Congressional Oversight: The General Accounting Office (Testimony,
04/30/96, GAO/T-OCG-96-2).
GAO discussed its work. GAO noted that: (1) in the last 5 years, GAO
work has resulted in financial savings and other benefits at a return of
$55 for every dollar appropriated for GAO; (2) it has developed a cadre
of experts who have helped federal agencies improve their information
systems and financial, property, and inventory management; (3) despite
budget cuts, it has maintained or increased its productivity; (4) GAO
work directly resulted in financial statement requirements for federal
agencies and first alerted the nation to the savings and loan crisis and
the risk of derivatives; (5) it has established five broad,
high-priority work areas that seek to improve government efficiency and
cost-effectiveness, expose fraud, waste, abuse, and mismanagement,
reduce the deficit, improve accountability, and identify trends with
fiscal, budgetary, or oversight consequences; (6) to improve its
productivity, it is streamlining its operations and downsizing its
workforce, improving its work and reporting processes, using advanced
information resources technology, and enhancing its methodological and
technical skills; (7) further staff cuts may affect its accountability
and jeopardize its ability to conduct audits and investigations; (8) an
independent study has recognized the value of GAO and its nonpartisan
and nonideological nature; (9) in response to the study's
recommendations, it has taken steps to focus and improve its work and
optimize its usefulness to Congress; and (10) it will continue to guard
its reputation for independence, credibility, and integrity while
meeting Congress' needs.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-OCG-96-2
TITLE: Congressional Oversight: The General Accounting Office
DATE: 04/30/96
SUBJECT: Federal downsizing
Budget cuts
Deficit reduction
Productivity
Accountability
Financial management
Information resources management
Investigations by federal agencies
Reengineering (management)
Oversight by Congress
IDENTIFIER: Clinch River Breeder Reactor (TN)
Bank Insurance Fund
BIF
DOJ Operation Ill Wind
Medicare Program
Strategic Petroleum Reserve
SPR
Medicaid Program
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Cover
================================================================ COVER
Before the Subcommittee on Government Management, Information and
Technology
Committee on Government Reform and Oversight
House of Representatives
For Release on Delivery
Expected at
10:00 a.m., EDT
Tuesday
April 30, 1996
CONGRESSIONAL OVERSIGHT - THE
GENERAL ACCOUNTING OFFICE
Statement of Charles A. Bowsher
Comptroller General of the United States
GAO/T-OCG-96-2
GAO/OCG-96-2t
Abbreviations
=============================================================== ABBREV
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee
I am pleased to appear before you today to discuss the work of the
General Accounting Office (GAO). We welcome this opportunity to
discuss the important role that GAO plays as the nation's
watchdog--the agency responsible for providing the Congress with
objective and credible audits and evaluations of executive branch
programs and management.
GAO is justifiably proud of its long tradition of service to the
Congress, its contribution to improving government operations, and
the billions of dollars that taxpayers have saved as a result of its
work. This year marks a milestone for GAO and a personal milestone
for me as Comptroller General. In July 1996, GAO will celebrate 75
years of service to the Congress, and in September 1996 I will be
completing my 15-year term of office. The GAO that I will leave to
my successor will be a leaner organization. Since 1992, our
downsizing efforts will have reduced GAO's workforce by one-third.
At 3,500, the agency's workforce will be at its lowest level since
before World War II. Still, GAO will remain an organization of
highly skilled professionals that has successfully managed this
substantial reduction while remaining a highly productive and
effective source of information for the Congress.
Creation of the General Accounting Office was the culmination of a
national debate over who had authority--Congress or the President--to
set the federal budget. In the end, a deal was struck and a
compromise made: The President was given authority to propose the
national budget with the help of a new Bureau of the Budget. In
return, Congress reserved the right, through GAO, to set federal
accounting rules and to audit executive spending.
Over 75 years, GAO has evolved from an agency of bookkeepers to an
agency of experts in far-ranging disciplines. Where GAO once
employed an army of voucher clerks, we are today an agency of
highly-trained specialists: auditors and lawyers, health experts and
economists, statisticians and methodologists, computer specialists,
and engineers.
Let me highlight for you GAO's success in meeting its mission
responsibilities in the midst of downsizing, as well as actions we
have recently completed or have underway to continue to improve GAO's
ability to serve the Congress.
IMPACT OF GAO'S WORK
---------------------------------------------------------- Chapter 0:1
In today's challenging times, we must find ways of doing a good job
even better--and doing it faster, at less cost, and with fewer
people. During the 10 years beginning in 1983, GAO virtually doubled
its productivity. And although budget constraints since fiscal year
1992 have required us to significantly reduce our workforce, we have
maintained both our productivity and the uncompromising quality of
our products and services. To amplify on how GAO has been able to
provide information to help the Congress and the executive branch
make decisions that have improved government operations, I will use
several charts to review our service to the Congress and our
contributions to the taxpayer since our last House oversight hearing
in 1993. In essence, these charts, in keeping with the Government
Performance and Results Act, highlight the major results and outcomes
of GAO's work.
