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gao_GAO-07-75

gao_GAO-07-75_0

States Identified Several Long-standing and Emerging Challenges to Ensuring Child Safety, Well-Being, and Permanency State child welfare agencies identified three primary challenges as the most important to resolve to improve outcomes for children under their supervision: providing an adequate level of services for children and families, recruiting and retaining caseworkers, and finding appropriate homes for children. In addition, state officials identified three challenges of increasing concern: children’s exposure to illegal drugs; increased demand to provide services for children with special needs, such as those with developmental disabilities; and changing demographic trends or needs for cultural sensitivity for some groups of children in care and their families. States also reported that they were dissatisfied with the level of services provided to at-risk families in the child welfare system. 5.) State Initiatives Insufficiently Address State Challenges to Improve Child Outcomes, and Evaluations Showed Mixed Results Most states reported that they had implemented initiatives since January 2002 to address challenges associated with maintaining an adequate level of services, recruiting and retaining caseworkers, and finding appropriate homes for children. In states where evaluations of their initiatives had been completed under a federal demonstration project, the evaluations generally showed that states had achieved mixed results across child welfare outcomes. For example, with respect to services, states most frequently identified that they were challenged by the lack of mental health and substance abuse services for children and families, yet only a fourth of the 32 states dissatisfied with these services reported having initiatives to improve the level of these services. Similarly, nearly all states in our survey reported that HHS-sponsored technical assistance was helpful to some degree. However, HHS officials said that limitations in their technical assistance tracking system made it difficult to maximize its use as a management tool. Additionally, child welfare officials in three of the five states we visited reported that the reviews prompted them to develop interagency strategies for providing an array of needed services, such as mental health services and education for children and families. HHS has provided state child welfare systems an array of training and technical assistance that states report as helpful for improving their child welfare programs. In the absence of complete and timely information, HHS may be limited in its ability to determine how best to allocate technical assistance resources to help maximize states’ ability to address child welfare issues. Appendix I: Objectives, Scope, and Methodology We were asked to examine (1) the primary challenges state child welfare agencies face in their efforts to ensure the safety, well-being, and permanency of the children under their supervision; (2) the changes states have made since January 1, 2002, to improve the outcomes for children in the child welfare system; and (3) the extent to which states participating in the Department of Health and Human Services (HHS) Child and Family Services Reviews (CFSR) and technical assistance efforts find the assistance to be helpful. We received completed surveys from 48 states, the District of Columbia, and Puerto Rico (a 96 percent response rate).

Why GAO Did This Study Despite substantial federal and state investment, states have not been able to meet all outcome measures for children in their care. Given the complexity of the challenges that state child welfare agencies face, GAO was asked to determine (1) the primary challenges state child welfare agencies face in their efforts to ensure the safety, well-being, and permanent placement of the children under their supervision; (2) the changes states have made to improve the outcomes for children in the child welfare system; and (3) the extent to which states participating in the Department of Health and Human Services (HHS) Child and Family Services Reviews (CFSR) and technical assistance efforts find the assistance to be helpful. GAO surveyed child welfare agencies in 50 states, the District of Columbia, and Puerto Rico and visited 5 states, interviewed program officials, and reviewed laws, policies, and reports. What GAO Found In response to a GAO survey, state child welfare agencies identified three primary challenges as most important to resolve to improve outcomes for children under their supervision: providing an adequate level of services for children and families, recruiting and retaining caseworkers, and finding appropriate homes for certain children. State officials also identified three challenges of increasing concern over the next 5 years: children's growing exposure to illegal drugs, increased demand to provide services for children with special needs, and changing demographic trends or cultural sensitivities in providing services for some groups of children in the states' child welfare systems. Most states reported that they had implemented initiatives to address challenges associated with improving the level of services, recruiting and retaining caseworkers, and finding appropriate homes for children. These initiatives, however, did not always mirror the major challenges. For example, with respect to services, states most frequently identified that they were challenged by the lack of mental health and substance abuse services for children and families, yet only a fourth of the dissatisfied states reported having initiatives to improve the level of these services. In states where evaluations of their initiatives had been completed under a federal demonstration project, the evaluations generally showed that states had achieved mixed results across child welfare outcomes. States we visited reported that HHS reviews of their child welfare systems and training and technical assistance efforts helped them improve their child welfare programs. For example, officials in three of the five states we visited reported that the CFSRs prompted them to develop interagency strategies for providing an array of needed services to children and families. Similarly, nearly all states in our survey reported that HHS-sponsored technical assistance was helpful to some degree. However, HHS officials said that several factors limited their ability to use their technical assistance tracking system as a management tool. For example, not all service providers are included in the tracking system, and some providers inconsistently enter required data into the system. As a result, HHS may be limited in its ability to determine how best to allocate technical assistance resources to help maximize states' ability to address child welfare issues.

gao_HEHS-95-142

gao_HEHS-95-142_0

Such discussions may have highlighted the need to analyze offerors’ individual cost containment approaches. DOD Actions to Improve and Help Ensure Fairness of the Procurement Process DOD has made several changes that should improve future procurements. Major changes due to the protest experiences include (1) revising the price evaluation methodology and providing offerors more complete RFP information on how the methodology will be used in evaluating bid prices, (2) adding requirements for discussions between price and technical evaluation boards, and (3) revising both the requirements and the technical evaluation criteria for utilization management. First, unless DOD can avoid further delays in this round of procurements, it may not meet the congressional deadline for awarding all contracts by September 30, 1996. On the other hand, procurements have been delayed to allow offerors to correct errors in their cost proposals and as a result of bid protests. Nevertheless, DOD has acknowledged that offerors have some legitimate concerns. Shortening Post-Award Transition Creates Significant Risk Because of procurement delays occurring before contract award, DOD has tried to recover lost time by reducing to 6 months its scheduled 8- to 9-month transition period during which contractors prepare to deliver health care. Recommendations We recommend that the Secretary of Defense direct the Assistant Secretary of Defense (Health Affairs) to weigh, in view of the potential effects of such large procurements on competition, alternative award approaches for the next procurement round; determine whether and, if so, how the next round’s solicitation requirements could be simplified, incorporating the use of potentially better, more economical, best-practice managed care techniques while preserving the system’s overall health care goals; adhere to the 8- to 9- month scheduled transition period and discontinue, whenever possible, reducing such periods to make up for delays incurred before contracts are awarded; and establish general qualification requirements for evaluator appointees. Additional copies are $2 each. Address Correction Requested

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed defense health care, focusing on: (1) procurement process problems identified by the bid protest experiences; (2) the Department of Defense's (DOD) actions to improve and help ensure the fairness of the procurement process; and (3) what problems and concerns remain and whether further actions are needed. What GAO Found GAO found that: (1) DOD has changed its managed care procurement process to address such past problems as its failure to evaluate bidders' proposed prices according to solicitation criteria, the lack of communication between technical and price evaluators, and its failure to properly evaluate bidders' cost containment approaches; (2) although DOD has revised its evaluation methodology and has added new discussion requirements to improve future procurements and ensure better treatment of bidders, protests are likely to continue, given the vast sums of money at stake and the relatively small expense of protesting; (3) DOD may have difficulty meeting the congressional deadline for awarding all contracts by September 1996, since procurements have been taking twice as long as planned; (4) DOD has tried to make up for procurement delays by reducing its transition period after contract award for contractors to deliver health care, but this action has created major risks; and (5) DOD must establish required qualifications for evaluation board members, since their tasks have become so specialized.

gao_GAO-08-854

gao_GAO-08-854_0

DPA also requires the President to report annually to Congress on the effect of offsets—a range of incentives or conditions provided to foreign governments to purchase U.S. military goods and services—on U.S. defense preparedness, industrial competitiveness, employment, and trade. Agencies other than DOD generally do not apply the authority and would do so after an issue affecting delivery needs had been identified, which could add delays to the delivery of critical products during emergencies. Specifically, Title III authority to expand production capabilities for industrial resources or critical technology essential to the national defense has been used almost exclusively for defense needs, and circumstances have not required use of some Title VII authorities, such as the National Defense Executive Reserve or voluntary agreements. Agencies’ Timely Use of Title I Authorities Could Be Limited in Emergencies While other agencies have used or have considered using Title I’s priorities and allocations authority, DOD has been the primary user. Agency officials acknowledged that there is a need to have policies and guidance in order to implement the Title I priorities and allocations authority, but the degree to which agencies have accomplished this varies. Efforts from an interagency team chaired by DOD to consult with other countries on limiting harmful effects of offsets have resulted in a consensus with other nations that negative effects exist, but not yet on best practices to address them. Other related efforts to report on offsets have yet to be completed and are limited in their assessments of economic effects. Other Efforts to Report on Offsets Have Been Limited In the 2003 DPA reauthorization, Congress created an interagency team to consult with foreign nations on limiting the adverse effects of offsets in defense procurement—without damaging the U.S. economy, defense industrial base, defense production, or defense preparedness—and prepare an annual report detailing the results of their foreign consultations. Agencies’ efforts could be strengthened by placing priority ratings on contracts for critical emergency response items before an event occurs. Recommendations for Executive Action To ensure that the full range of Defense Production Act authorities can be used in an effective and timely manner, we recommend the Secretaries of Agriculture, Health and Human Services, and Transportation, in consultation with the Department of Commerce, develop and implement a system for using the priorities and allocations authority for food and agriculture resources, health resources, and civil transportation respectively. To position the Department of Commerce to respond to offset reporting requirements, we recommend the Secretary of Commerce update regulations to, for example, request more specific industry information from prime contractors that would improve the assessment of the economic effects of offsets. In its technical comments HHS noted that it is beginning to develop a regulation to establish a framework for considering requests for priority ratings. Appendix I: Scope and Methodology To determine the extent to which agencies use the authorities in the Defense Production Act of 1950 (DPA), we reviewed the current legislation and recent amendments. Where available, we collected and reviewed documentation on circumstances in which agencies have used the DPA. Department of Homeland Security Since 2003, DHS reported that it has authorized or endorsed to the Department of Commerce the use of priority ratings for 15 programs, which includes approval of other federal agencies’ use of priority ratings: restoration of rail service in the Gulf Coast region after Hurricane Katrina; construction of an FBI facility in Northern Virginia; construction of the Department of Justice’s Terrorist Screening Center; procurement of perimeter security equipment for a major airport and upgrades to cargo seaport security; procurement of encrypted radio equipment for use in U.S. Park Police acquisition of generator transfer switches and transformers for state upgrade of State Department domestic facility security; procurement of a generator for the State Department’s Continuity of Operations facility; construction of an emergency Federal Support Center; procurement of equipment for a FEMA emergency facility; DHS procurement of encrypted emergency communications equipment procurement of FBI night vision equipment; FEMA’s Communications Support Infrastructure Program; and The Geostationary Operational Environmental Satellite, R-Series Program of the National Oceanic and Atmospheric Administration.

