Reports and Testimony: March 1997 (Other Written Prod., 03/01/97,
GAO/OPA-97-6).
GAO published its monthly list of reports and testimony issued in March
1997.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: OPA-97-6
TITLE: Reports and Testimony: March 1997
DATE: 03/01/97
SUBJECT: Agricultural industry
Energy
Environmental monitoring
Fraud
Health care programs
Health insurance
Housing programs
Information resources management
Food relief programs
Tax administration
IDENTIFIER: Bibliographies
Food Stamp Program
Medicaid Program
Medicare Program
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO report. Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved. Major **
** divisions and subdivisions of the text, such as Chapters, **
** Sections, and Appendixes, are identified by double and **
** single lines. The numbers on the right end of these lines **
** indicate the position of each of the subsections in the **
** document outline. These numbers do NOT correspond with the **
** page numbers of the printed product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
** A printed copy of this report may be obtained from the GAO **
** Document Distribution Center. For further details, please **
** send an e-mail message to: **
** **
** **
** **
** with the message 'info' in the body. **
******************************************************************
REPORTS AND TESTIMONY: MARCH 1997
GAO/OPA-97-6
Highlights
Health Insurance
Although the percentage of Americans covered by employment-based
health insurance fell from 75 percent to 71 percent between 1989 and
1995, the number of insured dependent children fell even further,
from 73 percent to 66 percent. Higher costs have led some employers
to raise employee health insurance premiums for family coverage or to
drop such coverage altogether. Page 18.
Food Stamps
In a computer match of 1995 food stamp rolls with state prison data
in four states, GAO discovered more than 12,000 prisoners who were
improperly counted among households receiving food stamps, resulting
in an estimated $3.5 million in overpayments. Computer matching is
an effective way to detect such fraud, but it is not widely used.
Page 2.
Information Technology Investment
Investments in information technology can have a dramatic impact on
organizational performance, and the federal government is spending
billions of dollars to upgrade its aging systems. To evaluate how
well federal agencies select and manage information technology
resources, GAO has developed a guide to identify specific areas in
which improvements can be made.
Page 2.
GAO/OPA-97-6
Abbreviations
=============================================================== ABBREV
AIDS - x
AIDS/HIV - x
BLM - x
DFAS - x
DOD - x
DOE - x
DRMS - x
EPA - x
FAA - x
FBI - x
FDA - x
GPRA - x
HCFA - x
HHS - x
HIV - x
HMO - x
HOPWA - x
HUD - x
IAEA - x
INS - x
IRS - x
IT - x
KU - x
NIH - x
NOAA - x
PMA - x
ROTC - x
SSA - x
STARS - x
TBO - x
USDA - x
VA - x
Inside Front Cover
=============================================================== INSIDE
ANNOUNCEMENT
Beginning with this issue, the "Monthly List" will include GAO legal
decisions, opinions, and reports on agency rules. (See pages 46-48.)
These documents are posted daily and can be downloaded from GAO's
home page on the World Wide Web (http://www.gao.gov). They can also
be obtained by using the order form in the back of this publication.
REPORTS AND TESTIMONY: MARCH 1997
=========================================================== Appendix 0
SPECIAL PUBLICATIONS
--------------------------------------------------------- Appendix 0:1
Assessing Risks and Returns:
A Guide for Evaluating Federal Agencies' IT Investment
Decision-making
GAO/AIMD-10.1.13, Feb. 1997 (109 pages).
Despite huge federal investments in information technology (IT), many
government programs are still hampered by inaccurate data and
inadequate systems. Too often, federal IT projects have cost too
much, produced too little, and failed to significantly boost
performance. Yet general agreement exists that the government can
improve its performance through the integration of IT into basic
business and mission needs. Outdated computer systems must be
replaced; inefficient, paper-oriented processes must be automated;
accurate financial data must be developed and maintained; and an
ever-increasing amount of information must be stored and managed.
This guide is intended to help evaluate how well federal agencies are
selecting and managing their IT resources and to identify areas in
which improvements are needed. The guide focuses on assessing an
organization from three levels: (1) the process that an organization
is using to select, manage, and evaluate its IT investments; (2) the
data that are being used to make IT decisions; and (3) the IT
decisions that are being made using the defined processes
and data.
AGRICULTURE AND FOOD
--------------------------------------------------------- Appendix 0:2
Food Stamps:
Substantial Overpayments Result From Prisoners Counted as Household
Members
GAO/RCED-97-54, Mar. 10 (23 pages).
Despite federal regulations prohibiting prisoners from receiving food
stamps, GAO identified more than 12,000 inmates who were included in
households receiving food stamps. These households improperly
collected $3.5 million in benefits. Payments to prisoners go
undetected because government agencies do not verify the information
on household membership provided by food stamp applicants. Moreover,
most state and local agencies responsible for running the program do
not routinely collect and review lists of persons in state and local
prisons to determine whether they are being counted as members of
food stamp households. Because of the program's reliance on
information provided by clients, computer matching of lists of
prisoners and household members could detect prisoner participation.
Although some states have introduced various computer-matching
routines, many states have yet to do so.
Farm Programs:
Finality Rule Should Be Eliminated
GAO/RCED-97-46, Mar. 7 (22 pages).
The Farm Service Agency pays billions of dollars each year to farmers
as part of such programs as disaster assistance and agricultural
conservation. Occasionally, because of errors, the agency pays
farmers too much. In 1990, Congress enacted the "finality rule,"
which states that a farmer need not repay an overpayment unless it is
discovered within 90 days of the date of the payment or the
application for program benefits, fraud is involved, or the farmer
was aware that an error had occurred. The rule was intended to
protect farmers from the hardship of repaying large sums of money
long after payments had been made. This report reviews the (1)
number and the dollar amount of overpayments not repaid by farmers
under the rule since 1990 and the characteristics of individual
overpayments and (2) steps that the agency has taken to reduce the
number of finality-rule cases and associated dollar amounts.
Food-Related Services:
Opportunities Exist to Recover Costs by Charging Beneficiaries
GAO/RCED-97-57, Mar. 20 (64 pages).
The federal government spent nearly $1.6 billion in fiscal year 1995
to provide food-related services, such as testing, grading, and
approving agricultural commodities and products. Although the
government recovered about $400 million of this expenditure through
user fees, GAO has identified more than $700 million in additional
fees that could have been assessed. In some cases, the persons or
companies benefitting from these services paid user fees for all or
part of the cost to provide the services. In other cases, no user
fees were charged. This report identifies opportunities to increase
the share of funding by beneficiaries for food-related services now
provided by the federal government. GAO discusses the (1) types of
food-related services provided by federal agencies; (2) extent to
which beneficiaries now pay for these services through user fees; and
(3) potential opportunities to recover more of the service costs
through user fees, as well as arguments for and against
doing so.
TESTIMONY
------------------------------------------------------- Appendix 0:2.1
Agricultural Research: More Efficient and Accountable System Could
Better Respond to New Challenges, by Robert A. Robinson, Director of
Food and Agriculture Issues, before the Senate Committee on
Agriculture, Nutrition, and Forestry. GAO/T-RCED-97-101, Mar. 13
(seven pages).
For more than a century, publicly funded agricultural research has
been a catalyst in creating a vigorous agricultural economy and a
bountiful supply of inexpensive food and fiber. Along with extension
and education, agricultural research has helped transform U.S.
agriculture into a productive, technology-based operation. However,
GAO believes that changes are needed to strengthen the system so that
it can better respond to current and future food and agricultural
needs. In particular, the system could be made more efficient by
closing and consolidating federal laboratories and by increasing
collaboration among public and private researchers. In addition,
greater accountability is needed to foster quality research and
reduce unnecessary duplication.
BUDGET AND SPENDING
--------------------------------------------------------- Appendix 0:3
Addressing the Deficit:
Budgetary Implications of Selected GAO Work for Fiscal Year 1998
GAO/OCG-97-2, Mar. 14 (363 pages).
This report, part of a continuing effort to help Congress identify
ways to reduce the deficit, updates previous GAO work in this area
and systematically identifies the budgetary implications of selected
program reforms that have not yet been implemented or enacted. This
year's report contains 147 options (71 of them new) for deficit
reduction that have been drawn from the findings and issues developed
in GAO audits and evaluations. GAO includes an analytical framework
that Congress may want to use to assess the goals, scope, and
approaches for delivering federal programs. It is organized around
the following three themes: reassess objectives (reconsider whether
to terminate or change the services and the programs provided),
redefine beneficiaries (reconsider who pays for benefits from a
particular program), and improve efficiency (reconsider how a program
or service is provided).
Performance Budgeting:
Past Initiatives Offer Insights for GPRA Implementation
GAO/AIMD-97-46, Mar. 27 (54 pages).
Since 1950, the federal government has attempted several
governmentwide initiatives designed to better align spending
decisions with expected performance--commonly known as "performance
budgeting." Congress enacted the Government Performance and Results
Act (GPRA) in 1993 to improve the effectiveness, efficiency, and
accountability of federal programs by having agencies focus on
program results. In this way, GPRA can be viewed as the most recent
effort to closely link resources to performance expectations. This
report compares and contrasts the key design elements and approaches
of GPRA with those of past initiatives to identify ways in which past
lessons are incorporated into GPRA and which of the remaining issues
pose significant challenges to
successful implementation.
CIVIL RIGHTS
--------------------------------------------------------- Appendix 0:4
TESTIMONY
------------------------------------------------------- Appendix 0:4.1
Farm Programs: Efforts to Achieve Equitable Treatment of Minority
Farmers, by Robert A. Robinson, Director of Food and Agriculture
Issues, before the Subcommittee on Department Operations, Nutrition,
and Foreign Agriculture, House Committee on Agriculture.
GAO/T-RCED-97-112, Mar. 19 (14 pages).
The number of minority-owned farms is declining at a more rapid rate
than other farms, which has called into question the treatment of
minority farmers in receiving federal assistance. Moreover, for
years, minority farmers have reported that Agriculture Department
(USDA) officials do not treat them in the same way as nonminority
farmers in the agency's programs, particularly in decisions made in
USDA's county offices and district loan offices. This testimony,
which draws on a January 1997 report (GAO/RCED-97-41), (1) discusses
the Farm Service Agency's efforts to treat minority farmers in the
same way as nonminority farmers in delivering program services, (2)
examines the representation of minorities in the staffing of county
offices and county committees in counties with the highest number of
minority farmers, and (3) examines data on the disposition of
minority and nonminority farmers' applications to participate in the
Agricultural Conservation Program and the direct loan program at the
national level and in five county and five district loan offices for
fiscal years 1995 and 1996.
EDUCATION
--------------------------------------------------------- Appendix 0:5
School Finance:
State Efforts to Reduce Funding Gaps Between Poor and
Wealthy Districts
GAO/HEHS-97-31, Feb. 5 (319 pages).
Children from poor backgrounds often have low levels of academic
achievement and high dropout rates. In addition, poor communities
often lack the tax base to provide enough funding for education, even
when they tax themselves at high rates. Despite state efforts to
supplement the local funding of poor school districts, a GAO survey
found that in 37 states in 1991-92, wealthier districts had more
total funding available than did poor districts; on average, wealthy
districts had about 24 percent more funding per pupil than did poor
districts. To shrink the gap between poor and wealthy school
districts, states can raise their share of school funding, increase
targeted efforts to help poor districts, or both. If targeting is
increased, poor and middle-income districts would receive more state
funding, while wealthy districts would receive less state funding.
States may also increase their state share of education funding. A
higher state share can offset income-related gaps, even if the
targeting effort is low, according to GAO's analysis. However,
making such changes may be difficult because of taxpayers' concerns.
Policymakers and others can use the measures in this
report--particularly the fiscal neutrality score, implicit foundation
level, and equalization effort--to assess the equity effects of
current and proposed changes in policies for financing
state schools.
