30, 1992) relates
to additional areas of GAO concern. 

Pension Plans:  Pension Benefit Guaranty Corporation Needs to Improve
Premium Collections (GAO/HRD-92-103, June 30, 1992) relates to
additional areas of GAO concern. 

Private Pensions:  Most Underfunded Plan Sponsors Are Not Making
Additional Contributions (GAO/T-HRD-93-16, Apr.  20, 1993) relates to
additional areas of GAO concern. 

Financial Condition of Pension Benefit Guaranty Corporation
(GAO/T-HRD-92-52, Aug.  11, 1992) relates to additional areas of GAO
concern. 


NATIONAL AERONAUTICS AND SPACE
ADMINISTRATION (NASA)
=========================================================== Chapter 16


      OVERALL SUMMARY
------------------------------------------------------- Chapter 16:0.1

Our December 1992 transition series report on NASA Issues identified
the major challenges currently facing NASA management.  NPR's
recommendations generally relate to most of these challenges--program
and project management, contract management, and aeronautics research
and development.  Our work in these areas tends to support the thrust
of NPR's recommendations, although it is difficult to draw
one-for-one relationships without more specific information on the
exact changes NPR envisions. 

One area not specifically addressed by NPR but with which we have
been greatly concerned is the need for NASA to adjust the content and
pace of its programs to fit more realistically within the likely
budgets Congress will provide.  While this, of course, is not a
precise exercise, our work has shown a wholly unrealistic
relationship between NASA's plans and likely budgets.  NASA has taken
steps to close the gap between plans and budgets but its ultimate
success in correcting this situation has been clouded by unresolved
matters principally related to the space station program.  Thus, we
still consider the potential mismatch between program plans and
likely budgets as a key unresolved management issue at NASA. 

Another area of serious concern not addressed by NPR is NASA's
financial management weaknesses.  NASA's internal controls, policies
and procedures, and financial systems do not provide assurance that
appropriations and contractor-held property are properly accounted
for and reported. 


         GAO CONTACT
----------------------------------------------------- Chapter 16:0.1.1

Donna M.  Heivilin, Director, Defense Management and NASA Issues,
National Security and International Affairs Division, (202) 512-8412. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 16:1

NASA01:  Improve NASA Contracting Practices
This recommendation outlines several steps NASA can take to improve
its contracting procedures, including greater use of performance
standards, contracting out for data instead of hardware whenever
appropriate, and using cooperative research agreements to more
quickly exploit high performance computing techniques. 

GAO Comments
During the last 2 years, we have issued numerous reports and have
testified on a number of occasions about NASA's contract management
problems.  The primary focus of the work supporting those reports and
testimonies was to identify and set out the steps NASA needed to take
to improve its processes for awarding and administering contracts. 
Based on that work, we agree that NASA needs to improve its
contracting practices. 


------------------------------------------------------- Chapter 16:1.1

NASA04:  Strengthen and Restructure NASA Management
NASA program management should be aggressively overhauled.  This
recommendation outlines a number of steps the agency should take,
both in overall management and in the management of the space station
program. 

GAO Comments
Our work related to this area supports the need for NASA to
restructure the way NASA develops and manages programs.  For example,
our work shows that once approved, a major space project's cost
estimate will typically increase about 75 percent, and its launch
schedule will be delayed by about 4 years.  Many reasons explain the
cost growth and schedule delays.  Some of them relate to issues where
management should have been able to make a difference, such as
insufficient requirements determinations, overoptimism in estimating,
and incomplete initial cost estimates.  One of the important changes
NASA could make in overhauling its program management would be to
install strong financial management leadership under its Chief
Financial Officer organization. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 16:2

None. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 16:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 16:4

NASA02:  Increase NASA Technology Transfer Efforts and Eliminate
Barriers to Technology Development
NASA should expand its technology transfer efforts and promote the
development of new technologies. 

GAO Comments
We have done only limited work in space technology and cannot
specifically comment on transfer efforts and barriers.  On
aeronautical technology, we have recommended improvements designed to
establish and implement a consistent approach for monitoring and
measuring both the level of effort and the level of success in
transferring aeronautics technology.  Our work, however, has not
addressed the desirability of expanding transfer efforts or the need
to promote the development of new technologies. 


------------------------------------------------------- Chapter 16:4.1

NASA03:  Increase NASA Coordination of Programs with the U.S.  Civil
Aviation Industry
NASA should develop a closer relationship with the U.S.  civil
aviation industry to ensure industry input is received early and
throughout the technology development process. 

GAO Comments
We have expressed concern about the significant gains in market share
being achieved by foreign aeronautical companies and the limited
efforts by NASA to preserve U.S.  leadership in the aeronautics
industry.  We noted that neither the level nor the type of
aeronautics research supported by NASA was adequate.  The problem was
not a lack of awareness of the research that would be most useful to
the U.S.  aeronautics industry.  Rather, U.S.  policies did not
support doing more to assist the aeronautics industry in those areas
most beneficial to maintaining its near-term competitiveness. 


------------------------------------------------------- Chapter 16:4.2

NASA05:  Clarify the Objectives of the Mission to Planet Earth
Program
This recommendation suggests a number of steps needed to improve the
management and performance of the Mission to Planet Earth program. 

GAO Comments
Our work in this area has been limited to early development efforts
related to the Earth Observing System, a series of space-based
sensors and related ground facilities for detecting and recording
various characteristics in the atmosphere and on the surface of the
earth.  Our last look at the cost, schedule, and performance status
of that system showed that some instruments for achieving the
objectives of the program did not have flight assignments, and
another had its development and flight postponed until after the turn
of the century.  NASA was trying to arrange a flight or development
partnership with a foreign entity or other U.S.  government agency. 
Since our work, the planned funding level for the Earth Observing
System through fiscal year 2000 has been reduced by about 30 percent. 
However, we have not yet assessed NASA's efforts to achieve these
reductions. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 16:5

One area of our concern that was not specifically addressed by NPR's
recommendations is the unrealistic expectations of NASA's future
years' budget estimates.  Our work has shown that the estimates for
1993 through 1997 were up to as much as $20 billion higher than the
amounts likely to be appropriated under federal budget constraints. 
NASA officials acknowledged that a gap existed between program plans
and likely budgets and, in presenting NASA's fiscal year 1994 budget
request to Congress, the agency pointed out that net adjustments
totalling about $15 billion had been made to NASA's 5-year spending
plan.  However, we have not yet reviewed the nature of the
adjustments made to see that they were appropriate.  Also, these
adjustments included a 5-year estimate for the space station, which
was unrealistically low.  Therefore, further program adjustments are
needed, and we consider this an open issue. 

Another concern that was not addressed by NPR's recommendations is
the seriousness of NASA's financial management weaknesses.  NASA's
current systems and controls over accounting, budgetary resources,
contractor-held property, and financial reporting do not ensure that
data used by decisionmakers are reliable.  NASA's efforts to develop
an integrated accounting system, which began in 1988, are not
targeted for completion until July 1997.  NASA's controls over
property in the hands of its contractors do not ensure that property
reporting is accurate or timely, and financial reporting on NASA's
property is not consistent with the federal fiscal year.  Concerns we
identified in our review of NASA's fiscal year 1991 and 1992
financial management were born out by the NASA Inspector General's
audit report on NASA's fiscal year 1992 financial statement, which
concluded that NASA's statement was unauditable.  The Inspector
General also identified material weaknesses in NASA's accounting
systems, policies and procedures, and controls over contractor-held
property. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 16:6

NASA Issues (GAO/OCG-93-27TR, Dec.  1992) relates to the overall
summary. 

NASA:  Major Challenges for Management (GAO/T-NSIAD-94-18, Oct.  6,
1993) relates to NASA01, NASA02, NASA03, NASA04, and to additional
areas of GAO concern. 

High-Risk Series:  NASA Contract Management (GAO/HR-93-11, Dec. 
1992) relates to NASA01 and additional areas of GAO concern. 

NASA Procurement:  Opportunities to Improve Contract Management
(GAO/T-NSIAD-92-33, May 7, 1992) relates to NASA01 and additional
areas of GAO concern. 

Financial Management:  Actions Needed to Ensure Effective
Implementation of NASA's Accounting System (GAO/AFMD-91-74, Aug.  21,
1991) relates to NASA01, NASA04, and additional areas of GAO concern. 

Financial Management:  NASA's Financial Reports Are Based on
Unreliable Data (GAO/AFMD-93-3, Oct.  29, 1992) relates to NASA01,
NASA04, and additional areas of GAO concern. 

NASA's FMFIA Assertions and CFO Plan (GAO/AFMD-93-65R, June 11, 1993)
relates to NASA01, NASA04, and additional areas of GAO concern. 

NASA Property:  Improving Management of Government Equipment Provided
to Contractors (GAO/NSIAD-93-191, Sept.  9, 1993) relates to NASA01. 

NASA Aeronautics:  Impact of Technology Transfer Activities Is
Uncertain (GAO/NSIAD-93-137, Mar.  16, 1993) relates to NASA02 and
NASA03. 

NASA Aeronautics:  Efforts To Preserve U.S.  Leadership in the
Aeronautics Industry Are Limited (GAO/T-NSIAD-92-14, Mar.  18, 1992)
relates to NASA02 and NASA03. 

NASA Aeronautics:  Protecting Sensitive Technology (GAO/NSIAD-93-201,
Aug.  12, 1993) relates to NASA02 and NASA03. 

NASA Program Costs:  Space Missions Require Substantially More
Funding Than Initially Estimated (GAO/NSIAD-93-97, Dec.  31, 1992)
relates to NASA04. 

Space Programs:  NASA's Independent Cost Estimating Capability Needs
Improvement (GAO/NSIAD-93-73, Nov.  5, 1992) relates to NASA04. 

Earth Observing System:  NASA's EOSDIS Development Approach Is Risky
(GAO/IMTEC-92-24, Feb.  25, 1992) relates to NASA05. 

Earth Observing System:  Broader Involvement of the EOSDIS User
Community Is Needed (GAO/IMTEC-92-40, May 11, 1992) relates to
NASA05. 

EOS Data Policy:  Questions Remain About U.S.  Commercial Access
(GAO/IMTEC-92-44, June 25, 1992) relates to NASA05. 

NASA:  Changes to the Scope, Schedule, and Estimated Cost of the
Earth Observing System (GAO/NSIAD-92-223, July 22, 1992) relates to
NASA05. 

NASA Budget:  Potential Shortfalls in Funding NASA's 5-Year Plan
(GAO/T-NSIAD-92-18, Mar.  17, 1993) relates to additional areas of
GAO concern. 

NASA:  Large Programs May Consume Increasing Share of Limited Future
Budgets (GAO/NSIAD-92-278, Sept.  4, 1992) relates to additional
areas of GAO concern. 


NATIONAL SCIENCE FOUNDATION/OFFICE
OF SCIENCE AND TECHNOLOGY POLICY
(NSF)
=========================================================== Chapter 17


      OVERALL SUMMARY
------------------------------------------------------- Chapter 17:0.1

NPR's recommendations, particularly the recommendation to strengthen
the coordination of science policy throughout the government, are
generally consistent with our body of work over the past several
years.  In addition, the recommendations appear highly timely and
appropriate in view of the important role this administration and
Congress expects science and technology to play in stimulating the
nation's economic growth and helping U.S.  companies become more
competitive in global markets. 


         GAO CONTACT
----------------------------------------------------- Chapter 17:0.1.1

Victor S.  Rezendes, Director, Energy and Science Issues, Resources,
Community, and Economic Development Division, (202) 512-3841. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 17:1

NSF02:  Use a Federal Demonstration Project to Increase Research
Productivity
NPR recommends using a demonstration project structured between
several universities and five federal agencies as a model for a
program to reduce administrative overhead on research grants. 

GAO Comments
We support any effort to reduce unnecessary overhead costs.  We have
issued a number of reports on this issue.  More specifically,
regarding federally funded research at universities, we recommended
in an August 1992 report entitled Federal Research:  System for
Reimbursing Universities' Indirect Costs Should Be Reevaluated that
OMB consider involving a cross section of the university community in
the work of the task force it formed to evaluate alternative methods
for reimbursing universities for overhead costs related to federally
sponsored research. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 17:2

NSF01:  Strengthen Coordination of Science Policy
NPR recommends modifying the current structure of the Federal
Coordinating Council for Science, Engineering, and Technology
(FCCSET) to strengthen its role in science policy. 

GAO Comments
Although we have not done any work focused specifically on this
issue, FCCSET has been generally viewed as lacking the authority and
clout to play a significant role in directing science policy and in
establishing priorities for science and technology within the federal
government.  With the growing link this administration envisions
between initiatives in science and technology and the nation's
economic well-being, a stronger process for formulating policy and
setting priorities seems vital.  In addition, we have reported on the
need for better coordination of research activities among federal
agencies. 


------------------------------------------------------- Chapter 17:2.1

NSF03:  Continue Automation of NSF Research Support Functions
NSF should push forward with efforts to implement advanced
information technology in the proposal submission, review, award, and
information dissemination areas. 

GAO Comments
While we have not examined the status of automation at NSF, we
generally support efforts to use advanced information technologies
effectively in carrying out agencies' missions. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 17:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 17:4

None. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 17:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 17:6

Aviation Research:  Issues Related to FAA's Research Activities
(GAO/T-RCED-93-68, July 29, 1993) relates to NSF01. 

High Performance Computing:  Advanced Research Projects Agency Should
Do More to Foster Program Goals (GAO/IMTEC-93-24, May 17, 1993)
relates to NSF01. 

Federal Research:  Advanced Technology Program's Indirect Cost Rates
and Program Evaluation Status (GAO/RCED-93-221, Sept.  10, 1993)
relates to NSF02. 

Federal Research:  Minor Changes Would Further Improve New NSF
Indirect Cost Guidance (GAO/RCED-93-140, June 3, 1993) relates to
NSF02. 

Federal Research:  System for Reimbursing Universities' Indirect
Costs Should Be Reevaluated (GAO/RCED-92-203, Aug.  26, 1992) relates
to NSF02. 


SMALL BUSINESS ADMINISTRATION
(SBA)
=========================================================== Chapter 18


      OVERALL SUMMARY
------------------------------------------------------- Chapter 18:0.1

Our December 1992 transition series report entitled Housing and
Community Development Issues discussed matters that SBA needs to
focus on to accomplish its mission of developing and nurturing small
businesses.  Our work over the past several years has focused on key
SBA programs that provide financial assistance to all small
businesses and provide developmental assistance, including federal
contracts, to minority and other small disadvantaged firms. 

Small businesses are a critical element in developing and maintaining
the economic well-being of communities.  Overall, NPR's
recommendations for improving SBA are in line with the thrust of our
reports and testimonies and, if properly implemented, could result in
improving this sector of our economy. 


         GAO CONTACT
----------------------------------------------------- Chapter 18:0.1.1

Judy England-Joseph, Director, Housing and Community Development
Issues, Resources, Community, and Economic Development Division,
(202) 512-7631. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 18:1

SBA07:  Distribute SBA Staff Based on Workload and Administrative
Efficiency
Reallocate staff based on administrative efficiency and objective
workload measures to allow the SBA to better serve its customers by
shifting resources from its central and regional offices into its
district offices. 

GAO Comments
We support allocating resources to where they can do the most good. 
Reallocating SBA personnel to the district offices would improve the
effectiveness of SBA's program delivery by putting more resources
where the small businesses are located.  This approach would also
reduce the workload of the overburdened district office staff by
providing additional resources without increasing SBA's overall
budget. 


------------------------------------------------------- Chapter 18:1.1

SBA08:  Improve Federal Data on Small Businesses
The quality of information made available to shape federal
legislative and regulatory actions affecting small and large
businesses will be increased if federal household and employer
surveys include a "size of firm" question. 

GAO Comments
We support improving federal data on small businesses.  Inadequate
information on business activities has long hindered congressional
and executive branch decisionmakers.  We have frequently pointed out
the need for SBA to have complete and accurate information on its
small business programs.  Gathering information on the size of firms
would only enhance the decision-making process. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 18:2

SBA02:  Improve Assistance to Minority Small Businesses
This proposal recommends a complete review of all federal minority
business assistance programs and the establishment of a Small
Disadvantaged Business Set-Aside program for civilian agencies to
provide increased opportunities for minority small business. 

GAO Comments
We support improving assistance to minority-owned small businesses. 
Our work on SBA's minority business development program has shown a
need to review the effectiveness of federal minority assistance
programs.  However, it is unclear whether a small business set-aside
program would be the best way to provide increased opportunities
because such a program can hinder firms' self-marketing efforts and
other overall business development activities. 


------------------------------------------------------- Chapter 18:2.1

SBA04:  Examine Federal Guidelines for Small Business Lending
Requirements
The federal government should examine the guidelines bank regulators
set for small business lending by financial institutions to ensure
that capital is available without undue barriers while maintaining
the integrity of the financial institutions. 

GAO Comments
We support the need to examine federal guidelines for small business
lending requirements in order to make capital available to small
businesses.  We have recommended changes in collateral requirements
and in supervisory procedures that could facilitate traditional small
business lending without compromising the safety and soundness of
banks. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 18:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 18:4

SBA01:  Allow Judicial Review of the Regulatory Flexibility Act
Allow access to the courts when federal agencies develop rules that
fail to properly examine alternatives that will lessen the burden on
small businesses. 

GAO Comments
We support reducing the burden of unnecessary paperwork on small
businesses, but work would have to be performed to determine whether
such a review is necessary to resolve the problems in this area. 


------------------------------------------------------- Chapter 18:4.1

SBA03:  Reinvent the U.S.  Small Business Administration's Credit
Programs
Identify ways to improve SBA's credit programs to make SBA more
responsive to those industries with the potential for creating a
higher number of jobs, those involved in international trade, and
those providing critical technologies.  It will also enable the
agency to operate more efficiently. 

GAO Comments
Reinventing SBA credit programs may be needed, and although we agree
that the mission of SBA is, at least indirectly, to create new jobs,
work would have to be performed to determine what types of industries
have the potential to create the most jobs and to examine whether
targeting SBA loan assistance would make the agency more efficient. 


------------------------------------------------------- Chapter 18:4.2

SBA05:  Manage the Microloan Program to Increase Loans for Small
Businesses
Allowing SBA to guarantee loans made by banks to nonprofit
intermediaries, who could, in turn, make small loans to low-income
individuals, women, minorities and other small businesses unable to
obtain credit through traditional lending sources would increase
private sector participation and lessen administrative burdens linked
to direct government lending. 

GAO Comments
Although revising SBA's microloan program may reduce direct federal
expenditures, we do not know whether it will increase access for
small businesses.  Currently, SBA's microloan program provides direct
loans to nonprofit organizations that, in turn, lend to very small
businesses, especially those owned by women, minorities, and
low-income individuals.  We have not done any work to determine
whether the private sector would make funds available to nonprofits
solely on the basis of an SBA guarantee and whether this would
increase the access of small businesses to such loans. 


------------------------------------------------------- Chapter 18:4.3

SBA06:  Establish User Fees for Small Business Development Center
Services
Authorize Small Business Development Centers to charge a nominal fee
for their services to reduce federal outlays and require the direct
beneficiaries of the assistance to pay a share of the cost. 

GAO Comments
Although establishing user fees for Small Business Development
Centers' (SBDC) services may reduce federal outlays, we have not
examined what impact charging clients would have on program
participation and program effectiveness.  Currently, SBDCs provide a
variety of business-related services to the client.  The centers
receive financial assistance from SBA in the form of annual grants,
but to be eligible for a grant, the centers must provide an equal,
matching amount of funds from nonfederal sources.  However, most
SBDCs put major emphasis on counseling, which is provided at no cost. 
Our past work has determined that most clients are satisfied with the
counseling services they receive. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 18:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 18:6

Housing and Community Development Issues (GAO/OCG-93-22TR, Dec. 
1992) relates to the overall summary. 

Regulatory Flexibility Act:  Inherent Weaknesses May Limit Its
Usefulness for Small Governments (GAO/HRD-91-16, Jan.  11, 1991)
relates to SBA01. 

Small Business:  The Small Business Administration's Progress in
Restructuring Its Business Development Program (GAO/T-RCED-93-56,
Sept.  22, 1993) relates to SBA02. 

Small Business:  Problems Continue With SBA's Minority Business
Development Program (GAO/RCED-93-145, Sept.  17, 1993) relates to
SBA02, SBA07, and SBA08. 

Small Business:  Federal Agencies' Contracting Goals for Women-Owned
Businesses (GAO/T-RCED-92-95, Sept.  17, 1992) relates to SBA02. 

Small Business:  Efforts to Provide Federal Procurement Dollars to
Women-Owned Businesses (GAO/RCED-92-185, July 28, 1992) relates to
SBA02. 

Small Business:  The Small Business Administration's Progress in
Restructuring Its 8(a) Business Development Program
(GAO/T-RCED-92-35, Mar.  4, 1992) relates to SBA02. 

Small Business:  Problems in Restructuring SBA's Minority Business
Development Program (GAO/RCED-92-68, Jan.  31, 1992) relates to
SBA02. 

Small Business:  Participation in SBA's 8(a) Business Development
Program (GAO/RCED-91-173, June 11, 1991) relates to SBA02. 

Minority Business:  Minority Business Development Agency Needs to
Address Program Weaknesses (GAO/RCED-91-114, Apr.  16, 1991) relates
to SBA02. 

Minority Business:  Management Improvements Needed at Minority
Business Development Agency (GAO/RCED-90-69, Jan.  19, 1990) relates
to SBA02. 

Small Business:  Financial Condition of SBA's Business Loan Portfolio
Is Improving (GAO/RCED-92-49, Dec.  3, 1991) relates to SBA03. 

Bank Regulation:  Regulatory Impediments to Small Business Lending
Should Be Removed (GAO/GGD-93-121, Sept.  7, 1993) relates to SBA04. 

Small Business:  Analysis of SBA's Preferred Lenders Program
(GAO/RCED-92-124, May 15, 1992) relates to SBA04. 

Small Business:  Development Centers Meet Counseling Needs of Most
Clients (GAO/T-RCED-90-65, Apr.  18, 1990) relates to SBA06. 

Small Business:  Development Centers Meet Counseling Needs of Most
Clients (GAO/RCED-90-38BR, Nov.  22, 1989) relates to SBA06. 

Small Business in Southern Nevada (GAO/RCED-93-36R, Oct.  6, 1992)
relates to SBA07. 

Small Business:  Information on and Improvements Needed to Surety
Bond Guarantee Program (GAO/RCED-91-99, Apr.  23, 1991) relates to
SBA08. 


DEPARTMENT OF STATE/U.S. 
INFORMATION AGENCY (DOS)
=========================================================== Chapter 19


      OVERALL SUMMARY
------------------------------------------------------- Chapter 19:0.1

The United States faces a serious challenge in adjusting its foreign
policy and diplomatic activities to fit with post-Cold War
priorities.  As adjustments are made, the State Department and other
foreign affairs agencies will need to consider how they will be able
to operate more efficiently with declining resources.  Focusing more
attention on economic, refugee, and other global issues, correcting
long-standing management weaknesses, and identifying opportunities to
cut costs and optimize use of resources are key to adjusting to
today's world and achieving efficient operations.  Overall, NPR's
recommendations are consistent with the need to adjust activities and
achieve efficiencies. 


         GAO CONTACT
----------------------------------------------------- Chapter 19:0.1.1

Joseph E.  Kelley, Director-in-Charge, International Affairs Issues,
National Security and International Affairs Division, (202) 512-4128. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 19:1

DOS04:  Provide Leadership in the Department's Information Management
The Department of State should make significant changes in the way it
manages information technology policy.  Several improvements are
recommended. 

GAO Comments
Our work strongly supports this recommendation, particularly
improvements in the financial management area.  These include the
need to design, develop, and implement systems that meet
governmentwide standards; provide effective accountability over
resources; and support managerial decisionmaking.  The State
Department's financial operations and systems have had serious
shortcomings for years.  Responsibility for financial management has
been fragmented, and financial operations are hampered by
inexperienced and inadequately trained financial management staff. 
In addition, domestic and overseas financial management systems are
incompatible; have been allowed to deteriorate; are out of date; and
are unable to meet cost, performance measurement, and other financial
management needs.  The inadequacies in financial management systems
have directly contributed to the lack of cost information on overseas
property and the vulnerability of worldwide disbursing and cashiering
operations to fraud, waste, and abuse.  Although State is making
efforts to improve its financial management systems, the magnitude of
the problem indicates that sustained attention is required.  The
Department has begun to implement changes in the way it manages
information technology policy.  Specifically, it engaged a consulting
firm to develop its Information Strategy Plan for its proposed
Integrated Financial Management System. 


------------------------------------------------------- Chapter 19:1.1

DOS06:  Consolidate U.S.  Nonmilitary International Broadcasting
This recommendation supports the administration's decision to
consolidate U.S.  international broadcasting under the U.S. 
Information Agency and outlines ways of extending the benefits of
this change. 

GAO Comments
For years, we have advocated the consolidation of U.S.  international
broadcasting activities, and we support the administration's decision
and the NPR recommendation.  The consolidation will improve both the
effectiveness and efficiency of broadcasting efforts, and in the long
run result in significant savings.  In a recent report, we identified
cost and administrative issues surrounding the legislative proposal
to consolidate broadcasting activities that need to be addressed
before decisions on the structure and organization of broadcasting
entities are finalized. 


------------------------------------------------------- Chapter 19:1.2

DOS08:  Improve the Collection of Receivables
The State Department should do a better job collecting debts, such as
medical expenses and others, owed to the department. 

GAO Comments
We strongly agree with this recommendation.  Our work has shown that
State currently does not have adequate controls over receivables.  In
August 1992, we reported that DOS does not have reasonable assurances
that it is recovering the medical insurance benefits payable to
insured employees and dependents for overseas medical expenses paid
by the government.  As a result, the government may be losing
substantial amounts of recoverable expenses. 


------------------------------------------------------- Chapter 19:1.3

DOS09:  Change UN Administrative and Assessment Procedures
This recommendation outlines several changes in the United States'
fiscal relationship with the United Nations, including recommending
an oversight office for the organization and tax law changes to
reduce costs to the federal government. 

GAO Comments
We strongly endorse seeking support for the creation of an
independent U.N.  Inspector General or similar body to ensure
adequate accountability and oversight of U.N.  operations and
finances.  We have recommended this action for some time, and in 1992
report and again in a 1993 letter to the President of the Federal
Court of Audit of Germany, we provided a conceptual framework for an
accountability and oversight entity.  In August 1993, the U.N. 
Secretary General appointed an Assistant Secretary General to head an
independent Office for Inspections and Investigations.  However, this
appointment was seen as an interim measure until an independent body
to ensure accountability and oversight could be chartered by the U.N. 
General Assembly.  We have been working regularly with the State
Department on this matter.  We have also recommended a reexamination
of U.N.  assessment procedures and practices, particularly in light
of recent political changes in the world and revised estimates of
national income by the International Monetary Fund.  We have not
studied the tax law changes recommended by NPR. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 19:2

DOS01:  Expand the Authority of Chiefs of Mission Overseas
This recommendation proposes a pilot program to expand the management
authority of Chiefs of Mission overseas in the allocation of fiscal
and staffing resources. 

GAO Comments
Although we have not yet taken a position on the level of authority
that should be granted to the Chief of Mission, we support the
recommendation for a pilot study.  We are currently reviewing the
size and costs of U.S.  government overseas staffing and the
processes and mechanisms used to determine staffing needs.  As part
of this work, we are examining the Chief of Mission's role in
controlling the size and the composition of government staff at U.S. 
embassies and consulates.  We believe that the expanded Chief of
Mission authority recommended by NPR may help to achieve reductions
in overall spending at embassies and ensure that resources are
targeted on priority goals and objectives.  However, there may also
be some negative consequences.  For example, the Chief of Mission
could use the expanded authority to discontinue activities that a
federal agency and/or Congress believes are essential.  In addition,
jurisdictional issues within the executive and legislative branches
may make it difficult to implement the recommendation. 

To determine if expanded Chief of Mission authority is feasible and
can achieve savings without significant negative consequences, we
believe that conducting a study of the concept would be worthwhile. 
Careful evaluation of the study should be performed before expanded
authority over all resources and staffing is granted to all Chiefs of
Mission.  In addition, we believe that missions of varying size
should be considered as sites for the pilot program. 


------------------------------------------------------- Chapter 19:2.1

DOS02:  Integrate the Foreign Affairs Resource Management Process
NPR recommends specific reforms of the interagency foreign policy
resource management process to improve coordination.  The
recommendation also covers specific improvements within the
Department of State. 

GAO Comments
We have not reviewed the government's processes for allocating
resources to the various foreign affairs objectives.  Neither have we
reviewed the specific reforms that NPR recommends.  However, we
recognize that effective use of limited resources requires a
strategic planning and budgeting process that allocates resources to
the most important priorities.  For example, in March 1992, we
recommended a strategic management approach to help the Agency for
International Development face current and future challenges. 

Current U.S.  government processes for allocating resources to U.S. 
foreign affairs objectives are fragmented among many different
agencies, budget functions, and congressional committees.  Developing
a more integrated approach will not be easy (DOS01 proposes one
approach).  However, we believe that implementation of NPR's
recommendations could assist government decisionmakers to focus on
the range of U.S.  foreign affairs objectives, the agencies involved,
and the costs of programs.  This focus would help ensure that
available resources are allocated in accordance with priorities. 

Within the State Department, we agree with NPR that management can
improve the way priorities are set and resources allocated through
(1) a more strategic, mission-driven approach; (2) better integration
of program planning with budget formulation and allocation of funds;
and (3) refinements to the program planning process. 



------------------------------------------------------- Chapter 19:2.2

DOS03:  Improve State Department Efforts to Promote U.S.  Business
Overseas
International trade is an important responsibility of U.S.  missions
overseas in the post-Cold War world.  This recommendation outlines
several improvements that can be made in State Department efforts in
this area. 

GAO Comments
We have not examined the specific actions recommended by NPR, but
agree that State can make a major contribution to efforts to promote
U.S.  business interests overseas.  U.S.  economic and commercial
interests overseas have become a higher priority in today's world. 
However, State's efforts should be coordinated with and complement
those of the Departments of Commerce and Agriculture, which play
leading roles in promoting U.S.  exports and other business
activities overseas. 


------------------------------------------------------- Chapter 19:2.3

DOS05:  Reduce Mission Operating Costs
Several recommendations are made for reducing U.S.  costs to operate
missions overseas, including eliminating certain facilities, reducing
security costs and considering altogether new forms of overseas
representation. 

GAO Comments
We have not examined the specific cost-cutting actions recommended by
NPR, but support the general thrust of the recommendations.  In a
number of reports we have urged actions to correct management
weaknesses affecting overseas posts in the areas of real estate,
property and funds, administrative services, and other areas.  We
believe that improved management can reduce costs. 

For many years, we have reported long-standing problems with the
Department's overseas real estate programs.  As a result of the
problems, the Comptroller General designated management of overseas
real property as an area at high risk for waste and mismanagement. 
State is taking actions to improve its management practices. 
However, it is important that the Department continues its commitment
to management reforms and provides strong oversight of overseas real
estate actions. 

We also believe that State and other foreign affairs agencies need to
take a hard look at their current overseas activities and the
associated costs, and decide if the activities remain essential and
affordable given the changing world and current budget limitations. 
In an ongoing review, we are examining opportunities to adopt new
forms of overseas representation to reduce costs. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 19:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 19:4

DOS07:  Relocate the Mexico City Regional Administrative Management
Center
NPR recommends moving this administrative support office to the
United States to save money and recommends examining the need for
similar offices now in Paris and Bangkok. 

