Reports and Testimony: December 1995 (Other Written Prod., 01/01/96,
GAO/OPA-96-3).

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

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

 REPORTNUM:  OPA-96-3
     TITLE:  Reports and Testimony: December 1995
      DATE:  01/01/96
   SUBJECT:  Chief financial officers
             Postal service
             Financial management
             Environmental monitoring
             Economic development
             Community development
             Educational facility construction
             International relations
             Tax administration
             Advanced weapons systems
IDENTIFIER:  Economic Support Fund
             International Fund for Ireland
             Emergency Refugee and Migration Assistance Fund
             Canada
             France
             Mexico
             New Zealand
             United Kingdom
             SBA 8(a) Program
             Local Empowerment and Flexibility Act of 1995
             Tennessee
             Texas
             Minnesota
             Head Start Program
             Superfund Program
             OMB 2000
             Medicaid Program
             Florida
             New York
             Illinois
             Oregon
             Hawaii
             Soviet Union
             Hunter Unmanned Aerial Vehicle
             F/A-18 Aircraft
             Bibliographies
             
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REPORTS AND TESTIMONY:  DECEMBER
1995

GAO/OPA-96-3


Highlights

Financial Management

The Chief Financial Officers Act of 1990 is forcing reforms in
federal financial management:  use of modern accounting and
information systems, institution of better performance measures, and
design of results-oriented reports on the financial condition of
federal agencies.  Despite progress, however, implementation of these
reforms remains a challenge.  Page 11. 

Unmanned Aerial Vehicles

Despite objections from Navy fleet commanders, the Defense Department
continues to develop a variant of the Hunter unmanned aerial vehicle
for use on amphibious assault ships.  The fleet commanders do not
want the Hunter because of limited shipboard space and its
questionable performance record.  Page 18. 

Postal Service

Although the Postal Service has been collecting data on satisfaction
of business customers since 1993 as part of an effort to improve
service, fear that it might help competitors has kept the Service
from distributing these data internally or externally.  GAO believes
that use of these data with appropriate safeguards could help assess
and improve customer service.  Page 11. 

GAO/OPA-96-3



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

  AFIP - x
  CFO - x
  DOD - x
  DOE - x
  EPA - x
  IRS - x
  NDIC - x
  NHSC - x
  OMB - x
  SBA - x
  RTC - x
  USDA - x
  VA - x

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


   BUDGET AND SPENDING
--------------------------------------------------------- Appendix 0:1

Impoundments:
Comments on Three Proposed Deferrals of Fiscal Year 1996
Budget Authority

GAO/OGC-96-2, Nov.  21 (two pages). 

On October 19, 1995, the President submitted to Congress his first
special impoundment message for fiscal year 1996.  The message
reports three deferrals of budget authority affecting the Economic
Support Fund and the International Fund for Ireland, the Social
Security Administration, and the United States Emergency Refugee and
Migration Assistance Fund.  GAO reviewed the deferrals and found them
to be in accordance with the Impoundment Control Act. 

Budget Issues:
Privatization/Divestiture Practices in Other Nations

GAO/AIMD-96-23, Dec.  15 (32 pages). 

Various divestiture proposals are now being considered in the United
States, including plans to sell the Naval Petroleum Reserves, four
Power Marketing Administrations, and the Helium Program.  Because the
U.S.  government has limited experience with asset divestiture, GAO
examined the experiences of other governments for lessons that might
prove useful for the United States.  For this study, GAO reviewed the
divestiture experiences of the following countries:  Canada, France,
Mexico, New Zealand, and the United Kingdom.  Major industries that
have been fully or partially privatized include agriculture; mining
and construction; manufacturing; transportation and public utilities;
finance, insurance, and real estate; and services.  This report
discusses the (1) privatization process, (2) valuation and
preparation of the assets for sale, and (3) use and display of the
sale proceeds for budgetary purposes. 



   BUSINESS, INDUSTRY, AND
   CONSUMERS
--------------------------------------------------------- Appendix 0:2


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

Small Business Administration:  Case Studies Illustrate 8(a) Program
and Contractor Abuse, by Donald J.  Wheeler, Acting Director of the
Office of Special Investigations, before the House Committee on Small
Business.  GAO/T-OSI-96-1, Dec.  13 (nine pages). 

This testimony discusses program and contractor abuses involving two
of the top 25 contractors participating in the Small Business
Administration's (SBA) 8(a) business development program, which is
intended to promote the development of small businesses owned by
socially and economically disadvantaged persons.  GAO's investigation
uncovered program abuse and ineffective SBA oversight of the two
firms--I-NET, Inc., of Bethesda, Maryland, and TAMSCO of Calverton,
Maryland.  During the application process, both firms provided
information that raised questions about their eligibility to
participate in the program, but SBA did not fully resolve these
issues before admitting the firms to the program.  Further, one firm
misrepresented its qualifications to enter and stay in the program. 
SBA did not, however, suspend the firm's contracts or remove it from
the program after it learned about the misrepresentations.  With
regard to the second firm, GAO questioned the practices of the
contracting agency--the Coast Guard.  Coast Guard officials changed
the original classification code in a contract with the second firm
to one for which the firm qualified and altered the contract's
minimum value to direct a contract to the firm, avoiding federal
competition requirements. 