TESTIMONY
------------------------------------------------------- Appendix 0:5.1
Department of Education: Challenges in Promoting Access and
Excellence in Education, by Cornelia M. Blanchette, Associate
Director for Education and Employment Issues, before the Subcommittee
on Human Resources, House Committee on Government Reform and
Oversight. GAO/T-HEHS-97-99, Mar. 20 (20 pages).
This testimony discusses two major challenges confronting the
Department of Education. The first is ensuring access to
postsecondary institutions while also protecting the financial
interests of the government. The second is promoting access to
excellence in elementary, secondary, and adult education. GAO also
discusses how better management, as envisioned in recent legislation,
could enhance the Department's ability to meet these challenges.
EMPLOYMENT
--------------------------------------------------------- Appendix 0:6
TESTIMONY
------------------------------------------------------- Appendix 0:6.1
Department of Labor: Challenges in Ensuring Workforce Development
and Worker Protection, by Carlotta C. Joyner, Director of Education
and Employment Issues, before the Subcommittee on Human Resources,
House Committee on Government Reform and Oversight.
GAO/T-HEHS-97-85, Mar. 6 (22 pages).
The mission of the Department of Labor, which has a budget of $34
billion and 16,000 staff in fiscal year 1997, is to promote the
welfare of U.S. wage earners, improve their working conditions, and
advance opportunities for profitable employment. In recent years,
the U.S. work environment has changed, making these goals more
difficult to achieve. Although the strength of international
competition has underscored the need for a skilled U.S. labor force,
many Americans remain unprepared for such employment. At the same
time, major changes are occurring in employer/employee relations,
such as greater use of part-time and contract workers. This
testimony discusses two areas that pose significant challenges to the
Department: (1) providing effective employment and training programs
that meet the diverse needs of target populations in a cost-effective
way and (2) ensuring worker protection within a flexible regulatory
structure. GAO also discusses how better management, as envisioned
in recent legislation, could improve the Department's ability to meet
these challenges.
ENERGY
--------------------------------------------------------- Appendix 0:7
Nuclear Weapons:
Capabilities of DOE's Limited Life Component Program to Meet
Operational Needs
GAO/RCED-97-52, Mar. 5 (eight pages).
The Energy Department (DOE) is responsible for managing the nation's
nuclear weapons stockpile, including a limited life components
program. This program involves the periodic replacement of
components to prevent nuclear weapons from becoming inoperative. DOE
appears able to provide limited life components for nuclear weapons
as long as the size of the nation's stockpile does not increase
significantly. DOE lacks enough production capacity for some key
components if weapons from the inactive stockpile are reactivated.
DOE's Albuquerque Operations Office plans to expand production
capacity of these key components. This expansion, if completed on
time, will allow DOE to meet the Production and Planning Directive's
requirements by providing the capacity to support weapons that may be
reactivated. Initially, DOE considered delaying the expansions by
not funding them in fiscal year 1997. However, DOE told its
Albuquerque Office to make the expansions a priority and to fund them
during fiscal year 1997.
Department of Energy:
Management and Oversight of Cleanup Activities at Fernald
GAO/RCED-97-63, Mar. 14 (90 pages).
More than 50 articles alleging mismanagement and safety violations at
the Energy Department's (DOE) Fernald site appeared in the Cincinnati
Enquirer last year. The Fernald Site, located about 18 miles from
Cincinnati, is contaminated from years of uranium metal production.
DOE has a five-year, $1.9 billion contract with Fluor Daniel Fernald
to clean up the facility. The contract will be up for a one- to
three-year renewal in November 1997. DOE estimates that it will take
an additional 13 years and about $2.4 billion to finish the cleanup.
The seriousness of the allegations prompted both DOE and Fluor Daniel
Fernald to investigate the situation. This report discusses (1) the
extent to which DOE is effectively managing and overseeing two key
cleanup projects at Fernald--the vitrification pilot plant project
and the uranyl hexahydrate project--that were reported on in the
Cincinnati Enquirer, (2) DOE's oversight of safety and health
activities at the site, and (3) the contractors' compliance with
performance and financial system procedures. GAO also discusses the
major allegations and what is known about them, including the results
of the two main investigations, and provides information on the facts
surrounding Fluor Daniel Fernald's recent announcement that it may
take 12 to 15 years to complete the cleanup, rather than the
previously agreed-upon 10-year
time frame.
Nuclear Safety:
International Atomic Energy Agency's Nuclear Technical Assistance for
Cuba
GAO/RCED-97-72, Mar. 24 (24 pages)
The International Atomic Energy Agency (IAEA) has provided technical
aid to Cuba, including $680,000 for nuclear safety assistance for two
Soviet-designed power reactors on which construction has been
suspended because of a lack of financial support. Russia intends to
resume construction with financing provided by an international
consortium. The United States opposes the completion of these
reactors and discourages other countries from providing assistance to
Cuba, except for safety purposes. GAO found that IAEA has spent
about $12 million on nuclear technical assistance projects for Cuba
since 1963. About three-quarters of the assistance consisted of
equipment, such as computer systems, and radiation-monitoring and
laboratory equipment. IAEA recently approved an additional $1.7
million for nuclear technical assistance for Cuba through 1999. Most
of IAEA's assistance projects were funded through the agency's
technical cooperation fund, which is supported by member states'
voluntary contributions. In 1996, the United States contributed more
than $16 million, about 30 percent, of the $53 million in the fund.
From 1981 through 1995, the United States withheld about $2 million
from its voluntary contribution that otherwise would have gone for
nuclear technical assistance for Cuba. Of the total dollar value of
all projects IAEA has provided for Cuba, about $680,000 was approved
for nuclear safety assistance for Cuba's nuclear power reactors from
1991 through 1998, of which about $313,000 has been spent. U.S.
officials told GAO that they did not object to IAEA providing nuclear
safety assistance to Cuba's reactors because the United States
generally supports nuclear safety assistance.
Federal Power:
Issues Related to the Divestiture of Federal
Hydropower Resources
GAO/RCED-97-48, Mar. 31 (114 pages).
In recent years, various bills have been introduced to divest the
federal assets used for generating, transmitting, and marketing
hydroelectricity. At the request of Members of Congress, GAO agreed
to develop a primer on issues that should be considered in any
discussion about the divestiture of federal hydropower assets,
including federal power marketing administrations (PMAs). GAO agreed
to provide information on the Southeastern, Southwestern, and Western
PMAs, including similarities and differences, and their interactions
with the agencies that operate federal water projects (mostly, the
Bureau of Reclamation and the Army Corps of Engineers); the main
objectives and general decisions involved in divesting federal
assets; and the specific issues related to hydropower to be addressed
before a divestiture of the PMAs. GAO found that although
Southeastern, Southwestern, and Western all market hydropower
generated at federal water projects, they serve different
geographical areas and have different assets. The PMAs are not the
main source of electricity for most of their customers; the three in
the GAO study supply only about 7 percent of the electricity
requirements of their customers. However, because their power is
purchased primarily during times of peak demand at rates that are, on
average, half the rates charged by other utilities, great demand
exists for PMA power. Divestiture of hydropower assets involves
decisions about what assets to sell, how to group these assets, what
conditions and liabilities to transfer to the buyer, and what sales
mechanism to use. If a decision to divest federal hydropower assets
is reached, several key issues would need to be addressed. These
include balancing how water is used among the multiple purposes of
federal water projects; assigning the contractual obligations and
liabilities of the Bureau, the Corps, and the PMAs; handling Native
Americans' claims to water, property, and tribal artifacts; and
determining the future responsibility for protecting the environment
and endangered species. The potential effects of a divestiture on
wholesale and retail electric rates, which in turn would affect
regional economies, are other important issues.
TESTIMONY
------------------------------------------------------- Appendix 0:7.1
Department of Energy: Improving Management of Major System
Acquisitions, by Victor S. Rezendes, Director of Energy, Resources,
and Science Issues, before the Subcommittee on Energy and
Environment, House Committee on Science. GAO/T-RCED-97-92, Mar. 6
(12 pages).
From 1980 through 1996, the Energy Department (DOE) conducted 80
projects that it characterizes as "major system acquisitions."
Thirty-one of these projects were terminated before completion after
expenditures of more than $10 billion. Only 15 of the projects were
completed, and most of them were finished behind schedule and over
budget. Moreover, three of the 15 projects have yet to be used for
their intended purpose. The remaining 34 projects are ongoing, many
with substantial cost increases and schedule slippages. Four key
factors underlie the cost overruns, schedule slippages, and
terminations of DOE's most critical projects. These are unclear or
changing missions, the incremental funding of projects, a flawed
system of incentives both for DOE personnel and contractors, and too
few DOE personnel with the skills to effectively oversee contractors'
operations. On the positive side, DOE is launching several
initiatives that could help improve the Department's overall
management as well as the management of individual major system
acquisitions.
ENVIRONMENTAL PROTECTION
--------------------------------------------------------- Appendix 0:8
Federal Facilities:
EPA's Penalties for Hazardous Waste Violations
GAO/RCED-97-42, Feb. 28 (22 pages).
From November 1989 through October 1996, the Environmental Protection
Agency (EPA) assessed penalties in 61 cases totaling $16.4 million
against federal agencies for hazardous waste violations. Penalties
were assessed against the Departments of Agriculture, Defense,
Energy, and the Interior and the U.S. Coast Guard. Forty-one cases
involving penalties of $8.2 million were settled for $8.4 million,
including the value of supplemental environmental projects. Agencies
made direct cash payments of $2.4 million and agreed to perform
supplemental environmental projects costing about $6 million. Twenty
cases with assessed penalties of $8.2 million are still being
negotiated. GAO reviewed three settled cases that involved penalties
of $6 million against the Departments of Defense and Energy, which
represented more than a third of the value of all the assessed
penalties. After negotiations--which lasted from seven to 20
months--were finalized, the cases were settled for $3.7 million. EPA
and the Departments of Defense and Energy spent $364,000 in salaries,
travel expenses, and other costs to negotiate these three
settlements.
Superfund:
EPA Could Further Ensure the Safe Operation of
On-Site Incinerators
GAO/RCED-97-43, Mar. 5 (23 pages).
The Environmental Protection Agency (EPA) has used
incineration--controlled, high-temperature burning--to clean up some
of the most toxic forms of contamination at the nation's most
severely contaminated hazardous waste sites. However, local
community groups, concerned that incinerators could emit hazardous
substances, have often protested the choice of incineration as a
cleanup remedy. This report examines (1) the safeguards that EPA
uses to promote the safe operation of incinerators at these sites and
(2) whether EPA has fully implemented its planned system of
safeguards.
TESTIMONY
------------------------------------------------------- Appendix 0:8.1
Superfund: Proposals to Remove Barriers to Brownfield Redevelopment,
by Peter F. Guerrero, Director of Environmental Protection Issues,
before the Senate Committee on Environment and Public Works.
GAO/T-RCED-97-87, Mar. 4 (seven pages).
During the past several decades, manufacturing has been on the
decline in many U.S. cities. When businesses close, they often
leave behind abandoned and idled properties, known as "brownfields,"
which are sometimes contaminated with chemical wastes. To avoid the
cost of assessing and cleaning up these properties in accordance with
federal and state environmental laws, some new businesses have opted
to locate in uncontaminated sites outside cities. These decisions
have deprived central city neighborhoods of tax revenues and
employment opportunities. This testimony draws on the findings of a
June 1996 report (GAO/RCED-96-125). GAO discusses the (1) legal
barriers that the Superfund legislation poses to redeveloping
brownfields and (2) types of federal financial support that states
and localities would like to help them address such properties.
Peer Review: EPA's Implementation Remains Uneven, by Stanley J.
Czerwinski, Associate Director for Environmental Protection Issues,
before the Subcommittee on Energy and Environment, House Committee on
Science. GAO/T-RCED-97-95, Mar. 11 (10 pages).