GAO Comments
We have not studied the advantages and disadvantages of relocating
the Regional Administrative Management Centers to the United States. 
Embassies need accurate and timely financial information and
services.  However, our work indicates that some embassies are
dissatisfied with the services provided by the regional centers.  We
support efforts to improve the quality and timeliness of
administrative financial support services whether through improvement
of existing centers or their relocation to the United States. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 19:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 19:6

Foreign Affairs Issues (GAO/OCG-93-26TR, Dec.  1992) relates to
DOS02, DOS03, DOS05, and DOS06. 

AID Management:  Strategic Management Can Help AID Face Current and
Future Challenges (GAO/NSIAD-92-100, Mar.  6, 1992) relates to DOS02. 

Overseas Staffing:  Embassies in the Former Soviet Union
(GAO/NSIAD-92-306, Aug.  31, 1992) relates to DOS03. 

Overseas Staffing:  U.S.  Economic, Commercial, and Agricultural
Staffing in Japan and Korea (GAO/NSIAD-92-162, Apr.  24, 1992)
relates to DOS03. 

State Department:  Survey of Administrative Issues Affecting
Embassies (GAO/NSIAD-93-218, July 12, 1993) relates to DOS04, DOS05,
and DOS07. 

Financial Management:  Serious Deficiencies in State's Financial
Systems Require Sustained Attention (GAO/AFMD 93-9, Nov.  13, 1992)
relates to DOS04. 

Widespread Weaknesses at Overseas Embassies (GAO/T-NSIAD-93-17, July
13, 1993) relates to DOS05. 

State Department:  Management Weaknesses at U.S.  Embassies in
Panama, Barbados, and Grenada (GAO/NSIAD-93-190, July 9, 1993)
relates to DOS05. 

State Department:  Management Weaknesses at the U.S.  Embassy in
Mexico City, Mexico (GAO/NSIAD-93-88, Feb.  8, 1993) relates to DOS05
and DOS07. 

Management of Overseas Real Property (GAO/HR-93-15, Dec.  1992)
relates to DOS05. 

Foreign Affairs Issues (GAO/OCG-93-26TR, Dec.  1992) relates to
DOS05. 

State Department:  Management Weaknesses in the Security Construction
Program (GAO/NSIAD-92-2, Nov.  29, 1991) relates to DOS05. 

State Department:  Status of Actions to Improve Overseas Procurement
(GAO/NSIAD-92-24, Oct.  25, 1991) relates to DOS05. 

State Department:  Efforts Underway to Enhance Management of Overseas
Real Property (GAO/NSIAD-91-279, Sept.  5, 1991) relates to DOS05. 

U.S.  Embassy Moscow:  Alternatives for Reconstruction and Their
Costs (GAO/NSIAD-91-43FS, Dec.  28, 1990) relates to DOS05. 

State Department:  Efforts to Improve Management of Overseas Real
Property (GAO/T-NSIAD-91-40, June 20, 1991) relates to DOS05. 

State Department:  Proposed Overseas Housing Standards Not Justified
(GAO/NSIAD-90-17, Dec.  18, 1990) relates to DOS05. 

State Department:  Management of Overseas Real Property Needs
Improvement (GAO/NSIAD-89-116, Apr.  13, 1989) relates to DOS05. 

Department of State Issues (GAO/OCG-89-19TR, Nov.  1988) relates to
DOS05. 

State Department's Management of Real Property (GAO/T-NSIAD-89-1,
Oct.  5, 1988) relates to DOS05. 

Internal Controls:  State Department Needs to Improve Management of
Travel Advances (GAO/NSIAD-88-178, Aug.  15, 1988) relates to DOS05. 

Overseas Support:  Current U.S.  Administrative Support System Is Too
Complicated (GAO/NSIAD-88-84, Mar.  25, 1988) relates to DOS05. 

Issues Regarding Consolidating International Broadcasting
(GAO/NSIAD-93-302R, Sept.  17, 1993) relates to DOS06. 

Questions on the Consolidation of U.S.  International Broadcasting
(GAO/NSIAD-93-286R, Sept.  17, 1993) relates to DOS06. 

Letter to Senator Russell D.  Feingold Responding to Questions on the
Consolidation of International Broadcasting (July 14, 1993) relates
to DOS06. 

Voice of America:  Management Actions Needed to Adjust to a Changing
Environment (GAO/NSIAD-92-150, July 24, 1992) relates to DOS06. 

Need for Study of U.S.  International Broadcasting
(GAO/T-NSIAD-90-24, Mar.  3, 1990) relates to DOS06. 

State Department:  Need to Ensure Recovery of Overseas Medical
Expenses (GAO/NSIAD-92-277, Aug.  7, 1992) relates to DOS08. 

State Department's Management of Its Travel Funds (GAO/T-NSIAD-88-21,
Apr.  27, 1988) relates to DOS08. 

U.N.  Peacekeeping:  Observations on Mandates and Operational
Capability (GAO/T-NSIAD-93-15, May 24, 1993) relates to DOS09. 

United Nations:  U.S.  Participation in Peacekeeping Operations
GAO/NSIAD-92-247, Sept.  9, 1992) relates to DOS09. 

Letter to the President of the Federal Court of Audit of Germany
(Nov.  2, 1993) relates to DOS09. 


DEPARTMENT OF TRANSPORTATION (DOT)
=========================================================== Chapter 20


      OVERALL SUMMARY
------------------------------------------------------- Chapter 20:0.1

As discussed in our December 1992 transition series report entitled
Transportation Issues, resolving major transportation issues--such as
rebuilding the nation's roads and bridges--will critically affect the
economy.  Furthermore, capital investments in transportation will
have a profound effect on the mobility of people, the quality of the
environment, and competitiveness in the international marketplace. 
Finally, transportation accidents claimed about 43,500 lives in the
United States in 1991, making transportation safety a vital concern. 

Overall, NPR's recommendations regarding the Department of
Transportation (DOT) are consistent with the thrust of
recommendations in our testimonies and reports.  A number of NPR's
recommendations have been made before, including the need to (1) use
a cross-modal approach to problem solving, (2) institute a strategic
planning process, and (3) develop an integrated national
transportation research and development plan.  As we noted in our
transition series report, the challenge lies in the implementation of
these recommendations.  The legislative framework for doing so in the
arena of surface transportation was enacted into law with the passage
in 1991 of the Intermodal Surface Transportation Efficiency Act
(ISTEA). 

In addition to acting on NPR's recommendations, DOT faces several
additional challenges, such as (1) ensuring that the nation's air
travelers receive the benefits of deregulation from a highly
competitive and financially healthy airline industry; (2) moving
forward to address the future of passenger rail in the United States,
including Amtrak's financial viability and operating efficiency as
well as the benefits and costs of high-speed rail in selected
corridors; (3) strengthening the Federal Aviation Administration's
(FAA) and the Federal Railroad Administration's (FRA) inspection
programs; (4) allocating FAA's limited funds under the Airport
Improvement Program to projects that best achieve national goals; and
(5) developing a plan for DOT's new consolidated Accounting and
Financial Information System that strengthens the system's value as a
management tool. 


         GAO CONTACT
----------------------------------------------------- Chapter 20:0.1.1

Kenneth M.  Mead, Director, Transportation Issues, Resources,
Community, and Economic Development Division, (202) 512-2834. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 20:1

DOT03:  Use a Consensus-Building Approach to Expedite Transportation
and Environmental Decisionmaking
DOT should conduct two demonstration projects to apply a
problem-solving approach to transportation planning, development, and
decisionmaking as a means of reducing costs and improving the
efficiency of agency decisionmaking. 

GAO Comments
Consistent with our previous recommendations, we support applying a
cross-modal problem-solving approach to transportation planning,
development, and decision-making at the federal and state level.  We
understand that DOT has already initiated several efforts that use a
consensus-building approach to expedite transportation and
environmental decision-making at the federal level.  We support these
actions and suggest that DOT not restrict pilot programs for such
activities to these efforts alone.  Furthermore, we have recommended
that the Secretary of Transportation develop a framework that
provides common measures to assist states and localities in comparing
highway and mass transit projects.  Such a framework would aid
efficient and effective transportation investment decisions at the
state and local level. 


------------------------------------------------------- Chapter 20:1.1

DOT09:  Contract for Level I Air Traffic Control Towers
NPR recommends converting 99 Level I (low-use) air control towers to
contract operation and reviewing the remaining Level I towers for
possible decommissioning. 

GAO Comments
We support having FAA contract out low-activity towers and
decommission towers that have been temporarily closed since the early
1980s.  By contracting out low-activity towers, FAA estimates that it
could save between $93 million and $101 million and reduce staff by
about 900 through the year 2012 without negatively affecting safety. 
We are examining FAA's estimated resource savings and the barriers
preventing the agency from moving forward to contract out and
decommission low-activity towers. 


------------------------------------------------------- Chapter 20:1.2

DOT11:  Improve Intermodal Transportation Policy Coordination and
Management
DOT should institute a strategic planning process to promulgate
national, integrated transportation policies. 

GAO Comments
As we have previously noted in our reports and testimonies, we
support establishing a strategic planning process as a first step
towards ensuring a total systems approach to selecting among
transportation alternatives.  However, a planning process alone may
not be sufficient.  DOT may need to consider organizational changes
that coordinate the planning and financing arms of the separate modal
administrations.  One such change, suggested by the National Academy
of Public Administration several years ago, would create a Surface
Transportation Administration to encompass the missions currently
performed by separate rail, highway, and transit agencies. 


------------------------------------------------------- Chapter 20:1.3

DOT12:  Develop an Integrated National Transportation Research and
Development Plan
DOT should examine the nation's transportation-related research and
development portfolio and develop an integrated national
transportation plan that considers specific transportation research
needs as well as intermodal transportation plans. 

GAO Comments
We support such an effort.  On the basis of our recommendations on
intelligent vehicle highway systems, Congress enacted into law a
requirement that DOT develop a program of operational field tests in
accordance with a strategic research plan.  DOT needs to develop such
a plan because it would be a necessary step towards enabling this
family of technologies to fulfill its promise.  Regarding FAA's
Research, Engineering, and Development Program, we have reported that
FAA's success in meeting current and future challenges will depend on
several factors.  These factors include integrating research goals
into other program areas, leveraging research conducted by other
federal agencies, and integrating various technologies to meet
specific safety and capacity problems.  In addition, we are currently
examining DOT's management of university research grants. 


------------------------------------------------------- Chapter 20:1.4

DOT13:  Create and Evaluate Telecommuting Programs
DOT should implement a telecommuting plan within the agency and
should evaluate transportation-related behavior and other topics
requiring research in this area. 

GAO Comments
This proposal has merit and should be explored.  We have recommended
additional evaluation of telecommuting and transportation-related
behavior.  Any research efforts undertaken in this area should be
explicitly linked to DOT's research and development plan and budget. 


------------------------------------------------------- Chapter 20:1.5

DOT14:  Improve DOT Information Technology Management
The department should develop an information management strategy
which will enable the sharing of data among its component agencies
and reduce costs. 

GAO Comments
We agree with this recommendation and have previously recommended
that the Secretary of Transportation report the lack of a complete
departmental strategic Information Resources Management (IRM) plan as
a material weakness under the Federal Managers' Financial Integrity
Act.  The Bureau of Transportation Statistics and the Office of
Intermodalism, established by the enactment of ISTEA, would be
important vehicles for (1) ensuring the integrity of the data and (2)
facilitating the sharing of this information.  Additionally, we have
made similar recommendations to improve IRM management at the Coast
Guard and FAA. 


------------------------------------------------------- Chapter 20:1.6

DOT15:  Provide Reemployment Rights for Merchant Mariners
Guarantee reemployment rights to U.S.  seafarers at their private
sector jobs if called to serve during a war or national emergency. 

GAO Comments
Bills have been introduced to secure reemployment rights and other
benefits for merchant seamen equivalent to the rights and benefits
provided for any member of a reserve component of the Armed Forces. 
This seems to be a fair and equitable measure. 


------------------------------------------------------- Chapter 20:1.7

DOT22:  Assign Office of Motor Carriers (OMC) Field Staff to Improve
Program Effectiveness and Reduce Costs
OMC should develop a resource allocation model so that regional
managers will be able to optimize geographic assignment of staff,
schedule carrier reviews in an efficient manner, and eliminate
unnecessary travel requirements. 

GAO Comments
We concur that motor carrier field staff should be located in the
geographic areas where the greatest safety risks occur.  The Federal
Highway Administration (FHWA) should utilize the experience gained
from FRA, FAA, and the Research and Special Programs Administration
regarding risk assessment modeling. 


------------------------------------------------------- Chapter 20:1.8

DOT23:  Automate Administrative Requirements for Federal Aid Highway
Projects
NPR recommends improvements in the flow of information on Federal Aid
Highway projects that will reduce paperwork and reduce staff time in
completing certain forms and other current requirements. 

GAO Comments
We endorse the call for improvements, including automation, in the
flow of information.  In the course of our work, we have recognized
the need for better information to gauge the condition of and any
progress made in improving the transportation network.  For instance,
in 1991 we reported that while FHWA collects data on state
expenditures for interstate highway maintenance, the data were not
reliable because information from many states was missing or
incomplete. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 20:2

DOT01:  Measure Transportation Safety
NPR recommends the development of common, governmentwide measures of
transportation safety. 

GAO Comments
This recommendation has merit, but the development of such measures
will likely be difficult and take several years to implement. 
Additionally, common, governmentwide safety indicators should
supplement, but not replace, predictors of safety problems that are
specific to the individual modes of transportation.  Over the last
several years, all modes have been working on developing
mode-specific safety performance measures and predictors of safety
problems.  It is important that these efforts be brought to fruition. 

As we recommended in our management review of DOT and in numerous
reports and testimonies, the individual modes should establish
precursors of safety risk--that is, conditions or circumstances that,
if left uncorrected, lead to accidents.  The ultimate goal of DOT's
safety programs is to prevent accidents and their consequences: 
death, injury, and property damage.  We previously reported that in
most instances, accident rates, especially in the rail and aviation
areas, do not provide the most reliable basis on which to target
inspection resources.  There are two major reasons:  (1) once the
accident has occurred, it is too late to prevent it and (2) accidents
occur too infrequently to be good indicators of all safety problems. 
For example, if noncompliance with certain safety regulations would
likely lead to runway incursions, a precursor indicator of safety
risk might be noncompliance with that regulation. 

Efforts by the individual modes to develop precursors of safety risk
would better position the Department to delineate common measures of
safety because doing so requires that the elements of a
transportation system common to all modes be identified.  For
example, every accident has associated dollar costs, and the use of
any mode can be expressed in terms of output (e.g., cost per
passenger mile or per ton mile) or per unit of exposure (e.g., cost
per hour or per trip).  Greater standardization makes it easier to
compare the benefits of added expenditures on safety across modes. 
We are currently analyzing information on (1) the safety record for
each major transportation mode, (2) the potential for safety to be
measured comparably across modes, and (3) each mode's safety
strategy.  Because this NPR recommendation contemplates a DOT-wide
effort and its implementation would likely involve designing and
distributing new data collection instruments and improving and/or
modifying existing data bases, it is essential that the newly
established Bureau of Transportation Statistics have a central role
in such an effort. 


------------------------------------------------------- Chapter 20:2.1

DOT05:  Permit States to Use Federal Aid as a Capital Reserve
This recommendation would allow federal transportation grant
recipients to use grant funds capital reserve to back debt financing
to construct eligible transportation projects. 

GAO Comments
Section 1012 of ISTEA already provides for the use of federal funds
as a capital reserve to back debt financing for one category of
transportation projects:  toll roads.  The experience gained in
financing toll roads should be considered in determining the broader
applicability of this recommendation. 


------------------------------------------------------- Chapter 20:2.2

DOT07:  Examine User Fees for International Over-Flights
DOT should conduct a cost allocation study to determine whether
foreign air carriers passing over U.S.  air space are paying their
fair share and whether direct user fees should be imposed. 

GAO Comments
We agree that commercial users of the nation's air space should, to
the maximum extent practical, pay their fair share of the burden that
they impose on the system, as U.S.  commercial aviation already does. 
At present, foreign airlines do not pay any fee when passing through
our nation's air space.  The situation is much different overseas. 
For example, U.S.  carriers flying through European air space pay
user fees that many airlines, both American and European, believe are
excessive.  Assuming that the current funding system (i.e., the trust
fund) continues, DOT should conduct a cost allocation study to
determine the feasibility of imposing direct user fees on foreign
carriers for international overflights. 


------------------------------------------------------- Chapter 20:2.3

DOT08:  Increase FAA Fees for Inspection of Foreign Repair Facilities
To ensure full cost recovery, increase the fees charged for
certification and surveillance of foreign aircraft repair stations. 

GAO Comments
We agree with the concept of full cost recovery of FAA's expenses for
foreign repair stations.  FAA already charges a fee to certify
foreign repair stations.  Further consideration should be given to
accelerating FAA's implementation of proposed regulations for
increasing the $5 aircraft registration fee.  However, consideration
should also be given to the fact that some countries may not have the
financial means to pay for continued FAA surveillance of the repair
stations. 


------------------------------------------------------- Chapter 20:2.4

DOT10:  Establish a Public-Private Consortium to Develop an
Aeronautical Telecommunications Network
FAA should pursue the creation of a public-private consortium under a
cooperative agreement with industry to develop an Aeronautical
Telecommunications Network. 

GAO Comments
We generally agree with the notion of creating a public-private
consortium to develop the Aeronautical Telecommunications Network.  A
public-private partnership, by accelerating the development of the
data communication system, has the potential to shorten the
procurement cycle for the system.  We hesitate to support the
recommendation fully without having more specific information about
the proposed consortium.  Although FAA has been working with industry
on a proposal promoting the creation of this consortium, the proposal
has not been made public. 


------------------------------------------------------- Chapter 20:2.5

DOT16:  Establish an Independent Commission to Review the U.S. 
Maritime Industry
NPR recommends a detailed examination of the future of the maritime
industry in the U.S.  and the benefits derived by the taxpayers from
maritime industry subsidies and related issues. 

GAO Comments
At the heart of this issue are fundamental questions about the role
the maritime industry is expected to play during both times of peace
and times of conflict.  Maritime reform has been proposed repeatedly
over the years by both the executive and legislative branches without
resolution.  For example, during the closing months of the Bush
administration, the Secretary of Transportation proposed major
maritime reforms that were not adopted.  If an independent
commission, as suggested by NPR, would facilitate resolution of the
issues surrounding the current vague and uncertain U.S.  maritime
policy, it would be welcome. 


------------------------------------------------------- Chapter 20:2.6

DOT17:  Eliminate Funding for Highway Demonstration Projects
Rescind funding for existing highway demonstration projects.  These
demonstration projects should compete at the state level for the
limited highway resources available and not be singled out for
special treatment at the federal level. 

GAO Comments
As stated in our report and testimony (GAO/RCED-91-146 and
GAO/T-RCED-93-29), highway demonstration projects frequently face
impediments, such as citizen opposition or failure to satisfy key
state transportation priorities, that can cause projects to languish
in the early development stages or never get started at all.  We
support rescinding unobligated balances for those projects that are
clearly inactive as well as for those projects that are complete but
still carry an unobligated balance.  Criteria for defining inactive
projects should provide a basis for the rescissions.  One option
would be to require that funds be obligated within 4 years of their
allocation.  This approach is in keeping with the rules that govern
most other federal-aid highway program categories.  At the 4-year
point, the funds could be rescinded, redistributed to other projects
within the affected state, or distributed under other arrangements
Congress directs. 

While we agree that most highway projects should compete at the state
level for limited resources, it should be noted that in limited
instances, targeting federal funds for a special project may be
appropriate.  Projects that demonstrate new technology that is widely
applicable could be one such instance.  To help ensure that such
demonstration projects are sound investments, both the House
appropriating and authorizing committees have recently developed
screening mechanisms for considering the merits of individual
projects. 


------------------------------------------------------- Chapter 20:2.7

DOT19:  Rescind Unobligated Earmarks for the FTA New Starts and Bus
Program
Rescind unobligated balances for fiscal year 1992 and prior earmarked
funding under this FTA program that remain unobligated after three
years. 

GAO Comments
We agree with the recommendation to rescind unobligated balances but
only for inactive or completed projects funded by the Federal Transit
Administration (FTA).  We urge caution in blanket rescissions because
there may be acceptable reasons for a project's inability to obligate
funds over time.  Criteria to define inactive projects need to be
developed. 


------------------------------------------------------- Chapter 20:2.8

DOT20:  Reduce the Annual Essential Air Service Subsidies
This recommendation would set new, more restrictive criteria for
small airports to qualify for essential air service subsidies. 

GAO Comments
Pending legislation could reduce by 11 the number of communities that
qualify for the subsidy.  The Essential Air Service (EAS) program
currently affects roughly 300 smaller communities in the United
States.  This program is relatively small, accounting for less than
$40 million in 1992.  The EAS program is often described by critics
as uneconomical and as an unwarranted subsidy to small communities. 
However, when the airline industry was deregulated in 1978, Congress
guaranteed that small communities would continue to be connected to
the nation's air system through direct service to a medium or large
airport for a period of 10 years.  Congress later extended the
program for an additional 10 years and has made other adjustments to
this policy over the years.  The communities that benefit maintain
that they would be adversely affected if the assistance were
terminated and direct access to the nation's air transport network
were lost. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 20:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 20:4

DOT02:  Streamline the Enforcement Process
NPR recommends pilot programs in the U.S.  Coast Guard, the Federal
Aviation Administration, and the Federal Highway Administration,
designed to offer greater flexibility in enforcement methods. 

GAO Comments
We would have to better understand the type of flexibility envisioned
before we could support this recommendation.  For example, FAA
already has a program that grants amnesty from penalties to air
carriers that voluntarily report safety violations to FAA.  It is not
clear whether such an amnesty program falls within the definition of
flexibility and whether each transportation mode could implement
similar programs. 

Additionally, before more flexibility is added, there must be
assurance that the integrity of the underlying program for each mode
is strong.  We have found that several modes could greatly improve
their inspection and enforcement programs.  For example, we
previously reported that FRA could enhance its enforcement program by
seeking options to more expeditiously settle civil penalty cases.  At
the time of that report, FHWA was testing a system in which regional
directors could send civil penalty letters directly to motor
carriers.  We suggested that FRA could adopt a similar process by
having its regional offices formally notify railroads of violations
and penalty assessments.  In addition, our ongoing work indicates
that FAA could improve its enforcement efforts for foreign carriers
that fly into the United States. 


------------------------------------------------------- Chapter 20:4.1

DOT04:  Establish a Corporation to Provide Air Traffic Control
Services
NPR recommends development of a detailed action plan and statutory
language for changes in air traffic control management to make it
more business-like. 

GAO Comments
This NPR recommendation is the subject of an analysis we have under
way.  We expect to testify on this extremely controversial issue this
winter or early spring.  In 1988, we expressed reservations about the
contention that air traffic control modernization problems, including
schedule delays and costs increases, were largely the result of
federal budget constraints and procurement and personnel rules.  The
primary causes of these problems, in our view, were poor management
of the modernization program and the technical complexity of
developing advanced technologies.  It was not clear to us how a
change in FAA's organizational structure would address these
problems.  Given the passage of time since our last examination of
these and similar matters, we are now evaluating three key issues
that are germane to this NPR recommendation.  These issues involve
the linkage between FAA's structure and modernization problems,
opportunities to improve the modernization program within the current
structure, and the justifications and analyses needed by Congress if
the administration proposes that the air traffic control system be
run by a public corporation.  The analyses needed include an
examination of the potential impacts of restructuring on
stakeholders, financing, management, and rate-setting as well as on
federal oversight, regulations, and coordination. 


------------------------------------------------------- Chapter 20:4.2

DOT06:  Encourage Innovations in Automotive Safety
NPR recommends allowing the National Highway Traffic Safety
Administration to grant more exemptions from highway safety standards
to develop new safety systems. 

GAO Comments
We have no basis for agreeing or disagreeing with this recommendation
without more specific data on what safety standards would be exempted
and what new safety systems would replace the exempted standards.  We
think that as a part of implementing this recommendation, an
effective process for evaluating the expected benefits of the new
safety systems needs to be in place before existing safety standards
are waived.  We would, of course, support alternative safety systems
to the extent that they provide the same or greater safety and are as
effective and efficient as the current ones. 


------------------------------------------------------- Chapter 20:4.3

DOT18:  Reduce Spending for the U.S.  Merchant Marine Academy
As an economy measure, federal funding for the U.S.  Merchant Marine
Academy should be cut by half.  The Academy should be given the
ability to charge tuition to cover a portion of its operations. 

GAO Comments
While implementing this recommendation might lead to budget savings,
we do not have sufficient information to evaluate the impact that
requiring students to pay part of their tuition would have on
enrollment.  In DOT16, NPR recommended that an independent commission
be established to review the U.S.  maritime industry.  The future of
the Academy could well depend on the outcome of the commission's
review.  Consequently, it may be premature to decide on the
appropriate level of funding for the Academy until the commission's
study is completed. 


------------------------------------------------------- Chapter 20:4.4

DOT21:  Terminate Grant Funding for Federal Aviation Administration
Higher Education Programs
To reduce costs, eliminate federal grant funding of two FAA
post-secondary education programs. 

GAO Comments
We have not evaluated either of these programs, but we do have
several observations to make on the basis of the body of work we have
performed concerning FAA's workforce.  We have testified that the
Office of Personnel Management's register includes over 25,000 people
qualified to seek employment as air traffic controllers.  This large
backlog, and the administration's decision to allow controllers fired
during the strike to compete for employment, should be considered in
determining whether the Collegiate Training Initiative Program for
air traffic controllers should be retained.  If Congress decides to
terminate this program, it should consider using a phased approach to
minimize the impact on the students involved. 

Regarding the Airways Science Curriculum Program, the stated purpose
of the program is to develop a base of aviation technicians and
managers for FAA and for the aviation industry.  While a recent
report by DOT's Inspector General found that the program offered
little benefit to FAA, we have not conducted a review to determine
whether there is a continuing need for this program or how the
program affects the aviation industry. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 20:5

Although the NPR report covers many of the major issues affecting
DOT, it does not address five transportation issues that, in our
opinion, warrant attention.  These issues include the following: 

  DOT needs to ensure that the nation's air travelers receive the
     benefits of deregulation from a highly competitive and
     financially healthy airline industry. 

  DOT needs to address the future of passenger rail in the United
     States, including Amtrak's financial viability and operating
     efficiency as well as the benefits and costs of high-speed rail
     in selected corridors. 

  FAA does not have an effective system for monitoring inspection
     findings and ensuring that airlines take appropriate corrective
     actions.  We have made recommendations to help correct these
     weaknesses and long-standing problems in FAA's Safety Indicators
     Program, including unreliable data and limited user involvement
     in designing the data collection and analysis system.  DOT's
     Office of Inspector General has also identified significant
     weaknesses in FAA's inspection program.  Similarly, we have
     reported that FRA could enhance its enforcement programs by more
     expeditiously settling civil penalty cases. 

  FAA's approach to airport development needs to be strengthened by
     allocating the limited funds in the Airport Improvement Program
     to projects that best achieve national goals, such as reducing
     flight delays and increasing airport capacity, while at the same
     time preserving environmental quality.  In order to compare the
     ability of competing projects to achieve such goals, FAA needs
     to collect better data and improve analytical methods. 

  DOT has consolidated 14 separate accounting systems into a single
     departmental Accounting and Financial Information System.  To
     realize the full potential of the system and strengthen its
     value as a management tool, DOT needs to develop a plan that
     contains clear objectives, resource estimates, and timetables. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 20:6

Transportation Issues (GAO/OCG-93-14TR, Dec.  1992) relates to the
overall summary, most of NPR's recommendations, and additional areas
of GAO concern. 

Department of Transportation:  Enhancing Policy and Program
Effectiveness Through Improved Management (GAO/RCED-87-3, Apr.  13,
1987) assessed DOT's management, analyzed problems and determined
their underlying causes, and recommended actions to improve
operations.  Therefore, it relates to NPR's recommendations for DOT
in general. 

Aviation Safety:  Progress on FAA Safety Indicator Program Slow and
Challenges Remain (GAO/IMTEC-92-57, Aug.  31, 1992) relates to DOT01
and DOT14. 

Railroad Safety:  Weaknesses Exist in FRA's Enforcement Program
(GAO/RCED-91-72, Mar.  22, 1991) relates to DOT02. 

Financial Management:  Internal Control Weaknesses in FRA's Civil
Penalty Program (GAO/RCED-91-47, Dec.  26, 1990) relates to DOT02. 

Transportation Infrastructure:  Urban Transportation Planning Can
Better Address Modal Trade-offs (GAO/RCED-92-112, Apr.  2, 1992)
relates to DOT03. 

Aviation Safety:  Unresolved Issues Involving U.S.-Registered
Aircraft (GAO/RCED-93-135, June 18, 1993) relates to DOT08. 

Aviation Certification:  Limited Progress on Developing International
Design Standards (GAO/RCED-92-179, Aug.  20, 1992) relates to DOT08. 

Aircraft Maintenance:  Additional FAA Oversight Needed of Aging
Aircraft Repairs (Vols.  I and II) (GAO/RCED-91-91A and B, May 24,
1991) relates to DOT08. 

FAA Budget:  Important Challenges Affecting Aviation Safety,
Capacity, and Efficiency (GAO/T-RCED-93-33, Apr.  26, 1993) relates
to DOT09, DOT21, and DOT22. 

Aviation Research:  Actions to Enhance the Effectiveness of FAA's
Research Activities (GAO/T-RCED-93-40, May 20, 1993) relates to
DOT12. 

Urban Transportation:  Reducing Vehicle Emissions With Transportation
Control Measures (GAO/RCED-93-169, Aug.  3, 1993) relates to DOT13. 

Transportation Safety:  Information Strategy Needed for Hazardous
Materials (GAO/IMTEC-91-50, Sept.  25, 1991) relates to DOT14. 

FAA Information Resources:  Agency Needs to Correct Widespread
Deficiencies (GAO/IMTEC-91-43, June 18, 1991) relates to DOT14. 

Coast Guard:  Strategic Focus Needed to Improve Information Resources
Management (GAO/IMTEC-90-32, Apr.  24, 1990) relates to DOT14. 

Surface Transportation:  Budget Issues and Optimizing Investment
Returns (GAO/T-RCED-93-29, Apr.  22, 1993) relates to DOT17. 

Highway Demonstration Projects:  Improved Selection and Funding
Controls Are Needed (GAO/RCED-91-146, May 28, 1991) relates to DOT17. 

High-Risk Series:  Federal Transit Administration Grant Management
(GAO/HR-93-16, Dec.  1992) relates to DOT19. 

Airport Improvement Program:  Opportunity to Consider FAA's Role in
Meeting Airport System Needs (GAO/T-RCED-93-43, May 26, 1993) relates
to DOT20 and additional areas of GAO concern. 

FAA Reauthorization:  Opportunity Exists to Address Safety, Capacity,
and Efficiency Issues (GAO/T-RCED-93-75, Sept.  28, 1993) relates to
DOT21. 

Railroad Safety:  New Approach Needed for Effective FRA Safety
Inspection Program (GAO/RCED-90-194, July 31, 1990) relates to DOT22. 

Pipeline Safety:  New Risk Assessment Program Could Help Evaluate
Inspection Cycle (GAO/RCED-89-107, Mar.  7, 1989) relates to DOT22. 

Transportation Infrastructure:  Preserving the Nation's Investment in
the Interstate Highway System (GAO/RCED-91-147, Aug.  2, 1991)
relates to DOT23. 

