Reports and Testimony: May 1996 (Other Written Prod., 05/01/96,
GAO/OPA-96-8).

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

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

 REPORTNUM:  OPA-96-8
     TITLE:  Reports and Testimony: May 1996
      DATE:  05/01/96
   SUBJECT:  Financial institutions
             Computer security
             Income maintenance programs
             Privatization
             Tax administration
             Environmental monitoring
             Defense operations
             Government sponsored enterprises
             Federal downsizing
             Law enforcement
IDENTIFIER:  Bibliographies
             Supplemental Security Income Program
             FEMA Public Assistance Program
             Baltimore (MD)
             Dade County (FL)
             Hartford (CT)
             Minneapolis (MN)
             AmeriCorps USA Program
             Pick-Sloan Missouri Basin Program
             Superfund Program
             EPA Leaking Underground Storage Tank Program
             Canada
             France
             Germany
             United Kingdom
             Japan
             BIA Tribal Trust Fund
             New Orleans (LA)
             Social Security Disability Insurance Program
             Customs Service Automated Commercial Environment Import 
             System
             NWS Advanced Weather Interactive Processing System
             Caribbean
             C-17 Aircraft
             F-15 Aircraft
             Eagle Aircraft
             
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Cover
================================================================ COVER


Office of Public Affairs

May 1996

REPORTS AND TESTIMONY:
MAY 1996

GAO/OPA-96-8


Highlights

Fannie Mae and Freddie Mac

Although privatizing the Federal National Mortgage Association
(Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie
Mac) could reduce the risk to taxpayers should either of these
government-sponsored enterprises fail to meet obligations that now
total $1.4 trillion, privatization could also increase the cost of
operations and cause mortgage rates to rise.  Page 9. 

Information Security

Last year, the Defense Department may have experienced as many as
250,000 attacks from hackers trying to break into the military's
computer systems.  Attacks are successful 65 percent of the time, and
the number of attacks is doubling each year.  Page 18. 

Supplemental Security Income

Noncitizens, including legal immigrants and refugees, accounted for
nearly 25 percent of the increase in the supplemental security income
(SSI) caseload from 1986 through 1993.  In December 1995, about
800,000 noncitizens were receiving benefits under SSI, which provides
means-tested income support payments to eligible aged, blind, or
disabled persons.  Page 17. 

GAO/OPA-96-8



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

  BIA - x
  DOD - x
  DOE - x
  EPA - x
  EU - x
  FDA - x
  FEMA - x
  HUD - x
  IRS - x
  NATO - x
  NWS - x
  OJJDP - x
  R&D - x
  RIF - x
  SSA - x
  SSI - x
  STARS - x
  TRICARE - x
  USDA - x
  USTF - x
  VA - x

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


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

Food Safety:
Information on Foodborne Illnesses

GAO/RCED-96-96, May 8 (31 pages). 

Because most cases of foodborne illness go unreported, existing data
may understate the extent of the problem.  However, the best
estimates indicate that millions of Americans become sick and
thousands die each year because of contaminated food.  Moreover,
public health officials believe that the risk of foodborne illnesses
has been on the rise during the past 20 years.  The precise cost of
foodborne illnesses is unknown, but recent estimates place the cost
as high as $22 billion annually.  According to Department of
Agriculture estimates, the cost of medical treatment and lost
productivity related to foodborne illnesses from seven of the most
harmful bacteria approached $10 billion in 1993.  Public health and
safety officials believe that current data on foodborne illnesses do
not provide a complete picture of the risk level and do not
sufficiently describe the sources of contamination and the
populations at greatest risk.  In 1995, federal and state agencies
began to collect more uniform and comprehensive data across the
country.  Because of budget constraints, federal officials are
concerned that they may not be able to continue this effort long
enough to collect meaningful trend data.  GAO summarized this report
in testimony before Congress; see: 

Food Safety:  Reducing the Threat of Foodborne Illness, by Robert A. 
Robinson, Director of Food and Agriculture Issues, before the
Subcommittee on Human Resources and Intergovernmental Relations,
House Committee on Government Reform and Oversight. 
GAO/T-RCED-96-185, May 23 (nine pages). 

Commodity Programs:
Freedom-to-Farm Approach Will Reduce USDA's Personnel Costs

GAO/RCED-96-116, May 22 (12 pages). 

Under the provisions of the new farm bill, farmers receiving federal
support will operate with fewer controls over which crops to plant
and how much acreage to put into production.  This new approach is
generically known as "freedom to farm." This report discusses the
personnel reductions that could have been achieved by implementing
the freedom-to-farm approach set forth in H.R.  2195 and the proposed
Balanced Budget Act.  As the farm bill was ultimately enacted,
personnel reductions at the Agriculture Department will still be
possible but probably to a lesser degree than would have occurred
under the original provisions.  The new act adopted various
provisions that changed some of the assumptions USDA used to estimate
workloads and delayed crop insurance changes that will reduce USDA
staffing needs.  On the other hand, if USDA reduces its staffing
under the new farm bill, it may be able to achieve further savings by
closing or consolidating county offices. 


      TESTIMONY
------------------------------------------------------- Appendix 0:1.1

Food Stamp Program:  Focus Group Research and Procurement Problems,
by Keith O.  Fultz, Assistant Comptroller General for Resources,
Community, and Economic Development, before the House Committee on
Agriculture.  GAO/T-RCED-96-157, May 8 (13 pages). 

Under the term of its contract, Global Exchange, Inc., is to help the
Agriculture Department (USDA) conduct a national nutrition education
and information distribution campaign.  Since the award of this
contract in 1994, Global Exchange has used subcontracts to perform
several tasks for USDA.  This testimony focuses on the subcontract
with Lake Research, Inc., which was hired to conduct focus groups and
obtain the views of the public and food stamp recipients on USDA's
food stamp reform efforts.  GAO found that USDA did not comply with
the Federal Acquisition Regulation and the Paperwork Reduction Act
and used a flawed methodology.  On the basis of these problems, GAO
concludes that USDA exercised questionable judgment in carrying out
virtually every aspect of this work.  GAO raises concerns about USDA
making changes to the food stamp program on the basis of the results
of this research. 


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

Impoundments:
Comments on Proposed Rescissions of Fiscal Year 1996
Budget Authority

GAO/OGC-96-7, Apr.  29 (three pages). 

On March 13, 1996, the President submitted to Congress his fifth
special impoundment message for fiscal year 1996.  The message
reports five rescissions of budget authority affecting military
construction.  GAO reviewed the proposed rescissions and found them
to be in accordance with the Impoundment Control Act. 


   ECONOMIC DEVELOPMENT
--------------------------------------------------------- Appendix 0:3

Disaster Assistance:
Improvements Needed in Determining Eligibility for
Public Assistance

GAO/RCED-96-113, May 23 (68 pages). 

The Federal Emergency Management Agency's (FEMA) public assistance
program funds the repair of public and private nonprofit facilities,
such as roads, government buildings, utilities, and hospitals, that
are damaged during natural disasters.  Under the program, FEMA has
spent more than $6.5 billion for disasters that occurred during
fiscal years 1989-94.  This report (1) reviews FEMA's criteria for
determining eligibility for public assistance, (2) examines how FEMA
ensures that public assistance money is spent only for eligible
items, and (3) discusses changes in eligibility that could lower the
costs of public assistance in the future. 


   EDUCATION
--------------------------------------------------------- Appendix 0:4

Private Management of Public Schools:
Early Experiences in Four School Districts

GAO/HEHS-96-3, Apr.  19 (75 pages). 