Why GAO Did This Study Congress enacted the Defense Production Act of 1950 (DPA) to ensure the availability of industrial resources to meet defense needs. Amendments to the Act allow its use for energy supply, emergency preparedness, and critical infrastructure protection and require agencies to report on foreign offsets, which are incentives to foreign governments to purchase U.S. goods and services. Only Titles I, III, and VII remain in effect. In the National Defense Authorization Act for Fiscal Year 2008, Congress directed GAO to review recent agency efforts to implement the DPA. This report (1) examines the extent to which agencies use DPA authorities and (2) assesses agencies' response to reporting requirements on the economic impact of foreign offsets. GAO's work is based on a review of policies and guidance for the use of DPA authorities, instances in which agencies have exercised the authorities, and the analysis used in required reports on foreign offsets. What GAO Found The Department of Defense (DOD) routinely exercises the DPA Title I priorities and allocations authority, which allows rated contracts and orders to be delivered before others, to ensure the availability of defense resources. However, civilian agencies have generally not used the Title I authority and most differ from DOD in deciding when to apply it. For example, DOD places ratings on most of its contracts before critical defense items are needed. In contrast, agencies such as the Department of Homeland Security (DHS) generally request ratings after delivery needs are identified, potentially delaying critical items during emergencies. Also, agencies responsible for responding to domestic emergencies and procuring resources in the areas of food and agriculture, health resources, and civil transportation, lack policies and guidance that could facilitate execution of the Title I authority and delivery of items needed in an emergency. While the Departments of Agriculture (USDA) and Health and Human Services are developing regulations to establish a framework for considering priority ratings, the Department of Transportation (DOT) has not yet begun to do so. Other DPA authorities have been used exclusively by DOD or have not been triggered by recent events. For example, DOD has generally been the sole user of the Title III authority for expansion of production capabilities, while events that would activate some Title VII authorities--such as the National Defense Executive Reserve and voluntary agreements--have not occurred. Agencies have taken steps towards fulfilling their offset reporting requirements to Congress, but data collected by the Department of Commerce limits the analysis of the economic effect of offsets. Commerce officials noted that a more detailed analysis could be provided if they requested more specific product data from prime contractors. Also, a DOD-chaired interagency team--required to report on its consultations with foreign nations on limiting the adverse effects of offsets--has reached consensus with other nations that adverse effects exist, but not yet on best practices to address them. Actions by the National Commission on Offsets have similarly been limited in the assessment of economic effects.

gao_GAO-14-499

gao_GAO-14-499_0

Fusion occurs when the nuclei of two light atoms collide with sufficient energy to overcome their natural repulsive forces and fuse together. The Estimated Cost and Schedule of the U.S. ITER Project Has Grown Substantially Since 2006 The estimated cost and schedule of the U.S. ITER Project has grown substantially since the ITER Agreement was signed in 2006 (see fig. 5), and DOE has identified several reasons for these changes. Despite Reflecting Most Characteristics of Reliable Cost and Schedule Estimates, DOE’s Estimates Cannot Be Used to Set a Baseline in Part Because They Are Linked to an Unreliable International Schedule DOE’s current cost estimate for the U.S. ITER Project reflects most of the characteristics of a reliable cost estimate, and its schedule estimates reflect all characteristics of a reliable schedule. DOE’s Cost and Schedule Estimates Cannot Be Used to Set a Baseline Due to Factors That DOE Can Only Partially Influence DOE considers its current cost and schedule estimates for the U.S. ITER Project to be preliminary, and these estimates cannot be used to set a performance baseline that would represent a commitment from DOE to Congress to deliver the project at a specific cost and date. DOE Has Taken Several Actions to Reduce U.S. ITER Project Costs According to DOE documents and officials, DOE has taken several actions to reduce the cost of the U.S. ITER Project by about $388 million as of February 2014, including the following: Value engineering: The U.S. ITER Project Office has identified ways to design U.S. hardware components that lower costs but maintain the component’s essential functions. Without a strategic plan for the overall U.S. fusion program that addresses DOE’s plans for managing the impacts of U.S. ITER Project costs, the agency does not have information to involve and help create a basic understanding among stakeholders— including Congress and the U.S. fusion community—about its plans for balancing the competing demands that confront the program with the limited resources available; better ensure that the U.S. ITER Project and other U.S. fusion program activities are aligned to effectively and efficiently achieve the program’s goals; and improve Congress’s ability to weigh the potential trade-offs of different funding decisions for the U.S. ITER Project and the overall U.S. fusion program within a constrained budget environment. However, DOE has not yet set a performance baseline for the U.S. ITER Project in part because the international project schedule is not reliable, a key factor that DOE can only partially influence. To its credit, DOE has taken several actions to push for a reliable international project schedule and improvements to ITER Organization project management. DOE is beginning the initial work on such a plan, but a similar effort that was started in 2012 did not result in a completed strategic plan for the U.S. fusion program, and the agency has not provided a specific date when it will complete its current effort. Continue to formally advocate for the timely implementation of those actions at each future ITER Council meeting until the ITER Council approves an updated international project schedule; Once the ITER Organization completes its reassessment of the international project schedule, use that schedule, if reliable, to propose a final, stable funding plan for the U.S. ITER Project, approve a performance baseline with finalized cost and schedule estimates, and communicate this information to Congress; and Set a specific date for completing, in a timely manner, a strategic plan for the U.S. fusion program that addresses DOE’s priorities for the overall U.S. fusion program in light of U.S. ITER Project costs, and involve the Fusion Energy Sciences Advisory Committee in the development of the plan. Appendix I: Objectives, Scope, and Methodology Our review assessed: (1) how and why the estimated cost and schedule for the U.S. International Thermonuclear Experimental Reactor (ITER) Project have changed since 2006; (2) the reliability of the Department of Energy’s (DOE) current cost and schedule estimates for the U.S. ITER Project and the factors, if any, that have affected their reliability; and (3) the actions DOE has taken, if any, to reduce U.S. ITER Project costs and plan for their potential impact on the overall U.S. fusion program.

Why GAO Did This Study ITER is an international research facility being built in France to demonstrate the feasibility of fusion energy. Fusion occurs when the nuclei of two light atoms collide and fuse together at high temperatures, which results in the release of large amounts of energy. The United States has committed to providing about 9 percent of ITER's construction costs through contributions of hardware, personnel, and cash, and DOE is responsible for managing those contributions, as well as the overall U.S. fusion program. In fiscal year 2014, the U.S. ITER Project received $199.5 million, or about 40 percent of the overall U.S. fusion program budget. GAO was asked to review DOE's cost and schedule estimates for the U.S. ITER Project. This report examines (1) how and why the estimated costs and schedule of the U.S. ITER Project have changed since 2006, (2) the reliability of DOE's current cost and schedule estimates, and (3) actions DOE has taken to reduce U.S. ITER Project costs and plan for their impact on the overall U.S. fusion program. GAO reviewed documents; assessed DOE's current estimates against best practices; and obtained the perspectives of 10 experts in fusion energy and project management. What GAO Found Since the International Thermonuclear Experimental Reactor (ITER) Agreement was signed in 2006, the Department of Energy's (DOE) estimated cost for the U.S. portion of ITER has grown by almost $3 billion, and its estimated completion date has slipped by 20 years (see fig.). DOE has identified several reasons for the changes, such as increases in hardware cost estimates as designs and requirements have been more fully developed over time. DOE's current cost and schedule estimates for the U.S. ITER Project reflect most characteristics of reliable estimates, but the estimates cannot be used to set a performance baseline because they are linked to factors that DOE can only partially influence. A performance baseline would commit DOE to delivering the U.S. ITER Project at a specific cost and date and provide a way to measure the project's progress. According to DOE documents and officials, the agency has been unable to finalize its cost and schedule estimates in part because the international project schedule the estimates are linked to is not reliable. DOE has taken some steps to help push for a more reliable international project schedule, such as providing position papers and suggested actions to the ITER Organization. However, DOE has not taken additional actions such as preparing formal proposals that could help resolve these issues. Unless such formal actions are taken to resolve the reliability concerns of the international project schedule, DOE will remain hampered in its efforts to create and set a performance baseline for the U.S. ITER Project. DOE has taken several actions that have reduced U.S. ITER Project costs by about $388 million as of February 2014, but DOE has not adequately planned for the potential impact of those costs on the overall U.S. fusion program. The House and Senate Appropriations Committees have directed DOE to complete a strategic plan for the U.S. fusion program. GAO has previously reported that strategic planning is a leading practice that can help clarify priorities, and DOE has begun work on such a plan but has not committed to a specific completion date. Without a strategic plan for the U.S. fusion program, DOE does not have information to create an understanding among stakeholders about its plans for balancing the competing demands the program faces with the limited available resources or to help improve Congress' ability to weigh the trade-offs of different funding decisions for the U.S. ITER Project and overall U.S. fusion program. What GAO Recommends GAO recommends, among other things, that DOE formally propose the actions needed to set a reliable international project schedule and set a date to complete the U.S. fusion program's strategic plan. DOE agreed with GAO's recommendations.

