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gao_GAO-13-247

gao_GAO-13-247_0

According to provisions in annual appropriations laws, grantees may use up to 20 percent of their annual grants plus program income on administration. Information that grantees enter in IDIS is used to generate financial summary reports, which contain information on the CDBG funds available and expenditures incurred, including the percentage of funds used for low- and moderate-income persons, public services, and administration. The Administrative Limit Covers a Range of Activities As previously noted, grantees may use no more than 20 percent of the CDBG grant and program income received for a range of activities related to program administration. Examples of eligible administrative activities include  managing, overseeing, and coordinating the CDBG program;  providing local officials and citizens with information about the CDBG conducting fair housing activities;  preparing reports and other HUD-required documents;  preparing comprehensive plans;  preparing community development plans;  developing functional plans for housing, land use, urban environmental design, and economic development; and  providing policy planning. The matrix code used most often, general program administration, is broad. Once adjusted for inflation, the funds available for administrative costs decreased by 47 percent. Specifically, the aggregate amount available to CDBG grantees for administrative costs for fiscal year 2012 was $590 million, down from approximately $881 million in fiscal year 2001 nominal dollars (see fig. Reducing staff. For example, one grantee used its local funds to supplement the salaries of CDBG staff. Limiting the number and types of projects. For example, officials from a grantee we contacted told us that they had revisited the consolidated plan to determine which CDBG activities the city could continue to fund and had determined that it could no longer administer its housing rehabilitation program. While the grantees have taken a number of steps to address declining funds available for administering CDBG as the program has gotten smaller, the vast majority of the grantees we spoke with told us that a reduction in the statutory limit on using funds for administration would have a significant impact on their ability to administer and oversee the projects they implemented with CDBG funding. HUD Does Not Routinely Assess Compliance with the Administrative Limit Across the Program Incomplete data, technical limitations of IDIS, and reliance on field office oversight have meant that HUD has not routinely assessed compliance with the limit on the use of funds for administration across the program. If they do not choose this option, the information is not saved. HUD allows grantees to revise the information in IDIS or on their financial summary reports if such errors occur. 3). In addition, because our analysis showed that the majority of entitlement communities in program year 2010 obligated between 15 percent and 20 percent of their funds for administration, HUD’s lack of information on compliance across the program limits its ability to determine how many may be affected by more stringent requirements. While grantees are responsible for complying with the limit, internal control guidance states that information needed to assess compliance with laws and regulations should be timely and reported in a manner that allows for effective monitoring. Because of limitations in IDIS, HUD’s recent attempt to report on grantee compliance across the program for a single year required a labor-intensive process that ultimately produced data that were not reliable. Recommendation for Executive Action In order to demonstrate compliance across the program with the statutory limit on funds that can be used for administration, the Secretary of HUD should direct the Assistant Secretary for Community Planning and Development to develop a process for generating annual reports on compliance across the program, including making any requisite changes to IDIS to better ensure that the agency has complete and analyzable data to support such reporting. As our draft report noted, HUD can determine an individual grantee’s compliance with the administrative limit but has to review each individual grantee’s report and manually create a summary of compliance across the program. Appendix I: Objectives, Scope, and Methodology The objectives of this report were to describe (1) the types of activities that are subject to the 20 percent limit on administration and the ways in which grantees have used their administrative funds, (2) trends in funds available to grantees for Community Development Block Grant (CDBG) administration and the impact of these trends on grantee spending, and (3) the Department of Housing and Urban Development’s (HUD) reporting on grantee compliance with the limit. To determine how grantees have used their administrative funds, we interviewed HUD officials, reviewed the selected grantees’ annual reports to HUD for 2010 or 2011, and reviewed and summarized expenditure data from HUD’s Integrated Disbursement & Information System (IDIS). We then compared HUD’s reporting on grantee compliance with internal control standards for the federal government.

Why GAO Did This Study CDBG is the federal government's principal community development program. In fiscal year 2012, Congress provided CDBG with approximately $3 billion for activities such as housing, economic development, and neighborhood revitalization. While a provision reducing the amount grantees can use for administration was considered but not enacted, GAO was required to examine grantees' use of administrative funds up to the allowed 20 percent of program funds. This report discusses (1) the types of activities subject to the 20 percent limit and grantees' use of their administrative funds, (2) trends in funds available to grantees for CDBG administration and the impact of these trends on grantees' administrative spending, and (3) HUD's reporting on compliance with the limit. GAO analyzed HUD data and program information, reviewed federal internal control standards, and interviewed HUD headquarters and field office staff and organizations representing grantees. GAO also interviewed 12 grantees selected based on grant size and location, among other things, to obtain a range of experiences. What GAO Found The annual appropriation for the Community Development Block Grant (CDBG) program allows grantees to use up to 20 percent of program funds for planning, management, and administration (collectively referred to as "administration"). Specifically, grantees may use these funds for a range of activities, including general management, oversight, and coordination; fair housing activities; preparing community development plans; and policy planning. The Department of Housing and Urban Development (HUD) uses broad categories, such as "general program administration" and "fair housing activities," to record grantees' administrative expenses. According to HUD's data for the last decade, grantees primarily recorded their administrative expenses under the general program administration category, which includes staff salaries. Grantees GAO interviewed added that they also used administrative funds to cover general administrative costs such as supplies, training, and travel. The amount available to grantees for administrative costs decreased from 2001 to 2012 by 47 percent, or about $532 million in 2012 constant dollars, as the amount of overall CDBG funding declined. Grantees GAO interviewed reported taking various steps to address this decline, including reducing the number of CDBG staff and changing the types of projects they administered. For example, one grantee determined that it could no longer administer its housing rehabilitation program. However, the vast majority of the grantees that GAO interviewed said that reducing the statutory limit on administration would negatively impact their ability to administer and oversee CDBG-funded projects. HUD does not routinely determine and report on compliance with the administrative limit across the program. HUD reviews financial summary reports--which contain information grantees enter in HUD's Integrated Disbursement & Information System (IDIS) and their own internal accounting systems--to determine individual grantees' compliance. Internal control guidance states that information needed to assess compliance with laws and regulations should be timely and reported in a manner that allows for effective monitoring. However, HUD managers cannot use IDIS to generate summaries of compliance with the administrative limit across the program. First, grantees are not required to save information from their own systems in IDIS. Second, when such data are saved, the information is not stored as separate data elements that can be extracted and analyzed. Rather, HUD officials must download each grantee's report and manually create a summary of compliance across the program. HUD's most recent attempt to assemble this information for a single year required a labor-intensive process that ultimately produced unreliable data. Without making changes to IDIS that allow for summaries of compliance across the program, HUD lacks the ability to monitor grantees' compliance across the program. Further, GAO's analysis of financial summary reports for program year 2010 (the most recent year available) showed that 60 percent of entitlement communities (eligible cities and counties) obligated between 15 percent and 20 percent of their funds for administration. Given these statistics, HUD could benefit from having the information it needs to determine how many grantees would be affected by reducing the administrative limit. What GAO Recommends GAO recommends that HUD develop a process for annually reporting on compliance across the program with the statutory limit on the use of funds for administration. In its response, HUD noted that it was not required to assess cumulative compliance with the limit. As discussed in the report, an annual report that summarizes individual grantee compliance is essential to effective monitoring.

gao_GAO-03-801

gao_GAO-03-801_0

Army transformation plans call for the ability to deploy a brigade anywhere in the world in 4 days, a division in 5 days, and five divisions within 30 days. Progress Has Been Made, but the Army Cannot Currently Achieve Its Deployment Goal of 4 Days Although Stryker brigades will be more rapidly deployable than Army heavy armored brigades, the Army cannot currently achieve its goal of deploying a Stryker brigade anywhere in the world within 4 days. However, if sealift were used to deploy the Stryker brigades, deployment times to many global regions would be significantly longer than the 4-day goal the Army has set for itself. Obtaining this amount of airlift for deploying one Stryker brigade would require allocating 31 percent of the Air Force’s total 2005 inventory of C-17 aircraft and 38 percent of its C-5 aircraft inventory. Army Plans to Use a Combination of Airlift and Sealift to Deploy Stryker Brigades Because it may not always be possible to obtain sufficient airlift to deploy an entire Stryker brigade, Army officials anticipate using a combination of airlift and sealift to deploy the brigades, although sea deployment time would be slower than the Army’s 4-day worldwide deployment goal to most locations. Army’s Plan for Supporting and Sustaining Stryker Brigades in Combat Operations Is Still Evolving The Army’s plan for supporting and sustaining Stryker brigades in combat operations is still evolving and cannot be considered finalized until a number of issues are resolved. These issues include the results from the operational evaluation of the first brigade, funding questions, and decisions relating to implementing some of the plan’s logistical support concepts. The Army will not be able to finish its support plan until November 2003, when results from the operational evaluation of the first Stryker brigade will be issued. To make Stryker brigades easier to deploy and support, the Army designed the brigades with a support structure that is only about one-third the size of that found in a heavy armored brigade. Before it can fully implement the support plan, the Army will need to determine the cost and decide whether it will fund the acquisition of vehicles and equipment replacement reserves. In addition, deployment goals may need further modification should the brigade’s organizational and operational design significantly change in response to direction from OSD to enhance the brigade’s capabilities.

Why GAO Did This Study The Army is organizing and equipping rapidly deployable Stryker brigades as the first step in its planned 30-year transformation. Stryker brigades are to help fill a gap in capabilities between current heavy and light forces--heavy forces require too much time to deploy, and light infantry forces lack the combat power and mobility of the heavy forces. The Army has a goal to be able to deploy a Stryker brigade anywhere in the world with 4 days. As part of a series of ongoing reviews of Army transformation, GAO assessed the Army's progress in (1) meeting its deployment goal for Stryker brigades and (2) supporting and sustaining a deployed Stryker brigade in combat operations. What GAO Found The Army has made significant progress in creating forces that can be more rapidly deployed than heavy forces with its medium weight Stryker brigades, but it cannot deploy a Stryker brigade anywhere in the world within 4 days. Meeting the 4-day worldwide deployment goal of a brigade-size force would require more airlift than may be possible to allocate to these brigades; at present, it would take from 5 to 14 days, depending on brigade location and destination, and require over one- third of the Air Force's C-17 and C-5 transport aircraft fleet to deploy one Stryker brigade by air. Because airlift alone may not be sufficient, the Army is planning to use a combination of airlift and sealift to deploy the brigades. However, if sealift were used to deploy the Stryker brigades, deployment times to many global regions would be significantly longer than the 4-day goal the Army has set for itself. The Army's plan for supporting and sustaining Stryker brigades in combat operations is still evolving. The Army will not be able to finish its support plan until November 2003, when the results from an operational evaluation of the first Stryker brigade will be issued. Before it can fully implement the support plan, the Army will also need to make funding and other decisions relating to implementing some of the plan's logistical support concepts. Deployment goals may need modification should the brigades' design significantly change in response to direction from the Office of the Secretary of Defense to enhance the brigades' capabilities.

gao_GGD-95-34

gao_GGD-95-34_0

Frequent changes to the tax laws necessitate revisions to both forms and publications. Tax forms and instructions are written by tax law specialists in the Forms Branch. Objectives, Scope, and Methodology Our objectives were to (1) evaluate IRS’ forms and publications development and revision process, (2) identify IRS’ efforts to improve this process, and (3) identify IRS’ initiatives to increase involvement of taxpayers in this process. To evaluate the reasonableness of IRS’ process for developing and revising forms and publications, we considered whether its procedures provided for clear lines of responsibility and accountability, specific timeframes, adequate management oversight, sufficient opportunities to evaluate suggestions from internal and external sources, and appropriate strategies for coping with sudden tax law changes. To identify IRS’ efforts to improve the process and to increase taxpayers’ involvement in it, we interviewed IRS officials. As part of its annual revisions process, IRS obtains suggestions for improving both the accuracy and clarity of its forms and publications from a variety of internal and external sources such as organizations representing tax professionals and tax preparers, taxpayers, and employees. IRS Needs Data to Better Identify Concerns of Individual Taxpayers While IRS gets information on the clarity of forms and publications for individual taxpayers from several sources, IRS officials acknowledge that there is not a systematic way for obtaining input from the many individual taxpayers not represented by particular interest groups or associations. We agree that IRS has made efforts to improve its forms and publications.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the accuracy and clarity of the Internal Revenue Service's (IRS) forms and publications, focusing on: (1) the adequacy of the process IRS uses to revise its tax forms; (2) IRS efforts to improve this process; and (3) IRS efforts to increase taxpayer involvement in the process. What GAO Found GAO found that: (1) IRS efforts to provide taxpayers with accurate and easy-to-read tax forms have been hampered by increasingly complex tax codes, frequent tax code revisions, and taxpayers' reading ability; (2) the IRS process for developing and revising its tax forms and publications appears reasonable and provides clear lines of responsibility and accountability, specific timeframes, adequate management oversight, sufficient opportunities to evaluate suggestions from internal and external sources, and appropriate strategies for coping with sudden tax law changes; (3) IRS periodically reviews and revises its publications and tax forms so that accurate forms and publications are available to taxpayers for each filing season; (4) IRS considers comments from taxpayers and tax preparers, payroll professionals, accountants, and lawyers regarding clarity improvements; (5) IRS has initiated several special projects to study taxpayer comprehension problems and to further improve its forms and publications; (6) despite its ongoing commitment to improvement, IRS does not have a systematic way to identify the specific areas that cause individual taxpayer confusion; and (7) IRS needs to find ways to readily identify the specific concerns of individual taxpayers.

gao_T-RCED-97-95

gao_T-RCED-97-95_0

Implementation Remains Uneven We found that—2 years after EPA established its peer review policy— implementation was still uneven. We concluded that EPA’s uneven implementation was primarily due to (1) inadequate accountability and oversight to ensure that all products are properly peer reviewed by program and regional offices and (2) confusion among agency staff and management about what peer review is, what its significance and benefits are, and when and how it should be conducted. However, some EPA officials with expertise in conducting peer reviews disagreed, maintaining that it is important to have peer reviewers comment on whether or not EPA has properly interpreted the results of the underlying scientific and technical data. EPA’s Actions to Improve the Peer Review Process During our review, we found that EPA had recently taken a number of steps to improve the peer review process. Although we believed that these steps should prove helpful, we concluded that they did not fully address the previously-discussed underlying problems and made some recommendations for improvement. EPA agreed with our findings and recommendations and has recently undertaken steps to implement them. While it is too early to gauge the effectiveness of these efforts, we are encouraged by the attention peer review is receiving by the agency’s upper-level management. However, we also concluded that the efforts aimed at improving the oversight of peer review fell short by not ensuring that all relevant products had been considered for peer review and did not require documenting the reasons why products were not selected. In response, ORD’s Assistant Administrator proposed a three-pronged approach consisting of (1) audits of a select number of work products to determine how well the peer review policy was followed; (2) a series of interviews with office and regional staff involved with peer review to determine the processes used to implement the policy; and (3) training to educate and provide help to individuals to improve the implementation of the peer review policy.

Why GAO Did This Study GAO discussed its recent report on the Environmental Protection Agency's (EPA) implementation of its peer review policy, focusing on EPA's: (1) progress in implementing its peer review policy; and (2) efforts to improve the peer review process. What GAO Found GAO noted that: (1) despite some recent progress, peer review continues to be implemented unevenly; (2) although GAO found some cases in which EPA's peer review policy was properly followed, it also found cases in which key aspects of the policy were not followed or in which peer review was not conducted at all; (3) GAO believes that two of the primary reasons for this uneven implementation are: (a) inadequate accountability and oversight to ensure that all relevant products are properly peer reviewed; and (b) confusion among EPA's staff and management about what peer review is, its importance and benefits, and how and when it should be conducted; (4) EPA officials readily acknowledge this uneven implementation and, during the course of GAO's work, had a number of efforts under way to improve the peer review process; (5) although GAO found these efforts to be steps in the right direction, it concluded that EPA was not addressing the underlying problems that GAO had identified; (6) accordingly, GAO recommended that EPA ensure that: (a) upper-level managers have the information they need to know whether or not all relevant products have been considered for peer review; and (b) staff and managers are educated about the need for and benefits of peer review and their specific responsibilities in implementing policy; (7) EPA agreed with GAO's recommendations and has several efforts under way to implement them; (8) for example, EPA plans to initiate a peer review training program for its managers and staff in June 1997; and (9) while it is still too early to be certain if these efforts will be fully successful, GAO is encouraged by the high-level attention being paid to this very important process.

gao_GAO-16-767

gao_GAO-16-767_0

NOAA’s process for updating its flyout charts involves obtaining updated information on the health of operational satellites from internal specialists and program based studies, such as satellite availability assessments; obtaining updated information on the launch schedules for new satellites; having relevant individuals and entities review the updated charts; and obtaining approval from the Assistant Administrator of the National Environmental Satellite, Data, and Information Service (NESDIS) to publish the new chart on its public facing website. This process is partially documented in a draft policy from June 2011. NOAA Has Made Several Recent Changes to Its Flyout Charts Using the process outlined in NOAA’s draft policy, program officials have updated the geostationary and polar-orbiting satellite flyout charts three times since March 2014. Key changes included adding newly planned satellites; removing a satellite that reached the end of its life; and adjusting planned dates for when satellites would launch, begin operations, and reach the end of their lives. For example, in one set of changes between April 2015 and January 2016, NOAA (1) delayed the GOES-R launch date from March to October 2016, resulting in a corresponding move in its estimated end-of-life, and (2) added 6-month on-orbit checkout periods to the next three satellites in the series, called GOES-S, T, and U satellites. NOAA Has Not Consistently and Accurately Updated Its Flyout Charts While NOAA regularly updates its flyout charts and most of the data on specific satellites were aligned with supporting program documents, the agency has not consistently ensured that its charts were supported by stringent analysis, accurate, clearly communicated, and fully documented. Accuracy: NOAA’s flyout chart updates are not always accurate and consistent with agency documentation including program schedules for future satellites and polar availability assessments. Clarity: NOAA does not clearly and consistently depict how long a satellite might last once it is beyond its design life. Documentation: While standard internal controls and NOAA’s draft policy calls for documenting the reasons for changes to the flyout charts and the executive approval for those changes, NOAA does not consistently document the justification for its updates. Furthermore, based on the 27 key changes we noted on the flyout charts between March 2014 and January 2016, 9 were justified in NOAA documentation and 18 were not. Between March 2014 and January 2016, agency officials revised the flyout charts three times to add newly planned satellites; remove a satellite that ceased operations; and change the expected dates for launch, beginning operations, and end-of-life. In its efforts to update its flyout charts, NOAA provides regular updates that are mostly consistent with supporting documentation. Part of the reason for these issues is that NOAA has not established a policy that includes these steps. Until NOAA addresses the shortfalls in its practices and updates its policy to help ensure the flyout charts are accurate, consistent, and well-documented, it runs an increased risk that its flyout charts will be misleading to Congress and may lead to less-than-optimal decisions. Specially, we recommend that the Secretary direct NOAA’s Assistant Administrator for Satellite and Information Services to take the following actions for its geostationary and polar-orbiting satellite programs: Require satellite programs to perform regular availability assessments and use these analyses to inform the flyout charts and support its budget requests. Revise and finalize the draft policy governing how flyout charts are to be updated to address the shortfalls with analysis, accuracy, consistency, and documentation noted in the above recommendations. NOAA concurred with all five of our recommendations and noted that it plans to implement a more consistent approach in updating its flyout charts.

Why GAO Did This Study NOAA manages two weather satellite programs that provide critical environmental data used in weather forecasts and warnings: a geostationary and a polar-orbiting satellite program. The agency is acquiring the next generation of satellites to replace existing satellites that are approaching the end of their expected lives. NOAA regularly publishes timelines, called flyout charts, depicting its expectations for how long its operational satellites will last and when it plans to launch new satellites. These charts are used to support budget requests, provide status reports, facilitate appropriations discussions with congressional committees, and inform the public. GAO was asked to review NOAA's recent flyout charts. GAO's objectives were to (1) describe NOAA's process for updating its satellite flyout charts; (2) identify changes NOAA has made to its flyout charts in recent years and the justification for those changes; and (3) assess NOAA's recent efforts to update its flyout charts. To do so, GAO reviewed agency policies and procedures for updating its charts; analyzed changes made to the charts since March 2014; and compared NOAA's approach to Air Force practices, internal control standards, and program documentation. What GAO Found The National Oceanic and Atmospheric Administration's (NOAA) process for updating its flyout charts involves obtaining updated information on the health of operational satellites and schedules for new satellites, having relevant individuals review the updated charts, and obtaining approval from a senior NOAA official to publish the charts. This process is partially documented in a 2011 draft policy. NOAA updated the geostationary and polar-orbiting flyout charts three times between March 2014 and January 2016. Key changes included adding newly planned satellites; removing a satellite that reached the end of its life; and adjusting planned dates for when satellites would launch, begin operations, and reach the end of their lives. For example, in one set of changes between April 2015 and January 2016, NOAA extended the life of older polar orbiting satellites by 1 year, added a new fuel limited life period to its most recently launched satellite (called S-NPP), and changed the launch date and the end-of-life date for another satellite (called JPSS-2), as shown below. While NOAA has regularly updated its flyout charts and most of the data on specific satellites were aligned with supporting program documents, it has not consistently ensured that the data were supported by stringent analysis, consistent with underlying program data, clearly communicated, and fully documented. For example, unlike the Air Force, NOAA does not require regular availability assessments for its satellite programs. Also, NOAA's flyout chart updates are not always accurate and consistent with program schedules and polar availability assessments. Further, NOAA does not fully document its changes to the charts. For example, GAO's assessment of 27 key changes between March 2014 and January 2016 showed that 9 were justified in NOAA documentation and 18 were not. Part of the reason for these issues is that NOAA has not established a clear policy to standardize its approach. Until NOAA addresses the shortfalls in its practices and revises and finalizes its draft policy to help ensure the charts are accurate, consistent, and well documented, it runs an increased risk that its flyout charts will be misleading to Congress and may lead to less-than-optimal decisions. What GAO Recommends GAO recommends that NOAA take steps to improve the accuracy and consistency of its flyout charts, and to revise and finalize the draft policy for updating its flyout charts to address the shortfalls GAO noted. NOAA agreed with GAO's recommendations and identified plans to implement them.

gao_GAO-09-549

gao_GAO-09-549_0

In addition, all the companies that share the proceeds from the sale of oil and gas from federal lands and waters are required each month to report to MMS on the Form MMS-2014 data about the oil and gas they sold. Also, the Royalty Policy Committee (RPC)—a group empanelled by the Secretary of the Interior and charged with providing advice on managing federal and Indian leases and revenues––has identified numerous deficiencies. MMS Has Ongoing Efforts to Improve the Accuracy of Payor- Reported Royalty Data, but It Is Too Early to Assess the Effectiveness of These Efforts MMS has three major efforts underway to improve the accuracy of payor- reported royalty data used to collect and verify royalties, but it is too early to evaluate the effectiveness of these efforts. Second, MMS is implementing RPC recommendations concerning edit checks, valuation regulations for natural gas, and coordination with BLM. Third, MMS is continuing to develop processes to increase the accuracy of royalty reporting data by improving edit checks on oil and gas sales prices and using the CPT to identify errors in the amount of oil and gas reportedly sold by payors. In Several Instances, Data Used to Collect and Verify Royalties Are Either Missing or Appear to Be Erroneous While much of the royalty data we examined from fiscal years 2006 and 2007 appears reasonable, we found several instances where key data were missing or appear to be erroneous. We also found that from about 2 to 7.4 percent of the time, depending on the group of leases we examined, either the amount of royalties that payors report due (royalty value) and/or the total value of the oil and gas that payors report (sales value) appeared erroneous. We found that about 5.5 percent of the time that operators reported monthly gas production from leases, payors did not submit the corresponding monthly royalty report. The missing royalty reports for this production represent potentially about $117 million in royalties that may not have been collected. Checks for Reasonableness of Payor- Reported Royalty Data Indicate Errors in Transportation and Processing Allowances We evaluated all royalty data for fiscal years 2006 and 2007—excluding royalty-in-kind leases—for obvious errors in key reported royalty variables, including volumes of oil and gas sold, the value of this oil and gas, and royalties paid, and found that the error rate for these variables ranged from 0 percent to about 2.3 percent, with the highest levels of errors being found in transportation and processing allowances. Multiple Factors Affect Oil and Gas Companies’ Abilities to Accurately Report Royalties Owed to the Federal Government Oil and gas company representatives reported that several factors can affect their ability to accurately report royalty data, including complex land ownership patterns, unit agreements, ambiguity in federal regulations, short time frames for filing royalty reports, and inaccuracies in MMS’s internal databases. This resulted in about 1,500 producing gas leases.

Why GAO Did This Study In fiscal year 2008, the Department of Interior's Minerals Management Service (MMS) collected over $12 billion in royalties from oil and gas production from federal lands and waters. Companies that produce this oil and gas self-report to MMS data on the amount of oil and gas they produced and sold, the value of this production, and the amount of royalties owed. Since 2004, GAO has noted systemic problems with these data and recommended improvements. GAO is providing: (1) a descriptive update on MMS's key efforts to improve the accuracy of oil and gas royalty data; (2) our assessment of the completeness and reasonableness of fiscal years 2006 and 2007 oil and gas royalty data--the latest data available; and (3) factors identified by oil and gas companies that affect their ability to accurately report royalties owed to the federal government. What GAO Found MMS has several key efforts underway to improve the accuracy of the payor-reported data used to collect and verify royalties, but it is too soon to evaluate their effectiveness. MMS is in the process of implementing (1) GAO's past recommendations to help identify missing royalty reports and monitor payors' changes to royalty data; (2) recommendations from the Royalty Policy Committee--a group empanelled by the Secretary of the Interior to provide advice on managing federal and Indian leases and revenues--to improve edit checks, monitor the quality of natural gas, revise gas valuation regulations, and improve coordination with BLM; and (3) other efforts on adding specific edits for sales prices and identifying discrepancies in volumes between operators and payors. While much of the royalty data we examined from fiscal years 2006 and 2007 are reasonable, we found significant instances where data were missing or appeared erroneous. For example, we examined gas leases in the Gulf of Mexico and found that, about 5.5 percent of the time, lease operators reported production, but royalty payors did not submit the corresponding royalty reports, potentially resulting in $117 million in uncollected royalties. We also found that a small percentage of royalty payors reported negative royalty values, which cannot happen, potentially costing $41 million in uncollected royalties. In addition, payors claimed processing allowances 2.3 percent of the time for unprocessed gas, potentially resulting in $2 million in uncollected royalties. Furthermore, we found significant instances where payor-provided data on royalties paid and the volume and/or the value of the oil and gas produced appeared erroneous because they were outside of expected ranges. Oil and gas company representatives reported that several factors affect their ability to accurately report royalties, including complex land ownership, administratively combining leases into units, ambiguity in federal regulations that establish gas prices, short time frames for filing royalty reports, and inaccuracies in MMS's internal databases.

gao_GAO-13-797

gao_GAO-13-797_0

They also use an interagency process to identify and transfer funds to GLRI work, and to enter into agreements among themselves and with nonfederal stakeholders to identify and implement GLRI projects, or they do the work themselves. Therefore, measures that track conditions that are not directly Some measures track actions that may not be sufficient to lead to the desired GLRI goals. Consequently, reducing average concentrations of PCBs in fish is not likely to lead to lifting all restrictions on the consumption of Great Lakes fish. Task Force Agencies and Nonfederal Stakeholders Report GLRI Progress, but Overall Great Lakes Restoration Progress Is Difficult to Quantify The Task Force agencies have issued two GLRI progress reports, but the reports include few specific examples of progress. To obtain further insights about GLRI progress, we surveyed nonfederal GLRI stakeholders and interviewed Task Force agency officials. When asked to provide examples of how one or more of their organization’s GLRI projects had benefitted the Great Lakes ecosystem, 87 percent (153) of the 176 respondents provided at least one example of how one or more of their GLRI projects had benefited, or was expected to benefit, the Great Lakes ecosystem in each of the five focus areas. The respondent reported that this fiscal year 2011 to 2012 GLRI project resulted in an improvement in water quality. Global Change Research Program reported in 2009 that warming water temperatures can lead to increased numbers of aquatic invasive species, which tend to thrive under a wide range of environmental conditions, and a decline in native species, which are adapted to a narrower range of conditions. As we noted previously, invasive species such as the zebra mussel have caused extensive ecological and economic damage to the Great Lakes. However, the Action Plan does not state how these effects will be addressed. Without such linkages in the current Action Plan, it is unclear how EPA will be able to assess progress in meeting the Action Plan’s long-term goals and objectives. Without useful measures, EPA may not be able to determine that GLRI efforts are producing the desired results. Without more clearly expressing that connection in the next Action Plan, EPA will not be able to help address the effects of these factors, including climate change, on GLRI restoration efforts. Recommendations for Executive Action To address challenges the Task Force faces in producing comprehensive and useful assessments of progress and addressing factors that may limit GLRI progress, we recommend that the EPA Administrator, in coordination with the Task Force, as appropriate, take the following seven actions: ensure progress toward long-term goals or objectives that are identified in the Action Plan, but which do not have measures that link to them, is assessed; ensure that linkages between long-term goals, objectives, and measures are identified in the Action Plan for 2015 to 2019; ensure that the progress being made by projects that do not have an Action Plan measure assigned to them is captured in assessments of GLRI progress; capture complete information about progress for each of the measures that are addressed by a project; further evaluate the usefulness of the current measures and targets and the need, if any, for the creation of additional measures; establish an adaptive management plan that includes all of the key elements of adaptive management and provides details on how these elements will be implemented; and address how factors outside of the scope of the Action Plan that may limit progress, such as inadequate infrastructure for wastewater or stormwater and the effects of climate change, may affect GLRI efforts to restore the Great Lakes. Appendix I: Objectives, Scope, and Methodology This appendix provides information on the scope of work and the methodology used to examine (1) how the Great Lakes Restoration Initiative (GLRI) is implemented by the Task Force agencies and other stakeholders; (2) the methods that the Environmental Protection Agency (EPA) has in place to assess GLRI progress; (3) the progress identified by the Task Force agencies and nonfederal stakeholders; and (4) the views of nonfederal stakeholders on factors, if any, that may affect or limit GLRI progress. Specifically, we analyzed the Great Lakes Restoration Initiative Action Plan Fiscal Years 2010-2014 (Action Plan) to understand its structure and identify the long-term goals, objectives, measures of progress and related annual targets, and principal actions in each of the Action Plan’s five focus areas; EPA GLRI financial reports and the agency’s fiscal year 2014 budget justification to determine the amount of GLRI funds that have been allocated for fiscal years 2010 to 2013 to each Task Force agency and each focus area; and, information from the Great Lakes Accountability System (GLAS) to identify the number of GLRI projects in each focus area and to learn more about GLRI projects, such as location, size, and funding. Appendix VI: Great Lakes Restoration Initiative Action Plan Long-term Goals, Objectives, and Measures of Progress for Each of the Five Focus Areas The GLRI Action Plan for fiscal years 2010 to 2014 is organized by five focus areas that, according to the federal agencies responsible for implementing the GLRI, encompass the most significant environmental problems in the Great Lakes: (1) toxic substances and areas of concern; (2) invasive species; (3) nearshore health and nonpoint source pollution; (4) habitat and wildlife protection and restoration; and (5) accountability, education, monitoring, evaluation, communication and partnerships.

Why GAO Did This Study The Great Lakes contain about 84 percent of North America's surface freshwater and provide economic and recreational benefits in the Great Lakes Basin. However, the Great Lakes face significant stresses--such as toxic pollution--that have caused ecological and economic damage to the region. Approximately $1.3 billion has been appropriated to the GLRI, created in fiscal year 2010, which an interagency Task Force of 11 federal agencies, chaired by the EPA Administrator, oversees. In 2010, the Task Force issued an Action Plan for fiscal years 2010 to 2014 to develop a comprehensive approach to restoring the health of the Great Lakes ecosystem. GAO was asked to review the GLRI. This report examines (1) how the GLRI is implemented by the Task Force agencies and other stakeholders, (2) the methods that EPA has in place to assess GLRI progress, (3) the progress identified by the Task Force agencies and nonfederal stakeholders, and (4) the views of nonfederal stakeholders on factors, if any, that may affect or limit GLRI progress. GAO analyzed the Action Plan, surveyed 205 non-federal recipients of GLRI funding, and interviewed Task Force agency officials and nonfederal stakeholders. What GAO Found The Task Force agencies use the Action Plan to implement the Great Lakes Restoration Initiative (GLRI) and use an interagency process to enter into agreements among themselves to identify GLRI projects and with other stakeholders to implement GLRI projects. The Action Plan includes guidance for implementing the GLRI in five focus areas (such as invasive species and habitat and wildlife protection and restoration) that encompass the most significant environmental problems in the Great Lakes. Each focus area includes, among other things, long-term goals, objectives to be achieved by fiscal year 2014, and 28 measures of progress that have annual targets for fiscal years 2010 to 2014. EPA uses the Action Plan's measures to assess GLRI progress. However, its methods may not produce comprehensive and useful assessments of GLRI progress for several reasons. Among them, some of the goals and objectives do not link to any measures and, as a result, it is unclear how EPA will be able to assess progress toward them. In addition, some measures track actions that may not lead to the desired GLRI goal. For example, one measure tracks the reduction in concentrations of polychlorinated biphenyls (PCB) in fish as part of the goal to lift all restrictions on consumption of Great Lakes fish. However, stakeholders reported that the measure is too narrow and that mercury and other contaminants need to be addressed as well. Consequently, reducing PCB concentrations in fish is not likely to lead to the desired result of lifting all Great Lakes fish consumption restrictions. Without useful measures, EPA may not be able to determine that GLRI efforts are producing the desired results. In spring 2013, the Task Force agencies issued two reports about GLRI progress in fiscal years 2010 and 2011, which state whether the targets for the Action Plan's 28 measures were being met (e.g., 15 of 28 measures met or exceeded in fiscal year 2011), but the reports include few specific examples of progress. As a result, GAO sought further insights into such progress by surveying nonfederal GLRI stakeholders. Overall, 87 percent of respondents cited at least one example of how one or more of their projects had, or was expected to, benefit the Great Lakes ecosystem. GAO and others have reported that quantifying overall Great Lakes restoration progress is difficult, that the environmental conditions of each lake are unique, and, according to a 2006 U.N. report, it is often impossible to attribute specific environmental changes to specific projects or programs. In response to GAO's survey, among the factors respondents most often cited as potentially limiting GLRI progress are several outside the scope of the Action Plan, such as inadequate infrastructure for wastewater or stormwater and the effects of climate change. These factors could negatively affect GLRI restoration efforts. For example, as a result of climate change, warming water temperatures can lead to increased numbers of aquatic invasive species and a decline in native ones, a GLRI focus area. The Action Plan touches on these factors but does not state how they will be addressed. In 2012, EPA took steps to incorporate climate change considerations into a small number of GLRI projects but has yet to decide if the GLRI will consider climate change impacts on all GLRI projects. Without addressing these factors in the next Action Plan, EPA will not be able to more fully account for their impacts on GLRI restoration efforts.

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CARES Process and Modeling Tools Drive VHA’s Capital Planning Efforts In developing the model for analyzing VA’s health care demand and making recommendations for ways to meet that demand, the CARES process provided VA with a blueprint that drives VHA’s capital planning process. Using information from the model, VA could determine current supply and identify current and future gaps in infrastructure capacity. In addition, the CARES process serves as the foundation for VHA’s capital budget process. VA continues to use the tools developed through CARES as part of its capital planning process. According to VA officials, all capital projects must be based upon the CARES planning model to advance through VHA’s capital planning process. Range of Alignment Alternatives Considered throughout the CARES Process, and Resulting Decisions Will Result in an Expansion of VA’s Capital Assets The DNCP, the CARES Commission, and the Secretary considered a range of capital asset alignment alternatives throughout the CARES process. Although the Secretary tended to agree with the CARES Commission’s recommendations, the extent to which he agreed varied by alignment alternative. In particular, the Secretary always agreed with the commission’s recommendations to build new facilities, enter into enhanced use leases, and collaborate with DOD and universities, but was less likely to agree to the CARES Commission’s recommendations to contract out or close facilities. The resulting capital alignment alternatives recommended by the CARES Commission and agreed to by the Secretary will result in an overall expansion of VA facilities. DNCP, Commission, and VA Secretary Generally Agreed on Alignment Alternatives for VA Facilities, and Decisions Will Result in an Expansion of Assets Although a range of capital asset alignment alternatives were considered for VA facilities throughout the CARES process, there was relatively consistent agreement among the DNCP, the CARES Commission, and the Secretary as to which were the best alternatives to pursue. These factors include competing stakeholder interests, facility condition and location, access issues, established relationships with other health care providers, and legal restrictions. Some CARES Decisions Implemented, but VA Does Not Use Performance Measures to Assess and Track Their Implementation and Impact VA has started implementing some CARES decisions and integrating CARES concepts into its strategic planning process. Specifically, as of February 2007, VA was in the process of implementing 32 of more than 100 major capital projects that were identified in the CARES process. During this time, VA put a number of decisions on hold in anticipation of the CARES decisions. VA has over 100 performance measures that it uses to centrally monitor agency programs and activities. Thus, VA cannot readily determine whether the implementation of certain CARES decisions are achieving the intended results. For example, VA does not centrally monitor or track the implementation of CARES decisions, a process that could be used as a performance measure for CARES. According to officials in some of the networks we visited, the department does not require them to track the implementation of CARES decisions. These measures should include both output measures, such as the implementation status of all CARES decisions, and outcome measures, such as the degree to which CARES has improved access to medical services for veterans, and should be explicitly linked to the goals of CARES. Appendix I: Objectives, Scope, and Methodology Our overall objective was to determine the extent to which the Department of Veterans Affairs’ (VA) Capital Asset Realignment for Enhanced Services (CARES) process has been implemented and how it has contributed to its overall mission of providing health care services to veterans. Specifically, our research examined (1) how CARES contributes to Veterans Health Administration’s (VHA) capital planning process, (2) the extent to which the CARES process considered alignment alternatives, and (3) the extent to which VA has implemented CARES decisions and how this implementation has helped VA carry out its mission. Build a new outpatient clinic and close inpatient services.

Why GAO Did This Study Through its Veterans Health Administration (VHA), the Department of Veterans Affairs (VA) operates one of the largest health care systems in the country. In 1999, GAO reported that better management of VA's large inventory of aged capital assets could result in savings that could be used to enhance health care services for veterans. In response, VA initiated a process known as Capital Asset Realignment for Enhanced Services (CARES). Through CARES, VA sought to enhance veteran care by the appropriate sizing, upgrading, and locating of VA facilities. GAO was asked to examine the CARES process. Specifically, GAO examined (1) how CARES contributes to VHA's capital planning process, (2) the extent to which the CARES process considered capital asset alignment alternatives, and (3) the extent to which VA has implemented CARES decisions and how this implementation has helped VA carry out its mission. To address these issues, we analyzed CARES documents, interviewed VA officials, and conducted six site visits, among other things. What GAO Found The CARES process provided VA with a blueprint that drives VHA's capital planning efforts. As part of the CARES process, VA adapted a model to estimate demand for health care services and to determine the capacity of its current infrastructure to meet this demand. VA continues to use this model in its capital planning process. The CARES process resulted in capital alignment decisions intended to address gaps in services or infrastructure. These decisions serve as the foundation for VA's capital planning process. According to VA officials, all capital projects must be based upon demand projections that use the planning model developed through CARES. A range of capital asset alignment alternatives were considered throughout the CARES process, which adheres to capital planning best practices. There was relatively consistent agreement among the Draft National CARES Plan prepared by VA, the CARES Commission appointed by the VA Secretary to make alignment recommendations, and the Secretary as to which were the best alternatives to pursue. Although the Secretary tended to agree with the CARES Commission's recommendations, the extent to which he agreed varied by alignment alternative. In particular, the Secretary always agreed with the commission's recommendations to build new facilities, enter into enhanced use leases, and collaborate with the Department of Defense and universities, but was less likely to agree to the CARES Commission's recommendations to contract out or close facilities. The decisions that emerged from the CARES process will result in an overall expansion of VA's capital assets. For example, the capital alignment alternatives the Secretary chose to meet future health care demand includes building 3 new medical centers and opening 156 outpatient clinics. In contrast, VA will completely close one facility. A number of factors, including competing stakeholders interests and legal restrictions, shaped and in some cases limited VA's range of alternatives considered during the CARES process. VA has started implementing some CARES decisions, but does not centrally track the implementation of all the CARES decisions or monitor the impact such implementation has had on its mission. VA has begun implementing 32 of the more than 100 capital projects and 32 of the 156 outpatient care centers approved by the Secretary during the CARES process. Although VA has over 100 performance measures to monitor other agency programs and activities, these measures either do not directly link to the CARES goals or VA does not use them to centrally monitor the implementation and impact of CARES decisions. Without this information, VA cannot readily assess the implementation status of CARES decisions, determine the impact such decisions are having on veterans' care, or be held accountable for achieving the intended results of CARES.

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Today, SBA’s stated purpose is to promote small business development and entrepreneurship through business financing, government contracting, and technical assistance programs. The 7(a) loan program, which is SBA’s largest business loan program, is intended to serve small business borrowers who cannot obtain credit elsewhere. Therefore, strong oversight of lenders by SBA is needed to ensure that qualified borrowers get 7(a) loans and to protect SBA from financial risk. In administering the 7(a) program, SBA has evolved from making loans directly to depending on lending partners, primarily banks that make SBA guaranteed loans. SBA’s other lending partners are Small Business Lending Companies (SBLC)—privately owned and managed, non-depository lending institutions that are licensed and regulated by SBA and make only 7(a) loans. Since the mid-1990s, when SBA had virtually no oversight program for its 7(a) guaranteed loan program, the agency has established a program and developed some enhanced monitoring tools. We have conducted four studies of SBA’s oversight efforts since 1998 and made numerous recommendations related to establishing a lender oversight function and improving it. In the same year, SBA contracted with the Farm Credit Administration—the safety and soundness regulator of the Farm Credit System—to perform examinations of SBLCs. We did, however, find some shortcomings in the program and made recommendations for improving it. SBA Has Experienced Mixed Success in Addressing Other Management Challenges to Its 7(a) Loan Program Since the late 1990s, SBA has taken steps to address other management challenges that affect its ability to manage its business loan program and the technical assistance it provides small businesses. Information technology, human capital, and financial management have posed challenges for SBA, as we have noted in special reports to Congress. This effort led to SBA awarding a contract to Dun and Bradstreet in April 2003 to obtain loan monitoring services, including loan and lender monitoring and evaluation; and risk management tools. We found that the agency had applied some key practices important to successful organizational change, but had overlooked aspects that emphasize transparency and communication. However, for fiscal year 2005 SBA’s auditor continued to note weaknesses in SBA’s overall internal controls. SBA Provided Disaster Loans in Response to September 11th and Now Is Responding to the Gulf Coast Hurricanes Disaster assistance has been part of SBA since its inception, and SBA’s physical disaster loan program is the only form of assistance not limited to small businesses. Following the terrorist attacks of September 11th, SBA provided approximately $1 billion in loans to businesses and individuals in the federally declared disaster areas and to businesses nationwide that suffered related economic injury. First, the volume of loan applications SBA mailed out and received has far exceeded any previous disaster. Second, although SBA’s new disaster-loan processing system provides opportunities to streamline the loan origination process, initially it experienced numerous outages and slow response times in accessing information. Third, SBA’s planning efforts to address a disaster of this magnitude appear to have been inadequate. We are also assessing other factors that have affected SBA’s ability to provide timely loans to disaster victims in the Gulf region including: workforce transformation, the exercise of its regulatory authority to streamline program requirements and delivery to meet the needs of disaster victims, coordination with state and local government agencies, SBA’s efforts to publicize the benefits offered by the disaster loan program, and the limits that exist on the use of disaster loan funds. Small Business Administration: SBA Followed Appropriate Policies and Procedures for September 11 Disaster Loan Applications. Small Business Administration: Progress Made but Improvements Needed in Lender Oversight.

Why GAO Did This Study The Small Business Administration's (SBA) purpose is to promote small business development and entrepreneurship through business financing, government contracting, and technical assistance programs. SBA's largest business financing program is its 7(a) program, which provides guarantees on loans made by private-sector lenders to small businesses that cannot obtain financing under reasonable terms and conditions from the private sector. In addition, SBA's Office of Disaster Assistance makes direct loans to households to repair or replace damaged homes and personal property and to businesses to help with physical damage and economic losses. This testimony, which is based on a number of reports that GAO issued since 1998, discusses (1) changes in SBA's oversight of the 7(a) business loan program; (2) steps SBA has taken to improve its management of information technology, human capital, and financial reporting for business loans; and (3) SBA's administration of its disaster loan program. What GAO Found Since the mid-1990s, when GAO found that SBA had virtually no oversight program for its 7(a) guaranteed loan program, SBA has, in response to GAO recommendations, established a program and developed some enhanced monitoring tools. The oversight program is led by its Office of Lender Oversight, which was established in 1999. Strong oversight of SBA's lending partners is needed to protect SBA from financial risk and to ensure that qualified borrowers get 7(a) loans. In addition to its bank lending partners, loans are made by Small Business Lending Companies (SBLC)--privately owned and managed, non-depository lending institutions that are licensed and regulated by SBA. Since SBLCs are not subject to safety and soundness oversight by depository institution regulators, SBA has developed such a program under a contract with the Farm Credit Administration. Over the years, SBA has implemented many GAO recommendations for lender oversight and continues to make improvements toward addressing others. Since the late 1990s, SBA has experienced mixed success in addressing other management challenges that affect its ability to manage the 7(a) loan program. With respect to using information technology to monitor loans made by 7(a) lenders, between 1997 and 2002, SBA was unsuccessful in developing its own system to establish a risk management database as required by law. However, SBA awarded a contract in April 2003 to obtain loan monitoring services. Regarding SBA's most recent workforce transformation efforts begun in 2002, GAO found that SBA applied some key practices important to successful organizational change but overlooked aspects that emphasize transparency and communication. SBA has implemented some related GAO recommendations for improvements in those areas. SBA has also made good progress in response to GAO recommendations addressing financial management issues. With respect to SBA's administration of its disaster loan program after the September 11, 2001, terrorist attacks, GAO found that SBA followed appropriate policies and procedures for disaster loan applications in providing approximately $1 billion in loans to businesses and individuals in the disaster areas, and to businesses nationwide that suffered economic injury. GAO's preliminary findings from ongoing evaluations of SBA's response to the 2005 Gulf Coast hurricanes indicate that SBA's workforce and new loan processing system have been overwhelmed by the volume of loan applications. GAO identified three factors that have affected SBA's ability to provide a timely response to the Gulf Coast disaster victims: (1) the volume of loan applications far exceeded any previous disaster; (2) although SBA's new disaster loan processing system provides opportunities to streamline the loan origination process, it initially experienced numerous outages and slow response times in accessing information; and (3) SBA's planning efforts to address a disaster of this magnitude appear to have been inadequate.

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2. The District has made substantial progress in establishing performance measures for most of its goals. In response to our request for evidence that a system existed to ensure that the performance data were sufficiently reliable for measuring progress toward goals, the District did not provide such evidence for 7 of the12 goals that the District reported had been met and for 11 of the 14 goals that the District reported had not been met. In addition, at the Subcommittee’s request, we determined the extent to which the performance contracts that the Mayor signed with the directors of three agencies are aligned with both the Mayor’s performance plan and the Mayor’s scorecard. performance plan. Opportunities to Improve the Usefulness of the District’s Performance Report As you know, Congress passed legislation in 1994 that is similar to the performance reporting requirement in GPRA in that it requires the District to prepare an annual performance report on each goal in the City’s annual performance plan. year 2000 and added 7 new management reform initiatives.

Why GAO Did This Study This testimony focuses on the District of Columbia's progress and challenges in performance management. What GAO Found GAO discusses whether the District: (1) met the 29 performance goals that it scheduled for completion by the end of fiscal year 2000 that Congress chose from the more than 400 performance measures contained in the Mayor's fiscal year 2001 budget request, and (2) provided evidence that the performance data are sufficiently reliable for measuring progress toward goals. Mayor Williams' performance management system contains many--but not all--of the elements used successfully by leading organizations. The District could improve the usefulness of its mandated annual performance plans and reports by ensuring that the District government's most significant performance goals are included in both the annual performance plan and the annual performance report that federal law requires the Mayor to send to Congress every year.

gao_GAO-16-491T

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Fewer Small Employers Claimed the Credit Than Were Thought to Be Eligible Claims of the small employer health tax credit have continued to be lower than thought eligible by government agency and small business group estimates, limiting the effect of the credit on expanding health insurance coverage through small employers. In 2014, about 181,000 employers claimed the credit, down somewhat from 2010 (see figure 1). These numbers are relatively low compared to the number of employers thought eligible for the credit. In 2012, we reported that selected estimates of the number of employers eligible ranged from about 1.4 million to 4 million. In 2010, claims totaled $468 million compared to initial estimates of $2 billion by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT). The revised estimates appear overstated as well given that actual claims for the credit in 2013 and 2014 were about $511 million and $541 million, respectively. Small Employers Have Been Unlikely to Claim the Health Tax Credit for Various Reasons Maximum Small Employer Credit Amount is Too Small Based on our interviews, discussion groups, and literature review conducted for the 2012 report, we found the small employer health tax credit has not provided a strong enough incentive for employers to begin to offer health insurance for various reasons, as discussed below. The maximum amount of the credit does not appear to be a large enough incentive to get employers to offer or maintain insurance. The amount of the credit is also reduced if premiums paid by an employer are more than the average premiums for the small group market in the state in which the employer offers insurance. Our 2012 report also noted that the complexity involved in claiming the tax credit was significant, deterring small employers from claiming it. Lack of Awareness May Contribute to Low Credit Claims, Although IRS Engaged in Significant Outreach Many small businesses reported that they were unaware of the credit, as discussed in our 2012 report. Amending the eligibility requirements or increasing the amount of the credit may allow more businesses to claim the credit, but as we noted in 2012, these changes would increase its cost to the federal government. Options for changing the design of the credit include the following: increasing the amount of the full credit, the partial credit, or both; increasing the amount of the credit for some by eliminating state premium averages; expanding eligibility requirements by increasing the eligible number of FTEs and wage limit for employers to claim the partial credit, the full credit, or both; or simplifying the credit calculation by (1) using the number of employees and wage information already reported on the employer’s tax return, which could reduce the amount of data gathering as well as credit calculations because eligibility would be based on the number of employees rather than FTEs; and (2) offering a flat credit amount per FTE (or per employee) rather than a percentage. For example, the bills sought to increase the number of eligible small employers (e.g., allowing an employer to have 50 FTEs); changing the phase out formula; allowing the credit to be claimed in more than two consecutive years; increasing the average annual wage limitation; eliminating the requirement that employers contribute the same percentage of cost of each employee’s health insurance; eliminating the cap limiting the credit amount to average premiums paid to a state health insurance exchange; and allowing a partial credit for health insurance purchased outside of SHOP exchanges.

Why GAO Did This Study Many small employers do not offer health insurance. The Small Employer Health Insurance Tax Credit was established as part of the Patient Protection and Affordable Care Act to help eligible small employers—businesses or tax-exempt entities—provide health insurance for employees. The base of the credit is premiums paid or the average premium for an employer's state if premiums paid were higher. In 2016, for small businesses, the credit is 50 percent of the base unless the business had more than 10 FTE employees or paid average annual wages over $25,900. This statement summarizes and updates GAO's prior work in May 2012, November 2014, and March 2015 on the extent to which the credit is claimed, any reasons that limit claims, and changes to the credit proposed by Congress and the administration. To conduct the updates, GAO reviewed 2013 and 2014 IRS data on credit claims and academic and government studies, and summarized proposed legislation related to the credit. What GAO Found Claims of the small employer health tax credit have continued to be lower than thought eligible by government agency and small business group estimates, limiting the effect of the credit on expanding health insurance coverage through small employers. In 2014, about 181,000 employers claimed the credit, down somewhat from 2010 (see figure). These numbers are relatively low compared to the number of employers eligible for the credit. In 2012, GAO reported that selected estimates of the number of employers eligible ranged from about 1.4 million to 4 million. In 2010, claims totaled $468 million compared to initial estimates of $2 billion by the Congressional Budget Office and the Joint Committee on Taxation. Actual claims for the credit in 2013 and 2014 increased slightly to about $511 million and $541 million, respectively. The small employer health tax credit has not been widely claimed for a variety of reasons, as GAO reported in May 2012. The maximum amount of the credit does not appear to be a large enough incentive for employers to offer or maintain insurance. Also, few small employers qualify for the maximum credit amount. For those employers who do claim the credit, the credit amount “phases out” to zero as employers employ up to 25 full time equivalent (FTE) employees at higher wages. The amount of the credit is also limited if premiums paid by an employer are more than the average premiums for the small group market in the employer's state. Furthermore, the credit can only be claimed for two consecutive years after 2013. GAO also found that the cost and complexity involved in claiming the tax credit was significant, deterring small employers from claiming it. Many small businesses have also reported that they were unaware of the credit. Even so, the Internal Revenue Service (IRS) had been taking steps since April 2010 to raise awareness about the credit and reduce the burden on taxpayers by offering tools to help taxpayers determine eligibility for the credit. Congress and the administration have proposed a number of changes to the credit. These include expanding the size of eligible employers, altering the phase out rules, and allowing the credit to be claimed in more than two consecutive years. Amending the eligibility requirements or increasing the amount of the credit may allow more businesses to claim the credit. However, these changes would increase its cost to the federal government. What GAO Recommends GAO is not making recommendations in this testimony statement.

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The Federal Trade Commission (FTC) regulates advertising for dietary supplements and other products sold to consumers. The most egregious practices included suspect marketing claims that a dietary supplement prevented or cured extremely serious diseases, such as cancer and cardiovascular disease. In addition, while conducting in-person and telephone conversations with dietary supplements sellers, our investigators, posing as elderly consumers, were given potentially harmful medical advice by sales staff, including that they could take supplements in lieu of prescription medication. A link to selected audio clips from these calls is available at: http://www.gao.gov/products/GAO-10-662T. All cases of deceptive or questionable marketing and inappropriate medical advice have been referred to FDA and FTC for appropriate action. These claims are unproven—no studies confirm that ginseng can prevent or cure any disease. The sales representative recommended a garlic supplement and stated that the product could be taken in lieu of prescribed blood pressure medication. The consumer told the representative that he takes aspirin everyday and asked if it was safe to take aspirin and ginkgo biloba together. In addition, FDA and NIH both noted that by definition, no dietary supplement can treat, prevent, or cure any disease. Trace Contaminants Found in Selected Herbal Dietary Supplements, but None Pose an Acute Toxicity Hazard to Humans We found trace amounts of at least one potentially hazardous contaminant in 37 of the 40 herbal dietary supplement products we tested, though none of the contaminants were found in amounts considered to pose an acute toxicity hazard to humans. Specifically, all 37 supplements tested positive for trace amounts of lead. Thirty-two also contained mercury, 28 contained cadmium, 21 contained arsenic, and 18 contained residues from at least one pesticide. The levels of contaminants found do not exceed any FDA or EPA regulations governing dietary supplements or their raw ingredients, and FDA and EPA officials did not express concern regarding any immediate negative health consequences from consuming these 40 supplements. While the manufacturers we spoke with were concerned about finding any contaminants in their supplements, they noted that the levels identified were too low to raise any issues during their own internal product testing processes. Appendix I: Scope and Methodology To determine whether sellers of herbal dietary supplements are using deceptive or questionable marketing practices to encourage the use of these products, we investigated a nonrepresentative selection of 22 storefront and mail-order retailers selling herbal dietary supplements. Posing as elderly customers, we asked sales staff at each company a series of questions regarding the potential health benefits of herbal dietary supplements as well as potential interactions with other common over-the- counter and prescription drugs. We also reviewed written marketing language used on approximately 30 retail Web sites. We evaluated the accuracy of product marketing claims against health benefit evaluations published through the National Institutes of Health and Food and Drug Administration (FDA). To determine whether selected herbal dietary supplements were contaminated with harmful substances, we purchased 40 unique single- ingredient herbal supplement products from 40 different manufacturers and submitted them to an accredited laboratory for analysis. All 40 products were submitted to an accredited laboratory where they were screened for the presence of lead, arsenic, mercury, cadmium, and residues from organichlorine and organophosphorous pesticides.

Why GAO Did This Study Recent studies have shown that use of herbal dietary supplements--chamomile, echinacea, garlic, ginkgo biloba, and ginseng--by the elderly within the United States has increased substantially. Sellers, such as retail stores, Web sites, and distributors, often claim these supplements help improve memory, circulation, and other bodily functions. GAO was asked to determine (1) whether sellers of herbal dietary supplements are using deceptive or questionable marketing practices and (2) whether selected herbal dietary supplements are contaminated with harmful substances. To conduct this investigation, GAO investigated a nonrepresentative selection of 22 storefront and mail-order retailers of herbal dietary supplements. Posing as elderly consumers, GAO investigators asked sales staff (by phone and in person) at each retailer a series of questions regarding herbal dietary supplements. GAO also reviewed written marketing language used on approximately 30 retail Web sites. Claims were evaluated against recognized scientific research published by the National Institutes of Health (NIH) and the Food and Drug Administration (FDA). GAO also had an accredited lab test 40 unique popular single-ingredient herbal dietary supplements for the presence of lead, arsenic, mercury, cadmium, organichlorine pesticides, and organophosphorous pesticides. What GAO Found Certain dietary supplements commonly used by the elderly were deceptively or questionably marketed. FDA statutes and regulations do not permit sellers to make claims that their products can treat, prevent, or cure specific diseases. However, in several cases, written sales materials for products sold through online retailers claimed that herbal dietary supplements could treat, prevent, or cure conditions such as diabetes, cancer, or cardiovascular disease. When GAO shared these claims with FDA and the Federal Trade Commission (FTC), both agreed that the claims were improper and likely in violation of statutes and regulations. In addition, while posing as elderly customers, GAO investigators were often told by sales staff that a given supplement would prevent or cure conditions such as high cholesterol or Alzheimer's disease. To hear clips of undercover calls, see http://www.gao.gov/products/GAO-10-662T . Perhaps more dangerously, GAO investigators were given potentially harmful medical advice. For example, a seller stated it was not a problem to take ginkgo biloba with aspirin to improve memory; however, FDA warns that combining aspirin and ginkgo biloba can increase a person's risk of bleeding. In another case, a seller stated that an herbal dietary supplement could be taken instead of a medication prescribed by a doctor. GAO referred these sellers to FDA and FTC for appropriate action. GAO also found trace amounts of at least one potentially hazardous contaminant in 37 of the 40 herbal dietary supplement products tested, though none in amounts considered to pose an acute toxicity hazard. All 37 supplements tested positive for trace amounts of lead; of those, 32 also contained mercury, 28 cadmium, 21 arsenic, and 18 residues from at least one pesticide. The levels of heavy metals found do not exceed any FDA or Environmental Protection Agency (EPA) regulations governing dietary supplements or their raw ingredients, and FDA and EPA officials did not express concern regarding any immediate negative health consequences from consuming these 40 supplements. While the manufacturers GAO spoke with were concerned about finding any contaminants in their supplements, they noted that the levels identified were too low to raise any issues internal product testing.

gao_GAO-14-182

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Military Services’ Systems for Managing Ammunition Inventory All of the military services have automated information systems for managing and maintaining accountability for ammunition inventory. Military Services’ Systems Have Some Limitations That Affect Their Ability to Facilitate Efficient Management of Conventional Ammunition Military Services’ Ammunition Information Systems Use Different Formats and Cannot Directly Exchange Data The military services’ ammunition systems cannot directly exchange data because they use different data exchange formats. Without upgrades of the Navy, Marine Corps, and Air Force systems to DLMS, the services will continue to devote extra time and resources to ensure the efficient transfer of ammunition data between these systems and LMP. LMP Has Some Limitations That Can Affect the Accuracy and Completeness of Data on Ammunition Items Stored at Depots LMP was not specifically designed to track ammunition and has some limitations in its ammunition-related functionality that can affect the accuracy and completeness of data for items stored at Army depots. NLAC Has Some Limitations in Providing Visibility of Conventional Ammunition The Army’s NLAC is a DOD-wide repository of ammunition data; however, it has some limitations in providing visibility of conventional ammunition and is not widely used outside of the Army. The Army does not have reasonable assurance that NLAC collects complete and accurate data from service ammunition systems. In addition to the challenges with LMP data discussed earlier in this report, NLAC also does not have certain checks and controls that could help ensure that data are accurately being transferred from source systems to NLAC. Services Have a Process for Collecting and Sharing Data on Conventional Ammunition, but the Army Does Not Report Information about All Available and Usable Items The military services have a process for collecting and sharing data in annual reports on conventional ammunition levels and use these reports to identify inventory owned by one service that may be available to meet the requirements of another service. Also, the Army’s annual report does not provide information about all available, usable ammunition items. This information is not routinely shared with all services in the annual reports on ammunition inventory because DOD guidance does not require reporting this type of inventory as part of the stratification process. The Army is aware of these challenges but has not developed a plan to address them. A comprehensive plan, with time frames and costs, for resolving limitations in LMP ammunition-related functionality could provide DOD reasonable assurance that its efforts to upgrade this functionality in LMP are making progress. The services use the stratification and redistribution process to better optimize the department’s ammunition inventory by collecting and sharing information on available inventory that could meet the requirement of another service. Without such annual reporting, the information DOD obtains may lack full transparency about all available items and may miss opportunities to avoid procurement costs for certain usable items that may already be available in the Army’s stockpile. Recommendations for Executive Action We are making seven recommendations to improve the efficiency of DOD’s systems for managing its conventional ammunition inventory and to improve data sharing among the services. To improve DOD’s ability to provide total asset visibility over conventional ammunition, we recommend that the Secretary of Defense direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in conjunction with the Secretaries of the Army, the Air Force, and the Navy, to take the following two actions: Identify and implement internal controls, consistent with federal internal control standards, that will provide reasonable assurance that NLAC collects comprehensive, accurate data from other service ammunition systems. Such a plan could provide DOD with reasonable assurance that the Army's efforts to upgrade ammunition-related functionality in LMP are making progress and, moreover, provide greater assurance that LMP is capable of maintaining accurate, timely, and more complete ammunition data in accordance with DOD supply chain materiel management and ammunition management guidance. With regard to the seventh recommendation, that the Under Secretary of Defense for Acquisition, Technology, and Logistics revise guidance to require the Secretary of the Army to include information on all available ammunition for use during the redistribution process, including ammunition that in a previous year was unclaimed by another service and categorized for disposal, DOD concurred and noted that the Under Secretary would clarify direction in recently issued guidance that the military departments will use information on all available ammunition categorized for disposal. To determine the extent to which the military services collect and share inventory data to help them meet their stated requirements, we reviewed policies, procedures, and other guidance, as well as reports related to conventional ammunition reporting requirements for the services, including DOD Regulation 4140.1-R and the Joint Conventional Ammunition Policies and Procedures. We obtained and reviewed the records of results from the redistribution meeting for fiscal years 2009 through 2013.

