Reports and Testimony: May 1997 (Other Written Prod., 05/01/97,
GAO/OPA-97-8).

GAO provided a monthly digest of its reports and testimonies issued in
May 1997.

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

 REPORTNUM:  OPA-97-8
     TITLE:  Reports and Testimony: May 1997
      DATE:  05/01/97
   SUBJECT:  Federal courts
             Claims processing
             Agricultural industry
             International relations
             Transportation operations
             National defense operations
             Financial management
             Public administration
             Health care programs
IDENTIFIER:  Bibliographies
             Bosnia
             HCFA Medicare Transaction System
             
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REPORTS AND TESTIMONY:  MAY 1997

GAO/OPA-97-8


Highlights

Bosnia Peace Operation

Peacekeeping operations in Bosnia--estimated to cost the United
States at least $7.7 billion--have helped Bosnia to take the first
steps toward achieving the Dayton Agreement's goal of a unified,
democratic country.  However, the leaders of Bosnia's three major
ethnic groups have yet to embrace reconciliation, and the country
remains politically divided and economically moribund.  Page 24. 

Courthouse Construction

In a sample of seven U.S.  district courts, courtrooms were idle, on
average, about 46 percent of the days available for court activities. 
Usage rates, as an indicator of space needed, are not collected by
the judiciary and factored into its plans for building courtrooms,
which can cost between $640,000 and $1.3 million each, depending on
location.  Page 15. 

Medicare Transaction System

By the year 2000, Medicare will process more than a billion claims
and pay $288 billion in benefits annually.  To keep up, Medicare
plans to spend $1 billion to replace nine processing systems with the
unified Medicare Transaction System.  Despite some progress, critical
weaknesses call into serious question whether MTS, without
significant change, will perform as required.  Page 22. 

GAO/OPA-97-8



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

  ACE - x
  BIA - x
  CLEP - x
  CSRS - x
  DOD - x
  DOE - x
  EIC - x
  EPA - x
  FAA - x
  FBI - x
  FERS - x
  FSA - x
  GIPSA - x
  GPRA - x
  GSA - x
  HCFA - x
  HMO - x
  HUD - x
  INS - x
  IRS - x
  MTS - x
  NATO - x
  SAMHSA - x
  SEC - x
  SSA - x
  USAID - x
  USDA - x
  VA - x
  VETS - x

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


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

Packers and Stockyards Programs:
USDA's Response to Studies on Concentration in the
Livestock Industry

GAO/RCED-97-100, Apr.  23 (25 pages). 

Concentration in the meatpacking industry has been a matter of
concern since the turn of the century, when five firms controlled 55
percent of the market.  This situation led to the 1921 passage of the
Packer and Stockyards Act, which created a division within the
Agriculture Department (USDA) to ensure fair business practices, such
as prompt and accurate payment, and to detect and prevent
anticompetitive behavior.  An October 1991 GAO report
(GAO/RCED-92-36) found that the industry had become even more
concentrated than it was in 1921:  four firms controlled 70 percent
of the meatpacking industry.  Since then, industry concentration has
intensified, with four firms controlling 81 percent of the industry
as of 1995.  This report discusses (1) whether USDA's February 1996
report on concentration in the meatpacking industry identified the
geographic boundaries of livestock procurement markets; (2) whether
the report provided guidance on how to monitor these markets; (3)
whether, as a result of the report, USDA had identified additional
data that the Grain Inspection, Packers, and Stockyards
Administration (GIPSA) could use to strengthen its monitoring of
these markets; and (4) the steps that GIPSA plans to take as a result
of this report.  GAO also presents the views of the Justice
Department on the usefulness of GIPSA's data for conducting its
regulatory responsibilities in the livestock procurement markets. 

Farm Service Agency:
Additional Actions Needed to Address Employee Conflict-of-Interest
Issues

GAO/RCED-97-104, Apr.  25 (23 pages). 

Through its farm credit programs, the Farm Service Agency (FSA) makes
loans at less-than-market interest rates to borrowers with limited
resources.  As a result of agency consolidations, FSA now has a
number of its own employees, members of county farmer committees, and
family members and business associates of these groups participating
in the farm credit program.  FSA is starting to phase out the
eligibility of all of its employees for farm loans and has been
trying to identify cases requiring action to avoid conflicts of
interest.  This report reviews the (1) number of FSA federal and
nonfederal employees as well as county committee members with FSA
farm loans; (2) comparative size and repayment history of farm loans
to FSA federal employees, FSA's nonfederal employees, county
committee members, and other FSA borrowers; (3) number of cases FSA
has identified requiring action to avoid conflicts of interest; and
(4) measures FSA has taken to address these cases. 

Agricultural Inspection:
Improvements Needed to Minimize Threat of Foreign Pests
and Diseases

GAO/RCED-97-102, May 5 (29 pages). 

Foreign pests and diseases entering the United States cost an
estimated $41 billion annually in lost production and expenses for
prevention and control.  The Agriculture Department's Animal and
Plant Health Inspection Service is responsible for protecting U.S. 
agriculture by inspecting passengers and cargo entering the country. 
Since 1990, however, the rapid growth in international trade and
travel has dramatically increased the amount of cargo and the number
of passengers that the Service must examine.  Moreover, policy
changes to facilitate trade and customer service have put pressure on
the Service to conduct inspections more quickly to speed the flow of
passengers and trade.  Despite increased funding and added staff, the
Service is struggling to keep pace with its increased workload. 
Heavy workloads have led to shortcuts, which raise questions about
inspection efficiency and effectiveness.  On a broader scale, the
Service's efforts to address its workload problems have been hampered
by inadequate information for determining how best to deploy its
inspectors.  As a result, the Service may not be targeting its
limited inspection resources at those ports of entry that are most
vulnerable to the introduction of pests and diseases. 

Food Stamp Program:
Characteristics of Households Affected by Limit on the
Shelter Deduction

GAO/RCED-97-118, May 14 (52 pages). 

Under the Food Stamp Program, a household's net monthly income is one
of several factors used to calculate the food stamp benefit.  Net
monthly income is determined by subtracting various approved
deductions from a household's gross monthly income.  One of these
deductions is for shelter expenses that exceed 50 percent of a
household's income after other allowable deductions have been taken. 
This deduction, known as the "excess shelter expenses deduction,"
includes rent, mortgage payments, utility bills, property taxes, and
insurance.  The deduction is designed to take into account the effect
of higher-than-average shelter costs on a low-income household's
ability to buy an adequate amount of food.  The welfare reform act
retained an existing cap on the amount of excess shelter expenses
that can be deducted from income for households receiving food stamps
without elderly or disabled members.  As a result, some households
will receive a smaller food stamp benefit.  This report describes,
for fiscal year 1995, the (1) characteristics of households whose
food stamp benefits were limited because of the cap on their
deduction for excess shelter expenses and (2) extent to which food
stamp benefits would have been higher for those households if there
had not been a cap. 

School Meal Programs:
Sharing Information on Best Practices May Improve
Programs' Operations

GAO/RCED-97-126, May 21 (35 pages). 

In fiscal year 1997, the Agriculture Department (USDA) will provide
more than $6 billion in cash reimbursements and more than $600
million in commodities to the two largest school meal programs. 
Although USDA regulates and oversees the school meal programs, the
states and local school food authorities have flexibility in
purchasing, distributing, and preparing the food that is served to
students.  Some states and local school food authorities have
developed unique and innovative approaches to help run these programs
more efficiently.  To learn how these "best practices" might apply to
the school meal programs, this report (1) identifies state and local
school food authority operating practices that are generally
recognized as best practices by USDA, states, and other officials;
(2) determines whether some of these best practices could be
replicated by other states and local school food authorities; and (3)
reviews the training and technical assistance that USDA provides to
the states and local school food authorities to help them better
manage the school meal programs.  GAO reviews two best practices in
depth--Pennsylvania's computerized system for ordering commodities
from USDA and Texas' use of the Defense Department's commodity
purchasing infrastructure to buy fresh fruits and vegetables. 


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

Budget Issues:
Fiscal Year 1996 Spending by Budget Function

GAO/AIMD-97-95, May 13 (64 pages). 

This report provides information on federal spending by budget
function and subfunction for fiscal year 1996.  GAO displays agency
spending in terms of gross obligations reported against the broad
federal mission areas described by budget function classifications. 
GAO (1) provides a brief description of each budget function and
subfunction, (2) provides a series of tables that classify department
and agency spending by subdepartment and by subfunction, and (3)
summarizes spending for each budget function and subfunction by
federal departments and subdepartments. 

Budget Trends:
Federal Investment Outlays, Fiscal Years 1981-2002

GAO/AIMD-97-88, May 21 (19 pages). 

During the past decade, concerns have been raised about the declining
levels of federally and domestically financed investment and national
savings.  Continued efforts to reduce the federal deficit could help
boost national savings and expand domestic capital available for
private investment.  At the same time, reducing the deficit
constrains the government's discretionary spending, which finances
most federal investment.  As the constraints on discretionary
spending have tightened with the broad agreement to balance the
budget by fiscal year 2002, legislative proposals before Congress
have sought to promote long-term economic growth in the private
sector.  This report provides trend data and estimates of future
outlays for investments through fiscal year 2002. 


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

Bilingual Voting Assistance:
Assistance Provided and Costs

GAO/GGD-97-81, May 9 (56 pages). 

The Voting Rights Act of 1965 was intended to protect the voting
rights of U.S.  citizens of certain ethnic groups whose command of
the English language may be limited.  The legislation's "bilingual
voting assistance requirements" apply to ethnic groups in 422
jurisdictions, mainly counties, in 28 states.  Critics of the
bilingual provisions charge that the implementation of these
requirements has proved costly and has been of questionable benefit
in boosting voter turnout among targeted ethnic groups.  This report
reviews (1) the types of assistance that jurisdictions provided for
the 1996 general election and (2) how much covered jurisdictions
spent to provide voting assistance in 1996 and in
earlier years. 

Indian Programs:
BIA's Management of the Wapato Irrigation Project

GAO/RCED-97-124, May 28 (24 pages). 

