Reports and Testimony: September 1995 (Other Written Prod., 09/95,
GAO/OPA-95-12).

GAO published its monthly digest of reports and testimonies issued in
September 1995.

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

 REPORTNUM:  OPA-95-12
     TITLE:  Reports and Testimony: September 1995
      DATE:  09/95
   SUBJECT:  Uranium
             National defense operations
             Small business assistance
             Deficit reduction
             Health care programs
             Supplemental security income
             Immigrants
             Financial management
             Information resources management
             International relations
IDENTIFIER:  Debt Collection Improvement Act of 1995
             Dept. of Commerce Dismantling Act
             Trade Reorganization Act of 1995
             Bibliographies
             SBA Three Percent Preferred Stock Repurchase Program
             SBA Small Business Investment Companies Program
             SBA Specialized Small Business Investment Companies Program
             RDA Water and Waste Disposal Systems for Rural Communities 
             Program
             JTPA State Education Coordination and Grants Program
             DOE Nuclear Materials Management and Safeguard System
             
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REPORTS AND TESTIMONY:  SEPTEMBER
1995

GAO/OPA-95-12


Highlights

Uranium Enrichment

A review of the privatization of the U.S.  Enrichment Corporation
shows that the projected sale price is partly based on an analysis in
need of revision.  GAO also believes that because the sale has
national security implications, involves billions of dollars, and may
set a precedent for future sales, more careful scrutiny should be
given to protect the interests of taxpayers.  Page 10. 

Deficit Reduction

On the basis of a wide-ranging body of work evaluating the
effectiveness of federal programs, GAO believes that the choice is
not whether to reduce the deficit, but when and how.  GAO economic
simulations also show that eliminating the deficit will boost the
capacity to provide a higher standard of living.  Page 4. 

Supplemental Security Income

Some ineligible non-English speaking immigrants have obtained
supplemental security income benefits illegally by using middlemen,
hired to translate and otherwise help in the application process, who
provide false documentation of medical records or coach applicants on
how to appear mentally disabled in order to obtain benefits.  Page
23. 

GAO/OPA-95-12



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

  CHA - x
  DOD - x
  DOE - x
  DOL - x
  EBT - x
  EEOC - x
  EPA - x
  FTS - x
  GSA - x
  HHS - x
  HUD - x
  IRS - x
  MFO - x
  NASA - x
  NATO - x
  NIH - x
  NPR - x
  OPM - x
  PLO - x
  RDT&E - x
  SBA - x
  SBIC - x
  SSBIC - x
  SSA - x
  SSI - x
  USAID - x
  USDA - x
  VA - x
  VHA - x

REPORTS AND TESTIMONY:  SEPTEMBER
1995
=========================================================== Appendix 0


   AGRICULTURE AND FOOD
--------------------------------------------------------- Appendix 0:1

Crop Insurance:
Additional Actions Could Further Improve Program's
Financial Condition

GAO/RCED-95-269, Sept.  28 (94 pages). 

Since the 1930s, the federal government has offered subsidized crop
insurance to farmers.  After the program was expanded in 1980 to
include more crops and locations, however, it paid out about $3
billion more in claims through 1994 than it received in premiums from
farmers and the federal government.  To correct this imbalance,
Congress required that, by October 1995, the program reduce its
projected ratio to at least $1 in premiums to $1.10 in claims paid. 
In other words, insurance rates were to cover at least 91 percent of
the anticipated claims--termed "91-percent adequacy." The Agriculture
Department (USDA) estimates that the government's costs for the
program will total $1.5 billion for fiscal year 1996.  This report
examines whether USDA (1) set the insurance rates to achieve
91-percent adequacy, (2) reduced the losses caused by high-risk
farmers, (3) based payments to farmers for claimed losses on their
actual production history, and (4) set deadlines for farmers to buy
crop insurance before planting their crops. 


   BUDGET AND SPENDING
--------------------------------------------------------- Appendix 0:2

Block Grants:
Issues in Designing Accountability Provisions

GAO/AIMD-95-226, Sept.  1 (20 pages). 

Congress has shown strong interest in consolidating narrowly defined
categorical grant programs into broader purpose block grants.  A
total of 15 block grant programs with funding of $35 billion were in
effect in fiscal year 1994, constituting a small portion of the total
federal aid to states.  If Medicare and Aid to Families With
Dependent Children are added, however, block grant spending could
rise substantially--to as much as $138 billion or about 58 percent of
the total federal aid to states.  This report summarizes information
on how accountability for programs' financial management can be
designed to fit a block grant approach and the potential consequences
of such provisions.  To provide an overview and summary of GAO's
evaluations of past block grant programs, GAO reviewed nearly two
decades of reports, testimony, and other documents on accountability
issues related to intergovernmental programs.  GAO also consulted
with experts on block grants, performance budgeting, and financial
accountability. 

Budget Trends:
Obligations by Item of Expense, Fiscal Years 1971-1994

GAO/AIMD-95-227, Sept.  12 (62 pages). 

The budget object classification structure presents budgetary
information in terms of the items of government expenditures--the
personal and contractual services obtained, capital assets acquired,
and other charges and payments.  During fiscal years 1971-94, trends
in object class obligations mirrored the better known trends seen in
federal outlays.  For example, gross obligations for interest charges
and "transfer payments," such as grants and social and health
insurance, have grown at about twice the rate of the U.S.  gross
domestic product.  Correspondingly, gross obligations of what
remains--what could be called the "operating expenses" of the federal
government--represent a declining share of total obligations and have
shown overall growth rates of less than one-half the pace of gross
domestic product growth.  Within this category of obligations, only a
few object classes--benefits to current and former personnel; rent,
communications, and utilities; and consulting and other
services--have experienced real growth greater than the overall pace
of economic growth during the 24-year period studied in this report. 

Budget Account Structure:
A Descriptive Overview

GAO/AIMD-95-179, Sept.  18 (68 pages). 

This report provides an overview of the federal budget account
structure.  The need to better understand the budget account
structure is prompted by recent congressional action, such as the
Government Performance and Results Act, and executive branch
initiatives, such as the National Performance Review, which call for
or suggest cross-cutting changes to budget accounts.  This report
examines the following eight dimensions to define and explain budget
accounts:  How many accounts exist?  What level of resources is
available in an account?  What is the main focus of an account as
created by Congress?  What type of budget authority is available to
an account?  What is the extent of resource restriction or earmarking
within an account?  What are the purposes or areas of national need
addressed by an account?  What federal entity is responsible for an
account?  The first section of this report describes the budget
account structure in terms of these eight dimensions.  The second
section constructs profiles and discusses relationships among the
dimensions. 


      TESTIMONY
------------------------------------------------------- Appendix 0:2.1

Deficit Reduction:  Opportunities to Address Long-Standing Government
Performance Issues, by Charles A.  Bowsher, Comptroller General of
the United States, before the House Committee on the Budget. 
GAO/T-OCG-95-6, Sept.  13 (31 pages). 

GAO's work underscores the need to continue to reduce annual deficits
and highlights opportunities to improve the performance of government
programs concurrent with downsizing efforts.  The Comptroller
General's testimony focuses on the following four issues that the
current budget policy debate needs to consider:  (1) the compelling
importance of continuing to reduce and eliminate the deficit; (2) the
advantage of targeting budget cuts to those government programs that
have proven to be ineffective and inefficient in achieving their
goals; (3) the need to confront the major drivers of the deficit now
and in the future--such as health care and, ultimately, social
security--in addressing the deficit to ensure sustainable fiscal
progress; and (4) the need to develop and use fundamental management
tools and systems and to better design and evaluate programs so that
the government that emerges is more effective and can gain the
confidence of the nation's taxpayers. 


   BUSINESS, INDUSTRY, AND
   CONSUMERS
--------------------------------------------------------- Appendix 0:3

Small Business:
SBA's Preferred Stock Repurchase Program

GAO/RCED-95-249FS, Aug.  18 (21 pages). 

The Small Business Administration (SBA) formerly provided investment
capital to Specialized Small Business Investment Companies (SSBIC) by
purchasing their three-percent preferred stock.  In 1989, Congress
authorized SBA to allow SSBIC's to repurchase that stock.  Following
a pilot program, SBA began allowing SSBIC's to buy back their stock
at 35 percent of the price paid by SBA.  Accrued unpaid dividends
were either forgiven or were written off over a five-year period.  In
May 1995, GAO reported (GAO/RCED-95-146FS) that 17 SSBICs had
repurchased their stock under the program.  Since then, another four
of the current 90 SSBICs have repurchased their stock.  This fact
sheet provides information on each SSBIC participating in the stock
repurchase program, including (1) the repurchase price paid, unpaid
dividends forgiven or allowed to be amortized, and the method used to
finance the repurchase; (2) the company's private capital, SBA
financing, and capital impairment at the time of the stock
repurchase; and (3) the company's investments in small businesses
during the last five years and the value of the investment portfolio
at the time of the company's most recent report to SBA

Small Business:
Monitoring of Subcontracting to Small Disadvantaged Businesses

GAO/RCED-95-271, Sept.  22 (32 pages). 

GAO reviewed federal efforts to monitor the progress of federal
contractors in providing maximum subcontracting opportunities for
small businesses owned and controlled by socially and economically
disadvantaged persons.  GAO's review included the Defense Logistics
Agency, NASA, the Energy Department, and the General Services
Administration.  This report determines (1) how these agencies
monitor contractors' progress in subcontracting to small
disadvantaged businesses; (2) whether agencies have assessed monetary
damages, known as liquidated damages, against contractors who did not
make a good faith effort to subcontract to small disadvantaged
businesses; and (3) what initiatives are being considered to change
the monitoring process. 


      TESTIMONY
------------------------------------------------------- Appendix 0:3.1

Export Finance:  The Small Business Administration's Role in Meeting
Small Business Needs, by JayEtta Z.  Hecker, Director of
International Trade, Finance, and Competitiveness Issues, before the
Subcommittee on Procurement, Exports, and Business Opportunities and
the Subcommittee on Government Programs, House Committee on Small
Business.  GAO/T-GGD-95-235, Sept.  7 (18 pages). 

This testimony discusses the Small Business Administration's (SBA)
efforts to meet the export finance needs of smaller businesses while
adjusting its operations to the possibility of reduced federal
funding.  GAO addresses concerns raised by exporters and the Trade
Promotion and Coordinating Committee about the limited export
financing available to small- and medium-sized businesses and how SBA
has responded to this issue.  GAO focuses on SBA's Export Working
Capital Program, highlighting use of the program, key improvements
made to it, projected and current uses of the program, and options to
help minimize the negative effect that a reduction in the credit
subsidy appropriation has had on the goal of
expanding exports. 

