Reports and Testimony: January 1997 (Other Written Prod., 01/01/97,
GAO/OPA-97-4).

GAO provided a listing of its reports and testimonies issued in January
1997.

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

 REPORTNUM:  OPA-97-4
     TITLE:  Reports and Testimony: January 1997
      DATE:  01/01/97
   SUBJECT:  Breast cancer
             Consumer protection
             Nursing homes
             Health care services
             Overpayments
             Attrition rates
             Military recruiting
             Nuclear waste disposal
             International economic relations
             Tax administration systems
IDENTIFIER:  Bibliographies
             
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REPORTS AND TESTIMONY:  JANUARY
1997

GAO/OPA-97-4


Highlights

Mammography

The Food and Drug Administration began annual inspections of
mammography facilities in 1995.  Although GAO found growing
compliance by these facilities with federal standards, the FDA needs
to develop more consistent reporting standards and strengthen
enforcement to protect women from poor mammograms at facilities with
severe quality problems.  Page 8. 

Skilled Nursing Facilities

Medicare payments to skilled nursing facilities have grown from $456
million in 1983 to nearly $11 billion in 1996, in part because many
facilities collect higher payments on grounds that they treat
patients who require more complex care.  But GAO found that
facilities that collect the higher fees did not have a larger
proportion of patients requiring complex care than did other
facilities.  Page 9. 

Military Attrition

The Defense Department could save millions of dollars by better
screening military recruits, who often go through basic training only
to be discharged because they are physically unprepared for basic
training or lack motivation.  Page 15. 

GAO/OPA-97-4



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

  CBO - x
  DOD - x
  DOE - x
  EPA - x
  Eximbank - x
  FAA - x
  FACNET - x
  FBI - x
  FDA - x
  HUD - x
  IRS - x
  OMB - x
  SCRIPS - x
  SSA - x
  USAID - x
  USDA - x
  VA - x

REPORTS AND TESTIMONY:  JANUARY
1997
=========================================================== Appendix 0


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

Farm Service Agency:
Update on the Farm Loan Portfolio

GAO/RCED-97-35, Jan.  3 (22 pages). 

As of September 1996, the outstanding principal for the Farm Service
Agency's active direct and guaranteed farm loans totaled nearly $17
billion--$10.5 billion in the direct loan program and $6.4 billion in
the guaranteed loan program.  About 34 percent of the $10.5 billion
in outstanding principal in the direct loan program was held by
delinquent borrowers.  This compares with 40 percent of the $11.4
billion in outstanding principal for fiscal year 1995.  For borrowers
who owed more than $1 million in outstanding principal, the
delinquency rate was considerably higher than for those who owed
less.  Delinquent borrowers held about four percent--or $280
million--of the $6.4 billion in outstanding principal in the
guaranteed loan program.  By comparison, $218 million, or about four
percent, of the $5.9 billion in outstanding principal was held by
delinquent borrowers in fiscal year 1995.  During fiscal year 1996,
$1.1 billion in principal and interest was lost by reducing or
forgiving the debt of delinquent direct loan borrowers and about $42
million in losses was incurred on guaranteed loans. 


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

Budget Issues:
Budget Enforcement Compliance Report

GAO/AIMD-97-28, Jan.  16 (39 pages). 

As required by the Budget Enforcement Act of 1990, also known as
Gramm-Rudman-Hollings, this compliance report covers budget
sequestration reports issued by the Office of Management and Budget
(OMB) and the Congressional Budget Office (CBO).  In GAO's opinion,
the OMB and CBO reports substantially complied with the act.  GAO
does raise three compliance issues and some implementation issues
that represent questionable and inconsistent scoring practices. 

Impoundments:
Deferrals of Fiscal Year 1997 Budget Authority for Security
Assistance and SSA Administrative Expenses

GAO/OGC-97-13, Jan.  24 (two pages). 

On December 4, 1996, the President submitted to Congress his first
special impoundment message for fiscal year 1997.  The message
reports seven deferrals of budget authority affecting international
security assistance programs and administrative expenses at the
Social Security Administration.  GAO reviewed the deferrals and found
them to be in accordance with the Impoundment Control Act. 


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

Community Development:
Status of Urban Empowerment Zones

GAO/RCED-97-21, Dec.  20 (62 pages). 

The Empowerment Zone and Enterprise Community Program targets federal
grants to distressed urban and rural communities for social services
and community redevelopment and provides tax and regulatory relief to
attract or retain businesses in distressed communities.  This report
focuses on six urban empowerment zones that receive most of the
program's funds--Atlanta, Baltimore, Chicago, Detroit, New York, and
Philadelphia/Camden.  GAO discusses the (1) status of the program's
implementation in the urban empowerment zones, including the extent
to which public housing officials and residents have been involved;
(2) factors that participants believe have either helped or hindered
efforts to carry out the program; and (3) plans for evaluating the
program. 


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

Student Loans:
Default Rates at Historically Black Colleges and Universities

GAO/HEHS-97-33, Jan.  21 (20 pages). 

