Reports and Testimony: November 1995 (Other Written Prod., 11/01/95,
GAO/OPA-96-2).

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

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

 REPORTNUM:  OPA-96-2
     TITLE:  Reports and Testimony: November 1995
      DATE:  11/01/95
   SUBJECT:  Managed health care
             Health maintenance organizations
             Pharmaceutical industry
             Nuclear facility safety
             Student financial aid
             Potable water
             Chief financial officers
             Financial management
             Personnel management
             Defense procurement
IDENTIFIER:  Pell Grant
             Dept. of Education Stafford Student Loan Program
             ETA Senior Community Service Employment Program
             Soviet Union
             FHwA Federal-Aid Highway Program
             United Kingdom
             Medicare Program
             AIDS
             Federal Employees Retirement System
             Federal Thrift Savings Plan
             BLM Automated Land and Minerals Record System
             HCFA Medicare Transaction System
             West Bank
             Gaza
             DOD Joint Simulation System
             C-5 Aircraft
             B-1B Aircraft
             C-17 Aircraft
             DOD Selective Reenlistment Bonus Program
             USDA Animal Damage Control Program
             Dept. of the Interior Animas-La Plata Project
             Navajo Indian Irrigation Project
             Forest Service Emergency Salvage Timber Sale Program
             Bibliographies
             
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REPORTS AND TESTIMONY:  NOVEMBER
1995

GAO/OPA-96-2


Highlights

Nuclear Safety

The countries of the former Soviet Union house hundreds of nuclear
facilities and nuclear submarines as well as thousands of
organizations using radiation for medicine or research.  Aging
facilities, lack of funds for safety improvements, and contamination
from radioactive waste raise major safety and environmental concerns. 
Page 4. 

FDA Approval Process

The time it takes the Food and Drug Administration to approve a new
drug has decreased in recent years, from an average of 33 months in
1987 to 19 months in 1992.  In a separate study, GAO found that
approval times for medical devices varied widely in recent years;
after remaining stable from 1989 through 1991, they rose sharply in
1992 and 1993, then dropped in 1994.  Pages 11 and 12. 

Medicare Managed Care

Health maintenance organizations could provide Medicare coverage at
lower cost than fee-for-service providers.  Strategies to fix the way
Medicare pays HMOs include replacing existing fee formulas with
competitive bidding or negotiated fees; adopting risk adjustment to
avoid overpaying for healthy enrollees; and adjusting formulas to
reflect local health care costs.  Page 12. 

GAO/OPA-96-2



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

  ALJ - x
  BLM - x
  CFTC - x
  CRA - x
  DOD - x
  DOE - x
  EPA - x
  FDA - x
  FERS - x
  GSA - x
  HCFA - x
  HIV - x
  HMO - x
  IRS - x
  MTS - x
  NASA - x
  PLO - x
  SEC - x
  USDA - x
  VA - x

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


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

Fruit Juice Adulteration:
Detection Is Difficult, and Enhanced Efforts Would Be Costly

GAO/RCED-96-18, Nov.  3 (21 pages). 

Nationwide, school districts serve more than 56 million gallons of
fruit juice each year.  Unscrupulous processors can gain an economic
advantage over legitimate competitors by adding water, sugar, and
other ingredients to fruit juice and labeling the product as pure. 
However, the extent to which adulteration takes place is uncertain
and difficult to detect.  Inspections of juice plants are not
designed to spot adulteration, and current laboratory tests have
limitations.  Estimates of the problem's extent vary widely for
orange and apple juice, the two most frequently consumed juices. 
Government and industry officials believe that the adulteration rate
for apple juice is insignificant, but estimates of the adulteration
rate for orange juice range as high as 20 percent.  Since the
mid-1980s, the Justice Department has prosecuted seven cases of juice
adulteration.  These prosecutions resulted in six convictions and one
acquittal.  On the basis of these convictions, the Agriculture
Department has taken action against three companies that remain in
business and against 21 individuals to prevent them from selling
juice to the school meal programs.  Government and industry officials
have identified two main options for enhancing the detection of
adulterated juice sold to schools-- conducting in-plant inspections
and instituting either systematic or risk-based juice-testing
programs.  Although both methods could enhance detection of
adulterated juices, they would be costly. 


   CIVIL RIGHTS
--------------------------------------------------------- Appendix 0:2

Military Equal Opportunity:
Certain Trends in Racial and Gender Data May Warrant
Further Analysis

GAO/NSIAD-96-17, Nov.  17 (40 pages). 

Pentagon policy holds that discrimination based on race, national
origin, gender, or other factors is counterproductive to combat
readiness and mission accomplishment and contrary to good order and
discipline.  GAO reviewed Military Equal Opportunity Assessments
prepared by the military services and examined active-duty personnel
data to determine whether racial or gender disparities existed in
selection rates.  GAO examined accessions, assignments considered
career enhancing, and promotions for fiscal years 1989 through 1993. 
In measuring promotion rates among women, American Indians, Asians,
blacks, and Hispanics compared with those for whites, GAO found that
blacks in the military were statistically less likely than whites to
be promoted.  In contrast, women had a greater-than-expected
likelihood of promotion. 


   EDUCATION
--------------------------------------------------------- Appendix 0:3

Higher Education:
Selected Information on Student Financial Aid Received by
Legal Immigrants

GAO/HEHS-96-7, Nov.  24 (26 pages). 

According to records at the Education Department, about 390,000 legal
immigrant students received Pell grant aid in academic year 1992-93. 
This was about 10 percent of all students receiving Pell grants.  In
total, immigrants received $662 million, or about 11 percent, of Pell
grant aid in that year.  GAO was unable to determine the total number
of legal immigrants who received Stafford loans because citizenship
data are not maintained in the Education Department's loan files. 
Some immigrants who received Pell grants, however, also received
Stafford loans totaling $257 million.  About 82 percent of the
immigrants who received student aid lived in seven states, led by
California and New York.  Sixty-one percent attended public colleges,
19 percent attended private colleges, and 21 percent attended
for-profit vocational schools.  The 100 schools with the most
immigrant Pell grant recipients accounted for about half of all such
students, and 91 percent of these schools were located in the seven
states with the highest concentration of immigrant students. 


   EMPLOYMENT
--------------------------------------------------------- Appendix 0:4

Department of Labor:
Senior Community Service Employment Program Delivery Could Be
Improved Through Legislative and Administrative Actions

GAO/HEHS-96-4, Nov.  2 (75 pages). 