Small Business Administration:  Prohibited Practices and Inadequate
Oversight in SBIC and SSBIC Programs, by Donald J.  Wheeler, Deputy
Director of the Office of Special Investigations, before the House
Committee on Small Business.  GAO/T-OSI-95-16, Sept.  28 (13 pages). 

Since 1966, nearly 600 companies that participated in the Small
Business Administration's (SBA) Small Business Investment Company
(SBIC) and Specialized Small Business Investment Company (SSBIC)
programs have failed and gone into liquidation.  GAO found that the
SBICs and SSBICs that it investigated engaged in improper management
practices, including loans to associates, loans for prohibited real
estate purchases, and loans to persons of questionable eligibility. 
Several of these regulatory violations should have been red flags of
potential criminal misconduct.  Two of the licensees GAO examined are
now being investigated by U.S.  Attorney's Offices.  The
investigation of a third resulted in the conviction of its president
for soliciting and receiving cash payment in return for approving
loans.  In addition, the SBICs and SSBICs seldom took prompt
corrective actions for regulatory violations.  Moreover, SBA did not
ensure that the violations were corrected.  For the SBICs and SSBICs
that GAO reviewed, some violations went unresolved for five years or
longer.  Estimated losses for three of the five companies that have
gone into liquidation, receivership, or bankruptcy exceeded $4
million. 

Small Business Administration:  Better Oversight of SBIC Programs
Could Reduce Federal Losses, by Judy A.  England-Joseph, Director of
Housing and Community Development Issues, before the House Committee
on Small Business.  GAO/T-RCED-95-285, Sept.  28 (19 pages). 

Although the Small Business Administration (SBA) has taken steps to
reduce losses when firms fail, weaknesses in SBA's management and
oversight of the Small Business Investment Company (SBIC) and
Specialized Small Business Investment Company (SSBIC) programs
continue to place SBA funds at risk.  Corrective actions on
examination findings are not pursued rigorously, financially troubled
firms are not liquidated quickly, and overstated asset valuations are
not detected promptly.  GAO believes that these weaknesses result in
losses to the government that could have been avoided.  Also, because
of today's tight budget climate, GAO questions whether the stock
repurchase program is the best use of federal funds to help small
businesses.  Finally, although GAO has found no evidence of attempts
to restrict or influence examinations, GAO believes that the
organizational placement of the Office of Examinations in the same
division that is responsible for promoting the program leaves it
vulnerable to questions about its independence--especially in light
of the programs that GAO describes in this testimony. 

U.S.  Competitiveness:  Assessing the Impact of Government Activities
on Productivity and Living Standards, by Allan I.  Mendelowitz,
Director of International Trade, Finance, and Competitiveness Issues,
before the Subcommittee on Technology, House Committee on Science. 
GAO/T-GGD-95-196, Sept.  28 (13 pages). 

Since World War II, the U.S.  economy has been transformed by
technological, political, and economic changes that have presented
opportunities and challenges for businesses, workers, and the
government.  During the early part of this period, the United States
experienced rapid economic growth, with major increases in real
incomes and productivity.  During the past 20 years, however, the
United States has seen slower productivity growth, declines in real
wages, and stagnating median family incomes.  This testimony focuses
on the impact of government activities on the economy and living
standards.  GAO discusses whether the goals of government policies
and programs are consistent with the goals of improving productivity
and living standards.  GAO also discusses opportunities to change
programs and policies to increase their cost-effectiveness, improve
the ratio of benefits to costs, and increase their contributions to
improving productivity and living standards. 


   CIVIL RIGHTS
--------------------------------------------------------- Appendix 0:4

Equal Employment Opportunity:
DOL Contract Compliance Reviews Could Better Target
Federal Contractors

GAO/HEHS-95-177, Sept.  28 (22 pages). 

The Labor Department's Office of Federal Contract Compliance Programs
relies on compliance reviews to identify cases of employment
discrimination by federal contractors.  During these reviews, the
Office compares the sex and racial composition of the contractor's
workforce with that of the workforce of similar contractors in the
area.  The Office also reviews the contractor's employment policies
and practices.  In fiscal year 1994, the Office devoted about 80
percent of its enforcement hours to compliance reviews, completing
about 4,000 such reviews.  The Office's financial and staff resources
have declined in recent years, as have the number of compliance
reviews it conducts.  From fiscal year 1989 through fiscal year 1994,
the number of completed compliance reviews fell by one-third.  One
practice the Office uses raises questions about its ability to
effectively target potential violators.  The Office receives
information on the sex and racial groups that compose the
contractor's workforce, yet the Office aggregates the data on all
minority employees in a given company before completing its initial
analysis.  This practice could cause the Office to overlook companies
that discriminate. 

Equal Employment Opportunity:
Women and Minority Representation at Interior, Agriculture, Navy, and
State

GAO/GGD-95-211, Sept.  29 (114 pages). 

The Departments of the Interior, Agriculture, Navy, and State have
made progress in improving women and minority representation in their
workforces.  However, some groups are still underrepresented on an
overall basis and are often underrepresented to a greater degree in
key jobs.  Also, although the numbers of women and minorities in key
jobs increased across all white-collar grade and management levels,
as of 1992 these groups continued to be less well represented in the
higher grades at agencies.  Furthermore, the four agencies' multiyear
affirmative employment planning program analyses did not completely
address each of the eight required program elements set forth by the
Equal Employment Opportunity Commission's (EEOC) Management Directive
714.  For example, none of the four agencies completely analyzed
recruitment and hiring, promotion, or separation program elements,
all of which are needed to identify the basic causes of
underrepresentation.  Finally, neither the Office of Personnel
Management nor EEOC provided the oversight needed to ensure that the
agencies' affirmative employment programs could effectively correct
imbalances in their workforces. 


   ECONOMIC DEVELOPMENT
--------------------------------------------------------- Appendix 0:5

Rural Development:
USDA's Approach to Funding Water and Sewer Projects

GAO/RCED-95-258, Sept.  22 (38 pages). 

Many of the 62 million people living in rural counties in the United
States still lack access to clean drinking water and sanitary waste
disposal facilities.  Continuing a long-standing effort, the
Agriculture Department's (USDA) Water and Waste Disposal Program
funds water and sewer projects in rural communities.  The program is
now the major source of federal funds targeted to water and sewer
projects in rural areas.  In fiscal year 1994, USDA provided about
$1.3 billion for the program.  This report provides information on
(1) funding levels for the program and the projects supported, (2)
the formula that USDA uses to allocate loan and grant funds among its
state offices, and (3) the approach that USDA state and district
offices use to distribute funds within states. 


   EDUCATION
--------------------------------------------------------- Appendix 0:6

Adult Education:
Measuring Program Results Has Been Challenging

GAO/HEHS-95-153, Sept.  8 (44 pages). 

According to a recent national survey, nearly 90 million adults in
the United States have difficulty writing a letter explaining an
error on a credit card bill, using a bus schedule, or calculating the
difference between the regular and sale price of an item.  To address
these deficient skills, Congress passed the Adult Education Act,
which funds state programs to help adults acquire the basic skills
needed for literacy, benefit from job training, and continue their
education at least through high school.  The most common types of
instruction funded under the act's largest program--the State Grant
Program--are basic education (for adults functioning below the eighth
grade level), secondary education, and English as a second language. 
Because many clients of federal employment training programs need
instruction provided by the State Grant Program, coordination among
these programs is essential.  Although the State Grant Program funds
programs that address the educational needs of millions of adults, it
has had difficulty ensuring accountability for results because of a
lack of clearly defined program objectives, questionable validity of
adult student assessments, and poor student data. 

School Finance:
Trends in U.S.  Education Spending

GAO/HEHS-95-235, Sept.  15 (55 pages). 

Recent trends in financing U.S.  education show a leveling off of per
pupil spending for education combined with increasing enrollment in
public elementary and secondary schools.  Meanwhile, the schools face
an increasing number of poor children and others at high risk of
school failure--students whose education costs are generally greater
than average.  Moreover, education's share of state budgets has
declined, and federal funding for education faces tight fiscal
constraints.  If these trends continue, America may be less able to
provide adequate educational services for many school-age children or
make needed improvements in the educational system. 


   ENERGY
--------------------------------------------------------- Appendix 0:7

Uranium Enrichment:
Process to Privatize the U.S.  Enrichment Corporation Needs to
Be Strengthened

GAO/RCED-95-245, Sept.  14 (70 pages). 

The United States Enrichment Corporation, a wholly owned government
corporation, was created in 1992 to take over the Energy Department's
(DOE) uranium enrichment program.  The corporation's privatization
plan estimates that the corporation's stock could be sold for between
$1.5 and $1.8 billion, less about $100 million in transaction fees. 
The plan also assumes that the corporation will take with it up to
$600 million from its Treasury account.  After privatization, the
corporation could pay as much as $1.1 billion annually in taxes.  The
return to the U.S.  Treasury from privatizing the corporation could
range from $1.7 billion to $2.2 billion.  GAO believes, however, that
the net present value analysis, on which the plan's projected sale
price is partly based, needs revision.  For example, it does not
reflect current market conditions and recent administrative
decisions.  Further, the plan's analyses do not consider the value of
excess inventory, which could be worth more than $300 million. 
Because the corporation's sale has national security implications,
involves billions of dollars, and may set a precedent for the
contemplated sales of other federal assets, GAO urges that careful
scrutiny be given to the privatization process.  The privatization
process must protect the taxpayers' interest as fully as possible. 
This protection can best be ensured by placing in the lead role a
government official whose position will not be affected by the
privatization and whose job will be clearly defined as protecting the
taxpayers' interests.  Moreover, safeguards may be needed to protect
the taxpayers if the corporation is undervalued when sold.  The
privatization plan assumes the enactment of proposed legislation
requiring that most of the corporation's billions of dollars in
liabilities remain with the federal government, and the plan's
estimates are based on this assumption. 

Electric Vehicles:
Efforts to Complete Advanced Battery Development Will Require More
Time and Funding

GAO/RCED-95-234, Aug.  17 (44 pages). 