Of the $26.2 billion in federal student loans made in fiscal year
1995, $731 million--or about three percent--was made to students
attending historically black colleges and universities.  This
percentage remained steady during fiscal years 1991-95.  For fiscal
year 1993, the average loan default rate for historically black
colleges and universities was 21.1 percent.  The average for other
colleges and universities was 7.2 percent.  These percentages
remained relatively constant throughout fiscal years 1991-93.  If the
default rates for historically black colleges and universities remain
the same for fiscal years 1994-96 as they were for fiscal years
1991-93, 22 of these institutions could lose their eligibility for
federal student loan programs in fiscal year 1998, after their
exemption from default rate requirements expire. 

Student Loans:
Selected Characteristics of Schools in Two Major Federal
Loan Programs

GAO/HEHS-97-45, Jan.  31 (28 pages). 

Federal support for student financial aid totaled about $35 billion
in fiscal year 1995.  Most of this aid--$27 billion--was provided
through student loans.  Eligible postsecondary institutions can
choose to give students access to federally supported loans through
either the William D.  Ford Federal Direct Loan Program or the
Federal Family Education Loan Program.  This report provides
information on comparative levels of activity in the two programs. 
Legislation requires the Federal Direct Loan Program to provide five
percent of federal student loans during school year 1994-95,
increasing to at least 60 percent by school year 1998-99.  GAO
discusses (1) the number of schools in each program and the
distribution of student loans between the two, (2) the loan default
rate for schools associated with each program, and (3) the number of
schools in each program on a state-by-state basis and among the 100
largest postsecondary schools participating in these federal loan
programs. 


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

Department of Energy:
Contract Reform Is Progressing, but Full Implementation Will
Take Years

GAO/RCED-97-18, Dec.  10 (80 pages). 

As the world's largest civilian contracting agency, the Department of
Energy (DOE) has earmarked 91 percent ($17.5 billion) of its fiscal
year 1995 obligations for contracts.  For years, GAO has reported on
weaknesses in DOE's contracting practices.  In February 1994, DOE's
Contract Reform Team completed a review of the Department's
contracting practices.  The team made several recommendations aimed
at making DOE's contracting work better and cost less.  This report
(1) determines the status of the team's recommendations, (2)
evaluates the effect of the initiatives on competition for management
and operating contracts at DOE facilities, (3) evaluates DOE's
attempts to insert performance goals in its management and operating
contracts, and (4) evaluates DOE's early use of incentive contracts
to control the costs of its management and
operating contracts. 

Nuclear Safety:
Uncertainties About the Implementation and Costs of the Nuclear
Safety Convention

GAO/RCED-97-39, Jan.  2 (17 pages). 

The 1986 explosion of the Chernobyl reactor, which spread radioactive
material across Europe, underscored the global dimensions of nuclear
safety.  In the aftermath of the Chernobyl accident, representatives
of more than 50 nations produced a multilateral treaty to improve the
safety of civil nuclear power reactors.  At the end of 1996, 65
nations, including the United States, had signed the Convention on
Nuclear Safety.  In order for the United States to become legally
bound by the treaty, the U.S.  Senate must ratify it.  The
administration sent the treaty to the Senate in May 1995, but the
Senate has yet to take action.  This report provides information on
(1) how compliance with the treaty's terms and obligations will be
reviewed by the ratifying countries and (2) the potential costs to
the United States to participate in the Convention. 

Nuclear Waste:
Impediments to Completing the Yucca Mountain Repository Project

GAO/RCED-97-30, Jan.  17 (56 pages). 

Congress is expressing growing concern about the pace, direction, and
cost of the Department of Energy's (DOE) effort to permanently
dispose of radioactive waste generated by civilian nuclear power
plants and DOE's nuclear weapons programs.  Central to the disposal
effort is the investigation of Yucca Mountain, Nevada, as a possible
site for a geologic repository to contain the waste.  The perceived
lack of progress on the repository project has led to renewed debate
over the need for a federal facility to store waste until the
repository has been built and a reduced allotment of appropriations
for the project in fiscal year 1996.  This report identifies the (1)
adjustments DOE made to the disposal program because of the reduced
appropriations and (2) potential impediments to achieving DOE's
objectives and schedule for the repository project. 

Department of Energy:
Value of Benefits Paid to Separated Contractor Workforce
Varied Widely

GAO/RCED-97-33, Jan.  23 (27 pages). 

Since 1993, The Department of Energy (DOE) has paid more than $600
million in benefits to contractor employees separated in workforce
restructurings and downsizings at its facilities.  Brought on by the
end of the Cold War, this downsizing has been carried out using
benefits provided by legislation requiring DOE to develop plans for
minimizing the impact of downsizing on workers at affected
facilities.  Members of Congress have raised concerns about the costs
associated with DOE's implementation of these plans, particularly as
the costs relate to workers hired after the end of the Cold War. 
This report answers the following questions:  What types and amounts
of benefits were provided to separated employees?  What distinctions
did DOE make in determining who should receive these benefits?  To
what extent did the contractors at DOE facilities have to rehire
workers or replace them with others having similar skills because the
downsizings were not targeted enough to retain critically needed
skills?  What steps has DOE taken to oversee implementation of the
plans? 


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

Clean Water Act:
State Revolving Fund Loans to Improve Water Quality

GAO/RCED-97-19, Dec.  31 (20 pages). 