In the late 19th century, Congress began authorizing funds to build
Indian irrigation projects.  The goal was to spur economic
development on Indian reservations and to meet federal legal
obligations.  Today, the Bureau of Indian Affairs (BIA) manages more
than 70 projects that deliver water to about 1 million acres of
reservation land.  The Wapato Irrigation Project, located on the
Yakama Indian Reservation in Washington State, irrigates about
142,000 acres.  The cost to run the project, which BIA has designated
as self-sustaining, is to be covered by annual assessments against
all irrigable acres.  The project has contributed substantially to
the local economy, but, over the years, the project has fallen into
disrepair, and many irrigated acres are idle.  Estimates of the cost
to bring the project back to operating condition range as high as
$200 million.  This report examines the (1) key reasons for the
project's idle acreage and the steps that can be taken to return
these lands to agricultural production, (2) main reasons why
operation and maintenance assessments for the project are past due,
and (3) obstacles that BIA will face in trying to collect the past
due assessments. 


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


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

Department of Education:  Multiple, Nonintegrated Systems Hamper
Management of Student Financial Aid Programs, by Cornelia M. 
Blanchette, Associate Director for Education and Employment Issues,
before the Senate Committee on Labor and Human Resources. 
GAO/T-HEHS/AIMD-97-132, May 15 (eight pages). 

This testimony discusses the Education Department's information
management systems that support student financial aid programs,
including the Federal Family Education Loan Program, the Ford Direct
Loan Program, the Federal Pell Grant Program, and campus-based
programs.  In academic year 1998-99, these programs will make more
than $47 billion available in loans, grants, and other aid to about
8.1 million students.  GAO is concerned that without effective
information management that would result from fully implementing
recent legislation (the Clinger-Cohen Act), the multiple,
nonintegrated information systems run by the Department may hamper
its management of student financial
aid programs. 


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

Department of Energy:
Funding and Workforce Reduced, but Spending Remains Stable

GAO/RCED-97-96, Apr.  24 (31 pages). 

In fiscal year 1996, the Department of Energy (DOE) had a $17.4
billion budget and a contractor workforce totaling 127,850 workers. 
Like many other agencies, DOE has been downsizing.  Overall funding,
spending, and workforce reductions took place from fiscal years 1994
to 1996.  However, budget cuts did not result in commensurate
reductions in spending.  DOE spent nearly the same in fiscal year
1996 as it had in 1994.  DOE's overall federal workforce declined by
more than six percent, and its contractor workforce declined by 20
percent.  About half of the cuts in the federal workforce took place
at headquarters, while the remainder occurred in DOE field offices. 
Despite these overall reductions, some programs saw an increase in
their spending and workforces.  For example, as the defense nuclear
production facilities have been transferred to the Environmental
Program, spending rose by $682 million, or about 11 percent, between
fiscal years 1994 and 1996.  However, none of DOE's major programs
experienced increases in their contractor workforce. 


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

Cleanup Technology:  DOE's Program to Develop New Technologies for
Environmental Cleanup, by Victor S.  Rezendes, Director of Energy,
Resources, and Science Issues, before the Subcommittee on Oversight
and Investigations, House Committee on Commerce.  GAO/T-RCED-97-161,
May 7 (16 pages). 

In 1989, the Energy Department established within its Office of
Environmental Management a technology program whose mission is to
develop new technologies to reduce environmental cleanup costs,
reduce risks, and do what cannot be done with conventional methods. 
About $2 billion has been spent on this effort, but the program has
experienced management problems and limited success in implementing
innovative technologies.  This testimony discusses (1) the Office of
Environmental Management's progress in resolving management problems
identified in GAO reports issued since 1992, (2) barriers to the use
of innovative technologies, (3) the technology deployment initiatives
that the Office of Environmental Management has proposed to overcome
these barriers, (4) the program's methods for computing cost savings
from the use of innovative technologies, and (5) future challenges
facing the technology development program. 

Naval Petroleum Reserves:  Transfer Options for Naval Oil Shale
Reserves 1 and 3 in Colorado, by Martin J.  Fitzgerald, Associate
General Counsel, before the Subcommittee on Military Readiness, House
Committee on National Security.  GAO/T-OGC-97-42, May 7 (six pages). 

The Petroleum and Oil Shale Reserves were established in the early
1900s when the government began setting aside large sections of
public lands favorable for hydrocarbon production.  Although these
reserves were originally intended as a source of oil for the
military, the Naval Petroleum Reserves are now primarily produced for
commercial purposes.  By contrast, the Naval Oil Shale Reserves have
remained largely undeveloped, although protective drilling has
occurred since 1985 to protect government-owned resources from being
drained by adjacent operations.  This testimony discusses the Energy
Department's recommendation that Oil Shale Reserves 1 and 3 be
transferred to the Interior Department for leasing and surface
management under the Mineral Leasing Act and the Federal Land Policy
Management Act. 


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

Superfund:
Stronger EPA-State Relationship Can Improve Cleanups and
Reduce Costs

GAO/RCED-97-77, Apr.  24 (54 pages). 

A growing consensus has emerged in recent years among many in the
administration, state governments, and Congress that the states
should take on more responsibility for leading the cleanup of the
Superfund program's highest-priority sites, which are included on the
Environmental Protection Agency's (EPA) National Priorities List. 
This report examines ways in which interested states can successfully
assume greater cleanup responsibilities at National Priorities List
sites.  GAO discusses (1) the lessons learned from the experiences of
five states--Minnesota, New Hampshire, Texas, Washington, and
Wisconsin--that already have led National Priorities List cleanups
and (2) how EPA can ensure that interested states are successful in
their efforts to assume increased Superfund responsibilities. 

Superfund:
Times to Complete the Assessment and Cleanup of Hazardous Waste Sites

GAO/RCED-97-20, Mar.  31 (57 pages). 

The times to evaluate, process, and clean up waste sites under the
Superfund law have increased in recent years.  For hazardous waste
sites added in 1996 to the Environmental Protection Agency's (EPA)
register of the most contaminated locations, EPA took an average of
more than nine years to complete the process--from site discovery to
final listing on the National Priorities List.  Although this
represents some improvement over 1995, it is still longer than
earlier listing times.  Cleanup times have also lengthened.  From
1986 to 1989, cleanup projects were finished, on average, 3.9 years
after sites were placed on the National Priorities List.  By 1996,
however, completed cleanups were averaging 10.6 years.  Much of the
time spent on cleanups centers on the early planning phases, when
cleanup remedies are selected.  Less time has been spent on actual
construction work at sites than on the selection of remedies.  EPA
officials attributed the increasingly lengthy cleanup times to the
growing complexity of the cleanup problems at sites, the agency's
efforts to reach settlements with parties responsible for
contamination, and
limited resources. 

Superfund:
State Voluntary Programs Provide Incentives to
Encourage Cleanups

GAO/RCED-97-66, Apr.  9 (60 pages). 

After nearly two decades and billions of dollars in federal, state,
and private outlays for cleanups, thousands of hazardous waste sites
still need to be dealt with.  The federal Superfund program and state
enforcement programs have forced cleanups at many of the most
contaminated locations, but thousands of other sites await discovery,
evaluation, and cleanup.  To reduce this backlog, many states have
created voluntary cleanup programs, which rely on incentives rather
than enforcement orders to accomplish cleanups.  This report (1)
identifies the accomplishments of voluntary cleanup programs; (2)
describes these programs' organization, funding, and major
characteristics; and (3) determines the effects of federal hazardous
waste policies on voluntary cleanups and the types of federal
assistance that could further support voluntary programs. 


   FINANCIAL INSTITUTIONS
--------------------------------------------------------- Appendix 0:7

Bank Oversight:
Few Cases of Tying Have Been Detected

GAO/GGD-97-58, May 8 (25 pages). 

With increasing cross-industry competition in financial services in
the United States, market participants have raised concerns about the
so-called "tying" provisions found in the Bank Holding Company Act
Amendments of 1970.  Those provisions prohibit a bank from engaging
in tying practices or, in other words, requiring customers to obtain
credit, property, or services as a condition of their obtaining
credit or other desired products or services.  The banking industry
argues for the removal of the tying provisions, while some securities
firms, insurers, and independent insurance agents have advocated
retaining or strengthening them.  This report provides information on
the (1) evidence of tying abuses by banks and their affiliates and
regulatory efforts to ensure compliance, (2) views of representatives
of securities and insurance firms and independent insurance agents on
tying provisions, and (3) views of representatives of banks and bank
regulators on the tying provisions. 

Foreign Banks:
Opportunities Exist to Enhance Supervision Program as Implementation
Proceeds

GAO/GGD-97-80, May 9 (32 pages). 

The Foreign Bank Supervision Enhancement Act of 1991 gave the Federal
Reserve greater supervisory and regulatory authority over foreign
banks operating in the United States.  Before then, although the Fed
had overall authority for supervising foreign banks' presence in the
United States, no formal mechanism existed to allow the various
agencies to share information about foreign banks with offices in
multiple states and to coordinate supervisory activities.  In keeping
with its enhanced authority, the Fed has worked with other agencies
to develop a foreign bank supervision program with the goal of
improving and better coordinating supervision of foreign banks in the
United States.  This report (1) describes the Fed's foreign bank
supervision program and (2) evaluates the banking supervisors'
progress in implementing it. 

Mutual Funds:
SEC Adjusted Its Oversight in Response to Rapid Industry Growth

GAO/GGD-97-67, May 28 (35 pages). 

The rapid growth in open-end investment companies, commonly known as
mutual funds, had the potential to outstrip the Security and Exchange
Commission's (SEC) ability to properly oversee the industry.  GAO's
September 1995 report on bank mutual funds (GAO/GGD-95-210) noted
that SEC had hired additional staff to oversee mutual funds but that
continued industry expansion could challenge SEC's ability to meet
its oversight responsibilities.  This report discusses how SEC has
responded to this rapid industry growth in carrying out its mutual
fund oversight through inspections, disclosure reviews, and other
regulatory activities. 

Financial Crisis Management:
Four Financial Crises in the 1980s

GAO/GGD-97-96, May 1977 (77 pages). 

The increasing interconnectedness of financial institutions and
markets has underscored the need for diverse federal, state,
international, and private organizations to work together to contain
and resolve financial disruptions.  The federal government's ability
to manage financial crises effectively is important to the stability
of the U.S.  financial system and economy as well as the worldwide
financial system.  This report examines federal actions that
successfully contained four major financial crises during the
1980s--the Mexican debt crisis of 1982; the near failure of the
Continental Illinois National Bank in 1984; the run on
state-chartered, privately insured savings and loans in Ohio in 1985;
and the stock market crash of 1987.  The report focuses on the
following three phases of financial crisis management:  (1)
preparedness, which includes activities undertaken before a crisis
takes place; (2) containment, which involves measures undertaken
immediately following a crisis to mitigate financial disruption and
lessen any ill effects on the financial system; and (3) resolution,
which includes steps taken to reduce the likelihood of a crisis
reoccurring. 


