Reports and Testimony: April 1996 (Other Written Prod., 04/01/96,
GAO/OPA-96-7).

GAO published its monthly digest of reports and testimonies issued in
April 1996.

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

 REPORTNUM:  OPA-96-7
     TITLE:  Reports and Testimony: April 1996
      DATE:  04/01/96
   SUBJECT:  Tax administration
             Health care services
             Veterans
             Transportation operations
             Financial management
             Economic development
             Employment or training programs
             Environmental monitoring
             Law enforcement
             Defense operations
IDENTIFIER:  SBA Small Business Investment Companies Program
             SBA Specialized Small Business Investment Companies Program
             Superfund Program
             State Water Pollution Control Revolving Fund
             Defense Business Operations Fund
             Medicare Program
             European Union
             Haiti
             HUD Single Family Property Disposition Program
             Social Security Program
             Supplemental Security Income Program
             DOD Composite Health Care System
             Japan
             France
             Germany
             United Kingdom
             Burma
             Bosnia
             IRS Taxpayer Compliance Measurement Program
             M1 Tank
             Abrams Tank
             Airport and Airway Trust Fund
             Coast Guard Vessel Traffic Service 2000 Program
             
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REPORTS AND TESTIMONY:  APRIL 1996

GAO/OPA-96-7


Highlights

Airline Deregulation

Average air fares, adjusted for inflation, have fallen since airline
deregulation at airports serving small- and medium-sized communities
as well as at those serving large cities, but regional differences
persist.  The largest fare decreases have taken place in the West and
the Southwest and the largest increases in the Southeast and
Appalachia.  Page 34. 

Medicare Home Health Benefits

Since guidelines were relaxed in 1989 on Medicare's home health
benefits, program costs have escalated from $2.7 billion in 1989 to
$12.7 billion in 1994, and costs are projected to reach $21 billion
in 2000.  Controls, however, remain almost nonexistent, with few
claims subject to review and most claims paid without question.  Page
14. 

Defense Infrastructure

The Pentagon expects major savings from streamlining defense
infrastructure to pay for new weapons systems.  However, GAO found
that substantial net savings from infrastructure improvements are
unlikely during the next five years.  Page 25. 

GAO/OPA-96-7



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

  ADP - x
  ATF - x
  DBOF - x
  DEA - x
  DOD - x
  DOE - x
  EPA - x
  EU - x
  FAA - x
  FBI - x
  FEMA - x
  FHA - x
  GPO - x
  HCFA - x
  HUD - x
  IRS - x
  NASA - x
  R&D - x
  SBA - x
  SBIC - x
  SSA - x
  SSBIC - x
  SEAD - x
  USDA - x
  VTS - x
  VA - x

REPORTS AND TESTIMONY:  APRIL 1996
=========================================================== Appendix 0


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

Agricultural Research:
Information on Research System and USDA's Priority Setting

GAO/RCED-96-92, Mar.  28 (92 pages). 

For more than a century, U.S.  agricultural research, education, and
extension activities have been major catalysts in creating a vigorous
agricultural economy and a plentiful, low-cost supply of food and
fiber.  Although each has its own purpose--research, to discover
solutions to food and agriculture problems; education, to formally
teach future farmers and others in the food and agricultural sector;
and extension, to disseminate the results of agricultural research
and other information to the public--the functions are closely
linked.  The Agriculture Department (USDA) spent more than $2 billion
in fiscal year 1994 to support its agricultural research, education,
and extension system.  This report (1) provides an overview of the
system, (2) provides the views of users of agricultural research on
the extent to which USDA and the land grant universities are meeting
their research needs and on the effectiveness with which research
results are being disseminated, and (3) assesses USDA's processes for
planning and establishing research priorities. 


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

Impoundments:
Proposed Deferrals and Rescissions of Fiscal Year 1996
Budget Authority

GAO/OGC-96-5, Apr.  16 (six pages). 

On February 21, 1996, the President submitted to Congress his second
special impoundment message for fiscal year 1996.  The message
reports three rescissions of budget authority.  On February 23, 1996,
the President submitted to Congress his third special impoundment
message for fiscal year 1996.  The message reports one revised
deferral and three deferrals of budget authority as well as four
proposed rescissions of budget authority.  Also, on March 5, 1996,
the President submitted to Congress his fourth special impoundment
message for fiscal year 1996.  The message reports one revised
deferral and two proposed rescissions of budget authority.  GAO
reviewed the deferrals and rescissions in the three special messages
and found them to be in accordance with the Impoundment Control Act. 


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

Budget and Financial Management:  Progress and Agenda for the Future,
by Charles A.  Bowsher, Comptroller General of the United States,
before the Subcommittee on Government Management, Information and
Technology, House Committee on Government Reform and Oversight. 
GAO/T-AIMD-96-80, Apr.  23 (27 pages). 

A solid framework for improving the government's financial management
has been established during the past six years.  This framework
consists of (1) the original Chief Financial Officers Act of 1990 and
its expansion through the Government Management Reform Act of 1994;
(2) the Federal Accounting Standards Advisory Board, created in 1990;
and (3) measures to improve the budget process, such as the enactment
of credit reform.  The next step is to improve the federal budget
process to take advantage of accurate and reliable financial
information as the basis for sound budget and policy decisions.  The
Comptroller General urges reform in the following three areas:  the
budget process, accountability for costs and performance, and the use
of improved reports to better inform policy and budget decisions. 
Improved financial management and reports are essential to improving
the government's ability to account for taxpayer dollars.  Continuing
fiscal pressures will place a premium on the proper stewardship of
increasingly scarce public resources.  Recent efforts to improve
federal financial reporting will, if properly implemented, redress
long-standing weaknesses. 


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

Small Business Administration:
SBA Monitoring Problems Identified in Case Studies of 12 SBICs
and SSBICs

GAO/OSI-96-3, Apr.  3 (32 pages). 

The Small Business Investment Companies (SBIC) and Specialized Small
Business Investment Companies (SSBIC) that GAO reviewed engaged in
such improper practices as loans to associates, including officers
and directors of the licensees; loans for prohibited real estate
purchases; and loans to ineligible persons.  In addition, the SBICs
and SSBICs seldom took timely measures to correct violations after
being notified by the Small Business Administration (SBA), nor did
SBA ensure that the violations it had identified during examinations
had been corrected promptly.  Therefore, the same or similar
violations were identified during later examinations.  Such
mismanagement or misconduct may have led to the liquidations or the
bankruptcy of some of the SBICs and SSBICs, with the government
picking up the tab.  Estimated losses for three of the five companies
that have gone into liquidation or bankruptcy have exceeded $4
million.  SBA now examines the performance of SBICs and SSBICs more
often, has expanded the comprehensiveness of those examination, and
has recently changed its licensing procedures so that new SBICs are
more experienced and capitalized.  However, GAO has found that SBA
had not responded in a timely manner to serious regulatory violations
identified
during examinations. 


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

Economic Development:
Limited Information Exists on the Impact of Assistance Provided by
Three Agencies

GAO/RCED-96-103, Apr.  3 (32 pages). 

The Appalachian Regional Commission, the Commerce Department's
Economic Development Administration, and the Tennessee Valley
Authority are three of the federal agencies whose programs provide
economic development assistance to local communities.  Recent
congressional debate has centered on the impact of the economic
development aid provided by these three agencies and the "performance
ratios" they calculate--a comparison of the total dollars invested or
planned for an economic development project with the dollars
contributed by the agency itself.  The performance ratio is seen as a
measure of the extent to which other federal, state, local, or
private sector investment is attracted to a project as a result of
the agency's investment.  This report (1) reviews studies that
evaluate the impact of economic development of these three agencies'
programs and (2) determines how the performance ratios used by the
three agencies were calculated. 


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

Disaster Assistance:  Improvements Needed in Determining Eligibility
for Public Assistance, by Judy A.  England-Joseph, Director of
Housing and Community Development Issues, before the Subcommittee on
VA, HUD, and Independent Agencies, Senate Committee on
Appropriations.  GAO/T-RCED-96-166, Apr.  30 (15 pages). 

The Federal Emergency Management Agency's (FEMA) public assistance
program funds the repair of public facilities, such as roads,
government buildings, utilities, and hospitals, that are damaged by
natural disasters.  Under the program, FEMA spent more than $6.5
billion for disasters that occurred during fiscal years 1989-94. 
FEMA may make public assistance grants to state and local governments
and nonprofit groups for three general activities:  debris removal,
emergency protective measures, and permanent restoration.  GAO
testified that clearer and more-comprehensive criteria for
determining eligibility for public assistance would ensure that
eligibility determinations were consistent and equitable.  To the
extent that the criteria were more restrictive, the cost of future
public assistance could be reduced.  In the 1990s, the potential
adverse effects of a lack of clear criteria have become more
significant because of (1) an increase in major disasters and (2) the
need to use temporary workers with limited training to inspect damage
and prepare damage survey reports. 