Congress authorized the creation of state revolving funds in 1987 to
help local governments and others build projects that would improve
water quality.  The federal government provides annual grants to the
states as "seed money" to help capitalize their revolving loan funds. 
The states use their revolving funds to make loans to local
governments and others; as the loans are repaid, the fund is
replenished, and more loans can be made.  All 50 states and Puerto
Rico have set up state revolving funds, and through fiscal year 1996,
Congress had provided more than $11 billion to those revolving funds. 
GAO surveyed nine states with revolving fund programs--Arizona,
Florida, Illinois, Louisiana, Maryland, Missouri, Oregon,
Pennsylvania, and Texas.  This report provides information on (1) the
amount of funds lent and the percentage of available funds lent as of
the end of each state's fiscal year 1996 and (2) the factors at the
federal and state levels that constrained the amount and percentage
of funds lent. 


   FINANCIAL MANAGEMENT
--------------------------------------------------------- Appendix 0:7

Financial Management:
DOD Inventory of Financial Management Systems Is Incomplete

GAO/AIMD-97-29, Jan.  31 (23 pages). 

As part of GAO's ongoing review of the Defense Department's (DOD)
financial management systems, this report evaluates the accuracy and
completeness of DOD's inventory of financial management systems.  An
accurate inventory is a critical step in DOD's efforts to develop
reliable financial management systems and overcome its long-standing
financial management problems.  DOD's ability to produce accurate,
auditable financial statements and other reliable management reports
as required by the Chief Financial Officers Act of 1990 and the
Government Management Reform Act of 1994 has been hampered by the
lack of integrated financial systems that link accounting, budgeting,
and program information. 


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

Financial Management:  Challenges Facing the IRS, by Gregory M. 
Holloway, Director of Governmentwide Audits, before the Commission on
Restructuring the Internal Revenue Service.  GAO/T-AIMD-97-34, Jan. 
9
(seven pages). 

This testimony addresses the financial management challenges
confronting the Internal Revenue Service (IRS).  GAO discusses the
specific financial management problems cited in GAO's audits of IRS
financial statements, the measures IRS needs to take to overcome
these problems, and how the Commission on Restructuring the Internal
Revenue Service can further its efforts to strengthen IRS operations. 


   GOVERNMENT OPERATIONS
--------------------------------------------------------- Appendix 0:8

Acquisition Reform:
Obstacles to Implementing the Federal Acquisition
Computer Network

GAO/NSIAD-97-26, Jan.  3 (46 pages). 

The Federal Acquisition Streamlining Act of 1994 mandated the
creation of a Federal Acquisition Computer Network (FACNET)
architecture to allow federal agencies and vendors to do business
electronically in a standard way.  FACNET is intended primarily for
purchases valued at between $2,500 and $100,000.  Federal officials
and others expect many benefits from FACNET, including expanded
contracting opportunities for small businesses, greater competition
and lower prices for goods and services, shorter contract-processing
times, simplified procurement processes, and greater federal
productivity.  This report discusses (1) federal agencies' use of
FACNET, (2) benefits and drawbacks to using FACNET, (3) concerns
about the act's requirements for FACNET, and (4) management obstacles
to effective governmentwide implementation of FACNET. 

Status of Open Recommendations:
Improving Operations of Federal Departments and Agencies

GAO/OP-97-1, Jan.  24 (154 pages). 

Each year, GAO's work contributes to many legislative and executive
branch actions that yield significant financial savings and other
improvements in government operations.  Some, but not all, are
identified through GAO's system for periodically following up to
determine the status of actions taken on the recommendations made in
GAO reports.  About 70 percent of the recommendations made during the
past five years have been implemented.  This report highlights the
impact of GAO's work on various issues and summarizes key open
recommendations.  It also includes a set of computer diskettes with
details on all open recommendations.  The diskettes have several menu
options to help users find information easily. 


   HEALTH
--------------------------------------------------------- Appendix 0:9

FDA's Mammography Inspections:
While Some Problems Need Attention, Facility Compliance
Is Growing

GAO/HEHS-97-25, Jan.  27 (39 pages). 

To address concerns about the quality of mammography services offered
by more than 10,000 facilities throughout the United States, Congress
passed legislation in 1992 requiring the accreditation and annual
inspection of mammography facilities.  The results of the Food and
Drug Administration's (FDA) current mammography facility inspection
program are encouraging.  By mid-1996, more than 9,000 facilities had
been inspected, and about 1,500 of these had undergone two rounds of
inspections.  The first time these facilities were evaluated, more
than one-quarter had significant violations; during the second-year
inspection, this figure had dropped to about 10 percent.  Also, the
percentage of facilities with less significant deviations from
quality standards had decreased.  However, GAO did note some
differences in how inspectors are conducting inspections that could
lead to inconsistent reporting of violations, thereby limiting FDA's
ability to determine the full effect of the inspection process and to
identify the extent of repeat violations.  Moreover, GAO's review of
FDA actions during the first 18 months of the inspection program
revealed two problem areas.  First, FDA's inspection procedures for
an important test of mammography equipment were inadequate.  Second,
FDA lacked procedures to guarantee that all violations of standards
were both promptly and adequately corrected. 

Skilled Nursing Facilities:
Approval Process for Certain Services May Result in Higher Medicare
Costs

GAO/HEHS-97-18, Dec.  20 (133 pages). 