Peer review is the critical evaluation of scientific and technical
work by independent experts to enhance the product's quality and
credibility. Peer review can actually help avoid costly and
time-consuming delays by helping to steer product development along
the most efficient, effective course. The Environmental Protection
Agency's (EPA) current peer review policy--updated in 1994 and now
under evaluation by the agency--stresses the importance of these
reviews and calls for the peer review of all major scientific and
technical work that may eventually play an important role in key
agency decisions. Despite recent progress, however, EPA continues to
implement peer review unevenly. GAO recommended that (1) upper-level
EPA managers have the information needed to know whether all relevant
work has been considered for peer review and (2) staff and managers
are informed about the need for and benefits of peer review and their
specific responsibilities in implementing the policy. EPA has taken
steps to implement GAO's recommendations. For example, EPA plans to
begin peer review training for its managers and staff in June 1997.
Although it is still too soon to know whether these efforts will be
successful, GAO is encouraged by the high-level attention being paid
to this important issue.
FINANCIAL INSTITUTIONS
--------------------------------------------------------- Appendix 0:9
Bank Data:
Material Loss of Oversight Information From Interstate Banking
Is Unlikely
GAO/GGD-97-49, Mar. 26 (30 pages).
The Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 authorizes interstate mergers between banks beginning June 1,
1997. When this law was passed, there was a concern that information
on the distribution of bank deposits and loans by state would be
lost. As a result, GAO was mandated to determine whether
implementation of the act would result in a loss of information that
is important to federal bank regulation and oversight. GAO found
that to the extent that interstate branching becomes prevalent, data
from financial filings known as call reports, as currently collected
and reported to regulators, will become less useful for approximating
bank loan and deposit activity within a state. As bank holding
companies consolidate by merging multistate banking operations and as
banks expand across state lines, call report information reported at
the bank level will increasingly encompass the loans and deposits
from more than one state. However, accurately measuring loan and
deposit activity by state was subject to limitations even before
Riegle-Neal. Compared with the information that existed before it
was enacted, the implementation of Riegle-Neal is unlikely to result
in a loss of information essential to regulatory and congressional
oversight.
FINANCIAL MANAGEMENT
-------------------------------------------------------- Appendix 0:10
Financial Audit:
Independent Counsel Expenditures for the Six Months Ended September
30, 1996
GAO/AIMD-97-64, Mar. 31 (26 pages).
Independent counsels are required to report every six months on their
expenditures from a permanent, indefinite appropriation established
with the Justice Department to fund independent counsel activities.
GAO audits these expenditures. GAO found that the statements of
expenditures for the offices of independent counsels Arlin M.
Adams/Larry D. Thompson, David M. Barrett, Joseph E.
diGenova/Michael F. Zeldin, Daniel S. Pearson, Donald C. Smaltz,
and Kenneth W. Starr were reliable in all material respects. GAO's
consideration of internal controls disclosed no material weaknesses.
In addition, GAO found no reportable instances of noncompliance with
laws and regulations.
Financial Management:
Improved Management Needed for DOD Disbursement
Process Reforms
GAO/AIMD-97-45, Mar. 31 (21 pages).
Problem disbursements by the Defense Department--those that have not
been matched with corresponding obligations--have been a source of
concern for many years because such disbursements increase the chance
that fraudulent or erroneous payments will go undetected and that
cumulative amounts of disbursements will exceed appropriated funds.
Defense Finance and Accounting Service (DFAS) officials have said
that transactions paid at one location, but accounted for at
another--known as "transactions by others" (TBO)--are the major
contributors to problem disbursements. To address the problem, DFAS
sought to improve the current disbursement process and identified 14
action items to improve TBO disbursement operations. GAO found that
as of October 1996, 10 of the 14 action items had either not been
implemented or were only partially completed. Of the four items
implemented, GAO's review of the two for which some implementation
information was available showed that DFAS had not met its
objectives. GAO identified three issues that limited DFAS' ability
to effectively and promptly achieve its goal of improved TBO
processing. First, DFAS did not develop adequate information to
effectively diagnose the causes of problem disbursements, implement
solutions, and evaluate progress. Second, DFAS did not provide
strong, consistent management for the project. Third, DFAS may not
be allocating enough resources to critical areas.
GOVERNMENT OPERATIONS
-------------------------------------------------------- Appendix 0:11
Postal Reform in Canada:
Canada Post Corporation's Universal Service and Ratemaking
GAO/GGD-97-45BR, Mar. 5 (69 pages).
This briefing report provides information on Canada's 1981 postal
reform initiative, which created the Canada Post Corporation. The
Corporation strives to operate on a self-sustaining financial basis.
The Corporation incurred operating losses each year through fiscal
year 1988 and reported its first profit the following year. The
Corporation subsequently reported profits in four of the seven fiscal
years 1990 through 1996. Knowledge about Canada's experience with
postal reform may prove helpful to ongoing congressional efforts to
reform the U.S. Postal Service. This report presents information on
(1) universal mail service in Canada, (2) Corporation ratemaking, and
(3) key events affecting the Corporation since its creation in 1981.
U.S. Postal Service:
Information on Post Office Closures, Appeals, and
Affected Communities
GAO/GGD-97-38BR, Mar. 11 (44 pages).
Local post offices, long a part of American culture and business,
have become increasingly expensive for the Postal Service to
maintain. Nevertheless, the Postal Reorganization Act of 1970
prohibits the Postal Service from closing any small post offices
purely for economic reasons. In 1976, Congress formulated guidelines
on whether and how the Postal Service is to close post offices. This
briefing report provides information on (1) the Postal Service
process for closing post offices, (2) the number of post offices
closed since 1970, (3) the number of proposed post office closures
appealed to the independent Postal Rate Commission and the
disposition of those appeals, and (4) the attributes of affected
communities for fiscal years 1995 and 1996.
Privatization:
Lessons Learned by State and Local Governments
GAO/GGD-97-48, Mar. 14 (48 pages).
A number of state and local governments have successfully shifted
functions or responsibilities to the private sector, usually through
contracting or managed competition. Lessons learned from these
experiences may be helpful to the federal government as it pursues
its own privatization efforts. This report discusses privatization
initiatives in the states of Georgia, Massachusetts, Michigan, New
York, and Virginia as well as the city of Indianapolis, Indiana.
TESTIMONY
------------------------------------------------------ Appendix 0:11.1
High-Risk Areas: Benefits to Be Gained by Continued Emphasis on
Addressing High-Risk Areas, by Gene L. Dodaro, Assistant Comptroller
General for Accounting and Information Management, before the
Subcommittee on Oversight, House Committee on Ways and Means.
GAO/T-AIMD-97-54, Mar. 4 (nine pages); and
High-Risk Areas: Actions Needed to Solve Pressing Management
Problems, by Gene L. Dodaro, Assistant Comptroller General for
Accounting and Information Management, before the Senate Committee on
Governmental Affairs. GAO/T-AIMD/GGD-97-60, Mar. 5 (24 pages).
Drawing on GAO's high-risk series (GAO/HR-97-1 through GAO/HR-97-14,
Feb. 1997), the first testimony discusses major government programs
prone to waste, fraud, abuse, and mismanagement. GAO focuses on
high-risk areas within the Internal Revenue Service, Medicare, and
the Supplemental Security Income Program. GAO also discusses such
other vulnerable areas as financial management at the Customs
Service, information security weaknesses, and the "Year 2000"
problem. The second testimony addresses solutions to these serious
management problems, which cost taxpayers billions of dollars and
undermine the quality of government services. GAO outlines the steps
that need to be taken to fix these problems.
Congressional Review Act, by Robert P. Murphy, General Counsel,
before the Subcommittee on Commercial and Administrative Law, House
Committee on the Judiciary. GAO/T-OGC-97-29, Mar. 6 (11 pages).
Concerned about the reach, cost, and impact of federal regulations on
citizens and businesses, Congress passed the Small Business
Regulatory Enforcement Fairness Act, which requires agencies to
submit proposed rules to Congress and GAO. This gives Congress an
opportunity to review rules before they take effect and to disapprove
those found to be too burdensome, excessive, or duplicative. GAO's
role is to provide Congress with a quick review of all major rules
submitted to determine if the agencies have complied with the
procedural steps governing the regulatory process. For rules that
are determined to be "major," GAO must report to relevant
congressional committees within 15 calendar days. This testimony
discusses GAO's responsibilities under the act and the agency's
experiences in the 11 months since the law was enacted.
Managing for Results: Enhancing the Usefulness of GPRA Consultations
Between the Executive Branch and Congress, by L. Nye Stevens,
Director of Federal Management and Workforce Issues, before the
Subcommittee on Management, Information and Technology, House
Committee on Government Reform and Oversight. GAO/T-GGD-97-56, Mar.
10 (17 pages).
Under the Government Performance and Results Act (GPRA), each agency
is to develop a strategic plan that lays out its mission, long-term
goals, and strategies for achieving those goals. Agencies are
required to submit their plans to Congress by September 30, 1997.
The plans must take into account the views of Congress and other
stakeholders. To ensure that these views are considered, GPRA
requires that the agencies consult with Congress and solicit the
views of other stakeholders as they develop their strategic plans.
This testimony discusses ways to enhance the usefulness of the
consultations between executive branch agencies and Congress.
U.S. Postal Service: Challenges to Sustaining Improved Performance,
by Michael E. Motley, Acting Director for Government Business
Operations Issues, before the Subcommittee on the Postal Service,
House Committee on Government Reform and Oversight. GAO/T-GGD-97-53,
Mar. 12 (14 pages).
This testimony (1) focuses on the performance of the Postal Service
and the need to improve internal controls and protect revenues in an
organization that takes in and spends billions of dollars each year
and (2) highlights some of the key reform and oversight issues that
continue to challenge the Postal Service and Congress as they
consider how U.S. mail service should be provided in the future.
GAO also provides observations from its ongoing work on
labor-management relations at the Postal Service and other areas.
Department of Health and Human Services: Management Challenges and
Opportunities, by Richard L. Hembra, Assistant Comptroller General
for Health, Education, and Human Services Programs, before the
Subcommittee on Human Resources, House Committee on Government Reform
and Oversight. GAO/T-HEHS-97-98, Mar. 18 (21 pages).
This testimony highlights three challenges that the Department of
Health and Human Services (HHS) faces in meeting its mission. First,
HHS needs to better define its mission, objectives, and measures of
success and increase its accountability to taxpayers. The Government
Performance and Results Act presents HHS with opportunities to bring
discipline to management at all levels of the Department, define the
kinds of information needed to implement and assess its programs, and
identify ways to progress toward accomplishing its goals. However,
meeting the law's requirements for strategic plans, performance
measures, and reporting on program accomplishments will not be easy.
Second, HHS needs to ensure that it has the information systems
necessary to manage and evaluate its programs and to track its
progress in meeting performance goals. Third, HHS must constantly
combat fraud, waste, abuse, and mismanagement. Medicare, for
example, which accounts for more than half of HHS' total budget, is
particularly vulnerable. HHS needs to be vigilant because its
programs will likely remain targets of fraud and abuse and because
waste and mismanagement can have serious consequences for both
taxpayers and program beneficiaries.
HEALTH
-------------------------------------------------------- Appendix 0:12
Employment-Based Health Insurance:
Costs Increase and Family Coverage Decreases
GAO/HEHS-97-35, Feb. 24 (36 pages).
Nearly two-thirds of Americans under age 65--some 150 million
people--have employment-based private health insurance. At the same
time, the percentage of Americans who are uninsured or rely on
Medicaid, particularly children, continues to increase. GAO found
that as costs for providing health insurance increase, the percentage
of Americans under age 65 with private health insurance coverage
decreased from 75 percent in 1989 to about 71 percent in 1995. Of
this general decline, about 70 to 90 percent was due to fewer
working-age adults and children being covered as dependents. Between
1989 and 1995, the percentage of working-age adults (18 to 64 years
old) with private insurance coverage decreased from 76 percent to 73
percent. If the same percentage of working-age adults had been
covered in 1995 as in 1989, about 5 million more adults would have
had private insurance. However, children experienced the greatest
loss of private coverage. During these 6 years, the percentage of
children under age 18 with private health insurance decreased from
more than 73 percent to 66 percent. If private coverage had not
decreased, about 5 million more children would have had private
insurance.