   EMPLOYMENT
--------------------------------------------------------- Appendix 0:5

Job Training Partnership Act:
Long-Term Earnings and Employment Outcomes

GAO/HEHS-96-40, Mar.  4 (38 pages). 

The federal government spends billions of dollars annually to support
employment training programs, but little is known about their
long-term effect on participants' earnings and employment rates. 
GAO's analysis found some positive effects of the Job Training
Partnership Act--the cornerstone of the federal employment training
effort--in the years immediately following training.  However,
neither employment rates nor earnings were significantly higher for
participants than for nonparticipants five years after training.  In
some earlier years, adults (but not youth) who received training had
earnings or employment rates significantly higher than those of the
control group.  By the fifth year, each of the four treatment groups
had earnings and employment rates that were nominally higher than
those of the control group.  Because none of the fifth-year
differences were statistically significant, however, GAO could not
attribute the higher earnings to training provided under the act
rather than to chance alone. 

Job Training:
Small Business Participation in Selected Training Programs

GAO/HEHS-96-106, Apr.  29 (67 pages). 

Both government and the private sector spend considerable sums to
train the nation's workforce.  In 1995, the federal government alone
spent about $20 billion on 163 programs that included some aspect of
worker training.  GAO found that large employers were about twice as
likely to take advantage of several types of training programs as
were small employers.  Training programs that require employers to
comply with detailed administrative or other paperwork requirements
present economic barriers.  Small employers may find it too costly to
devote the time needed to conform to these requirements.  In
addition, training programs that focus on workers' general needs
rather than on employers' specific skill needs present institutional
barriers.  Finally, informational barriers may also exist because
small employers often know less about the training programs available
to them than do larger employers.  In GAO's case studies, those
programs that focused mainly on employer needs used or actively
encouraged consortia, which are organizations of employers, unions,
or other interested parties.  These consortia provide employment
training to employers and, in these particular programs, overcame
many of the barriers cited above. 


      TESTIMONY
------------------------------------------------------- Appendix 0:5.1

Employment and Training:  Successful Projects Share Common Strategy,
by Carlotta C.  Joyner, Director of Education and Employment Issues,
before the Subcommittee on Human Resources and Intergovernmental
Relations, House Committee on Government Reform and Oversight. 
GAO/T-HEHS-96-127, Apr.  18 (12 pages). 

Strong foreign competition has underscored the need for a skilled
U.S.  labor force.  It has also focused attention on the many
Americans who are unprepared for employment.  The federal government
earmarked about $20 billion in fiscal year 1995 for 163 different
training programs.  GAO visited six projects that had outstanding
results, as indicated by project completion rates, job placement and
retention rates, and wages.  The projects GAO visited differed in
many ways, but they shared a common strategy that has four key
elements:  (1) ensuring that clients were committed to training and
getting jobs; (2) removing barriers, such as a lack of child care,
that might hinder clients' ability to finish training and get and
keep jobs; (3) improving clients' employability skills, such as
getting to jobs regularly and on time, working well with others, and
dressing and behaving appropriately; and (4) linking occupational
skills training with the local labor market.  The upshot is that
clients are ready, willing, and able to benefit from training and
employment programs and move toward self-sufficiency. 


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

DOE Management:
DOE Needs to Improve Its Analysis of Carryover Balances

GAO/RCED-96-57, Apr.  12 (48 pages). 

In recent years, Congress has reduced the Energy Department's (DOE)
budget request for new obligational authority and has recommended
that DOE use balances remaining from prior years' obligational
authority that are carried over into the new fiscal year.  DOE had
$12 billion in such "carryover balances" from prior years as it began
fiscal year 1995.  In fiscal year 1995, DOE used nearly $1 billion in
carryover balances to supplement its $18 billion in new obligational
authority.  Although DOE needs some carryover balances to pay for
commitments made in prior years that have not yet been completed, the
agency's large and persistent carryover balances have raised concerns
within DOE and Congress that the agency is carrying balances that
exceed the minimum needed to support its programs.  This report
discusses whether (1) DOE has an effective approach to identify the
carryover balances that exceed its programs' requirements and may be
available to reduce its budget request and (2) opportunities exist to
develop a better approach for analyzing these carryover balances. 


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

Energy R&D:  Observations on DOE's "Success Stories" Report, by Allen
Li, Associate Director for Energy, Resources, and Science Issues,
before the Subcommittee on Energy and Environment, House Committee on
Science.  GAO/T-RCED-96-133, Apr.  17 (11 pages). 

The Energy Department's (DOE) applied research and development
programs support the development (R&D) of technologies that achieve
national energy objectives, such as securing future energy supplies. 
In fiscal year 1995, DOE received about $1.65 billion--nearly 10
percent of its overall budget--for applied R&D programs.  Members of
Congress and the Congressional Budget Office have raised concerns
about whether the federal investment in these programs is
cost-effective.  In response, DOE last year published its Success
Stories report, which describes 61 technologies developed by its
applied R&D programs, highlighting the measurable economic benefits,
such as energy savings, produced by each technology.  Success Stories
makes some valid claims about the benefits of DOE's applied research. 
However, GAO found problems with the analyses used to support the
benefits DOE had cited in 11 out of 15 cases GAO reviewed.  The
problems ranged from basic mathematical errors to unsupported links
between the benefits cited and DOE's role.  Although DOE's applied
R&D programs do produce some benefits, GAO does not believe that the
report can be used to assess the effectiveness of such programs
overall because it describes the "successes" of a very small
percentage of the programs that DOE has funded.  In addition, Success
Stories does not report how much DOE spent to support any of the
technologies GAO evaluated. 

Energy Department Trade Missions:  Authority, Results, and Management
Issues, by JayEtta Z.  Hecker, Associate Director for International
Relations and Trade Issues, before the Subcommittee on Oversight and
Investigations, House Committee on Commerce.  GAO/T-NSIAD-96-151,
Apr.  24 (33 pages). 

The Energy Department (DOE) conducts trade missions to help develop
energy markets abroad.  DOE has reported the results of these trips
on the basis of the value of the business agreements signed.  The
agency cited nearly $20 billion in potential and finalized agreements
signed during the Energy Secretary's four trade missions and
follow-up trips, and it later reported more than $2 billion in
finalized deals.  In reviewing the finalized deals, GAO found that in
some cases, U.S.  exports appeared to be substantially less than 50
percent of the projects' total estimated exports.  Company
representatives that participated in the missions generally supported
the Secretary's efforts and the resulting intangible benefits, such
as greater credibility, access, and acceleration of projects. 
Several company officials said that their business agreements would
have been completed without DOE involvement.  In addition, several
management weaknesses plague DOE's trade mission program.  DOE's
process for acquiring aircraft; recovering expenses from, and
approving travel for, nonfederal travelers; and documenting U.S. 
embassy expenses was weak.  New procedures have been introduced to
correct these shortcomings, but they have yet to be fully tested in
practice. 


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

Air Pollution:
Limited New Data on Inspection and Maintenance
Program's Effectiveness

GAO/RCED-96-63, Mar.  21 (29 pages). 

The Environmental Protection Agency (EPA) issued a new rule in
November 1992 requiring 83 of the most seriously polluted areas in 23
states to implement more-stringent programs to test for and reduce
vehicle emissions.  EPA data collected before November 1992 suggested
that test-and-repair networks, in which inspector/mechanics in the
testing stations were allowed to make repairs, were less effective in
controlling emissions than were test-only networks.  Consequently,
EPA decreased by 50 percent the number of credits assigned to
test-and-repair networks.  Test-only networks continued to receive
full credit.  Some states and other interested parties questioned the
adequacy of the supporting data behind the 50-percent decrease.  This
report discusses (1) the results of any audits, surveys, or studies
done since November 1992 that have a bearing on this decrease and (2)
the status of EPA efforts to provide states greater flexibility in
designing more-stringent testing programs. 

Superfund:
How States Establish and Apply Environmental Standards When Cleaning
Up Sites

GAO/RCED-96-70FS, Mar.  20 (26 pages). 

One issue being raised as part of the debate over Superfund
reauthorization is whether to revise or eliminate the requirement
that hazardous waste site cleanups comply with federal and state
standards protecting public health and the environment.  Among these
standards are numeric limits on the concentrations of toxic chemicals
in the environment.  Those responsible for cleaning up Superfund
sites have raised concerns that complying with these standards can
result in more-extensive and costlier cleanups than necessary to
safeguard public health.  This report discusses whether states, (1)
when setting numeric standards, based them on estimates of the human
health risks posed by exposure to contaminants and (2) when using
such standards, provided the flexibility to adjust the level of
cleanup prescribed by the standards to take into account the
conditions and risks found at individual hazardous waste sites.  GAO
also discusses the degree of correspondence between the state and
federal standards governing the cleanup of groundwater that could be
a source of drinking water. 

Superfund:
Number of Potentially Responsible Parties at Superfund Sites Is
Difficult to Determine

GAO/RCED-96-75, Mar.  27 (10 pages). 