gao_GAO-05-227

gao_GAO-05-227_0

The process of preparing their annual budget request requires that FHA and RHS prepare estimates of the dollar amount of loans they anticipate guaranteeing nearly 2 years in advance. When an agency decides to guarantee a loan, it uses this rate to determine the credit subsidy cost of doing so. Difficulties in Estimating Demand Underlie FHA and RHS’s 10 Suspensions of Loan Guarantee Programs Since 1994 On 10 occasions since 1994, FHA and RHS have suspended the issuance of loan guarantees under certain programs because the programs effectively exhausted their commitment authority or credit subsidy budget authority before the end of a fiscal year. Specifically, FHA suspended programs six times and RHS four times. Difficulties in Estimating Program Demand Contributed to the Exhaustion of Commitment and Budget Authority before the End of a Fiscal Year Due partly to difficulties in estimating the demand for loan guarantee programs, the resources budgeted for these programs have not always reflected the amounts required to keep them operating for a full fiscal year. FHA and RHS Manage Their Programs in a Similar Manner but Estimate and Notify Congress of the Rate at Which They Will Exhaust Commitment and Budget Authority Differently FHA and RHS basically manage their loan guarantee programs on a first- come, first-served basis, a factor limiting both agencies’ ability to control the rate at which they use commitment authority and obligate credit subsidy budget authority. Our analysis indicates that FHA’s basic approach for making estimates does not always accurately forecast whether the agency will exhaust its commitment authority; however, FHA officials and federal budget experts said that more complex methods would not necessarily produce better estimates. FHA Has Specific Estimation and Notification Requirements for Utilization of Commitment Authority and Relies Primarily on a Straightforward Estimation Process to Satisfy These Requirements FHA is required by statute to estimate, on at least a monthly basis, the rate at which it will use commitment authority for the remainder of the fiscal year and to notify Congress (1) when 75 percent of the authority has been used or (2) if estimates indicate that the authority will be exhausted before the end of the year. For example, by requiring FHA to provide more frequent notifications concerning its commitment authority balances and creating notification requirements for FHA and RHS concerning their balances of credit subsidy budget authority, Congress could gain additional and more timely information to consider whether supplemental appropriations would be needed to prevent program suspensions. Congress could also provide FHA higher annual limits on commitment authority to minimize the likelihood that the agency would exhaust this authority before the end of a fiscal year. To help prevent program suspensions due to the exhaustion of credit subsidy budget authority, Congress could (1) combine multifamily programs with negative and positive subsidy costs under the GI/SRI account to eliminate the need for credit subsidy appropriations, (2) authorize FHA to use negative subsidies to cover any shortfalls in credit subsidy budget authority, or (3) make budget authority from the subsequent year’s appropriation available in the current year. Finally, the agencies can continue to use or be given additional administrative tools to help delay or prevent program suspensions due to exhaustion of credit subsidy budget authority. Congress could require FHA and RHS to provide such notifications—for example, when they have obligated specified percentages or at certain points in the fiscal year. To identify options that Congress, FHA, and RHS could exercise to help prevent the agencies from suspending their loan guarantee programs before the end of a fiscal year and the likely implications of these options, we interviewed budget, legal, and housing finance specialists from OMB and CBO; housing industry officials from the National Association of Home Builders, the Mortgage Bankers Association, and the National Association of Realtors; and we conducted a literature review to identify relevant studies and legislation.

Why GAO Did This Study In fiscal year 2004, the Department of Housing and Urban Development's Federal Housing Administration (FHA) and the Department of Agriculture's Rural Housing Service (RHS) guaranteed approximately $136 billion in mortgages for single-family homes, multifamily rental housing, and healthcare facilities under a variety of programs. In past years, both agencies have occasionally had to suspend the issuance of guarantees under some programs when they exhausted the dollar amounts of their commitment authority (which serves as a limit on the volume of new loans that an agency can guarantee) or credit subsidy budget authority (the authority to cover the long-term costs--known as credit subsidy costs--of extending these guarantees) before the end of a fiscal year. These suspensions can be disruptive to homebuyers, developers, and lenders. GAO was asked to determine (1) how often and why FHA and RHS have suspended their loan guarantee programs over the last decade, (2) how these agencies manage and notify Congress of the rate at which the authorities for these programs will be exhausted, and (3) options Congress and the agencies could exercise to help prevent future suspensions and the potential implications of these options. What GAO Found On 10 occasions since 1994, FHA and RHS have suspended the issuance of loan guarantees after exhausting the commitment authority or credit subsidy budget authority for certain programs before the end of a fiscal year. Specifically, FHA suspended several programs six times and RHS suspended one program four times. The resources budgeted for these programs have not always been adequate to keep them operating for a full fiscal year due partly to difficulties in estimating demand for loan guarantees--a difficulty compounded by the process of preparing the budget request to Congress, which requires that the agencies forecast demand nearly 2 years in advance. FHA and RHS both manage their programs on a first-come, first-served basis, a factor limiting their ability to control the rate at which they use commitment authority and obligate budget authority. However, the agencies have different requirements and approaches for estimating the rate at which they will exhaust these authorities and notifying Congress. For example, unlike RHS, FHA is statutorily required to notify Congress when it has used 75 percent of its commitment authority and when it estimates that it will exhaust this authority before the end of a fiscal year. GAO's analysis indicates that FHA's basic approach for making estimates--applying utilization rates experienced up until the time of the analysis to the remainder of the fiscal year--does not always accurately forecast whether the agency will exhaust its commitment authority. However, FHA officials and federal budget experts said that more complex methods would not necessarily produce better estimates. Through discussions with federal agency and mortgage industry officials, GAO identified several options that Congress, FHA, and RHS could exercise to help prevent future suspensions; however, the options would also have budgetary impacts (such as increasing the budget deficit), make oversight of the programs more difficult, or impose additional administrative burdens on the agencies. For example, Congress could require FHA to provide more frequent notifications about the percentage of commitment authority the agency has used and expand this requirement to include obligations of credit subsidy budget authority. This option, which could also be applied to RHS, could give Congress additional and more timely information to consider whether to provide supplemental appropriations before the end of a fiscal year. Other options for Congress include (1) authorizing FHA to use revenues generated by some of its loan guarantee programs to cover any shortfalls in budget authority for others and (2) providing "advance funding"--budget authority made available in an appropriation act for the current fiscal year that comes from a subsequent year's appropriation--for FHA and RHS program credit subsidy costs. Further, FHA and RHS can continue to use or be given additional administrative tools--such as transferring budget authority--to help delay or prevent program suspensions.

gao_GAO-16-555

gao_GAO-16-555_0

Federal Agencies Have Initiated Efforts to Determine Prevalence of Human Trafficking; Existing Trafficking Data Rely on Information Reported to Authorities Federal Agencies Have Made Efforts to Determine Prevalence of Human Trafficking in the United States and Are Taking Steps to Improve Data Collection Federal agencies have begun efforts to assess the prevalence of human trafficking in the United States and develop data standards and definitions to help facilitate prevalence studies. The purpose of the project is to inform the development of an integrated data collection platform regarding human trafficking victimization; establish baseline knowledge of human trafficking and victim needs; and support effective prevention and intervention responses. HHS, in consultation with key stakeholders, has developed draft data fields and definitions for human trafficking and expects to begin piloting the data collection effort in fall 2016. NIJ has awarded grants for the development and testing of methodologies that could be used to calculate human trafficking prevalence. Selected Law Enforcement Officials and Prosecutors Reported Lack of Victim Cooperation, Limited Services, and Difficulty Detecting Victims as Challenges, and Have Taken Steps to Mitigate Them According to federal, state, and local law enforcement officials and prosecutors we interviewed, investigating and prosecuting human trafficking crimes is challenging for multiple reasons, including a lack of victim cooperation, limited availability of victim services, difficulty identifying human trafficking, and others. Federal, state and local agencies have taken or are taking some actions to address these challenges, such as increasing the availability of services, primarily by providing funding through grants. In general, officials stated that obtaining the victim’s cooperation is important for human trafficking investigations and prosecutions because the victim is generally the primary witness and source of evidence. The officials told us that human trafficking victims may be unable or unwilling to cooperate with the investigation or prosecution because they distrust law enforcement, may be traumatized by abuse or addicted to drugs, have a sentimental attachment to the trafficker, do not see themselves as victims, or fear retaliation from the trafficker. Such an approach places value on the identification and stabilization of victims and providing immigration relief, as well as the investigation and prosecution of traffickers. Victim services. DOJ and HHS Administer Human Trafficking Grants to Promote Stakeholder Collaboration and Provide Victim Services, and They Have Processes to Minimize Grant Duplication At Least 42 Federal Grant Programs Are Available to Combat Human Trafficking in the United States and Assist Victims We identified 42 grant programs for which the federal government awarded funding in 2014 and 2015 that may be used to combat human trafficking or to assist victims of human trafficking (see appendix IV for a list of the grant programs and their objectives). Figure 6 shows the number of human trafficking grants awarded within the United States by city. In response to these recommendations, DOJ also requires grant applicants to identify in their applications any federal grants they are currently operating under as well as federal grants for which they have applied. Agency Comments and Our Evaluation We provided a draft of this report for review and comment to the Departments of Defense, Health and Human Services, Homeland Security, Justice, Labor, and State; the Equal Employment Opportunity Commission; and the Administrative Office of the United States Courts. 2. 3. To address the first objective, we reviewed prior GAO human trafficking reports, the Justice for Victims of Trafficking Act of 2015 and other federal laws related to human trafficking, and we interviewed Department of Justice (DOJ), the Department of Homeland Security (DHS), and the Department of Health and Human Services (HHS) officials, to learn whether their component agencies had efforts underway to collect human tracking data that could be used to determine the prevalence of human trafficking in the United States. We conducted 32 interviews with federal, state and local law enforcement and prosecutorial agencies who were part of the identified task forces in these jurisdictions. While these officials’ perspectives cannot be generalized to all jurisdictions, they provided insights into federal, state, and local efforts to combat human trafficking. Duplication occurs on multiple levels. Fifteen are intended solely for these purposes.

Why GAO Did This Study Human trafficking—the exploitation of a person typically through force, fraud, or coercion for such purposes as forced labor, involuntary servitude or commercial sex—is occurring in the United States. Congress has passed multiple laws to help ensure punishment of traffickers and protection of victims. DOJ and the Department of Homeland Security lead federal investigations and prosecutions of trafficking crimes. The Departments of Defense, Labor, and State, and the Equal Employment Opportunity Commission investigate trafficking related offenses under certain circumstances, and take further action, as appropriate. DOJ and HHS award grants to fund victim service programs. The Justice for Victims of Trafficking Act of 2015 includes a provision for GAO to review law enforcement efforts and grant programs to combat human trafficking and assist victims in the United States. This report discusses (1) federal efforts to assess prevalence of human trafficking (2) challenges agencies face in investigating and prosecuting human trafficking cases, and 3) federal grants and steps taken to prevent duplication. GAO reviewed trafficking data and agency documents, and conducted 32 interviews with federal, state and local law enforcement officials and prosecutors in four jurisdictions. We selected these jurisdictions based on the number of human trafficking tips they received, receipt of human trafficking task force funding and geographic variation. These officials' perspectives cannot be generalized to all jurisdictions but they provide insights into anti-trafficking efforts. What GAO Found Federal agencies have begun efforts to assess the prevalence of human trafficking in the United States and develop data standards and definitions to help facilitate prevalence studies. For example, the Department of Health and Human Services (HHS) is sponsoring the Human Trafficking Data Collection Project, which seeks to inform the development of an integrated data collection platform regarding human trafficking victimization, establish baseline knowledge of human trafficking and victim needs, and support effective prevention and intervention responses. HHS, in consultation with key stakeholders, has developed draft data fields and definitions for human trafficking and expects to begin piloting the data collection effort in fall 2016. Further, the National Institute of Justice, within the Department of Justice (DOJ), has awarded grants for the development and testing of methodologies that could be used to estimate the prevalence of human trafficking. Federal, state and local law enforcement officials and prosecutors GAO interviewed reported that investigating and prosecuting human trafficking cases is challenging for multiple reasons, including a lack of victim cooperation, limited availability of services for victims, and difficulty identifying human trafficking. Officials told us that obtaining the victim's cooperation is important because the victim is generally the primary witness and source of evidence; however, obtaining and securing victims' cooperation is difficult, as victims may be unable or unwilling to testify due to distrust of law enforcement or fear of retaliation by the trafficker. According to these officials, victim service programs, such as those that provide mental health and substance abuse services, have helped improve victim cooperation; however, the availability of services is limited. Further, officials reported that identifying and distinguishing human trafficking from other crimes such as prostitution can be challenging. Federal, state, and local agencies have taken or are taking actions to address these challenges, such as increasing the availability of victim services through grants and implementing training and public awareness initiatives. GAO identified 42 grant programs with awards made in 2014 and 2015 that may be used to combat human trafficking or to assist victims of human trafficking, 15 of which are intended solely for these purposes. Although some overlap exists among these human trafficking grant programs, federal agencies have established processes to help prevent unnecessary duplication. For instance, in response to recommendations in a prior GAO report, DOJ requires grant applicants to identify any federal grants they are currently operating under as well as federal grants for which they have applied. In addition, agencies that participate in the Grantmaking Committee of the Senior Policy Operating Group are encouraged to share grant solicitations and information on proposed grant awards, allowing other agencies to comment on proposed grant awards and determine whether they plan to award funding to the same organization.