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

Financial Regulation:  Bank Modernization Legislation, by James L. 
Bothwell, Chief Economist, before the House Committee on Banking and
Financial Services.  GAO/T-OCE/GGD-97-103, May 7 (21 pages). 

Laws governing the financial services industry were devised for an
industry compartmentalized into commercial banking, investment
banking, and insurance.  The lines between these sectors have become
increasingly blurred, however, and the financial products and
services offered by banks, securities firms, and insurance companies
today are more alike than different.  Attempts by regulators to adapt
to the rapid changes taking place in the financial marketplace have
been incremental and ad hoc.  Congress could improve the functioning
of the U.S.  regulatory system by modernizing the banking laws. 
Modernization, however, must also take into account other important
goals, such as preserving the safety and the soundness of the
financial system and the deposit insurance funds, preventing undue
concentrations of economic power, and protecting consumers from
conflicts of interest.  This testimony recommends that several
safeguards be included in any modernization legislation.  GAO also
urges Congress to proceed with caution if its decides to relax the
current separation of banking and commerce. 


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

Financial Management:
Improved Reporting Needed for DOD Problem Disbursements

GAO/AIMD-97-59, May 1 (36 pages). 

Problem disbursements are payments that have not been matched with
corresponding obligations, thereby increasing the risk of undetected
fraudulent or erroneous payments.  Problem disbursements also
increase the likelihood that cumulative disbursement amounts will
exceed appropriated amounts and other spending limits.  This report
reviews the Defense Department's (DOD) reporting on the amount of its
problem disbursements.  GAO focuses on whether DOD's reporting of
problem disbursements is producing accurate and consistent data
needed to effectively measure its progress and manage the reduction
of its
problem disbursements. 

Financial Management:
The Prompt Payment Act and DOD Problem Disbursements

GAO/AIMD-97-71, May 23 (14 pages). 

The Defense Department (DOD) claims that the Prompt Payment Act has
pressured its employees into paying invoices within 30 days even
though the payment may cause a problem disbursement.  Problem
disbursements are payments that have not been properly matched with
corresponding obligations.  As a result, fraudulent and erroneous
payments may go detected and the cumulative amounts of disbursements
may exceed appropriated amounts and other legal limits.  DOD did not
provide, and GAO did not find, any empirical evidence to support
assertions that the Prompt Payment Act contributes to problem
disbursements.  Also, a 1995 Defense study, which identified several
major contributing causes to problem disbursements, did not cite
either the Prompt Payment Act or DOD policies on making timely
payments as a cause. 

Financial Management:
Opportunities to Improve Experience and Training of Key
Navy Comptrollers

GAO/AIMD-97-58, May 5 (28 pages). 

Beginning in fiscal year 1996, the Navy and other federal agencies
must produce auditable financial statements.  In addition, accurate
financial data are needed for measuring performance under the
Government Performance and Results Act.  In the Navy, comptrollers
are critical to ensuring that the Department achieves its financial
management objectives and meets the requirements of recent financial
reform legislation.  Yet GAO found that the Navy's personnel
practices do not provide a career path for Navy officers to develop
and maintain the core competencies needed by a comptroller.  By
contrast, the Air Force and the Army offer a career path in
comptrollership.  Because of the Navy's approach, many officers in
key comptroller jobs lack adequate financial management experience
and accounting education.  Slightly more than half of the Navy's key
comptroller positions are filled by line officers whose primary
experience has been in surface warfare, submarines, aviation, or
operational staff jobs.  About 26 percent of the line officers
serving as comptrollers lacked a college degree in a business-related
field.  Supply corps officers, while more qualified from the
standpoint of formal education, generally lacked the depth of
experience needed by a comptroller in the 1990s. 

Financial Audit:
Congressional Award Foundation's 1996 and 1995
Financial Statements

GAO/AIMD-97-87, May 15 (14 pages). 

GAO audited the Congressional Award Foundations' 1996 and 1995
financial statements.  The Foundation is a private, nonprofit,
tax-exempt organization that promotes excellence among youth in
public service, personal development, and physical fitness.  GAO
found that the statements were reliable in all material respects;
that internal controls effectively safeguarded assets from material
loss, ensured compliance with laws and regulations, and ensured that
no misstatements appeared in the financial statements; and that there
was no noncompliance with laws
and regulations. 

Financial Audit:
Senate Restaurants Revolving Fund for Fiscal Years 1996 and 1995

GAO/AIMD-97-93, May 16 (19 pages). 

GAO contracted with KPMG Peat Marwick LLP to audit the financial
statements of the Senate Restaurants Revolving Fund for fiscal years
1996 and 1995.  The Fund operates dining facilities in and around the
U.S.  capitol for Senators, Senate employees, and the public.  KPMG
found that the financial statements were reliable in all material
respects; internal controls were effective in safeguarding assets,
ensuring material compliance with laws and regulations, and ensuring
that there were no material misstatements in the financial
statements; and that there was no reportable noncompliance with laws
and regulations.  KPMG's audit did reveal a significant weakness
involving the adequacy of logical access controls over the Fund's
accounting and information management systems and related data. 
Logical access controls use computer software and related procedures
to prevent or detect unauthorized access to computer software and
data. 


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

Courthouse Construction:
Better Courtroom Use Data Could Enhance Facility Planning
and Decisionmaking

GAO/GGD-97-39, May 19 (98 pages). 

Trial courtrooms, because of their size and configuration, are
expensive to build.  The judiciary's current policy is, whenever
possible, to assign a trial courtroom to each district judge.  GAO's
work in seven cities--Dallas, Miami, Albuquerque, Sante Fe, Las
Cruces, San Diego, and Washington, D.C.--found that courtrooms were
idle, on average, about 46 percent of the days available for
courtroom activities.  In other words, these courtrooms were vacant
115 days out of 250 federal workdays in 1995.  Courtrooms were used
for trials less than one-third of the days, and the use of courtrooms
for trials varied by location.  At the six locations with more than
one trial courtroom, all courtrooms at any one location were seldom
used for trials the same day.  Senior judges--district judges who
were eligible to retire but chose to continue to perform judicial
duties, often at reduced caseloads--used the courtrooms assigned to
them for trials considerably less frequently than did active district
judges.  The judiciary recognizes that it has not developed the data
or done the research to support its practice of providing a separate
trial courtroom for every district judge.  Although it has taken some
steps to help it better understand courtroom usage, the judiciary has
yet to develop a plan to gather data on actual use of courtrooms for
trials or to systematically quantify the latent and other usage
factors.  See page 42 for GAO's correspondence (GAO/GGD-97-59R, May
19) discussing courtroom usage in Denver, Fresno, Salt Lake City, and
Seattle. 

The Excepted Service:
A Research Profile

GAO/GGD-97-72, May 1997 (44 pages). 

Beginning in 1997, the Government Performance and Results Act
requires federal agencies to identify their missions and strategic
goals, to measure their progress in meeting those goals, and to focus
their resources--whether budgetary, technical, or human--on achieving
results.  A key questions is whether, under the current civil service
system, agencies will have the flexibility to shape their human
resource management systems to meet these new needs.  As of June
1996, 52 percent of the civil service was in the "competitive
service." Most of the remaining federal employees were in the
"excepted service," where many jobs are covered by alternative
personnel systems.  One of Congress' reasons for establishing
alternative personnel systems was to exempt agencies from the strict
rules governing the competitive service.  This report describes (1)
the distribution of excepted service employees across government
organizations; (2) the composition of the excepted service in terms
of the various legal bases under which employees were appointed; (3)
policy concerns and study focuses that have guided earlier studies;
and (4) the coverage of agencies and employees, as well as data
elements, in two data sources that were useful for studying the
excepted service. 

Federal Retirement:
Federal and Private Sector Retirement Program Benefits Vary

GAO/GGD-97-40, Apr.  7 (130 pages). 

GAO found no clearcut answer to the question of whether federal
retirement programs offer greater or smaller benefits than those
offered by private sector retirement programs.  The benefits
available from the Federal Employees Retirement System (FERS) and the
Civil Service Retirement System (CSRS) can be smaller, similar, or
greater than those offered by the private sector, depending on a
range of variables.  Chief among these factors are the (1) ages at
which employees retire and which programs provide reduced benefits,
(2) extent to which employees and employers contribute to the defined
contribution plans that are integral components of FERS and most
private sector programs, and (3) impact of cost-of-living adjustments
on benefit amounts over the long term.  In fact, FERS and CSRS can
provide quite different benefit amounts because of their different
designs.  As a result, greater benefits are available from FERS than
from CSRS, but FERS employees must contribute larger percentages of
their salaries to receive the higher benefits. 

Performance-Based Organizations:
Issues for the Saint Lawrence Seaway Development
Corporation Proposal

GAO/GGD-97-74, May 15 (33 pages). 

Congress and the administration have suggested various approaches in
recent years to make federal agencies more results- oriented and
federal managers more accountable for results.  One approach proposed
by the administration is the performance-based organization concept,
inspired by the Next Steps program that the British government
introduced in the late 1980s.  This report (1) compares the
characteristics of the Next Steps program with the performance-based
organization concept and (2) describes the changes and effects that
the performance-based organization concept could have on the Saint
Lawrence Seaway Development Corporation.  Specifically, GAO examines
how performance-based organization status would potentially affect
the Corporation's financing mechanism; management structure;
accountability for performance, including safety and regional
economic impact; and congressional oversight. 

Federal Civilian Personnel:
Cost of Lump-Sum Annual Leave Payments to Employees Separating From
Government

GAO/GGD-97-100, May 29 (14 pages). 

The cost of lump-sum payments to employees leaving the federal
government totaled $562 million in 1996.  Between 1985 and 1996,
lump-sum payments averaged about $595 million per year.  The costs
ranged from a low of $355 million in 1991 to a high of $700 million
in 1992, when downsizing led to large numbers of separations.  The
Office of Personnel Management has not provided formal written
guidance on lump-sum payments since 1993, and other guidance that is
available to agencies falls short of ensuring consistent agency
payment practices.  As a result, employees leaving different agencies
with the same rates of pay and amounts of unused annual leave may not
receive the same payment amount.  The Congressional Budget Office
estimates that agencies could save $18 million in personnel costs
over five years if lump-sum annual leave payments were limited to the
rate of pay at the time of separation, instead of the current method
of assuming that the employee had remained in service until the
entire leave balance had expired.  Such a limitation would not,
however, ensure consistent treatment of employees and might cause
workforce disruptions if employees were forced to use all or a large
part of their accumulated leave before separation. 