The Labor Department's Senior Community Service Employment Program
finances part-time, minimum-wage community service jobs for about
100,000 poor elderly Americans.  GAO found that Labor distributes
program funds through noncompetitive grants to 10 national
organizations, called national sponsors, and to state agencies. 
These national sponsors and state agencies, in turn, use the grant
funds to finance local employment projects run by community service
host agencies, such as libraries, nutrition centers, and parks, that
directly employ older Americans.  GAO found that the relative
distribution of funds to the national sponsors and state agencies
along with Labor's method of implementing the hold harmless
provisions have resulted in the distribution of funds among and
within states that bear little relationship to actual need.  GAO also
found that, under Labor's regulations, expenditures that GAO believes
to be administrative in nature may be charged to another cost
category, allowing grantees to exceed the statutory 15-percent limit
on administrative costs.  GAO summarized this report in testimony
before Congress; see: 

Senior Community Service Employment:  Program Delivery Could Be
Improved Through Legislative and Administrative Actions, by Cornelia
M.  Blanchette, Associate Director for Education and Employment
Issues, before the Subcommittee on Early Childhood, Youth and
Families, House Committee on Economic and Educational Opportunities. 
GAO/T-HEHS-96-57, Nov.  2 (15 pages). 


   ENERGY
--------------------------------------------------------- Appendix 0:5

Nuclear Safety:
Concerns With Nuclear Facilities and Other Sources of Radiation in
the Former Soviet Union

GAO/RCED-96-4, Nov.  7 (41 pages). 

Although safety problems with nuclear reactors in the former Soviet
Union and eastern Europe have received widespread attention, many
other nuclear facilities and other sources of radiation in the former
Soviet Union also pose safety, health, and environmental threats. 
For example, a 1993 accident at a plutonium processing plant in
Russia highlighted safety problems associated with these types of
facilities.  This report provides information on (1) nuclear
facilities (other than civil nuclear power reactors), nuclear-powered
vessels, and other sources of radiation in the former Soviet Union;
(2) the views of U.S.  and international experts on the safety of
these facilities and other sources of radiation; and (3) U.S.  and
international efforts to address nuclear safety and environmental
problems with these facilities and other sources of radiation. 


   ENVIRONMENTAL PROTECTION
--------------------------------------------------------- Appendix 0:6


      TESTIMONY
------------------------------------------------------- Appendix 0:6.1

Drinking Water:  Safe Drinking Water Act Reauthorization Issues, by
Peter F.  Guerrero, Director of Environmental Protection Issues,
before the Senate Committee on Environment and Public Works. 
GAO/T-RCED-96-35, Oct.  19 (16 pages). 

In recent years, escalating costs and increasing serious
implementation problems have affected the drinking water program,
particularly as it affects individual water systems and the states
responsible for overseeing them.  The bill to reauthorize the Safe
Drinking Water Act contains provisions that address these important
issues.  This testimony highlights some of the key findings in past
GAO work relating to (1) various managerial, technical, and
preventive approaches to dealing with water systems' compliance
problems; (2) state resources needed to oversee the implementation of
the drinking water program; and (3) financing infrastructure needs. 
GAO comments on relevant sections of the proposed reauthorization
bill. 

Global Warming:  Limitations of General Circulation Models, by Peter
F.  Guerrero, Director of Environmental Protection Issues, before the
Subcommittee on Energy and Environment, House Committee on Science. 
GAO/T-RCED-96-43, Nov.  16 (eight pages). 

When discussing the implications of global warming and the steps
needed to control greenhouse gas emissions, one needs to consider the
range of projected temperature increases and the degree of
uncertainty in these estimates.  In July 1995, GAO reported (see
GAO/RCED-95-164) on the limitations of general circulation computer
models used to make such predictions.  This testimony is based on the
findings of that report.  Although the accuracy of general
circulation models has improved during the past decade, these models
are still limited by incomplete and inaccurate representations of the
processes affecting climate and by insufficient computing power. 
These limitations do not change the likelihood that the climate will
change as a result of increased greenhouse gas emissions.  They do,
however, limit the ability to predict with certainty how the climate
will respond-- how much warming will occur, how soon it will happen,
and what the regional effects will be.  Efforts are under way to
collect and analyze data, improve representations of various climatic
processes, and develop and use more powerful computers.  These
efforts, which could take a decade or more, should improve the
accuracy of
the models. 


   FINANCIAL INSTITUTIONS
--------------------------------------------------------- Appendix 0:7

Administrative Law Judges:
Comparison of SEC and CFTC Programs

GAO/GGD-96-27, Nov.  14 (29 pages). 

Generally, Administrative Law Judges (ALJ) at the Securities and
Exchange Commission (SEC) and the Commodity Futures Trading
Commission (CFTC) serve as hearing officers in cases involving
violations of securities and futures laws.  In response to press
reports that CFTC routinely reversed or scaled back penalties imposed
by its ALJs, this report compares the ALJ programs at the two
agencies, including case-processing times and the results of appeals
of ALJ decisions.  GAO also provides information on budgets,
staffing, and caseload statistics for both agencies' ALJ operations. 

Community Reinvestment Act:
Challenges Remain to Successfully Implement CRA

GAO/GGD-96-23, Nov.  28 (111 pages). 

Concerned that banks and thrifts were unresponsive to credit needs in
low- and moderate-income areas, Congress enacted the Community
Reinvestment Act of 1977 (CRA).  Under CRA, federal bank and thrift
regulatory agencies must encourage institutions to help meet credit
needs in all areas of the communities that they serve, consistent
with safe and sound operations.  CRA also requires the regulators to
assess institutions' CRA performance during examinations and to
consider that performance when evaluating institutions' applications
for expansion or relocation of operations.  Growing concern about the
effectiveness of CRA's implementation and its regulatory burden on
institutions led to the recent revision of CRA regulations.  This
report addresses the following four questions:  (1) What were the
major problems in implementing CRA, as identified by the affected
parties-- bankers, regulators, and community groups?  (2) To what
extent do the regulatory reforms address these problems?  (3) What
challenges do the regulators face in ensuring the success of the
reforms and what actions would help the regulators to face these
challenges?  and (4) What initiatives have been taken or proposed to
help bankers overcome community lending barriers and enhance lending
opportunities, particularly in low- and moderate-income areas? 


   FINANCIAL MANAGEMENT
--------------------------------------------------------- Appendix 0:8


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

Financial Management:  Challenges Facing DOD in Meeting the Goals of
the Chief Financial Officers Act, by Gene L.  Dodaro, Assistant
Comptroller General for Accounting and Information Management, before
the Subcommittee on Government Management, Information and
Technology, House Committee on Government Reform and Oversight. 
GAO/T-AIMD-96-1, Nov.  14 (28 pages). 