Parties responsible for contaminating Superfund sites are liable for
the costs of cleaning them up.  De minimus parties--those who have
contributed only a small amount of low-toxicity waste at a
location--can incur legal expenses that may exceed their share of a
site's cleanup costs.  In addition, parties associated with municipal
codisposal landfills--landfills that have received both municipal
solid waste and industrial hazardous materials--can incur high legal
expenses when disputes over allocating costs arise at these sites. 
Congress is now considering proposals that would provide relief from
liability for site cleanup costs for de minimus parties and parties
associated with municipal codisposal landfills.  GAO found that
determining with any degree of certainty the number of both types of
parties is difficult because the Environmental Protection Agency's
data on the number of parties at many sites are incomplete.  On the
basis of the limited information in EPA's database, GAO estimates
that as many as 25,000 de minimus parties can be found at 175
nonfederal Superfund sites and that as many as 40,000 potentially
responsible parties can be found at 245 nonfederal codisposal
landfill sites.  Because EPA's data are incomplete, GAO's estimates
are likely to be understated. 


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

Clean Water Act:  Use of State Revolving Funds Varies, by Stanley J. 
Czerwinski, Associate Director for Environmental Protection Issues,
before the Subcommittee on VA, HUD, and Independent Agencies, House
Committee on Appropriations.  GAO/T-RCED-96-140, Apr.  16 (seven
pages). 

The State Water Pollution Control Revolving Fund Program provides
communities with federal assistance to help them build wastewater
treatment facilities and thereby meet the requirements of the Clean
Water Act.  This testimony provides information on (1) how much of
their available funds the states have lent for wastewater treatment
facilities and related purposes and (2) what impediments states are
encountering in making these loans. 

Superfund:  Non-Time-Critical Removals as a Tool for Faster and Less
Costly Cleanups, by Peter F.  Guerrero, Director of Environmental
Protection Issues, before the Subcommittee on VA, HUD, and
Independent Agencies, House Committee on Appropriations. 
GAO/T-RCED-96-137, Apr.  17 (nine pages). 

Since Superfund was created in 1980, the Environmental Protection
Agency (EPA) has spent more than $15 billion but has finished
cleaning up only about 300 of the 1,300 most contaminated sites
nationwide.  EPA is expanding use of its removal program, which it
typically has used to respond only to urgent situations, to conduct
major nonemergency cleanups at portions of sites.  These
non-time-critical removals are quicker than EPA's traditional
remedial efforts because they streamline the steps used to study a
site's contamination and design a cleanup method.  This testimony
focuses on three issues:  (1) the major benefits and potential
disadvantages of using non-time-critical removals, (2) the extent to
which such removals can be used in more Superfund cleanups, and (3)
the factors that limit the use of such removals. 


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

Defense Business Operations Fund:
DOD Is Experiencing Difficulty in Managing Fund's Cash

GAO/AIMD-96-54, Apr.  10 (32 pages). 

Serious cash management problems at the Defense Business Operations
Fund (DBOF), which disburses about $75 billion annually, jeopardize
the goal of enhancing military readiness through business operations
efficiencies.  DBOF managers lack accurate information on cash
balances and, to cover cash shortages, have relied on advance billing
for work yet to be performed.  At the end of fiscal year 1995, the
Defense Department had $2.6 billion in outstanding advance billings;
the Navy accounted for nearly $2 billion of that amount.  At the same
time, DBOF had about $1 billion in outstanding accounts receivable
that were more than 120 days old and was unable to collect more than
$200 million for completed work because the billing documents did not
specify the activities to bill.  If these problems are not resolved,
DOD may require excessive amounts of cash to pay for ongoing Fund
operations, and opportunities for violations of the Antideficiency
Act may increase. 

Financial Audit:
U.S.  Government Printing Office's Financial Statements for Fiscal
Year 1995

GAO/AIMD-96-52, Apr.  16 (48 pages). 

GAO is required to audit the U.S.  Government Printing Office's (GPO)
financial statements at least once every three years.  GAO contracted
with the independent public accounting firm Arthur Andersen to audit
GPO's financial statements for fiscal year 1995.  GAO concurs in
Arthur Andersen's opinion that the statements present fairly, in all
material respects, GPO's financial position and the results of its
operations and cash flows.  GPO maintained effective internal
controls over financial reporting, and Arthur Andersen found no
instances of noncompliance with laws and regulations that would be
reportable under generally accepted auditing standards.  The firm did
identify several deficiencies in GPO's internal controls and
operations, ranging from computer security weaknesses to a failure to
regularly reconcile subsidiary ledgers for accounts receivable and
payable. 


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

District's Workforce:
Annual Report Required by the District of Columbia Retirement Reform
Act

GAO/GGD-96-95, Mar.  29 (five pages). 

The federal government makes annual payments to the District of
Columbia retirement fund for police officers and firefighters.  To
encourage the District government to control disability retirement
costs, these payments must be reduced when disability retirement
rates exceed a certain limit.  GAO concludes that no reduction is
required in the fiscal year 1997 payment to the fund. 

District of Columbia:
Information on Health Care Costs

GAO/AIMD-96-42, Apr.  22 (56 pages). 

Recent studies on the District of Columbia's health care system have
concluded that the city's health care problems are aggravated by such
social factors as high rates of poverty, crime, substance abuse, and
unemployment.  These factors account for the sizable numbers of
persons who do not seek preventive health care and cannot pay for
medical treatment, the inappropriate use of D.C.  General Hospital
for primary care, and the many trauma care patients at area
hospitals.  To help Congress evaluate various restructuring proposals
being considered for the District, this report discusses the
District's health care budget and the composition of the District's
health care system, including the number of Medicaid recipients and
uninsured and the distribution of hospitals and clinics. 

Workers' Compensation:
Selected Comparisons of Federal and State Laws

GAO/GGD-96-76, Apr.  3 (75 pages). 

Concerns have been raised that workers' compensation benefits
authorized under the Federal Employees' Compensation Act may provide
federal workers having job-related injuries with more generous
benefits than other federal or state workers' compensation programs. 
This report compares (1) monetary benefits authorized by the act with
those authorized by other workers' compensation laws and (2) other
significant benefit provisions of federal and state workers'
compensation laws, such as those involving waiting periods, physician
choice, and coverage of occupational diseases. 


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

Federal Employee Redress:  A System in Need of Reform, by Timothy P. 
Bowling, Associate Director for Federal Management and Workforce
Issues, before the Subcommittee on Treasury, Postal Service, and
General Government, House Committee on Appropriations. 
GAO/T-GGD-96-110, Apr.  23 (11 pages). 

The redress system for federal workers seeks to protect employees
against arbitrary agency actions and prohibited personnel practices,
such as discrimination or retaliation for whistle-blowing.  But how
well is the redress system working, and does it add to or detract
from fair and efficient government operations?  This testimony makes
three main points:  First, because of the system's complexity and the
various 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 workers, it
is vulnerable to employees who would take advantage of these
protections.  Its protracted processes and requirements divert
managers from more-productive activities and inhibit some of them
from taking legitimate actions in response to performance or conduct
problems.  Further, the demands of the system put pressure on
employees and agencies alike to settle cases--regardless of their
merit--to avoid potential costs.  Third, alternatives to the current
redress system can be found in the private sector and in some parts
of the federal government.  These alternatives, including a variety
of less-formal approaches collectively known as alternative dispute
resolution, may be worth further study. 

Congressional Oversight:  The General Accounting Office, by Charles
A.  Bowsher, Comptroller General of the United States, before the
Subcommittee on Government Management, Information and Technology,
House Committee on Government Reform and Oversight.  GAO/T-OCG-96-2,
Apr.  30 (16 pages). 

In 1996, GAO celebrates 75 years of service to Congress.  This
testimony discusses the important role GAO has played over the years
as the "nation's watchdog"--the agency responsible for providing
Congress with objective and credible audits and evaluations of
executive branch programs and management.  Since 1992, GAO has
reduced its workforce by one-third to about 3,500 employees--its
lowest level since before World War II.  Still, GAO, with its cadre
of highly skilled professionals, remains a highly productive and
effective source of information for Congress.  The Comptroller
General highlights GAO's success in meeting its mission
responsibilities in the midst of downsizing, as well as recent steps
GAO has taken to continue to improve its service to Congress. 


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

Medicare:
Home Health Utilization Expands While Program
Controls Deteriorate

GAO/HEHS-96-16, Mar.  27 (52 pages). 

Use of the Medicare home health benefit has increased dramatically,
with spending rising from $2.7 billion in 1989 to $12.7 billion in
1994.  Costs are projected to reach $21 billion by the year 2000.  In
earlier reports (GAO/HRD-81-155 and GAO/HRD-87-9), GAO cited lax
controls over the use of the home health benefit and recommended
measures to improve Medicare's ability to detect claims that were not
medically necessary or did not meet the coverage criteria. 
Medicare's escalating home health outlays continue to raise concerns
about the extent of benefit abuse.  This report examines the factors
underlying the growth in the use of the home health benefit.  GAO
discusses (1) changes in the composition of the home health industry,
(2) changes in the composition of Medicare home health users, (3)
differences in utilization patterns across geographic areas, (4)
incentives to overuse services, and (5) the effectiveness of payment
controls in preventing payments for services not covered by Medicare. 