Managing for Results:
Analytic Challenges in Measuring Performance

GAO/HEHS/GGD-97-138, May 30 (44 pages). 

The Government Performance and Results Act (GPRA) requires agencies
to identify program goals and report on their progress in achieving
them.  GPRA includes a phase during which about 70 programs, ranging
from the U.S.  Geological Survey's National Water Quality Assessment
Program to the entire Social Security Administration, were designated
as GPRA pilot projects.  These and other government programs have
been gaining experience with the act's requirements.  GPRA requires
GAO to review implementation of the pilot phase and to comment on the
prospects for compliance by federal agencies when governmentwide
implementation begins in 1997.  This report answers the following
questions:  What analytic and technical challenges are agencies
experiencing as they try to measure program performance?  What
approaches have they taken to address these challenges?  How have
agencies made use of program evaluations or evaluation expertise in
implementing performance measurement? 


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

Federal Management:  Addressing Management Problems at the Department
of Commerce, by L.  Nye Stevens, Director of Federal Management and
Workforce Issues, before the Senate Committee on Commerce, Science,
and Transportation.  GAO/T-GGD/AIMD-97-115, May 14
(16 pages). 

The missions and functions of the Department of Commerce are among
the most diverse of any government agency.  Formed in 1913, Commerce
is today essentially a holding company for many disparate programs. 
Its 14 major components cover a range of responsibilities that
includes natural resources and the environment, advancement of
commerce, regional development, scientific research, and statistical
information collection.  This testimony discusses major challenges
facing Commerce in managing its wide range of missions and how recent
reform legislation can be used to address them. 


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

Medicare HMOs:
HCFA Can Promptly Eliminate Hundreds of Millions in
Excess Payments

GAO/HEHS-97-16, Apr.  25 (58 pages). 

Medicare's method for paying risk contract health maintenance
organizations (HMO)--Medicare's primary managed care option--was
designed to save the program five percent of the costs for
beneficiaries who enrolled in HMOs.  Contrary to expectations,
however, these HMOs have not produced savings for Medicare.  Research
sponsored by Medicare and others have found that the program has
actually spent more for HMO enrollees than if they had stayed in
fee-for-service plans.  Researchers attribute this outcome to
"favorable selection," or the tendency for healthier persons to
enroll in HMOs.  To reduce excess Medicare payments to HMOs by
several hundred million dollars a year, the current Medicare HMO
rate-setting formula should be modified to include cost data on HMO
enrollees, who tend to be healthier as a group than other Medicare
beneficiaries.  The current formula relies on costs of
fee-for-service beneficiaries only. 

Medicare HMO Enrollment:
Area Differences Affected by Factors Other Than Payment Rates

GAO/HEHS-97-37, May 2 (38 pages). 

Enrollment nationwide in the Medicare managed care program has more
than tripled during the past decade--from about 1 million enrollees
in 1987 to 3.8 million in 1996--but differences in enrollment by
state and by market area are striking.  In such cities as Portland,
Oregon, and Tucson, Arizona, health maintenance organizations (HMO)
have enrolled more than 40 percent of the Medicare beneficiaries.  By
contrast, HMO enrollment in most rural areas is negligible.  Although
the linkage of payment rates to risk HMO enrollment may be important
in some areas, dramatic differences in enrollment are often
associated with other factors.  The presence of HMOs, population
density, and the number of Medicare beneficiaries, especially those
familiar with managed health care, all spur enrollment growth--and
their absence hinders it.  In addition, the health care benefits
provided by employers in a market area can affect beneficiaries'
willingness to enroll in risk HMOs.  The rapid growth in risk HMO
enrollment is likely to continue as employers encourage retirees to
join HMOs and as HMOs pursue various strategies for expanding their
Medicare business. 

Health Insurance:
Management Strategies Used by Large Employers to Control Costs

GAO/HEHS-97-71, May 6 (86 pages). 

After years of double-digit increases in the cost of employee health
insurance, the nation's larger firms, employer coalitions, and even
state governments began to aggressively rein in these costs in the
1990s.  The recent downturn in health insurance premium growth,
during which some large employers actually saw premium declines, is
partly attributable to these efforts.  Spending pressures in public
programs, such as Medicare and Medicaid, also slowed, although not as
markedly as for most private purchasers.  This report examines the
strategies that large purchasers have tried to stem the rapid
escalation of health insurance costs while maintaining or enhancing
the quality of care for their employees. 


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

Medicare Managed Care:  HMO Rates, Other Factors Create Uneven
Availability of Plans and Benefits, by William J.  Scanlon, Director
of Health Financing and Systems Issues, before the Senate Special
Committee on Aging.  GAO/T-HEHS-97-133, May 19 (15 pages). 

Medicare risk health maintenance organization (HMO) plans are now
available nationwide, and differences in premiums charged and
benefits offered across the country have produced inequities for
Medicare beneficiaries.  In addition, the risk contract program has
not realized the expected savings from enrolling beneficiaries in
capitated managed care plans.  Medicare's risk HMO payment system,
which is built largely on fee-for-service costs, accounts for some,
but not all, of the unevenness in Medicare's risk contract program. 
Differences in local medical prices and service utilization explain
much of the variation in HMO capitation rates across counties.  In
turn, the variation in these rates explains some of the differences
across locations in the availability of risk contract HMOs, the level
of HMO premiums charged, and the richness of benefits offered.  Other
factors, however, also play an important role.  GAO proposes
correcting a flaw in Medicare's rate-setting method that contributes
to excess payments to HMOs. 


Substance Abuse and Mental Health:  Reauthorization Issues Facing the
Substance Abuse and Mental Health Services Administration, by Marsha
Lillie-Blanton, Associate Director for Health Services Quality and
Public Health Issues, before the Subcommittee on Public Health and
Safety, Senate Committee on Labor and Human Resources. 
GAO/T-HEHS-97-135, May 22 (eight pages). 

With an operating budget of $1.9 billion in fiscal year 1996, the
Substance Abuse and Mental Health Services Administration (SAMHSA) is
the Department of Health and Human Service's lead agency for
substance abuse and mental illness prevention and treatment.  This
testimony discusses SAMHSA's role in (1) coordinating its efforts
with federal agencies involved in related research or services; (2)
measuring the results of its program or activities, particularly
because most of its funds are used to support services provided by
states and by local grantees; and (3) monitoring the impact of the
transition to managed care on persons with mental disorders and
substance abuse problems. 


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


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

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, Senate Committee on Appropriations. 
GAO/T-RCED-97-129, May 13 (12 pages). 

This testimony addresses the Department of Housing and Urban
Development's (HUD) fiscal year 1998 budget request.  GAO's primary
focus is on HUD's request for more than $9 billion to renew rental
assistance contracts as well as on some of the assumptions that
underlie HUD's estimates.  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 public housing modernization funds 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 0:12

SSA Benefit Estimate Statements:
Additional Data Needed to Improve Workload Management

GAO/HEHS-97-101, May 20 (23 pages). 

Congress passed legislation in 1990 requiring the Social Security
Administration (SSA) to begin providing the public with annual
statements about its social security earnings records and estimates
of the amount of benefits persons may receive.  Starting in fiscal
year 2000, SSA must mail personal earnings and benefit estimate
statements to nearly every U.S.  worker aged 25 and older--an
estimated 123 million people.  SSA projects that printing, mailing,
and personnel costs associated with this effort will total nearly $77
million in fiscal year 2000 alone.  Although SSA believes that it is
prepared for the increased workload arising from this initiative, it
has not assessed the added work likely to stem from questions about
and corrections to the statements.  SSA lacks reliable data on either
the number of people who call or visit SSA with questions about their
statements or the number of earnings corrections resulting from
statement mailings.  SSA could better manage the potential workload
if it began to collect more complete and accurate data now on the
effects of mailing the
mandated statements. 


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

Medicare Transaction System:
Success Depends Upon Correcting Critical Managerial and Technical
Weaknesses

GAO/AIMD-97-78, May 16 (83 pages). 

By the year 2000, Medicare, the nation's largest health insurer,
expects to process more than 1 billion claims and pay $288 billion in
benefits annually.  To keep up, Medicare plans to spend $1 billion to
replace nine separate automated processing systems with the Medicare
Transaction System (MTS).  MTS is intended to improve customer
service; cut administrative and operating costs; strengthen controls
over claims processing; improve contractor oversight; better protect
against waste, fraud, and abuse; and accommodate managed care and
other alternative payment methodologies.  However, since GAO issued
its first analysis in 1992, project costs have soared from $151
million to $1 billion.  GAO concludes that the benefits of MTS will
not be realized unless the Health Care Financing Administration
(HCFA) overcomes serious management and technical weaknesses in three
areas.  First, HCFA needs to greatly improve management of its
interim Medicare processing environment.  Second, MTS should be
better managed as an investment.  HCFA has not followed practices
that are essential if management is to make informed technology
investment decisions, including preparing a valid cost-benefit
analysis and considering viable alternatives.  Third, HCFA has not
adequately applied sound systems development practices necessary to
reduce risk.  GAO summarized this report in testimony before
Congress; see: 

Medicare Transaction System:  Serious Managerial and Technical
Weaknesses Threaten Modernization, by Joel C.  Willemssen, Director
of Information Resources Management Issues, before the Subcommittees
on Human Resources and on Government Management, Information and
Technology, House Committee on Government Reform and Oversight. 
GAO/T-AIMD-97-91, May 16 (21 pages). 


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

Social Security Administration:  Internet Access to Personal Earnings
and Benefits Information, by Joel C.  Willemssen, Director of
Information Resources Management Issues, and by Keith A.  Rhodes,
Technical Director, Office of the Chief Scientist, before the
Subcommittee on Social Security, House Committee on Ways and Means. 
GAO/T-AIMD/HEHS-97-123, May 6 (12 pages). 