The Defense Department (DOD) needs accurate financial information and
appropriate internal controls to effectively manage its vast
resources--more than $1 trillion in assets, 3 million in military and
civilian personnel, and a budget of more than $250 billion for fiscal
year 1995.  Unfortunately, DOD suffers from serious and pervasive
financial management problems, ranging from the inability to account
for billions of dollars in disbursements to a breakdown in an ability
to protect assets from waste, fraud, and abuse.  No military service
or other major DOD component has been able to withstand the scrutiny
of an independent financial statement audit.  Although DOD recognizes
the problem, it faces serious challenges in implementing its
"blueprint" for reform.  GAO continues to believe that DOD should
establish an independent, outside board of experts to provide
counsel, oversight, and perspective to DOD's reform efforts.  Such
experts could provide valuable advice and expertise in three
challenging areas:  systems development, personnel needs assessment,
and organizational structure. 


   GOVERNMENT OPERATIONS
--------------------------------------------------------- Appendix 0:9

Personnel Security:
Pass and Security Clearance Data for the Executive Office of
the President

GAO/NSIAD-96-20, Oct.  19 (36 pages). 

Because of reported delays of more than a year in issuing access
passes at the White House, Members of Congress have expressed concern
about the White House's management of the access pass and security
clearance processes.  GAO found that persons starting work at the
White House during 1993 received final approval for permanent White
House access passes an average of 346 days from their start date, but
the average approval time fell to 98 days for staff brought on board
in 1994.  According to White House officials, the White House has not
historically tracked time interval data on the access pass process. 
As a result, GAO could not compare the information it analyzed with
prior experience.  White House and congressional action have
introduced changes to improve the access and security clearance
processes.  For the time intervals and offices GAO reviewed, with few
exceptions, the time intervals declined and the procedures were
followed.  However, controls could be strengthened in several areas,
including the renewal of temporary passes, the revoking of passes
after separation, and the granting of security clearances. 

Government Contractors:
Selected Agencies' Efforts to Identify Organizational Conflicts
of Interest

GAO/GGD-96-15, Oct.  25 (17 pages). 

This report reviews federal agencies' implementation of the Office of
Management and Budget's 1989 policy letter entitled "Conflict of
Interest Policies Applicable to Consultants." It also reviews
organizational conflict of interest requirements applicable to
advisory and assistance service contractors, including consultants. 
GAO (1) determines whether selected agencies have complied with
requirements to identify and evaluate potential organizational
conflicts of interest and (2) identifies ways that agencies might
improve their screening for such conflicts.  GAO focuses on the
Energy Department, the Environmental Protection Agency, and the Navy
because they are among the largest users of contracted advisory and
assistance services. 

Federal Job Classification:
Comparison of Job Content With Grades Assigned in
Selected Occupations

GAO/GGD-96-20, Nov.  6 (144 pages). 

Over the years, many studies have suggested that women and minorities
are paid less than men and nonminorities who work comparable jobs. 
These observations have raised questions about whether the federal
government's classification systems result in lower grades being
assigned to jobs in occupations with large number of females or
minorities.  GAO examined the relationship between job content and
grades assigned using the Fact Evaluation System and found
differences in the grading of positions in occupations with high
representations of women or minorities.  The National Performance
Review and other studies suggest that the current classification
systems should be abandoned in favor or more flexible, broad-banded
systems.  GAO suggests that policymakers closely monitor any new
systems to ensure that (1) unintended disparities are identified and
corrected and (2) the national policy underlying the existing
classification system-- that jobs be classified so that pay is equal
for substantially equal work--is being satisfactorily achieved. 

U.S.  Postal Service:
Postal Ratemaking in Need of Change

GAO/GGD-96-8, Nov.  15 (35 pages). 

Today, the U.S.  Postal Service competes with communications
technologies and private carriers for the delivery of services in
markets that in 1970 were the sole domain of the Postal Service. 
Many observers believe that the current ratemaking process takes too
long for the Postal Service to respond to today's rapidly changing
market conditions.  This report discusses (1) whether changes in
policies concerning volume discounting and demand pricing should
still be considered by Congress, (2) the issues surrounding the
current ratemaking process, and (3) proposals for modifying the
postal ratemaking process and other changes that merit further
consideration by Congress.  The proposals that GAO offers--to improve
the effectiveness of the postal ratemaking process, ensure financial
accountability, and give the Postal Service more flexibility to price
and compete in the marketplace-- provide the Postal Service, the
Postal Rate Commission, and Congress with a variety of options to
consider in reforming the ratemaking process. 


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

Federal Courthouse Construction:  More Disciplined Approach Would
Reduce Costs and Provide for Better Decisionmaking, by J.  William
Gadsby, Director of Government Business Operations Issues, before the
Subcommittee on Oversight of Government Management and the District
of Columbia, Senate Committee on Governmental Affairs. 
GAO/T-GGD-96-19, Nov.  8 (37 pages). 

The General Services Administration (GSA), in response to the growing
space needs of the federal judiciary, has begun a major courthouse
construction initiative that could cost $10 billion during the next
10 to 15 years.  Concerns have been raised in Congress about the huge
sums of money involved and that new courthouses may not be needed or
are too expensive.  This testimony focuses on three areas:  (1) the
approach for meeting federal courthouse needs, (2) the controls over
and oversight of courthouse construction design and costs, and (3)
the current efforts to improve this multibillion-dollar initiative. 
GAO found that GSA and the federal judiciary had wide latitude in
making choices that significantly affected costs.  These choices were
made under circumstances in which budgets or designs were often
committed to before requirements were established, design guidance
was flexible, and systemic oversight was limited.  The upshot was
that some courthouses ended up with more expensive materials or
costly design configurations, while others had, or are to have, more
economical features.  These differences had a major impact on the
overall cost of courthouse construction. 

Status of General Accounting Office Reviews of the Library of
Congress, by J.  William Gadsby, Director of Government Business
Operations Issues, before the Senate Joint Committee on the Library
of Congress.  GAO/T-GGD-96-49, Nov.  29 (two pages). 

This testimony discusses the status of GAO's reviews at the Library
of Congress.  It briefly summarizes GAO's August 1991 report
(GAO/AFMD-91-13) on the Library's financial management and its
response to GAO's recommendations.  The testimony also explains the
scope and status of GAO's current review, which broadly assesses the
Library's management and updates the 1991 financial audit. 