Why GAO Did This Study DOD manages nearly $70 billion of conventional ammunition—which includes many types of items other than nuclear and special weapons—at eight Army depots. The military services use automated information systems to manage their inventory. They also compile annual reports that compare ammunition inventory levels against stated requirements. GAO was asked to evaluate DOD's management of conventional ammunition. This report addresses the extent to which (1) the services' information systems facilitate efficient management of the conventional ammunition inventory and (2) the services collect and share inventory data to help them meet their stated requirements. GAO reviewed DOD guidance on materiel management and logistics systems, reviewed the services' annual inventory reports for fiscal years 2009 to 2013, and discussed inventory management and related issues with service officials. What GAO Found The military services use automated information systems to manage and maintain accountability for the Department of Defense (DOD) ammunition inventory, but the systems have some limitations that affect their ability to facilitate efficient management of conventional ammunition. The systems cannot directly exchange ammunition data because they use different data exchange formats. Only the Army's Logistics Modernization Program (LMP) system uses the standard DOD format. The other services have not adopted this format, although Air Force officials have said that they plan to by 2017. Without a common format for data exchange, the services will continue to devote extra time and resources to ensure efficient data exchange between their systems and LMP. LMP has some limitations in its ammunition-related functionality that can affect the accuracy and completeness of data for items stored at Army depots and require extra time and resources to confirm data or correct errors. The Army acknowledges there are limitations in LMP; however, it has not yet developed a comprehensive plan, with time frames and costs, for addressing the limitations. Such a plan could provide DOD reasonable assurance that its efforts to upgrade ammunition-related functionality in LMP are making progress. The Army developed the National Level Ammunition Capability (NLAC) as a DOD-wide repository of ammunition data, but NLAC has some limitations in providing ammunition visibility—that is, having complete and accurate information on items wherever they are in the supply system. The Army does not have reasonable assurance that NLAC collects complete and accurate data from service systems because it does not have checks and controls that federal internal control standards recommend to ensure source data is reliable. Without steps to ensure the quality of the data that flows into NLAC, DOD officials risk making decisions based on inaccurate and incomplete inventory information, or ammunition offices may have to devote extra staff and time to obtain accurate data of DOD-wide inventory. To identify inventory owned by one service that may be available to meet the requirements of another service, the military services have a process for collecting and sharing ammunition data. Through a stratification and redistribution process, the services assess whether inventory can meet stated requirements and then may transfer available inventory, including inventory in excess of one service's requirement, to another service. This redistribution offsets procurements of ammunition items. To facilitate this process, each service develops and shares ammunition inventory data in annual reports. The Army's annual report, however, does not include information on certain missiles. Also, the Army's report does not include information on all available, usable ammunition that in a prior year was unclaimed by another service and placed in storage for disposal; DOD guidance does not require that such inventory be included in the reports. Without incorporating these items in the Army's report, DOD may lack full transparency about all available items and may miss opportunities to avoid procurement costs for certain usable items that may already be available in the Army's stockpile. What GAO Recommends GAO is making seven recommendations to improve the efficiency of the services' systems for managing DOD's conventional ammunition inventory and to improve data sharing among the services, including implementing data exchange standards, developing a plan for improving the accuracy and timeliness of ammunition data in the Army's LMP, enhancing DOD's ability to provide total asset visibility over conventional ammunition, and incorporating additional items as part of the services' current stratification and redistribution process. DOD concurred with all of these recommendations.

gao_HEHS-96-108

gao_HEHS-96-108_0

It also provides remedial education and English language instruction. Key Features of Job Training Strategy Shared by Successful Projects Although the common strategy may be implemented differently, each project incorporates four key features into its strategy: (1) ensuring that participants are committed to training and getting a job; (2) removing barriers, such as lack of child care, that might limit participants’ ability to get and keep a job; (3) improving participants’ employability skills, such as getting to a job regularly and on time, working well with others while there, and dressing and behaving appropriately; and (4) linking occupational skills training with the local labor market. For example, all projects require participants to sign an agreement of commitment outlining the participants’ responsibilities while in training, and all projects monitor attendance throughout participants’ enrollment. Each project we visited coaches participants in employability skills through on-site workshops or one-on-one sessions. Projects Link Occupational Skills Training to the Local Labor Market Five of the six projects we visited provide occupational training, using information from the local labor market to guide their selection of training options for participants. Project staff strive to ensure that the training they provide will lead to self-sufficiency—jobs with good earnings potential as well as benefits. Scope and Methodology We designed our study to identify factors and strategies associated with successful employment training projects for disadvantaged adults. participants are generally economically disadvantaged, lack marketable job skills, have low self-esteem, and have few employability skills. JOBS and JTPA: Tracking Spending, Outcomes, and Program Performance.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the merits of 6 highly successful employment training programs for economically disadvantaged adults. What GAO Found GAO found that successful employment training projects: (1) serve adults with little high school education, limited basic skills and English language proficiency, few marketable job skills, and past histories of substance abuse and domestic violence; (2) only enroll students who are committed to completing the job training and seeking full-time employment; (3) ensure that clients are committed to training and getting a good job, and as a result, require them to sign an agreement of commitment outlining their responsibilities; (4) provide child care, transportation, and basic skills training, to enable clients to complete program training and acquire employment; (5) improve their clients' employability through on-site workshops and one-on-one sessions and by developing professional workplace attitudes; (6) have strong links with the local labor market and use information from the local market to guide training options; and (7) aim to provide their clients with training that will lead to higher earnings, good benefits, and overall self-sufficiency.

gao_GAO-05-317T

gao_GAO-05-317T_0

The Long-Term Budget Outlook Three years ago when I appeared before this Committee, I spoke about a large and growing long-term fiscal gap driven largely by known demographic trends and rising health care costs. GAO’s long-term simulations illustrate the magnitude of the fiscal challenges associated with an aging society and the significance of the related challenges the government will be called upon to address. Although revenues will be part of the debate about our fiscal future, making no changes to Social Security, Medicare, Medicaid, and other drivers of the long-term fiscal gap would require at least a doubling of taxes—and that seems implausible. In my view, elected representatives should have more explicit information on the present value dollar costs of major spending and tax bills—before they vote on them. By extending beyond conventional accounting, the concept of fiscal exposure is meant to provide a broad perspective on long-term costs and uncertainties. Several approaches that could be used, depending on the type of program and information available, are include fiscal exposures in the budget process, and include fiscal exposures in budget data. These trends, along with GAO’s institutional knowledge and issued work, helped us identify the major challenges and specific questions. For example, Social Security faces a large and growing structural financing challenge. Would such a change help respond to challenges posed by demographic, economic, and technological changes? We believe that we at GAO have an obligation to assist and support the Congress in this effort. Given the size of the long-term fiscal imbalances, all major spending and revenue programs in the budget should be subject to periodic reviews and reexamination. While it is important to consider the role and size of government, how we finance government, and the major programs driving the long-term spending path—Medicare, Medicaid, and Social Security— our recent fiscal history suggests that exempting major areas from reexamination and review can undermine the credibility and political support for the entire process.

Why GAO Did This Study This testimony discusses the nation's long-term fiscal outlook and the challenge it poses for the budget and oversight processes. First, GAO provides results of its most recent simulations of the long-term fiscal outlook, updating a model GAO initially developed in 1992. GAO also discusses some ideas for increasing transparency of the long-term costs of government commitments and the range of fiscal exposures. Finally, GAO discusses a forthcoming report that it believes will help the Congress in dealing with a range of performance and accountability issues. This report will provide policy makers with a comprehensive compendium of those areas throughout government that could be considered ripe for reexamination and review based on GAO's past work and institutional knowledge. What GAO Found The nation's fiscal policy is on an unsustainable course, and its long-term fiscal gap grew much larger in fiscal year 2004. Long-term budget simulations by GAO, the Congressional Budget Office, and others show that, over the long term the nation faces a large and growing structural deficit due primarily to known demographic trends and rising health care costs. Continuing on this unsustainable fiscal path will gradually erode, if not suddenly damage, the nation's economy, its standard of living, and ultimately its national security. The long-term outlook challenges the budget process to provide more transparency about the specific exposures that will encumber the nation's fiscal future. GAO feels that elected representatives should have more explicit information on the present value dollar costs of major spending and tax bills--before they vote on them. All simulations indicate that the problem is too big to be solved by economic growth alone or by making modest changes to existing spending and tax policies. A fundamental reexamination of major spending and tax policies and priorities will be important to recapture fiscal flexibility and update the nation's programs and priorities to respond to emerging social, economic, and security changes.

gao_GGD-96-6

gao_GGD-96-6_0

After considering its audit resources and manually reviewing the audit potential of every CEP return, IRS selects returns for audit. 3. Direct audit hours: A comparison of 1988 and 1994 shows that IRS invested 25 percent more hours in auditing large corporations, particularly those with lower assets. 4. Additional recommended taxes: This amount increased 16 percent from about $1.6 billion in 1988 to $1.9 billion in 1994. IRS Finance officials provided data indicating that IRS collected 23 percent of the taxes recommended and 68 percent of the taxes assessed as of July 1995 for the audits closed in fiscal years 1992 through 1994. Using only the direct audit costs, we calculated that IRS recommended $56 and assessed $15 in taxes for each dollar directly spent on auditing large corporations from 1988 through 1994. Objectives, Scope, and Methodology Our objectives were to (1) analyze audit trends for large corporations not in the Coordinated Examination Program (CEP) for fiscal years 1988 through 1994, (2) compute the portion of taxes recommended in audits that were actually assessed, and (3) develop and compare profiles of audited large corporations with those not audited. If IRS recommended additional taxes, large corporations could agree to pay or appeal these taxes. Computing the Assessment Rate To compute the assessment rate—the percentage of recommended taxes ultimately assessed after audits—we did a computer data match of corporate income tax returns between two IRS databases. For the other tax credits reported in table IV.2, the sampling errors exceeded 5 percent for both audited and nonaudited corporations. Over the 7 years, the additional taxes recommended per audited return averaged about $189,000 for all large corporations. By asset class, the rates ranged from 20 percent to 38 percent. By including all but two IRS districts doing large corporate audits, the lowest rate was negative 20 percent. Less than 1 percent.

Why GAO Did This Study GAO reviewed the results of the Internal Revenue Service's (IRS) efforts to audit the tax returns of about 45,000 large corporations, focusing on: (1) audit trends for fiscal years 1988 through 1994; (2) the portion of taxes recommended by agents that were eventually assessed; and (3) the profiles of audited large corporations compared with those of nonaudited corporations. What GAO Found GAO found that: (1) for every dollar invested in large corporation audits, IRS ultimately assessed $15 in additional taxes for the years 1988 through 1994; (2) IRS invested more hours in directly auditing large corporations but recommended less additional tax per hour invested in 1994 compared to 1988; (3) in 1994, large corporations appealed 66 percent of the additional taxes that IRS recommended in its audits; (4) between 1988 and 1994, IRS assessed 27 percent of the recommended additional taxes either after agreement or resolution in appeals; (5) IRS believed that the assessment rate was not an accurate measure of audit effectiveness, since various factors outside the audit could lower the rate; (6) the assessment rates ranged from 20 to 38 percent for four asset classes and from 0 to 103 percent by IRS district, but the reasons for the disparities were unclear; (7) the rates for audits closing without any adjustments has rapidly increased, raising questions about how IRS selects returns for audits; and (8) audited corporations tended to report higher average incomes, tax liabilities, and other tax amounts than nonaudited corporations.

gao_GAO-06-492T

gao_GAO-06-492T_0

Magnitude of Unpaid Taxes of GSA Contractors Over 3,800 GSA contractors had about $1.4 billion in unpaid federal taxes as of June 30, 2005. This represents approximately 10 percent of GSA contractors during fiscal year 2004 and the first 9 months of fiscal year 2005. In addition to civil penalties, criminal penalties exist for an employer’s failure to turn over withheld employee payroll taxes to IRS. Our audit and investigation of the 25 case-study business contractors showed substantial abuse or potential criminal activity as all had unpaid payroll taxes and have diverted those funds for personal or business use. Further, several owners owned homes worth over $1 million. At the same time the company was not paying its taxes, the company made a loan to a company officer for hundreds of thousands of dollars. Tax Debts Are Generally Not Considered When Awarding Contracts Federal law implemented in the FAR, and GSA internal policies do not require GSA contracting officers to examine tax debt when awarding contracts, nor do they provide guidance as to what role, if any, tax debt should play in determining whether prospective contractors meet the general criteria of responsible contractors. However, the FAR does not require contracting officers to consider tax debt in making this determination. As a result, when in direct competition for homogenous types of goods and services in wage-based businesses, these contractors could offer prices for their goods and services that are lower than their tax compliant competitors. Aside from any general concerns about the federal government doing business with contractors that do not pay their taxes, allowing these contractors to do business with the federal government while not paying their taxes could create an unfair competitive advantage for these contractors. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) determine the magnitude of tax debts owed by GSA contractors; (2) identify examples of GSA contractors that have tax debts and are also engaged in potentially abusive, fraudulent, or criminal activities; and (3) determine whether GSA screens contractors for tax debts and criminal activities prior to awarding contracts and at the exercise of any government contract options. To identify the magnitude of unpaid taxes owed by GSA contractors, we first identified the federal contractors that were either GSA interagency contractors or that were paid by GSA. To identify GSA-paid contractors, we obtained from the Department of the Treasury’s Financial Management Service (FMS) the Payments, Claims, and Enhanced Reconciliation (PACER) database containing all Automated Clearing House (ACH) and check payments made by FMS on behalf of GSA to federal contractors during fiscal year 2004 and the first 9 months of fiscal year 2005. Specifically, we narrowed the 25 contractors with unpaid taxes based on the amount of unpaid taxes, number of unpaid tax periods, amount of payments reported by GSA and FMS, indications that owner(s) might be involved in multiple companies with tax debts, and selection of contractors doing business with a variety of federal agencies. Through its supply schedules and governmentwide acquisition contracts, GSA arranges for federal agencies to purchase billions of dollars of goods and services directly from private vendors.

Why GAO Did This Study In February 2004 and again in June 2005, GAO testified that some Department of Defense (DOD) and civilian agency federal contractors abused the federal tax system with little consequence. Previous problems we identified with contractors with unpaid taxes have led to concerns over whether any interagency contractors, such as those on the General Services Administration's (GSA) federal supply schedule, failed to pay their taxes. GSA, through its federal supply schedule and other interagency contracts, arranges for federal agencies to purchase billions of dollars of goods and services directly from private vendors. GAO was asked to determine if GSA contractors, including both contractors that were paid by GSA and GSA interagency contractors, have unpaid federal taxes, and if so, to (1) determine the magnitude of tax debts owed by GSA contractors; (2) identify examples of GSA contractors that have tax debts and are also engaged in potentially abusive, fraudulent, or criminal activities; and (3) determine whether GSA screens contractors for tax debts and criminal activities prior to awarding contracts and at the exercise of any government contract options. What GAO Found Over 3,800 GSA contractors had tax debts totaling about $1.4 billion as of June 30, 2005. This represented approximately 10 percent of the number of GSA contractors during fiscal year 2004 and the first 9 months of fiscal year 2005. GAO investigated 25 GSA contractors with abusive and potentially criminal activity. These businesses had not forwarded payroll taxes withheld from their employees and other taxes to IRS. Willful failure to remit payroll taxes is a felony under U.S. law. Furthermore, some company owners diverted payroll taxes for personal gain or to fund their businesses. These contractors worked for a number of federal agencies including the departments of Defense, Justice, and Homeland Security. A number of owners or officers of the 25 GSA contractors have significant personal assets, including commercial properties, houses worth over $1 million, and luxury vehicles. In addition, several of the owners of these GSA contractors gambled hundreds of thousands of dollars at the same time they were not paying the taxes that their businesses owed. Neither federal law, as implemented by the Federal Acquisition Regulation (FAR), nor GSA policies require contracting officers to specifically consider tax debts in making contracting decisions either at initial award or when considering options to extend. In addition, federal law generally prohibits the disclosure of taxpayer data, and consequently contracting officers have no access to tax data directly from the IRS. GSA contractors that do not pay tax debts could have an unfair competitive advantage in costs because they may have lower costs than tax compliant contractors on government contracts. This is especially true in wage-based businesses that provide homogenous types of goods and services. GAO's investigation identified instances in which contractors with tax debts won awards based on price differential over tax compliant competing contractors.

gao_GAO-08-597

gao_GAO-08-597_0

FDA Has Limited Assurance That Companies Are Complying with Food Labeling Requirements FDA’s use of oversight and enforcement tools has not kept pace with the growing number of food firms. FDA’s testing of nutrition information has been limited and has found varying degrees of compliance. In addition, FDA has not analyzed data on labeling violations and follow-up activities to inform its managers or the public. Furthermore, CFSAN has continued to maintain a duplicate food recall system that FDA had agreed to eliminate in response to a recommendation we made in a 2004 report. Food Labeling Oversight Has Not Kept Pace with the Growing Number of Firms While the number of domestic food firms has increased, FDA has not increased the number of its inspections in response to this increase (see fig. Also, FDA does not have reliable data on the total number of labels reviewed because investigators do not have to enter this information into the FACTS database, which documents other inspection details. FDA has conducted few inspections in foreign food firms and that number has declined significantly—from 211 in 26 countries in 2001 to 95 in 11 countries in 2007—even as the United States has received hundreds of thousands of different imported food product entry lines from tens of thousands of foreign food firms in more than 150 countries. However, we found that FDA’s efforts have generally declined or held steady. Some U.S. trading partners have implemented voluntary front-of-package nutrition symbols and several U.S. manufacturers and groceries are using front-of-package symbols. The European Commission has proposed a mandatory, front-of-package labeling system. FDA does not maintain in an accessible format, or analyze in routine reports, information it has on such areas as labeling violations discovered during inspections, the results of tests on the accuracy of labels, warning letters, recalls, and import refusals. Better leverage resources to carry out food safety and other regulatory responsibilities, including administering and enforcing labeling requirements, by providing Congress with specific, detailed information on the new statutory authorities identified in the Food Protection Plan, such as the authority to charge user fees, accredit third-party inspectors, and mandate food recalls, with specific information on how these authorities would help achieve its mission; posting on FDA’s public Web site periodic updates of the status of implementation of the Food Protection Plan, including goals achieved and time frames for completing the remaining work; and collaborating with other federal agencies and stakeholders experienced in nutrition and health issues, to evaluate labeling approaches and options for developing a simplified, empirically valid system that conveys overall nutritional quality to mitigate labels that are misleading to consumers. Analyzing these data for routine reports could help inform labeling managers’ decisions and help them target labeling resources. Objectives, Scope, and Methodology This report examines (1) the Food and Drug Administration’s (FDA) efforts to ensure that domestic and imported foods comply with food labeling requirements, including those prohibiting false or misleading labeling; (2) the challenges FDA faces in its efforts to administer and enforce food labeling requirements; and (3) the actions that stakeholders from health, medical, and consumer organizations believe are needed to mitigate the effects of food labeling practices they consider misleading and to help consumers identify healthy food. Funding and staffing data for FDA, the Center for Food Safety and Applied Nutrition (CFSAN), and the Office of Regulatory Affairs (ORA) were available for 10 fiscal years (1998 through 2007). GAO Comments 1. With respect to labeling initiatives to help consumers make healthy food choices, the report identifies several areas where stakeholders believe that FDA falls short. 2. 3. 4. 5.

Why GAO Did This Study Two thirds of U.S. adults are overweight, and childhood obesity and diabetes are on the rise. To reverse these health problems, experts are urging Americans to eat healthier. Food labels contain information to help consumers who want to make healthy food choices. The Food and Drug Administration (FDA) oversees federal labeling rules for 80 percent of foods. GAO was asked to examine (1) FDA's efforts to ensure that domestic and imported foods comply with labeling rules, (2) the challenges FDA faces in these efforts, and (3) the views of key stakeholders on FDA actions needed to mitigate misleading labeling. GAO analyzed FDA data, reports, and requirements on food labeling oversight and compliance and interviewed agency and key stakeholder group officials. What GAO Found FDA's oversight and enforcement efforts have not kept pace with the growing number of food firms. As a result, FDA has little assurance that companies comply with food labeling laws and regulations for, among other things, preventing false or misleading labeling. Specifically: (1) FDA does not have reliable data on the number of labels reviewed; the number of inspections, which include label reviews, has declined. For example, of the tens of thousands of foreign food firms in over 150 countries, just 96 were inspected by FDA in 11 countries in fiscal year 2007--down from 211 inspections in 26 countries in 2001. (2) FDA's testing for the accuracy of nutrition information on labels in 2000 through 2006 was limited. FDA could not provide data for 2007. (3) Although the number of food firms in FDA's jurisdiction has increased, the number of warning letters FDA issued to firms that cited food labeling violations has held fairly steady. (4) FDA does not track the complete and timely correction of labeling violations or analyze these and other labeling oversight data in routine reports to inform managers' decisions, or ensure the complete and timely posting of information on its Web site to inform the public. (5) In addition to its official recalls database, FDA's Center for Food Safety and Applied Nutrition has continued to waste resources on a second recall database that FDA had agreed to eliminate in 2004, as GAO had recommended. FDA has reported that limited resources and authorities challenge its efforts to carry out its food safety responsibilities--these challenges also impact efforts to oversee food labeling laws. FDA's Food Protection Plan cites the need for authority to, among other things, collect a reinspection user fee, accredit third-party inspectors, and require recalls when voluntary recalls are not effective. Stakeholders from health, medical, and consumer groups identified actions they believe will mitigate misleading labeling and help consumers identify healthy food. Several stakeholders support a simplified, uniform front-of-package symbol system to convey nutritional quality to consumers. The United Kingdom, Sweden, and the Netherlands have developed voluntary nutrition symbols, while the European Commission has proposed requiring front-of-package labeling of key nutrients.

gao_GAO-09-950T

gao_GAO-09-950T_0

According to the EPA, carbon dioxide emissions from fossil fuel combustion accounted for approximately 80 percent of all greenhouse gas emissions in 2007. Placing a price on emissions is likely to raise the cost of production of many goods and services. On the other hand, research suggests that policy makers could mitigate or eliminate these effects by selling allowances to covered entities through auctions and returning the revenue back to consumers in the form of lump-sum rebates or tax adjustments. According to one study, governments produce approximately 13 percent of U.S. carbon dioxide emissions, and the allowance consumption associated with these emissions could cost governments an additional $16.6 billion. For example, markets for emissions allowances would require oversight, and the distribution of auction revenues could require additional personnel or a new entity to administer payments. Different Methods of Allocating Emissions Allowances Will Affect Government, Covered Entities, and Consumers The design of a cap-and-trade program’s allowance allocation plan—the ways in which tradable allowances are allotted to covered entities at the outset of the program—will help determine how costs and benefits are distributed across the economy, according to available literature. Therefore, the principal consideration in designing an allowance allocation plan is how to distribute the allowances in a way that helps to achieve certain goals: for example, to offset the program’s economic impact on disproportionately affected industries or to generate revenue that could be redistributed to consumers or used for other purposes. Auctioning Allowances Could Generate Substantial Revenue and Provide Other Key Benefits Selling allowances to regulated entities could provide several benefits. Free Allocation of Allowances May Ease Entry Into Emissions Regulation but Can Increase the Overall Cost of the Program Free allocation could help establish political support at the outset of a cap- and-trade program and compensate covered entities for any decrease in profits they might experience as a result the program, but it could also have some disadvantages. Since these cuts may be more expensive than the reductions that would have otherwise taken place, the overall cost of the cap-and-trade program would increase. Furthermore, attempts to keep energy prices low could increase the cost of the program to the economy. Rising prices for energy and energy- intensive goods are critical to the success of the program, because these “price signals” create incentives for both covered entities and consumers to conserve energy, and thereby reduce emissions of greenhouse gases. This could reduce the economic efficiency of a cap-and-trade program, since some of the less costly emissions reduction opportunities would be forgone. The Effects of a Cap- and-Trade Program Depend on the Use of Revenues or Allowance Value The establishment of a cap-and-trade program creates opportunities for the government to direct the value of allowances in a variety of ways. For the purposes of this testimony, we assessed five options that are frequently discussed in the economic literature, although numerous other options exist. Second, the government could distribute lump-sum rebates to consumers, who would likely pay the bulk of the economic costs associated with a cap-and-trade program. Third, revenues could be used to expand the Earned Income Tax Credit to assist low-income working families. However, ‘recycling’ auction revenues through the tax code could partially or wholly offset costs that result from inefficiencies in the tax code, as well as potential costs imposed by the cap-and-trade program, according to a review of economic literature and interviews conducted with economists. Economic analyses suggest that reducing tax rates would do little to compensate low-income individuals that may be disproportionately affected by the cap-and-trade program. The funds could be distributed, for example, using existing government programs, such as the income tax system or other benefit transfer programs. However, this study suggests this option would affect low-income households differently depending on their location. Free Allocation of Allowances Allocating free allowances to covered entities can help establish political support at the outset of a cap-and-trade program and compensate covered entities for any increased costs they incur as a result. Most of the benefits of freely allocated allowances will accrue to the shareholders of entities that receive them by compensating shareholders for any declines in stock value they might experience as a result of the cap. However, the overall effects of this approach would depend largely on the extent to which it creates incentives to reduce energy use, according to economists we spoke with. Funding Climate-Related Programs or Activities Revenues generated through allowance auctions could also be directed toward climate-related programs or activities, including the research and development of low-carbon technologies, programs to promote energy- efficiency, or mitigation and adaptation activities abroad. For example, using auction revenue to support weatherization improvements for homes or the purchase of energy-efficient appliances could lower these households’ energy consumption and expenditures.

Why GAO Did This Study Congress is considering proposals to establish a price on greenhouse gas emissions through a cap-and-trade program that would limit overall emissions and require covered entities to hold tradable emissions permits, or allowances, for their emissions. The purpose of such a program is to raise the cost of activities that produce emissions and thereby provide an economic incentive to decrease emissions. Carbon dioxide, which results from burning fossil fuels, is the primary greenhouse gas and accounts for about 80 percent of U.S. emissions. A cap-and-trade program would increase the cost of burning fossil fuels and other activities that generate emissions and potentially raise costs for consumers. A key decision is the extent to which the government offsets these costs. For example, the government could sell the allowances and then return the revenues to covered entities or households. The government could also give away some or all of the allowances. According to the Congressional Budget Office, the value of the allowances could total $300 billion annually by 2020. Today's testimony provides preliminary results of ongoing work assessing the potential effects of (1) allowance allocation methods, and (2) options for distributing program revenues or the economic value of allowances. GAO reviewed economic literature and interviewed experts in climate policy, including those involved in existing cap-and-trade programs. What GAO Found The method for allocating allowances in a cap-and-trade program can have significant economic implications for the government, regulated entities, and households. Most importantly, a cap-and-trade system would create a market for a valuable new commodity: emissions allowances. The government could allocate these allowances to regulated entities in three main ways. First, it could auction all of the allowances and collect a significant amount of revenue that it could use, for example, to compensate households affected by the cap-and-trade program. Second, it could give away the allowances to entities affected by the program and thereby transfer the value of the allowances to those entities. This could enhance the program's appeal to covered entities but could also increase the program's overall cost to the economy if it reduced incentives for those entities to decrease their emissions. Third, the government could give away some allowances and auction the rest. For example, studies have suggested that freely allocating 6 to 21 percent of the allowances created by a cap-and-trade program would be sufficient to compensate entities in energy-intensive industries for any profit losses incurred as a result of the cap-and-trade program. According to the economic literature and economists we interviewed, regardless of the mechanism for distributing allowances, consumers will bear most of the costs of a cap-and-trade system because most regulated entities will pass along their increased costs in the form of increased prices; however, these costs could be largely offset depending on how revenues are used. Available literature and economists we interviewed point to five main options for distributing a program's allowance revenues, although numerous other options exist. First, the government could lower the overall cost of the cap-and-trade program to the economy through accompanying reductions in taxes on income, labor, or investment. Second, auction revenues could be distributed to households through lump-sum payments, which could offset the higher consumer prices resulting from a cap-and-trade program and mitigate any disproportionate impacts on low-income households. Third, the government could expand the scope of the Earned Income Tax Credit to further benefit low-income working families. Fourth, the government could compensate regulated entities and their shareholders for lost profits by allocating them free allowances. Finally, revenues might be used to fund climate-related programs, such as research on low-carbon technologies, or used to support climate change mitigation activities in developing nations. Each potential use of revenues has trade-offs. For example, decreasing tax rates could lower the overall economic cost of the program; however, this approach may do little to compensate low-income consumers, who would receive greater benefit from a direct rebate. In addition, using revenues to dampen increases in energy prices may benefit ratepayers but reduce their incentives to conserve energy, potentially increasing the program's overall cost.

gao_GAO-14-374

gao_GAO-14-374_0

As in our 2012 report, for this report we define a federally-funded STEM education program as a program funded in a designated fiscal year by allocation or congressional appropriation that includes one or more of the following as a primary objective: attract or prepare students to pursue classes or coursework in STEM areas through formal or informal education activities, attract students to pursue degrees (2-year, 4-year, graduate, or doctoral) in STEM fields through formal or informal education activities, provide training opportunities for undergraduate or graduate students in STEM fields (this can include grants, fellowships, internships, and traineeships that are targeted to students; we do not consider general research grants to researchers that may hire a student to work in the lab to be a STEM education program), attract graduates to pursue careers in STEM fields, improve teacher education in STEM areas for teachers and those studying to be teachers, improve or expand the capacity of K-12 schools or postsecondary institutions to promote or foster education in STEM fields, or conduct research to enhance the quality of STEM education programs provided to students. STEM Degrees and Jobs Are Increasing, but Their Alignment Is Difficult to Determine While Degrees Have Increased in Most STEM Fields, Some Fields Have Grown More than Others Overall, postsecondary degrees awarded in STEM fields have increased at a greater rate than in non-STEM fields during the past decade. The number of STEM degrees awarded increased 55 percent, from 1.35 million degrees awarded in the 2002-2003 academic year to over 2 million in the 2011-2012 academic year. 3). The number of jobs in STEM occupations increased 16 percent from 14.2 million jobs in 2004 to 16.5 million in 2012, while jobs in non-STEM occupations remained fairly steady (with a decline of 0.1 percent). First, estimating how many STEM workers employers need is a challenge, in part because demand for STEM workers can fluctuate with economic conditions. Most Federal Postsecondary STEM Education Programs Address Workforce Needs to Some Extent Most Federal Postsecondary STEM Education Programs Consider Workforce Needs, Including Jobs, Diversity, and Innovation Eighty-eight percent of the 124 federal postsecondary STEM education programs that responded to our survey indicated that meeting one or more of the workforce needs we identified, such as promoting a diverse workforce, was a stated objective of the program. The most common stated objective was to prepare postsecondary students for a career in a STEM field. Diversity In addition to preparing students for STEM jobs, we identified several other workforce needs that federal STEM education programs reported addressing. However, some programs did not measure an outcome or output that directly related to their stated objectives. As we recommended in 2012, the National Science and Technology Council recently issued guidance to help agencies better incorporate their STEM education efforts and the goals from the government-wide STEM Education 5-Year Strategic Plan into their agency performance plans and reports. As agencies follow the guidance, improve their outcome measures, and focus on the effectiveness of the programs, more programs may measure outcomes directly related to their stated program objectives, such as preparing students for STEM careers. Agency Comments and Our Evaluation We provided a draft of this product for comment to the Departments of Defense, Education, Energy, and Health and Human Services; National Science Foundation; and Office of Management and Budget. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Our research objectives were to review (1) recent trends in the number of degrees and jobs in Science, Technology, Engineering, and Mathematics (STEM) fields, (2) the extent to which federal postsecondary STEM education programs take workforce needs into consideration, and (3) the extent to which federal kindergarten-12th grade (K-12) STEM education programs prepare students for postsecondary STEM education. To provide more details about some of the STEM education programs with the highest reported obligations, we conducted a more in-depth review of 13 of the largest STEM education programs from three agencies: the National Science Foundation, the Department of Education, and the National Institutes of Health at the Department of Health and Human Services. GAO-12-108. Higher Education: Federal Science, Technology, Engineering, and Mathematics Programs and Related Trends.

Why GAO Did This Study Federal STEM education programs help enhance the nation's global competitiveness by preparing students for STEM careers. Researchers disagree about whether there are enough STEM workers to meet employer demand. GAO was asked to study the extent to which STEM education programs are aligned with workforce needs. GAO examined (1) recent trends in the number of degrees and jobs in STEM fields, (2) the extent to which federal postsecondary STEM education programs take workforce needs into consideration, and (3) the extent to which federal K-12 STEM education programs prepare students for postsecondary STEM education. GAO analyzed trends in STEM degrees and jobs since 2002 using 3 data sets—the Integrated Postsecondary Education Data System, American Community Survey, and Occupational Employment Statistics—and surveyed 158 federal STEM education programs. There were 154 survey respondents (97 percent): 124 postsecondary and 30 K-12 programs. In addition, GAO conducted in-depth reviews—including interviews with federal officials and grantees—of 13 programs chosen from among those with the highest reported obligations. What GAO Found Both the number of science, technology, engineering, and mathematics (STEM) degrees awarded and the number of jobs in STEM fields increased in recent years. The number of degrees awarded in STEM fields grew 55 percent from 1.35 million in the 2002-2003 academic year to over 2 million in the 2011-2012 academic year, while degrees awarded in non-STEM fields increased 37 percent. Since 2004, the number of STEM jobs increased 16 percent from 14.2 million to 16.5 million jobs in 2012, and non-STEM jobs remained fairly steady. The trends in STEM degrees and jobs varied across STEM fields. It is difficult to know if the numbers of STEM graduates are aligned with workforce needs, in part because demand for STEM workers fluctuates. For example, the number of jobs in core STEM fields, including engineering and information technology, declined during the recession but has grown substantially since then. Almost all of the 124 federal postsecondary STEM education programs that responded to GAO's survey reported that they considered workforce needs in some way. For example, the most common program objective was to prepare students for STEM careers. Some of these programs focused on occupations they considered to be in demand and/or related to their agency's mission. Many postsecondary programs also aimed to increase the diversity of the STEM workforce or prepare students for innovation. Most STEM programs reported having some outcome measures in place, but GAO found that some programs did not measure an outcome directly related to their stated objectives. As GAO recommended in 2012, the National Science and Technology Council recently issued guidance to help agencies better incorporate STEM education outcomes into their performance plans and reports. As agencies follow the guidance and focus on the effectiveness of the programs, more programs may measure outcomes directly related to their objectives. Of the 30 kindergarten through 12th grade (K-12) STEM education programs responding to GAO's survey, almost all reported that they either directly or indirectly prepared students for postsecondary STEM education. For example, one program worked closely with students to provide math and science instruction and supportive services to prepare them for postsecondary STEM education, while another supported research projects intended to enhance STEM learning. What GAO Recommends GAO makes no recommendations in this report. GAO received technical comments from the Departments of Education, Energy, and Health and Human Services; National Science Foundation; and Office of Management and Budget.

gao_GAO-12-319

gao_GAO-12-319_0

DOD’s September 2011 In-sourcing Report Addressed Two of the Three Mandated Requirements DOD’s September 2011 in-sourcing report addressed the legislative requirements to report the service or agency involved with each of its fiscal year 2010 in-sourcing actions and the rationale for each action, but did not report the number of contractor employees whose functions were in-sourced, as specified in the act. DOD stated that it could not report the number of contractor employees because it contracts for services, rather than hiring contractor employees directly. An OUSD (P&R) official noted that one of the data elements Congress has required DOD to include in its annual inventories of contracted services is the number of contractor employees, expressed as full-time equivalents, that performed each activity, and DOD is in the process of implementing a revised approach to collect these data directly from contractors. In its September 2011 in-sourcing report to Congress, DOD noted that ongoing efforts to collect the information required by section 2330a may in the future help inform the number of contractor full-time equivalents in-sourced. DOD and Military Department Approaches to Verifying Reported Data Varied To produce the report on fiscal year 2010 in-sourcing actions, OUSD (P&R) requested that DOD components provide certain information about their fiscal year 2010 in-sourcing actions, and DOD and the military departments took varying, and in some instances limited, approaches to ensuring the reliability of the reported data. Our work identified either an inaccuracy in the information reported to OUSD (P&R) for the in-sourcing report or concerns about the accuracy of the data included in the report to Congress at four of the nine major commands we met with, as the following examples illustrate: The Navy’s Fleet Forces Command acknowledged that while they reported establishing 348 authorizations (out of a total of 354 fiscal year 2010 in-sourcing authorizations) to perform information technology functions that were inherently governmental, these authorizations should have been categorized as exempt from private sector performance for continuity of infrastructure operations. Without access to accurate data, decision makers in DOD and Congress may not have reliable information to help manage and oversee DOD’s in-sourcing actions. Alignment between In-sourcing Actions and Strategic Workforce Plans Is Unclear While section 323 of the FY11 NDAA did not require the in-sourcing report to address whether DOD’s fiscal year 2010 in-sourcing actions aligned with the department’s strategic workforce plans, DOD officials told us that the department had taken some initial steps to align these efforts. DOD’s in-sourcing implementation guidance required components to identify contracted services for possible in- sourcing as part of a total force approach to strategic human capital planning, and we and the Office of Personnel Management have identified aligning an organization’s human capital program with its current and emerging mission and programmatic goals as a critical need of strategic workforce planning.data used in the in-sourcing report and workforce plans hinder an accurate assessment of the degree to which DOD’s use of in-sourcing achieved the department’s strategic workforce objectives. However, differences in the types of With respect to the steps DOD took to align in-sourcing with its strategic workforce plans, the department identified a goal for the in-sourcing initiative in its March 2010 civilian strategic workforce plan. The plan stated that the goal was to optimize the department’s workforce mix to maintain readiness and operational capability, ensure inherently governmental positions were performed by government employees, and construct the workforce in an effective, cost efficient manner. However, without greater alignment between the in-sourcing data and strategic workforce plans, decision makers in DOD and Congress have limited information about the extent to which in-sourcing actions furthered the department’s strategic workforce goals. To improve DOD’s strategic workforce planning, we recommend that the Secretary of Defense direct the Under Secretary of Defense for Personnel and Readiness to better align the data collected on in-sourcing with the department’s strategic workforce plans and establish metrics with which to measure progress in meeting any in-sourcing goals. We agree, and have noted in our report that the need for reliable data is not unique to in-sourcing decisions. In that regard, as we state in our report, DOD officials acknowledged that they had not established metrics to measure progress against the in-sourcing goal in the department’s most recent strategic workforce plan and that it would be difficult to use the available data to assess such progress. Specifically, we ascertained the extent to which DOD reported on: (1) the agency or service of the department involved in the decision, (2) the basis and rationale for the decision, and (3) the number of contractor employees whose functions were converted to performance by DOD civilians. We also reviewed DOD guidance on the in-sourcing decision process.

Why GAO Did This Study The Department of Defense (DOD) relies on contractors for varied functions, and obligated about $200 billion in fiscal year 2010 for contracted services. In-sourcing—moving contracted work to performance by DOD employees—has been one tool through which DOD managed its workforce. The National Defense Authorization Act for Fiscal Year 2011 required DOD to report on its fiscal year 2010 in-sourcing decisions and required GAO to assess DOD’s report. The act required DOD to report, for each decision, the agency or service involved, the basis and rationale for the decision, and the number of contractor employees in-sourced. GAO assessed the report against these requirements and examined how DOD prepared the report and assured itself of the data’s reliability, and the extent the in-sourcing actions were aligned with DOD’s strategic workforce plans. GAO reviewed the in-sourcing report, examined in-sourcing guidance, reviewed DOD’s recent strategic workforce plans, and interviewed appropriate department officials. What GAO Found DOD reported on two of three issues required by law: the component involved with each of its fiscal year 2010 in-sourcing actions and the rationale for each action. However, DOD did not report the number of contractor employees whose functions were in-sourced, because, DOD officials said, the department does not have these data. Specifically, the department noted, in its report to Congress, that it contracts for services and does not hire individual contractor employees. Instead, DOD reported the number of new civilian authorizations created due to in-sourcing. Congress has separately required DOD to report the number of contractor employees performing services for DOD, expressed as full-time equivalents, as part of its inventory of activities performed under contracts for services. In its in-sourcing report, DOD said that efforts to comply with this additional requirement may in the future help inform the number of contractor full-time equivalents in-sourced. The Office of the Under Secretary of Defense for Personnel and Readiness (OUSD (P&R)) requested information from DOD components on fiscal year 2010 in-sourcing actions to produce its report, and the military departments and OUSD (P&R) took varying, and in some instances limited, approaches to ensuring the data’s reliability. Additionally, some of the commands GAO contacted made errors in reporting in-sourcing data. For example, 348 of 354 new in-sourcing authorizations by the Navy’s Fleet Forces Command were categorized as inherently governmental when they should have been categorized as exempt from private sector performance for continuity of infrastructure operations. Federal internal control standards state that data verification helps provide management with reasonable assurance of achieving agency objectives, including compliance with laws. Without accurate data, decision-makers in DOD and Congress may not have reliable information to help manage and oversee DOD in-sourcing. While the mandate did not require the in-sourcing report to align with DOD’s strategic workforce plans, it was unclear to what extent the in-sourcing actions aligned with DOD’s plan due to differences in the types of data used in the in-sourcing report and the most recent workforce plan, and the absence of metrics to measure the in-sourcing goal established in the plan. DOD took some steps toward aligning these efforts, such as establishing a goal for in-sourcing in its most recent strategic workforce plan, which was issued in March 2010. Additionally, OUSD (P&R) officials said that the in-sourcing actions furthered DOD’s strategic workforce objectives, but acknowledged they had not established metrics to measure against the in-sourcing goal—which was to, among other things, optimize the department’s workforce mix to maintain readiness and operational capability and ensure inherently governmental positions were performed by government employees. Additionally, the strategic workforce plans coded jobs by occupational series, such as budget analyst, while the in-sourcing report used function codes indicating broad areas of work, such as logistics. DOD officials told GAO there is no crosswalk between the two. GAO has previously reported that strategic workforce planning includes aligning human capital programs with programmatic goals. Without metrics and due to the differences in the data used, DOD and Congress may have limited insight on the extent to which in-sourcing actions met strategic workforce goals. What GAO Recommends GAO recommends that, for future in-sourcing actions, DOD (1) issue guidance to components on verifying in-sourcing data, and (2) better align in-sourcing data with strategic workforce plans and establish metrics to measure progress against in-sourcing goals. DOD partially concurred with the recommendations, but noted that the challenges identified in GAO’s report are not unique to in-sourcing. GAO agrees, but believes actions are necessary to improve oversight of DOD’s in-sourcing.

gao_GAO-16-390

gao_GAO-16-390_0

Program Continues to Face Affordability Challenges The F-35 program continues to face affordability challenges. At the same time, the number of operational F-35 aircraft that DOD will have to support will be increasing. Initial Development is Nearing Completion and F-35 Program is Addressing Technical Risks The F-35 program is nearing the completion of the developmental test program with about 20 percent of its flight sciences and mission systems testing remaining; however the remaining testing is likely to be challenging as it will require complex missions and stressing environments. Manufacturing and Reliability Progress Continue The F-35 airframe and engine contractors continue to report improved efficiency and supply chain performance, and program data indicates that reliability and maintainability are also improving. This poses risk as the F-35 program plans to significantly increase production rates over the next five years. DOD plans to manage F-35 follow-on modernization, formerly known as follow-on development, as part of the existing program baseline and not as a separate program which we have seen before. In addition, the F-35 program is exploring the potential for using a single contract to purchase multiple lots of future aircraft—known as a block buy approach—which has potential benefits and risks. Although the requirements are not yet final and no official cost estimate has been developed for Block 4, DOD’s fiscal year 2017 budget request indicates that the department expects to spend nearly $3 billion on these development efforts over the next 6 years (see figure 10). Therefore, DOD will not be required to separately account for cost, schedule and performance progress to Congress with regular, formal reports. Best practices recommend an incremental approach in which new development efforts are structured and managed as separate acquisition programs with their own requirements and acquisition program baselines. Without an acquisition program baseline and regular reporting on progress, it will be difficult for Congress to hold DOD accountable for achieving F-35 Block 4 cost, schedule, and performance goals. Matter for Congressional Consideration To enhance program oversight and accountability given that DOD does not plan to modify its acquisition strategy and hold a Milestone B decision review for the F-35 follow-on modernization program, Congress should consider directing the Secretary of Defense to hold a Milestone B review and manage F-35 Block 4 as its own separate and distinct major defense acquisition program with its own acquisition baseline and regular cost, schedule, and performance report to Congress. Recommendations for Executive Action In order to ensure that proper statutory and regulatory oversight mechanisms are in place and to increase transparency into a major new investment in the F-35 program, we recommend that the Secretary of Defense hold a Milestone B review and manage F-35 Block 4 as a separate and distinct Major Defense Acquisition Program with its own acquisition program baseline and regular cost, schedule, and performance reports to the Congress. DOD did not concur with our recommendation to hold a Milestone B review and manage F-35 Block 4 follow-on modernization as a separate and distinct major defense acquisition program. DOD stated that it views Block 4 as a continuation of the existing F-35 acquisition program, which it believes is the department’s most closely managed system. As noted in this report, the Air Force’s F-22 modernization program began in a similar situation. Appendix II: Scope and Methodology To assess the program’s cost and affordability, we reviewed total program funding requirements using the December 2015 Selected Acquisition Report. To assess future modernization and procurement plans, we discussed cost and manufacturing efficiency initiatives, such as the block buy approach, with contractor and program office officials to understand potential cost savings and plans. F-35 Joint Strike Fighter: Problems Completing Software Testing May Hinder Delivery of Expected Warfighting Capabilities. Joint Strike Fighter: DOD Plans to Enter Production before Testing Demonstrates Acceptable Performance.

Why GAO Did This Study With estimated acquisition costs of nearly $400 billion, the F-35 Joint Strike Fighter—also known as the Lightning II —aircraft is DOD's most costly and ambitious acquisition program. Since 2001, GAO has reported extensively on the F-35 program's cost, schedule, and performance problems. The program plans to begin increasing production rates over the next few years. The National Defense Authorization Act for Fiscal Year 2015 contains a provision for GAO to review the F-35 acquisition program. This report assesses program (1) affordability, remaining development, and ongoing manufacturing, and (2) future modernization and procurement plans. GAO analyzed total program funding requirements. GAO analyzed program documentation including management reports, test data and results, and internal DOD program analyses. GAO also collected and analyzed production and supply chain performance data, and interviewed DOD, program, and contractor officials. What GAO Found Although the estimated F-35 Joint Strike Fighter (F-35) program acquisition costs have decreased since 2014, the program continues to face significant affordability challenges. The Department of Defense (DOD) plans to begin increasing production and expects to spend more than $14 billion annually for nearly a decade on procurement of F-35 aircraft. Currently, the program has around 20 percent of development testing remaining, including complex mission systems software testing, which will be challenging. At the same time, the contractors that build the F-35 airframes and engines continue to report improved manufacturing efficiency and supply chain performance. DOD plans to manage F-35 modernization as part of the existing program baseline and is exploring the use of a single contract to procure multiple lots of future aircraft. Both courses of action have oversight implications. DOD has begun planning and funding significant new development work to add to the F-35's capabilities. Known as Block 4, the funding needed for this effort is projected to be nearly $3 billion over the next 6 years (see figure below), which would qualify it as a major defense acquisition program in its own right. DOD does not currently plan to manage Block 4 as a separate program with its own acquisition program baseline but rather as part of the existing baseline. As a result, Block 4 will not be subject to key statutory and regulatory oversight requirements, such as providing Congress with regular, formal reports on program cost and schedule performance. A similar approach was initially followed on the F-22 Raptor modernization program, making it difficult to separate the performance and cost of the modernization from the baseline program. Best practices recommend an incremental approach in which new development efforts are structured and managed as separate acquisition programs with their own requirements and acquisition program baselines. The F-22 eventually adopted this approach. If the Block 4 effort is not established as a separate acquisition program, transparency will be limited. Therefore, it will be difficult for Congress to hold it accountable for achieving its cost, schedule, and performance requirements. What GAO Recommends Congress should consider directing DOD to manage F-35 follow-on modernization, Block 4, as a separate and distinct acquisition program with its own baseline and regular cost, schedule and performance reporting. GAO included this matter for consideration because DOD did not concur with GAO's recommendation to manage Block 4 as a separate acquisition program. GAO continues to believe this recommendation is valid as discussed in this report.

gao_NSIAD-99-8

gao_NSIAD-99-8_0

DOD Prime and Subcontract Awards Performed Outside the United States Although DOD purchases the majority of its defense equipment and services from contractors performing in the United States, it does purchase some from firms performing outside the United States. While subject to annual fluctuations, the value of DOD’s prime contract awards performed outside the United States remained about 5.5 percent of total DOD procurement awards from fiscal year 1987 to 1997 (see fig. Prime contracts performed outside the United States tended to be concentrated in certain countries and products. According to DOD’s DD 2139 data, the value of annual foreign subcontract awards ranged from a high of almost $2 billion in fiscal year 1990 to a low of almost $1.1 billion in fiscal year 1997, averaging about $1.4 billion over this period. Weaknesses Exist in DOD’s Use, Collection, and Management of Foreign Subcontract Data DOD’s Office of Foreign Contracting and DOD industrial base offices both collect and use foreign subcontract data, but they do not exchange their data with one another. In our review of selected subcontracts, we found instances in which foreign subcontracts were not reported to DOD in accordance with the reporting requirement, resulting in the underreporting of foreign subcontract values. Data Collection Does Not Capture Complete Foreign Subcontract Activity DOD has no process or procedures to systematically ensure that contractors are complying with the foreign subcontract reporting requirement. DOD industrial base specialists collect similar information for periodic industrial base assessments but are unaware of the data the Office has collected. In addition, weaknesses in the Office’s data collection process significantly limit DOD’s ability to use consistent data on foreign subcontract-level procurements. Poor database management also undermines the credibility and usefulness of the Office’s foreign subcontract data. We also recommend that the Under Secretary of Defense for Acquisition and Technology direct the Director of the Office of Defense Procurement to develop and implement controls and procedures for periodically verifying compliance with the foreign subcontract reporting requirement and specify how to transmit the information to the Office of Foreign Contracting as a means of improving the completeness and consistency of its data and develop and implement procedures for entering data, verifying critical fields, documenting database programs, and querying the database to improve the Office’s database management practices.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) foreign procurement data, focusing on DOD's: (1) reported trends on contracts performed outside the United States; and (2) use of foreign subcontract information and the completeness and accuracy of how DOD collects and manages its data. What GAO Found GAO noted that: (1) for prime contracts, DOD purchases the majority of its defense equipment and services from contractors operating in the United States; (2) though subject to annual fluctuations, DOD's prime contract awards outside the United States remained about 5.5 percent of total DOD contract awards from fiscal year (FY) 1987 to 1997; (3) over this period, the value of DOD prime contracts performed both in and out of the United States declined; (4) prime contracts performed outside the United States tended to be concentrated in certain countries such as Germany, Italy, Japan, South Korea, and the United Kingdom and in certain sectors such as services, fuel, and construction; (5) at the subcontract level, the value of DOD's reported foreign subcontract awards ranged from almost $2 billion in FY 1990 to almost $1.1 billion in FY 1997, but this data has its limitations; (6) the Office of Foreign Contracting does not consider the data needs of industrial base specialists in its efforts to collect foreign subcontract data; (7) industrial base specialists are often unaware that data of this nature are available; (8) furthermore, weaknesses in the Office of Foreign Contracting's data collection and management processes undermine DOD's ability to use the foreign subcontract data for defense trade and industrial base decision-making; (9) the Office has no mechanism for ensuring that contractors provide required foreign subcontract information, which contributes to the underrepresentation of foreign subcontract activity; (10) GAO's review of selected subcontracts disclosed instances in which foreign subcontracts were not reported to the Office because contractors were unaware of the reporting requirement or misunderstood the criteria for reporting a foreign subcontract; and (11) the Office's poor database management also compromises the credibility and usefulness of its foreign subcontract data.

gao_GAO-07-1002T

gao_GAO-07-1002T_0

Congress Has Established a Statutory Framework to Promote Agency Telework Programs and Increase Employee Participation Through a number of legislative actions, Congress has indicated its desire that agencies create telework programs to accomplish a number of positive outcomes. 106-346 in October 2000, which provides the current mandate for telework in the executive branch of the federal government by requiring each executive agency to establish a policy under which eligible employees may participate in telework to the maximum extent possible without diminishing employee performance. The legislative framework has provided both the General Services Administration (GSA) and OPM with lead roles for the governmentwide telework initiative, to provide services and resources to support and encourage telework, including providing guidance to agencies in developing their program procedures. Although agency telework policies meet common requirements and often share some common characteristics, each agency is responsible for developing its own policy to fit its mission and culture. Better Performance Measures and Program Evaluations Could Improve the Assessment of Telework in the Federal Government In our 2003 study of telework in the federal government, we identified 25 key practices that federal agencies should implement in developing their telework programs. Among those were several practices closely aligned with managing for program results, including: developing a business case for implementing a telework program; establishing measurable telework program goals; establishing processes, procedures, and/or a tracking system to collect data to evaluate the telework program; and identifying problems and/or issues with the telework program and making appropriate adjustments. None of the four agencies we reviewed, however, had effectively implemented this practice. None of the five agencies we looked at had the capability to track who was actually teleworking or how frequently, despite the fact that the fiscal year 2005 consolidated appropriations act covering those agencies required each of them to provide a quarterly report to Congress on the status of its telework program, including the number of federal employees participating in its program. The Telework Enhancement Act of 2007, S. 1000, Addresses Key Telework Issues, but Some Provisions Merit Additional Consideration S. 1000 is intended to enhance the existing legislative framework and provides that all employees of executive agencies are eligible for telework except in some circumstances related to an employee’s duties and functions. The bill further recognizes the importance of leadership in promoting an agency’s telework program by requiring the appointment of a senior-level management official to perform several functions to promote and enhance telework opportunities. The bill would extend coverage of these telework initiatives to the legislative and judicial branches.

Why GAO Did This Study Telework continues to receive attention within Congress and federal agencies as a human capital strategy that offers various flexibilities to both employers and employees, including the capacity to continue operations during emergency events, as well as benefits to society, such as decreased energy use and pollution. This statement highlights some of GAO's prior work on federal telework programs, including key practices for successful implementation of telework initiatives, identified in a 2003 GAO report and a 2005 GAO analysis of telework program definitions and methods in five federal agencies. In addition, the statement discusses GAO observations on the Telework Enhancement Act of 2007, S. 1000. What GAO Found Through a number of legislative actions, Congress has indicated its desire that agencies create telework programs to accomplish a number of positive outcomes. Many of the current federal programs were developed in response to a 2000 law that required each executive branch agency to establish a telework policy under which eligible employees may participate in telecommuting to the maximum extent possible without diminishing employee performance. The legislative framework has provided the OPM and the General Services Administration (GSA) with lead roles for the governmentwide telework initiative, providing services and resources to support and encourage telework. Although agency telework policies meet common requirements and often share characteristics, each agency is responsible for developing its own policy to fit its mission and culture. In a 2003 report, GAO identified a number of key practices that federal agencies should implement in developing their telework programs. Four of these were closely aligned with managing for program results: (1) developing a business case for telework, (2) establishing measurable telework program goals, (3) establishing systems to collect data for telework program evaluation, and (4) identifying problems and making appropriate adjustments. None of the four agencies we reviewed, however, had effectively implemented any of these practices. In a related review of five other agencies in 2005, GAO reported that none of the agencies had the capability to track who was actually teleworking or how frequently, relying mostly on the number of telework agreements as the measure of program participation. S. 1000 is intended to enhance the existing legislative framework and provides that all employees of the executive, judicial, and legislative branches are eligible for telework except in some circumstances related to an employee's duties and functions. The bill also recognizes the importance of leadership in promoting an agency's telework program by requiring the appointment of a senior-level management official to perform several functions to promote and enhance telework opportunities. GAO's statement suggests changes to the assignment of responsibilities for rating and reporting along with changes to make the responsibilities for heads of agency and entities in the legislative and judicial branches more consistent with those of executive branch officials. The statement also points out several provisions of S. 1000 that are not clear in relation to existing legislation.

gao_GAO-06-414

gao_GAO-06-414_0

Health and nonhealth spending from both federal and state sources increased over the decade, a reflection of the strong fiscal partnership between the federal government and states in supporting low-income individuals. Our analysis of state expenditures showed that the spending increases evident since 1995 were substantially supported by both federal and state funds in the health and nonhealth areas in both time periods. Spending Priorities Shifted Away from Cash Assistance The overall increases in spending for nonhealth services in the nine states mask some substantial shifts over the decade in how states spent federal and state funds for low-income people. Second, this expansion in noncash spending was strongest from 1995 to 2000, and spending increased further—but more slowly—from 2000 to 2004. Spending Priorities for Low- Income Programs Changed Significantly from 1995 to 2004 By 2004, the nonhealth portion of state spending (from federal and state sources) for low-income services looked substantially different than it did in 1995. First, many states increased their efforts to engage more welfare families in work or work-related activities in keeping with key TANF program requirements. This shift to noncash assistance was curtailed somewhat from 2000 to 2004, when cash assistance caseloads and related spending increased in several of the states, associated with a contraction of spending for other forms of aid and services, as shown in figure 6. During this period, state officials generally had to make different choices about what services and programs they could support with TANF and MOE funds to ensure they had enough funds to support the core cash assistance program. States are using substantial portions of their block grants and MOE funds as large, flexible funding streams to meet their priorities in many areas of their budgets for low-income families, yet much remains unknown at the national level about how these federal TANF and state MOE funds are used to meet the overall goals of welfare reform. A key challenge is to strike an appropriate balance between flexibility for states and accountability for federal goals. Objectives, Scope, and Methodology In order to provide information on welfare-related spending over the decade since welfare reform, we designed our study to (1) examine changes in the overall level of welfare-related spending for nonhealth and health services in the periods before and after the recession in 2001 and over the decade since 1995, (2) examine changes in spending priorities for nonhealth welfare-related services during the same time periods, and (3) review the contribution of Temporary Assistance to Needy Families (TANF) funds to states’ spending for welfare-related services. For the purposes of this report, we focused on spending for working-age adults and children and excluded spending for the elderly, long-term care, and institutional care. State budget structures differ across states.

Why GAO Did This Study Under the Temporary Assistance for Needy Families (TANF) block grant created as part of the 1996 welfare reforms, states have the authority to make key decisions about how to allocate federal and state funds to assist low-income families. States also make key decisions, through their budget processes, about federal and state funds associated with other programs providing assistance for the low-income population. States' increased flexibility under TANF as well as the budgetary stresses they experienced after a recession draw attention to the fiscal partnership between the federal government and states. To update GAO's previous work, this report examines (1) changes in the overall level of welfare-related spending; (2) changes in spending priorities for welfare-related nonhealth services; and (3) the contribution of TANF funds to states' spending for welfare-related services. GAO reviewed spending in nine states for state fiscal years 1995, 2000, and 2004 and focused on spending for working-age adults and children, excluding the elderly, long-term and institutional care. What GAO Found GAO found that spending for low-income people for health and nonhealth services in nine states generally increased in real terms from 1995 to 2000 and from 2000 to 2004. Health spending, excluding spending for the elderly, outpaced nonhealth spending over the decade and now consumes an even greater share of total spending for low-income people, mirroring a nationwide expansion in health care costs. Spending increases were substantially supported by both federal and state funds in the health and nonhealth areas in each time period, reflecting the important federal-state partnership supporting these low-income programs. Overall, spending increases reflected changes in eligible populations and needs, increasing costs, as well as policy changes. While nonhealth spending increased in real terms, spending priorities shifted away from cash assistance to other forms of aid, particularly work supports, in keeping with welfare reform goals. The largest increases for noncash services occurred from 1995 to 2000, with smaller increases from 2000 to 2004, when some state officials cited challenges in maintaining services. By 2004, states used federal and state TANF funds to support a broad range of services, in contrast to 1995 when spending priorities focused more on cash assistance. However, reporting and oversight mechanisms have not kept pace with the evolving role of TANF funds in state budgets, leaving information gaps at the national level related to numbers served and how states use funds to meet welfare reform goals, hampering oversight. Any efforts to address these gaps should strike an appropriate balance between flexibility for state grantees and accountability for federal funds and goals.

gao_GAO-02-962T

gao_GAO-02-962T_0

Background The SSI program provides eligible aged, blind, or disabled persons with monthly cash payments to meet basic needs for food, clothing, and shelter. In 1998, we reported on a variety of management issues related to the deterrence, detection, and recovery of SSI overpayments. The Foster Care Independence Act of 1999 gave SSA new authority to deter fraudulent or abusive actions, better detect changes in recipient income and financial resources, and improve its ability to recover overpayments. SSA Has Improved Its Ability to Detect Payment Errors SSA has made several automation improvements over the last several years to help field managers and staff control overpayments. Despite its increased emphasis on overpayment detection and deterrence, SSA is not meeting its payment accuracy goals. In fiscal year 2001, SSI benefit payments represented about 6 percent of benefits paid under all SSA-administered programs, but the SSI program accounted for 31 percent of the agency’s administrative expenses. However, a number of key initiatives are still in the early planning or implementation stages, and it is too soon to gauge what effect they will have on SSI collections.