Concerns have been raised in Congress about whether the Social
Security Administration's (SSA) interactive benefits estimates
service adequately protects the privacy of Americans and whether
unauthorized access to confidential information is taking place over
the Internet.  Although GAO has just begun a review of SSA's use of
the Internet to disseminate benefits estimates, earlier reports have
discussed computer and Internet security as well as the risks facing
agencies in providing electronic access to data.  (See
GAO/AIMD-96-84, May 1996, and GAO/T-AIMD-96-108, June 1996.) This
testimony focuses on general privacy and security considerations that
federal agencies must address to safeguard sensitive information made
available as a public service via the Internet. 

USDA Information Management:  Extensive Improvements Needed in
Managing Information Technology Investments, by Joel C.  Willemssen,
Director of Information Resources Management Issues, before the
Subcommittee on Department Operations, Nutrition, and Foreign
Agriculture, House Committee on Agriculture.  GAO/T-AIMD-97-90, May
14
(36 pages). 

The Department of Agriculture (USDA) needs effective and efficient
information systems if it is to work better and cost less in the 21st
century.  Unfortunately, USDA has a long history of poorly planning
and managing investments in information technology.  Because of its
poor track record, USDA needs to demonstrate to Congress that it has
made progress in implementing recent legislation that provides a
framework for making sound decisions on information technology.  USDA
also needs to show that is has strengthened Departmentwide
leadership, accountability, and oversight of the acquisition and use
of information technology investments before millions more are spent
on additional investments.  Until and unless USDA can do so, Congress
may wish to limit funding for USDA's information technology to
critical information technology needs required to support ongoing
operations.  Otherwise, USDA risks continuing its pattern of wasting
taxpayer dollars on information technology projects that are poorly
planned and managed. 

Customs Service Modernization:  ACE Poses Risks and Challenges, by
Linda D.  Koontz, Associate Director for Information Resources
Management Issues, before the Subcommittee on Trade, House Committee
on Ways and Means.  GAO/T-AIMD-97-96, May 15 (nine pages). 

This testimony discusses efforts by the U.S.  Customs Service to
address risks associated with the agency's modernization of its
automated system.  GAO also identifies challenges that Customs faces
as it plans and develops the Automated Commercial Environment, which
is critical because it supports improvements to Customs' trade
compliance (import) process through greater use of information
technology. 


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

Bosnia Peace Operation:
Progress Toward Achieving the Dayton Agreement's Goals

GAO/NSIAD-97-132, May 5 (127 pages). 

Peacekeeping operations in Bosnia--estimated to cost the United
States at least $7.7 billion--have helped Bosnia to take the first
steps toward achieving the Dayton Agreement's goal of a unified,
democratic country.  However, the leaders of Bosnia's three major
ethnic groups have yet to embrace reconciliation, and the country
remains politically divided and economically moribund.  NATO-led
military forces have allowed the peace process to move forward and
Bosnians to return to normal life.  The cease-fire has held, general
security has improved, schools and shops have reopened, and families
have started to repair damaged houses.  Yet the transition to a
multiethnic government has not occurred.  Major obstacles to the
vision embodied in the Dayton Agreement remain, particularly the lack
of cooperation among Bosnia's political leaders, and experts say that
full political and social reconciliation in Bosnia will be a long and
difficult process. 

Foreign Assistance:
Impact of Funding Restrictions on USAID's Voluntary Family Planning
Program

GAO/NSIAD-97-123, Apr.  25 (26 pages). 

So far, congressionally imposed funding cuts have not forced the U.S. 
Agency for International Development (USAID) to drop countries from
its voluntary family planning program or to terminate any contracts
or grants.  USAID was able to consolidate programs and cut activities
in anticipation of fiscal year 1996 governmentwide cuts, to
supplement its fiscal year 1996 appropriation with carryover funds,
and to draw funds from its family-planning pipeline.  However, if the
funding limitations continue into fiscal year 1998, many of USAID's
family-planning projects would be in serious jeopardy of running out
of money.  Some studies have shown a link between increased use of
modern contraceptives and a reduction in abortions.  For example, in
Almaty, Kazakstan, contraceptive use increased at USAID-supported
clinics by 59 percent from 1993 to 1994, while abortions declined by
41 percent during the same period.  However, because of a lack of
reliable data, researchers have been unable to prove conclusively
that a statistically based causal relationship exists between
increases in the use of modern family-planning methods and decreases
in abortion in developing countries. 

Multilateral Organizations:
U.S.  Contributions to International Organizations for Fiscal
Years 1993-95

GAO/NSIAD-97-42, May 1 (87 pages). 

For fiscal years 1993-95, the United States contributed about $6.3
billion to 130 international organizations and programs.  This amount
includes $2.7 billion in assessed contributions and $3.6 billion in
voluntary contributions.  The State Department spent most of this
money (about $5.2 billion), with the U.S.  Agency for International
Development spending the second largest amount ($1.1 billion).  Other
agencies that spent considerable sums included the Department of
Health and Human Services, the Commerce Department, and the
Agriculture Department. 


      TESTIMONY
------------------------------------------------------ Appendix 0:14.1

State Department:  Efforts to Reduce Visa Fraud, by Benjamin F. 
Nelson, Director of International Relations and Trade Issues, before
the Subcommittee on Immigration and Claims, House Committee on the
Judiciary.  GAO/T-NSIAD-97-167, May 20 (six pages). 

At the time GAO issued its report in May 1996 (GAO/NSIAD-96-99), the
State Department was attempting to make its visa-issuing process more
efficient and less vulnerable to fraud by (1) issuing visas that were
machine readable, (2) expanding automated name-check capability to
all posts, (3) forming "lookout" committees to identify suspected
terrorists and others ineligible for visas, and (4) strengthening
compliance with management controls.  Since then, the State
Department's efforts to combat visa fraud at diplomatic posts by
introducing a machine-readable visa system have been hampered by
technical problems, a lack of cooperation from other government
agencies, and weak management controls at many U.S.  embassies. 


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

U.S.  Currency:
Treasury's Plans to Study Genuine and Counterfeit U.S. 
Currency Abroad

GAO/NSIAD-97-104, Apr.  11 (12 pages). 

All currencies are susceptible to counterfeiting, but the stability
and worldwide acceptance of U.S.  currency have made it a
particularly tempting target for international counterfeiters. 
Although most counterfeiters engage in this activity for personal
gain, some counterfeiting is linked to other criminal activities,
such as drug trafficking, arms dealing, and terrorism.  Widespread
counterfeiting of U.S.  bills could undermine confidence in the
currency.  Moreover, if done on a large-enough scale, it could reduce
international holdings of U.S.  currency and could harm the U.S. 
economy.  Recent legislation requires the Treasury Department to
develop an audit plan that addresses counterfeiting of U.S. 
currency.  GAO reviewed the Treasury's October 1996 audit plan to
determine whether it will enable Treasury to (1) study the use of
U.S.  currency in foreign countries, (2) study the holding of U.S. 
currency in foreign countries, and (3) develop useful estimates of
the amount of counterfeit U.S.  currency that circulates outside the
United States each year.  GAO also reviews other information and
materials that the Treasury intends to use to conduct the audits. 

Alien Applications:
Processing Differences Exist Among INS Field Units

GAO/GGD-97-47, May 20 (34 pages). 

The Immigration and Naturalization Service (INS) collects fees for
processing aliens' applications for such things as naturalization and
adjustment of status (to become permanent residents).  Eighteen
percent of INS's fiscal year 1997 budget, or $566 million, is
earmarked for processing applications.  The number of applications
received by INS is growing, and there are indications that some INS
field units are faster than others at processing applications.  In
fiscal year 1996, INS received nearly 5.4 million new applications
and completed about 5.6 million applications--a 115 percent increase
over the number of applications received and completed in fiscal year
1989.  At the end of fiscal year 1996, INS had an inventory of about
1.7 million applications waiting to be processed.  This represents an
increase of about 2.5 times the pending caseload at the end of fiscal
year 1989.  A recent INS report found differences in application
production rates and projected processing times among its district
offices.  This report examines differences in production rates and
processing times among INS field units.  GAO also asked officials at
nine district offices and two service centers about the factors that
accounted for the differences GAO found. 


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

Naturalization of Aliens:  INS Internal Controls, by Richard M. 
Stana, Associate Director for Administration of Justice Issues,
before the Subcommittee on Immigration, Senate Committee on the
Judiciary.  GAO/T-GGD-97-98, May 1 (nine pages). 

Aliens who apply to become naturalized citizens must meet certain
requirements, such as being of good moral character.  To determine
whether an alien has been convicted of a crime that would preclude
citizenship, the Immigration and Naturalization Service (INS) submits
the alien's fingerprints to the FBI, which researches whether that
person has a criminal history on file.  Between September 1995 and
September 1996, some aliens with disqualifying felony convictions
were improperly naturalized, probably because INS adjudicators were
unaware of the results of an FBI check.  In addition, both the
Justice Department's Inspector General and GAO have found problems
with the fingerprinting part of the process.  For example, persons
intent on hiding their criminal backgrounds could have someone else
complete the INS fingerprint card and submit the prints as their own. 
In November 1996, the INS Commissioner announced changes intended to
strengthen the naturalization process.  However, an April 1997 report
by Peat Marwick showed that INS has not ensured that its field units
were carrying out the Commissioner's instructions. 

Drug Control:  Reauthorization of the Office of National Drug Control
Policy, by Norman J.  Rabkin, Director of Administration of Justice
Issues, before the Subcommittee on National Security, International
Affairs, and Criminal Justice, House Committee on Government Reform
and Oversight.  GAO/T-GGD-97-97, May 1 (13 pages). 

This testimony discusses the Office of National Drug Control Policy. 
GAO focuses on (1) its recent work on federal drug control efforts;
(2) the Office's efforts to implement performance measures; (3) the
Office's anticipated efforts to lead the development of a centralized
lessons-learned data system for drug control activities; and (4)
whether the Office, which is scheduled to expire in September 1997,
should be reauthorized. 

U.S.  Customs Service:  Oversight Issues, by Norman J.  Rabkin,
Director of Administration of Justice Issues, before the Subcommittee
on Trade, House Committee on Ways and Means.  GAO/T-GGD-97-107, May
15 (13 pages). 

One of the oldest federal agencies, the U.S.  Customs Service
collects more than $23 billion in revenues annually while processing
an estimated 14 million import entries and 450 million people through
301 ports of entry into the United States.  This testimony focuses on
three issues:  drug interdiction, labor-management relations, and
overtime pay. 


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

Contract Management:
Fixing DOD's Payment Problems Is Imperative

GAO/NSIAD-97-37, Apr.  10 (44 pages). 