   CIVIL RIGHTS
--------------------------------------------------------- Appendix 0:3

Department of Education:
Efforts by the Office of Civil Rights to Resolve
Asian-American Complaints

GAO/HEHS-96-23, Dec.  11 (56 pages). 

As with many other federal agencies responsible for enforcing civil
rights and equal employment opportunity laws, in recent years the
discrimination complaint workload of the Education Department's
Office for Civil Rights has increased, but its staffing has remained
level.  In the early 1990s, compared with the 1980s, the number of
compliance reviews fell and the average time to resolve complaint
investigations and complete reviews rose.  As a result, concerns have
been raised about how effectively the Office for Civil Rights carries
out its duties.  This report examines the Office's complaint
investigations and compliance reviews of discrimination cases
involving Asian-Americans who applied for or were enrolled in
postsecondary schools--mainly colleges and universities. 


   ECONOMIC DEVELOPMENT
--------------------------------------------------------- Appendix 0:4


      TESTIMONY
------------------------------------------------------- Appendix 0:4.1

Community Development:  Comprehensive Approaches and Local
Flexibility Issues, by Judy A.  England-Joseph, Director of Housing
and Community Development Issues, before the Senate Committee on
Governmental Affairs.  GAO/T-RCED-96-53, Dec.  5 (10 pages). 

The Local Empowerment and Flexibility Act of 1995 would give greater
flexibility to local governments and private nonprofit groups using
federal programs to help communities and their residents.  The
proposed legislation would create a council composed of cabinet-level
officials to review and approve local plans for integrating federal
funds to meet the needs of a specific geographic area.  This
testimony is based on a February 1995 GAO report
(GAO/RCED/HEHS-95-69) that discussed the comprehensive approaches
involving resident participation that community groups have used to
address housing, economic, and social service needs in distressed
neighborhoods.  GAO discusses (1) why community development experts
advocate a comprehensive approach, (2) the challenges that a
comprehensive approach presents, and (3) how the federal government
might support comprehensive approaches. 

Natural Disaster Insurance:  Federal Government's Interests
Insufficiently Protected Given Its Potential Financial Exposure, by
Thomas J.  McCool, Associate Director for Financial Institutions and
Markets Issues, before the Subcommittee on Water Resources and
Environment, House Committee on Transportation and Infrastructure. 
GAO/T-GGD-96-41, Dec.  5
(28 pages). 

Proposed legislation (H.R.  1856) would create a new corporation to
provide protection against catastrophic losses from natural disasters
for residential and commercial property owners.  H.R.  1856 would
establish (1) natural disaster mitigation programs to be run by the
Federal Emergency Management Agency and (2) a federally chartered
entity--the Natural Disaster Insurance Corporation--to insure
residential property owners against losses arising from earthquakes,
volcanos, and hurricanes and to provide reinsurance to protect
insurers and owners of large residential and commercial properties
against catastrophic losses arising from these same disasters.  GAO
is concerned that this unregulated, privately owned enterprise, which
would not be subject to oversight of its risk-taking or solvency,
could expose the federal government to significant financial losses. 


   EDUCATION
--------------------------------------------------------- Appendix 0:5

School Facilities:
States' Financial and Technical Support Varies

GAO/HEHS-96-27, Nov.  28 (31 pages). 

Although local governments have traditionally been responsible for
constructing, renovating, and maintaining America's school
facilities, most state education agencies have established a state
presence in school facilities matters using various approaches.  GAO
found that states' levels of involvement varied:  about one-fourth of
them had programs that included ongoing funding assistance, various
technical assistance and compliance review activities, and collection
of data on the condition of the facilities; 10 states were involved
in one or none of the activities.  Further, officials reported
differing viewpoints and traditions on state involvement in
facilities matters.  Such variations in approach and philosophy among
states illustrate the lack of consensus on the most appropriate and
effective state role.  Today, state involvement in school facilities
remains in flux.  Because the physical condition of school buildings
has become a concern in school finance equity litigation, experts
expect disparities in facilities to be a continuing a pressing issue. 
States will likely be looked to for ways to lessen these disparities. 
State governments, however, face pressure from other rapidly rising
budget expenditures, such as those for health care, that compete for
the same limited funds. 

School Facilities:
Accessibility for the Disabled Still an Issue

GAO/HEHS-96-73, Dec.  29 (37 pages). 

The requirement that programs and activities of schools receiving
federal financial assistance be accessible to the disabled has been
in force for two decades.  Yet no comprehensive nationwide study has
been done or is planned to evaluate schools' accessibility to the
disabled.  Meanwhile, passage of the Americans With Disabilities
Act--although not changing the accessibility requirements for schools
from those in the earlier law--has underscored the need to improve
accessibility.  More than half of schools nationwide reported having
spent $1.5 billion during the last three years on accessibility. 
Only about 20 percent of schools indicated that such spending had not
been needed.  A total of 56 percent of all schools estimated that
they would need an additional $5.2 billion for accessibility in the
next three years.  Only about 26 percent of schools reported that
such spending would not be needed.  At the district level, the
situation is very complex.  Just because one school is fully
accessible does not mean that other schools in a district are.  The
law, however, does not require a school district to make each of its
buildings or every part of a facility accessible to and usable by
persons with disabilities.  Lack of funding was cited by many as the
main reason for not making schools accessible. 