Medicaid Long-Term Care:
State Use of Assessment Instruments in Care Planning

GAO/PEMD-96-4, Apr.  2 (14 pages). 

GAO examined how publicly funded programs assess the need for home
and community-based long-term care for the elderly with disabilities. 
This care is provided to persons living at home who, because of a
chronic condition or illness, cannot care for themselves.  Services
ranges from skilled nursing to assistance with day-to-day activities,
such as bathing and housekeeping.  Under the Medicaid program, 49
states have obtained waivers to provide home and community-based
services to low-income elderly persons who would otherwise need
institutional care paid for by Medicaid.  These states are
responsible for developing a care plan tailored to a client's
specific needs.  A well-designed assessment instrument helps identify
all appropriate needs--increasing the likelihood that important
aspects of the client's situation will not be overlooked in care
planning.  Standardized administration of the assessment instrument
increases the likelihood that the needs of all clients will be
determined in the same way.  This report provides information on the
(1) comprehensiveness of assessment instruments, (2) uniformity of
their administration, and (3) training for staff who do the
assessments. 

European Union Drug Approval:
Overview of New European Medicines Evaluation Agency and Approval
Process

GAO/HEHS-96-71, Apr.  5 (21 pages). 

With a population of 370 million, the European Union (EU) represents
a consumer base that is one-third larger than that of the United
States.  Moreover, the EU leads the world in the consumption of
pharmaceutical products--nearly $83 billion worth in 1992.  The EU
recently changed its drug approval procedures and created a new
agency--the European Medicines Evaluation Agency--to approve drugs
more quickly and efficiently.  Advocates of reforming the Food and
Drug Administration (FDA) have suggested that the new European model
may provide helpful lessons for improving the timeliness of FDA drug
approvals.  This report (1) determines how the EU now reviews and
approves new drug applications and (2) explains why the European
Medicines Evaluation Agency was established, how it operates, and how
it is financed.  GAO notes that because the EU system has been up and
running for only a year, it is too soon to know whether it will
enable drug companies to more quickly market their products
throughout Europe. 

Medicare:
Federal Efforts to Enhance Patient Quality of Care

GAO/HEHS-96-20, Apr.  10 (48 pages). 

In the past decade, Medicare costs have risen on average more than 10
percent per year.  Expanding managed care options for Medicare
patients has been proposed as a way to contain costs.  Concerns have
been raised, however, that such changes may undermine the quality of
care provided to Medicare beneficiaries.  Currently, Medicare
reimburses only for care provided in health maintenance organizations
and by the fee-for-service sector.  This report (1) discusses the
present and future strategies of the Health Care Financing
Administration, which administers the Medicare program, to ensure
that Medicare providers furnish quality health care, in both
fee-for-service and health maintenance organization arrangements and
(2) provides the views of experts on attributes a quality assurance
program should have if more managed care options are made available
to Medicare beneficiaries. 


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

Medicare:  Private Payer Strategies Suggest Options to Reduce Rapid
Spending Growth, by Janet L.  Shikles, Assistant Comptroller General
for Health, Education, and Human Services Programs, before the
Subcommittee on Health, House Committee on Ways and Means. 
GAO/T-HEHS-96-138, Apr.  30 (16 pages). 

Improvements to Medicare's traditional fee-for-service program could
yield much-needed savings.  With better management, this program,
which now serves about 90 percent of beneficiaries, could run more
efficiently while continuing to serve well the nation's elderly. 
This means allowing Medicare to use tools similar to those used by
private payers to manage health care costs.  Negotiated discounts,
competitive bidding, preferred providers, case management utilization
reviews--these and other tools allow private payers to use market
forces to control health care costs.  Most, however, are not
authorized for general use by the Health Care Financing
Administration (HCFA), which runs Medicare.  This results in a
publicly financed program that pays higher-than-market rates for some
goods and services and sometimes pays without question for improbably
high bills.  Recent HCFA efforts and pending legislation to address
these problems appear promising.  In addition, HCFA should test the
feasibility of applying management strategies in high-cost
high-utilization areas.  Finally, Congress needs to give the
Department of Health and Human Services the flexibility to make
prompt price adjustments. 


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

Mortgage Financing:
FHA Has Achieved Its Home Mortgage Capital Reserve Target

GAO/RCED-96-50, Apr.  12 (48 pages). 

Borrowers with mortgage loans insured by the Federal Housing
Administration (FHA) pay insurance premiums, which are deposited into
the Department of Housing and Urban Development's Mutual Mortgage
Insurance Fund.  FHA-insured Fund mortgages were valued at about $305
billion as of September 1994.  Although the Fund has traditionally
been self-sufficient, it began to suffer substantial losses during
the 1980s, mainly because foreclosures on single-family homes
supported by the Fund were high in areas experiencing difficult times
economically.  To help place the Fund on a financially sound basis,
legislative reforms, such as requiring FHA borrowers to pay more in
premiums, were made in November 1990.  This report (1) estimates,
under different economic scenarios, the Fund's economic net worth as
of the end of fiscal year 1994; (2) assesses the Fund's progress in
achieving the legislatively mandated capital reserve ratio that
expresses economic net worth as a percentage of insurance-in-force;
and (3) compares GAO's estimate of the Fund's economic net worth with
the estimate prepared for FHA by
Price Waterhouse. 

Property Disposition:
HUD's Illinois State Office Incurred Unnecessary
Management Expenses

GAO/RCED-96-52, Apr.  22 (10 pages). 

Although the Department of Housing and Urban Development (HUD) cannot
control all the costs associated with buying and selling foreclosed
single-family properties, it can avoid or minimize some of the costs
of managing them.  GAO reviewed HUD's Single-Family Property
Disposition Program in the Illinois State Office and found that the
Illinois State Office had spent thousands of dollars unnecessarily on
water and sewer services, as well as for tax penalties, lost
properties, and increased costs to recover properties from the new
owners.  Nationwide, HUD could be wasting large amounts of money. 
GAO supports efforts by the Illinois State Office to better track
unpaid taxes, which would help avoid future tax liens and
lost properties. 


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

Public Pensions:
State and Local Government Contributions to Underfunded Plans

GAO/HEHS-96-56, Mar.  14 (19 pages). 

State and local governments with underfunded pension plans risk tough
budget choices in the future if they do not make progress toward full
funding.  Their taxpayers will face a liability for benefits earned
by current and former government workers, forcing these governments
to choose between reducing future pension benefits or raising taxes. 
Funding of state and local pension plans has improved significantly
since the 1970s.  After adjusting for inflation, the amount of the
unfunded liability has been cut in half.  Still, in 1992, 75 percent
of state and local government pension plans in the Public Pension
Coordinating Council survey were underfunded; 38 percent were less
than 80 percent funded.  Sponsors of slightly more than half of the
plans in the survey made contributions on schedule to pay off any
unfunded liability.  One-third of the pension plans, however, were
underfunded in 1992 and were not receiving the actuarially required
sponsor contributions.  Of all plans with complete data, one-fifth
were underfunded and were not receiving full contributions in both
1990 and 1992. 

Social Security:
Issues Involving Benefit Equity for Working Women

GAO/HEHS-96-55, Apr.  10 (67 pages). 

When the social security program was established in the 1930s, less
than 15 percent of married women held paying jobs outside the home;
today, about 60 percent of married women are paid workers.  Despite
the movement of women into the labor market, the social security
benefit structure has remained essentially unchanged over the years. 
The fairness of the benefit structure has come under increasing
scrutiny, especially as it affects women who have earned benefits in
their own right.  For example, a two-earner couple will receive lower
combined benefits in retirement than an identical one-earner couple. 
Also, a married woman who works and pays social security taxes might
not, because of the dual entitlement limitation, receive higher
benefits than if she had never worked and received only a spousal
benefit.  Several proposals seek to remedy these inequities.  These
include two broad proposals--"earnings sharing" and a "double-decker"
plan--and several more-narrow proposals, such as reducing spousal
benefits.  None of the measures has been adopted, however, partly
because they would either boost program costs or reduce benefits for
some beneficiaries.  Their enactment could also impose a large
administrative burden on the Social Security Administration. 

Supplemental Security Income:
Some Recipients Transfer Valuable Resources to Qualify
for Benefits

GAO/HEHS-96-79, Apr.  30 (16 pages). 

Existing law does not prohibit people from transferring resources to
qualify for benefits under the Supplemental Security Income
program--the largest cash assistance program for the poor and one of
the fastest growing entitlement programs.  Between 1990 and 1994,
3,500 Supplemental Security Income recipients transferred assets,
including cash, houses, land, and other items, valued at $74 million. 
Transfer values ranged as high as $800,000; most transfers fell
between $10,000 and $25,000.  The total amount of resources
transferred, however, is likely to be larger than GAO's estimate
because the Social Security Administration (SSA) is not required to
verify the accuracy of resource transfer information, which is
self-reported by individuals.  Moreover, because the information is
self-reported, SSA is unlikely to detect unreported transfers. 
Without a transfer-of-resource restriction, Supplemental Security
Income recipients who transferred assets to qualify for benefits
would receive nearly $8 million in benefits in the 24 months after
they transferred resources.  Many of these recipients could also have
received Medicaid acute-care benefits at an annual value of between
$2,800 and $5,300 per recipient.  GAO estimates that from 1990
through 1995, SSA could have saved $14.6 million with a
transfer-of-income restriction similar to that used for Medicaid. 
Such a restriction could also boost the public's confidence in the
program's integrity. 