The Defense Department has made hundreds of millions of dollars in
overpayments to contractors, many undetected for years, because it
uses inadequate computer systems requiring manual entry of often
erroneous or incomplete data and a burdensome document-matching
process.  Improving DOD's payment system will not be easy or quick. 
It will take sustained top management attention and support for years
to come.  Although DOD is taking some steps to overcome its payment
problems, it remains to be seen how successful they will be. 
Emulating the best practices used by the private sector could help
DOD reengineer its
payment system. 

Major Acquisitions:
Significant Changes Underway in DOD's Earned Value
Management Process

GAO/NSIAD-97-108, May 5 (31 pages). 

Despite the regularity with which defense acquisition programs have
experienced cost overruns and schedule delays, the Pentagon does have
an extensive system intended to provide managers with early warnings
of cost and schedule problems.  In 1967, the Defense Department (DOD)
issued a set of cost/schedule control system criteria that it
required defense contractors to meet.  However, DOD and the defense
industry alike generally accept that this process needs reform.  This
report discusses the (1) problems confronting the cost-schedule
control system, (2) progress DOD has made with reforms, and (3)
challenges that DOD faces in fostering and managing potentially
significant changes. 

Defense Health Care:
Medical Surveillance Improved Since Gulf War, but Mixed Results in
Bosnia

GAO/NSIAD-97-136, May 13 (33 pages). 

Since the Persian Gulf War, the Defense Department (DOD) has sought
to improve the medical surveillance of military personnel returning
from overseas missions.  However, GAO found that many U.S.  soldiers
who had served in Bosnia either never received medical assessments or
were tested for diseases like tuberculosis much later than required. 
Moreover, the database used to track deployed Air Force and Navy
personnel is considered inaccurate by DOD personnel.  GAO also
reviewed servicemembers' medical records maintained by medical units
in Germany and found that many were incomplete and inaccurate.  In
particular, nearly one fourth of the soldiers who received an
investigational tick-borne encephalitis vaccine before deploying to
Bosnia did not have this information noted in their files. 

Army Acquisition:
Longbow Hellfire Missile Procurement Quantities
Significantly Overstated

GAO/NSIAD-97-93, May 14 (13 pages). 

The Longbow Hellfire is an air-to-ground missile designed to be fired
from a modified Apache helicopter.  Testing showed the missile to be
operationally effective and suitable.  However, the Army's current
requirements of 12,722 missiles may be overstated by more than 8,300
missiles.  The Army made computational errors and a questionable
assumption that resulted in an overstatement of about 7,100 missiles,
and test results suggest that the missile quantity could be reduced
by nearly 1,200 more missiles.  Although cost estimates for cutting
8,300 missiles are not yet available, the Defense Department believes
that it could save up to $500 million by eliminating 4,000 of these
weapons. 

Special Operations Forces:
Opportunities to Preclude Overuse and Misuse

GAO/NSIAD-97-85, May 15 (33 pages). 

U.S.  special operations forces consist of highly capable, elite
military personnel who are trained to address critical national
security objectives.  Their versatility, quick deployment, and
capabilities make the forces ideally suited for today's security
environment, in which significant dangers are posed by regional
conflicts, the proliferation of weapons of mass destruction, and
transitional threats.  The Defense Department needs to ensure that
special operations forces are ready to carry out their intended
missions and are used in ways that capitalize on their unique
capabilities.  This report discusses (1) whether general agreement
exists on the priorities for the use of special operations forces by
the regional commanders in chief and the forces' unit commanders; (2)
the pace of force operations and how force units' senior officers and
enlisted personnel view the impact of that pace on readiness, morale,
and retention; and (3) whether opportunities exist to reduce that
pace in those cases where it is perceived to be degrading the
readiness of special operations forces. 

Surface Combatants:
Navy Faces Challenges Sustaining Its Current Program

GAO/NSIAD-97-57, May 21 (87 pages). 

The Navy now spends about $3 billion each year to modernize its
surface combatant force.  The high costs of these ships, especially
the $870 million price tag for each Arleigh Burke destroyer, raises
questions about the Navy's ability to sustain this force level.  The
Navy's plan to build and maintain a fleet of 125 cruisers,
destroyers, and frigates through the year 2013 hinges on optimistic
assumptions about future defense budgets and ship construction
schedules.  Moreover, the Navy has yet to explain how this force
level relates to the national defense strategy of fighting two nearly
simultaneous regional conflicts. 


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

DOD High-Risk Areas:  Eliminating Underlying Causes Will Avoid
Billions of Dollars in Waste, by Henry L.  Hinton, Jr., Assistant
Comptroller General, before the Senate Committee on Governmental
Affairs.  GAO/T-NSIAD/AIMD-97-143, May 1 (60 pages). 

GAO began reporting in 1990 on government programs at high risk for
waste, fraud, abuse, and mismanagement.  In February 1997, GAO issued
a series of reports updating the status of these areas, six of which
fall within the Defense Department (DOD).  (See GAO/HR-97-3 through
GAO/HR-97-7 and GAO/HR-97-9.) DOD's inability to overcome problems in
these high-risk areas has resulted in billions of dollars being
wasted and placed billions of dollars in future spending at risk. 
This testimony discusses the (1) high-risk areas of financial
management, information technology, weapon systems acquisition,
contract management, infrastructure, and inventory management; (2)
underlying causes of these high-risk areas; and (3) overall strategy
that GAO believes is needed to eliminate them. 

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
Readiness, Senate Committee on Armed Services.  GAO/T-NSIAD-97-112,
May 1 (46 pages). 

Waste and inefficiency in the Defense Department's (DOD) logistics
system, including the management of its $13 billion depot maintenance
program, is one of the key reasons GAO included military
infrastructure activities in its list of 24 government programs at
high risk for waste, fraud, abuse, and mismanagement.  (See
GAO/HR-97-7, Feb.  1997.) This testimony discusses DOD's (1) plans
for eliminating costly depot maintenance excess capacity, (2)
progress in finalizing a new depot workload allocation policy, (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 Depot Maintenance:  Challenges Facing DOD in Managing Working
Capital Funds, by Henry L.  Hinton, Jr., Assistant Comptroller
General for National Security and International Affairs, before the
Subcommittee on Defense, Senate Committee on Appropriations. 
GAO/T-NSIAD/AIMD-97-152, May 7 (62 pages). 

This testimony discusses financial management and logistics
management issues relating to the effectiveness and efficiency of the
Defense Department's (DOD) operations.  GAO focuses on the operations
of DOD's working capital funds, which collect and disburse more than
$65 billion annually, and on DOD's management of the $13 billion
depot maintenance program.  DOD has consistently experienced losses
in the operations of various working capital funds, including the
depot maintenance activity group, and has had to request additional
money to support their operations.  GAO has included these issues in
its list of government programs at high risk for waste, fraud, abuse,
and mismanagement.  (See GAO/HR-97-3 and GAO/HR-97-7, Feb.  1997.)

Reserve Forces:  Observations on the Ready Reserve Mobilization
Income Insurance Program, 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-97-154, May 8 (12 pages). 

Reserve forces are generally considered essential to the nation's
defense, as evidenced by the increasing use of these forces in recent
years.  Congress and the Defense Department (DOD) have been concerned
about the (1) financial losses that some reservists have confronted
with when they are activated and (2) DOD's ability to continue
recruiting and retaining sufficient numbers of quality personnel in
its reserve forces.  These concerns have led to the development of an
insurance program to protect reservists and their families against
financial losses arising from extended mobilizations.  GAO concludes
that the program is not self-sustaining under its current design and
with its current low enrollment.  GAO suggests that the program be
suspended while DOD reexamines the need for and possible alternatives
to the program. 


   NATURAL RESOURCES
-------------------------------------------------------- Appendix 0:17


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

Bureau of Reclamation:  Reclamation Law and the Allocation of
Construction Costs for Federal Water Projects, by Victor S. 
Rezendes, Director of Energy, Resources, and Science Issues, before
the Subcommittee on Water and Power Resources, House Committee on
Resources.  GAO/T-RCED-97-150, May 6 (nine pages). 

Since 1902, the federal government has helped finance and build water
projects, mainly to reclaim arid land in the West.  Initially, those
projects were often small and built almost solely to provide
irrigation.  Over the years, however, new projects have grown more
ambitious and today they provide a host of benefits in addition to
irrigation, including municipal and industrial water supply,
hydroelectric power, recreation, and flood control.  The Bureau of
Reclamation and the U.S.  Army Corps of Engineers build most federal
water projects.  Although the Corps operates nationwide, the Bureau's
activities are limited to 17 western states.  This testimony focuses
on (1) the evolution of reclamation law, primarily from 1902 to 1982,
and (2) the allocation and repayment of construction costs for
federal water projects among the projects' beneficiaries. 


   SCIENCE, SPACE, AND TECHNOLOGY
-------------------------------------------------------- Appendix 0:18


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

Federal Research:  The Small Business Technology Transfer Program, by
Susan D.  Kladiva, Associate Director for Energy, Resources, and
Science Issues, before the Subcommittee on Government Programs and
Oversight, House Committee on Small Business.  GAO/T-RCED-97-157, May
22 (six pages). 

The Small Business Technology Transfer Pilot Program and the Small
Business Innovation Research Program share similar goals:  to
emphasize the benefits of technological innovation and the ability of
small business to translate the results of research and development
into new products.  The first program differs from the second
primarily in requiring a company to form a partnership with a
nonprofit research institution.  This testimony is based on a January
1996 report (GAO/RCED-96-19) on the Small Business Technology
Transfer Pilot Program that discussed the (1) quality and commercial
potential of research proposals, (2) steps taken to avoid the
conflict of interest that would arise if a party both submitted and
evaluated program proposals, and (3) effect of and need for the
program. 


   SOCIAL SERVICES
-------------------------------------------------------- Appendix 0:19

Foster Care:
State Efforts to Improve the Permanency Planning Process Show Some
Promise

GAO/HEHS-97-73, May 7 (28 pages). 