ACHIEVING FINANCIAL BENEFITS
-------------------------------------------------------- Chapter 0:1.1
Year after year, our work has led to legislative and executive
actions--budget reductions, cost avoidance, appropriations deferrals,
and revenue collections--that have provided financial savings and
other benefits in the billions of dollars. Let me direct your
attention to the first set of charts that shows that in fiscal year
1995 alone, these financial benefits totaled nearly $16 billion--a
return of more than $35 for every dollar appropriated for GAO. The
companion chart documents a steady upward trend in our measurable
benefits in the preceding three 5- year periods. Between 1991 and
1995, financial benefits that either were directly attributable to or
significantly influenced by our work totaled nearly $120 billion, or
about $55 for every dollar appropriated for GAO. Given the
importance of reducing the budget deficit, we keep financial benefits
at the forefront of our work.
Illustrative examples of important financial accomplishments achieved
by the Congress and the executive branch as a result of our work
include efforts ranging from studies of the health care system's
vulnerability to fraud and abuse which yielded billions of dollars in
budget reductions and significant administrative reforms, to reports
on the Department of Energy's nuclear programs that led to decisions
that saved billions of dollars, including terminating construction of
an uranium enrichment plant and the Clinch River Breeder Reactor;
from work on inefficient and
(See figure in printed
edition.)
wasteful inventory management practices at the Department of Defense,
which resulted in use of more efficient business practices and
savings of billions, to suggested tax code changes, which resulted in
billions in tax savings; and from oversight of multi-billion dollar
information system modernization efforts at the Internal Revenue
Service and the Federal Aviation Administration crucial to
congressional funding decisions on these programs, to reorganization
and streamlining of federal departments, such as the Agriculture
Department, which yielded billions more in savings and improved
customer service. Our goal is to continue this trend. Work underway
since the beginning of the new Congress is designed to achieve
similar results.
GAO'S PRODUCTIVITY RISES
SIGNIFICANTLY
-------------------------------------------------------- Chapter 0:1.2
The next set of charts shows how we have been able to maintain or
increase our productivity levels despite budgetary reductions. In
fiscal year 1995, GAO produced 1,322 audit and evaluation products
that cut across the full range of government programs and activities.
These consisted of 910 reports to the Congress and agency officials,
166 formal congressional briefings, and 246 congressional
testimonies. The productivity level for fiscal year 1995 represents
a 6-percent increase over that for fiscal year 1994. Moreover, when
GAO's downsizing efforts are considered and its productivity
calculated on the basis of output per 100 staff years spent, the
product volume for fiscal year 1995 represents a 12-percent increase
over that for fiscal year 1994.
(See figure in printed
edition.)
Responding to congressional requests for testimony is one of GAO's
most important services, and this has continued with the 104th
Congress. The chart shows a steady upward trend in the number of
testimony appearances between fiscal years 1993 and 1995. In fact,
during the first 100 days of the new Congress, GAO officials were
called upon to testify a record 109 times. In total, in the first
year of the new Congress, 72 GAO witnesses testified 246 times before
112 congressional committees and subcommittees on issues that ranged
from budget savings, to fraud, waste, and abuse, to proposals for
reengineering the federal government. By comparison, 42 GAO
witnesses testified 117 times in fiscal year 1985. This demonstrates
the extent to which congressional committees are increasingly finding
GAO's work relevant to and useful in addressing issues of concern to
Congress. It also illustrates the increased level of expertise in
our senior executive ranks.
IMPROVEMENTS IN GOVERNMENT
OPERATIONS
-------------------------------------------------------- Chapter 0:1.3
Many of GAO's recommendations and audit findings result in or
contribute to improvements in the effectiveness and the efficiency of
government operations and services and have provided information and
analyses on some of the most pressing and controversial matters faced
by the Congress. As shown in the next chart, GAO documented nearly
200 of these accomplishments in each of the past several years and
more than 200 in 1995.
For example, the Chief Financial Officers (CFO) Act of 1990 was
passed after GAO audits found that federal agencies cannot account
for tens of billions of dollars, that books cannot be balanced, and
that lack of accountability had led to billions of dollars in waste,
fraud, abuse, and mismanagement. The law now requires major federal
agencies for the first time to prepare financial statements and
undergo annual financial audits.
(See figure in printed
edition.)