Troubled by childrens' low test scores, as well as their low
attendance, promotion, and graduation rates, educators and parents
have searched for ways to improve public education.  School districts
nationwide are experimenting with a range of reform options, one of
which is private management of public schools.  GAO reviewed the
early experiences of school districts that contracted with private,
for-profit companies to manage the public schools.  GAO found that
private firms hired to manage public schools in four school
districts--Baltimore, Maryland; Dade County, Florida; Hartford,
Connecticut; and Minneapolis, Minnesota--made changes that resulted
in better attendance, better individual instruction, more computers,
and facilities that were better maintained.  However, student scores
on standardized tests did not improve substantially. 

Employment Training:
Successful Projects Share Common Strategy

GAO/HEHS-96-108, May 7 (48 pages). 

GAO reviewed six successful employment training projects with a
variety of characteristics, including diverse geographic locations,
client populations, program sizes, and funding sources.  Despite
these differences, the six training projects shared a common strategy
to prepare clients for self sufficiency.  This strategy--resulting in
placement rates of more than 90 percent for three of the projects GAO
visited--incorporated four key features:  ensuring commitment to
training and landing a job, removing barriers that might hinder a
client's ability to finish training and get and keep a job, improving
employability skills, and linking occupational skills training with
the local labor market.  Although the projects implemented them
differently, together these features ensure that clients are ready,
willing, and able to participate in and benefit from training and
employment assistance and become self-sufficient. 

Public Education:
Issues Involving Single-Gender Schools and Programs

GAO/HEHS-96-122, May 28 (26 pages). 

A host of legal and educational issues surround proposals for
single-sex classes in the public schools.  These issues involve the
legality of single-gender programs, the effectiveness of such
programs in promoting desired educational outcomes, and the
desirability of using these programs to achieve such goals as
fostering improved academic and social performance among boys and
teaching mathematics to girls in a nonthreatening setting.  Some
public elementary and secondary schools have recently offered
single-sex classes or programs in a coeducational setting.  However,
some of these programs have been terminated or modified to not
exclude anyone on the basis of gender because federal or state
officials believed that the programs violated federal or state laws. 
School districts that have such programs could face lawsuits. 


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

Davis-Bacon Act:
Process Changes Could Raise Confidence That Wage Rates Are Based on
Accurate Data

GAO/HEHS-96-130, May 31 (44 pages). 

The Davis-Bacon Act requires employers on federal construction
projects to pay workers wages at or above the level determined to be
prevailing in a geographic area.  Critics say that the act
artificially inflates federal construction costs--a charge with
serious financial implications given that the federal government will
contract about $42 billion in construction projects during fiscal
year 1996, according to Congressional Budget Office estimates. 
Inaccurate wage determination could lead either to excessive
government construction costs or to large numbers of workers
receiving wages and fringe benefits that are lower than those
required by law.  This report (1) identifies the steps used by the
Labor Department to collect data and determine and report the
prevailing wages to be paid on federally funded construction
projects, (2) discusses weaknesses in the determination process that
could have resulted in the use of inaccurate or fraudulent data, and
(3) assesses the extent to which Labor is addressing weaknesses in
its determination process. 


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

National Service Programs:  AmeriCorps*USA--First-Year Experience and
Recent Program Initiatives, by Cornelia M.  Blanchette, Associate
Director for Education and Employment Issues, before the Senate
Committee on Labor and Human Resources.  GAO/T-HEHS-96-146, May 21
(14 pages). 

This testimony presents information on the Americorps*USA program,
among the largest national and community service programs since the
Civilian Conservation Corps of the 1930s.  GAO discusses the total
amount of resources available from all sources to support
AmeriCorps*USA during its first year of operation (1995-95),
expressed on a per-participant and per-service-hour basis.  GAO also
discusses the resources available to programs run by nonfederal and
federal entities and cites examples of program benefits.  In
addition, GAO highlights some of the recent legislative, budgetary,
and programmatic changes in AmeriCorps*USA since GAO testified before
Congress in October 1995. 


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


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

DOE Cleanup:  Status and Future Costs of Uranium Mill Tailings
Program, by Bernice Steinhardt, Associate Director for Energy,
Resources, and Science Issues, before the Subcommittee on Energy and
Environment, House Committee on Science.  GAO/T-RCED-96-167, May 1
(12 pages). 

The Energy Department (DOE) is seeking to clean up contamination
resulting from decades of processing uranium ore as part of the U.S. 
nuclear weapons and energy program.  Under the Uranium Mill Tailings
Radiation Control Act of 1978, DOE was required to clean up inactive
sites, while private owners and operators were required to clean up
sites that were active when the law was passed.  This testimony
discusses (1) the status and cost of DOE's cleanup program and (2)
factors that could affect the federal government's costs in the
future. 

Federal Power:  Recovery of Federal Investment in Hydropower
Facilities in the Pick-Sloan Program, by Victor S.  Rezendes,
Director of Energy, Resources, and Science Issues, before the
Subcommittee on Water and Power Resources, House Committee on
Resources.  GAO/T-RCED-96-142, May 2 (27 pages). 

This testimony discusses the requirements under the Pick-Sloan
Program for the Western Power Administration to repay the federal
investment in the program's hydropower facilities.  GAO reviewed the
effect of policies under which repayment of part of the federal
investment is deferred.  GAO presents information on (1) the amount
of this investment that may not be recovered under the current
repayment criteria and (2) potential actions for recovering the
investment. 

Managing DOE:  The Department's Efforts to Control Litigation Costs,
by Victor S.  Rezendes, Director of Energy, Resources, and Science
Issues, before the Subcommittee on Oversight and Investigations,
Senate Committee on Energy and Natural Resources.  GAO/T-RCED-96-170,
May 14
(11 pages). 

Many class action lawsuits have been filed against the contractors
who have operated the Energy Department's (DOE) facilities, and the
costs associated with their defense have been borne by DOE.  DOE has
taken steps to better control its outside litigation expenses, which
exceeded $25 million in fiscal year 1995.  DOE has instituted cost
control guidance on litigation expenses that can be reimbursed by the
agency, a measure that has saved DOE hundreds of thousands of
dollars.  In some cases, however, the guidance has not been
consistently applied or followed.  Moreover, other issues are driving
DOE's overall litigation costs, including the number of law firms
representing DOE contractors, the way in which discovery requests are
handled, and database development.  DOE has begun to take action,
such as consolidating law firms and contractors in the In re Hanford
case, to address these issues. 


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

Superfund:
Outlook for and Experience With Natural Resource
Damage Settlements

GAO/RCED-96-71, Apr.  16 (42 pages). 

Under the law, parties responsible for the release of hazardous
substances are liable for any resulting injury to natural resources,
such as wildlife and groundwater.  Federal agencies, state
governments, and tribal authorities have been designated natural
resource trustees and are authorized to make claims against
responsible parties for natural resource damages.  As of April 1995,
relatively few claims had been settled and their amount was small
compared with the cost of cleaning up sites, but some recent claims
have been quite sizable.  These large claims have heightened concern
over the potential for future claims.  This report (1) provides
information on the potential for future federal natural resource
damage claims, (2) determines total funds that federal agencies have
collected from natural resource damage settlements and how these
funds have been used, and (3) describes the procedures that federal
agencies use to set the amount of damage claims. 


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

Environmental Protection:  Selected Issues Related to EPA's Fiscal
Year 1997 Appropriation, 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-96-164, Apr.  17 (11 pages). 

This testimony provides information on (1) the extent of the leaking
underground storage tank problem, (2) federal and state funding for
the Environmental Protection Agency's (EPA) leaking underground
storage tank program, and (3) EPA's plans for future involvement in
the program.  GAO also discusses the potential for EPA to recover
excess funds now obligated for inactive Superfund cleanup contracts. 

Superfund:  Implications of Key Reauthorization Issues, by Peter F. 
Guerrero, Director of Environmental Protection Issues, before the
Senate Committee on Environment and Public Works.  GAO/T-RCED-96-145,
Apr.  24
(19 pages). 