Blood Supply:
FDA Oversight and Remaining Issues of Safety
GAO/PEMD-97-1, Feb. 25 (157 pages).
Transmission of the HIV virus by transfusion decreased dramatically
after donor testing was introduced in 1995, and more and better tests
for other diseases have also reduced transfusion risks. Although the
blood supply is very safe, federal regulations cannot entirely
eliminate all risk from transfusions because of human error,
technological limitations of testing, and the biological nature of
the product itself. The Food and Drug Administration (FDA) can
strengthen the safety of the blood supply in some areas. For
example, the lack of a uniform donor questionnaire allows variability
in donor screening; the lack of mandatory deferral notification
allows some donors who have tested positive for viruses to
unwittingly attempt to donate again; the untested units donated for
self-use may be mistakenly used for unintended recipients; and FDA
has been slow to investigate error and accident reports that may
warrant a recall. FDA does not require unlicensed facilities--those
that do not sell or exchange blood products across state lines--to
report errors and accidents. This is a significant problem because
these unlicensed facilities constitute more than two thirds of all
blood facilities that, together, produce 10 percent of the nation's
blood supply. FDA inspections of both licensed and unlicensed blood
facilities appear to be inconsistent in focus, scope, and
documentation. Moreover, FDA does not maintain a central repository
for inspection reports and, therefore, does not examine national
trends. GAO also found confusion within the blood industry about how
to interpret
FDA regulations.
Blood Supply:
Transfusion-Associated Risks
GAO/PEMD-97-2, Feb. 25 (92 pages).
The U.S. blood supply is safer today than at any time in recent
history, with risks from blood transfusions quite small compared with
the benefits of transfusion in saving lives. Improved donor
screening and education have removed from the donor pool many persons
who are at high risk for disease, and tests used to screen blood for
viruses are considerably more sensitive than earlier versions.
However, risks remain. Eight of every 10,000 donated units of blood
carry a serious risk to the recipient, including allergic reactions,
bacteria, reactions to incompatible blood transfusions, and viruses.
GAO estimates that four out of 1,000 patients who receive the average
transfusion of five units of blood are at risk of being exposed to
contaminated blood that could sicken or even kill them. On the other
hand, as many as half of the 1,000 recipients would be at serious
risk of dying immediately unless they receive a transfusion. The
risk that a surgery patient will require blood and develop a chronic
disease or die as a result of that blood is estimated at four in
10,000. For the average person with no foreseeable plans for
surgery, the annual risk of developing a chronic disease or dying
from the transfusion is five in 1 million.
Medicare HMOs:
Potential Effects of a Limited Enrollment Period Policy
GAO/HEHS-97-50, Feb. 28 (48 pages).
Congress has recently considered making Medicare's policies more
consistent with those of other large health care purchasing
organizations by establishing a limited time each year when Medicare
beneficiaries could enroll in a particular plan and by restricting
disenrollment outside that period. To assist Congress in considering
the effects of such a policy change, this report assesses how a
limited enrollment period would affect Medicare, private health
plans, beneficiaries, and employers who provide Medicare supplemental
benefits to retirees. GAO examines the potential effects of policy
changes on (1) the growth of Medicare's managed care program, (2)
employers' attempts to administer their respective benefits seasons,
(3) taxpayer savings measured against beneficiary protections, and
(4) the resources needed by the federal agency that runs Medicare's
day-to-day operations.
NIH-Funded Research:
Therapeutic Human Fetal Tissue Transplantation Projects Meet Federal
Requirements
GAO/HEHS-97-61, Mar. 10 (eight pages).
Therapeutic human fetal tissue transplantation holds promise for
treating a host of diseases, including juvenile diabetes and
leukemia. Ongoing federally funded research is using tissue from
aborted fetuses to treat patients with Parkinson's disease. Ethical
concerns have been raised, however, that some women might choose to
abort their fetuses to treat family members or to supply fetal tissue
for financial gain. In June 1993, legislation was enacted that
established guidelines governing human fetal tissue transplantation
research that is federally funded. In general, GAO found that the
law's requirements are being complied with. The legislation's
documentation requirements--pertaining to informed consent of donors
and recipients and compliance statements made by institutions,
researchers, and attending physicians--were met. The Department of
Health and Human Services did not submit required annual reports on
the program's activities, although it did issue a combined report in
January 1997 describing activities from fiscal year 1993 onward.
There have been no reported violations in the acquisition of human
fetal tissue for use in transplantation.
TESTIMONY
------------------------------------------------------ Appendix 0:12.1
Medicaid: Decline in Spending Growth Due to a Combination of
Factors, by Jonathan Ratner, Associate Director for Health Financing
and Systems Issues, before the Senate Committee on Finance.
GAO/T-HEHS-97-91, Mar. 4 (11 pages).
The annual growth rate in Medicaid spending dropped from more than 20
percent in the early 1990s to 3.3 percent in fiscal year 1996. This
testimony discusses the following three issues: (1) the variation in
Medicaid spending growth among the states, particularly for the most
recent two-year period, which culminated in the 3.3-percent growth
rate in fiscal year 1996; (2) the key factors behind the decrease
from previous years' growth rates; and (3) the implications of these
and other factors for Medicaid's expenditures in the future.
Medicaid: Recent Spending Experience and the Administration's
Proposed Program Reform, by William J. Scanlon, Director of Health
Financing and Systems Issues, before the Subcommittee on Health and
Environment, House Committee on Commerce. GAO/T-HEHS-97-94, Mar. 11
(15 pages).
This testimony focuses on the following two issues: (1) the key
factors underlying Medicaid's 3.3-percent growth rate in fiscal year
1996 and their implications for future spending and (2) the
administration's proposal to contain Medicaid cost growth through
decreases in disproportionate share hospital payments and per capita
caps and to increase state flexibility. GAO found no single pattern
across all states that explains the recent dramatic decrease in the
growth of Medicaid spending. Rather, a combination of factors
accounts for the low growth rate in 1996. Leading factors include
continued reductions in disproportionate share hospital payments in
some states because of earlier federal restrictions on the amount of
such payments and the leveling off of Medicaid enrollment in other
states following planned expansions in prior years. Several states
attributed the lower growth rate to an improved economy and to state
initiatives limiting expenditure growth through the use of managed
care, long-term care alternatives, and other programmatic changes.
The administration's Medicaid reform proposal would further control
spending by reducing disproportionate share hospital expenditures and
imposing a per capita cap, while giving the states greater
flexibility in program policy and administration for their managed
care and long-term care programs.
Medicare: Inherent Program Risks and Management Challenges Require
Continued Federal Attention, by Leslie G. Aronovitz, Associate
Director for Health Financing and Systems Issues, before the
Subcommittee on Oversight, House Committee on Ways and Means.
GAO/T-HEHS-97-89, Mar. 4 (eight pages).
Federal spending for Medicare, one of the largest government
entitlement programs, totaled $197 billion in fiscal year 1996.
Because of the program's size and mission, Medicare remains at
high-risk for waste, fraud, and abuse. Wrongdoers continue to find
ways to dodge safeguards, underscoring the need for constant
vigilance and increasingly sophisticated ways to protect against
gaming the system. Better oversight and leadership by the Health
Care Financing Administration (HCFA), the appropriate application of
new anti-fraud-and-abuse funds, and the mitigation of risks involved
in acquiring the Medicare Transaction System--a major claims
processing system--should help reduce future losses. Moreover, as
Medicare's managed care enrollment grows, HCFA must ensure that
payments to health maintenance organizations (HMO) reflect the cost
of care, that beneficiaries receive enough information about HMOs to
make informed choices, and that the agency uses its expanded
authority to enforce HMO compliance with federal standards.
Medicare Post-Acute Care: Home Health and Skilled Nursing Facility
Cost Growth and Proposals for Prospective Payment, by William J.
Scanlon, Director of Health Financing and Systems Issues, before the
Subcommittee on Health, House Committee on Ways and Means.
GAO/T-HEHS-97-90, Mar. 4 (11 pages).
After relatively modest cost growth during the 1980s, Medicare
outlays for skilled nursing facilities and home health care have
grown rapidly during the 1990s. Skilled nursing facility payments
rose from $2.8 billion in 1989 to $11.3 billion in 1996, while home
health care costs rose from $2.4 billion to $17.7 billion during the
same period. This testimony discusses the reasons behind the cost
growth for skilled nursing facilities and home health care and the
administration's announced legislative proposals for these two
Medicare benefits.
Medicare: Home Health Cost Growth and Administration's Proposal for
Prospective Payment, by William J. Scanlon, Director of Health
Financing and Systems Issues, before the Subcommittee on Health and
Environment, House Committee on Commerce. GAO/T-HEHS-97-92, Mar. 5
(seven pages).
After relatively modest cost growth during the 1980s, Medicare
expenditures for home health care have soared in recent years. Home
health care costs grew from $2.4 billion in 1989 to $17.7 billion in
1996--an average annual increase of 33 percent. Medicare's home
health care costs have grown because a larger portion of
beneficiaries use this benefit than in the past and the number of
services used by each beneficiary has more than doubled. Several
factors have increased use of the benefit. Legislation and coverage
policy changes in response to court decisions have liberalized
coverage criteria for the benefit. These changes, in turn, have
transformed the nature of home health care from primarily
posthospital care to more long-term care for chronic conditions.
Finally, weaker administrative controls over the benefit, resulting
from resource constraints, make the detection of inappropriate claims
more unlikely. The administration's major proposals for home health
care are designed to give providers greater incentives to operate
efficiently by immediately tightening the limits on the cost per
visit that will be paid and imposing a new cap on per-beneficiary
costs. After these changes go into effect in 1999, home health
payments would switch from a cost reimbursement to a prospective
payment system. These two proposals are estimated to save $12.4
billion during the next five years.
HOUSING
-------------------------------------------------------- Appendix 0:13
Fair Housing:
Funding and Activities Under the Fair Housing Initiatives Program
GAO/RCED-97-67, Mar. 26 (39 pages).
The Fair Housing Initiatives Program was established in 1988 to help
public and private organizations fight housing discrimination. GAO
was asked to review how funds are allocated among funding categories,
how much demand exists for funds, who receives funds, and how this
money is being used. From the program's inception through fiscal
year 1997, Congress appropriated $113 million for the program. Funds
are allocated among four categories: private enforcement (for
private nonprofit groups), the fair housing organizations initiative
(for private nonprofit entities), education and outreach (for private
and public entities), and administrative enforcement (for state and
local agencies). The largest portion, more than $40 million, has
gone to the private enforcement initiative. Through fiscal 1996, 220
organizations in 44 states and the District of Columbia received
program grants. Other than enforcement activities, funds have been
used for various other activities, such as litigation, new fair
housing organizations, pamphlets and brochures, advertisements, and
conferences and seminars on fair housing.
Housing:
HUD's Program for Persons With AIDS
GAO/RCED-97-62, Mar. 24 (41 pages).
The Housing Opportunities for Persons With AIDS (HOPWA) program was
established within the Department of Housing and Urban Development in
1990 to meet the needs of people with AIDS, who often have had
difficulty obtaining suitable housing because of discrimination, the
need for support services, or other problems. Grantees can use funds
from the program for a broad range of housing assistance and support
services intended to prevent homelessness. Limited data indicate
that about 71 percent of the funds have been spent on housing
assistance, about 16 percent on support services, and the remaining
13 percent on housing information services and administrative costs.
The program generally provides assistance to low-income individuals
suffering from AIDS/HIV and their families. Coordination between the
HOPWA program and the Ryan White programs, which provide grants to
states and localities to fund an array of services for persons with
AIDS/HIV, occurs primarily at the grantee level. Several grantees
and project sponsors told GAO that the two programs could be better
coordinated. HUD's field offices are primarily responsible for
overseeing and monitoring grantees under the HOPWA program, and field
offices can use various tools to oversee grantees and monitor their
use
of funds.