What GAO Found As the nation's largest cash assistance program for the poor, the Supplemental Security Income (SSI) program SSI provided $33 billion in benefits to 6.8 million aged, blind, and disabled persons last year. In 2001, the outstanding SSI debt and newly detected overpayments totaled $4.7 billion. To deter and detect overpayments, the agency obtained legislative authority to use additional tools to verify recipients financial eligibility for benefits, enhanced its processes for monitoring and holding staff accountable for completing assigned SSI workloads, and improved its use of automation to strengthen its overpayment detection capabilities. However, because a number of initiatives are still in the planning or early implementation stages, it is too soon to assess their ultimate impact on SSI payment accuracy. In addition to improving its overpayment deterrence and detection capabilities, SSA has made recovery of overpaid benefits a high priority.

gao_HEHS-98-33

gao_HEHS-98-33_0

Introduction The Social Security program is the foundation of the nation’s retirement income system. Objectives, Scope, and Methodology The Chairman and Ranking Minority Member of the Senate Finance Committee asked us to discuss (1) the various perspectives that underlie the current solvency debate, (2) the reform options within the current structure, and (3) the issues that might arise if Social Security were restructured to include individual accounts. We also discuss the likely effects on national saving of reform proposals that call for more advance funding of Social Security benefits. This view generally leads to a rather different approach to providing retirement income. Rather, the pay-as-you-go financing structure means that current workers pay for the benefits of current retirees and that benefits are promised largely on the basis of the ability of the government to pay them in the future. A Variety of Options Could Restore Program Solvency Within the Existing Program Structure Resolving Social Security’s long-term financing problem within the program’s current structure would require increasing the program’s revenues, decreasing its expenditures, or both. These revenues are returned to the Social Security Trust Funds. Individual Accounts Invested in Stocks and Bonds Would Likely Generate a Better Rate of Return, Albeit at Some Increased Risk Individual account systems generally aim to add to the retirement income provided by Social Security. Level of Social Adequacy Would Need to Be Determined The annuity-welfare concept of social insurance leads to questioning the appropriate role for the government in providing retirement income. If Social Security benefits were reduced, then private employers with integrated plans might experience an increase in their pension costs that could prompt them to redesign their plans. This aspect of the reform debate requires careful scrutiny and additional attention. The Federal Budget Influences National Saving The realization that there will be relatively fewer workers in the future to produce the goods and services to support not only themselves, but also a larger number of retirees, has led many to focus on the potential contribution of Social Security financing reform to long-term economic growth. Retirement programs, such as pensions, are essentially savings for long-term capital formation. Financing Transition Costs Could Reduce Saving Resulting From Advance Funding Individual Accounts While increased advance funding of Social Security by the government could potentially have a positive impact on national saving, the impact would depend in part on what happened in the non-Social Security part of the budget. These unfinanced costs of the current system are the transition costs of moving to a fully funded system. Moving even part of Social Security to individual accounts would raise many questions and challenges. Nonetheless, because such action will affect the nation and its economy for years to come, decisions should be made with full knowledge and debate of the trade-offs inherent in each proposed change.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on issues related to social security financing, focusing on: (1) the various perspectives that underlie the current solvency debate; (2) the reform options within the current program structure; (3) the issues that might arise if social security were restructured to include individual retirement accounts; and (4) the likely impacts on national saving of reform proposals that call for changes in how Social Security benefits are funded. What GAO Found GAO noted that: (1) many options exist for restoring long-term solvency within the current program structure; (2) these possibilities include raising the retirement age, altering the benefit formula, reducing the cost-of-living adjustment, investing Social Security Trust Fund surpluses in the stock market, and mandating participation of workers who are currently excluded; (3) some combinations of these changes could restore program solvency while retaining the program's social insurance features; (4) while these options generally require reducing benefits or raising revenues, their effects on workers and retirees might be mitigated if adjustments were made sooner, not later; (5) proposals for more fundamental program changes have the potential to increase returns overall but would entail increased risk; (6) moving even part of social security to individual accounts would require careful consideration of the issues raised by such a fundamental change; (7) the consequences for the insurance aspects of the current social security system would require close scrutiny if social security were wholly or partly privatized; (8) most of the reform proposals envision substituting advance funding for the largely pay-as-you-go system that exists today; (9) in principle, advance funding of social security benefits could lead to an increase in national saving; (10) increased saving could lead to higher rates of economic growth and better enable future generations to support themselves and future retirees; (11) moving to an advance funded system would entail substantial transition costs that could offset any potential savings for a number of years; (12) over the years, social security has evolved to be more than a retirement program; (13) social security not only provides the floor for an adequate retirement income, it also insures families in the event of the death or disability of the earner and helps provide retirement income security for low-income workers; (14) restoring the system to financial solvency will require fundamental choices about such issues as the strength of guarantees of retirement income to the nation's elderly, levels of insurance for working families, and the role of government in providing retirement income; and (15) because such decisions will affect the nation and its economy for years to come, they should be made with full knowledge and debate of the trade-offs inherent in each proposed change.

gao_GAO-12-672

gao_GAO-12-672_0

To receive Title I funds, states must comply with certain requirements. Key Education Stakeholders and State and School District Officials Cited Many Federal Requirements as Both Burdensome and Beneficial Consistent with Key Education Stakeholders, Officials in Selected States and School Districts Identified 17 Federal Requirements as Most Burdensome Key education stakeholders we interviewed said many federal requirements related to ESEA Title I, IDEA Part B, or national school meals programs were burdensome to states and school districts. Officials characterized 16 of the 17 requirements as being burdensome in multiple ways. For example, officials told us that collecting data for the IDEA Indicators requires a significant amount of time and resources because of the volume of data reported. School district officials told us they also struggle with their responsibilities under these requirements. For example, an official told us that special education service providers on the IEP team often misinterpret questions on the IEP regarding the student’s performance and progress. Despite these challenges, IEPs provide benefits for students with disabilities. Officials described 13 of the 17 requirements as time-intensive. Several of the most burdensome requirements identified are reporting requirements, which state and district officials told us contained duplicative data elements. Also, some officials said they are paperwork-intensive. States and School Districts Generally Do Not Track Their Costs to Comply with Federal Requirements, According to Those We Interviewed According to key stakeholders and state and school district officials we interviewed, states and districts do not generally collect information about the cost to comply with federal requirements. Specifically, state and school district officials we interviewed said they do not collect information about the costs their agencies incur to comply with federal requirements, for a variety of reasons, including: (1) capacity limitations, such as limited staff and heavy workloads; (2) states and the federal government do not require them to report it; (3) it is too burdensome to collect the information; and (4) the information is not useful for improving student achievement or program administration and evaluation (see figure 2). Federal Agencies Are Taking Steps to Reduce Burden, but Potentially Duplicative Reporting Requirements and Statutory Limitations Remain Federal Agencies Developed Plans, Offered Waivers, and Streamlined Other Processes to Reduce Burden on States and School Districts Education and USDA developed plans, known as retrospective analysis plans, to identify and address burdensome regulations, as required by Executive Order 13563. Education’s final plan, issued in August 2011 discussed its efforts to reduce the burden on states and school districts and identified a preliminary list of regulatory provisions for future review, including IDEA reporting requirements, which were mentioned as burdensome by several stakeholders and state and school district officials we interviewed. Education’s Ability to Address the Burden Associated with Some Requirements May Be Limited without Statutory Changes Education may be unable to address certain burdensome requirements in the absence of legislative changes. In these cases, statutory changes would be needed. Recommendations for Executive Action We recommend that the Secretary of Education take additional steps to address duplicative reporting and data collection efforts across major programs such as ESEA Title I and IDEA Part B as well as other efforts, such as the Civil Rights Data Collection. For example, Education could work with stakeholders to better understand and address their concerns and review reporting requirements to identify specific data elements that are duplicative. In addition, we recommend that the Secretary build on these efforts by identifying unnecessarily burdensome statutory requirements and developing legislative proposals to help reduce or eliminate the burden these requirements impose on states and districts. Education generally agreed with our recommendations. Requirements are grouped by program: Elementary and Secondary Education Act (ESEA) Title I, Part A; Individuals with Disabilities Education Act (IDEA) Part B; national school meals programs, including the National School Lunch Program and the School Breakfast Program; and other requirements related to the receipt of federal funds.

Why GAO Did This Study States and school districts receive funding through ESEA, IDEA, and national school meals programs. Some requirements for these programs are intended to help ensure program integrity and transparency, among other purposes, but questions have been raised about whether some federal requirements place an undue burden on states and school districts. GAO was asked to (1) describe federal requirements identified as the most burdensome by selected states and school districts and other stakeholders, (2) describe information states and school districts collect on the cost of complying with those requirements, and (3) assess federal efforts to reduce or eliminate burdensome requirements. We defined burdensome requirements as those that are viewed as complicated or duplicative, among other things. We interviewed officials in 3 states and 12 districts and obtained information on the costs to comply with selected requirements. While the results from these interviews are not generalizable, they provide insights into complying with federal requirements. We interviewed external education stakeholders and officials in the Departments of Education and Agriculture and the Office of Management and Budget. What GAO Found Generally consistent with the views of key stakeholders we interviewed, state and school district officials cited 17 federal requirements as most burdensome for them. These requirements were related to the Elementary and Secondary Education Act (ESEA) Title I, Part A; the Individuals with Disabilities Education Act (IDEA) Part B; national school meals programs; or other requirements related to the receipt of federal funds. Officials described the burdens associated with these requirements as complicated, time-intensive, and duplicative, among other things, and characterized most of the requirements as being burdensome in multiple ways. For example, several officials told us that collecting data for IDEA reporting requirements—such as the number of data elements collected—takes a significant amount of time and resources. State and district officials also noted benefits of some requirements, for example, that the process to create individualized education programs can help protect the rights of students with disabilities. For a variety of reasons, states and school districts generally do not collect information about the costs to comply with federal requirements, according to officials we interviewed. For example, states and district officials told us they are not required to report compliance cost data, the data are not useful to them, and collecting the data would be too burdensome, in their view. Federal agencies have developed plans and are taking other steps to reduce burden, but stakeholders and state and district officials told us about several burdensome requirements that have not been addressed. The Department of Education’s (Education) plan identified regulatory provisions for review including ones that were mentioned as burdensome in interviews we conducted. In addition, Education granted waivers to some states from certain ESEA requirements, such as offering supplemental educational services to eligible students in certain schools identified for improvement. To receive waivers, states had to describe how they will implement key efforts, such as college and career-ready standards. Despite these efforts, stakeholders and state and district officials said there are potentially duplicative reporting requirements that still need to be addressed. Department officials told us that there are relatively few duplicative reporting requirements and the few that exist present only a small burden on states and districts. In addition, Education’s ability to address the burden associated with some requirements, such as some IDEA provisions, may be limited without statutory changes. What GAO Recommends GAO recommends that the Secretary of Education take additional steps to address potentially duplicative reporting requirements, such as working with stakeholders to address their concerns, and develop legislative proposals to reduce unnecessarily burdensome statutory requirements. Education generally agreed with our recommendations.

gao_GAO-12-511T

gao_GAO-12-511T_0

Background SSA administers two of the largest disability programs: the Disability Insurance (DI) program, enacted in 1956, and the Supplemental Security Income (SSI) program, enacted in 1972. At this step, SSA examiners assess the applicant’s medical impairment(s) against the Listings of Impairments, also known as the medical listings, which are organized into 14 major body systems for adults and reflect medical conditions that have been determined by the agency to be severe enough to qualify an applicant for benefits. Since the 1990s, we, along with SSA’s Office of Inspector General and the Social Security Advisory Board, have expressed concerns that the medical listings being used no longer provide sufficient criteria to evaluate disability applicants’ inability to work and that SSA was simply extending the listings instead of periodically updating them. With respect to information on jobs in the national economy that supports SSA’s occupational criteria, we and others have reported that the DOT, which SSA still relies on to assess eligibility at steps 4 and 5 of the process, is outdated. The DOT has not been updated since 1991, and Labor has since replaced the DOT with a new database called the Occupational Information Network (O*NET).determined that O*NET is not sufficiently detailed for evaluating DI and SSI disability claims and therefore has begun developing its own OIS in order to better reflect the physical and mental demands of work in the national economy. Under this system, SSA first completes a comprehensive listings update for a body system that reviews all the diseases and disorders listed within that system and makes revisions it determines are needed. For subsequent updates of listings for a body system that underwent a comprehensive revision, SSA will pursue a more targeted approach—that is, SSA will conduct ongoing reviews with the expectation of making targeted revisions for a small number of medical diseases or disorders that need to be updated. Agency officials told us that targeted updates should be completed more quickly than comprehensive updates, allowing them to focus on the most critical changes needed. Another change, according to agency officials, is that in 2010 the SSA Commissioner set a 5-year cycle time for updating listings for each body system. Previously, SSA set expiration dates for periodically updating listings according to each body system, ranging from 3 to 8 years, but frequently extended them. For example, SSA contracted with the Institute of Medicine to study its medical criteria for determining disability and to make recommendations for improving the timeliness and accuracy of its disability decisions, resulting in a 2007 report with recommendations and a symposium of experts in 2010. SSA has addressed some of the institute’s recommendations, such as making better use of its administrative data to update criteria and creating a standing committee through the institute to provide recommendations for listings revisions. SSA Has Experienced Delays with Its Revision Process SSA continues to face delays in completing both comprehensive and other ongoing updates. For example, as of early March 2012, SSA officials told us they still needed to complete comprehensive revisions for listings of six body systems that have been ongoing for the last 19 to 33 years, after numerous extensions beyond the original expiration periods (see table 1). SSA Has Begun an Ambitious Project to Develop Its Own Source of Occupational Information SSA is in the Preliminary Stage of Developing a New Up-to-Date Source of Occupational Information In 2008, SSA began a multiyear project to develop a new source of occupational information that will replace the outdated information currently being used to determine if claimants are able to do their past work or any other work in the national economy. SSA also plans to develop a strategy for piloting data collection nationwide within this time frame. SSA Has Made Progress on Its OIS, but It Is Too Soon to Know if Project Timelines Will be Met As of February 2012, SSA had made progress on many of the baseline activities outlined in its research and development plan for the OIS. While SSA has made progress on several key activities, agency officials delayed 2011 completion dates for certain activities and anticipate making additional changes to its timeline as a result of not meeting its staffing goals for fiscal year 2011. As part of our ongoing work, we are assessing SSA’s current OIS project schedule and cost estimates against best practices, and have preliminarily identified some gaps in SSA’s approach. However, while SSA has estimated the cost to research and develop the OIS, the estimate does not project the future costs to implement or maintain the system.

Why GAO Did This Study SSA administers two of the largest disability programs, with annual benefit payments that have grown fivefold over the last 20 yearsfrom $35 billion in 1990 to over $164 billion in 2010and the agency receives millions of new applications annually. GAO has designated federal disability programs as a high-risk area, in part because eligibility criteria have not been updated to reflect medical and technological advances and labor market changes. Given the size and cost of its disability programs, SSA needs updated criteria to appropriately determine who qualifies for benefits. In this statement, GAO discusses initial observations from its ongoing review and assessment of SSAs efforts to (1) update its medical criteria and (2) develop a new occupational information system. To do this, GAO reviewed prior GAO and SSA Inspector General reports; relevant federal laws and regulations; program documentation including policies, procedures, strategic goals, and supporting project plans; and cost estimates. GAO also interviewed SSA officials, project stakeholders, experts, and representatives from other agencies that administer disability programs. This work is ongoing and GAO has no recommendations at this time. GAO plans to issue its final report later in 2012. What GAO Found The Social Security Administration (SSA) has made several changes to improve the process it uses for updating its medical criteria, but continues to face challenges ensuring timely updates. SSA’s medical criteria for adults are in the form of listings of medical conditions and impairments organized under 14 body systems, which SSA periodically updates. To help ensure timely, periodic updates of a body system’s listings, SSA is moving away from comprehensively revising a body system’s listings toward a more targeted approach, wherein SSA selects for revision those impairment listings most in need of change. To date, SSA has completed comprehensive revisions of listings for 8 of the 14 body systems and now is in the process of reviewing them to determine whether and which targeted revisions are appropriate. In 2010, the SSA Commissioner set a 5-year cycle time for updating listings for each body system, replacing the agency’s prior practice of setting expiration dates for listings that ranged from 3 to 8 years and then frequently extending them. To further increase the timeliness and accuracy of decisions, SSA has sought recommendations from the Institute of Medicine and has acted on some of them, such as creating a standing committee to provide advice on updating the listings. However, SSA continues to face challenges keeping its listings up to date. For example, SSA is still working on completing comprehensive revisions of listings for six body systems that have been ongoing for 19 to 33 years. SSA staff told us that a lack of staff and expertise, along with the complexity and unpredictability of the regulatory process, have made it challenging to maintain its schedule of periodic updates for all listings. SSA has embarked on an ambitious plan to produce by 2016 an occupational inventory database to support its disability benefit decisions, but it is too soon to determine if SSA will meet key time frames. SSA currently relies on an occupational information source developed by the Department of Labor that was updated for the last time in 1991 and is viewed by many as outdated. In 2008, SSA initiated a project to develop its own occupational information system (OIS), which SSA expects will provide up-to-date information on the physical and mental demands of work, and in sufficient detail to support its disability benefit decisions. To guide the creation of its OIS, SSA established an advisory panel, collaborated with outside experts and other agencies, and in July 2011 issued a research and development plan detailing all relevant activities and goals between 2010 and 2016. As of February 2012, SSA had completed many initial research efforts, including investigating other types of occupational information systems and identifying job analysis methods. Despite preliminary progress, it is too early to determine if SSA will meet its target implementation date. SSA officials told us that due to staffing shortages it did not meet all initial goals on time and may need to adjust its time frames for future activities. While GAO is still evaluating SSA’s schedule and cost estimates against best practices, we have preliminarily identified some potential gaps in SSA’s approach, such as not reflecting the costs to both implement and maintain a new OIS.

gao_NSIAD-96-88

gao_NSIAD-96-88_0

The Secretary cannot delegate the waiver authority below the level of an Assistant Secretary of Defense or of a military department. Objectives, Scope, and Methodology Our objectives were to determine whether the warranties being obtained for weapon systems provide the expected benefits to the government, and to assess whether the use of warranties, as required by law, is compatible with the acquisition of weapon systems. The report stated that “a failure to conduct cost-benefit analyses and to process waivers where cost-effective guarantees are not obtainable would defeat the legislative intent of congressional warranty initiatives.” The majority of program officials we interviewed said that they do not consider waivers a viable option because of (1) the high placement of the waiver approval authority required by the warranty law (2) the potential for negative attention being focused on the program by these high level officials, and (3) the administrative burden of processing a waiver request. Applicable regulations (DFARS 246.770-7) require that a cost-benefit analysis be conducted and documented in the contract file to determine if the warranty is cost-effective. However, because DOD is usually the only buyer for a weapon system, the contractor cannot allocate the cost of insuring against that risk among multiple buyers. A warranty extends beyond acceptance the period during which the government can identify defects and require the contractor to correct them at no charge. Conclusions While warranties may have value to a consumer in the commercial world, obtaining a warranty for a weapon system may be a flawed concept because (1) the government does not need the insurance coverage provided by a warranty and cannot share the expense of the warranty with other customers; (2) warranties are an expensive way to assure the quality of a weapon system; (3) DOD’s quality assurance activities, should provide much greater assurance of compliance with contract specifications than does a warranty; and (4) warranties may not cause contractors to improve the quality of the weapon systems’ they produce. Although DOD currently has insight into warranty costs, we found that this information is often not used in the cost-benefit analyses.

Why GAO Did This Study GAO reviewed the Department of Defense's (DOD) use of major weapon system warranties, focusing on whether these warranties: (1) provide expected benefits to the government; and (2) are compatible with the weapon systems acquisition process. What GAO Found GAO found that: (1) DOD receives about $1 in direct benefit for every $19 paid to a contractor for a warranty; (2) DOD program officials rarely seek to waive the warranty requirement because waivers require the approval of an Assistant Secretary of Defense and congressional defense authorization and appropriations committees; (3) despite DOD regulations that require a cost-benefit analysis to determine if the warranty is cost-effective, some cost-benefit analyses are inadequate; (4) the military services are not conducting post-award assessments to determine whether warranty costs are commensurate with the benefits received and to identify advantageous and disadvantageous warranty provisions for future contracts; (5) the government has traditionally self-insured because its large resources make protection against catastrophic loss unnecessary, and it is often the sole buyer for a product and cannot share the insurance costs with other buyers; (6) because a contractor cannot allocate the cost of insuring against the risk of failure among multiple buyers, DOD ends up bearing the entire estimated cost; (7) DOD officials said that warranties do not motivate contractors to improve the quality of their products; and (8) warranties only extend the period that DOD can determine that a product does not conform to contract specifications and requirements and require the contractor to make repairs.

gao_GAO-12-723T

gao_GAO-12-723T_0

However, as the agency’s systems have aged, SSA has faced challenges in carrying out its increasing workload. SSA Has Undertaken Numerous Modernization Efforts but Lacks Effective Tools for Measuring Progress Since 2001, SSA has reported spending more than $5 billion on the development, modernization, and enhancement of its IT systems and capabilities. SSA officials identified 120 initiatives undertaken from 2001 to 2011 that the agency considered to be key investments in modernization. These comprise a subset of the hundreds of projects and modernization activities SSA undertakes yearly, which vary greatly in level of effort, scope, and cost. These initiatives affected all of the agency’s main program areas: According to managers within SSA’s Office of Disability Systems, in an effort to reduce backlogs of disability hearings, the agency implemented a process for creating electronic “folders” for each applicant, to replace the existing paper-based process. This initiative included capabilities for electronically viewing an applicant’s folder, electronic screening for faster disability determinations, and Internet access to information on disability hearings and determinations. The Office of Retirement and Survivors Insurance Systems took steps to improve outdated legacy systems and respond to legislation or other mandates requiring new system functionality. These efforts included integrating stand-alone “post-entitlement” processes, facilitating online application for benefits, and conversion of a key database to a more modern, industry-standard one. Managers from the Office of Applications and Supplemental Security Income described initiatives to modernize large legacy databases and facilitate data sharing to streamline the claims process. These included enhancements to the electronic death registration process and the development of a Web application enabling access to data from multiple systems. SSA officials described initiatives in the area of electronically exchanging data with external partners, including states and private- sector partners such as banks and credit bureaus. SSA also noted efforts to streamline the process for administering Social Security cards, such as introducing safeguards against counterfeiting and replacing its legacy printers. These efforts involve completing the conversion of the agency’s legacy Master Data Access Method database system (used to support the storage and retrieval of SSA’s major program master files) to a modern, industry-standard database system; transitioning from its legacy system for processing retirement and survivors’ claims to a single, unified system that integrates initial and post-entitlement actions; streamlining operations and reducing duplication in disability databases and transitioning from multiple and fragmented applications to a single, unified case processing system; enhancing and refreshing telecommunications equipment and ongoing improvement of connectivity and bandwidth for data, voice, and video communications; and supporting enhancements to SSA’s Medicare initiatives, including changes required by the Patient Protection and Affordable Care Act, which are intended to improve the process for verifying the name, Social Security number, and other data on Medicare earnings reports. Modernization Approach Is Not Guided by Key Practices Comprehensive strategic planning is essential for successfully carrying out large-scale efforts such as SSA’s IT modernizations. Key elements of such planning include developing an IT strategic plan and an enterprise architecture that, together, outline modernization goals, measures, and timelines. An IT strategic plan serves as an agency’s vision and helps align its information resources with its business strategies and investment decisions. As such, it provides a high-level perspective of the agency’s goals and objectives, enabling the agency to prioritize how it allocates resources; proactively respond to changes; and communicate its vision and goals to management, oversight bodies, and external parties. The enterprise architecture helps to implement the strategic vision by providing a focused “blueprint” of the organization’s business processes and technology that supports them. It includes descriptions of how the organization operates today, how it intends to operate in the future, and a plan for transitioning to the target state. It further helps coordinate the concurrent development of IT systems to limit unnecessary duplication and increase the likelihood that these systems will inter-operate. SSA developed an IT strategic plan in 2007 to guide its modernization efforts; however, the plan is outdated and may not be aligned with the agency’s overall strategic plan. Specifically, because it has not been updated since 2007, the plan contains elements that are no longer relevant to SSA’s ongoing modernization efforts. CIO Realignment Allows for Effective Oversight and Management but Was Implemented without Adequate Planning or Updated Guidance As mentioned earlier, in 2011, SSA realigned the functions of its Office of the CIO, consolidating major responsibilities for the management and oversight of IT in its Office of Systems. Federal law, specifically the Clinger-Cohen Act of 1996, requires the heads of executive branch agencies to designate a CIO with key responsibilities for managing an agency’s IT resources. As we have previously reported, to carry out these responsibilities effectively, CIOs require sufficient control over IT investments, including control over the IT budget and workforce. Under the realignment, key responsibilities of the CIO and Deputy Commissioner for Systems were merged into the Office of Systems. Specifically, this arrangement gave the Office for Systems responsibility for, among other things, oversight and management of IT budget formulation; systems acquisition, development, and integration; the IT capital planning and investment control process; workforce planning and allocation of resources to IT projects; IT operations.

Why GAO Did This Study This hearing is on the Social Security Administration’s (SSA) efforts to modernize its information technology (IT) systems and environment. As you know, SSA is responsible for delivering services that touch the lives of virtually every American, and the agency relies heavily on IT to do so. Its computerized information systems support a range of activities, from the processing of Disability Insurance and Supplemental Security Income payments to the calculation and withholding of Medicare premiums, and the issuance of Social Security numbers and cards. Last fiscal year, the agency spent nearly $1.6 billion on IT. As SSA’s systems have aged and its workload has increased, the agency has committed to investing in the capacity and modern technologies needed to update its strained IT infrastructure. In addition, the agency has recently undertaken a realignment of its IT governance structure, including the responsibilities of its Chief Information Officer (CIO). At your request, over the past year, we have been examining SSA’s modernization efforts. The specific objectives of our study were to (1) determine SSA’s progress in modernizing its IT systems and capabilities; (2) evaluate the effectiveness of SSA’s plans and strategy for modernizing its systems and capabilities; and (3) assess whether the realignment of the agency’s CIO responsibilities allows for effective oversight and management of the systems modernization efforts. What GAO Found Since 2001, SSA has reported spending more than $5 billion on the development, modernization, and enhancement of its IT systems and capabilities. SSA officials identified 120 initiatives undertaken from 2001 to 2011 that the agency considered to be key investments in modernization. These comprise a subset of the hundreds of projects and modernization activities SSA undertakes yearly, which vary greatly in level of effort, scope, and cost. These initiatives affected all of the agency’s main program areas: According to managers within SSA’s Office of Disability Systems, in an effort to reduce backlogs of disability hearings, the agency implemented a process for creating electronic “folders” for each applicant, to replace the existing paper-based process. This initiative included capabilities for electronically viewing an applicant’s folder, electronic screening for faster disability determinations, and Internet access to information on disability hearings and determinations. The Office of Retirement and Survivors Insurance Systems took steps to improve outdated legacy systems and respond to legislation or other mandates requiring new system functionality. These efforts included integrating stand-alone “post-entitlement” processes, facilitating online application for benefits, and conversion of a key database to a more modern, industry-standard one. Managers from the Office of Applications and Supplemental Security Income described initiatives to modernize large legacy databases and facilitate data sharing to streamline the claims process. These included enhancements to the electronic death registration process and the development of a Web application enabling access to data from multiple systems. SSA officials described initiatives in the area of electronically exchanging data with external partners, including states and private-sector partners such as banks and credit bureaus. SSA also noted efforts to streamline the process for administering Social Security cards, such as introducing safeguards against counterfeiting and replacing its legacy printers. Comprehensive strategic planning is essential for successfully carrying out large-scale efforts such as SSA’s IT modernizations. Key elements of such planning include developing an IT strategic plan and an enterprise architecture that, together, outline modernization goals, measures, and timelines. An IT strategic plan serves as an agency’s vision and helps align its information resources with its business strategies and investment decisions. As such, it provides a high-level perspective of the agency’s goals and objectives, enabling the agency to prioritize how it allocates resources; proactively respond to changes; and communicate its vision and goals to management, oversight bodies, and external parties. The enterprise architecture helps to implement the strategic vision by providing a focused “blueprint” of the organization’s business processes and technology that supports them. It includes descriptions of how the organization operates today, how it intends to operate in the future, and a plan for transitioning to the target state. It further helps coordinate the concurrent development of IT systems to limit unnecessary duplication and increase the likelihood that these systems will inter-operate. SSA developed an IT strategic plan in 2007 to guide its modernization efforts; however, the plan is outdated and may not be aligned with the agency’s overall strategic plan. Specifically, because it has not been updated since 2007, the plan contains elements that are no longer relevant to SSA’s ongoing modernization efforts. As mentioned earlier, in 2011, SSA realigned the functions of its Office of the CIO, consolidating major responsibilities for the management and oversight of IT in its Office of Systems. Federal law, specifically the Clinger-Cohen Act of 1996, requires the heads of executive branch agencies to designate a CIO with key responsibilities for managing an agency’s IT resources. As we have previously reported, to carry out these responsibilities effectively, CIOs require sufficient control over IT investments, including control over the IT budget and workforce. Under the realignment, key responsibilities of the CIO and Deputy Commissioner for Systems were merged into the Office of Systems. Specifically, this arrangement gave the Office for Systems responsibility for, among other things, oversight and management of IT budget formulation; systems acquisition, development, and integration; the IT capital planning and investment control process; workforce planning and allocation of resources to IT projects; IT strategic planning; enterprise architecture; IT security; and IT operations.

gao_GAO-17-35

gao_GAO-17-35_0

USAID and State Have Obligated 58 Percent and Disbursed More than One- Third of Their Appropriated Funding for Ebola Response and Preparedness Activities As of July 1, 2016, USAID and State had obligated a total of almost $1.5 billion (58 percent) and disbursed $875 million (35 percent) of the $2.5 billion appropriated for Ebola response and preparedness activities (see fig. 5). USAID and State used different appropriation accounts to fund Ebola activities. In addition, USAID has not developed written policies or procedures to guide staff on appropriate steps to take for the reimbursement process. Twenty-One of USAID’s 271 Reimbursements Were Not Made In Accordance with the Provisions of the Act Of 271 reimbursements that USAID made for obligations incurred prior to the enactment of the Act, USAID made 21 reimbursements (totaling over $60 million) that were not in accordance with the Act. These 21 reimbursements represent roughly 15 percent of the approximately $401 million that USAID obligated for reimbursements, of the almost $1.5 billion that had been obligated as of July 1, 2016. Because USAID did not have the legal authority to make the reimbursements that were not in accordance with the reimbursement provisions in the Act, these 21 reimbursements represent unauthorized transfers. Conclusions West Africa has experienced the largest and most complex Ebola outbreak since the virus was first discovered, resulting in more than 11,000 deaths. USAID and State have funded a range of activities to control the outbreak and will continue to fund longer-term efforts to mitigate the second-order effects and strengthen global health security. In particular, USAID did not in all cases reimburse the same appropriation accounts from which it obligated funds as required by the Act, and in several instances it made reimbursements for obligations for which it did not document that it incurred the obligation to prevent, prepare for, and respond to the Ebola outbreak. 2. To help ensure that USAID complies with reimbursement provisions that may arise in future appropriations laws, we recommend that the Administrator of USAID develop written policies and procedures for the agency’s reimbursement process. We examined (1) USAID’s and State’s obligations and disbursements for Ebola activities and (2) the extent to which USAID made reimbursements in accordance with the requirements of the fiscal year 2015 appropriations act. We interviewed USAID and State officials in Washington, D.C., from each bureau and office that administers funding from accounts of the fiscal year 2015 appropriation to discuss the status of the agencies’ obligations and disbursements for activities to prevent, prepare for, and respond to the Ebola outbreak in West Africa, methods for reporting the funding data, and plans for obligating and disbursing the funds. Appendix V: USAID’s Reimbursements for Funds Obligated Prior to Enactment of the Fiscal Year 2015 Appropriations Act The U.S. Agency for International Development (USAID) made 271 reimbursements for the approximately $401 million total obligations that USAID’s Bureau for Global Health; Office of Food for Peace (FFP); Office of U.S. Foreign Disaster Assistance (OFDA); and the missions in Guinea, Liberia, and Senegal incurred prior to the enactment of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2015 (the Act).

Why GAO Did This Study In March 2014, the World Health Organization reported an Ebola outbreak in West Africa and, as of June 2016, reported that the outbreak had resulted in more than 11,000 deaths in Guinea, Liberia, and Sierra Leone. USAID and State initially funded Ebola activities using funds already appropriated. In December 2014, Congress appropriated approximately $2.5 billion to USAID and State, in part, for international efforts to prevent, prepare for, and respond to an Ebola outbreak and mandated that the agencies report periodically on their use of the funds. Congress also allowed the agencies to reimburse accounts for obligations incurred for Ebola activities prior to the fiscal year 2015 appropriation. The Act also included a provision for GAO to conduct oversight of USAID and State activities to prevent, prepare for, and respond to the Ebola outbreak. This report examines (1) USAID's and State's obligations and disbursements for Ebola activities and (2) the extent to which USAID made reimbursements in accordance with the fiscal year 2015 appropriations act. GAO analyzed USAID and State funding, reviewed documents on Ebola activities, and interviewed agency officials. What GAO Found As of July 1, 2016, the U.S. Agency for International Development (USAID) and the Department of State (State) had obligated 58 percent and disbursed more than one-third of the $2.5 billion appropriated for Ebola activities. In the early stages of the U.S. response in West Africa, USAID obligated $883 million to control the outbreak, and State obligated $34 million for medical evacuations, among other activities. Subsequently, the United States shifted focus to mitigating second-order impacts, such as the deterioration of health services and food insecurity, and strengthening global health security. Accordingly, USAID obligated $251 million to restore health services, among other activities, and $183 million for activities such as strengthening disease surveillance, while State obligated $5 million for biosecurity activities. Of 271 reimbursements that USAID made for obligations incurred prior to the enactment of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2015 (the Act), USAID made 21 reimbursements, totaling over $60 million, that were not in accordance with the Act. These 21 reimbursements represent roughly 15 percent of the $401 million that USAID obligated for reimbursements, of the almost $1.5 billion that had been obligated as of July 1, 2016 (see fig.). For these 21 reimbursements, USAID did not reimburse the same appropriation accounts as the accounts from which it originally obligated the funds, and therefore it did not have legal authority to make these reimbursements. In addition, four reimbursements were for obligations that USAID did not document were for Ebola activities. In reviewing the reimbursements, GAO found that USAID does not have written policies or procedures for staff to follow in making and documenting reimbursements. As a result, USAID does not have a process that could provide reasonable assurance that it complies with reimbursement provisions of applicable appropriations laws, such as the reimbursement provisions in the Act. What GAO Recommends GAO is making four recommendations, including that USAID should reverse reimbursements not made in accordance with the Act and develop written policies and procedures for its reimbursement process. USAID concurred with GAO's recommendations.

gao_GAO-16-545

gao_GAO-16-545_0

In carrying out its mission, IRS annually collects over $2 trillion in taxes from millions of individual taxpayers and numerous other types of taxpayers and manages the distribution of over $300 billion in refunds. IRS allocated $91.7 million to RRP for fiscal year 2016. Specifically, IRS has developed eight priority groups for operations, such as the delivering essential tax administration and taxpayer services group, and identified eight priority projects for modernization, including CADE 2 and RRP, to help reach IRS’s future state vision. In addition, IRS has developed a structured process for allocating funding to its operations support activities which is consistent with best practices. However, IRS has not fully documented this process. In addition, IRS does not have a similar structured process for prioritizing funding among its modernization activities, stating it does not have such a process because there are fewer competing activities than for operations support. A documented process for both operations support and modernization activities that is consistent with best practices would provide transparency into the process and provide greater assurance it is consistently applied. IRS officials stated this is because it is relatively new and not yet stabilized. Performance Varied for Selected Investments Of the six selected investments in our review, two development investments—FATCA and RRP—performed under cost, with varying schedule performance, and delivered most of the scope that was planned; however, performance information for these investments could be improved by implementing best practices for determining actual work performed. However, neither investment reported information on planned versus actual delivery of scope, in accordance with best practices. Specifically, IRS uses a level of effort method beyond the amount generally accepted by best practices to determine the amount of work completed by its own staff. CADE 2 and ACA: For the CADE 2 projects that were completed during fiscal year 2015 and the first quarter of fiscal year 2016, IRS reported that CADE 2 performed on time and $1.7 million under planned cost. Recommendations for Executive Action To help IRS improve its process for determining IT funding priorities and to provide timely information on the progress of its investments, we recommend that the Commissioner of IRS direct the Chief Technology Officer to take the following four actions: document IRS’s process for selecting and prioritizing operations establish, document, and implement policies and procedures for selecting new and reselecting ongoing business systems modernization activities, consistent with IRS’s process for prioritizing operations support priorities, which addresses (1) prioritization and comparison of IT assets against each other, (2) criteria for making selection and prioritization decisions, and (3) ensuring IRS executives’ final funding decisions on IT proposals are based on IRS’s prioritization process; modify existing processes for FATCA and RRP for measuring work performed by IRS staff to incorporate best practices, including accounting for actual work performed and using the level of effort measure sparingly; and report on actual costs and scope delivery at least quarterly for CADE 2 and ACA. In its written comments, reproduced in appendix III, IRS agreed with two recommendations, did not agree nor disagree with one, and disagreed with one. Accordingly, we maintain our recommendation is still warranted. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) describe the Internal Revenue Service’s (IRS) current information technology (IT) investment priorities and assess IRS’s process for determining these priorities, and (2) determine IRS’s progress in implementing key IT investments. For our second objective, we analyzed the performance of four key development investments—Customer Account Data Engine 2 (CADE 2), Return Review Program (RRP), Foreign Account Tax Compliance Act (FATCA), and the Affordable Care Act Administration (ACA). Further, we analyzed two key operational investments —Telecommunications Systems and Support (TSS) and Mainframes and Servers Services and Support (MSSS).

Why GAO Did This Study IRS relies extensively on IT systems to annually collect more than $2 trillion in taxes, distribute more than $300 billion in refunds, and carry out its mission of providing service to America's taxpayers in meeting their tax obligations. For fiscal year 2016, IRS planned to spend approximately $2.7 billion for IT investments. Given the size and significance of these expenditures, it is important that Congress be provided information on agency funding priorities, the process for determining these priorities, and progress in completing key IT investments. Accordingly, GAO's objectives were to (1) describe IRS's current IT investment priorities and assess IRS's process for determining these priorities, and (2) determine IRS's progress in implementing key IT investments. To do so, GAO analyzed IRS's process for determining its fiscal year 2016 funding priorities, interviewed program officials, and analyzed performance information for six selected investments for fiscal year 2015 and the first quarter of 2016. What GAO Found The Internal Revenue Service (IRS) has developed information technology (IT) investment priorities for fiscal year 2016, which support two types of activities—operations and modernization. For example, it has developed priority groups for operations such as: (1) critical business operations, infrastructure operations, and maintenance; and (2) delivery of essential tax administration/taxpayer services. It has identified priorities for modernization, such as web applications, to help reach IRS's future state vision. However, while IRS has developed a structured process for allocating funding to its operations activities consistent with best practices, it has not fully documented this process. IRS officials stated this is because the process is relatively new and not yet stabilized. In addition, IRS does not have a structured process for its modernization activities, because, according to officials, there are fewer competing activities than for operations activities. Fully documenting a process for both operations support and modernization activities that is consistent with best practices would provide transparency and greater assurance it is consistently applied. Of the six investments GAO reviewed, two investments—Foreign Account Tax Compliance Act and Return Review Program—provided complete and timely performance information for GAO's analyses. These investments performed under cost, with varying schedule performance, and delivered most planned scope (see table). However, IRS did not always use best practices for determining scope delivered. Specifically, IRS used a method inconsistent with best practices for determining the amount of work completed by its own staff. Two other investments reported completing portions of their work on time and $1.7 million under planned costs (for the Customer Account Data Engine 2), and on time and $10.3 million under planned costs (for Affordable Care Act Administration). However, neither investment reported information on planned versus actual delivery of scope in accordance with best practices. The remaining two investments—Mainframes and Servers Services and Support and Telecommunications Systems and Support—generally met performance goals. What GAO Recommends GAO is recommending that IRS develop and document its processes for prioritizing IT funding and improve the calculation and reporting of investment performance information. IRS agreed with two recommendations regarding its prioritization processes, disagreed with one related to the calculation of performance information, and did not comment on one recommendation. GAO maintains all of the recommendations are warranted.

gao_AIMD-96-88

gao_AIMD-96-88_0

As you requested, our statement today will cover three areas (1) IRS’ efforts to correct management and technical weaknesses that have impeded its Tax Systems Modernization (TSM) program as well as whether IRS can successfully complete the program within the time frames and cost figures it has established; (2) IRS efforts to collect delinquent tax debts and deal with its accounts receivable problems; and (3) the viability of return-free filing as an option to the current tax filing system. IRS has continued with plans to spend billions more on TSM solutions with little confidence of successfully delivering effective systems within established TSM time frames and cost figures. At that time, we considered IRS’ response to be a commitment to correct its management and technical weaknesses. Further, IRS is in the process of rethinking and rescoping many of its modernization and operational initiatives that would affect accounts receivable and collections. Several staffing-related projects have been affected by IRS’ actions taken in response to its reduced appropriations for fiscal year 1996. Although IRS is attempting to address some of the problems, their underlying causes remain and continue to hinder the potential for significant improvement.

Why GAO Did This Study Pursuant to a congressional request, GAO discussed the Internal Revenue Service's (IRS) Tax Systems Modernization (TSM) Plan, focusing on: (1) IRS efforts to correct TSM management and technical weaknesses within an established time frame and cost figure; (2) IRS plans to collect delinquent taxes and correct accounts receivable discrepancies; and (3) the viability of return-free filing. What GAO Found GAO noted that: (1) IRS has attempted to address its management and technical weaknesses, but its initiatives do not satisfy previous recommendations or provide assurance that the problems will be timely corrected; (2) IRS continues to spend billions of dollars on TSM solutions, but it has little confidence in its ability to deliver an effective system within the established TSM time frame and cost figure; (3) IRS is rethinking its modernization and operational initiatives related to accounts receivable and delinquent taxes, but it projects a 13-percent decrease in collections for fiscal year 1996; and (4) return-free filing is a viable option if taxpayers continue to provide information regarding their tax status and number of dependents, and employers are legally authorized to compute tax liabilities under final withholding.

gao_GAO-06-748T

gao_GAO-06-748T_0

DOD’s Office of the Under Secretary of Defense for Intelligence has overall responsibility for DOD clearances, and its responsibilities also extend beyond DOD. Long-standing delays in completing hundreds of thousands of clearance requests for servicemembers, federal employees, and industry personnel as well as numerous impediments that hinder DOD’s ability to accurately estimate and eliminate its clearance backlog led us to declare the program a high-risk area in January 2005. Among other things, the executive order resulted in the Office of Management and Budget (OMB) taking a lead role in preparing a strategic plan to improve personnel security clearance processes governmentwide. First, I will provide a status update and preliminary observations from our ongoing audit on the timeliness and completeness of the processes used to determine whether industry personnel are eligible to hold a top secret clearance—an audit that this Subcommittee requested. Communication problems may be limiting governmentwide efforts to improve the personnel security clearance process. In addition, OPM is still in the process of developing a foreign presence to investigate leads overseas. Some DOD adjudication facilities have stopped accepting closed pending cases—investigations forwarded to adjudicators even though some required information is not included—from OPM. Expiration of Executive Order Could Slow Improvements in Clearance Processes The July 1, 2006, expiration of Executive Order 13381 could slow improvements in personnel security clearance processes governmentwide as well as for DOD in particular. We have been encouraged by the high level of commitment that OMB demonstrated in the development of a plan to improve the personnel security clearance process governmentwide. Because there has been no indication that the executive order will be extended, we are concerned about whether such progress will continue without OMB’s high-level management involvement. While OPM has provided some leadership in assisting OMB with the development of the governmentwide plan, OPM may not be in a position to assume additional high-level commitment for a variety of reasons if OMB does not continue in its current role. These reasons include: (1) the governmentwide plan lists many management challenges facing OPM and the Associate Director of its investigations unit, such as establishing a presence to conduct overseas investigations and adjusting its investigative workforce to the increasing demand for clearances; (2) adjudication of personnel security clearances and determination of which organizational positions require such clearances is not an OPM responsibility; and (3) agencies’ disputes with OPM—such as the current billing dispute with DOD—may need a high-level, impartial third party to mediate a resolution. Unexpected Volume of Clearance Requests and Funding Constraints Delay Security Clearances for Industry Personnel Further DOD stopped processing applications for clearances for industry personnel on April 28, 2006. DOD attributed its actions to an overwhelming volume of requests for industry personnel security investigations and funding constraints. DOD’s inability to accurately project clearance requirements makes it difficult to determine clearance-related budgets and staffing. For example, in response to our May 2004 recommendation to improve the projection of clearance requests for industry personnel, DOD indicated that it is developing a plan and computer software to have the government’s contracting officers (1) authorize the number of industry personnel clearance investigations required to perform the classified work on a given contract and (2) link the clearance investigations to the contract number. The dispute stems from the February 2005 transfer of DOD’s personnel security investigations function to OPM. Information from DOD and OPM indicates that OMB subsequently directed the two agencies to continue to work together to resolve the matter on their own. Questions for the Record Related to DOD’s Personnel Security Clearance Program and the Government Plan for Improving the Clearance Process.

Why GAO Did This Study The Department of Defense (DOD) is responsible for about 2 million active personnel security clearances. About one-third of the clearances are for industry personnel working on contracts for DOD and more than 20 other executive agencies. Delays in determining eligibility for a clearance can heighten the risk that classified information will be disclosed to unauthorized sources and increase contract costs and problems attracting and retaining qualified personnel. Long-standing delays in completing hundreds of thousands of clearance requests and numerous impediments that hinder DOD's ability to accurately estimate and eliminate its clearance backlog led GAO to declare DOD's personnel security clearance program a high-risk area in January 2005. This testimony presents GAO's (1) preliminary observations from its ongoing review of the timeliness and completeness of clearances, (2) concerns about the upcoming expiration of an executive order that has resulted in high level commitment to improving the governmentwide clearance process, and (3) views on factors underlying DOD's decision to stop accepting clearance requests for industry personnel. What GAO Found GAO's ongoing review of the timeliness and completeness of security clearance processes for industry personnel has provided three preliminary observations. First, communication problems between DOD and the Office of Personnel Management (OPM) may be limiting governmentwide efforts to improve the personnel security clearance process. Second, OPM faces performance problems due to the inexperience of its domestic investigative workforce, and it is still in the process of developing a foreign presence to investigate leads overseas. Third, some DOD adjudication facilities have stopped accepting closed pending cases--that is, investigations formerly forwarded to DOD adjudicators from OPM--even though some required investigative information was not included. In addition, the expiration of Executive Order 13381 could slow improvements in the security clearance processes governmentwide, as well as for DOD in particular. The executive order, which among other things delegated responsibility for improving the clearance process to the Office of Management and Budget (OMB), is set to expire on July 1, 2006. GAO has been encouraged by the high level of commitment that OMB has demonstrated in the development of a plan to address clearance-related problems. Because there has been no indication that the executive order will be extended, GAO is concerned about whether the progress that has resulted from OMB's high-level management involvement will continue. Issues such as OPM's need to establish an overseas presence are discussed as potential reasons why OPM may not be in a position to assume an additional high-level commitment if OMB does not continue in its current role. Finally, inaccurate projections of clearance requests and funding constraints are delaying the processing of security clearance requests for industry personnel. DOD stopped processing new applications for clearance investigations for industry personnel on April 28, 2006. DOD attributed its actions, in part, to an overwhelming volume of requests for industry personnel security investigations. DOD's long-standing inability to accurately project its security clearance workload makes it difficult to determine clearance-related budgets and staffing requirements. The funding constraints that also underlie the stoppage are related to the transfer of DOD's personnel security investigations functions to OPM. DOD has questioned some of the costs being charged by OPM and has asked OMB to mediate the DOD-OPM dispute. Information from the two agencies indicates that OMB has directed the agencies to continue to work together to resolve the matter. According to officials in the DOD and OPM inspector general offices, they are investigating the billing dispute and expect to report on the results of their investigations this summer.

gao_GGD-98-106

gao_GGD-98-106_0

The intent of section 6039E was that IRS would use this information to identify nonfilers residing abroad. However, the data we obtained on the U.S. population residing abroad—from State Department and foreign government estimates—and the number of returns they filed are too uncertain to support such estimates. Estimating revenue impact would require reliable information concerning the number of U.S. citizens residing abroad, the number who would be required to file tax returns, the extent of nonfiling, and the amount of tax nonfilers would owe if they were to file. In general, IRS has found much higher rates of noncompliance among individuals not covered by these systems. Factors Limiting IRS’ Enforcement of the Filing Requirement or Otherwise Contributing to Nonfiling Abroad IRS’ enforcement of the filing requirement abroad is impeded by the limited reach of U.S. law in foreign countries. Also, IRS’ filing instructions for individuals may lead some U.S. citizens residing abroad to erroneously conclude that they do not need to file tax returns. Limited Information Reporting and Tax Withholding on U.S. Citizens Abroad Information reporting and tax withholding from employers and other income providers are the key tools available to IRS for identifying nonfilers and reducing the resulting lost revenue, but they have limited applicability to U.S. citizens residing abroad who are employed by foreign companies or derive investment income from foreign sources. As a result, IRS generally cannot collect unpaid taxes from assets that have been transferred to a foreign country, except for the five countries that have entered into mutual collection assistance agreements as part of tax treaties with the United States—Canada, France, Denmark, Sweden, and the Netherlands. Passport application forms include a statement noting that an SSN must be provided if the applicant has received one, subject to a $500 penalty. Whether it could do so is unclear. IRS’ Recent Initiatives to Address Nonfiling Abroad IRS has initiated some actions in recent years to improve filing compliance abroad, but has not yet developed global information on the prevalence or impact of the problem or the countries where the problem may be particularly severe. In particular, IRS initiated a multiyear compliance project in 1991 aimed at U.S. citizens working in the Middle East. IRS believes that the project resulted in the recovery of a substantial amount of tax revenue, and is now attempting to gather foreign census and other demographic data that might reveal other concentrations of nonfilers abroad with tax liabilities. The seminars were focused on companies employing a large number of U.S. citizens, which IRS identified through the financial news media and information obtained from the Department of State, the Department of Labor, and other sources. Early in fiscal year 1997, IRS began a project to identify countries or regions where additional compliance projects similar to the Mideast project might be warranted. The Treasury study cited several factors beyond IRS’ control as inhibiting its efforts to improve compliance levels in the U.S. population abroad. Recommendations To obtain better data on the filing compliance of the U.S. population residing abroad and to promote their understanding of their filing requirements, the Commissioner of Internal Revenue should ensure that assesses the usefulness of country of residence and occupation data, in addition to data IRS currently receives from passport applicants, as a means of identifying potential nonfilers abroad and supplementing IRS’ other sources of demographic data on U.S. citizens abroad.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the tax compliance of U.S. citizens residing in foreign countries, focusing on: (1) whether it is possible, given available data, to estimate the prevalence and revenue impact of nonfiling among U.S. citizens residing abroad; (2) factors that may limit the Internal Revenue Service's (IRS) enforcement of the filing requirement or otherwise contribute to nonfiling abroad; (3) IRS' recent initiatives to improve the filing compliance in this population; and (4) the Department of the Treasury's study on the income tax compliance of U.S. taxpayers residing abroad. What GAO Found GAO noted that: (1) IRS has not estimated the overall prevalence of nonfiling abroad or the resulting loss of tax revenue, and the data GAO identified in its review were inadequate to support reliable quantified estimates; (2) data on the number of U.S. taxpayers residing abroad and the number of returns they file are of uncertain reliability, and the amount of taxes that nonfilers would owe if they were to file is unknown; (3) one recent IRS initiative, however, focused on certain Mideast countries and identified enough nonfilers and additional tax revenue that IRS believes there may be benefits to looking for concentrations of nonfilers in other foreign countries; (4) GAO was able to identify several factors that may limit IRS' enforcement of the filing requirement or otherwise contribute to nonfiling abroad; (5) some of these factors are beyond IRS' control; (6) the income of U.S. citizens residing abroad is generally not subject to U.S. tax withholding or information reporting if it is derived from foreign employers or foreign financial investments; (7) IRS data show that tax withholding and information reporting by employers or other income providers resulted in much higher rates of tax compliance than when neither system is in place; (8) IRS generally cannot collect unpaid taxes from assets that have been transferred to a foreign country; (9) the enforcement actions that IRS uses in the United States have no legal standing in most foreign countries; (10) although IRS obtains passport data from the Department of State, it has made little use of these data; and in recent years, IRS has not attempted to penalize the large number of applicants who fail to furnish a social security number (SSN), as the law provides; (11) IRS has no systematic way of capturing a passport applicant's country of residence and occupation, which could provide demographic data on foreign concentrations of U.S. citizens and help IRS distinguish them from tourists; (12) the instructions for filing form 1040 are potentially misleading and may cause some taxpayers residing abroad to erroneously conclude that they have no obligation to file; (13) IRS' recent initiatives concerning nonfiling abroad include a special project in the Middle East that was initiated as a result of events related to the Desert Storm War and a data-gathering effort to identify other potential concentrations of nonfilers residing abroad; and (14) in fiscal year 1997, IRS began to gather foreign census and other demographic information on U.S. citizens residing abroad to identify other countries where similar compliance efforts may be beneficial.

gao_GAO-03-182

gao_GAO-03-182_0

Background Most of the diseases treated by stem cell transplantation involve abnormalities of the blood, metabolic, or immune systems. Bone Marrow and Other Sources of Stem Cells for Transplantation Although bone marrow was initially the only source of stem cells for transplantation, in recent years two other sources of stem cells, umbilical cord blood and peripheral blood stem cells (PBSC), have also been used. A donor, matched to a patient, may be asked to donate either bone marrow or PBSC, depending on the preference of the patient’s physician. These other registries, however, are relatively small; often specialize in donors from particular racial or ethnic groups; and are private, with no national requirements. National Registry May Be Underutilized Although the exact number of patients in need of transplants from unrelated donors is not known, the number of patients utilizing the Registry to search for matches is about one-third of the estimated number of patients in need of unrelated donor transplants. This suggests that the Registry may be underutilized, as many more U.S. patients may need unrelated donor transplants than obtain them through the Registry. The results of the selected site visits, analysis of CPI measures, and incident report summaries we reviewed show that the organizations in the NMDP network generally adhere to NMDP’s standards and procedures. In 2001, NMDP required 24 donor and transplant centers to take corrective actions because they did not meet its standards.

What GAO Found More than 30,000 people are diagnosed annually with leukemia or other blood, metabolic, or immune system disorders, many of whom may die without stem cell transplants, using stem cells from bone marrow or another source. When a patient needs a transplant of donated stem cells and no genetically compatible related donor is available, the National Bone Marrow Donor Registry may help the patient search for compatible stem cells from unrelated donors. The National Bone Marrow Registry Reauthorization Act of 1998 required, among other things, that the Registry carry out a donor recruitment program giving priority to minority and underrepresented donor populations, ensure efficiency of operations, and verify compliance with standards by organizations that participate in the Registry. From 1998, when the National Bone Marrow Registry Reauthorization Act was enacted, through 2001, the number of stem cell donors on the Registry increased for all racial and ethnic groups. Although the exact number of patients in need of transplants is not known, estimates suggest that about one-third of them use the Registry to search for donors. The organizations that are involved in transplantation and participate in the National Marrow Donor Program (NMDP) network generally adhere to NMDP's standards and procedures. In 2001, NMDP required 24 centers to take corrective actions because they did not meet its standards.

gao_GAO-15-563

gao_GAO-15-563_0

However, our analysis of Treasury’s bond data showed that the drop in bond purchases after the elimination of paper savings bonds was not statistically significant. To open a TreasuryDirect account, a customer generally must have both Internet access and a bank account. According to representatives from a nonprofit organization that focuses on savings for lower-income households, mobile access is the primary means of Internet access for some lower-income consumers. Decline in Purchases after the Elimination of Paper Savings Bonds Is Consistent with Long-Term Trends, and Treasury Is Addressing Access and Usability Challenges Our analyses of Treasury savings bond data indicated that the decline in savings bond purchases after Treasury discontinued the sale of paper savings bonds in January 2012 was consistent with the overall long-term decline in savings bond purchases. For example, about 55,000 tax filers with adjusted gross incomes of $25,000 or less participated in the program for tax years 2010 through 2013 and bought about $13.7 million in savings bonds. Tax Time Savings Bond Program Promotes Savings through the Purchase of Paper Savings Bonds, Including by Lower-Income Households Since 2010, U.S. tax filers have been able to use their tax refund to purchase paper savings bonds through the Tax Time Savings Bond program. As shown in table 1, in tax years 2010 through 2013 about 142,000 total tax filers used the Tax Time program to buy a total of about $72.5 million in paper savings bonds. In prior work on agency stewardship of public funds, we reported that properly estimating program costs is necessary for several reasons and that comparing these costs to the program’s benefits to evaluate alternatives related to program decisions is a best practice. As discussed, Treasury has previously considered levels of program participation and amounts of savings bonds purchased by participants in its decisions, and most recently has extended the program until a suitable electronic alternative is available. Savings by Lower- Income Households Are Limited but Federal Agencies and Other Entities Have Created Savings Programs GAO found that lower-income households save relatively small amounts and face a number of savings challenges that result, in part, from limited access to financial institutions and products. In addition to their financial literacy efforts, some federal agencies have developed savings programs involving financial assets. According to a Treasury official, Treasury launched the myRA program, which is in a soft-launch phase, to promote retirement savings among individuals without access to employer-sponsored retirement plans.According to Treasury, the program offers a retirement savings account that is a Roth IRA, so it follows the same rules that apply generally to Roth IRAs and receives the same tax treatment.no minimum-amount requirement, a maximum balance of $15,000, and it can be funded through payroll direct deposit. U.S. savings bonds continue to provide Americans, including those with lower- incomes, with an affordable, safe, and convenient way to save and invest. Treasury has taken steps to develop a more flexible and responsive Internet-based system than TreasuryDirect, but the TRIM system is in the early stages of development. However, the TRIM system still will require Internet access by computer or mobile device, and Tax Time program users who lack Internet access may not be able to save by buying savings bonds at tax time if the program is discontinued. How the benefits and costs of the Tax Time program would compare when Treasury implements TRIM is not known—in part because Treasury generally has considered the program’s benefits but not the program’s costs. Without considering both, Treasury cannot make a fully informed decision on whether to discontinue the Tax Time program when an electronic alternative is available. Recommendation for Executive Action To help ensure that Treasury can make a fully informed decision on whether to discontinue the Tax Time Savings Bond program as it implements the TRIM system, GAO recommends that the Secretary of the Treasury consider the benefits and costs of the Tax Time program in future decisions on whether to extend the program. Appendix I: Objectives, Scope, and Methodology Our review examines (1) the effect of Treasury’s elimination of paper U.S. savings bonds, including on the savings bond program and bond purchases; (2) the extent to which Treasury’s Tax Time Savings Bond program has promoted savings, particularly by lower-income households, and Treasury’s plans for the program’s future; and (3) the extent to which lower-income households are saving using financial products, and some of the government and nonprofit programs developed to promote savings by lower-income households. Third, we used aggregated data provided by the Internal Revenue Service (IRS) on income tax filers who used at least part of their tax refunds to buy paper savings bonds from 2010 through 2013 to analyze the number of tax filers who bought paper savings bonds, including those with adjusted gross incomes of $25,000 or below—the lowest income category reported in the data—and the amount of savings bonds they purchased. We also reviewed select state, local, and nonprofit programs targeting lower-income households.

Why GAO Did This Study U.S. savings bonds provide Americans with an affordable way to save. In 2012, Treasury stopped selling paper savings bonds at banks as part of its broader electronic initiative. As a result, savings bonds generally must be purchased through TreasuryDirect®. The one exception is the Tax Time Savings Bond program, established in 2010 to enable taxpayers to use their tax refund to buy paper savings bonds. The program is one way for lower-income families to save. You requested that GAO examine Treasury's savings bond program, including the accessibility of TreasuryDirect, and other savings programs. This report examines (1) the effect of Treasury's elimination of paper U.S. savings bonds on the program and bond purchases, (2) the extent to which the Tax Time Savings Bond program has promoted savings by lower-income households and Treasury's future plans for the program, and (3) the extent to which lower-income households are saving and programs developed by federal agencies and others. GAO reviewed agency rules and other documents; analyzed Treasury, Internal Revenue Service, and other data, in part using economic models; and interviewed federal, state, and nonprofit entities and experts involved in savings programs. What GAO Found The Department of the Treasury's (Treasury) elimination of paper savings bonds made buying bonds more difficult for some customers, but GAO's analyses generally indicated that the decline in bond purchases after the change was not statistically significant. Treasury eliminated paper savings bonds in January 2012, after a long-term decline in savings bond purchases. It estimated the change would save about $70 million in program costs from 2012 through 2016. Except for the Tax Time Savings Bond program, customers who want to buy savings bonds must use TreasuryDirect—an online system that requires users to have Internet access and a bank account. Customers without both, which likely includes lower-income households, face challenges accessing TreasuryDirect. Treasury is in the early stages of developing a new system, the Treasury Retail Investment Manager (TRIM), to make it easier to buy savings bonds, such as by using a mobile device, which often is the primary means of accessing the Internet for many lower-income households. A little more than one-third of the users of Treasury's Tax Time Savings Bond program—the only way to purchase paper bonds—were lower-income tax filers (filers with an adjusted gross income of $25,000 or less), but the program's future is uncertain. Since 2010, tax filers have been able to use a tax form to buy paper savings bonds with their tax refund. For tax years 2010 through 2013, about 142,000 tax filers (less than 1 percent of tax filers receiving refunds) used at least part of their tax refund to buy nearly $72.5 million in savings bonds. Of these filers, about 55,000 had incomes of $25,000 or less and bought about $13.7 million in savings bonds, or about $250, on average, per filer each year. Treasury has been extending the program partly because the amount of bonds purchased and participation levels indicate that the program is providing benefits, but it generally has not considered the program's costs. In May 2015, Treasury officials told GAO that they plan to continue to extend the program until TRIM can provide a suitable electronic alternative. Because TRIM will require Internet access by computer or mobile device, Tax Time program users without such access may no longer be able to save by buying bonds with their refunds after TRIM is implemented. In prior work on agency stewardship of public funds, GAO reported that agencies, as a best practice, should consider both benefits and costs in considering alternatives related to program decisions. Without considering both, Treasury cannot make a fully informed decision on whether to discontinue the Tax Time program when an electronic alternative is available. On the basis of GAO's analysis of data from the most recent Survey of Consumer Finances conducted in 2013, the median value of financial assets held by the bottom fifth of income earners (whose median annual income was $14,200) was $550. Given the limited savings of lower-income households and savings challenges faced by such households, a number of federal agencies have developed programs to promote savings. For example, Treasury's my RA®, which is in a soft-launch phase, promotes retirement savings for individuals without access to employer-sponsored retirement plans. State, local, and nonprofit agencies also have initiated programs that promote savings for retirement, child development, or emergencies and generally target lower-income households. Eligibility requirements and participation vary by program. What GAO Recommends GAO recommends that as Treasury implements the TRIM system, it consider the benefits and costs of the Tax Time program in future decisions on whether to extend the program. Treasury agreed with GAO's recommendation.

gao_GAO-08-531T

gao_GAO-08-531T_0

To carry out these responsibilities, the Coast Guard operates a number of vessels and aircraft and, through its Deepwater Program, is currently modernizing or replacing those assets. At the start of Deepwater, the Coast Guard chose to use a system-of-systems acquisition strategy that would replace its assets with a single, integrated package of aircraft, vessels, and communications systems through Integrated Coast Guard Systems (ICGS), a system integrator that was responsible for designing, constructing, deploying, supporting and integrating the assets to meet Coast Guard requirements. In a series of reports since 2001, we have noted the risks inherent in the systems integrator approach and have made a number of recommendations intended to improve the Coast Guard’s management and oversight. Coast Guard Is Taking Steps To Increase Management Of The Deepwater Program Over the past year, the Coast Guard’s Deepwater Program has been in the midst of a major shift, from heavy reliance on a system integrator to greater government control and a greater government role in decision- making. The Coast Guard has made a number of significant program decisions and taken actions, including: an increase in the Coast Guard’s management role through a reorganization of its acquisition directorate; a restructured approach to the review and approval of individual planned improvements to the use and quality of information on program performance, and initiatives to develop a workforce with the requisite acquisition and program management skills. Maintaining momentum will be important in improving the Deepwater Program; we will continue to evaluate the Coast Guard’s progress in all of these areas as part of our ongoing work. At this time, the Coast Guard has completed reports on ten Deepwater assets. Coast Guard Continues to Face Challenges in Balancing Its Homeland Security and Non-Homeland Security Missions The new and modernized assets the Coast Guard expects to acquire under the Deepwater Program are intended to be used to help meet a wide range of missions. After the September 11, 2001, terrorist attacks, the Coast Guard’s priorities and focus had to shift suddenly and dramatically toward protecting the nation’s vast and sprawling network of ports and waterways. Although we have previously reported that the Coast Guard is restoring activity levels for many of its non-homeland security missions, the Coast Guard continues to face challenges in balancing its resources between the homeland and non-homeland security missions. In addition to the growing demands for homeland security missions, there are indications that the Coast Guard’s requirements are also increasing for selected non-homeland security missions. The additional requirements found in the SAFE Port Act have added to the resource challenges already faced by the Coast Guard, some of which are described below: Inspecting domestic maritime facilities: Pursuant to Coast Guard guidance, the Coast Guard has conducted annual inspections of domestic maritime facilities to ensure that they are in compliance with their security plans. Appendix I: Deepwater In 2005, the Coast Guard revised its Deepwater acquisition program baseline to reflect updated cost, schedule, and performance measures. Other assets, such as the National Security Cutter and Maritime Patrol Aircraft, are in production.