Electric vehicles would significantly improve air quality and save
oil if they replaced large numbers of gasoline-powered vehicles. 
Electric vehicles will not become widely available, however, unless
advanced batteries are successfully developed or some other
technological breakthrough occurs to extend their range and lower
their cost.  In 1988, the three domestic automobile companies formed
a partnership known as the United States Advanced Battery Consortium
to jointly sponsor advanced battery research.  The Energy Department
and representatives of the electric utility industry have agreed to
work with the consortium.  GAO found that advanced batteries that
would make electric vehicles fully competitive with gasoline-powered
vehicles have not yet proven to be feasible, although DOE and
consortium officials believe that continued research is justified. 
Progress has been made on developing mid-term batteries, but they
will not make electric vehicles fully competitive with
gasoline-powered vehicles.  Thus, the energy security and
environmental benefits of mid-term batteries appear limited.  To
reach the goal of developing a long-term advanced battery, consortium
officials believe that about $38 million in additional federal
funding will be needed.  DOE did not follow up on several lessons
learned during this program that could benefit future cooperative
agreements.  Industry officials believe that steps, such as
streamlining DOE's contract review procedures, could prevent such
programs as the consortium from falling behind schedule. 


   FINANCIAL INSTITUTIONS
--------------------------------------------------------- Appendix 0:8

Bank Regulatory Structure:
France

GAO/GGD-95-152, Aug.  31 (60 pages). 

Proposals to consolidate U.S.  bank regulatory agencies have raised
questions about how other countries structure and carry out their
various bank regulation and supervision and central bank activities. 
As part of a congressional request that GAO examine such activities
in several countries, this report provides information on France,
where jurisdiction over the authorization, regulation, and
supervision of banks is divided among three different, but
interrelated, regulatory bodies called committees.  GAO describes (1)
the French bank regulatory and supervisory structure and its key
participants; (2) how that structure functions, particularly with
respect to bank authorization, regulation, and supervision; (3) how
banks are examined in France; and (4) how the central bank handles
other bank-related responsibilities. 

Banks' Securities Activities:
Oversight Differs Depending on Activity and Regulator

GAO/GGD-95-214, Sept.  21 (116 pages). 

About 22 percent of U.S.  banks offered securities brokerage services
to their customers in 1994.  These activities can provide
diversification and additional income for banks, a more competitive
securities industry, and added convenience for bank customers. 
However, because oversight of bank securities activities is split
between bank and securities regulators, the potential exists for
inconsistent regulation.  GAO found that greater cooperation and
coordination between regulators would help overcome this problem. 
This report (1) determines the extent to which banks provide
securities brokerage services and how these services are regulated;
(2) evaluates the completeness and results of the Federal Reserve's
inspections of bank holding company subsidiaries that the agency
authorizes to underwrite and deal in securities; and (3) evaluates
the Federal Deposit Insurance Corporation's regulation of bank
subsidiaries that can underwrite and deal in securities. 

Mutual Funds:
Impact on Bank Deposits and Credit Availability

GAO/GGD-95-230, Sept.  22 (18 pages). 

From year-end 1989 through year-end 1994, the amount of money in
mutual funds rose from $994 billion to $2,172 billion--a rise of
nearly $1.2 trillion.  Although this increase included some price
gains for mutual funds owning stocks and bonds, about 90 percent of
the rise stemmed from net customer inflows.  In contrast, bank
deposits fell to $3,462 billion by the end of 1994--$89 billion less
than at year-end 1989.  Compelling evidence exists that some portion
of the growth in mutual funds came at the expense of bank deposits
during this period.  The amount was probably less than $700 billion. 
The movement of money into mutual funds rather than bank deposits has
been, at least in part, the result of historically low interest rates
paid on bank deposits and could change as those rates increase
relative to expected returns on mutual fund investments.  However,
this movement of money should have little impact on the total supply
of loadable and investable funds because both banks and mutual funds
generally lend or invest a large portion of the funds they receive. 
Available data do not show whether the different categories of
borrowers--residential, consumer, and business, were affected by the
shift of money from bank deposits to mutual funds.  Nonetheless,
there remains a possibility that the flow of deposits out of smaller
banks could reduce the availability of finances for small businesses
who depend on loans from such banks. 


      TESTIMONY
------------------------------------------------------- Appendix 0:8.1

FHLBank System:  Reforms Needed to Promote Its Safety, Soundness, and
Effectiveness, by Thomas J.  McCool, Associate Director for Financial
Institutions and Markets Issues, before the House Committee on
Banking and Financial Services.  GAO/T-GGD-95-244, Sept.  27 (19
pages). 

In December 1993, GAO issued a report (GAO/GGD-94-38) on reforming
the Federal Home Loan Bank System.  Since then, several bills have
been introduced in Congress that incorporate recommendations GAO made
in that report.  This testimony updates GAO's conclusions and
recommendations on the Federal Home Loan Bank and System reform and
comments on suggestions that others have made since GAO's report was
issued. 


   FINANCIAL MANAGEMENT
--------------------------------------------------------- Appendix 0:9

Denver International Airport:
Information on Selected Financial Issues

GAO/AIMD-95-230, Sept.  20 (24 pages). 

Under construction since September 1989, the $4.8 billion Denver
International Airport opened for business in February 1995.  This
report reviews (1) the airport's cost growth, (2) differences between
the airport's financial consultant's report and audited financial
statements relating to the Denver Airport System's bond debt, and (3)
Securities and Exchange Commission jurisdiction over municipal bonds
and the status and scope of its investigation of the airport. 


Financial Audit:
Expenditures by Six Independent Counsels for the Six Months Ended
March 31, 1995

GAO/AIMD-95-233, Sept.  29 (29 pages). 

This report presents the results of GAO's audit of expenditures
reported by six independent counsels for the six months ended March
31, 1995.  GAO found that the statements of expenditures for
independent counsels Arlin M.  Adams, Joseph E.  diGenova, Robert B. 
Fiske, Jr., Donald C.  Smaltz, Kenneth W.  Starr, and Lawrence E. 
Walsh were reliable in all material respects.  GAO also did limited
tests of internal controls and discovered a material weakness in
internal controls over reporting of expenditures.  GAO found no
reportable noncompliance with laws and regulations that
it tested. 


      TESTIMONY
------------------------------------------------------- Appendix 0:9.1

Financial Management:  Legislation to Improve Governmentwide Debt
Collection Practices, by Jeffrey C.  Steinhoff, Director of Planning
and Reporting in the Accounting and Information Management Division,
before the Subcommittee on Government Management, Information and
Technology, House Committee on Government Reform and Oversight. 
GAO/T-AIMD-95-235, Sept.  8 (26 pages). 

This testimony focuses on (1) the proposed Debt Collection
Improvement Act of 1995, whose overall thrust GAO agrees with, and
(2) governmentwide debt collection improvements being considered by
Congress.  Federal agencies have long had problems in managing credit
programs and collecting nontax debts.  Billions of dollars is at
stake.  As of September 1994, the government reported $241 billion in
nontax receivables, mainly from direct loans and loans acquired as a
result of claims paid on defaulted guaranteed loans.  Of that amount,
$49 billion was reported to be delinquent.  Moreover, the government
was contingently liable for outstanding guaranteed loans totaling
$694 billion.  It is essential that the federal government not only
make and guarantee creditworthy loans but also put effective
practices in place to collect amounts owed.  In addition to being a
good business practice, increasing debt collections could help reduce
the deficit.  GAO highlights the magnitude of the government's direct
loans and guaranteed loans, the long-standing debt collection
problems facing federal agencies, the necessity of having reliable
information with which to manage credit programs, and the importance
of leadership in having effective credit management and debt
collection programs. 


   GOVERNMENT OPERATIONS
-------------------------------------------------------- Appendix 0:10

Postal Service:
Performing Remote Barcoding In-House Costs More Than Contracting Out

GAO/GGD-95-143, Sept.  13 (40 pages). 

Remote barcoding is a process in which barcodes are added to
addresses on mail that cannot be read by the Postal Service's
automated mail processing equipment.  Images of these pieces of mail
are sent over telephone lines to off-site locations where operators
read and key in enough address information to allow the equipment to
produce a barcode.  The Service began remote barcoding in 1991 at two
test sites run by contractors.  Following a July 1991 decision to
contract out all remote barcoding, the Service established 17 more
contractor-operated remote keying sites to serve 25 postal
facilities.  This report compares the direct costs to the Service of
contracting out for remote barcoding versus having the work done by
postal employees.  GAO also identifies various advantages and
disadvantages of using postal workers rather than contractors for
these services. 

Federal Personnel Management:
Views on Selected NPR Human Resource Recommendations

GAO/GGD-95-221BR, Sept.  18 (50 pages). 

The National Performance Review (NPR), the administration's major
management reform initiative, seeks to make government work better
and cost less.  Legislation enacted in response to NPR
recommendations calls for cutting nearly 273,000 federal jobs during
fiscal years 1994-99.  Most of this workforce reduction is expected
to come from administrative functions, such as human resources.  Some
NPR recommendations involve delegating authority for personnel
decisions from the Office of Personnel Management (OPM) to individual
agencies.  For example.  NPR recommends that OPM abolish its central
hiring registers and authorize agencies to establish their own
recruitment and examining programs.  Concerns have been raised about
whether human resource offices in federal agencies could handle more
responsibilities from OPM, especially when those offices may be
facing staff cuts.  Concerns have also been raised about additional
flexibility leading to more violations of civil service laws.  This
report discusses (1) whether human resource officials favor the
recommendations, (2) if these officials believe that they have the
capacity to assume the additional responsibility envisioned by NPR,
and (3) what oversight is anticipated by OPM and agencies to ensure
accountability for merit system principles. 

Public-Private Mix:
Effectiveness and Performance of GSA's In-House and
Contracted Services

GAO/GGD-95-204, Sept.  29 (34 pages). 

GAO reviewed the cost-effectiveness and performance of the General
Services Administration's (GSA) real property management services,
such as building maintenance and custodial services.  The cost
comparison, performance evaluation, and historical tracking data GAO
reviewed for 54 activities indicated that GSA's decisions to retain
activities in-house or contract them out were sound.  Post-decision
analyses and evaluations by GSA showed that the agency generally
obtained services at a reasonable cost and at an acceptable level of
performance and that it made relatively few reversals from its
original decisions.  GAO found no evidence of performance problems in
the case files for a majority of the 54 sample activities.  For 11
activities, however, GAO found serious problems, such as defaults or
terminations for unsatisfactory performance.  All but one of these
activities involved maintenance services.  In general, the files
provided evidence of GSA's efforts to oversee the activities and take
appropriate corrective action, including deductions from payments to
contractors, when necessary.  Information on private sector practices
that GAO reviewed and that GSA gathered to support its reinvention
efforts indicated that real estate organizations commonly used such
approaches as performance measurement and benchmarking to manage and
evaluate their operations and activities and to decide whether to
contract them out.  The approaches offer an opportunity for GSA to
improve the oversight and evaluation of its services.  Although GSA
has begun to implement some performance measures, such as customer
satisfaction surveys, the specific performance measures that it will
use after its reorgnization is completed are still being developed. 