Skilled nursing facilities provide posthospital care for people who
need more care than is available in the home.  Medicare payments to
these facilities have grown rapidly, from $456 million in 1983 to
nearly $11 billion in 1996.  The number of facilities that have
sought and been granted payments higher than those normally allowed
by Medicare has also grown, from a total of 80 during fiscal years
1979-92 to 552 in fiscal year 1995.  The skilled nursing facility
industry contends that the higher payments are justified because
these facilities care for more complex and costly patients than they
did in the past.  However, GAO did not find that skilled nursing
facilities that collected the higher fees had a larger proportion of
patients requiring complex care than did other facilities.  Moreover,
in the area of therapy, which could be indicative of complex care
needs, GAO found no major differences in the amount and types of
therapy provided.  Although the number of skilled nursing facilities
granted exceptions to routine cost limits under Medicare soared from
62 in fiscal year 1992 to 552 in 1995, the Health Care Financing
Administration's review process for exception requests does not
ensure that facilities actually provide atypical services to their
Medicare patients.  In addition, the patient-specific data obtained
from requesting skilled nursing facilities generally are not used to
assess whether the Medicare beneficiaries need or receive atypical
services. 

Health Care Services:
How Continuing Care Retirement Communities Manage Services for the
Elderly

GAO/HEHS-97-36, Jan.  23 (17 pages). 

Continuing care retirement communities provide their residents with
various services--from housing to long-term care to recreation--in an
effort to bring the benefits of managed care to the elderly.  About
350,000 residents live in 1,200 of these communities nationwide, most
of which are private, nonprofit agencies, often with religious
affiliations.  The communities GAO examined managed to meet the needs
of both healthy residents and those with chronic conditions.  They
use active strategies to promote health, prevent disease, and detect
health problems early by encouraging exercise, proper nutrition,
social contacts, immunizations, and periodic medical exams.  Many of
these communities also have teams of nurses, social workers,
rehabilitation specialists, doctors, and dieticians to plan and
manage residents' care.  Active monitoring of residents with chronic
diseases, such as arthritis, hypertension, and heart disease, is an
integral part of this coordinated, multidisciplinary approach to
managing care.  Although the health benefits of these practices are
generally recognized, little evidence exists to demonstrate health
care cost savings. 

Medical Device Reporting:
Improvements Needed in FDA's System for Monitoring Problems With
Approved Devices

GAO/HEHS-97-21, Jan.  29 (56 pages). 

The Food and Drug Administration (FDA) is responsible for protecting
the American public from unsafe and ineffective medical devices,
which range from simple household items, such as thermometers, to
implanted heart valves.  During the past 15 years, the U.S.  medical
device industry has grown from 5,900 to 16,900 firms; more than $40
billion was spent on such devices in the United States in 1994. 
Medical device manufacturers have been required since 1984 to report
malfunctions, along with resulting injuries and deaths, to FDA. 
Hospitals and other facilities, however, were not required to report
these cases and rarely did so.  As a result, Congress passed the Safe
Medical Devices Act of 1990, which expanded the reporting
requirements to include user facilities, such as hospitals and
nursing homes, and medical device distributors.  GAO found that
although FDA collects reports from users, hospitals, nursing homes,
manufacturers, and others about problems with medical devices, FDA
does not act systematically to ensure that reported problems are
resolved promptly, thus defeating the system's usefulness as an early
warning about defective medical devices. 


   HOUSING
-------------------------------------------------------- Appendix 0:10

Public Housing:
HUD Should Improve the Usefulness and Accuracy of Its Management
Assessment Program

GAO/RCED-97-27, Jan.  29 (61 pages). 

The Department of Housing and Urban Development (HUD) is responsible
for ensuring that the 3,000 independent, state-chartered public
housing authorities provide safe and decent housing and protect the
federal investment in their properties.  However, the public housing
management assessment program--HUD's primary tool for measuring the
performance of housing authorities--has been criticized as
unreliable, inaccurate, and at times conflicting with good property
management practices.  Nevertheless, because no other measurement
tool exists, Congress and HUD have proposed using the program as a
basis for deregulating or rewarding high-scoring housing authorities. 
This report reviews HUD's implementation of the program.  GAO
discusses whether (1) HUD's field offices are using the program and
complying with the program's statutory and regulatory requirements to
monitor and provide technical assistance to housing authorities; (2)
program scores have increased and how HUD uses the program to inform
HUD's Secretary and Congress about the performance of housing
authorities; and (3) program scores are consistently accurate and can
be considered a generally accepted measure of good property
management. 


   INFORMATION MANAGEMENT
-------------------------------------------------------- Appendix 0:11

Air Traffic Control:
Improved Cost Information Needed to Make Billion Dollar Modernization
Investment Decisions

GAO/AIMD-97-20, Jan.  22 (60 pages). 