Why GAO Did This Study The Deepwater Program is intended to replace or modernize 15 major classes of Coast Guard assets--including vessels, aircraft, and communications systems. At the program's start, the Coast Guard chose to use a system integrator, Integrated Coast Guard Systems, to design, build, deploy, and support Deepwater in a system-of-systems approach. In a series of reports, we have noted the risks inherent in this approach. With the Deepwater program under way, the Coast Guard's priorities and focus shifted after September 11 toward homeland security missions, such as protecting the nation's ports and waterways. The 2002 Maritime Transportation Security Act and the 2006 SAFE Port Act required a wide range of security improvements. GAO is monitoring the acquisition of Deepwater and the Coast Guard's ability to carry out its numerous missions. This testimony addresses: (1) changes the Coast Guard is making as it assumes a larger role in managing the Deepwater Program and (2) challenges the Coast Guard is facing in carrying out its various missions. To conduct this work, GAO reviewed key documents, such as Deepwater acquisition program baselines, human capital plans, and Coast Guard budget and performance documents. For information on which GAO has not previously reported, GAO obtained Coast Guard views. The Coast Guard generally concurred with the information. What GAO Found With a recognition that too much control had been ceded to the system integrator under the Deepwater Program, the Coast Guard began this past year to shift the way it is managing the acquisition. Significant changes pertain to: (1) increasing government management of the program as part of the Coast Guard's reorganized Acquisition Directorate; (2) acquiring Deepwater assets individually as opposed to through a system-of-systems approach; (3) improving information to analyze and evaluate progress; and (4) developing an acquisition workforce with the requisite contracting and program management skills. Many of these initiatives are just getting under way and, while they are positive steps, the extent of their impact remains to be seen. The Coast Guard will likely continue to face challenges balancing its various missions within its resources for both the short and long term. For several years, we have noted that the Coast Guard has had difficulties fully funding and executing both homeland security missions and its non-homeland security missions. GAO's recent and ongoing work has shown that the Coast Guard's requirements continue to increase in such homeland security areas as providing vessel escorts, conducting security patrols of critical infrastructure, and completing inspections of maritime facilities here and abroad. In several cases, the Coast Guard has not been able to keep up with these security demands, in that it is not meeting its own requirements for vessel escorts and other security activities at some ports. In addition, there are indications that the Coast Guard's requirements are also increasing for selected non-homeland security missions. Since 2001, we have reviewed the Deepwater Program and have informed Congress, the Department of Homeland Security, and the Coast Guard of the risks and uncertainties inherent with such a large acquisition. In March 2004, we made a series of recommendations to the Coast Guard. The Coast Guard has taken actions on many of them. Three recommendations remain open, as the actions have not yet been sufficient to allow us to close them. In past work on Coast Guard missions, GAO made recommendations related to strategic plans, human capital, performance measures, and program operations.

gao_GAO-06-494

gao_GAO-06-494_0

The Army Has Referred Debts of Nearly 1,300 Battle- Injured Soldiers for Collection, and the Number May Be Greater Our analysis of Army and DFAS data through the end of fiscal year 2005 identified nearly 1,300 separated battle-injured soldiers and soldiers who were killed in combat who had military debts totaling $1.5 million that were reported to DFAS for debt collection action. Of the nearly 1,300 soldiers, almost 900 separated battle-injured soldiers had debts totaling about $1.2 million and about 400 soldiers who died in combat had debts totaling over $300,000. As a policy, DFAS does not pursue collection of debts of fallen soldiers. Debt-related experiences of 19 separated battle- injured soldiers who contacted us included the following. Sixteen soldiers had their military debts reported to credit bureaus, 9 soldiers had debts turned over to private collection agencies, and 8 soldiers had their income tax refunds withheld under TOP. Sixteen could not pay their basic household expenses. Four soldiers were unable to obtain loans to purchase a home, meet other needs, or obtain VA educational benefits due to service-related debt on their credit reports. Table 4 illustrates examples of the effects of debt collection actions on selected separated Army battle-injured soldiers and their families based on our case studies. Opportunities Exist for Congress to Legislate a More Soldier-Friendly Process for Collecting GWOT Debts As a result of concern regarding the indebtedness of soldiers resulting from pay-related problems during deployments, Congress on occasion has provided authority to the Secretary of Defense to cancel such debts. In addition, unlike waivers, soldiers who paid debts are not eligible for refunds under the remission statute. Because of a restriction in the current law, injured Army GWOT soldiers who separated from the service at different times have been treated differently, which raises questions of equity. Because the current debt relief authority expires on December 31, 2007, injured soldiers and their families who have GWOT-incurred military debts could face the prospect of bad credit reports, visits by collection agencies, and offsets of their tax refunds if the authority is not available throughout the OIF/OEF deployment and a reasonable period after the deployment ends. Appendix II: Objectives, Scope, and Methodology The purpose of our audit was to determine the (1) extent to which Army soldiers serving in the Global War on Terrorism (GWOT) who were injured or killed by hostile fire and were released from active duty are having debts referred to credit bureaus and collection agencies and (2) the impact of Department of Defense (DOD) debt collection action on these soldiers and their families. You also asked us to discuss ways that Congress could make the process for collecting out-of-service debts more soldier friendly. We were contacted by 19 separated battle-injured Army GWOT soldiers.

Why GAO Did This Study As part of the Committee on Government Reform's continuing focus on pay and financial issues affecting Army soldiers deployed in the Global War on Terrorism (GWOT), the requesters were concerned that battle-injured soldiers were not only battling the broken military pay system, but faced blemishes on their credit reports and pursuit by collection agencies from referrals of their Army debts. GAO was asked to determine (1) the extent of debt of separated battle-injured soldiers and deceased Army soldiers who served in the GWOT, (2) the impact of DOD debt collection action on separated battle-injured and deceased soldiers and their families, and (3) ways that Congress could make the process for collecting these debts more soldier friendly. What GAO Found Pay problems rooted in the complex, cumbersome processes used to pay Army soldiers from their initial mobilization through active duty deployment to demobilization have generated military debts. As of September 30, 2005, nearly 1,300 separated Army GWOT soldiers who were injured or killed during combat in Iraq and Afghanistan had incurred over $1.5 million in military debt, including almost 900 battle-injured soldiers with debts of $1.2 million and about 400 soldiers who died in combat with debts of $300,000. As a policy, DOD does not pursue collection of debts of soldiers who were killed in combat. However, hundreds of battle-injured soldiers experienced collection action on their debts. The extent of these debts may be greater due to incomplete reporting. GAO's case studies of 19 battle-injured soldiers showed that collection action on military debts resulted in significant hardships to these soldiers and their families. For example, 16 of the 19 soldiers were unable to pay their basic household expenses; 4 soldiers were unable to obtain loans to purchase a car or house or meet other needs; and 8 soldiers' debts were offset against their income tax refunds. In addition, 16 of the 19 case study soldiers had their debts reported to credit bureaus and 9 soldiers were contacted by private collection agencies. Due to concerns about soldier indebtedness resulting from pay-related problems during deployments, Congress recently gave the Service Secretaries authority to cancel some GWOT soldier debts. Because of restrictions in the law, debts of injured soldiers who separated at different times can be treated differently. For example, soldiers who separated more than 1 year ago are not eligible for debt relief and soldiers who paid their debts are not eligible for refunds. Further, because this authority expires in December 2007, injured soldiers and their families could face bad credit reports, visits from collection agents, and tax refund offsets in the future.

gao_NSIAD-98-161

gao_NSIAD-98-161_0

Section 277 of the same act required DOD to develop a 5-year plan to consolidate and restructure its laboratories and test and evaluation centers. DOD’s Acquisition Workforce Is Smaller, but Potential Savings Are Difficult to Track and May Be Offset Our analysis of data obtained from the Defense Manpower Data Center (DMDC) indicates that DOD is still on schedule to achieve acquisition workforce reductions of 25 percent by the end of fiscal year 2000. In addition, some of the potential savings DOD anticipates it will achieve through these reductions may be offset by other costs. Potential Savings From Personnel Reductions Cannot Be Precisely Tracked in DOD’s Budget DOD’s civilian acquisition workforce comprises nearly 40 percent of DOD’s overall civilian workforce and is paid primarily through operations and maintenance (O&M) and RDT&E funding. For example, potential savings from acquisition workforce reductions may be offset in part by contracting with private entities for some services previously performed by government personnel (i.e., substituting one workforce for another). In response to congressional direction, DOD has developed a new way to define its acquisition workforce that it believes (1) more accurately reflects the numbers of personnel performing acquisition functions throughout the agency and (2) has the potential to directly link the management of acquisition personnel to DOD’s overall manpower and budgeting systems and processes. Under this approach, various segments of that workforce have been exempted. For example, it could (1) improve significantly, DOD’s ability to effectively manage the acquisition workforce in budgeting and planning for training and (2) allow DOD to more directly identify and track the impacts of changes in the acquisition workforce, such as reductions and potential savings. In a review of a major Air Force laboratory reorganization, however, we found that DOD’s efforts focused more on management efficiencies than actual infrastructure reductions. Conclusions DOD has reduced its acquisition workforce and associated costs.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) acquisition workforce reductions, focusing on: (1) DOD's progress in reducing its workforce in acquisition organizations by 25 percent; (2) the potential savings associated with these personnel reductions; (3) the status of DOD efforts to redefine its acquisition workforce; and (4) DOD's efforts to consolidate and restructure acquisition organizations. What GAO Found GAO noted that: (1) DOD has been reducing its acquisition workforce at a faster rate than its overall workforce and is on schedule to accomplish a 25-percent reduction by the end of fiscal year 2000; (2) however, potential savings from these reductions cannot be precisely tracked in DOD's budget; (3) in addition, some of the potential savings from acquisition workforce reductions may be offset by other anticipated costs; (4) such costs include those for contracting with private entities for some services previously performed by government personnel; (5) DOD developed a new definition for the acquisition workforce and is using it to identify individuals who perform acquisition functions throughout the Department; (6) DOD is also exploring a process by which it can, for the first time, link management of the acquisition workforce to DOD's overall manpower and budget processes; (7) although far from assured, success in this arena could allow better planning and budgeting for workforce training and tracking changes in the workforce; (8) GAO recently reported that DOD's efforts to streamline and consolidate the research, development, test, and evaluation segment of its acquisition organizations have not resulted in significant infrastructure reductions; and (9) GAO's further analysis of the results of one Air Force effort confirmed GAO's earlier conclusions that such initiatives have been unable to overcome numerous obstacles, which often impede them.

gao_GAO-14-436T

gao_GAO-14-436T_0

The President’s Management Agenda Covers Many Areas Highlighted by GAO as Needing Attention A number of areas on the President’s Management Agenda are consistent with issues highlighted by our work on the High Risk Program, our annual reports on fragmentation, overlap, and duplication, and other work related to long-standing management challenges. Examples of where the President’s Management Agenda and our work are consistent include: Using information technology (IT) to better manage for results. Addressing improper payments. Expanding strategic sourcing. OMB has efforts underway to address this recommendation. Strengthening strategic human capital management. The President’s Management Agenda is consistent with our findings and recommendations on improving the Department of Defense’s (DOD) acquisition of weapon systems and services, issues that have been on GAO’s High Risk List since the 1990s. DOD has made some progress in this area. Effective Implementation Is Essential to Successfully Addressing Issues on the Management Agenda Lasting success in addressing the difficult and longstanding issues on the President’s Management Agenda will hinge on effective implementation, including sustained top leadership attention. GAO and OMB have agreed to hold a series of meetings on the issues on GAO’s High Risk List. The purposes of these meetings are to discuss progress achieved and specifically focus on actions that are needed to fully address high-risk issues and ultimately remove them from the list. For example, the executive branch has taken a number of steps to implement key provisions of GPRAMA. The Office of Management and Budget (OMB) has developed cross-agency priority goals, and agencies developed agency priority goals. Agency officials reported that their agencies have assigned performance management leadership roles and responsibilities to officials who generally participate in performance management activities, including quarterly performance reviews for agency priority goals. Further, OMB developed Performance.gov, a government-wide website, which provides quarterly updates on cross-agency priority goals and agency priority goals. Developing a Comprehensive Inventory of Federal Programs Executive branch efforts to address crosscutting issues are hampered by the lack of a comprehensive list of programs—a key requirement of the act. OMB began implementing this provision by directing 24 large federal agencies to develop and publish inventories of their programs in May 2013. Enhancing the Use of Collaborative Mechanisms Collaboration across agencies, levels of government, or sectors is fundamental to addressing many high-risk issues and reducing fragmentation, overlap, and duplication. Effective implementation could help identify and address fragmentation, overlap, and duplication issues because as part of the strategic reviews, agencies are to identify the various organizations, programs, regulations, tax expenditures, policies, and other activities that contribute to each objective both within and outside the agency. Improving the Government’s Capacity to Gather and Use Better Performance Information Our annual reports on fragmentation, overlap and duplication have also highlighted several instances in which executive branch agencies do not collect necessary performance data. Three major impediments prevented us from rendering an opinion on the federal government’s accrual-based consolidated financial statements: serious financial management problems at DOD that have prevented its financial statements from being auditable — about 33 percent of the federal government’s reported total assets as of September 30, 2013, and approximately 16 percent of the federal government’s reported net cost for fiscal year 2013 relate to DOD, which received a disclaimer of opinion on its consolidated financial statements, the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal entities, and the federal government’s ineffective process for preparing the consolidated financial statements. In addition to financial management and widespread fragmentation, overlap, and duplication issues, the federal government must address pressing challenges with its cybersecurity. We have reported that (1) cyber threats to systems supporting government operations and critical infrastructure were evolving and growing, (2) cyber incidents affecting computer systems and networks continue to rise, and (3) the federal government continues to face challenges in a number of key aspects of its approach to cybersecurity, including those related to protecting the nation’s critical infrastructure.

Why GAO Did This Study The federal government is one of the world's largest and most diverse entities, with about $3.5 trillion in outlays in fiscal year 2013, funding an extensive array of programs and operations. Moreover, it faces a number of significant fiscal, management, and governance challenges in responding to the varied and increasingly complex issues it seeks to address. This statement focuses on (1) GAO's work related to the President's Management Agenda, and (2) additional opportunities for decision makers to address major management challenges. This statement is primarily based upon our published and ongoing work covering GAO's High Risk List; fragmentation, overlap, and duplication reports; and managing for results work. The work upon which these published reports and preliminary findings were based was conducted in accordance with generally accepted government auditing standards. GAO has made numerous recommendations to OMB and executive branch agencies in these areas and reports in this statement on the status of selected key recommendations. What GAO Found A number of areas on the President's Management Agenda are consistent with issues highlighted by GAO's work on the High Risk Program, its annual reports on fragmentation, overlap, and duplication, and other work related to long-standing management challenges. These include, for example: using information technology to better manage for results; addressing improper payments; expanding strategic sourcing; strengthening strategic human capital management; and improving the Department of Defense's weapon systems and services acquisitions. Lasting success in addressing the difficult and longstanding issues on the Presidents Management Agenda will hinge on effective implementation, including sustained top leadership attention. GAO and the Office of Management and Budget (OMB) have agreed to hold a series of high level meetings on the issues on GAO's High Risk List to discuss progress and actions that are needed to fully address high-risk issues. Further, the executive branch has taken a number of steps to implement key provisions of the GPRA Modernization Act by developing cross-agency and agency priority goals; assigning performance management roles and responsibilities to leadership; conducting agency quarterly performance reviews; and developing Performance.gov, a website that provides quarterly updates on the priority goals. However, additional opportunities exist for decision makers to address major performance management challenges, including, for example: Developing a comprehensive inventory of federal programs. GAO's preliminary review of the program inventories produced by 24 large federal agencies identified concerns about the usefulness of the information provided in these inventories for addressing crosscutting issues. Enhancing the use of collaborative mechanisms. Addressing many of the challenges government faces requires collaboration across agencies, levels of government, or sectors. Yet the mechanisms the federal government uses to collaborate do not always operate effectively. Effectively implementing strategic reviews . Starting in 2014, agency leaders are to annually assess how relevant organizations, programs, and activities, both within and outside of their agencies, are contributing to progress on their strategic objectives and identify corrective actions where progress is lagging. Such reviews could help address fragmentation, overlap, and duplication issues. Improving capacity to gather and use better performance information . GAO's work has found that federal decision makers often lack complete and reliable performance data needed to address the government's management challenges. Furthermore, the administration needs to accelerate progress in (1) addressing major impediments preventing GAO from rendering an opinion on the U.S. government's consolidated financial statements and risks to the government's future financial condition; (2) elevating top leadership attention to the areas identified in our annual reports on fragmentation, overlap, and duplication; and (3) responding to pressing challenges with its cybersecurity, such as evolving cyber threats to systems supporting government operations and critical infrastructure. Congress also has key roles in addressing each of these issues.

gao_GAO-01-430

gao_GAO-01-430_0

In response to concerns about the government’s ability to take advantage of the opportunities offered by the commercial marketplace, these reforms streamlined the way that the federal government buys its goods and services. Federal Purchases of Recycled-Content Products Cannot Now Be Determined Because of Incomplete Reporting and Lack of Monitoring EPA accelerated its efforts in the 1990s to identify and issue guidance on procuring products with recycled content, but the extent to which the major federal procuring agencies, with the exception of Energy, have purchased these products cannot be determined because they do not have data systems that clearly identify purchases of recycled-content products. According to the agencies, implementing the EPA guidance for determining what constitutes an environmentally preferable product is difficult and time-consuming. Federal agencies’ development and implementation of programs to encourage purchases of environmentally preferable products has not resulted in significant changes to agencies’ procurement practices. Nonetheless, RCRA requires such information. EPA and the departments of Agriculture, Housing and Urban Development, and Transportation declined to formally comment on the report. After discussing these issues with their offices, we agreed to address the status of, and barriers to, federal agencies efforts to (1) implement the Resource Conservation and Recovery Act’s requirements for procuring products with recycled content, and (2) procure environmentally preferable and biobased products.

What GAO Found The federal government buys about $200 billion worth of goods and services each year. Through its purchasing decisions, the federal government can signal its commitment to preventing pollution, reducing solid waste, increasing recycling, and stimulating markets for environmentally friendly products. The Resource Conservation and Recovery Act of 1976 (RCRA) directs the Environmental Protection Agency (EPA) to identify products made with recycled waste materials or solid waste by-products and to develop guidance for purchasing these products. The act also requires procuring agencies to establish programs for purchasing them. This report examines efforts by federal agencies to (1) implementation of RCRA requirements for procuring products with recycled content and (2) the purchase of environmentally preferable and bio-based products. EPA accelerated its efforts in the 1990s to identify recycled-content products, but the status of agencies' efforts to implement the RCRA purchasing requirements for these products is uncertain. The four major procuring agencies report that, for many reasons, their procurement practices have not changed to increase their purchases of environmentally preferable and bio-based products. One reason for the lack of change is that EPA and the U.S. Department of Agriculture have been slow to develop and implement the programs.

gao_GAO-08-628T

gao_GAO-08-628T_0

The Structure of the Programs Varies Significantly The purpose of the four federal compensation programs we examined is similar in that they all were designed to compensate individuals injured by exposure to harmful substances. Responsibility for administering two of the programs has changed since their inception. Funding of the four programs varies. Although initially funded through annual appropriations, the Black Lung Program is now funded by a trust fund established in 1978 that is financed by an excise tax on coal and supplemented with additional funds. EEOICP and RECP are completely federally funded. Actual Costs of Benefits Paid Exceeded Initial Cost Estimates for Two Programs and Annual Administrative Costs Varied At the time of our review, total benefits paid for two of the programs—the Black Lung Program and RECP—significantly exceeded their initial estimates. The initial estimate of benefits for the Black Lung Program developed in 1969 was about $3 billion. Actual benefits paid through 1976—the date when the program was initially to have ended—totaled over $4.5 billion and benefits paid through fiscal year 2004 totaled over $41 billion. For RECP, the costs of benefits paid through fiscal year 2004 exceeded the initial estimate by about $247 million. Table 1 shows the initial program estimates and actual costs of benefits paid through fiscal year 2004 for the four programs. Actual costs for the Black Lung Program have significantly exceeded the initial estimate for several reasons, including (1) the program was initially set up to end in 1976 when state workers’ compensation programs were to have provided these benefits to coal miners and their dependents, and (2) the program has been expanded several times to increase benefits and add categories of claimants. The reasons the actual costs of RECP have exceeded the initial estimate include the fact that the original program was expanded to provide benefits to additional categories of claimants, including uranium miners who worked above ground, ore transporters, and mill workers. At the time of our review, the annual administrative costs of the four programs varied. For fiscal year 2004, they ranged from approximately $3.0 million for RECP to about $89.5 million for EEOICP (see table 2). The Number of Claims Filed Generally Exceeded Initial Estimates and Program Structure Affected the Time It Took to Finalize Claims The number of claims filed for the three programs for which initial estimates were available significantly exceeded the initial estimates and the structure of the programs, including the approval process and the extent to which the programs allow claimants and payers to appeal claims decisions in the courts, affected the amount of time it took to finalize claims and compensate eligible claimants. The number of claims filed through fiscal year 2004 ranged from about 10,900 for VICP to about 960,800 for the Black Lung Program. The agencies responsible for processing claims have, at various times, taken years to finalize some claims, resulting in some claimants waiting a long time to obtain compensation. For example, it can take years to approve some EEOICP claims because of the lengthy process required for one of the agencies involved in the approval process to determine the levels of radiation to which claimants were exposed. In addition, claims for benefits provided by programs in which the claims can be appealed can take a long time to finalize. Conclusions The federal government has played an important and growing role in providing benefits to individuals injured by exposure to harmful substances. All four programs we reviewed have been expanded to provide eligibility to additional categories of claimants, cover more medical conditions, or provide additional benefits. As the programs changed and grew, so did their costs.

Why GAO Did This Study The U.S. federal government has played an ever-increasing role in providing benefits to individuals injured as a result of exposure to harmful substances. Over the years, it has established several key compensation programs, including the Black Lung Program, the Vaccine Injury Compensation Program (VICP), the Radiation Exposure Compensation Program (RECP), and the Energy Employees Occupational Illness Compensation Program (EEOICP), which GAO has reviewed in prior work. Most recently, the Congress introduced legislation to expand the benefits provided by the September 11th Victim Compensation Fund of 2001. As these changes are considered, observations about other federal compensation programs may be useful. In that context, GAO's testimony today will focus on four federal compensation programs, including (1) the structure of the programs; (2) the cost of the programs through fiscal year 2004, including initial cost estimates and the actual costs of benefits paid, and administrative costs; and (3) the number of claims filed and factors that affect the length of time it takes to finalize claims and compensate eligible claimants. To address these issues, GAO relied on its 2005 report on four federal compensation programs. As part of that work, GAO did not review the September 11th Victim Compensation Fund of 2001. What GAO Found The four federal compensation programs GAO reviewed in 2005 were designed to compensate individuals injured by exposure to harmful substances. However, the structure of these programs differs significantly in key areas such as the agencies that administer them, their funding, benefits paid, and eligibility. For example, although initially funded through annual appropriations, the Black Lung Program is now funded by a trust fund established in 1978 financed by an excise tax on coal and supplemented with additional funds. In contrast, EEOICP and RECP are completely federally funded. Since the inception of the programs, the federal government's role has increased and all four programs have been expanded to provide eligibility to additional categories of claimants, cover more medical conditions, or provide additional benefits. As the federal role for these four programs has grown and eligibility has expanded, so have the costs. Total benefits paid through fiscal year 2004 for two of the programs--the Black Lung Program and RECP--significantly exceeded their initial estimates for various reasons. The initial estimate of benefits for the Black Lung Program developed in 1969 was about $3 billion. Actual benefits paid through 1976--the date when the program was initially to have ended--totaled over $4.5 billion and, benefits paid through fiscal year 2004 totaled over $41 billion. Actual costs for the Black Lung Program significantly exceeded the initial estimate for several reasons, including (1) the program was initially set up to end in 1976 when state workers' compensation programs were to have provided these benefits to coal miners and their dependents, and (2) the program has been expanded several times to increase benefits and add categories of claimants. For RECP, the costs of benefits paid through fiscal year 2004 exceeded the initial estimate by about $247 million, in part because the original program was expanded to include additional categories of claimants. In addition, the annual administrative costs for the programs varied, from approximately $3.0 million for RECP to about $89.5 million for EEOICP for fiscal year 2004. Finally, the number of claims filed for three of the programs significantly exceeded the initial estimates, and the structure of the programs affected the length of time it took to finalize claims and compensate eligible claimants. For the three programs for which initial estimates were available, the number of claims filed significantly exceeded the initial estimates. In addition, the way the programs were structured, including the approval process and the extent to which the programs allow claimants and payers to appeal claims decisions in the courts, affected how long it took to finalize the claims. Some of the claims have taken years to finalize. For example, it can take years to approve some EEOICP claims because of the lengthy process required for one of the agencies involved in the approval process to determine the levels of radiation to which claimants were exposed. In addition, claims for benefits provided by programs in which the claims can be appealed can take a long time to finalize.

gao_GGD-96-127

gao_GGD-96-127_0

The aggregate amount of EITC earned by these taxpayers would have been about $574 million, thus the aggregate net federal tax liability would have been about $49 million (see table 1). Our estimates indicate that, before taking the federal child and dependent care tax credit (DCTC) into account, about 41 percent of the 651,201 households that filed Puerto Rican income tax returns in 1992 would have had positive federal income tax liabilities, about 53 percent would have received net transfers from the federal government because their EITC would have more than offset their precredit liabilities, and the remaining 6 percent would have had no federal tax liability. The Treasury Department estimated that the tax expenditure would be $2.8 billion in 1996, rising to $3.4 billion by 2000. Specifically, they asked that we provide estimates of (1) the amount of federal income tax that individuals residing in Puerto Rico would pay if they were treated in the same manner as residents of the 50 states, the amount of earned income tax credits (EITC) Puerto Rican residents would receive, the percentage of taxpayers who would have positive federal tax liabilities, and the percentage who would earn EITC; (2) the extent to which the Government of Puerto Rico would have to reduce its own income tax if it were to keep the amount of combined income tax (both federal and Commonwealth) on individuals the same as it was without the full imposition of the federal tax; (3) how the amount of income taxes paid by the average taxpayer in Puerto Rico compares with the amount of combined federal, state, and local income taxes paid by residents in the 50 states and the District of Columbia; and (4) the amount of revenue the U.S. Treasury could obtain by the repeal of the possessions tax credit, which effectively exempts from federal taxation a portion of the income that subsidiaries of U.S. corporations earn in Puerto Rico. Conversion to the U.S. return: EITC was computed using information reported on the Puerto Rican tax return.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the potential effects of extending the Internal Revenue Code (IRC) to residents of Puerto Rico. What GAO Found GAO found that if IRC tax rules are applied to residents of Puerto Rico: (1) the residents would owe around $623 million in federal income tax before taking into account the earned income tax credit (EITC); (2) the aggregate amount of EITC would total $574 million; (3) 59 percent of the population filing individual income tax returns would earn some EITC; (4) 41 percent of the households filing income tax returns would have positive federal income tax liabilities, 53 percent would receive net transfers from the federal government, and 6 percent would have no federal tax liability; (5) more Puerto Rican residents and married couples would file federal tax returns if they qualified for EITC; (6) the average EITC earned by eligible taxpayers would be $1,494; (7) the Puerto Rican government would have to reduce its own individual revenue by 5 percent to keep the aggregate amount of income tax levied on its residents constant; (8) the taxes paid by certain classes of Puerto Ricans would change drastically; (9) the per capita combined individual income tax in Puerto Rico would increase by 5.5 percent; and (10) tax expenditures would total $2.8 billion in 1996 and $3.4 billion in 2000.

gao_RCED-98-110

gao_RCED-98-110_0

In addition, the settlement clarifies FDA’s authority to regulate tobacco products—including regulating the level of nicotine in cigarettes—under the Food, Drug, and Cosmetic Act and requires the tobacco industry to pay for FDA’s oversight of the industry; bans all outdoor tobacco advertising and the use of cartoon characters and human figures, such as the Marlboro Man, in tobacco advertising; requires manufacturers to disclose internal research relating to the health effects of their products; establishes a minimum federal standard to restrict smoking in public places, with enforcement funding coming from the industry’s payments; settles all punitive damages claims against the tobacco industry and places limits on future class-action suits against the industry; provides for the annual payments to be reflected in the prices that manufacturers charge for tobacco products; and treats all payments as ordinary and necessary business expenses, which makes them tax-deductible. Reducing Tobacco Consumption Unlikely to Increase Nation’s Unemployment Rate From 353,000 to 555,000 U.S. jobs are directly related to the growing, warehousing, manufacturing, wholesaling, and retailing of tobacco products, according to the studies we reviewed that examined the national and regional economic impacts of the tobacco industry. The Southeast Tobacco Region, where tobacco production is most heavily concentrated, would likely experience job losses. The estimates of total supplier-sector employment—indirect tobacco-related jobs associated with the producers of farm chemicals, paper, cellophane, and others that supply materials and services to the tobacco core sector—range from about 149,000 to about 213,000 employees. The combined estimates of tobacco-related employment associated with the supplier and expenditure-induced sectors range from about 653,000 to over 2.3 million jobs. This study also assumes that money previously spent on tobacco products would be reallocated to all goods and services in the U.S. economy in the same proportions as these goods and services currently contribute to the gross domestic product. The study also concluded that the general result does not change—that is, an overall gain in jobs nationwide—regardless of how tobacco expenditures are assumed to be reallocated. 1.) These two trends show an inverse relationship between the real price of a pack of cigarettes and the smoking rate for youths. A Tobacco Settlement Would Likely Reduce States’ Tax Revenues National tobacco settlement legislation would likely result in a decline in state revenues from cigarette excise taxes. 2.) Scope and Methodology We searched the literature to identify studies that assessed the national and regional economic impacts of the tobacco industry and talked to officials at USDA, the tobacco industry, and academia. Additional Information on International Cigarette Smuggling This appendix presents information on cigarette smuggling between the United States and Canada and between the United States and Mexico. V.1.)

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed issues surrounding a proposed national tobacco settlement, focusing on: (1) tobacco-related industries and existing studies that assess the national and regional economic impacts of the tobacco industry; (2) smoking trends for United States and Canadian youths; (3) the potential effect of a settlement on state revenues from cigarette excise taxes; and (4) the extent to which interstate and international cigarette smuggling affects the United States. What GAO Found GAO noted that: (1) according to recent studies, from 353,000 to 555,000 jobs are directly related to the tobacco industry nationwide, including jobs in the tobacco growing, warehousing, manufacturing, wholesaling, and retailing industries; (2) according to these studies, an additional 653,000 to over 2.3 million jobs nationwide are estimated to be indirectly related to the tobacco industry; (3) this additional employment includes jobs associated with the producers that supply materials and services to the tobacco industry and jobs associated with the industries that provide goods and services to the employees of the tobacco industry and its suppliers; (4) two of the studies estimated that declining tobacco consumption--that would occur, for example, as a result of an increase in the price of a pack of cigarettes--would likely result in job losses in the tobacco growing and manufacturing industries; (5) however, it must be recognized that the money previously spent on tobacco products would not simply disappear from the nation's economy; rather it would be reallocated to other goods and services; and (6) these studies indicate that this reallocation could have little effect on national employment, although the Southeast Tobacco Region could experience job losses.

gao_GAO-09-702T

gao_GAO-09-702T_0

Currently, PBGC insurance covers 44 million participants, including retirees, in over 29,000 DB plans. In 2003, GAO designated PBGC’s single-employer program as high-risk, meaning that the program needs urgent Congressional attention and agency action. PBGC’s Financial Condition Has Likely Worsened Since September 2008 While PBGC’s deficit improved for fiscal year 2008, the fiscal year ended just prior to the severe market downturn, and it is likely that their net position looks different today. Since we last reported to Congress on PBGC, PBGC issued its fiscal year 2008 financials and reported that the net deficit for its insurance programs was $11.2 billion. However, the lower 2008 deficit may be a product of conditions that no longer exist. For example, PBGC’s net deficit is a resulting difference between its assets and its liabilities. Improvements Needed to PBGC’s Governance and Management PBGC’s Governance Structure Needs Improvement PBGC’s board has limited time and resources to provide policy direction and oversight. PBGC’s three-member board, established by ERISA, includes only the Secretary of Labor, as the Chair of the Board, and the Secretaries of Commerce and Treasury. PBGC’s board members have numerous other responsibilities in their roles as cabinet secretaries and have been unable to dedicate consistent and comprehensive attention to PBGC. In addition, PBGC is also exposed to challenges as the board, board members’ representatives, and the director have changed with the recent presidential transition, limiting the board’s institutional knowledge of the Corporation. As PBGC Relies Heavily on Its’ Contractor and Federal Workforce, A More Strategic Approach Is Needed Although two-thirds of PBGC’s workforce includes contractor employees, PBGC’s strategic planning generally does not recognize contracting as a major aspect of PBGC activities (see figure 3). As PBGC’s workload grew due to the significant number of large pension plan terminations, PBGC relied on contractors to supplement its workforce, acknowledging that it has difficulty anticipating workloads due to unpredictable economic conditions. PBGC lacks a strategic approach to its acquisition and human capital management needs. (Appendix I includes selected GAO recommendations on PBGC Governance and Management). The need for a strategic approach to acquisition and human capital management is essential to ensure that PBGC is able to manage the administrative fluctuations of a pension insurance corporation. When we last reported on PBGC’s financial challenges in September, we specifically mentioned the change in investment policy as a key challenge going forward. This is still the case, but even more recent events, such as legislative changes and the plight of the automakers and other financially weak sponsors in other industries, have the potential to expose PBGC to claims of a potentially unprecedented magnitude. While many of the financial challenges are a result of long-term weaknesses that are in many ways structural, PBGC does have some degree of control over challenges it faces with respect to governance, oversight, and management. Pension Benefit Guaranty Corporation: Improvements Needed to Address Financial and Management Challenges.

Why GAO Did This Study The Pension Benefit Guaranty Corporation (PBGC) insures the retirement future of nearly 44 million people in over 29,000 private-sector defined benefit pension plans. In July 2003, GAO designated PBGC's single-employer pension insurance program--its largest insurance program--as "high risk," including it on GAO's list of major programs that need urgent Congressional attention and agency action. The program remains on the list today with a financial deficit of just over $11 billion, as of September 2008. The committee asked GAO to discuss our recent work on PBGC. Specifically, this testimony addresses two issues: (1) PBGC's financial vulnerabilities, and (2) the governance, oversight, and management challenges PBGC faces. To address these objectives, we are relying on our prior work assessing PBGC's long-term financial challenges, and several reports that we have published over the last two years on PBGC governance and management. GAO has made a number of recommendations and identified matters for Congressional consideration in these reports, and PBGC is implementing some of these recommendations. No new recommendations are being made as part of this testimony. What GAO Found Financial and economic conditions have deteriorated since we last reported on PBGC's finances. While PBGC's deficit improved for fiscal year 2008, the fiscal year ended just prior to the severe market downturn, and this lower deficit may be a product of conditions that no longer exist. As a result, it is likely that PBGC's net position looks different today. Other recent events have also added to PBGC's financial challenges. These events include: recent legislation that grants funding relief to certain sponsors, developments with PBGC's investment policy, and a concern that a wide array of industry sectors--including the automotive sector--are under financial distress and may expose PBGC to future claims. As a result, the potential for automaker pension plan terminations could dramatically increase not only PBGC's deficit, but also its administrative workload. With mounting financial challenges and the potential for PBGC's workload to dramatically increase, our concerns about PBGC governance and strategic management have become acute, and improvements are needed, now more than ever. PBGC's board has limited time and resources to provide policy direction and oversight. The three-member board includes the Secretary of Labor, as the Chair of the Board, and the Secretaries of Commerce and Treasury. These board members have numerous other responsibilities and are unable to dedicate consistent and comprehensive attention to PBGC. With only 3 members, PBGC's board may not be large enough to include the knowledge needed to direct and oversee PBGC. In fact, the new board members have yet to meet, and there has not been a face-to-face board meeting in the last 15 months. In addition, without an appointed director, PBGC's governance structure is further exposed to challenges. Further, PBGC continues to lack a fully-adopted strategic approach to its acquisition and human capital management needs. Although contract employees comprise two-thirds of PBGC's workforce, PBGC's strategic planning generally does not recognize contracting as a major aspect of PBGC activities.

gao_GAO-12-568

gao_GAO-12-568_0

For example, Executive Order 13548 requires federal agencies to develop plans for hiring and retaining employees with disabilities and to designate a senior-level official to be accountable for meeting the goals of the order and to develop and implement the agency’s plan. Participants said that the most significant barrier keeping people with disabilities from the workplace is attitudinal and identified eight leading practices that agencies could implement to help the federal government become a model employer: (1) top leadership commitment; (2) accountability, including goals to help guide and sustain efforts; (3) regular surveying of the workforce on disability issues; (4) better coordination within and across agencies; (5) training for staff at all levels to disseminate leading practices (6) career development opportunities inclusive of people with (7) a flexible work environment; and (8) centralized funding at the agency level for reasonable accommodations. OPM and Labor Have Taken Steps to Implement the Executive Order, but Further Action Is Needed to Meet Hiring Goals OPM Helped Agencies Develop Plans to Employ More Individuals with Disabilities, Yet Many Plans Lacked Required Elements and Have Not Been Corrected OPM, in consultation with EEOC, OMB, and Labor, issued a memorandum in November 2010 to heads of executive departments and agencies outlining the key requirements of the executive order and what elements must be included in agency disability hiring plans. 1). For example, OPM found that 40 of the 66 agency plans included a process for increasing the use of Schedule A to increase the hiring of people with disabilities. However, 32 out of the 59 agencies with deficiencies in their plans had not addressed them as of April 2012. In response to the executive order’s reporting requirement, OPM officials told us that they had briefed White House officials on issues related to agencies’ implementation of the executive order, but did not provide information on the deficiencies in all of the agency plans. While the executive order did not provide additional detail as to what information should be reported, providing information on the extent to which agencies’ plans have met OPM’s criteria would better enable the White House to hold agencies accountable for addressing plan deficiencies. Goals such as these are useful tools to help agencies improve performance. Selected Agencies Have Plans in Place to Hire and Retain Employees with Disabilities and Have Adopted Many Leading Practices Agencies Are Implementing Plans to Improve Hiring and Retention of Employees with Disabilities Each of the four agencies we reviewed submitted a plan for implementing the executive order as required. In particular, Education, SSA, and VA said that the executive order provided an opportunity to further develop the written plans they already had in place for hiring and retaining employees with disabilities. Officials at all of the agencies we interviewed cited funding constraints as a potential obstacle to hiring more employees with disabilities. Agencies Have Taken Steps to Implement Leading Practices for Increasing Employment of Individuals with Disabilities In October 2010, we reported on eight leading practices that could help the federal government become a model employer for individuals with disabilities. Leaders at the agencies we talked with have, to varying degrees, communicated their commitment to hiring and retaining individuals with disabilities to their employees. Education, SSA and VA’s disability hiring plans all include goals that will allow them to measure their progress toward meeting the goals of the executive order. In addition, each agency has a single office or primary point of contact that is responsible for overseeing activities related to hiring and retaining employees with disabilities. They also require managers and supervisors to take training on hiring procedures related to individuals with disabilities, and the use of Schedule A hiring authority. Education, SSA, and VA use centralized funding accounts to pay for reasonable accommodations for employees with disabilities. Unreliable data hinder OPM’s ability to measure the population of federal workers with disabilities and may prevent the federal government from developing needed policies and procedures that support efforts to become a model employer of people with disabilities. Incorporate information about plan deficiencies into its regular reporting to the president on agencies’ progress in implementing their plans, and inform agencies about this process to better ensure that the plan deficiencies are addressed. 2. Expedite the development of the mandatory training programs for hiring managers and human resource personnel on the employment of individuals with disabilities, as required by the executive order. Assess the extent to which the SF-256 accurately measures progress toward the executive order’s goal and explore options for improving the accuracy of SF-256 reporting, if needed, including strategies for encouraging employees to voluntarily disclose their disability status.

Why GAO Did This Study In July 2010, the president signed Executive Order 13548 committing the federal government to become a model employer of individuals with disabilities and assigned primary oversight responsibilities to OPM and Labor. According to OPM, the federal government is not on track to meet the goals of the executive order, which committed the federal government to hire 100,000 workers with disabilities over the next 5 years. GAO was asked to examine the efforts that (1) OPM and Labor have made in overseeing federal efforts to implement the executive order; and (2) selected agencies have taken to implement the executive order and to adopt leading practices for hiring and retaining employees with disabilities. To conduct this work, GAO reviewed relevant agency documents and interviewed appropriate agency officials. GAO conducted case studies at Education, SSA, VA, and OMB. What GAO Found The Office of Personnel Management (OPM) and the Department of Labor (Labor) have taken steps to implement the executive order and help agencies recruit, hire, and retain more employees with disabilities. OPM provided guidance to help agencies develop disability hiring plans and reviewed the 66 plans submitted. OPM identified deficiencies in most of the plans. For example, though 40 of 66 agencies included a process for increasing the use of a special hiring authority to increase the hiring of people with disabilities, 59 agencies did not meet all of OPM’s review criteria, and 32 agencies had not addressed plan deficiencies as of April 2012. In response to executive order reporting requirements, OPM officials said they had briefed the White House on issues related to implementation, but they did not provide information on deficiencies in all plans. While the order does not specify what information these reports should include beyond addressing progress, providing information on deficiencies would enable the White House to hold agencies accountable. OPM is still developing the mandatory training programs for officials on the employment of individuals with disabilities, as required by the executive order. Several elective training efforts exist to help agencies hire and retain employees with disabilities, but agency officials said that more information would help them better use available tools. To track and measure progress towards meeting the executive order’s goals, OPM relies on employees to voluntarily disclose a disability. Yet, agency officials, including OPM’s, are concerned about the quality of the data. For example, agency officials noted that people may not disclose their disability due to concerns about how the information may be used. Without quality data, agencies may be challenged to effectively implement and assess the impact of their disability hiring plans. The Department of Education (Education), Social Security Administration (SSA), Office of Management and Budget (OMB), and Department of Veterans Affairs (VA) submitted disability hiring plans, and have taken steps to implement leading practices for increasing employment of individuals with disabilities, such as demonstrating top leadership commitment. The executive order provided SSA, VA, and Education an opportunity to further develop existing written plans. However, officials at these agencies cited funding constraints as a potential obstacle to hiring more employees with disabilities. In terms of leading practices, all four agencies have communicated their commitment to hiring and retaining individuals with disabilities and coordinated within or across other agencies to improve their recruitment and retention efforts. For example, each agency has a single point of contact to help ensure that employees with disabilities have access to information that is comparable to that provided to those without disabilities, and for overseeing activities related to hiring and retaining employees with disabilities. In addition, VA holds senior managers accountable for meeting hiring goals by including targets in their contracts. Each agency requires training for managers and supervisors on procedures for hiring individuals with disabilities, and VA further requires that all employees receive training on the legal rights of individuals with disabilities. Education, SSA, and VA rely on centralized funding accounts to pay for reasonable accommodations. What GAO Recommends GAO recommends that OPM: (1) incorporate information about plan deficiencies into its required regular reporting to the president on implementing the executive order and inform agencies about this process; (2) expedite the development of the mandatory training programs required by the executive order; and (3) assess the accuracy of the data used to measure progress toward the executive order’s goals and, if needed, explore options for improving its ability to measure the population of federal employees with disabilities, including strategies for encouraging employees to voluntarily disclose disability status. OPM agreed with GAO’s recommendations.

gao_GAO-13-281

gao_GAO-13-281_0

Background PPACA provided for additional health care coverage options for millions of lower income individuals through the expansion of eligibility for the Medicaid program and the creation of health insurance exchanges where eligible individuals can qualify for federal subsidies to purchase private health insurance coverage. In both the January 2010 and Fall 2010 Baseline Extended simulations, spending for Medicaid and exchange subsidies follows CBO’s baseline projections for the first 10 years and is then based on growth in spending for these programs consistent with CBO’s long-term assumptions for the number and age composition of enrollees and the Medicare Trustees’ intermediate assumptions for excess cost growth. Effect of PPACA on the Long-Term Fiscal Outlook Depends on Whether Cost- Containment Mechanisms are Sustained The effect of PPACA on the long-term fiscal outlook depends largely on whether elements designed to control cost growth are sustained. Overall, there was notable improvement in the longer-term outlook after the enactment of PPACA under our Fall 2010 Baseline Extended simulation, which, consistent with federal law at the time the simulation was run, assumed the full implementation and effectiveness of the cost- containment provisions over the entire 75-year simulation period. In contrast, the long-term outlook in the Fall 2010 Alternative simulation worsened slightly compared to our January 2010 simulation. This is largely due to the fact that cost-containment mechanisms specified in PPACA are assumed to phase out over time while the additional costs associated with expanding federal health care coverage remain. The net effect of changes to spending and revenue on the federal budget were relatively small in the first few decades in both simulations, and the improvements in the Baseline Extended simulations from January 2010 to Fall 2010 do not significantly slow the growth in debt held by the public until the outyears. The effect of PPACA on the long-term fiscal outlook is seen largely through changes in federal spending on major federal health care programs. The Trustees, CBO, and OACT have questioned whether the cost- containment mechanisms enacted in PPACA can be sustained over the long term, due in part to the challenges in sustaining increases in health care productivity. As a result, total federal health care spending was higher in the Fall 2010 Alternative simulation than in the January 2010 simulation. While some of this uncertainty is related to the implementation and effectiveness of provisions of PPACA, there is also broader uncertainty about the future underlying rate of health care cost growth before cost-containment mechanisms are applied. Enrollment in the major federal health care programs is expected to continue to increase in the near term due both to the aging of the U.S. population and to expanded eligibility. As such, a key driver of federal spending for both Medicare and Medicaid is the aging of the population. Growth in Health Care Spending Per Capita is a Key Driver of Federal Health Care Spending Over the Long Term The share of the federal budget devoted to Medicare and Medicaid has increased over the past several decades due not only to increases in enrollment but also due to increases in health care spending per enrollee. The extent to which the annual growth rate of health care spending per capita exceeds the annual growth rate of potential GDP per capita adjusted for demographic characteristics, is referred to as excess cost growth. Figure 8 shows that slowing the rate of excess cost growth could slow the buildup of debt held by the public considerably and help put the budget on a more sustainable path. In this simulation, revenue and spending follow historic trends and past policy preferences. Technological Change Has Been the Largest Driver of Health Care Cost Growth, and with Health Insurance Coverage and Increasing Income, is Likely the Largest Source of Uncertainty for Health Care Cost Projections Technological Change Accounts for about 50 Percent of Health Care Cost Growth A growing U.S. population directly increases overall health care spending; however, the causes of rising health care cost per capita are more difficult to identify. There is general agreement among researchers about the factors that drive health care cost growth and the relative size of influence of this growth, although each factor has a unique mechanism to affect health care costs, and therefore, a different relative influence on health care cost growth (see fig. Key Uncertainties for Health Care Cost Projections are Technological Change, Increases in Income, and Health Insurance Expansions Although there is some consensus among researchers about which factors drive health care cost growth, there is considerable uncertainty about the magnitude of impact of each factor on future health care cost growth. Together, the expected volatility in future GDP growth and possible changes in the distribution of income among Americans leads us to believe that there is some uncertainty surrounding the size of the impact that increases in income may have on future health care cost growth, and that the uncertainty is larger for the more distant future. Concluding Observations Comparing the results of our simulations before and after the enactment of PPACA helps to illustrate the important role that efforts to slow the growth in health care spending have in improving the long-term fiscal outlook. Reducing health care cost growth alone, however, is not sufficient to put the federal budget on a sustainable path. Our Baseline Extended simulation illustrates the long-term outlook assuming current law is generally continued, while the Alternative simulation illustrates the long-term outlook assuming historical trends and policy preferences are continued. For example, after the enactment of the Patient Protection and Affordable Care Act (PPACA), consistent with CBO, we included federal spending for CHIP and federal exchange subsidies in the same category with Medicaid.

Why GAO Did This Study GAO regularly prepares long-term federal budget simulations under different assumptions about broad fiscal policy decisions. GAO's Baseline Extended simulation illustrates the long-term outlook assuming current law at the time the simulation was run is generally continued, while the Alternative simulation illustrates the long-term outlook assuming historical trends and past policy preferences continue. Under either set of assumptions, these simulations show that the federal budget is on an unsustainable fiscal path driven on the spending side by rising health care costs and the aging of the population. PPACA provides for expanded eligibility for Medicaid and federal subsidies to help individuals obtain private health insurance and includes provisions designed to slow the growth of federal health care spending. GAO was asked to describe the longterm effects of PPACA on the federal fiscal outlook under both its Baseline Extended and Alternative simulations; how changes in assumptions for federal health care cost growth might affect the outlook; and the key drivers of health care cost growth and how the uncertainty associated with each may influence future health care spending. To do this, GAO compared the results of its long-term fiscal simulations from before and after the enactment of PPACA and examined the key factors that contributed to changes in revenue and spending components; reviewed trends in health care cost growth and performed a sensitivity analysis varying rates of excess cost growth; and reviewed literature describing key drivers of health care cost growth and areas of uncertainty related to projections of federal health care costs. What GAO Found The effect of the Patient Protection and Affordable Care Act (PPACA), enacted in March 2010, on the long-term fiscal outlook depends largely on whether elements in PPACA designed to control cost growth are sustained. There was notable improvement in the longer-term outlook after the enactment of PPACA under GAO's Fall 2010 Baseline Extended simulation, which assumes both the expansion of health care coverage and the full implementation and effectiveness of the cost-containment provisions over the entire 75-year simulation period. However, the federal budget remains on an unsustainable path. Further, questions about the implementation and sustainability of these provisions have been raised by the Centers for Medicare & Medicaid Services' Office of the Actuary and others, due in part to challenges in sustaining increased health care productivity. The Fall 2010 Alternative simulation assumed cost containment mechanisms specified in PPACA were phased out over time while the additional costs associated with expanding federal health care coverage remained. Under these assumptions, the long-term outlook worsened slightly compared to the pre-PPACA January 2010 simulation. Federal health care spending is expected to continue growing faster than the economy. In the near term, this is driven by increasing enrollment in federal health care programs due to the aging of the population and expanded eligibility. Over the longer term, excess cost growth (the extent to which growth of health care spending per capita exceeds growth of income per capita) is a key driver. Slowing the rate of health care cost growth would help put the budget on a more sustainable path. There is general agreement that technological advancement has been the key factor in health care cost growth in the past, along with the effects of expanding health insurance coverage and increasing income, but there is considerable uncertainty about the magnitude of the impact that the different factors will have on future health care cost growth.The effect of the Patient Protection and Affordable Care Act (PPACA), enacted in March 2010, on the long-term fiscal outlook depends largely on whether elements in PPACA designed to control cost growth are sustained. There was notable improvement in the longer-term outlook after the enactment of PPACA under GAO's Fall 2010 Baseline Extended simulation, which assumes both the expansion of health care coverage and the full implementation and effectiveness of the cost-containment provisions over the entire 75-year simulation period. However, the federal budget remains on an unsustainable path. Further, questions about the implementation and sustainability of these provisions have been raised by the Centers for Medicare & Medicaid Services' Office of the Actuary and others, due in part to challenges in sustaining increased health care productivity. The Fall 2010 Alternative simulation assumed cost containment mechanisms specified in PPACA were phased out over time while the additional costs associated with expanding federal health care coverage remained. Under these assumptions, the long-term outlook worsened slightly compared to the pre-PPACA January 2010 simulation. Federal health care spending is expected to continue growing faster than the economy. In the near term, this is driven by increasing enrollment in federal health care programs due to the aging of the population and expanded eligibility. Over the longer term, excess cost growth (the extent to which growth of health care spending per capita exceeds growth of income per capita) is a key driver. Slowing the rate of health care cost growth would help put the budget on a more sustainable path. There is general agreement that technological advancement has been the key factor in health care cost growth in the past, along with the effects of expanding health insurance coverage and increasing income, but there is considerable uncertainty about the magnitude of the impact that the different factors will have on future health care cost growth.

gao_GAO-12-80

gao_GAO-12-80_0

Best practices in GAO’s Cost Estimating and Assessment Guide illustrate how an agency can strengthen its ability to control costs by using available cost data to make comparisons over time and identify and quantify trends. The Bureau Is Assessing Options for Controlling Field Costs, but Additional Steps Could Be Taken The Bureau Is Considering Design Alternatives to Potentially Reduce Costs for the 2020 Census The Bureau has developed a range of design alternatives for the 2020 Census aimed at counting each housing unit at a lower cost than in 2010. Decision points at key phases of the planning process could improve the Bureau’s ability to manage risks as well as achieve desired cost, schedule, and performance outcomes for the decennial. Recommendations for Executive Action To improve the Bureau’s ability to control costs for the 2020 decennial and balance cost and quality, we recommend that the Secretary of Commerce direct the Under Secretary of the Economics and Statistics Administration, as well as the Director of the U.S. Census Bureau, to take the following four actions: Develop and document a method to compare costs in 2010 to those in future decennials, for example, around major activities or investments, to allow the Bureau to identify and address factors that contribute to cost increases. To help ensure that the Bureau produces a reliable and high-quality cost estimate for the 2020 Census, we recommend that the Bureau take the following action: Finalize guidance, policies, and procedures for cost estimation in accordance with best practices prior to developing the Bureau’s initial 2020 life cycle cost estimate. The Department of Commerce expressed broad agreement with the overall theme of the report but did not directly comment on the recommendations. It raised concerns about specific aspects of the summary of findings which GAO addressed as appropriate. In commenting on the first paragraph, the Bureau stated that it does not believe its inability to identify specific factors affecting past growth will make it difficult to control costs for the 2020 Census. However, our report concludes that the Bureau’s inability to identify specific actionable factors will make it difficult for the Bureau to focus its cost control efforts for the 2020 Census. However, the paragraph discusses practices for strengthening agency decision making for large projects rather than establishing formal guidance for developing cost estimates. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objective, Scope, and Methodology To identify the key factors affecting cost growth from the 2000 Census to the 2010 Census, we reviewed U.S. Census Bureau (Bureau) strategic planning documents for 2000 and 2010, Bureau operational and systems plans for 2000 and 2010, Bureau assessments and evaluations of past census operations, National Academy of Sciences work on decennial census costs, and our prior work on implementation of 2000 and 2010 census operations. It is the same system, but the name changed over time. We reviewed Office of Management and Budget guidance on major acquisitions as well as GAO work on acquisition best practices to determine whether the use of decision points could help the Bureau make more informed decisions about census design that could relate to cost control. To assess the extent to which the Bureau’s plans for developing life cycle cost estimates for 2020 are consistent with best practices, we reviewed available Bureau documentation on the Bureau’s life cycle cost estimation processes and procedures.

Why GAO Did This Study A complete count of the nation’s population is an enormous challenge requiring the U.S. Census Bureau (Bureau) to balance requirements for accuracy with the need to control escalating costs. The 2010 Census was the costliest U.S. Census in history at about $13 billion, and was about 56 percent more costly than the $8 billion cost of the 2000 Census (in 2010 dollars). The fundamental challenge facing the Bureau going forward is cost effectively counting a population that is growing steadily larger, more diverse and becoming increasingly difficult to enumerate. As requested, this report assesses (1) the key factors affecting cost growth from the 2000 Census to the 2010 Census; (2) the Bureau’s plans for controlling costs for the 2020 Census and what additional steps, if any, could be taken; and (3) the extent to which the Bureau’s plans for developing life cycle cost estimates for 2020 are consistent with best practices. The report is based on GAO’s analysis of Bureau data and documents as well as interviews with Bureau officials. What GAO Found The average cost to count each housing unit rose from $70 in 2000 to $97 in 2010 (in constant 2010 dollars). While the U.S. Census Bureau (Bureau) made changes to its budget structure from 2000 to 2010, they did not document the changes that would facilitate comparisons over time and cannot identify specific drivers of this cost growth. According to GAO’s Cost Estimating and Assessment Guide, an agency can strengthen its ability to control costs by using available cost data to make comparisons over time and identify and quantify trends. The Bureau faces the fundamental challenge of striking a balance between how best to control costs without compromising accuracy. However, the Bureau’s inability to identify specific actionable factors affecting past growth will make it difficult for the Bureau to focus its efforts to control costs for the 2020 Census. The Bureau developed several design alternatives for the 2020 Census that could help reduce costs, but has not identified decision points when executives would review progress and decide whether the Bureau is prepared to move forward from one project phase to another. Office of Management and Budget guidance and previous GAO work support the use of these practices to strengthen an agency’s decision making on large-scale projects. Incorporating these practices in its 2020 planning could help the Bureau improve its ability to manage risk to achieve desired cost, schedule and performance outcomes. The Bureau is taking steps to strengthen its life cycle cost estimates. However, the Bureau has not yet established guidance for developing cost estimates. The Bureau is scheduled to begin work on the 2020 Census estimate in fiscal year 2013 but has limited time to develop guidance. By finalizing such guidance, the Bureau can better ensure that it is developing comprehensive, accurate, and credible estimates for the 2020 Census. What GAO Recommends GAO recommends that the Census Director develop a method to identify and address specific factors that contribute to cost increases, identify decision points, and finalize guidance for the 2020 life cycle cost estimate. The Department of Commerce expressed broad agreement with the overall theme of the report but did not directly comment on the recommendations. It raised concerns about specific aspects of the summary of findings which GAO addressed as appropriate.

gao_AIMD-98-91

gao_AIMD-98-91_0

According to HCFA, the CCI edits helped Medicare save about $217 million in 1996 by successfully identifying inappropriate claims. Objective, Scope, and Methodology Our objective was to determine if HCFA was using an adequate methodology for testing the commercial claims auditing system in Iowa for potential implementation with its Medicare claims processing systems. These insurers’ activities were comprehensive and required significant time to complete. First, it developed the design specifications and related computer code necessary for integrating the commercial system into the Medicare claims-processing software. They reported that the test showed that the system’s claims auditing edits could save Medicare up to $465 million annually, which is in addition to the savings provided by the CCI edits. The second—HCFA’s initial plan following the test to award a contract to develop its own edits rather than acquiring commercial edits such as those used in the test—would have potentially not only required additional time before implementation, but could well have resulted in a system that is not as comprehensive as commercially available edits. She said HCFA (1) is evaluating legal options for expediting the contracting process, and (2) now plans to begin immediately to acquire commercial claims auditing edits. Awarding a new contract could result in additional expense to either develop new edits or for substantial rework to adapt the new system’s edits to HCFA’s payment policy if a contractor other than the one performing the original test wins the competition. In March 1998, HCFA’s administrator told us that HCFA is doing what it can to avoid any delay resulting from this limited test contract. Likewise, other public health care insurers, including CHAMPVA, TRICARE, and the two state Medicaid agencies we visited, do not have such a policy, and are indeed using commercial claims-auditing systems without disclosing the details of the edits. Developing comprehensive HCFA-owned claims auditing edits could take years, during which time hundreds of millions of dollars could be lost annually due to incorrectly coded claims. Conclusions HCFA followed an approach in testing and evaluating the commercial claims auditing system that was consistent with the approach used by other public health care insurers. Two critical HCFA decisions could have unnecessarily delayed implementation for several years and prevented HCFA from taking full advantage of the substantial savings offered by this technology. These decisions—to limit the test contract to the test and not include a provision for national implementation, and to develop HCFA’s own edits rather than acquiring commercial ones—would have resulted in costly delays and could have resulted in an inferior system. Recommendations To implement HCFA’s current plans to expeditiously realize dollar savings in the Medicare program through the use of claims auditing edits, we recommend that the Administrator, Health Care Financing Administration proceed immediately to purchase or lease existing comprehensive commercial claims auditing edits and begin a phased national implementation, and require, in any competition, that vendors have comprehensive claims auditing edits, which at a minimum address the mutually exclusive, incidental procedure, and diagnosis-to-procedure categories of inappropriate billing codes. 3.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed whether the Health Care Financing Administration (HCFA) used an adequate methodology for testing the commercial claims auditing system for potential nationwide implementation with its Medicare claims processing system. What GAO Found GAO noted that: (1) the test methodology HCFA used in Iowa was consistent with the approach used by other public health care insurers who have already implemented a commercial claims auditing system; (2) HCFA's test covered 15 months and included extensive work, such as modifying the system's software to comply with Medicare payment policies; (3) the test showed that the commercial claims auditing system could save Medicare up to $465 million annually with claims auditing edits that detect inappropriately coded claims; (4) these savings are in addition to any results from the correct coding initiative which, according to HCFA, saved Medicare about $217 million in 1996; (5) while HCFA used an adequate methodology to test the system and demonstrated that commercial claims auditing edits could result in significant savings, two critical management decisions would have unnecessarily delayed implementation for several years, resulting in potentially hundreds of millions of dollars in lost savings annually; (6) first, HCFA limited its 1996 test contract to the test, and did not include a provision for implementing the commercial system throughout the Medicare program; (7) thus, to acquire a commercial system for nationwide implementation, up to an additional year may be required to complete all activities necessary to plan for and award another contract; (8) this could also result in substantial rework to adapt the system if a different contractor were to win the new contract; (9) HCFA's administrator told GAO that HCFA is evaluating legal options for expediting the contracting process; (10) second, in addition to the potential delay from the test contract limitation, following the test HCFA initially planned to develop its own claims auditing edits rather than acquire commercial edits, such as those used in the test; (11) under this plan, HCFA would have obtained a development contractor that may, or may not, have existing claims auditing edits; (12) if the winning contractor did not have existing edits on which to build, it could take years to complete the HCFA-owned edits; (13) near the conclusion of GAO's review HCFA representatives told GAO this approach would have allowed them to make the edits available to the public and avoid being obligated to one vendor's commercial edits and related fees; and (14) public health care insurers for the Department of Defense and the Department of Veterans Affairs and several state Medicaid agencies did not take this approach, opting to lease commercial systems instead of owning the claims auditing edits.

gao_GAO-11-36

gao_GAO-11-36_0

Background Under Section 123 of the U.S. Atomic Energy Act of 1954, as amended, nuclear cooperation agreements are a prerequisite to certain aspects of civilian U.S. nuclear cooperation with countries and other cooperating partners. Agencies Do Not Systematically Track and Report Data Needed to Assess Export Benefits Facilitated by Nuclear Cooperation Agreements No single federal agency systematically tracks and reports the data necessary to determine the amount and value of U.S. nuclear exports facilitated by U.S. nuclear cooperation agreements. Existing data from Commerce, DOE, and NRC contain gaps and in some cases were not sufficiently detailed for our reporting purposes. The U.S. Share of Global Exports of Sensitive Nuclear Material and Reactors, Major Components, and Minor Parts Has Declined in the Last 15 Years Based on available data, while the value of U.S. exports of sensitive nuclear material has remained stable from 1994 through 2008, the U.S. share of global exports of sensitive nuclear material declined significantly over the same period. Finally, the United States imports sensitive nuclear material, nuclear reactors, major components and equipment, and minor reactor parts from other countries. In sum, the United States was a net importer of nuclear components and materials, which may indicate a lack of comparative advantage in this industry. Commerce Has an Initiative to Coordinate Interagency Efforts, but Has Made Limited Progress and Does Not Have a Well- Defined Strategy to Promote the U.S. Nuclear Industry Globally DOE, NRC, and State officials told us they rely on Commerce to develop and lead U.S. nuclear industry export promotion activities because Commerce’s mission includes providing trade support to U.S. businesses and trade promotion. Commerce launched the Civil Nuclear Trade Initiative in 2008 to help promote the competitiveness of the U.S. nuclear industry; however, this initiative has made limited progress. In addition, U.S. agency and industry representatives and foreign government officials we interviewed identified challenges that U.S. companies face that, in their view, impede the U.S. nuclear industry’s ability to compete globally. U.S. Nuclear Industry May Not Be Well-Positioned to Secure Trade Benefits and U.S. Companies Face Competition from State- Owned Nuclear Firms Officials from Commerce, State, and DOE, as well as U.S. industry told us they are concerned that the U.S. nuclear industry may not be well- positioned to secure the trade benefits facilitated by nuclear cooperation agreements due to a decline in domestic manufacturing capabilities, increased international competition, and U.S. industry’s liability concerns. The United States has ratified this convention, but it has not yet come into force. Some U.S. Policies and Practices Are Viewed by Industry Officials and Foreign Governments as Impediments to U.S. Nuclear Exports U.S. industry representatives and foreign government officials we interviewed identified certain U.S. government policies and practices that, in their view, impede the U.S. nuclear industry’s ability to compete globally for nuclear trade. In particular, industry representatives told us that DOE’s regulations governing the Part 810 authorization process place U.S. companies at a competitive disadvantage. Recommendations for Executive Action To help federal agencies gain a better understanding of how—and the extent to which—nuclear cooperation agreements impact exports to other countries, we recommend that the Secretary of Commerce, working with the Secretaries of Energy and State and the Chairman of the Nuclear Regulatory Commission, take the following three actions: identify what additional nuclear export data and information may be necessary to better quantify the export benefits associated with these agreements; review, with an eye toward strengthening, Commerce’s existing nuclear export promotion strategy document to, among other things, identify key market opportunities for U.S. nuclear industry, and develop key goals and an implementation plan for achieving these goals; and consider ways for the TPCC Civil Nuclear Trade Working Group to obtain a more comprehensive range of U.S. industry views. Commerce agreed with two of our three recommendations. In addition, we found that Commerce’s strategy document for the initiative has some limitations, including that it does not identify key market opportunities and goals; have an implementation plan; nor includes metrics, benchmarks, or timelines to measure progress in meeting specific goals. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology We addressed the following questions during our review: (1) quantify the amount and value of U.S. nuclear exports facilitated by these agreements; (2) assess U.S. government efforts to support the U.S. nuclear industry’s ability to compete for sales made possible by nuclear cooperation agreements between the United States and other countries; and (3) examine U.S. nuclear industry challenges to exporting as identified by industry representatives and U.S. and foreign government officials. We are making this recommendation because Commerce needs to strengthen interagency coordination efforts to promote nuclear trade. 10. 2. 3.