Airspace System:  Emerging Technologies May Offer Alternative to the
Instrument Landing System (GAO/RCED-93-33, Nov.  13, 1992) relates to
additional areas of GAO concern. 


DEPARTMENT OF THE
TREASURY/RESOLUTION TRUST
CORPORATION (TRE)
=========================================================== Chapter 21


      OVERALL SUMMARY
------------------------------------------------------- Chapter 21:0.1

We have issued many reports and testified many times in the past few
years on major management issues facing the Department of the
Treasury and the Resolution Trust Corporation (RTC)--issues like
modernization of the Internal Revenue Service's antiquated systems
and work processes, development of a strategic management process in
Customs, better agency coordination, enhanced tax compliance, and
improved asset management.  Many of the NPR recommendations are
consistent, at least in concept, with positions we have taken in
those products.  Our agreement with some of the recommendations is
tempered, however, by a lack of sufficient information as to the
specific changes being proposed. 

NPR has correctly articulated, as one of its key principles, the need
to put customers first.  One important customer service issue that
seems to have been overlooked by NPR, however, is the problem
taxpayers have in reaching IRS over the telephone.  IRS' performance
in this area is poor and is getting worse. 


         GAO CONTACT
----------------------------------------------------- Chapter 21:0.1.1

Jennie S.  Stathis, Director, Tax Policy and Administration Issues,
General Government Division, (202) 512-5407. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 21:1

TRE02:  Improve Border Management
Federal border management should be significantly improved.  NPR
recommends a series of actions to be taken by Customs and INS to make
these improvements. 

GAO Comments
Customs and INS have a long history of interagency rivalry, poor
coordination, and ineffective cooperation despite sharing
responsibility for primary inspections at land border ports of entry. 
We have recommended that OMB, working with Treasury and Justice,
develop a proposal for ending the dual management of border
inspections. 


------------------------------------------------------- Chapter 21:1.1

TRE03:  Redirect and Better Coordinate Resources Dedicated to the
Interdiction of Drugs
This recommendation outlines changes that can be made to better
coordinate federal programs directed at the air interdiction of
drugs. 

GAO Comments
We agree.  Given worldwide drug production capacity, domestic demand,
and the resourcefulness of drug smugglers to adapt to U.S. 
enforcement initiatives, the overall availability of drugs in this
country has not been diminished despite substantial increases in air
interdiction efforts and related drug seizures.  The commitment of
resources should not be made without considering the potential
effectiveness of alternative efforts, both supply and demand, and
should be based on achieving measurable goals.  Also, to better
coordinate agency efforts, improvements in information system
interoperability, data integrity, security, and overall intelligence
information management are needed. 


------------------------------------------------------- Chapter 21:1.2

TRE04:  Foster Federal-State Cooperative Initiatives by the IRS
Cooperative relationships between the IRS and state tax
administrations, including joint filing of data, should improve
taxpayer service as well as collection activity while reducing costs. 

GAO Comments
We fully support such relationships and have recommended that IRS
identify and implement ways to increase cooperation with state
governments in collecting delinquent taxes.  We have also noted the
growing cooperation between IRS and states in the joint electronic
filing of income tax returns. 


------------------------------------------------------- Chapter 21:1.3

TRE09:  Modernize the IRS
The IRS Tax System Modernization (TSM) initiative, currently in its
initial stages, would ease taxpayer burdens due to manual return
processing and inaccessible information, and enable IRS to provide a
level of service comparable to private sector financial institutions. 

GAO Comments
We fully support the need to modernize IRS and have been active in
monitoring IRS' efforts to ensure that appropriate steps are taken to
bring this major effort to fruition and to take full advantage of the
opportunities afforded by the new technology. 


------------------------------------------------------- Chapter 21:1.4

TRE10:  Modernize the U.S.  Customs Service
NPR recommends a number of changes in Customs' organization and
management processes to provide an improved management structure and
strategic vision. 

GAO Comments
We agree.  Customs cannot adequately ensure that it is meeting its
responsibilities to combat unfair foreign trade practices or protect
the public from unsafe goods.  We have recommended that Customs
institute a strategic management process that defines a clear trade
enforcement strategy, sets mission priorities, establishes
performance objectives, and monitors progress toward achieving them. 
We also recommended the adoption of an organizational structure that
more adequately supports the achievement of Customs' trade
enforcement mission.  Customs is taking action on these
recommendations. 


------------------------------------------------------- Chapter 21:1.5

TRE11:  Ensure the Efficient Merger of Resolution Trust Corporation
into the FDIC
The merger of the RTC and the FDIC should ensure the transfer of RTC
expertise not currently held by the FDIC in order to provide the most
efficient administration of these asset-disposition functions. 

GAO Comments
We agree with this recommendation.  The merger of RTC with FDIC
offers the opportunity to combine the expertise of these
organizations and improve the efficiency of asset management and
disposition activities.  We believe that FDIC can benefit from RTC's
experiences--both positive and negative--in developing systems and
procedures for asset marketing and disposition, information
management, contracting, and affordable housing.  As the transition
progresses, RTC and FDIC should keep Congress informed so that
changes in operations are responsive to congressional concerns.  Key
decisions about strategies, staffing, and organization should be
objective and based on careful analysis. 


------------------------------------------------------- Chapter 21:1.6

TRE16:  Improve Agency Compliance with Employment Tax Reporting
Requirements
Many federal agencies do not fully comply with federal tax reporting
requirements.  Responsibilities for compliance should be more fully
communicated and enforced. 

GAO Comments
We agree that attention needs to be given to federal agency
compliance with employment tax reporting requirements.  We first
reported on this problem in April 1991 and followed with a February
1992 update that showed compliance problems continuing. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 21:2

TRE01:  Improve the Coordination and Structure of Federal Law
Enforcement Agencies
NPR recommends the designation of the Attorney General as the
Director of Law Enforcement to coordinate federal law enforcement
efforts.  It also recommends changes in the alignment of federal law
enforcement responsibilities. 

GAO Comments
We support the need for greater coordination of the numerous agencies
involved in federal law enforcement.  The decentralized operations,
including the 94 U.S.  Attorneys and the various investigative
agencies within Justice and Treasury, complicate efforts by the
Department of Justice to coordinate and direct a wide variety of
initiatives and programs to fight crime.  We have not taken a
position as to whether the various law enforcement agencies should be
consolidated into one or more agencies. 


------------------------------------------------------- Chapter 21:2.1

TRE05:  Simplify Employer Wage Reporting
The administrative burden caused by our current employer
wage-reporting requirements could be reduced while maintaining or
improving the effectiveness of government operations by developing
and implementing a simplified wage reporting system. 

GAO Comments
We agree that there are problems with the current wage reporting
requirements and fully support attempts to simplify.  We would need
to know more, however, about the particulars.  In 1989, we reported
on our assessment of three possible alternatives to the current
system including one that involved establishing a single point to
receive and process wage data for IRS, SSA, and the states.  We
concluded that although there were advantages to each alternative,
none were compelling enough to warrant a change to the existing
process in the near term. 


------------------------------------------------------- Chapter 21:2.2

TRE06:  Establish Federal Firearms License User Fees to Cover Costs
The current fee for a retail dealer's firearms license (authorized in
1968) does not cover the cost of license processing and is low enough
to encourage applications from individuals wishing to occasionally
purchase firearms at reduced cost.  Increased fees would recover the
cost of operating the firearms program. 

GAO Comments
Although we have not completed a detailed review of firearms
licensing fees, we believe, as a matter of principle, that licensing
fees should be set (and periodically adjusted) to recover the costs
of related government services.  This would include making decisions
on such issues as (1) the extent to which compliance inspection costs
should be recovered and (2) whether all categories of related fees,
e.g., license fees for firearms manufacturers, importers and
pawnbrokers, should be adjusted.  The extent to which these issues
have been addressed by NPR is unclear at this time. 


------------------------------------------------------- Chapter 21:2.3

TRE07:  Improve the Management of Federal Assets Targeted for
Disposition
Improvements are needed in the methods by which the federal
government disposes of various assets. 

GAO Comments
We have assessed the asset disposition activities of selected
agencies--General Services Administration, Resolution Trust
Corporation, Customs Service, Marshals Service, and Internal Revenue
Service--and have identified the need for improvements by these
agencies.  We have also initiated work to evaluate asset disposition
practices on a governmentwide basis, but as yet do not have enough
information to comment on the recommendation from this broader
perspective. 


------------------------------------------------------- Chapter 21:2.4

TRE08:  Reduce the Duplication of Drug Intelligence Systems and
Improve Computer Security
NPR recommends several changes to eliminate duplication in the
federal drug intelligence system. 

GAO Comments
We agree in principle but are uncertain as to the specifics of the
recommendation.  Fragmentation and duplication in the intelligence
area are an outgrowth of the overlap in responsibilities among the
numerous law enforcement and defense agencies involved in countering
drug-trafficking activities.  We have also reported on inadequate
physical and operational controls over computer security, absence of
contingency plans, and lack of computer security training.  We
believe that strong leadership, such as by the Office of National
Drug Control Policy (the office responsible for overseeing the
implementation of national drug policies) is a key factor in
streamlining the intelligence effort without compromising security. 


------------------------------------------------------- Chapter 21:2.5

TRE13:  Streamline Background Investigations for Federal Employees
The current method of completing background examinations of federal
employees is time-consuming and inefficient.  This recommendation
outlines improvements to streamline the process without sacrificing
thoroughness. 

GAO Comments
We have not specifically reviewed this issue with respect to Treasury
employees.  But, given our past work at other agencies, we endorse
the concept of streamlining background investigations provided that
thoroughness is not jeopardized, particularly with respect to the
investigation of employees for sensitive positions such as those in
law enforcement. 


------------------------------------------------------- Chapter 21:2.6

TRE15:  Increase IRS Collections Through Better Compliance Efforts
NPR supports the current efforts of the IRS under Compliance 2000 to
improve voluntary compliance and other efforts to collect taxes
already owed to the federal government. 

GAO Comments
We have long been on record as supporting the need for improved
compliance efforts.  While supporting Compliance 2000 in concept, we
have not fully endorsed IRS' implementation of that concept.  It is
also not clear what, if anything, NPR is recommending beyond what IRS
is already doing. 


------------------------------------------------------- Chapter 21:2.7

TRE17:  Authorize Federal Tax Payment by Credit Card
Legislation should be enacted to allow certain taxpayers to make tax
payments with a credit card. 

GAO Comments
We support the general recommendation of payment of taxes by credit
card.  However, we have identified several issues that need to be
addressed before this recommendation could be implemented.  For
example, how would federal taxes paid with a credit card be treated
in bankruptcy proceedings?  Under current law, federal taxes are
generally not dischargeable in bankruptcy.  However, consumer
indebtedness owed on credit cards is subject to discharge in
bankruptcy proceedings. 


------------------------------------------------------- Chapter 21:2.8

TRE19:  Repeal Section 5010 of the Internal Revenue Code to Eliminate
Tax Credits for Wine and Flavors
The wine and flavors tax credit should be repealed. 

GAO Comments
We agree that section 5010 should be repealed, and we so recommended
in a September 1990 report.  Our recommendation, however, was
predicated on Congress first taking steps to standardize alcohol
excise tax rates across products on the basis of the percentage of
alcohol in a beverage regardless of the mix of ingredients.  Our
analysis had indicated that differing rates had originally prompted
Congress to enact the credit.  It is unclear whether NPR's
recommendation anticipates the standardization of rates. 


------------------------------------------------------- Chapter 21:2.9

TRE20:  Amend or Repeal Section 5121 of the Internal Revenue Code
Requiring Special Occupational Taxes on Retail Alcohol Dealers
This recommendation would increase federal income from alcohol
dealers. 

GAO Comments
We agree that Congress needs to consider changing the special
occupational tax provisions.  As we reported in September 1990, those
taxes, primarily paid by alcohol retailers, are difficult to collect
and administer.  We suggested two alternatives:  (1) eliminating the
special occupational taxes and offsetting the revenue loss through a
slight increase in existing excise taxes or (2) keeping the special
occupational taxes but collecting them only from alcohol producers
and importers and varying the tax on the basis of the size of the
facility.  We are unclear as to the specifics behind NPR's
recommendation. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 21:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 21:4

TRE12:  Reduce the Duplication of Law Enforcement Training Facilities
Overlap and duplication in the provision of federal law enforcement
training facilities should be examined.  Multi-agency training needs
should be accommodated through existing facilities in lieu of the
construction of new facilities by individual agencies. 

GAO Comments
Although we have not studied this issue, this is an area where we
would agree that further examination could prove worthwhile.  Law
enforcement agencies, while having unique missions that require
individualized training, frequently have overlapping jurisdictions
and perform functions that require similar or identical knowledge and
skills. 


------------------------------------------------------- Chapter 21:4.1

TRE14:  Adjust Civil Monetary Penalties to the Inflation Index
Civil monetary penalties have not been adjusted to keep up with
inflation.  Under this recommendation, a "catch-up" adjustment would
be made and the need for additional inflation adjustments would be
automatically reassessed by the government every four years. 

GAO Comments
At this time we have insufficient information to assess the basis for
or desirability of this recommendation.  Our work on civil debt and
criminal fines indicates that a major problem is collecting the
criminal and civil fines and penalties now imposed.  Recent Justice
estimates indicate that the total amount of unpaid criminal debt
exceeded $1.6 billion, and the balance continues to grow. 


------------------------------------------------------- Chapter 21:4.2

TRE18:  Modernize the Financial Management Systems
NPR recommends several changes to improve financial management with
Treasury, including consolidation of some operations, the improved
use of technology, and other actions. 

GAO Comments
We have an extensive body of work that supports the need for and
recommends the modernization of financial management systems.  We do
not know what specific changes the NPR is recommending for Treasury. 
However, along with improving technology, it is imperative that
efforts to improve financial management systems include systems and
control improvements that will enable the Treasury and its Bureaus to
prepare and report auditable financial information.  We recently
completed audits of the IRS and Customs-- two major Treasury
Bureaus--and neither was able to obtain an unqualified audit opinion. 
The financial management systems of these Bureaus were not designed
to generate important cost, revenue, and performance data.  Further,
these Bureaus' policies and procedures were not sufficiently
developed and implemented to ensure that correct data were processed. 
Lack of information impairs these agencies' ability to manage their
operations and protect their resources.  For example, IRS could not
readily determine how much of the delinquent taxes it had recorded
was legitimate receivables and how much was not.  These problems, if
not rectified, will render the modernization efforts virtually
useless because the result will be bad information processed faster. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 21:5

Chapter 2 of the NPR report, "Putting Customers First," appropriately
commends IRS for improving the accuracy of its toll-free telephone
service for taxpayers--up now to 89 percent.  At the same time,
however, taxpayers are having problems reaching IRS to ask their
questions.  During the first 3 months of the 1993 filing season, for
example, IRS received about 55 million calls, but IRS staff only
answered about 13 million.  The rest of the taxpayers either got busy
signals or were put on hold and hung up before an assistor got on the
line.  There is nothing in the NPR recommendations directed at
correcting this poor customer service.  We recently started a job to
review taxpayers' accessibility to IRS' toll-free telephone sites. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 21:6

Justice Issues (GAO/OCG-93-23TR, Dec.  1992) relates to TRE01. 

Bank and Thrift Criminal Fraud:  The Federal Commitment Could Be
Broadened (GAO/GGD-93-48, Jan.  8, 1993) relates to TRE01. 

Bank and Thrift Fraud:  Overview of the Federal Government's Response
(GAO/T-GGD-92-12, Feb.  6, 1992) relates to TRE01. 

Justice Department:  Coordination Between DEA and the FBI
(GAO/GGD-90-59, Mar.  21, 1990) relates to TRE01. 

War on Drugs:  Information Management Poses Formidable Challenges
(GAO/IMTEC-91-40, May 31, 1991) relates to TRE01, TRE03, and TRE08. 

Customs Service and INS:  Dual Management Structure for Border
Inspections Should Be Ended (GAO/GGD-93-111, June 30, 1993) relates
to TRE02. 

Drug Control:  Heavy Investment in Military Surveillance Is Not
Paying Off (GAO/NSIAD-93-220, Sept.  1, 1993) relates to TRE03. 

Drug Interdiction:  Funding Continues to Increase but Program
Effectiveness Is Unknown (GAO/GGD-91-10, Dec.  11, 1990) relates to
TRE03. 

Drug Control:  Anti-Drug Efforts in the Bahamas (GAO/GGD-90-42, Mar. 
8, 1990) relates to TRE03. 

Drug Smuggling:  Capabilities for Interdicting Private Aircraft Are
Limited and Costly (GAO/GGD-89-93, June 9, 1989) relates to TRE03. 

Tax Administration:  New Delinquent Tax Collection Methods for IRS
(GAO/GGD-93-67, May 11, 1993) relates to TRE 04, TRE 15, and TRE17. 

Tax Administration:  Opportunities to Increase the Use of Electronic
Filing (GAO/GGD-93-40, Jan.  22, 1993) relates to TRE04. 

Social Security:  Reconciliation Improved SSA Earnings Records, but
Efforts Were Incomplete (GAO/HRD-92-81, Sept.  1, 1992) relates to
TRE05. 

Social Security:  Alternative Wage-Reporting Processes
(GAO/HRD-90-35, Nov.  8, 1989) relates to TRE05. 

Asset Forfeiture Programs (GAO/HR-93-17, Dec.  1992) relates to
TRE07. 

Resolution Trust Corporation (GAO/HR-93-4, Dec.  1992) relates to
TRE07 and TRE11. 

Tax Administration:  IRS' Management of Seized Assets
(GAO/T-GGD-92-65, Sept.  24, 1992) relates to TRE07. 

Real Property Dispositions:  Flexibility Afforded Agencies to Meet
Disposition Objectives Varies (GAO/GGD-92-144FS, Sept.  18, 1992)
relates to TRE07. 

Asset Management:  Governmentwide Asset Disposition Activities
(GAO/GGD-91-139FS, Sept.  27, 1991) relates to TRE07. 

Drug Control:  Reauthorization of the Office of National Drug Control
Policy (GAO/T-GGD-94-7, Oct.  5, 1993) relates to TRE08. 

Drug Control:  Coordination of Intelligence Activities
(GAO/GGD-93-83BR, Apr.  2, 1993) relates to TRE08. 

Computer Security:  DEA's Handling of Sensitive Drug Enforcement and
National Security Information Is Inadequate (GAO/T-IMTEC-92-24, Sept. 
30, 1992) relates to TRE08. 

Drug Control:  Inadequate Guidance Results in Duplicate Intelligence
Production Efforts (GAO/NSIAD-92-153, Apr.  14, 1992) relates to
TRE08. 

Tax Administration:  Achieving Business and Technical Goals in Tax
Systems Modernization (GAO/T-GGD-93-24, Apr.  27, 1993) relates to
TRE09. 

Internal Revenue Service Issues (GAO/OCG-93-24TR, Dec.  1992) relates
to TRE09 and TRE15. 

Tax Systems Modernization:  Progress Mixed in Addressing Critical
Success Factors (GAO/T-IMTEC-92-13, Apr.  2, 1992) relates to TRE09. 

Tax Systems Modernization:  Issues Facing IRS (GAO/T-IMTEC-91-18,
July 9, 1991) relates to TRE09. 

Tax Systems Modernization:  Attention to Critical Issues Can Bring
Success (GAO/T-IMTEC-91-8, June 25, 1991) relates to TRE09. 

Customs Service:  Trade Enforcement Activities Impaired by Management
Problems (GAO/GGD-92-123, Sept.  24, 1992) relates to TRE10. 

Financial Management:  Customs Needs to Establish Adequate
Accountability and Control Over Its Resources (GAO/AFMD-92-30, Aug. 
25, 1992) relates to TRE10. 

RTC Performance Assessment (GAO/T-GGD-93-13, Mar.  18, 1993) relates
to TRE11. 

Employee Background Checks (GAO/GGD-93-62R, Sept.  2, 1993) relates
to TRE13. 

Nuclear Security:  DOE's Progress on Reducing Its Security Clearance
Work Load (GAO/RCED-93-183, Aug.  12, 1993) relates to TRE13. 

Personnel Security:  Efforts by DOD and DOE to Eliminate Duplicate
Background Investigations (GAO/RCED-93-23, May 10, 1993) relates to
TRE13. 

OPM Revolving Fund:  Benchmarking Could Aid OPM's Efforts to Improve
Customer Service (GAO/GGD-92-18, Jan.  21, 1992) relates to TRE13. 

National Fine Center:  Expectations High, but Development Behind
Schedule (GAO/GGD-93-95, Aug.  10, 1993) relates to TRE14. 

Program Fraud:  Implementation of the Program Fraud Civil Remedies
Act of 1986 (GAO/AFMD-91-73, Sept.  16, 1991) relates to TRE14. 

U.S.  Department of Justice:  Overview of Civil and Criminal Debt
Collection Efforts (GAO/T-GGD-90-62, July 31, 1990) relates to TRE14. 

Tax Administration:  Improving Staffing of IRS' Collection Function
Would Increase Productivity (GAO/GGD-93-97, May 5, 1993) relates to
TRE15. 

Internal Revenue Service Receivables (GAO/HR-93-13, Dec.  1992)
relates to TRE15. 

Tax Administration:  Compliance 2000--A Worthy Idea That Needs
Effective Implementation (GAO/T-GGD-92-48, June 3, 1992) relates to
TRE15. 

Tax Administration:  Federal Agency Tax Compliance Problems Remain;
Improvements Are Planned (GAO/GGD-92-29, Feb.  18, 1992) relates to
TRE16. 

Tax Administration:  Changes Are Needed to Improve Federal Agency Tax
Compliance (GAO/GGD-91-45, Apr.  16, 1991) relates to TRE16. 

Financial Management:  Additional Actions Needed to Improve Federal
Financial Management Systems (GAO/AFMD-90-14, Apr.  27, 1990) relates
to TRE18. 

Alcohol Excise Taxes:  Simplifying Rates Can Enhance Economic and
Administrative Efficiency (GAO/GGD-90-123, Sept.  27, 1990) relates
to TRE19 and TRE20. 


DEPARTMENT OF VETERANS AFFAIRS
(DVA)
=========================================================== Chapter 22


      OVERALL SUMMARY
------------------------------------------------------- Chapter 22:0.1

As discussed in our December 1992 transition series report on
Veterans Affairs Issues, the Department of Veterans Affairs (VA),
like other government entities, will have to operate its programs and
activities with increasingly constrained resources.  Nevertheless, VA
has numerous opportunities to operate more cost effectively, thereby
saving hundreds of millions of dollars while preserving or enhancing
the quality of services it provides to veterans.  Taking advantage of
such opportunities will be critically important if VA is to
successfully compete with private sector health plans under health
reform. 

Overall, we agree with the thrust of NPR's recommendations for
improvements in veterans' affairs programs.  However, the
recommendations often appear too vague and narrowly focused to
achieve significant cost savings.  And, while we agree with NPR's
desire to decentralize decisionmaking, we believe there needs to be
strong central office oversight to help ensure that problems are
identified and corrected.  As we stated in our transition series
report, identified quality of care and service-delivery problems
frequently go uncorrected because medical centers have too much
autonomy.  If VA is to take advantage of opportunities to improve its
cost effectiveness, it must substantially improve central office
efforts to ensure the timely implementation of policies to correct
identified problems while allowing field facilities flexibility in
designing corrective actions. 

Achieving real improvements in operational efficiency and service to
the public will require that VA (1) integrate the planning of its
three largely autonomous components into the Department's overall
strategic management; (2) develop a more forward-looking, proactive
approach to human resource management; (3) integrate its information
systems; and (4) strengthen financial management. 


         GAO CONTACT
----------------------------------------------------- Chapter 22:0.1.1

David P.  Baine, Director, Federal Health Care Delivery Issues, Human
Resources Division, (202) 512-7101. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 22:1

DVA01:  Develop the Master Veteran Record and Modernize the
Department's Information Infrastructure
Creation of a master veteran record for all VA programs and
improvements in the department's information technology will improve
services to veterans and their families. 

GAO Comments
We strongly support this recommendation and were instrumental in
getting OMB and VA to establish a formal agreement articulating
specific service improvement goals in part through the use of
automation.  The agreement included the creation of a master veteran
record. 


------------------------------------------------------- Chapter 22:1.1

DVA02:  Modernize Benefits Claims Processing
Modernization of the VA benefits claims processing system will
improve the quality of service and save taxpayer dollars over time. 

GAO Comments
We fully support efforts to modernize benefits claims processing. 
VA, based on our recommendations, is currently analyzing its business
practices as one of the initial steps in reengineering benefits
claims processing. 


------------------------------------------------------- Chapter 22:1.2

DVA06:  Enhance VA Cost Recovery Capabilities
Revise VA policy to use a portion of cost recovery funds to defray
debt collection costs and expand recoveries to save money. 

GAO Comments
We support actions to allow VA to use a portion of recovery funds to
defray debt collection costs; such action, however, has already been
taken and no further revisions are needed.  NPR's recommendation does
not address many other important aspects of cost recovery, such as
income verification and establishing billing rates.  Improvements in
these functions could result in millions of dollars in additional
billings and collections. 


------------------------------------------------------- Chapter 22:1.3

DVA10:  Serve Veterans and Their Families as Customers
This recommendation outlines several approaches for VA to improve its
focus on veterans and their families as customers. 

GAO Comments
We strongly support actions to implement this recommendation.  NPR
mentions plans to outline suggested approaches, but details on those
approaches are not available at this time.  We have issued numerous
reports detailing problems in service delivery and quality assurance
both for the health and benefits programs and have recommended
specific actions to improve services, including restructuring VA's
ambulatory care delivery system. 


------------------------------------------------------- Chapter 22:1.4

DVA12:  Improve Business Practices through Electronic Commerce
VA should expand its use of electronic media to reduce paperwork and
save money.  It should seek to make greater use of electronic funds
transfer of compensation and pension benefits. 

GAO Comments
We strongly agree that electronic fund transfers can improve the
accuracy of payments and cut administrative costs, even though we
have not done any work looking specifically at electronic fund
transfers for payment of VA compensation and pension benefits.  We
have long supported the use of electronic funds transfers to pay
Social Security benefits and use such transfers for our own payroll. 


------------------------------------------------------- Chapter 22:1.5

DVA13:  Eliminate "Sunset" Dates in the Omnibus Budget Reconciliation
Act of 1990
To achieve cost savings, extend certain cost savings measures that
are due to expire in 1998. 

GAO Comments
We strongly support the elimination of "sunset" dates.  Establishing
sunset dates gives the illusion of additional cost savings when the
measures are reauthorized.  Our prior work has been instrumental in
getting sunset provisions extended with respect to using VA, IRS, and
SSA records to verify veterans' reported incomes for VA health care
and pension benefits determinations. 

Equally important, however, is prompt implementation of cost saving
measures once they are enacted.  As we point out in our 1992
transition series report, slow implementation of legislative
initiatives cost VA an estimated $120 million in co-payment revenues
from veterans who underreported their incomes to VA.  Although the
Omnibus Budget Reconciliation Act of 1990 extended the sunset date
another 5 years, no savings will occur unless VA implements the
policies for using tax records to verify veterans' reported incomes. 


------------------------------------------------------- Chapter 22:1.6

DVA15:  Restructure the Veterans Affairs' Health Care System
VA should reexamine its role and delivery structure after the
issuance of the report of the President's National Health Care Reform
Task Force and take actions to restructure the VA health care system. 

GAO Comments
We strongly agree that restructuring of the veterans' health care
system is needed with or without national health reform.  NPR's
recommendation, however, lacks specificity and VA is already
reexamining its role.  Through a series of completed and ongoing
assignments, we are assessing the reasonableness of VA's plans.  As
discussed in our transition series report, we believe Congress should
consider limiting construction of additional VA acute care capacity
until the reformed health care system takes shape and VA's role in
that system is defined. 


------------------------------------------------------- Chapter 22:1.7

DVA16:  Recover Administrative Costs of Veterans' Insurance Program
from Premiums and Dividends
VA should be permitted to recover certain insurance program costs
from insurance trust fund surpluses. 

GAO Comments
We strongly support this position and recommended such action in a
March 1992 report.  VA has proposed legislation to amend title 38 of
the U.S.  Code to allow administrative costs for three programs to be
paid from insurance trust fund earnings.  Five year savings would be
about $150 million and would cost the average policyholder about $11
a year in reduced dividends. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 22:2

DVA03:  Eliminate Legislative Budget Constraints to Promote
Management Effectiveness
VA is covered by a number of special legislative requirements,
including employment "floors" for certain programs.  Reducing or
eliminating some of these controls can reduce costs and improve
service without sacrificing accountability. 

GAO Comments
We generally agree with the thrust of this recommendation and are
currently assessing some of the legislative barriers that could
hinder VA's ability to compete with private sector health plans under
the President's health reform proposal.  In addition, our office and
OMB have, for years, been required to certify, each time an
appropriation bill or continuing resolution is enacted, that funds
and personnel have been properly released to VA. 


------------------------------------------------------- Chapter 22:2.1

DVA04:  Streamline Benefits Claims Processing
VA should examine the usefulness of a New York Regional Office
approach to benefits claims processing that promises to streamline
the process.  It should also examine regional staffing. 

GAO Comments
We agree that benefit claims processing should be streamlined and are
currently examining innovative ways to reduce claims backlogs and
improve timeliness.  As part of that review, we will assess the
effectiveness of the New York Regional Office project. 


------------------------------------------------------- Chapter 22:2.2

DVA08:  Decentralize Decisionmaking Authority to Promote Management
Effectiveness
NPR recommends that VA headquarters and field management work
together to improve agency decisionmaking, including the delegation
of some decisionmaking to field activity directors. 

GAO Comments
We agree that decisionmaking can often be decentralized, but have
repeatedly found problems in VA's efforts to implement legislative
and administrative policies because too much autonomy was given to
medical centers.  VA currently operates a decentralized medical care
system and the VA central office is reluctant to direct field
facilities to take action to correct operational problems.  While we
agree, in theory, with delegating decisionmaking to field staff, our
transition series report documents repeated problems in correcting
operational problems and implementing legislative initiatives because
field facilities were given too much autonomy and were not held
accountable for taking corrective actions.  There needs to be a
balance between giving field facilities increased flexibility in
designing corrective actions and implementing policies and central
office oversight to ensure that those actions are adequate and
consistent with overall VA policies. 


------------------------------------------------------- Chapter 22:2.3

DVA09:  Establish a Comprehensive Resource Allocation Program
VA should design and develop a comprehensive, departmentwide,
performance and needs-based resource allocation program to replace
current approaches. 

GAO Comments
We agree with the need for a comprehensive resource allocation
program, particularly for the health care system.  We have issued
several reports on problems in VA's former resource allocation method
for its medical centers and on the inequities in access to VA medical
benefits that result from the lack of an effective resource
allocation method. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 22:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 22:4

DVA05:  Consolidate Department of Defense and Department of Veterans
Affairs Compensation and Retired Pay Programs
DOD and VA should create a task force to jointly examine their
disability compensation adjudication and disbursement processes. 

GAO Comments
It is not clear from NPR's recommendation what efficiencies would be
attained by combining these two apparently disparate programs.  For
example, is NPR suggesting that the DOD program governing disability
retirement be combined with the VA compensation program or that the
broader DOD program covering all DOD retirement pay be combined with
the VA compensation program. 


------------------------------------------------------- Chapter 22:4.1

DVA07:  Establish a Working Capital Fund
This recommendation would allow creation of a working capital fund
using existing resources in the department to be used for certain
selected needs. 

GAO Comments
We supported the establishment of VA's existing working reserve fund
for the major construction program.  The current NPR recommendation,
however, provides insufficient information on what other working
capital funds would be established or how the proposed funds would be
used. 