Financing College Facilities:
Factors Limit Connie Lee's Ability to Help More Schools

GAO/HEHS-96-6, Dec.  8 (25 pages). 

The College Construction Loan Insurance Association (Connie Lee) is a
for-profit bond insurance holding company that insures municipal
bonds issued by schools of higher education (colleges, universities,
and teaching hospitals) that have difficulty obtaining insurance
because their bonds have relatively low credit ratings--BBB and
below.  Connie Lee insures bonds issued to build and renovate
academic buildings.  Although federal law generally limits Connie Lee
to insuring bonds that are relatively greater credit risks, state law
constrains bond insurance companies, including Connie Lee, to
insuring 95 percent of their business in bonds rated BBB and above. 
Industry practice further constrains these companies.  Rating firms'
guidelines require larger amounts of capital for insuring bonds rated
below BBB than for insuring bonds rated BBB and above.  Among those
schools that Connie Lee is permitted to serve, some, including some
historically black colleges and universities, do not need or want to
issue bonds or to insure the bonds that they issue.  For example,
some bonds that public schools issue do not require insurance because
the bonds have the states' credit rating.  These high ratings reduce
or eliminate the benefits of insurance.  Some schools, both public
and private, are fundamentally strong and do not have to take out
loans to finance construction projects.  Yet other schools find the
cost to issue bonds or the size of the debt incurred makes using
bonds to finance a project impractical.  Finally, some schools find
other sources of financing, such as the Education Department. 

School Finance:
Three States' Experiences With Equity in School Funding

GAO/HEHS-96-39, Dec.  19 (56 pages). 

Since the 1960s, the federal government has targeted educational
funds to areas with the greatest need.  More recently, the federal
government has also encouraged states and localities to develop high
academic standards for all school-age children.  The system used to
finance local schools in each state can affect whether students in
all districts can realistically meet such standards.  In most states,
these systems rely heavily on local property wealth, which can vary
greatly from district to district.  Since 1989, more than half of the
states have been involved in lawsuits alleging that disparate access
to education revenues violated the state's responsibility to provide
for the education of all students.  GAO reviewed the experiences of
three states--Tennessee, Texas, and Minnesota--that had recently
reformed their finance systems to make them more equitable.  For each
state, GAO characterizes (1) the reforms to the school finance
systems and the legal, budgetary, and political pressures that the
state legislature faced in making the changes and (2) the general
impact of the legislative remedy, especially in addressing
disparities in educational funding.  This report also presents advice
from state officials for other states reforming their school finance
systems. 

Head Start:
Information on Federal Funds Unspent by Program Grantees

GAO/HEHS-96-64, Dec.  29 (33 pages). 

In fiscal year 1995, Head Start--the centerpiece of federal early
childhood programs--received $3.5 billion to provide a range of
services to preschool-aged children from poor families.  Today, about
1,400 local agencies, known as grantees, sponsor these programs and
serve 752,000 children.  Local programs provide education, nutrition,
health, and social services to low-income children and opportunities
for parental involvement and enrichment.  Since 1990, Congress has
boosted Head Start funding by 135 percent to enable more children to
participate and to improve the quality of services.  However, some
Head Start grantees, as expected, did not spend all the funds awarded
to them each year and carried this unspent money forward for use in
subsequent years.  This report discusses (1) the amount of Head Start
funding unspent by grantees at the end of budget years 1992, 1993,
and 1994 and the reasons for these unspent funds; (2) the proportions
of carryover funds that were added to grantee awards or that offset
grantee awards in subsequent years; (3) the proportions of carryover
funds that were one or more grantee budget years old; and (4)
grantees' intended uses of carryover funds. 


   ENERGY
--------------------------------------------------------- Appendix 0:6

Uranium Mill Tailings:
Cleanup Continues, but Future Costs Are Uncertain

GAO/RCED-96-37, Dec.  15 (48 pages). 

Decades of uranium processing for the nation's nuclear weapons and
energy programs has contributed to radioactive contamination at 50
ore-processing sites and thousands of nearby areas.  The Energy
Department (DOE) now expects to spend more than $2.4 billion during
the next 20 years to clean up surface and groundwater contamination
at the sites.  Various factors could affect the future federal costs
and the ultimate completion dates of the cleanups.  These factors
include whether (1) DOE will keep open part of one disposal site to
dispose of tailings unearthed during future work on roads and
utilities and (2) the affected states will contribute their
10-percent share of the groundwater cleanup expenses.  Depending on
what happens regarding these factors, millions of dollars and years
of work could be added to the cleanup effort. 

Energy Downsizing:
Criteria for Community Assistance Needed

GAO/RCED-96-36, Dec.  27 (nine pages). 