In 1981, the Federal Aviation Administration (FAA) began an air
traffic control modernization program that the agency now expects
will cost more than $34 billion by 2003.  The vast majority of these
air traffic control capital investment projects, both in terms of
money and number, involve software-intensive information acquisition,
processing, and display systems.  GAO found that the program's
cost-estimating and accounting practices are badly flawed, resulting
in an absence of reliable cost and financial information needed to
make informed investment decisions.  This report examines the
cost-estimating and accounting practices that FAA has used for its
air traffic control project.  GAO discusses whether (1) air traffic
control cost estimates are based on good estimating processes and (2)
actual air traffic control project costs are being properly captured
and reported. 


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

Managing Technology:  Best Practices Can Improve Performance and
Produce Results, by Christopher Hoenig, Director of Information
Resources Management Policies and Issues, before the National
Commission on Restructuring the Internal Revenue Service. 
GAO/T-AIMD-97-38, Jan.  31 (31 pages). 

This testimony discusses how best practices at leading organizations
can be used to improve the management of information technology in
the federal government.  This is especially important for the
Internal Revenue Service (IRS), whose tax systems modernization
effort has been plagued by problems.  GAO makes four main points. 
First, better facts are needed about the government's information
technology investments.  Although the federal government spends
upwards of $25 billion annually on information technology, it is
unclear what the government is getting for its money.  Second,
information technology is characterized by high risk and high return. 
Information technology can boost organizational performance, but the
risks of failure are ever present and must be rigorously managed. 
Third, repeatable success takes sound management processes that are
applied with relentless discipline.  Organizations with successful
information technology projects have sustainable and effective
management practices in place.  Fourth, the challenge is
implementation.  Leading organizations discovered that understanding
these practices was only a first step.  For most, it took three to
five years to fully translate the practices into improved management
processes.  Similarly, a consensus has emerged among decisionmakers
in the federal government on what the problems are and how to solve
them.  Now, agency leaders must effectively implement information
technology management processes and reinforce accountability to
produce tangible results from information technology investments. 


   INTERNATIONAL AFFAIRS
-------------------------------------------------------- Appendix 0:12

Foreign Assistance:
Harvard Institute for International Development's Work in Russia and
Ukraine

GAO/NSIAD-97-27, Nov.  27 (118 pages). 

As the Soviet Union crumbled, the United States sought to help Russia
and the other newly independent states become free market
democracies.  The U.S.  supported various reforms, including the
development of democratic institutions, the privatization of
state-owned property, the establishment of legal codes, and the
creation of mechanisms to operate a private capital market.  The U.S. 
Agency for International Development, (USAID) the lead U.S.  agency
to provide transition assistance, lacked the contacts and expertise
to accomplish this unprecedented task.  Therefore, it turned to
private organizations, including the Harvard Institute for
International Development, to provide direct technical help to
Russian reformers.  The Institute was also expected to help oversee
U.S.  contractors in USAID's Russian economic restructuring project. 
The Institute had preexisting relationships with Russian officials
and had already helped establish several Russian institutions to
sustain reforms, including the Russian Privatization Center, which
helped restructure business enterprises and facilitated land reform. 
Members of Congress had raised concerns about the noncompetitive
nature of the awards to the Institute and about the Institute's
effectiveness.  This report assesses (1) how USAID awarded assistance
agreements to the Institute to carry out work in Russia and Ukraine
and (2) the Institute's role and accomplishments in implementing
assistance agreements to develop a Russian capital market and devise
a legal reform program.  GAO also evaluates the effectiveness of the
Russian Privatization Center in implementing USAID post-privatization
and land reform projects. 

Export-Import Bank:
Options for Achieving Possible Budget Reductions

GAO/NSIAD-97-7, Dec.  20 (47 pages). 

Financing provided by the Export-Import Bank of the United States
(Eximbank) helps support the sale of billions of dollars worth of
U.S.  goods and services to foreign markets each year consistent with
U.S.  foreign policy interests.  However, this comes at a cost to
U.S.  taxpayers--about $3.75 billion in appropriated program funds
during the last five years.  The Office of Management and Budget
projects a substantial decline in these resources during the next
five years.  GAO identifies two options for reducing the Eximbank's
subsidy costs:  (1) raising fees for services and (2) reducing the
risks of its programs.  For example, Eximbank might cap the maximum
allowable subsidies offered, limit program availability in some
high-risk markets, or offer less than 100-percent risk protection. 
Both of these options could significantly reduce subsidy costs and
would allow Eximbank to continue to operate with reduced federal
funding.  GAO cautions that these options need to be considered
within the full context of their trade and foreign policy
implications and should be consistent with Eximbank's other statutory
obligations.  In GAO's view, raising exposure fees within the context
of ongoing international negotiations to reduce government export
credit subsidies appears to be the least disruptive of the two
options. 

U.S.-Japan Trade:
U.S.  Company Views on the Implementation of the 1994
Insurance Agreement

GAO/NSIAD/GGD-97-64BR, Dec.  20 (55 pages). 

Japan is the second largest insurance market in the world; in fiscal
year 1995, Japanese firms received 96.4 percent of the $400 billion
in annual risk insurance premiums.  In October 1994, the United
States and Japan signed an agreement to reduce barriers that impede
the access of competitive foreign insurance companies to the Japanese
market.  GAO surveyed U.S.  companies on the 1994 insurance
agreement.  Although U.S.  insurance providers indicated that the
Japanese government has implemented many of the key provisions of the
1994 agreement, these actions have not resulted in significant
liberalization and have had no effect on their ability to compete in
the Japanese insurance market.  For example, most companies said that
they remained unable to differentiate the types of coverage they
could offer and the rates that they could charge.  In addition, they
said that the distribution systems in Japan impeded their ability to
distribute their products. 