------------------------------------------------------- Chapter 22:4.2

DVA11:  Phase-Out and Close Supply Depots
VA should convert its existing centralized depot storage and
distribution program to a commercial just-in-time delivery system and
close unneeded supply depots. 

GAO Comments
While we have not done any work specifically addressing this
recommendation, we note that VA is already in the process of
implementing the recommendation. 


------------------------------------------------------- Chapter 22:4.3

DVA14:  Raise the Fees for Veterans Affairs' Guaranteed Home Loans
As a cost savings measure, loan fees on veterans loans should be
raised above the levels set in the Omnibus Budget Reconciliation Act
of 1994. 

GAO Comments
We have not done work directly relevant to this recommendation but
have generally supported user fees.  It should be noted, however,
that increasing loan fees is a policy option not a performance
improvement action. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 22:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 22:6

Veterans Affairs Issues (GAO/OCG-93-21TR, Dec.  1992) relates to the
overall summary, DVA06, DVA08, DVA10, DVA13, and DVA15. 

Veterans Benefits:  Redirected Modernization Shows Promise (draft
report) relates to DVA01, DVA02, DVA10, and DVA12. 

Veterans Benefits:  Acquisition of Information Resources for
Modernization is Premature (GAO/IMTEC-93-6, Nov.  4, 1992) relates to
DVA01, DVA02, DVA10, and DVA12. 

Veterans Affairs IRM:  Stronger Role Needed for Chief Information
Resources Officer (GAO/IMTEC-91-51BR, July 24, 1991) relates to
DVA01. 

VA Health Care Cost Recoveries (GAO/T-HRD-90-40, June 20, 1990)
relates to DVA06. 

VA Health Care:  Better Procedures Needed to Maximize Collections
From Health Insurers (GAO/HRD-90-64, Apr.  6, 1990) relates to DVA06. 

VA Health Care:  Medical Centers Need to Improve Collection of
Veterans' Copayments (GAO/HRD-90-77, Mar.  28, 1990) relates to
DVA06. 

VA Health Care:  Verifying Veterans' Reported Income Could Generate
Millions in Copayment Revenues (GAO/HRD-92-141, Sept.  15, 1992)
relates to DVA06 and DVA13. 

VA Health Care:  Copayment Exemption Procedures Should Be Improved
(GAO/HRD-92-77, June 24, 1992) relates to DVA06. 

VA Health Care:  Offsetting Long-Term Care Costs By Adopting State
Copayment Practices (GAO/HRD-92-96, Aug.  12, 1992) relates to DVA06. 

Veterans Benefits:  Improved Management Needed to Reduce Waiting Time
for Appeal Decisions (GAO/HRD-90-62, May 25, 1990) relates to DVA08. 

VA Health Care:  Problems in Implementing Locality Pay for Nurses Not
Fully Addressed (GAO/HRD-93-54, May 21, 1993) relates to DVA08. 

VA Health Care:  Medical Centers Are Not Correcting Identified
Quality Assurance Problems (GAO/HRD-93-20, Dec.  30, 1992) relates to
DVA08. 

VA Health Care for Women:  Despite Progress, Improvements Needed
(GAO/HRD-92-23, Jan.  23, 1992) relates to DVA08 and DVA10. 

VA Health Care:  Role of the Chief of Nursing Service Should Be
Elevated (GAO/HRD-92-74, Aug.  4, 1992) relates to DVA08. 

VA Health Care:  Efforts to Improve Pharmacies Controls Over
Addictive Drugs (GAO/T-HRD-92-38, June 10, 1992) relates to DVA08. 

VA Health Care:  Inadequate Controls Over Addictive Drugs
(GAO/HRD-91-101, June 19, 1991) relates to DVA08. 

VA Health Care:  Resource Allocation Methodology Has Had Little
Impact on Medical Center Budgets (GAO/HRD-89-93, Aug.  18, 1989)
relates to DVA09. 

VA Health Care:  Veterans' Efforts to Obtain Outpatient Care From
Alternative Sources (GAO/HRD-93-123, July 14, 1993) relates to DVA10. 

VA Health Care:  Variabilities in Outpatient Care Eligibility and
Rationing Decisions (GAO/HRD-93-106, July 16, 1993) relates to DVA10. 

VA Health Care:  Telephone Service Should Be More Accessible to
Patients (GAO/HRD-91-110, July 31, 1991) relates to DVA10. 

VA Health Care:  VA Plans Will Delay Establishment of Hawaii Medical
Center (GAO/HRD-92-41, Feb.  25, 1992) relates to DVA10 and DVA15. 

VA Health Care:  The Quality of Health Care Provided By Some VA
Psychiatric Hospitals Is Inadequate (GAO/HRD-92-17, Apr.  22, 1992)
relates to DVA10. 

VA Health Care:  Closure and Replacement of the Medical Center in
Martinez, California (GAO/HRD-93-15, Dec.  1, 1992) relates to DVA10. 

Veterans' Benefits:  Availability of Benefits in American Samoa
(GAO/HRD-93-16, Nov.  18, 1992) relates to DVA10. 

Veterans Disability:  Information From Military May Help VA Assess
Claims Related to Secret Tests (GAO/NSIAD-93-89, Feb.  18, 1993)
relates to DVA10. 

Veterans' Affairs:  Establishing Patient Smoking Areas at VA Medical
Centers (GAO/HRD-93-104, May 3, 1993) relates to DVA10. 

Veterans' Benefits:  Millions in Savings Possible From VA's Matching
Program With IRS and SSA (GAO/HRD-92-37, Dec.  23, 1991) relates to
DVA13. 

VA Health Care:  Potential Effects of Health Care Reforms on VA's
Major Construction Program (GAO/T-HRD-93-19, May 6, 1993) relates to
DVA15. 

Veterans' Benefits:  Savings Possible From Reducing Pensions to
Medicaid-Supported Nursing Home Residents (GAO/HRD-92-32, Dec.  27,
1991) relates to DVA13. 

Veterans' Health Care:  Potential Effects of Health Financing Reforms
on Demand for VA Services (GAO/T-HRD-93-12, Mar.  31, 1993) relates
to DVA15. 

Veterans' Health Care:  Potential Effects of Health Reforms on VA
Construction (GAO/T-HRD-93-7, Mar.  3, 1993) relates to DVA15. 

VA Health Care:  Demonstration Project Concerning Future Structure of
Veterans' Health Program (GAO/T-HRD-92-53, Aug.  11, 1992) relates to
DVA15. 

VA Health Care:  Alternative Health Insurance Reduces Demand For VA
Health Care (GAO/HRD-92-79, June 30, 1992) relates to DVA15. 

VA Life Insurance:  Administrative Costs for Three Programs Should Be
Paid From Excess Funds (GAO/HRD-92-42, Mar.  10, 1992) relates to
DVA16. 

VA Health Care:  Restructuring Ambulatory Care System Would Improve
Services to Veterans (GAO/HRD-94-4, Oct.  15, 1993) relates to DVA10. 

Veterans Affairs:  Service Delays at VA Outpatient Facilities
(GAO/T-HRD-94-5, Oct.  27, 1993) relates to DVA09 and DVA10. 


CREATING QUALITY LEADERSHIP AND
MANAGEMENT (QUAL)
=========================================================== Chapter 23


      OVERALL SUMMARY
------------------------------------------------------- Chapter 23:0.1

Our December 1992 transition series report on Government Management
Issues discussed many of the elements essential for a successful
organization that are not present in the management of federal
programs.  Most agencies have not created a strategic vision of their
futures, most lack good systems to collect and use financial and
program information to gauge operational success and accountability,
and many do not have the people with the necessary skills to
accomplish their missions.  Agencies' lack of attention to these
elements has made many programs targets for waste, inefficiency, and
even scandal.  The lack of focus on quality and program results has
contributed to creating the perception held by Congress and the
public that our federal institutions are not working well. 

Overall, most of the NPR recommendations are consistent with the
thrust of improvement actions we have supported.  We agree that
improved communication between executive branch officials, members of
Congress and their staff on program management issues is needed. 
Further, we support the roles played by presidential councils in
facilitating past management reform efforts and believe that moving
the federal government in the direction of leading and managing for
quality and results will require qualified senior leadership
committed to making continuous quality improvements in their
agencies. 


         GAO CONTACT
----------------------------------------------------- Chapter 23:0.1.1

William M.  Hunt, Director, Federal Management Issues, General
Government Division, (202) 512-8676. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 23:1

QUAL04:  Improve Legislative-Executive Branch Relationship
Improve communications between the executive branch, members of
Congress, and congressional staff on key issues during and after
program and policy development and implementation.  Develop an
agreed-upon approach for dealing with management failures, crises,
and chronic program difficulties. 

GAO Comments
We agree with the need to develop an approach for improving
communications between executive branch, members of Congress, and
congressional staff on program management issues.  On several
occasions, we have reported on how improved communication is needed
in setting agency and program goals and priorities as well as in
conducting oversight of agencies to ensure goals and priorities are
being met.  While we have not done any work evaluating specific
approaches for improving communications, we agree that any approach
chosen should be based on the agreement of all relevant parties. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 23:2

QUAL01:  Provide Improved Leadership and Management of the Executive
Branch
The President should define a vision for the management of the
government in the 21st century.  To act on this vision, he should
direct department and agency heads to designate chief operating
officers and he should establish a President's Management Council,
comprised of the chief operating officers, to oversee the
implementation of NPR's recommendations. 

GAO Comments
We have emphasized that achieving quality results in the federal
government must begin with a strategic vision of the future. 
Further, we have endorsed the roles played by the President's Council
on Management Improvement and the President's Council on Integrity
and Efficiency in helping implement management reform.  Without more
detailed information on the responsibilities of a new council,
however, it is unclear how a new council's role would differ from
those of the councils already established. 


------------------------------------------------------- Chapter 23:2.1

QUAL02:  Improve Government Performance Through Strategic and Quality
Management
Encourage all department and agency heads to lead and manage in
accordance with the criteria in the Presidential Award for Quality. 
To begin this culture change, all executive branch
employees--starting with the President and Cabinet--should attend
appropriate educational sessions on strategic and quality management. 

GAO Comments
We fully support the need for federal managers to lead and manage for
quality.  A key legislative action prompting a greater focus on
improving management in the federal government was the Civil Service
Reform Act of 1978.  This act recognized the need for performance
measures and emphasized that, where feasible, organizational and
individual performance be appraised in terms of timeliness, quality,
and efficiency.  More broadly, the Government Performance and Results
Act of 1993 emphasizes strategic planning as one of the critical
elements for instilling a results-oriented management focus
throughout the federal government.  We believe, however, that
establishing this focus will also require that federal managers have
available to them the tools and incentives necessary for achieving
results. 

We support the use of the Presidential Award for Quality criteria to
assess program performance.  However, this should be revised, as
necessary, to ensure it recognizes other criteria that exist on
quality management, and lessons learned from using these criteria. 
Finally, we have found that training is one of the critical elements
in perpetuating cultural change. 


------------------------------------------------------- Chapter 23:2.2

QUAL03:  Strengthen the Corps of Senior Leaders
Develop guidance to be used to determine the qualifications needed
for selected senior political appointee positions, and provide
adequate orientations for individuals upon their appointment. 

GAO Comments
We agree that political appointees should be qualified for their jobs
and support orientation sessions for new appointees.  Moreover, we
have emphasized the need to establish strong financial management
leadership at both OMB and the agencies, and support the Chief
Financial Officers (CFO) Act requirement that OMB develop
qualification standards for agency CFOs and their deputies.  Agency
CFO and deputy leadership positions, which must be key figures in top
management teams, should be filled by highly qualified people with
extensive financial management experience. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 23:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 23:4

None. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 23:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 23:6

Government Management Issues (GAO/OCG-93-3TR, Dec.  1992) relates to
the overall summary. 

Managing the Government:  Revised Approach Could Improve OMB's
Effectiveness (GAO/GGD-89-65, May 4, 1989) relates to QUAL01. 

Management Practices:  U.S.  Companies Improve Performance Through
Quality Efforts (GAO/NSIAD-91-190, May 2, 1991) relates to QUAL02. 

Organizational Culture:  Techniques Companies Use to Perpetuate or
Change Beliefs and Values (GAO/NSIAD-92-105, Feb.  27, 1992) relates
to QUAL02. 

Quality Management:  Survey of Federal Organizations (GAO/GGD-93-9BR,
Oct.  1, 1992) relates to QUAL02. 

Office of Personnel Management:  Better Performance Information
Needed (GAO/GGD-90-44, Feb.  7, 1990) relates to QUAL02. 

Report of the National Commission on the Public Service
(GAO/T-GGD-89-19, Apr.  27, 1989) relates to QUAL03. 

The Qualifications for and Role of Agency Chief Financial Officers
(GAO/T-AFMD-91-7, June 7, 1991) relates to QUAL03. 

Financial Management Issues (GAO/OCG-93-4TR, Dec.  1992) relates to
QUAL03. 

Financial Management Issues:  First Financial Audits of IRS and
Customs Revealed Serious Problems (GAO/T-AIMD-93-3, Aug.  4, 1993)
relates to QUAL03. 

Financial Services Industry Issues (GAO/OCG-93-10TR, Dec.  1992)
relates to QUAL04. 

Environmental Protection Issues (GAO/OCG-93-16TR, Dec.  1992) relates
to QUAL04. 

Major Issues Facing a New Congress and a New Administration
(GAO/T-OCG-93-1, Jan.  8, 1993) relates to QUAL04. 

Social Security Administration:  Stable Leadership and Better
Management Needed to Improve Effectiveness (GAO/HRD-87-39, Mar.  18,
1987) relates to QUAL04. 

Strong Leadership Needed to Improve Management at the Department of
Labor (GAO/HRD-86-12, Oct.  21, 1985) relates to QUAL04. 


STREAMLINING MANAGEMENT CONTROL
(SMC)
=========================================================== Chapter 24


      OVERALL SUMMARY
------------------------------------------------------- Chapter 24:0.1

We support agencies in their pursuit to streamline controls to enable
more efficient and effective operations.  For example, in Financial
Management:  DOD Has Not Responded Effectively to Serious,
Long-standing Problems and Federal Internal Control and Financial
Management Systems:  Major Reform Efforts Are Needed, we testified
that financial management and internal control systems reform are
needed.  In addition, we have also recognized the need to be attuned
to our congressional customers.  In 1992, we surveyed key
congressional staff in an effort to find ways to improve our
services. 

While several of NPR's recommendations do not provide sufficient
detail for us to comment, we agree with NPR's underlying premise that
the government must move from an exclusive reliance to holding
managers accountable for process to a greater focus on accountability
for results. 


         GAO CONTACT
----------------------------------------------------- Chapter 24:0.1.1

William M.  Hunt, Director, Federal Management Issues, General
Government Division, (202) 512-8676. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 24:1

SMC05:  Improve the Effectiveness of the General Accounting Office
Through Increased Customer Feedback
Improve GAO's documentation of best practices and the use of feedback
loops on its performance. 

GAO Comments
We have long recognized the importance of being attuned to our
customers' needs.  In 1992, we surveyed key congressional staff,
representing our primary customers, in an effort to find ways to
improve our services.  We are also looking at ways to get feedback
from agencies so we can be assured that our work is as helpful as
possible to them as well.  We fully recognize that, like everyone
else, we need to continuously seek ways to better serve our customers
if we are to improve our effectiveness. 

In our reports, it has always been our policy to recognize noteworthy
management accomplishments identified during our work.  Government
Auditing Standards note that such information is necessary to fairly
present, and provide balance to, the issues covered.  Including such
information could stimulate improved performance by other government
organizations that read the report.  For example, we are studying the
best practices of a range of private sector firms that were very
successful in integrating modern computer technology into their
operations.  Overall, we are increasingly seeking opportunities to
report on the best practices that we identify as part our work. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 24:2

SMC02:  Streamline the Internal Controls Program to Make It an
Efficient and Effective Management Tool
Rescind the current set of Internal Control Guidelines and replace
them with a broader handbook on management controls. 

GAO Comments
Clearly, changes are needed in the government's internal control
program.  Agencies must fix the long-standing control weaknesses that
limit the efficiency and effectiveness of their programs and
undermine public confidence in government.  Almost a decade after the
Federal Managers' Financial Integrity Act became law, we see the same
kinds of internal control problems emerging in our current audits. 
Moreover, our audits of the Air Force, Army, NASA, Internal Revenue
Service, and the Customs Service have identified a lack of adequate
reporting of those problems as required by FMFIA.  GAO's High-Risk
reports and OMB's recent targeted efforts show that serious problems,
when they are properly identified, are deep-rooted and require major
efforts to correct. 

A broader handbook on management controls is part of the solution. 
But, in addition, ways must be found to shift the focus of efforts to
identify root causes of the serious problems and to actually correct
those problems rather than only carrying out processes.  Senior
manages must be held accountable for fixing the internal control
problems that have been properly and fully indentified.  A start
should be made on those that pose the highest risk.  Of course, in
designing control systems, a cost-benefit analysis is required and
agencies' operations must not be impeded. 


------------------------------------------------------- Chapter 24:2.1

SMC03:  Change the Focus of the Inspectors General
Change the focus of Inspectors General from compliance auditing to
evaluating management control systems.  In addition, recast the IGs
method of operation to be more collaborative and less adversarial. 

GAO Comments
We support Inspectors General broadening their role to evaluate
management control systems and, when circumstances warrant it, to be
more collaborative and less adversarial.  The key is to appoint
Inspectors General with the competence and interest in taking on this
broader role.  In that regard, financial audits under the CFO Act,
for which Inspectors General now have responsibility, provide much of
the needed incentive and opportunity.  We would caution, however,
that Inspectors General not lose sight of their independence and
other legislative responsibilities to conduct audits and
investigations. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 24:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 24:4

SMC01:  Implement a Systems Design Approach to Management Control
Redesign the existing collection of management control mechanisms for
the executive branch, using a systems design approach, in order to
create a well managed and cost-effective system. 

GAO Comments
We fully support agency and governmentwide efforts to strengthen
internal control systems.  For example, systems should be cost
effective and managers should manage for risks.  However, without
more detailed information, it is not possible to comment on the
specifics of this recommendation. 


------------------------------------------------------- Chapter 24:4.1

SMC04:  Increase the Effectiveness of Offices of General Counsel
Define clearly the clients of agency General Counsel offices as
agency line managers.  Train staff attorneys to understand the
cultural changes they will need to undertake to operate in an
environment where program results are important.  Develop performance
measures and "feedback loops" to ensure close cooperation with line
managers. 

GAO Comments
We agree that agency General Counsel offices should understand their
program environment using any applicable management tools necessary. 
However, we have not performed any work in this area. 


------------------------------------------------------- Chapter 24:4.2

SMC06:  Reduce the Burden of Congressionally Mandated Reports
Eliminate at least 50 percent of all congressionally mandated
reports.  Review new reporting requirements for management impact,
and include a sunset provision. 

GAO Comments
We fully support congressional efforts to streamline reporting
requirements.  We have issued at least 15 products on this topic
dating back to 1973.  Based on this work, we believe there are
opportunities to streamline reporting requirements and decrease
duplication.  For example, there are opportunities for combining
FMFIA and CFO reporting requirements.  However, we do not know the
overall percentage of reports that should be eliminated.  We believe
that any effort to streamline reporting requirements should be done
as part of a focused strategy that considers Congress' information
needs and how those needs can best be met. 


------------------------------------------------------- Chapter 24:4.3

SMC07:  Reduce Internal Regulations By More Than 50 Percent
Direct department secretaries and agency heads to reduce by at least
50 percent the number of internal regulations, and the number of
pages of regulations, within 3 years. 

GAO Comments
We agree that agencies should pursue initiatives to eliminate and
consolidate unnecessary or duplicative internal regulations. 
However, we have not examined the potential regulations that could be
eliminated governmentwide nor do we have a basis for identifying a
percentage of internal regulations that should be eliminated. 


------------------------------------------------------- Chapter 24:4.4

SMC08:  Expand the Use of Waivers to Encourage Innovation
Establish a process for obtaining waivers from federal regulations
and identifying those regulations for which this process should
apply. 

GAO Comments
We cannot comment on the specifics of this recommendation because we
have not done work on this issue.  However, the Government
Performance and Results Act of 1993 (GPRA) established a framework
for holding agencies accountable for results while granting managers
the tools and incentives to achieve desired outcomes.  GPRA
authorizes a series of pilot agencies in performance measurement and
waivers from certain administrative requirements.  More important, we
believe, will be the degree to which agencies use the strategic
planning and performance measuring processes required by GPRA to
identify opportunities they can take to streamline and deregulate
their internal operations. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 24:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 24:6

Financial Management:  DOD Has Not Responded Effectively to Serious,
Long-standing Problems (GAO/T-AIMD-93-1, July 1, 1993) relates to the
overall summary and SMC01. 

Federal Internal Control and Financial Management Systems:  Major
Reform Efforts Are Needed (GAO/T-AFMD-90-14, Apr.  18, 1990) relates
to the overall summary and SMC01. 

Government Management:  Report on 17 High-Risk Areas (GAO/T-OCG-93-2,
Jan.  8, 1993) relates to SMC01. 

Financial Integrity Act:  Inadequate Controls Result in Ineffective
Federal Programs and Billions in Losses (GAO/AFMD-90-10, Nov.  28,
1989) relates to SMC01. 

Ten-Year Perspective on Federal Inspectors General (GAO/T-AFMD-88-16,
Aug.  4, 1988) relates to SMC03. 

Inspectors General:  Legislative Action Needed to Strengthen OIGs at
Designated Federal Entities (draft report) relates to SMC03. 

Continuous Improvement:  The Quality Challenge (GAO/QMG-93-1, Mar. 
1993) relates to SMC05. 

Continuous Improvement:  The Quality Challenge (GAO/QMG-92-1, Nov. 
1991) relates to SMC05. 

Congressional Reports:  OMB and Other Agency Reporting Requirements
(GAO/GGD-92-90FS, Aug.  31, 1992) relates to SMC06. 


TRANSFORMING ORGANIZATIONAL
STRUCTURES (ORG)
=========================================================== Chapter 25


      OVERALL SUMMARY
------------------------------------------------------- Chapter 25:0.1

The topic of organizational structure is one which merits critical
review at every level of government.  In this regard, our work
generally has focused on the effects of structure within specific
issues or agencies.  For example, in many of our transition series
reports and various general management reviews, we have uncovered
particular problems in federal management and traced their causes to
organizational structures.  NPR's six recommendations in this section
concern either government as a whole or principles of organization
that should be applied similarly across agencies.  Our work has
generally not addressed issues of governmentwide organizational
structure.  Moreover, some of the recommendations lack sufficient
detail to allow a meaningful evaluation. 


         GAO CONTACT
----------------------------------------------------- Chapter 25:0.1.1

William M.  Hunt, Director, Federal Management Issues, General
Government Division, (202) 512-8676. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 25:1

None. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 25:2

ORG02:  Use Multi-Year Performance Agreements between the President
and Agency Heads to Guide Downsizing Strategies
Performance agreements with agency heads (see NPR recommendation
BTG01) should be used to identify progress toward agreed-upon
downsizing goals--not central management agency controls such as
across the board cuts or ceilings on employment.  In exchange,
agencies will be supported with increased management flexibilities. 

GAO Comments
We generally agree with the implicit intent of this recommendation to
ensure that downsizing is carried out with regard for the management
context and particular necessities of individual agencies.  However,
it is not clear what benefit is intended by the use of proposed
multiyear performance agreements to accomplish this or what form
these proposed agreements might take.  Other mechanisms could be used
to tailor downsizing efforts to individual agency needs, such as
agency strategic plans or cross-departmental reorganizations. 


------------------------------------------------------- Chapter 25:2.1

ORG03:  Establish a List of Specific Field Offices to be Closed
Within 18 months, the President's Management Council should submit a
list to Congress of civilian field offices that should be closed. 

GAO Comments
We generally support a review of civilian agencies' field offices to
determine which offices might be closed or consolidated with other
offices to achieve economy and efficiency.  However, it is not clear
what criteria and process will be used to develop this list, what
benefit is intended by creating a consolidated list, or what process
is being suggested to carry out closures once the list is produced. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 25:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 25:4

ORG01:  Reduce the Costs and Numbers of Positions Associated with
Management Control Structures by Half
Cut management control positions over the next 5 years.  Reinvest
some of the savings in benchmarking, training, and investments in new
technology.  In addition to separation incentives (see HRM14),
provide outplacement services to affected staff. 

GAO Comments
It is not clear what NPR means by "management control structures" and
there is no explanation of the rationale for reduction and its
intended effect.  While we are not opposed to reductions in
management control positions, we recognize that management control
systems were put in place to create particular, desired effects.  If
these systems are to be eliminated or reduced, NPR should first
demonstrate that (1) other mechanisms will take their place, (2) the
particular effect is no longer needed or relevant in the current
environment, or (3) the current system is not serving a useful
purpose. 


------------------------------------------------------- Chapter 25:4.1

ORG04:  The President Should Request Authority to Reorganize Agencies
Congress should restore to the President the authority to restructure
the executive branch. 

GAO Comments
There are a number of different ways in which the authority to
restructure could be granted to the President.  In the past, Congress
has usually had a significant role in the review and approval of
executive branch reorganization proposals, even within the context of
the type of Presidential authority suggested here.  We can offer more
detailed commentary when a definition of these reorganization powers
and a proposed reorganization plan are made available. 


------------------------------------------------------- Chapter 25:4.2

ORG05:  Sponsor Three or More Cross-Department Initiatives Addressing
Common Issues or Customers
The President's Management Council should identify and sponsor three
or more cross-departmental initiatives in areas such as illegal
immigration, debt collection, and the problems of the homeless. 

GAO Comments
It is unclear what is meant by "cross-departmental initiatives" and
how these would differ from the cross-departmental coordination
mechanisms that currently exist in many areas of government. 


------------------------------------------------------- Chapter 25:4.3

ORG06:  Identify and Change Legislative Barriers to
Cross-Organizational Cooperation
As cross-organizational collaborations become an integral part of
government operations, barriers to ready collaboration and funding
should be removed. 

GAO Comments
Specific barriers need to be identified so that their intended
purposes and impacts can be weighed against their imputed negative
consequences. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 25:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 25:6

Social Security Downsizing:  Significant Savings But Some Service
Quality and Operational Problems (GAO/HRD-91-63, Mar.  19, 1991)
relates to ORG01. 

U.S.  Department of Agriculture:  Overhauling the Farm Agencies'
Field Structure (GAO/T-RCED-92-87, July 30, 1992) relates to ORG03. 

Department of Agriculture:  Restructuring Will Impact Farm Service
Agencies' Automation Plans and Programs (GAO/T-IMTEC-92-22, July 30,
1992) relates to ORG03. 

Other products relate to NPR's organizational structure
recommendations at a broad level: 

Government Management Issues (GAO/OCG-93-3TR, Dec.  1992). 

Financial Management Issues (GAO/OCG-93-4TR, Dec.  1992). 

Information Management and Technology Issues (GAO/OCG-93-5TR, Dec. 
1992). 

Program Evaluation Issues (GAO/OCG-93-6TR, Dec.  1992). 

The Public Service (GAO/OCG-93-7TR, Dec.  1992). 

Commerce Issues (GAO/OCG-93-12TR, Dec.  1992). 

Improving Government:  Need to Reexamine Organization and Performance
(GAO/T-GGD-93-9, Mar.  11, 1993). 

Creation of a Department of the Environment (GAO/T-RCED-93-6, Feb. 
18, 1993). 

One-Stop Shops (GAO/GGD-93-1R, Nov.  6, 1992). 

Customs Service:  Trade Enforcement Activities Impaired by Management
Problems (GAO/GGD-92-123, Sept.  24, 1992). 

Soil Conservation Service Reorganization (GAO/RCED-92-254R, Aug.  7,
1992). 

Administration on Aging:  Operations Have Been Strengthened But
Weaknesses Remain (GAO/PEMD-92-27, June 11, 1992). 

Defense Reorganization:  DOD Establishment and Management of Defense
Agencies (GAO/NSIAD-92-210BR, May 27, 1992). 

Export Promotion:  Overall U.S.  Strategy Needed (GAO/T-GGD-92-40,
May 20, 1992). 

Foreign Assistance:  Management Problems Persist at the Agency for
International Development (GAO/T-NSIAD-92-31, May 1, 1992). 

U.S.  Department of Agriculture:  Revitalizing Structure, Systems,
and Strategies (GAO/RCED-91-168, Sept.  3, 1991). 


IMPROVING CUSTOMER SERVICES (ICS)
=========================================================== Chapter 26


      OVERALL SUMMARY
------------------------------------------------------- Chapter 26:0.1

We recommended in Improving Government:  Need to Reexamine
Organization and Performance that a governmentwide focus on the
citizen's needs should be a part of the government's reorganization
and management.  Specifically, we have recommended that agencies that
deal directly with the public, such as the Postal Service, track
customer satisfaction especially if there is competition from the
private sector. 

Overall, most of NPR's recommendations are consistent with the thrust
of improvement actions we have supported in the past.  We agree that
there is a need for improved customer service in the federal
government and that a customer focus should be an essential component
in the way government works. 


         GAO CONTACT
----------------------------------------------------- Chapter 26:0.1.1

William M.  Hunt, Director, Federal Management Issues, General
Government Division, (202) 412-8676. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 26:1

ICS01:  Create Customer-Driven Programs in all Departments and
Agencies that Provide Services Directly to the Public
Establish an overall policy for quality of federal services delivered
to the public and initiate customer service programs in all agencies
that provide services directly to the public. 

GAO Comments
We strongly advocate the creation of such a policy, which could
foster good public relations and timely service to citizens.  We have
recommended that a governmentwide focus on citizen's needs be the
foundation for the government's management and reorganization. 
Further, we have supported a customer-oriented approach in individual
federal agencies.  Also, we have suggested incorporating the needs of
the American public in developing information technology strategies. 

It should be noted that many government services are provided to the
public through third parties, such as housing administrations or
medical insurance providers.  Our ongoing work suggests that it may
be appropriate to include requirements for ensuring or measuring
customer service in the contracts or agreements with such third
parties.  A pertinent consideration in this regard is whether
additional government funds would be needed if this were done. 


------------------------------------------------------- Chapter 26:1.1

ICS03:  Customer Service Performance Standards--Social Security
Administration
As part of its participation in NPR, the Social Security
Administration is publishing customer service performance standards. 
SSA will also obtain customer opinions on all the goals and
objectives of their strategic plan, using that input to revise the
goals and objectives as needed, set priorities, and establish interim
objectives. 

GAO Comments
We endorse SSA's efforts to improve its customer service performance. 
We have recently completed audit work suggesting that SSA put forth
sustained effort to improve management and future plans. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 26:2

ICS04:  Customer Service Performance Standards--Postal Service
As part of its participation in NPR, the U.S.  Postal Service will
expand its plans to display customer service standards in Post Office
retail lobbies. 

GAO Comments
We fully support the Postal Service's current initiative to develop
standards to govern the provision of customer services and agree that
those standards should be fully disclosed to the public. 


------------------------------------------------------- Chapter 26:2.1

ICS05:  Streamline Ways to Collect Customer Satisfaction and Other
Information from the Public
For voluntary information collection requests directed at customers,
OMB will delegate authority to approve such requests if departments
certify that they will fully comply with Paperwork Reduction Act
requirements.  OMB will also clarify rules on the use of focus groups
and streamline renewals of previously approved survey requests. 