Since the end of the Cold War, the Energy Department (DOE) has been
downsizing and realigning its facilities.  As part of this effort,
DOE closed its Pinellas plant in Largo, Florida, which had
manufactured components for nuclear weapons.  In 1995, DOE
transferred the facility to the Pinellas County Industry Council to
help alleviate the economic impact of the closing on neighboring
communities.  DOE also provided funding to help mitigate the effects
of the closing.  GAO examined the criteria DOE had used to identify
and evaluate the economic effects of closing the Pinellas plant and
found that DOE's policy guidance supports economic development to
minimize the impact on displaced workers and affected communities of
closing the Department's former defense nuclear weapons facilities. 
However, DOE has not established specific criteria for identifying
and evaluating the impact of the closings; nor has it established
criteria for deciding what types and amounts of assistance are
appropriate to offset that impact.  Such criteria are important
because DOE's downsizing will likely continue for years and will cost
millions of dollars. 


   ENVIRONMENTAL PROTECTION
--------------------------------------------------------- Appendix 0:7

Pesticides:
The Phaseout of Methyl Bromide in the United States

GAO/RCED-96-16, Dec.  15 (41 pages). 

Methyl bromide had been used in agriculture since the 1930s, mainly
as a fumigant to control pests in the soil before planting seeds, to
protect stored crops, and to treat commodities being shipped abroad. 
World scientists participating in the United Nations Environment
Programme concluded that emissions from methyl bromide use contribute
significantly to ozone depletion and should be controlled.  In
response, the Environmental Protection Agency (EPA) issued
regulations that froze the production and the importation of methyl
bromide at 1991 levels until 2001, when the pesticide is no longer
allowed to be produced in the United States for domestic use. 
However, a phaseout of the substance could harm U.S.  agriculture and
trade unless adequate--that is, environmentally acceptable,
effective, and economical--alternatives are found before the ban
takes effect in five years.  More progress in identifying
alternatives is being made for some uses of methyl bromide than for
others.  If adequate alternatives are not ready by the time the ban
takes effect, exemptions from the ban may be needed for some domestic
uses until alternatives can be developed.  EPA now lacks the
authority, however, to grant exemptions for the continued production
and/or importation of methyl bromide for domestic uses. 


      TESTIMONY
------------------------------------------------------- Appendix 0:7.1

Superfund:  Use of Innovative Technologies for Site Cleanups, by
Lawrence J.  Dyckman, Associate Director for Environmental Protection
Issues, before the Subcommittee on Energy and Environment, House
Committee on Science.  GAO/T-RCED-96-45, Dec.  6 (12 pages). 

In past and ongoing work, GAO has assessed the Environmental
Protection Agency's (EPA) promotion of innovative technologies at
Superfund sites.  GAO testified that EPA has made progress in using
innovative technology at Superfund sites, but these technologies are
still used at only a small number of locations.  Greater use of new
technologies, which can reduce cleanup costs, has been prevented by
such factors as regulatory standards, the absence of track records
for these technologies, and uncertainties about future regulatory
standards.  Even after Congress reauthorizes Superfund, it is likely
that these challenges to the development and the use of new
technologies will continue. 


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

Resolution Trust Corporation:
Performing Assets Sold to Acquirers of Minority Thrifts

GAO/GGD-96-44, Dec.  22 (17 pages). 

GAO reviewed the Resolution Trust Corporation's (RTC) efforts to sell
performing assets to acquirers of failed thrifts under the minority
preference resolutions program.  GAO found that RTC had established a
reasonable process anchored to agency and mortgage securities markets
standards.  This process allowed for the independent valuation of
one- to four-family residential mortgage loans that had been offered
for sale to minority acquirers.  RTC contracted with two independent
valuation contractors, experienced in mortgage securities markets, to
provide separate prices for each loan, which RTC then averaged and
offered to minority acquirers as the final prices.  By removing
itself from the initial phase of the loan-pricing process, RTC showed
its commitment to establishing a process that was fair to minority
acquirers but that, at the same time, sought to maximize total return
on the disposition of assets as required by law.  Under this program,
11 of the 14 minorities who bought thrifts from RTC purchased 4,063
one- to four-family residential mortgage loans.  Moreover, to price
the loans, the two valuation contractors appeared to have used a
reasonable methodology that considered fluctuations in interest
rates, credit risk sensitivity, and the fact that these were RTC
loans.  Further, officials at Fannie Mae and Freddie Mac found this
pricing methodology to be generally consistent with their approaches. 


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


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

Financial Management:  Continued Momentum Essential to Achieve CFO
Act Goals, by Charles A.  Bowsher, Comptroller General of the United
States, before the Senate Committee on Governmental Affairs. 
GAO/T-AIMD-96-10, Dec.  14 (31 pages). 