This testimony comments on the Accelerated Cleanup and Environmental
Restoration Act of 1996, which reauthorizes and significantly changes
the Superfund program.  Few of the nation's worst hazardous waste
sites have been cleaned up under the current Superfund law. 
Moreover, the estimated costs of the cleanups have risen at a time
when the government's resources are limited.  GAO discusses six major
changes that the proposed legislation would make to the Superfund
program:  (1) increasing the role of risk in decisions on whether and
how to clean up waste sites, (2) expanding the range of alternatives
available to address wastes at sites, (3) transferring some of the
federal government's authority for cleanups to the states, (4)
reducing legal costs, (5) limiting claims for damages to natural
resources caused by contamination, and (6) fostering the wider use of
cost-effective technologies for cleaning up
federal facilities. 

Superfund:  More Emphasis Needed on Risk Reduction, by Stanley J. 
Czerwinski, Associate Director for Environmental Protection Issues,
before the Subcommittee on National Economic Growth, Natural
Resources and Regulatory Affairs, House Committee on Government
Reform and Oversight.  GAO/T-RCED-96-168, May 8 (12 pages). 

GAO testified that the Superfund program could benefit from greater
emphasis on reducing risks to human health and the environment more
quickly and cost effectively.  In this time of fiscal constraint, GAO
believes that the Environmental Protection Agency (EPA) could conduct
cleanups more cost effectively by prioritizing its funding for
cleanups on the basis of risk reduction.  Realistic land-use
assumptions are also important for using Superfund resources to
maximize the protection of public health and the environment.  GAO
also believes that greater use of EPA's removal authority could lead
to quicker, more cost-effective, and more focused actions at
hazardous waste sites while better protecting human health and the
environment.  GAO applauds EPA's recent efforts to set priorities for
the use of Superfund resources by stressing the health risks at sites
and to develop realistic forecasts of future uses of sites. 
Sustained management attention and follow-through are essential if
lasting changes are to be achieved. 


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

Housing Enterprises:
Potential Impacts of Severing Government Sponsorship

GAO/GGD-96-120, May 13 (106 pages). 

The Federal National Mortgage Association (Fannie Mae) and the
Federal Home Loan Mortgage Corporation (Freddie Mac) are
government-sponsored enterprises with $1.4 trillion in combined
obligations as of the end of 1995.  In response to growing concern
over the potential risk that these obligations pose to taxpayers and
questions about their continued need for government-sponsored status,
GAO studied the effects of repealing the charters of Fannie Mae and
Freddie Mac, eliminating any federal sponsorship, and allowing them
to operate as fully private corporations.  This report assesses the
effects of privatization on (1) the enterprises; (2) residential
mortgage markets in general; and (3) housing finance, homeownership,
and housing affordability for low- and moderate-income families and
residents of underserved areas.  GAO also identifies and discusses
other policy options that Congress may want to consider to limit the
enterprises' potential risk to taxpayers or increase their social
benefits. 


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

Bank Oversight:  Fundamental Principles for Modernizing the U.S. 
Structure, by James L.  Bothwell, Director of Financial Institutions
and Markets Issues, before the House Committee on Banking and
Financial Services.  GAO/T-GGD-96-117, May 2 (19 pages). 

This testimony discusses four basic principles that GAO believes
Congress should consider in modernizing the structure of U.S.  bank
regulatory structure.  GAO believes that structural reform should
provide for (1) consolidated and comprehensive oversight of companies
owning federally insured banks and thrifts, with coordinated
functional regulation and supervision of individual components; (2)
independence from undue political pressures, balanced by appropriate
accountability and adequate congressional oversight; (3) consistent
rules, consistently applied for similar activities; and (4) enhanced
efficiency and reduced regulatory burden.  GAO's work on bank
oversight in Canada, France, Germany, the United Kingdom, and Japan
showed that different ways exist to simplify bank oversight in
accordance with the above four principles.  GAO urges Congress to
reduce the number of federal agencies with primary responsibility for
bank oversight, include both the Federal Reserve and the Treasury
Department in bank oversight, provide the Federal Deposit Insurance
Corporation with the authority to protect deposit insurance funds,
and incorporate mechanisms to ensure consistent oversight and reduce
regulatory burden. 


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

Financial Management:
BIA's Tribal Trust Fund Account Reconciliation Results

GAO/AIMD-96-63, May 3 (28 pages). 

The Bureau of Indian Affairs (BIA) has spent more than five years and
$21 million in a massive effort to locate supporting documentation
and reconcile trust fund accounts, but tribal accounts could not be
fully reconciled or audited due to missing records and the lack of an
audit trail in BIA's systems.  Because BIA does not know the universe
of transactions or leases, it does not know the total amount of
receipts and disbursements that should have been recorded.  Indian
tribes have raised questions about the adequacy and reliability of
the reconciliation results.  If follow-up meetings with the tribes do
not resolve these concerns, the settlement process that GAO has
recommended could be used as a framework for resolving disagreements
on account balances.  In addition, due to cost considerations and the
potential lack of supporting documentation, reconciliations for
individual Indian accounts were never done, and no alternative
procedures were developed to verify these account balances.  Because
any attempt to reconcile these accounts would be costly and the
results would be limited, these accounts should be included in the
settlement process. 


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

Financial Audit:  Actions Needed to Improve IRS Financial Management,
by Gregory M.  Holloway, Director of Governmentwide Audits, before
the Senate Committee on Governmental Affairs.  GAO/T-AIMD-96-96, May
23
(27 pages). 

This testimony discusses GAO's financial audits of the Internal
Revenue Service (IRS).  As part of a pilot program under the Chief
Financial Officers Act of 1990, IRS began preparing annual financial
statements explaining the results of its operations.  GAO's audits
span fiscal years 1992-95.  Implementation of the act has (1) led IRS
top managers to have a greater understanding of IRS' serious and
pervasive accounting and reporting problems, (2) yielded information
on the magnitude of IRS' tax receivables collection problems, and (3)
underscored the need for stronger controls over such areas as payroll
operations.  The act has also provided the impetus behind efforts to
improve IRS operations and address the major problems cited by GAO
financial audits.  However, GAO has been unable to express an opinion
on the reliability of IRS' financial statements for any of the four
fiscal years--from 1992 through 1995.  This testimony describes in
detail the fundamental, persistent problems that remain uncorrected
and will prevent GAO from expressing an opinion on IRS' future
financial statements. 


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

Federal Personnel:
Issues on the Need for the Public Health Service's
Commissioned Corps

GAO/GGD-96-55, May 7 (45 pages). 

This report reviews the operations of the Public Health Service's
Commissioned Corps, whose officers carry out various public health
functions.  GAO addresses why the Corps exists; Corps officers'
duties; the rational for their receiving military-like pay,
allowances, and benefits; and any savings that might accrue from not
using uniformed personnel to carry out the Corps' duties. 

Federal Downsizing:
The Costs and Savings of Buyouts Versus Reductions-in-Force

GAO/GGD-96-63, May 14 (33 pages). 

To facilitate federal downsizing, Congress is again considering
buyouts.  GAO found that buyouts will generate more savings than
reductions-in-force (RIF) if typical bumping and retreating take
place.  In cases in which bumping and retreating do not take place,
however, RIFs may be yield more savings than buyouts for
retirement-eligible employees.  If the employee being RIFed is not
eligible for a retirement annuity, the projected buyout savings would
be 10 percent more than the net RIF savings for this same worker. 
Projected savings from both buyouts and RIFs could be reduced if
vacated positions were refilled and not eliminated or if work
previously done by the separated employees is later contracted out. 
Although the extent of bumping and retreating under a RIF may be hard
to determine, it may have a significant effect on the economics of
the downsizing strategy used.  Economics play an important part in an
agency's decision on which downsizing strategy to use, but agency
officials also consider noneconomic effects, such as the ability to
use buyouts to restructure agency workforces, retain or improve
workforce diversity, and avoid lowering productivity and morale. 