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

Medical ADP Systems:
Defense Achieves Worldwide Deployment of Composite Health Care System

GAO/AIMD-96-39, Apr.  5 (24 pages). 

As the backbone of the military's medical operations, the Composite
Health Care System--an automated medical system developed by the
Defense Department (DOD) at a cost of $2.8 billion--will provide
doctors and nurses with almost instant access to patient information,
from medical history to current treatment and vital statistics.  DOD
should be able to significantly improve operations at its medical
facilities while reducing costs.  Improved appointment scheduling
will increase patients' access to health care, while better access to
patient information will save medical personnel time.  If DOD is to
realize the system's full potential, however, physicians and other
health care providers must be able to access the system at all times. 
Although DOD's backup and recovery plan provides for recovery from
disruptions in computer service because of power outages, it does not
effectively address major disruptions requiring the repair or the
replacement of equipment damaged by a natural disaster.  Health care
providers have become dependent on the patient data in the system, so
any major disruption could result in injury or even death.  DOD could
greatly reduce this risk by developing a more effective backup and
recovery plan for its equipment. 

Telecommunications Network:
NASA Could Better Manage Its Planned Consolidation

GAO/AIMD-96-33, Apr.  9 (17 pages). 

NASA has yet to finalize its strategy for consolidating the
management and the operations of its wide-area telecommunications
network, although it has made some important decisions.  NASA plans
to begin consolidating its networks immediately at the Marshall Space
Flight Center and procuring services from commercial providers in
fiscal year 1998.  NASA's decision to consolidate its networks offers
the potential for savings.  Nevertheless, in adopting its current
strategy, NASA neither considered alternatives suggested by officials
at centers other than Marshall nor tried to do a complete review of
its networking needs to determine how best to satisfy them
independently of its ongoing networking activities. 

USDA Telecommunications:
More Effort Needed to Address Telephone Abuse and Fraud

GAO/AIMD-96-59, Apr.  16 (22 pages). 

Because of a lack of adequate controls over telephone use, the
Agriculture Department (USDA), which spends about $50 million
annually on commercial telecommunications services, is putting itself
at risk for fraud and abuse.  GAO reviewed bills for all collect
calls over a four-month period at USDA offices in the Washington,
D.C., area and found that USDA had accepted more than 600
inappropriate collect calls--about half of all collect calls accepted
and paid for by the agency during this time--from prisoners.  USDA
has been aware of collect-calling abuse since 1994 but has not taken
adequate steps to stop it.  USDA does not generally review telephone
bills.  As a result, the agency cannot be certain whether
international long-distance calls originating from its Washington,
D.C., offices--which total tens of thousands of dollars each
month--are authorized.  GAO found several instances in which persons
had placed unauthorized calls to sex and party lines abroad. 
Moreover, because of weaknesses in a USDA contractor's voice mail
equipment, hackers were able to break into USDA's telephone system
and make $40,000 to $50,000 worth of international long-distance
calls.  USDA eventually paid the bill, even though the contractor
admitted responsibility.  USDA has tried to correct some of its
telecommunications management weaknesses, including automating its
current paper-based billing system so that telephone bills can be
verified cost effectively.  However, USDA has yet to respond in
writing to GAO's recommendations on resolving these problems. 


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

Foreign Investment:
Foreign Laws and Policies Addressing National Security Concerns

GAO/NSIAD-96-61, Apr.  2 (43 pages). 

Japan, France, Germany, and the United Kingdom have the authority to
block investments for national security reasons, as does the United
States.  In recent years, however, these five countries have rarely
invoked this authority.  Some of these countries have established
processes for reviewing foreign investment for national security
concerns.  U.S.  defense industry officials said that they had not
pursued defense-related direct investment in Japan, France, Germany,
or the United Kingdom because of economic factors, such as the size
of the defense markets in these nations, as well as informal
barriers, such as domestic company ownership structures.  Most
countries offer investment incentives, but U.S.  defense industry
officials did not cite them as a major inducement to invest.  U.S. 
defense industry officials said that they were pursuing access to
overseas defense markets through strategies other than foreign direct
investment.  For example, U.S.  defense firms either licensed
technology to Japanese companies or made direct sales to Japan.  In
the three European countries, U.S.  companies formed partnerships to
compete for projects. 

Overseas Real Estate:
Millions of Dollars Could Be Generated by Selling Unneeded
Real Estate

GAO/NSIAD-96-36, Apr.  23 (38 pages). 

The State Departments owns more than $10 billion in real estate at
200 locations overseas.  GAO reviewed State's efforts to identify and
sell excess or underused real estate and to use the proceeds for
other high-priority real property needs.  GAO reported in 1995
(GAO/NSIAD-95-73) on the potential budget savings from selling
expensive property in Tokyo and on the problems in State's management
of properties abroad.  This report (1) identifies real estate at
other locations that could possibly be sold to provide money to meet
other real estate needs, (2) describes problems that State has had in
deciding which properties to dispose of, and (3) explains how State
uses the proceeds from the properties it does sell. 


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

Drug Control:
U.S.  Heroin Program Encounters Many Obstacles in Southeast Asia

GAO/NSIAD-96-83, Mar.  1 (39 pages). 

Although heroin is not the primary illegal narcotic used in the
United States, production, trafficking, and consumption of this drug
are growing.  Worldwide production of opium has nearly doubled since
the late 1980s, and heroin overdoses have increased by 50 percent. 
Heroin programs in Southeast Asia--except for Burma--have had some
success, but U.S.  efforts have failed to reduce the flow of heroin
from the region because producers and traffickers shift
transportation routes and growing areas to countries with inadequate
law enforcement or political will.  In 1994, Burma accounted for
about 87 percent of the opium cultivated in Southeast Asia and about
94 percent of the opium production in the region.  If the flow of
heroin from Southeast Asia is to be stopped, opium production in
Burma must be addressed.  This report discusses why doing this will
be difficult.  In particular, GAO focuses on the effectiveness of the
United Nations Drug Control Program in Burma. 

Use of Force:
ATF Policy, Training and Review Process Are Comparable to DEA's and
FBI's

GAO/GGD-96-17, Mar.  29 (125 pages). 

In recent years, the Bureau of Alcohol, Tobacco and Firearms (ATF)
has come under public criticism and congressional scrutiny, in part
due to accusations that ATF agents used excessive force in carrying
out their responsibilities.  This report discusses (1) ATF's policies
on using deadly force; (2) the way in which ATF conveys its policies
to its agents; (3) the reasons for and the extent to which ATF uses
dynamic entries and the equipment it uses to make them; and (4) ATF's
compliance with its procedures for investigating shooting and alleged
excessive use-of-force incidents.  GAO compares ATF's policy,
training, and reveiw process on the use of force with those at the
Drug Enforcement Administration and the FBI.  GAO summarized this and
the following report in testimony before Congress; see: 

Alcohol, Tobacco and Firearms:  Issues Related to Use of Force,
Dealer Licensing, and Data Restrictions, by Norman J.  Rabkin,
Director of Administration of Justice Issues, before the Subcommittee
on Treasury, Postal Service, and General Government, House Committee
on Appropriations.  GAO/T-GGD-96-104, Apr.  25 (46 pages). 

Federal Firearms Licensees:
Various Factors Have Contributed to the Decline in the Number
of Dealers

GAO/GGD-96-78, Mar.  29 (57 pages). 

The Bureau of Alcohol, Tobacco and Firearms (ATF) issues various
federal firearms licenses, including those for manufacturers and
importers of firearms.  This report focuses on federal firearms
dealer licenses, which are granted to dealers and pawnbrokers who
sell firearms at wholesale or retail and gunsmiths who repair
firearms.  Federal firearms dealer licenses account for about 90
percent of all federal firearms licenses.  Since 1993, the number of
federally licensed firearms dealers has declined significantly.  Some
groups have raised concerns about the effects of the decline and the
factors contributing to it, including the role of ATF.  This report
discusses (1) the extent and the nature of recent declines in the
number of firearms dealers; (2) factors that have affected the recent
declines, including whether ATF had a policy to reduce the number of
dealers; and (3) the views of pertinent organizations on the
advantages and the disadvantages of reducing the number of dealers. 

Terrorism and Drug Trafficking:
Threats and Roles of Explosives and Narcotics
Detection Technology

GAO/NSIAD/RCED-96-76BR, Mar.  27 (22 pages). 