      TESTIMONY
------------------------------------------------------ Appendix 0:10.1

Commerce Dismantlement:  Observations on Proposed Implementation
Mechanism, by L.  Nye Stevens, Director of Federal Management and
Workforce Issues, before the Subcommittee on Government Management,
Information and Technology, before the House Committee on Government
Reform and Oversight.  GAO/T-GGD-95-233, Sept.  6 (20 pages). 

The proposed Department of Commerce Dismantling Act--H.R.  1756--is
one of several proposals that would abolish or significantly
reorganize the Commerce Department.  Few, if any, precedents exist
for dismantling a Cabinet-level, federal agency.  However, six agency
reorganizations under the Reorganization Act of 1977 and the
Resolution Trust Corporation's liquidation of savings and loans
appear to share some characteristics with the proposed act's Commerce
Programs Resolution Agency, which would wind up the affairs of
Commerce.  This testimony focuses on the proposed Commerce Programs
Resolution Agency and raises several issues that Congress may wish to
consider as it continues to deliberate the
act's provisions. 


   HEALTH
-------------------------------------------------------- Appendix 0:11

Health Research and Misconduct:
HHS' Handling of Cases Is Appropriate, but Timeliness Remains
a Concern

GAO/HEHS-95-134, Aug.  3 (21 pages). 

The federal government spends billions of dollars each year on
research for cures for many chronic diseases and on preventative
treatments.  This money is channelled to researchers mainly through
the National Institutes of Health and other offices within the
Department of Health and Human Services' (HHS) Public Health Service. 
Congressional concern that federal dollars have been misspent on
inappropriate research was heightened by widely publicized reports of
research fraud and other scientific misconduct, such as the recent
detection of falsified data in federally funded breast cancer
research.  HHS' Office of Research Integrity was established to
foster confidence in federal health research programs in two ways: 
through direct investigations of misconduct allegations and through
oversight of investigations done by extramural research institutions. 
GAO found that since its inception, the Office has improved its
handling of scientific misconduct cases.  By continuing to follow
sound investigative procedures and striving to improve its handling
of cases, the Office will increase public trust.  However, the Office
needs to overcome persistent delays in handling cases and
shortcomings in its management systems if it is to effectively
fulfill its mission. 

Medicare:
Excessive Payments for Medical Supplies Continue
Despite Improvements

GAO/HEHS-95-171, Aug.  8 (44 pages). 

In fiscal year 1994 alone, Medicare was billed more than $6.8 billion
for medical supplies.  Congressional hearings and government studies
have shown that Medicare has been extremely vulnerable to fraud and
abuse in its payments for medical supplies, especially surgical
dressings.  In one case, Medicare paid more than $15,000 in claims
for a month's supply of surgical dressings for a single patient,
apparently without reviewing the reasonableness of the claims before
payment.  Until recently, medical suppliers had considerable freedom
in choosing the Medicare contractors that would process and pay their
claims.  Some exploited this freedom by "shopping" for contractors
with the weakest controls and highest payment rates.  This report
discusses (1) the circumstances allowing payment for unusually high
claims for surgical dressing and (2) the adequacy of Medicare's
internal controls to prevent payments for excessive claims. 

Medicare Spending:
Modern Management Strategies Needed to Curb Billions in Unnecessary
Payments

GAO/HEHS-95-210, Sept.  19 (24 pages). 

Medicare's vulnerability to billions of dollars in unnecessary
payments stems from a combination of factors.  First, Medicare pays
higher than market rates for some services and supplies.  For
example, Medicare pays more than the lowest suggested retail price
for more than 40 types surgical dressings.  Second, Medicare's
anti-fraud-and-abuse controls do not prevent the unquestioned payment
of claims for improbably high charges or manipulated billing codes. 
Third, Medicare's checks on the legitimacy of providers are too
superficial to detect the potential for scams.  Various health care
management strategies help private payers avoid these problems, but
Medicare generally does not use these strategies.  The program's
pricing methods and controls over utilization, consistent with health
care financing and delivery 30 years ago, have not kept pace with
major financing and delivery changes.  GAO believes that a viable
strategy to remedy the program's weaknesses would involve adapting
the health care management approach of private payers to Medicare's
public payer role.  This strategy would include (1) more
competitively developed payment rates, (2) enhanced fraud and abuse
detection efforts through modernized information systems, and (3)
more rigorous criteria for granting authorization to bill the
program. 

Medicaid:
Tennessee's Program Broadens Coverage but Faces
Uncertain Future

GAO/HEHS-95-186, Sept.  1 (54 pages). 

In early 1993, Tennessee predicted that increases in state Medicaid
expenditures and the loss of tax revenues used to finance Medicaid
would produce a financial crisis.  To avert it, control Medicaid
expenditures, and extend health insurance coverage to most state
residents, Tennessee converted its Medicaid program into a
managed-care health program--TennCare--to serve both Medicaid
recipients and uninsured persons.  GAO found that although TennCare
met its objectives of providing health coverage to many uninsured
persons while controlling costs, concerns remain with respect to
access to quality care and managed care performance.  In addition,
the soundness of the methodology for determining and the resulting
adequacy of the program's capitation rates have been questioned. 
This report discusses (1) TennCare's basic design and objectives, (2)
the degree to which the program is meeting these objectives, and (3)
the experiences of TennCare's insurers and medical providers and
their implications for TennCare's future. 

Health Care Shortage Areas:
Designations Not a Useful Tool for Directing Resources to
the Underserved

GAO/HEHS-95-200, Sept.  8 (55 pages). 

Many Americans live in places where barriers exist to obtaining basic
health care.  These areas range from isolated rural locations to
inner-city neighborhoods.  In fiscal year 1994, the federal
government spent about $1 billion on programs to overcome access
problems in such locales.  To be effective, these programs need a
sound method of identifying the type of access problems that exist
and focusing services on the people who need them.  The Department of
Health and Human Services uses two main systems to identify such
sites.  One designates Health Professional Shortage Areas, the other
Medically Underserved Areas.  More than half of all U.S.  counties
fall into these two categories.  GAO reviewed the two systems to
determine (1) how well they identify areas with primary care
shortages, (2) how well they help target federal funding to benefit
those who are underserved, and (3) whether they are likely to be
improved under proposals to combine them. 

Cancer Drug Research:
Contrary to Allegation, NIH Hydrazine Sulfate Studies Were
Not Flawed

GAO/HEHS-95-141, Sept.  13 (24 pages). 

Despite advances in treating cancer, some forms of the disease remain
resistant to all therapies and are often fatal.  Because of findings
suggesting that hydrazine sulfate may improve survival for some
patients with advanced cancers, the National Cancer Institute
sponsored three studies of the drug.  All three studies failed to
show any benefit from it.  The developer of hydrazine therapy alleged
that the National Cancer Institute compromised its studies by
allowing study patients to take tranquilizers, barbiturates, and
alcohol, which he contends are incompatible with hydrazine sulfate. 
GAO confirmed that all three trials allowed the use of tranquilizers
to varying degrees and one trial allowed the use of barbiturates and
alcohol.  Retrospective analyses, however, found no evidence that the
use of these allegedly incompatible agents adversely affected the
results of the clinical trials.  Although GAO's work did not support
the allegation that the studies were flawed, the National Cancer
Institute should have ensured that complete and accurate records were
kept on concurrent medications and possible alcohol use. 
Furthermore, the National Cancer Institute's investigators did not
analyze this issue until recently, and the published results did not
accurately describe the use of tranquilizers during one of these
clinical trials. 

Health Insurance Portability:
Reform Could Ensure Continued Coverage for up to 25
Million Americans

GAO/HEHS-95-257, Sept.  19 (18 pages). 

Although federal and state laws have improved the portability of
health insurance, an individual's health care coverage could still be
reduced when changing jobs.  Between 1990 and 1994, 40 states enacted
small group insurance regulations that include portability standards,
but the federal Employee Retirement Income Security Act of 1974
prevents states from applying these standards to the health plans of
employers who self-fund.  As a result, Members of Congress have
proposed broader national portability standards.  GAO estimates that
as many as 21 million Americans each year would benefit from federal
legislation to ensure that workers who change jobs would not be
subject to new health insurance plans that impose waiting periods or
exclude "preexisting conditions." In addition, as many as 4 million
Americans who at some point have been unwilling to leave their jobs
because they feared losing their health care coverage would benefit
from national portability standards.  Such a change, however, could
possibly boost premiums, according to insurers. 

Durable Medical Equipment:
Regional Carriers' Coverage Criteria Are Consistent With Medicare Law

GAO/HEHS-95-185, Sept.  19 (14 pages). 

In November 1993, the Health Care Financing Administration began
consolidating the work of processing and paying claims for durable
medical equipment, prostheses, orthoses, and supplies at four
regional carriers.  Claims for such items had previously been
processed and paid by local Medicare carriers.  As part of the
transition to regional processing, the four regional carriers
developed coverage criteria for the items.  GAO found that the final
criteria adopted by the regional carriers are consistent with
Medicare's policies on national coverage and the law.  GAO does not
believe that the criteria have impeded access by disabled
beneficiaries to needed durable medical equipment and other items. 
Also, the regional carriers approved a similar percentage of service
for durable medical equipment and other items for disabled and aged
Medicare beneficiaries in 1994, so there was no significant
difference in access to durable medical equipment and other items
between the two groups of beneficiaries. 

Medical Liability:
Impact on Hospital and Physician Costs Extends Beyond Insurance

GAO/AIMD-95-169, Sept.  29 (25 pages). 

As Congress considers proposals to reduce the tort liability in the
health care industry, little consensus exists on the extent to which
medical liability-related spending boosts hospital and physician
expenditures, a central issue in the debate over health care reform. 
GAO found that hospitals and physicians incur a variety of medical
liability costs.  Studies attempting to measure such costs have
focused on the cost of purchased malpractice insurance, which is
readily quantifiable because of state reporting requirements.  Other
hospital and physician liability costs, however, are impractical and
methodologically difficult to measure with any precision.  Such costs
include defensive medicine, liability-related administrative
expenses, and medical device and drug company's liability expenses
that are passed on to hospitals and doctors in the price of products. 
However, a broader understanding of such costs and their implications
is useful to the ongoing medical liability reform debate. 