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

Library of Congress:  Opportunities to Improve General and Financial
Management, by J.  William Gadsby, Director of Government Business
Operations Issues; Robert W.  Gramling, Director of Corporate Audits
and Standards; Joyce C.  Doria, Partner in Booz-Allen & Hamilton,
Inc.; and Paul E.  Lohneis, Partner in Price Waterhouse LLP; before
the Joint Committee on the Library of Congress. 
GAO/T-GGD/AIMD-96-115, May 7
(40 pages). 

In response to allegations about the way in which the Library of
Congress handled the thefts of rare materials, as well as
longstanding problems related to human resources and financial
management, GAO was asked to assess management at the Library. 
Because of the tight timeframe involved in this assignment, GAO
contracted with Booz-Allen Hamilton, Inc.  to conduct a general
management review of the Library and with Price Waterhouse LLP to
audit the Library's fiscal year 1995 financial statements.  This
testimony is based on the reports prepared by Booz-Allen Hamilton and
Price Waterhouse and includes executive summaries of their reports. 
GAO discusses four main themes:  the Library of Congress' mission,
operations, resources, and financial condition. 

H.R.  3078, The Federal Agency Anti-Lobbying Act, by Robert P. 
Murphy, General Counsel, before the House Committee on Government
Reform and Oversight.  GAO/T-OGC-96-18, May 15 (18 pages). 

H.R 3078 would prohibit federal agencies from using appropriated
funds to lobby.  GAO recommended a similar restriction 12 years ago
and believes that the need remains for permanent government-wide
legislation.  This testimony (1) explains GAO's role in investigating
alleged violations of the lobbying restrictions found in 13 regular
appropriation acts, (2) discusses H.R.  3078's ban on lobbying by
federal agencies in light of its statutory model--section 303 of
recent Interior Department appropriation acts--and GAO's decisions
and interpretations interpreting and applying section 303, and (3)
examines H.R.  3078's potential effect on
GAO's workload. 

Defense Communications:  White House Communications Agency Activities
and Funding, by Henry L.  Hinton, Jr., Assistant Comptroller General
for National Security and International Affairs Programs, before the
Subcommittee on National Security, International Affairs, and
Criminal Justice.  GAO/T-NSIAD-96-168, May 16 (10 pages). 

Lax oversight of the White House Communications Agency, which
provides the President with worldwide communications support, has
resulted in budgeting problems and questionable procurements,
including the acquisition of nonstandard, redundant telephone and
computer equipment that did not interface and was costly to maintain. 
This testimony discusses (1) GAO's 1994 effort to assess activities
and funding of the agency and (2) events that led to the separate
review and reports by the Defense Department (DOD) Inspector General. 
In GAO's view, the Inspector General's work disclosed serious
management issues that warrant the attention of top management at
both the White House and the Pentagon.  The Inspector General's staff
told GAO that the Defense Information Systems Agency and the White
House Communications Agency have taken steps to overcome these
shortcomings.  Because these long-standing problems cannot be solved
immediately and areas of disagreement continue, GAO urges continued
congressional monitoring. 

Federal Downsizing:  The Status of Agencies' Workforce Reduction
Efforts, by Timothy P.  Bowling, Associate Director for Federal
Management and Workforce Issues, before the Subcommittee on Civil
Service, House Committee on Government Reform and Oversight. 
GAO/T-GGD-96-124, May 23 (15 pages). 

The downsizing of the federal workforce is ahead of the schedule set
by the Workforce Restructuring Act.  At the same time, the
administration has called on agencies to restructure their workforces
by reducing management positions.  These jobs have yet to be reduced
to the extent called for by the National Performance Review.  With
regard to future workforce reductions, GAO found that in terms of
absolute numbers--and given historical quit rates--the remaining
employment ceilings called for by the act probably could be achieved
governmentwide through attrition.  Nevertheless, some agencies may be
forced to downsize more than others.  In such situations, buyouts or
reductions-in-force (RIF) may be necessary.  GAO found that buyouts
offer greater savings than RIFs, except when RIFed employees do not
bump and retreat and are eligible to retire. 

GAO's Downsizing Efforts, by John H.  Luke, Deputy Assistant
Comptroller General for Human Resources, before the Subcommittee on
Civil Service, House Committee on Government Reform and Oversight. 
GAO/T-OCG-96-4, May 23 (eight pages). 

This testimony discusses GAO's downsizing efforts, including its
reduction in force (RIF).  It addresses (1) GAO's strategic planning
process to restructure GAO's workforce, (2) the development and
implementation of GAO's new RIF rules, and (3) differences between
GAO's RIF rules and appeal rights and those for the executive branch. 
It also discusses the impact of the downsizing on veterans at GAO. 


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

Health Insurance:
Coverage of Autologous Bone Marrow Transplantation for
Breast Cancer

GAO/HEHS-96-83, Apr.  24 (25 pages). 

Although many insurers now cover the cost of autologous bone marrow
transplantation, a new and expensive treatment for breast cancer,
issues surrounding the procedure have put several goals of the U.S. 
health care systems in conflict:  access to the best, most advanced
care; cost containment; and research adequate to assess the value of
new treatments.  Proponents of insurance coverage argue that
autologous bone marrow transplantation provides breast cancer
patients with a promising, potentially life-saving treatment. 
Critics say that the proliferation of such unproven treatments is
costly and harmful, potentially hindering clinical research to
determine whether the treatment is effective.  This report discusses
(1) the factors that have influenced insurers' decisions on whether
to cover the treatment, (2) the status of research on autologous bone
marrow transplantation for breast cancer and the consensus on what is
known about its effectiveness, and (3) the consequences of increased
use and insurance coverage of the treatment while it is still being
evaluated in clinical trials. 

Health Care Fraud:
Information-Sharing Proposals to Improve Enforcement Efforts

GAO/GGD-96-101, May 1 (96 pages). 

Estimates of health care fraud range from between 3 and 10 percent of
all health care expenditures--as much as $100 billion based on
estimated 1995 expenditures.  In late 1993, the Attorney General
designated health care fraud as a enforcement priority second only to
violent crime initiatives.  This report discusses (1) the extent of
federal and state immunity laws protecting persons who report
information on health care fraud and (2) the advantages and
disadvantages of establishing a centralized health care fraud
database to strengthen information-sharing and support enforcement
efforts. 


      TESTIMONY
------------------------------------------------------ Appendix 0:11.1

FDA Review Times, by Mary R.  Hamilton, Director of Program
Evaluation in Human Services Areas, before the Subcommittee on Health
and Environment, House Committee on Commerce.  GAO/T-PEMD-96-9, May 2
(13 pages). 

New drug applications are moving more quickly through the Food and
Drug Administration's (FDA) review and approval process.  It now
takes about the same amount of time to receive approval in the United
States as it does in the United Kingdom.  FDA review times for
medical device applications vary widely from one year to the next. 
For all types of applications, the median review time rose
dramatically in the early 1990s and then began to fall.  Whether this
downturn will continue will become clear as data for additional years
become available.  Some aspects of the new drug and medical device
review systems introduced by the European Union (EU) in 1995 differ
significantly from FDA's approach to medical product review, and
there is great optimism in the EU about their prospects.  However, it
is still to early to tell whether the EU approach will result in more
efficient reviews while ensuring product safety. 


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

Public Housing:
HUD Takes Over the Housing Authority of New Orleans

GAO/RCED-96-67, May 3 (27 pages). 