The mid-1980s through the mid-1990s witnessed dramatic increases in
the number of children placed in foster care to protect them from
abuse and neglect at home.  From fiscal years 1984 to 1995, the
foster care population soared from 276,000 to 494,000 children.  The
Congressional Budget Office estimates that by 2001, the federal tab
for foster care will reach $4.8 billion.  The continued rise in the
foster care caseload and its associated costs, as well as the harmful
effects that long stays in foster care can have on children,
underscore the importance of quickly finding permanent placements for
children.  A number of states are trying to speed the permanent
placement of foster children by shortening deadlines for permanency
hearings, expediting reunification of families, and, when
reunification is not the best option, streamlining parental rights
termination so that children can be adopted.  These efforts appear
promising, but states have not done systematic evaluations and the
data are limited. 

Welfare Reform:
States' Early Experiences With Benefit Termination

GAO/HEHS-97-74, May 15 (112 pages). 

Recent legislation ends the individual entitlement to federally
supported cash assistance to needy families with children and
provides for terminating benefits to families failing to comply with
program rules or after a specified time period.  So far, states have
seldom used benefit termination provisions.  Moreover, of the 18,000
families whose benefits were terminated under waivers through
December 1996, more than 99 percent failed to comply with program
requirements.  Most terminations took place in Iowa, Massachusetts,
and Wisconsin.  Through June 1996, prior recipients' failure to
comply with new enrollment requirements accounted for more than half
of the terminations nationwide.  By the end of December 1996, failure
to comply with work requirements increased by one-third and became
the most significant reason for termination.  Recipients'
explanations for noncompliance included wanting to stay at home with
their children and an unwillingness to do community service or work
for low wages.  Terminating a family's welfare benefit amounts to the
loss of a significant source of monthly income.  Although more than
80 percent of the families in the cases GAO studied in Iowa,
Massachusetts, and Wisconsin were later found to have a source of
support or had returned to welfare, the percentages of such families
receiving food stamps and Medicaid declined significantly after
termination.  Officials in the three states GAO studied generally
believed that their benefit termination provisions had improved
program effectiveness by increasing work activity, job placements,
and families moving off welfare
more quickly. 

Welfare Reform:
Three States' Approaches Show Promise of Increasing
Work Participation

GAO/HEHS-97-80, May 30 (60 pages). 

Recent welfare reform legislation puts time limits on welfare
benefits and requires welfare recipients to participate in work and
work-related activities.  Moreover, the new law requires states to
have a minimum percentage of their caseload participating in such
activities to avoid a financial penalty.  Even before passage of the
law, many states were exploring ways to boost participation in work
by reforming their welfare programs through waivers of welfare
program rules, which allowed them to try innovative approaches.  GAO
reviewed welfare experiments in three states--Massachusetts,
Michigan, and Utah--to get a sense of (1) the policies and programs
the states initiated under waivers to increase participation in work
and work-related activities and (2) whether states with statewide
waivers achieved participation rates comparable to those specified by
the new federal law. 


   TAX POLICY AND ADMINISTRATION
-------------------------------------------------------- Appendix 0:20

Internal Revenue Service:
IRS Initiatives to Resolve Disputes Over Tax Liabilities

GAO/GGD-97-71, May 9 (34 pages). 

Each year, thousands of disputes arise between taxpayers and the
Internal Revenue Service (IRS) over billions of dollars in additional
taxes recommended by IRS auditors.  IRS eventually resolves most of
these disputes over tax liability without litigation, but
negotiations can take years and hundreds of staff hours for disputes
involving large amounts.  Since 1990, IRS has introduced several
initiatives to provide alternatives to litigation for resolving tax
disputes.  This report (1) analyzes IRS' design of these initiatives
and taxpayers' use of them to resolve disputes between IRS and
taxpayers over tax liability and (2) analyzes IRS' plans for
evaluating the effects of its new initiatives on the stated goals. 


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

Tax Administration:  Earned Income Credit Noncompliance, by Lynda D. 
Willis, Director of Tax Policy and Administration Issues, before the
House Committee on Ways and Means.  GAO/T-GGD-97-105, May 8 (22
pages). 

"Noncompliance" with the earned income credit (EIC) involves persons
who either claim credits to which they are not entitled or claim
credits in excess of the amount to which they are entitled.  The
Internal Revenue Service (IRS) has reduced the level of
noncompliance, but it remains above 20 percent, with several billion
dollars in overclaimed credits annually.  A root cause of EIC
noncompliance is the self-determination of eligibility by taxpayers
combined with IRS' limited ability to verify eligibility before the
refund is issued.  The Treasury Department has announced eight
proposals, six of which would entail legislation, to reduce EIC
noncompliance.  Those proposals provide a starting point for
deliberations on what can reasonably be done to address this
difficult problem.  Various questions need to be answered in
assessing those proposals, the most significant being whether they
get at the real causes of noncompliance. 


   TRANSPORTATION
-------------------------------------------------------- Appendix 0:21

Aviation Safety:
FAA Has Begun Efforts to Make Data More Publicly Available

GAO/RCED-97-137, Apr.  25 (15 pages). 

Beginning in July 1996, the Federal Aviation Administration (FAA)
took several steps to provide the public with information on aviation
safety.  FAA formed a working group of senior agency officials and
adopted a three-pronged approach to better inform the public on
aviation safety issues:  it launched a web site on the Internet,
began publicizing significant enforcement actions, and initiated a
public education campaign.  Since FAA started its aviation safety
site on the Internet, it has seen a fourfold increase in the number
of users who have accessed the web site each week.  Usage has
increased during those weeks when a public announcement related to
the site has been made.  In addition, FAA's data show that users are
spending more time browsing the site.  It is too soon to know,
however, if these trends will continue.  FAA plans to expand the
number of databases that it posts on its aviation safety web site
throughout the rest of 1997.  It expects to incorporate information
on the airlines' composition, such as the make, models, and ages of
planes in each airline's fleet, and other indicators of aviation
safety, such as data on near mid-air collisions. 

Coast Guard:
Challenges for Addressing Budget Constraints

GAO/RCED-97-110, May 14 (77 pages). 

Since fiscal year 1992, the Coast Guard has assumed increased
responsibilities while cutting its workforce by nearly 10 percent and
operating with a budget that has increased by about one percent a
year in actual dollars.  The Commandant of the Coast Guard told
Congress last year that funding was no longer sufficient to sustain
the normal pace of operations over time.  Yet the Coast Guard, like
other federal agencies, faces the prospect of further budget cuts to
meet deficit reduction targets during the next several years.  By
fiscal year 2002, the Coast Guard is projected to have a gap of as
much as $493 million between the Office of Management and Budget's
budget target and the estimated cost of maintaining services at
current levels.  Whether the Coast Guard can close the gap with its
current budget strategy is highly uncertain at this point and is
likely to remain so for some time.  GAO believes that the Coast Guard
needs to quantify the extent of likely savings from ongoing or
planned actions.  Except for a recent streamlining program, the Coast
Guard has relatively incomplete knowledge about the savings that it
can expect in coming years from cost-saving measures that are in
various stages of implementation.  In addition, the Coast Guard may
have to consider significant changes in its operating culture, such
as changing its military rotation policy, or measures that stir
public opposition, such as closing small boat stations. 


      TESTIMONY
------------------------------------------------------ Appendix 0:21.1

Aviation Insurance:  Issues Related to the Reauthorization of FAA's
Aviation Insurance Program, by Gerald L.  Dillingham, Associate
Director for Transportation Issues, before the Subcommittee on
Aviation, House Committee on Transportation and Infrastructure. 
GAO/T-RCED-97-115, May 1 (12 pages). 

The Federal Aviation Administration's (FAA) aviation insurance
program, which is set to expire in September 1997, covers aircraft
operations that are considered essential to the foreign policy
interests of the United States when commercial insurance is
unavailable on reasonable terms.  The program is important because
the government must call on commercial airlines to move troops and
equipment when it has insufficient airlift capacity.  In 1994, GAO
reported that the program lacked enough funds to pay potential
insurance claims in the event of a catastrophic loss.  (See
GAO/RCED-94-151.) GAO testified that although progress has been made
in addressing that issue, two other concerns raised in the 1994
report remain.  First, gaps persist in the program's ability to pay
claims for non-Defense flights.  These flights account for only a
small percentage of flights that have been insured by the program,
but a single major loss could wipe out the program's available funds
and leave a substantial part of the claims unpaid.  FAA would need to
seek supplemental funding to pay those claims, but the delay could
pose financial hardship for the affected airline.  Second, GAO
believes that some uncertainty about the program continues because of
ambiguity in the statutory language and FAA's current implementing
regulations about whether the President must determine that a flight
is in the foreign policy interests of the United States before
issuing insurance. 

Transportation Financing:  Challenges in Meeting Long-Term Funding
Needs for FAA, Amtrak, and the Nation's Highways, by John H. 
Anderson, Jr., Director of Transportation Issues, before the
Subcommittee on Transportation, Senate Committee on Appropriations. 
GAO/T-RCED-97-151, May 7 (21 pages). 

Overall, the $38 billion proposed in the Department of
Transportation's fiscal year 1998 budget represents about a
one-percent reduction from the agency's current appropriation.  This
testimony focuses on three critical transportation financing issues
facing Congress and the administration:  meeting the long-term
funding needs of the Federal Aviation Administration, Amtrak, and the
nation's highways.  Each area presents formidable challenges that
will stretch limited resources in a time of continuing pressure to
reduce the federal budget. 

Domestic Aviation:  Barriers to Entry Continue to Limit Benefits of
Airline Deregulation, by John H.  Anderson, Jr., Director of
Transportation Issues, before the Subcommittee on Aviation, Senate
Committee on Commerce, Science, and Transportation. 
GAO/T-RCED-97-120, May 13 (13 pages). 

An April 1996 GAO report (GAO/RCED-96-79) noted that deregulation of
the domestic airline industry has led to lower fares and better
service for most air travelers.  These benefits stem from greater
competition spurred by the emergence of new airlines and the entry of
established airlines into new markets.  Nevertheless, some airports,
mainly in the East and the upper Midwest, have yet to see the lower
fares and improved services that deregulation has brought to other
markets.  An October 1996 GAO report (GAO/RCED-97-4) found that some
industry practices, such as restrictive gate-leasing arrangements,
impeded entry, particularly at major airports in the East and the
upper Midwest.  This testimony discusses (1) GAO's findings and
recommendations concerning barriers to entry in the airline industry
and (2) the Transportation Department's response to the
recommendations in GAO's October 1996 report. 

Federal Management:  Addressing Management Issues at the Department
of Transportation, by John H.  Anderson, Jr., Director of
Transportation Issues, before the Senate Committee on Commerce,
Science, and Transportation.  GAO/T-RCED-97-172, May 21 (27 pages). 