Health Care:
Employers and Individual Consumers Want Additional Information on
Quality

GAO/HEHS-95-201, Sept.  29 (24 pages). 

Both employers who purchase health care and individual consumers have
demanded more information on quality.  In response to these demands,
some states, large employers, and health plans have been publishing
performance reports describing the quality of health care providers. 
These "report cards" provide such information as the frequency with
which preventive services are provided and the degree of success in
treating certain diseases.  Data comparing health care plans and
providers helped the consumers GAO surveyed make their health care
purchasing decisions.  However, performance reports have yet to
achieve their fullest potential.  Consumers said that they needed
more reliable and valid data, more readily available and standardized
information, and more emphasis on outcome measures.  Meeting the
information needs of individual consumers continues to lag behind
meeting employer needs.  Attention must be paid to ensuring that
individual consumers have access to health care data.  Although
employers themselves have begun to cooperate with one another, few of
those GAO interviewed are making complete health care data available
to help individual consumers make purchasing decisions.  Relevant
stakeholders have not yet addressed the issues of disseminating
performance data to individual consumers so that they can make
responsive, informed decisions about their health care coverage. 


   HOUSING
-------------------------------------------------------- Appendix 0:12


      TESTIMONY
------------------------------------------------------ Appendix 0:12.1

Public Housing:  Status of HUD's Takeover of the Chicago Housing
Authority, by Judy A.  England-Joseph, Director of Housing and
Community Development Issues, before the Subcommittee on Human
Resources and Intergovernmental Relations, House Committee on
Government Reform and Oversight.  GAO/T-RCED-95-275, Sept.  5 (10
pages). 

This testimony focuses on the Department of Housing and Urban
Development's (HUD) takeover of the Chicago Housing Authority (CHA)
in May 1995.  The HUD takeover was prompted by the poor physical
condition of the CHA's extensive housing stock and the troubled
management of the housing authority.  GAO concludes that HUD
officials had little choice in taking over CHA.  Even if the progress
that HUD has made so far in establishing CHA continues, HUD will not
solve CHA's problems in the near future.  Because of the magnitude
and persistence of the problems, improvements at the authority will
take years to achieve and short-term gains will be difficult.  Thus,
it is important that HUD officials not raise the expectations of
tenants or the public for immediate solutions.  Although HUD has set
and already met some short-term goals, preparing a comprehensive
long-term recovery plan is crucial to ensuring
sustained success. 


   INCOME SECURITY
-------------------------------------------------------- Appendix 0:13

Supplemental Security Income:
Disability Program Vulnerable to Applicant Fraud When Middlemen Are
Used

GAO/HEHS-95-116, Aug.  31 (32 pages). 

Some ineligible applicants who cannot speak English have obtained
Social Security Income (SSI) benefits illegally by using middlemen. 
These middlemen, who provide translation services, have allegedly
coached SSI claimants on how to appear mentally disabled, have used
dishonest health care providers to submit false medical evidence for
those seeking benefits, and have provided false information on
claimants' medical and family histories.  By 1990, the Social
Security Administration (SSA) had become aware of the middleman
problem.  For example, a Washington state middleman arrested for
fraud had helped at least 240 immigrants obtain $7 million in SSI
benefits by coaching them on which medical symptoms to claim and
providing false information on their medical conditions and family
histories.  This report describes factors that contribute to the SSI
program's vulnerability to fraudulent applications and describes
federal and state initiatives to combat such fraudulent activities. 

Private Pension Plans:
Efforts to Encourage Infrastructure Investment

GAO/HEHS-95-173, Sept.  8 (42 pages). 

The federal government invests billions of dollars each year in the
nation's infrastructure--highways, mass transit, rail, aviation,
water resources, and wastewater treatment facilities.  However,
concern about the state of this infrastructure and the need for
additional expenditures in the face of federal budget deficit has led
to proposals encouraging the nation's pension plans to invest in
infrastructure projects.  Congress passed legislation in 1991
creating a commission to study ways to promote infrastructure
investment, particularly by pension plans.  The commission issued
recommendations in 1993.  This report (1) identifies the role that
current federal policies play in providing incentives for private
pension plans to invest in infrastructure projects and (2) analyzes
the commission's proposals on pension plan investment to determine
how pension plans might respond. 


   INFORMATION MANAGEMENT
-------------------------------------------------------- Appendix 0:14

Department of Energy:
Poor Management of Nuclear Materials Tracking System Makes Success
Unlikely

GAO/AIMD-95-165, Aug.  3 (15 pages). 

The Energy Department (DOE) is attempting to develop a new tracking
system to replace its current system for monitoring U.S.  imports and
exports of nuclear materials.  DOE plans to discontinue the existing
system and begin operating the replacement system in September 1995. 
However, DOE's replacement system is being developed in an
undisciplined, poorly controlled manner that makes success unlikely. 
Planning was inadequate and basic system development practices were
not followed.  The upshot is that DOE has no guarantee that the
replacement system will produce accurate and timely reports before it
accepts the system and pays the subcontractor.  DOE's disregard for
basic system development practices to ensure the accuracy and
dependability of its nuclear tracking system is inconsistent with the
importance of the Nuclear Materials Management and Safeguards System,
which produces the United States' officials records for tracking
nuclear materials.  It is not in DOE's best interests, therefore, to
disconnect the existing system and replace it with an untested,
undocumented new system.  The history of software development is
littered with systems that failed under
similar circumstances. 

Hazardous Waste:
Benefits of EPA's Information System Are Limited

GAO/AIMD-95-167, Aug.  22 (17 pages). 

In 1991, the Environmental Protection Agency (EPA) began operating
its Resource Conservation and Recovery Information System to help the
federal government and the states better manage their hazardous waste
cleanup programs.  GAO found that the system has not met three of its
main objectives.  Although the system gives the states their own
individual databases, data entry and retrieval are so difficult that
most users do not rely on it.  Furthermore, the data in the system
are unreliable, forcing users to manually verify the information. 
The system's shortcomings have not significantly affected
implementation of the Resource Conservation and Recovery Act because
the system is not relied on as a key tool for managing the program. 
Instead, users depend on systems that they have independently
developed as well as other work-arounds that have been created. 
Recognizing that the system is not meeting the needs of federal and
state users, EPA recently began reassessing information needs and
system support for the Resource Conservation and Recovery Act
program. 

Superfund:
System Enhancements Could Improve the Efficiency of
Cost Recovery

GAO/AIMD-95-177, Aug.  25 (22 pages). 

Under the Superfund program, the Environmental Protection Agency
(EPA) is responsible for recovering from responsible parties billions
of dollars in costs associated with cleaning up the worst hazardous
waste sites.  In 1992 and again in 1995, GAO cited Superfund as a
"high-risk" government program and noted that EPA lacked the
information needed to adequately manage and support its cost recovery
efforts, which are supported by several financial and records
management systems.  Because of limitations in these systems, cost
recovery staff cannot fully depend on them to provide all the
information needed for cost recovery.  Instead, staff must do
excessive manual searches and reconciliations to ensure that the
information supporting cost recovery cases is accurate, reliable, and
complete.  EPA is aware of these limitations and has taken steps to
address them.  For example, planned modifications to the financial
systems should produce more detailed cost data, thus reducing manual
reconciliation efforts.  GAO notes additional measures that EPA could
take to ensure that its systems provide the best possible support for
its cost recovery efforts. 

USDA Telecommunications:
Better Management and Network Planning Could Save Millions

GAO/AIMD-95-203, Sept.  22 (53 pages). 

From telephone calls to video conferencing to providing nationwide
customer access to information, the Agriculture Department (USDA)
uses a wide array of telecommunications technology.  GAO found that
USDA is not cost-effectively managing its annual $100 million
telecommunications investment.  USDA agencies waste millions of
dollars each year by paying for (1) unnecessary telecommunications
services, (2) leased equipment that goes unused and services billed
but never provided, and (3) commercial carrier services that cost
more than three times what they would under the FTS 2000 program. 
These problems exist because USDA's Office of Information Resources
Management has not fulfilled its responsibility to mange and oversee
USDA's telecommunications and ensure that resources are properly
used, costs are controlled, and federal requirements are met.  USDA
is also not cost-effectively planning its telecommunications networks
to ensure that they can support the agency's information sharing
needs for the 21st century.  Instead, the Office of Information
Resources Management continues to approve the acquisition and
development of costly new agency networks that overlap and do not
support
interagency sharing. 

VA Health Care Delivery:
Top Management Leadership Critical to Success of Decision Support
System

GAO/AIMD-95-182, Sept.  29 (22 pages). 

One of the main missions of the Department of Veterans Affairs (VA)
is to provide health care to veterans.  VA's Veterans Health
Administration (VHA) runs the largest health care system in the
nation, with an annual budget of more than $16 billion.  Despite its
size and complexity, however, VHA lacks detailed, reliable
information on the operating costs of its 172 hospitals. 
Consequently, as GAO reported in December 1992 (GAO/OCG-93-4TR), VHA
could not determine which of its facilities were working well and
which procedures were cost-effective.  This report assesses VA's
efforts to develop a medical decision support system, a computer
system that has provided hospitals in the private sector with
improved data on patterns of patient care and the cost of providing
health care services.  As of July 1995, VA had started implementing
its decision support system at 38 hospitals.  GAO examines (1) the
benefits that such a system can provide VA, (2) whether VA is
pursuing the comprehensive business strategy needed to achieve these
benefits, and (3) whether VA is establishing an adequate information
infrastructure for the system. 

USDA Financial Systems:
Additional Actions Needed to Resolve Major Problems

GAO/AIMD-95-222, Sept.  29 (41 pages). 

To manage its $146 billion in assets and to account for $75 billion
in expenditures for fiscal year 1994, the Agriculture Department
(USDA) used 115 separate financial management systems that performed
overlapping and similar functions.  These systems are not integrated,
contain inconsistent and inaccurate data, and are plagued with
internal control weaknesses.  To address these problems and carry out
its financial management system responsibilities under the Chief
Financial Officers Act of 1990, USDA began implementing a project in
1993 known as the Financial Information Systems Vision and Strategy. 
This report discusses whether the project will (1) resolve USDA's
major financial system weaknesses and (2) consolidate USDA's separate
financial and mixed systems that perform similar functions, as well
as reengineer USDA's financial processes. 