Operating more than 13,000 housing units and providing homes to
nearly 25,000 people, the Housing Authority of New Orleans is one of
the largest public housing authorities in the country.  For nearly
two decades, however, New Orleans has been one of the nation's
poorest performing housing authorities.  Moreover, its performance
has improved only marginally in recent years, despite federal grants,
hands-on management assistance from professional property managers,
and the personal involvement of the Secretary of the Department of
Housing and Urban Development (HUD).  This report discusses the (1)
major operational problems at the Housing Authority of New Orleans,
(2) underlying causes of these problems, and (3) steps HUD has taken
to improve the performance of the Housing Authority of New Orleans
and what success these measures have had. 


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

SSA Disability:
Program Redesign Necessary to Encourage Return to Work

GAO/HEHS-96-62, Apr.  24 (84 pages). 

During the past decade, the number of persons receiving benefits from
Social Security's Disability and Supplemental Security income
programs increased 70 percent because of program changes and economic
and demographic factors.  These programs, which provide assistance to
persons with disabilities until they return to work, if that is
possible, provided $53 million in cash benefits to 7.2 million people
in 1994.  Advances in technology, such as standing wheelchairs and
synthetic voice systems, and the medical management of some physical
and mental disabilities have allowed some persons to work.  Moreover,
there has been a greater trend toward inclusion of and participation
by people with disabilities in the mainstream of society.  Yet both
programs have done little to identify recipients who might benefit
from rehabilitation and employment assistance and ultimately return
to work. 

Public Pensions:
Section 457 Plans Post Greater Risk Than Other
Supplemental Plans

GAO/HEHS-96-38, Apr.  30 (38 pages). 

Millions of state and local government employees are trying to
increase their future retirement benefits by deferring some of their
wages to supplement pension plans, known as salary reduction
arrangements or plans.  The amount deferred or contributed to these
plans, however, may be at risk.  Recent media stories have recounted
instances of imprudent investment, improper use of plan funds by
sponsors, and possible seizure of plan funds by sponsoring
governments' creditors.  This report examines the risks of financial
loss inherent in such plans and discusses whether the provisions of
such plans treat participants comparably. 


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

Supplemental Security Income:  Noncitizen Caseload Continues to Grow,
by Jane L.  Ross, Director of Income Security Issues, before the
Subcommittee on Human Resources, House Committee on Ways and Means. 
GAO/T-HEHS-96-149, May 23 (10 pages). 

Noncitizens are one of the fastest growing groups of recipients of
supplemental security income (SSI) benefits.  They represent nearly
one-third of aged SSI recipients and about six percent of disabled
recipients.  Although the growth rate for noncitizen caseloads has
slowed, it is still higher than that for citizens, and the proportion
of noncitizens relative to other SSI recipients continues to rise. 
About two-thirds of noncitizens recipients--roughly 520,000--live in
three states:  California, New York, and Florida.  On the whole,
noncitizens are more likely to receive SSI than are citizens, but
this may be primarily true for refugees and asylees.  Adult children
of aged immigrants and others who say they are willing to financially
support them sometimes do not.  Eventually, some of these older
immigrants receive SSI.  Also, some translators have helped
noncitizens to fraudulently obtain SSI disability benefits. 


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

Information Security:
Computer Attacks at Department of Defense Pose Increasing Risks

GAO/AIMD-96-84, May 22 (44 pages). 

Unknown and unauthorized persons are increasingly attacking and
gaining access to highly sensitive information in the Defense
Department's (DOD) computer systems.  Although the exact number of
attacks cannot be precisely determined, recent data suggest that DOD
may have experienced as many as 250,000 attacks last year.  These
attacks are often successful, and the number of attacks is doubling
each year as Internet use increases and hackers become more
sophisticated.  At a minimum, these attacks are a multimillion dollar
nuisance to the Pentagon.  At worst, they pose a serious threat to
national security.  Attackers have seized control of entire DOD
systems, some of which control critical functions, such as weapons
system research and development, logistics, and finance.  Attackers
have also stolen, modified, and destroyed data and software.  The
potential for catastrophic damage is great.  DOD is taking steps to
address this growing problem but faces major challenges in
controlling unauthorized access to its computer systems.  DOD is now
trying to react to successful attacks as it learns of them, but it
has no uniform policy for assessing risks, protecting its systems,
responding to incidents, or assessing damage.  Training of users and
system and network administrators is haphazard and constrained by
limited resources.  Technical solutions, such as firewalls, smart
cards, and network monitoring systems, should help, but their success
depends on whether DOD implements them in tandem with better policy
and personnel measures.  GAO summarized this report in testimony
before Congress; see: 

Information Security:  Computer Attacks at Department of Defense Pose
Increasing Risks, by Jack L.  Brock, Jr., Director of Defense
Information and Financial Management Systems, before the Permanent
Subcommittee on Investigations, Senate Committee on Governmental
Affairs.  GAO/T-AIMD-96-92, May 22 (seven pages). 

Customs Service Modernization:
Strategic Information Management Must Be Improved for National
Automation Program to Succeed

GAO/AIMD-96-57, May 9 (18 pages). 

The U.S.  Customs Service is very aware that its ability to
effectively conduct business in the future depends heavily on
successfully modernizing its import process and automated systems. 
To its credit, Customs is redesigning its import process.  It is also
developing a new automated import system--the Automated Commercial
Environment--to support this new process.  Customs' efforts, however,
are at risk for failure because the agency is not effectively
applying best practices to overcome the serious risks arising from
such an ambitious systems modernization.  For example, contrary to
best practices, Customs chose hardware, software, and
telecommunications for its systems before it redesigned its key
business processes.  Moreover, Customs has not been applying specific
criteria to assess projects and analyze project costs and benefits. 
Finally, Customs has not established clear accountability for
ensuring that the requirements of the National Customs Automation
Program are successfully implemented. 

Weather Forecasting:
Recommendations to Address New Weather Processing System Development
Risks

GAO/AIMD-96-74, May 13 (17 pages). 

GAO testified in February 1996 on the National Weather Service's
(NWS) Advanced Weather Interactive Processing System, the cornerstone
of NWS' $4.5 billion modernization program.  (See GAO/T-AIMD-96-47.)
This report discusses the recommendations GAO made during its
testimony before Congress.  These recommendations, if fully
implemented, will strengthen NWS' ability to achieve a fair return on
its investment in the system. 


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

Passports and Visas:
Status of Efforts to Reduce Fraud

GAO/NSIAD-96-99, May 9 (12 pages). 

Technical problems and the failure of overseas consular staff to
comply with internal management controls have hampered State
Department efforts to modernize its visa and passport operations and
make them less vulnerable to fraud.  After initial delays, State has
made steady progress in installing its machine-readable system--the
primary initiative for eliminating visa fraud--and provided all
visa-issuing posts with automated access to its global database
containing the names of persons ineligible for visas.  Operational
problems, however, have diminished the effectiveness of these
efforts.  Meanwhile, State's modernization program to reduce passport
fraud is behind schedule.  State originally planned to install a new
wide-area network, develop a system to print a digitalized passport
photograph, and install a system to verify the multiple issuance of
passports by December 1995.  However, only the installation of the
wide-area network, upon which the other two projects depend, has been
completed.  Full implementation also depends on modernizing the
passport production system, which according to State depends on
funding availability. 


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

Money Laundering:
A Framework for Understanding U.S.  Efforts Overseas

GAO/GGD-96-105, May 24 (65 pages). 