GAO was also among the first organizations, public or private, to
warn that the nation's savings and loan industry faced collapse and
the Federal Deposit Insurance Corporation was rapidly approaching
insolvency--developments that ultimately led to the most expensive
federal bailout in American history and the rebuilding of the bank
insurance fund. Also, months before Orange County, California,
declared bankruptcy after officials invested public funds in risky
financial instruments known as derivatives, GAO had issued a major
report alerting the Congress to weaknesses in the regulation of these
products. GAO's work has also led to improvements in major
departments and agencies, such as the Social Security Administration,
the Internal Revenue Service, and the Postal Service, that
dramatically influence the public's perception of the efficiency and
effectiveness of the federal government.
IMPROVED SERVICES TO THE
CONGRESS
-------------------------------------------------------- Chapter 0:1.4
GAO's record of accomplishment notwithstanding, we recognize that
success requires continuous improvement in quality while reducing the
duration of jobs and their cost. GAO's workload has become larger
and more technically and analytically complex, even as budget and
staff resources have become more constrained. Nevertheless, the
chart below illustrates that in the key dimensions of job length and
job cost, GAO's performance improved in 1995, thus providing better
service to the Congress.
(See figure in printed
edition.)
The chart shows reductions in both the average and the median
duration and cost of GAO's jobs between fiscal years 1993 and 1995.
The median is the more important indicator since it is more
representative of the time and the cost of a typical assignment. As
the chart shows, GAO's median assignment duration dropped from 8.7
months in fiscal year 1994 to 6.3 months in fiscal year 1995, or over
27 percent. Similarly, the cost of a typical assignment during this
period dropped 29 percent, providing the Congress with more
cost-effective products and services.
SETTING PRIORITIES
---------------------------------------------------------- Chapter 0:2
To optimize our usefulness to the Congress, we have taken a number of
actions in recent years to better focus our efforts. For example, we
have refocused the annual planning process for GAO's 32 issue areas
to obtain a more complete understanding of the issues the Congress is
likely to address in the next several years. We consult broadly with
congressional Members and staff on both sides of the aisle, as well
as with a wide spectrum of government and private experts. The
resulting plans define the major issues about which we believe the
Congress will need information and advice and describe the overall
strategy and likely jobs that we will undertake as resources become
available.
In setting priorities for our work, we give preference to committee
requests made by chairs and ranking minority members, as well as to
legislative mandates. We also attempt to preserve some level of
resources for important self-initiated work that may not as yet have
a congressional sponsor, but we believe could have important impacts
on the effectiveness of government or could help avoid economic
losses to the taxpayer. Over the past several years, the proportion
of our staff years spent at the specific request of the Congress has
ranged from 70 to 80 percent of our available audit resources.
Resource constraints have required us to continue to constantly look
for ways to refine and improve upon how we set our work priorities.
In this regard, we published, in March 1995, a GAO-wide strategic
plan entitled Following the Federal Dollar that identified the
following five broad areas of work to which we have assigned the
highest priority:
-- Promoting a More Efficient and Cost-Effective Government;
-- Exposing Waste, Fraud, Abuse, and Mismanagement;
-- Targeting Spending Reductions to Reduce the Deficit;
-- Improving Accountability Through Financial and Information
Management; and
-- Identifying Trends With Fiscal, Budgetary, or Oversight
Consequences for the Government.
Some of the benefits for the Congress from GAO's work as a result of
this mission and structure are illustrated below.
GAO AUDITS HELP ASSURE A
MORE EFFICIENT AND
COST-EFFECTIVE GOVERNMENT
-------------------------------------------------------- Chapter 0:2.1
GAO is in a unique position to help the Congress as it strives to
reexamine the objectives and structures of federal programs and
initiatives to cut the deficit. Committees in both houses have
requested that GAO do work vital to their legislative agendas.
Moreover, new and continuing statutory requirements necessitate that
GAO continue to play a key role in improving government
accountability and management.
We believe that it is possible not only to create a government that
costs less, but one that at the same time operates more efficiently
and effectively. Downsizing is one way to move toward this goal, but
downsizing must be carefully planned and carried out--a process that
demands the kind of objective and comprehensive information GAO is
uniquely equipped to gather. We have, for example, studied defense
force structure in light of decisions to reduce the size of the U.S.
armed forces, tracked the results of previous downsizing efforts at
the Social Security Administration and other agencies, and studied
downsizing approaches taken by private sector organizations.
We have a number of audits and evaluations either underway or
contemplated for the coming months that could yield significant
savings for the government, for example, identifying "best practices"
to help streamline defense acquisition, procurement, finance,
inventory management, maintenance and repair, and transportation;
identifying more cost-effective ways to clean up the nation's nuclear
weapons complex; evaluating major reorganization proposals facing the
Federal Aviation Administration and Amtrak; and identifying
alternative return-to-work strategies to reduce the costs of the
Social Security Administration's disability programs.