   INTERNATIONAL AFFAIRS
-------------------------------------------------------- Appendix 0:15

Foreign Assistance:
Assessment of Selected USAID Projects in Russia

GAO/NSIAD-95-156, Aug.  3 (99 pages). 

The nearly $540 million that the U.S.  Agency for International
Development (USAID) has spent on economic and political reform
projects in the former Soviet Union since 1990 has yielded mixed
results.  Successful projects, such as those involving coal industry
restructuring or housing sector reform, generally had strong backing
from the Russian government; used U.S.  contractors with a long-term
presence in Russia; and had a specific, sustainable objective.  USAID
did not adequately manage some projects it funded.  The devolution of
management and monitoring responsibility from USAID's Washington
office to its Moscow office delayed decision-making and created
confusion among contractors.  Furthermore, USAID's management
information systems were inadequate, and it did not adequately
monitor or coordinate some projects.  USAID has taken steps to
overcome these problems. 

Peacekeeping:
Assessment of U.S.  Participation in the Multinational Force
and Observers

GAO/NSIAD-95-113, Aug.  15 (66 pages). 

The recent signing of peace accords between Israel and the
Palestinian Liberation Organization, Israel and Jordan, and the
possibility of similar agreements between Israel and Syria and
Lebanon have heightened interest in the Multinational Force and
Observers (MFO), which has monitored the current peace treaty between
Egypt and Israel since 1982.  In light of these regional developments
and the significant U.S.  contribution to the MFO since its
inception, this report provides information on (1) U.S. 
contributions to and the total cost of the MFO, including measures
taken to reduce costs; (2) the level of U.S.  participation and its
operational impacts; (3) the State Department's oversight of U.S. 
participation; and (4) the views of the State Department and other
relevant parties on MFO's performance and the lessons learned. 

U.S.  Department of Agriculture:
Foreign Agricultural Service Could Benefit From Better
Strategic Planning

GAO/GGD-95-225, Sept.  28 (56 pages). 

International agricultural trade has become highly competitive, and
the United States increasingly confronts competitors using
sophisticated marketing practices.  The Foreign Agricultural Service,
part of the Agriculture Department (USDA), oversees a variety of
export promotion programs aimed at boosting U.S.  exports of
agricultural commodities.  The Service's mission statement calls for
it to gather and report information about agricultural commodities in
foreign countries, improve access to foreign markets, and promote
greater foreign consumption of U.S.  agricultural commodities.  This
report examines whether the Service has used its resources in the
most effective way to accomplish its mission.  GAO reviews the
Service's (1) strategic planning, specifically whether USDA's
long-term agricultural trade strategy contributed to effective
strategic planning by the Service; (2) foreign service, particularly
whether its operations were planned and managed to use its available
resources effectively; and (3) commodity reporting, specifically the
extent to which the Service's commodity reporting was an effective
use of resources. 

Multilateral Development Banks:
U.S.  Firms' Market Share and Federal Efforts to Help U.S.  Firms

GAO/GGD-95-222, Sept.  28 (40 pages). 

According to the Treasury and Commerce Departments, multilateral
development banks, such as the World Bank, provide about $45 billion
annually in loan commitments that generate business opportunities for
U.S.  firms.  The multilateral development banks' procurement process
is designed to provide fair and equal opportunity for prospective
bidders, taking into account economy and efficiency.  Yet some U.S. 
businesses have been concerned about how the process is implemented
and what the U.S.  government is doing to promote U.S.  exports
through procurements funded by these banks.  This report (1)
identifies and compares the multilateral development bank market
share held by U.S.  firms and their major competitors, (2) describes
obstacles that U.S.  businesses may face in competing for bank
projects and the services that the U.S.  government provides to help
U.S.  businesses overcome these barriers, and (3) describes the
Treasury Department's efforts to help ensure fair and open
procurements for projects that the banks finance. 

Weapons of Mass Destruction:
DOD Reporting on Cooperative Threat Reduction Assistance Can
Be Improved

GAO/NSIAD-95-191, Sept.  29 (20 pages). 

In 1991, Congress authorized the Defense Department to help the
former Soviet Union (1) destroy nuclear, chemical, and other weapons
of mass destruction (including strategic missiles); (2) transport,
store, and safeguard such weapons in connection with their
destruction; and (3) prevent the proliferation of such weapons. 
Under the Cooperative Threat Reduction program, DOD manages various
projects to help Balarus, Kazakhstan, Russia, and Ukraine--the four
republics that inherited the former Soviet Union's weapons of mass
destruction.  This report examines whether DOD had (1) made progress
in auditing and examining program aid; (2) listed its planned audit
and examination efforts to be carried out during fiscal year 1995;
(3) compiled a list describing the current location and condition of
program assistance; and (4) provided a basis for determining whether
the assistance was being used for the
purposes intended. 

Foreign Direct Investment:
Review of Commerce Department Reports and
Data-Sharing Activities

GAO/GGD-95-242, Sept.  29 (40 pages). 

This is GAO's final report on the Secretary of Commerce's first three
annual reports on foreign direct investment in the United States. 
GAO (1) assesses the extent to which Commerce's second and third
reports--issued in 1993 and 1995--fulfilled their requirements under
the law and responded to recommendations made in a 1992 GAO report;
(2) reviews the process by which federal agencies collect data on
foreign direct investment; (3) reviews the status and processes of
the data exchanges, or links, initiated by the Financial Data
Improvements Act of 1990 between the Commerce Department's Bureau of
Economic Analysis and its Bureau of the Census and between the Bureau
of Economic Analysis and the Labor Department's Bureau of Labor
Statistics; and (4) evaluates the extent to which implementation of
the act has improved public information on foreign direct investment
in the United States. 


      TESTIMONY
------------------------------------------------------ Appendix 0:15.1

Government Reorganization:  Observations About Creating a U.S.  Trade
Administration, by Allan I.  Mendelowitz, Director of International
Trade, Finance, and Competitiveness Issues, before the Subcommittee
on International Economic Policy and Trade, House Committee on
International Relations.  GAO/T-GGD-95-234, Sept.  6 (32 pages). 

This testimony focuses on several broad trade issues.  GAO discusses
(1) the basis for the federal role in international trade, (2) the
various roles that the U.S.  Trade Representative and the Commerce
Department play in international trade activities, and (3) the
interagency mechanisms that help integrate federal trade activities. 
GAO also discusses the current proposal in H.R.  2121, "The Trade
Reorganization Act of 1995," to create a U.S.  Trade Administration
by combining the U.S.  Trade Representative, various offices in the
Commerce Department, and the U.S.  Trade and Development Agency. 

Foreign Affairs:  Scope of Our Review of Palestine Liberation
Organization Finances, by Joseph E.  Kelley, Director of
International Affairs Issues, before the House Committee on
International Relations.  GAO/T-NSIAD-95-227, Sept.  20 (eight
pages). 

After the government of Israel and the Palestine Liberation
Organization (PLO) signed a Declaration of Principles in September
1993, the United States agreed to help fund long-term development
projects in the West Bank and Gaza Strip.  GAO issued a classified
report dealing with the PLO's finances.  Specifically, GAO (1)
assessed the PLO's ability to finance the operations of the
Palestinian Authority--the organization established to implement
self-rule, (2) ascertained whether the international donors
effectively analyzed the need to help fund the Palestinian
Authority's operating and start-up expenses, and (3) determined
whether appropriate controls had been implemented to ensure that
donor funds would be adequately accounted for.  This testimony
discusses the audit work supporting the classified report, the
principal cooperation issues GAO confronted during this assignment,
and GAO's efforts to have its report declassified in response to
requests from Members of Congress. 


   JUSTICE AND LAW ENFORCEMENT
-------------------------------------------------------- Appendix 0:16

The Federal Judiciary:
Observations on Selected Issues

GAO/GGD-95-236BR, Sept.  18 (106 pages). 

This briefing report reviews operations of the federal judiciary. 
GAO provides information on (1) the appropriations, the expenditures,
and the functions of the Administrative Office of the U.S.  Courts
and Federal Judicial Center, including any substantial duplication in
their functions and services; (2) the costs of the Federal Judicial
Center education and training programs, including the potential
savings that could result from eliminating all such programs except
for the training and the education of new district judges; (3) the
annual number and cost of meetings of the Judicial Conference and its
committees, circuit judicial conferences, and circuit judicial
councils; and (4) the cost, by circuit, of any circuit task forces on
gender, racial, and ethnic bias, and the process used to select any
executive directors for the task forces.  GAO also assesses the
methodological soundness of circuit task force reports that were at
least in final draft. 

Electronic Benefits Transfer:
Use of Biometrics to Deter Fraud in the Nationwide EBT Program

GAO/OSI-95-20, Sept.  29 (32 pages). 

The National Performance Review recommended in 1993 that the federal
government consider paying individuals by using electronic rather
than paper means.  In 1994, a task force composed of representatives
from various federal agencies estimated that more than $110 billion
in annual cash benefits and food assistance could be delivered with
electronic benefits transfer (EBT), including food stamps, social
security payments, and federal pensions.  EBT is already providing
the Agriculture Department with data that can be used to target
stores trafficking in food stamps.  However, EBT alone has not
effectively deterred fraud in the delivery of food stamp benefits. 
An EBT program without the enhanced security of biometric
verification--an automated method to measure a physical
characteristic or personal trait--raises a genuine concern about the
potential for higher program costs and losses.  GAO believes that
fingerprint verification is the biometric option that offers the
greater potential for reducing fraud in EBT systems.  Although
development of an EBT system with biometric safeguards would be more
expensive, largely because of the need to purchase hardware and
software, and would take longer to implement nationwide, such system
enhancement is needed to ensure that the future system is practical
and not beset by fraud. 


   NATIONAL DEFENSE
-------------------------------------------------------- Appendix 0:17

Military Bases:
Case Studies on Selected Bases Closed in 1988 and 1991

GAO/NSIAD-95-139, Aug.  15 (120 pages). 

As part of an earlier review of 37 bases closed by the first two base
realignment and closure rounds, GAO reported in late 1994
(GAO/NSIAD-95-3) on expected revenues from land sales, resources
requested from the federal government, and issues delaying reuse
planning.  GAO collected more information on reuse planning and
implementation at the 37 bases.  This report provides updated
summaries on the planned disposal and reuse of properties, successful
conversions, problems that delayed planning and implementation, and
assistance provided to communities.  GAO also profiles each of the 37
installations. 