Money laundering is a global problem that needs to be fought
collectively by the international community.  This report provides a
framework for understanding U.S.  efforts oversees to combat
international money laundering.  GAO describes (1) the approaches
used by the United States and European countries to combat money
laundering through regulation of financial institutions, (2) U.S. 
bank regulators' oversight of money-laundering controls at overseas
branches of U.S.  banks, (3) U.S.  law enforcement agencies' efforts
to coordinate their overseas anti-money-laundering activities among
themselves and with law enforcement agencies in these European
countries, and (4) U.S.  participation in international agreements to
combat money
laundering abroad. 

Drug Control:
U.S.  Interdiction Efforts in the Caribbean Decline

GAO/NSIAD-96-119, Apr.  17 (42 pages). 

Budget reductions and a lack of resources among island nations have
hampered efforts to intercept drug traffickers in the Caribbean--the
transit route for nearly one-third of the cocaine now entering the
United States.  As a result, cocaine seizures in the Caribbean fell
from a peak of 70,000 kilograms in 1992 to 37,000 kilograms in 1995. 
In recent years, drug traffickers in the Caribbean have increasingly
relied on ships rather than planes to transport drugs.  Traffickers
are also using sophisticated technologies, such as global positioning
systems, to counter U.S.  efforts to monitor their activities. 
Although most Caribbean nations have cooperated in fighting drug
trafficking, a lack of finances and effective law enforcement
operations have stymied their efforts.  Corruption has also been a
concern.  U.S.  budget cuts have undermined the ability of the
Defense Department and law enforcement agencies to track and
intercept drug traffickers.  Funding for drug interdiction declined
from $1 billion in fiscal year 1992 to $569 million in fiscal year
1995.  The executive branch has yet to develop a regional plan to
implement the U.S.  cocaine strategy in the transit zone, fully staff
interagency organizations, or resolve issues on intelligence sharing. 
GAO summarized this report in testimony before Congress; see: 

Drug Control:  Observations on U.S.  Interdiction in the Caribbean,
by Jess T.  Ford, Associate Director for International Relations and
Trade Issues, before the Subcommittee on National Security,
International Affairs, and Criminal Justice, House Committee on
Government Reform and Oversight.  GAO/NSIAD-96-171, May 23 (12
pages). 

Anti-Car Theft Act:
Implementation Status of Certain Provisions of the 1992 Act

GAO/GGD-96-77, Apr.  22 (26 pages). 

The Anti-Car Theft Act of 1992 was intended to reduce automobile
theft by making it harder to sell stolen cars and parts.  This report
provides information on the following parts of the act:  (1) the
national information system on motor vehicle titles, (2) the marking
of major component parts of passenger motor vehicles with an
identification number, and (3) the national information system on
stolen passenger motor vehicles and parts.  GAO discusses the status
of implementation and issues that may impede the implementation or
influence the effectiveness of these provisions. 


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

Juvenile Justice:  Selected Issues Relating to OJJDP's
Reauthorization, by Laurie E.  Ekstrand, Associate Director for
Administration of Justice Issues, before the Subcommittee on Youth
Violence, Senate Committee on the Judiciary.  GAO/T-GGD-96-103, May 8
(43 pages). 

The goal of the Office of Juvenile Justice and Delinquency Prevention
(OJJDP) is to provide national leadership in addressing juvenile
delinquency and in improving juvenile justice.  OJJDP, whose budget
totaled $162 million in fiscal year 1995, administers a range of
grants to states, territories, and public and private groups.  OJJDP
has procedures to plan, solicit, and award grants, as well as to
audit and monitor grant projects and communicate the results of the
work to practitioners and policymakers.  However, some monitoring
procedures were not followed.  A review of formula grant data between
January 1993 and December 1995 showed that on-site visits for program
monitoring were generally not done annually, as required.  According
to OJJDP, the visits did not occur because they are expensive and
time consuming.  Although almost all OJJDP grant files indicated
plans for monitoring the work, the files contained little evidence to
suggest that the monitoring actually occurred.  OJJDP indicated that
it planned to improve its monitoring records. 


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

C-17 Aircraft:
Cost of Spare Parts Higher Than Justified

GAO/NSIAD-96-48, Apr.  17 (27 pages). 

GAO reviewed the pricing of spare parts for the C-17 aircraft and
found that the Air Force paid higher prices for these items than was
justified.  GAO focused on a limited number of spare parts that
experienced significant price increases when McDonnell Douglas
decided to manufacture the parts at its St.  Louis plant rather than
buy them from outside vendors.  For 33 selected spare parts formerly
procured under subcontracts, the costs were from four to 56 times
higher after McDonnell Douglas moved the work in-house.  For example,
McDonnell Douglas paid an outside vender $389 to machine a door hook
that it later machined in-house at an estimated cost of $8,842. 
Costs for some spare parts were higher than justified because
McDonnell Douglas used outdated pricing data that overstated its
proposed prices.  In developing the proposed costs of spare parts,
McDonnell Douglas used outdated labor variance factors, which
resulted in prices being overstated by 34 percent for 37 parts. 
Also, the profits awarded on some orders under contract-2109 appeared
to be higher than warranted. 

Military Bases:
Opportunities for Savings in Installation Support Costs Are
Being Missed

GAO/NSIAD-96-108, Apr.  23 (25 pages). 

The Defense Department (DOD) has long recognized that support costs
for military bases located near to one another could be reduced if
the military services relied more on each other for base
support--known as interservicing.  However, the services have not
taken advantage of opportunities to achieve significant savings
through greater use of interservicing.  Differing service traditions
and cultures as well as concern about loss of control over support
assets often cause military commanders to resist interservicing. 
Other factors, such as differences in service standards and resource
constraints, also affect commanders' willingness to embrace
interservicing.  Although these factors have hampered interservicing
of base support functions on a limited scale, military officials
suggest that they could prove to be even greater impediments to
interservicing on a larger scale, such as having one base commander
responsible for providing all base support to collocated bases of two
or more services. 

Federally Funded R&D Centers:
Information on the Size and Scope of DOD-Sponsored Centers

GAO/NSIAD-96-54, Apr.  24 (52 pages). 

Federally funded research and development (R&D) centers were first
established during World War II to meet the military's specialized
research needs that could not be met by government workers because of
limits on placed on salaries and hiring.  Today, eight agencies,
including the Defense Department (DOD), fund 39 centers that are run
by universities, nonprofit groups, and industrial firms under
long-term contracts.  This updates GAO's 1988 report
(GAO/NSIAD-88-116FS) on DOD's 11 centers.  GAO describes the (1)
funding and staff size of the centers; (2) extent of subcontracted
work at the centers; (3) structure of the parent organizations; (4)
missions, core competencies, and capabilities of the centers; (5)
sponsors' criteria for defining core work; and (6) sponsors'
oversight mechanisms and responsibilities. 

Satellite Control Capabilities:
National Policy Could Help Consolidation and Cost Savings

GAO/NSIAD-96-77, May 2 (30 pages). 

Satellite control relies on ground antennas to track satellites and
collect satellite health and status data by telemetry as well as to
command satellites to perform various functions.  GAO has been
reviewing space programs and activities within the Defense Department
and intelligence community.  This report discusses the potential for
consolidating satellite control functions within the government. 

Air Force Aircraft:
Consolidating Fighter Squadrons Could Reduce Costs

GAO/NSIAD-96-82, May 6 (22 pages). 

The Air Force decided in 1992 to reconfigure its fighter force into
smaller squadrons.  This decision was made at a time when the Defense
Department was seeking to reduce military operating and
infrastructure costs.  GAO found that the organizational structure of
the Air Force's fighter force is not cost-effective.  By operating
F-15s and F-16s in smaller squadrons, the Air Force boosts the number
of squadrons above the number that would have been used in the
traditional 24-aircraft configuration.  This reconfiguration has
increased operating costs and slowed reductions in infrastructure
costs.  Although the Air Force considers smaller fighter squadrons to
be beneficial, it has not undertaken any studies to support its
decision.  The Air Force's arguments for using smaller squadrons do
not justify the additional expense.  GAO evaluated a range of options
for consolidating squadrons that could cut operating costs by as much
as $745 million during fiscal years 1997-2002.  In addition,
consolidating squadrons could result in base closures, reducing
infrastructure costs by about $50 million per base closure per year. 