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Preliminary Observations on the Final DHS Human Capital Regulations The final regulations establish a new human capital system for DHS that is intended to assure its ability to attract, retain, and reward a workforce that is able to meet its critical mission. We continue to believe that many of the basic principles underlying the DHS regulations are generally consistent with proven approaches to strategic human capital management. Today, I will provide our preliminary observations on the following elements of DHS’s human capital system as outlined in the final regulations—pay and performance management, adverse actions and appeals, and labor-management relations. The final DHS regulations include other elements of a modern compensation system. While the DHS regulations contain many elements of a performance-based and market-oriented pay system, there are several issues that we identified last year that DHS will need to continue to address as it moves forward with the implementation of the system. We identified multiple implementation challenges at last year’s hearing. We believe that these challenges are still critical to the success of the new human capital system. A Chief Operating Officer/Chief Management Officer (COO/CMO) or similar position can effectively provide the continuing, focused attention essential to successfully completing these multiyear transformations. Especially for such an endeavor as critical as DHS’s new human capital system, such a position would serve to elevate attention that is essential to overcome an organization’s natural resistance to change, marshal the resources needed to implement change, and build and maintain the organizationwide commitment to new ways of doing business; integrate this new system with various management responsibilities so they are no longer “stovepiped” and fit it into other organizational transformation efforts in a comprehensive, ongoing, and integrated manner; and institutionalize accountability for the system so that the implementation of this critical human capital initiative can be sustained. Establishing an Overall Communication Strategy Another significant challenge for DHS is to assure an effective and ongoing two-way communication strategy that creates shared expectations about, and reports related progress on, the implementation of the new system. According to DHS, its communication strategy will include global e-mails, satellite broadcasts, Web pages, and an internal DHS weekly newsletter. Nevertheless, regarding the implementation of the DHS system, how it is done, when it is done, and the basis on which it is done can make all the difference in whether it will be successful. DHS appears to be committed to continue to involve employees, including unions, throughout the implementation process, another critical ingredient for success. Specifically, under DHS’s final regulations, employee representatives or union officials are to have opportunities to participate in developing the implementing directives, as outlined under the “continuing collaboration” provisions; hold four membership seats on the Homeland Security Compensation Committee; and help in evaluations of the human capital system. Many of the basic principles underlying the DHS regulations are consistent with proven approaches to strategic human capital management, including several approaches pioneered by GAO, and deserve serious consideration. However, some parts of the system raise questions that DHS, OPM, and Congress should consider. DHS was provided with significant flexibility to design a modern human capital management system. DHS has begun strategic human capital planning efforts at the headquarters level since the release of the department’s overall strategic plan and the publication of proposed regulations for its new human capital management system. Sustained and committed leadership is required on multiple levels: securing appropriate resources for the design, implementation, and evaluation of the human capital management system; communicating with employees and their representatives about the new system and providing opportunities for feedback; training employees on the details of the new system; and continuing opportunities for employees and their representatives to participate in the design and implementation of the system.

Why GAO Did This Study At the center of any agency transformation, such as the one envisioned for the Department of Homeland Security (DHS), are the people who will make it happen. Thus, strategic human capital management at DHS can help it marshal, manage, and maintain the people and skills needed to meet its critical mission. Congress provided DHS with significant flexibility to design a modern human capital management system. DHS and the Office of Personnel Management (OPM) have now jointly released the final regulations on DHS's new human capital system. Last year, with the release of the proposed regulations, GAO observed that many of the basic principles underlying the regulations were consistent with proven approaches to strategic human capital management and deserved serious consideration. However, some parts of the human capital system raised questions for DHS, OPM, and Congress to consider in the areas of pay and performance management, adverse actions and appeals, and labor management relations. GAO also identified multiple implementation challenges for DHS once the final regulations for the new system were issued. This testimony provides preliminary observations on selected provisions of the final regulations. What GAO Found GAO believes that the regulations contain many of the basic principles that are consistent with proven approaches to strategic human capital management. For example, many elements for a modern compensation system--such as occupational clusters, pay bands, and pay ranges that take into account factors such as labor market conditions--are to be incorporated into DHS's new system. However, these final regulations are intended to provide an outline and not a detailed, comprehensive presentation of how the new system will be implemented. Thus, DHS has considerable work ahead to define the details of the implementation of its system and understanding these details is important in assessing the overall system. The implementation challenges we identified last year are still critical to the success of the new system. Also, DHS appears to be committed to continue to involve employees, including unions, throughout the implementation process. Specifically, according to the regulations, employee representatives or union officials are to have opportunities to participate in developing the implementing directives, hold four membership seats on the Homeland Security Compensation Committee, and help in the design and review the results of evaluations of the new system. Further, GAO believes that to help ensure the quality of that involvement, DHS will need to ensure sustained and committed leadership. A Chief Operating Officer/Chief Management Officer or similar position at DHS would serve to elevate, integrate, and institutionalize responsibility for this critical endeavor and help ensure its success by providing the continuing, focused attention needed to successfully complete the multiyear conversion to the new human capital system. DHS will need to establish an overall communication strategy. According to DHS, its planned communication strategy for its new human capital system will include global e-mails, satellite broadcasts, Web pages, and an internal DHS weekly newsletter. A key implementation step for DHS is to assure an effective and on-going two-way communication effort that creates shared expectations among managers, employees, customers, and stakeholders. While GAO strongly supports human capital reform in the federal government, how it is done, when it is done, and the basis on which it is done can make all the difference in whether such efforts are successful. GAO's implementation of its own human capital authorities, such as pay bands and pay for performance, could help inform other organizations as they design systems to address their human capital needs. The final regulations for DHS's new system are especially critical because of the potential implications for related governmentwide reforms.

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TSA’s aviation security mission includes strengthening the security of airport perimeters and restricted airport areas; hiring and training a screening workforce; prescreening passengers against terrorist watch lists; and screening passengers, baggage, and cargo at the over 400 commercial airports nation-wide, among other responsibilities. TSA’s security mission includes establishing security standards and conducting assessments and inspections of surface transportation modes, including passenger and freight rail; mass transit; highways and commercial vehicles; and pipelines. DHS Has Made Progress in Securing the Nation’s Aviation and Surface Transportation Systems, but More Work Remains DHS, primarily through the efforts of TSA, has undertaken numerous initiatives to strengthen the security of the nation’s aviation and surface transportation systems. Specifically, regarding commercial aviation, we reported that DHS has generally achieved 17 performance expectations in this area, and has generally not achieved 7 expectations. Regarding the security of surface transportation modes, we reported that DHS has generally achieved three performance expectations and has generally not achieved two others. Aviation Security Since its inception, TSA has focused much of its efforts on aviation security and has developed and implemented a variety of programs and procedures to secure commercial aviation. Although TSA has taken important actions to strengthen aviation security, the agency has faced difficulties in implementing an advanced, government-run passenger prescreening program for domestic flights, and in developing and implementing technology to screen passengers at security checkpoints and cargo placed on aircraft, among other areas. However, we found that while TSA has developed and tested checkpoint technologies to address vulnerabilities that may be exploited by identified threats such as improvised explosive devices, it has not yet effectively deployed such technologies. We are currently reviewing DHS and TSA’s efforts to develop, test and deploy airport checkpoint technologies. Strategic Approach for Implementing Security Functions. We will continue to assess DHS's efforts to implement its strategy for securing surface transportation modes as part of our ongoing reviews of mass transit, passenger and freight rail, commercial vehicle, and highway infrastructure security. TSA has taken actions to conduct threat, criticality, and vulnerability assessments of surface transportation assets, particularly for mass transit, passenger rail, and freight rail, but we have not yet reviewed the quality of many of these assessments. For example, TSA has conducted threat assessments of mass transit, passenger rail, and freight rail transportation modes. However, TSA did not provide us with evidence of its efforts to develop and issue security standards for all surface transportation modes, or provided a rationale or explanation why standards may not be needed for other modes. We have made numerous recommendations to DHS and its components to strengthen these efforts, and the department has made progress in implementing some of these recommendations. For example, with regards to TSA’s efforts to secure air cargo, we reported that TSA completed an Air Cargo Strategic Plan in November 2003 that outlined a threat-based risk management approach to securing the nation’s domestic air cargo system, and that this plan identified strategic objectives and priority actions for enhancing air cargo security based on risk, cost, and deadlines. DHS has also not fully adopted and applied a risk management approach in implementing its mission and core management functions. With respect to transportation security, the importance of information sharing was recently highlighted in the 9/11 Commission Act which requires DHS to establish a plan to promote the sharing of transportation security information among DHS and federal, state and local agencies, tribal governments, and appropriate private entities.The Act also requires that DHS provide timely threat information to carriers and operators that are preparing and submitting a vulnerability assessment and security plan, including an assessment of the most likely methods that could be used by terrorists to exploit weaknesses in their security. In addition to providing federal leadership with respect to homeland security, DHS also plays a large role in coordinating the activities of key stakeholders, but has faced challenges in this regard. A well-managed, high-performing department is essential to meeting the significant challenge of securing the transportation network.