GAO AUDITS EXPOSE WASTE,
FRAUD, ABUSE, AND
MISMANAGEMENT
-------------------------------------------------------- Chapter 0:2.2
After the scandal at the Department of Housing and Urban Development
in the late 1980s, as well as the "Ill Wind" scandal at the
Department of Defense, we began a widely publicized effort to
identify and monitor programs at risk for waste, fraud, abuse, or
mismanagement. Through scores of studies and two special series of
reports on "high risk" programs--the most recent of which appeared in
February 1995--we have highlighted areas in which major improvements
are needed to protect the taxpayers' interests. Priority work
includes assessing payment practices under Medicare, where losses run
into the billions annually; minimizing defaults in federal loan
programs, such as student assistance and the Farmers Home
Administration, where loss exposure runs into the billions of
dollars; and monitoring defense programs in which billions of dollars
have been spent on unneeded inventory and millions of dollars have
been incorrectly paid to defense contractors.
Our highlighting of high risk programs is paying off. The most
recent high risk reports confirmed that progress had been made in
attacking the root causes of problems at 15 of the 18 programs we had
identified through fiscal year 1994. Five of the 18--the Bank
Insurance Fund, the Resolution Trust Corporation, the Pension Benefit
Guaranty Corporation, the State Department's management of overseas
property, and the Federal Transit Administration's grant management
program--are now on sound enough footing that we have removed their
high-risk designations. In fiscal year 1995, we designated seven new
high risk areas, in hopes that the greater focus afforded these areas
will yield progress among them as well. The areas included
monitoring multi-billion dollar information technology initiatives at
the Internal Revenue Service and the Federal Aviation Administration
as well as assessing improvements needed in the Defense Department's
financial management.
GAO EXPERTISE CAN HELP
TARGET SPENDING REDUCTIONS
TO REDUCE THE DEFICIT
-------------------------------------------------------- Chapter 0:2.3
As the Congress works to balance the federal budget, one of its major
challenges will be to cut federal spending over the next 6 years by a
total of $1 trillion or more. Every year, we work with the
congressional appropriations committees to find potential savings in
the administration's proposed budget, generally identifying savings
in the billions of dollars. We also work with the budget and
authorizing committees to find opportunities to save money by
modifying, limiting, or abolishing entire programs. We have
underway, or soon will begin, efforts such as reviewing the need for
such Department of Energy programs as the clean coal technology
program, the civilian nuclear waste program, the power marketing
administrations, and the Strategic Petroleum Reserve; identifying
agricultural commodity programs in which savings could be achieved;
assessing discretionary programs at the Department of Health and
Human Services to identify those that are ineffective or whose
overhead expenses run too high; and analyzing military budget
requests to identify funds Congress may want to rescind or reallocate
to higher priority needs in research and development, procurement,
and in operation and maintenance accounts. To help the Congress
address the deficit, GAO has also recently reported over 120 options
for budgetary savings based on its audit and evaluation work and many
of these options were included in the House report on the fiscal year
1996 budget resolution.
GAO AUDITS IMPROVE
ACCOUNTABILITY THROUGH
FINANCIAL AND INFORMATION
MANAGEMENT
-------------------------------------------------------- Chapter 0:2.4
For more than a decade, GAO has reported to the Congress that federal
agencies were lacking even minimally acceptable accounting and
financial management systems. Recognizing the need for better
financial management in the federal government, the Congress passed,
on a bipartisan basis, the Chief Financial Officers (CFO) Act of
1990. In 1994, the Government Management Reform Act expanded the CFO
Act to require major federal departments and agencies to prepare
financial statements and to undergo annual financial audits.
We have a major responsibility to monitor agencies' progress under
the expanded CFO act. Starting this year, the 24 largest federal
departments and agencies will be required to produce auditable
financial statements. Beginning in 1997, we will also have the job
of auditing the annual U.S. government consolidated financial
reports, which are intended to show the Congress and the American
taxpayers the status of federal finances. It is crucial that CFO act
implementation stays on schedule and equally important that we at GAO
maintain our capacity to assist. The comprehensive, reliable data
developed under the CFO act will give congressional leaders
invaluable information to use in reducing federal spending and
ensuring accountability among the departments and agencies. Further,
the data will contribute to the effective implementation of the
Government Performance and Results Act of 1993, which makes
performance measurement a key element of federal program management.
We have also put considerable emphasis on the need for better
information resource management (IRM). The federal government spends
about $25 billion each year on computers and information technology.