NATO Enlargement:
NATO and U.S.  Actions Taken to Facilitate Enlargement

GAO/NSIAD-96-92, May 6 (31 pages). 

In January 1994, the North Atlantic Treaty Organization (NATO)
committed itself to expanding its membership to include the newly
democratic states of the former Communist bloc.  According to the
State Department, the United State has been the driving force behind
NATO's enlargement.  This report discusses (1) actions taken or
planned to enlarge NATO, (2) the extent of current and planned U.S. 
bilateral assistance programs to enhance the military operations and
capabilities of aspiring NATO members, and (3) the potential costs of
enlargement to NATO and the new members. 

U.S.  Combat Air Power:
Reassessing Plans to Modernize Interdiction Capabilities Could Save
Billions

GAO/NSIAD-96-72, May 13 (60 pages). 

In view of continuing concerns over future defense spending and the
military's services' ample ability to intercept enemy missiles and
aircraft, GAO questions the Pentagon's decision to upgrade warplanes
and other weapons systems at a cost of more than $200 billion during
the next 20 years.  GAO recommends that the Defense Department
routinely review modernization proposals according to how they will
enhance the overall ability of the U.S.  military to intercept enemy
targets.  Proposals that add redundancy, such as the B-1B and Apache
modifications and the purchase of F/A-18E/Fs, attack helicopters, and
precision-guided missiles, should be examined in the context of the
additional interdiction capability they offer.  This analysis could
serve as the basis for deciding funding priorities, the sufficiency
of investment, and the future force structure. 

DOD Dependents Schools:
Cost Issues Associated With the Special Education Program

GAO/HEHS-96-77, May 13 (10 pages). 

Congress created the Department of Defense (DOD) Dependents Schools
in 1978 to provide a free public education for dependents of military
personnel serving abroad.  DOD Dependents Schools are required to
provide special education to all eligible students as required by the
Individuals With Disabilities Education Act.  Members of Congress
have raised concern that DOD Dependents Schools are spending
excessive amounts to educate special education students who live in
areas overseas that lack a school that can meet their needs.  This
report discusses (1) the amount of money the schools spend on their
special education programs, (2) the number of special education
students who live in areas lacking a DOD Dependents School with the
resources to meet the students' needs and the cost to meet their
needs another way, and (3) the number of special education students
who are sent to schools outside the DOD Dependents School system
because no DOD Dependents School is nearby to meet their needs and
the cost to do so. 

Defense Procurement:
E-Systems' Reporting of Alleged Wrongdoing to Army's
Fraud Division

GAO/OSI-96-6, May 16 (26 pages). 

After the defense contractor E-Systems, Inc., pleaded guilty in 1990
to federal violations involving Army contracts, the Army entered into
a three-year administrative settlement agreement with the company. 
Among other things, the agreement required E-Systems to report all
hotline allegations to the Army's Procurement Fraud Division.  This
report answers the following questions:  Did federal law,
regulations, or the agreement require E-Systems to disclose suspected
violations of procurement law?  How many, and what types of hotline
complaints were lodged against E-Systems' Greenville Division?  Did
E-Systems employees, contrary to federal law, alter or reinvestigate
hotline complaints and investigation results to avoid disclosing
information to the federal government; and what were the details
behind three cases brought to the attention of Congress?  Why didn't
the Army debar E-Systems from doing business with the government,
given the serious accusations contained in a May 1994 Army "show
cause" letter?  What were the government's losses as a result of
E-Systems' actions in the three previously mentioned hotline cases? 

Defense Health Care:
Effects of Mandated Cost Sharing on Uniformed Services Treatment
Facilities Likely to Be Minor

GAO/HEHS-96-141, May 13 (38 pages). 

The establishment of uniform benefits and cost sharing for Defense
Department (DOD) beneficiaries is a key component of the TRICARE
program and is something that GAO and others have long advocated. 
Such uniformity would, in GAO's view, eliminate inequities and
confusion that now exist among beneficiaries of military health
plans.  Although adopting TRICARE cost shares may cause some minor
adverse selection for the Uniformed Services Treatment Facilities
(USTF), there should be no lasting negative financial impact on its
operations.  Moreover, the new cost shares, which are similar to
health maintenance organizations, are appropriate for the risks to be
borne by the USTFs and will likely make the USTF population more
similar to DOD's general beneficiary population.  More importantly,
there should be a financial impact.  DOD's current USTF capitation
methodology takes into account and allows for adjusted reimbursement
levels for such higher costs that result from changes in the enrollee
cost shares and population characteristics. 

Defense Health Care:
Medicare Costs and Other Issues May Affect Uniformed Services
Treatment Facilities' Future

GAO/HEHS-96-124, May 17 (37 pages). 

Since fiscal year 1994, Congress has appropriated nearly $1 billion
for the Uniformed Services Treatment Facilities (USTF) to deliver
health care to what now totals 124,000 beneficiaries.  In recent
years, Congress has grown concerned about the rising cost to treat
USTF members, in part because some members retain dual eligibility
and unrestricted access to other government health care services,
such as Medicare and Defense Department (DOD) hospitals.  Congress
directed DOD in 1991 to reform the USTF program by introducing a
managed care program.  As DOD begins to implement its new nationwide
managed care program, known as TRICARE, questions about the program's
future persist.  This report discusses (1) whether unnecessary costs
result from USTF members' use of other federally funded health care
sources and (2) other issues that need to be considered as Congress
deliberates reauthorization of the USTF program. 

Contingency Operations:
DOD's Reported Costs Contain Significant Inaccuracies

GAO/NSIAD-96-115, May 17 (36 pages). 

Since fiscal year 1992, the Pentagon has reported more than $7
billion in incremental costs for its participation in contingency
operations, ranging from peacekeeping missions in Haiti and the
former Yugoslavia to deployments to the Middle East during the
Persian Gulf War.  Accurate reporting of these costs is crucial to
effective congressional oversight of appropriated funds.  GAO found
inaccuracies in the Defense Department's (DOD) costs for contingency
operations, representing about seven percent of the $4.1 billion in
costs reported in fiscal years 1994 and 1995.  In GAO's judgment,
this variance in reported costs is indicative of a material weakness
in the accounting systems.  DOD guidance on reporting incremental
costs is vague and incomplete, and weaknesses plague DOD's accounting
system. 

Defense Depot Maintenance:
DOD's Policy Report Leaves Future Role of Depot System Uncertain

GAO/NSIAD-96-165, May 21 (20 pages). 

The National Defense Authorization Act for Fiscal Year 1996 requires
GAO to analyze the Defense Department's (DOD) report entitled Policy
Regarding Performance of Depot-Level Maintenance and Repair, which
was submitted to Congress in April 1996.  GAO focuses on (1) the
likely future role of the defense depots, (2) the adequacy of the
depot maintenance policy's content, and (3) the inconsistency of
DOD's policy with current statutes and congressional direction on the
use of public-private competitions. 

Defense Depot Maintenance:
More Comprehensive and Consistent Workload Data Needed
for Decisionmakers

GAO/NSIAD-96-166, May 21 (23 pages). 

The National Defense Authorization Act for Fiscal Year 1996 requires
GAO to analyze the Defense Department's (DOD) report entitled Depot
Maintenance and Repair Workload, which was submitted to Congress in
April 1996.  GAO focuses on DOD's analysis of (1) the need for and
effect of the 60/40 legislative requirement concerning the allocation
of depot maintenance workloads between the public and private
sectors, (2) historical public and private sector depot maintenance
workload allocations, and (3) projected public and private depot
maintenance workload allocations. 