Even though conventional X-ray screening falls short in its ability
to reveal concealed narcotics and explosives, the Federal Aviation
Administration (FAA) and the U.S.  Customs Service have lagged in
introducing advanced technologies to detect drugs and explosives
smuggled aboard commercial aircraft.  The intelligence community
believes that the threat of terrorism within the United States has
grown and that commercial aircraft are likely to remain targets. 
According to the FBI, terrorist attacks could come from groups that
are hard to infiltrate and control.  In January 1995, a plot to
attack U.S.  flights in Asia was discovered.  Narcotics trafficking
is a continuing problem.  Although cocaine has been the main threat
since 1985, heroin is an growing concern.  Trafficking is most active
today along the southwest border of the United States.  To counter
these threats, FAA recently certified an advanced automated explosive
detection system but has not required its deployment.  The cost of
buying and installing the equipment at the 75 busiest domestic
airports could be as high as $2.2 billion, according to preliminary
FAA estimates.  Customs has one truck X-ray system at the southwest
border to detect narcotics and plans to spend $38 million to acquire
others.  Its plans for seaports and the use of mobile systems have
not been clearly defined.  Other countries, including the United
Kingdom and France, are already using advanced technologies to detect
explosives and narcotics. 



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

Defense Infrastructure:
Budget Estimates for 1996-2001 Offer Little Savings for Modernization

GAO/NSIAD-96-131, Apr.  4 (48 pages). 

The Pentagon is counting on large savings from streamlining
infrastructure to pay for new weapons systems, but GAO found that
substantial net savings from infrastructure improvements, such as
base closures and military purchasing reforms, are unlikely during
the next five years.  In defining "infrastructure," the Defense
Department (DOD) has excluded most intelligence; space; and command,
control, and communications programs.  These programs will cost about
$25 billion in fiscal year 1996.  If DOD's objective is to examine
all possible infrastructure for savings, it should include these
programs.  Moreover, some infrastructure costs are hidden in accounts
that are supposedly devoted to operations and maintenance and to
quality-of-life programs for military personnel.  Unless the Pentagon
is willing to consider these areas, military overhead will likely
remain relatively constant--at 60 percent of DOD's budget--through
2001.  This report identifies options to consolidate and reengineer
infrastructure that would yield savings of nearly $12 billion in
future years. 

Army Aviation Testing:
Need to Reassess Consolidation Plan

GAO/NSIAD-96-87, Mar.  15 (16 pages). 

The Army decided in 1995 to move Army aviation testing from Edwards
Air Force Base, California, to Fort Rucker, Alabama.  The Army also
decided to retain Yuma Proving Ground.  This decision represented a
shift from earlier Army studies, which had recommended consolidating
all Army aviation testing at Yuma.  GAO's analysis confirmed the
Army's position that a dual-site consolidation involving Fort Rucker
and Yuma provided the greatest short-terms savings to the Army and
offered significant long-term savings.  A single-site consolidation
at Yuma also offers significant long-term savings and, according to
Army officials, a better environment for future testing.  On the
other hand, the Defense Department (DOD) has raised questions about
whether either option would be the best choice from a DOD-wide
perspective.  However, the services and DOD have not agreed on how
best to downsize and consolidate testing, even though Congress has
encouraged them to do so.  Given this situation, DOD has an
opportunity to explore options with a longer-term DOD-wide
perspective.  This will require strong commitment and leadership on
the part of top DOD officials. 

Environmental Cleanup:
Progress in Resolving Long-Standing Issues at the Rocky
Mountain Arsenal

GAO/NSIAD-96-32, Mar.  29 (21 pages). 

The Rocky Mountain Arsenal, located on 17,000 acres northeast of
Denver, is one of the Defense Department's most contaminated
installations.  The Army manufactured chemical weapons, such as
napalm bombs and mustard gas, and conventional munitions at the
Arsenal until the 1960s, and it destroyed weapons there through the
early 1980s.  In addition, from 1952 to 1987 the Army leased part of
the Arsenal to the Shell Oil Company, which produced herbicides and
pesticides.  This report provides information on (1) the status of
cleanup efforts at the Arsenal, (2) completion plans for the cleanup,
and (3) the cost-sharing arrangement between the Army and Shell. 

Chemical and Biological Defense:
Emphasis Remains Insufficient to Resolve Continuing Problems

GAO/NSIAD-96-103, Mar.  29 (42 pages). 

U.S.  troops remain highly vulnerable to attack from biological and
chemical agents because the Defense Department (DOD) has yet to
address many shortcomings identified during the Persian Gulf War,
including inadequate training, a lack of decontamination kits and
other equipment, and a shortage of vaccine stocks.  Problems in
chemical and biological defense are likely to continue unless DOD
designates this area a higher priority.  This report discusses (1)
DOD's actions to address chemical and biological warfare problems
identified during the Persian Gulf War and (2) the current
preparedness of U.S.  ground forces to operate in a contaminated
environment. 

Military Readiness:
A Clear Policy Is Needed to Guide Management of Frequently Deployed
Units

GAO/NSIAD-96-105, Apr.  8 (26 pages). 

This report addresses concerns raised by Congress that the length of
time that military personnel are spending away from home on
deployments--commonly called personnel tempo--has increased and is
stressing portions of the military community and harming readiness. 
GAO discusses (1) U.S.  forces' frequency of deployments in recent
years; (2) the effect of increased personnel tempo on the readiness
of U.S.  forces; and (3) Defense Department efforts to mitigate the
impact of high personnel tempo, including measures to create systems
for measuring
personnel tempo. 

Military Bases:
Closure and Realignment Savings Are Significant, but Not
Easily Quantified

GAO/NSIAD-96-67, Apr.  8 (22 pages). 

Savings from military base closures and realignments should be
substantial.  The Pentagon's accounting systems, however, do not
provide Congress with an accurate picture of actual savings.  The
Defense Department (DOD) is counting on significant savings to pay
for a host of initiatives--from force modernization to child care
support.  DOD will have difficulty funding these programs should the
savings fall short of expectations.  This report examines cost and
savings estimates for past base closures and realignments.  GAO
discusses (1) the extent to which the Defense Department (DOD) is
achieving actual savings from the base closures and realignments and
(2) the adequacy of DOD's process for developing the cost and savings
estimates reported in its annual
budget submissions. 

Defense Contractor Restructuring:
First Application of Cost and Savings Regulations

GAO/NSIAD-96-80, Apr.  10 (nine pages). 

The National Defense Authorization Act for Fiscal Year 1995 restricts
Defense Department (DOD) payments to contractors for costs associated
with business combinations.  Specifically, the law prohibits payment
of restructuring costs, such as those associated with closing
facilities and eliminating jobs, until a senior DOD official
certifies that projected savings from the restructuring are based on
audited data and should reduce DOD's overall costs.  This report
discusses whether the certification process (1) was carried out in
accordance with the interim regulations and (2) reduced DOD's
contract prices.  GAO focuses on the United Defense, Limited
Partnership business combination of FMC Corporation's Defense Systems
Group and Harsco Corporation's BMY-Combat Systems Division--two
manufacturers of tracked combat vehicle for the Army.  This business
combination is particularly significant because restructuring at
United Defense could be a model for future DOD restructuring efforts. 

M1 Tanks
Status of Proposed Overhaul Program

GAO/NSIAD-96-100, Apr.  10 (13 pages). 

Concerns have been raised in Congress about the absence of a
procurement program to modernize the M1 tank fleet beyond the current
upgrade of existing tanks and to counter new tank threats.  This
report discusses whether the (1) current readiness level of the M1
tank is adequate to meet its war-fighting requirements, (2) operating
condition of the tanks at the National Training Center is adequate to
meet training requirements, and (3) change in repair parts funding
harmed unit maintenance.  GAO also reports on the status of the
Army's proposed M1 tank overhaul program. 

Combat Air Power:
Funding Priority for Suppression of Enemy Air Defenses May Be Too Low

GAO/NSIAD-96-128, Apr.  10 (16 pages). 

Although the Pentagon acknowledges that its strategy for airborne
suppression of enemy air defenses (SEAD) is critical to military air
operations, recent budget decisions may undermine SEAD capability. 
The Defense Department (DOD) is abandoning deployed SEAD capabilities
that have significant military value and has dropped plans to improve
SEAD's ability to meet new threats.  Despite the potential harm to
war-fighting capability, DOD has chosen to (1) retire the F-4G
without a comparable replacement, (2) retire the EF-111 and use the
less suitable EA-6B for Air Force missions, and (3) curtail funding
for other SEAD programs.  DOD now recognizes that the decline in SEAD
capabilities may increase the vulnerability of friendly aircraft,
frustrate the accomplishment of U.S.  military objectives, and
prolong future wars.  Nevertheless, DOD has chosen to support less
urgent and more prospective combat air power programs, such as the
F-22 aircraft.  GAO is concerned that DOD's decisions could undermine
U.S.  war-fighting capabilities and may have to be corrected later,
at much greater expense and effort. 

Military Exports:
Offset Demands Continue to Grow

GAO/NSIAD-96-65, Apr.  12 (40 pages). 