It ought to be getting far greater value than it has been for so
large an investment. In 1994, we produced a widely recognized report
on how 11 basic principles drawn from leading public and private
sector organizations could be used in the federal government's IRM
programs. The Congress has already endorsed many of these "best
practices" in its 1995 reauthorization of the Paperwork Reduction
Act. GAO has also worked with the Congress in passing the
Information Technology Management Reform Act of 1996 to strengthen
the government's information resources management programs and
improve accountability for information technology investments and
results.
GAO EVALUATORS IDENTIFY
TRENDS WITH FISCAL,
BUDGETARY, OR OVERSIGHT
CONSEQUENCES FOR THE
GOVERNMENT
-------------------------------------------------------- Chapter 0:2.5
Numerous GAO reports have alerted the Congress and other policymakers
to crises in the making--from an outdated federal food inspection
system to the crumbling financial condition of the District of
Columbia, from cost overruns in major weapon systems to the
deterioration of nuclear weapon facilities. GAO will continue to
play an important role in identifying trends that could lead to major
problems for the government. Four examples: The financial services
industry is growing larger and more complex, but the regulatory
structure in place to protect investors and depositors has many gaps.
Health care costs continue to grow at a rate faster than inflation,
and major changes are under way in the delivery of health care
services--most notably the emergence of "managed care"--yet the
implications of these structural changes for the financially pressed
Medicare and Medicaid systems are unclear. The Department of
Energy's program to store and dispose of spent radioactive fuel from
civilian nuclear power plants may be reaching the crisis stage; it
will be the Congress's challenge to decide how to deal with this
growing problem. And, while the 1993 amendments to the Social
Security Act reestablished the fiscal soundness of the Social
Security retirement program, workforce and retirement trends over the
coming decades will put new pressures on the program. Projections
show the program beginning to run annual deficits about the year
2013. Options for addressing this problem need to be acted upon in
the near term in order to assure a stable retirement future for
millions of Americans.
INITIATIVES TO IMPROVE OUR
PRODUCTIVITY
---------------------------------------------------------- Chapter 0:3
I'd like to briefly discuss some of the investments we have made over
the years to improve our productivity and better serve the needs of
the Congress. Specifically, I would like to focus on steps we have
taken to streamline our headquarters and field organization; improve
our processes for conducting and reporting the results of our work;
capitalize on advances in information resources technology; and
enhance our methodological and technical skills. Changes such as
these have allowed us to keep pace with the growth and complexity of
government while reducing the size of our staff.
STREAMLINING GAO OPERATIONS
-------------------------------------------------------- Chapter 0:3.1
GAO understands the financial crises our nation faces and is
committed to being a model government agency of the future--smaller
and at the same time achieving greater efficiencies through
effectively using technology and modern management principles. We
have worked in close cooperation with this committee, its counterpart
in the Senate, and our appropriations committees to develop
strategies for reducing the size of GAO. By the end of fiscal year
1996, GAO 's staff level will be at 3,500 full time equivalent
positions. This level is down one-third from 5,325 employees in 1992
and puts GAO at its lowest staffing level since before World War II.
To manage this downsizing efficiently, we are maintaining a hiring
freeze imposed in February 1992. Also, we sought and obtained the
authority to manage an early retirement program as well as two
separation incentive programs designed to offer incentive payments to
staff that volunteered to retire from or leave GAO. Furthermore, we
have consolidated some of our issue areas at headquarters and have
reduced the size of our field structure by consolidating or closing
eleven field offices. In fact, since the mid 1980's we have reduced
our field structure from 40 to 16 locations. We are also in the
process of implementing a reduction-in-force of our administrative
and support staff and privatizing our supply function, and are
looking for other opportunities to use contract assistance. These
actions will reduce the agency by over 30 percent from our 1992
level.
While we continue to be committed to managing this reduction so that
the quality and impact of our work are not compromised, significant
reductions in GAO's workforce carry with it some risks. If our
ability to adequately audit, investigate, and evaluate federal
programs is diminished too greatly, the risk exists that we will no
longer be able to effectively do our job as auditors and meet our
obligation to alert the Congress to emerging and recurring problems.
As I testified before the Senate Committee on Governmental Affairs in
last year's oversight hearing, I am concerned that reducing GAO below
the level of 4,000 staff may lead to the possibility that GAO, as an
independent auditor, will be unable to provide the Congress
assurances that proper accountability exists over the expenditure of
federal dollars as well as adequate audit coverage of government
operations.
Thus far, our downsizing efforts have resulted in some imbalances in
our technical expertise, particularly in financial accounting and
information systems management, which are essential to carrying out
responsibilities levied on us by the Chief Financial Officers Act and
to support congressional efforts to reform the federal government's
financial management systems. We are also carefully assessing losses
in key expertise suffered in our program audit areas which will
require attention.
Critical to our ability to accomplish this downsizing is our
continuous improvement effort that has enabled us to focus on
reengineering our job management processes and use enhanced
technology to improve the way we do the work. We are tracking these
efforts and implementing ways to measure progress in terms of time
and cost reductions and productivity improvements.