Tactical Intelligence:
Accelerated Joint STARS Ground Station Acquisition Strategy
Is Risky

GAO/NSIAD-96-71, May 23 (20 pages). 

The Army and the Air Force are jointly developing the Joint
Surveillance Target Attack Radar System (Joint STARS), which is
designed to locate and track wheeled and track vehicles beyond the
ground line of sight during either day or night and under most
weather conditions.  The Army is responsible for the development,
test, production, and fielding of Joint STARS ground station modules. 
GAO found that the Army's strategy to accelerate production of the
Common Ground Station--the next version of the ground station
modules--unnecessarily risks millions of dollars on an unproven
system.  GAO believes that buying more systems than are needed for
operational testing and evaluation significantly raises the risks of
procuring a costly and ineffective system.  The Army has accelerated
the program and moved the first fielding date for the Common Ground
Station from fiscal year 2002 to fiscal year 1998.  However, the Army
lacks analyses showing an urgent need to field the added capabilities
of the Common Ground Station four years earlier than planned or
showing that the expected benefits of accelerated procurement, prior
to successful completion of operational testing and evaluation,
outweigh the risks. 

Ammunition Industrial Base:
Information on DOD's Assessment of Requirements

GAO/NSIAD-96-133, May 31 (17 pages). 

This report reviews the production facilities available to support
the military's ammunition requirements and the status of the
ammunition stockpile.  GAO focuses on the Defense Department's
assessment of the industrial base's ability to supply ammunition to
meet requirements for peacetime and two major regional conflicts and
to replenish the ammunition stockpile following those conflicts. 


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

Chemical and Biological Defense:  Emphasis Remains Insufficient to
Resolve Continuing Problems, by Mark E.  Gebicke, Director of
Military Operations and Capabilities Issues, before the Presidential
Advisory Committee on Gulf War Veterans' Illnesses. 
GAO/T-NSIAD-96-154, May 1
(nine 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.  DOD has spent
less than one percent of its budget on chemical and biological
warfare defense, and during 1992-1995, funding in real terms fell by
30 percent.  Problems in chemical and biological defense are likely
to continue unless DOD designates this area a higher priority. 


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

U.S.  Forest Service:
Fee System for Rights-of-Way Program Needs Revision

GAO/RCED-96-84, Apr.  22 (23 pages). 

The Forest Service needs to update its fees to reflect fair market
value for rights-of-way used by operators of oil and gas pipelines,
power lines, and communications lines.  In most cases, nonfederal
landowners charge higher fees for similar rights-of-way.  To
determine fees on the basis of fair market value, the Forest Service
has several options, some of which have advantages and disadvantages. 
The initial cost of developing a new fee system could be substantial
because of the need to do appraisals and collect the market data to
establish fair market value.  These costs could be mitigated, and in
some instance negated, with administrative improvements to the
program.  Given the tight budgets at federal land management agencies
today, one option appears to be particularly advantageous:  obtaining
site-specific appraisals that are paid for by the users of
rights-of-way.  However, implementing this option would require
several changes to the program to make it more market-like and
efficient to run. 


   TAX POLICY AND ADMINISTRATION
-------------------------------------------------------- Appendix 0:19

Tax Administration:
Audit Trends and Results for Individual Taxpayers

GAO/GGD-96-91, Apr.  26 (34 pages). 

Compared to the 1960s and 1970s, the audit rate--the annual
percentage of individual tax returns that the Internal Revenue
Service (IRS) has audited of the total number of tax returns
filed--has dropped, falling below one percent in fiscal year 1993. 
Although IRS believes that its audits promote voluntary taxpayer
compliance, no one knows their actual impact, particularly in light
of a decreasing audit rate.  Data are available, however, on trends
in audit rates across the country and on the results of these audits,
such as the type of tax returns being audited and the productivity of
the audits, measured by additional taxes recommended per return and
per direct audit hour.  This report discusses (1) the trend in IRS'
audit rates for individual returns and (2) the overall results of
IRS' most recent audits of individual returns. 

Internal Revenue Service:
Results of Nonfiler Strategy and Opportunities to Improve
Future Efforts

GAO/GGD-96-72, May 13 (38 pages). 

At the beginning of fiscal year 1993, the Internal Revenue Service
(IRS) had an inventory of about 10 million individual and business
nonfilers.  IRS estimated that unpaid taxes on nonfiled individual
income tax returns for 1992 alone totaled more than $10 billion. 
Concerned about this noncompliance, IRS began a strategy in fiscal
year 1993 to bring nonfilers into the system and keep them there. 
This report (1) assesses the results of that strategy and (2)
discusses opportunities to improve future
nonfiler efforts. 

Tax Policy and Administration:
Review of Studies of the Effectiveness of the Research Tax Credit

GAO/GGD-96-43, May 21 (26 pages). 

This report evaluates recent studies of the effectiveness of the
research tax credit--in particular those cited in a report done by
KPMG Peat Marwick--and discusses whether the studies provided
adequate evidence to conclude that each dollar taken of the tax
credit stimulates at least one dollar of research spending in the
short run, and about two dollars of research spending in the long
run.  GAO examines the six studies cited in the KPMG report as well
as other recent studies of this credit.  GAO (1) evaluates the
studies for the adequacy of the data and methods used to determine
the amount of research spending stimulated per dollar of foregone tax
revenue and (2) identifies factors, other than spending per dollar of
revenue cost, that determine the credit's value to society. 


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

Tax Systems Modernization:  Progress in Achieving IRS' Business
Vision, by Lynda D.  Willis, Director of Tax Policy and
Administration Issues, before the Senate Committee on Governmental
Affairs.  GAO/T-GGD-96-123, May 9
(35 pages). 

The Internal Revenue Service (IRS) has developed a vision for 2001
that calls for organizational, technological, and operational changes
affecting the way in which the agency processes tax returns, provides
customer service, and ensures compliance.  IRS has made progress in
modernizing its operations, but the differences between IRS' existing
operations and those proposed in its vision are great.  IRS has made
little progress either in reducing the number of paper returns it
processes or in delivering the new systems needed to better process
paper.  In addition, taxpayers have long had difficulty reaching IRS
by telephone.  And, when they do reach IRS assistors, they do not
always receive the information they need.  Although IRS has developed
a promising strategy to improve customer service, the agency faces
many challenges in implementing it.  IRS is seeking to boost
compliance to 90 percent by 2001.  However, this goal relies on a set
of assumptions that have since changed significantly.  GAO questions
IRS' ability to make sound investment decisions until it reengineers
important processes, such as tax return processing.  Until clearly
defined business requirements drive Tax Systems Modernization
projects, there is no guarantee that these projects will successfully
improve IRS operations. 


   TRANSPORTATION
-------------------------------------------------------- Appendix 0:20


      TESTIMONY
------------------------------------------------------ Appendix 0:20.1

Highway Trust Fund:  Financial Status and Outlook, by Phyllis F. 
Scheinberg, Associate Director for Transportation and
Telecommunications Issues, before the Subcommittee on Surface
Transportation, House Committee on Transportation and Infrastructure. 
GAO/T-RCED-96-169, May 16 (11 pages). 

This testimony discusses the financial condition and outlook for the
Highway Trust Fund, specifically the Fund's ability to support
surface transportation infrastructure needs in the future.  GAO
focuses on how the Highway Trust Fund operates and its ability to
support current and future surface transportation needs. 


   SPECIAL PUBLICATIONS
-------------------------------------------------------- Appendix 0:21

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

GAO/HEHS-96-139W, May 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. 


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