This report examines offset requirements associated with military
exports.  Offsets are the range of industrial and commercial
compensation packages offered to foreign governments and companies as
inducements to purchase military goods.  They include coproduction,
technology transfer, training, investment, marketing assistance, and
commodity trading.  Since the mid-1980s, U.S.  firms have entered
into offset agreements valued at more than $84 billion.  GAO
discusses the (1) ways in which the offset goals and strategies of
major buying countries have changed, (2) offset requirements of these
countries and the kinds of activities being undertaken to satisfy
their requirements, and (3) effects of offsets and the steps that the
U.S.  government has taken on this matter.  GAO focuses on 10 buying
countries from the Middle East, Asia, and Europe. 

Acquisition Management:
Fiscal Year 1995 Waivers of Acquisition Workforce Requirements

GAO/NSIAD-96-102, Apr.  15 (16 pages). 

The Defense Acquisition Workforce Improvement Act was intended to
professionalize the Defense Department's (DOD) acquisition workforce
by setting requirements for education, training, and experience that
were to take effect during a three-year period beginning in October
1991.  The act allows DOD officials to waive qualification
requirements because of unusual circumstances or an individual's
qualifications.  During fiscal year 1995, the military services and
DOD agencies granted 233 waivers for 231 persons not meeting the
training, education, tenure, or experience requirements, compared
with fiscal year 1994, when 63 waivers were granted.  Of the waivers
granted, 83 percent were for persons not meeting the tenure
requirements--they had not served the required three-year term in
critical acquisition positions because of retirement, promotion,
reassignment, or downsizing.  Fiscal year 1995 was the first time
that tenure waivers outnumbered all other types of waivers. 
One-third of the 39 waivers that were not related to tenure
requirements were for membership in the acquisition corps.  By
comparison, 19 persons received waivers for corps membership in
fiscal year 1994.  Waivers for acquisition experience decreased by 58
percent.  Only one waiver was granted for the required Program
Management Course and no fulfillment waivers were granted. 

DOD Infrastructure:
DOD Is Opening Unneeded Finance and Accounting Offices

GAO/NSIAD-96-113, Apr.  16 (six pages). 

In a September 1995 report (GAO/NSIAD-95-127), GAO evaluated the
Defense Department's (DOD) justification and its cost analysis for
consolidating more than 300 defense accounting centers into five
large existing finance centers and 20 new sites called operating
locations.  GAO challenged the need for the 20 operating locations
because (1) DOD's analysis showed that finance and accounting
operations could be consolidated into as few as six; (2) some planned
sites, particularly those located on closed or realigned military
bases, would cost $173 million to renovate; and (3) DOD, in arriving
at its decision, had not considered additional operating efficiencies
expected from business process reengineering initiatives.  DOD
generally agreed with GAO's findings.  This report raises an issue
that, in GAO's view, warrants immediate attention:  DOD is opening
new finance and accounting centers even though its recent analysis
shows that they are not needed. 

Acquisition Reform:
Efforts to Reduce the Cost to Manage and Oversee DOD Contracts

GAO/NSIAD-96-106, Apr.  18 (13 pages). 

The Defense Department (DOD) contracted with the management
consulting firm of Coopers and Lybrand to study the impact of the
military's acquisition regulations and oversight requirements on its
contracts.  Coopers and Lybrand's 1994 report cited more than 120
regulatory and statutory "cost drivers" that increased the prices
that DOD paid for goods and services by 18 percent.  In response, DOD
established a working group to address the issue of cost drivers. 
The working group is tracking many reforms initiated by DOD to reduce
the cost of managing and overseeing DOD contracts.  Although DOD
expects substantial savings from these reforms, the actual savings
may be significantly less than the 18-percent cost premium noted by
Coopers and Lybrand.  In December 1995, contractors participating in
DOD's Reducing Oversight Costs Reinvention Laboratory noted that
current measures would yield savings of only about one percent.  DOD
said that the one-percent cost savings was based on "work in
progress" and that it would be inappropriate to use these results to
draw conclusions about DOD's ability to reduce the cost premium.  DOD
fully expects the savings from laboratory activities to exceed the
level reported in December 1995. 

Civilian Downsizing:
Unit Readiness Not Adversely Affected, but Future Reductions
a Concern

GAO/NSIAD-96-143BR, Apr.  22 (40 pages). 

The Defense Department (DOD) began its downsizing effort in fiscal
year 1988.  Since then, DOD has reduced its civilian workforce by
about 25 percent, or 284,000 jobs.  By the time it finishes its
downsizing in fiscal year 2001, DOD will have cut nearly 730,000
jobs, or 35 percent below its strength level in 1987.  Civilian
downsizing has not harmed military readiness at the installations GAO
visited.  However, Army installation officials raised concerns about
the effects of civilian downsizing on civilian services, such as
public works and repair and maintenance.  Civilian downsizing has
affected the amount of time its takes to repair noncritical
equipment, and both Army and Air Force officials said that civilian
downsizing had reduced recreational and family services.  Officials
at all installations were concerned about the effect of downsizing on
civilian workforce morale because of limited career and promotion
opportunities, job insecurity, and longer working hours.  GAO found
that the military services lacked a long-term road map to guide
civilian reduction decisions to meet future mission requirements. 
Although the services are developing comprehensive mission strategies
to better determine future civilian workforce requirements, most of
the civilian reductions will have been completed by the time these
strategies are in place. 

Peace Operations:
Reservists Have Volunteered When Needed

GAO/NSIAD-96-75, Apr.  26 (26 pages). 

U.S.  participation in peace operations, such as those in Haiti and
the former Yugoslavia, has increased dramatically since the end of
the Cold War in 1989.  At the same time, fewer active duty forces are
available today as a result of defense downsizing, and the Defense
Department (DOD) depends on the reserves to play a greater role in
peace operations.  Although authority to order reservists
involuntarily to active duty has been available for recent operations
in Haiti and Bosnia, DOD will likely have to rely on volunteers to
meet some of its future needs.  This report discusses (1) whether
qualified volunteers have been accessible for recent peace
operations, (2) differences among the services in how much they rely
on volunteers, (3) factors that affect the availability of
volunteers, and (4) any steps being taken by DOD to ensure that
volunteers are accessible. 


      TESTIMONY
------------------------------------------------------ Appendix 0:16.1

Defense Depot Maintenance:  Privatization and the Debate Over the
Public-Private Mix, by David Warren, Director of Defense Management
Issues, before the Subcommittee on Military Readiness, House
Committee on National Security.  GAO/T-NSIAD-96-146, Apr.  16 (19
pages); and

Defense Depot Maintenance:  Privatization and the Debate Over the
Public-Private Mix, by David Warren, Director of Defense Management
Issues, before the Subcommittee on Readiness, Senate Committee on
Armed Services.  GAO/T-NSIAD-96-148, Apr.  17 (19 pages). 

The Pentagon's policy of shifting depot maintenance workloads to the
private sector is unlikely to generate expected savings and could
worsen excess capacity problems at underused repair facilities. 
Meanwhile, the Defense Department (DOD) could save $182 million
annually by closing rather than privatizing-in-place the Sacramento
and San Antonio Air Logistics Centers.  This testimony is a
preliminary analysis of DOD's March 1996 report, mandated by
Congress, on the military's comprehensive depot maintenance policy. 
GAO also addresses the allocation of the depot maintenance workload
between the public and the private sectors, including ongoing
privatization initiatives, such as privatization-in-place.  GAO
discusses (1) DOD's depot maintenance management model in the
post-Cold War era, (2) the extent to which DOD's proposed depot
maintenance policy is consistent with congressional direction and
guidance, (3) the savings that DOD is anticipating from privatization
of depot maintenance activities, and (4) the cost-effectiveness of
privatization-in-place as an alternative to
closing depots. 


   TAX POLICY AND ADMINISTRATION
-------------------------------------------------------- Appendix 0:17

Tax Administration:
Alternative Strategies to Obtain Compliance Data

GAO/GGD-96-89, Apr.  26 (17 pages). 

In October 1995, the Internal Revenue Service (IRS) decided to
postpone indefinitely the 1994 Taxpayer Compliance Measurement
Program because of budget concerns.  In addition, Congress, taxpayer
groups, paid preparers, and others exerted considerable pressure to
cancel the program because of its cost to and burden on taxpayers. 
For more than 30 years, this program has been IRS' primary means for
gathering comprehensive and reliable taxpayer compliance data.  IRS
has used the data to identify areas in which tax law needs to be
changed to improve voluntary compliance and to estimate the tax gap
and its components.  This report determines the effects on IRS'
compliance programs of postponing the 1994 Taxpayer Compliance
Measurement Program and identifies potential short- and long-term
alternatives to the planned Taxpayer Compliance Measurement Program
for collecting these data. 


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

Tax System:  Issues in Tax Burden Compliance, by Natwar M.  Gandhi,
Associate Director for Tax Policy and Administration Issues, before
the Subcommittee on National Economic Growth, Natural Resources and
Regulatory Affairs, House Committee on Government Reform and
Oversight.  GAO/T-GGD-96-100, Apr.  3 (19 pages). 