This testimony discusses the steady progress being made to improve
financial management in the federal government through implementation
of the Chief Financial Officers Act of 1990.  This landmark
legislation was enacted five years ago, but a great deal more
perseverance will be required to sustain the current momentum and
successfully overcome decades of serious neglect in fundamental
financial management operations and reporting methods.  The
Comptroller General focuses on the following four implementation
challenges:  (1) successfully implementing the expanded requirements
for audited financial statements to improve the reliability of data
for decision-making and strengthen the efficiency of financial
operations and controls; (2) continuing to build stronger financial
management organizations by upgrading skill levels, enhancing
training, and ensuring that Chief Financial Officers have the
necessary authority to achieve change; (3) devising and applying more
effective solutions to overcome difficult problems plaguing agencies'
financial systems; and (4) designing comprehensive accountability
reports to allow more thorough and objective assessments of agencies'
performance and financial contributions, as well as to enhance the
budget preparation and deliberation process.  The Comptroller General
also comments on amendments to the Single Audit Act being considered
by Congress. 


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

U.S.  Postal Service:
New Focus on Improving Service Quality and
Customer Satisfaction

GAO/GGD-96-30, Dec.  20 (90 pages). 

Above all, Postal Service customers want and expect prompt, reliable
mail delivery.  When dissatisfied with traditional mail services,
customers increasingly turn to alternatives, such as electronic
communication or other suppliers.  According to the Postal Service,
on the basis of current customer satisfaction levels and if customers
could use an alternative service at the same price, more than 40
percent of the residential customer market could be vulnerable to
competition.  This report examines the Postal Service's efforts to
measure, report on, and improve customer satisfaction.  GAO discusses
(1) to what extent the Service distributes customer satisfaction data
for use internally and by Congress; (2) whether the Service can
improve the distribution of these data; (3) what steps it is taking
to use customer satisfaction and other performance data to improve
customer satisfaction by improving customer service; and (4) any
additional steps it could take to improve customer satisfaction. 

Government Corporations:
Profiles of Existing Government Corporations

GAO/GGD-96-14, Dec.  13 (186 pages). 

Government corporations are generally federally chartered entities
created to serve a public function of a predominantly business
nature.  These entities range from Amtrak to the Federal Deposit
Insurance Corporation to the Export-Import Bank.  This report
discusses (1) government corporations now in operation and (2) their
adherence to 15 federal statutes. 

Transforming the Civil Service--Building the Workforce of
the Future:
Results of a GAO-Sponsored Symposium

GAO/GGD-96-35, Dec.  26 (36 pages). 

In April 1995, GAO sponsored a symposium--"Transforming the Civil
Service:  Building the Workforce of the Future"--that brought
together representatives of leading private sector firms, public
sector employers from both the United States and abroad, and
distinguished former federal officials to discuss new approaches to
managing people.  This report distills from their discussions a set
of emerging human resource management principles and points out some
ramifications should Congress consider applying these ideas to the
federal civil service. 

Office of Management and Budget:
Changes Resulting From the OMB 2000 Reorganization

GAO/GGD/AIMD-96-50, Dec.  29 (44 pages). 

This report describes the changes that have resulted from OMB 2000--a
major reorganization and process change at the Office of Management
and Budget (OMB) that was announced in 1994 as part of the National
Performance Review.  The main goal of OMB 2000 was to integrate OMB's
budget analysis, management review, and policy development roles
under a new structure to improve the decisionmaking process and
oversight of executive branch operations.  GAO describes (1) the
changes in OMB's organizational structure, responsibilities, and
staffing as a result of OMB 2000; (2) the changes to OMB's three
statutory offices; (3) the changes in the attention OMB devoted to
management issues in the budget formulation process before and after
OMB 2000; and (4) the way OMB planned to evaluate OMB 2000. 


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

Travel of Government Officials on Government Aircraft, by Mark E. 
Gebicke, Director of Military Operations and Capabilities Issues,
before the Subcommittee on Government Management, Information, and
Technology, House Committee on Government Reform and Oversight. 
GAO/T-NSIAD-96-85, Dec.  29 (13 pages). 

This testimony discusses two recent GAO reports (GAO/NSIAD-95-144,
July 1995, and GAO/NSIAD-95-168BR, June 1995) on the White House
staff's use of military helicopters and government aircraft used to
fly senior-level military and civilian officials.  This testimony
highlights the key findings from these reports and then discusses
each finding in detail. 


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

Medicaid Section 1115 Waivers:
Flexible Approach to Approving Demonstrations Could Increase Federal
Costs

GAO/HEHS-96-44, Nov.  8 (87 pages). 

Several states have been given waivers allowing them to use savings
from managed care Medicaid programs to cover additional
beneficiaries.  GAO found that contrary to assertions that such
waivers would be "budget neutral," most of them could increase
federal Medicaid expenditures.  Specifically, approved spending
limits for demonstration waivers in Oregon, Hawaii, and Florida could
boost federal Medicaid outlays.  Only Tennessee's 1115 waiver
agreement should cost no more than the continuation of its smaller,
prewaiver program and, in fact, should yield savings.  Federal
Medicaid spending could rise significantly if the administration
continues to show a similar flexibility in reviewing state 1115
financing strategies.  Five waivers have been approved since
Florida's waiver in late 1994, and the large backlog of pending
waivers includes three states with large Medicaid programs--New York,
Illinois, and Texas.  Additional federal dollars are available along
with other funding sources identified in state waiver applications. 
GAO believes that the potential for additional sources of federal
funding serves as a hedge against the many uncertainties states face
in implementing these ambitious demonstrations--including changing
economic conditions, the accuracy of cost-containment assumptions,
the availability of anticipated funding cited in waiver applications,
and the lack of reliable cost data on the uninsured. 