Inventory Management:
Purchasing Parts From Contractor-Operated Parts Stores and Commercial
Sources

GAO/NSIAD-95-176, Sept.  11 (15 pages). 

In comparing costs for vehicle parts purchased from the Air Force
Contractors Operated Parts Stores with those purchased directly from
commercial suppliers, GAO found that the most cost-effective way to
buy parts to repair vehicles can vary from base to base.  Factors,
such as the types of vehicles in a fleet, the volume of business
being done, vendor availability, and vendor payment preferences,
differ among bases and can affect the price of parts.  Also,
mission-related factors, such as deployments, can affect the
availability of personnel needed to manage a commercial-source parts
procurement operation.  Given these differences, installation
commanders are in the best position to decide which approach for
acquiring parts will best meet their needs.  GAO also found that
controlling personnel costs is key to determining whether savings can
be achieved in a commercial-source procurement system.  Office of
Management and Budget Circular A-76 does not apply to the Air Force's
vehicle repair parts support decision.  The establishment of a
commercial-source procurement system is simply an alternative way of
doing business.  The Air Force is not replacing the stores with an
identical in-house service.  As a result, no study is required. 

Combat Identification Systems:
Changes Needed in Management Plans and Structure

GAO/NSIAD-95-153, Sept.  14 (35 pages). 

The Army and the Navy have failed to fully consider how to integrate
their independently developed systems to identify friend from foe on
the battlefield and thus reduce fratricide incidents.  Moreover,
these systems, which could cost more than $4 billion, are limited to
identifying "friends" equipped with compatible identification
systems.  GAO recently learned that the Army plans to acquire more
near-term millimeter wave cooperative identification systems without
analyzing whether the system can be integrated into the mid- and
long-term solutions--as GAO recommended in an October 1993 report
(GAO/NSIAD-94-19).  The Army plans to acquire another 115 near-term
systems at a cost of nearly $24 million.  The Defense Department and
the Army are concerned about the affordability and cost-effectiveness
of the near-term system, and it may never be fully fielded for these
reasons.  The Army's plan risks wasting millions of dollars on a
system that may never be procured. 

Unmanned Aerial Vehicles:
Maneuver System Schedule Includes Unnecessary Risk

GAO/NSIAD-95-161, Sept.  15 (15 pages). 

The cost of the Defense Department's unmanned aerial vehicle systems,
which are designed to fly over enemy territory and transmit images
back to ground stations, is expected to reach $4.2 billion.  Past
unmanned aerial vehicle acquisition programs have been marked by
premature entry into production that resulted in extensive and costly
system redesigns in an attempt to achieve acceptable system
performance.  Nevertheless, the Joint Tactical Unmanned Aerial
Vehicle Project Office plans to begin production of the Maneuver
system, a variant of the Hunter, without adequate assurances that it
can meet operational performance requirements.  As a result, the
Pentagon will again risk acquiring an unsatisfactory system. 

1996 Defense Budget:
Potential Reductions, Rescissions, and Restrictions in RDT&E
and Procurement

GAO/NSIAD-95-218BR, Sept.  15 (105 pages). 

GAO reviewed the Defense Department's (DOD) fiscal year 1996 budget
request and prior years' appropriations for research, development,
test, and evaluation and procurement programs.  Because of schedule
delays, changes in program requirements, and issues that emerged
after the budget request was developed, GAO identified opportunities
to reduce the funding levels for fiscal year 1996 by about $956
million and rescind about $265 million from prior years'
appropriations.  GAO also found about $934 million that Congress can
restrict from obligation until specified criteria are met to minimize
risks in acquisition programs.  Of these totals, GAO identified
potential budget cuts of nearly $103 million to the fiscal year 1996
research, development, test, and evaluation budget request and
potential rescissions of about $15 million to prior years'
appropriations.  GAO also identified about $27 million in
obligational authority that can be restricted.  GAO identified
potential budget reductions of about $854 million to the fiscal year
1996 procurement budget request, potential rescissions of about $250
million to prior years' appropriations, and about $907 million in
potential restrictions.  GAO also found nearly $98 million in
obligational authority expiring on September 30, 1995, including
about $77 million in fiscal year 1994 research, development, test,
and evaluation funds and about $19 million in fiscal year 1993
procurement funds. 

Future Years Defense Program:
1996 Program Is Considerably Different From the 1995 Program

GAO/NSIAD-95-213, Sept.  15 (24 pages). 

This report compares the Defense Department's (DOD) fiscal year 1996
Future Years Defense Program with the program for fiscal year 1995. 
Specifically, GAO discusses (1) what major program changes were made
from 1995 to 1996, (2) what the implications of these changes are for
the future, and (3) whether the 1996 program complies with statutory
requirements. 

DOD Infrastructure:
DOD's Planned Finance and Accounting Structure Is Not
Well Justified

GAO/NSIAD-95-127, Sept.  18 (32 pages). 

The Defense Department's (DOD) consolidation of more than 300 defense
accounting offices did not adequately consider the functions and
proper staffing levels of the new offices and gave undue weight to
the reuse of closed military bases.  GAO concludes that DOD's plan,
which is expected to cut 23,000 finance and accounting jobs, stressed
short-term cost savings at the expense of customer service and
improved business practices.  This report assesses (1) the process
that DOD used to identify the appropriate size and location for its
finance and accounting centers and operating locations, (2) the
consolidation's potential impact on customer service, and (3) the
extent to which DOD's consolidation plan reflects cutting-edge
business practices. 

DOD Dependents Schools:
Enrollment Categories, Numbers, and Locations

GAO/HEHS-95-149, Sept.  18 (46 pages). 

For school year 1994-95, the Defense Department's (DOD) dependents
schools system enrolled more than 88,000 students in 191 schools
worldwide and had a budget of $860 million.  Most students were DOD
command-sponsored, military or civilian dependents for whom DOD must
provide a free public education overseas.  About 5,500 students were
enrolled as space-available students--that is, dependents who were
not command sponsored and thus not eligible for space-required
enrollment, but were allowed to enroll if space was available.  About
3,000 of these space-available children paid tuition, while the other
2,500 attended tuition free.  This report (1) reviews legislation
that establishes eligibility and authorizes funding for student to
enroll in DOD's dependents schools system as space-available, (2)
identifies the number of students enrolled as space-available and
their locations, and (3) explains the circumstances surrounding high
space-available enrollments in some schools. 

Unexploded Ordnance:
A Coordinated Approach to Detection and Clearance Is Needed

GAO/NSIAD-95-197, Sept.  20 (29 pages). 

Inexpensive improvements in mine design; the unique challenges posed
by clearing large areas, such as farmland, in Third World countries;
and the difficulty of controlling the proliferation of antipersonnel
landmines have thwarted U.S.  technological efforts to detect and
clear unexploded ordnance, which kills an estimated 30,000 people
around the world each year.  Many of the victims are civilians,
including children, who are killed years after hostilities have
ceased.  This report reviews the extent to which technology offers
solutions to worldwide landmine and other unexploded ordnance
problems.  GAO (1) reviews the extent to which the Defense
Department's and other agency's requirements and associated research
and development could be applied to clearance problems elsewhere in
the world, (2) assesses the ability of existing or foreseeable
technologies to detect and clear landmines and other unexploded
ordnance, and (3) identifies barriers that could impeded the progress
or output of
this technology. 

1996 DOD Budget:
Potential Reductions to Operation and Maintenance Programs

GAO/NSIAD-95-200BR, Sept.  26 (28 pages). 

GAO identified potential reductions of $4.9 billion to the fiscal
year 1996 operation and maintenance budget requests, which totaled
$70.3 billion, from the military services and the Defense Department
(DOD).  In addition, GAO notes that funding for the Partnership for
Peace program, which is designed to encourage joint training and
military exercises with NATO forces and to promote greater partner
interoperability, is divided between the DOD and State Department
budgets.  As a result, no one congressional committee has complete
oversight to ensure that the program's efforts are effective and not
duplicative.  The fiscal year 1996 operation and maintenance budget
request from DOD earmarks $40 million for program expenses, including
an information management system, regional airspace initiative,
defense resource management program, and unit exchanges.  Meanwhile,
the State Department is requesting $60 million for this
same program. 

Military Physicians:
DOD's Medical School and Scholarship Program

GAO/HEHS-95-244, Sept.  29 (93 pages). 

Critics of the Uniformed Service University of the Health
Sciences--the Defense Department's (DOD) medical school in Bethesda,
Maryland--have been trying to close the University ever since it was
established 20 years ago.  They argue that DOD's need for doctors can
be met at a lower cost by using physicians educated at civilian
medical schools.  GAO found that when all federal costs are factored
in, the University nearly equals the cost of the regular scholarship
program and is lower than the cost of the deferred scholarship
program.  This difference arises because University graduates are
expected to serve much longer in the military and the University
receives much less non-DOD federal support than do civilian medical
schools.  Medical education at the University compares well with that
of other U.S.  medical schools.  DOD retention data suggest that
University graduates are likely to provide DOD with a cadre of
experienced physician career officers.  Scholarship program doctors,
who comprise the majority of new physicians being hired, stay in the
military for shorter periods, on average, than do University
graduates.  However, given changes in operational scenarios and DOD's
approach to delivering peacetime health care, the military's
physician needs and the means to hire and retain these doctors should
be reassessed.  For example, alternative strategies, such as an
additional scholarship option with a longer service obligation, could
be considered as a potentially less expensive way to increase the
length of military physicians' careers. 

Aircraft Requirements:
Air Force and Navy Need to Establish Realistic Criteria for
Backup Aircraft

GAO/NSIAD-95-180, Sept.  29 (30 pages). 

Since 1977, many audits by the Defense Department (DOD) and GAO have
pointed out that the military services overstate the number of backup
fighter and attack aircraft needed for training, test, and
evaluation, and to replace combat aircraft that are lost through
attrition or are being repaired.  At the end of fiscal year 1993, the
Air Force and the Navy/Marine Corps maintained nearly 3,000 fighter
and attack aircraft and about 1,600 similar, equally capable backup
planes.  In response to congressional concerns that backup forces are
not efficiently managed and that this had adversely affected funds
available for combat forces, this report identifies (1) trends in the
number of backup aircraft maintained by the services, (2) steps that
the military has taken in response to recommendations made by GAO and
others to validate backup aircraft requirements, and (3)
opportunities to remove unneeded backup aircraft from the force to
minimize the cost of operating and maintaining combat aircraft. 


   NATURAL RESOURCES
-------------------------------------------------------- Appendix 0:18

National Parks:
Difficult Choices Need to Be Made About the Future of the Parks

GAO/RCED-95-238, Aug.  30 (52 pages). 