Why GAO Did This Study Within the Department of Homeland Security (DHS), the Transportation Security Administration's (TSA) mission is to protect the nation's transportation network. Since its inception in 2001, TSA has developed and implemented a variety of programs and procedures to secure commercial aviation and surface modes of transportation, including passenger and freight rail, mass transit, highways, commercial vehicles, and pipelines. Other DHS components, federal agencies, state and local governments, and the private sector also play a role in transportation security. GAO examined (1) the progress DHS and TSA have made in securing the nation's aviation and surface transportation systems, and (2) challenges that have impeded the department's efforts to implement its mission and management functions. This testimony is based on issued GAO reports and testimonies addressing the security of the nation's aviation and surface transportation systems, including a recently issued report (GAO-07-454) that highlights the progress DHS has made in implementing its mission and management functions. What GAO Found In August 2007, GAO reported that DHS had made moderate progress in securing the aviation and surface transportation networks, but that more work remains. Specifically, of the 24 performance expectations GAO identified in the area of aviation security, GAO reported that DHS had generally achieved 17 of these expectations and had generally not achieved 7 expectations. With regard to the security of surface modes of transportation, GAO reported that DHS generally achieved three performance expectations and had generally not achieved two others. DHS and TSA have made progress in many areas related to securing commercial aviation. For example, TSA has undertaken efforts to strengthen airport security; provide and train a screening workforce; prescreen passengers against terrorist watch lists; and screen passengers, baggage, and cargo. With regard to surface transportation modes, TSA has taken steps to develop a strategic approach for securing mass transit, passenger and freight rail, commercial vehicles, highways, and pipelines; establish security standards for certain transportation modes; and conduct threat, criticality, and vulnerability assessments of surface transportation assets, particularly passenger and freight rail. TSA also hired and deployed compliance inspectors and conducted inspections of passenger and freight rail systems. While these efforts have helped to strengthen the security of the transportation network, DHS and TSA still face a number of key challenges in further securing these systems. For example, regarding commercial aviation, TSA has faced difficulties in developing and implementing its advanced passenger prescreening system, known as Secure Flight, and has not yet completed development efforts. In addition, TSA's efforts to enhance perimeter security at airports may not be sufficient to provide for effective security. TSA has also initiated efforts to evaluate the effectiveness of security-related technologies, such as biometric identification systems, but has not developed a plan for implementing new technologies to meet the security needs of individual airports. TSA has also not yet effectively deployed checkpoint technologies to address key existing vulnerabilities, and has not yet developed and implemented technologies needed to screen air cargo. Further, while TSA has initiated efforts to develop security standards for surface transportation modes, these efforts have been limited to passenger and freight rail, and have not addressed commercial vehicles or highway infrastructure, including bridges and tunnels. GAO also reported that a number of issues have impeded DHS's efforts in implementing its mission and management functions, including not always implementing effective strategic planning, or fully adopting and applying a risk management approach with respect to transportation security.

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First, many statutes contain provisions authorizing the award of attorney fees from a losing party to a prevailing party; many of these provisions apply to the federal government. Second, where there is a fee-shifting statute that allows for the payment of attorney fees by a losing party to a prevailing party but is not independently applicable to the federal government, EAJA provides that the government is liable for reasonable attorney fees to the same extent as a private party (i.e., claims paid under EAJA subsection (b)). Most USDA Agencies Did Not Have Readily Available Attorney Fee Information In April 2012, we found that USDA did not report any aggregated data on attorney fee claims and payments made under EAJA and other fee- shifting statutes for fiscal years 2000 through 2010, but USDA and other key departments involved—Treasury and DOJ—maintained certain data on individual cases or payments in several internal agency databases. However, collectively, these data did not capture all claims and payments. USDA officials stated at the time that given the decentralized nature of the department and the absence of an external requirement to track or report on attorney fee information, the information was not centrally tracked and decisions about whether to track attorney fee data and the manner in which to do so were best handled at the agency level. Accordingly, for our April 2012 report, we contacted 33 agencies within USDA to obtain their available attorney fee information. In response, officials from 29 of the 33 USDA agencies told us that they did not track or could not readily provide us with this information. We reported that the remaining 4 USDA agencies we contacted either had mechanisms to track information on attorney fees, or were able to compile this information manually using hard copy files, or directed us to publicly available sources where we could obtain the information. Further, in April 2012, we reported that given the differences in attorney fee information available across the 4 USDA agencies and the limitations identified below, it was difficult to comprehensively determine (1) the total number of claims filed for attorney fees, (2) who received payments, (3) in what amounts, and (4) under which statutes. In our April 2012 report, we found that the Forest Service was the only program agency that was able to provide us with attorney fee data across the 11-year period and gathered information on attorney fees and cost awards associated with cases from three sources—Forest Service regional officials, a Forest Service-commissioned university study, and publicly available court documents. The data include only environmental cases. Not all of the attorney fees and costs included in the spreadsheet were paid from Forest Service appropriations, as Treasury may have paid some of the attorney fees and costs from its Judgment Fund. Using the Forest Service’s spreadsheet data, we reported that about $16.3 million in attorney fees and costs in 241 environmental cases from fiscal years 2000 through 2010 was awarded against or settled by the Forest Service. In April 2012, we also reported on the amount and number of payments Treasury made on behalf of USDA, by fiscal year, as shown in figure 3.

Why GAO Did This Study In the United States, parties involved in federal litigation generally pay their own attorney fees. There are many exceptions to this general rule where “fee-shifting” statutes authorize the award of attorney fees to a successful, or prevailing, party. Some of these provisions also apply to the federal government when it loses a case. In 1980, Congress passed EAJA to allow parties that prevail in cases against federal agencies to seek reimbursement from the federal government for attorney fees, where doing so was not previously authorized. Although all federal agencies are generally subject to, and make payments under, attorney fee provisions, some in Congress have expressed concerns about the use of taxpayer funds to make attorney fee payments with agencies' limited funding. These concerns include that environmental organizations are using taxpayer dollars to fund lawsuits against the government, including against USDA. This statement addresses the extent to which USDA had information available on attorney fee claims and payments made under EAJA and other fee-shifting statutes for fiscal years 2000 through 2010. This statement is based on GAO's April 2012 report on USDA and the Department of Interior attorney fee claims and payments and selected updates conducted in March 2014. To conduct the updates, among other things, GAO reviewed Forest Service budget documents for fiscal years 2014 and 2105 and interviewed Forest Service officials. What GAO Found In April 2012, GAO found that the Department of Agriculture (USDA) did not report any aggregated data on attorney fee claims and payments made under the Equal Access to Justice Act (EAJA) and other fee-shifting statutes for fiscal years 2000 through 2010, but USDA and other key departments involved—the Departments of the Treasury and Justice—maintained certain data on individual cases or payments in several internal agency databases. However, collectively, these data did not capture all claims and payments. USDA officials stated at the time that given the decentralized nature of the department and the absence of an external requirement to track or report on attorney fee information, the information was not centrally tracked and decisions about whether to track attorney fee data and the manner in which to do so were best handled at the agency level. Officials from 29 of the 33 USDA agencies GAO contacted for its April 2012 report stated that they did not track or could not readily provide GAO with this information. The remaining 4 USDA agencies had mechanisms to track information on attorney fees, were able to compile this information manually, or directed GAO to publicly available information sources. GAO found that the Forest Service was the only program agency within USDA that was able to provide certain attorney fee data across the 11-year period. GAO reported in April 2012 that about $16.3 million in attorney fees and costs in 241 environmental cases from fiscal years 2000 through 2010 was awarded against or settled by the Forest Service (see fig. below). Note: Forest Service data may include attorney fees authorized by underlying statutes, EAJA subsection (b), and EAJA subsection (d); as such, some funds may have been paid by the Judgment Fund, as opposed to agency appropriations. However, the extent to which the 4 USDA agencies had attorney fee information available for the 11-year period varied. Given this limitation as well as others, such as inconsistent availability of payment data, GAO concluded that it was difficult to comprehensively determine the total number of claims filed for attorney fees, who received payments, in what amounts, and under what statutes. GAO did not make any recommendations in its April 2012 report.

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However, in response to the attacks on September 11, Congress passed the Aviation and Transportation Security Act (ATSA), which created TSA within DOT and defined its primary responsibility as ensuring security in all modes of transportation. Common challenges stem from the extensiveness of the transportation system, the interconnectivity of the system, funding security improvements, and the number of stakeholders involved in transportation security. The transportation system’s extensive infrastructure crisscrosses the nation and extends beyond our borders to move millions of passengers and tons of freight each day. The extensiveness of the infrastructure as well as the sheer volume of freight and passengers moved through the system creates an infinite number of targets for terrorists. The sluggish economy has further weakened the transportation industry’s financial condition by decreasing ridership and revenues. The federal government has provided additional funding for transportation security since September 11, but demand has far outstripped the additional amounts made available. Prior to September 11, DOT had primary responsibility for the security of the transportation system. In the wake of September 11, Congress created TSA and gave it responsibility for the security of all modes of transportation. DOT modal administrations are also continuing their security efforts for different modes of transportation. Congress and Federal Agencies Have Acted to Enhance Transportation Security Congress has acted to enhance the security of the nation’s transportation system since September 11. TSA is also planning to establish security standards for all modes of transportation and is launching a number of new security efforts for the maritime and land transportation modes. TSA’s and DOT’s Roles and Responsibilities Have Not Been Clearly Defined The roles and responsibilities of TSA and DOT in transportation security have yet to be clearly delineated, which creates the potential for duplicating or conflicting efforts as both entities move forward with their security efforts. However, during TSA’s first year of existence, TSA’s main focus was on aviation security—more specifically, on meeting ATSA deadlines. Experts and Associations Identified Future Actions to Advance the Security of the Transportation System Transportation security experts and representatives of state and local government and industry associations we contacted generally believe that the transportation system is more secure today than it was prior to September 11. Observations Securing the transportation system is fraught with challenges. It will take the collective effort of all transportation stakeholders to meet the continuing challenges and enhance the security of the transportation system. Conducted security assessments at the 36 largest transit agencies.