Native American Housing:
Information on HUD's Housing Programs for Native Americans
GAO/RCED-97-64, Mar. 28 (31 pages).
Although the Department of Housing and Urban Development (HUD) has
invested $4.3 billion during the past decade for housing and
community development in Native American tribal areas, the Urban
Institute recently reported that 40 percent of Native Americans in
these areas live in overcrowded or physically inadequate housing.
Providing safe and decent housing at reasonable cost is difficult in
tribal areas because of (1) remote and austere settings, (2) the
limited human resources of many Indian housing authorities, (3)
land-use restrictions, (4) the difficulty that contractors and Indian
housing authorities have in complying with statutory requirements
that give hiring preference to Indians, and (5) vandalism and
neglect. New Indian housing legislation, set to take effect in
October 1997, changes HUD's Indian housing assistance by requiring
block grants to each of more than 550 tribes instead of categorical
grants to each of the existing 180 housing authorities. HUD believes
that its initial workload could rise significantly. GAO summarized
this report in testimony before Congress; see:
Native American Housing: Challenges Facing HUD's Indian Housing
Program, by Judy A. England-Joseph, Director of Housing and
Community Development Issues, before the Senate Committees on Indian
Affairs and Banking, Housing, and Urban Affairs. GAO/T-RCED-97-105,
Mar. 12 (16 pages).
TESTIMONY
------------------------------------------------------ Appendix 0:13.1
Housing and Urban Development: HUD's Management Deficiencies,
Progress on Reforms, and Issues for Its Future, by Lawrence J.
Dyckman, Associate Director for Housing and Community Development
Issues, before the Subcommittee on Human Resources and
Intergovernmental Relations, House Committee on Government Reform and
Oversight. GAO/T-RCED-97-89, Mar. 6 (23 pages).
Serious management and budgetary problems continue to plague the
Department of Housing and Urban Development (HUD). Although HUD has
taken steps during the past two years to address some of its most
pressing problems, those actions are far from complete. HUD's
programs continue to represent large federal loan commitments and
discretionary spending, much of which goes to rental assistance for
people who are least able to afford decent housing. This testimony
focuses on (1) the long-standing management shortcomings that hamper
HUD's effectiveness, the progress made in addressing these problems,
and the work remaining; (2) the problems in HUD's assisted and public
housing programs, which represent the largest part of its outlays and
a vast share of the budget authority that HUD expects to need in the
future; and (3) the need to reach agreement on federal housing
policy, HUD's mission, and the resources devoted to achieving that
mission.
HUD's Fiscal Year 1998 Budget Request: Some Requests for Funding May
Be Unnecessary, by Judy A. England-Joseph, Director of Housing and
Community Development Issues, before the Subcommittee on VA, HUD, and
Independent Agencies, House Committee on Appropriations.
GAO/T-RCED-97-108, Mar. 18 (15 pages).
GAO has included the Department of Housing and Urban Development
(HUD) in its list of government programs at high risk for waste,
fraud, abuse, and mismanagement. (See GAO/HR-97-12, Feb. 1997).
This testimony focuses on HUD's request for more than $9 billion to
renew rental assistance contracts, as well as on some of the
assumptions underlying HUD's estimate. GAO discusses (1) the
estimates that HUD used to develop its budget request for renewing
Section 8 assisted housing contracts, (2) HUD's justification for
50,000 additional Section 8 certificates, (3) HUD's success in
reducing the level of uncommitted funds for public housing
modernization that are held by housing authorities, and (4) HUD's
request for $100 million to fund the second round of the Empowerment
Zone/Enterprise Community Program.
INCOME SECURITY
-------------------------------------------------------- Appendix 0:14
Social Security:
Disability Programs Lag in Promoting Return to Work
GAO/HEHS-97-46, Mar. 17 (36 pages).
Each week, the Social Security Administration (SSA) pays more than $1
billion in cash benefits to disabled beneficiaries under the
disability insurance and the supplemental security income programs.
Design and implementation weaknesses, however, have hindered the
ability of these programs to return beneficiaries to work. The
application process stresses work incapacity and assumes that many
medical impairments preclude employment. Also, SSA does little to
provide the support and assistance that many disabled persons need to
work. Not surprisingly, these program weaknesses have yielded poor
return-to-work outcomes and the two programs have not kept pace with
changing societal attitudes toward economic self-sufficiency among
the disabled. Lessons learned from return-to-work strategies in the
private sector and other countries could help federal disability
programs return the disabled to productive activity and at the same
time reduce the flow of cash benefits.
TESTIMONY
------------------------------------------------------ Appendix 0:14.1
Supplemental Security Income: Long-Standing Problems Put Program at
Risk for Fraud, Waste, and Abuse, by Jane L. Ross, Director of
Income Security Issues, before the Subcommittee on Oversight, House
Committee on Ways and Means. GAO/T-HEHS-97-88, Mar. 4 (eight
pages).
The problems GAO has identified with the Social Security
Administration's (SSA) supplemental security income program are
long-standing and have led to billions of tax dollars being overpaid
to recipients. They have also compromised the program's integrity
and reinforced public perceptions that the program pays benefits to
too many people for too long. Although many of the changes recently
made by Congress and SSA may yield improvements, the underlying
problems persist. Shortcomings in program design and inadequate SSA
management oversight have placed the supplemental security income
program at high risk for waste, fraud, and abuse. Sustained
attention from top-level SSA management as well Congressional
cooperation are needed to improve the program's operations and
eligibility rules.
INFORMATION MANAGEMENT
-------------------------------------------------------- Appendix 0:15
Weather Satellites:
Planning for the Geostationary Satellite Program Needs
More Attention
GAO/AIMD-97-37, Mar. 13 (56 pages).
The National Oceanic and Atmospheric Administration (NOAA) is in the
process of procuring new geostationary operational environmental
satellites to replace the current series of satellites, which will
reach the end of their useful lives around 2002. NOAA plans to buy a
continuation series of two to four satellites that will be very
similar to the current series in their capabilities to fill the
potential gap in satellite coverage that could occur after the turn
of the century. Beyond the potential gap in coverage, NOAA has not
yet decided whether to continue procuring the same type of satellites
or consider new designs for a next generation system. In fiscal year
1998, NOAA plans to spend more than $240 million to develop and
operate the geostationary operational environmental satellite system.
Because upcoming NOAA budgets are expected to be tight, this report
assesses (1) the agency's strategy for procuring continuation series
satellites, (2) what steps the agency should be taking to prepare for
the next generation series of satellites, and (3) whether the
potential exists to improve the system and reduce costs in the long
term.
Land Management Systems:
BLM Faces Risks in Completing the Automated Land and Mineral Record
System
GAO/AIMD-97-42, Mar. 19 (28 pages).
The Bureau of Land Management's (BLM) automated land and mineral
record system/modernization project is intended to improve BLM's
ability to record, maintain, and retrieve land description,
ownership, and use information. It is the largest system development
project ever undertaken by BLM or the Department of the Interior.
BLM and the prime contractor are now approaching the final stages of
software development and the beginning stages of operational testing.
This report discusses (1) whether risks remain that could seriously
affect the project's performance, capability, or cost; (2) whether
BLM is ready to deploy the project in fiscal year 1997; (3) the
latest costs estimates for the project and reasons for any cost
increases; (4) what Interior is doing to promote the use of the
project by its other bureaus; and (5) whether other Interior bureaus
are planning to use the project for their land management needs.
Air Traffic Control:
Immature Software Acquisition Processes Increase FAA System
Acquisition Risks
GAO/AIMD-97-47, Mar. 21 (144 pages).
The Federal Aviation Administration (FAA) is spending billions of
dollars to modernize software-intensive air traffic control systems.
GAO examined the processes used to acquire software, using models
developed by Carnegie Mellon University's Software Engineering
Institute to define and determine an organization's software process
maturity. FAA did not fully meet any of the criteria to achieve a
"repeatable" level of maturity, the second of a five-level maturity
scale. FAA's processes for acquiring costly and complex software are
ad hoc, sometimes chaotic, and not repeatable across projects.
Moreover, serious process weaknesses have prevented FAA from
satisfying the one criterion for the third level of maturity, called
"defined." FAA is committed to increasing process maturity in its air
traffic control modernization effort, but despite four years of
effort it still lacks an effective management approach to improve
software processes. In addition, FAA lacks an effective plan to
prioritize improvements and measure progress. As a result, it has
launched a "hodge podge" of software acquisition improvement efforts
without any analytical justification.
TESTIMONY
------------------------------------------------------ Appendix 0:15.1
USDA Information Management: Action Needed to Address Long-Standing
Deficiencies, by Joel C. Willemssen, Director of Information
Resources Management Issues, before the Senate Committee on
Agriculture, Nutrition, and Forestry. GAO/T-AIMD-97-56, Mar. 5 (16
pages).
This testimony focuses on efforts by the Agriculture Department
(USDA) to put into place a foundation for effective acquisition and
management of its information technology resources. GAO discusses
(1) past difficulties that USDA has experienced in planning for and
managing information technology, (2) steps the Department needs to
take to significantly improve its management of information
technology resources, and (3) USDA's current moratorium on
information technology acquisitions.
National Oceanic and Atmospheric Administration: Weather Service
Modernization and NOAA Corps Issues, by Joel C. Willemssen, Director
of Information Resources Management Issues, before the Subcommittee
on Energy and Environment, House Committee on Science.
GAO/T-AIMD/GGD-97-63, Mar. 13 (16 pages).
This testimony discusses GAO's work in three areas involving the
National Oceanic and Atmospheric Administration (NOAA), an agency
within the Commerce Department. GAO (1) provides its preliminary
findings on the National Weather Service's advanced weather
interactive processing system, the linchpin of the Service's
$4.5-billion modernization effort; (2) discusses NOAA's geostationary
operational environmental satellite system, which plays a vital role
in weather forecasting; and (3) summarizes the findings from an
October 1996 report (GAO/GGD-97-10) on the NOAA commissioned corps.
INTERNATIONAL AFFAIRS
-------------------------------------------------------- Appendix 0:16
State Department:
U.S. Participation in Special-Purpose International Organizations
GAO/NSIAD-97-35, Mar. 6 (82 pages).
Because of tight federal budgets, some Members of Congress have
expressed concern about the level of U.S. spending to support
international organizations. This report provides information on
U.S. government membership in 25 special-purpose international
organizations and two inter-American organizations that received
funding of $10.8 million in 1995 through assessed contributions
provided by the State Department. GAO discusses (1) the State
Department's efforts to assess whether U.S. government membership in
these groups continues to serve the nation's interests (included is a
summary description of the organizations' missions and the issues
that have been raised about the benefits of U.S. membership) and (2)
the steps that have been taken to keep the government's contribution
costs low.
United Nations:
Limitations in Leading Missions Requiring Force to Restore Peace
GAO/NSIAD-97-34, Mar. 27 (56 pages).
During the Cold War, the United Nations had few opportunities to
carry out peace operations involving military force because the
superpowers vetoed most of these initiatives. Since then, the U.N.
Security Council has authorized several peace operations involving
the use of force, including those in Somalia and the former
Yugoslavia. Because of the U.N.'s performance in leading peace
operations, some now question whether the U.N. is an appropriate
organization to lead such missions. Others contend that inadequate
resources and operational structure have hampered the U.N.'s
effectiveness. GAO examined this issue, with particular focus on (1)
the precedents that exist for authorizing the U.N. to lead peace
operations that require force to achieve their objectives and (2)
whether limitations exist in the U.N.'s ability to lead peace
operations calling for the use of force.
JUSTICE AND LAW ENFORCEMENT
-------------------------------------------------------- Appendix 0:17
Campus Crime:
Difficulties Meeting Federal Reporting Requirements
GAO/HEHS-97-52, Mar. 11 (24 pages).