Federal Employee Redress:  An Opportunity for Reform, by Timothy P. 
Bowling, Associate Director for Federal Management and Workforce
Issues, before the Subcommittee on Civil Service, House Committee on
Government Reform and Oversight.  GAO/T-GGD-96-42, Nov.  29 (19
pages). 

The redress system for federal workers seeks to protect these
employees against arbitrary agency actions and prohibited personnel
practices, such as discrimination or retaliation for whistleblowing. 
But how well is the redress system working, and does it add to or
detract from the fair and efficient operation of the federal
government?  This testimony makes three main points.  First, because
of the system's complexity and the variety of redress mechanisms it
affords federal employees, it is inefficient, expensive, and
time-consuming.  Second, because the system is so strongly protective
of the redress rights of individual workers, it is vulnerable to
employees who would take undue advantage of these protections.  Its
protracted processes and requirements divert managers from more
productive activities and inhibit some of them from addressing
legitimate performance and conduct problems.  Moreover, the demands
of the system put pressure on employees and agencies alike to settle
cases-- regardless of their merits--to avoid potential costs.  Third,
alternatives to the current system do exist and may be worth further
study as Congress considers modifying the federal system.  Leading
private sector employers told GAO that their managers are held
accountable for treating people fairly but are also given the
flexibility and the discretion to make the tough decisions that are
an inevitable part of sound management.  To the extent that the
federal redress system is tilted toward employee protections at the
expense of the effective management of the nation's business, it
deserves
congressional attention. 


   HEALTH
-------------------------------------------------------- Appendix 0:10

FDA Drug Approval:
Review Time Has Decreased in Recent Years

GAO/PEMD-96-1, Oct.  20 (44 pages). 

New drugs marketed in the United States must be approved first by the
Food and Drug Administration (FDA).  FDA grants its approval after it
has determined from data submitted by a drug's sponsor that the drug
is safe and effective and that the manufacturer can guarantee its
quality.  GAO found a considerable reduction in approval time for new
drug applications between 1987 and 1992.  It took an average of 33
months for new drug applications submitted in 1987 to be approved but
only 19 months on average to approve new drug applications submitted
in 1992.  The priority that FDA assigns to a new drug application and
the experience of its sponsors significantly affect the likelihood of
a quick decision.  FDA assigns priority status to drugs that are
expected to provide therapeutic benefit to consumers beyond that of
drugs already marketed.  Priority status and sponsor experience are
also the two factors that predict the likelihood of drug approval. 
Finally, the limited data available on review time for FDA and its
counterpart in the United Kingdom paint a more ambiguous picture than
presented in many recent reports.  In fact, the latest data published
by the regulatory agency in the United Kingdom show that it does not
have faster approval times than FDA. 

Medical Devices:
FDA Review Time

GAO/PEMD-96-2, Oct.  30 (87 pages). 

The Food and Drug Administration (FDA) regulates the manufacture and
marketing of medical devices in the United States.  Some critics have
argued that FDA's review of medical devices is excessively lengthy
and can impose inordinate delays in the introduction of new devices
into the marketplace.  GAO found that FDA review times and trends for
medical device applications varied widely between October 1988
through May 1995.  For 510(k) applications submitted, the review time
remained stable from 1989 to 1991, then rose sharply in 1992 and
1993, before dropping in 1994.  For 1994, the median was 152 days. 
The mean time to a decision was higher--166 days--and this mean will
continue to grow as the remaining open cases (13 percent) are
completed.  The review time trend for original premarket approvals
was less clear, in part because a large proportion of applications
had yet to be completed.  Not all the time that elapsed between an
application's submission and its final determination was spent under
FDA's review process.  In many cases, FDA had to wait for additional
information. 

Medicare Managed Care:
Growing Enrollment Adds Urgency to Fixing HMO Payment Problem

GAO/HEHS-96-21, Nov.  8 (28 pages). 

Enrollment of Medicare beneficiaries in health maintenance
organizations (HMO) has soared in recent years, concentrated in some
states and locales.  This rapid growth in enrollment highlights the
urgency of correcting Medicare's excessive payment rates to
HMOs--particularly in certain areas.  Likewise, enrollment stagnation
elsewhere underscores the need to examine the causes of payment rate
disparities among states and counties.  Medicare's HMO payment method
is plagued by three flaws.  First, the rigidity of the formula-based
fixed payment rate does not allow Medicare to capitalize on the
competition among HMOs that, in the private market, leads to lower
rates.  Second, rate adjustment for differences in beneficiaries'
health status are so imprecise that Medicare overpays HMOs that
enroll beneficiaries in good health.  Third, the reliance on a
county's fee-for- service health care costs to establish a payment
rate produces rates that vary considerably within market areas.  GAO
concludes that a sensible approach would be to pursue three promising
strategies concurrently--foster price competition among HMOs, improve
risk adjusters' accuracy, and allow for adjustments in the current
formula to reflect market competition and HMO's local health care
costs.  The Health Care Financing Administration (HCFA) plans
demonstration projects using competitive bidding and improved risk
adjustment, but results of a full-scale evaluation of these projects
are years away.  In the interim, HCFA should promptly gather and use
valuable design and implementation data as they become available. 
HCFA's legislative authority to carry out these projects does not
address managed care options explicitly, which raises questions about
HCFA's authority to mandate HMO participation in
the projects. 

Pharmacy Benefit Managers:
Early Results on Ventures With Drug Manufacturers

GAO/HEHS-96-45, Nov.  9 (30 pages). 

Some of the largest drug companies have recently merged or formed
alliances with some of the largest companies that manage prescription
drug benefits for health plans, called pharmacy benefit managers. 
The ventures gained immediate attention from industry observers not
only because of their size but also because of concerns about their
effect on competition in markets for drug manufacturers' products and
pharmacy benefit managers' services.  This report discusses the role
of pharmacy benefit managers in the health care industry, the
objectives of these ventures, and concerns about the effect of these
ventures on competition in the markets served by drug companies and
pharmacy benefit managers.  GAO concludes that some mergers between
drug manufacturers and pharmacy benefit managers warrant continued
monitoring by the Federal Trade Commission to ensure that the
pharmacy benefit managers do not give their manufacturing partners an
unfair advantage by including their products on lists of preferred
drugs that they cover and excluding those of competing firms. 

Health Care Task Force:
Governmentwide Costs

GAO/GGD-96-45R, Nov.  9 (10 pages). 

This letter provides information on the governmentwide costs
associated with the President's Task Force on Health Care Reform. 
GAO collected information from all 10 federal agencies, including the
Executive Office of the President, that participated in the Task
Force.  GAO lists by agency their Task Force-related spending, which
totaled $13.8 million.  More than half of the total--$7.5
million--was attributed to personnel costs.  Task Force spending
ranged from more than $9 million at the Department of Health and
Human Services to less than $50,000 at the Education Department.  GAO
also breaks out the total cost by work phases and functional
categories. 