Why GAO Did This Study The economic well being of the United States is dependent on the expeditious flow of people and goods through the transportation system. The attacks on September 11, 2001, illustrate the threats to and vulnerabilities of the transportation system. Prior to September 11, the Department of Transportation (DOT) had primary responsibility for the security of the transportation system. In the wake of September 11, Congress created the Transportation Security Administration (TSA) within DOT and gave it primary responsibility for the security of all modes of transportation. TSA was recently transferred to the new Department of Homeland Security (DHS). GAO was asked to examine the challenges in securing the transportation system and the federal role and actions in transportation security. What GAO Found Securing the nation's transportation system is fraught with challenges. The transportation system crisscrosses the nation and extends beyond our borders to move millions of passengers and tons of freight each day. The extensiveness of the system as well as the sheer volume of passengers and freight moved makes it both an attractive target and difficult to secure. Addressing the security concerns of the transportation system is further complicated by the number of transportation stakeholders that are involved in security decisions, including government agencies at the federal, state, and local levels and thousands of private sector companies. Further exacerbating these challenges are the financial pressures confronting transportation stakeholders. For example, the sluggish economy has weakened the transportation industry's financial condition by decreasing ridership and revenues. The federal government has provided additional funding for transportation security since September 11, but demand has far outstripped the additional amounts made available. It will take the collective effort of all transportation stakeholders to meet existing and future transportation challenges. Since September 11, transportation stakeholders have acted to enhance security. At the federal level, TSA primarily focused on meeting aviation security deadlines during its first year of existence and DOT launched a variety of security initiatives to enhance the other modes of transportation. For example, the Federal Transit Administration provided grants for emergency drills and conducted security assessments at the largest transit agencies, among other things. TSA has recently focused more on the security of the maritime and land transportation modes and is planning to issue security standards for all modes of transportation. DOT is also continuing their security efforts. However, the roles and responsibilities of TSA and DOT in securing the transportation system have not been clearly defined, which creates the potential for overlap, duplication, and confusion as both entities move forward with their security efforts.

gao_GAO-09-165

gao_GAO-09-165_0

Awards. To address identified problems with awards, since 2006, the Cuba Program has competitively awarded all democracy assistance grants and discontinued its use of funded grant extensions. In addition, in some cases the impact of these actions on the risk of Cuba Program grantees’ misusing funds and failing to comply with U.S. laws and regulations is not yet apparent. USAID Is Increasing Resources for Cuba Program Grant Oversight To increase resources aimed at improving the management and oversight of Cuba Program democracy assistance, USAID established a Cuba project committee comprising key USAID and State senior managers in December 2006; has hired more staff for the Cuba Program office since January 2008; and contracted for financial services—including reviews of grantee internal controls, procurement practices, and expenditures—to enhance oversight of grantees in April 2008. Preaward reviews and follow-up. Permitted assistance. In addition, the new financial services contractor will review grantee support for cost-share claims. Impact of USAID’s Actions to Improve Oversight Is Not Yet Evident Because many of USAID’s actions to improve its oversight of the Cuba democracy grants were implemented recently, in 2007 and 2008, their impact on the risk of grantees’ misusing grant funds or failing to comply with U.S. laws and regulations is not yet evident. Additionally, in mid-July 2008, USAID decided to accelerate planned reviews of Cuba democracy grantees’ procurement systems under the April 2008 financial review services contract and to conduct audits of grantees’ incurred cost under the Inspector General; pending the results of those reviews and audits, USAID partially suspended two more grants. The procurement reviews, which were completed in August 2008, identified weaknesses at three grantees; USAID is working with the grantees to correct these weaknesses. USAID expects the incurred cost audits to be completed by November 2008 under a contract with another firm. In July 2008, USAID suspended its $10.95 million grant to GAD, which was awarded in September 2000. The program’s other grants remained active, based on USAID’s review of the grantees’ A-133 audits and other relevant information, but pending the results of the procurement reviews and incurred cost audits announced in July 2008. The procurement reviews, completed in August 2008, identified internal control, financial management, and procurement weaknesses at three grantees. Recommendations for Executive Action To strengthen oversight of USAID’s Cuba Program grants and the program’s ability to ensure the appropriate use of grant funds, we recommend that the USAID Administrator take the following two actions: ensure that the Cuba Program office is staffed at the level that is needed to fully implement planned monitoring activities, such as the systematic analysis of grantee data to identify at-risk grantees, and that the agency has determined is necessary for effective oversight; and periodically assess the Cuba Program’s overall efforts to address and reduce grantee risks, particularly with regard to grantees’ internal controls, procurement practices, expenditures, and compliance with laws and regulations. Appendix I: Scope and Methodology To review the actions that U.S. Agency for International Development (USAID) has taken since 2006 to improve its award and oversight of the Cuba Program’s grants as well as actions taken in response to the recently detected misuses of program grant funds, we analyzed USAID and Department of State (State) records, including agendas and minutes for meetings of USAID’s Cuba project committee, draft and final changes to agency policy and guidance, and audit and financial reports of grantee activities.

Why GAO Did This Study The U.S. Agency for International Development's (USAID)Cuba Program provides assistance to support human rights and promote nonviolent democratic change in Cuba. From 1996 through 2008, the program awarded $83 million in grants to nongovernmental organizations and universities. In 2006, GAO found weaknesses in program oversight that increased the risk of grantees' improperly using grant funds and failing to comply with U.S. laws. In 2008, misuse of grant funds at organizations with the program's two largest grants was detected. GAO was asked to examine (1) actions that USAID has taken since 2006, or plans to take, to improve its award and oversight of the Cuba Program's grants and (2) actions that USAID has taken in response to the recently detected misuses of grant funds. GAO analyzed USAID and grantee records, conducted limited reviews at five grantees, and interviewed agency and grantee officials. What GAO Found Since 2006, USAID has taken a number of steps to address identified problems with the Cuba Program's awards of democracy assistance and improve oversight of the assistance. For example, USAID has competitively awarded all Cuba Program grants since 2006, compared with 5 percent of grants awarded in 1995-2006; has hired more staff for the program office since January 2008; and contracted in April 2008 for financial services--such as reviews of grantee internal controls and procurement systems--to enhance oversight of grantees. USAID also has worked to strengthen program oversight by, for instance, ensuring preaward and follow-up reviews, improving grantee internal controls and implementation plans, and providing guidance and monitoring about permitted types of assistance and cost sharing. However, USAID has not staffed the Cuba Program at the level the agency has determined is needed for appropriate oversight; as of October 2008, the program office had five staff, compared with the 11 recommended in two USAID assessments. Further, because many of USAID's actions to improve oversight were initiated recently, their impact on the risk of the program grantees misusing grant funds or failing to comply with U.S. laws and regulations is not yet evident. In June 2008, for example, USAID's new financial services contractor found unsupported purchases at the organization with the program's largest grant. In response to the misuse of funds at organizations with the two largest Cuba Program grants, USAID suspended the two grantees in March and July 2008, respectively, pending the results of criminal investigations. To detect financial vulnerabilities at other grantees, USAID announced in mid-July 2008 that it would accelerate planned reviews of program grantees' procurement systems and initiate audits of their incurred cost, and it partially suspended two additional grantees pending the results of the procurement reviews. The program's other grants remained active pending the results of these reviews and audits. The procurement reviews--completed in August 2008 by the new financial services contractor--identified internal control, financial management, and procurement weaknesses at three grantees; USAID is working with the grantees to correct these weaknesses. The USAID Inspector General will oversee the incurred cost audits, which USAID expects to be completed by November 2008 under a separate contract with another firm.

gao_GAO-01-172

gao_GAO-01-172_0

More than half of initial applicants claim multiple disabilities, and veterans who believe their disabilities have worsened can reapply for higher ratings and more compensation. VA has had long-standing difficulties in keeping up with its claims processing workload, resulting in increasing backlogs of pending claims.In fiscal year 1999, VA received approximately 468,000 compensation claims—about 345,000 of which were repeat claims. In its 1996 report, the Veterans’ Claims Adjudication Commission observed that 56 percent of veterans with pending repeat claims were rated as 30- percent or less disabled. Reactions to a Lump Sum Option Are Mixed Veterans’ views captured through our survey and focus groups were based on the following features of both the lump sum and monthly payment options: Both types of payment—monthly and lump sum—would be tax-free. Veterans and military personnel also suggested strategies that they believe would limit the risk of forgone compensation or other benefits if a veteran’s disability were to progress. Specifically, some suggested that a lump sum payment option not be offered to those who would be least able to manage the money well—such as those who have been declared incompetent or have a history of significant psychological disabilities—or that the lump sum payment be assigned to someone who could manage the money for the payee.One concern that was raised with this type of strategy was that there would not be enough time to declare a newly compensated veteran incompetent or in need of a representative before the veteran was offered a choice. We contacted officials from these countries directly or through the Department of State.

Why GAO Did This Study Currently, veterans who are disabled while serving their country are compensated for average reduction in earning capacity. Monthly compensation is based on the severity of a veteran's disability. After an initial rating for compensation has been determined, veterans who believe their condition has worsened may file a claim with the Department of Veterans' Affairs (VA) to reevaluate their disability rating. These repeat claims outnumbered initial disability applications by nearly three to one in fiscal year 1999, dominating VA's workload. To help reduce the volume of repeat claims, the Veterans' Claims Adjudication Commission asked Congress to consider paying less severely disabled veterans compensation in a lump sum. GAO surveyed veterans who are now being compensated on their reaction to a lump sum option. What GAO Found Veterans had mixed views. Many veterans and military personnel could see advantages and disadvantages to this new option. They also suggested some strategies that they believed could minimize the financial risks a lump sum payment option might introduce.

gao_GAO-05-622T

gao_GAO-05-622T_0

During the 1970s and 1980s, we issued a number of reports on the funding formulas used to direct Revenue Sharing funds to local communities based on both their capacity and willingness to utilize local resources to address local needs. This wide range of experience provides us with an in-depth understanding of the issues associated with the equitable and efficient targeting of federal grant dollars. The first principle is based on the idea that communities with similar needs should receive roughly similar per capita funding amounts. However, determining the extent to which program funding is disproportionately allocated to communities with the highest needs involves value judgments that are the responsibility of policymakers rather than technicians and administrators. One of the criticisms directed at the CDBG program in the administration’s fiscal year 2006 budget proposal is that there is a “lack of clarity in the program’s purpose,” a statement which is supported by the long list of specific program objectives cited in HUD’s report. These variables represent 80 percent of HUD’s overall index of need. Many Features of CDBG Funding Formulas Limit Their Ability to Consistently Target High-Need Communities The HUD study reaches a number of valid conclusions regarding the targeting performance of the program’s funding formulas. I will just mention their conclusions to echo the more detailed analysis presented in the HUD report: The primary reasons entitlement communities with similar community development needs receive wide differences in funding are 1) using two formulas rather than a single formula and 2) the factor that reflects older housing in formula B results in especially large disparities in funding among communities with similar needs because units occupied by higher income residents typically are not in need of rehabilitation at public expense. Formula A is most responsible for reducing the extent to which funding is targeted to high-need communities, because its reliance on general population precludes greater targeting based on community development needs. Changing the poverty measure to one based on the poverty status of households rather than individuals would avoid awarding large grants to low-need college towns. While HUD Formula Options Improve Needs Targeting, Additional Options Should Also Be Explored before Deciding on a Particular Reform Strategy In our view, the HUD study has clearly identified the major elements that limit the current formula’s ability to efficiently and effectively target funding to high-need communities, and it puts forward a number of formula alternatives that would strengthen the program in this regard. The first option, formula alternative one, introduces revised indicators of poverty, older housing units and slow population growth and decline, and places greater emphasis on the poverty indicators. In contrast, a third option, formula alternative three, introduces two additional factors—community per capita income and the per capita income of the wider metropolitan area in which the grantee is located. The metropolitan PCI factor partly offsets the effect of community PCI by increasing funding for communities in high-income metropolitan areas. The net effect of both factors is that the two factors, to some extent, work at cross purposes. The HUD report suggests using the two per capita income factors because they provide a means of directing more funding to high-need communities. Clearly, the introduction of per capita income can be justified on the grounds that it provides a means of taking into account the underlying economic strength of communities and their ability to fund local needs from local resources. Central to such a reexamination is assessing how to better target federal assistance to those with the greatest need and the least capacity to meet those needs.