With more than $39 billion provided in its fiscal year 1997
appropriation, the Transportation Department is responsible for
ensuring the safe and efficient movement of people and goods and
cost-effective investment in the nation's transportation
infrastructure, including its highways and transit systems, airports,
airways, ports, and waterways.  This testimony discusses critical
management issues at the Department and steps that Congress, the
Department, and others can take to solve them. 


   VETERANS AFFAIRS
-------------------------------------------------------- Appendix 0:22


      TESTIMONY
------------------------------------------------------ Appendix 0:22.1

VA Health Care:  Assessment of VA's Fiscal Year 1998 Budget Proposal,
by Stephen P.  Backhus, Director of Veterans Affairs and Military
Health Care Issues, before the Subcommittee on VA, HUD, and
Independent Agencies, Senate Committee on Appropriations. 
GAO/T-HEHS-97-121, May 1 (18 pages). 

With a 1997 medical care appropriation of $17 billion and a declining
veteran population, the Department of Veterans Affairs (VA) faces
mounting pressure to control spending as part of efforts to achieve a
balanced budget.  Last year, GAO reported that VA's health care
system could reduce its operating costs by billions of dollars over
the next several years.  VA has requested medical care funding of
$17.6 billion in 1998.  This consists of an appropriation of nearly
$17 billion and a legislative proposal to retain insurance payments
and other third-party reimbursements.  VA characterizes this as the
first step in a five-year plan to reduce its per patient cost by 30
percent, increase patients served by 20 percent, and finance 10
percent of its expenditures using nonappropriated revenues by the
year 2002.  This testimony focuses on VA's five-year plan, including
the outlook for attaining the stated targets and the potential
effects on veterans and others.  GAO also offers preliminary
observations on VA's progress on two major initiatives:  developing a
method to more equitably allocate resources and establishing a
decentralized management structure to more efficiently and
effectively deliver services. 

Veterans' Employment and Training Service:  Focusing on Program
Results to Improve Agency Performance, by Carlotta C.  Joyner,
Director of Education and Employment Issues, before the Subcommittee
on Benefits, House Committee on Veterans' Affairs. 
GAO/T-HEHS-97-129, May 7
(seven pages). 

The Government Performance and Results Act (GPRA) is a powerful tool
that brings discipline to program management by requiring agencies to
clarify their missions, set goals, measure performance, and report on
their accomplishments.  GAO testified that the Veterans' Employment
and Training Service (VETS) focuses more on process than on results. 
VETS has drafted a strategic plan and performance measures,
consistent with GPRA, and has submitted it to the Office of
Management and Budget for review.  GAO believes that the proposed
performance measures for employment and training services are an
improvement over VETS' current approach because of their focus on
results.  But the plan has not received final approval from the
Department of Labor or been incorporated into an overall
developmental strategic plan.  In addition, development of a
strategic plan and better performance measures do not guarantee
improved performance.  Continued senior management commitment and
effective implementation are necessary to achieved the improved
agency performance envisioned by GPRA. 

Veterans' Affairs:  Veterans Benefits Administration's Progress and
Challenges in Implementing GPRA, by Stephen P.  Backhus, Director of
Veterans' Affairs and Military Health Care Issues, before the
Subcommittee on Benefits, House Committee on Veterans Affairs. 
GAO/T-HEHS-97-131, May 14 (seven pages). 

In response to widespread management problems in the government,
Congress has taken steps to fundamentally change the way that federal
agencies go about their work.  The Government Performance and Results
Act, passed in 1993, requires agencies to clearly define their
missions, set goals, measure performance, and report on their
accomplishments.  This testimony discusses the progress made and the
challenges faced by the Veterans Benefits Administration in
implementing that legislation. 


   SPECIAL PUBLICATIONS
-------------------------------------------------------- Appendix 0:23

Agencies' Strategic Plans Under GPRA:
Key Questions to Facilitate Congressional Review

GAO/GGD-10.1.16, May 1997 (37 pages). 

The Government Performance and Results Act (GPRA) requires federal
agencies to set goals, measure performance, and report on their
accomplishments.  Critical to such results-oriented management is an
agency's strategic planning effort.  This effort is the starting
point for defining what the agency seeks to accomplish, for
identifying the strategies it will use to attain desired results, and
for determining whether it has achieved its objectives.  Developing a
strategic plan can help clarify organizational priorities and unify
the agency's staff in the pursuit of shared goals.  GPRA requires
agencies, as they develop their strategic plans, to consult with
Congress and solicit the views of other key stakeholders.  This
report focuses on key questions to facilitate congressional
consultations on the plans and to help Congress determine how those
plans can be improved to better support congressional and
agency decisionmaking. 


   CORRESPONDENCE
-------------------------------------------------------- Appendix 0:24

Regulatory Flexibility Act:  Agencies' Use of the November 1996
Unified Agenda Did Not Satisfy Notification Requirements. 
GAO/GGD/OGC-97-77R, Apr.  22. 

Aviation Security:  Commercially Available Advanced Explosives
Detection Devices.  GAO/RCED-97-119R, Apr.  24. 

Federal Retirement:  Comparison of High 3, 4, and 5 Salary Factors. 
GAO/GGD-97-84R, Apr.  25. 

Department of Energy:  Information on the Distribution of Funds for
Counterintelligence Programs and the Resulting Expansion of These
Programs.  GAO/RCED-97-128R, Apr.  25. 

Mine Safety and Health Administration:  Information on Proposed
Relocation of Its Denver Technical Center to West Virginia. 
GAO/HEHS-97-100R, Apr.  30. 

States' Lobbying Disclosure:  Information on States' Lobbying
Disclosure Requirements.  GAO/GGD-97-95R, May 2. 

U.S.  Department of Agriculture:  Analysis of Budgets, Fiscal Years
1997-98.  GAO/RCED-97-135R, May 5. 

Procurement:  Overview of HUD's Contracting Activities. 
GAO/RCED-97-132R, May 9. 

Internet:  Internet Census and Use Estimates.  GAO/GGD-97-102R, May
12. 

Medicare:  Comparison of Medicare and VA Payment Rates for Home
Oxygen.  GAO/HEHS-97-120R, May 15. 

Courthouse Construction:  Information on the Use of District
Courtrooms at Selected Locations.  GAO/GGD-97-59R, May 19. 

Student Loans:  Potential Effects of Raising Statutory Audit
Threshold.  GAO/HEHS-97-111R, May 20. 

Federal Workforce:  Attrition Rates at Ex-Im Bank and Similar
Agencies.  GAO/GGD-97-104R, May 20. 

District of Columbia:  Opportunities for Improving the D.C. 
Authority's Financial Statements.  GAO/AIMD-97-83R, May 23. 

District of Columbia:  Analysis of the D.C.  Authority's Financial
Statements for Fiscal Years 1995 and 1996.  GAO/AIMD-97-80R, May 23. 

Indian Trust Funds:  Tribal Account Holders' Responses to
Reconciliation Results.  GAO/AIMD-97-102R, May 23. 

Forest Service:  Construction of National Forest Roads. 
GAO/RCED-97-160R, May 27. 

Uninsured Children:  Estimates of Citizenship and Immigration Status
in 1995.  GAO/HEHS-97-126R, May 27. 

Undocumented Aliens:  Medicaid-Funded Births in California and Texas. 
GAO/HEHS-97-124R, May 30. 

Superfund:  Information on EPA's Administrative Reforms. 
GAO/RCED-97-174R, May 30. 


   DECISIONS AND OPINIONS
-------------------------------------------------------- Appendix 0:25

GAO's Office of General Counsel regularly issues legal decisions and
opinions, reports on major rules issued by federal agencies prior to
their implementation, and decisions resolving bid protests.  These
documents are posted daily and may be downloaded from GAO's home page
on the World Wide Web (http://www.gao.gov). 

The following is a list of legal decisions and opinions and reports
on major agency rules issued by the Office of General Counsel.  In
addition to being available on the World Wide Web, these documents
may also be obtained by using the order form in the back of this
publication.  Bid protest decisions are not included in this list. 

Payment of Fees for College Level Examination Program

B-272280, May 29. 

The Department of Defense On-Site Inspection Agency may properly pay
examination fees for College Level Examination Program (CLEP)
examinations as part of academic degree training that the agency has
determined, under 5 U.S.C.  4107(b) and implementing regulations, is
necessary for recruitment or retention of employees.  CLEP may
properly be viewed as an integral part of the overall academic degree
training because the examination allows the examinee to obtain
college credit in substitution for a portion of the program leading
to an academic degree.  55 Comp.  Gen.  759 (1976) and B-187525, Oct. 
15, 1976, regarding an examination to qualify for a professional
license or certification, are distinguished. 

[Letter]

B-276403, May 19. 

GAO has no objection to an agency's proposal to allow an employee who
has frequent flyer accounts with several airlines in which he has
both government and personal mileage credits (separately accounted
for), to trade personal mileage in one account for government mileage
in another account thereby providing sufficient mileage for a free
ticket for use on official business from one account and for personal
use from the other account.  In this case, without the trade, the
agency will lose the benefit of the government mileage because the
employee plans to leave the agency shortly, after which the
government mileage will become useless.  A trade in these
circumstances does not violate the rule against allowing an employee
to retain government mileage for personal use because it will result
in the agency obtaining a free ticket on another airline and it is
consistent with legislative and GSA guidance directing agencies to
encourage employees' participation in frequent flyer programs to
reduce agency travel costs. 


   REPORTS ON AGENCY RULES
-------------------------------------------------------- Appendix 0:26

Department of Agriculture, Animal and Plant Health Inspection
Service:  Importation of Pork from Sonora, Mexico.  GAO/OGC-97-43,
May 27. 

Department of Agriculture, Animal and Plant Health Inspection
Service:  Karnal Bunt Disease; Domestic Plant-related Quarantine;
Final Rule and Karnal Bunt; Compensation for 1995- 1996 Crop Season;
Final Rule.  GAO/OGC-97-44, May 21. 

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. 

Environmental Protection Agency:  Addition of Facilities in Certain
Industry Sectors; Revised Interpretation of Otherwise Use; Toxic
Release Inventory; Community Right-to-Know.  GAO/OGC-97-41, May 15. 

Federal Communications Commission:  Use of the 28 GHz and 31 GHz
Bands for Local Multipoint Distribution Service.  GAO/OGC-97-40, May
1. 

*** End of document. ***