Why GAO Did This Study The United States has 26 agreements in force for peaceful nuclear cooperation. Under the U.S. Atomic Energy Act of 1954, as amended, these agreements are a prerequisite to certain aspects of U.S. nuclear cooperation with other cooperating partners. GAO was asked to (1) quantify the amount and value of U.S. nuclear exports facilitated by these agreements, (2) assess U.S. efforts to support the U.S. nuclear industry's ability to compete for sales, and (3) examine U.S. nuclear industry challenges to exporting. To conduct this work, GAO reviewed and assessed data collection efforts by U.S. agencies from 1994 through 2008, analyzed available data, and interviewed U.S. industry representatives and U.S. and foreign government officials. What GAO Found No single federal agency systematically tracks and reports the data necessary to determine the amount and value of U.S. nuclear exports facilitated by U.S. nuclear cooperation agreements. Data from the departments of Commerce, Energy (DOE), State, and the Nuclear Regulatory Commission (NRC) contain gaps and in some cases were not sufficiently detailed for GAO's reporting purposes. Using data from the United Nations Commodity Trade Statistics database, GAO found that the United States' share of global exports of nuclear material, reactors, and components has declined in the last 15 years. For example, the amount of U.S. exports of sensitive nuclear material such as natural and enriched uranium remained stable, while the U.S. share of global exports for these materials decreased significantly, from 29 percent to 10 percent, from 1994 through 2008. The United States also imports sensitive nuclear material, nuclear reactors, major components and equipment, and minor reactor parts from other countries. GAO found that in sum, the United States was a net importer of nuclear components and materials, which may indicate a lack of comparative advantage in this industry. Commerce has an initiative to coordinate interagency efforts and identify and respond to the U.S. nuclear industry's trade policy challenges, but the initiative has made limited progress and does not include a well-defined strategy to support and promote U.S. nuclear industry efforts to compete globally. DOE, NRC, and State officials told us they rely on Commerce to develop and lead U.S. nuclear industry export promotion activities. In October 2008, Commerce established the Civil Nuclear Trade Initiative to help promote the competitiveness of the U.S. nuclear industry. The initiative aims to, among other things, coordinate interagency efforts and identify and respond to trade policy challenges faced by the U.S. nuclear industry. However, the initiative has made limited progress. For example, the initiative's interagency trade promotion committee to coordinate interagency efforts on behalf of U.S. industry has received briefings from only three U.S. nuclear companies; though Commerce officials report many more companies would like to participate. In addition, the initiative's strategy document has some limitations, in that it does not establish goals, does not have an implementation plan, and does not contain metrics for measuring its progress, which are critical for agencies to achieve intended goals. Commerce, State, and DOE officials as well as U.S. industry representatives identified challenges facing the U.S. nuclear industry, including a decline in domestic manufacturing capabilities, increased international competition, and U.S. industry's liability concerns. In addition, U.S. industry representatives and U.S. foreign government officials GAO interviewed also identified challenges that, in their view, impede the U.S. nuclear industry's ability to compete globally for nuclear trade, including a DOE process for authorizing the transfer of U.S. nuclear technology and technical information overseas. In particular, industry representatives told us they believe that DOE's regulations are outdated and place U.S. companies at a competitive disadvantage. What GAO Recommends GAO recommends that Commerce (1) identify additional nuclear data that may better quantify the export benefits of nuclear cooperation agreements, (2) review its strategy document to identify markets and include benchmarks for evaluating progress, and (3) consider ways the interagency trade promotion committee may obtain a comprehensive range of U.S. industry views. Commerce agreed with our first two recommendations but disagreed with the third, stating that it already has mechanisms in place to obtain industry views. GAO is making this recommendation because Commerce needs to strengthen interagency coordination efforts to promote nuclear trade.

gao_HEHS-95-222

gao_HEHS-95-222_0

When Corporation appropriations were combined with resources from other federal agencies and state and local governments, the public sector provided about 88 percent of the $351 million in total program resources available. Most of the Corporation’s funding for AmeriCorps*USA projects went to providing operating grants and education awards. In calculating resources available on a per-participant and per-service-hour basis (see table 1), we found that average resources available from all sources per AmeriCorps*USA participant amounted to about $26,654 (excluding in-kind contributions from private sources). Meeting Unmet Needs One of AmeriCorps*USA’s objectives was to help the nation meet its unmet human, educational, environmental, and public safety needs, or as the Corporation states it, “getting things done.” Our visits to programs also identified diverse achievements. The Corporation also disagreed with the methodology we employed to develop and report on total available resources per participant and per service hour. These estimates of resources and participants were used to calculate the available resources per participant for nonfederal programs. Many of the federal agencies did not directly administer their AmeriCorps*USA programs. SCC supports the task force’s mission to develop and support programs that decrease the demand for illegal drugs within and, when directed, outside of the Navy. Program Accomplishments MAGIC ME aims to improve the program’s effectiveness and expand the program to reach youth and elderly nationwide. Participants receive a stipend of $7,660 for the program year; those beginning the program after its start receive an adjusted amount. Per FTE (n=17) The resources available to the program are 88 percent federal funds and in-kind contributions, and 12 percent private funds. 1. 2. 3. 4. 5. 6. Address Correction Requested

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the public and private resources being used to support the Corporation for National and Community Service's AmeriCorps*USA program, focusing on: (1) the amount of funds and in-kind contributions used to support program participants; (2) the per-participant and per-service-hour allocation of program resources; and (3) program objectives, anticipated benefits, and achievements to date. What GAO Found GAO found that: (1) for program year 1994 to 1995, Corporation resources available per program participant totalled $17,600, while total resources per participant averaged about $26,654; (2) over one-third of the program's financial resources came from sources outside of the Corporation, mostly from other federal agencies and state and local governments; (3) private sector contributions accounted for about 12 percent of the program's total available resources; (4) most of the Corporation's funding for program projects went to providing operating grants and education awards; (5) per-participant resources were lower for programs run by nonfederal organizations than those funded by federal agencies; (6) total available resources per-service-hour amounted to about $16; (7) Congress intended for the program to help communities address their unmet human, educational, environmental, and public safety needs; (8) the program has achieved a variety of results that support its goals; and (9) the programs reviewed were designed to strengthen community ties and spirit, develop civic responsibility, and expand educational opportunities for program participants and others.

gao_GAO-09-24

gao_GAO-09-24_0

However, field office employees completed more work, on average, as a result of greater efficiency. Nonetheless, staffing declines resulted in customers waiting longer to be served and difficulties for field offices in answering calls from customers. Reviews of continuing eligibility, however, are key activities in ensuring payment accuracy. 4). SSA’s 2006 Field Office Caller Survey found that 51 percent of customers that called 48 randomly selected field offices had one or more earlier calls that had gone unanswered. These factors may have contributed to a 3 percent drop in SSA’s overall customer satisfaction rating from 84 percent in fiscal year 2005 to 81 percent in fiscal year 2008. Growth in Work Demands and an Employee Retirement Wave May Pose Difficult Challenges without a Detailed Plan for Service Delivery Projected increases to SSA’s workload from retirement and disability filings by the nation’s approximately 80 million baby boomers and a wave of employee retirements may pose serious management challenges. SSA’s ability to meet its growing workload challenges will be more difficult as a result of the anticipated retirement of many of the agency’s most experienced field office workers. Based on the agency’s projections, 44 percent of SSA’s current workforce will retire by 2016. SSA’s Strategic Plan Is Ambitious, but It Is Not Clear How SSA Plans to Achieve Its Goals SSA’s new strategic plan, published in September 2008, calls for SSA to eliminate the backlog of disability hearings; improve the speed and quality of the disability process; and improve retiree services—such as achieving an online filing rate of 50 percent of retirement applications by 2012. This plan also stresses the workload increases that SSA will face in the coming years and recognizes SSA’s limited resources. While discussing the strategic plan with us, SSA officials stated the strategic plan is not intended to be a service delivery plan that details how the agency will address the service needs of the retiring Baby Boom generation. Further, while the plan includes strategies to significantly expand the use of electronic services, it is not clear how the increase of online services will mitigate the increasing workload. SSA has been deferring work and letting customer service decline. Still, over 3 million people waited over 1 hour for service last year and in 2 offices the average wait was over 1 hour. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology The objectives of our study were to determine (1) the effect that staffing reductions have had on field office operations and (2) the challenges the Social Security Administration (SSA) faces in meeting service delivery needs in the future and the agency’s plans for addressing them. officials responsible for overseeing field Compared the overall number of field office staffing per year from fiscal years 2005 through 2008 to the amount of work produced overall by the field offices for the same fiscal years to understand changes in field office work productivity. Interviewed managers and staff in 21 field offices, 2 Social Security Card Centers, 2 regional offices, and 3 area offices to gain their perspectives on the effect of staffing reductions and strategies used to manage work. SSA Customer Service: Broad Service Delivery Plan Needed to Address Future Challenges.

Why GAO Did This Study Millions of people rely on the services of Social Security Administration (SSA) field offices. In fiscal year 2008, SSA's approximately 1,300 field offices provided service to about 44 million customers. People visit field offices to apply for Social Security cards, apply for retirement and disability benefits, establish direct deposit, and a host of other services. Over the last several years, staffing reductions have challenged field offices' ability to manage work while continuing to deliver quality customer service. To better understand the challenges SSA faces in delivering quality customer service, GAO was asked to determine (1) the effect that staffing reductions are having on field office operations and (2) the challenges SSA faces in meeting service delivery needs in the future and the agency's plan for addressing them. In May 2008, GAO reported initial observations on the effects of reduced staff levels. To conduct this work, GAO interviewed SSA headquarters and field officials and analyzed various data on SSA's workloads and customer service. What GAO Found Staffing constraints are having adverse effects on field office services. The number of staff in field offices dropped 4.4 percent from 2005 to 2008. As a result of greater efficiencies, field office work produced fell only 1.3 percent during the same period. To manage the reduced staffing, SSA deferred work deemed as a lower priority, such as conducting reviews of beneficiaries' continuing eligibility. However, deferring these reviews means that beneficiaries who no longer qualify for benefits may still receive payments erroneously. Reduced staffing also impacted key customer service indicators. In fiscal year 2007, more than 3 million customers waited for over 1 hour to be served. Further, SSA's Field Office Caller Survey found that 51 percent of customers calling selected field offices had at least one earlier call that had gone unanswered, but for methodological reasons, the unanswered call rate was likely even higher. These factors may have contributed to a 3 percent drop in SSA's overall customer satisfaction rating from 84 percent in fiscal year 2005 to 81 percent in fiscal year 2008. Increases in retirement and disability filings and a significant retirement wave of SSA's most experienced staff pose difficult challenges for SSA in meeting future service delivery needs. SSA estimates that retirement and disability filings will increase the agency's work by about 1 million annual claims by 2017. Further, SSA will experience an agency-wide retirement wave in the coming years--the agency projects that 44 percent of its staff will retire by 2016. SSA published its new strategic plan in September 2008, which calls for SSA to eliminate the backlog of disability hearings and increase online retirement filings to 50 percent of applications. While discussing the plan with us, SSA officials noted that it is not intended to be a service delivery plan detailing how the agency will address the service needs of the retiring baby boom generation. While the plan includes the goal of significantly expanding the use of electronic services, it is not clear how this will mitigate the increasing SSA workload.

gao_GAO-03-348

gao_GAO-03-348_0

Despite the overall progress made in reducing the national default rate, the cumulative student loan funds in default had doubled to almost $22 billion by fiscal year 2001 from their fiscal year 1990 level of nearly $11 billion. During this same time period, the total student loan portfolio grew by more than 400 percent from $54.1 billion to $233.2 billion and the defaults, as a percent of the total loan portfolio, declined from 20.1 percent to 9.4 percent. To address longstanding management weaknesses, the Congress amended HEA in 1998, establishing FSA as a performance-based organization (PBO) to improve Education’s delivery of student financial aid services. FSA’s Default Management Goals Were Mostly to Prevent Defaults, Increase Collections, and Verify Student Eligibility, but the Agency Lacked a Plan to Guide its Efforts FSA identified 39 default management goals for fiscal years 2000 through 2002, which were mainly to prevent defaults, increase collections, or verify student eligibility. However, FSA did not prepare annual 5-year performance plans required by HEA. FSA Met or Exceeded Most Goals, but Did Not Prepare Timely Performance Reports According to our analysis of FSA’s internal documents, we determined that the agency met or exceeded performance targets for 36 of its 39 default management goals during fiscal years 2000 through 2002. FSA’s Fiscal Years 2000 and 2001 Performance Report Was Not Timely and Did Not Indicate Whether Goals Were Met FSA did not prepare performance reports that conform to the requirements in HEA for fiscal years 2000 and 2001. In December 2002, FSA issued a performance report that included its accomplishments for both fiscal year 2000 and fiscal year 2001. Therefore, the report does not clearly indicate the extent to which goals were or were not met. Surveyed School Officials’ Suggestions Did Not Indicate the Need for Additional Goals Although nearly a third of the school officials that participated in our survey made suggestions about ways that FSA could better assist them, none of the suggestions indicated that FSA needed additional default management goals. FSA provided similar assistance to all schools by sharing default management strategies and information through symposiums, workshops, and other media, and provided individual assistance to some schools through on-site visits and telephone calls. However, these suggestions did not indicate a need for additional default management goals because they either related to existing goals or addressed operational issues. Suggestions From Survey Respondents Did Not Indicate the Need for Additional Goals, But Could Serve to Improve FSA’s Assistance to Schools The 11 suggestions made by officials at 7 of the 23 schools responding to our survey did not indicate the need for additional goals because either FSA already had goals related to them or the suggestions related to operational matters. As we have noted in this report, HEA requires FSA to prepare annual 5-year plans in consultation with the Congress, institutions of higher education, and other stakeholders.

Why GAO Did This Study During fiscal year 2002, an estimated 5.8 million people borrowed about $38 billion in federal student loans. Despite a dramatic reduction in annual default rates on those loans since fiscal year 1990 (from 22.4 to 5.9 percent), the total volume of dollars in default doubled to nearly $22 billion by fiscal year 2001 from about $11 billion in fiscal year 1990. During that same period, the total student loans outstanding grew from $54.1 billion to $233.2 billion. The Department of Education's Office of Federal Student Aid (FSA) manages the nation's student financial assistance programs authorized under title IV of the Higher Education Act (HEA). In 1998, Congress amended the HEA and established FSA as a performance-based organization. Among other requirements, the HEA called for FSA to annually develop 5-year plans, issue annual reports, and consult with stakeholders regarding their delivery system. GAO initiated a review to assess FSA's default management efforts and results. What GAO Found FSA's default management goals were mostly to prevent defaults, increase collections, and verify student eligibility, but the agency lacked a plan to guide its efforts. FSA had 39 default management goals for fiscal years 2000 through 2002. However, the goals changed significantly during this period and FSA did not annually prepare 5-year performance plans as required by the HEA. FSA met or exceeded most goals, but did not prepare timely performance reports. According to our analysis, FSA met or exceeded performance targets for 36 of its 39 default management goals during fiscal years 2000 through 2002. However, FSA did not issue performance reports for fiscal years 2000 and 2001, as required by the HEA. Instead, in December 2002, FSA issued one report for both fiscal years that lists accomplishments, but does not clearly indicate the extent to which goals were or were not met. Suggestions from survey respondents did not indicate the need for additional goals. While about one-third of the 23 school officials who responded to our survey made suggestions about ways that FSA could better assist them, none of the suggestions indicated the need for additional default management goals. FSA assisted all schools by sharing default management information through symposiums and other media, and provided individual assistance to some schools through visits and telephone calls. Most of the responding officials were generally pleased with FSA's assistance. The suggestions that officials made did not indicate a need for additional goals because they either related to existing goals or addressed operational issues.

gao_NSIAD-99-27

gao_NSIAD-99-27_0

In recognition of the integral part women play in the all-volunteer force, the National Defense Authorization Act for Fiscal Year 1998 directed us to conduct a study on any inequalities or perceptions of inequalities in the treatment of men and women in the armed forces that are tied to statutes and regulations governing the armed forces. The purpose of this report is to (1) identify perceptions of gender inequities found in various surveys and studies of male and female servicemembers and (2) examine what available data and studies reveal about those perceptions. There was no legal prohibition of women serving in direct ground combat roles. The local policies and practices of military commanders can also affect assignments. However, no study has addressed the specific issues. According to one study,some Army men believe that because women cannot be assigned to combat units, they have more opportunities to take advantage of training opportunities that make them more competitive for career advancement and promotions. A few men and women have expressed concerns about the equity of the promotions process. We found no studies that directly addressed whether service assignment policies and practices or the ground combat exclusion policy have an inequitable impact on career opportunities of men and women. Consequently, we examined the data submitted by the services as part of their annual equal opportunity assessments to determine whether men and women were selected at similar rates for promotion, key assignments, and professional military education. Analysis of 60 key assignment selection boards showed that, of those being considered, the military as a whole selected men and women for key assignments at similar rates in 32 of the selection boards in fiscal years 1993 to 1997 (see table 2.3). Recommendations To provide DOD and service officials with information to address perceptions of gender inequities in position prerequisites and skill utilization, we recommend that the Secretary of Defense direct the services to assess whether requirements for skills or specialties that are presently closed to women or have only recently been opened to women are being inappropriately used as prerequisites for positions that are otherwise open to women and men or women are receiving an equal opportunity to work within the area of their military specialties. Different Fitness Standards for Men and Women Do Not Necessarily Constitute a Double Standard Many servicemembers believe that the services’ physical fitness standards are measures of one’s ability to perform in a combat environment or are related to a specific job or occupation. The Commission concluded that since physical fitness standards are established to promote the highest level of general wellness in the armed forces and are not aimed at assessing capability to perform specific jobs or missions, it is appropriate to adjust the standards for physiological differences among servicemembers. Furthermore, DOD said that developing standards for general fitness and health is a complex matter, where academic and research experts often differ on conclusions and research.

Why GAO Did This Study Pursuant to a legislative requirement, GAO conducted a study on inequalities or perceptions of inequalities in the treatment of men and women in the armed forces, focusing on: (1) perceptions of gender inequities found in various surveys and studies of male and female servicemembers; and (2) what available data and studies reveal about those perceptions. What GAO Found GAO noted that: (1) some perceptions of inequality in the area of career opportunities involve various local assignment policies and practices established by unit commanders; (2) some women have raised concerns about being assigned to clerical and administrative positions instead of positions requiring the technical skills in which they were trained; (3) some women believe that they are being denied opportunities to serve in positions that are legally open to them because of perceived unjustified prerequisite requirements for a certain kind of experience that is closed to women; (4) however, no existing studies show the extent to which such practices take place or are inequitable; (5) researchers have found perceptions among some men and women that the Department of Defense's (DOD) policy restricting women from occupations and units involved in direct ground combat affects their opportunities for promotions and career advancement; (6) no study was found that specifically addressed whether the ground combat exclusion policy has an inequitable impact on the career opportunities of men and women; (7) consequently, GAO examined the data submitted by the services as part of their annual equal opportunity assessments, and its analysis showed that the military selected men and women for promotion at basically similar rates over 80 percent of the time and selected men and women for key assignments and professional military education at similar rates approximately half of the time; (8) in those cases where the selection rates differed, no clear pattern of a systematic advantage to either gender emerged; (9) a RAND study stated that many servicemembers believe that fitness standards are a measure of one's ability to perform in a combat environment, and that lower fitness standards for women amounts to a double standard; (10) however, the physical fitness program is intended only to maintain the general fitness and health of military members and fitness testing is not aimed at assessing the capability to perform specific missions or military jobs; (11) DOD officials and experts agree that it is appropriate to adjust the standards for physiological differences among servicemembers by age and gender; and (12) many military women have also expressed concerns about the fairness of the services' body fat standards.

gao_NSIAD-99-158

gao_NSIAD-99-158_0

Over this period, rule of law assistance totaled at least $970 million. Haiti received the most, primarily in connection with U.S. and international efforts to restore peace and stability to the country after a 1991 coup. Most countries (102 of the 184) received less than $1 million. At least 35 entities from the departments and agencies have a role in providing U.S. rule of law assistance programs. 3.) Recipients of Rule of Law Assistance in the Region In fiscal years 1993-98, the United States provided $349 million in rule of law assistance to Latin America and the Caribbean (about 36 percent of the worldwide total). Seven countries accounted for about 76 percent of the total regional funding. Two of the seven—Haiti and El Salvador—accounted for just over 50 percent of the regional total, with $137.9 million and $40.7 million, respectively. 4.) The United States provided large amounts of assistance during this period in an attempt to restore order and democracy after a coup in 1991. Rule of Law Assistance Activities in the Region To help illustrate what rule of law assistance was used for in the Latin America and the Caribbean region, we grouped rule of law assistance into one of six categories based on descriptions provided by the cognizant agencies. Assistance for judicial and court operations was the second largest category, comprising $74.2 million (21 percent of the regional total). Assistance for civil government and military reform was the third largest category—$47.6 million (13.6 percent). Scope and Methodology To determine how much U.S. rule of law assistance was provided worldwide in fiscal years 1993-98, and to identify the U.S. departments and agencies involved, we reviewed program documentation and interviewed officials at the Department of State, USAID, the Department of Defense, and USIA—the principal sources of funding for U.S. rule of law programs. Many are law enforcement agencies providing training and technical assistance to their counterparts overseas. International Trade Administration National Telecommunications and Information Administration Office of General Counsel, Commercial Law Development Program U.S. Patent and Trademark Office U.S. Air Force U.S. Army U.S. Marine Corps U.S. Navy Drug Enforcement Administration Federal Bureau of Investigation Immigration and Naturalization Service Criminal Division International Criminal Investigative Training Assistance Program Office of Overseas Prosecutorial Development, Assistance and Bureau of Diplomatic Security, Office of Antiterrorism Assistance Bureau of International Narcotics and Law Enforcement Affairs Bureau of Western Hemisphere Affairs (formerly Bureau of Inter-American Affairs) Bureau of Alcohol, Tobacco and Firearms Office of International Affairs Office of Investigations Federal Law Enforcement Training Center Financial Crimes Enforcement Network Internal Revenue Service U.S. Secret Service U.S. Agency for International Development (USAID) U.S. Information Agency (USIA) U.S. Funding for Rule of Law Assistance Categories for Latin America and the Caribbean, Fiscal Years 1993-98 To develop an overview of the types of activities being funded for the Latin America and the Caribbean region, we grouped the U.S. rule of law assistance program data for the region into six categories based on activity descriptions provided by the cognizant departments and agencies. Well over half of all U.S. rule of law assistance to the region was technical assistance and training for criminal justice and law enforcement personnel—police, prosecutors, public defenders, and others.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on U.S. rule of law assistance programs and activities, focusing on the: (1) amount of U.S. rule of law funding provided worldwide in fiscal years 1993-1998; and (2) U.S. Departments and agencies involved in providing rule of law assistance. What GAO Found GAO noted that: (1) based on the funding data cognizant Departments and agencies made available, during fiscal years 1993-1998, the United States provided at least $970 million in rule of law assistance to countries throughout the world; (2) the Latin America and the Caribbean region was the largest recipient of U.S. rule of law assistance over the period, accounting for $349 million, or more than one-third of the total assistance; (3) in recent years, Central European countries received an increasingly larger share and, in 1998, Central Europe was the largest regional recipient, accounting for about one-third of all rule of law assistance; (4) the United States provided at least some assistance to 184 countries--ranging from $138 million for Haiti to $2,000 for Burkina Faso; (5) while most countries received less than $1 million, 15 countries, including 7 in Latin America and the Caribbean, accounted for just over half of the total funding; (6) at least 35 entities from various U.S. Departments and agencies have a role in the U.S. rule of law assistance programs; (7) the Departments of State and Justice and the Agency for International Development are the principal organizations providing rule of law training, technical advice, and related assistance; (8) the Department of Defense, the U.S. Information Agency, numerous law enforcement agencies and bureaus, and other U.S. Departments and agencies also have a direct role; (9) 40 countries in the Latin America and the Caribbean region received some rule of law assistance; (10) more than three-fourths of the $349 million in assistance was provided to seven countries; (11) Haiti received nearly $138 million, or about 40 percent of the regional total, largely in connection with U.S. and international efforts to restore order and democracy after a September 1991 military coup; (12) six other countries in the region--ranging from about $41 million for El Salvador to $12 million for Panama--accounted for about $127 million, or nearly 37 percent of the regional total; (13) most of the rule of law assistance for Latin America and the Caribbean was provided to help the countries reform their criminal justice or law enforcement organizations, including training and technical assistance for prosecutors, public defenders, police officers, and investigators; and (14) a substantial amount was also dedicated to improving court operations, including modernizing court administration and enhancing public access to the judicial system.

gao_GAO-12-749

gao_GAO-12-749_0

The financial eligibility criteria are based on individuals’ assets—income and resources together. States are responsible for determining whether applicants meet the financial and other eligibility criteria for Medicaid coverage for long-term care. (See table 1 for examples of different types of income and resources.) Federal law limits Medicaid payment for long-term care services for persons who divest themselves of—or “transfer”—their assets for less than FMV within a specified time period. If the state determines an applicant transferred an asset for less than FMV during the look-back period, the individual may be ineligible for Medicaid coverage for long-term care for a period of time, called the penalty period. To assess applicants’ financial eligibility for Medicaid coverage for long- term care, and to determine whether they transferred assets for less than FMV, states generally require applicants to submit applications and to provide documentation of certain assets reported on the applications. States Required Applicants to Document Most Assets, but What Was Considered Acceptable Proof Varied States reported requiring applicants to provide documentation for most of the 13 types of assets contained in our survey; however, the types and number of months of documentation that the states considered to be acceptable proof for determining an applicant’s financial eligibility for Medicaid coverage for long-term care varied. All States Obtained Some Amount of Asset Information from Third Parties, and No State Had Implemented an Asset Verification System All 51 states reported that they obtained some amount of asset information from third parties, although the extent of the screenings conducted varied by state. CMS officials were aware of states’ progress in implementing the AVS and told us that the agency was regularly communicating with states regarding AVS implementation. It Is Unclear Whether Some States Obtain Sufficient Information to Implement Certain DRA Provisions On the basis of states’ responses to questions about the documentation required from applicants and the asset information obtained from third parties, it is unclear whether some states obtain sufficient information to implement certain DRA provisions, particularly the provisions related to the look-back period and home equity. The results of our survey raise questions about some states’ implementation of the DRA, but are not conclusive, and we have additional work planned related to Medicaid long-term care financial eligibility. Three of the 31 states reported requiring a single month of documentation from applicants and did not obtain any information from financial institutions. Thus, these officials stated, it was understandable for states to use discretion and only conduct reviews when there is reason to believe that a transfer could have been made during the look-back period. States must balance the costs of eligibility determination efforts with the need to ensure that those efforts provide sufficient information to implement federal requirements. Given the complexities involved, it may be reasonable for states to adhere to a risk-based approach and focus their eligibility determination efforts on applicants who appear to be more likely to have assets or to have transferred assets that would make them ineligible. However, it is too early to assess its overall effectiveness, which will ultimately depend on the breadth of the financial institutions participating and the depth of the information obtained. HHS concurred with our findings and noted that the results of our comprehensive report will serve as a resource for all interested parties. Appendix III: States’ Use of Data Matches to Verify Applicants’ Assets Table 27a: Proportion of Applicants for which States Conduct Data Matches with Third Parties to Verify Applicants’ Assets, by State and Source of Data Match, 2011 Social Security Administration  = All applicants.

Why GAO Did This Study Medicaid—a joint federal-state health care financing program for certain low income individuals—paid for nearly half of the nation’s $263 billion long-term care expenditures in 2010. To be financially eligible for Medicaid coverage for long-term care, applicants cannot have assets—income and resources—above certain limits. Federal law discourages individuals from artificially impoverishing themselves in order to establish financial eligibility for Medicaid. Specifically, those who transfer assets for less than fair market value during a specified time period—or “look-back” period—before applying for Medicaid may be ineligible for coverage for longterm care for a period of time. The DRA extended the look-back period to 60 months and introduced new requirements for the treatment of certain types of assets, such as annuities, in determining eligibility. States are responsible for assessing applicants’ eligibility for Medicaid, the criteria for which varies by state. GAO was asked to provide information on states’ requirements and practices for assessing the financial eligibility of applicants for Medicaid long-term care coverage. GAO examined the extent to which states (1) require documentation of assets from applicants, (2) obtain information from third parties to verify applicants’ assets, and (3) obtain information about applicants’ assets that could be used to implement eligibility-related DRA provisions. From October 2011 to November 2011, GAO surveyed Medicaid officials from each of the 50 states and the District of Columbia. GAO also interviewed officials from CMS, the agency within HHS that oversees Medicaid. What GAO Found States reported requiring applicants to provide documentation for most of the 13 types of assets included in GAO’s survey. States varied in the extent to which they obtained information from third parties to verify applicants’ assets. For example, all states conducted data matches with the Social Security Administration but used other sources to a lesser extent. While states’ implementation of an electronic asset verification system (AVS) was required on a rolling basis beginning in 2009, no state had fully implemented an AVS at the time of GAO’s survey. Among the implementation challenges reported by states were lack of resources and getting financial institutions to participate. Officials from the Centers for Medicare & Medicaid Services (CMS) were aware of states’ progress and challenges and told GAO that they regularly communicated with states on AVS implementation. On the basis of states’ responses to questions about the extent of documentation required from applicants and information obtained from third parties, it is unclear whether some states obtain sufficient information to implement certain provisions of the Deficit Reduction Act of 2005 (DRA). For example, 31 states reported requiring less than 60 months of documentation from applicants and financial institutions. The results of GAO’s survey raise questions about states’ implementation of the DRA, but are not conclusive. CMS officials said that it is reasonable for states to only conduct reviews when there is reason to believe a transfer of assets occurred. GAO has additional work planned related to Medicaid long-term care financial eligibility. States must balance the costs of eligibility determination efforts with the need to ensure that those efforts provide sufficient information to implement federal requirements. Given the complexities involved, it may be reasonable for states to adhere to a risk-based approach and focus their eligibility determination efforts on applicants who appear to be more likely to have assets or to have transferred assets that would make them ineligible. It is too early to assess the effectiveness of the AVS; its utility will ultimately depend on the breadth of the financial institutions participating and the depth of the information obtained. The Department of Health and Human Services (HHS) concurred with GAO’s findings and commented that GAO’s comprehensive report will serve as a helpful resource for CMS and other interested parties.

gao_GAO-17-610

gao_GAO-17-610_0

FPDS-NG reports that the federal government obligated approximately $1.5 billion on personal services contracts from fiscal years 2011 through 2015. The FAR enumerates the characteristics of personal services contracts: Performance on a government site, Principal tools and equipment furnished by the government, Services applied directly to the agency mission, Comparable services are performed in similar agencies using civil The need for the type of service can reasonably be expected to last more than 1 year, and The nature of the service or the way that it is performed reasonably requires government direction or supervision of the contractor’s employees to adequately protect the government’s interest, retain control of the function, or retain full responsibility for the function. DOD concurred with GAO’s recommendations. Specifically, although FPDS-NG reports that DOD spent about $118 million on personal services contracts in fiscal year 2015, we found that personal services contract obligations from the Air Force and Army were overstated in the FPDS-NG data because they included obligations that were not for personal services contracts. We confirmed this with Air Force officials. All of the contracts we reviewed were for health care-related services at U.S. Personal and Nonpersonal Services Contracts Can Be Difficult to Distinguish from Each Other Apart from the inaccuracies and differences in data reported in FPDS and the inventories of contracted services, it is also possible that personal services contracts could be undercounted because nonpersonal services contracts could be administered in a manner that results in their actually being personal services contracts and potentially unauthorized personal services contracts. USAID Cited Incorrect Authority for Personal Services Contracts, and USAID and DOD Use the Contracts for Different Purposes USAID and DOD have multiple authorities available for awarding personal services contracts. However, contract files at USAID did not cite the correct authority for the 15 contracts we reviewed. USAID and DOD Use Personal Services Contracts for Different Purposes USAID’s personal services contracts that we reviewed cover a broad range of activities including program management, security analysis, and logistics, among others. According to DOD officials, it is not DOD’s practice to assign personal services contractors to perform inherently governmental tasks. These tasks are considered inherently governmental, according to the FAR and OFPP Policy Letter 11-01. USAID has taken initial steps to revise its documentation but has not yet developed a process to determine whether the steps taken will result in increased accuracy. The Secretary of Defense direct the Secretaries of the Air Force and the Army take steps to ensure the accurate recording of personal services contracts in the Federal Procurement Data System-Next Generation. Appendix I: Objectives, Scope, and Methodology This report examines (1) the extent to which selected agencies award personal services contracts; and (2) how those agencies use personal services contracts. We also identified the four agencies—the Air Force, Army, and Navy within the Department of Defense (DOD), and the United States Agency for International Development (USAID)—with the highest obligations for personal services contracts using FPDS-NG data. These agencies account for nearly 60 percent of the spending on such contracts in fiscal year 2014. Fiscal year 2014 was the latest year with certified inventory data, at the time of our review. Based on our review of the FPDS-NG data, reviews of the selected service contract inventory data, selected contract files, and interviews with DOD and USAID officials, we determined that the FPDS-NG data are not sufficiently reliable for comparing obligations from year to year for personal services contracts or for determining the extent to which DOD awarded personal services contracts. To further explore the differences in how these agencies use personal services contracts and other types of service contracts, we also reviewed a different nongeneralizable random sample of 40 contracts that were coded as engineering and technical services, or other professional services contracts awarded by the Air Force, Army, Navy, and USAID in fiscal year 2014 (10 contracts from each agency).

Why GAO Did This Study A personal services contract is one that makes contractor personnel appear to be government employees. These contracts must be authorized by federal law. According to FPDS-NG, the government reported obligating about $1.5 billion on personal services contracts in fiscal years 2011 through 2015. GAO was asked to examine the federal government's use of personal services contracts. This report discusses (1) the extent to which selected federal agencies award personal services contracts, and (2) how those agencies use them. GAO identified the four agencies spending the most on personal services contracts—the Air Force, Army, Navy, and USAID—as reported in FPDS-NG. These agencies account for about 60 percent of total spending on these contracts. GAO also reviewed the service contract inventories these agencies prepared for fiscal year 2014, the latest year available at the time of this review. GAO reviewed the files for a nongeneralizable sample of 60 personal (15 at each agency) and 40 nonpersonal services contracts (10 at each agency) and interviewed agency officials. GAO did not review the administration of the contracts. What GAO Found The United States Agency for International Development (USAID) spent more than $123 million on personal services contracts in fiscal year 2015, according to the Federal Procurement Data System-Next Generation (FPDS-NG). But GAO cannot confirm the extent that personal services contacts are awarded by the Department of Defense (DOD) because GAO identified significant reporting errors at two DOD agencies—the Air Force and the Army. Specifically, 4 of the 15 Air Force contracts and 13 of the 15 Army contracts GAO reviewed were incorrectly recorded in FPDS-NG as personal services contracts. Defense officials agreed with this assessment. Further, the fiscal year 2014 inventories of contracted services at Air Force, Army, and Navy contained personal services contracts not captured in FPDS-NG, as shown in the figure below. Apart from the inaccuracies of the reported data, GAO observed and agency officials agreed that additional undercounting could exist since some contracts for nonpersonal services could become personal services contracts, depending on whether the contract involves direct supervision by government employees. In the absence of accurate data, proper management of personal services and other contracts becomes more difficult. Military departments and USAID use personal services contracts differently. DOD personal services contracts GAO reviewed were mostly for health care services. As permitted under its regulations, USAID uses personal services contracts for a broader range of functions such as program management, security analysis, and logistics, some of which are considered tasks that only government employees should perform—inherently governmental activities. Federal regulations that prohibit contractors from performing such activities do not apply to authorized personal services contracts. DOD's practice is not to use personal services contracts for inherently governmental tasks. DOD and USAID have multiple authorities for awarding personal services contracts, but none of the files GAO reviewed at USAID cited the correct authority for personal services contracts performed in the United States. USAID has taken steps to address this issue but has not yet determined whether these steps will be effective. What GAO Recommends GAO recommends that the Secretary of Defense direct the Air Force and Army to take steps to ensure the accurate recording of personal services contracts in FPDS-NG; and that USAID ensure the correct authority is cited for personal services contracts performed in the United States. DOD and USAID concurred with our recommendations.

gao_NSIAD-96-172

gao_NSIAD-96-172_0

Cleanup issues faced at closing bases are similar to those at active bases. Through March 1996, DOD had allocated $3.4 billion, obligated $2.8 billion, and expended $1.6 billion on BRAC environmental cleanup. Further, with the use of available DOD financial data, we estimate that the total cost is likely to exceed $11 billion, as shown in table 4. Among these factors are (1) the large number of contaminated sites and associated extent of contamination, (2) the requirements of federal and state environmental laws and regulations, (3) the lack of cost-effective cleanup technology, and (4) property reuse plans. Identifying Full Extent of Contamination at BRAC Sites Is Difficult and Costly The sheer magnitude of the BRAC program, coupled with the severe soil and water contamination that has developed over decades of base operations, is a key cause for the high cost of cleanup. Environmental Laws and Regulations Contribute to High Costs The requirements of federal and state environmental laws and regulations have a significant impact on the cost of environmental cleanup. Opportunities for Reducing Cleanup Costs and Their Impact on Programmatic Goals Potential options exist for reducing the cost of cleanup. The options we analyzed are (1) deferring or extending certain cleanup actions, (2) modifying existing laws and regulations, (3) adopting more cost-effective cleanup technologies, and (4) sharing costs with transferees. It would delay transfer of property to users and be contrary to the spirit of the President’s base closure community reinvestment program, announced in July 1993, for the economic recovery of those communities affected by the closure process. It must be recognized that, on a case-by-case basis, deferring or extending cleanups may increase costs. For example, easing cleanup standards and associated requirements may increase environmental risk and create unacceptable danger to human health and the environment, thereby increasing public resistance and dissatisfaction. This revision would reduce cost and allow more expedited transfer of uncontaminated property. Developing and Using More Cost-Effective Technology New and more cost-effective technology may offer cost reduction potential for cleaning up groundwater, unexploded ordnance, and other contaminants. First, because many BRAC bases are being cleaned up under accelerated schedules, many new technologies now under development may not be available for widespread use for years after the technology is needed. Second, newer technology may not be more cost-effective than existing technology. Existing legislation to encourage sharing costs has not been effective, in part, because of unknown future liabilities and difficulty establishing the value of the property.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the costs of the Department of Defense's (DOD) environmental cleanup efforts under the base realignment and closure (BRAC) process, focusing on the: (1) reasons that cleanups are so costly; and (2) potential for reducing costs and the impact on program goals. What GAO Found GAO found that: (1) as of March 1996, DOD had allocated about $3.4 billion for the BRAC environmental cleanup program; (2) as more bases are closed and more cleanup actions are underway, program costs are likely to increase significantly; (3) although DOD has not computed a total cost estimate for the program, available DOD financial data indicate that program costs are likely to exceed $11 billion; (4) the key reasons for the high cost of closing base cleanups include the large number of contaminated sites and difficulties associated with types of contamination, requirements of federal and state laws and regulations, lack of cost-effective cleanup technology for certain contaminants, and intended property reuse; (5) DOD has identified over 5,300 potentially contaminated sites at its BRAC bases; (6) the laws and regulations DOD must abide by in expediting property transfer for reuse have proven to be time- consuming, complex, and costly; (7) technology limitations in cleaning property of certain contaminants (such as unexploded ordnance) have proved costly; (8) options for reducing cleanup costs at closing bases include deferring or extending certain cleanup actions, modifying existing laws and regulations, adopting more cost-effective cleanup technologies, and sharing costs with the ultimate user of the property; (9) all of these options may adversely impact programmatic goals, thereby presenting decisionmakers with difficult choices in developing a cost-effective environmental cleanup program; (10) deferring or extending cleanup actions may delay property transfer and reuse, hurt the economic revitalization of communities affected by the closure process, and harm the environment and health as well; (11) modifying law and regulations may increase environmental risk, thereby increasing public resistance and dissatisfaction; (12) adopting more cost- effective technologies may delay the program because new technologies currently under development may not be available for years and the new technologies may not be more cost- effective than existing technologies; and (13) sharing costs with the ultimate user could present problems because of unknown future liabilities and difficulty establishing the value of the property.

gao_T-RCED-98-12

gao_T-RCED-98-12_0

Concerns Exist About Whether WAAS Can Satisfy Performance Requirements Within Budget and on Schedule While system developers and outside experts have confidence that WAAS can achieve most key performance requirements within current cost and schedule estimates, four concerns are worth noting: (1) the ability of WAAS to provide the level of service for precision approaches provided by existing ground-based systems; (2) the ability of computers to process the large quantities of GPS/WAAS data within a few seconds; (3) the vulnerability of GPS/WAAS signals to interference; and (4) the need for additional satellites to achieve the availability requirement. If WAAS cannot meet this requirement, FAA may incur additional costs to install local area augmentation systems at more airports than expected. A decision is expected on any needed procedural changes by late 1998. The addition of one or two GEO satellites would increase the program cost beyond the current estimate of $2.4 billion. FAA expects that adding one or two GEO satellites would cost between $71 million and $192 million over the WAAS life cycle (2001-2016). Full Cost Savings From WAAS Tied to FAA’s Decommissioning of Ground-Based System To get the full cost savings from WAAS, FAA will need to decommission its ground-based network of navigation aids, which now costs the agency $166 million annually to maintain. FAA’s plan presumes that both its current ground-based system and the new satellite-based system will be in place from the time that the full, Phase 3 WAAS is commissioned until the decommissioning of the ground-based network is completed in 2010. Nevertheless, FAA’s plans could be impeded if the WAAS program’s schedule slips or if safety and economic benefits are not sufficient to cause the aviation industry to switch quickly to satellite technology. Cost Increases and Delays in Decommissioning Reduce Net Benefits of WAAS, but Benefits Still Exceed Costs In making investment decisions, FAA conducts benefit-cost analyses to determine if the benefits to be derived from acquiring new equipment outweigh the costs. To understand the impact of the potential cost increases and decommissioning delays previously discussed, we requested that FAA’s support contractor perform alternative runs of the benefit-cost analysis.FAA’s 1997 analysis served as the base case for comparison purposes. Using these assumptions, the contractor’s analysis found that the benefit-cost ratio would be 4.6 when passenger time savings were included and all aircraft gained savings from shorter flights and 1.7 when passenger time savings were excluded and 30 percent of all aircraft gained savings from shorter flights. However, delays in decommissioning or the retention of ground-based navigation aids would cause substantial decreases in the net benefits of the WAAS program.

Why GAO Did This Study GAO discussed the Federal Aviation Administration's (FAA) Wide Area Augmentation System (WAAS) program, focusing on: (1) the likelihood of WAAS satisfying key performance requirements within current program cost and schedule estimates; (2) the importance of avoiding delays in FAA's timetable for shutting down (decommissioning) ground-based navigation aids; and (3) the potential impact of cost increases and decommissioning delays on the benefit-cost analysis for the WAAS program. What GAO Found GAO noted that: (1) while the developers of WAAS and outside experts are confident that WAAS is likely to satisfy most key performance requirements within current program cost and schedule estimates, some concerns are worth noting; (2) specifically, FAA may make some procedural changes for aircraft landings if WAAS is not able to deliver the level of service provided by existing ground-based landing systems; (3) also, FAA may add more space-based equipment to meet performance requirements; (4) FAA expects to make decisions on these matters by late 1998 and late 2000, respectively; (5) if the space-based equipment is added, program costs would grow between $71 million and $192 million above the current total program cost estimate of $2.4 billion; (6) the program's schedule can be expected to slip if arrangements are not made immediately to put this equipment in space; (7) to realize the full cost savings from WAAS, FAA will need to avoid delays in decommissioning its ground-based network of navigation aids; (8) FAA estimates that it incurs costs of $166 million annually to maintain this ground-based network; (9) FAA's plans--which envision complete decommissioning of the network by 2010--presume that the full WAAS will become operational (commissioned) in 2001 and that the aviation industry will install the necessary equipment in its aircraft during the remainder of that decade; (10) however, the planned decommissioning could be delayed if the WAAS program's schedule slips or if safety and economic benefits, such as an aircraft's ability to take advantage of more fuel-efficient routes, are not sufficient to cause the industry to switch to satellite-based navigation technology by the end of the next decade; (11) cost increases and decommissioning delays, if they occur, would reduce the net benefits of the WAAS program, but program benefits would still outweigh costs; (12) FAA's July 1997 benefit-cost analysis found that benefits were: (a) more than five times greater than costs when passenger time savings were included and all aircraft gained savings from shorter flights; and (b) more than two times greater than costs when passenger time savings were excluded and 30 percent of all aircraft gained savings from shorter flights; (13) additional analyses done at GAO's request, using pessimistic cost and decommissioning assumptions, found that the WAAS program's benefits are still significantly greater than the costs; and (14) however, if the ground-based navigation network is not decommissioned or must remain in place much longer than expected, the net benefits from WAAS would be substantially reduced.

gao_GAO-14-623T

gao_GAO-14-623T_0

FPS Faces Challenges Ensuring Contract Guards Have Been Properly Trained and Certified before Being Deployed to Federal Facilities Some FPS Contract Guards Have Not Received Required Training on Responding to Active-Shooter Scenarios According to FPS officials, the agency has required its guards to receive training on how to respond to an active-shooter scenario since 2010. We were unable to determine the extent to which FPS’s guards have received active-shooter response training, in part, because FPS lacks a comprehensive and reliable system for guard oversight (as discussed below). When we asked officials from 16 of the 31 contract guard companies we contacted if their guards had received training on how to respond during active-shooter incidents, responses varied.companies we interviewed about this topic: For example, of the 16 contract guard officials from eight guard companies stated that their guards had received active-shooter scenario training during FPS orientation; officials from five guard companies stated that FPS had not provided active-shooter scenario training to their guards during the FPS- provided orientation training; and officials from three guard companies stated that FPS had not provided active-shooter scenario training to their guards during the FPS- provided orientation training, but that the topic was covered at some other time. Without ensuring that all guards receive training on how to respond to active-shooter incidents, FPS has limited assurance that its guards are prepared for this threat. An official at one contract guard company stated that 133 of its approximately 350 guards (about 38 percent) on three separate FPS contracts (awarded in 2009) have never received their initial x-ray and magnetometer training from FPS. Consequently, some guards deployed to federal facilities may be using x- ray and magnetometer equipment that they are not qualified to use─thus raising questions about the ability of some guards to execute a primary responsibility to properly screen access control points at federal facilities. FPS Lacks Effective Management Controls to Ensure Contract Guards Have Met Training and Certification Requirements In our September 2013 report, we found that FPS continues to lack effective management controls to ensure that guards have met training and certification requirements. For example, although FPS agreed with our 2012 recommendations to develop a comprehensive and reliable system to oversee contract guards, it still has not established such a system. FPS’s file reviews for that period showed files missing, for example, documentation for screener training, initial weapons training, CPR certification, and firearms qualifications. FPS Continues to Face Challenges with Assessing Risk at Federal Facilities We found in 2012 that FPS did not assess risks at the 9,600 facilities under the control and custody of GSA in a manner consistent with federal standards, although federal agencies paid FPS millions of dollars to assess risk at their facilities. Our March 2014 report examining risk assessments at federal facilities found that this is still a challenge for FPS and several other federal agencies. Federal standards such as the National Infrastructure Protection Plan’s (NIPP) risk management framework and ISC’s RMP call for a risk assessment to include a threat, vulnerability, and consequence assessment. Risk assessments help decision-makers identify and evaluate security risk and implement protective measures to mitigate risk. Instead of conducting risk assessments, FPS uses an interim vulnerability assessment tool, referred to as the Modified Infrastructure Survey Tool (MIST), with which it assesses federal facilities until it develops a longer- term solution. MIST has some limitations. Most notably, it does not assess consequence (the level, duration, and nature of potential loss resulting from an undesirable event). Three of the four risk assessment experts we spoke with generally agreed that a tool that does not estimate consequences does not allow an agency to fully assess risks. MIST was also not designed to compare risks across federal facilities. Consequently, FPS does not have the ability to comprehensively manage risk across its portfolio of 9,600 facilities and recommend countermeasures to federal tenant agencies. Since fiscal year 2010, we have made 31 recommendations to help FPS address its challenges with risk management, oversight of its contract guard workforce, and its fee-based funding structure. The remaining 15 have not been implemented. Related GAO Products Federal Facility Security: Additional Actions Needed to Help Agencies Comply with Risk Assessment Methodology Standards. Homeland Security: Federal Protective Service Continues to Face Challenges with Contract Guards and Risk Assessments at Federal Facilities. Homeland Security: Challenges Associated with Federal Protective Service’s Contract Guards and Risk Assessments at Federal Facilities. GAO-13-222. Homeland Security: Protecting Federal Facilities Remains a Challenge for the Department of Homeland Security’s Federal Protective Service. Federal Facility Security: Staffing Approaches Used by Selected Agencies. GAO-10-506T.

Why GAO Did This Study Recent incidents at federal facilities demonstrate their continued vulnerability to attacks or other acts of violence. As part of the Department of Homeland Security (DHS), FPS is responsible for protecting federal employees and visitors in approximately 9,600 federal facilities under the control and custody the General Services Administration (GSA). To help accomplish its mission, FPS conducts facility security assessments and has approximately 13,500 contract security guards deployed to federal facilities. FPS charges fees for its security services to federal tenant agencies. This testimony discusses challenges FPS faces in (1) ensuring contract security guards deployed to federal facilities are properly trained and certified and (2) conducting risk assessments at federal facilities. It is based on GAO reports issued from 2009 through 2014 on FPS's contract guard and risk assessment programs. To perform this work, GAO reviewed FPS and guard company data and interviewed officials about oversight of guards. GAO compared FPS's and eight federal agencies' risk assessment methodologies to ISC standards that federal agencies must use. GAO selected these agencies based on their missions and types of facilities. GAO also interviewed agency officials and 4 risk management experts about risk assessments. What GAO Found The Federal Protective Service continues to face challenges ensuring that contract guards have been properly trained and certified before being deployed to federal facilities around the country. In September 2013, for example, GAO reported that providing training for active shooter scenarios and screening access to federal facilities poses a challenge for FPS. According to officials at five guard companies, their contract guards have not received training on how to respond during incidents involving an active shooter. Without ensuring that all guards receive training on how to respond to active-shooter incidents at federal facilities, FPS has limited assurance that its guards are prepared for this threat. Similarly, an official from one of FPS's contract guard companies stated that 133 (about 38 percent) of its approximately 350 guards have never received screener training. As a result, guards deployed to federal facilities may be using x-ray and magnetometer equipment that they are not qualified to use raising questions about their ability to fulfill a primary responsibility of screening access control points at federal facilities. GAO was unable to determine the extent to which FPS's guards have received active-shooter response and screener training, in part, because FPS lacks a comprehensive and reliable system for guard oversight. GAO also found that FPS continues to lack effective management controls to ensure its guards have met its training and certification requirements. For instance, although FPS agreed with GAO's 2012 recommendations that it develop a comprehensive and reliable system for managing information on guards' training, certifications, and qualifications, it still does not have such a system. Additionally, 23 percent of the 276 contract guard files GAO reviewed did not have required training and certification documentation. For example, some files were missing items such as documentation of screener training, CPR certifications, and firearms qualifications. Assessing risk at federal facilities remains a challenge for FPS. GAO found in 2012 that federal agencies pay FPS millions of dollars to assess risk at their facilities, but FPS is not assessing risks in a manner consistent with federal standards. In March 2014, GAO found that this is still a challenge for FPS and several other agencies. The Interagency Security Committee's (ISC) Risk Management Process for Federal Facilities standard requires federal agencies to develop risk assessment methodologies that, among other things, assess the threat, vulnerability, and consequence to undesirable events. Risk assessments help decision-makers identify and evaluate security risks and implement protective measures. Instead of conducting risk assessments, FPS uses an interim vulnerability assessment tool, referred to as the Modified Infrastructure Survey Tool (MIST) to assess federal facilities until it develops a longer-term solution. However, MIST does not assess consequence (the level, duration, and nature of potential loss resulting from an undesirable event). Three of the four risk assessment experts GAO spoke with generally agreed that a tool that does not estimate consequences does not allow an agency to fully assess risks. Thus, FPS has limited knowledge of the risks facing about 9,600 federal facilities around the country. FPS officials stated that consequence information in MIST was not part of the original design, but they are exploring ways to incorporate it. What GAO Recommends Since fiscal year 2010, GAO has made 31 recommendations to improve FPS's contract guard and risk assessment processes, of which 6 were implemented, 10 are in process, and 15 have not been implemented.

gao_GAO-05-30

gao_GAO-05-30_0

In the Consolidated Appropriations Act of 2004, Congress limited the uses of the administrative fees earned in fiscal year 2004 to the provision of Housing Choice Voucher Program rental assistance and related development activities. Almost All Housing Agencies Reported January 2003 Reserves As of September 2004, all but 5 of the 2,477 housing agencies required to report their available administrative fee reserves as of January 31, 2003, had done so. A Small Number of Housing Agencies Were Responsible for Most of the Difference The total of all the housing agencies’ reported reserves available as of January 31, 2003, was $587 million, about $211 million (26 percent) lower than the average total reserves of $798 million for fiscal years 1999 to 2002. 1). 2). January 2003 Available Reserves Were Lower for Several Reasons We found several reasons for the difference in reported reserve amounts. Second, some housing agencies obligated some of their reserves for expenses not related to the Housing Choice Voucher Program, as was permitted by HUD regulations. HUD Is Reducing Estimated Administrative Fees by About $37.8 Million By December 2004, HUD plans to have completed most of the required reductions to the estimated fiscal year 2003 administrative fees of 180 housing agencies, a total of about $37.8 million. As required by the 2003 Appropriations Resolution, HUD identified housing agencies whose fees should be reduced because their reported January 2003 reserves exceeded 105 percent of the fees they earned in federal fiscal year 2002. HUD did not reduce the fees of some housing agencies by the full difference between their January 2003 reserves and 105 percent of the fees earned in federal fiscal year 2002, because the 2003 resolution did not require HUD to make reductions to housing agencies’ administrative fees that exceeded the amounts they earned in fiscal year 2003. HUD Expects to Have Recaptured Some Excess 2003 Administrative Fees by December 2004 The 2003 Appropriations Resolution required HUD to recapture from housing agencies administrative fees that they earned in fiscal year 2003 that exceeded administrative expenses, except for an amount necessary to maintain a reserve equal to 5 percent of the fees earned in the Housing Choice Voucher Program fiscal year 2003. HUD has not yet recaptured any excess fiscal year 2003 administrative fees. To determine the extent to which housing agencies reported to HUD their available administrative fee reserves as of January 31, 2003, we analyzed data from HUD showing all of the housing agencies that had reported their January 2003 reserves and the amounts they had reported. To determine how housing agencies calculated their reserves as of January 31, 2003, and the possible reasons for declines in the reported amounts, we selected 5 of the 10 housing agencies that had the largest differences between the average of their reserves reported for fiscal years 1999 to 2002 and the amount they reported as of January 2003.

Why GAO Did This Study The Department of Housing and Urban Development (HUD) received $12.9 billion in fiscal year 2003 for the Housing Choice Voucher Program, which helps about 2 million low-income families pay rent for privately owned housing. This amount included $1.1 billion in administrative fee payments to the public housing agencies that administer the program for HUD. In the Consolidated Appropriations Resolution of 2003, Congress included provisions to address a concern that housing agencies may have received more in fees than they needed to run the program. Housing agencies were directed to report to HUD their available reserves as of January 31, 2003. HUD was directed to reduce the fees agencies would receive if these levels were too high and recapture some excess fees. The conference report accompanying the Consolidated Appropriations Act of 2004 directed GAO to review compliance with these provisions. This report discusses (1) the extent to which housing agencies complied with the requirement to report to HUD their available administrative fee reserves as of January 31, 2003; (2) how these reported reserves compared with reserves reported in earlier fiscal years and possible reasons for any declines; (3) the extent to which HUD made required reductions to fiscal year 2003 fees; and (4) the extent to which HUD has recaptured excess fiscal year 2003 administrative fees. What GAO Found By the end of calendar year 2004, HUD expects to have finished implementing most of the provisions in the Consolidated Appropriations Resolution of 2003 that address the administrative fees housing agencies receive under the Housing Choice Voucher Program. As of September 2004, all but 5 of the 2,477 housing agencies had reported their available administrative fee reserves as of January 31, 2003. The reported amounts totaled $587 million, or about $211 million (26 percent) less than the average $798 million that housing agencies had reported in fiscal years 1999 to 2002. GAO found several reasons for this decline. For example, the 2003 resolution allowed housing agencies to deduct from their January 2003 reported amounts funds that were not "available." Some housing agencies deducted obligated or committed funds they considered unavailable, although they normally include these funds in the reserve amounts they report at their fiscal year ends. Further, between the end of their fiscal year 2002 and the January reporting date, some housing agencies obligated some of their reserves for expenses not related to the Housing Choice Voucher Program, as was permitted by HUD regulations. By December 2004, HUD plans to have completed most of the required reductions to the estimated fiscal year 2003 administrative fees of 180 housing agencies, a total of about $37.8 million. As required by the 2003 resolution, HUD identified housing agencies whose fees would be reduced based on the difference between their available January 2003 reserve balances and 105 percent of the fees they earned in federal fiscal year 2002. HUD has not recaptured any excess 2003 administrative fees but expects to have made some of the required recaptures by December 2004.

gao_GAO-14-762

gao_GAO-14-762_0

However, technology enhancements improved the extraction of natural gas from shale formations and resulted in a dramatic increase in domestic natural gas production. DOE started to receive applications to export LNG in 2010 and, since then, it has approved 37 of 42 applications to export LNG to FTA countries. As previously mentioned, this report discusses DOE’s process to review applications to export to non-FTA countries. FERC’s Responsibilities In keeping with its obligation to authorize LNG facility siting and construction under the NGA, FERC reviews applications to construct and operate LNG export facilities. FERC’s review is considered a federal action and subject to the National Environmental Policy Act (NEPA). DOE Has Approved 9 Applications to Export LNG through a Review Process That Considers a Range of Factors to Determine Whether Approval Is in the Public Interest Since 2010, DOE has granted final approval to 3 applications and conditional approval to 6 others. In August 2011, after DOE conditionally approved exports from Sabine Pass, DOE commissioned a study of the cumulative effects of additional LNG exports on the economy and the public interest.approve any conditional applications during the 16-month period of the DOE did not study. The study was completed in December 2012. Since then, DOE has conditionally approved 7 applications, including the Cameron LNG application that it granted final approval in September 2014 (See fig. DOE Reviews Each Application Separately and Considers a Range of Factors to Determine if Approval Is in the Public Interest According to DOE, when determining whether approval of an application is in the public interest, DOE focuses on (1) the domestic need for natural gas, (2) whether the proposed export threatens the security of domestic natural gas supplies, and (3) whether the arrangement is consistent with DOE’s policy of promoting market competition along with other factors bearing on the public interest, such as environmental concerns. FERC Has Approved 3 Facility Applications and Is Reviewing 14 Others Using a Technically Complex Process That Involves Other Agencies Since 2010, FERC approved 3 facility applications, including 2 in 2014, and is currently reviewing 14 applications. FERC Approved 3 Facility Applications and Is Reviewing 14 Applications FERC approved applications to construct and operate the Sabine Pass LNG export facility in April 2012, the Cameron facility in June 2014, and the Freeport facility in July 2014. As of late August 2014, FERC was reviewing 14 applications (See fig. Pre-filing. After FERC approves a project but before an applicant can start construction, the applicant must develop a plan describing how it will meet any conditions and mitigation measures identified in FERC’s approval. FERC’s Review Process Involves Other Federal, State, and Local Agencies As the lead agency responsible for the environmental and safety review of LNG export facilities under NEPA, FERC works with federal, state, and local agencies to develop the NEPA document. In addition to federal permits and consultations, applicants may also be required to obtain other permits under state and local law. Table 1 lists (1) the names of applicants that submitted requests to FERC to construct liquefied natural gas (LNG) export facilities, (2) the names of applicants that submitted requests to DOE to export LNG from those facilities, and (3) the name GAO used to refer to these applications.