Why GAO Did This Study Congress asked GAO to comment on the Department of Housing and Urban Development's (HUD) 2005 report on the Community Development Block Grant (CDBG), "CDBG Formula Targeting to Community Development Need." The CDBG program distributes funding to communities using two separate formulas that take into account poverty, older housing, community size, and other factors. That study evaluates the program's funding formula from two perspectives: (1) to what extent do communities with similar needs receive similar CDBG funding, and (2) to what extent are program funds directed to communities with greater community development needs. The HUD report is particularly salient in light of the administration's 2006 budget request which criticizes the program for not effectively targeting high-need communities. Congress asked us to provide our views on the HUD study based on our experience and past assistance to various congressional committees on a wide variety of federal formula funding issues. What GAO Found HUD's report on the CDBG formula provides a thoughtful and sophisticated analysis of those elements of the formula that impede effective and equitable targeting of limited federal resources. Central to HUD's analysis is an index of need that encompasses a wide variety of indicators related to poverty, housing infrastructure, and population growth and decline. While we would question some of the factors in their index, overall we believe it serves as a reasonable basis for evaluating CDBG targeting. The study identifies a number of causes that explain the poor performance of the current formula. The use of two formulas rather than one is an important reason communities with similar needs do not receive similar funding. The use of population size as a need indicator significantly reduces the extent to which funding is directed to high-need communities. Changing the poverty measure to one based on the poverty status of households rather than individuals would avoid large grants to communities with large student populations. An increasing number of communities have attained the minimum population size necessary to be eligible for formula funding and this has also reduced funding to communities with the highest needs. In addition to presenting formula options that address a number of these problems, HUD's study also presents an option that would include per capita income in the formula. The inclusion of per capita income could be justified on the grounds that it directs more funding to communities with weaker economic capacity to meet needs from local resources. However, some of the effect of this factor is offset by introducing an additional factor--metropolitan per capita income. The metropolitan per capita income factor directs more rather than less funding to communities located in high-income metropolitan areas. This works at cross purposes with the local per capita income factor. GAO suggests that Congress consider a needs-based criterion to determine eligibility and eliminate the grandfathering of eligibility into the formula before this approach is adopted as a means of improving the targeting performance of the program.

gao_GAO-12-557

gao_GAO-12-557_0

The Science and Technology Directorate’s use of other transaction authority has declined since 2005 when it entered into 28 new agreements. Gaps in the Collection and Reporting of Information on the Use of Other Transactions Based on our review of all 27 available DHS agreement files, we found three gaps in the collection and reporting of information on its use of other transaction authority: (1) DHS does not consistently document the rationale for entering into an other transaction agreement in an agreement analysis document, despite DHS guidance to do so; (2) discrepancies between DHS’s data sources result in an incomplete picture of other transaction agreements activity, including an inaccurate annual report to Congress; and (3) DHS does not track the circumstances that permit the use of other transaction authority, such as the involvement of a nontraditional contractor, through the phases of an other transaction agreement. We found that the agreement analysis is not consistently documented in the files. But DHS officials told us they have not established metrics. Without consistent information on the universe of other transaction agreements, DHS continues to report inaccurate or incomplete information on the use of its other transaction authority in its annual report to Congress. This may undermine Congress’s ability to obtain a full picture on the use of this special acquisition authority. Recommendations for Executive Action To promote the efficient and effective use by DHS of its other transaction authority to meet its mission needs, we recommend that the Secretary of Homeland Security direct the Under Secretary for Management to take the following three actions: Establish an action plan with specific time frames for fully implementing the prior GAO recommendation to establish a mechanism to collect and track relevant data on other transaction agreements, including the role of the nontraditional contractor, and systematically assess the data and report to Congress. DHS’s comments are reprinted in appendix III. Appendix I: Objectives, Scope, and Methodology The objectives for this report were to review (1) the Department of Homeland Security’s (DHS) Science and Technology Directorate’s use of other transaction authority, (2) the extent to which DHS has addressed challenges we previously identified with its use of the authority, and (3) the information DHS collects and reports on the use of other transaction authority. To determine the extent to which DHS has addressed challenges with its use of other transaction authority, we drew upon prior GAO reports on DHS’s use of other transaction authority, reviewed DHS other transaction agreement policies and procedures, conducted interviews with DHS officials, and reviewed other transaction agreement files that were active on or after April 1, 2008, through September 2011.

Why GAO Did This Study When DHS was created in 2002, Congress granted it special acquisition authority to use “other transaction” agreements, which are special vehicles used for research and development or prototype projects. Unlike conventional contracts, other transaction agreements offer flexibilities to reach entities that traditionally have not done business with the government. They have risks, however, because they are exempt from the Federal Acquisition Regulation and other requirements. The Homeland Security Act of 2002 required GAO to report on the use of other transactions by DHS. In 2004 and 2008, GAO reported on challenges DHS faced. This report covers (1) the DHS Science and Technology Directorate’s use of other transactions, (2) DHS’s progress in addressing challenges, and (3) the information collected on the use of the authority and reported to Congress. GAO examined all 27 available other transaction agreement files, reviewed DHS’s other transaction policies and procedures, and interviewed cognizant officials. What GAO Found In the last 8 years, the Department of Homeland Security’s (DHS) Science and Technology Directorate has used its special acquisition authority to enter into 58 “other transaction” agreements. Use of the authority has declined since 2005. DHS officials said the decline is due to uncertainty about the agency’s continuing authority to enter into these agreements, among other things. DHS has made progress in addressing challenges and prior GAO recommendations related to its use of other transaction agreements in five areas. GAO’s analysis of DHS’s files and reports to Congress found gaps in the collection and reporting of information on other transactions. Specifically: DHS does not consistently document the rationale for entering into an other transaction agreement in the agreement analysis document, although DHS guidance requires it to do so. Recent annual reports to Congress did not contain information on all other transaction agreements. DHS does not collect information on the circumstances that permit the use of other transaction authority throughout the life of the agreement. Without complete information about the universe of other transaction agreements, neither Congress nor DHS can have full visibility into the use of this authority. What GAO Recommends GAO recommends that DHS (1) develop an action plan with specific time frames for fully implementing GAO’s prior recommendation on data collection and congressional reporting, (2) ensure full implementation of its guidance regarding documentation, and (3) establish a policy for reviewing the circumstances that permit the use of other transaction authority throughout the life of the agreement. DHS agreed with these recommendations.

gao_GAO-13-645

gao_GAO-13-645_0

In the absence of authorization to carry out the BRAC process, installation closures and realignments that are subject to the requirements in 10 U.S.C. § 2687, and Uses Them Hundreds of Time Per Year DOD and the military services have processes in place to meet statutory requirements for basing decisions, and according to DOD officials they use these processes to make hundreds of basing decisions each year that are not subject to 10 U.S.C. For example, in addition to closures and realignments, basing decisions can include actions such as reductions in force, disestablishments, changes to mission statements, and other organization changes. § 2687 or were undertaken with a statutorily authorized BRAC process. They also told us they do not anticipate that closures or realignments pursuant to this statute will take place in the near future, citing BRAC as the preferred method for implementing basing actions that are above statutory thresholds. § 2687 Each military service has its own processes for evaluating and implementing basing decisions, including proposals to close or realign installations outside of the BRAC process. Generally, the services’ basing decision processes use similar criteria, scope, and methodologies to determine where to locate the services’ force structure, and each process is documented in established guidance. Each service’s process requires a series of analyses, such as analysis of capability and capacity, cost estimates, and environmental considerations. According to service officials, this review provides them with data to determine whether the basing action is above or below 10 U.S.C. In addition to the requirement to provide data on the effect on civilian personnel, each service’s basing decision process includes legal reviews of basing decisions, which, according to service officials, occur at multiple stages throughout the process and ensure compliance with 10 U.S.C. Specifically, closures and realignments that trigger congressional notification and waiting include any: closure of any installation with 300 or more direct-hire permanent DOD civilian authorized positions (this includes all authorized positions, regardless of whether they are vacant or filled); or realignment of any installation with 300 or more direct-hire permanent DOD civilian authorized positions (vacant or filled), if the realignment will involve a reduction by (1) 1,000 or more civilian positions, or (2) 50 percent or more of the total civilian authorized positions. The January 2011 disestablishment of Joint Forces Command led to approved basing decisions that, according to DOD, reduced civilian personnel and eliminated functions at multiple installations, but did not exceed the personnel threshold of 10 U.S.C. For example, one of the installations affected by the disestablishment of Joint Forces Command was Naval Support Activity Norfolk, Virginia—the installation where Joint Forces Command was headquartered. Naval Support Activity Norfolk, according to DOD documents, had approximately 3,200 civilian personnel at the time of the disestablishment, of which 1,058 (about 33 percent) were Joint Forces Command personnel. According to DOD, a significant number of Joint Forces Command functions and positions were eliminated through a reduction in force—an action that is not subject to 10 U.S.C. § 2687—and the remainder were part of a realignment of Naval Support Activity Norfolk, which fell below the statutory thresholds of 1,000 authorized civilian personnel or 50 percent of the total civilian personnel authorized to be employed at the installation. § 2687 threshold, the Army was not required to conduct evaluations and submit congressional notifications pursuant to 10 U.S.C. In its written comments, reproduced in appendix II, DOD stated this report, in general, explains the processes it follows to comply with requirements for closing or realigning installations outside of a congressionally authorized BRAC process. (b) No action described in subsection (a) with respect to the closure of, or a realignment with respect to, any military installation referred to in such subsection may be taken unless and until— (1) the Secretary of Defense or the Secretary of the military department concerned notifies the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives, as part of an annual request for authorization of appropriations to such Committees, of the proposed closing or realignment and submits with the notification— (A) an evaluation of the fiscal, local economic, budgetary, environmental, strategic, and operational consequences of such closure or realignment; and (B) the criteria used to consider and recommend military installations for such closure or realignment, which shall include at a minimum consideration of— (i) the ability of the infrastructure (including transportation infrastructure) of both the existing and receiving communities to support forces, missions, and personnel as a result of such closure or realignment; and (ii) the costs associated with community transportation infrastructure improvements as part of the evaluation of cost savings or return on investment of such closure or realignment; and (2) a period of 30 legislative days or 60 calendar days, whichever is longer, expires following the day on which the notice and evaluation referred to in clause (1) have been submitted to such committees, during which period no irrevocable action may be taken to effect or implement the decision.