National Health Service Corps:
Opportunities to Stretch Scarce Dollars and Improve
Provider Placement

GAO/HEHS-96-28, Nov.  24 (59 pages). 

The National Health Service Corps (NHSC) places physicians and other
health care providers in underserved areas in exchange for
scholarships or loan repayments for medical training.  In recent
years, funding for NHSC scholarships and loan repayments has soared
nearly 10-fold, from about $8 million in fiscal year 1989 to nearly
$80 million in fiscal year 1994.  This report (1) compares the costs
and benefits of the NHSC scholarship and loan repayment programs and
(2) discusses whether NHSC has distributed available providers to as
many eligible areas as possible.  GAO concludes that the loan
repayment programs offers a better long-term investment of limited
federal dollars.  GAO also found that some areas receive more doctors
and other health providers than needed while other areas suffer
shortages of requested medical personnel. 


   INFORMATION MANAGEMENT
-------------------------------------------------------- Appendix 0:12

Financial Management:
General Computer Controls at the Senate Computer Center

GAO/AIMD-96-15, Dec.  22 (14 pages). 

Computer controls at the Senate Computer Center failed to adequately
protect sensitive data, such as that related to payroll and
personnel, from unauthorized disclosure and modification. 
Specifically, GAO found weaknesses in the Center's ability to (1)
restrict access to sensitive data, programs, and other computer
resources; (2) monitor the activity of users and programmers; (3)
control changes to software; (4) segregate data processing duties;
and (5) provide for continued processing in the event of emergencies
or interrupted service.  In addition, the Senate lacked a
comprehensive strategic plan to secure Senate computer resources that
included the Center, the Office of Telecommunications, and system
users.  The absence of such a plan could lead to security problems as
the Senate moves from a centralized mainframe processing to a
decentralized network distributed throughout the Senate. 


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

Managing Technology Change:  Challenges and Opportunities for the
United States Senate, by Christopher W.  Hoenig, Director of
Information Resources Management Issues, before the Senate Committee
on Rules and Administration.  GAO/T-AIMD-96-25, Dec.  7 (14 pages). 

As the Senate increases its use of information technology, it is in
an excellent position to profit from the experiences of organizations
that have used computers and automation to improve their operations. 
This testimony, which draws on many years of GAO work related to
information resources management issues, makes three main points. 
First, although the Senate is a unique institution, it is similar
enough to private and public sector organizations to make learning
from their experiences useful.  Second, information technology offers
many opportunities for the Senate and the entire legislative branch
to improve its services to constituents, accessibility to the public,
legislative processes and decisionmaking, and committee and public
operations.  Legislatures around the world are using information
technology to improve these same areas.  Third, GAO's analysis of
successful public and private organizations underscores the need for
key management practices that can spell the difference between
success and failure in using information technology to improve
performance.  The key is to develop the organizational strategy and
support needed to effectively harness the power of information
technology and avoid the costly mistakes that others have made. 


   INTERNATIONAL AFFAIRS
-------------------------------------------------------- Appendix 0:13

Former Soviet Union:
Information on U.S.  Bilateral Program Funding

GAO/NSIAD-96-37, Dec.  15 (136 pages). 

Hampered at the outset by a lack of coordination, U.S.  aid to the
former Soviet Union is now better managed and is achieving promising,
albeit mixed, results in a variety of projects ranging from the
promotion of economic reforms to the disposal of nuclear weapons. 
This report provides information on U.S.  bilateral programs with the
newly independent states of the former Soviet Union from fiscal year
1990 through December 1994 to help them make the transition to
democratic societies with market economies.  GAO discusses (1) the
amount of funds obligated and spent; (2) the amount of credits
provided, including subsidy costs; and (3) the appropriation source
and budget function for these funds.  This information is categorized
by agency, recipient country, and programmatic sector.  GAO
summarized this and the following report in testimony before
Congress; see: 

Former Soviet Union:  Assessment of U.S.  Bilateral Programs, by
Harold J.  Johnson, Associate Director for International Relations
and Trade Issues, before the House Committee on International
Relations.  GAO/T-NSIAD-96-78, Dec.  15 (13 pages). 

Former Soviet Union:
An Update on Coordination of U.S.  Assistance and Economic
Cooperation Programs

GAO/NSIAD-96-16, Dec.  15 (14 pages). 

A February 1995 GAO report (GAO/NSIAD-95-10) indicated that the
executive branch lacked an effective mechanism to coordinate U.S. 
bilateral programs designed to assist the newly independent states of
the former Soviet Union with economic and political reforms. 
Specifically, GAO found that the State Department Coordinator's
authority was weak and that the U.S.  Agency for International
Development and other agencies were often embroiled in disputes about
implementation of their programs.  Since then, the Coordinator's role
has been expanded to include oversight of all U.S.  government
bilateral programs in the former Soviet Union, and his authority to
review budgets and direct the interagency process for program
development and implementation has been strengthened.  Even so, the
Coordinator has been unable to effectively oversee the anticrime
program for the former Soviet Union.  Interagency cooperation in
implementing aid programs for the former Soviet Union has improved,
with fewer disagreements on program content. 