GAO concludes that there is cause for concern about the health of
national parks.  Visitor services were deteriorating at most of the
park units that GAO reviewed.  Services were being cut back, and the
condition of many trails, campgrounds, and other facilities was
declining.  Trends in resource management were less clear because
most park managers lacked enough data to determine the overall
condition of their parks' natural and cultural resources.  In some
cases, parks lacked an inventory of the resources under their
protection.  Two factors strongly affected the levels of visitor
services and the management of park resources:  (1) additional
operating requirements placed on parks by laws and administrative
requirements and (2) increased visitation, which drives up the parks'
operating costs.  These two factors have seriously eroded funding
increases since the mid-1980s.  The national park system is at a
crossroads.  Although the system continues to grow, conditions at the
parks have been deteriorating and the dollar amount of the
maintenance backlog has soared from $1.9 billion in 1988 to more than
$4 billion today.  Congress is faced with the following difficult
policy choices:  (1) increasing the amount of financial resources
going to the parks, (2) limiting or reducing the number of units in
the park system, and (3) reducing the level of visitor services.  The
Park Service should be able to stretch available resources by
operating more efficiently and by improving its financial management
and performance measuring systems. 

Forest Service:
Distribution of Timber Sales Receipts Fiscal Years 1992-94

GAO/RCED-95-237FS, Sept.  8 (54 pages). 

Over the years, the Forest Service's annual reports to Congress have
indicated that receipts from the timber sales program exceeded the
expense of preparing and administering the sales.  However, these
reports did not show the extent to which timber sales receipts were
distributed to various Forest Service funds or accounts established
for specific purposes, such as reforesting the land and making
payments to the states in which the forests were located.  GAO found
that during fiscal years 1992-94, the Forest Service collected nearly
$3 billion in timber sales receipts and distributed about $2.7
billion, or 90 percent, to various Forest Service funds or accounts
for specific purposes.  The Forest Service deposited the remaining
receipts--about $300 million--in the General Fund of the Treasury. 
Outlays for preparing and administering timbers sales totaled about
$1.3 billion for the same period. 


   SCIENCE, SPACE, AND TECHNOLOGY
-------------------------------------------------------- Appendix 0:19

Federal Research:
Lessons Learned From the Pilot Technology Access Program

GAO/RCED-95-212, Sept.  18 (62 pages). 

The goal of the Pilot Technology Access Program is to establish
special technology assistance centers to deliver counseling,
training, and research assistance to small businesses.  A March 1994
GAO report (GAO/RCED-94-75) discussed the program's implementation
and progress during the first two years.  Shortly after that report
was issued, Congress decided not to fund the program beyond fiscal
year 1995, its fourth year.  This second and final report on the
program discusses the status of the program centers during the fourth
and final year of federal funding and also provides GAO's
observations on lessons learned during the pilot.  GAO believes that
these observations could be beneficial if Congress reconsiders such a
program in the future. 


   SOCIAL SERVICES
-------------------------------------------------------- Appendix 0:20

Welfare to Work:
Child Care Assistance Limited; Welfare Reform May Expand Needs

GAO/HEHS-95-220, Sept.  21 (32 pages). 

From 1991 through 1993, federal and state spending on child care
subsidies to help welfare recipients work or go to school grew from
about $600 million to more than $1 billion.  As Congress and the
states consider various approaches to restricting the length of time
that mothers stay on welfare, questions have arisen about the child
care needs that will arise as more and more welfare mothers
participate in training activities or return to work.  In particular,
concerns have been raised about the capacity of states' child care
resources to handle the rise in the number of children needing care
under such proposals.  This report examines (1) the extent to which
child care needs of welfare recipients in an education program--the
Job Opportunities and Basic Skills Training program--are being met,
(2) whether any barriers exist to meeting the child care needs of
program participants, (3) the effects of child care subsidies on
former welfare recipients' progress toward self-sufficiency, and (4)
the potential implications of welfare reform for child care
availability and continuity. 

Child Welfare:
Complex Needs Strain Capacity to Provide Services

GAO/HEHS-95-208, Sept.  26 (38 pages). 

Between 1983 and 1993, sharp increases in the number of foster
children combined with unprecedented service needs led to a crisis in
foster care.  Reports of child abuse and neglect nearly doubled, and
foster care caseloads grew by two-thirds.  Demands for child welfare
services grew not only because the number of foster children
increased but also because families and children were more troubled
and had more complex needs than in the past.  Large numbers of
preschool-age foster children, for example, are at risk for health
problems due to prenatal drug exposure.  Meanwhile, resources for
child welfare services failed to keep pace with the needs of troubled
children and their parents.  Although foster care funding has
increased dramatically at all levels of government, federal funding
for child welfare services has lagged.  State and localities have
found it hard to meet the demand, despite the fact that they have
more than tripled expenditures in some cases.  As a result, states
have adopted various measures to meet the needs of troubled children
and their families while maintaining childrens' safety.  Many states
now offer family preservation services or place children with
relatives to maintain family ties and save money.  States are also
increasingly considering the use of specialized foster homes for
children with unique problems, including emotionally disturbed and
medically fragile youngsters, to provide more family-like care at
lower costs than institutions. 


   TAX POLICY AND ADMINISTRATION
-------------------------------------------------------- Appendix 0:21

Tax Administration:
Sole Proprietor Identification Numbers Can Be Improved

GAO/GGD-95-160, Sept.  18 (23 pages). 

Taxpayers are required to have identification numbers so that the
Internal Revenue Service (IRS) can establish accounts for them and
record transactions, such as the payment of taxes.  Most taxpayers
have only one identification number.  However, persons who are
self-employed (referred to as sole proprietors) are sometimes
required to have two identification numbers--a Social Security Number
for their individual income tax returns and an Employer
Identification Number for their business returns.  According to IRS,
sole proprietors are among worst groups in terms of reporting all
income.  This report discusses whether IRS (1) accurately cross
references the two identification numbers that self-employed persons
report and (2) needs to take steps to improve the accuracy of its
cross-reference files. 

Tax Administration:
Recurring Issues in Tax Disputes Over Business
Expense Deductions

GAO/GGD-95-232, Sept.  26 (23 pages). 

Every year, the Internal Revenue Service (IRS) audits the tax returns
of more than one million taxpayers and adjusts the tax liability of
those who IRS believes did not comply with the provisions of the tax
code.  Taxpayers may challenge the proposed adjustments by filing a
protest with IRS.  This report discusses the issues that caused the
most frequent disputes between IRS and taxpayers in connection with
section 162 of the tax code, which allows taxpayers to deduct from
income "ordinary and necessary" expenses related to trade or
business.  GAO has previously reported that section 162 was the tax
code section most commonly cited in large tax cases at IRS' Office of
Appeals. 


   TRANSPORTATION
-------------------------------------------------------- Appendix 0:22

Niagara Falls Bridge Commission:
Audit of Capital Development Efforts and Selected
Financial Practices

GAO/RCED-95-92, Sept.  7 (54 pages). 

The Niagara Falls Bridge Commission owns and operates three of four
international bridges across the Niagara River that link New York
state and Ontario.  The Commission's operations have never been
independently reviewed by a government body.  GAO and the New York
State Office of the State Comptroller jointly reviewed the
Commission's operations.  This report addresses the Commission's (1)
efforts to finance and administer its 30-year capital program and (2)
internal controls used to ensure that its business affairs were
appropriately conducted.  This report also discusses the extent of
authority for governmental oversight of the Commission. 

Scenic Byways:
States' Use of Geometric Design Standards

GAO/RCED-95-243, Sept.  19 (20 pages). 

Thirty-six states and two federal agencies have recognized 34,000
miles of roads as scenic byways--roadways that provide access to
historic, cultural, recreational, and other resources.  Many of these
roads were built years ago, often to specifications that fall short
of today's geometric design standards governing the physical layout
of roads.  In relying on current standards to improve or rebuild
their scenic byways, state highway agencies could end up damaging the
byway's scenic character because the standards emphasize mobility and
safety rather than preservation.  To help prevent such damage,
Congress passed legislation giving state highway agencies the
flexibility to use alternatives to the geometric design standards for
improving and reconstructing scenic byways.  This report discusses
(1) what design standards states use or plan to use to improve and
reconstruct roads in scenic areas and (2) what national design
standards or guidance is available to states for improving and
rebuilding such roads.  In addition, GAO provides information on
design approaches to reconstructing one scenic byway--Rhode Island's
Ministerial Road--to illustrate the trade-offs involved in different
design standards. 


   VETERANS AFFAIRS
-------------------------------------------------------- Appendix 0:23

Veterans' Benefits:
Effective Interaction Needed Within VA to Address Appeals Backlog

GAO/HEHS-95-190, Sept.  27 (53 pages). 

Veterans often wait months for the Department of Veterans Affairs
(VA) to decide their compensation and pension claims.  In addition,
the 40,000 veterans who appeal VA's decisions each year wait much
longer---more than two years for a final decision, according to
agency officials.  GAO found that VA's appeals process is
increasingly bogged down, and the outlook for the future is not
bright.  Legislation and court rulings have expanded veterans' rights
but have also expanded VA's adjudication responsibilities.  VA is
having difficulty integrating these responsibilities into its already
complex and unwieldy adjudication process.  Since 1991, the number of
appeals awaiting action by the Board of Veterans' Appeals has risen
by 175 percent and the average processing time has increased by more
than 50 percent.  Studies by GAO, VA, and others have recommended
that the autonomous organizations in VA work together to identify and
resolve problems.  Yet GAO found that problems continue to go
unidentified and unresolved.  Unless VA clearly defines its
adjudication responsibilities, it will be unable to determine whether
it has the resources to meet those responsibilities and whether new
solutions may be needed, including laws amending VA's
responsibilities or reconfiguring the agency. 


   SPECIAL PUBLICATIONS
-------------------------------------------------------- Appendix 0:24

GAO Reports:
Health, Education, Employment, Social Security, Welfare, and Veterans
Issues

GAO/HEHS-95-261W, Sept.  1995 (40 pages). 

This booklet lists GAO documents on government programs related to
health, education, employment, social security, welfare, and veterans
issues, which are primarily run by the Departments of Health and
Human Services, Labor, Education, and Veterans Affairs.  One section
identifies reports and testimony issued during the past months and
summarizes key products.  Another section lists all documents
published the past year, organized chronologically by subject.  Order
forms are included. 

*** End of document. ***