GAO Comments
We agree with the thrust of this recommendation to streamline the
collection of customer satisfaction information.  However, there is
some ambiguity on what constitutes voluntary information collection
requests. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 26:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 26:4

ICS02:  Customer Service Performance Standards--Internal Revenue
Service
As part of its participation in NPR, the Internal Revenue Service is
publishing customer service performance standards.  To speed the
delivery of taxpayer refunds, the Secretary of the Treasury should
delegate disbursing authority to IRS in 1993 and future tax seasons. 

GAO Comments
While we agree with the intent of getting refunds to taxpayers in a
timely manner, we are unsure whether delegation of disbursing
authority to IRS is an appropriate means to that end.  We would have
to know more about the costs and implications of such a change. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 26:5

As we said in the Department of the Treasury section of this report,
taxpayers are having problems reaching IRS by telephone to ask
questions.  Nothing in NPR's recommendations is directed at
correcting this poor customer service. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 26:6

Improving Government:  Need to Reexamine Organization and Performance
(GAO/T-GGD-93-9, Mar.  11, 1993) relates to the overall summary and
ICS01. 

Meeting the Government's Technology Challenge:  Results of a GAO
Symposium (GAO/IMTEC-90-23, Feb.  1990) relates to ICS01. 

U.S.  Postal Service:  Tracking Customer Satisfaction in a
Competitive Environment (GAO/GGD-93-4, Nov.  12, 1992) relates to
ICS01. 

Office of Personnel Management:  Better Performance Information
Needed (GAO/GGD-90-44, Feb.  7, 1990) relates to ICS01. 

Social Security:  Sustained Effort Needed to Improve Management and
Prepare for the Future (GAO/HRD-94-22, Oct.  27, 1993) relates to
ICS03. 

Social Security:  Need to Improve Postentitlement Service to the
Public (GAO/HRD-93-21, May 7, 1993) relates to ICS03. 

Social Security:  Telephone Busy Signal Rates at Local SSA Field
Offices (GAO/HRD-93-49, Mar.  4, 1993) relates to ICS03. 

Social Security:  Measure of Telephone Service Accuracy Can Be
Improved (GAO/HRD-91-69, Aug.  30, 1991) relates to ICS03. 

Social Security Downsizing:  Significant Savings But Some Service
Quality and Operational Problems (GAO/HRD-91-63, Mar.  19, 1991)
relates to ICS03. 

Social Security:  Little Overall Change in Telephone Accessibility
Between 1985 and 1988 (GAO/HRD-88-129, Sept.  15, 1988) relates to
ICS03. 

Social Security:  Staff Reductions and Service Quality
(GAO/HRD-88-97, May 13, 1988) relates to ICS03. 

Paperwork Reduction:  Mixed Results on Agency Decision Processes and
Data Availability (GAO/PEMD 89-20, Sept.  7, 1989) relates to ICS05. 


MISSION-DRIVEN, RESULTS-ORIENTED
BUDGETING (BGT)
=========================================================== Chapter 27


      OVERALL SUMMARY
------------------------------------------------------- Chapter 27:0.1

As addressed in our June 1992 report, Budget Policy:  Prompt Action
Necessary to Avert Long-Term Damage to the Economy and our 1992
transition series reports on the budget deficit and investment,
changes are necessary in our fiscal policy and in the composition of
the federal budget.  Reducing the federal deficit is central to our
future economic and social well-being as a nation, but doing so
requires difficult choices. 

In overall thrust, many of NPR's recommendations on mission-driven
results-oriented budgeting seek to assist the process of making these
choices by increasing the focus on program outcomes.  Some seek to
change the nature--and perhaps the balance--of
congressional-executive budgetary relations. 


         GAO CONTACT
----------------------------------------------------- Chapter 27:0.1.1

Susan J.  Irving, Associate Director, Budget Issues, Accounting and
Information Management Division, (202) 512-9142. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 27:1

BGT01:  Develop Performance Agreements with Senior Political
Leadership That Reflect Organizational and Policy Goals
The President should develop performance agreements with agency
heads, starting with the top two dozen.  Agency heads should also use
performance agreements within their agency to forge an effective team
committed to achieving organizational goals and objectives. 

GAO Comments
Developing such agreements can help focus efforts on key priorities
in each agency and help achieve the results-oriented environment that
we believe is needed to improve effective delivery of government
programs.  It remains unclear however on how these agreements would
operate or what Congress' role would be. 


------------------------------------------------------- Chapter 27:1.1

BGT02:  Effectively Implement the Government Performance and Results
Act of 1993
Accelerate planning and measurement efforts to improve performance in
every federal program and agency.  Designate as pilots under the act
several multiagency efforts that have related programs and functions. 
Develop common measures and data collection efforts for cross-cutting
issues.  Clarify the goals and objectives of federal programs. 
Incorporate performance objectives and results as key elements in
budget and management reviews. 

GAO Comments
We endorse the importance of agencies and Congress reaching agreement
on agency mission and realistic, outcome-oriented goals, developing
measures of performance in terms of those goals, and publicly
reporting results.  We believe that this management framework--which
is set forth in the Government Performance and Results Act of
1993--could serve as the foundation for a broad range of efforts to
improve federal management.  Providing managers with the tools and
incentives they need to achieve their missions will be critical if
outcome-oriented management is to increase the effectiveness of
federal programs.  However, coming to agreement on outcome-oriented
goals and objectives and indicators of performance will be difficult
and take time.  We strongly endorse the need for agencies to begin
now preparing for implementation of GPRA by defining mission
statements, developing strategic plans, and identifying and
developing performance measures.  The success of GPRA will depend in
part, however, on achieving the goals of the CFO legislation for
generating reliable financial information and accurate operating cost
data. 

We also endorse designating as pilots several multiagency efforts
with related programs and functions, and development of common
measures and data collection efforts for crosscutting issues.  In
this way, various implementation strategies can be explored and
lessons can be learned about best practices in forging critical
crosscutting linkages across the federal government and with state
and local governments as well. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 27:2

None. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 27:3

None. 



   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 27:4

BGT03:  Empower Managers to Perform
Restructure appropriations accounts to reduce overitemization and to
align them with programs.  Ensure that direct operating costs can be
identified.  Reduce overly detailed restrictions and earmarks in
appropriations and report language.  Simplify the apportionment
process.  Reduce the excessive administrative subdivision of funds in
financial operating plans. 

GAO Comments
The degree of "overitemization" is a matter of interpretation and
political judgment, potentially affecting the balance of power
between the legislative and executive branches.  Changing the account
structure is not simply a matter of management flexibility.  An
examination of the structure and number of appropriation accounts,
however, could provide useful information for consideration of
changes in the current structure and how such changes would affect
oversight.  It also will be necessary--although conceptually very
difficult--to identify direct operating costs if the focus of
government management is to be on cost-effective performance. 
Harmonizing this approach with existing program definitions and
budgetary account structures will present difficult problems, which
the administration and Congress will need to resolve. 


------------------------------------------------------- Chapter 27:4.1

BGT04:  Eliminate Employment Ceilings and Floors By Managing Within
Budget
Budget and manage on the basis of operating costs rather than
full-time equivalents or employment ceilings.  Request Congress to
remove FTE floors. 

GAO Comments
This recommendation seeks to change the nature--and perhaps the
extent--of legislative oversight.  Pending development of
alternatives, employment ceilings and floors are both means by which
Congress expresses its intentions on priorities.  Ceilings seek to
affect total personnel resources whereas floors are directed at the
allocation of those resources.  As NPR recognizes, implementation of
this proposal is currently not possible both because there are
conceptual and practical difficulties involved in defining operating
costs and because FTEs will be necessary to the administration to
monitor progress on its initiatives to reduce the size of the federal
workforce.  However, in his supplemental appropriation package for
fiscal year 1994, the President proposed legislative language
removing employee FTE floors established for several agencies. 
Experimentation with using operating costs to manage has just begun
and the Financial Accounting Standards Advisory Board has yet to
propose standards for cost accounting. 


------------------------------------------------------- Chapter 27:4.2

BGT05:  Provide Line Managers with Greater Flexibility to Achieve
Results
Identify those appropriations that should be converted to multi- or
no-year status.  Permit agencies to roll over 50 percent of their
unobligated year-end balances in annual operating costs to the next
year.  Expedite reprogramming of funds within agencies. 

GAO Comments
Multiyear availability of funds, where appropriate, makes sense.  The
impact of various proposed changes in the treatment of unobligated
funds should be explored. 


------------------------------------------------------- Chapter 27:4.3

BGT06:  Streamline Budget Development
Begin the President's budget formulation process with a
mission-driven Executive Budget Resolution process that will replace
hierarchial budget development, delegate more decision making to
agency heads, and promote a collaborative approach to crosscutting
issues.  In the process, eliminate multiple requirements for detailed
budget justification materials.  Negotiate a reduction in the
detailed budget justification provided to Congress. 

GAO Comments
This recommendation addresses the way the President develops his
budget.  To the extent that agency budget preparation is seen to be
duplicative, provision of targets to each agency at the beginning of
the process may help. 


------------------------------------------------------- Chapter 27:4.4

BGT07:  Institute Biennial Budgets and Appropriations
Submit a legislative proposal to move from an annual to a biennial
budget submission by the President.  Establish biennial budget
resolution and biennial appropriation processes.  Evaluate program
effectiveness and refine performance measures in the off-year. 

GAO Comments
We have supported multiyear fiscal policy agreements and biennial
budget resolutions to implement these agreements.  We have supported
multiyear authorizations and multiyear funds where it makes sense. 
We have noted that a shift to a biennial appropriations process is
not necessary to provide multiyear funds to those programs where
Congress deems it appropriate, and that Congress routinely provides
such multiyear monies.  A shift from an annual to a biennial
appropriations cycle would be a change in the nature--and perhaps in
the degree--of congressional oversight. 


------------------------------------------------------- Chapter 27:4.5

BGT08:  Seek Enactment of Expedited Rescission Procedures
Pursue negotiations with the leadership of the House and Senate to
gain enactment of expedited rescission authority. 

GAO Comments
In two recent testimonies we concluded that current rescission
procedures were working as originally intended by Congress. 
Rescissions can only have a relatively small influence on budgetary
totals and deficits of today's magnitude.  Therefore, in our
testimonies we concluded that any change in the current rescission
procedure should be viewed as a question of the relative balance of
power between the President and Congress. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 27:5

The current budget structure with its emphasis on short-term goals
does not support long-term decisionmaking.  A federal investment
budget component within a unified budget framework could provide
decisionmakers with better information on spending for short-term
consumption versus investment for future economic growth. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 27:6

Budget Policy:  Prompt Action Necessary to Avert Long-Term Damage to
the Economy (GAO/OCG-92-2, June 5, 1992) relates to the overall
summary. 

Federal Budget:  Choosing Public Investment Programs (GAO/AIMD-93-25,
July 23, 1993) relates to the overall summary. 

Government Management Issues (GAO/OCG-93-3TR, Dec.  1992) relates to
BGT01. 

Improving Government:  Need to Reexamine Organization and Performance
(GAO/T-GGD-93-9, Mar.  11, 1993) relates to BGT02. 

Improving Government:  Measuring Performance and Acting on Proposals
for Change (GAO/T-GGD-93-14, Mar.  23, 1993) relates to BGT02. 

Budget Issues:  Financial Reporting to Better Support Decision-making
(GAO/AFMD-93-22, June 1993) relates to BGT02 and BGT03. 

Performance Budgeting:  State Experiences and Implications for the
Federal Government (GAO/AFMD-93-41, Feb.  17, 1993) relates to BGT02. 

Tax Policy:  Tax Expenditures Deserve More Scrutiny (draft report)
relates to BGT02. 

Budget Issues:  Assessing Executive Order 12837 on Reducing
Administrative Expenses (GAO/AIMD-94-15, Nov.  17, 1993) relates to
BGT03. 

Budget Policy:  Biennial Budgeting for the Federal Government
(GAO/T-AIMD-94-4, Oct.  7, 1993) relates to BGT07. 

Budget Process:  Use and Impact of Rescission Procedures
(GAO/T-OCG-93-5, Mar.  10, 1993) relates to BGT08. 

Budget Process:  Use and Impact of Rescission Procedures
(GAO/T-OCG-92-5, Sept.  25, 1992) relates to BGT08. 

Budget Policy:  Federal Capital Budgeting (GAO/T-AFMD-93-7, May 26,
1993) relates to additional areas of GAO concern. 

Budget Issues:  Incorporating an Investment Component in the Federal
Government (GAO/AIMD-94-40, Nov.  9, 1993) relates to additional
areas of GAO concern. 

Budget Policy:  Investment Budgeting for the Federal Government
(GAO/T-AIMD-94-54, Nov.  9, 1993) relates to additional areas of GAO
concern. 


IMPROVING FINANCIAL MANAGEMENT
(FM)
=========================================================== Chapter 28


      OVERALL SUMMARY
------------------------------------------------------- Chapter 28:0.1

As discussed in our December 1992 transition series report on
Financial Management Issues, widespread financial management
weaknesses are crippling the ability of our leaders to effectively
run the federal government.  Reducing the federal deficit requires
monumentally difficult decisions.  If our government is to make these
decisions in an informed manner, it must have better financial
information.  Also, our citizens should be provided meaningful
information that allows them to judge the performance of their
government and controls that help guarantee fundamental
accountability. 

Our financial audits have shown that agencies have major financial
systems deficiencies, significant internal control weaknesses, and
unreliable financial information.  Because of these problems, public
confidence in the federal government as a financial steward has been
severely undermined.  Overall, NPR's financial management improvement
recommendations are in line with the thrust of the financial systems
and information improvement actions our reports and testimonies have
outlined, and if properly implemented, could result in strengthened
government accountability.  Financial management reform, however,
will also require other actions, such as the expansion to all major
departments and agencies of the Chief Financial Officers Act's
requirement for audited financial statements.  This expansion is also
a prerequisite for providing reliable and clear reports to the public
on the government's financial condition and use of tax dollars. 


         GAO CONTACT
----------------------------------------------------- Chapter 28:0.1.1

Jeffrey C.  Steinhoff, Director, Civil Audits, Accounting and
Information Management Division, (202) 512-9454. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 28:1

FM05:  Use the Chief Financial Officers (CFO) Act to Improve
Financial Services
Identify the set of financial management functions which should
report to agency CFOs, and ensure that all financial management
personnel are fully-qualified when hired.  Ensure that information
being collected, disseminated, and reported on is useful, objective,
timely, and accurate for the benefit of program managers. 

GAO Comments
We strongly advocate these types of actions, which are critically
needed to strengthen financial management leadership, attract and
retain qualified financial management personnel, and develop useful
and relevant financial reports that emphasize accountability and
operating performance. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 28:2

FM01:  Accelerate the Issuance of Federal Accounting Standards
Issue a comprehensive set of federal financial accounting standards
within 18 months.  If all standards are not issued under the present
advisory board structure, create an independent federal financial
accounting standards board. 

GAO Comments
We fully support the accelerated issuance of federal agency
accounting standards.  We would not, at this time, though, endorse
the creation of an independent standards setting board. 


------------------------------------------------------- Chapter 28:2.1

FM02:  Clarify and Strengthen the Financial Management Roles of OMB
and Treasury
Develop a Memorandum of Understanding to clarify the roles of OMB and
Treasury in financial management.  Create a governmentwide budget and
financial information steering group to develop and provide guidance
in implementing an integrated budget and financial information
strategic plan.  Shift review of the Financial Management Service's
budget to the OMB Deputy Director for Management. 

GAO Comments
OMB's and Treasury's roles are pivotal to federal financial
management reform; thus, it is essential that their responsibilities
be clearly delineated and they be provided commensurate resources. 
Also, we fully support the use of steering groups, such as the CFO
Council and the Joint Financial Management Improvement Program, to
improve financial management governmentwide.  We have not, though,
specifically addressed the issue of shifting the review of Treasury's
Financial Management Service's budget to OMB's Deputy Director for
Management. 


------------------------------------------------------- Chapter 28:2.2

FM03:  Fully Integrate Budget, Financial and Program Information
Ensure that agency financial systems are in compliance with a revised
OMB Circular A-127, "Financial Management Systems," by September
1996.  Provide interagency funding for the joint development of
financial systems. 

GAO Comments
We strongly endorse the concept of fully integrating budget,
financial, and program information and urge that agency financial
systems be in compliance with OMB Circular A-127.  While we have not
specifically recommended that agencies jointly develop financial
systems through interagency funding, we support the concept and have
also suggested the possibility of agencies having standard systems
and expanding the use of cross-servicing arrangements. 


------------------------------------------------------- Chapter 28:2.3

FM04:  Increase the Use of Technology to Streamline Financial
Services
Use electronic funds transfer to pay and reimburse expenses for all
federal employees, to handle all interagency payments, to make
payments to state and local governments, and to pay for purchases
from the private sector.  Similarly, all payments to individuals
should be done electronically. 

GAO Comments
We strongly agree that substantial benefits are to be gained through
the increased use of technology in financial operations, including
greater use of electronic funds transfers, and fully support the
increased use of technology.  We have not studied the feasibility of
using electronic funds transfers for each of the types of payments
NPR cited, but note that electronic funds transfers are presently
used for some of these payments and agree with the thrust of NPR's
proposal.  Also, Treasury has been working on the exchange of
technological improvement techniques between agencies, which we
support. 


------------------------------------------------------- Chapter 28:2.4

FM06:  "Franchise" Internal Services
The President's Management Council should encourage agencies to
purchase common administrative services, such as payroll, computer
support, or procurement, competitively from other federal agencies
that may be more responsive or offer better prices. 

GAO Comments
We strongly advocate that agencies use standard systems and
cross-servicing arrangements for payroll and other financial
management operations and services.  We have not, however, taken a
position with respect to computer support and procurement.  (See
discussion for NPR recommendations in the Department of Defense,
Procurement, and Information Technology sections of this report.)


------------------------------------------------------- Chapter 28:2.5

FM09:  Simplify the Financial Reporting Process
Grant OMB the flexibility to consolidate and simplify over a dozen
related statutory reports to Congress and the President.  Require
agency heads to provide two reports annually, a planning report and
an accountability report.  Ensure that any future financial
management reporting requirements can be addressed in either the
planning or accountability reports. 

GAO Comments
We strongly support financial planning and accountability reporting
as the cornerstone of improved federal financial reporting.  We also
fully support efforts to consolidate and streamline reporting, where
needed, with the goal of more useful and meaningful reporting. 
However, the potential impact of this recommendation on specific
reports to Congress and the President which agencies are required by
law to prepare cannot be determined from the information provided. 
Accordingly, it would be essential that any changes be fully
coordinated with and agreed to by cognizant congressional committees. 


------------------------------------------------------- Chapter 28:2.6

FM10:  Provide an Annual Financial Report to the Public
Provide a simplified version of a consolidated report on the finances
of the federal government for distribution to the taxpayers by June
1995.  Develop a method of identifying and budgeting for the expected
costs of contingent liabilities of the Federal Government. 

GAO Comments
We strongly believe that the public is entitled to be provided
financial reports annually on the government's stewardship of
taxpayer monies and that such financial statement information be
subjected to audit.  Also, we have generally advocated the inclusion
in the budget of the expected costs of contingent liabilities, such
as is done for credit programs under the Credit Reform Act.  The
nature of the specific contingent liabilities to which NPR refers,
though, is unclear. 


------------------------------------------------------- Chapter 28:2.7

FM11:  Strengthen Debt Collection Program
Propose legislation to allow debt collection activities to be funded
by the revenues generated from collections and to allow the agencies
to keep a certain percentage of any increased collection amounts. 
Propose legislation to lift restrictions on the use of private
collection, and expand agency litigation authority for debt
collection through the designation of special assistant U.S. 
Attorneys. 

GAO Comments
While we have not examined all aspects of the impact these
recommendations may have on individual agencies' operations, our work
has shown the need for stronger governmentwide credit management and
debt collection programs.  We have specifically reported on the need
for legislation to lift restrictions on the use of private collection
agencies by the Customs Service.  Also, we have proposed that
agencies keep a portion of any increased collections to improve debt
collection systems and practices.  Further, we have supported the
increased use of private-sector attorneys to assist in collecting
delinquent debt, which relates to the NPR recommendation involving
expanded use of U.S.  Attorneys. 


------------------------------------------------------- Chapter 28:2.8

FM12:  Manage Fixed Asset Investments for the Long Term
Establish a long-term fixed asset planning and analysis process, and
incorporate it into the federal budget process.  Ensure there is no
bias in the budget against long-term investments. 

GAO Comments
We support a neutral treatment of long-term investments in the budget
consistent with budget scorekeeping principles that are meant to
reflect the actual commitments made by the federal government. 


------------------------------------------------------- Chapter 28:2.9

FM13:  Charge Agencies for the Full Cost of Employee Benefits
Require all agencies to pay the full accruing cost of Civil Service
Retirement and Pensions.  OMB and the Office of Personnel Management
should also research the possibility of charging agencies for
civilian retiree health benefits. 

GAO Comments
We have reported that budget reporting of the cost of most civilian
personnel programs can be improved by including data on liabilities
incurred, rather than cash, in the budget.  While we have not
addressed all facets of charging agencies for civilian retiree health
benefits, we have reported on payments for retiree health benefits
that the Postal Service is required to make to the Civil Service
Fund.  Also, the accounting standards prescribed for use by the
private sector require employers to recognize the cost of retiree
health benefits when liable for making such payments. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 28:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 28:4

FM07:  Create Innovation Funds
Allow agencies to create innovation capital funds from retained
savings to invest in innovations that can improve service and provide
a return on investment. 

GAO Comments
Allowing agencies to create innovation capital funds from retained
savings to invest in innovations could have merit and, for the
financial management services area, could offer opportunities for
advancements, as we have suggested.  We believe it should be
seriously explored but sufficient information is not yet available
from NPR for us to assess specific approaches. 


------------------------------------------------------- Chapter 28:4.1

FM08:  Reduce Financial Regulations and Requirements
Eliminate timesheets and timecards and use technology to enter
payroll data only on an exception basis.  Allow use of commercial
checking accounts instead of third-party accounts.  Create a
threshold below which it is not cost effective to resolve audit
findings. 

GAO Comments
While we have not studied the elimination of time and attendance
records, title 6 of our Policy and Procedures Manual for Guidance of
Federal Agencies allows employees' time to be recorded on an
exception basis, which is consistent with NPR's recommendation. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 28:5

The NPR report makes recommendations that are consistent with many of
the financial management improvement measures we support.  We believe
additional actions are also essential to successfully implementing
needed reform.  These actions are outlined in our December 1992
report Financial Management Issues.  In summary, these actions call
for

  the President to (1) make financial management reform a high
     priority, (2) hold agency heads accountable for successfully
     implementing the CFO Act, (3) sustain a high level of financial
     management leadership in OMB, and (4) appoint to the agencies'
     CFO positions only highly qualified individuals;

  the OMB Director to promote and closely monitor agencies' (1)
     adherence to existing accounting policies and procedures, (2)
     efforts to build financial management infrastructures, (3)
     actions to correct long-standing internal control weaknesses and
     high-risk problems, and (4) projects to integrate accounting,
     program, and budget systems and data; and

  Congress to (1) focus closely on CFO appointments to ensure the
     qualifications of these individuals, (2) conduct annual
     oversight hearings using the CFOs' annual reports and audited
     financial statements, and (3) provide the necessary funding
     support for financial reform efforts. 

Also, we strongly support amending the CFO Act to require audited
financial statements on an annual basis for all major agencies and
for the government overall.  The Administration's proposed Government
Reform and Savings Act of 1993, which is based on elements of the NPR
report, would require that 23 key federal agencies prepare annual
audited financial statements.  These audited statements are essential
to achieving full accountability and will make it easier to achieve
NPR's stated goal of providing an accurate and clear report to the
public on the government's finanical condition. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 28:6

Financial Management Issues (GAO/OCG-93-4TR, Dec.  1992) relates to
the overall summary, FM01, FM03, FM05, FM06, and FM09. 

Financial Management:  First Financial Audits of IRS and Customs
Revealed Serious Problems (GAO/T-AIMD-93-3, Aug.  4, 1993) relates to
FM01, FM03, FM05, FM06, FM09, and FM10. 

Financial Management:  Immediate Actions Needed to Improve Army
Financial Operations and Controls (GAO/AFMD-92-82, Aug.  7, 1992)
relates to FM01, FM03, FM05, FM06, FM09, and FM10. 

Financial Audit:  Air Force Does Not Effectively Account for Billions
of Dollars of Resources (GAO/AFMD-90-23, Feb.  23, 1990) relates to
FM01, FM03, FM05, FM09, FM10, and FM12. 

Financial Management:  Additional Actions Needed to Improve Federal
Financial Management Systems (GAO/AFMD-90-14, Apr.  27, 1990) relates
to FM02. 

Budget Issues:  Financial Reporting to Better Support Decision-making
(GAO/AFMD-93-22, June 1993) relates to FM03 and FM05. 

Financial Audit:  Examination of the Army's Financial Statements for
Fiscal Years 1992 and 1991 (GAO/AIMD-93-1, June 30, 1993) relates to
FM03, FM05, FM09, FM10, and FM11. 

Financial Audit:  Aggressive Actions Needed for Air Force to Meet
Objectives of the CFO Act (GAO/AFMD-92-12, Feb.  19, 1992) relates to
FM03, FM05, FM09, FM10, and FM12. 

Government Management:  Major Issues Facing the Congress
(GAO/T-AFMD-92-4, Feb.  6, 1992) relates to FM03, FM05, and FM06. 

The Qualifications for and Role of Agency Chief Financial Officers
(GAO/T-AFMD-91-7, June 7, 1991) relates to FM05. 

Managing the Cost of Government:  Proposals for Reforming Federal
Budgeting Practices (GAO/AFMD-90-1, Oct.  1989) relates to FM10 and
FM13. 

Financial Management:  Customs Needs to Establish Adequate
Accountability and Control Over Its Resources (GAO/AFMD-92-30, Aug. 
25, 1992) relates to FM11. 

Credit Management:  Deteriorating Credit Picture Emphasizes
Importance of OMB's Nine-Point Program (GAO/AFMD-90-12, Apr.  16,
1990) relates to FM11. 

Debt Collection:  Billions Are Owed While Collection and Accounting
Problems Are Unresolved (GAO/AFMD-86-39, May 23, 1986) relates to
FM11. 

Federal Budget:  Choosing Public Investment Programs (GAO/AIMD-93-25,
July 23, 1993) relates to FM12. 

Budget Policy:  Federal Capital Budgeting (GAO/T-AFMD-93-7, May 26,
1993) relates to FM12. 

Budget Policy:  Budgetary Treatment of Investment Programs
(GAO/T-AFMD-92-15, July 23, 1992) relates to FM12. 

Budget Policy:  Prompt Action Necessary to Avert Long-Term Damage to
the Economy (GAO/OCG-92-2, June 5, 1992) relates to FM12. 

Financial Reporting:  Accounting for the Postal Service's
Postretirement Health Care Costs (GAO/AFMD-92-32, May 20, 1992)
relates to FM13. 


REINVENTING HUMAN RESOURCE
MANAGEMENT (HRM)
=========================================================== Chapter 29


      OVERALL SUMMARY
------------------------------------------------------- Chapter 29:0.1

The effectiveness of federal agencies in achieving their missions
depends in large measure on the quality, motivation, and performance
of the employees that agencies are able to recruit and retain.  The
taxpayers are entitled to expect the federal workforce to be governed
by human resource policies that ensure the government's programs are
carried out as efficiently as possible.  However, as we have pointed
out in numerous reports on human resource issues, including our
December 1992 transition series report on The Public Service, the
government's ability to meet this objective has been hampered by
limited top-management support coupled with complex and restrictive
laws, regulations, and processes. 

Overall, we find NPR's recommendations to be in keeping with the
spirit of promoting the efficient use of federal human resources.  An
underlying theme of many of the recommendations is that central
control and regulation are unnecessarily hindering the agencies'
abilities to manage their human resources, and that greater agency
autonomy in areas such as determining the number of employees needed,
recruiting and hiring, position classification, and performance
management would allow agencies to establish policies better tailored
to their own circumstances.  We agree, in principle, that greater
agency flexibility is a desirable goal and, if used responsibly,
could lead to more effective management of the federal workforce. 

However, we also believe greater flexibility must be accompanied by
an assurance that the agencies are accountable for meeting merit
system, equity, equal opportunity, and other national objectives that
the central controls were designed to achieve.  The report does not
indicate how this accountability would be accomplished or whether an
oversight role for the Office of Personnel Management is
contemplated.  In addition, we often found very limited evidence
presented to support the positions taken in the report.  In some
cases, the information was simply too inadequate to allow us to make
a meaningful evaluation. 


         GAO CONTACT
----------------------------------------------------- Chapter 29:0.1.1

Nancy R.  Kingsbury, Director, Federal Human Resource Management
Issues, General Government Division, (202) 512-5074. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 29:1

HRM03:  Authorize Agencies to Develop Programs for Improvement of
Individual and Organizational Performance
Authorize agencies to design their own performance management
programs which define and measure success based on each agency's
unique needs. 

GAO Comments
Our reviews confirm that a prescribed "one size fits all" approach to
performance management is too restrictive and does not allow agencies
to use systems they find work best in their situations.  The
September 30, 1993, enactment of the Performance Management and
Recognition System Termination Act of 1993 (P.L.  103-89) was an
important step toward accomplishing the objectives of this
recommendation because it terminated the governmentwide performance
management system for federal managers and supervisors.  The act
authorized agencies to include managers and supervisors, in whatever
manner they deemed appropriate, under their performance management
systems for employees in general. 


------------------------------------------------------- Chapter 29:1.1

HRM04:  Authorize Agencies to Develop Incentive Award and Bonus
Systems to Improve Individual and Organizational Performance
Authorize agencies to develop their own incentive award and bonus
systems.  Encourage agencies to establish productivity gainsharing
programs to support their reinvention and change efforts. 

GAO Comments
Our comments above on recommendation HRM03 apply to this
recommendation as well. 


------------------------------------------------------- Chapter 29:1.2

HRM07:  Enhance Programs to Provide Family-Friendly Workplaces
Implement family-friendly workplace practices (flex-time, flexiplace,
job sharing, telecommuting) while ensuring accountability for
customer service.  Provide telecommunications and administrative
support necessary for employees participating in flexiplace and
telecommuting work arrangements.  Expand the authority to establish
and fund dependent care programs.  Allow employees to use sick leave
to care for dependents.  Allow employees who leave and then re-enter
federal service to be given credit for prior sick leave balances. 

GAO Comments
The dramatic demographic changes occurring in the federal workforce
signify the need to modernize federal employment policies to help
employees balance their work and family responsibilities.  Leading
nonfederal employers have found that well-conceived work/family
programs can improve employee recruitment, retention, and
productivity.  Our work shows that the government has not kept pace
with other employers in this area. 


------------------------------------------------------- Chapter 29:1.3

HRM09:  Improve Accountability for Equal Opportunity Goals and
Accomplishments
Charge all federal agency heads with the responsibility for ensuring
equal opportunity and increasing representation of qualified women,
minorities, and persons with disabilities into all levels and job
categories, including middle and senior management positions. 

GAO Comments
Our work shows that progress is being made in making federal
employment and advancement opportunities available to persons
representative of all segments of society.  However, some agencies
have made far greater progress than others.  The changing composition
of the workforce in general means the government cannot relax its
efforts to accommodate and manage the increasing diversity of its own
workforce. 


------------------------------------------------------- Chapter 29:1.4

HRM13:  Form Labor-Management Partnerships for Success
Identify labor-management partnerships as a goal of the executive
branch and establish the National Partnership Council. 