INVESTMENTS TO IMPROVE OUR
WORK PROCESSES
-------------------------------------------------------- Chapter 0:3.2
GAO knows that it must be able to produce high quality products on
time, every time, and have high quality processes in place to make
that possible. To achieve this, we are implementing a new
standardized work process, which we developed, that is to be used
uniformly throughout GAO. The process incorporates new technology
and automated tools to ensure timely responses and enhanced quality
in every job.
For our congressional customers, the new process means greater focus
on them and a more businesslike working relationship. The result is
a prompt response, early information on the proposed methodology, a
delivery date, and a written commitment.
Within GAO, collaboration and teamwork are the cornerstones of our
process. New approaches have been added to ensure that all staff and
managers meet early and continuously on assignments to assure
agreement on a job's design and messages. The new process also
includes a streamlined product review phase that allows our
management to tailor its involvement according to the complexity or
sensitivity of the jobs, thereby maximizing the efficiency of staff
time invested. Emphasis has also been placed on obtaining agency
comments on all products to ensure the completeness and objectivity
of GAO's reports. The new process will reduce the time it takes to
obtain and address such views in our products.
This new job process will benefit all of us in several ways. First
and foremost, we will be able to consistently provide a high-quality,
cost-effective work product, on time. This result is ensured because
the new process places a premium on communication and collaboration
between GAO and our customers from the outset of a job through
completion. This means not just less time wasted in rework, but more
cost efficiency and reduced staff frustration.
Second, everyone will have a consistent understanding of how our work
is done. Our staff will benefit from standardization and increased
productivity across each of our divisions. And requesters will know
how the process works from the request for services through delivery
of those services. To remain responsive to new needs and
suggestions, feedback mechanisms have also been incorporated into the
process. As we strive to reach higher levels of performance, we will
listen to both customer requirements and staff suggestions.
Our new process is scheduled to be fully operational by June 1, 1996.
Once implemented, we expect this new process to enable us to achieve
our goal of delivering timely, high quality reports on time, every
time, at reduced cost.
CAPITALIZING ON INFORMATION
RESOURCES TECHNOLOGY
-------------------------------------------------------- Chapter 0:3.3
As you know, advances in the information sciences, especially
microcomputer technology, have revolutionized the way modern
organizations function. This is especially true for organizations
such as ours, in which information itself is both a major input and
the principal product. Successful organizations must integrate
information and technology into the very fabric of the organization
itself, and we have undertaken a number of initiatives to do just
that.
We have invested substantial resources in modern technology and in
training our staff to use such technology. Computer networks linking
all GAO have been installed, providing easier, faster, and more
efficient sharing of information. We are also in the process of
implementing a full-scale program for computerized data collection
and analysis, which will enable our work groups to complete their
assignments more efficiently by increasing their ability to share
information, reuse data, manage assignments, reduce rework, and
review products.
Our communications capability has also been enhanced by initiatives
to upgrade telephone services and to establish videoconferencing
capability in our headquarters and regional offices. The changes in
our telephone services have given us communications compatibility
with the legislative branch, and significantly reduced costs. The
new videoconferencing equipment has allowed staff to become more
productive by improving communications and teamwork and decreasing
travel costs.
We also have in place a financial management package that meets the
accounting principles and standards we promulgate for the rest of the
federal government. The system has successfully supported production
of timely auditable financial statements for nearly a decade.
INVESTING IN THE GAO
WORKFORCE
-------------------------------------------------------- Chapter 0:3.4
As we strive to continually improve our responsiveness to the
Congress and the efficiency with which we carry out our work, our
people are clearly our most critical resource, and our organizational
success depends on how well we manage that resource.
The broad scope of our work requires that managers and staff be
familiar with a wide range of methodologies and be able to work
effectively in interdisciplinary teams. To support them, we have
made a substantial financial investment in training and education for
all employees. Since establishing our Training Institute in 1988, we
have completely revamped the technical curriculum for evaluators and
have developed new curricula for attorneys and support staff. Major
effort also has been devoted to supporting specialized training in
such fields as financial management, information management, and
logistics and we are taking advantage of standard audit methodologies
to help ensure that we consistently produce timely, high quality
results. We also require continuing professional education for all
evaluator and evaluator-related staff, including senior managers.
They must complete 80 hours every 2 years in order to remain
qualified to conduct audit or evaluation work. And we have extended
similar requirements to our attorneys. We believe that these
training efforts have significantly improved the ability of our staff
to address complex questions posed by the Congress as well as the
efficiency with which we conduct this work.