   JUSTICE AND LAW ENFORCEMENT
-------------------------------------------------------- Appendix 0:13

Fingerprint-Based Background Checks:
Implementation of the National Child Protection Act of 1993

GAO/GGD-97-32, Jan.  15 (53 pages). 

The National Child Protection Act of 1993 encourages states to enact
legislation authorizing fingerprint-based national searches of
criminal history records of persons seeking either paid or volunteer
jobs with organizations serving children, the elderly, or the
disabled.  This report addresses the following questions:  (1) To
what extent have the states GAO reviewed--California, Florida,
Tennessee, Texas, and Virginia--enacted statutes authorizing national
background checks of child care providers?  Also, what fees are
charged for background checks of volunteers, and how do these fees
compare with the actual costs in these states?  (2) What effect have
these states' laws and related fees had on volunteerism?  (3) Have
state agencies and other organizations found national background
checks a useful screening tool?  More specifically, for certain jobs,
how often have fingerprint-based background checks identified persons
with criminal histories?  (4) What is the status of the Integrated
Automated Fingerprint Identification System being developed by the
FBI, and what are the selected states' plans for using the system
when it becomes available? 


   NATIONAL DEFENSE
-------------------------------------------------------- Appendix 0:14

Military Attrition:
DOD Could Save Millions by Better Screening Enlisted Personnel

GAO/NSIAD-97-39, Jan.  6 (64 pages). 

The Defense Department (DOD) could save as much as $39 million over
the long term by better screening military recruits, who often go
through basic training only to be discharged because of preexisting
conditions, such as disqualifying medical problems, drug use, or lack
of physical fitness.  For at least the last decade, about one-third
of enlistees in the armed forces have failed to complete their first
tours of duty.  DOD's main database for managing attrition cannot be
used to pinpoint the reasons that recruits leave and to set
appropriate targets for reducing attrition because (1) the services
interpret and apply DOD's uniform set of separation codes differently
due to a lack of DOD directives and (2) current separation codes only
list the official reason why an enlistee leaves the military. 
Thousands of recruits leave during the first six months because the
military does not adequately screen applicants for disqualifying
medical conditions or for drug use.  One reason that this screening
is inadequate is that recruiters do not have sufficient incentives to
ensure that their recruits are qualified.  Thousands of recruits are
also discharged because they fail to meet minimum performance
criteria, primarily because they are not physically prepared for
basic training or they lack motivation. 

Army Ranger Training:
Safety Improvements Need to Be Institutionalized

GAO/NSIAD-97-29, Jan.  2 (33 pages). 

The Army has taken steps to improve the safety of training conditions
since four students died of hypothermia during ranger training in a
Florida swamp in 1995, but it needs to strengthen oversight of key
safety controls to avoid such tragedies in the future.  The Ranger
Training Brigade has improved safety by developing systems to better
monitor and predict swamp conditions.  It has moved training
exercises out of high-risk areas in the swamp, eliminated discretion
to deviate from planned exercise locations, and incorporated the
latest guidance on training safety.  Evacuation procedures have been
revised and rehearsed, new medevac helicopters and refueling capacity
have been obtained, and medics have been assigned directly to the
Brigade.  In addition, GAO recommends that the Ranger Training Bridge
be required to identify critical training safety controls at each
location; that periodic safety inspections be conducted to ensure
compliance with these controls; and that inspections of these
controls be made periodically by groups outside the chain of command,
such as the Army Inspector General. 

Defense Inventory:
Spare and Repair Parts Inventory Costs Can Be Reduced

GAO/NSIAD-97-47, Jan.  17 (12 pages). 

The Army, the Navy, and the Air Force could save an estimated $380
million in storage and acquisition costs if they eliminated rarely
used items from their inventory of spare and repair parts that they
maintain at hundreds of smaller storage facilities across the
country.  GAO found that more than 53 percent of the items stored in
these locations were in quantities of three or less, while only 25
percent were in quantities of 11 or more.  This inventory, however,
is valued at more than $8.3 billion.  The need for many of these
items is questionable.  Maintaining inventory that is not needed is
expensive and does not contribute to an effective, efficient, and
responsive supply system. 

Environmental Cleanup:
Inadequate Army Oversight of Rocky Mountain Arsenal
Shared Costs

GAO/NSIAD/AIMD-97-33, Jan.  23 (22 pages). 

The Rocky Mountain Arsenal, located on 17,000 acres northeast of
Denver, is one of the Defense Department's most contaminated
installations.  The military manufactured chemical weapons there for
decades, and the Army leased part of the arsenal to the Shell Oil
Company, which produced herbicides and pesticides.  GAO found that
the Army's process for reviewing claims under its cost sharing for
cleanup at the arsenal falls short in ensuring that costs claimed by
Shell are appropriate.  The review process does not always ensure
that (1) enough documentation is available to review claimed costs
and (2) formal agreements exist defining which costs should be
shared.  The review process generally does not look at the detailed
documentation supporting cost claims.  GAO found that in most cases
further information was available, but in some cases, it was not. 
Also, the review process lacks effective checks and balances, such as
separation of key duties and responsibilities and independent review. 
The combination of limited documentation and inadequate controls
places the government at risk of paying for unwarranted charges. 