The Crime Awareness and Campus Security Act, which was enacted in
1990 in response to a steady rise in violent crime reported on
college campuses, encourages the development of security policies and
procedures at all colleges and universities participating in federal
student aid programs--including policies and procedures to address
sexual assaults and to introduce uniformity in reporting campus crime
statistics to students, parents, and employees. GAO found that
although colleges are having difficulty complying with the act, the
Department of Education only recently began to systematically monitor
compliance. Moreover, citing resource limitations, the Department
delayed preparing a report on campus crime statistics that was
required by law to be issued in September 1995; the Department issued
the report in February 1997. At the campus level, colleges are
finding it difficult to consistently interpret and apply some of the
law's reporting requirements. Areas of difficulty include how to
include incidents reported to campus officials other than law
enforcement officers, interpreting federal requirements for reporting
sexual offenses, and reporting data on hate crimes. Proposed federal
legislation would have augmented available information on campus
crime by requiring that campus police records be open to the campus
community. Similar laws are on the books in eight states. Three
laws require that colleges maintain daily logs.
Drug Control:
Observations on Elements of the Federal Drug Control Strategy
GAO/GGD-97-42, Mar. 14 (68 pages).
Although the federal government spent more than $15 billion in fiscal
year 1997 to combat drugs, the availability of drugs on U.S. streets
and the number of persons using illegal drugs continue to be serious
problems. This report (1) discusses the findings of current research
on promising approaches in drug abuse prevention targeted at
school-age youth; (2) describes promising drug treatment strategies
for cocaine addiction; (3) summarizes recent GAO work assessing the
effectiveness of international efforts to reduce illegal drug
availability, including interdiction (GAO/NSIAD-97-75, Feb. 1997);
(4) assesses whether the U.S. Coast Guard's performance measures for
its antidrug efforts conform to the principles of the Government
Performance and Results Act of 1993; and (5) summarizes recent GAO
documents on federal drug prevention and treatment activities.
TESTIMONY
------------------------------------------------------ Appendix 0:17.1
Naturalization of Aliens: Assessment of the Extent to Which Aliens
Were Improperly Naturalized, by Laurie E. Ekstrand, Associate
Director for Administration of Justice Issues, before subcommittees
of the House Committee on Government Reform and Oversight and the
House Committee on the Judiciary. GAO/T-GGD-97-51, Mar. 5 (11
pages).
Between September 1995 and September 1996, the Immigration and
Naturalization Service (INS) received about 1.3 million
naturalization applications, and about 1 million aliens were
naturalized. During that time, INS streamlined the naturalization
process. Although these efforts greatly increased the volume of
applications processed and approved, the Justice Department has
identified errors in the naturalization process. Concerns have been
raised that INS may have improperly naturalized aliens with felony
convictions. According to the Justice Department, among the 1
million aliens who were naturalized between September 1995 and
September 1996 were about 71,500 aliens who had criminal history
records on file with the FBI and about 179,500 aliens whose
fingerprint records were unclassifiable by the FBI or whose records
for other reasons may not have been checked by the FBI for their
criminal history. The Justice Department and INS are reviewing
records to determine the extent to which aliens were improperly
naturalized.
U.S. Customs Service: Varied Reaction to the Labor-Management
Partnership Concept, by Norman J. Rabkin, Director of Administration
of Justice Issues, before the Subcommittee on Trade, House Committee
on Ways and Means. GAO/T-GGD-97-54, Mar. 11 (13 pages).
A 1993 executive order required the head of each federal agency to
create labor-management councils to involve employees and their
unions as full partners. The idea was for the councils to identify
problems and craft solutions to better serve the agency's customers
and accomplish its mission. In June 1994, the U.S. Customs Service
and the National Treasury Employees Union entered into a partnership
agreement that established 19 goals, set up a National Partnership
Council, and stated that the Union will participate in agency
operational meetings and groups in order to involve the Union in
decisions affecting the workforce. This testimony discusses the new
relationship between the Customs Service and the Union; the views of
Customs management, supervisors, and the Union on the relationship;
and GAO's own observations on this relationship.
U.S. Customs Service: Office of Regulations and Rulings Has Yet to
Establish Performance Measures, by JayEtta Z. Hecker, Associate
Director for International Relations and Trade Issues, before the
Subcommittee on Trade, House Committee on Ways and Means.
GAO/T-NSIAD-97-115, Mar. 11 (nine pages).
The U.S. Custom Service's Office of Regulations and Rulings
facilitates the entry of goods, which were valued at more than $800
billion in 1996. The Office drafts regulations implementing U.S.
trade laws; issues rulings on the classification, valuation, and
marking of imported goods; and provides guidance to the trade
community and other Customs' units on their compliance
responsibilities. This testimony discusses (1) how the Office
measures its performance, (2) the extent to which it is meeting its
timeliness goals, and (3) industry views on its performance.
NATIONAL DEFENSE
-------------------------------------------------------- Appendix 0:18
Base Operations:
Challenges Confronting DOD as It Renews Emphasis on Outsourcing
GAO/NSIAD-97-86, Mar. 11 (28 pages).
Increasingly, the federal government is using "outsourcing," or
contracting out, for commercial services to save money, achieve
management efficiencies, and promote operating flexibility. Recent
studies have noted that the Pentagon could save billions of dollars
by outsourcing support functions at military bases. This report
examines the (1) extent to which the Defense Department (DOD) and the
military services emphasize the outsourcing of base support services,
(2) factors that influence savings in the outsourcing process, and
(3) impediments to DOD's outsourcing.
Navy Ordnance:
Analysis of Business Area Price Increases and Financial Losses
GAO/AIMD/NSIAD-97-74, Mar. 14 (50 pages).
The Navy ordnance business area increased prices 78 percent from
fiscal years 1994 through 1996 and incurred about $212 million in
losses during that same period. Most of these losses were due to
actual overhead costs exceeding budgeted overhead costs. This
situation has led to significant price increases that ultimately
reduce purchasing power for the military services' operations and
maintenance appropriation dollars. GAO is concerned that excessive
operating costs may exist in many of the Defense Department's (DOD)
logistics business activities and may be causing operations and
maintenance appropriations to be used inefficiently. GAO will be
examining additional DOD business activities to determine the extent
of the problem.
DOD Service Academies:
Problems Limit Feasibility of Graduates Directly Entering
the Reserves
GAO/NSIAD-97-89, Mar. 24 (18 pages).
The National Defense Authorization Act for Fiscal Year 1997 directed
GAO to report on the policy and cost implications of assigning up to
five percent of the graduating class of the military service
academies to National Guard or military reserve units with a
corresponding increase in the number of Reserve Officer Training
Corps (ROTC) graduates serving on active duty. Officials at the
military academies and the Defense Department, with the exception of
those representing the National Guard, believe that sending academy
graduates to guard or reserve units upon graduation would be
counterproductive. They point to the need for new officers,
regardless of the source of their education, to receive skill
training and experience before they can be productive guard or
reserve members. Because the academies are the most expensive source
of new officers, concerns were expressed that sending academy
graduates to the reserves before they complete their active duty
obligation would not produce enough of a payback for the cost of
their education. National Guard officials, however, noted that they
have vacancies in junior officer grades and believe that assigning
academy graduates directly to the National Guard would be feasible.
National Guard officials believe that the policy and administrative
difficulties in accessing academy graduates could be overcome.
Force Structure:
Potential Exists to Further Reduce Active Air Force Personnel
GAO/NSIAD-97-78, Mar. 28 (48 pages).
Between fiscal years 1986 and 1997, the Air Force will cut its active
military personnel from more than 600,00 to 381,000--a 37-percent
reduction. Mission forces were reduced at a much greater rate than
infrastructure forces; consequently, about two-thirds of present
active duty forces are allocated to infrastructure functions. It is
possible to further reduce the active Air Force below the 381,000
threshold without affecting the Air Force's war-fighting capability.
The Air Force recently identified a potential to reduce active forces
by as many as 75,000 additional military personnel beyond fiscal year
1998 and is reviewing options for replacing military personnel
assigned to infrastructure jobs with civilians or contractors who may
be able to do this work at less cost.
TESTIMONY
------------------------------------------------------ Appendix 0:18.1
Combat Air Power: Joint Mission Assessments Could Enhance Investment
Decisions, by Richard Davis, Director of National Security Analysis
Issues, before the Subcommittee on Airland Forces, Senate Committee
on Armed Services. GAO/T-NSIAD-97-105, Mar. 5 (28 pages).
Considerable discussion has taken place in recent months about the
Defense Department's (DOD) aircraft modernization programs. Much of
the discussion has centered on whether DOD will be able to "afford"
the large number of new combat aircraft that it now plans to buy.
This testimony, which is based on a September 1996 GAO report
(GAO/NSIAD-96-177), focuses on joint warfighting requirements, the
aggregate capabilities of U.S. combat air power forces to meet those
requirements, and DOD's efforts to place greater emphasis on joint
considerations in program and
budget decisions.
Defense Aircraft Investments: Major Program Commitments Based on
Optimistic Budget Projections, by Louis Rodrigues, Director of
Defense Acquisition Issues, before the Subcommittees on Military
Research and Development and Military Procurement, House Committee on
National Security. GAO/T-NSIAD-97-103, Mar. 5 (21 pages).
Although the Defense Department (DOD) plans to buy more than 8,300
aircraft at a cost of $343 billion through fiscal year 2030, the
financing of these acquisitions appears questionable given likely
future defense budgets. GAO believes that the need and timing of
several planned military aircraft acquisitions should be reexamined.
This testimony discusses (1) how much DOD has historically spent on
aircraft purchases, (2) the availability of funding for aircraft
purchases, and (3) how funding instabilities have led to schedule
delays and billions in cost increases. GAO also discusses recent
reports in which it has questioned the need for and the timing of
some aircraft programs.
Chemical Weapons and Materiel: Key Factors Affecting Disposal Costs
and Schedule, by Henry L. Hinton, Jr., Assistant Comptroller General
for National Security and International Affairs, before the
Subcommittee on Military Procurement, House Committee on National
Security. GAO/T-NSIAD-97-118, Mar. 11 (37 pages).
Destroying the stockpile of U.S. chemical munitions will exceed the
Army's estimate of nearly $25 billion and will take longer than
planned because of public concerns over the safety of incineration,
compliance with environmental laws, and the introduction of
alternative disposal technologies. The cost and the schedule of the
disposal program are driven largely by whether states and local
communities agree with the proposed disposal method at the remaining
stockpile sites. Reaching agreement has consistently taken longer
than the Army had anticipated. Recognizing the difficulty of
satisfying public concerns about specific disposal locations,
suggestions have been made by Congress, the Defense Department, and
others to change the program's basic approach to destruction.
However, these proposals involve trade-offs and would require changes
in existing legal requirements.
Military Readiness: Improvements Still Needed in Assessing Military
Readiness, by Mark E. Gebicke, Director of Military Operations and
Capabilities Issues, before the Subcommittee on Military Readiness,
House Committee on National Security. GAO/T-NSIAD-97-107, Mar. 11
(16 pages).
Today's American military forces have earned the reputation of being
among the best, if not the best, trained forces in the world. Yet,
after nearly a decade of military downsizing, concerns have been
raised about the potential for a new "hollowing" of U.S. forces.
Concerns voiced by military personnel to congressional staff during
field visits are very different from official assessment reports on
unit readiness that are forwarded through service headquarters to the
Joint Chiefs of Staff and to the Office of the Secretary of Defense.
This difference has raised questions about the true measure of
readiness of U.S. military forces. This testimony addresses three
questions: What disconnects are associated with readiness reporting,
and why do they exist? What corrective measures have been proposed
and taken to measure readiness? What further actions are needed?
Defense Outsourcing: Challenges Facing DOD As It Attempts to Save
Billions in Infrastructure Costs, by David R. Warren, Director of
Defense Management Issues, before the Subcommittee on Readiness,
House Committee on National Security. GAO/T-NSIAD-97-110, Mar. 12
(42 pages).