Foreign Assistance:
Private Voluntary Organizations' Contributions and Limitations

GAO/NSIAD-96-34, Dec.  15 (77 pages). 

In response to budget constraints and concerns about effectiveness,
major donors, including the United States, are reassessing their
foreign aid programs and strategies.  The method of delivery is one
of the primary areas being reexamined.  Although most U.S.  foreign
aid is still delivered on a government-to-government basis, the
current administration had pledged to boost the percentage of U.S. 
assistance being channeled through nongovernmental organizations
during the next five years.  Some congressional proposals have
recommended that U.S.  development aid be channeled through
nongovernmental organizations, including private voluntary
organizations.  Support for a greater role of private voluntary
organizations in delivering assistance seems to stem from general
disappointment with the results of more than 40 years of
government-to- government assistance and a perception that private
groups are better able to identify development needs and deliver
help.  This report analyzes (1) the role of private voluntary
organizations in delivering U.S.  foreign assistance and the
potential issues and implications of increasing their role in
delivery aid, including accountability issues; (2) 26 private
voluntary organization projects and whether they achieved their
objectives; and (3) the extent to which U.S.  private voluntary
organizations are dependent on funding from the U.S.  government. 

Foreign Investment:
Implementation of Exon-Florio and Related Amendments

GAO/NSIAD-96-12, Dec.  21 (44 pages). 

In 1988, Congress enacted the Exon-Florio legislation authorizing the
President to suspend or prohibit foreign acquisitions, mergers, or
takeovers of U.S.  companies when credible evidence exists that a
foreign controlling interest might threaten national security and
when other legislation cannot provide adequate protection.  The
President delegated authority to review foreign investment
transactions to an interagency group--the Committee on Foreign
Investment in the United States.  This report examines (1) the
characteristics of foreign investments and the extent to which these
investments are reported to the Committee and (2) the factors that
the Committee considers in deciding whether a foreign investment
would result in a foreign company's control of a U.S.  company,
whether the acquiring company is controlled by a foreign government,
and whether national security risks exist.  GAO analyzed these issues
for a sample of 16 cases that the Committee reviewed in 1992 and
1993. 


   JUSTICE AND LAW ENFORCEMENT
-------------------------------------------------------- Appendix 0:14

Private Attorneys:
Selected Attorneys' Fee Awards Against Nine Federal Agencies in 1993
and 1994

GAO/GGD-96-18, Oct.  31 (32 pages). 

This report provides information on the number of cases and amount of
plaintiff attorneys' fees exceeding $100,000 that were awarded
against federal agencies for cases closed during fiscal years 1993
and 1994.  These data include the highest individual fees and hourly
rates awarded under federal statutes against the following nine
federal agencies:  the Departments of Defense, Health and Human
Services, Housing and Urban Development, the Interior, Justice,
Transportation, and the Treasury; the General Services
Administration; and the U.S.  Postal Service.  GAO also provides data
on attorneys' fee awards reported in the fiscal year 1993 Equal
Access to Justice annual reports and attorneys' fee awards paid from
the Judgement Fund during fiscal years 1993 and 1994. 


   NATIONAL DEFENSE
-------------------------------------------------------- Appendix 0:15

Unmanned Aerial Vehicles:
Hunter System Is Not Appropriate for Navy Fleet Use

GAO/NSIAD-96-2, Dec.  1 (10 pages). 

The Defense Department (DOD) continues to develop a variant of the
Hunter unmanned aerial vehicle for use on amphibious assault ships
despite objections from Navy fleet commanders, who do not want the
spy plane on their vessels because of limited shipboard space and the
Hunter's questionable performance record.  Because the Hunter cannot
take off or land vertically, a ship's crew would have to clear the
back half of a ship's deck to allow the Hunter to take off and land. 
Helicopters and jets would have to be moved below deck or to the
front of the ship.  For Hunter landings, the crew would also have to
erect a protective barrier to shield parked aircraft from an
out-of-control Hunter.  In addition, Hunter's range of about 100
miles is considered inadequate in the vast Pacific.  Also, when the
Hunter is viewing land targets, its limited range means that the ship
must move closer to shore, increasing the risk from shore patrol
attacks, mines, and other threats.  GAO concludes that DOD is at risk
of investing in a spy plane that may never be used. 

Depot Maintenance:
The Navy's Decision to Stop F/A-18 Repairs at Ogden Air
Logistics Center

GAO/NSIAD-96-31, Dec.  15 (28 pages). 

GAO reviewed the Navy's analysis to support its decision to move
F/A-18 depot maintenance work from the Air Force Ogden Air Logistics
Center in Odgen, Utah, to the North Island Naval Aviation Depot in
San Diego, California.  This report addresses GAO's (1) review of the
Navy's analysis and adjustments for cost and performance
comparability used to justify the decision to move its F/A-18 repair
activities from Ogden to North Island, (2) independent analysis using
more current data than that available at the time of the Navy's
decision, and (3) analysis of the adequacy of guidance regarding the
conduct of merit-based analyses. 