Why GAO Did This Study Technological advances in hydraulic fracturing and horizontal drilling have resulted in a dramatic increase in the amount of natural gas that can be produced domestically. DOE is responsible for reviewing applications to export LNG—natural gas cooled to a liquid state for transport—and, under the Natural Gas Act, must approve an application unless it finds that approval is not consistent with the public interest. Since 2010, DOE has received 35 applications to export LNG that must address the public interest question. In addition, under NEPA, FERC is required to assess how LNG export facilities may affect the environment and is responsible for granting approval to build and operate export facilities. Since 2010, FERC has received 17 applications to construct export facilities. GAO was asked to report on the federal process for reviewing applications to export LNG. This report describes (1) the status of applications to export LNG and DOE's process to review them and (2) the status of applications to build LNG export facilities and FERC's process to review them. GAO reviewed laws, regulations, and guidance; examined export approvals; visited LNG facilities; and interviewed federal and state agency officials and industry representatives, including LNG export permit applicants. GAO is not making any recommendations in this report. What GAO Found Since 2010, of 35 applications it has received that require a public interest review, the Department of Energy (DOE) has approved 3 applications to export liquefied natural gas (LNG) and 6 applications are conditionally approved with final approval contingent on the Federal Energy Regulatory Commission's (FERC) issuance of a satisfactory environmental review of the export facility. DOE considers a range of factors to determine whether each application is in the public interest. After the first application was conditionally approved in 2011, DOE commissioned a study to help it determine whether additional LNG exports were in the public interest. Since the 16-month study was published in December 2012, DOE issued 7 conditional approvals (one of which became final) and 1 other final approval (see fig. below). In August 2014, DOE suspended its practice of issuing conditional approvals; instead, DOE will review applications after FERC completes its environmental review. DOE LNG Export Application Status Since 2010, FERC has approved 3 LNG export facilities for construction and operation, including 2 facilities in 2014, and is reviewing 14 applications (see fig. below). FERC's review process is, among other things, designed to fulfill its responsibilities under the National Environmental Policy Act (NEPA). Before submitting an application to FERC, applicants must enter an initial stage called pre-filing to identify and resolve potential issues during the earliest stages of a project. Of the 14 applications, 5 are in the pre-filing stage at FERC and not shown in the figure below. FERC conducts an environmental and safety review with input from other federal, state and local agencies. FERC LNG Export Facility Application Status

gao_GAO-13-832

gao_GAO-13-832_0

SORNA and other federal laws identify certain points in time when sex offenders should be informed of their registration requirements and when relevant jurisdiction officials—that is, state, territorial, and tribal sex offender registry and law enforcement officials—should be informed that a sex offender has been released in their jurisdiction. For example, 42 U.S.C. Most Alien Sex Offenders under ICE- ERO Supervision Were Registered, but About 5 Percent Were Not On the basis of our analysis of a representative sample of 131 alien sex offenders under ICE supervision, and for whom ICE had a record of the alien’s complete date of birth, we estimate that as of September 2012, 72 percent of alien sex offenders were registered in the jurisdictions where they lived, 22 percent were not required to register, and 5 percent did not register but should have. The ICE-ERO field office did not inform 2 of the 6 alien sex offenders about their registration requirements, but did inform the remaining 4 offenders. However, officials at some field offices identified several reasons why they did not ensure that these offenders actually registered. First, the offender may have moved to another state and no longer resided in the area of responsibility for that particular field office. Alien Sex Offenders May Not Be Informed of Potential Registration Requirements, and Jurisdiction Officials May Not Be Notified When an Offender Is Removed or Released Other state and federal correctional and supervision agencies are limited in the information they can provide to and about alien sex offenders to help ensure that these offenders are registered, but ICE-ERO may be in a position to help address these notification gaps. We found that ICE-ERO informs alien sex offenders who are removed from the country about potential registration requirements, but ICE-ERO does not consistently inform alien sex offenders who are released under ICE-ERO supervision about these requirements. Other Agencies Inform Sex Offenders of Requirements and Notify Jurisdiction Officials, but Are Limited in What They Can Do to Help Ensure Alien Sex Offenders Are Registered Federal and state correctional and supervision agencies have processes in place to inform sex offenders of their registration requirements and notify jurisdictions when sex offenders are released from criminal custody. Project Management Institute’s The Standard for Program Management©. ICE-ERO Does Not Notify Relevant Sex Offender Registry and Law Enforcement Officials When an Alien Sex Offender Is Removed or Released under Supervision ICE-ERO also does not notify sex offender registry and law enforcement officials when an alien sex offender is removed from the country or released under supervision, in part because ICE-ERO officials stated that the extent to which ICE-ERO has the authority or responsibility to do so is questionable. ICE-ERO Plans to Review Notification Options for Offenders under Supervision, but Has Not Set a Deadline for Doing So, and Does Not Plan to Consider Options for Removed Offenders ICE-ERO plans to review options to help address notification gaps pertaining to alien sex offenders who are released under order of supervision, but has not established a deadline for when it will complete this review. Marshals Service and the SMART Office stated that ICE-ERO was in the best position to inform alien sex offenders about potential registration requirements, and to notify relevant jurisdiction officials—either state registry or law enforcement officials—when an alien sex offender is removed from the country or released, because ICE-ERO is the last federal agency that has had contact with these offenders and releases these offenders from custody into the community. DHS agreed with our recommendations that ICE-ERO establish deadlines for when it will complete its review of the Form I-220B addendum and its assessment of options for informing alien sex offenders who are released under order of supervision about their potential registration responsibilities. Appendix I: Objectives, Scope, and Methodology This report addresses the following objectives: (1) To what extent are alien sex offenders under the Enforcement and Removal Operations division of U.S. Immigration and Customs Enforcement (ICE-ERO) order of supervision registered as sex offenders? ICE-ERO provided us with the names for 2,837 alien sex offenders under orders of supervision as of September 2012. To address our second objective, we reviewed the Sex Offender Registration and Notification Act of 2006 (SORNA), other applicable laws, and guidelines developed by the Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) Office to obtain information on federal sex offender registration requirements. In addition, we interviewed officials from the U.S.

Why GAO Did This Study ICE-ERO uses orders of supervision to release from custody criminal aliens--including sex offenders--who have been ordered to be removed from the United States, but cannot be removed for various reasons or detained indefinitely under U.S. Supreme Court precedent. In July 2006, SORNA was enacted, which established minimum standards for sex offender registration and notification. Congressional requesters asked GAO to assess registration of alien sex offenders. This report addresses the extent to which alien sex offenders (1) under ICE-ERO order of supervision are registered and (2) who are removed or released under ICE-ERO order of supervision are informed of registration requirements and relevant jurisdiction officials are notified about these offenders. GAO analyzed a representative sample of 131 of 1,309 alien sex offenders who were under orders of supervision as of September 2012. GAO also interviewed officials from ICE-ERO, the SMART Office, and other relevant federal, state registry and local law enforcement agencies. What GAO Found On the basis of GAO's analysis of a representative sample of 131 alien sex offenders under U.S. Immigration and Customs Enforcement (ICE) supervision, GAO estimates that as of September 2012, 72 percent of alien sex offenders were registered, 22 percent were not required to register, and 5 percent did not register but should have. According to officials, offenders were not required to register for various reasons, such as the offense not requiring registration in some states. Of the 6 offenders in GAO's sample that should have registered, officials from ICE's Enforcement and Removal Operations (ICE-ERO) field offices informed 4 of their registration requirements. However, officials at some of these field offices identified several reasons why they did not ensure that these offenders actually registered. For example, the offender may have moved and no longer resided in the area of responsibility for that particular field office. ICE had not informed the remaining 2 offenders of their registration requirements. Alien sex offenders are not consistently informed of potential registration requirements, and relevant jurisdiction officials--that is, state, territorial, and tribal sex offender registry and law enforcement officials--are not consistently notified when an offender is removed from the country or released. The Sex Offender Registration and Notification Act of 2006 (SORNA) and other federal laws identify when sex offenders and relevant jurisdiction officials should be notified. However, the agencies that have these notification responsibilities are limited in their ability to provide information to and about alien sex offenders, in part because they do not know when ICE-ERO will release or remove these offenders. ICE-ERO has a procedure in place to inform alien sex offenders who are being removed about potential registration requirements, but not alien sex offenders who are being released into the community under supervision, primarily because ICE-ERO is uncertain whether it has a responsibility to do so. ICE-ERO also does not consistently notify relevant jurisdiction officials when an alien sex offender is removed or released under supervision, for similar reasons. However, officials from the Department of Justice's Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) Office said that state correctional facilities, in the interest of public safety, have notification processes in place, even though sometimes not required to do so. ICE-ERO is reviewing options for informing alien sex offenders under supervision about their potential registration requirements and notifying jurisdictions when alien sex offenders are released under supervision, but has not established a deadline for completing its review, which is inconsistent with project management standards. Without a deadline, it will be difficult to hold ICE-ERO accountable for providing these notifications. Further, ICE-ERO does not plan to notify relevant jurisdictions when an alien sex offender is removed. Providing such notification could help jurisdictions ensure public safety and avoid unnecessarily spending resources trying to locate the offender. This is a public version of a sensitive security report GAO issued in August 2013, which also included information about steps ICE has taken to determine its responsibility for informing alien sex offenders of their notification requirements. What GAO Recommends GAO recommends, among other things, that ICE-ERO (1) set a deadline for its review of options for providing notifications to and about alien sex offenders under supervision and (2) in consultation with SMART and others, consider options for notifying jurisdictions about removed offenders. ICE agreed with the recommendations.

gao_GAO-17-622

gao_GAO-17-622_0

Reengineered Address Canvassing Was Designed to Substantially Reduce In-Field Canvassing To achieve cost savings, the Bureau decided in September 2014 that while it would still verify all the addresses in the country, not all of this canvassing would take place by going door-to-door (or “in-field”), as it had in prior decennials. Rather, some areas might only need a review of their address and map information using computers and what the Bureau refers to as “in-office” procedures. The Bureau Lacks Information on Implications of Reengineered Design on Cost and Quality of Address Canvassing The Bureau Has Not Completed Evaluations of 2016 Tests as Scheduled The Bureau has not completed evaluations of results from tests and activities it carried out in 2016 to assess the effectiveness of in-office address canvassing. In addition to the cancellation of the 2017 Master Address File Coverage Study, the cancellation of the field work components of the 2017 Census Test, which the Bureau similarly attributed to budgetary constraints it faced, represents a lost opportunity to collect data that could have been used to evaluate the quality of in-office address canvassing. As a result, the Bureau has had limited information to demonstrate the cost and quality of in-office address canvassing along the way and has made major design decisions, such as the suspension of the second phase of in-office address canvassing, without the benefit of information from testing. We have previously reported on the need for the Bureau to rethink its approach to, among other things, testing and evaluating the census. The Bureau agreed, and its early plans for the 2020 Census called for the use of incremental, small-scale testing throughout the decade. However, as the Bureau begins planning for future census operations in the coming years, it will be important to commit to an approach of small-scale, more frequent testing that provides real-time, actionable data to inform decisions. The Bureau’s Measures of In-Office Address Canvassing Do Not Reflect the Effect on Reducing Fieldwork Bureau’s Measures Do Not Reflect Total Completion of Workload The Bureau includes work that has been put on hold in its measure of completed workload. In measuring the day-to-day process of the in- office address canvassing operation, the Bureau regularly tracks the number of blocks for which it has conducted an initial round of review. However, the workload the Bureau identifies as completed as part of this first pass includes blocks that have been put on hold. For example, this may occur if imagery was blocked by cloud cover. The Bureau has additional work to update previously-reviewed blocks. The Bureau had initially planned on resolving 75 percent of housing units in-office, but as of March 2017 the blocks that the Bureau had successfully removed from fieldwork account for 51 percent of all housing units. The Bureau suspended the second phase of in-office address canvassing without detailed data on the cost, value, or accuracy of the operation itself, citing budget uncertainty. Given that the Bureau will need to make consequential decisions about the scope and nature of its fieldwork for 2020, it will be important for the Bureau to make use of information on the effectiveness of its reengineered operation, in terms of both the cost and quality of constructing the address list, so that it can justify these decisions and achieve desired outcomes. 2. Early in the next decennial cycle, plan and execute more flexible, and perhaps smaller, address canvassing test and evaluation activity needed to support key design decisions having significant effect on the cost and quality of the census. 3. Use productivity measures that track the progress in completing in- office address canvassing workload and the effectiveness of in-office address canvassing in reducing fieldwork in order to make informed decisions on allocating resources to current and future address canvassing workload so that the operation is completed in a timely and cost-effective manner. In its written comments, reproduced in appendix III, the Department of Commerce had no disagreements with GAO’s findings and recommendations. In addition, the Secretary noted that the Department was conducting its own review. Appendix I: Objectives, Scope, and Methodology You asked us to evaluate the U.S. Census Bureau’s (Bureau) reengineered approach to 2020 Address Canvassing. We (1) described the Bureau’s design for its reengineered 2020 Census address canvassing, (2) evaluated the extent to which the Bureau assessed the cost and quality implications of its reengineered address canvassing approach, and (3) assessed the status of the Bureau’s efforts to reduce the in-field address canvassing workload. For the second objective we interviewed officials in the Bureau’s Geography and Decennial Census Management Divisions and reviewed relevant documentation to determine how the Bureau was managing address canvassing testing, assessing cost and quality implications, making decisions regarding the design of the reengineered address canvassing approach, and managing related risks.

Why GAO Did This Study With a lifecycle cost of $12.3 billion (in 2020 dollars), the 2010 Census was the most expensive in U.S. history. Reengineering how the Bureau builds its address list is one of the ways the Bureau intends to reduce the per–housing unit cost of the 2020 count. GAO was asked to evaluate the Bureau's reengineered approach for 2020 address canvassing. This report (1) describes the Bureau's design for 2020 address canvassing, (2) evaluates the extent to which the Bureau assessed the cost and quality implications of its reengineered address canvassing approach, and (3) assesses the status of the Bureau's efforts to reduce the in-field address canvassing workload. GAO reviewed relevant design and testing documentation and interviewed cognizant Bureau officials. GAO also reviewed Bureau address canvassing production and payroll data in December 2016 and March 2017. What GAO Found To achieve cost savings, the Census Bureau (Bureau) decided in September 2014 to use a reengineered approach for building its address list for the 2020 Census without having to go door-to-door (or “in-field”) across the country, as it has in prior decennial censuses. Rather, some areas (known as “blocks”) might only need a review of their address and map information using computer imagery and third-party data sources – what the Bureau calls “in-office” procedures. The Bureau planned to use a two-phase, in-office address canvassing operation to update 75 percent of all housing units in its master address list, and initially estimated this approach could reduce 2020 Census costs by $900 million. The Bureau has not completed evaluations of results from tests and activities it carried out in 2016 to assess the effectiveness of in-office address canvassing. Specifically, the Bureau has not completed its evaluations designed to evaluate the accuracy of in-office address canvassing. Similarly, citing budget constraints, the Bureau also cancelled 2017 fieldwork that could have provided additional data to evaluate the reengineered approach. Further, the Bureau has changed the design of the in-office address canvasing operation with limited information on the cost and quality implications of the changes. Citing budget uncertainty, in March 2017 the Bureau suspended its second phase of in-office address canvassing, which was designed to resolve address coverage issues identified in the first phase. Bureau officials indicated that this decision would increase the in-field address canvassing workload from 25 percent to at least 30 percent, but they could not provide details of the cost or quality tradeoffs of this decision. Using its remaining evaluations to determine cost and quality implications would better position the Bureau to justify future decisions for its reengineered approach. GAO has previously reported on the need for the Bureau to rethink its approach to testing and evaluating the census. The Bureau agreed, and its early plans called for the use of incremental, small-scale testing throughout the decade. As the Bureau begins planning for future census operations, small-scale testing by the Bureau may be less susceptible to budgetary constraints and allow it to better demonstrate the effectiveness of its operational innovations. The Bureau manages the day-to-day production of in-office address canvassing using measures that do not fully reflect the effectiveness of the approach in reducing fieldwork. For example, the Bureau regularly tracks the number of blocks for which it has conducted an initial round of review. However, the workload the Bureau identifies as completed includes blocks that have been put on hold and that await availability of better information before being reviewed again. Other assumptions about how quickly the workflow proceeds have not been met. In testing the Bureau's productivity assumptions using actual production data through March 2017, GAO found that even small differences in measurement can have significant impacts on estimates of the remaining workload and the time to complete it. Without measuring how much in-office work is truly completed and how much fieldwork has been reduced, the Bureau risks underestimating the time and resources needed to complete the in-office operation, and may require more in-field address canvassing—at greater costs—than the Bureau currently projects. What GAO Recommends GAO recommends that the Bureau (1) use its remaining evaluations before 2020 to determine cost and quality implications and to justify future decisions for its reengineered approach; (2) plan and execute smaller, more flexible tests needed to support key address canvassing design decisions in future census operations; and (3) use productivity measures that track the progress of the in-office address canvassing and its effectiveness in reducing fieldwork. The Department of Commerce had no disagreements with GAO's findings and recommendations. In addition, the Secretary noted that the Department was conducting its own review.

gao_GAO-06-162

gao_GAO-06-162_0

In addition, China joined the WTO in December 2001, making it subject to the multilateral organization’s trade liberalizing requirements. In 2004, $33 billion, or 4 percent of total U.S. goods exports, went to China, compared with $164 billion and $93 billion to Canada and Mexico, respectively. China Is a Growing Destination for U.S. Services Exports, Which Grew Faster Than Overall U.S. Services Exports Although still small, China is a growing market for U.S. services exports, which grew faster than U.S. services exports to the rest of the world from 1995 to 2004. 3). Office of the United States Trade Representative (USTR) officials noted that implementation problems have inhibited market access for services. 7). These trends are due to multiple factors. U.S. Investment in China Has Increased, and Affiliate Sales Surpassed U.S. Exports Through increased foreign direct investment in China, U.S. affiliate sales have exceeded U.S. exports to China, since U.S. companies have increasingly sold their goods and services directly to the Chinese market through their local affiliates. For example, the cumulative stock of U.S. investment in China grew from $2 billion in 1995 to $15 billion in 2004. Figure 10 shows affiliate sales from 1995 to 2003 and exports from 1995 to 2004. Observations This analysis reflects a range of issues affecting U.S.-China trade and investment, including broad factors, such as China’s economic development and exchange rate regime, and more narrowly focused sector- specific aspects such as China’s growing importance as a market for U.S. goods and services, the rise in integrated production among China’s regional trading partners, China’s increasing demand for oil, and China’s growing role as an attractive venue for foreign direct investment. Agency Comments We provided USTR, the Departments of Agriculture and Commerce, and the International Trade Commission with a draft of this report for their review and comment. All four agencies chose to provide technical comments from their staff. A GAO contact and staff acknowledgments are listed in appendix V. Objectives, Scope, and Methodologies As part of a long-term body of work that the Chairman and the Ranking Minority Member of the Senate Committee on Finance as well as the Chairman and the Ranking Minority Member of the House Committee on Ways and Means requested, we (1) analyzed U.S. goods exports to China and how they have changed over time, (2) analyzed U.S. services exports to China and how they have changed over time, (3) assessed how U.S. exports to China have fared against other major trading partners’ exports to China, and (4) analyzed U.S. investment and affiliate sales in China. Table 8 lists subcategories whose exports to China accounted for more than 10 percent of total U.S. exports in that category in 2004; table 9 lists subcategories whose exports to China accounted for less than 1 percent of total U.S. exports in 2004; table 10 list subcategories with the largest increases in export value over the decade; table 11 lists subcategories with the largest declines in export value; table 12 lists subcategories with the largest declines the U.S. share of world exports to China; and table 13 lists subcategories with the largest increases in the U.S. share of world exports to China. China is a major market for some U.S. goods exports. U.S. share of world goods exports to China declined overall from 1995 to 2004.

Why GAO Did This Study China is important to the global economy and a major U.S. trading partner. By joining the World Trade Organization (WTO) in 2001, China pledged to further liberalize its trade regime and follow global trade rules. While U.S.-Chinese commercial relations have expanded, controversies have emerged, including the size and growth of the U.S. trade deficit with China, China's lack of intellectual property protection, and China's implementation of its WTO obligations. Despite these challenges, China's vast consumer and labor markets present huge opportunities for U.S. exporters and investors. GAO (1) analyzed U.S. goods and services exports to China, (2) assessed how U.S. exports to China have fared against those of other major trading partners, and (3) analyzed U.S. investment and affiliate sales in China. We provided the Office of the U.S. Trade Representative, the Departments of Agriculture and Commerce, and the International Trade Commission with a draft of this report for their review and comment. These agencies chose to provide technical comments from their staff. We incorporated their suggestions as appropriate. What GAO Found China is a rapidly growing market for U.S. goods and services. Although still small, accounting for only 4 percent of U.S. goods exports in 2004, U.S. goods exports to China tripled, from $11 billion to $33 billion, and increased across virtually all major categories from 1995 to 2004. Over the same period, China went from the ninth-largest to the fifth-largest U.S. market for goods behind Canada, the European Union, Mexico, and Japan. Although smaller, U.S. services exports grew from $3 billion to $7 billion, from 1995 to 2004. Economic growth in China and liberalization of its market, including joining the WTO, are among the factors driving the impressive export growth. Despite rapid growth, U.S. goods exports to China have not kept pace with those of other countries, particularly exports from Asia. The U.S. share of world goods exports to China declined from 12 percent to 9 percent, from 1995 to 2004, while South Korea and Taiwan's shares increased and at times surpassed that of the United States. The decline is partly due to increased integrated production among China's neighbors; growing resource-based exports, such as oil, from smaller countries; and macroeconomic factors, including exchange rates. Sales to China by U.S. affiliates located in China grew faster and exceeded U.S. exports to China in 2003, $38 billion versus $35 billion, while U.S. foreign direct investment grew from $2 billion to $15 billion from 1995 to 2004. Growth in U.S. investment and affiliate sales, particularly for goods, is due at least in part to China's attraction as a growing economy, including its burgeoning domestic market, high productivity and low labor costs, and developing infrastructure.

gao_GAO-11-595

gao_GAO-11-595_0

Specifically, in fiscal year 2008, the most recent year for which data were available, about 8 percent of districts’ funding came from federal programs and about 2 percent of districts’ funding came from Title I, which is generally the largest of the federal funding sources for kindergarten through grade 12. To provide for local flexibility in determining how to use funds, ESEA requires districts to measure academic outcomes and achieve benchmarks, but does not generally dictate how funds are to be spent. However, schools and districts are still responsible for maintaining appropriate internal controls over all federal education funds. For example, the law requires that, generally, a state spend no more than 1 percent on administration. Selected School Districts Used Funds to Support a Variety of Initiatives, Primarily Related to Instruction, to Improve Student Outcomes District Title I Initiatives Were Generally Targeted at the Elementary Level and Included Reducing Class Sizes and Extending Instructional Time The 12 selected school districts we visited used Title I funds for activities intended to improve academic outcomes for low-income students, primarily in elementary school, through a variety of initiatives, such as reducing class sizes and expanding instructional hours. Districts Generally Spent Most Title I Funds on Personnel, but Some Spent More on Purchased Services than Others Due to Title I Requirements In the 12 districts we visited, which generally pursued personnel-intensive strategies to improve academic outcomes, we found that salaries and benefits, when combined, were the largest category of Title I expenditures. Prior studies have also found that more than 80 percent of Title I funds are spent or budgeted for instruction-related (versus administrative) purposes. The smaller districts with few or no schools in need of improvement had service expenditures for other types of services, such as license agreements for software. The five selected districts we visited that reserved funds for supplemental educational services and transportation set aside 4 to 18 percent of their Title I funds for those purposes. Mandatory set-asides alone amounted to as much as 28 percent in two districts. Various Title I Oversight Mechanisms Exist, But Are Not Designed to Yield Estimates of the Full Scope of Spending Noncompliance Title I recipients are subject to various oversight mechanisms, which provide some information on noncompliance with relevant spending requirements, but are not designed to provide estimates of the prevalence of noncompliance with requirements regarding use of funds. As a part of its assessment of state oversight of districts and schools, Education reviews Title I compliance in two to three school districts in each state being reviewed. Education uses the results of its monitoring efforts and others’ oversight efforts to design technical assistance and training initiatives to assist states and school districts in using their resources and flexibility appropriately. They also use results to target future monitoring efforts based on risk. Among findings Education identified as common, some dealt with program compliance issues that were unrelated to how Title I funds were spent, such as failing to ensure that districts notified parents about supplemental educational services or school choice in a timely manner or failing to post information about school choice on their Web sites. OIG Audits Education’s OIG also conducts audits of selected districts, using risk- based criteria including tips, past audit findings, and other known weaknesses according to officials. Education’s OIG has identified some instances in which selected districts spent Title I funds for unallowable purposes, did not adequately document Title I expenditures, or used Title I funds to supplant state and local funds. Therefore, the single audit findings related to allowable costs/cost principles indicate that the audited district did not comply with one or more of these criteria. We received technical comments and incorporated them where appropriate. Appendix I: Objectives, Scope, and Methodology To perform this work, we visited 12 school districts, 3 in each of 4 states—Louisiana, Ohio, Rhode Island, and Washington. We selected states and school districts based on the characteristics described in the mandate, including variation in size, student demographics, economic conditions, and geographic locations. We reviewed findings from Education’s fiscal year 2009 monitoring efforts, audits conducted by Education’s Office of the Inspector General from fiscal years 2003 to 2009 that included a review of fiscal controls over Title I funds, and data on school district single audits for fiscal year 2009 to determine whether Title I funds were used in accordance with relevant requirements. District characteristics Geographic category: city (large) Total schools in district: 112 Number of schools receiving Title I funds: 108 (98%) Total number of students: 52,358 Services delivered by top five vendors Supplemental educational services (4 vendors) Percentage of students on free or reduced lunch: 81% Student demographics African American: 65.3% Title I staff (full-time equivalents) Native American: 0.3% District report card Graduation rate: 54.3% Overall Title I budget (showing discretionary and required reservations) District characteristics Geographic category: rural (fringe) Total schools in district: 5 Number of schools receiving Title I funds: 1 (20%) Schoolwide programs: none Targeted assistance programs: 1 (100%) Number of Title I schools in need of improvement, corrective action, or restructuring: none Total number of students: 1,713 Percentage of students on free or reduced lunch: 10% Title I staff (full-time equivalents) Student demographics Asian/Pacific Islander: 1.0% Instructional (2 teachers) District report card Overall Title I budget (Showing discretionary and required reservations) Graduation rate: 85% District characteristics Geographic category: city (small) Total schools in district: 22 Number of schools receiving Title I funds: 8 (36%) Schoolwide programs: 4 (50%) Targeted assistance programs: 4 (50%) Total number of students: 10,684 Percentage of students on free or reduced lunch: 28% Computers and supplies (2 vendors) Student demographics Title I staff (full-time equivalents) Asian/Pacific Islander: 6.9% Administrative positions (<1 administrators) District report card Graduation rate: 79.5% Overall Title I budget (Showing discretionary and required reservations) District characteristics Geographic category: city (midsize) Total schools in district: 47 Number of schools receiving Title I funds: 47 (100%) Total number of students: 23,710 Percentage of students on free or reduced lunch: 86% Supplemental educational services (3 vendors) Student demographics African American: 22.0% Title I staff (full-time equivalents) Native American: 0.6% District report card Graduation rate: 66.5% Overall Title I budget (Showing discretionary and required reservations) District characteristics Geographic category: suburb (large) Number of schools receiving Title I funds: 12 (35%) Schoolwide programs: 5 (42%) Targeted assistance programs: 7 (58%) Total number of students: 20,911 Percentage of students on free or reduced lunch: 24% Student demographics Asian/Pacific Islander: 7.0% Title I staff (full-time equivalents) Latino: 6.8% District report card Graduation rate: 70.6% Overall Title I budget (showing discretionary and required reservations) District characteristics Geographic category: suburb (midsize) Total schools in district: 19 Number of schools receiving Title I funds: 5 (26%) Schoolwide programs: 3 (60%) Targeted assistance programs: 2 (40%) Total number of students: 13,924 Percentage of students on free or reduced lunch: 33% Student demographics Asian/Pacific Islander: 13.1% Title I staff (full-time equivalents) Administrative positions (<1 clerical) District report card Graduation rate: 79.3% Overall Title I budget (showing discretionary and required reservations) District characteristics Geographic category: city (large) Total schools in district: 99 Number of schools receiving Title I funds: 33 (33%) Schoolwide programs: 31 (94%) Targeted assistance programs: 2 (6%) Total number of students: 45,968 Percentage of students on free or reduced lunch: 39% Supplemental educational services (4 vendors) Student demographics Title I staff (full-time equivalents) African American: 21.1% Native American: 1.9% District report card Graduation rate: 70.1% Overall Title I budget (Showing discretionary and required reservations) Appendix III: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments The following staff members made key contributions to this report: Cornelia Ashby, Director; Betty Ward-Zukerman, Assistant Director; Lara Laufer, Analyst-in-Charge; Matthew Alemu; Phyllis Anderson; James Bennett; Jessica Botsford; William Colvin; Susannah Compton; Ranya Elias; Catherine Hurley; Kimberly McGatlin; Sarah McGrath; Jean McSween; Maria Morton; and Ellen Phelps Ranen.

Why GAO Did This Study Title I of the Elementary and Secondary Education Act (ESEA), as amended, is the largest federal education funding source for kindergarten through grade 12. In fiscal year 2010, Congress appropriated $14.5 billion for Title I grants to school districts to improve educational programs in schools with high concentrations of students from lowincome families. ESEA includes accountability requirements for schools and districts that focus primarily on measuring academic outcomes rather than prescribing exactly how Title I funds are to be spent. ESEA, as amended, includes a mandate that requires GAO determine how selected districts expend Title I funds. In response, GAO addressed (1) how selected school districts spent their Title I funds and (2) what federal mechanisms are in place to oversee how Title I funds are used and what is known about the extent of noncompliance with relevant requirements. To do this, GAO visited a nongeneralizable sample of 12 school districts in 4 states and analyzed their Title I expenditures for the 2008-2009 school year. GAO also reviewed federal and local audit findings for a wider range of states and districts. Districts were selected based on criteria in the mandate including variation in size, student demographics, location, and economic conditions. What GAO Found GAO found that 12 selected districts in Louisiana, Ohio, Rhode Island, and Washington used Title I funds primarily for instructional purposes, consistent with findings from other research. Most selected districts focused Title I activities at the elementary level, where they expected the greatest improvement in academic achievement. Title I funds supported district initiatives to improve academic outcomes, such as reducing class sizes, extending class time, and coaching Title I teachers. The selected districts generally spent the majority of Title I funds on salaries and benefits, largely for instructional personnel. Districts with schools that failed to meet state adequate yearly progress goals for two or more consecutive years were required by law to reserve funds for various initiatives, such as transportation for public school choice, supplemental educational services, and professional development. In some districts such set-asides, which do not flow directly to schools, accounted for sizable portions of funds, amounting in two districts to 28 percent of Title I revenue. Predictably, such districts spent more than other districts on purchased services, such as tutoring for students eligible for supplemental educational services. Title I recipients are subject to various oversight mechanisms, which provide some information on noncompliance with relevant spending requirements, but are not designed to provide estimates of the prevalence of noncompliance. The Department of Education (Education) has conducted state-level monitoring to assess states' Title I program implementation. It has identified common issues, such as failure to ensure that districts properly calculate or reserve funds for specific purposes. To guard against fraud and abuse, Education's Office of Inspector General (OIG) uses risk-based criteria, such as past audit findings, to select districts for financial audit. In such districts, OIG has found instances of unallowable expenditures of Title I funds. Also, all states and districts that spend more than $500,000 in federal awards must file an annual audit that focuses on financial management and compliance with provisions of selected federal programs. Roughly 18 percent of districts that filed a fiscal year 2009 audit in which Title I compliance was reviewed had findings related to Title I, which most commonly dealt with unallowable costs and cost principles. However, only a subset of districts are audited for Title I compliance in any given year. When any type of oversight identifies noncompliance, school districts and states must identify and take corrective actions. Education also uses results of oversight and monitoring to target future monitoring efforts and to develop technical assistance and training to assist states and school districts in using their resources and flexibility appropriately. What GAO Recommends GAO is not making recommendations. Education provided technical comment on a draft of this report, which we incorporated as appropriate.

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The Results Act requires agencies to consult with the Congress in developing their strategic plans. Improvements and Remaining Challenges in VA’s August 1997 Draft Strategic Plan VA’s August 15, 1997, draft strategic plan represents a significant improvement over the June 1997 draft. The latest version is clearer and easier to follow, more complete, and better organized to focus more on results and less on process. At the same time, VA has still not fully addressed some of the key elements required by the Results Act; the draft plan has a lack of goals focused on the results of VA programs for veterans and their families, such as assisting veterans in readjusting to civilian life; limited discussions of external factors beyond VA’s control that could affect its achievement of goals; a lack of program evaluations to support the development of results-oriented goals; and insufficient plans to identify and meet needs to coordinate VA programs with those of other federal agencies. Improvements From the June 1997 Draft Strategic Plan results. The August 15, 1997, version reflects significant progress in these areas. The largest gap in the June 1997 draft was the lack of goals for four of the five major veterans benefit programs. This is an area where VA and the Congress can make progress in further consultations.

Why GAO Did This Study GAO discussed the draft strategic plan developed by the Department of Veterans Affairs (VA), pursuant to the Government Performance and Results Act of 1993. What GAO Found GAO noted that: (1) VA has made substantial progress in its strategic planning, based in part on consultations with the Congress; (2) however, as with many other agencies, VA's process of developing a plan that meets the requirements of the Results Act is an evolving one that will continue well after the September 30, 1997, deadline for submitting its first strategic plan to the Congress and the Office of Management and Budget (OMB); (3) the August 15, 1997, draft that VA submitted to OMB for review is an improvement over the June 1997 version, because it is easier to follow, places more emphasis on results and less on process, and fills in some major gaps in the June 1997 draft; (4) however, the latest draft strategic plan continues to lack some of the key elements expected under the Results Act; and (5) as with the June 1997 draft, the August 15, 1997, draft lacks results-oriented goals for several major VA programs, lacks a program evaluation schedule, and contains inadequately developed discussions of external factors and the need to coordinate with other federal agencies.

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However, FSD management responsibilities differ at airports using federal versus private screeners. TSA Has Approved 25 SPP Applications; Enhanced Customer Service Was the Most Commonly Cited Advantage of the SPP SPP Applicants and Participating Airports Since the inception of the SPP in 2004, 29 airports have applied for participation in the program; 25 airports have been approved, and as we noted earlier in this report, 16 airports are participating in the SPP as of October 2012. TSA denied applications from 6 airports—submitted from March 2009 through December 2011. Two of the 6 airports that had been denied never reapplied for participation in the SPP (see fig. Reported Advantages and Disadvantages of Joining the SPP Airport operators we surveyed and interviewed, as well as aviation industry stakeholders (i.e., aviation associations) and TSA officials we interviewed, most commonly cited customer service and staffing flexibility as advantages of participating in the SPP, but also expressed concerns about the SPP transition process and satisfaction with existing TSA screening services as potential disadvantages of participating in the program. We surveyed 28 airport operators who had applied to the SPP from its inception in 2004 through April 2012. Four of six FSDs we interviewed cited a reduced involvement in human resource management as an advantage to the federal government for participating in the SPP. In addition, 2 airport operators who have not applied to the SPP expressed concerns about the potential disruption associated with the transition from TSA screeners to private screeners at their airports, and the associated risk of doing so if the process does not proceed as smoothly as intended. TSA Has Developed Application Resources, but Could Provide Guidance for SPP Applicants TSA has developed some resources to assist applicants; however, it has not provided guidance on its application and approval process to assist airports with applying to the program. At the time, TSA did not provide written guidance to airports to assist them in understanding what would constitute a “clear and substantial advantage to TSA security operations” or TSA’s basis for determining whether an airport had established that opting out would present a clear and substantial advantage to TSA security operations. In March 2012, TSA again revised the SPP application in accordance with provisions of the FAA Modernization Act enacted in February 2012. However, TSA has not issued guidance to assist airports with completing the new application and has not explained to airports how it will evaluate applications given the changes brought about by the new law. We interviewed 4 of the 5 airport operators that applied to the SPP since TSA revised its application in the wake of the FAA Modernization Act. TSA Has Measures to Assess Screener Performance, but Enhanced Processes for Evaluating Screener Performance Could Be Beneficial TSA improved its set of screener performance measures in 2012 by adding measures that address passenger satisfaction, thereby ensuring that the measures address all aspects of the agency’s airport screening strategic goals and mission. However, a mechanism to monitor private versus federal screener performance could help TSA to routinely ensure that the level of screening services and protection provided at SPP airports continues to be conducted at acceptable levels provided at non- SPP airports, and could help inform TSA managers when making decisions regarding the future of the SPP, such as whether to expand the program to more non-SPP airports. Monitoring private screener performance in comparison with federal screener performance is consistent with the statutory requirement that TSA enter into a contract with a private screening company only if the Administrator determines and certifies to Congress that the level of screening services and protection provided at an airport under a contract will be equal to or greater than the level that would be provided at the Further, according to TSA airport by federal government personnel.guidance on the SPP, one of TSA’s major goals for the SPP is that private screeners must perform at the same or better level as federal screeners. Recommendations for Executive Action To improve TSA’s SPP application process and to inform decisions regarding the future of the SPP, we recommend that the Secretary of the Department of Homeland Security direct the Administrator of TSA to take the following two actions: develop guidance that clearly (1) states the criteria and process that TSA is using to assess whether participation in the SPP would compromise security or detrimentally affect the cost- efficiency or the effectiveness of the screening of passengers or property at the airport; (2) states how TSA will obtain and analyze cost information regarding screening cost-efficiency and effectiveness and the implications of not responding to the related application questions; and (3) provides specific examples of additional information airports should consider providing to TSA to help assess an airport’s suitability for SPP, and develop a mechanism to regularly monitor private versus federal screener performance. Appendix I: Objectives, Scope, and Methodology Objectives This appendix describes how we did our work to address (1) the status of Screening Partnership Program (SPP) applications, and airport operator, other stakeholder, and the Transportation Security Administration’s (TSA) views on the advantages and disadvantages of participating in the SPP; (2) the extent to which TSA has provided guidance to govern the SPP application process; and (3) the extent to which TSA assesses and monitors the performance of private and federal screeners. nationally, from fiscal year 2009 through 2011.

Why GAO Did This Study TSA maintains a federal workforce to screen passengers and baggage at the majority of the nation's commercial airports, but also oversees a workforce of private screeners at airports who participate in the SPP. The SPP allows commercial airports to use private screeners, provided that the level of screening matches or exceeds that of federal screeners. In recent years, TSA's SPP has evolved to incorporate changes in policy and federal law, prompting enhanced interest in measuring screener performance. GAO was asked to examine the (1) status of SPP applications and airport operators', aviation stakeholders', and TSA's reported advantages and disadvantages of participating in the SPP; (2) extent to which TSA has provided airports guidance to govern the SPP application process; and (3) extent to which TSA assesses and monitors the performance of private and federal screeners. GAO surveyed 28 airport operators that had applied to the SPP as of April 2012, and interviewed 5 airport operators who have not applied and 1 airport operator who applied to the SPP after GAO's survey. Although not generalizable, these interviews provided insights. GAO also analyzed screener performance data from fiscal years 2009-2011. This is a public version of a sensitive report that GAO issued in November 2012. Information that TSA deemed sensitive has been redacted. What GAO Found Since implementation of the Screening Partnership Program (SPP) in 2004, 29 airports have applied to the program, citing various advantages and relatively few disadvantages. Of the 25 approved, 16 are participating in the program, 6 are currently in the contractor procurement process, and the remainder withdrew from participation because their commercial airline services were discontinued. In 2011, the Transportation Security Administration (TSA) denied applications for 6 airports because, according to TSA officials, the airports did not demonstrate that participation in the program would "provide a clear and substantial advantage to TSA security operations." After enactment of the Federal Aviation Administration Modernization and Reform Act of 2012 (FAA Modernization Act) in February 2012, TSA revised its SPP application, removing the "clear and substantial advantage" question. Four of the 6 airports that had been denied in 2011 later reapplied and were approved. In GAO's survey and in interviews with airport operators (of SPP and non-SPP airports) and aviation stakeholders, improved customer service and increased staffing flexibilities were most commonly cited as advantages or potential advantages of the SPP. Individual Federal Security Directors we interviewed cited reduced involvement in human resource management as an advantage; however, TSA generally remains neutral regarding the SPP. Few disadvantages were cited; however, some airport operators cited satisfaction with federal screeners and concerns with potential disruption from the transition to private screening services. TSA has developed some resources to assist SPP applicants; however, it has not provided guidance to assist airports applying to the program. Consistent with the FAA Modernization Act, TSA's revised SPP application requested that applicants provide information to assist TSA in determining if their participation in the SPP would compromise security or detrimentally affect the cost-efficiency or screening effectiveness of passengers and property at their airport. TSA also developed responses to frequently asked questions and has expressed a willingness to assist airports that need it. However, TSA has not issued guidance to assist airports with completing applications and information on how the agency will assess them. Three of five airport operators who applied using the current application stated that additional guidance is needed to better understand how to respond to the new application questions. Developing guidance could better position airports to evaluate whether they are good candidates for the SPP. TSA recently improved its screener performance measures, but could benefit from monitoring private versus federal screener performance. In April 2012, TSA added measures to ensure that the set of measures it uses to assess screener performance at private and federal airports better addresses its airport screening strategic goals and mission. However, TSA does not monitor private screener performance separately from federal screener performance. Instead, TSA conducts efforts to monitor screener performance at individual SPP airports, but these efforts do not provide information on SPP performance as a whole or across years, which makes it difficult to identify program trends. A mechanism to consistently monitor SPP versus non-SPP performance would better position TSA to ensure that the level of screening services and protection provided at SPP airports continues to match or exceed the level provided at non-SPP airports, thereby ensuring that SPP airports are operating as intended. What GAO Recommends GAO recommends that the TSA Administrator develop guidance for SPP applicants and a mechanism to monitor private versus federal screener performance. TSA concurred with the recommendations.

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NTSB’s principal responsibility is to promote safety in various modes of transportation through accident investigation, special studies, and recommendations intended to prevent accidents. In September 1999, NTSB stopped using Rapidrafts. For the three payment types we examined, the nature and extent of these weaknesses were indicative of insufficient and/or ineffective management attention paid to ensuring that, during the period reviewed, (1) key internal controls were effectively designed into NTSB administrative policies and procedures and (2) employees and management effectively implemented their respective internal control responsibilities when initiating and approving payment transactions. We also found that certain aspects of NTSB policies reduced the opportunity for effective internal controls over payment transactions. By its nature, managerial review and approval represents the last and best opportunity to detect and address inadequate supporting documentation and other control deficiencies. Specifically, PwC identified weaknesses related to the completeness and clarity of financial policies, recording and reviewing transactions, segregation of duties, and reporting on budget execution. Proper Review of Transactions. Specifically, the act provides for a statutory Chief Financial Officer reporting directly to the Chairman on matters of financial management and budget execution, a Board-approved budget for non-accident-related travel expenditures of Board members, the submission of the budget to congressional oversight committees, and an annual report detailing the non-accident-related travel and expenses by Board members, establishment of comprehensive internal controls for its financial programs based on findings and recommendations resulting from a review of NTSB’s internal controls conducted by PwC, and the Inspector General of the Department of Transportation to review the financial and property management and business operations of NTSB, including internal accounting and administrative controls systems, to determine whether they comply with applicable laws, rules, and regulations.

What GAO Found The National Transportation Safety Board (NTSB) promotes transportation safety through accident investigations, special studies, and recommendations intended to prevent accidents. Separate reviews at NTSB by PricewaterhouseCoopers, LLP (PwC) and GAO found significant shortcomings in the design and operation of NTSB's internal controls during 1999 and 2000. These deficiencies indicated insufficient or ineffective management attention to establishing and maintaining an effective system of internal control over financial management operations. The resulting weaknesses exposed the agency to waste, fraud, and mismanagement. Some basic controls were not always clearly and consistently incorporated into NTSB policies and procedures, and, in some cases, the written policies were ambiguous and contributed to possible improper transactions. Furthermore, NTSB's payment review and approval process--the last and best opportunity to detect and address inadequate documentation and other policy violations prior to payment--was often ineffective. Separate reviews of different aspects of NTSB's 1999 and 2000 financial activities and related internal controls, done by PwC at NTSB's request, documented various internal control weaknesses, including problems with the completeness and clarity of policies, the recording and review of transactions, and the tracking and reporting its use of funds.

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Since our report was issued, some states have strengthened their guardianship programs and some efforts have been made to lay the groundwork for better collaboration. However, there continues to be little coordination between state courts and federal agencies in the area of guardianships. While State Court Procedures Vary in Their Oversight of Guardianships, Some States Have Recently Strengthened Their Guardianship Programs In our 2004 review we determined that all 50 states and the District of Columbia have laws requiring courts to oversee guardianships. Alaska, for example, established requirements for the licensing of private professional guardians and, in January of this year, New Jersey began requiring the registration of professional guardians. “Exemplary” Courts Focus on Training and Monitoring In our 2004 report several courts were identified as having “exemplary” programs. State Courts and Federal Representative Payee Programs Serve Many of the Same Incapacitated Elderly People, but Continue to Collaborate Little in Oversight Efforts There is also a role for the federal government in the protection of incapacitated people. Limited Progress Has Been Made on Recommendations from 2004 Only limited progress has been made on our recommendations. In one recommendation we suggested that SSA convene an interagency study group to increase the ability of representative payee programs to protect federal benefit payments from misuse. Although VA, HHS, and OPM indicated their willingness to participate in such a study group, SSA disagreed with this recommendation. We checked with SSA recently and learned that its position has not changed. Coordination among federal agencies and between federal agencies and state courts remains essentially unchanged, according to agency and court officials we spoke with. In 2004, we also recommended that HHS work with national organizations involved in guardianship programs to provide support and leadership to the states for cost-effective pilot and demonstration projects to facilitate state efforts to improve oversight of guardianships and to aid guardians in the fulfillment of their responsibilities. HHS has taken a step in this direction by supporting the inclusion of questions about guardians in the National Center on Elder Abuse’s annual survey of state adult protective services agencies. Only 11 states provided information about the source of reports of abuse. Finally, we also recommended that HHS facilitate a review of state policies and procedures concerning interstate transfer and recognition of guardianship appointments to facilitate efficient and cost-effective solutions for interstate jurisdictional issues. The National Conference of Commissioners on Uniform State Laws (NCCUSL) met in July 2006 and issued a discussion draft for a Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act. This implementation session developed a series of 45 action steps that could be taken at the national, state, and local levels in order to accomplish a select subset of the recommendations made at the 2001 Second National Guardianship Conference--the “Wingspan Conference.” These action steps fall into five main categories: the development of interdisciplinary guardianship committees at the national, state, and local levels; the development of uniform jurisdiction procedures, uniform data collection systems, and innovative funding mechanisms for guardianships; the enhancement of training and certification for guardians and the encouragement of judicial specialization in guardianship matters; the encouragement of the most appropriate and least restrictive types of guardianships; and the establishment of effective monitoring of guardianships. In our 2004 report we concluded that the prospect of increasing numbers of incapacitated elderly people in the years ahead signals the need to reassess the way in which state and local courts and federal agencies work together in efforts to protect incapacitated elderly people.

Why GAO Did This Study The Senate Special Committee on Aging asked GAO to follow up on its 2004 report, Guardianships: Collaboration Needed to Protect Incapacitated Elderly People, GAO-04-655 . This report covered what state courts do to ensure that guardians fulfill their responsibilities, what exemplary guardianship programs look like, and how state courts and federal agencies work together to protect incapacitated elderly people. For this testimony, GAO agreed to (1) provide an overview and update of the findings of this prior work; (2) discuss the status of a series of recommendations GAO made in that report; and (3) discuss the prospects for progress in efforts to strengthen protections for incapacitated elderly people through guardianships. To complete this work, GAO interviewed lawyers and agency officials who have been actively involved in guardianship and representative payee programs, and spoke with officials at some of the courts identified as exemplary in the report. What GAO Found GAO's 2004 report had three principal findings. First, all states have laws requiring courts to oversee guardianships, but court implementation of these laws varies. Second, those courts recognized as exemplary in the area of guardianships focused on training and monitoring. Third, there is little coordination between state courts and federal agencies or among federal agencies regarding guardianships. At present, these findings remain largely the same, but there are some new developments to report. Since GAO's report was issued, some states have strengthened their guardianship programs. For example, Alaska established requirements for licensing of private guardianships and New Jersey and Texas established requirements for the registration of professional guardians. However, there continues to be little coordination between state courts and federal agencies or among federal agencies in the protection of incapacitated people. GAO's report made recommendations to federal agencies, but to date little progress has been made. GAO recommended that SSA convene an interagency study group to increase the ability of representative payee programs to protect federal benefit payments from misuse. Although VA, HHS, and OPM indicated their willingness to participate in such a study group, SSA disagreed with this recommendation, and its position has not changed. Second, GAO recommended that HHS work with national organizations involved in guardianship programs to provide support and leadership to the states for cost-effective pilot and demonstration projects to facilitate state efforts to improve oversight of guardianships and to aid guardians in the fulfillment of their responsibilities. HHS did support a study that surveyed the status of states' guardianship data collection practices. HHS also supported a National Center on Elder Abuse survey of adult protective services agencies to collect information including the extent to which guardians are the alleged perpetrators or the sources of reports about elder abuse. Third, GAO recommended a review of state policies and procedures concerning interstate transfer and recognition of guardianship appointments. A National Conference of Commissioners on Uniform State Laws, held in July of this year, issued a discussion draft for a uniform state law addressing these issues. Following issuance of GAO's 2004 report, a joint conference of professional guardianship organizations agreed on a set of action steps to implement previously-released recommendations from a group of experts on adult guardianship, known as the Wingspan recommendations. Among other things, these action steps call for licensing, certifying, or registering professional guardians.

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gao_GAO-08-934T_0

Data Show That Delays and Cancellations are Increasing, but Provide an Incomplete Picture of the Extent and Sources of Delays Nationwide, according to DOT data the annual number of domestic airline flight delays and cancellations has increased about 62 percent (from 1.2 million to 2.0 million), while the annual number of scheduled flights has increased about 38 percent (from 5.4 million to 7.5 million) since 1998. In the New York area, the trend is even more pronounced, as the number of domestic flight delays and cancellations at the three main commercial airports has increased about 111 percent, while the number of domestic operations has increased about 57 percent since 1998. DOT statistics indicate that 2007 was the second worst year on record for U.S. airlines’ on-time performance, and the trends in the percentage of flight delays and cancellations appear to be worsening. Compared to the rest of the country, where flight delays and cancellations have been steadily increasing, the magnitude and upward trend of the problem in the New York region is greater than the rest of the airspace system. DOT Data Provide an Incomplete Picture of the Sources of Delays The data collected by DOT on the sources of delays provide information about where delays occur and what causes them, but the data are incomplete. In 2007, approximately 38 percent of delays were assigned to this category. For example, the original source of delay for a late arriving aircraft may be the result of other sources—such as a severe weather condition, the airline, security, or the national airspace system—or a combination of one or more of these sources. DOT and FAA Are Implementing Actions Intended to Reduce Delays DOT and FAA are implementing several actions intended to reduce flight delays beginning in summer 2008. DOT and FAA have announced multiple capacity-enhancing initiatives designed to reduce delays in the New York region for this summer and beyond. The initiatives range from new procedures and reroutes for handling air traffic during severe weather conditions to efforts to reduce excessive spacing on final approach before landing, and to an airspace flow program that allows New York departures to move more freely while delays are redistributed to airports within the region. These two demand management policies are being developed, but it is unlikely that they will be in effect by this summer. DOT and FAA are currently reviewing comments for the proposed rule to establish slot auctions at LaGuardia and will be collecting comments on the proposed rule to establish slot auctions at JFK and Newark until July 21, 2008; thus it is unlikely the final rules will be issued during the summer. DOT’s and FAA’s Actions May Help Reduce Delays, but the Extent of Delay Reduction in Summer 2008 Will Likely Be Limited DOT’s and FAA’s capacity-enhancing initiatives have the potential to reduce congestion and thereby avoid delays, according to FAA and stakeholders we consulted, but the effect will likely be limited for the summer 2008 traveling season. DOT’s and FAA’s demand management policies—in particular, caps on scheduled operations at all three New York area airports—are expected to have some delay avoidance impact in the near term. DOT and FAA set the caps at Newark and LaGuardia at a level intended to avoid an increase in delays above that experienced in 2007 and set the caps at JFK to generate a 15 percent reduction in average departure delays over 2007 levels. Thus, the caps at Newark are not expected to bring a delay reduction benefit as compared to delays experienced in 2007. In closing, DOT and FAA should be commended for taking steps to reduce mounting flight delays and cancellations for the 2008 summer travel season. 3. Appendix II: Status and Reported Benefits of Capacity-Enhancing Initiatives and Demand Management Policies The New York Aviation Rulemaking Committee (ARC) recommended a list of 77 items for consideration and implementation in the New York area. From these, FAA identified 17 short-term initiatives for immediate action.

Why GAO Did This Study Flight delays and cancellations have plagued the U.S. aviation system. According to the Department of Transportation (DOT), more than one in four flights either arrived late or was canceled in 2007--making it one of the worst years for delays in the last decade. Delays and cancellations were particularly evident at certain airports, especially the three New York metropolitan commercial passenger airports--Newark Liberty International (Newark), John F. Kennedy International (JFK), and LaGuardia. To avoid a repeat of last summer's problems, DOT and the Federal Aviation Administration (FAA) have worked with the aviation industry over the past several months to develop and implement several actions to reduce congestion and delays for the summer 2008 travel season. This testimony addresses (1) the trends in the extent and principal sources of flight delays and cancellations over the last 10 years, (2) the status of federal government actions to reduce flight delays and cancellations, and (3) the extent to which these actions may reduce delays and cancellations for the summer 2008 travel season. This statement is based on an analysis of DOT data on airline on-time performance, a review of relevant documents and reports, and interviews with officials from DOT, FAA, airport operators, and airlines, as well as aviation industry experts and associations. DOT and FAA provided technical comments which were incorporated as appropriate. What GAO Found DOT data show that flight delays and cancellations have increased nationwide and especially in the New York region; however, the data provide an incomplete picture of the source of delay. Since 1998, the total number of flight delays and cancellations nationwide has increased 62 percent, while the number of scheduled operations has increased about 38 percent. Flight delays and cancellations in the New York region are even more pronounced. Specifically, since 1998, the number of flight delays and cancellations in the New York region has increased about 111 percent, while the number of operations has increased about 57 percent. DOT data on the sources of delays provide an incomplete picture. For example, in 2007, late arriving aircraft accounted for 38 percent of delays nationwide, but this category indicates little about what caused the aircraft to arrive late, such as severe weather. To reduce delays and congestion beginning in summer 2008, DOT and FAA are implementing several actions that for the purposes of this review GAO is characterizing as capacity-enhancing initiatives and demand management policies. Some of these actions are already in effect, such as 11 of the 17 short-term initiatives designed to improve capacity at the airport or system level and the hourly schedule caps on operations at the New York area airports. The other actions are being developed but are unlikely to be in effect by this summer. For example, DOT and FAA are soliciting comments on the proposed rule to establish slot auctions at JFK and Newark until July 21, 2008. DOT's and FAA's capacity-enhancing initiatives and demand management policies may help reduce delay, but the collective impact of these actions on reducing delay in 2008 is limited. For example, the benefit of the 17 initiatives--which range from efforts to reduce excessive spacing on final approach before landing to new procedures for handling air traffic during severe weather conditions--is generally expected to come from the initiatives' combined incremental improvements over time and in certain situations. The demand management policies may have a more immediate but limited effect on delays since the caps at Newark and LaGuardia were set at a level that was generally designed to avoid an increase in delay over 2007 levels. For example, the caps at Newark are set at a level that that is not expected to bring a delay reduction as compared to delays in 2007.

gao_RCED-99-13

gao_RCED-99-13_0

Since 1989, DOE has spent about $3.5 billion on this effort. On August 24, 1998, DOE signed a fixed-price contract with BNFL to continue with phase I by developing an approach that would process at least 10 percent of Hanford’s tank waste by 2017. Instead of requiring the contractor to obtain all needed financing without recovery from DOE if the project fails, DOE is now planning to repay BNFL’s debts above its equity, insurance, and other limited funds if BNFL defaults on its loans and DOE terminates the contract. Government backing of the private debt is an unusual feature for a fixed-price contract because the government normally does not agree to pay a contractor’s debt as an allowable cost. The August 1998 contract identified a target price and set August 2000 as the date at which the unit price will be fixed and BNFL’s funding commitments will be established. Schedule Revision In addition to more permanent, costly facilities, the new contract extends the design period and delays the start of construction about 19 months beyond what was originally planned. BNFL proposed this approach, and DOE agreed to it, because (1) BNFL said that nuclear and worker safety requirements could not be efficiently incorporated into the demonstration facilities initially proposed and (2) permanent facilities provided advantages in processing the tank waste that would remain after phase I. The total project costs for phase I, including DOE’s support costs, increased from $4.3 billion in the original estimate to process 6 percent of the waste to $8.9 billion in the current estimate to process 10 percent of the waste, as measured in constant fiscal year 1997 dollars. This is not the first time DOE has based cost savings on questionable analytical practices. Revised Approach Shifts Significant Financial Risk to the Government Under the revised contract approach, DOE faces a substantial financial risk that could be in the billions of dollars. This risk comes mainly in the form of an agreement to pay BNFL for much of the debt incurred in constructing and operating the waste treatment facilities if BNFL defaults on its loan payments and DOE terminates the contract. DOE officials told us they agreed to back BNFL’s loans because lenders told DOE that BNFL would not be able to obtain affordable financing without it. DOE’s financial risks hinge on a number of factors that could potentially affect the project. This scoring is of consequence because it affects how much funding DOE will have to have on hand for the project, and when. Therefore, the Congress may wish to require DOE to include in its annual status report on privatization contracts (1) the results of BNFL’s technology demonstration and testing using Hanford’s waste, (2) a reassessment of the cost-effectiveness of the proposed approach including the results of DOE’s analysis of different financing alternatives, and (3) DOE’s overall preparedness to effectively oversee the project. To determine the steps that DOE is taking to carry out its responsibilities for overseeing the project, we reviewed DOE’s report to the Congress describing how the Department is organized to manage the project, as well as Department and contractor plans for managing the project. Additional copies are $2 each. A recorded menu will provide information on how to obtain these lists.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the Department of Energy's (DOE) revised contracting approach for its Hanford Tank Waste Project, focusing on: (1) how DOE's current approach has changed from its original privatization strategy; (2) how this change has affected the project's schedule, cost, and estimated savings over conventional DOE approaches; (3) what risks DOE is now assuming with this change in approach; and (4) what steps DOE is taking to carry out its project oversight responsibilities. DOE contracted with BNFL, Inc. to treat about 10 percent of Hanford's tank waste. What GAO Found GAO noted that: (1) the project as currently envisioned is substantially different from DOE's 1996 initial privatization strategy; (2) although the project award was made on the basis of a fixed-price contract, further competition between contractors and short-term demonstration facilities has been eliminated in favor of more permanent facilities that could operate for 30 years or more and, therefore, would be available to treat additional tank waste; (3) the design phase as well as the date when DOE and BNFL are to reach agreement on final contract price have been extended by 2 years to August 2000; (4) BNFL's specific project financing arrangements, which were to be established in May 1998, have been deferred until August 2000; (5) to ensure that BNFL can obtain affordable private financing, DOE has agreed to repay much of the project debt if BNFL defaults on its loans and DOE terminates the contract; (6) this is an unusual feature of a fixed-price contract because the government normally does not agree to pay a contractor's debt as an allowable cost; (7) the revised approach extends the completion date for processing the first portion of the waste from 2007 to 2017, and total costs rise from $4.3 billion to $8.9 billion; (8) the increased costs are mainly the result of DOE's decision to build permanent facilities that will take longer and cost more to design and build, and the higher financing costs and contractor profits involved in operating these facilities over a longer period of time; (9) DOE estimated that this approach would save 26 to 36 percent over contracting approaches it has used in the past; (10) because of questions about DOE's methodology for estimating savings, considerable caution is needed in assuming how much the revised approach will save; (11) the contract now calls for DOE to pay BNFL for most of the debt incurred in building and operating the facility if BNFL should default on its loans; (12) thus, DOE faces a financial risk not initially contemplated on the project that could be in the billions of dollars; (13) DOE agreed to assume this risk because it did not think BNFL would be able to obtain affordable financing unless the government provided some assurance that the loans would be repaid; (14) given that the project still has a number of technical uncertainties, DOE's financial risks are significant; (15) DOE has identified additional expertise it needs and has developed several management tools to strengthen its oversight of the project; and (16) the success of the project will depend on how well DOE implements these plans.

gao_RCED-95-34

gao_RCED-95-34_0

However, because U.S.-flag vessels often charge higher rates to transport cargo than foreign-flag vessels, cargo preference laws increase the government’s transportation costs. 1.1.) The Costs of Cargo Preference Laws to the Federal Government Because the cost to transport cargo on U.S.-flag vessels is generally higher than it is on foreign-flag vessels, cargo preference laws add directly to a federal agency’s transportation costs. In fiscal years 1989 through 1993, the five agencies responsible for the transportation costs of most of the government’s international cargo paid an estimated additional $3.5 billion in transportation costs to ship cargo on U.S.-flag vessels. However, DOD estimates that $659 million of this cost was related to the Persian Gulf War. However, their effect on the U.S. merchant marine industry is mixed. The Impact of Cargo Preference Laws on the U.S. Maritime Industry While cargo preference laws do not appear to have significantly affected the share of international oceanborne freight carried on U.S.-flag vessels, we estimate that in the absence of preference cargo, a significant portion of the U.S. fleet would reflag or cease operating. 3.6.) Conclusions The effect of cargo preference laws on the U.S. merchant marine industry is mixed. This would likely result in the elimination of about 6,000 U.S. shipboard jobs but would have a minimal impact on the U.S. shipbuilding industry.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on cargo preference laws, focusing on their effect on: (1) federal transportation costs; and (2) the U.S. merchant marine industry. What GAO Found GAO found that: (1) cargo preference laws have increased federal agencies' transportation costs by an average of $578 million per year; (2) cargo preference laws increase agencies' transportation costs because U.S.-flag vessels generally charge more than foreign vessels to carry cargo; (3) although some agencies paid an estimated $3.5 billion in additional transportation costs to ship cargo on U.S.-flag vessels, DOD estimated that $659 million of those costs were related to the Persian Gulf War; (4) the effect of cargo preference laws on the U.S. merchant marine industry has been mixed; (5) the share of oceanborne cargo carried aboard U.S.-flag vessels has declined because most internationally shipped cargo is exempt from cargo preference laws; (6) in 1992, foreign-flag vessels carried about 96 percent of international cargo; and (7) although eliminating cargo preference laws could cause two-thirds of the U.S.-flag vessels to leave the U.S. fleet and result in the elimination of about 6,000 U.S. shipboard jobs, it would have a minimal impact on the U.S. shipbuilding industry.

gao_GAO-15-189

gao_GAO-15-189_0

OPM has a key leadership and oversight role in the design and implementation of executive branch agencies’ SES performance-based pay systems by certifying that the agencies’ systems meet certain criteria. Most Senior Executives Continued to Receive High Performance Ratings and Performance Awards for Fiscal Years 2010 through 2013 For Fiscal Years 2010 through 2013, Approximately 85 Percent of Career SES Received the Two Highest Ratings In 2003, when Congress refined the pay systems for members of the SES by requiring a clearer link between performance and pay, many senior executives were receiving the top rating. Selected Departments’ SES Performance Management Systems Are Becoming Standardized, but Disparities in Rating Distributions and Pay Remain for Fiscal Year 2013 Selected Departments’ SES Performance Systems Used or Were Converting to the New SES System According to a 2012 OPM document on the new SES performance appraisal system, with a different SES system in each agency, inconsistency among the executive branch agencies was a problem because of different definitions for rating levels across government, a mix of four- and five-level rating systems, and variable application of rating levels in evaluating SES—which led to a disparity in the ratings distribution across government. OPM guidance states that, for agencies seeking access to higher levels of pay through certification, PRBs are to ensure meaningful distinctions in executive performance and that pay increases and performance awards are made based on individual and organizational performance. Consistent with Government-wide Data, Selected Departments Rated SES Primarily in the Top Two Categories for Fiscal Year 2013 All five departments rated the majority of SES in the top two categories, indicating little differentiation between executives in their ratings. However, for fiscal year 2013, four out of five selected departments awarded the same or higher performance awards as a percentage of base salary to SES with lower ratings as was awarded to those SES with higher ratings. The new system provides for the uniform administration of SES executive branch performance management systems by promoting consistency, clarity, and transferability of performance standards and ratings across agencies. According to OPM officials, in 2015 OPM plans to convene a cross- agency working group that is to revisit the SES certification process. As part of this effort, it will be important for OPM and the working group to consider whether—given the continued high SES performance ratings— the new system is contributing to making meaningful distinctions in performance ratings and awards, and if not, what refinements are needed. If the performance definitions cannot be consistently applied across the government, creating a uniform framework to communicate expectations and evaluate the performance of SES members will be difficult to attain. Recommendation for Executive Action As OPM convenes the cross-agency working group, we recommend that the Director of OPM, as the head of the agency that certifies—with OMB concurrence—SES performance appraisal systems, consider the need for refinements to the performance certification guidelines addressing distinctions in performance and pay differentiation. The objectives of this report were to (1) describe key characteristics of the awards, such as rating and awards distributions, award amounts, and percentage of executives receiving awards, from fiscal years 2010 through 2013, and (2) describe and assess the extent to which selected departments’ SES performance appraisal systems factored in organizational and individual performance and made meaningful distinctions in their fiscal year 2013 performance awards. Selected case studies included the Departments of Defense (DOD), Energy, Health and Human Services (HHS), Justice (DOJ), and Treasury. Appendix III: Career Senior Executive Service (SES) Ratings and Performance Awards at the 24 Chief Financial Officers (CFO) Act Agencies for Fiscal Year 2013 Percent of career SES at each rating level Office of Personnel Management (OPM), Small Business Administration (SBA), and Social Security Administration (SSA).