Businesses and individuals spend time and money--and sometimes
experience frustration--trying to comply with federal, state, and
local tax requirements.  GAO refers to this experience as the
"taxpayer compliance burden." GAO collected information on the
federal tax compliance burden from businesses, tax accountants, tax
lawyers, representatives of tax associations, and Internal Revenue
Service (IRS) staff.  Several themes emerged from GAO's analysis. 
First, the complexity of the Internal Revenue Code, compounded by the
frequency of changes to it, is the driving force behind the
compliance burden on companies.  Second, a reliable estimate of the
overall costs of business tax compliance would be costly and in
itself burdensome on companies to obtain.  GAO is studying two
return-free filing approaches used in other countries to determine
whether they reduce the tax compliance burden on individuals. 
Despite their promise, these approaches may impose burdens on
employers, tax preparers, and state tax systems.  Moreover, IRS'
ability to implement such systems is unclear.  Reducing the tax
compliance burden on businesses and individuals will be a challenge
because of various policy trade-offs, such as revenue impact and
taxpayer equity. 


Tax Administration:  IRS Tax Debt Collection Practices, by Lynda D. 
Willis, Director of Tax Policy and Administration Issues, before the
Subcommittee on Oversight, House Committee on Ways and Means. 
GAO/T-GGD-96-112, Apr.  25 (15 pages). 

The Internal Revenue Service (IRS) confronts major hurdles in
collecting tens of billions of dollars in delinquent taxes.  As
Congress tries to balance the federal budget, these unpaid taxes have
become increasingly important as have IRS' collection efforts.  GAO
testified that IRS could do more to improve its collection practices. 
Valuable lessons may be gained from IRS' pilot program testing the
use of private debt collectors.  IRS' improvement efforts are
jeopardized by a lack of reliable information on its accounts
receivable and the effectiveness of its collection tools, an aged
inventory of receivables, outdated collection processes, and
antiquated technology.  IRS needs a long-term strategy to guide its
efforts to improve delinquent tax collection.  The key to any
improvement lies in having accurate and reliable information.  In
addition, the private sector may be able to assist IRS by performing
some collection activities. 


   TRANSPORTATION
-------------------------------------------------------- Appendix 0:18

Airline Deregulation:
Changes in Airfares, Service, and Safety at Small, Medium-Sized, and
Large Communities

GAO/RCED-96-79, Apr.  19 (84 pages). 

The Airline Deregulation Act of 1978 phased out the federal
government's control over airfares and services, relying instead on
competitive market forces to determine the price, the quantity, and
the quality of domestic air service.  In an earlier report
(GAO/RCED-91-13), GAO indicated that between 1979--the earliest year
for which reliable data on fares are available--and 1988, the average
fare per passenger mile, adjusted for inflation, fell by nine percent
at small-community airports, 10 percent at medium-sized-community
airports, and five percent at large-community airports.  The largest
decreases were at airports in the Southwest, regardless of the
community's size.  This report (1) updates GAO's analysis of airfare
trends and (2) compares changes in the quantity, the quality, and the
safety of air service since deregulation at airports serving small,
medium-sized, and large communities.  GAO summarized this report in
testimony before Congress; see: 


Domestic Aviation:  Changes in Airfares, Service, and Safety Since
Airline Deregulation, by John H.  Anderson, Jr., Director of
Transportation and Telecommunications Issues, before the Senate
Committee on Commerce, Science, and Transportation. 
GAO/T-RCED-96-126, Apr.  25 (17 pages). 

Airport and Airway Trust Fund:
Effects of the Trust Fund Taxes' Lapsing on FAA's Budget

GAO/RCED-96-130, Apr.  15 (nine pages). 

The Airport and Airway Trust Fund was financed from taxes on domestic
and international airline travel, domestic cargo sent by air, and
noncommercial aviation fuels.  Although these taxes expired at the
end of 1995, there is enough money in the Trust Fund to pay for its
portion of the Federal Aviation Administration's (FAA) fiscal year
1996 budget.  FAA estimates that with no tax receipts, the Trust Fund
money available at the end of fiscal year 1996 would total $600
million.  FAA also estimates that the taxes must be reinstated no
later than December 1996 to enable the Trust Fund to finance $6.1
billion of FAA's $8.1 billion fiscal year 1997 budget as requested,
with the General Fund paying for the rest.  For each full month
beyond December 1996 that passed with no tax receipts, an additional
$550 million would be needed from the General Fund to finance FAA's
fiscal year 1997 budget. 

Marine Safety:
Coast Guard Should Address Alternatives as It Proceeds With
VTS 2000

GAO/RCED-96-83, Apr.  22 (39 pages). 

Currently, the U.S.  Coast Guard and private entities operate
radar-based vessel traffic service (VTS) in several U.S.  ports.  A
VTS system employs remote surveillance sensors, such as radar or
closed-circuit television, that relay information on maritime traffic
conditions to VTS personnel, who pass it on to mariners and the
maritime industry by radio.  The purpose of these systems is to
improve the safe and efficient movement of ships around ports and to
protect the environment.  The Coast Guard is considering installing
VTS systems in as many as 17 ports.  The federal government will
spend as much as $310 million to build the proposed expansion, known
as VTS 2000, and about $42 million annually to operate it.  The
report answers the following four questions:  What is the status of
the Coast Guard's development of VTS 2000?  At ports being considered
for VTS 2000, to what extent do major stakeholders support acquiring
and funding it?  If major stakeholders do not support VTS 2000, to
what extent are they interested in acquiring and funding other VTS
systems?  What other issues could affect the establishment of VTS
systems that are privately funded?  GAO summarized this report in
testimony before Congress; see: 

Marine Safety:  Current Status of the VTS 2000 Program and Key
Stakeholders' Views on It, by Gerald L.  Dillingham, Associate
Director for Transportation and Telecommunications Issues, before the
Subcommittee on Coast Guard and Maritime Transportation, House
Committee on Transportation and Infrastructure.  GAO/T-RCED-96-129,
Apr.  25 (10 pages). 


      TESTIMONY
------------------------------------------------------ Appendix 0:18.1

Aviation Safety:  Targeting and Training of FAA's Safety Inspector
Workforce, by Gerald L.  Dillingham, Associate Director for
Transportation and Telecommunications Issues, before the Subcommittee
on Governmental Management, Senate Committee on Governmental Affairs. 
GAO/T-RCED-96-26, Apr.  30 (17 pages). 

Although accident rates for air travel in the United States are among
the lowest in the world and aviation remains one of the safest means
of transportation, recent fatal accidents have raised concerns about
the safety of air travel.  GAO testified that the Federal Aviation
Administration (FAA) needs to target the resources of its safety
inspection program to the areas of greatest risk.  Because of the
magnitude of inspectors' workloads, targeting is essential because
FAA may never have enough resources to inspect all pilots, aircraft,
and facilities.  Although FAA has been working since 1991 to develop
a $31 million system to target resources for aviation inspections,
data quality problems, such as information on the results of safety
inspections, jeopardize the system's potential benefits.  During the
past decade, GAO and others have reported on problems with the
technical training of inspectors, including those performing
inspections for which they lacked proper credentials.  Inspectors
have been unable to take courses that they believe are necessary for
them to do their jobs.  Cuts in FAA's budget have reduced the money
available for technical training by 42 percent during fiscal years
1993-96.  FAA projects that it will have a shortfall of $20 million
for technical training that FAA had earlier deemed essential. 


   VETERANS AFFAIRS
-------------------------------------------------------- Appendix 0:19


      TESTIMONY
------------------------------------------------------ Appendix 0:19.1

VA Health Care:  Efforts to Improve Veterans' Access to Primary Care
Services, by David P.  Baine, Director of Health Care Delivery and
Quality Issues, before the Subcommittee on Hospitals and Health Care,
House Committee on Veterans' Affairs.  GAO/T-HEHS-96-134, Apr.  24
(16 pages). 

The Department of Veterans Affairs (VA) runs one of the nation's
largest health care systems, including 173 hospitals and 220 clinics. 
Last year, VA spent about $16 million serving 2.6 million veterans. 
This testimony focuses on VA efforts to increase veterans' access to
health care.  GAO discusses legal, financial, and equity-of-access
issues facing VA managers as they try to establish new "access
points"--a VA clinic or a VA funded or reimbursed private clinic,
group practice, or individual practitioner that is geographically
separate from the parent facility.  Access points are intended to
provide primary care to all veterans and refer those needing
specialized services or inpatient stays to VA hospitals. 


   SPECIAL PUBLICATIONS
-------------------------------------------------------- Appendix 0:20

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

GAO/HEHS-96-123W, Apr.  1996 (19 pages). 

This monthly bibliography lists GAO documents on health, education,
employment, social security, disability, welfare, and veterans
issues.  One section summarizes reports and testimony issued during
the past month.  Another section lists the titles of all documents
published during the past four months, organized chronologically by
subject.  Order forms are included, as is a list of subject area
experts who can answer questions about specific reports. 

*** End of document. ***