The Defense Department (DOD) estimates that almost two-thirds of its
budget for fiscal year 1997--about $146 billion--will go towards
operations and support activities, which include facility
maintenance, training, military health care, and spare parts
inventories. DOD is trying to save billions of dollars by
outsourcing work to the private sector and through other initiatives.
This testimony discusses DOD's past experience in realizing
infrastructure savings, key infrastructure areas that offer the
greatest potential for savings, and challenges that DOD faces in
reducing its infrastructure in the future.
Military Attrition: Better Screening of Enlisted Personnel Could
Save DOD Millions of Dollars, by Mark E. Gebicke, Director of
Military Operations and Capabilities Issues, before the Subcommittee
on Personnel, Senate Committee on Armed Services.
GAO/T-NSIAD-97-102, Mar. 5 (18 pages); and
Military Attrition: Better Screening of Enlisted Personnel Could
Save Millions of Dollars, by Mark E. Gebicke, Director of Military
Operations and Capabilities Issues, before the Subcommittee on
Military Personnel, House Committee on National Security.
GAO/T-NSIAD-97-120, Mar. 13
(17 pages).
This testimony summarizes a January 1997 report (GAO/NSIAD-97-39) on
military attrition. GAO found that more than 14 percent of new
recruits leave the military during their first six months and that
more than 30 percent leave before the end of their first term. The
main reasons for the high attrition rate during the first six months
are the (1) inadequate screening of military applications for
disqualifying medical conditions or drug use and (2) failure of
recruits to perform adequately because they are in poor physical
shape or they lack motivation. Although the military is very
concerned about attrition, its goals for reducing attrition are based
on inconsistent, incomplete data and are unrealistic. GAO estimates
that the military could save as much as $39 million annually if it
reduced these attrition rates.
Defense Depot Maintenance: Uncertainties and Challenges DOD Faces in
Restructuring Its Depot Maintenance Program, by David R. Warren,
Director of Defense Management Issues, before the Subcommittee on
Military Readiness, House Committee on National Security.
GAO/T-NSIAD-97-111, Mar. 18 (62 pages).
Waste and inefficiency in the Defense Department's (DOD) logistics
system, including management of its $13 billion depot maintenance
program, prompted GAO to include military infrastructure among its
list of high-risk areas within the federal government. (See
GAO/HR-97-7, Feb. 1996.) This testimony discusses DOD's (1) plans
for eliminating costly depot maintenance excess capacity, (2)
progress in finalizing a new policy on allocating depot workload, (3)
current approach to allocating maintenance workloads for new and
existing systems, and (4) estimates that billions can be saved by
outsourcing depot maintenance.
Defense Inventory Management: Problems, Progress, and Additional
Actions Needed, 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, House Committee on Government Reform and
Oversight. GAO/T-NSIAD-97-109, Mar. 20 (33 pages).
Inventory management problems have plagued the Defense Department
(DOD) for decades. Despite DOD's efforts to correct these
shortcomings, GAO has included inventory management in its list of
government programs vulnerable to fraud, waste, and abuse. (See
GAO/HR-97-5, Feb. 1997.) GAO recently reported that half of DOD's
$69.6 billion inventory of spare parts, medical supplies, hardware,
food, and clothing is either obsolete or rarely used. (See
GAO/NSIAD-97-71, Feb. 1997.) The underlying causes of this unneeded
inventory include outdated and inefficient inventory management
practices that often fail to meet customer demands, inadequate
inventory oversight, weak financial accountability, and overstated
requirements. Because of these problems, DOD's annual outlay of $15
billion for additional inventory is at risk. In the short term, DOD
must continue to stress the efficient operations of its existing
logistics systems. This includes disposing of unneeded inventory,
implementing efficient and effective inventory management practices,
training personnel and rewarding the right behavior, improving data
accuracy, and enforcing existing policies to minimize the acquisition
of unneeded inventory. In the long term, DOD must establish goals,
objectives, and milestones for changing its culture and adopting new
management tools and practices. The key to changing DOD's management
culture will be an aggressive approach using best practices from the
private sector.
NATURAL RESOURCES
-------------------------------------------------------- Appendix 0:19
Emergency Salvage Sale Program:
Forest Service Met Its Target, but More Timber Could Have Been
Offered for Sale
GAO/RCED-97-53, Feb. 24 (33 pages).
In 1995, Congress established an emergency program, commonly known as
the "salvage rider," to boost sales of salvage timber by easing
environmental regulations, eliminating the administrative appeals
process, and expediting judicial reviews. GAO found that although
the Forest Service slightly exceeded its target for salvage timber
sales, the volume could have been significantly greater. In July
1996, for example, USDA placed restrictions on the criteria used to
classify sales as salvage sales, which delayed 224 sales containing
722 million board feet that the Forest Service had planned to offer
for sale. In addition, in December 1996, USDA told the Forest
Service not to advertise any salvage sales under the rider after that
date. This delayed 27 additional sales involving nearly 30 million
board feet. This report also discusses whether (1) four provisions
of the salvage rider helped the Forest Service to offer salvage
timber for sale more promptly and (2) salvage sales of concern to
environmentalists met the definition of salvage timber under the
salvage rider and Forest
Service guidelines.
Minerals Management:
Costs for Onshore Minerals Leasing Programs in Three States
GAO/RCED-97-31, Feb. 27 (42 pages).
In fiscal year 1996, the development of federal onshore leasable
minerals nationwide generated $936 million, of which the states
received about half. The federal government's appropriations for
administering its onshore leasable minerals program in that same year
were nearly $114 million. States will pay the federal government $22
million of this amount. This report (1) identifies how much Wyoming,
New Mexico, and California paid the federal government for managing
minerals on federal lands within their boundaries, (2) identifies the
costs to the three states for their own minerals management programs,
and (3) compares these federal and state program costs. GAO also
discusses the activities that are associated with the federal and
state programs.
SCIENCE, SPACE, AND TECHNOLOGY
-------------------------------------------------------- Appendix 0:20
Intellectual Property:
Comparison of Patent Examination Statistics for Fiscal Years 1994 and
1995
GAO/RCED-97-58, Mar. 13 (22 pages).
A July 1996 GAO report (GAO/RCED-96-190) provided statistics on
"patent pendency," or the amount of time that the Patent and
Trademark Office takes to examine a patent application. This report
updates those statistics and compares pendency for fiscal years 1994
and 1995. Specifically, GAO discusses overall pendency; patent
pendency by examination groups, secrecy orders, foreign applications,
and current and original application dates; and patent pendency
attributable to applicants.
TAX POLICY AND ADMINISTRATION
-------------------------------------------------------- Appendix 0:21
Tax Policy:
Effects of the Alcohol Fuels Tax Incentive
GAO/GGD-97-41, Mar. 6 (60 pages).
In the late 1970s and early 1980s, Congress enacted tax incentives
for biomass-derived alcohol fuels. Proponents maintained that the
incentives would reduce U.S. dependence on petroleum imports and
would provide an additional market for U.S. agricultural products.
Subsequent environmental legislation has boosted the demand for
alcohol fuels, which are blended with gasoline to increase its oxygen
content, in areas of the country with mandatory minimum oxygen
requirements for transportation fuel. In recent months, Congress has
debated the need for continuing the tax incentives for alcohol fuels.
This report answers the following questions on tax incentives for
alcohol fuels: Whom do the incentives benefit and harm economically?
What environmental benefits have the incentives produced? Have the
incentives increased the nation's economic independence? To what
extent has the partial exemption from the excise tax for alcohol
fuels reduced the flow of revenues into the Highway
Trust Fund?
Tax Policy:
Information on the Joint and Several Liability Standard
GAO/GGD-97-34, Mar. 12 (43 pages).
When a married couple files a joint federal income tax return, each
spouse becomes individually responsible for paying the entire amount
of the tax associated with that return. Because of this joint and
several liability standard, one spouse can be held liable for tax
deficiencies assessed after a joint return was filed that were solely
attributable to the actions of the other spouse. However, when one
spouse, without the knowledge of the other, incurs additional taxes,
the other potentially "innocent spouse" can obtain relief from the
additional tax liability if certain conditions are met. In response
to concerns about the effectiveness of the current innocent spouse
provisions and other perceived inequities caused by the joint and
several liability standard, this report discusses (1) the potential
universe of taxpayers who may be eligible for innocent spouse relief,
(2) the Internal Revenue Service's (IRS) procedures for handling
requests for innocent spouse relief, (3) whether the innocent spouse
provisions afford the same treatment for all taxpayers, (4) the
potential effects of replacing the joint and several liability
standard with a proportionate liability standard, (5) the potential
effects on IRS of requiring it to abide by the terms of divorce
decrees when those decrees allocate tax liabilities, and (6) the
potential effects on IRS of changing the law so that community income
of one spouse cannot be seized to satisfy tax liabilities incurred by
the other spouse before their marriage.
TESTIMONY
------------------------------------------------------ Appendix 0:21.1
IRS High-Risk Issues: Modernization of Processes and Systems
Necessary to Resolve Problems, by Lynda D. Willis, Director of Tax
Policy and Administration Issues, before the Subcommittee on
Oversight, House Committee on Ways and Means. GAO/T-GGD-97-52, Mar.
4 (17 pages).
The Internal Revenue Service (IRS) has for years struggled to collect
the nation's tax revenues using outdated processes and technology.
The result has often been inefficient and ineffective programs that
are prone to waste, fraud, abuse, and mismanagement. Of particular
concern are IRS' efforts to modernize its tax systems, manage its
administrative and revenue accounting systems, identify and collect
taxes owed to the government, detect and prevent the filing of
fraudulent tax returns, protect the confidentiality of taxpayer
information, and prevent the disruption of services because of
computer malfunctions. At a minimum, IRS needs an implementation
strategy that includes both cost-benefit analyses and reasonable
estimates of the extent, time frames, and resources needed to correct
its high-risk vulnerabilities. IRS also needs to (1) better define,
prioritize, and manage new information systems; (2) ensure that its
administrative and revenue accounting systems fully comply with the
federal government's accounting standards; (3) design and implement
both administrative and electronic controls to protect taxpayer data
from unauthorized access; and (4) develop performance measures that
will allow its managers, Congress, and GAO to track its progress.
Above all, IRS management needs to sustain its commitment to
resolving the agency's high-risk problems.
Tax Administration: IRS' Fiscal Year 1997 Spending, 1997 Filing
Season, and Fiscal Year 1998 Budget Request, by Lynda D. Willis,
Director of Tax Policy and Administration Issues, before the
Subcommittee on Oversight, House Committee on Ways and Means.
GAO/T-GGD/AIMD-97-66, Mar. 18
(30 pages).
Halfway through the 1997 tax season, nearly 25 percent more tax
returns had been filed electronically than at the same time last
year. Meanwhile, of some 21.6 million attempts by taxpayers to reach
the Internal Revenue Service (IRS) by phone, IRS answered more than
52 percent of the calls as of February 1997--up from about 21 percent
in 1996. Regarding IRS's fiscal year 1997 spending and fiscal year
1998 budget request, Congress may wish to consider the following
issues as it continues its oversight and appropriations activities:
Should the $36 million that IRS will not be using for systems
development in fiscal year 1997 be rescinded? What level of funding
is needed to make IRS' information systems century date compliant,
and will those changes be made in time? Does IRS need all of the
money it is requesting for fiscal year 1998 for the Distributed Input
System/Remittance Processing System replacement project? What level
of funding should Congress provide for developing new information
systems, given the lack of any justification for the $131 million
request for fiscal year 1998 and the $1 billion investment account
for fiscal years 1998 and 1999? What reliable, outcome-oriented
performance measures should be put in place to guide Congress and IRS
in deciding what resources should be given to IRS and how best to
allocate them among IRS's different programs?
TRANSPORTATION
-------------------------------------------------------- Appendix 0:22
Air Traffic Control:
Status of FAA's Standard Terminal Automation Replacement System
Project
GAO/RCED-97-51, Mar. 5 (16 pages).