Why GAO Did This Study The career SES, a cadre of senior leaders, has a pay-for-performance compensation system, which includes annual cash performance awards. OPM has a key leadership and oversight role in the implementation of the SES pay-for-performance system, including the certification of SES performance appraisal systems. GAO was asked to examine SES performance awards. Specifically, this report (1) describes key characteristics of executive branch agency ratings and performance awards for fiscal years 2010 through 2013, and (2) provides a more in-depth look at five departments' fiscal year 2013 ratings and awards. GAO analyzed data from OPM on the 24 CFO Act agencies for fiscal years 2010 through 2013. GAO also selected five case study departments: Defense, Energy, Health and Human Services, Justice, and Treasury and examined how they factored organizational and individual performance into their fiscal year 2013 SES performance awards. What GAO Found In 2012, the Office of Personnel Management (OPM) facilitated development of a new Senior Executive Service (SES) performance appraisal system with a more uniform framework to communicate expectations and evaluate the performance of executive branch agency SES members. The new system is expected to promote consistency, clarity, and transferability of performance standards and ratings across agencies. To obtain SES appraisal system certification for agencies seeking access to higher levels of pay, agencies are required to make meaningful distinctions based on the relative performance of their executives as measured through the performance and pay criteria. Further, if the modal rating is at the highest level of “outstanding,” agencies must provide an acceptable justification to OPM for the high level. (The modal rating is the rating level assigned most frequently among the actual ratings.) More than 85 percent of career Chief Financial Officers (CFO) Act agency SES were rated in the top two of five categories for fiscal years 2010 through 2013, and career SES received approximately $42 million in awards for fiscal year 2013. The average award amount was higher for executives with higher ratings. In a closer examination of five departments for fiscal year 2013, GAO found that they used or planned to use OPM's new SES performance system. The departments also had performance plans with links between individual SES responsibilities and organizational goals. Similar to the government-wide results, departments rated SES primarily in the top two categories. Four out of five departments awarded the same or higher performance awards to some SES with lower ratings. Department officials gave several reasons for giving lower-rated SES higher performance awards, including that they considered relative contributions, and that the awards were consistent within subcomponents of the department. OPM plans to convene a cross-agency working group in 2015 to revisit the SES certification process. It will be important for OPM and the working group to consider whether, given the continued high SES performance ratings, the new SES appraisal system is contributing to making meaningful distinctions in performance ratings and awards without creating forced distributions, and if not, what refinements are needed. What GAO Recommends GAO recommends that the Director of OPM consider various refinements to better ensure the SES performance appraisal system certification guidelines promote making meaningful distinctions in performance. Options could include not certifying appraisal systems where the modal rating is “outstanding.” OPM disagreed with the recommendation stating that, among other things, it could result in forced distributions in ratings. GAO maintains that additional action should be considered to ensure equity in ratings and performance awards across departments.

gao_NSIAD-98-57

gao_NSIAD-98-57_0

Federal Dollars Contribute to New Mexico Economy, but Economy Is Diversifying DOE and DOD military activities have contributed substantially to the economy of New Mexico for about 50 years. Government data show that between 1988 and 1996, New Mexico was ranked second, third, or fourth, among U.S. states in per capita distribution of federal dollars. The state was also ranked first in return on federal tax dollars in 1995. A comparison of the percent change in New Mexico’s per capita income and total defense-related spending (DOE and DOD) in the state during 1990-94 shows that real growth occurred in per capita income, while total defense expenditures declined (see fig.1). A comparison between percent real growth in New Mexico’s gross state product and total defense-related federal expenditures reveals the same pattern, suggesting that efforts to diversify the state’s economy may be having a positive effect (see fig. 2). 3). Among the most notable limitation in the data is the lack of a central or official source of data on private-sector employment associated with DOD contracts. Conclusions The available data indicate that the state of New Mexico receives relatively large amounts of federal dollars. The best available data indicate that in New Mexico DOE and DOD account for about 90 percent of all federal procurement spending (1993-96), 54 percent of expenditures for federal worker salary and wages (1988-96), 72 percent of all federal jobs in the state (1988-96), and 68 percent of all retired federal workers living in the state (1990-96). The largest component of DOE employment is private contractor employment, while the largest component of DOD employment is federal employment, namely active duty military members. To determine the characteristics of the New Mexico economy and recent changes in the economy, we reviewed and analyzed economic data and information we obtained from interviews with New Mexico state officials, federal government officials, and available federal and state data sources, including the Bureau of Economic Analysis and the Bureau of Business and Economic Research at the University of New Mexico. To determine the extent to which available government data provides reliable information on defense spending and employment, we evaluated the qualities of the existing federal data. Copies will also be made available to others upon request. Direct Federal Expenditures and Employment in New Mexico This appendix presents 1988-96 (1) trends in total direct federal expenditures and employment in New Mexico and within specific spending categories, (2) defense-related and nondefense-related expenditures and employment, and (3) the Department of Energy’s (DOE) and the Department of Defense’s (DOD) share of the defense-related expenditures and employment. Federal salary and wage trends are marked by small increases over time with periods of stability following an increase. But both types of expenditures have been declining (see fig. DOD and DOE Share of Defense-Related Employment in New Mexico Defense-related federal employment in New Mexico is higher than nondefense-related employment. DynCorp did not have information on its subcontractors prior to 1993.

Why GAO Did This Study Pursuant to a congressional request, GAO examined defense and other federal spending in the state of New Mexico, focusing on: (1) characteristics of New Mexico's economy and changes in it; (2) the amount of direct defense-related and nondefense-related federal spending in the state and the direct federal employment associated with both, over time; and (3) the extent to which available government data can provide reliable information on defense spending and employment. What GAO Found GAO noted that: (1) New Mexico is home to two Department of Energy (DOE) national laboratories and four Department of Defense (DOD) military installations, among other federal activities; (2) state officials indicate that New Mexico's economy is "heavily dependent" upon federal expenditures; (3) in 1996, New Mexico was fourth among states in the per capita distribution of federal dollars and first in return on federal tax dollars; (4) while parts of the state have relatively strong economies, in 1994 New Mexico's poverty rate was the second highest in the country and its per capita income was 48th in the country; (5) although defense-related spending has been declining, New Mexico's gross state product and total per capita income have been increasing, indicating that the economy is growing and that efforts to diversify the economy may be having a positive effect; (6) one can learn several things from the available federal government expenditure and employment data for New Mexico; (7) DOD and DOE expenditures have consistently represented the largest share of all federal expenditures for procurement and salaries and wages in New Mexico; (8) defense-related employment has also consistently represented the largest share of total federal employment in New Mexico, including retired federal workers; (9) DOD and DOE do not contribute equally on types of defense-related spending or defense-related employment, revealing relevant distinctions between the types of direct economic contributions made by these agencies; (10) DOE contributes most in federal procurement expenditures and private contractor employment; (11) DOD contributes most in federal salaries and wages and federal employment, namely active duty military and retired employees; (12) existing government data, however, contributes to only a partial understanding of the type of federal dollars that enter a state's economy and the employment supported by the expenditures; (13) GAO's research based on New Mexico shows that the data have limitations that severely restrict the ability to determine the total amount and distribution of federal funding and jobs in the state; (14) key limitations include: (a) reporting thresholds that exclude millions in procurement expenditures; (b) the reporting of the value of an obligation, rather than the money actually spent; (c) the absence of any comprehensive source of primary data that systematically identifies private sector employment associated with federal contracts; and (d) DOD's lack of data on subcontracts; and (15) since these data sources are not unique to New Mexico, these limitations would also apply to assessments of other states.

gao_GAO-13-206

gao_GAO-13-206_0

CMS’s Adjustment for Coding Differences for 2010 through 2012 Was Too Low, Resulting in Estimated Excess Payments to MA Plans of at Least $3.2 Billion CMS’s risk score adjustment for diagnostic coding differences for 2010 through 2012 was too low. Specifically, we estimated that the cumulative impact of coding differences on risk scores increased from 2010 through 2012 and was greater than CMS’s risk score adjustment of 3.4 percent for each of the 3 years. In updating our analysis from the January 2012 report, we estimated that cumulative risk scores in 2010 were 4.2 percent higher than they likely would have been if the same beneficiaries had been enrolled continuously in FFS. Using the methodology described earlier, we estimated that differences in diagnostic coding resulted in 2011 risk scores that were 4.6 to 5.3 percent higher than they likely would have been if the same beneficiaries had been continuously enrolled in FFS. This upward trend continued for 2012, with estimated risk scores 4.9 to 6.4 percent higher (see fig. Because CMS’s adjustment to risk scores for 2010 through 2012 to account for diagnostic coding differences was too low, we estimated that MA plans received excess payments of between $3.2 billion and $5.1 billion over the 3-year period. CMS’s annual 3.4 percent reduction in risk scores is equivalent to reducing total payments to MA plans by an estimated $2.8 billion in 2010, $3.0 billion in 2011 and $3.2 billion in 2012. According to our estimates, the amount of the excess payments to MA plans after accounting for CMS’s adjustments was $0.6 billion in 2010, $1.1 billion to $1.6 billion in 2011, and $1.5 billion to $2.9 billion in 2012. 2.) CMS Did Not Change Its Risk Score Adjustment Methodology for 2013, but May Revisit It in Future Years According to CMS officials, the agency used the same methodology to determine the 2013 risk score adjustment as it used in 2011 and 2012, resulting in a risk score adjustment of 3.4 percent for 2013. To conduct its data- based analysis, CMS officials reported that they used the same methodology they used to calculate the 3.4 percent adjustment for 2010, but incorporated more recent data. In addition to the results of their data-based analysis, CMS officials told us that they took into account other factors when determining the 2013 risk score adjustment, such as payment changes made to the MA program under the Patient Protection and Affordable Care Act, the stability of the MA program, and the maintenance of benefits for seniors. However, the express purpose of the requirements to conduct and incorporate a data-based analysis of coding differences into the risk scores is to ensure payment accuracy. The statute does not provide for factors other than the results of the analysis to be incorporated into the adjustment, suggesting that accuracy would be achieved through the incorporation of these analytical results by themselves. CMS officials did not identify the specific source of their authority to consider factors other than the required data-based analysis when determining the adjustment amount, but stated that they believed that there was policy discretion with respect to the most appropriate adjustment factor for the payment year. While CMS did not change its risk score adjustment methodology for 2013, agency officials said they may revisit their methodology for future years. In our January 2012 report, we recommended that CMS take steps to improve the accuracy of the adjustment to account for excess payments due to differences in diagnostic coding. Agency Comments We provided a draft of this report to CMS for comment. Estimating the Impact of Coding Differences on MA Risk Scores To determine the extent to which differences, if any, in diagnostic coding between MA plans and Medicare FFS affected MA risk scores in 2010, 2011, and 2012, we compared actual risk score growth for beneficiaries in our MA study population with the estimated risk score growth these beneficiaries would have had if they had been enrolled in Medicare FFS. To do these analyses, we used Centers for Medicare & Medicaid Services (CMS) enrollment and risk score data from 2004 through 2011. We used these data to calculate total risk-adjusted payments for each MA plan before and after applying a coding adjustment, and then used the differences between these payment levels to estimate the percentage reduction in total projected payments to MA plans resulting from adjustments for coding differences in 2010, 2011, and 2012.associated with each adjustment to the estimated total payments to MA plans—$114.8 billion in 2010, $122.9 billion in 2011, and $133.5 billion in 2012—and accounted for reduced Medicare Part B premium payments Then we applied the percentage reduction in payments received by CMS, which offset the reduction in MA payments (see table 1).

Why GAO Did This Study CMS pays plans in MA--the private plan alternative to FFS--a predetermined amount per beneficiary adjusted for health status. To make this adjustment, CMS calculates a risk score, a relative measure of expected health care for each beneficiary. Risk scores should be the same among all beneficiaries with the same health conditions and demographic characteristics. Differences in diagnostic coding between MA plans and Medicare FFS led to inappropriately high MA risk scores and payments to MA plans, and CMS adjusted for coding differences in 2010. In January 2012, GAO reported that CMS's adjustments to risk scores did not sufficiently correct for coding differences, resulting in excess payments to MA plans. Since completing the analysis for the January 2012 report, risk score data for two additional years have become available. GAO (1) determined the extent to which differences, if any, in diagnostic coding between MA plans and Medicare FFS affected MA risk scores and payments to MA plans in 2010, 2011, and 2012; and (2) identified what changes, if any, CMS made to its risk score adjustment methodology for 2013 and intends to make for future years. To do this, GAO compared risk score growth for MA beneficiaries with an estimate of what risk score growth would have been for those beneficiaries if they were in Medicare FFS for 2010 and projected the growth to 2011 and 2012, and determined if there were changes to CMS's methodology by reviewing agency documentation and interviewing agency officials. What GAO Found GAO found that the cumulative impact of coding differences on risk scores increased from 2010 through 2012 and was greater than the Centers for Medicare & Medicaid Services' (CMS) risk score adjustment of 3.4 percent for each of the 3 years. In updating the analysis from its January 2012 report, GAO estimated that cumulative Medicare Advantage (MA) risk scores in 2010 were 4.2 percent higher than they likely would have been if the same beneficiaries had been enrolled continuously in Medicare fee-for-service (FFS). For 2011, GAO estimated that differences in diagnostic coding resulted in risk scores that were 4.6 to 5.3 percent higher than they likely would have been if the same beneficiaries had been continuously enrolled in FFS. This upward trend continued for 2012, with estimated risk scores 4.9 to 6.4 percent higher. CMS's adjustment to risk scores for 2010 through 2012 to account for diagnostic coding differences was too low, resulting in estimated excess payments to MA plans of at least $3.2 billion. CMS's annual 3.4 percent reduction in risk scores is equivalent to $2.8 billion in 2010, $3.0 billion in 2011 and $3.2 billion in 2012. According to GAO's estimates, the amount of the excess payments to MA plans after accounting for CMS's adjustments was $0.6 billion in 2010, between $1.1 billion and $1.6 billion in 2011, and between $1.5 billion and $2.9 billion in 2012. Cumulatively across the 3 years, this equals excess payments of between $3.2 billion and $5.1 billion. For 2013, CMS continues to use the risk score adjustment of 3.4 percent it used in 2010, 2011, and 2012. To conduct its data-based analysis, CMS officials reported that they used the same methodology used in 2010, but they incorporated more recent data. CMS officials told us that, in addition to the results of the data analysis, they incorporated additional factors such as recent payment changes made to the MA program under the Patient Protection and Affordable Care Act and the maintenance of benefits for seniors. The Social Security Act does not prescribe CMS's methodology for adjusting for differences in diagnostic coding. However, the express purpose of the requirements to conduct and incorporate into the risk scores a data-based analysis of coding differences is to ensure payment accuracy. The act does not provide for factors other than the results of the analysis to be incorporated into the adjustment, suggesting that accuracy would be ensured solely through the incorporation of analytical results. CMS officials stated that they believed there was policy discretion with respect to the most appropriate adjustment factor but did not identify the specific source of their authority to consider factors other than the required data analysis when determining the adjustment amount. While CMS did not change its risk score adjustment methodology for 2013, agency officials said they may revisit their methodology for future years. GAO's findings underscore the importance for CMS to implement the recommendation from GAO's January 2012 report that the agency improve the accuracy of its MA risk score adjustments by taking steps such as using the most current data available and incorporating adjustments for additional beneficiary characteristics. CMS reviewed a draft of this report and stated that it had no comments.

gao_GAO-05-172

gao_GAO-05-172_0

Background The scope of the nation’s transportation system is vast and increasingly congested. IV for additional information about the level of usage of and investment in the nation’s highway and transit systems.) However, measuring all the potential benefits and costs of proposed highway and transit investments can be challenging and subject to several limitations and sources of error. The extent to which these indirect benefits are relevant depends to some degree on whether the project is viewed from a local or a broader perspective. Research further indicates that to realize desired land-use changes and higher density development, transit investments need to be coordinated with supportive local land-use policies and that impacts need to occur more readily in rapidly growing regions with demand for high-density development.In a similar fashion, the extent to which highway investments will result in improvements in freight productivity will depend on economic conditions; the amount of freight traffic on the local network; the presence of alternative freight modes, such as rail or waterways; and various other locally specific factors. Analysis of Benefits and Costs Not Usually Systematic, and Results of Analysis Are Only One Factor Among Many Considered in Investment Decision Making According to our survey results and case studies, although the costs and benefits of projects were almost always considered in some way, formal analyses such as benefit-cost analysis were not usually conducted when considering project alternatives, and they were completed less frequently for proposed highway projects than transit projects. 2). Similarly, our survey of transit agencies and state DOTs also showed that the results of economic analysis of a project are not necessarily the most important factor considered in highway and transit investment decision making. 3). 4). Transportation officials we interviewed generally contend that completed projects have achieved other outcomes that were projected to flow from the highway and transit investments, such as positive changes in land use and economic development. Transportation Officials Cite Several Reasons for Not Conducting Outcome Evaluations Transportation officials we spoke with offered several reasons why they do not typically conduct evaluations of the outcomes of highway and transit projects. These options focus on improving the value of this information for decision makers to make more fully informed choices and in helping ensure that projects can be evaluated on the results they produce. However, as noted previously, the outcomes of completed projects are not typically evaluated. Factors that Work Against Greater Use of Analysis in Investment Decisions As our survey responses showed, decisions about transportation investments are based on many things besides the results of economic analyses of a project’s benefits and costs, such as the availability of funding or public perception about a project. As a result, the federal government misses an opportunity to use financial incentives to improve performance and to hold agencies accountable for results. Given the current and long-term fiscal challenges, careful decisions need to be made to ensure that transportation investments systematically consider the benefits of each federal dollar invested. Nevertheless, the increased use of systematic analytical tools such as benefit-cost analysis, and the continued improvement of such tools through dissemination of new methods and advancement of existing techniques, can provide important additional information that can be used to inform discussions about community needs and values, which could then lead to better-informed transportation investment decision making. Finally, both FTA and FHWA offered a number of technical comments, which have been incorporated in this report, as appropriate. Scope and Methodology To identify the categories of benefits and costs that can be attributed to highway and transit investments and the challenges in measuring these benefits and costs as well as options to improve the information available to decision makers, we reviewed the economics literature, academic research, and transportation planning studies containing evaluations of various economic analytical tools, with an emphasis on benefit-cost analysis. To determine how state, local, and regional decision makers consider the benefits and costs of new highway and transit investments and the extent to which select capacity-adding highway and transit investments met their projected outcomes, we conducted a survey and a series of case studies. We chose these five metropolitan areas because they each had both a New Starts project and a capacity-adding highway project completed within the last 10 years and were identified by the Texas Transportation Institute as among the top 25 most congested areas in the United States. 1. Information on Benefits Attributable to Highway and Transit Investments Measuring benefits that can potentially result from highway and transit investments can be quite contentious and spur vigorous debates among experts in the field and in literature, although there tends to be more agreement about the nature of the direct user benefits associated with highway and transit investments, as opposed to the wider social benefits or the indirect benefits. Not all projects that affect travel-time savings will affect reliability and vice versa.

Why GAO Did This Study Mobility is critical to the nation's economy. Projections of future passenger and freight travel suggest that increased levels of investment may be needed to maintain the current levels of mobility provided by the nation's highway and transit systems. However, calls for greater investment in transportation come amid growing concerns about fiscal imbalances at all levels of the government. As a result, careful decisions will need to be made to ensure that transportation investments maximize the benefits of each federal dollar invested. In this report GAO identifies (1) the categories of benefits and costs that can be attributed to new highway and transit investments and the challenges in measuring them; (2) how state, local, and regional decision makers consider the benefits and costs of new highway and transit investments when comparing alternatives; (3) the extent to which investments meet their projected outcomes; and (4) options to improve the information available to decision makers. To address these objectives, we convened an expert panel, surveyed state departments of transportation and transit agencies, and conducted site visits to five metropolitan areas that had both a capacity-adding highway project and transit project completed within the last 10 years. DOT generally agreed with the report's findings and offered technical comments, which were incorporated as appropriate. What GAO Found A range of direct and indirect benefits, such as savings in travel time and positive land-use changes, and costs can result from new highway and transit investments. The extent to which any particular highway or transit investment will result in certain benefits and costs, however, depends on the nature of the project and the local economic and transportation conditions where the investment is being made. In addition, measuring project benefits and costs can be challenging and is subject to several sources of error. For example, some benefit-cost analyses may omit some benefits or double-count benefits as they filter through the economy. Officials we surveyed and visited said they considered a project's potential benefits and costs when considering project alternatives but often did not use formal economic analyses to systematically examine the potential benefits and costs. Even when economic analyses are performed, the results are not necessarily the most important factor considered in investment decision making. Rather, our survey responses indicate that a number of factors, such as public support or the availability of funding, shape transportation investment decisions. Officials we interviewed indicated that they often based their decision to select a particular alternative on indirect benefits that were often not quantified in any systematic manner, such as desirable changes in land use or increasing economic development. Available evidence indicates that highway and transit projects do not achieve all projected outcomes; in addition, our case studies and survey show that evaluations of the outcomes of completed projects are not frequently conducted. A number of outcomes and benefits are often projected for highway and transit investments, including positive changes to land use and increased economic development. These projected outcomes were often cited as reasons why the projects were pursued. However, because evaluations of the outcomes of completed highway and transit projects are not typically conducted, officials have only limited or anecdotal evidence as to whether the projects produced the intended results. Several options exist to improve the information available to decision makers about new highway and transit investments and to make analytic information more integral to decision making. These options, such as improving modeling techniques and evaluating the outcomes of completed projects, focus on improving the value this information can have to decision makers and holding agencies accountable for results. Even if steps are taken to improve the analytic information available to decision makers, however, overarching issues, such as the structure of the federal highway and transit programs, will affect the extent to which this information is used. Nevertheless, the increased use of economic analysis, such as benefit-cost analysis, could improve the information available, and ultimately, lead to better-informed transportation investment decision making.

gao_GAO-11-724

gao_GAO-11-724_0

For example, SSA requires beneficiaries to undergo periodic medical reviews called medical continuing disability reviews, or medical CDRs, to assess whether they continue to have a disabling impairment. The agency uses the ROAR system to track DI overpayments and collections. Most DI Overpayments Are Work-Related, and Their Recovery Can Take Decades Nearly Three-Quarters of All DI Overpayments Are to Beneficiaries Who Have Returned to Work Medical and work-related overpayments in the DI program detected by SSA grew from about $860 million in fiscal year 2001 to about $1.4 billion in fiscal year 2010, and though the true extent of overpayments due to earnings is currently unknown, our review suggests that most of them are related to beneficiaries who work above SGA while receiving benefits. SSA officials estimate that from fiscal years 2005 through 2009, about 72 percent of all projected DI overpayments were work-related, meaning the overpayments were to beneficiaries who returned to work and were no longer eligible. Of the 60 cases, we found 54 in which AERO increases in benefit amount occurred even while SSA conducted a work CDR to determine if the beneficiary was still eligible for benefits at all. In 49 of the 60 cases we randomly selected for review, there was no indication in the file that the individual had reported his or her earnings to SSA, and in 15 of the 60, SSA had detected two or more separate periods of earnings which resulted in overpayments. Despite an increase in DI debt collections—$340 million to $839 million from fiscal year 2001 through fiscal year 2010—outstanding DI debt grew from $2.5 billion to $5.4 billion during this time, including a $225 million increase in fiscal year 2010. SSA Policy Does Not Require Supervisory Review of Repayment Plans, although Some Last Decades SSA does not require supervisory review of repayment plans prior to approval, including those in which repayment periods exceed the recommended 36 months. While SSA’s POMS require that staff should seek full repayment within 36 months, SSA officials reported that no supervisory approval is needed to exceed the 36 months. Since bringing this issue to their attention, SSA officials told us that the agency has begun to study this ROAR system limitation and an agency working group will recommend a course of action to correct the problem. However, earnings data provided through the IRS match are often more than a year old when SSA staff begin the work CDR prompted by the match. From the date of the initial IRS alert to the date staff begin work on the CDR, cases that have been identified by the IRS match and selected for a work CDR (but for which no action has yet been taken to process the work CDR) are categorized by SSA as “pending development.” In the 60 cases we reviewed, the median time cases were pending development was 205 days, or about 7 months, and ranged from 2 to 466 days, or more than 15 months. The agency’s actual experience with the NDNH in its SSI program suggests its application in the DI program may be more cost-effective than indicated by SSA’s analysis. SSA officials told us they are in the early stages of evaluating this use and, as part of this effort, they said they may include an AERO alert as one of several screening factors to identify cases at high risk for DI overpayments. SSA Lacks Agencywide Performance Goals and a Consistent Approach for Processing Work CDRs Similar to our findings about the lack of agencywide performance goals for overpayment debt recovery, we also found that SSA does not have agencywide performance goals or a consistent approach for processing work CDRs across its processing centers. More specifically, we found that processing times for the 60 cases we reviewed ranged from 82 to 992 days (with a median of 396 days) and resulted in combined overpayments totaling more than $1 million. Conclusions Our review shows that while SSA has some initiatives to improve how it performs work CDRs, existing policies and processes impede its ability to more effectively detect, prevent, and recover overpayments. Recommendations To enhance SSA’s ability to recover debt and to improve the detection and, where possible, prevention of overpayments in the DI program, we recommend that the Commissioner of Social Security 1. develop and adopt agencywide performance goals, for the recovery of DI overpayment debt, such as the percent of outstanding debt collected annually. SSA disagreed with our second recommendation to require supervisory review and approval of DI repayment plans which exceed SSA’s targeted 36 months. SSA agreed with our fourth recommendation to explore options for obtaining more timely earnings information for DI program beneficiaries who may be working, and thus more likely to incur overpayments.

Why GAO Did This Study The Social Security Administration's (SSA) Disability Insurance (DI) program paid almost $123 billion in benefits in fiscal year 2010 to more than 10 million workers and dependents. The program is poised to grow further as the baby boom generation ages. GAO examined (1) what is known about the extent to which SSA makes overpayments to, and recovers overpayments from, DI beneficiaries who exceed program earnings guidelines, and (2) potential DI program vulnerabilities that may contribute to overpayments to beneficiaries who have returned to work. To answer these questions, GAO reviewed work continuing disability review (work CDR) policies and procedures, interviewed SSA headquarters and processing center officials, visited 4 of 8 processing centers, and reviewed a random nongeneralizable sample of 60 CDR case files across those 4 centers (15 from each). What GAO Found Disability Insurance overpayments detected by SSA increased from about $860 million in fiscal year 2001 to about $1.4 billion in fiscal year 2010. SSA estimates about 72 percent of all projected DI overpayments were work-related during fiscal years 2005 through 2009. While the agency collected, or recovered, $839 million in overpayments in fiscal year 2010, monies still owed by beneficiaries grew by $225 million that same year, and cumulative DI overpayment debt reached $5.4 billion. SSA does not have agencywide performance goals for debt collection-- for example, the percent of outstanding debt collected annually. And while SSA has a policy for full repayment within 3 years, 19 of the 60 work CDR cases GAO reviewed had repayment plans exceeding 3 years. SSA officials said that lengthy repayment plans are often the result of an individual's limited income, but SSA does not review or approve repayment plans which exceed agency policy. During the course of the review, GAO also found a limitation in SSA's Recovery of Overpayments, Accounting and Reporting (ROAR) system. Used to track overpayments and collections, ROAR does not reflect debt due SSA past year 2049, so the total balance due the program is unknown and likely larger than the agency is reporting. SSA officials acknowledged this issue, but are unable to determine the extent of the problem at this time. They told GAO they have a work group which will recommend action to correct the problem. But until this issue is addressed, SSA officials said that the agency can only track and report on overpayments scheduled to be repaid through 2049. The amount owed after that year is unreflected in current totals even as it annually increases. SSA officials reported that the agency has ongoing initiatives to enhance debt collection. SSA has numerous policies and processes in place to perform work CDRs, though two key weaknesses have hindered SSA's ability to identify and review beneficiary earnings which affect eligibility for DI benefits. First, SSA lacks timely earnings data on beneficiaries who return to work. In 49 of the 60 CDR cases GAO reviewed, there was no evidence in the file that the beneficiary reported his or her earnings, as required by program guidelines. To identify unreported work and earnings, SSA primarily relies on data matching with the Internal Revenue Service (IRS), then sends these matches to staff for a work CDR. However, the IRS data may be more than a year old when received by SSA, and SSA says it is not cost-effective to gain access to and use other sources of earnings information, such as the National Directory of New Hires database. In addition, GAO found that cases may wait up to 15 additional months before SSA staff begin work on the CDRs. Second, SSA lacks formal, agencywide performance goals for work CDRs. While it targets 270 days to complete a case, actual processing time ranged from 82 to 992 days (with a median of 396 days) in the 60 cases GAO reviewed, and overpayments which accrued as a result topped $1 million total. SSA officials reported several initiatives to more effectively prioritize work CDR cases--for example, those with the largest potential overpayment amounts--but these efforts are in the early stages, and GAO could not yet assess their effectiveness as part of this review. What GAO Recommends GAO recommends that SSA develop and adopt agencywide performance goals for recovering DI overpayments and processing work CDRs, require supervisory review of certain repayment plans, address a system limitation which precludes an accurate record of debt owed SSA, and explore options for obtaining more timely earnings information. SSA agreed with four of five recommendations. It disagreed with the need for supervisory review of repayment plans while acknowledging the need for more related guidance to its staff.

gao_NSIAD-96-36

gao_NSIAD-96-36_0

It also has legislative authority to sell its real estate and use the proceeds to buy or improve other real estate and furnishings without further congressional approval. Additional Property Could Be Listed for Potential Sale From 1990 to 1995, State made real estate sales totaling $133 million, including $48.8 million from the forced sale of property and property rights in Singapore because of road construction. In light of (1) the revenues that could be earned from the sales of high value property, (2) the cost to the U.S. government to maintain excess properties, and (3) the likely increase in excess properties that will result from announced post closings, we recommend that the Secretary of State establish an independent panel to make recommendations regarding the sale of excess real estate to reduce the current inventory of property. Despite these improvements, State still does not have an efficient system for identifying and disposing of excess real estate. FBO and the embassy could not agree on which properties would be sold or how the prospective sales proceeds would be used. GAO Comments 1. 3. State does not routinely weigh proposed uses of sales proceeds at an embassy against the needs of other embassies, such as it does for certain uses of its appropriated funds. 4. State’s consensus mode of operation and the asserted effects on diplomatic relations of selling real estate, in our view, are at the heart of State’s difficulties in selling excess or underutilized real estate. 5. 6. The information provided indicated that the property was originally owned by a U.S. citizen.

Why GAO Did This Study GAO reviewed the Department of State's excess or underused overseas real estate, focusing on: (1) property that potentially could be sold to provide funds for other real estate needs; (2) State's problems in determining which properties to sell; and (3) how State uses proceeds from real estate sales. What GAO Found GAO found that: (1) from 1990 to 1995, State sold $133 million in real estate, which was a small part of its total excess or underused property; (2) State does not have a standard process for identifying and selling excess or underused real estate; (3) in practice, excess or underused property is not identified or sold without the assistance of an embassy; (4) the use of the funds from property sales is the only incentive that the embassies have to identify and sell excess or underused real estate; (5) State does not ensure that the profits from the sale of property go to its most urgent real estate needs worldwide; and (6) the proceeds from the sale of property are generally allowed to be used by the corresponding embassy.

gao_GAO-14-176

gao_GAO-14-176_0

Historically, categories of Medicaid eligibility included pregnant women, low-income children and their parents, individuals who are aged, and individuals with disabilities. The research also indicates that there is a subset of Medicaid-only beneficiaries who are very costly, such as those with institutional care needs or chronic conditions. beneficiaries (less than 1 percent of the total Medicaid population) and 21.9 percent of total Medicaid expenditures on other dual-eligible beneficiaries (13.8 percent of total Medicaid beneficiaries). We found that about two-thirds of the high-expenditure group was comprised of beneficiaries who were eligible for Medicaid due to disability. In contrast, payments to managed care organizations and premium assistance constituted the largest proportion of expenditures for all other Medicaid-only beneficiaries. In contrast to high- expenditure Medicaid-only beneficiaries, the largest share of total expenditures for all other Medicaid-only beneficiaries was for managed care and premium assistance (57.2 percent), followed by non-hospital acute care (16.6 percent), hospital services (11.9 percent), drugs (9.7 percent) and LTSS in non-institutional settings (4.5 percent). 3.) He was indicated to have diabetes, a mental health condition, and resided in a long-term care facility. Over 73 percent of expenditures for the Medicaid-only aged were for those in the high-expenditure group. Spending on these services comprised almost 80 percent of the total expenditures for beneficiaries with expenditures within the top 1 percent for their state. Agency Comments HHS reviewed a draft of this report and provided technical comments, which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology This appendix describes the methodology for addressing three objectives that examine: (1) states’ spending for high-expenditure beneficiaries, both Medicaid-only and dual-eligible beneficiaries, compared with other Medicaid beneficiaries; (2) the characteristics associated with high- expenditure Medicaid-only beneficiaries; and (3) the services that contributed to high expenditures for Medicaid-only beneficiaries, and how they compared with service usage by all other Medicaid-only beneficiaries. We analyzed data from the fiscal year 2009 Medicaid Statistical Information System (MSIS) Annual Person Summary File. To examine the characteristics associated with high-expenditure Medicaid-only beneficiaries, we determined the percentage of high- expenditure Medicaid-only beneficiaries with key characteristics and used logistic regression to examine the effect of having key beneficiary characteristics on the probability of being a high-expenditure Medicaid- only beneficiary. All probabilities were significant at the 0.05 level. We report percentages that describe the high-expenditure In order to determine which service categories contributed to expenditures for high-expenditure Medicaid-only beneficiaries, we examined how total expenditures for high-expenditure Medicaid-only beneficiaries were distributed among the following six expenditure categories: (1) hospital care, (2) non-hospital acute care, (3) drugs, (4) managed care and premium assistance, (5) long-term services and supports (LTSS) in non-institutional settings, and (6) long-term services and supports in institutional settings.

Why GAO Did This Study Medicaid is an important source of health coverage for millions of low-income individuals. Research on Medicaid has demonstrated that a small percentage of beneficiaries account for a disproportionately large share of Medicaid expenditures. Understanding states' expenditures for high-expenditure populations—both those dually eligible for Medicare and Medicaid, and those who are Medicaid-only—could enhance efforts to manage Medicaid expenditures. GAO was asked to examine the demographics and service usage of Medicaid beneficiaries, particularly those who are not eligible for Medicare. This report examines high-expenditure Medicaid-only beneficiaries, considering (1) states' spending on them compared with all other Medicaid beneficiaries; (2) their key characteristics; and (3) their service usage compared with all other Medicaid-only beneficiaries. GAO analyzed beneficiary and expenditure data from the Medicaid Statistical Information System Annual Person Summary File for 2009, the most recent year available at the time GAO conducted its work. GAO defined high-expenditure beneficiaries as those with total expenditures in the top 5 percent of expenditures within each state. GAO combined these data at a national level, and analyzed the characteristics associated with being a high-expenditure beneficiary, the probability of being a high-expenditure Medicaid beneficiary, and what services contributed to high expenditures. What GAO Found In fiscal year 2009, states spent nearly a third (31.6 percent) of all Medicaid expenditures on the most expensive Medicaid-only beneficiaries, who were 4.3 percent of total Medicaid beneficiaries. States spent another third (33.1 percent) on all other Medicaid-only beneficiaries, who represented 81.2 percent of total Medicaid beneficiaries. Among dual eligible beneficiaries, a similar pattern existed, with a small proportion of the population accounting for a disproportionate share of expenditures. Certain characteristics significantly increased the probability of being a high-expenditure Medicaid-only beneficiary. Specifically, the results of GAO's analyses indicate that the probability of being a high-expenditure Medicaid-only beneficiary was: 24.4 percent for those residing in a long-term care facility, 20.8 percent for those with human immunodeficiency virus/acquired immunodeficiency syndrome, 18.3 percent for those with disabilities, and 13.3 percent for new mothers or infants. Overall, hospital services and long-term services and supports in non-institutional and institutional settings comprised nearly 65 percent of the total expenditures for high-expenditure Medicaid-only beneficiaries, with smaller proportions for drugs, payments to managed care organizations and premium assistance, and non-hospital acute care. In contrast to high-expenditure beneficiaries, payments to managed care organizations and premium assistance comprised 57.2 percent of total expenditures for all other Medicaid-only beneficiaries. HHS provided technical comments on a draft of this report, which were incorporated as appropriate.

gao_GAO-02-129T

gao_GAO-02-129T_0

Several agencies also provide assistance to victims of terrorism. Although federal departments and agencies have engaged in a number of efforts to coordinate these activities on a formal and informal basis, we found that coordination between departments and agencies is fragmented, as illustrated by the many and complex relationships between federal departments and agencies shown in Appendix III. In addition, we found concerns about the preparedness of state and local jurisdictions, including the level of state and local planning for response to terrorist events, inadequacies in the public health infrastructure, a lack of hospital participation in training on terrorism and emergency response planning, capabilities for treating mass casualties, and the timely availability of medical teams and resources in an emergency. National Pharmaceutical Stockpile Program. This cooperative group is developing a system to improve on-site rapid detection of biological agents in animals, plants, and food. Related GAO Products Bioterrorism: Federal Research and Preparedness Activities (GAO-01-915, Sept. 28, 2001).

Why GAO Did This Study This testimony discusses on the efforts of federal agencies to prepare for the consequences of a bioterrorist attack. What GAO Found GAO found that federal agencies are participating in research and preparedness activities, from improving the detection of biological agents to developing a national stockpile of pharmaceuticals to treat victims of disasters. Federal agencies also have several efforts underway to coordinate these activities on a formal and informal basis, such as interagency work groups. Despite these efforts however, coordination between agencies remains fragmented. GAO also found emerging concerns about the preparedness of state and local jurisdictions, including insufficient state and local planning for response to terrorist events, inadequate public health infrastructure, a lack of hospital participation in training on terrorism and emergency response planning, insufficient capabilities for treating mass casualties, and the timely availability of medical teams and resources in an emergency. This testimony summarizes a September 2001 report (GAO-01-915).

gao_GAO-11-692T

gao_GAO-11-692T_0

In August 2006, NASA competitively awarded a $278 million Space Act agreement to SpaceX to develop and demonstrate end-to-end transportation systems, including the development of the Falcon 9 launch vehicle and Dragon spacecraft, ground operations, and berthing with the space station. Since our 2009 report, the two COTS project partners, Orbital and SpaceX, have made progress in the development of their respective vehicles. Nonetheless, the criticality of these vehicles to the space station’s operations, as well as NASA’s ability to affordably execute its science missions has heightened the importance of their timely and successful completion and lessened the level of risk that NASA is willing to accept in this regard. As a result, the project recently requested and received an additional $300 million to augment the partner development efforts with, according to NASA, risk reduction milestones. SpaceX’s first demonstration mission readiness review was completed 15 months behind schedule and its successful first demonstration mission was flown in December 2010, 18 months late. The company’s second and third demonstration missions have been delayed by almost 2 years to November 2011 and January 2012, respectively. In preparing for its second COTS demonstration flight, SpaceX has experienced additional design, development, and production delays. Risk Reduction Milestones Recently Added to COTS Agreements In addition to the prior milestones negotiated under the COTS project, NASA has amended its agreements with SpaceX and Orbital to include a number of additional milestones aimed at reducing remaining developmental and schedule risks. SpaceX has completed 4 of its new milestones on time but has experienced minor delays in completing 3 others. The Taurus II test flight is scheduled for October 2011. Appendix I describes SpaceX’s and Orbital’s progress meeting the new COTS development milestones in their agreements with NASA. COTS Delays Will Likely Cause Resupply Flights to Slip, but NASA Has Taken Steps to Mitigate Short-Term Impact Based on the current launch dates for SpaceX’s and Orbital’s upcoming COTS demonstration missions, it is likely that both commercial partners will not launch their initial CRS missions on time, but NASA has taken steps to mitigate the short-term impact to the space station. These launch windows are either scheduled to occur before or during SpaceX’s upcoming COTS demonstration flights and thus will need to be rescheduled. In the case of Orbital, NASA officials told us that the launch window for its first CRS flight is from January to March 2012, but will likely slip from those dates given the Taurus II test flight added to its milestone schedule. NASA officials added that once SpaceX and Orbital have finished completing their COTS demonstration flights, NASA will have to renegotiate the number of flights needed from each partner and re- baseline the launch windows for future CRS missions. International Space Station program officials told us they have taken steps to mitigate the short-term impact of CRS flight delays through prepositioning of cargo on the last space shuttle flights, including cargo that is being launched on the planned contingency space shuttle flight in early July 2011. Despite these steps, NASA officials said they would still need one flight each from SpaceX’s and Orbital’s vehicles in order to meet science-related cargo needs in 2012. In considering the use of funded Space Act agreements for COTS, NASA identified several advantages. For example: The government can share costs with the agreement partner with fixed government investment. For example: The government has limited ability to influence agreement partners in their approach. Given the intended goals of the project and the availability of alternative vehicles to deliver goods to the space station when the COTS agreements were signed, NASA was willing to accept the risks associated with the disadvantages of using a Space Act agreement. As the project has progressed, however, and these alternatives are no longer viable or available, NASA has become less willing to accept the risks involved. The additional investment required, however, can be lessened by ensuring that accurate knowledge about requirements, cost, schedule, and risks is achieved early on. We have made recommendations to NASA and NASA is taking steps to address these recommendations to help ensure that these fundamentals are present in its major development efforts to increase the likelihood of success.

Why GAO Did This Study Since the National Aeronautics and Space Administration (NASA) created the strategy for the Commercial Orbital Transportation Services (COTS) project in 2005, the space landscape has changed significantly--the Space Shuttle program is retiring and the Ares I will not be available--increasing the importance of the timely development of COTS vehicles. The lack of alternatives for supplying the International Space Station and launching science missions have all contributed to an increased need for the COTS vehicles. The two COTS project partners, Orbital and SpaceX, have made progress in the development of their respective vehicles; however, both providers are behind schedule. As a result, the project recently received an additional $300 million to augment development efforts with risk reduction milestones. This testimony focuses on: (1) COTS development activities, including the recent funding increase; (2) the extent to which any COTS demonstration delays have affected commercial resupply services (CRS) missions and NASA's plans for meeting the space station's cargo resupply needs; and (3) lessons learned from NASA's acquisition approach for COTS. To prepare this statement, GAO used its prior relevant work and conducted additional audit work, such as analyzing each partner's agreement with NASA and interviewing NASA officials. New data in this statement was discussed with agency and company officials who provided technical comments, which we included as appropriate. What GAO Found SpaceX and Orbital continue to make progress completing milestones under their COTS agreements with NASA, but both partners are working under aggressive schedules and have experienced delays in completing demonstration missions. SpaceX successfully flew its first demonstration mission in December 2010, but the mission was 18 months late and the company's second and third demonstration missions have been delayed by almost 2 years due to design, development, and production challenges with the Dragon spacecraft and Falcon 9 launch vehicle. Orbital faced technical challenges developing the Taurus II launch vehicle and the Cygnus spacecraft and in constructing launch facilities, leading to multiple delays in completing program milestones, including its demonstration mission. NASA has amended its agreements with the partners to include a number of new milestones, such as additional ground and flight tests, to reduce remaining developmental and schedule risks; most of the new milestones completed thus far were finished on time, but many milestones remain. Based on the current launch dates for SpaceX's and Orbital's upcoming COTS demonstration missions, it is likely that neither will launch its initial CRS mission on time, but NASA has taken steps to mitigate the short-term impact to the space station. The launch windows for SpaceX's first and second CRS flights are scheduled to occur either before or during its upcoming COTS demonstration flights and will need to be rescheduled. Orbital's first CRS flight will also likely shift due to a Taurus II test flight. NASA officials said that the agency will have to renegotiate the number of flights needed from each partner and re-baseline the launch windows for future CRS missions once COTS demonstration flights are completed. NASA has taken steps to mitigate the short-term impact of CRS delays through prepositioning of cargo, some of which will be delivered on the last space shuttle flight. Despite these efforts, NASA officials said they would still need one flight in 2012 from SpaceX's and Orbital's vehicles to meet science-related cargo needs. In considering the use of a Space Act agreement for COTS, NASA identified several advantages. These advantages include sharing costs with agreement partners and promoting innovation in the private sector. A disadvantage, however, is that NASA is limited in its ability to influence agreement partners in their approach. At the time the agreements were awarded, NASA was willing to accept the risks of using a Space Act agreement given the goals of the project and alternative vehicles that were available to deliver goods to the space station. As the project has progressed, however, and these alternatives are no longer viable or available, NASA has become less willing to accept the risk involved and has taken steps aimed at risk mitigation. Given a critical need, the risk is present that the government will be required to make additional investments to meet mission needs. The amount of investment can be lessened by ensuring that accurate knowledge about requirements, cost, schedule, and risks is achieved early on. What GAO Recommends GAO has made recommendations to NASA and NASA is taking steps to help ensure that these fundamentals are present in its major development efforts to increase the likelihood of success.

gao_GAO-08-215T

gao_GAO-08-215T_0

The goal over the years has been to disrupt the market for illegal drugs, making it more difficult for traffickers to produce and transport illicit drugs to the United States. Illicit Drug Production and Trafficking by Mexican Drug Organizations Have Continued Virtually Unabated Mexico is the conduit for most of the cocaine reaching the United States, the source for much of the heroin consumed in the United States, and the largest foreign supplier of marijuana and methamphetamine to the U.S. market. In addition, although reported seizures of these drugs within Mexico and along the U.S. southwest border generally increased, according to the U.S. interagency counternarcotics community, seizures have been a relatively small percentage of the estimated supply. Based on the available data, the following describes the trends since 2000 on the amount of cocaine arriving in Mexico for transshipment to the United States; the amounts of heroin and marijuana produced in Mexico; and reported seizures of these illicit drugs and methamphetamine in Mexico and along the U.S.-Mexico border. Using the midpoint of the IACM ranges, the amount of cocaine estimated arriving in Mexico during 2000-2006 averaged about 290 metric tons per year. Heroin: During 2000-2005, the estimated amount of heroin produced for export in Mexico averaged almost 19 metric tons a year—ranging from a low of 9 metric tons in 2000 to a high of 30 metric tons in 2003. Reported heroin seizures in Mexico and along the U.S.- Mexico border averaged less than 1 metric ton or less than 5 percent a year of the estimated export quality heroin produced in Mexico between 2000 and 2005. On the basis of the reported data, seizures along the U.S.-Mexico border rose more than five times—from an estimated 500 kilograms in 2000 to almost 2,900 metric tons in 2004 and over 2,700 kilograms in 2006. Since then State has reported on the Mexican government’s efforts to reduce corruption. Since 2000, Mexico has undertaken several initiatives to address corruption. Mexican DTOs Control Drug Trafficking in Mexico and Have Extended Their Reach into the United States According to the Drug Enforcement Administration (DEA), four main DTOs control the illicit drug production and trafficking in Mexico and operate with relative impunity in certain parts of the country: The Federation, which operates from the Mexican state of Sinaloa, is an alliance of drug traffickers that U.S. and Mexican officials told us may have the most extensive geographic reach in Mexico. U.S. Support for Mexican Interdiction Efforts Has Helped, but Improvements Are Needed The fourth strategy under the embassy’s counternarcotics goal is to support Mexican efforts to interdict illicit drugs. However, the United States and Mexico have not agreed to a bilateral maritime cooperation agreement that would allow U.S. law enforcement personnel to board and search Mexican-flagged vessels on the high seas suspected of trafficking illicit drugs without asking the government of Mexico for authority to board on a case-by-case basis. However, according to State officials, due to funding limitations and changed priorities, NAS capped the number at 12. Southwest Border Strategy’s Implementation Plan In March 2006, ONDCP, in conjunction with the National Security Council and other agencies involved in the U.S. interagency counternarcotics community, developed a Southwest Border Strategy to help reduce the flow of illicit drugs entering the United States across the southwest border with Mexico. Conclusions U.S. counternarcotics assistance to Mexico since 2000 has helped Mexico strengthen its law enforcement institutions and capacity to combat illicit drug production and trafficking.

Why GAO Did This Study The overall goal of the U.S. National Drug Control Strategy, which is prepared by the White House Office of National Drug Control Policy (ONDCP), is to reduce illicit drug use in the United States. One of the strategy's priorities is to disrupt the illicit drug marketplace. To this end, since fiscal year 2000, the United States has provided about $397 million to support Mexican counternarcotics efforts. According to the Department of State (State), much of the illicit drugs consumed in the United States flows through or is produced in Mexico. GAO examined (1) trends in Mexican drug production and trafficking since calendar year 2000 and (2) U.S. counternarcotics support for Mexico since fiscal year 2000. This testimony is based on a recently issued report (GAO-07-1018) that addresses these issues. What GAO Found According to the U.S. interagency counternarcotics community, hundreds of tons of illicit drugs flow from Mexico into the United States each year, and seizures in Mexico and along the U.S. border have been relatively small in recent years. The following illustrates some trends since 2000: (1) The estimated amount of cocaine arriving in Mexico for transshipment to the United States averaged about 290 metric tons per year. Reported seizures averaged about 36 metric tons a year. (2) The estimated amount of export quality heroin and marijuana produced in Mexico averaged almost 19 metric tons and 9,400 metric tons per year, respectively. Reported heroin seizures averaged less than 1 metric ton and reported marijuana seizures averaged about 2,900 metric tons a year. (3) Although an estimate of the amount of methamphetamine manufactured in Mexico is not prepared, reported seizures along the U.S. border rose from about 500 kilograms in 2000 to highs of about 2,800 kilograms in 2005 and about 2,700 kilograms in 2006. According to U.S. officials, this more than fivefold increase indicated a dramatic rise in supply. In addition, according to State, corruption persists within the Mexican government and challenges Mexico's efforts to curb drug production and trafficking. Moreover, Mexican drug trafficking organizations operate with relative impunity along the U.S. border and in other parts of Mexico, and have expanded their illicit business to almost every region of the United States. U.S. assistance since fiscal year 2000 has helped Mexico strengthen its capacity to combat illicit drug production and trafficking. Among other things, extraditions of criminals to the United States increased; thousands of Mexican law enforcement personnel were trained; and controls over chemicals to produce methamphetamine were strengthened. Nevertheless, cooperation with Mexico can be improved. The two countries do not have an agreement permitting U.S. law enforcement officers to board Mexican-flagged vessels suspected of transporting illicit drugs on the high seas; an aerial monitoring program along the U.S. border was suspended because certain personnel status issues could not be agreed on; State-provided Vietnam-era helicopters have proved expensive and difficult to maintain and many are not available for operations; and a State-supported border surveillance program was cut short due to limited funding and changed priorities. In 2006, in response to a congressional mandate, ONDCP and other agencies involved in U.S. counternarcotics efforts developed a strategy to help reduce the illicit drugs entering the United States from Mexico. An implementation plan was prepared but is being revised to address certain initiatives recently undertaken by Mexico. Based on our review of the plan, some proposals require the cooperation of Mexico; but, according to ONDCP, they had not been addressed with Mexican authorities at the time of our review.

gao_T-RCED-97-152

gao_T-RCED-97-152_0

Amount and Percentage of Funds Lent Generally Increased The overall amount of funds lent by the nine states increased between 1995 and 1996, from $3.3 billion to $4.0 billion. All nine states increased the amount of funds they lent between 1995 and 1996. The other three states increased their amount of funds lent by 30 percent or more. Three states increased their percentage by 17 percentage points or more. Specifically, five states lent 80 percent or more of their available funds, another three states lent 70 to 79 percent, and the final state lent 60 percent. Lack of Legislative Reauthorization and Other Federal-Level Factors Constrained Lending in Eight States Officials in eight of the nine states cited one or more factors at the federal level as affecting the amount and percentage of funds they lent. In seven states, officials said that uncertainty about the reauthorization of the SRF program discouraged some potential borrowers. Finally, in three states, officials identified other reasons, such as federal restrictions on the use of SRF funds. Expiration of Legislative Authorization Discouraged Some Potential Borrowers Officials in seven of the nine states said that the lack of reauthorization of the Clean Water Act limited their success in lending funds. EPA officials said they were aware that many states had a concern about the prevailing-wage requirement. To determine the percentage of funds lent by each state as of the end of 1995 and 1996, we divided the total amount of funds lent by the total funds available to lend, as defined above, both as of the end of the year. Table I.2 shows the amount and percentage of funds lent for the nine states for each state’s fiscal year 1995 and 1996.

Why GAO Did This Study GAO discussed selected states' experience with the Environmental Protection Agency's (EPA) Clean Water State Revolving Fund program, focusing on: (1) the amount of funds lent and the percentage of available funds lent, as of the end of each state's fiscal year 1996; and (2) information on factors at the federal and state levels that constrained the amount and percentage of funds lent. What GAO Found GAO noted that: (1) the nine states increased the total amount of funds they lent from $3.3 billion in 1995 to $4.0 billion in 1996; (2) all nine states increased the amount they lent by 15 percent or more, and three states achieved increases of 30 percent or more; (3) in addition, seven of the nine states increased the percentage of available funds they lent; (4) of these seven, three states increased this proportion by 17 percentage points or more; (5) nevertheless, the percentage of funds lent as of the end of 1996 varied substantially among the nine states; (6) specifically, five states had lent 80 percent or more of their available funds, three states had lent between 70 and 79 percent, and one state had lent 60 percent; (7) in eight of the nine states, officials identified the expiration of the authorizing legislation, as well as federal requirements, as affecting the amount and percentage of funds lent; (8) for example, officials in seven states said the legislation's expiration created uncertainty about the loan conditions that might apply in the future and caused some communities to postpone seeking or accepting loans; (9) also, officials in seven states said that other federal requirements, such as a prevailing-wage provision, discouraged some communities from seeking loans; and (10) finally, in two states, officials said that state program decisions constrained lending.

gao_GAO-05-477

gao_GAO-05-477_0

Identity Theft a Primary Means of Committing Fraud Using the stolen identities and documentation of U.S. citizens is the primary tactic of those fraudulently applying for U.S. passports. Passport fraud is often linked to other crimes. Various Other Methods Used to Fraudulently Obtain Passports Applicants commit passport fraud through other means, including submitting false claims of lost, stolen, or mutilated passports; child substitution; and counterfeit citizenship documents. According to Diplomatic Securityofficials, concerns exist within the law enforcement and intelligence communities that passport fraud could also be used to help facilitate acts of terrorism. Other leaders of alien smuggling rings have also been recently convicted. Limited interagency information sharing between State and law enforcement and other agencies makes it more difficult to protect U.S. citizens from terrorists, criminals, and others who would harm the United States. State’s CLASS Name-Check System Does Not Include Names of All Fugitives Wanted by Federal and State Law Enforcement Authorities Because the FBI and other law enforcement agencies do not currently provide State with the names of all individuals wanted by federal law enforcement authorities, State’s CLASS name-check system does not contain the names of many federal fugitives, some wanted for murder and other violent crimes; these fugitives could therefore obtain passports and potentially flee the country. State officials became aware of this situation when the union representing passport examiners brought to their attention that a number of individuals on the FBI’s Ten Most Wanted list were not in CLASS. Insufficient Fraud Prevention Staffing, Training, Oversight, and Investigative Resources Make Fraud Detection More Difficult Limited fraud prevention staffing, training, oversight, and investigative resources pose additional challenges to fraud detection efforts. Effect of New Examiner Performance Standards on Fraud Detection Remains Unclear Although State’s approach to developing new nationwide passport examiner production standards, which were implemented in January 2004, raises a number of methodological concerns, subsequent changes to the standards make an assessment of their impact on fraud detection premature. State intended that the new nationwide standards would make performance expectations and work processes more uniform among its 16 issuing offices. Because State has modified the 2004 production standards in response to management, union, and examiner concerns, the standards’ effect on fraud detection is unclear. Conclusions Maintaining the integrity of the U.S. passport is an essential component of State’s efforts to help protect U.S. citizens from those who would harm the United States. Recommendations for Executive Action To improve the coordination and execution of passport fraud detection efforts, we recommend the Secretary of State take the following six actions: Expedite, in consultation with the U.S. Attorney General, Director of the Federal Bureau of Investigation, and Secretary of Homeland Security, arrangements to enhance interagency information sharing, and reach agreement on a plan and timetable for doing so, to ensure that State’s CLASS system for passports contains a more comprehensive list of individuals identified in the Terrorist Screening Center database as well as state and federal fugitives and that such information is made available to State in an efficient and timely manner. To identify and assess the key challenges State faces in detecting passport fraud, we directly observed State’s fraud detection efforts at 7 of its 16 domestic passport-issuing offices; tested State’s use of electronic databases for fraud detection; analyzed fraud referral statistics from the Bureaus of Consular Affairs and Diplomatic Security; and interviewed cognizant officials in both of these bureaus.

Why GAO Did This Study Maintaining the integrity of the U.S. passport is essential to the State Department's efforts to protect U.S. citizens from terrorists, criminals, and others. State issued about 8.8 million passports in fiscal year 2004. During the same year, State's Bureau of Diplomatic Security arrested about 500 individuals for passport fraud, and about 300 persons were convicted. Passport fraud is often intended to facilitate other crimes, including illegal immigration, drug trafficking, and alien smuggling. GAO examined (1) how passport fraud is committed, (2) what key fraud detection challenges State faces, and (3) what effect new passport examiner performance standards could have on fraud detection. What GAO Found Using the stolen identities of U.S. citizens is the primary method of those fraudulently applying for U.S. passports. False claims of lost, stolen, or damaged passports and child substitution are among the other tactics used. Fraudulently obtained passports can help criminals conceal their activities and travel with less scrutiny. Concerns exist that they could also be used to help facilitate terrorism. State faces a number of challenges to its passport fraud detection efforts, and these challenges make it more difficult to protect U.S. citizens from terrorists, criminals, and others. Information on U.S. citizens listed in the federal government's consolidated terrorist watch list is not systematically provided to State. Moreover, State does not routinely obtain from the Federal Bureau of Investigation (FBI) the names of other individuals wanted by federal and state law enforcement authorities. We tested the names of 67 federal and state fugitives and found that 37, over half, were not in State's Consular Lookout and Support System (CLASS) database for passports. One of those not included was on the FBI's Ten Most Wanted list. State does not maintain a centralized and up-to-date fraud prevention library, hindering information sharing within State. Fraud prevention staffing reductions and interoffice workload transfers resulted in fewer fraud referrals at some offices, and insufficient training, oversight, and investigative resources also hinder fraud detection efforts. Any effect that new passport examiner performance standards may have on State's fraud detection efforts is unclear because State continues to adjust the standards. State began implementing the new standards in January 2004 to make work processes and performance expectations more uniform nationwide. Passport examiner union representatives expressed concern that new numerical production quotas may require examiners to "shortcut" fraud detection efforts. However, in response to union and examiner concerns, State eased the production standards during 2004 and made a number of other modifications and compromises.

gao_AIMD-98-6

gao_AIMD-98-6_0

SSA also depends on 54 state DDS offices, along with one federally administered DDS, to help process claims under its disability insurance programs. State DDSs rely primarily on their internal systems to process medical determinations. Systems may contain up to several million lines of software code that must be examined for potential date-format problems. Renovation. Significant Progress Made in Awareness, Assessment, and Renovation of SSA’s Mission-Critical Mainframe Systems SSA began examining the Year 2000 problem almost a decade ago and since then has taken various steps to raise agency awareness of the issue. SSA did not include the DDS systems in its initial assessment of systems that it considered a priority for correction. Within these offices, the contractors also are responsible for ensuring that the production databases and NDDSS interfaces are Year 2000 compliant. Even with Year 2000 action now underway, however, the potential magnitude of the DDS problem makes systems correction by January 1, 2000, a high-risk area. Disruptions to this service due to incomplete Year 2000 conversions will prevent or delay SSA’s assistance to millions of individuals across the country. Resolving Data Exchange Issues and Developing Contingency Plans Will Help Reduce Risk An essential yet challenging aspect of SSA’s Year 2000 work will be ensuring that data exchanges with other federal and state agencies and businesses are Year 2000 compliant. SSA recognizes the importance of this matter and has taken a number of steps to address it. At the same time, SSA needs to have contingency plans to ensure that strategies exist for mitigating any risks associated with this and any of the other Year 2000 related issues that can affect the agency’s ability to provide Social Security and other benefits and services to the public. SSA exchanges data files with hundreds of federal and state agencies and thousands of businesses. In addition, to facilitate data exchange compliance, SSA has developed a database that maintains information on the status of compliance activities related to all of its incoming and outgoing file exchanges. Given the magnitude of its data exchanges, one of SSA’s biggest challenges will be coordinating its compliance work with that of its exchange partners and, where necessary, developing mechanisms to ensure the continued processing of its data. SSA has identified approximately 100 files in this category, although the Year 2000 project director stated that this number could change as SSA continues to review and include compliance information in its tracking system. SSA has made significant progress in addressing many of the systems that are critical to its mission and is regarded by many as a leader in the federal arena. Nonetheless, the agency is at risk of not being able to adequately process disability benefits at the turn of the century because it has not assessed and corrected systems used by the state DDS offices to support the processing of initial disability claims. Recommendations In light of the importance of SSA’s function to most Americans and the risks associated with its Year 2000 program, we recommend that the Commissioner of Social Security direct SSA’s Chief Information Officer, in conjunction with the Deputy Commissioner for Systems, to take the following actions: Require expeditious completion of the assessment of mission-critical systems at all state DDS offices and use the results of this assessment to develop a Year 2000 plan that identifies, for each system, the specific tasks and resources required and specific schedules and milestones for completing all tasks and phases of the conversion for each state system. GAO Comment 1.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Social Security Administration's (SSA) actions to achieve Year 2000 information systems compliance, focusing on the adequacy of steps taken by SSA to ensure that computing problems related to the year 2000 are fully addressed, including its oversight of state disability determinations services' (DDS) Year 2000 program activities. What GAO Found GAO noted that: (1) SSA first recognized the potential impact of the Year 2000 problem almost a decade ago, and was able to launch an early response to this challenge; (2) it initiated early awareness activity and has made significant progress in assessing and renovating mission-critical mainframe software that enables it to provide social security benefits and other assistance to the public; (3) because of the knowledge and experience gained through its early Year 2000 efforts, SSA has come to be regarded as a federal leader in addressing this issue; (4) SSA's Assistant Deputy Commissioner for Systems chairs the Chief Information Officers Council's Subcommittee on the Year 2000 and works with other federal agencies to address Year 2000 issues across government; (5) while SSA deserves credit for its leadership, the agency remains at risk that not all of its mission-critical systems--those necessary to prevent the disruption of benefits--will be corrected before January 1, 2000; (6) at particular risk are the systems that have not yet been assessed for the 54 state DDSs that provide vital support to SSA in administering its disability insurance programs; (7) private contractors SSA hired to make 42 of the 54 state DDS systems Year 2000 compliant reported that these offices had at least 33 million additional lines of software code that must be assessed and, where necessary, renovated; (8) given the potential magnitude of this undertaking, SSA could face major disruptions in its ability to process initial disability claims for millions of individuals throughout the country if these systems are not addressed in time for corrective action to be completed before the change of century; (9) SSA also faces the challenge of ensuring that its critical data exchanges with federal and state agencies and other businesses are Year 2000 compliant; (10) it has taken a number of positive steps in this direction, such as identifying incoming and outgoing file exchanges with the external business community and developing a database to maintain information on the status of compliance activities; (11) however, because SSA must rely on the hundreds of federal and state agencies and the thousands of businesses with which it exchanges files to make their systems compliant, SSA faces a definite risk that inaccurate data will be introduced into its databases; and (12) that risk could be magnified if SSA does not develop contingency plans to ensure the continuity of its critical systems and activities should systems not be corrected in time.

gao_GAO-09-551

gao_GAO-09-551_0

1). 3). As we reported in 2003, there is no single federal agency responsible for managing and funding flooding and erosion programs in Alaska. The Flooding and Erosion Threats to Villages Have Not Been Completely Assessed, but Some Threatened Villages Are Exploring Relocation Options While the flooding and erosion threats to Alaska Native villages have not been completely assessed, a growing number of imminently threatened villages have been identified, and some have decided to relocate or are exploring relocation options. Since our 2003 report, federal, state, and village officials have identified 31 villages that face imminent threats. 4). Twelve Imminently Threatened Villages Are Exploring Relocation Options for All of, or a Portion of, Their Existing Villages According to federal, state, and village officials, at least 12 of the 31 imminently threatened villages have decided to relocate—in part or entirely—or to explore relocation options. Federal Disaster Programs Have Provided Limited Assistance to Villages, and No Comprehensive Relocation Program Exists Federal programs to assist threatened villages prepare for and recover from disasters and to protect and relocate them are limited and unavailable to some villages. While FEMA administers several disaster preparedness and recovery programs, villages often fail to qualify for these programs. Other federal agencies have individual programs, but there is no single comprehensive proactive federal program to assist villages with their relocation efforts. No Comprehensive Federal Relocation Program Exists, but Individual Agencies Are Providing Some Relocation Assistance, and Other Flooding and Erosion Mitigation Activities Are Ongoing “Notwithstanding any other provisions of law, the Secretary of the Army is authorized to carry out, at full Federal expense, structural and non-structural projects for storm damage prevention and reduction, coastal erosion, and ice and glacial damage in Alaska, including relocation of affected communities and construction of replacement facilities.” Despite this new authority, which was subsequently repealed in March 2009, the Corps’ role in village relocation efforts has generally remained unchanged since our 2003 report and has been limited to evaluating potential relocation sites for Kivalina, Koyukuk, and Shishmaref and to designing an evacuation center and road for Newtok. Varying levels of progress have been made by the 8 villages that are gradually migrating to new locations over time. Specifically, none of these villages have yet identified relocation sites that federal, state, and village officials agree are safe, sustainable, and desirable for the subsistence lifestyle of the villagers (see table 5). Lacking a Lead Federal Entity to Prioritize and Coordinate Assistance, Individual Agency Efforts May Not Adequately Address the Growing Threat to Relocating Villages In the absence of a lead entity, federal agencies individually prioritize assistance to villages on the basis of their programs’ criteria, which do not necessarily ensure that the villages in the greatest peril get the highest priority for assistance. The lack of a lead federal entity has impeded village relocation efforts, including the fulfillment of the environmental analysis requirements under NEPA. Because of the concerns raised by the Newtok Planning Group regarding the lack of federal and state lead agencies, the state designated DCCED as the lead state coordinating agency for all village relocation assistance in 2008. Confirming the concerns of the Newtok Planning Group, federal, state, and village officials with whom we spoke told us that a lead federal entity is needed to coordinate village relocation efforts. Alternatively, a new entity could be formed to lead, oversee, and coordinate village relocation efforts. Because the Corps’ Alaska Baseline Erosion Assessment did not consider flooding, the status of the threat to many villages cannot be properly taken into account by federal and state officials when planning and prioritizing assistance to villages, thereby creating the potential that villages may not receive the assistance they need due to a lack of complete information for decision makers. Because of Alaska’s unique structure of organized boroughs and an unorganized borough, unincorporated Native villages in the unorganized borough do not qualify for federal housing funds from HUD’s Community Development Block Grant program.