These efforts build on the foundation for effective human resource
management that we laid down over the last decade: a
pay-for-performance system designed to more effectively reward staff
for their contributions, a revised merit promotion process, a
broad-banded system to replace the rigid structure of federal GS pay
schedules, and an enhanced senior executive selection and development
process to ensure that our future leaders are carefully chosen and
thoroughly prepared.
All of these efforts are designed to provide us better assurance that
we can carry out work supporting the oversight and legislative needs
of the Congress more effectively.
ACTIONS TAKEN IN RESPONSE TO
THE NAPA REPORT
---------------------------------------------------------- Chapter 0:4
In May 1993, the Senate Committee on Governmental Affairs asked the
National Academy of Public Administration (NAPA) to convene a panel
to conduct an independent assessment of GAO's roles, mission, and
operation. NAPA recognized in its October 1994 report that GAO has
been a valuable part of the federal government for more than 70
years, providing audit, research, and evaluation services to the
government in general and to the Congress in particular. In
addition, NAPA recognized that our statutory foundations were sound
and recommended no legislative changes. NAPA also found no evidence
of GAO deliberately steering its research toward satisfying
particular policy or partisan interests.
The NAPA report provided a number of useful suggestions on how GAO
could best work with the Congress to improve and enhance the economy
and efficiency of government. GAO has taken a number of actions to
better focus its work and to optimize its usefulness to the Congress
that are consistent with these suggestions. For example, GAO has
taken several steps to increase the transparency with which it
conducts its work. Specifically, GAO formalized and distributed to
the Congress its Strategic Plan. In addition, issue area strategic
plans outlining the key issues and focus of planned work are made
publicly available to the Congress and other cognizant officials.
Congressional committees, Members and staff are also provided with
quarterly listings of assignments underway in GAO issue areas to
ensure that they are advised of all ongoing work.
NAPA also provided a number of useful suggestions on how we could
improve our work processes for doing our work and reporting the
results. Their suggestions significantly influenced the development
of our new job management process discussed earlier in this
statement.
In addition, an external peer review program has been implemented,
adding another important dimension to GAO's program for ensuring the
quality and credibility of its work. KPMG Peat Marwick recently
completed an external review of our financial audit work and issued
an unqualified report stating that the system of quality control for
this work met the objectives of applicable quality control standards
established by the American Institute of Certified Public Accountants
and Government Auditing Standards.
Further, GAO has worked successfully with committee and subcommittee
leadership to reduce the number of congressional detailees and to
eliminate details beyond the 1-year statutory limitation. The number
of detailees has continually decreased over the last few fiscal years
from 61 detailees at the end of fiscal 1990, to 32 detailees at the
end of fiscal 1993, to 15 detailees as of March 1996. This reduction
has been influenced by a January 1995 House of Representatives
decision to reimburse GAO for the cost of detailees.
ASSURING INSTITUTIONAL
CREDIBILITY
---------------------------------------------------------- Chapter 0:5
Most of my testimony today has focused on the results-oriented
framework suggested by the Government Performance and Results Act for
judging an organization's performance and various management
initiatives to improve GAO's ability to serve the Congress. Before
closing, let me spend a few moments describing for you GAO's unique
and historic role in our American system of government and the
important features in GAO's legislative authority that have allowed
it to evolve over 75 years into an institution that can be relied on
by the Congress as a source of nonpartisan, credible information.
If our skills and mission responsibilities have changed over the
years to meet the evolving needs of Congress, the core of what GAO is
all about remains the same today as it was in the beginning.
Independence and credibility were the two cornerstones on which the
Congress created GAO. GAO's founding legislation, the Budget and
Accounting Act of 1921, was drafted to severely limit the extent to
which GAO could be subjected to political partisan pressure. This is
apparent not only in the act's provisions regarding the Comptroller
General but also in the debate prior to the act's passage. For
example, the debate repeatedly stressed that GAO and the Office of
the Comptroller General were structured ". . .to make them
absolutely independent of the Executive in their decisions."
Representative Good, a principal sponsor of GAO's original
authorizing legislation, voiced a similar theme during floor debate.
"In creating the general accounting office and providing for the
comptroller general and the assistant comptroller general, the
committee was guided by a single thought, and that was that
these two officers should be placed upon a plane somewhat
comparable to the position occupied by Federal judges. The
positions are semijudicial, and it was the opinion of the
committee that we should remove them as far as possible from
political considerations."
The authors of the act were concerned with insulating GAO from
political pressures as evidenced by the following exchange:
"Mr. BLAND: Did not the committee contemplate that the
comptroller general might not only be brought into conflict with
the executive department and with the executive branches of the
Government, but sometimes with one side or the other of the
aisle in Congress, and possibly both sides, in the impartial
discharge of his duties?"