GAO Comments
Based on our evaluation of the state of the federal labor-management
relations program, we concluded that the program is not accomplishing
its objectives.  We recommended that a panel of nationally recognized
experts in labor-management relations and participants in the federal
program be convened to develop a proposal for comprehensive program
reform.  The proposed National Partnership Council could be an
appropriate body to serve that purpose.  It should be recognized
that, depending on the matters made subject to collective bargaining
in a revised program, considerable training for federal managers on
bargaining strategies and methods could be required since few matters
are now subject to bargaining. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 29:2

HRM01:  Create a Flexible and Responsive Hiring System
Authorize agencies to establish their own recruitment and examining
programs.  Abolish centralized registers and standard application
forms.  Allow federal departments and agencies to determine that
recruitment shortages exist and directly hire candidates without
ranking.  Reduce the types of competitive service appointments to
three.  Abolish the time-in-grade requirement. 

GAO Comments
We agree that reforms are needed to bring the federal hiring process
more into line with the needs of agencies and job applicants, and we
can see merit in allowing agencies greater latitude in determining
which job candidates they wish to hire.  However, the specific
proposals represent significant departures from the traditional
hiring process, and we have completed no work on which to base a
determination of whether they are the best way to improve the
process.  More importantly, the report gave no indication of how
agencies would be held accountable for ensuring that merit system
principles and other statutory requirements, such as veterans'
preference in hiring, are followed under a complete decentralization
of the hiring process.  Thus, we generally agree with the
recommendation's objective, but cannot endorse the specific proposals
without further study. 


------------------------------------------------------- Chapter 29:2.1

HRM02:  Reform the General Schedule Classification and Basic Pay
System
Remove all grade-level classification criteria from the law.  Provide
agencies with flexibility to establish broadbanding systems built
upon the General Schedule framework. 

GAO Comments
Similar to our position on the previous recommendation, we generally
favor granting agencies increased prerogatives in managing their
human resources, but are concerned about how they would be held
accountable for their actions.  The current job classification system
evolved to implement the principle that there be equal pay for
substantially equal work for all employees in each local pay area. 
The report gave no indication of how the integrity of the job
classification and pay system would be maintained if each agency were
allowed to establish its own system without central guidance and
controls.  Our examinations of the broadbanding approach to position
classification have shown it was generally successful in the few
instances in which it was used, but the tests were too limited for a
conclusion that it would be appropriate in other locations.  Salary
costs also tended to be higher under a broadbanding system. 
Legislation to allow broadbanding in all agencies has been proposed
in the past, but was not enacted because of congressional concerns
that it had not been sufficiently tested. 


------------------------------------------------------- Chapter 29:2.2

HRM05:  Strengthen Systems to Support Management in Dealing with Poor
Performers
Develop a culture of performance which provides supervisors with the
skills, knowledge, and support they need to deal with poor
performers, and holds supervisors accountable for effectively
managing their human resources.  Reduce by half the time needed to
terminate federal employees for cause. 

GAO Comments
In 1989, we surveyed a random sample of supervisors across government
and in specific agencies asking about their experiences in
identifying and dealing with poor performers.  The survey respondents
felt that implementing the process was unduly difficult and
time-consuming.  Some of the difficulties they expressed were a
perceived lack of management support, a perceived lack of authority
to propose performance actions, and a reluctance to go through the
appeal or arbitration process.  They were particularly concerned
about the limited actions available to them in dealing with employees
who were performing at the level between fully successful and
unacceptable (minimally successful). 

Our findings indicated a need for agency management to focus on
creating an environment within which supervisors are encouraged and
motivated to deal with poor performers and are properly trained and
supported when they attempt to deal with them.  Thus, we agree with
the general thrust of the recommendation.  However, we are concerned
that the recommendation does not address the need to ease the
difficulties supervisors encounter when dealing with employees who
perform at the minimally successful level for extended periods of
time.  Also, we have done no work on which to base an opinion on the
reasonableness of the goal to reduce by half the time required to
terminate employees for cause. 


------------------------------------------------------- Chapter 29:2.3

HRM06:  Clearly Define the Objective of Training as the Improvement
of Individual and Organizational Performance; Make Training more
Market-Driven
Reduce restrictions on training to allow managers to focus on
organizational mission and to take advantage of the available
training marketplace. 

GAO Comments
We find this recommendation to be rather vague as to exactly what
changes are being called for.  However, we agree completely that
greater emphasis on federal employee training is needed.  Training
expenditures are often one of the first areas to be cut when agency
budgets are reduced, and our work indicates that many employees are
not receiving all of the training they need.  In a 1991 survey of
federal employees, we asked about their training experiences and
needs.  Overall, the employees expressed fairly positive views about
training, but sizeable numbers felt their training experiences left
something to be desired.  The following findings from the survey
illustrate the extent to which employees may have unmet training
needs. 

  About one-quarter of the respondents said they had no agency-paid
     training of any kind during the previous 2 years. 

  When asked to what extent their agencies encouraged them to
     participate in training, about 36 percent checked some, little,
     or no extent. 

  About 20 percent said they needed a great deal to a very great deal
     of additional job-related training. 

  Almost a quarter said they were treated fairly only some of the
     time or never when it came to training. 


------------------------------------------------------- Chapter 29:2.4

HRM11:  Strengthen the Senior Executive Service (SES) So That It
Becomes a Key Element in the Governmentwide Culture Change Effort
Create and reinforce a corporate perspective within the SES that
supports governmentwide culture change.  Promote a corporate
succession planning model to use to select and develop senior staff. 
Enhance voluntary mobility within and between agencies for top senior
executive positions in government. 

GAO Comments
Although this recommendation is not very specific, it appears to be
intended to achieve a more governmentwide approach to SES matters. 
We believe this idea may have merit.  The SES has not been the highly
mobile cadre of managers envisioned by the Civil Service Reform Act. 
Few SES members change agencies.  Our work has also shown that
relatively few SES appointees completed candidate development
programs designed to enhance their managerial skills. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 29:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 29:4

HRM08:  Improve Processes and Procedures Established to Provide
Workplace Due Process for Employees
Eliminate jurisdictional overlaps.  All agencies should establish
alternative dispute resolution methods and options for the informal
disposition of employment disputes. 

GAO Comments
Intuitively, this recommendation appears reasonable.  We agree that
improvements in the processes for resolving employment disputes
should be sought, but we have done no work to form an opinion on the
extent to which improvements are possible.  In a 1983 report entitled
Survey of Appeal and Grievance Systems Available to Federal
Employees, we concluded there was no strong evidence that
consolidating existing appeal and grievance systems would result in
significant savings in time or money.  We found that the individual
systems were established to serve specific needs and that nothing had
come to light to suggest that these needs no longer existed.  We have
made no further examination of this issue. 


------------------------------------------------------- Chapter 29:4.1

HRM10:  Improve Interagency Collaboration and Cross Training for
Human Resource Professionals
Establish an Interagency Equal Employment Opportunity and Affirmative
Employment Steering Group under the joint chair of the Equal
Employment Opportunity Commission and the Office of Personnel
Management.  Require appropriate cross training for human resource
management professionals. 

GAO Comments
Again, this recommendation seems reasonable, but it is not an issue
we have examined. 


------------------------------------------------------- Chapter 29:4.2

HRM12:  Eliminate Excessive Red Tape and Automate Functions and
Information
Phase out the entire 10,000 page Federal Personnel Manual (FPM) and
all agency implementing directives by December 1994.  Replace the FPM
and agency directives with automated personnel processes, electronic
decision support systems and "manuals" tailored to user needs. 

GAO Comments
In general, the FPM and agency directives provide guidance to federal
managers on how to interpret and apply the statutes pertaining to
federal employment.  To the extent that they can be simplified and
automated, they could possibly better accomplish their purposes. 
While we believe the recommendation's objective is sound and should
be seriously explored, we have no opinion on the amount of effort and
cost it would take to automate and reengineer the work processes. 
Nor do we have an opinion on the prospects of developing and having
replacement processes, systems, and manuals in place by December
1994.  We note, however, that major automation initiatives tend to be
costly. 


------------------------------------------------------- Chapter 29:4.3

HRM14:  Provide Incentives to Encourage Voluntary Separations
Provide departments and agencies with the authority to offer
separation pay.  Decentralize the authority to approve early
retirement.  Authorize departments and agencies to fund job search
activities and retraining of employees scheduled to be displaced. 
Limit annual leave accumulation by senior executives to 240 hours. 

GAO Comments
This recommendation is based on the premise that the government has
too many employees and should be reduced by offering employees
opportunities and incentives to leave.  The NPR report does not
clearly indicate how many employees, if any, are excess or how the
determination was made that agencies have more employees than they
need to accomplish their missions.  We have long maintained that the
numbers and types of employees needed should be determined through
sound workforce planning procedures.  We see no apparent relationship
between the downsizing issue and the accumulation of annual leave by
senior executives. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 29:5

The issues discussed in the Office of Personnel Management (OPM) and
other sections of this report are also HRM-related areas of concern. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 29:6

The Public Service (GAO/OCG-93-7TR, Dec.  1992) relates to the
overall summary. 

Federal Personnel Management:  OPM Reliance on Agency Oversight of
Personnel System Not Fully Justified (GAO/GGD-93-24, Dec.  8, 1992)
relates to HRM01. 

Personnel Practices:  Schedule C and Other Details to the Executive
Office of the President (GAO/GGD-93-14, Nov.  6, 1992) relates to
HRM01. 

Federal Employment:  Poor Service Found at Federal Job Information
Centers (GAO/GGD-92-116, July 28, 1992) relates to HRM01. 

Federal Hiring:  Does Veterans' Preference Need Updating? 
(GAO/GGD-92-52, Mar.  20, 1992) relates to HRM01. 

Personnel Practices:  Propriety of Career Appointments Granted Former
Political Appointees (GAO/GGD-92-51, Feb.  12, 1992) relates to
HRM01. 

Federal Recruiting:  College Placement Officials' Views of the
Government's Campus Outreach Efforts (GAO/GGD-92-48BR, Jan.  31,
1992) relates to HRM01. 

Federal Recruiting and Hiring:  Authority for Higher Starting Pay
Useful But Guidance Needs Improvement (GAO/GGD-91-22, Sept.  10,
1991) relates to HRM01. 

Federal Workforce:  Inappropriate Use of Experts and Consultants at
Selected Federal Agencies (GAO/GGD-91-99, July 17, 1991) relates to
HRM01. 

Federal Recruiting and Hiring:  Making Government Jobs Attractive to
Prospective Employees (GAO/GGD-90-105, Aug.  22, 1990) relates to
HRM01. 

Federal Workforce:  Selected Sites Cannot Show Fair and Open
Competition for Temporary Jobs (GAO/GGD-90-106, Sept.  5, 1990)
relates to HRM01. 

Personnel Practices:  Questionable Personnel Practices at the U.S. 
Fish and Wildlife Service (GAO/GGD-90-43, Jan.  23, 1990) relates to
HRM01. 

Federal Personnel:  Special Authorities Under the Demonstration
Project at Commerce (GAO/GGD-92-124BR, July 13, 1992) relates to
HRM02. 

Federal Personnel:  Review of Evaluation of Personnel Demonstration
Project at Commerce (GAO/GGD-91-93, May 14, 1991) relates to HRM02. 

Federal Pay:  Special Rates Effect on Recruitment and Retention for
Selected Clerical Occupations (GAO/GGD-90-118, Sept.  24, 1990)
relates to HRM02. 

Federal Personnel:  Observations on the Navy's Managing to Payroll
Program (GAO/GGD-90-47, Mar.  27, 1990) relates to HRM02. 

Federal Personnel:  Observations on the Navy's Personnel Management
Demonstration Project (GAO/GGD-88-79, May 3, 1988) relates to HRM02. 

Federal Performance Management:  Agencies Need Greater Flexibility in
Designing Their Systems (GAO/GGD-93-57, Feb.  24, 1993) relates to
HRM03 and HRM04. 

Performance Management:  Comments on Reauthorization of the
Performance Management and Recognition System (GAO/T-93-37, June 24,
1993) relates to HRM03 and HRM04. 

Federal Employment:  How Federal Employees View the Government as a
Place to Work (GAO/GGD-92-91, June 18, 1992) relates to HRM03, HRM04,
HRM06, and HRM07. 

Office of Personnel Management:  Better Performance Information
Needed (GAO/GGD-90-44, Feb.  7, 1990) relates to HRM03. 

Performance Management:  Appraisal and Promotion Results at the U.S. 
Customs Service (GAO/GGD-90-40, May 18, 1990) relates to HRM03 and
HRM04. 

Blue Collar Workers:  Appraisal Systems Are in Place, But Basic
Refinements Are Needed (GAO/GGD-87-72, June 18, 1987) relates to
HRM03. 

Pay for Performance:  Interim Report on the Performance Management
and Recognition System (GAO/GGD-89-69BR, May 18, 1989) relates to
HRM03 and HRM04. 

Pay for Performance:  Agency Personnel Directors' Views
(GAO/GGD-89-126FS, Sept.  15, 1989) relates to HRM03 and HRM04. 

Pay for Performance:  State and International Public Sector
Pay-for-Performance Systems (GAO/GGD-91-1, Oct.  12, 1990) relates to
HRM03 and HRM04. 

Gainsharing:  DOD Efforts Highlight an Effective Tool for Enhancing
Federal Productivity (GAO/GGD-86-143BR, Sept.  26, 1986) relates to
HRM04. 

Action Needed to Enhance the Credibility of Senior Executive Service
Performance Award Programs (GAO/FPCD-81-65, Sept.  30, 1981) relates
to HRM04. 

Performance Management:  How Well Is the Government Dealing with Poor
Performers?  (GAO/GGD-91-7, Oct.  2, 1990) relates to HRM05. 

Poor Performers:  How Are They Identified and Dealt With in the
Social Security Administration?  (GAO/GGD-89-28, Jan.  27, 1989)
relates to HRM05. 

Training Budgets:  Agency Budget Reductions in Response to the
Balanced Budget Act (GAO/GGD-86-98BR, July 16, 1986) relates to
HRM06. 

Federal Workforce:  Data on Training Received by Agency Executives,
Managers, and Supervisors (GAO/GGD-88-18FS, Nov.  30, 1987) relates
to HRM06. 

OPM Needs to Provide Better Guidance to Agencies for Approving
Government-Funded College Courses (GAO/FPCD-82-61, Sept.  20, 1982)
relates to HRM06. 

The Changing Workforce:  Demographic Issues Facing the Federal
Government (GAO/GGD-92-38, Mar.  24, 1992) relates to HRM07 and
HRM09. 

The Changing Workforce:  Comparison of Federal and Nonfederal
Work/Family Programs and Approaches (GAO/GGD-92-84, Apr.  23, 1992)
relates to HRM07. 

Federal Personnel:  Federal Agencies' Part-Time Employment Programs
(GAO/GGD-86-103BR, July 7, 1986) relates to HRM07. 

Federal Workforce:  Agencies' Estimated Costs for Counseling and
Processing Discrimination Complaints (GAO/GGD-92FS, Mar.  26, 1992)
relates to HRM08. 

Survey of Appeal and Grievance Systems Available to Federal Employees
(GAO/GGD-84-17, Oct.  20, 1983) relates to HRM08. 

Health and Human Services:  Update on Hispanic Representation in HHS
(GAO/GGD-93-47FS, Dec.  30, 1992) relates to HRM09. 

Federal Affirmative Employment:  Status of Women and Minority
Representation in Federal Law Enforcement Occupations
(GAO/T-GGD-93-2, Oct.  1, 1992) relates to HRM09. 

Federal Workforce:  Continuing Need for Federal Affirmative
Employment (GAO/GGD-92-27BR, Nov.  27, 1991) relates to HRM09. 

Federal Affirmative Employment:  Status of Women and Minority
Representation in the Federal Workforce (GAO/T-GGD-91-32, May 16,
1991, and GAO/T-GGD-92-2, Oct.  23, 1991) relates to HRM09. 

Federal Affirmative Action:  Better EEOC Guidance and Agency Analysis
of Underrepresentation Needed (GAO/GGD-91-86, May 10, 1991) relates
to HRM09. 

Equal Employment:  Minority Representation at USDA's National
Agricultural Statistics Service (GAO/GGD-91-31BR, Mar.  18, 1991)
relates to HRM09. 

EEO at Justice:  Progress Made But Underrepresentation Remains
Widespread (GAO/GGD-91-8, Oct.  2, 1990) relates to HRM09. 

Equal Employment Opportunity:  Representation of Minorities and White
Women at Fort Lee Army Post, Virginia (GAO/GGD-90-27, Jan.  17, 1990)
relates to HRM09. 

Disabled Veterans' Employment:  Performance Standards Needed to
Assess Program Results (GAO/GGD-89-45, Feb.  28, 1989) relates to
HRM09. 

Senior Executive Service:  Opinions About the Federal Work
Environment (GAO/GGD-92-63, May 1, 1992) relates to HRM11. 

Senior Executive Service:  The Extent to Which SES Members Have Used
the Sabbatical Program (GAO/GGD-88-90, Aug.  4, 1988) relates to
HRM11. 

Senior Executive Service:  Executives' Perspectives on Their Federal
Service (GAO/GGD-88-109FS, July 20, 1988) relates to HRM11. 

Senior Executive Service:  Reasons the Candidate Development Program
Has Not Produced More SES Appointees (GAO/GGD-88-47, Apr.  20, 1988)
relates to HRM11. 

Implementation of the Navy's Program to Rotate Career SES Members
(GAO/GGD-88-4, Oct.  5, 1987) relates to HRM11. 

Agencies' Use of the Candidate Development Program (GAO/GGD-86-93,
July 14, 1986) relates to HRM11. 

Federal Labor Relations:  A Program in Need of Reform
(GAO/GGD-91-101, July 30, 1991) relates to HRM13. 

The Federal Labor-Management Relations Program (GAO/T-GGD-92-8, Nov. 
19, 1991) relates to HRM13. 

Federal Employment:  Displaced Federal Workers Can Be Helped by
Expanding Existing Programs (GAO/GGD-92-86, May 5, 1992, and
GAO/T-GGD-92-38, May 6, 1992) relates to HRM14. 

Federal Employees:  Early Retirements in the Department of Defense
(GAO/GGD-89-53FS, Feb.  23, 1989) relates to HRM14. 

Information on the Administration's Program to Reduce Grade 11-15
Positions (GAO/GGD-85-48, Mar.  28, 1985) relates to HRM14. 

Federal Workforce:  How Certain Agencies Are Implementing the Grade
Reduction Program (GAO/GGD-86-33, Jan.  3, 1986) relates to HRM14. 

Also see the reports cited under the Office of Personnel Management
(OPM) section of this report. 


REINVENTING FEDERAL PROCUREMENT
(PROC)
=========================================================== Chapter 30


      OVERALL SUMMARY
------------------------------------------------------- Chapter 30:0.1

We strongly support the need for procurement reform.  A number of our
studies over the years have identified a wide range of problems in
the government's multibillion dollar procurement system.  NPR
recommendations for reinventing federal procurement address many of
the concerns we have expressed in reports and testimonies about the
way the government does business.  It is important to recognize,
however, that public support for reform can only be sustained by
ensuring the integrity and fairness of the procurement process and
properly protecting the government's and taxpayers' interests. 


         GAO CONTACT
----------------------------------------------------- Chapter 30:0.1.1

David E.  Cooper, Director, Acquisition Policy, Technology and
Competitiveness Issues, National Security and International Affairs
Division, (202) 512-4587. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 30:1

PROC02:  Build an Innovative Procurement Workforce
Establish an interagency program to improve the government wide
procurement workforce.  Provide civilian agencies with authority for
improving the acquisition workforce similar to that of the Defense
Department's. 

GAO Comments
We strongly support efforts to improve the management, training, and
career development of the procurement workforce governmentwide.  We
believe all agencies, civilian as well as military, should have the
authority needed to improve acquisition workforce management and
training.  However, we have not specifically addressed the
applicability to civilian agencies of the Defense Department's
authority and initiatives in acquisition workforce issues. 


------------------------------------------------------- Chapter 30:1.1

PROC09:  Lower Costs and Reduce Bureaucracy in Small Purchases
Through the Use of Purchase Cards
Provide managers with the ability to authorize employees to purchase
small dollar value items directly using a government purchase card. 
Require internal government supply sources to accept this card. 

GAO Comments
We have reported that, with adequate internal controls, the small
purchases credit card program can help agencies improve the
efficiency of their purchasing and payment processes when used for
purchases of $25,000 or less from both commercial and government
sources.  The credit card program offers several benefits, such as
reduced paperwork, prompt receipt of items, and a reduction in the
number of invoices and inquiries about payments. 


------------------------------------------------------- Chapter 30:1.2

PROC10:  Ensure Customer Focus in Procurement
Revise Procurement Management Reviews to incorporate NPR principles
such as "focusing on results" for the line managers. 

GAO Comments
We advocate the use of procurement management reviews as an important
tool in procurement planning, management, and oversight.  Our work
shows that procurement management reviews can provide useful
information to improve agencies' procurement organizations and
operations. 


------------------------------------------------------- Chapter 30:1.3

PROC13:  Foster Reliance On the Commercial Marketplace
Change laws to make it easier to buy commercial items.  For example,
revise the definition of commercial item.  Revise government wide and
agency regulations and procedures which preclude the use of
commercial specifications. 

GAO Comments
We strongly support efforts to promote and simplify commercial item
acquisitions.  For example, we strongly support legislative proposals
to broaden the definition of commercial items and otherwise promote
and simplify such acquisitions.  We also fully support the use of
commercial product descriptions, whenever they best satisfy the
government's legitimate needs. 


------------------------------------------------------- Chapter 30:1.4

PROC14:  Expand Electronic Commerce for Federal Acquisition
Establish a government wide program to use electronic commerce for
federal procurements. 

GAO Comments
We agree that automated technologies can be used to facilitate
computer-to-computer exchange of routine information and that such a
capability could play a key role in greatly improving the federal
government's business operations and processes, including procurement
of products and services.  Effective implementation of Electronic
Data Interchange (EDI) systems would help reduce the burdens of the
paper-based process now imposed on business and government and could
increase small business participation in the procurement process. 
Experience implementing EDI within large private sector companies and
the Department of Defense shows that effective EDI implementation
requires (1) business plans that clearly define how the technology
will benefit the targeted business areas, (2) using a standard
approach that concentrates on consistent electronic business forms
for each business area, and (3) a corporatewide telecommunications
infrastructure to support electronic business within the agency and
with external trading partners (other agencies, vendors, etc.). 


------------------------------------------------------- Chapter 30:1.5

PROC16:  Promote Excellence in Vendor Performance
Establish an interagency Excellence in Vendor Performance Forum that
would develop policies and techniques to measure contractor
performance for use in contract decisions.  Establish an award for
contractor and government acquisition excellence. 

GAO Comments
We fully support programs that are designed to recognize past
performance in selecting contractors.  We support programs that
emphasize quality and established performance, as well as price, in
awarding contracts.  We further believe that increased emphasis
should be placed on product quality and on-time delivery in assessing
contractor performance. 


------------------------------------------------------- Chapter 30:1.6

PROC18:  Authorize Multiyear Contracts
Authorize multiyear contracts and allow contracts for severable
services to cross fiscal years. 

GAO Comments
For many years, we have favored proposals to provide civilian
agencies with statutory authority, similar to that of the Department
of Defense, to enter into multiyear contracts.  Such legislation
could also include a provision enabling agencies to enter into
severable service contracts across fiscal years, financed by annual
appropriations. 


PROC19:  Conform Certain Statutory Requirements for Civilian Agencies
to Those of Defense Agencies
Repeal requirements for commercial pricing certificates and authorize
contract awards without discussions, where appropriate.  Maintain the
$500,000 threshold for cost and pricing data requirements for the
Defense Department and establish the same threshold for civilian
agencies. 

GAO Comments
We agree that the laws and regulations governing civilian and defense
agency acquisitions should be as consistent as possible, including
authority for awards without discussions.  We have recently testified
in support of a permanent $500,000 threshold for cost and pricing
data.  We have not done work on commercial pricing certificates. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 30:2

PROC03:  Encourage More Procurement Innovation
Provide new legislative authority to test innovative procurement
methods.  Establish a mechanism to disseminate information government
wide on innovative procurement ideas. 

GAO Comments
We support agency testing of innovative procurement methods and
believe that establishing means to publicize innovative ideas could
be beneficial.  Adequate controls and oversight over testing should
be maintained, however.  Existing authority to test procurement
innovations requires congressional approval, has been little used,
and may need improvement. 


------------------------------------------------------- Chapter 30:2.1

PROC04:  Establish New Simplified Acquisition Threshold and
Procedures
Enact legislation to simplify small purchases by raising the
threshold for the use of simplified acquisition procedures from
$25,000 to $100,000 and raise the various thresholds for the
application of over a dozen other statutory requirements that
similarly complicate the process.  To ensure small business
participation, establish a single electronic bulletin board
capability to provide access to information on contracting
opportunities. 

GAO Comments
We support recommendations such as these which, if effectively
implemented, can (1) increase the productivity of a shrinking Federal
workforce, (2) reduce costs for both the government and its
suppliers, and (3) enhance opportunities for small businesses. 
However, appropriate management attention and internal controls for
both small purchases and electronic contracting initiatives are
essential to ensure that these efforts are successful and abuses are
avoided.  We have not specifically addressed raising particular
statutory threshold levels. 


------------------------------------------------------- Chapter 30:2.2

PROC05:  Reform Labor Laws and Transform the Labor Department Into an
Efficient Partner For Meeting Public Policy Goals
Enact legislation to simplify acquisition labor laws such as the
Davis-Bacon Act, the Copeland Act, and the Service Contract Act. 
Improve access to wage schedules through an on-line electronic
system. 

GAO Comments
We believe that simplification of acquisition labor laws is a step in
the right direction.  One step we support to further this
simplification is to consolidate Davis-Bacon functions, now shared by
the Department of Labor and GAO, in the Department of Labor.  Also,
we are conducting a partial review of the changes that have occurred
since our last comprehensive report on Davis-Bacon in 1979 that would
affect the procedure for setting prevailing wages.  That work should
shed more light on this issue.  Further, while we have not
specifically addressed the issue of access to wage schedules through
on-line electronic systems, we believe it represents good business
practices. 


------------------------------------------------------- Chapter 30:2.3

PROC08:  Reform Information Technology Procurements
Increase the delegation of authority to agencies to purchase
information technology.  For purchases less than $500,000 for
products, and $2.5 million for services over the life of a contract,
eliminate indepth requirements for analyses of alternatives. 
Pilot-test alternative ways of buying commercially available
information technology items. 

GAO Comments
We support increasing delegations of procurement authority to those
agencies that have a good information technology acquisition track
record.  Given the history of widespread problems in government
information technology acquisitions, however, we do not support
increased delegations or relief from planning requirements for
agencies that do not have proven track records.  Proper evaluation of
alternatives lessens the risk that agencies will select alternatives
that do not fully meet user requirements or are unnecessarily complex
and expensive.  We believe the recommendation to "eliminate indepth
requirements for analyses of alternatives" for smaller acquisitions
is unnecessary because the government's current policy--codified in
the Federal Information Resources Management Regulation (FIRMR Sect. 
201-20)--states that agencies should vary the depth of their analyses
based upon the size and complexity of their requirements. 

We support pilot-testing of alternative methods of acquisition. 


------------------------------------------------------- Chapter 30:2.4

PROC11:  Improve Procurement Ethics Laws
Create consistency across the government in the application of
procurement ethics laws. 

GAO Comments
We support the reasoned and equitable application of procurement
ethics laws.  Ethical conduct in the procurement area is governed by
several statutes, some of which contain overlapping provisions.  Some
agencies, such as DOD, are subject to additional statutory
restrictions or requirements not applicable elsewhere in the
government.  We have previously reported that agencies had difficulty
implementing some of these provisions. 


------------------------------------------------------- Chapter 30:2.5

PROC15:  Encourage Best Value Procurement
To recognize other factors besides price, define "best value" and
provide regulatory guidance to implement a program for buying on a
"best value" basis.  Issue guide on the use of "best practices"
source selection procedures. 

GAO Comments
We strongly support the use of best value procurement principles in
federal procurement.  The government should have the means to ensure
that it gets the greatest value for the dollar.  We also support the
proposed improvements.  Best value buying requires, however, that
evaluation criteria be clear and that procurement personnel be
properly trained. 


------------------------------------------------------- Chapter 30:2.6

PROC20:  Streamline Buying for the Environment
Develop "best practice" guides on buying for the environment. 
Encourage multiple award schedule contractors to identify
environmentally preferable products.  Provide energy efficiency
information in government catalogs and automated systems. 

GAO Comments
We support environmentally sound buying practices.  Our work has
shown that agencies can improve their efforts in this regard.  NPR's
recommendations have merit. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 30:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 30:4

PROC01:  Reframe Acquisition Policy
Convert the 1,600 pages of the Federal Acquisition Regulation from a
set of rigid rules to a set of guiding principles. 

GAO Comments
Although we strongly support simplification of the procurement rules
where appropriate, we are unable to respond fully to the
recommendation without greater specificity. 


------------------------------------------------------- Chapter 30:4.1

PROC06:  Amend Protest Rules
Change the standard of review at the General Services Board of
Contract Appeals to conform to that used in the relevant courts. 
Allow penalties for frivolous protests.  Allow contract negotiation
to continue up to the point of contract award, even though a protest
has been filed with the General Services Board of Contract Appeals. 

GAO Comments
We have no work specifically on these issues that provides an
adequate basis for comment. 


------------------------------------------------------- Chapter 30:4.2

PROC07:  Enhance Programs for Small Business and Small Disadvantaged
Business Concerns
Repeal statutory limitations on subcontracting and substitute
regulatory limitations to provide greater flexibility.  Authorize
civilian agencies to establish small disadvantaged business
set-asides. 

GAO Comments
Although we endorse efforts to improve small and small disadvantaged
business participation in the federal marketplace, we have no work on
these specific issues that would provide an adequate basis for
comment. 


------------------------------------------------------- Chapter 30:4.3

PROC12:  Allow for Expanded Choice and Cooperation in the Use of
Supply Schedules
Allow state and local governments, grantees, and certain nonprofit
agencies to use federal supply sources.  Similarly, allow federal
agencies to enter into cooperative agreements to share state and
local government supply sources. 

GAO Comments
We have not done any analysis of this issue.  However, allowing
federal, state, and local governments to share supply sources may
offer opportunities to increase the government supplier base and
decrease costs of common supplies and services at all levels of
government. 


------------------------------------------------------- Chapter 30:4.4

PROC17:  Authorize a Two-Phase Competitive Source Selection Process
Authorize the use of a two-phase selection process for certain types
of contracts so that an offeror does not incur a substantial expense
in preparing a contract proposal. 

GAO Comments
We could support efforts to simplify the procurement process to
reduce the cost of competing for government contracts provided that
potential contractors are not rejected unreasonably.  However, the
precise dimensions of the recommendation are uncertain. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 30:5

Our work in reviewing information technology acquisitions indicates
that agencies should systematically identify potential risks in
systems under development, then alter their acquisition plans and
strategies to manage and control the identified risks.  In doing so,
they should draw on established guidance, such as Information
Technology:  A Model to Help Managers Decrease Acquisition Risks
(GAO/IMTEC-8.1.6, Aug.  1990). 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 30:6

Acquisition Reform:  DOD's Efforts to Streamline Its Acquisition
System and Reduce Personnel (GAO/NSIAD-90-21, Nov.  1, 1989) relates
to PROC02. 

Defense Management:  Implementation of the Defense Acquisition
Workforce Improvement Act (GAO/NSIAD-92-97, Jan.  31, 1992) relates
to PROC02. 