Ryan White Care Act of 1990:
Opportunities to Enhance Funding Equity

GAO/HEHS-96-26, Nov.  13 (65 pages). 

GAO's analysis of existing funding formulas demonstrates that federal
funding under the Ryan White Care Act can be made more equitable.  An
important goal of the act was to target emergency funding to areas of
greatest need.  At the time the law was enacted, high rates of human
immunodeficiency virus (HIV) infection were found in fewer areas of
the country, service delivery networks were just beginning to form,
and these service delivery systems had to rely primarily on private
and volunteer resources.  During the past five years, however, the
HIV epidemic has become more widespread and less localized.  Hence,
areas where the AIDS caseload had burgeoned recently need per-case
funding levels comparable to those in areas where AIDS was initially
concentrated. 

Medicare:
Enrollment Growth and Payment Practices for Kidney
Dialysis Services

GAO/HEHS-96-33, Nov.  22 (17 pages). 

Medicare is the predominant health care payer for people with end
stage renal disease--permanent and irreversible loss of kidney
function.  Medicare's costs for this program have increased, mainly
because of the substantial increase in new beneficiaries being
enrolled in the program.  The average annual rate of increase
averaged 11.6 percent between 1978 and 1991.  In addition to the rise
in enrollment, the mortality rate for new patients decreased.  For
example, deaths among beneficiaries during their first year in the
program fell from 28 percent to 24 percent between 1982 and 1991. 
Since the program began in 1973, technological advances and greater
availability of kidney dialysis machines have meant that persons who
were not considered good candidates for kidney dialysis in
1973--those 65 years old or older and those whose kidney failure was
caused by diabetes and hypertension--are now routinely placed on
dialysis.  GAO's review of medical services and supplies provided to
all Medicare end state renal disease patients in 1991 shows that no
separately billable service or supply was provided often enough to
make it a good candidate to be considered part of the standard
dialysis treatment and thus included in a future composite rate. 


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

Fraud and Abuse:  Medicare Continues to Be Vulnerable to Exploitation
by Unscrupulous Providers, by Sarah F.  Jaggar, Director of Health
Financing and Public Health Issues, before the Senate Special
Committee on Aging.  GAO/T-HEHS-96-7, Nov.  2 (16 pages). 

The vast majority of Medicare providers try to abide by program rules
and strive to meet beneficiaries' needs.  Nevertheless, Medicare is
overwhelmed in its attempts to keep pace with, much less stay ahead
of, those bent on cheating the system.  GAO's recent investigations
of Medicare fraud and abuse have implicated home health agencies,
medical suppliers, pharmacists, rehabilitation therapy companies, and
clinical laboratories.  They are attracted by the high reimbursement
levels for some supplies and services, and the few barriers to entry
into this lucrative marketplace.  Once engaged in these profitable
activities, exploitative providers too often escape detection because
of inadequate claims scrutiny, elude pursuit by law enforcement
authorities because of the authorities' limited resources and
fragmented responsibilities, and face little risk of speedy or
appropriate punishment. 


   HOUSING
-------------------------------------------------------- Appendix 0:11

Rural Housing Programs:
Opportunities Exist for Cost Savings and
Management Improvement

GAO/RCED-96-11, Nov.  16 (28 pages). 

The Agriculture Department's Rural Housing and Community Development
Service provides about $2.85 billion each year for rural housing
loans.  As of June 1995, the Service had an outstanding single-family
and multifamily housing loan portfolio of about $30 billion, which
represented a significant federal investment in affordable housing
for the rural poor.  The largest portion of the loan portfolio is for
single-family direct and guaranteed mortgage loans that are made to
families or individuals who are without adequate housing and who are
unable to obtain loans from private lenders at reasonable costs. 
Rural multifamily rental housing loans, made to finance
apartment-style housing or to buy and rehabilitate existing rental
units, make up the rest of the portfolio.  This report provides
information on the Service's single- and multifamily housing loans
programs and discusses suggestions made by GAO and others that could
yield cost savings or management improvement in these programs. 


   INCOME SECURITY
-------------------------------------------------------- Appendix 0:12

Federal Pensions:
Thrift Savings Plan Has Key Role in Retirement Benefits

GAO/HEHS-96-1, Oct.  19 (21 pages). 

As of September 1994, about 940,000 federal workers covered by the
Federal Employees Retirement System (FERS) were voluntarily
contributing an average of 5.7 percent of their salaries to the
Thrift Savings Plan.  Most of the remaining 300,000 workers covered
by FERS who were not contributing were in the lower pay ranges. 
Lower-paid workers who were contributing were doing so at lower rates
than higher-paid workers--an average of 4.4 percent of their
salaries.  However, lower-paid workers may achieve satisfactory
retirement income levels even with low contribution rates because
Social Security benefits are proportionately greater for them than
for higher-paid workers.  Higher paid workers need to defer at least
five percent of their salaries throughout their careers--if not
more--to achieve retirement income of 60 to 80 percent of their
preretirement salaries.  Educating FERS workers can play a key role
in their making wise preretirement investment choices.  Although
Thrift Savings Plan materials discuss the plan's financial aspects,
they do not explicitly discuss how the Thrift Savings Plan can help
workers covered by FERS achieve their retirement income goals.  The
Thrift Savings Plan Board is seeking legislation that would enable
employees to invest in a domestic small capitalization fund and an
international stock fund.  GAO found that these two additions would
make the Thrift Savings Plan's investment options more closely
resemble those in similar private sector plans. 



   INFORMATION MANAGEMENT
-------------------------------------------------------- Appendix 0:13

Land Management Systems:
Progress and Risks in Developing BLM's Land and Mineral
Record System

GAO/AIMD-95-180, Aug.  31 (20 pages). 

The Bureau of Land Management's (BLM) Automated Land and Mineral
Record System/Modernization, which is estimated to cost $428 million,
is intended to improve BLM's ability to record, maintain, and
retrieve land description, ownership, and use information.  To date,
the Bureau has been completing most of the project's tasks according
to the schedule milestones set in 1993.  In coming months, the work
will become more difficult as BLM and the primary contractor try to
complete, integrate, and test the new software system and meet the
current schedule.  Slippages may yet occur because little time was
allocated to deal with unanticipated problems.  BLM recently sought
to obtain independent verification and validation to ensure that the
new system software meets the Bureau's requirements.  A key risk
remains, however.  BLM's plans include stress testing only a portion
of the Automated Land and Mineral Record System/ Modernization,
rather than the entire project, to ensure that all systems and
technology can successfully process workloads expected during peak
operating periods.  By limiting the stress test, BLM cannot be
certain that the system's information technology will perform as
intended during
peak workloads. 