Acquisition Reform:
DOD Faces Challenges in Reducing Oversight Costs

GAO/NSIAD-97-48, Jan.  29 (18 pages). 

The Pentagon considers acquisition reform (lowering the cost of
acquiring weapon systems) to be one of its highest priorities.  In an
era of shrinking military budgets, the Defense Department (DOD) plans
to use the savings from acquisition reform to pay for forces
modernization.  DOD established a reinvention laboratory in September
1994 to help reduce nonvalue added oversight requirements, thereby
lowering contractors' compliance costs and the government's oversight
costs.  Overall, the reinvention laboratory has made only limited
progress in reducing the cost of contractors' compliance with
government regulations and oversight requirements.  In particular,
laboratory participants reported little success in addressing nine of
the top 10 cost drivers.  DOD officials said that the reinvention
laboratory tended to receive little top-level support from elsewhere
in DOD.  Other factors that limited various projects included
statutory and non-DOD regulatory requirements, disagreements between
DOD and contractors over the value of some oversight requirements,
and difficulties coordinating and obtaining approval for proposed
changes that involved multiple customers.  These results, however,
should not deter DOD from continuing its efforts to reduce nonvalue
added oversight requirements.  Sustained support from DOD leadership
is essential.  From a budgetary perspective, the laboratory results
underscore the need for caution in estimating cost savings from
oversight reform. 

Army National Guard:
Planned Conversions Are a Positive Step, but Unvalidated Combat
Forces Remain

GAO/NSIAD-97-55BR, Jan.  29 (31 pages). 

By the end of fiscal year 1999, the Army National Guard plans to have
367,000 personnel in military commands in the 50 states, the District
of Columbia, Puerto Rico, the U.S.  Virgin Islands, and Guam.  War
planners, the Defense Department (DOD), and the Army have noted that
many Guard combat units are not needed to meet the national security
strategy of fighting and winning two nearly simultaneous regional
conflicts.  According to DOD documents and Army officials, these
excess forces are assigned to secondary missions, such as providing
wartime rotational forces, serving as a deterrent to future
adversarial regimes, and supporting civil authorities at home. 
Previous GAO reports and the report of the Commission on Roles and
Missions of the Armed Forces have discussed the need to make better
use of reserve forces.  This report examines how the Army National
Guard Division Redesign Study addresses this need. 

Defense Industry:
Trends in DOD Spending, Industrial Productivity, and Competition

GAO/PEMD-97-3, Jan.  31 (70 pages). 

The end of the Cold War saw a continuing decline in most Defense
Department (DOD) appropriations accounts from their peaks in the
1980s.  Declines in military spending for procurement and research,
development, test, and evaluation have some effect on the industries
that manufacture weapons for DOD.  The impact of shrinking defense
budgets has been the focus of congressional and executive branch
initiatives designed to help communities, businesses, and workers
adjust to military downsizing in the post-Cold War era.  This report
is a broad review of productivity and competition in the defense
industrial base.  GAO describes (1) overall trends in productivity,
competition, and other financial indicators in the defense industry
over time and (2) the relationship between these trends and
indicators of defense spending over time. 


   TAX POLICY AND ADMINISTRATION
-------------------------------------------------------- Appendix 0:15

Tax Administration:
Lessons Learned From IRS' Initial Experience in
Redeploying Employees

GAO/GGD-97-24, Jan.  9 (61 pages). 

Thousands of employees could have their jobs eliminated or redesigned
as the Internal Revenue Service (IRS) modernizes its operations
during the next several years.  For example, many jobs that involved
processing tax returns at IRS service centers could be eliminated as
IRS moves to a paperless environment.  In addition, many jobs now
devoted to resolving taxpayer account issues, mainly through
correspondence, are to be redesigned as customer-service jobs that
will resolve those matters over the telephone.  Rather than fire
workers when their jobs become obsolete, IRS decided to give its
employees the opportunity to transfer into new jobs--a process known
as "redeployment." This report examines whether lessons can be
learned from (1) IRS' initial use of redeployment procedures and
their impact on IRS operations and (2) the reaction of redeployed
employees and their supervisors to redeployment and the
redeployment process. 

Tax Systems Modernization:
Imaging System's Performance Improving but Still Falls Short
of Expectations

GAO/GGD-97-29, Jan.  16 (24 pages). 

One of the major goals of the Internal Revenue Service's (IRS)
modernization effort is to move from a labor-intensive tax return
processing system that relies on thousands of employees transcribing
data from paper tax returns to an electronic system that reduces
processing costs and eliminates transcription errors.  For returns
that continue to be filed on paper, IRS plans to achieve its
objective through document imaging and optical character recognition. 
The Service Center Recognition/Image Processing System (SCRIPS) is
the first of what was to have been two document imaging and optical
character recognition systems.  SCRIPS became operational in late
1994, and GAO reported that it experienced many problems during the
1995 filing season.  (See GAO/GGD-96-48, Dec.  1995.) This report
follows up on these issues and assesses the performance of SCRIPS in
1996.  GAO (1) identifies the main causes of the performance problems
in 1995, (2) assesses whether SCRIPS' performance improved in 1996,
and (3) provides a status report on IRS' future plans
for SCRIPS. 