Why GAO Did This Study In December 2003, GAO reported that most of Alaska's more than 200 Native villages were affected to some degree by flooding and erosion (GAO-04-142). Since 2003, state officials have identified the growing impacts of climate change, increasing the urgency of federal and state efforts to identify imminently threatened villages and assess their relocation options. GAO was asked to report on (1) the flooding and erosion threats that Alaska Native villages currently face, (2) the federal programs that are available to assist villages facing potential disasters, (3) the status of village relocation efforts, and (4) how federal assistance to relocating villages is prioritized. GAO interviewed and gathered documentation from federal and state agency officials as well as regional organizations and village representatives. What GAO Found While the flooding and erosion threats to Alaska Native villages have not been completely assessed, since 2003, federal, state, and village officials have identified 31 villages that face imminent threats. The U.S. Army Corps of Engineers' (Corps) March 2009 Alaska Baseline Erosion Assessment identified many villages threatened by erosion, but did not assess flooding impacts. At least 12 of the 31 threatened villages have decided to relocate--in part or entirely--or to explore relocation options. Federal programs to assist threatened villages prepare for and recover from disasters and to protect and relocate them are limited and unavailable to some villages. The Federal Emergency Management Agency has several disaster preparedness and recovery programs, but villages often fail to qualify for them, generally because they may lack approved disaster mitigation plans or have not been declared federal disaster areas. Although there is no single comprehensive proactive federal program to assist villages with their relocation efforts, individual federal agencies can assist villages on specific projects, such as funding the construction or relocation of homes. However, 64 villages do not qualify for affordable housing and relocation assistance from the Department of Housing and Urban Development's Community Development Block Grant program because the federal law governing the program does not recognize unincorporated Alaska Native villages in Alaska's unorganized borough as eligible units of general local government. Of the 12 villages exploring relocation options, Newtok has made the most progress in its relocation efforts. The Newtok Planning Group, formed in 2006 by federal, state, regional, and village partners, has helped to accelerate the relocation process that the village proactively initiated in 1994. The 3 other villages that will likely need to relocate all at once--Kivalina, Shaktoolik, and Shishmaref--have yet to identify sites that federal, state, and village officials agree are safe, sustainable, and desirable for the subsistence lifestyle of the villagers. Eight other villages have begun to gradually migrate to new locations over time or are evaluating options for doing so. In the absence of a lead entity, federal agencies individually prioritize assistance to villages on the basis of their programs' criteria. These criteria do not necessarily ensure that the villages in greatest peril get the highest priority, and although the Corps has assessed erosion threats, there is no lead federal entity to prioritize and coordinate assistance using this information. In 2007, the Newtok Planning Group reported that the lack of designated federal and state lead entities to guide, coordinate, and fund assistance impeded village relocation efforts and created uncertainty regarding the fulfillment of environmental analysis requirements under the National Environmental Policy Act. In 2008, the state designated a lead agency for village relocation assistance, and federal, state, and village officials told GAO that a similar lead federal entity is needed. Lead authority could be provided to an existing agency or commission, or a new entity could be formed for this purpose.

gao_GAO-11-700

gao_GAO-11-700_0

Background Cyclone Nargis Severely Affected More than 3 Million Burmese Cyclone Nargis left nearly 140,000 people dead or missing, up to 800,000 displaced, and roughly 2.4 million severely affected. One U.S. official reported that the Burmese military set up a logistics center in Rangoon and delivered some relief supplies. The current U.S. sanctions against Burma limit, among other things, the export of financial services by U.S. persons or from the United States to Burma and new U.S. investment in Burma. Agencies Obligated About $335 Million in Assistance to Burma after Cyclone Nargis In response to the humanitarian crisis in Burma following Cyclone Nargis, UN and U.S. agencies obligated roughly $334.8 million in assistance, as of March 2011. U.S. Government Responded to Cyclone Nargis with Nearly $85 Million in Assistance In response to Cyclone Nargis, the U.S. government obligated $84.6 million since May 2008—$74.9 million for emergency response activities and $9.7 million for longer-term recovery assistance. USAID Has Taken Actions to Help Ensure Funds Have Been Used As Intended, but Has Some Monitoring Weaknesses USAID Took Actions Prior to Delivery of Assistance Prior to delivery of assistance, USAID took several actions to help ensure that funds were used as intended and did not benefit sanctioned entities. Under the terms of the licenses, USAID and its grantees had to continue to ensure that U.S. funding did not benefit sanctioned entities in Burma.  Food aid. USAID’s Monitoring Includes Limited Financial Oversight and Relies on External Audits, but Staff Were Not Aware of Relevant Audit Findings USAID’s monitoring activities, including their limited number of site visits, involve little financial oversight, which is to help ensure funds are used as intended. Organizations Responding to Cyclone Nargis Experienced Similar Challenges and Developed Lessons Learned Our analysis of 16 evaluative reports from NGOs, governments, and UN agencies as well as interviews with U.S., UN, and NGO officials found that organizations responding to Cyclone Nargis experienced similar challenges in four main categories: access to affected populations, coordination among responding organizations, implementation of assistance, and in-country disaster response capacity. Reports mentioned the physical distance between the locations and the limited, and unreliable, telecommunication services in the delta, as some of the reasons contributing to the communication challenges. Recommendations for Executive Action We recommend that the Administrator of USAID direct the appropriate mission and offices to improve management of grants related to Burma by taking actions, such as:  enhancing financial monitoring of agreements by including periodic reviews of grantee internal controls, transactions, and disbursement records;  providing grantees with specific guidance on the approval process for international travel requests, and ensuring that USAID staff monitor grantees’ expenditures for compliance with related laws, regulations, and grant agreements, including international travel; reinforcing the requirement for staff to formally document site visits to grantees; and  ensuring all relevant offices are made aware of audit findings in a timely manner. Appendix I: Scope and Methodology UN and U.S. Assistance To describe assistance provided by UN and U.S. agencies in response to Cyclone Nargis, we reviewed documents, including grants, cooperative agreements, and progress reports, from UN agencies, the U.S. Agency for International Development (USAID), Department of Defense (DOD), Department of State (State), and nongovernmental organizations (NGO). We report UN agency obligations. For example, DOD-procured water bottles were heavy and difficult to transport and medical supplies had instructions printed in non-Burmese languages. Responders cited the improvement of in-country emergency preparedness and response capacity through personnel training and local engagement as critical. USAID issued recommendations to address the lessons learned from many of these challenges. Restrictions Limit Work with Burmese Government USAID officials also said that U.S. restrictions limiting their ability to work with the Burmese government made it difficult to coordinate U.S. response and recovery activities. This was not the case in Burma and it created difficulties for the team. Conflicting agendas resulted in coordination difficulties related to the appropriateness, timing, procurement, and distribution of aid. USAID’s after action report also cited numerous challenges related to information management. and UN agencies said that they found little evidence that assistance had been misused,” USAID said no misuse of resources has been encountered.

Why GAO Did This Study Cyclone Nargis hit Burma's impoverished Irrawaddy Delta on May 2, 2008, leaving nearly 140,000 people dead or missing and severely affecting about 2.4 million others, according to the UN. The Burmese military government initially blocked most access to the affected region; however, amid international pressure, it slowly began allowing international aid workers entry into the region. Since 1997, the United States has imposed sanctions to prohibit, among other things, the exportation of financial services to Burma and transactions with Burmese officials. In response to a congressional mandate, GAO (1) described the assistance UN and U.S. agencies have provided in response to Cyclone Nargis, (2) assessed USAID actions to help ensure funds are used as intended and do not benefit sanctioned entities, and (3) described the challenges responders experienced and the lessons learned. GAO reviewed financial and program documents; interviewed U.S., UN, and nongovernmental organization (NGO) officials; and traveled to Thailand and Burma. What GAO Found UN and U.S. agencies provided about $335 million for emergency response and recovery activities after Cyclone Nargis. Of that total, 11 UN agencies obligated roughly $288 million for assistance in various sectors, including food, health, water and sanitation, and agriculture. The U.S. government provided about $38 million of the UN's total as part of its roughly $85 million in obligations for emergency response and longer-term recovery activities. Of the $85 million U.S. response, the U.S. Agency for International Development (USAID), which led U.S. efforts, obligated about $72 million. The Department of Defense obligated about $13 million to procure and deliver emergency relief supplies. USAID took actions to help ensure U.S. funds were used as intended and did not benefit sanctioned entities, but had some monitoring weaknesses. USAID took actions prior to the delivery of assistance, including selecting partners experienced in working with USAID and in Burma and providing extra guidance to help ensure funds were not misused. To monitor assistance, USAID has conducted some site visits. However, USAID's monitoring contains little financial oversight and we found that two grantees charged USAID for unapproved international travel. Also, in some cases site visits were not sufficiently documented. USAID relies on external audits of grantees, but relevant USAID staff were not aware of audit findings related to one grantee's cash payments to villagers in Burma. The grantee subsequently addressed the audit findings. Lastly, U.S. and UN agencies said they examined reports of misuse of assistance in their programs and found no evidence that assistance had been misused. GAO's review of 16 after-action reports from donors, NGOs, and UN agencies, showed that those responding to Cyclone Nargis experienced similar challenges and developed lessons learned in four main areas: access, coordination, implementation, and limited in-country disaster response capacity. Responders found it difficult to reach affected areas because the Burmese government limited their travel and the infrastructure was poor. Responders also had difficulty coordinating between headquarters and field offices for several reasons, including limited telecommunication services. A U.S. report highlighted coordination challenges amongst U.S. agencies, stating that agencies' conflicting agendas resulted in difficulties related to the appropriateness, timing, procurement, and distribution of aid. Implementation challenges include supplies that were incompatible with local conditions, such as medicines with instructions printed in non-Burmese languages and difficulties monitoring aid. Capacity challenges included a lack of experienced disaster specialists in Burma, which resulted in nonqualified individuals being placed in positions out of necessity. To address some of these challenges, reports suggested that organizations increase support staff and use the same reporting systems. Other reports prioritized involving local communities in decision making and improving emergency preparedness and local response capacity. What GAO Recommends GAO recommends that the Administrator of USAID (1) take four actions to improve the management of grants related to Burma, including enhancing financial monitoring and reinforcing the requirement to document site visits, and (2) review the questionable costs for international travel GAO identified. USAID concurred with GAO's recommendations.

gao_GAO-09-144

gao_GAO-09-144_0

However, states have limited budgets and staff to assist their firms. Both CS and most states’ trade offices focus their export promotion efforts on SMEs. In addition, to facilitate access to CS’s programs, about a third of the states responding to our survey indicated that they provide grants or payments to firms from their states to defray the costs of CS’s fee services. Most States’ Trade Offices Report CS’s Services Are Important to Their Export Promotion Capabilities and Have Partnered with CS States’ trade offices collaborate with CS to help provide firms export promotion services, and some states’ domestic offices are colocated with CS’s staff at a USEAC with a goal of helping firms access CS services. CS Needs to Improve Its Methodology to Determine Costs and Set User Fees CS needs better information to maximize the efficient and effective operation of its export promotion programs and to ensure there is a sound basis for setting its user fee rates. CS decided to base its export promotion user fees on program costs, though it has a yearly legislative exemption from having to recover full costs, and it attempted to recover only a portion of the cost of its services. Complete and accurate full cost information would assist CS and the Congress in making decisions about resource allocations, evaluating program performance, and improving program efficiency. The Extent to Which CS’s User Fees Affect SMEs’ Use of Its Export Promotion Services Is Unclear The extent to which CS’s user fees affect SMEs’ use of its export promotion programs is unclear because CS lacks comparable and reliable historical data on fees charged its customers and has only limited disaggregated data on services sold by company size and type of customers. CS Lacks Reliable and Sufficient Data to Evaluate Its Customer Base CS lacks reliable and sufficient data on its export promotion fee-based services to evaluate its customer base. The 10 percent increase in SMEs’ demand is not based on any analysis of historical data. Most states view CS’s new fee schedule to be reasonable. Conclusions CS and states’ trade offices provide various types of export promotion programs. Studies and other sources suggest that the types of services CS offers compared with other providers, the level of individualized attention provided, and service quality are factors that also affect SMEs’ choice to use CS’s services. These steps could, for example, include documenting the procedures and processes of the costing methodology in sufficient detail so that staff who work with costing at a later point could understand the specific procedures used and the data sources and cost assignment methods for each step in the process; incorporating costs paid by other federal entities for CS’s benefits, such as pensions and health insurance paid for by the Office of Personnel Management when determining the full cost of each service; updating estimates of the amount of time staff spent performing various activities to realize any efficiency gained and to provide more accurate estimates of full costs; and documenting the methods and assumptions for establishing the user fees CS charges different firms for each service to clearly show the linkage between costs and user fees, particularly with regard to the lower user fees for SMEs. GAO staff who made major contributions to this report are listed in appendix V. Appendix I: Scope and Methodology Our objectives were to evaluate (1) the relationship between the U.S. Commercial Service (CS) and states’ trade offices’ export promotion programs, (2) CS’s methodology and practices for determining costs and establishing user fees, and (3) how CS’s user fees affect small and medium-sized enterprises’ (SME) use of its programs. To determine CS’s procedures for determining costs and establishing user fees, we interviewed key CS and International Trade Administration staff and reviewed and analyzed available documentation about CS’s export promotion programs and user fees based on the 2005 and 2008 user fee changes; CS’s methodology for full cost recovery; cost templates of CS’s fee-based export promotion programs; data on CS’s budget and staff; data on staff time spent on various activities to deliver services; legislation authorizing CS to charge a fee for services (annual appropriations and the Mutual Education and Cultural Exchange Act); OMB Circular A-25, User Charges; Statement of Federal Financial Accounting Standards 4: Managerial Cost Accounting Standards and Concepts; GAO’s Standards for Internal Control in the Federal Government; and GAO’s Federal User Fees: A Design Guide.

Why GAO Did This Study Federal and state trade promotion activities are intended to help U.S. firms compete successfully in foreign markets. Small and medium-sized enterprises (SME)--firms with fewer than 500 employees--represent a key segment of exporting firms. GAO was asked to determine (1) the relationship between the Department of Commerce's (Commerce) U.S. Commercial Service (CS) and states' trade offices' export promotion programs, (2) CS's methodology and practices for determining costs and establishing user fees for export promotion services, and (3) how CS's user fees affect SMEs' use of its programs. GAO conducted a survey of states' trade offices and reviewed data such as export promotion budgets and fees, program information, government standards, and user fee studies. GAO met with officials from Commerce, the State International Development Organizations, six states' trade offices, and others. What GAO Found Both CS and most states' trade offices provide various types of export promotion services. However, states have limited resources and scope when compared with CS's $235 million budget and large overseas staff. Thus, most states responding to GAO's survey reported that CS's services are important to their export promotion capabilities. State offices often partner with CS on trade missions and other activities. CS and most states focus their efforts on encouraging SMEs to participate in their programs, but user fees can influence whether firms choose to access export promotion services. CS lowers fees for SME exporters, but about a third of the states said they provide grants or payments to defray firms' costs and facilitate access to CS's programs. CS needs better information to maximize the efficient and effective operation of its programs and to ensure that there is a sound basis for setting fees. CS set user fees in May 2008 guided by the Office of Management and Budget's (OMB) full cost recovery policy. However, CS has had a yearly legislative exemption from having to recover full costs through its fees and attempted to recover only a portion of the full cost of its export promotion services. CS did not support and document the methodology and assumptions it used to determine costs and cannot ensure its cost information is consistent and reliable and in accordance with government standards. GAO found significant instances where CS used incomplete and potentially inaccurate data. Complete and accurate full cost information would assist CS and the Congress in making decisions about resource allocations, evaluating program performance, and improving program efficiency. Finally, CS did not document how it established the lower user fees for SMEs and cannot show how the fees it charges different firms for each service link to costs. The extent to which CS's user fees affect SMEs' use of its export promotion programs is unclear. CS lacks reliable and sufficient data to evaluate its customer base and needs to ensure it charges firms the right fees. CS lacks reliable historical data on fees charged, firm size and status, and purchases by location and type. CS is taking steps to better evaluate its customer base. GAO's survey showed that most states reported the 2008 user fees to be reasonable but thought fees charged SMEs for some services were too high when compared with those charged by private sector providers. CS projects an increase in SMEs' demand for its services, but the projection is not based on any analysis of historical data. Relevant studies and other sources suggest that the types of services CS offers compared with other providers, the level of individualized attention provided, and service quality are factors that also affect SMEs' choice to use CS's services.

gao_GAO-16-443

gao_GAO-16-443_0

Collections for Over One-Third of Programs Fully Covered Identified Costs, but DHS Has Not Consistently Documented Cost Recovery Processes and Decisions Collections for 14 Programs Fully Covered Identified Costs, and Components Cited Actions to Increase Cost Recovery for 10 Additional Programs Our analysis of DHS collections and cost data showed that 14 of the 38 programs receiving fees and other collections in fiscal year 2014 collected amounts that fully covered identified program costs. Of the remaining 24 programs, collections for 20 programs partially covered identified program costs, and DHS did not provide cost data, or we determined such data may not be reliable, for 4 programs. Specifically, these officials said that they established such targets for 21 of 25 programs with unobligated balances carried over to fiscal year 2014 based on historical trends in collections and projected program costs. Our analysis of DHS OCFO data showed that DHS components carried over unobligated balances totaling $2.6 billion from fiscal year 2014 to fiscal year 2015 across the 25 fees and other collections. CBP’s User Fee Facility Program CBP has not established a target for the maximum unobligated carryover balance necessary for its User Fee Facility program or taken action necessary to reduce the approximately $14 million balance as of fiscal year end 2014 within the collection program that, while relatively small, consistently constituted over 100 percent of the program’s operational costs each year from fiscal years 2010 through 2014. DHS Does Not Ensure Components Conduct Program Reviews and Does Not Monitor Components’ Actions to Address Identified Management and Operational Deficiencies DHS Does Not Provide Oversight to Ensure That All Components Review and Report on Programs Receiving Fees and Other Collections DHS OCFO distributes instructions to components for submitting the results of biennial reviews of their fee and other collections programs to DHS, but does not provide oversight to ensure that components conduct these reviews. With regard to reporting, our review of DHS’s CFO Act report—The Department of Homeland Security’s Agency Financial Report for Fiscal Year 2014 (Agency Financial Report)—showed that DHS OCFO did not report the extent to which all components are conducting such reviews or any proposals to address management and operational deficiencies identified by components, such as those relating to the adjustment of fee and other collection rates. However, components have not taken action to address 9 of these 20 deficiencies. Conclusions The uncertain budgetary environment highlight the need for DHS and its components to effectively manage, use, and oversee the approximately $15 billion in collections by DHS components across 38 homeland security-related programs. For example, ensuring that for all fee and other collections programs DHS OCFO and components are (1) documenting decisions about whether or not to take action, as appropriate, to address differences between program costs and collections; (2) establishing targets for appropriate minimum and maximum unobligated carryover balances; (3) conducting fee reviews; and (4) tracking and reporting the status of recommended actions would allow the DHS Fee Governance Council, the DHS OCFO, or others to provide oversight and ensure that management practices and decisions are appropriate and effective to ensure continuity of operations and equity in amounts charged to users of program services. Recommendations for Executive Action To ensure effective management and oversight of DHS programs receiving fees and other collections, we recommend that the Secretary of Homeland Security direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to ensure that component management take the following actions for each fee and other collections program that they administer: document the processes and analyses for assessing and, as appropriate, for managing the difference between program costs and collections and document resulting decisions; establish processes for managing unobligated carryover balances, to include targets for minimum and maximum balances for programs that lack such processes and targets; conduct reviews to identify any management and operational deficiencies; and take action to track and report on management and operational deficiencies—including reasons supporting any decisions to not pursue recommended actions—identified in fee reviews or through other means. Specifically, DHS stated that GAO characterizes these processes as being too heavily focused on ensuring continuity of program operations rather than efficient use of funds, when in fact components actively manage carryover balances to ensure effective use of program funds. Appendix I: Department of Homeland Security (DHS) Programs Receiving Fees and Other Collections in Fiscal Year 2014 In fiscal year 2014, the Department of Homeland Security (DHS) received fees and other collections totaling approximately $15 billion from 38 programs with an estimated $17 billion in identified program costs.

Why GAO Did This Study The uncertain budgetary environment highlights the need for DHS to effectively manage and oversee billions of dollars in fees and other collections from users of homeland security program services. Each DHS component is responsible for administering, managing, and reviewing their respective programs to ensure that, consistent with law and policy, rates charged to users of program services are set to collect amounts sufficient to recover program costs and ensure efficient operations, but not in excess of operational needs. GAO was asked to review DHS's management and oversight of these programs. This report examines the extent to which (1) DHS components receive fees and other collections to recover program costs and manage any differences, as appropriate; (2) DHS components have processes in place to manage unobligated balances; and (3) DHS ensures components review their programs and monitors component action to address any management and operational deficiencies. GAO analyzed DHS financial information for 38 programs receiving fees and other collections in fiscal year 2014, examined DHS fee reviews and study results, and interviewed agency officials. What GAO Found The Department of Homeland Security (DHS) received $15 billion in fees and other collections across 38 programs in fiscal year 2014 that help fund homeland security functions, such as the screening and inspection of persons and goods entering the United States. Our analysis of DHS collections and cost data showed that 14 of the 38 programs receiving fees and other collections in fiscal year 2014 collected amounts that fully covered identified program costs. Of the remaining 24 programs, collections for 20 programs partially covered identified program costs, and DHS did not provide cost data, or we determined such data may not be reliable, for 4 programs. DHS components have taken action to address the estimated $6 billion difference between collections and identified program costs, with 6 programs comprising about 85 percent of the difference. However, components did not document processes for managing differences and making decisions on how to address the estimated $726 million difference across the 10 remaining programs. Such documentation of processes and decisions could help improve transparency and accountability over cost recovery efforts. DHS components have processes in place to manage unobligated balances carried over across fiscal years for 25 programs, with such balances totaling $2.6 billion at fiscal year-end 2014. These processes generally focused on ensuring continuity of program operations rather than efficiently using funds. For example, while components established targets for minimum balances for 21 of these 25 programs, none of the components established processes and related maximum targets to manage excessive unobligated carryover balances. Establishing such management processes and targets for minimum and maximum balances would enable components to show that management actions will be sufficient and appropriate to ensure the efficient use of funds—such as the Immigration Examinations Fee Account, which had an approximately $983 million unobligated balance as of fiscal year end 2014, and the User Fee Facility program account for small airports which has an unobligated balance of $14 million that has exceeded 100 percent of total operating costs each year from fiscal year 2010 through fiscal year 2014. DHS does not ensure that all components review their programs or monitor component actions to address management and operational deficiencies identified in those reviews. GAO found that three of the seven DHS components that have fee or other collection programs did not conduct such reviews for 6 of their programs, and that components had not taken recommended actions to address 9 of 20 deficiencies identified through program reviews as of fiscal year-end 2014. Further, DHS did not report the extent to which components are conducting such reviews or any proposals to address identified management and operational deficiencies. DHS oversight to ensure that components complete these reviews and report the results for all programs would enable Congress and others to receive information necessary to better ensure that fee and other collection programs are operating effectively and efficiently. What GAO Recommends GAO recommends that DHS ensure components document processes for managing differences in collections and costs, establish balance targets, and conduct program reviews and address identified deficiencies. DHS concurred with the recommendations.

gao_GAO-04-737

gao_GAO-04-737_0

Specifically, during this time frame, the OIG reported 5 fraud cases totaling $435,900. In addition, the OIG reported it had identified 457 improper or questionable purchases totaling $1.1 million that did not comply with the FAR, VA policy, or were not adequately supported by documentation. Scope and Methodology To determine whether existing controls at VHA were designed to provide reasonable assurance that improper purchases would be prevented or detected in a normal course of business, we obtained an understanding of VA/VHA’s purchase card and convenience check policies and procedures, and the related internal controls. Specifically, we reviewed applicable laws and regulations, VA and VHA directives and handbooks, and previous reports issued by VA’s OIG, conducted walkthroughs and telephone interviews with VHA personnel to identify key purchase card and convenience check policies and procedures, assessed the adequacy of internal controls, using our Audit Guide: Auditing and Investigating the Internal Control of Government Purchase Card Programs, Standards for Internal Control in the Federal Government, Internal Control Management and Evaluation Tool, Guide for Evaluating and Testing Controls Over Sensitive Payments, and Executive Guide: Strategies to Manage Improper Payments, and performed tests of those control activities that we considered to be key in creating a system to provide reasonable assurance that transactions are correct and proper throughout the purchase card procurement process and convenience check payment process. Noncompliance With Purchasing Requirements Resulted in Instances of Improper Purchases The lack of adequate internal controls resulted in numerous purchases made in violation of either applicable laws and regulations or VA/VHA purchase card policies that we classified as improper purchases. Improper purchases we found due to violations of applicable laws and regulations included (1) purchases of items for personal use, such as food for internal meetings and clothing, (2) purchases made from an improper source, (3) purchases split into two or more transactions to circumvent single purchase limits, (4) purchases, over the $2,500 micro-purchase threshold that exceeded the cardholders’ delegated purchasing authority, and (5) no evidence of competition for purchases exceeding the $2,500 micro- purchase threshold. Noncompliance with simplified acquisition procedures. Improper use of the convenience checks. We also identified other transactions that we classified as questionable because there was insufficient or no documentation to determine what was purchased. Therefore, we categorized these purchases as questionable government need. For example, we identified two transactions for 3,348 movie gift certificates totaling over $30,000. We also identified two purchases that we considered wasteful because of excessive cost. We identified a cardholder who purchased a $999 digital camera when there were other less costly digital cameras widely available. The lack of compliance with established internal control requirements coupled with a lack of internal control guidance in some areas such as documentation, resulted in improper, wasteful, and questionable purchases. Comments from the Department of Veterans Affairs The following are GAO’s comments on VA’s letter dated May 24, 2004.

Why GAO Did This Study The Department of Veterans Affairs Office of Inspector General (OIG) has identified significant vulnerabilities in Veterans Affairs' (VA) use of government purchase cards. In its April 26, 2004 report, the OIG reported instances of fraudulent activity totaling $435,900, and numerous improper and questionable uses of the purchase cards totaling $1.1 million. Given that VHA comprised at least 90 percent of VA's dollar and transaction volume for fiscal year 2002, GAO was asked to determine whether existing controls at VHA were designed to provide reasonable assurance that in the future, improper purchases would be prevented or detected in the normal course of business, purchase card and convenience check expenditures were made in compliance with applicable laws and regulations, and purchases were made for a reasonable cost and a valid government need. What GAO Found Weaknesses in the Veterans Health Administration's (VHA) controls over use of purchase cards and convenience checks resulted in instances of improper, wasteful, and questionable purchases. These internal control weaknesses included inadequate segregation of duties; lack of key supporting documents; lack of timely recording, reconciling, and reviewing of transactions; and insufficient program monitoring activities. This lack of adequate internal controls resulted in numerous violations of applicable laws and regulations and VA/VHA purchase card policies that GAO identified as improper purchases. These included purchases intended for personal use, purchases made from an improper source, purchases split into two or more transactions to circumvent single purchase limits, noncompliance with simplified acquisition procedures, incorrect procurement procedures, and improper use of convenience checks. GAO's work also identified over $300,000 in purchases that were considered wasteful--that is, excessive in cost or for questionable government need--or were considered questionable because there was insufficient or no documentation to determine the propriety of the transaction. Examples of wasteful and questionable purchases included two purchases for 3,348 movie gift certificates totaling over $30,000 for employee awards that were not supported by award letters or justifications; a purchase for a digital camera totaling $999 when there were other less costly digital cameras widely available; and a purchase of 3 cases of beer totaling $38.

gao_GAO-08-163

gao_GAO-08-163_0

For large public companies, the market remains highly concentrated, with the four largest accounting firms auditing the financial statements of almost all large public companies. While the current level of concentration does not appear to be having significant adverse effect, the loss of another of the larger firms would further increase concentration and limit company choices and may affect price competition. In Concentrated Market, Some Companies Perceive Limited Auditor Choice Many of the largest public companies—those in the Fortune 1000—told us that they generally found the audit firm attributes they sought only in the largest accounting firms, and as a result, many of these companies saw their number of auditor choices as insufficient. Our survey of the audit committee chairs of almost 600 public companies based in the United States showed that 86 percent of large public companies in the Fortune 1000 were not likely to use a midsize accounting firm and that none were likely to use a smaller accounting firm as a new auditor of record. According to our survey, about 80 percent of large public companies said that they would have three or fewer accounting firms (other than their current auditor of record) to choose from if they needed to change primary auditors. Effects of Concentration on Fee Increases The results of an econometric model we developed to assess the extent to which various factors could be influencing audit fees in recent years also indicated that factors other than concentration appear to explain audit fees. Midsize and Smaller Firms Face Challenges Auditing Public Companies, and Growth in These Firms Is Unlikely to Ease Concentration in the Large Public Company Audit Market Growth in the capacity of midsize and smaller audit firms is unlikely to reduce concentration in the large company audit market, at least in the near term, for two reasons. Second, firms that do want to audit large public companies continue to face challenges to expanding their public company practices. Smaller Audit Firms Are Taking Actions to Expand Their Market Share, but Challenges Remain Many midsize and smaller firms have taken steps to reduce the challenges that they face and have successfully expanded their share of the audit market for small and midsize companies somewhat in recent years. Appendix I: Objectives, Scope, and Methodology This work was conducted under the Comptroller General’s authority. Our objectives were to study (1) the level of concentration among the market for public company audits and the impact of this concentration, (2) the potential for increased capacity among midsize and smaller accounting firms to ease market concentration, and (3) proposals that have been offered by others for easing concentration in the market for public company audits and the barriers facing midsize and smaller firms in expanding their market share for public company audits. Finally, we surveyed public companies and accounting firms about their views on these topics. First, we surveyed a random sample of 595 publicly held companies. On our survey of the over 400 U.S. accounting firms that audit public companies, midsize and smaller accounting firms responding also reported resigning as auditor of record for risk mitigation reasons, specific issues with the client, or fees being insufficient to cover audit costs. Company officials and others we interviewed also generally said that overall audit quality had increased in recent years.

Why GAO Did This Study GAO has prepared this report under the Comptroller General's authority as part of a continued effort to assist Congress in reviewing concentration in the market for public company audits. The small number of large international accounting firms performing audits of almost all large public companies raises interest in potential effects on competition and the choices available to large companies needing an auditor. This report examines (1) concentration in the market for public company audits, (2) the potential for smaller accounting firms' growth to ease market concentration, and (3) proposals that have been offered by others for easing concentration and the barriers facing smaller firms in expanding their market shares. GAO surveyed a random sample of almost 600 large, medium, and small public companies on their experiences with their auditors. GAO also interviewed the four largest accounting firms and surveyed all other U.S. accounting firms that audit at least one public company. GAO also developed an econometric model that analyzed the extent to which various factors, including concentration and new auditing requirements, affected fee levels. To supplement this work, GAO interviewed market participants, including public companies, investors, accounting firms, academics, and regulators. This report makes no recommendations. What GAO Found While the small public company audit market is much less concentrated, the four largest accounting firms continue to audit almost all large public companies. According to GAO's survey, 82 percent of large public companies--the Fortune 1000--saw their choice of auditor as limited to three or fewer firms, and about 60 percent viewed competition in their audit market as insufficient. Most small public companies reported being satisfied with the auditor choices available to them. Although audit fees rose significantly in recent years, market participants attributed these increases to expanding accounting and auditing requirements and higher costs for accounting firm personnel. GAO's model also found that factors other than concentration appeared to explain audit fee levels. Public company officials generally acknowledged that audit quality had increased. Although current concentration does not appear to be having a significant adverse effect, the loss of another large firm would further reduce large companies' auditor choice and could affect audit fee competitiveness. Smaller accounting firms face various challenges in expanding to audit more public companies, although most are not interested in these clients. As a result, concentration in the audit market for large public companies is likely to continue. Large public companies that GAO surveyed said that smaller firms lacked the capacity and technical expertise they wanted in an auditor. Audit firms that GAO surveyed said that adding qualified staff and increasing their name recognition were the most significant challenges they faced in expanding their public company audit practices. Some have taken steps to increase their capacity by joining networks with other firms. Academics and business groups have put forth proposals to reduce audit market concentration and address challenges facing smaller accounting firms, including capping auditors' liability and creating an office to share technical expertise. Market participants raised questions about the overall effectiveness, feasibility, and benefit of these proposals, and none were widely supported. Given the lack of significant adverse effect of concentration in the current environment and that no clear consensus exists on how to reduce concentration, no compelling need for immediate action appears to exist.

gao_GAO-13-549

gao_GAO-13-549_0

Four Factors Facilitate CCOs’ Ability to Leverage Nonfederal Resources, but Information on These Resources Provided to Congress in Budget Requests Varies by CCO Officials from the CCOs we studied cited four factors that facilitate their ability to leverage nonfederal resources: (1) unique authorities that provided legal flexibilities; (2) benefits received from being part of the federal government; (3) governing boards that provided management and oversight; and (4) informal networks that enabled CCOs to share lessons. Critical among the authorities mentioned above is the ability to accept gifts and solicit private donations, but the CCOs we studied are not required to, and did not always provide, a complete picture of their nonfederal resources to Congress. Officials from all four CCOs we studied told us that this authority was critical to helping ensure they have appropriate resources to meet their organization’s mission and goals. The federal budget process is the primary means by which the President and Congress select among competing demands for federal funds; as such, it is essential that budget information be comprehensive and clear. Consistent and timely information about CCOs’ complete financial picture—including both appropriated and nonfederal funds— could provide the Congress with important context for understanding both the relative tradeoffs among appropriation decisions and the implications of such decisions for these entities. Six Key Principles Helped CCOs Leverage Resources through Nonfederal Partners We compiled six key principles and related key questions that CCOs can use to guide management decisions about partnering with the nonfederal sector. Organizations that leverage partnering arrangements have clear, well- articulated missions; the strategic goals to achieve them; and a defined process for assessing whether partnering arrangements are aligned with and further the organizations’ missions and goals. Principle 2: Ensure Top Leadership Support for Partnering Arrangements Top leadership support for partnering arrangements is critical to successfully pursuing and engaging partners. The tone at the top— management’s philosophy and operating style—sets the stage for how the organization will make management decisions, including decisions related to partnering with the nonfederal sector. Principle 3: Assess and Manage Risks Partnering decisions should reflect both the likely risk and the organization’s tolerance for risk in partnering. Incorporating risk assessment and risk management practices into partnering decisions can help ensure that the organization recognizes and is prepared to manage explicit risks (e.g., financial and physical) and implicit risks (e.g., reputational). Principle 4: Select Complementary Partners and Appropriate Projects Selecting appropriate partners and projects is central to a successful partnering arrangement. Partners should bring complementary resources, skills, and financial capacities to the relationship. Further, a systematic approach helps to identify projects that are well-suited for partnering opportunities and helps to achieve an organization’s mission. Principle 5: Manage Partnering Arrangements Partnering arrangements are relationships between or among different parties that should be managed actively. Formalizing collaborations between the partners, including documenting dispute resolution processes, can enable productive partner interactions. Further, it is important to have the staff with the right skills and experience to manage these opportunities. Principle 6: Evaluate Partnering Arrangements Information about how well existing partnering arrangements leverage nonfederal resources is important to inform decisions about continuing arrangements or entering into new ones. Gathering this information also presents an opportunity to evaluate progress toward a project’s intended goals. Congress does not direct the CCOs’ use of nonfederal funds. Matter for Congressional Consideration To provide more timely, complete information about CCOs’ fiscal health, and increase awareness about good practices and strategies for leveraging resources from nonfederal partners, congressional committees should consider requiring CCOs under their jurisdiction to report on their total nonfederal funds—including a breakdown of the amounts and uses of these funds—in their annual budget requests. All of the CCOs generally agreed with the findings and conclusions in this report. They also provided technical comments, which we have incorporated, as appropriate. We are sending copies of this report to the Holocaust Memorial Museum, the National Gallery of Art, the Presidio Trust, the Smithsonian Institution, and other interested parties.

Why GAO Did This Study Through congressional charters, Congress has created independent organizations which receive support from federal and nonfederal sources. These organizations, known as CCOs, are authorized to receive and retain financial and nonfinancial resources from nonfederal partners to help meet their core mission and goals. In 2012, GAO was directed to study CCOs. To determine whether selected CCOs offer lessons learned to facilitate the leveraging of nonfederal resources, GAO studied (1) factors, if any, that facilitated selected CCOs' ability to partner with the nonfederal sector and (2) key principles to better leverage resources through nonfederal partners. To do this, GAO reviewed relevant federal laws, regulations, and policies; analyzed relevant legal authorities, agency documents, and prior GAO reports; conducted site visits to the four CCOs; and reviewed literature on partnerships. GAO compiled key principles, discussed and validated them with subject matter specialists and the four CCOs, and incorporated their feedback, as appropriate. What GAO Found Four factors facilitated the ability of the U.S. Holocaust Memorial Museum, National Gallery of Art, Presidio Trust, and Smithsonian Institution to leverage nonfederal resources: (1) unique legal authorities and management flexibilities; (2) benefits received from these congressionally chartered organizations' (CCO) federal status; (3) governing boards that provided management and oversight; and (4) informal networks that enabled CCOs to share lessons. A critical flexibility is the ability to accept gifts and solicit private donations, but the CCOs in this study are not required to, and did not always provide, a complete picture of nonfederal resources to Congress. The federal budget process is the primary means by which the President and Congress select among competing demands for federal funds; as such, it is essential that budget information be comprehensive and clear. While Congress does not direct the CCOs' use of nonfederal funds, consistent and timely information about CCOs' total resources could provide important context for understanding both the relative tradeoffs among funding decisions and the implications of such decisions. GAO compiled six key principles to guide CCOs' management decisions about leveraging resources through nonfederal partners. 1. Make partnering decisions in line with mission. Organizations that leverage partnering arrangements have clear, well-articulated missions; strategic goals to achieve them; and a defined process for assessing whether partnering arrangements complement their missions and goals. 2. Ensure top leadership support for partnering arrangements. Top leadership support is critical to successfully pursuing and engaging partners. The tone at the top--management's philosophy and operating style--sets the stage for how the organization will make management decisions related to partnering. 3. Assess and manage risks . Partnering decisions should reflect both the likely risk and the organization's tolerance for risk in partnering. Incorporating risk assessment and risk management practices into partnering decisions can help ensure that the organization recognizes and is prepared to manage explicit risks (e.g., financial and physical) and implicit risks (e.g., reputational). 4. Select complementary partners and appropriate projects. Partners should bring complementary resources, skills, and financial capacities to the relationship. A systematic approach helps to identify projects that are well-suited for partnering opportunities and helps to achieve an organization's mission. 5. Manage partnering arrangements. Partnering arrangements are relationships that should be managed actively. Formalizing collaborations between the partners, including documenting dispute resolution processes, can enable productive partner interactions. Further, it is important to have the staff with the right skills and experience to manage these opportunities. 6. Evaluate partnering arrangements. Information about how well existing partnering arrangements leverage nonfederal resources could inform decisions about continuing arrangements or entering into new ones. Gathering this information also presents an opportunity to evaluate progress toward a project's intended goals. What GAO Recommends To provide more complete information about CCOs' fiscal position and strategies for leveraging resources from and strengthening relationships with nonfederal partners, congressional committees should consider requiring that the CCOs under their jurisdiction report on their total nonfederal funds--including a breakdown of the amounts and uses--in their annual budget requests. All of the CCOs GAO studied generally agreed with the report's findings and provided technical comments, which GAO incorporated, as appropriate.

gao_GGD-99-48

gao_GGD-99-48_0

The Correspondence Audit Process According to IRS, tax returns assigned to the service centers are to involve only one or two simple tax issues, such as EIC claims, that can be audited through correspondence. 1.1.) Objectives, Scope, and Methodology In response to a request from the Chairman, Subcommittee on Oversight, House Committee on Ways and Means, this report (1) provides information on the number, results, and duration of correspondence audits as well as the characteristics of the audited returns and (2) examines the processes and requirements that IRS has had for years to govern correspondence audits. Number of Returns Audited and the Results of the Correspondence Audits The number of correspondence audits and their results varied considerably between 1992 and 1997, with three distinct periods. This increased audit focus on EIC arose from congressional concerns about EIC noncompliance. For traditional correspondence audits closed in 1996, we found that the time between the filing of the return and the start of the audit averaged 10 months, and the time between the start of the audit and the assessment of any additional taxes took, on average, over 11 more months. In addition, the individual taxpayers subjected to traditional correspondence audits that closed in 1996 usually reported annual incomes of less than $15,000 on their audited returns. As for the reviews to measure audit quality, IRS requires each service center to review a sample of all its correspondence audits closed annually, regardless of how they closed, for adherence to IRS’ audit standards. In reviewing the correspondence audits closed in 1996, we found that an estimated 69 percent had not been classified. Further, service centers were allowed to exclude audits in which taxpayers did not respond and that lacked required documentation on the audit steps and support for recommended taxes from being measured against the audit standard on workpaper documentation. And when taxpayers did not respond, IRS had to assess the additional taxes under audit without knowing for sure if all these taxes were owed. Nevertheless, each weakness can, individually or in combination, erode the integrity of IRS’ correspondence audit processes, which are designed to help ensure that taxpayers pay the correct tax. Recommendations GAO recommends that the IRS Commissioner improve controls to better ensure that IRS’ correspondence audit processes adhere to existing audit requirements and standards on classifying filed returns, and in particular, referring returns with complex schedules that may have potential tax changes to staff with sufficient knowledge to classify them; documenting the support for audit findings and recommendations in the ensuring consistency in the treatment of audited EIC claims by collecting and using the information required, including verification from third parties, to justify the claims; and including all types of closed audits across the 10 service centers in the samples for measuring audit quality.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Internal Revenue Service's (IRS) program to audit income tax returns through correspondence, focusing on: (1) the number, results, and duration of correspondence audits as well as the characteristics of the audited returns; and (2) processes and requirements that IRS has had for years to govern correspondence audits. What GAO Found GAO noted that: (1) several weaknesses were found in IRS' correspondence audit processes; (2) these weaknesses, individually or in combination, can erode the integrity of the correspondence audit processes, which are designed to help ensure that taxpayers pay the correct tax amounts and are treated properly; (3) during fiscal years 1992-1997, the annual number and results of correspondence audits conducted by IRS varied considerably; (4) the number ranged annually from just over 200,000 to about 1.1 million audits; (5) the rate at which IRS auditors closed audits without recommending additional taxes ranged from 13 percent to 46 percent; (6) when they did recommend additional taxes, the average amounts ranged from $1,300 to $2,800; (7) the rate at which taxpayers did not respond to these recommended additional taxes after being requested to do so by IRS ranged from 29 percent to 63 percent; (8) these variations resulted, in part, from an increase in the number of correspondence audits of returns claiming an earned income credit (EIC); (9) for the traditional correspondence audits closed in fiscal year 1996, the time between the filing of a return and the start of the correspondence audit averaged 10 months; (10) it then took 11 more months before IRS assessed any taxes that were recommended during the audits; (11) as for the characteristics of these 1996 returns, an estimated 75 percent had reported adjusted gross incomes of less than $15,000; (12) in part, this percentage reflects the correspondence audit's focus on simple tax issues and EIC; (13) IRS had weaknesses in implementing the correspondence audit requirements for four processes; (14) not all of the traditional correspondence audits closed in 1996 were manually reviewed (or classified) to identify all issues for audit, as required by IRS; (15) support for recommended audit findings was not adequately documented in the audit workpaper files, as required, for about one-third of the audits; (16) the taxpayer documentation that was required to justify EIC claims varied from service center to service center; (17) GAO found weaknesses in the reviews that IRS did on a sample of closed audits to measure their quality; and (18) in addition to the weaknesses in implementing the requirements, IRS allowed service centers to exclude certain types of audits that did not have all required documentation from being measured against the audit standard on workpaper documentation.

gao_GAO-01-605

gao_GAO-01-605_0

This is what happened at Indian Point 2. Conclusions A more proactive approach by Consolidated Edison to fix recurring weaknesses that had been identified over several years could have improved the implementation of its emergency preparedness plan during the February 2000 event. This event also demonstrated the importance of effective, clear communication networks, both on-site in regard to the need to ensure that pagers work well to notify key personnel of an emergency, as well as off-site, in regard to communicating about the extent and magnitude of the emergency. Exercises, while playing a valuable role in preparing for and assessing such readiness, more than likely will not identify the human reactions and all communications issues that could arise in a real radiological emergency. This was demonstrated during the February 2000 event. In this regard, NRC’s and FEMA’s interacting primarily with the states for routine communications needs to be reassessed at least for the 17 states where another entity is responsible for radiological emergency responses. The four Indian Point counties' lack of knowledge regarding the flexibility in FEMA’s regulations to spend more time at various emergency levels and its proposed streamlined exercise process demonstrate that FEMA’s reliance on the state to communicate with the local communities did not work in this case. Third, NRC noted that despite the problems at the plant, Consolidated Edison's emergency preparedness program would protect the public in the event of a radiological emergency. Water leaks from the reactor coolant system in excess of The Nuclear Regulatory Commission’s allowed limits. 2.

Why GAO Did This Study Consolidated Edison Company shut down the Indian Point 2 commercial nuclear power plant in February 2000 because a tube had ruptured in a steam generator, raising the possibility that radioactively contaminated water could leak into the environment. In this case, the total amount of radioactivity released posed no threat because the amount of radioactivity released was about one thousandth of the dose an individual receives from a chest X-ray. However, in the event of a more serious emergency at Indian Point 2, protecting the public from a radioactive release presents more substantial challenges because the plant is located in a heavily populated area. This report reviews issues associated with emergency preparedness protocols associated with the plant. What GAO Found GAO found that a more proactive approach to correct recurring weaknesses could have improved the emergency preparedness plan during the February 2000 emergency. This emergency demonstrated the importance of effective, clear communication networks, both on-site regarding the need to ensure that pagers work well to notify key personnel of an emergency, as well as off-site, regarding communication about the extent and magnitude of the emergency. Exercises, although playing a valuable role in preparing for and assessing radiological emergency readiness, more than likely will not identify the human reactions and all communications issues that could arise in a real radiological emergency. In this regard the Nuclear Regulatory Commission's (NRC) and Federal Emergency Management Agency (FEMA) interact interactions with the states for routine communications needs to be reassessed--at least for the 17 states where another entity is responsible for radiological emergency responses. The lack of knowledge by the four Indian Point counties regarding the flexibility in FEMA's regulations to spend more time at various emergency levels and its proposed streamlined exercise process demonstrate that FEMA's reliance on the state to communicate with the local communities did not work in this case.

gao_GAO-01-459

gao_GAO-01-459_0

Conclusions GCPR’s aim to allow health care providers to electronically share comprehensive patient information should provide VA, DOD, and IHS a valuable opportunity to improve the quality of care for their beneficiaries. But without a lead entity, a clear mission, and detailed planning to achieve that mission, it is difficult to monitor progress, identify project risks, and develop appropriate contingency plans to keep the project moving forward and on track. Critical project decisions were not made, and the agencies were not bound by those that were made. The VA and DOD CIOs’ action to focus on short-term deliverables and to capitalize on existing technologies is warranted and a step in the right direction. However, until problems with the two agencies’ existing systems and issues regarding planning, management, and accountability are resolved, projected costs are likely to continue to increase, and implementation of the larger GCPR effort— along with its expected benefits—will continue to be delayed.

What GAO Found In November 1997, the President called for the Department of Veterans Affairs (VA) and the Department of Defense (DOD) to create an interface that would allow the two agencies to share patient health information. By allowing health care providers to electronically share comprehensive patient information, computer-based patient record's (GCPR) should help VA, DOD, and the Indian Health Service (IHS) to improve the quality of care for their beneficiaries. But without a lead entity, a clear mission, and detailed planning to achieve that mission, it is difficult to monitor progress, identify project risks, and develop appropriate contingency plans to keep the project moving forward and on track. Critical project decisions were not made, and the agencies were not bound by those that were made. The VA and DOD Chief Information Officers' (CIO) action to focus on short-term deliverables and to capitalize on existing technologies is warranted and a step in the right direction. However, until problems with the two agencies' existing systems and issues regarding planning, management, and accountability are resolved, project costs will likely continue to increase and implementation of the larger GCPR effort--and its expected benefits--will continue to be delayed.

gao_GAO-10-858T

gao_GAO-10-858T_0

Satellite-provided Environmental Data for Climate and Space Weather One key subset of satellite-provided data is climate data. USGEO and USGCRP report to the Executive Office of the President through the National Science and Technology Council’s Committee on Environment and Natural Resources, while the National Space Weather Program coordinates its activities through NOAA’s Office of the Federal Coordinator for Meteorology. Agencies Have Started Planning Separate Acquisitions, but the Impact of This Approach Is Not Known and Key Risks and Challenges Remain NOAA has developed preliminary plans for its new satellite acquisition program—called the Joint Polar Satellite System (JPSS)—to meet the requirements of the afternoon NPOESS orbit. DOD expects to make final decisions on the spacecraft, sensors, procurement strategy, and staffing in August 2010, and begin the program immediately. Because neither agency has finalized plans for its acquisition, the full impact of OSTP’s decision on the expected cost, schedule, and capabilities is unknown. Key Transition Risks and Continuing Development Challenges Threaten Satellite Data Continuity Moving forward, the agencies face key risks in transitioning from NPOESS to their new programs, including loss of key staff and capabilities, delays in negotiating contract changes and establishing new program offices, failure to support the other agency’s requirements, insufficient oversight of new program management, and potential cost growth from contract terminations and other program changes. While NOAA and DOD are developing plans for their new programs, the development of key NPOESS components is continuing. However, the expected launch date of the NPP satellite has been delayed by 9 months (moving the launch date to September 2011 or later), due to technical issues in the development of the NPP sensor that has not yet been integrated. Until the transition risks are effectively mitigated, and unless selected components are able to continue scheduled development, the launches of NPP and the first NOAA and DOD satellites could be further delayed. Further launch delays are likely to jeopardize the availability and continuity of weather and climate data. Federal Efforts to Ensure the Long-term Provision of Environmental Data from Satellites Are Lacking For over a decade, the climate community has clamored for an interagency strategy to coordinate agency priorities, budgets, and schedules for environmental satellites over the long term—and the governance structure to implement that strategy. Until an interagency strategy for earth observation is established, and a clear process for implementing it is in place, federal agencies will continue to procure their immediate priorities on an ad hoc basis, the economic benefits of a coordinated approach to investments in earth observation may be lost, and the continuity of key measurements may be jeopardized. This will hinder our nation’s ability to understand long-term climate changes. Federal Agencies Lack a Strategy for the Long-term Provision of Space Weather Data While key federal agencies have taken steps to plan for continued space weather observations in the near term, they lack a strategy for the long- term provision of space weather data. Specifically, NOAA and DOD are seeking to replace key experimental space-observing satellites. However, OSTP officials do not have a schedule for approving or releasing the reports. Among other things, we are recommending that the Secretaries of Defense and Commerce direct their respective NPOESS follow-on programs to expedite decisions on the expected cost, schedule, and capabilities of their planned programs; direct their respective NPOESS follow-on programs to develop plans to address key transition risks, including the loss of skilled staff, delays in contract negotiations and setting up new program offices, loss of support for the other agency’s requirements, and oversight of new program management; and direct the NPOESS program office to develop priorities for work slowdown and stoppage to allow the activities that are most important to maintaining launch schedules to continue. In written comments on the NPOESS report, both NOAA and DOD agreed with our recommendations and identified plans to implement them. Faced with expected cost growth exceeding $8 billion, schedule delays of over 5 years, and continuing tri-agency management challenges, a task force led by the President’s Office of Science and Technology Policy decided to disband NPOESS so that NOAA and DOD could pursue separate satellite acquisitions. Although initial steps have been taken to ensure the short-term continuity of key climate and space weather measurements from satellites, the federal government has not taken the necessary steps to ensure the long- term sustainment of these critical measurements.

Why GAO Did This Study Environmental satellites provide data used for weather forecasting, measuring variations in climate over time, and predicting space weather. Due to the continuing cost, schedule, and tri-agency management challenges of the National Polar-orbiting Operational Environmental Satellite System (NPOESS)--a key satellite acquisition managed by the National Oceanic and Atmospheric Association (NOAA), the Department of Defense (DOD), and the National Aeronautics and Space Administration (NASA)--the White House's Office of Science and Technology Policy (OSTP) decided in February 2010 to disband NPOESS and, instead, to have NOAA and DOD undertake separate acquisitions. GAO was asked to summarize its report being released today on plans for NOAA's and DOD's separate acquisitions and the key risks of the transition, as well as its recent work on federal efforts to establish long-term strategies for satellite-provided climate and space weather data. What GAO Found OSTP's decision to disband NPOESS came at a time when the program's cost estimate had more than doubled--to over $15 billion, the launch date for a demonstration satellite had been delayed by over 5 years, and the tri-agency management structure had repeatedly proven to be ineffective. To implement the decision, NOAA and DOD have begun planning for separate acquisitions to replace NPOESS. NOAA has developed preliminary plans for its new program--called the Joint Polar Satellite System--to meet the requirements of the afternoon NPOESS orbit. DOD expects to make final decisions on the spacecraft and sensors in August 2010. However, because neither agency has completed its plans, the impact of the decision to disband the program on the expected costs, schedules, and capabilities has not yet been determined. Moving forward, the agencies face key risks in transitioning from NPOESS to their separate programs, including the loss of key staff and capabilities, delays in negotiating contract changes and establishing new program offices, the loss of support for the other agency's requirements, insufficient oversight of new program management, and cost growth resulting from contract and program changes. While NOAA and DOD are establishing plans for their new programs, the development of key NPOESS components is continuing. However, the launch date of the demonstration satellite--to be used operationally to ensure climate and weather data continuity--has been delayed by 9 months, and the program has slowed down work on all development activities. Until the transition risks are effectively mitigated, and unless components are able to continue scheduled development, it is likely that launch dates will continue to be delayed. Further delays are likely to jeopardize the availability and continuity of critical weather and climate data. For over a decade, the climate community has clamored for a national interagency strategy that coordinates agency priorities, budgets, and schedules for environmental satellites over the long-term--and the governance structure to implement that strategy. While the federal government has taken several steps to ensure the provision of environmental data from satellites for both climate and space weather in the short term, federal efforts to ensure the long-term provision of these environmental measurements are still lacking. Specifically, although both the climate and space weather communities have recently drafted reports for OSTP containing recommendations for climate and space weather satellites, respectively, the climate report focuses only on short-term needs and does not include longer term priorities, nor does it include budgets or schedules. Further, OSTP does not have plans for finalizing or releasing either the climate or space weather reports. Until an interagency strategy for environmental observation is established, and a clear process for implementing it is in place, federal agencies will continue to procure their immediate priorities on an ad hoc basis, the economic benefits of a coordinated approach to investments in earth observation may be lost, and our nation's ability to understand long-term climate changes may be limited. In its reports, GAO recommended that NOAA and DOD address key transition risks, and that the President's Assistant for Science and Technology implement interagency strategies for the long-term provision of environmental observations. NOAA and DOD agreed, while the Assistant's office neither agreed nor disagreed, but noted its plan to develop a strategy for earth observations.

gao_GAO-03-351

gao_GAO-03-351_0

The proliferation of child pornography on the Internet is prompting wide concern. Web sites. In another study, focused on the availability of pornographic video files on peer-to-peer sharing networks, a sample of 507 pornographic video files retrieved with a file-sharing program included about 3.7 percent child pornography videos. Our analysis of 1,286 titles and file names identified through KaZaA searches on 12 keywords showed that 543 (about 42 percent) of the images had titles and file names associated with child pornography images. Of the remaining files, 34 percent were classified as adult pornography, and 24 percent as nonpornographic (see fig. In a search using innocuous keywords likely to be used by juveniles searching peer-to-peer networks (such as names of popular singers, actors, and cartoon characters), almost half of the images downloaded were classified as adult or cartoon pornography. As shown in figure 3, our analysis of the CyberSmuggling Center’s classification of the 177 downloaded images determined that 61 images contained adult pornography (34 percent), 24 images consisted of cartoon pornography (14 percent), 13 images contained child erotica (7 percent), and 2 images (1 percent) contained child pornography. Federal Law Enforcement Agencies Are Beginning to Focus Resources on Child Pornography on Peer- to-Peer Networks Because law enforcement agencies do not track the resources dedicated to specific technologies used to access and download child pornography on the Internet, we were unable to quantify the resources devoted to investigations concerning peer-to-peer networks. These agencies (including the FBI, CEOS, and Customs) do devote significant resources to combating child exploitation and child pornography in general. Conclusions It is easy to access and download child pornography on peer-to-peer networks. Juvenile users of peer-to-peer networks also face a significant risk of inadvertent exposure to pornography, including child pornography. We were unable to determine the extent of federal law enforcement resources available for combating child pornography on peer-to-peer networks; the key law enforcement agencies devote resources to combating child exploitation and child pornography in general, but they do not track the resources dedicated to peer-to-peer technologies in particular. The Department of Justice agreed with the report’s findings, provided additional information on the mission and capabilities of the High Tech Investigative Unit (part of its Criminal Division’s Child Exploitation and Obscenity Section), and offered comments on the description and purpose of Customs’ National Child Victim Identification Program. Appendix I: Appendix I: Objectives, Scope, Appendix I: Objectives, Scope, and Methodology determine the ease of access to child pornography on peer-to-peer assess the risk of inadvertent exposure of juvenile users of peer-to-peer networks to pornography, including child pornography, and determine the extent of federal law enforcement resources available for combating child pornography on peer-to-peer networks. Our analysts used keywords provided by the Customs CyberSmuggling Center. Because child pornography cannot be accessed legally other than by law enforcement agencies, we relied on Customs to download and analyze files. Our own analyses were based on keywords and file names only.

Why GAO Did This Study The availability of child pornography has dramatically increased in recent years as it has migrated from printed material to the World Wide Web, becoming accessible through Web sites, chat rooms, newsgroups, and now the increasingly popular peer-to-peer file-sharing programs. These programs enable direct communication between users, allowing users to access each other's files and share digital music, images, and video. GAO was requested to determine the ease of access to child pornography on peer-to-peer networks; the risk of inadvertent exposure of juvenile users of peer-to-peer networks to pornography, including child pornography; and the extent of federal law enforcement resources available for combating child pornography on peer-to-peer networks. Because child pornography cannot be accessed legally other than by law enforcement agencies, GAO worked with the Customs Cyber-Smuggling Center in performing searches: Customs downloaded and analyzed image files, and GAO performed analyses based on keywords and file names only. In commenting on a draft of this report, the Department of Justice agreed with the report's findings and provided additional information. What GAO Found Child pornography is easily found and downloaded from peer-to-peer networks. In one search using 12 keywords known to be associated with child pornography on the Internet, GAO identified 1,286 titles and file names, determining that 543 (about 42 percent) were associated with child pornography images. Of the remaining, 34 percent were classified as adult pornography and 24 percent as nonpornographic. In another search using three keywords, a Customs analyst downloaded 341 images, of which 149 (about 44 percent) contained child pornography. These results are in accord with increased reports of child pornography on peer-to-peer networks; since it began tracking these in 2001, the National Center for Missing and Exploited Children has seen a fourfold increase--from 156 in 2001 to 757 in 2002. Although the numbers are as yet small by comparison to those for other sources (26,759 reports of child pornography on Web sites in 2002), the increase is significant. Juvenile users of peer-to-peer networks are at significant risk of inadvertent exposure to pornography, including child pornography. Searches on innocuous keywords likely to be used by juveniles (such as names of cartoon characters or celebrities) produced a high proportion of pornographic images: in our searches, the retrieved images included adult pornography (34 percent), cartoon pornography (14 percent), child erotica (7 percent), and child pornography (1 percent). While federal law enforcement agencies--including the FBI, Justice's Child Exploitation and Obscenity Section, and Customs--are devoting resources to combating child exploitation and child pornography in general, these agencies do not track the resources dedicated to specific technologies used to access and download child pornography on the Internet. Therefore, GAO was unable to quantify the resources devoted to investigating cases on peer-to-peer networks. According to law enforcement officials, however, as tips concerning child pornography on peer-to-peer networks escalate, law enforcement resources are increasingly being focused on this area.