      TESTIMONY
------------------------------------------------------ Appendix 0:13.1

Medicare Transaction System:  Strengthened Management and Sound
Development Approach Critical to Success, by Frank W.  Reilly and
Christopher W.  Hoenig, Directors of Information Resources Management
Issues, before the Subcommittees on Human Resources and
Intergovernmental Relations, and Government Management, Information
and Technology, House Committee on Government Reform and Oversight. 
GAO/T-AIMD-96-12, Nov.  16 (15 pages). 

The Health Care Financing Administration (HCFA) is developing a
critical new claims-processing system, the Medicare Transaction
System (MTS), to replace the nine systems now used by Medicare.  MTS'
goal is to better protect program funds from waste, fraud, and abuse;
allow better oversight of Medicare contractor operations; improve
service to beneficiaries and providers; and cut administrative
expenses.  The weaknesses in HCFA's development of MTS stem from a
lack of a disciplined management process that has as its hallmark
managing information systems and technology as investments.  Not
managing MTS in this way has led to system design and development
proceeding despite (1) difficulties in defining requirements, (2) a
compressed scheduled containing significant overlap of
system-development phases, and (3) a lack of reliable information on
costs and benefits.  These risks can be substantially reduced if HCFA
adopts some of the "best practices" that have proven effective in
other organizations:  managing systems as investment, changing
information management practices, creating line manager ownership,
better managing resources, and measuring performance. 


   INTERNATIONAL AFFAIRS
-------------------------------------------------------- Appendix 0:14

Foreign Assistance:
PLO's Ability to Help Support Palestinian Authority Is Not Clear

GAO/NSIAD-96-23, Nov.  28 (14 pages). 

This is an unclassified version of a GAO report issued in June 1995
on the Palestine Liberation Organization's (PLO) finances.  That
report (1) assessed the PLO's ability to help finance the Palestinian
Authority's operations in the West Bank and Gaza Strip, (2) reviewed
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.  GAO was unable to independently verify the PLO's current
financial condition because the PLO was unwilling to provide GAO with
requested accounting records and supporting documentation.  GAO did,
however, obtain unclassified and classified data on the PLO's
finances.  Most of the information supplied by the State Department
is included in this report.  With minor exceptions, none of the
material GAO obtained from the Central Intelligence Agency could
be declassified. 


   JUSTICE AND LAW ENFORCEMENT
-------------------------------------------------------- Appendix 0:15


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

Federal Law Enforcement:  Information on Certain Agencies' Criminal
Investigative Personnel and Salary Costs, by Norman J.  Rabkin,
Director of Administration of Justice Issues, before the Subcommittee
on Crime, House Committee on the Judiciary.  GAO/T-GGD-96-38, Nov. 
15 (34 pages). 

This testimony discusses the composition and salary costs of federal
investigative authorities in federal agencies.  GAO provides
preliminary information it has obtained on federal agencies with
personnel employed in certain occupational series with criminal law
investigative responsibilities, the number of these personnel, and
their salaries.  GAO also provides information it has developed on
jurisdictional overlap or duplication of efforts among the agencies. 


   NATIONAL DEFENSE
-------------------------------------------------------- Appendix 0:16

DOD Procurement:
Millions in Contract Payment Errors Not Detected and
Resolved Promptly

GAO/NSIAD-96-8, Oct.  6 (28 pages). 

The 374 business units--representing 82 large defense contractors and
57 small contractors--that responded to GAO's request for data as of
July 1994 reported about $231.5 million in outstanding overpayments
and about $625.9 million in underpayments.  The evidence suggests and
contractors reported that they followed up to collect underpayments
and usually notified the Defense Department of overpayments. 
Contractors did not, however, always return overpayments unless told
to do so.  The Defense Finance and Accounting Service Center in
Columbus, Ohio, cannot readily detect payment discrepancies because
of significant errors in its automated payment records.  Despite
these errors, Center personnel pay contractors' invoices as if the
payment data were correct.  The Center did not properly pursue
recovery after overpayments were reported by contractors or
identified through contract reconciliation.  The Center's delay in
collecting overpayments has been long and costly.  For the $84.2
million in overpayments that it reviewed, GAO estimates that recovery
delays cost the government about $10.6 million in interest.  Even
after a public accounting firm completed contract reconciliations to
identify the amounts owed the government, the Center did not recover
overpayments promptly. 

Defense Contractors:
Pay, Benefits, and Restructuring During Defense Downsizing

GAO/NSIAD-96-19BR, Oct.  10 (44 pages). 

In the midst of defense downsizing, salary, bonuses, and other
compensation paid to the five highest paid executives at the top 10
defense contractors ranged from $230,000 in 1989 to nearly $18
million in 1993.  Many of these executives also exercised stock
options, with one individual receiving $26 million in 1993.  In 1989,
the average compensation paid by different defense contractors to
salaried employees ranged from $35,900 to $48,700.  By 1994, the
figures had risen to $48,100 and $55,000, respectively.  In 1989, the
average annual compensation for hourly employees ranged from $24,700
to $32,200; in 1994 these figures ranged from $30,200 to $39,500.  In
response to decreases in Defense Department procurement, these
companies have adopted various restructuring strategies, including
mergers with competitors, divesting units no longer considered to be
part of their core businesses, consolidation of production
facilities, and commercialization of military technologies. 
Assistance provided to separated workers included termination pay
based upon salary level and length of service; outplacement services,
such as job counseling and assistance with resume writing; and
extension of employee health, dental, and insurance benefits for a
time after separation.  Nine out of the 10 companies GAO surveyed
provided incentives to encourage
voluntary separation. 

Military Training:
Cost-Effective Development of Simulations Presents
Significant Challenges

GAO/NSIAD-96-44, Nov.  8 (19 pages). 

Since 1988, the Pentagon has been grappling with how to provide
simulations that realistically portray joint warfare operations for
training.  To help meet this training need, the Defense Department
(DOD) developed the Aggregate Level Simulation Protocol, a technique
that allows multiple service and agency models to communicate with
each other.  Although the Protocol is a technological advancement,
the existing warfare capabilities of the individual models are
limited and the problem of providing a valid joint training
environment persists.  Because of these limitations and the cost and
complexity of the Protocol, DOD is developing a new system--the Joint
Simulation System--that is scheduled to be fully operational by 2003. 
Until that system is up and running, DOD plans to continue improving
the Protocol.  This report discusses (1) how well DOD is progressing
with its development of the Joint Simulation System and (2) whether
DOD's decisions to improve the Protocol are cost effective. 