Weapons Acquisition:  A Rare Opportunity for Lasting Change
(GAO/NSIAD-93-15, Dec.  1992) relates to PROC02. 

Acquisition Management:  Waivers to Acquisition Work Force Training,
Education, and Experience Requirements (GAO/NSIAD-93-128, Mar.  30,
1993) relates to PROC02. 

Acquisition Management:  Implementation of the Defense Acquisition
Workforce Improvement Act (GAO/NSIAD-93-129, Apr.  26, 1993) relates
to PROC02. 

General Management Issues (GAO/OCG-93-3TR, Dec.  1992) relates to
PROC03 and PROC10. 

Procurement:  DOD Efforts Relating to Nondevelopmental Items
(GAO/NSIAD-89-51, Feb.  7, 1989) relates to PROC03 and PROC13. 

DOD Food Inventory:  Using Private Sector Practices Can Reduce Costs
and Eliminate Problems (GAO/NSIAD-93-110, June 4, 1993) relates to
PROC03 and PROC13. 

Commercial Practices:  DOD Could Save Millions by Reducing
Maintenance and Repair Inventories (GAO/NSIAD-93-155, June 7, 1993)
relates to PROC03 and PROC13. 

Defense Inventory:  Applying Commercial Purchasing Practices Should
Help Reduce Supply Costs (GAO/NSIAD-93-112, Aug.  6, 1993) relates to
PROC03 and PROC13. 

NASA:  Major Challenges for Management (GAO/T-NSIAD-94-18, Oct.  6,
1993) relates to PROC03, PROC04, PROC13, and PROC14. 

Multiple Award Schedule Purchases:  Changes Are Needed to Improve
Agencies' Ordering Practices (GAO/NSIAD-92-123, June 2, 1992) relates
to PROC03 and PROC14. 

Procurement Reform:  Comments on Proposed Acquisition Improvement Act
of 1993 (GAO/T-OGC-93-1, May 25, 1993) relates to PROC03, PROC04,
PROC14, and PROC19. 

Multiple Award Schedule Purchases:  Improvements Needed Regarding
Publicizing Agencies' Orders (GAO/NSIAD-92-88, May 12, 1992) relates
to PROC03 and PROC04. 

Resolution Trust Corporation:  Additional Monitoring of Basic
Ordering Agreements Needed (GAO/GGD-93-107, Sept.  13, 1993) relates
to PROC03. 

NASA Procurement:  Planning for Pilot Test of New Procurement
Procedures Is Adequate (GAO/NSIAD-94-67, Nov.  4, 1993) relates to
PROC04. 

The Davis-Bacon Act Should Be Repealed (GAO/HRD-79-18, Apr.  27,
1979) relates to PROC05. 

The Congress Should Consider Repeal Of the Service Contract Act
(GAO/HRD-83-4, Jan.  31, 1983) relates to PROC05. 

Small Business:  Problems in Restructuring SBA's Minority Business
Development Program (GAO/RCED-92-68, Jan.  31, 1992) relates to
PROC07. 

Small Business:  The Small Business Administration's Progress in
Restructuring Its 8(a) Business Development Program (GAO/T-RCED-92-5,
Mar.  4, 1992) relates to PROC07. 

Small Business:  Problems Continue With SBA's Minority Business
Development Program (GAO/RCED-93-145, Sept.  17, 1993) relates to
PROC07. 

Small Business:  The Small Business Administration's Progress in
Restructuring Its Business Development Program (GAO/T-RCED-93-56,
Sept.  22, 1993) relates to PROC07. 

Minority Contracting:  DOD's Reporting Does Not Address Legislative
Goal (GAO/NSIAD-93-167, July 27, 1993) relates to PROC07. 

ADP Procurements:  GSA Needs to Improve Its Review Process to Enhance
Its ADP Oversight (GAO/IMTEC-92-7, Oct.  28, 1991) relates to PROC08
and PROC10. 

DOD Computer Contracting:  Inadequate Management Wasted Millions of
Dollars (GAO/IMTEC-93-31, June 25, 1993) relates to PROC08. 

Major NIH Computer System:  Poor Management Resulted in Unmet
Scientists' Needs and Wasted Millions (GAO/IMTEC-92-5, Nov.  4, 1991)
relates to PROC08. 

Information Resources:  Summary of Federal Agencies' Information
Resources Management Problems (GAO/IMTEC-92-13FS, Feb.  13, 1992)
relates to PROC08. 

Perceived Barriers to Effective Information Resources
Management--Results of GAO Panel Discussions (GAO/IMTEC-92-67, Sept. 
1992) relates to PROC08. 

Information Management and Technology Issues (GAO/OCG-93-5TR, Dec. 
1992) relates to PROC08 and PROC14. 

Information Technology:  An Audit Guide for Assessing Acquisition
Risks (GAO/IMTEC-8.1.4, Dec.  1992) relates to PROC08. 

Cash Management:  Diners Club Business Travel Management Program
Needs Improvement (GAO/AFMD-90-66, Apr.  30, 1990) relates to PROC09. 

Cash Management:  Benefits and Limitations of the Small Purchases
Credit Card Program (GAO/AFMD-90-89BR, Sept.  11, 1990) relates to
PROC09. 

NASA Contract Management (GAO/HR-93-11, Dec.  1992) relates to
PROC10. 

Contract Pricing:  DOD's Use of the Truth in Negotiations Act
Deterrents Could Be Increased (GAO/NSIAD-94-7, Oct.  25, 1993)
relates to PROC10. 

Implementation of the Certification Requirements of the Procurement
Integrity Law (GAO/T-NSIAD-91-05, Feb.  21, 1991) relates to PROC11. 

Postal Procurement:  Ethics Violations Did Not Invalidate an
Automation Contract (GAO/GGD-92-119, Aug.  13, 1992) relates to
PROC11. 

VA Health Care:  Inadequate Enforcement of Federal Ethics
Requirements at VA Medical Centers (GAO/HRD-93-39, Apr.  30, 1993)
relates to PROC11. 

Commercial Practices:  Opportunities Exist to Reduce Aircraft Engine
Support Costs (GAO/NSIAD-91-240, June 28, 1991) relates to PROC13. 

Defense Inventory Management (GAO/HR-93-12, Dec.  1992) relates to
PROC13. 

National Institute of Standards and Technology:  Use of Electronic
Data Interchange Technology to Create Valid Obligations (71 Comp. 
Gen.  109, Dec.  13, 1991) relates to PROC14. 

Tax Systems Modernization:  IRS' Use of Consultants to Do the TMAC
Price/Technical Tradeoff Analysis (GAO/IMTEC-93-4BR, Oct.  23, 1992)
relates to PROC15. 

Tax Systems Modernization:  IRS Could Have Avoided Successful
Protests of Major Computer Procurement (GAO/IMTEC-92-27, Mar.  13,
1992) relates to PROC15. 

Army Acquisition:  Contract for the Reserve Component Automation
System (GAO/NSIAD-93-5, Nov.  5, 1992) relates to PROC15. 

General Services Administration:  Actions Needed to Stop Buying
Supplies From Poor-Performing Vendors (GAO/GGD-93-34, Jan.  11, 1993)
relates to PROC15 and PROC16. 

Defense Procurement:  Programs for Considering Vendor's Past
Performance in Awarding Contracts (GAO/NSIAD-93-63, June 30, 1993)
relates to PROC16. 

General Services Issues (GAO/OCG-93-28TR, Dec.  1992) relates to
PROC16. 

Comments on S.678, 99th Cong., 1st Sess., B-214545, Aug.  7, 1985,
relates to PROC18. 

Solid Waste:  Federal Program to Buy Products With Recovered
Materials Proceeds Slowly (GAO/RCED-93-58, May 17, 1993) relates to
PROC20. 

Solid Waste:  Progress in Implementing the Federal Program to Buy
Products Containing Recovered Materials (GAO/T-RCED-92-42, Apr.  3,
1992) relates to PROC20. 

Wastepaper Recycling:  Programs of Civil Agencies Waned During the
1980s (GAO/GGD-90-3, Dec.  15, 1989) relates to PROC20. 


REINVENTING SUPPORT SERVICES (SUP)
=========================================================== Chapter 31


      OVERALL SUMMARY
------------------------------------------------------- Chapter 31:0.1

Our December 1992 transition series reports on Government Management
Issues and General Services Issues highlighted the need for reforms
of traditional federal management principles and processes as well as
a fundamental restructuring of the way federal agencies obtain the
general purpose office space, goods, and services they need to
support their missions.  Traditional methods of delivering essential
mission support services to the federal agency community may have
worked well years ago.  But they no longer allow the government to
satisfy agencies' administrative support needs quickly and
effectively in a rapidly changing world. 

Many private and other public sector organizations, in this country
as well as abroad, have revamped the way they provide general
administrative services--separating policymaking and regulation or
oversight from operations, encouraging competition, and
decentralizing some operations to bring services closer to the
customer.  In concluding, as we had in our transition series reports
on overall federal management and GSA, that the traditional federal
administrative support model, grounded in centralization and
uniformity, should be replaced with a new one that is based on
entrepreneurial and competitive principles, NPR's report echoed our
basic concerns in this area. 


         GAO CONTACT
----------------------------------------------------- Chapter 31:0.1.1

J.  William Gadsby, Director, Government Business Operations Issues,
General Government Division, (202) 512-8387. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 31:1

SUP03:  Improve Distribution Systems to Reduce Costly Inventories
Permit customer choice in sources of supply.  Compare depot
distribution costs with commercial distribution systems.  Take away
the Federal Prison Industries' status as a mandatory source of
federal supplies and require it to compete commercially for federal
agencies' business.  Increase the use of electronic commerce for
ordering from depot systems. 

GAO Comments
We agree that existing inventories of equipment and supplies can and
should be reduced and that federal agencies should be permitted to
choose their sources of supply.  This will mean that central service
providers that now have mandatory source status, such as GSA and
Federal Prison Industries (FPI), will have to compete directly with
the private sector and others for federal agencies' business.  While
we support this concept, there are barriers and obstacles that likely
would inhibit these agencies from competing effectively.  These
problems need to be identified, reexamined, and resolved. 


------------------------------------------------------- Chapter 31:1.1

SUP08:  Give Customers Choices and Create Real Property Enterprises
That Promote Sound Real Property Asset Management
Give agencies greater authority to choose their sources of real
property services.  Create competitive enterprises within the
government to provide real property services on a fee basis, and
encourage federal managers to seek the best available source.  Create
an ownership enterprise for the sound management of federal real
property assets.  Establish a governmentwide policy for real property
asset management.  Manage the Federal Buildings Fund in a manner
comparable to the commercial sector. 

GAO Comments
We support the overall thrust of this recommendation.  It echoes our
longstanding concerns about GSA's monopoly and conflicting roles and
the unbusinesslike way the federal government's vast, valuable real
estate assets are acquired and managed.  While we support the
concepts of ending GSA's office space monopoly and creating a new
real property asset management enterprise to oversee the federal real
estate portfolio and help maximize its return on investment, barriers
inhibiting effective asset management and GSA's ability to compete
will need to be reexamined and resolved. 


------------------------------------------------------- Chapter 31:1.2

SUP11:  Reduce Postage Costs Through Improved Mail Management
Encourage postage savings through the implementation of mail
management initiatives.  Allow line managers to manage their own
postal budgets. 

GAO Comments
We support the pursuit of available postage discounts and other
initiatives that would reduce federal agencies' mail costs. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 31:2

SUP01:  Authorize the Executive Branch to Establish a Printing Policy
That Will Eliminate the Current Printing Monopoly
Give the executive branch authority to make its own printing policy
that will eliminate the mandatory printing source.  Develop a new
executive branch printing policy for the 21st century. 

GAO Comments
We agree that the Government Printing Office's (GPO) monopoly-like
status contributes to inefficiencies and ineffectiveness and that
GPO's mandatory source status for executive branch agencies should be
eliminated.  We also agree that a new executive branch printing
policy will be needed, but we have no basis to say who, within the
executive branch, should be responsible for developing such a policy
or what specific provisions should be included to ensure agencies
have sufficient flexibility in meeting their printing needs. 


------------------------------------------------------- Chapter 31:2.1

SUP02:  Assure Public Access to Federal Information
Give the executive branch agencies responsibility for distributing
printed federal information to depository libraries.  Require
agencies to inventory the federal information they hold, and make it
accessible to the public. 

GAO Comments
We agree with the intent of this recommendation.  However, we have no
basis to comment on specifically how and by whom it would be
implemented within the executive branch, nor on how costs should be
borne. 


------------------------------------------------------- Chapter 31:2.2

SUP04:  Streamline and Improve Contracting Strategies for the
Multiple Award Schedule Program
Eliminate the use of mandatory supply schedules.  Make the supply
schedule system easier to use by reducing the administrative burden
for acquisitions under $10,000.  In addition, eliminate the
announcement requirements and raise the maximum order limitations for
the purchase of information technology items listed in supply
schedules. 

GAO Comments
We support efforts to improve the Multiple Award Schedule program,
including streamlining the solicitation, selection, and related
requirements under the schedules.  We have supported proposals to
revise the dollar threshold for announcement requirements, but have
not supported elimination of those requirements.  Our work to date
has not addressed eliminating the use of mandatory supply schedules. 



------------------------------------------------------- Chapter 31:2.3

SUP05:  Expand Agency Authority and Eliminate Congressional Control
Over Federal Vehicle Fleet Management
Update vehicle replacement standards.  Increase emergency repair
limits to $150.  Eliminate the monopoly on disposing of agency-owned
vehicles. 

GAO Comments
Our ongoing work in this area indicates that this NPR recommendation
has merit.  This recommendation was originally proposed by the
President's Management Improvement Council in 1992 and has been
accepted by GSA, the Office of Management and Budget and other
agencies with motor vehicle fleets.  However, actions shouldn't be
restricted to these operational matters.  State governments and
private firms have made additional strategic improvements to their
fleets through benchmarking and improved information systems that
might also be applicable to the federal vehicle fleet. 


------------------------------------------------------- Chapter 31:2.4

SUP06:  Give Agencies Authority and Incentive for Personal Property
Management and Disposal
Provide incentives to agencies to dispose of excess personal
property.  Automate the process and eliminate the monopoly on
personal property disposal. 

GAO Comments
We agree that property management and disposal policies and practices
need improvement and that federal efforts to identify, manage, and
dispose of unneeded or underutilized property have been largely
ineffective.  Most federal agencies have no incentive to give up such
property because they generally get nothing for it.  Thus, financial
incentives could result in improvements.  However, most federal
agencies do not know the market value of their property and pay no
penalty for using it inefficiently. 


------------------------------------------------------- Chapter 31:2.5

SUP09:  Simplify Procedures for Acquiring Small Blocks of Space to
House Federal Agencies
Simplify the procedures for acquiring small amounts of leased space
under 10,000 square feet. 

GAO Comments
Our ongoing work in the leasing area indicates that this NPR
recommendation has merit and may be beneficial for the entire leased
space program.  GSA now pays $2 billion annually for leased office
space, and these costs are projected to rise to $3 billion annually
by 2002.  Federal agencies have become increasing dissatisfied with
the condition, quality, and costs of their space as well as the
length of time it takes GSA to deliver it. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 31:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 31:4

SUP07:  Simplify Travel and Increase Competition
Increase choices for federal travelers and automate the travel
process.  Pilot-test a tender system for airfares. 

GAO Comments
We have done no recent work in this area and have no basis to comment
on the merits of this recommendation. 


------------------------------------------------------- Chapter 31:4.1

SUP10:  Establish New Contracting Procedures for the Continued
Occupancy of Leased Office Space
Simplify the procedures for renewing leases. 

GAO Comments
We have no basis to comment on the merits of this recommendation. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 31:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 31:6

Government Management Issues (GAO/OCG-93-3TR, Dec.  1992) relates to
the overall summary. 

General Services Issues (GAO/OCG-93-28TR, Dec.  1992) relates to the
overall summary, SUP03, SUP06, SUP08, and SUP11. 

Government Printing Office:  Monopoly-Like Status Contributes to
Inefficiency and Ineffectiveness (GAO/GGD-90-107, Sept.  26, 1990)
relates to SUP01. 

Defense Management:  Printing Operations at the Department of Defense
(GAO/T-NSIAD-93-19, July 15, 1993) relates to SUP01. 

Federal Information:  Users' Current and Future Technology Needs
(GAO/GGD-89-20FS, Nov.  30, 1988) relates to SUP02. 

Federal Information:  Agency Needs and Practices (GAO/GGD-88-115FS,
Sept.  20, 1988) relates to SUP02. 

General Services Administration:  Increased Direct Delivery of
Supplies Could Save Millions (GAO/GGD-93-32, Dec.  28, 1993) relates
to SUP03. 

Defense Inventory:  Applying Commercial Practices Should Help Reduce
Supply Costs (GAO/NSIAD-93-112, Aug.  6, 1993) relates to SUP03. 

FPI Systems Furniture (GAO/GGD-93-51R, July 7, 1993) relates to
SUP03. 

Commercial Practices:  DOD Could Save Millions by Reducing
Maintenance and Repair Inventories (GAO/NSIAD-93-155, June 7, 1993)
relates to SUP03. 

DOD Medical Inventory:  Reductions Can Be Made Through the Use of
Commercial Practices (GAO/NSIAD-92-58, Dec.  5, 1991) relates to
SUP03. 

Commercial Practices:  Opportunities Exist to Reduce Aircraft Engine
Costs (GAO/NSIAD-91-240, June 28, 1991) relates to SUP03. 

General Services Administration:  Actions Needed to Improve
Protection Against Fraud, Waste, and Mismanagement (GAO/GGD-92-98,
Sept.  30, 1992) relates to SUP03, SUP05, SUP06, and SUP08. 

Multiple Award Schedule Contracting:  Changes Needed in Negotiation
Objectives and Data Requirements (GAO/GGD-93-123, Aug.  25, 1993)
relates to SUP04. 

Multiple Award Schedule Purchases:  Changes Are Needed to Improve
Agencies' Ordering Practices (GAO/NSIAD-92-123, June 2, 1992) relates
to SUP04. 

Multiple Award Schedule Purchases:  Improvements Needed Regarding
Publicizing Agencies' Orders (GAO/NSIAD-92-88, May 12, 1992) relates
to SUP04. 

NASA Property:  Improving Management of Government Equipment Provided
to Contractors (GAO/NSIAD-93-191, Sept.  9, 1993) relates to SUP06. 

Federal Real Property:  National Performance Review Recommendations
(GAO/T-GGD-93-47, Sept.  21, 1993) relates to SUP08, SUP09, and
SUP10. 

Federal Real Property:  Key Acquisition and Management Obstacles
(GAO/T-GGD-93-42, July 27, 1993) relates to SUP08. 

Federal Buildings Fund Limitations (GAO/GGD-93-34R, Apr.  5, 1993)
relates to SUP08. 

Real Property Management Issues Facing GSA and Congress
(GAO/T-GGD-92-4, Oct.  30, 1991) relates to SUP08. 

Mail Management:  GSA Needs to Improve Support of Agency Programs
(GAO/GGD-90-49, Aug.  7, 1990) relates to SUP11. 


REENGINEER THROUGH THE USE OF
INFORMATION TECHNOLOGY (IT)
=========================================================== Chapter 32


      OVERALL SUMMARY
------------------------------------------------------- Chapter 32:0.1

As discussed in our December 1992 transition series report on
Information Management and Technology Issues, widespread weaknesses
in federal information resources management underlie many of the
problems found in individual programs.  Despite heavy investments in
computer technology, executive agencies still lack essential
information for managing their programs and resources effectively,
controlling expenditures, and achieving measurable results. 
Moreover, many agencies are not using information technology
strategically to simplify and streamline their organization,
management, and business processes to improve service to the public
and reduce costs.  As a result, projects have consistently run into
serious trouble--they are developed late, fail to work as planned,
and cost much more than expected.  The results, in missed benefits
and misspent money, can be found throughout the government.  Dramatic
benefits in cost savings, productivity, and service rarely
materialize.  Rather, some improvements are gained at the
margins--but often at a high cost. 

NPR's recommendations are intended to make dramatic improvements in
government service with greatly reduced costs.  We generally agree
with the intent of most of these recommendations but have too little
detail to fully assess the potential impact of the recommendations on
reaching NPR's objectives.  We have additional areas of concern
(highlighted later in this section) that NPR does not appear to
address.  One overriding concern with NPR's recommendations is that
they are highly dependent on the effective deployment of information
technology and information systems.  Many agencies simply do not have
the capacity in terms of management skills, management continuity,
and technical ability to develop the fundamental underpinnings needed
to implement the recommendations.  The NPR report offers no
comprehensive implementation plan for addressing this basic
shortcoming in a reasonable timeframe.  Without such a plan, we are
concerned that the promises offered by NPR cannot be kept. 


         GAO CONTACT
----------------------------------------------------- Chapter 32:0.1.1

Jack L.  Brock, Jr., Director, Information Resources Management
Policies and Issues, Accounting and Information Management Division,
(202) 512-6406. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 32:1

None. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 32:2

IT01:  Provide Clear, Strong Leadership to Integrate Information
Technology Into the Business of Government
Create a Government Information Technology Services working group to
develop a strategic vision for the use of government information
technology and to implement NPR's information technology
recommendations. 

GAO Comments
We support the recommendation for developing a strategic vision for
the use of government information technology.  We have consistently
cited poor management as a root cause of agencies' shortcomings in
using information technology to streamline their operations and
improve their service to the public.  Specifically, top federal
managers continue to overlook the strategic role of information
technology in reengineering business practices.  The working group
could well be the vehicle for developing a strategic vision and--as
noted in our overall summary--an implementation plan if the group has
sufficiently broad representation.  Actual implementation of the NPR
recommendations, however, would likely require resources beyond the
working group. 


------------------------------------------------------- Chapter 32:2.1

IT02:  Implement Nationwide, Integrated Electronic Benefit Transfer
Design an integrated implementation plan for the use of electronic
benefit transfer for programs such as Food Stamps and for direct
payments to individuals without bank accounts. 

GAO Comments
We have not yet fully studied the issue of electronic benefit
transfers within the context of these particular programs because
such initiatives are relatively new.  However, we believe this
recommendation has merit and warrants further consideration because
of its potential for simplifying the delivery of benefit payments. 


------------------------------------------------------- Chapter 32:2.2

IT06:  Establish an International Trade Data System
Develop and implement a U.S.  Government International Trade Data
System in the Treasury Department. 

GAO Comments
While we do not know the details of this proposed system, we believe
it is important to streamline the collection of data needed to
support and facilitate trade, enforce trade laws, and collect customs
revenues. 


------------------------------------------------------- Chapter 32:2.3

IT07:  Create a National Environmental Data Index
Organize the implementation of a national environmental data index in
the Commerce Department. 

GAO Comments
Our work has shown a need to effectively share environmental data
within and among agencies responsible for maintaining and using these
data.  We do not have enough detail on the proposed National
Environmental Data Index to determine if it could facilitate such
information sharing. 


------------------------------------------------------- Chapter 32:2.4

IT08:  Plan, Demonstrate, and Provide Governmentwide Electronic Mail
Improve electronic mail and messaging among federal agencies. 

GAO Comments
We believe that electronic mail is rapidly becoming a fundamental
tool for communications in all organizations, in both the private and
public sectors.  As a result, investment in this technology seems
warranted. 


------------------------------------------------------- Chapter 32:2.5

IT09:  Establish an Information Infrastructure
Develop a Government Information Infrastructure to use government
information resources effectively and support electronic government
applications.  Consolidate and modernize government data processing
centers. 

GAO Comments
Within the context of specific government functions, we have
recommended that effective electronic infrastructures be developed. 
For example, our report War On Drugs:  Information Management Poses
Formidable Challenges recommended that the agencies involved
establish a proper electronic infrastructure to carry out their
coordinated drug interdiction efforts.  Therefore, while we support
the development of critical electronic infrastructures to support
specific programs, we do not have enough information about "a
Government Information Infrastructure" to endorse it.  However, it
should be noted that an electronic infrastructure would likely
involve state and local governments that have the primary delivery
roles for computer-dependent welfare and health programs.  We also
generally support the concept of consolidating and modernizing
government data processing centers. 


------------------------------------------------------- Chapter 32:2.6

IT10:  Develop Systems and Mechanisms to Ensure Privacy and Security
Establish a Privacy Protection Board.  Establish uniform privacy
protection practices and generally acceptable implementation methods
for these practices.  Develop a digital signature standard for
sensitive, unclassified data by January 1994. 

GAO Comments
We have identified agencies' inability to ensure the security,
integrity, or reliability of information systems as one of the 10
managerial and operational problems most cited in our past work. 
Indeed, the scope of these problems is so large that establishment of
such a board can only be regarded as a first step in resolving these
issues.  Therefore, we strongly agree with the fundamental principle
that data used in federal systems must be adequately protected. 
However, without more details about the organization and functions of
the proposed "Privacy Protection Board," we cannot fully endorse the
proposal.  Also, the Comptroller General has concluded that digital
signatures can be used to meet the requirements of 31 U.S.C.  1501
for recording an obligation (71 Comp.  Gen.  109, 1991).  Further,
the National Institute of Standards and Technology has issued a draft
digital signature standard and is currently in the process of
finalizing it. 


------------------------------------------------------- Chapter 32:2.7

IT11:  Improve Methods of Information Technology Acquisition
(see PROC09, PROC10, PROC15, SUP04, and FM06)

GAO Comments
As discussed in our December 1992 transition series report on
Information Management and Technology Issues, even well-planned
efforts to modernize the use of information technology can be
derailed by the federal acquisition management and budget processes. 
A fundamental dichotomy is at work in large-scale systems development
projects:  the acquisition management process demands certainty and
is risk-averse, yet systems development is inherently uncertain and
risk-intensive. 


------------------------------------------------------- Chapter 32:2.8

IT13:  Provide Training and Technical Assistance in Information
Technology to Federal Employees
Establish a program to train non-technical senior executives and
political appointees in information technology.  Require managers of
information resources to meet certification standards.  Promote
collegial assistance in using information technology.  Include
training costs as part of all information technology purchases. 

GAO Comments
We agree and generally support effective efforts to raise the level
of knowledge of information resources management in federal agencies. 
In 1991, participants in a GAO-sponsored roundtable identified a lack
of skills or information on how to manage technology as a barrier to
effective information management.  Specifically, they believed that
staff at all levels of government lacked the training, background, or
education necessary to successfully implement--or even
understand--information resources management. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 32:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 32:4

IT03:  Develop Integrated Electronic Access to Government Information
and Service
Use information technology initiatives to improve customer service by
creating a one-stop "800" calling service, integrated one-stop
service "kiosks," and a governmentwide electronic bulletin board
system. 

GAO Comments
While wholeheartedly supporting the use of information technology
initiatives to improve customer service, we cannot endorse these
specific initiatives without knowing further details about them. 


------------------------------------------------------- Chapter 32:4.1

IT04:  Establish a National Law Enforcement/Public Safety Network
Establish a national law enforcement/public safety data network for
use by federal, state, and local law enforcement officials. 

GAO Comments
We cannot reasonably agree or disagree with this recommendation
without knowing more details, such as what type of data would be
carried on the network and how and why it would be used. 


------------------------------------------------------- Chapter 32:4.2

IT05:  Provide Intergovernmental Tax Filing, Reporting, and Payments
Processing
Integrate government financial filings, reporting, and payments
processing, and determine ways to eliminate the need for filing
routine tax returns. 

GAO Comments
This recommendation is not clear.  Without further explanation, we
cannot reasonably agree or disagree. 


------------------------------------------------------- Chapter 32:4.3

IT12:  Provide Incentives for Innovation
Retain a portion of agency information technology savings to reinvest
in information technology.  Promote performance-based contracting for
information technology.  Establish a governmentwide venture capital
fund for innovative information technology projects. 

GAO Comments
We support the objectives of these concepts.  However, we do not know
enough about the proposals to determine if they would be effective in
encouraging innovation and contract performance.  Further, they raise
basic issues of program funding that need to be resolved between the
Administration and Congress. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 32:5

We have extensively cited widespread weaknesses in federal
information resources management.  In addition to the issues raised
by NPR and the concerns expressed in our overall summary, we have
other issues that must be addressed before the government can
effectively "reengineer through the use of information technology."
These are noted below. 

  The information resources management function at agencies needs to
     be an integral part of agency management to effectively
     implement technology.  It cannot continue to be treated as a
     separate, and secondary, support function. 

  In addition to developing a strategic vision, government agencies
     need to develop specific business plans that align resources,
     skills, and strategies with agency mission objectives.  Without
     such plans, information technology cannot be effectively and
     efficiently deployed. 

  The government needs to develop governmentwide system standards and
     model systems so that common operational and business functions
     can be addressed more efficiently and at lower cost. 

  The government needs to develop criteria and mechanisms for
     properly evaluating technology investments to ensure that
     limited resources are allocated in the most cost effective
     manner. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 32:6

Information Management and Technology Issues (GAO/OCG-93-5TR, Dec. 
1992) relates to the overall summary and IT11. 

Veterans Benefits:  Acquisition of Information Resources for
Modernization Is Premature (GAO/IMTEC-93-6, Nov.  4, 1992) relates to
IT01. 

Perceived Barriers to Effective Information Management:  Results of
GAO Panel Discussions (GAO/IMTEC-92-67, Sept.  1992) relates to IT01,
IT09, and IT13. 

Department of Energy:  Better Information Resources Management Needed
to Accomplish Missions (GAO/IMTEC-92-53, Sept.  29, 1992) relates to
IT01. 

Transportation Safety:  Information Strategy Needed for Hazardous
Materials (GAO/IMTEC-91-50, Sept.  25, 1991) relates to IT01. 

Meeting the Government's Technology Challenge:  Results of a GAO
Symposium (GAO/IMTEC-90-23, Feb.  1990) relates to IT01 and IT09. 

Tax System Modernization:  IRS' Challenge for the 21st Century
(GAO/IMTEC-90-13, Feb.  8, 1990) relates to IT01. 

Child Support Enforcement:  Timely Action Needed to Correct System
Development Problems (GAO/IMTEC-92-46, Aug.  13, 1992) relates to
IT02. 

Welfare Programs:  Ineffective Federal Oversight Permits Costly
Automated System Problems (GAO/IMTEC-92-29, May 27, 1992) relates to
IT02. 

Tax Systems Modernization:  Input Processing Strategy Is Risky and
Lacks a Sound Analytical Basis (GAO/T-IMTEC-92-15, Apr.  29, 1992)
relates to IT03. 

Public Access:  Two Case Studies of Federal Electronic Dissemination
(GAO/IMTEC-90-44BR, May 14, 1990) relates to IT03. 

Environmental Protection:  EPA's Plans to Improve Longstanding
Information Resources Management Problems (GAO/AIMD-93-8, Sept.  16,
1993) relates to IT07. 

National Water Quality Assessment:  Geological Survey Faces
Formidable Data Management Challenges (GAO/IMTEC-93-30, June 30,
1993) relates to IT07. 

Creation of a Department of Environmental Protection
(GAO/T-RCED-93-39, May 6, 1993) relates to IT07. 

Environmental Enforcement:  EPA Needs a Better Strategy to Manage Its
Cross-Media Information (GAO/IMTEC-92-14, Apr.  2, 1992) relates to
IT07. 

Food Safety:  USDA Data Program Not Supporting Critical Pesticide
Decisions (GAO/IMTEC-92-11, Jan.  31, 1992) relates to IT07. 

Geographic Information System:  Forest Service Has Resolved GAO
Concerns About Its Proposed Nationwide System (GAO/T-IMTEC-92-14,
Apr.  28, 1992) relates to IT09. 