Tax Systems Modernization:
IRS Needs to Resolve Certain Issues With Its Integrated Case
Processing System

GAO/GGD/AIMD-97-31, Jan.  17 (44 pages). 

To guide its efforts to improve customer service through tax systems
modernization, the Internal Revenue Service (IRS) has developed its
"Customer Service Vision," which describes how the agency proposes to
meet taxpayers' needs in the future.  IRS' plans for achieving this
vision include a long process of consolidating work units, retraining
employees, and developing new information systems.  If IRS is to be
successful, it must have the capabilities to quickly obtain the data
needed to answer taxpayer questions and resolve various taxpayer
problems.  IRS' integrated case-processing system is one of the key
information systems being developed to support these capabilities. 
With this and other new systems, IRS anticipates that by 2001 its
employees will be able to resolve taxpayer concerns during a single
telephone conversation 95 percent of the time.  This report (1)
evaluates IRS' assessment of the costs and benefits of the integrated
case-processing system and provides users' views on its benefits, (2)
analyzes IRS' testing of the system, (3) assesses IRS' efforts to
redesign its customer service work processes to fully use the
system's capabilities, and (4) assesses the software development
processes being used for the system. 


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

Taxpayer Compliance:  Analyzing the Nature of the Income Tax Gap, by
Lynda D.  Willis, Director of Tax Policy and Administration Issues,
before the National Commission on Restructuring the Internal Revenue
Service.  GAO/T-GGD-97-35, Jan.  9 (16 pages). 

Internal Revenue Service (IRS) data suggest that taxpayers ultimately
pay about 87 percent of the taxes they owe, a compliance level that
translates into a "tax gap" of billions of dollars.  IRS estimates
show that voluntary compliance in reporting income varies across
groups of individuals.  For example, wage earners report 99 percent
of their wages, while self-employed workers who operate informally on
a cash basis report just 19 percent of their income on tax returns. 
IRS data also show that compliance is highest under tax withholding,
a little lower without withholding but with information reporting to
IRS, and much lower when neither system is in place.  Other factors,
such as complex tax laws, can also influence the level of compliance. 
IRS faces many challenges in reducing the income tax gap.  Closing
some of the "tax gap" might entail unacceptable costs, such as overly
intrusive record-keeping requirements or more resources than IRS can
commit.  Thus, IRS needs to know as much as possible about current
compliance with the tax laws and use that information to focus its
resources in a cost-effective way. 


   TRANSPORTATION
-------------------------------------------------------- Appendix 0:16

Transportation Infrastructure:
States' Implementation of Transportation Management Systems

GAO/RCED-97-32, Jan.  13 (63 pages). 

The Intermodal Surface Transportation Efficiency Act of 1991 requires
states to develop six systems for managing highway pavement, bridges,
highway safety, congestion, public transportation facilities and
equipment, and intermodal transportation facilities and systems. 
Management systems can take various forms, including computerized
inventories of assets, software programs, systematic procedures for
collecting and analyzing information, and committees that make
recommendations for improving the systems' performance.  In 1995,
legislation made the systems optional, except for the congestion
management system in certain areas, and prohibited the Transportation
Department from withholding funds from states that chose not to
implement any system.  This report identifies (1) the status of the
states' development and implementation of the systems, (2) how the
states expect to use the systems, and (3) the factors that have
facilitated or hindered the development and implementation of the
systems. 


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

VA Disability Compensation:
Disability Ratings May Not Reflect Veterans' Economic Losses

GAO/HEHS-97-9, Jan.  7 (38 pages). 

The disability ratings used by the Department of Veterans Affairs
(VA) still rely on judgments made by doctors and lawyers in 1945
about the effect of service-connected conditions on an average
individual's ability to do jobs requiring manual or physical labor. 
During fiscal year 1995, veterans' monthly benefit ranged from $89 to
about $1,800, depending on the degree of disability.  Dramatic
changes have occurred in the labor market and in society since 1945,
and some of the ratings in the VA schedule likely do not reflect the
economic loss experienced by veterans today.  Basing disability
ratings at least in part on actual earnings loss rather than solely
on judgments of loss in functional capacity would help to ensure that
veterans are compensated according to their economic losses and that
compensation money is distributed equitably. 


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

Abstracts of Reports and Testimony:
Fiscal Year 1996

GAO/OIMC/OPA-97-1A and GAO/OIMC/OPA-97-1B (indexes), Feb.  1997
(198 pages and 336 pages). 

A two-volume set, this reference publication provides an overview of
GAO's work during fiscal year 1996.  The first volume summarizes more
than 1,000 "blue books" and other publications issued between October
1995 and September 1996.  The second volume contains indexes that
allow the reader to locate quickly documents that are of interest. 

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

GAO/HEHS-97-56W, Jan.  1997 (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
December 1996.  Another section lists the titles of all documents
issued from September through December 1996, organized
chronologically by subject.  Order forms are included, as is a list
of issue area experts who can answer questions about specific
reports. 

*** End of document. ***