Defense Acquisition Organizations:
Changes in Cost and Size of Civilian Workforce

GAO/NSIAD-96-46, Nov.  13 (26 pages). 

In 1994, Defense Department (DOD) acquisition organizations,
including the Defense Contract Audit Agency, employed about 464,000
persons--398,000 civilian and 66,000 military.  In addition to
acquisition duties, the acquisition organizations have other
significant responsibilities, such as logistics, maintenance, and
supply.  The workforce includes "white collar" jobs, such as
engineering, accounting, and computer specialists, as well as "blue
collar" jobs, such as machine tool operators, pipefitters, and
shipyard workers.  The civilian workforce in DOD's acquisition
organizations increased with the defense buildup of the early 1980s
and decreased following the reductions that began in the mid-1980s. 
However, this decline occurred without a commensurate decline in
civilian payroll costs, due in part to the significant decline in
blue collar workers.  DOD officials attributed the rise in civilian
payroll costs to several factors, such as the advent of locality pay
and changes in grade structure.  Against the backdrop of the civilian
workforce decline in DOD's acquisition organizations, defense
contract awards for services have risen about $10 billion since 1980. 
About $4 billion of this increase was for engineering and
architectural and computer services.  Even with the decline in both
the defense procurement budget and the civilian workforce since 1990,
the number of acquisition organizations remains relatively constant. 
GAO notes that each acquisition organization employs persons in
similar jobs, such as personnel and budgeting, and opportunities may
exist to improve efficiencies in these areas. 

Strategic Airlift:
Improvements in C-5 Mission Capability Can Help Meet
Airlift Requirements

GAO/NSIAD-96-43, Nov.  20 (28 pages). 

Although the Defense Department (DOD) is counting on the C-5 to
deliver nearly half of the cargo carried by military aircraft in the
event of war, a shortage of spare parts and a poor strategy to
modernize the aircraft have resulted in readiness rates that are
considerably below expectations.  The manufacturer contends that
improving the C-5 spare parts process, particularly by scheduling
repairs of spare parts on the basis of their impact on mission
capability, could substantially improve the C-5's mission capable
rate.  The rate could also be improved if the Air Force did a
readiness evaluation similar to the one recently completed for the
B-1B aircraft.  That evaluation found that the B-1B's mission capable
rate could increase if support for spare parts was improved.  The Air
Force has not prioritized proposed C-5 modifications according to
which one would contribute most to improving mission capability.  As
a result, decision- makers cannot fully assess the impact that
proposed improvements could have on overall aircraft mission
capability or total airlift capability.  If peacetime C-5 mission
capable rates achieved the Air Force's goal of 75 percent, DOD could
gain an additional 1.3 million ton miles per day of C-5 wartime
capability--the equivalent of 10 C-17s.  As a result, DOD could come
close to meeting military airlift requirements. 

Retention Bonuses:
More Direction and Oversight Needed

GAO/NSIAD-96-42, Nov.  24 (28 pages). 

The Selective Reenlistment Bonus Program was created 30 years ago to
help the military retain highly skilled service members.  However,
GAO found that in 1994, the Defense Department (DOD) paid about $64
million in retention bonuses to individuals who worked in job
categories in which positions were filled or who had been paid
incentives to leave.  Military officials defended their management of
the retention and separation incentive programs, asserting that each
is targeted at different segments of the force, that retention and
separation incentives went to personnel in different grades and year
groups, and that payment of separation incentives did not mean that
they were satisfied with manning levels.  GAO believes that if a
skill is experiencing shortages that warrant the payment of retention
incentives, it is not prudent to pay incentives to others with those
same skills to leave the service.  The Office of the Secretary of
Defense is not providing adequate direction and oversight of the
programs. 

Battlefield Automation:
Army's Digital Battlefield Plan Lacks Measurable Goals

GAO/NSIAD-96-25, Nov.  29 (17 pages). 

One of the Army's top priorities is a program to digitize the
battlefield by creating a vast network of computers, sensors, and
communications that would provide a common picture of the battlefield
from soldier to commander simultaneously.  The Army's plan, which is
estimated to cost $4 billion, contains many risks and lacks specific,
measurable goals for the series of large-scale experiments that are
to be done.  The Army plans to conduct a series of experiments from
1995 to 1997, including a brigade-level experiment in 1997 at a cost
of $258 million, without having had a successful battalion-level
experiment.  In fact, a battalion-level experiment in 1994 failed to
meet Army expectations.  Specific, measurable goals are needed to
evaluate the achievements of each experiment, and they should be met
before proceeding to the next experiment.  Otherwise, the Army risks
additional investments costing $397 million for digital systems
needed to conduct increasingly larger scale experiments through
fiscal year 1999.  On the basis of Army estimates, the investment
required to digitize a 10 division Army could run as high as $4
billion.  Also, because Congress has directed the Army to include the
Marine Corps in its plan, Defense Department funding for the Marine
Corps must be identified and ensured to solidify its participation
and success. 


   NATURAL RESOURCES
-------------------------------------------------------- Appendix 0:17

Animal Damage Control Program:
Efforts to Protect Livestock From Predators

GAO/RCED-96-3, Oct.  30 (19 pages). 

Efforts to protect livestock from predators, mainly coyotes,
constitute the major activity of the Agriculture Department's Animal
Damage Control Program.  In 1994, more than 100,000 predators were
killed by the program's field personnel.  GAO found that Agriculture
field personnel in California, Nevada, Texas, and Wyoming used lethal
methods in essentially all instances to control livestock predators. 
Agriculture's written policies and procedures call for field
personnel to give preference to the use of nonlethal methods when
practical and effective.  However, according to program officials,
this aspect of written guidance does not apply to the control of
livestock predators.  These officials said that in controlling
livestock predators, nonlethal methods, such as fencing and the use
of herders and guard dogs, are more appropriately used by ranchers,
have limited effectiveness, and are impractical for field personnel
to use. 

Animas-La Plata Project:
Status and Legislative Framework

GAO/RCED-96-1, Nov.  17 (36 pages). 