War On Drugs:  Information Management Poses Formidable Challenges
(GAO/IMTEC-91-40, May 31, 1991) relates to IT09. 

Tax Systems Modernization:  Concerns Over Security and Privacy
Elements of the Systems Architecture (GAO/IMTEC-92-63, Sept.  21,
1992) relates to IT10. 

Computers and Privacy:  How the Government Obtains, Verifies, Uses,
and Protects Personal Data (GAO/IMTEC-90-70BR, Aug.  3, 1990) relates
to IT10. 

Information Technology:  A Model to Help Managers Decrease
Acquisition Costs (GAO/IMTEC-8.1.6, Aug.  1990) relates to IT11. 

Information Technology:  An Audit Guide for Assessing Acquisition
Risks (GAO/IMTEC-8.1.4, Dec.  1992) relates to IT11. 

Management of HHS:  Using the Office of the Secretary to Enhance
Departmental Effectiveness (GAO/HRD-90-54, Feb.  9, 1990) relates to
IT13. 

Managing IRS:  Actions Needed to Assure Quality Service in the Future
(GAO/GGD-89-1, Oct.  14, 1988) relates to IT13. 


RETHINKING PROGRAM DESIGN (DES)
=========================================================== Chapter 33


      OVERALL SUMMARY
------------------------------------------------------- Chapter 33:0.1

Time and again our work has shown that the design and implementation
of federal programs has not received sufficient attention.  For
example, we reported in Groundwater Protection:  Validity and
Feasibility of EPA's Differential Protection Strategy that EPA should
pilot test a groundwater protection program before institutionalizing
its use.  In addition, we reported in Partnership Projects:  A
Framework for Evaluating Public-Private Housing and Development
Efforts that HUD personnel needed improved training in designing
programs to implement incentives for provision of privately-owned
low-income housing. 

Although we have not done work that addresses the specific aspects of
the NPR's recommendations, our work has shown that agencies need to
establish strong program design capabilities.  Such capabilities are
critical to creating successful programs.  Program design is a
complex discipline and should be tailored to individual agency needs
as determined by their respective programs.  As such, we generally
agree with NPR's recommendations to publish a program design handbook
and establish pilot efforts within agencies to strengthen agencies'
ability to design programs and implement sound program design
strategies. 


         GAO CONTACT
----------------------------------------------------- Chapter 33:0.1.1

William M.  Hunt, Director, Federal Management Issues, General
Government Division, (202) 512-8676. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 33:1

None. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 33:2

DES01:  Activate Program Design as a Formal Discipline
The President's Management Council should commission the development
of a handbook to help federal managers understand the strengths and
weaknesses of various forms of program design. 

GAO Comments
We agree that substantial benefits can be gained through analysis of
diverse program design methodologies as they relate to specific
program goals or objectives.  We have not studied the feasibility of
a handbook as cited by NPR, but note that many benefits may be
derived from program design guidelines and resources such as the
handbook. 


------------------------------------------------------- Chapter 33:2.1

DES02:  Establish Pilot Program Design Capabilities in One or Two
Agencies
Test the usefulness of the program design handbook and the value of
program design as a useful discipline. 

GAO Comments
As discussed in the comment for DES01, we have not studied the
feasibility of a handbook as cited by NPR.  However, if a handbook is
developed, pilot testing it in a few agencies would be an effective
way to observe and analyze the feasibility of different program
design methodologies. 


------------------------------------------------------- Chapter 33:2.2

DES03:  Encourage the Strengthening of Program Design in the
Legislative Branch
The President's Management Council should work with congressional
support agencies to help them strengthen their program design
capacities. 

GAO Comments
Although we have not assessed specific mechanisms, we agree that it
is important for executive branch and congressional support agencies
to learn from one another to better assist decisionmakers in
designing federal programs. 


------------------------------------------------------- Chapter 33:2.3

DES04:  Commission Program Design Courses
Develop training courses for managers and policymakers on various
program design approaches. 

GAO Comments
Although we have not identified the scope or magnitude of specific
training needs of managers and policymakers, we strongly agree that
program design training is necessary to ensure that managers and
policymakers fully understand the strengths and weaknesses associated
with program design methodologies. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 33:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 33:4

None. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 33:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 33:6

Partnership Projects:  A Framework for Evaluating Public-Private
Housing and Development Efforts (GAO/PEMD-90-9, May 22, 1990) relates
to the overall summary and DES01. 

Groundwater Protection:  Validity and Feasibility of EPA's
Differential Protection Strategy (GAO/PEMD-93-6, Dec.  9, 1992)
relates to the overall summary and DES02. 

Federal Budget:  Choosing Public Investment Programs (GAO/AIMD-93-25,
Mar.  23, 1993) relates to DES01. 

Rental Housing:  Implementing the New Federal Incentives to Deter
Prepayments of HUD Mortgages (GAO/PEMD-91-2, Apr.  30, 1991) relates
to DES02. 

Public Health Service:  Evaluation Set-Aside Has Not Realized Its
Potential to Inform the Congress (GAO/PEMD-93-13, Apr.  8, 1993)
relates to DES03. 


STRENGTHENING THE PARTNERSHIP IN
INTERGOVERNMENTAL SERVICE DELIVERY
(FSL)
=========================================================== Chapter 34


      OVERALL SUMMARY
------------------------------------------------------- Chapter 34:0.1

Our March 1990 report entitled Federal-State-Local Relations:  Trends
of the Past and Emerging Issues outlined issues that affected the
capacity of state and local governments to carry out their
responsibility to deliver a broad range of essential public services. 
During the past decade, changing federalism policies and federal
budgetary retrenchment resulted in an increased role of states and
localities in the intergovernmental system.  Now with new state and
local prominence, they stand at the threshold as highly visible
leaders of domestic policy.  To realize this emerging leadership role
in the implementation of domestic policy, the relationship among
these partners in the intergovernmental system will need to change. 
In that light, we agree with the NPR recommendations that seek to
give state and local governments more flexibility to create and
implement service delivery strategies best suited to their priorities
without the burden of increases in federal regulation. 


         GAO CONTACT
----------------------------------------------------- Chapter 34:0.1.1

Joseph F.  Delfico, Director, Income Security Issues, Human Resources
Division, (202) 512-7215. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 34:1

FSL01:  Improve the Delivery of Federal Domestic Grant Programs
Create flexibility and encourage innovation by designing a bottom-up
solution to the problem of grant proliferation and its accompanying
red tape.  Also, support the pending proposal for Federal-State
Flexibility Grants that has been developed by the National Governors
Association and the National Conference of State Legislatures. 
Establish a Cabinet-level Enterprise Board to oversee NEW initiatives
in community improvement. 

GAO Comments
We agree that new federal strategies need to be explored to assist
state and local governments to develop solutions to improving service
delivery.  However, as we have reported, because states occupy an
increasingly central place in the intergovernmental system, the
combination of reduced federal support and increased requirements
pose a special threat to states' leadership.  We have also documented
the efficacy of seeking service delivery solutions at points nearest
to the client rather that through "top down" efforts.  While we have
not done work evaluating specific strategies to improve the overall
capacity of state and local governments to deliver domestic services,
we agree that the federal role should be one that supports "local
solutions for local problems."


------------------------------------------------------- Chapter 34:1.1

FSL02:  Reduce Red Tape Through Regulatory and Mandate Relief
Issue an Executive Order addressing the problems of unfunded federal
mandates and regulatory relief and authorize Cabinet Secretaries and
agency heads to obtain selective relief from regulations or mandates
in programs they oversee. 

GAO Comments
While regulation of states and localities is an important tool for
the federal government to attain its statutory objectives, tensions
among levels of government have mounted over the years as regulatory
requirements, preemptions, and mandates increased.  The cumulative
effect of these increases could force state and local governments to
choose between meeting their service responsibilities and fulfilling
national regulatory objectives. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 34:2

FSL04:  Eliminate Needless Paperwork by Simplifying the Compliance
Certification Process
Simplify OMB's requirements to prepare multiple grant compliance
certifications by allowing state and local governments to submit a
single certification to a single point of contact in the federal
government. 

GAO Comments
We support efforts to reduce needless paperwork.  However, a single
point of contact in the federal government must be identified. 


------------------------------------------------------- Chapter 34:2.1

FSL05:  Simplify Administration by Modifying the Common Grant Rules
on Small Purchases
Modify OMB Circular A-102, "Grants and Cooperative Agreements to
State and Local Governments", to increase the dollar threshold for
small purchases by local governments from $25,000 to $100,000. 

GAO Comments
While we have not recently studied the issue of raising the
thresholds with regard to small purchases by local governments, we
have taken the stance that thresholds for small purchases for the
federal government should be raised.  Overall, we believe that grant
administration can be simplified.  However, we have no empirical
evidence to suggest appropriate dollar thresholds for small purchases
by local governments. 


------------------------------------------------------- Chapter 34:2.2

FSL06:  Strengthen the Intergovernmental Partnership
Reinvent the Advisory Commission on Intergovernmental Relations
(ACIR) and charge it with the responsibility for continuous
improvement in federal, state and local partnership and
intergovernmental service delivery.  Direct the ACIR to identify
opportunities to improve intergovernmental service delivery and
develop a set of benchmarks. 

GAO Comments
We fully support strengthening intergovernmental partnerships to
improve the delivery of services.  Because state and local
governments are often the frontline providers of services, their
views on ways to improve program efficiency and effectiveness should
be given the utmost consideration.  While a reinvigorated ACIR could
be the focal point for identifying opportunities to improve
intergovernmental partnerships, we have not done work to support this
expanded role and it is conceivable that other entities could also
perform this function.  For example, individual federal agencies must
become more involved in pursuing opportunities for stronger
partnerships with state and local governments within existing
structures. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 34:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 34:4

FSL03:  Simplify Reimbursement Procedures for Administrative Costs of
Federal Grant Disbursement
Modify OMB Circular A-87, "Cost Principles for State and Local
Governments," to provide a fixed fee-for-service option in lieu of
costly reimbursement procedures covering actual administrative costs
of grant disbursement. 

GAO Comments
Simplifying administrative cost reimbursement procedures could be
less costly and burdensome for state and local governments.  We have
not reviewed this issue to determine the extent of the problem or the
potential cost savings. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 34:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 34:6

Federal-State-Local Relations:  Trends of the Past Decade and
Emerging Issues (GAO/HRD-90-34, Mar.  22, 1990) relates to the
overall summary and FSL02. 

Integrating Human Services:  Linking At-Risk Families with Services
More Successful than System Reform Efforts (GAO/HRD-92-108, Sept. 
24, 1992) relates to FSL01. 

Administration on Aging:  More Federal Action Needed to Promote
Service Coordination of the Elderly (GAO/HRD-91-45, Apr.  23, 1991)
relates to FSL01. 

Elder Abuse:  Effectiveness of Reporting Laws and Other Factors
(GAO/HRD-91-74, Apr.  24, 1991) relates to FSL01. 

Effectiveness of Reporting Laws and Other Factors in Identifying,
Preventing, and Treating Elder Abuse (GAO/T-HRD-91-27, May 15, 1991)
relates to FSL01. 

Services for the Elderly:  Transportation Problems Need More Federal
Attention (GAO/HRD-91-117, Aug.  29, 1991) relates to FSL01. 

Long Term Care Forum (GAO/HRD-93-1-SP, July 13 & 14, 1993) relates to
FSL01. 

Legislative Mandates:  State Experiences Offer Insights for Federal
Action (GAO/HRD-88-75, Sept.  24, 1988) relates to FSL02. 

Regulatory Flexibility Act:  Inherent Weaknesses May Limit Its
Usefulness for Small Governments (GAO/HRD-91-16, Jan.  11, 1991)
relates to FSL02. 

Discretionary Grants:  Opportunities to Improve Federal Discretionary
Award Practices (GAO/HRD-86-108, Sept.  15, 1986) relates to FSL02. 


REINVENTING ENVIRONMENTAL
MANAGEMENT (ENV)
=========================================================== Chapter 35


      OVERALL SUMMARY
------------------------------------------------------- Chapter 35:0.1

We support NPR's overall goal of improving environmental management. 
On the basis of our completed and ongoing work, we find merit in all
four of the recommendations for reinventing environmental management. 


         GAO CONTACTS
----------------------------------------------------- Chapter 35:0.1.1

Richard L.  Hembra, Director, Environmental Protection Issues,
Resources, Community, and Economic Development Division (RCED), (202)
512-6112 (for ENV01); James Duffus III, Director, Natural Resources
Management Issues, RCED, (202) 512-7756 (for ENV02 and ENV04); and
Victor S.  Rezendes, Director, Energy and Science Issues, RCED (202)
512-3841 (for ENV03). 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 35:1

None. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 35:2

ENV01:  Improve Federal Decisionmaking Through Environmental Cost
Accounting
Develop demonstration projects to test the applicability of
environmental cost accounting.  Based on project results, develop
guidelines to implement environmental cost accounting throughout the
Federal Government.  Issue an Executive Order to encourage the use of
environmental cost accounting by federal agencies. 

GAO Comments
We concur that environmental cost accounting has merit and could help
federal agencies conduct their operations in a more environmentally
sound manner.  We have related work on environmental auditing at
federal agencies under way. 


------------------------------------------------------- Chapter 35:2.1

ENV02:  Develop Cross-Agency Ecosystem Planning and Management
Issue an Executive Order to encourage sustainable economic
development and ensure sustainable ecosystems through a cross-agency
ecosystem management process.  Begin phased-in implementation of the
policy with selected ecosystem management demonstration projects. 
Conduct management and budget reviews of the ecosystem management
projects as a part of the fiscal year 1995 budget process. 

GAO Comments
We have ongoing work that addresses this issue.  On the basis of the
work conducted to date, it appears that ecosystem management has the
potential for protecting biological diversity and sustaining
long-term economic development. 


------------------------------------------------------- Chapter 35:2.2

ENV03:  Increase Energy and Water Efficiency
Issue an Executive Order to address energy efficiency and water
conservation issues at federal facilities.  Propose legislation to
allow the Defense Department to retain savings from water efficiency
projects.  Develop appropriate mechanisms to allow facilities to
retain rebates received from utility companies. 

GAO Comments
We generally support efforts to increase the efficiency with which
federal facilities use energy and water.  Our completed and ongoing
work shows that federal agencies should place greater emphasis on
these efforts, perhaps in response to an updated executive order on
this subject.  We see merit in legislation that would provide the
Department of Defense with incentives to pursue water efficiency
projects--for example, allowing the Department to retain the savings
that result from such projects if the funds are used for additional
conservation projects.  We would also support efforts by all agencies
to develop mechanisms that would enable them to retain rebate funds
from utilities, as authorized by recent legislation. 


------------------------------------------------------- Chapter 35:2.3

ENV04:  Increase Environmentally and Economically Beneficial
Landscaping
Issue an Executive Order to require the use of environmentally
beneficial landscaping techniques, including increased use of native
species and reduced use of water and chemicals, at federal facilities
and federally-funded projects, where appropriate. 

GAO Comments
We support efforts to increase environmentally and economically
beneficial practices at federal facilities.  The increased use of
native species and the reduced use of water and chemicals at federal
facilities should help meet this goal. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 35:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 35:4

None. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 35:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 35:6

Barriers to Installing Energy-Efficient Lighting in Federal Buildings
(GAO/T-GGD-90-54, July 11, 1990) relates to ENV03. 


IMPROVING REGULATORY SYSTEMS (REG)
=========================================================== Chapter 36


      OVERALL SUMMARY
------------------------------------------------------- Chapter 36:0.1

Although we have not analyzed Federal regulatory systems in general,
we have reported on a number of individual regulatory systems in the
context of particular programs or agencies.  For example, we reported
that improvements are needed in the regulatory structure governing
the banking and thrift industries because this structure has not kept
pace with today's highly competitive and complex environment.  We
reported that bank and thrift examinations conducted by Federal
regulatory agencies were too limited to fully identify and determine
the extent of deficiencies affecting bank and thrift safety and
soundness.  These limitations impeded early warning of bank and
thrift weaknesses and reduced the opportunity for taking corrective
action and minimizing losses to the insurance funds.  We also believe
that federal regulatory agencies should assess the extent of
regulatory burden on financial institutions and determine ways to
reduce this burden that would not adversely affect safety and
soundness and consumer protection requirements. 

Based on our completed work, we agree with the overall objectives and
intent of the NPR recommendations in this area to:  develop
innovative regulatory approaches, anticipate regulatory problems,
share information among regulatory agencies and coordinate regulatory
approaches, encourage public participation and consensus-building
during the regulatory process, streamline rulemaking procedures,
improve the use of scientific information and judgments by regulatory
agencies, provide better training to regulatory officials, and
improve relationships between regulatory agencies and Congress. 
However, we have insufficient information to comment more
specifically on most of NPR's recommendations. 


         GAO CONTACT
----------------------------------------------------- Chapter 36:0.1.1

William M.  Hunt, Director, Federal Management Issues, General
Government Issues, (202) 512-8676. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 36:1

None. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 36:2

REG02:  Encourage More Innovative Approaches to Regulation
Use innovative regulatory approaches and develop a Deskbook on
Regulatory Design. 

GAO Comments
We generally agree on the need for more innovation in regulatory
approaches.  For example, states have used innovative measures
related to long-term care in an effort to provide services within the
constraints of regulatory burdens.  Lessons learned from states and
other countries may help the government change from process-oriented
regulations to performance goals and outcomes, with more state and
local latitude for determining how best to serve people requiring
long-term care.  A deskbook on regulatory design could draw from the
experiences of all regulatory agencies at the federal and state
levels and promote best practices. 


------------------------------------------------------- Chapter 36:2.1

REG07:  Rank Risks and Engage in "Anticipatory" Regulatory Planning
Rank the seriousness of environmental, health or safety risks and
develop anticipatory approaches to regulatory problems. 

GAO Comments
We generally agree that regulatory agencies should assess the extent
of risks facing the public in determining their regulatory agendas
and anticipate future problems.  For example, we recommended that the
EPA Administrator work with Congress to identify opportunities to
shift resources from problems of less severe risk to problems with
greater risks.  We also recommended that Congress consider
incorporating the concept of relative risks to human health and
environment in authorizing and appropriating funds for EPA. 


------------------------------------------------------- Chapter 36:2.2

REG09:  Improve Agency and Congressional Relationships
Encourage agencies to establish technical drafting services for
congressional committees and subcommittees. 

GAO Comments
Although we have not examined the extent to which Congress needs
technical drafting services from agencies, we believe that such
services may be useful to Congress in certain circumstances and that
agencies should provide such services to Congress upon request. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 36:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 36:4

REG01:  Create an Interagency Regulatory Coordinating Group
Create an interagency Regulatory Coordinating Group to share
information and coordinate approaches to regulatory issues. 

GAO Comments
We agree with the NPR recommendation's objective of sharing
information and coordinating regulatory approaches.  However, we
cannot evaluate this recommendation until we know the composition of
the proposed interagency regulatory coordinating group and its
specific responsibilities and authorities as compared with those of
the individual regulatory agencies. 


------------------------------------------------------- Chapter 36:4.1

REG03:  Encourage Consensus-Based Rulemaking
Encourage agencies to use negotiated rulemaking more frequently in
developing new rules. 

GAO Comments
We agree with the intent of the NPR recommendation to encourage
consensus during the rulemaking process.  However, the NPR
recommendation does not state whether such negotiated rulemaking
procedures would be required in certain circumstances or simply
permitted at the regulatory agency's discretion.  Neither does it
make clear how the negotiations will be conducted.  Until these and
other details of this recommendation are available, we cannot
evaluate it. 


------------------------------------------------------- Chapter 36:4.2

REG04:  Enhance Public Awareness and Participation
Use information technology and other techniques to increase
opportunities for early, frequent and interactive public
participation during the rulemaking process and to increase program
evaluation efforts. 

GAO Comments
We agree with the stated objectives of this recommendation, but NPR
does not describe the details of how they are to be achieved.  For
example, the specific means NPR proposes to enhance public
participation and program evaluation may interfere with the intent of
NPR recommendation REG05 (see below) to streamline agency rulemaking
procedures.  Until we know these kinds of details, we cannot evaluate
this recommendation. 


------------------------------------------------------- Chapter 36:4.3

REG05:  Streamline Agency Rulemaking Procedures
Streamline internal agency rulemaking procedures, use "direct final"
rulemaking for noncontroversial rules and expedite treatment of
rulemaking petitions. 

GAO Comments
We generally agree with the intent of this recommendation, but we
cannot evaluate it without further details about how the procedures
would be "streamlined" and whether it would conflict with NPR
recommendation REG04 or other recommendations. 


------------------------------------------------------- Chapter 36:4.4

REG06:  Encourage Alternative Dispute Resolution When Enforcing
Regulations
Increase the use of alternative means of dispute resolution. 

GAO Comments
We cannot evaluate this recommendation until we know the specific
ways in which NPR proposes to "encourage" the use of alternative
dispute resolution procedures and what those procedures might be. 


------------------------------------------------------- Chapter 36:4.5

REG08:  Improve Regulatory Science
Create science advisory boards for those regulatory agencies that
depend heavily on scientific information and judgments. 

GAO Comments
We agree with the thrust of this recommendation to improve the use of
scientific information and judgments, but we cannot evaluate whether
science advisory boards are the best means to accomplish that goal
until further details are available. 


------------------------------------------------------- Chapter 36:4.6

REG10:  Provide Better Training and Incentives for Regulators
Establish a basic training program for presidential appointees
assigned to regulatory agencies and expand existing training programs
to cover career staff not currently being trained. 

GAO Comments
We agree that training is an important component of the performance
of the federal workforce, including presidential appointees assigned
to regulatory agencies.  However, we cannot comment on this
recommendation until we understand the extent of this problem for
federal regulatory agencies. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 36:5

None. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 36:6

Thrift Examination Quality:  OTS Examinations Do Not Fully Assess
Thrift Safety and Soundness (GAO/AFMD-93-11, Feb.  16, 1993) relates
to the overall summary. 

Bank Examination Quality:  FDIC Examinations Do Not Fully Assess Bank
Safety and Soundness (GAO/AFMD-93-12, Feb.  16, 1993) relates to the
overall summary. 

Bank Examination Quality:  FRB Examinations and Inspections Do Not
Fully Assess Bank Safety and Soundness (GAO/AFMD-93-13, Feb.  16,
1993) relates to the overall summary. 

Bank Examination Quality:  OCC Examinations Do Not Fully Assess Bank
Safety and Soundness (GAO/AFMD-93-14, Feb.  16, 1993) relates to the
overall summary. 

Bank and Thrift Regulation:  Improvements Needed in Examination
Quality and Regulatory Structure (GAO/AFMD-93-15, Feb.  16, 1993)
relates to the overall summary. 

Bank Insurance Fund (GAO/HR-93-3, Dec.  1992) relates to the overall
summary. 

Long-Term Care Reform:  Rethinking Service Delivery, Accountability,
and Cost Control (GAO/HRD-93-1-SP, July 13, 1993) relates to REG02. 

Environmental Protection:  Meeting Public Expectations With Limited
Resources (GAO/RCED-91-97, June 18, 1991) relates to REG04 and REG07. 


GENERAL SERVICES ADMINISTRATION
(GSA)
=========================================================== Chapter 37


      OVERALL SUMMARY
------------------------------------------------------- Chapter 37:0.1

Our December 1992 transition series report on General Services Issues
discussed the need to (1) resolve GSA's conflicting policy and
service provider roles, (2) replace outmoded centralized methods of
delivering services with new methods based on entrepreneurial and
competitive principles, (3) strengthen weak and ineffective internal
management systems, and (4) improve GSA's oversight of governmentwide
procurement practices.  It also pointed out ways to improve
congressional oversight of GSA's many activities.  Finally, it
highlighted structural weaknesses in the way GSA does business that
no longer allow it to respond quickly and effectively and the need
for a fundamental restructuring of the way federal agencies obtain
the general purpose office space, goods, and services they need to
support their missions. 

As long as GSA depends for survival on its virtual monopoly over the
provision of office space, supplies, telecommunications, and
computers, it will lack the incentive and pressure to meet the modern
standards its customer agencies demand.  In calling for an end to
GSA's monopoly, separation of its governmentwide policymaking and
service provider responsibilities, and creation of a new asset
management organization to oversee federal real estate assets, NPR's
recommendations echoed our longstanding concerns in these areas.  We
fully support these concepts, but their actual implementation will
require careful study and thought as well as a reexamination of
existing congressional funding, budgetary, and authorization
processes that could impede their effectiveness. 


         GAO CONTACT
----------------------------------------------------- Chapter 37:0.1.1

J.  William Gadsby, Director, Government Business Operations Issues,
General Government Division, (202) 512-8387. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 37:1

GSA01:  Separate Policymaking From Service Delivery and Make the
General Services Administration (GSA) a Fully Competitive,
Revenue-Based Organization
Fund GSA service delivery from customer revenues, transfer activities
not related to GSA's central mission to other agencies, and allow
agencies to choose whether to purchase GSA services. 

GAO Comments
GAO supports these recommended reforms.  To compete with private
industry for federal agencies' business, however, GSA must be able to
respond quickly and effectively to customer needs and market
conditions.  In this regard, Congress and the administration need to
reexamine and resolve constraints and barriers, such as funding
limitations and the real estate prospectus authorization processes,
that would adversely affect GSA's ability to compete. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 37:2

None. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 37:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 37:4

None. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 37:5

Several GSA-related issues are discussed in the Reinventing Federal
Procurement (PROC) and Reinventing Support Services (SUP) sections of
this report.  Also, our transition series report on General Services
Issues addresses other GSA-related concerns, such as strengthening
internal controls, bolstering congressional oversight, and making GSA
more businesslike. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 37:6

General Services Issues (GAO/OCG-93-28TR, Dec.  1992) relates to the
overall summary and additional areas of GAO concern. 

Federal Real Property:  National Performance Review Recommendations
(GAO/GGD-93-47, Sept.  21, 1993). 

Federal Real Property:  Key Acquisition and Management Obstacles
(GAO/T-GGD-93-42, July 27, 1993). 

General Services Administration:  Actions Needed to Improve
Protection Against Fraud, Waste, and Mismanagement (GAO/GGD-92-98,
Sept.  30, 1992). 

Real Property Management Issues Facing GSA and Congress
(GAO/T-GGD-92-4, Oct.  30, 1991). 

GSA:  A Central Management Agency Needing Comprehensive Congressional
Oversight (GAO/T-GGD-92-3, Oct.  29, 1991). 

General Services Administration:  Status of Management Improvement
Efforts (GAO/GGD-91-59, Apr.  3, 1991). 

General Services Administration:  Sustained Attention Required to
Improve Performance (GAO/GGD-90-14, Nov.  6, 1989). 

ADP Procurements:  GSA Needs to Improve Its Review Process to Enhance
Its ADP Oversight (GAO/IMTEC-92-7, Oct.  28, 1991). 


OFFICE OF PERSONNEL MANAGEMENT
(OPM)
=========================================================== Chapter 38


      OVERALL SUMMARY
------------------------------------------------------- Chapter 38:0.1

Our work has shown that OPM has not provided the leadership necessary
to identify and resolve critical human resource problems. 
Fundamental policy redirections, reorganizations, and decreased
resource levels in recent years have left OPM with serious internal
difficulties and a diminished capacity to implement its initiatives. 
Over the years, we have reported to Congress, OPM, and others on a
variety of personnel management problems.  Many of these problems
still exist, and OPM leadership is needed to resolve them. 

NPR's recommendations relate to this issue by calling for OPM to
exert leadership in addressing federal human resource issues and
maintain a customer focus in carrying out its mission.  These are
laudable objectives, but the report does not indicate how OPM is
lacking in these areas or what actions OPM needs to take to
accomplish the objectives.  We found the three recommendations to be
very general and difficult to evaluate because of their lack of
specificity.  As a result, we were unable to conclusively agree or
disagree with any of them. 


         GAO CONTACT
----------------------------------------------------- Chapter 38:0.1.1

Nancy R.  Kingsbury, Director, Federal Human Resource Management
Issues, General Government Division, (202) 512-5074. 


   RECOMMENDATIONS WITH WHICH GAO
   AGREES
--------------------------------------------------------- Chapter 38:1

None. 


   RECOMMENDATIONS WITH WHICH GAO
   GENERALLY AGREES
--------------------------------------------------------- Chapter 38:2

OPM01:  Strengthen the Office of Personnel Management's (OPM)
Leadership Role in Transforming Federal Human Resource Management
Systems
Clearly define OPM's policy, service and leadership role in
addressing human resource problems and delegate operational work to
the agencies. 

GAO Comments
Our reports show the need for greater OPM leadership on federal human
resource issues.  While we agree that operational matters should be
delegated to the agencies, when appropriate, we have found that many
agencies' personnel management evaluation programs are not sufficient
to ensure that their personnel programs operate effectively and in
compliance with merit system principles.  OPM needs to exert greater
leadership in strengthening agency evaluation programs if they are to
be relied upon to oversee agency accountability for program
management. 


   RECOMMENDATIONS WITH WHICH GAO
   DISAGREES
--------------------------------------------------------- Chapter 38:3

None. 


   RECOMMENDATIONS ON WHICH GAO
   HAS INSUFFICIENT INFORMATION TO
   JUDGE
--------------------------------------------------------- Chapter 38:4

OPM02:  Redefine and Restructure OPM'S Functional Responsibilities to
Foster a Customer Orientation
Restructure and rightsize OPM to enhance and reflect its commitment
to addressing its customers' needs. 

GAO Comments
The NPR report gave no indication of the kind of restructuring and
rightsizing this recommendation envisions.  Thus, we cannot evaluate
the recommendation.  However, on the basis of a long history of GAO
work, we agree that this issue needs attention; OPM needs to work
with the agencies in preparing the government to meet future
challenges, attack performance improvement issues with more vigor,
and ensure more effective oversight of the government's key personnel
areas. 


------------------------------------------------------- Chapter 38:4.1

OPM03:  Change the Culture of OPM to Empower its Staff and Increase
its Customer Orientation Use interagency groups to involve OPM's
external stakeholders in changing federal human resource systems. 
Improve OPM's policy-making process through experimental use of
negotiated rulemaking ("reg-neg") and broaden the customer focus of
OPM and agency personnel specialists. 

GAO Comments
We believe it is reasonable to expect OPM to involve all stakeholders
in determining how to better serve its customers.  However, since we
have done no work to identify how this could best be accomplished, we
cannot comment further on this recommendation. 


   ADDITIONAL AREAS OF GAO CONCERN
--------------------------------------------------------- Chapter 38:5

Several issues discussed in the Reinventing Human Resource Management
(HRM) section of this report are also OPM-related areas of concern. 


   RELATED GAO PRODUCTS
--------------------------------------------------------- Chapter 38:6

Federal Personnel Management:  OPM Reliance on Agency Oversight of
Personnel System Not Fully Justified (GAO/GGD-93-24, Dec.  8, 1992)
relates to OPM01. 

Office of Personnel Management:  Better Performance Information
Needed (GAO/GGD-98-44, Feb.  7, 1990) relates to OPM01, OPM02, and
OPM03. 

Managing Human Resources:  Greater OPM Leadership Needed to Address
Critical Challenges (GAO/GGD-89-19, Jan.  19, 1989) relates to OPM01,
OPM02, and OPM03. 

Retrenchment and Redirection at the Office of Personnel Management
(GAO/GGD-83-95, Aug.  22, 1983) relates to OPM01, OPM02, and OPM03. 

OPM Revolving Fund:  Benchmarking Could Aid OPM's Efforts to Improve
Customer Service (GAO/GGD-92-18, Jan.  21, 1992) relates to OPM02 and
OPM03. 

Also see the reports cited under the HRM section of this report. 