Since the early 1980s, efforts by the Federal Aviation Administration
(FAA) to modernize the air traffic control system have experienced
lengthy schedule delays and substantial cost overruns. Because of
these problems, in 1994 FAA restructured its acquisition of the
Advanced Automation System--the centerpiece of its modernization
effort--into more manageable time segments. One of these segments,
known as the Standards Terminal Automation Replacement System (STARS)
project, is expected to replace older computers used at FAA
facilities to track aircraft in airspace around airports. In
September 1996, FAA contracted with Raytheon Corporation to develop
and install STARS. This report discusses the extent to which the (1)
schedule estimate for STARS is attainable and (2) cost estimates to
make STARS operational are likely to change.
TESTIMONY
------------------------------------------------------ Appendix 0:22.1
Aviation Safety and Security: Challenges to Implementing the
Recommendations of the White House Commission on Aviation Safety and
Security, by Gerald L. Dillingham, Associate Director for
Transportation Issues, before the Subcommittee on Aviation, Senate
Committee on Commerce, Science and Transportation. GAO/T-RCED-97-90,
Mar. 5 (11 pages).
Last year, 380 people died in accidents involving large U.S.
airlines--the largest number in 11 years. The crashes of TWA Flight
800 off Long Island and Valujet Flight 592 in the Florida Everglades
accounted for most of these deaths. Although the nation's air
transportation system remains the safest in the world and the Federal
Aviation Administration is a model for other countries, these tragic
events underscore the need to continuously increase the existing
margin of safety. The recently released report of the White House
Commission on Aviation Safety and Security made 57 recommendations
concerning safety, security, air traffic control, and disaster
response. GAO testified that these recommendations are a good start
toward ensuring greater safety and security for passengers,
restructuring the relationships between government and private
industry, and maintaining America's global leadership in aviation.
However, key questions remain about how and when the recommendations
will be implemented, how much they will cost, and who will pay for
them. This testimony focuses on the challenges to converting the
Commission's recommendations from concepts to realities.
DOT's Budget: Safety, Management, and Other Issues Facing the
Department in Fiscal Year 1998 and Beyond, by John H. Anderson, Jr.,
Director of Transportation Issues, before the Subcommittee on
Transportation, House Committee on Appropriations.
GAO/T-RCED/AIMD-97-86, Mar. 6 (60 pages).
Last year, GAO testified that the Department of Transportation faced
tremendous challenges in ensuring the safe and efficient movement of
people and goods and a cost-effective investment in the nation's
transportation infrastructure, which includes its highways and
transit systems, airports, airways, ports, and waterways. If
anything, overcoming these obstacles will be even more difficult
because efforts to improve the safety and security of the aviation
system will stretch limited resources even further. At the same
time, pressure to reduce the federal deficit and the demand for
scarce federal dollars for other transportation programs continue
unabated. The $38 billion proposed in the Department's fiscal year
1998 budget represents a one-percent reduction from this year's
enacted appropriation. Funding constraints underscore the need for
the Department to improve its management and oversight to ensure that
taxpayers get the most out of their transportation investment
dollars. This testimony discusses the major safety and security,
management, and other issues facing the Department.
Surface Transportation: Prospects for Innovation Through Research,
Intelligent Transportation Systems, State Infrastructure Banks, and
Design-Build Contracting, by Phyllis F. Scheinberg, Associate
Director for Transportation Issues, before the Subcommittee on
Transportation and Infrastructure, Senate Committee on Environment
and Public Works. GAO/T-RCED-97-83, Mar. 6 (10 pages).
This testimony focuses on how innovation in federal research,
financing, and contracting methods can improve the performance of the
nation's surface transportation system. GAO discusses (1) the role
of surface transportation research, which has yielded such benefits
as crash protection devices, programs to reduce alcohol-related
deaths, and long-lasting highway surfaces; (2) the Transportation
Department's Intelligent Transportation System Program, which has
received $1.3 billion to use computers and telecommunications to
promote safety and efficiency in surface transportation; (3) state
infrastructure banks; and (4) efforts by the Federal Highway
Administration to test and evaluate the use of an innovative
design-build contracting method for
highway construction.
Intercity Passenger Rail: Amtrak's Financial Viability Continues to
Be Threatened, by Phyllis F. Scheinberg, Associate Director for
Transportation Issues, before the Subcommittee on Railroads, House
Committee on Transportation and Infrastructure. GAO/T-RCED-97-80,
Mar. 12 (21 pages); and
Intercity Passenger Rail: The Financial Viability of Amtrak
Continues to Be Threatened, by Phyllis F. Scheinberg, Associate
Director for Transportation Issues, before the Subcommittee on
Surface Transportation and Merchant Marine, Senate Committee on
Commerce, Science, and Transportation. GAO/T-RCED-97-94, Mar. 13
(21 pages).
The elimination of federal operating support for Amtrak depends on
the railroad's ability to boost revenues, control costs, and provide
customers with high-quality service. GAO testified that Amtrak's
financial condition is still very perilous and heavily dependent on
federal capital and operating funds. Although Amtrak has developed a
plan to increase revenues and reduce cost growth, passenger revenues
have been declining and the gap between deficits and federal
operating subsidies has begun to grow. At the end of fiscal year
1996, the gap between the operating deficit and federal operating
subsidies totaled $82 million. Capital investment is critical if
Amtrak's business plans are to succeed. Amtrak will need billions of
dollars to bring its equipment and facilities systemwide and its
tracks in the Northeast Corridor into a state of good repair and to
introduce high-speed rail service between Washington and Boston. It
will be difficult for Amtrak to achieve operating self-sufficiency by
2002 because of the environment in which it operates. First, Amtrak
is depending on capital investment to support its business
plans--specifically, an increase in capital funding support, possibly
from a dedicated funding sources like the Highway Trust Fund. GAO
cautions that the current budget environment may limit the amount of
money actually made available to Amtrak. Second, Amtrak is relying
greatly on revenue growth and cost containment to replace federal
operating support. The economic and competitive environment in which
Amtrak operates may limit revenue growth, however, and Amtrak will
find it hard to take those steps necessary--such as route and service
adjustments--to cut costs.
VETERANS AFFAIRS
-------------------------------------------------------- Appendix 0:23
TESTIMONY
------------------------------------------------------ Appendix 0:23.1
Department of Veterans Affairs: Programmatic and Management
Challenges Facing the Department, by David P. Baine, Director of
Planning and Reporting in the Health, Education, and Human Services
Division, before the Subcommittee on Human Resources, House Committee
on Government Reform and Oversight. GAO/T-HEHS-97-97, Mar. 18 (36
pages).
The Department of Veterans Affairs (VA) has a profound effect on the
welfare of the nation's 26 million veterans. In fiscal year 1996,
VA's 222,000 workers delivered a wide array of medical, disability
compensation, pension, housing, insurance, education, and burial
services in more than 1,000 facilities at a cost of more than $38
billion. This testimony discusses the steps taken to boost the
efficiency of VA's health care system and VA's progress in addressing
the challenges GAO testified on two years ago. GAO also discusses
(1) challenges facing the Veterans Business Administration in
handling compensation and pension benefits, (2) VA's efforts to
implement the Government Performance Review Act and other recent
legislation intended to improve the management of government
programs, and (3) changes that could be made in veterans' benefits
and in the operation of VA programs to help reduce the budget
deficit.
LEGAL DECISIONS AND OPINIONS
-------------------------------------------------------- Appendix 0:24
GAO's Office of General Counsel regularly issues legal decisions and
opinions. It also issues reports on major rules issued by federal
agencies prior to their implementation. These documents are posted
daily and may be downloaded from GAO's home page on the World Wide
Web (http://www.gao.gov). Decisions, opinions, and reports of the
Office of General Counsel may also be obtained by using the order
form in the back of this publication.
Defense Reutilization and Marketing Service Awards Ceremonies
B-270327, Mar. 12.
Vouchers for luncheon expenses incurred by the Defense Reutilization
and Marketing Service (DRMS) for employees attending worldwide DRMS
awards ceremonies may be paid. We have approved the payment of
reasonable ceremonial expenses, including food, incurred in
connection with the presentation of awards under the Government
Employees' Incentive Awards Act. 65 Comp. Gen. 738 (1986). The
$20 per employee expense limitation set by DRMS in connection with
presentation of the awards is not inconsistent with the Incentive
Awards Act or implementing regulations.
Environmental Protection Agency--Inspector General-- Cooperative
Agreement--Procurement
B-262110, Mar. 19.
Environmental Protection Agency (EPA) should have used a procurement
contract rather than a cooperative agreement to obtain support
services from the University of Kansas (KU) for an EPA data
management conference. If EPA had chosen to use a contract to
procure the services, KU would not have been allowed to pay travel
and related expenses for non-federal conference attendees. However,
since the EPA Assistant Regional Administrator caused the error by
choosing an inappropriate funding vehicle, neither the certifying
official nor KU should have to repay EPA; both acted in good faith in
fulfilling their obligations and neither had a basis for questioning
the Assistant Regional Administrator's decision to use the
cooperative agreement.
Export-Import Bank
B-272254, Mar. 5.
Under 12 U.S.C. � 635(a)(1) (1994), the Export-Import Bank may not
charge its customers for travel expenses incurred by the Bank in
connection with a customer's transactions, and deposit the receipts
to the credit of the Bank's appropriation. Section 635(a)(1) permits
the Bank to accept voluntary reimbursements for the travel expenses
of its employees from non-federal sources; it does not authorize the
Bank to charge fees to cover employees' travel expenses.
National Security Agency--Availability of Appropriations To Purchase
Food as a Nonmonetary Award under the Government Employees Incentive
Awards Act.
B-271511, Mar. 4.
1. The National Security Agency may use appropriated funds to
purchase food or food vouchers for use as a nonmonetary award under
the Government Employees Incentive Awards Act, 5 U.S.C. ��
4501-4506. We have no legal basis to object to the Office of
Personnel Management's conclusion that agencies may use meals or food
vouchers as informal recognition awards provided that the agency
concludes that (1) the contribution being recognized will be properly
rewarded by presenting an informal recognition award of nominal
value, rather than a cash award, time off award, or an honorary
award; and (2) meals or vouchers therefor represent a form of
informal recognition award that would not jeopardize the credibility
and integrity of the government's incentive awards program. 2. The
Act authorizes agencies to "incur necessary expenses for the honorary
recognition of employees." 5 U.S.C. � 4503. We have previously
interpreted the Act to permit agencies to use operating
appropriations to pay for refreshments and meals in connection with
agency employee awards ceremonies, if the agency determines that a
reception with food would enhance the recognition value of the
awards. 65 Comp. Gen. 738, 740 (1986); B-235163.11, February 13,
1996.
[Letter]
B-271896, Mar. 4.
Relief is granted to State Department Class B Cashier where proximate
cause of loss was not negligent practices of the cashier, but the
laxity that pervaded the Embassy's operation and management of its
cashier's office.
REPORTS ON AGENCY RULES
-------------------------------------------------------- Appendix 0:25
Board of Governors of the Federal Reserve System: Bank Holding
Companies and Change in Bank Control (Regulation Y).
GAO/OGC-97-28, Mar. 12.
Department of Agriculture, Farm Service Agency and Commodity Credit
Corporation: Conservation Reserve Program--Long-Term Policy.
GAO/OGC-97-26, Mar. 6.
Department of Justice, Immigration and Naturalization Service and
Executive Office for Immigration Review: Inspection and Expedited
Removal of Aliens; Detention and Removal of Aliens; Conduct of
Removal Proceedings; Asylum Procedures. GAO/OGC-97-32, Mar. 28.
Federal Communications Commission: Facilitate Future Development of
Paging Systems and Implementation of Section 309(j) of the
Communications Act; Competitive Bidding. GAO/OGC-97-31, Mar. 21.
Securities and Exchange Commission: Revision of Holding Period
Requirements in Rules 144 and 145. GAO/OGC-97-27, Mar. 11.
*** End of document. ***