The Interior Department's Animas-La Plata Project was designed to
store water and divert it to arid regions in southwestern Colorado
and northwestern New Mexico, mainly by channelling water from the
Animas River to the La Plata River basin.  Before beginning
construction of the project, the Interior Department is required to
determine whether the project would jeopardize the continued
existence of any endangered species.  This report provides
information on the history and status of the Animas-La Plata project,
the legislative framework provided for the project by the 1988
Colorado Ute Indian Water Rights Settlement Act and the Endangered
Species Act, the consultation between the Bureau of Reclamation and
the Fish and Wildlife Service under the Endangered Species Act, and
the project's relationship to another congressionally authorized
project--the Navajo Indian Irrigation Project. 


      TESTIMONY
------------------------------------------------------ Appendix 0:17.1

Forest Service:  Observations on the Emergency Salvage Sale Program,
by James K.  Meissner, Associate Director for Natural Resources
Management Issues, before the Subcommittee on Forests and Public
Lands Management, Senate Committee on Energy and Natural Resources,
and the Timber Salvage Task Force, House Resources Committee. 
GAO/T-RCED-96-38, Nov.  29 (eight pages). 

Salvage timber involves dead or dying trees, much of which would be
marketable if harvested before it rots.  In the past, many sales of
salvage timber were delayed, altered, or withdrawn, and some of the
timber deteriorated and became unsalable.  In response to the
millions of acres of salvage timber caused by the devastating fires
of 1994, Congress established an emergency salvage timber sale
program, which was designed to increase the harvesting of salvage
timber by easing environment procedures and eliminating the
administrative appeals process.  GAO testified that it is too early
to say to what extent the changes introduced by the program will
boost sales because few sales have been made since the program became
effective.  Some salvage sale offerings failed to receive bids mainly
because of the terms and conditions of the sales, such as the minimum
bid or specific logging requirements or the volume of timber being
offered, were unacceptable to potential buyers.  In addition, because
of the short-term nature of the emergency salvage sale program, more
comprehensive information on the universe of marketable salvage
timber may help Congress as it assesses the program's impact and
whether additional resources are needed to support it. 


   SCIENCE, SPACE, AND TECHNOLOGY
-------------------------------------------------------- Appendix 0:18

Earth Science Information Network:
Relationship of Consortium to Federal Agencies

GAO/NSIAD-96-13, Oct.  27 (27 pages). 

The Consortium for International Earth Science Information Network
was established in 1989 as a private, nonprofit organization
chartered by the state of Michigan.  It is structured as a consortium
of university and nongovernmental research organizations.  The
Consortium's mission is to provide access to, and enhance the use of,
information on human interactions in the environment by scientists
and policy makers.  In addition to discussing the Consortium's
mission, this report provides information on (1) the Consortium's
past and prospective funding, (2) the way in which NASA will oversee
the Consortium's work on the human dimensions of global change, (3)
the similarity of activities between the Consortium and the National
Science Foundation's Centers for the Human Dimensions of Global
Change, and (4) the Consortium's
building requirements. 


   SOCIAL SERVICES
-------------------------------------------------------- Appendix 0:19

Child Support Enforcement:
States and Localities Move to Privatized Services

GAO/HEHS-96-43FS, Nov.  20 (16 pages). 

Facing budgetary and staffing constraints and increasing federal
performance standards, state child support enforcement programs are
struggling to serve their ever-increasing caseloads.  As states
strive to improve their services to the public, many are turning to
the private sector to augment their child support enforcement
programs.  Although states continue to expand these public and
private partnerships, little is known nationally about such efforts. 
This fact sheet discusses (1) the extent of, rationale for, and
perceived advantages and disadvantages of privatizing child support
functions; (2) the terms of these contracts; (3) the legal issues
surrounding privatization; and (4) what is known about the
cost-effectiveness of these efforts. 


   TAX POLICY AND ADMINISTRATION
-------------------------------------------------------- Appendix 0:20

Tax Administration:
Electronic Filing Falling Short of Expectations

GAO/GGD-96-12, Oct.  31 (27 pages). 

Electronic filing is a cornerstone of the Internal Revenue Service's
(IRS) plan to move away from the traditional filing of paper returns. 
Because electronic filing of tax returns in 1994 was most popular
among those using Forms 1040A or 1040EZ--the simplest and least
costly to process--IRS is not saving as much as it expected from
electronic filing.  Meanwhile, it appears that IRS will fall far
short of its goal of 80 million tax forms filed electronically by the
year 2001.  A major impediment to the expansion of electronic filing
is its cost to the public.  Taxpayers who file an electronic return
through a preparer or electronic filing transmitter must pay as much
as $40 for these services.  By focusing solely on its goal of 80
million tax forms, IRS may be targeting its limited resources toward
groups of taxpayers or types of returns that will boost the number of
electronic returns but not necessarily yield the greatest reductions
in IRS' paper-processing workload and operating costs.  Although a
marketing strategy that focuses on reducing paper and costs may
generate fewer than 80 million returns, it could have a more
significant impact on IRS' overall operations.  The contract that IRS
awarded in May 1995 may provide cost/benefit data that the agency can
use to reassess its strategy.  That information may help IRS identify
steps to make electronic filing more attractive to those taxpayers
and preparers who are now put off by
its cost. 


   TRANSPORTATION
-------------------------------------------------------- Appendix 0:21

Highway Funding:
Alternatives for Distributing Federal Funds

GAO/RCED-96-6, Nov.  28 (70 pages). 

Under the federal-aid highway program, billions of dollars are
distributed to the states each year for the construction and repair
of highways and related activities.  The Intermodal Surface
Transportation Efficiency Act of 1991 authorized about $120 billion
for this program for fiscal years 1992 through 1997.  This report
discusses (1) the way the formula works and the relevancy of the data
used for the formula and (2) the major funding objectives implicit in
the formula and the implications of alternative formula factors for
achieving them. 



   VETERANS AFFAIRS
-------------------------------------------------------- Appendix 0:22

VA Health Care:
Effects of Facility Realignment on Construction Needs
Are Unknown

GAO/HEHS-96-19, Nov.  17 (43 pages). 

As part of the fiscal year 1996 budget, the President requested $514
million for major construction projects at the Department of Veterans
Affairs (VA).  These projects include the construction of two new VA
medical facilities and major renovations at seven existing
facilities.  This report discusses how the projects are expected to
benefit veterans and the relationships between the proposed projects
and VA's recent efforts to realign all of its facilities into a new
service network.  GAO also discusses the potential effects of funding
delays on VA's construction award dates and costs. 


   SPECIAL PUBLICATIONS
-------------------------------------------------------- Appendix 0:23

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

GAO/HEHS-96-58W, Nov.  1995 (42 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 month and
summarizes key products.  Another section lists all documents
published during the past year, organized chronologically by subject. 
Order forms are included. 

*** End of document. ***