"Mr. GOOD: Absolutely. That department ought to be
independent and fearless to criticize wrong expenditures of
money wherever it finds them. It ought to criticize
inefficiency in every executive department where inefficiency
exists, and one of the troubles with our present system is that
the auditors dare not criticize. If they criticize, their
political heads will come off."
Later debate linked the drafters' concerns regarding political
pressure to the limitations on the circumstances under which the
Comptroller General can be removed.
"Mr. SIMS: I appreciate the attempt to take this matter away
from consideration as a political matter; but does the gentleman
think that the President is more likely to act from partisan
considerations than would a partisan Congress, where both Houses
are of the same political party?"
"Mr. GOOD: That is one of the reasons why we provided in the
law the causes for removal, and the only causes are
inefficiency, incapacity, neglect of duty, malfeasance in
office, or some offense that involves moral turpitude."
Representative Good summed up congressional intent with respect to
GAO's independence this way:
"It was the intention of the committee that the comptroller
general should be something more than a bookkeeper or
accountant; that he should be a real critic, and at all times
should come to Congress, no matter what the political complexion
of the Congress or the Executive might be, and point out
inefficiency, if he found that money was being misapplied--which
is another term for inefficiency--that he would bring such facts
to the notice of the committees having jurisdiction of
appropriations."
The end result of this concern for independence was a statute that
permanently authorized GAO, provided the Comptroller General with a
15-year nonrenewable term of office, and set stringent requirements
for his removal either by impeachment or by joint resolution of the
Congress for specific cause. Consistent with the drafter's
intentions, the tenure and related pension provisions for the
Comptroller General are similar to those for federal judges.
Once GAO was established, it was the first Comptroller General, John
McCarl, who set the pattern of independence and integrity that has
marked GAO throughout its 75 years. He clashed repeatedly with
executive branch agencies. Through the 1930's and 1940's there were
several Presidential attempts to weaken GAO, but Congress would have
none of it. Within a decade of its creation, Congress had come to
rely on GAO and it was not about to bow to Presidential pressure to
abolish or significantly modify GAO's role and powers.
This credibility that was hard-won in the early days of the 1920s and
1930s continues as GAO's bedrock value as it prepares to enter the
21st century. GAO remains today an organization of men and women who
jealously guard a reputation that is based on objectivity, fairness,
impartiality, and independence. GAO's credibility goes hand in glove
with its ability to serve the Congress. It is precisely because GAO
takes care to see that reports meet the highest standards of
credibility that they cannot easily be dismissed.
FINAL OBSERVATIONS
---------------------------------------------------------- Chapter 0:6
As the 20th century winds down, GAO has new challenges to meet. We
are charged by the expanded CFO Act with auditing, in 1997, the first
consolidated financial statements of the federal government. For
GAO, this is an unprecedented undertaking. Never before has the
federal government been subject to an independent financial audit --
something routinely demanded of every public corporation in America
and which has been required for state and local governments since the
Single Audit Act of 1984. Such an audit promises to provide Congress
and the American people with the first reliable financial data on the
operation of the federal government. GAO also has a major role to
play in monitoring the new Government Performance and Results Act--a
law that requires federal agencies to set strategic plans and
performance measures that will track results. Together, the CFO Act
and the Government Performance and Results Act hold the potential for
vast improvement in the management of federal agencies and programs.
GAO is proud of its role in implementing these laws.
Finally, GAO intends to continue meeting the needs of Congress with
work that is objective and independently derived; accurate, timely
and meaningful; and presented in a way that is most useful to
responsible officials. Wherever our services are required, GAO takes
seriously its mission to seek honest, efficient management and full
accountability throughout government. In areas as diverse as energy
and housing, law enforcement and banking, health care and education,
information technology and financial management, international
affairs and defense, program evaluation and methodology, GAO seeks to
serve the public interest.
Mr. Chairman, my tenure as Comptroller General will end five months
from today. I cannot begin to describe to you the pride I take in my
association with the men and women who have made GAO the effective
organization it is today.
For 75 years, GAO has served the legislative branch with honor and
commitment. As I prepare to retire, my overriding goal is to leave
for my successors an independent, impartial, nonpartisan GAO capable
of sustaining and continuing this proud tradition for the next 75
years and beyond. I urge this committee to consider with prudence
and care any proposal to fundamentally alter the very characteristics
that make GAO the credible organization it is today. These
characteristics--especially the 15-year nonrenewable term for the
Comptroller General and the agency's permanent status--have made GAO
a success story among government agencies. I believe it would be a
serious mistake to tamper with that success.
The General Accounting Office is an immense resource for all who
believe that an honest and accountable government is essential to the
proper functioning of our democracy. It has served our nation with
commitment and dedication, pride and honor. GAO has earned the trust
and respect of Congress and the American people.
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