Army and Marine Corps M198 Howitzer:
Maintenance Problems Not Severe Enough to Accelerate Replacement
System

GAO/NSIAD-96-59, Dec.  27 (14 pages). 

Marine Corps and Army users of the M198 155-millimeter towed howitzer
want to replace the 15,600-pound cannon with a light-weight weapon to
ease the burden on crews and to improve air and ground mobility.  The
Marines have found it hard to tow the M198 over soft terrain, and
only their heavy-lift helicopter can move the weapon by air.  This
report discusses whether the Marine Corps' and Army's reported
maintenance problems with the M198 justify accelerating the
development of a replacement weapon.  GAO also provides information
on the Marine Corps' and the Army's planned development of a new,
light-weight
155-millimeter howitzer. 


   TAX POLICY AND ADMINISTRATION
-------------------------------------------------------- Appendix 0:16

The 1995 Tax Filing Season:
IRS Performance Indicators Provide Incomplete Information About Some
Problems

GAO/GGD-96-48, Dec.  29 (35 pages). 

This report assesses the Internal Revenue Service's (IRS) performance
during the 1995 tax filing season.  Although IRS indicators show that
the agency met many of the 1995 filing season's goals, these
indicators do not provide a complete assessment of the filing season. 
Several problems are not obvious from these indicators:  (1) IRS'
efforts to combat fraud generated much adverse publicity that might
have been avoided had the agency better forewarned taxpayers of
potential refund delays; (2) GAO's tests and IRS data showed that
taxpayers continued to have serious problems trying to reach IRS by
telephone; and (3) a new document imaging system did not work as well
as expected, leading to increased costs to process returns and
lower-than-expected productivity. 


   VETERANS AFFAIRS
-------------------------------------------------------- Appendix 0:17

VA Health Care:
How Distance From VA Facilities Affects Veterans' Use of
VA Services

GAO/HEHS-96-31, Dec.  20 (24 pages). 

Living within five miles of a VA hospital or outpatient clinic
significantly increases the likelihood that a veteran will use VA
health care services.  Although most veterans live within 25 miles of
a VA hospital or outpatient clinic, use of a VA facility declines
significantly among veterans living more than five miles from a VA
facility.  Only about 11 percent of veterans live within five miles
of a VA hospital that provides acute medical and surgical care and 17
percent within five miles of a VA outpatient clinic.  Use of VA
health care services does not decline with distance as rapidly among
veterans receiving VA compensation or pension payments.  Even those
veterans with service-connected disability who live more than 100
miles from a VA outpatient clinic are more likely to avail themselves
of VA outpatient services than are higher income veterans with
nonservice-connected disabilities who live within five miles of a VA
outpatient clinic.  Other factors that may contribute to differences
in the use of VA services include broader eligibility and entitlement
to outpatient care for service-connected and low-income veterans,
veterans' ages, and differences in available resources. 

VA Health Care:
Trends in Malpractice Claims Can Aid in Addressing Quality of Care
Problems

GAO/HEHS-96-24, Dec.  21 (16 pages). 

From fiscal year 1990 through fiscal year 1994, malpractice claims
against VA medical centers have steadily increased, from 678 to 978,
with payments made to claimants totaling more than $200 million.  In
1992, the Department of Veterans Affairs (VA) entered into an
agreement with the Armed Forces Institute of Pathology (AFIP) to
analyze trends in VA malpractice claims.  VA's quality assurance
staff, however, are making only limited use of the information being
developed by AFIP.  Although information on malpractice claims is
available from the Defense Department (DOD), it is not comparable to
the malpractice data that VA collects.  The main reason for the lack
of comparability is the absence of a standard data collection format. 
Nonetheless, VA may find the DOD information useful when comparing
areas in which malpractice claims are being generated, such as
incidents related to surgery, diagnosis,
and medication. 


   SPECIAL PUBLICATIONS
-------------------------------------------------------- Appendix 0:18

Energy and Science:
Five-Year Bibliography 1990-1994

GAO/RCED-96-7W, Dec.  1995 (352 pages). 

GAO's Energy and Science Issue Area examines the activities of a
variety of entities, from the Nuclear Regulatory Commission to the
Tennessee Valley Authority to the National Science Foundation.  This
work reviews the role and continued need for a federal presence in
these areas, exposing incidences of waste and mismanagement and
promoting a smaller, more efficient, and cost-effective government. 
Organized into four main sections--"Management and Missions of Energy
and Science Agencies," "Consequences and Implications of the Nuclear
Age," "Competition and Security in Energy Supplies," and "Federal
Role and Investment in Science and Technology"--this extensive
bibliography lists products on science and energy topics that GAO
issued from 1990 through 1994.  The documents are listed
chronologically, with the most recent reports first.  A subject index
and ordering information are included.  (Please note:  Printed copies
of this document are not available.  The bibliography can be accessed
electronically via the World Wide Web from the GAO home page at
http://www.gao.gov.  For more information on GAO reports and
testimony available on the Internet, send e-mail to
[email protected]). 

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

GAO/HEHS-96-69W, Dec.  1995 (48 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. ***