Why GAO Did This Study DOD may be required to meet specific statutory requirements before closing or realigning installations that are authorized to employ 300 or more DOD civilians. In light of these requirements, DOD has historically used the BRAC process for closing or realigning bases that are above statutory thresholds. However, in March 2012, the Deputy Under Secretary of Defense (Installations and Environment) testified that because of fiscal and strategic imperatives, in the absence of an additional BRAC round, DOD may be forced to use its existing authorities to begin to realign and close bases. Subsequently, the National Defense Authorization Act for Fiscal Year 2013 mandated GAO to review the processes that DOD uses to close and realign military installations outside of the BRAC process. This report describes the extent to which DOD has processes in place to implement installation closures and realignments within the United States, and the extent to which DOD has implemented closures and realignments outside of the BRAC process. To conduct its work, GAO examined DOD's approach to implementing basing actions and interviewed DOD officials to identify how their approach ensures compliance with 10 U.S.C. 2687. GAO is not making any recommendations in this report. In commenting on this report DOD stated the report, in general, explains the processes it follows to comply with requirements for closing or realigning installations outside of a congressionally authorized BRAC process. What GAO Found The Department of Defense (DOD) and the military services have processes to meet statutory requirements for base closures and realignments, and use these processes hundreds of times each year to make basing decisions outside of the Base Realignment and Closure (BRAC) process. These processes provide guidance for all types of basing actions, including, but not limited to base closures and realignments. For example, basing decisions can include actions such as reductions in force, disestablishments, renaming a command, and other organization changes. Generally, each service's basing decision process uses similar criteria, scope, and methodologies to determine where to locate its force structure, and each process is documented in established guidance. Each service's process requires a series of analyses, such as analysis of capability and capacity, cost estimates, and environmental considerations. Additionally, each service basing decision process includes legal reviews and an evaluation of the effect on civilian personnel. According to service officials, these reviews provide them data to determine whether a closure or realignment is above thresholds established in section 2687 of Title 10, U.S. Code (hereafter 10 U.S.C. 2687), and therefore subject to additional evaluations and congressional notification. Specific statutory thresholds include: closure of any installation with 300 or more direct-hire DOD civilian authorized positions (this includes all authorized positions, regardless of whether they are vacant or filled); and realignment of any installation with 300 or more direct-hire DOD civilian authorized positions (vacant or filled), if the realignment will reduce the installation by 1,000 or more civilian positions, or 50 percent or more of the total civilian authorized positions. DOD has conducted closures or realignments that have either fallen below the thresholds of 10 U.S.C. 2687 or were authorized by the BRAC process, according to DOD officials. For example, the January 2011 disestablishment of Joint Forces Command was a basing decision that, according to DOD, reduced civilian personnel and eliminated functions at multiple installations, but did not require evaluations and congressional notification pursuant to 10 U.S.C. 2687. Specifically, one of the installations affected by the disestablishment of Joint Forces Command was Naval Support Activity Norfolk, Virginia--the installation where Joint Forces Command was headquartered. Naval Support Activity Norfolk had approximately 3,200 civilian personnel at the time of the disestablishment, of which 1,058 (about 33 percent) were Joint Forces Command personnel. According to DOD, a significant number of Joint Forces Command functions and positions were eliminated through a reduction in force--an action that is not subject to 10 U.S.C. 2687--and the remainder were part of a realignment of Naval Support Activity Norfolk that fell below the statutory thresholds of 1,000 authorized civilian personnel or 50 percent of the total civilian personnel authorized to be employed at the installation. Officials also told us they do not anticipate any future closures or realignments pursuant to this statute, citing BRAC as the preferred method for implementing basing actions that are above statutory thresholds.

gao_GAO-16-546

gao_GAO-16-546_0

Four Federal Agencies Manage Ten Efforts to Collect Data on Sexual Violence, which Differ in Target Population, Terminology, Measurements, and Methodology Federal Agencies Collect Sexual Violence Data on the General Population and on Segments of the Population Four federal agencies manage at least 10 data collection efforts that include data on sexual violence, among other things. Some of these data collection efforts focus on a target population that the agency serves. Data Collection Efforts Differ in the Terms They Use to Describe Sexual Violence, and Measurements and Definitions for Some Efforts are Inconsistent Data collection efforts use a range of terms to describe sexual violence in publicly-available agency documentation. Further, these data collection efforts do not have publicly-available descriptions of what is included in their respective measurements to allow persons using the data to understand the differences. Differences in Data Collection Efforts May Hinder the Understanding of the Occurrence of Sexual Violence; Agencies Have Taken Steps to Explain and Lessen Differences, but Efforts Have Been Fragmented and Limited in Scope The differences across the data collection efforts may hinder understanding of the extent of sexual violence, and agencies have taken steps to clarify differences and harmonize the data collection efforts. Differences in Data Collection Efforts Collectively May Hinder Understanding of the Extent of Sexual Violence Collectively, the differences across federal data collection efforts lead to differing estimates of sexual violence, for example rape, in the United States, as shown in selected data collection efforts on the general population in table 4. Also, as previously discussed, some data collection efforts’ measurements and definitions do not align and information on what is included in these measurements is not publicly available, which may lead to confusion for data users. Further, officials from the federal agencies and entities we spoke with that use federal data on sexual violence emphasized that the differences across the data collection efforts are such that the results are not comparable. Agencies Have Taken Some Steps to Clarify Differences across Sexual Violence Data Collection Efforts, but Efforts to Harmonize the Data Collection Efforts Have Been Fragmented Federal agencies have acknowledged that differences exist among data collection efforts, for example in terms of methodology, context, and data sources, which has led some agencies to take steps to identify and explain differences across the data collection efforts. Specifically, coordination has been bilateral—generally involving only 2 of the 10 data collection efforts at a time and limited in scope. For example, OMB has convened the following interagency groups: The Interagency Working Group for Research on Race and Ethnicity was formed in 2014 to exchange research findings, identify implementation issues, and collaborate on a shared research agenda to improve federal statistics on race and ethnicity. Recommendations for Executive Action To enhance the clarity and transparency of sexual violence data that is reported to the public, we recommend that the Secretary of Education direct the Assistant Secretary for the Office of Postsecondary Education, the Secretary of Health and Human Services direct the Director of CDC, and the Attorney General direct the Director of BJS to make information on the acts of sexual violence and contextual factors that are included in their measurements of sexual violence publicly available. In an email responding to our recommendation that OMB establish a federal interagency forum on sexual violence statistics, OMB stated that it did not believe convening a forum at this time was the most strategic use of resources. Appendix I: Objectives, Scope and Methodology Our objectives for this report were to address the following questions: (1) What are the federal efforts underway to collect data on sexual violence, and how, if at all, do these efforts differ? (2) How do any differences across the data collection efforts affect the understanding of sexual violence, and to what extent are federal agencies addressing any challenges posed by the differences? To address the first question, we identified federal efforts to collect data on sexual violence, for which the data: provided information on the extent to which acts of sexual violence occur in the United States in a particular year (for example, the number of times a rape or sexual assault has occurred or the number of victims of rape and sexual assault); were collected recently (i.e., 2010 or after); were collected periodically (i.e., at least once every 2 years); were reported publicly; and were not focused primarily on minors.

Why GAO Did This Study Concerns have grown about sexual violence—in general, unwanted sexual acts—in the United States, particularly involving certain populations such as college students, incarcerated individuals, and military personnel. Data on the occurrence of sexual violence are critical to preventing, addressing, and understanding the consequences of these types of crimes. GAO was asked to identify and compare federal efforts to collect data on sexual violence. This report addresses two questions: (1) What are the federal efforts underway to collect data on sexual violence, and how, if at all, do these efforts differ? (2) How do any differences across the data collection efforts affect the understanding of sexual violence, and to what extent are federal agencies addressing any challenges posed by the differences? GAO reviewed agency documentation and academic literature, and interviewed agency officials. What GAO Found Four federal agencies—the Departments of Defense, Education, Health and Human Services (HHS), and Justice (DOJ)—manage at least 10 efforts to collect data on sexual violence, which differ in target population, terminology, measurements, and methodology. Some of these data collection efforts focus on a specific population that the agency serves—for example, the incarcerated population—while others include information from the general population. These data collection efforts use 23 different terms to describe sexual violence. Data collection efforts also differ in how they categorize particular acts of sexual violence. For example, the same act of sexual violence could be categorized by one data collection effort as “rape,” whereas it could be categorized by other efforts as “assault-sexual” or “nonconsensual sexual acts,” among other terms. In addition, five data collection efforts—overseen by Education, HHS, and DOJ—reflect inconsistencies between their measurements and definitions of sexual violence. Further, these data collection efforts do not have publicly-available descriptions of what is included in their respective measurements to allow persons using the data to understand the differences, which may lead to confusion for data users. Publicly-available measurement information could enhance the clarity and transparency of sexual violence data. Data collection efforts also differ in terms of the context in which data are collected, data sources, units of measurement, and time frames. Differences in data collection efforts may hinder the understanding of the occurrence of sexual violence, and agencies' efforts to explain and lessen differences have been fragmented and limited in scope. Differences across the data collection efforts may address specific agency interests, but collectively, the differences lead to varying estimates of sexual violence. For example, in 2011 (the most recent year of available data), estimates ranged from 244,190 rape or sexual assault victimizations to 1,929,000 victims of rape or attempted rape. These differences can lead to confusion for the public. Officials from federal agencies and entities GAO spoke with who use federal data on sexual violence emphasized that the differences across the data collection efforts are such that the results are not comparable, and entities reported using data that best suited their needs. Agencies have taken some steps to clarify the differences between the data collection efforts. For example, two DOJ entities coauthored a statement that describes the differences between their two efforts. In addition, agencies have taken some steps to harmonize the data collection efforts—that is, coordinate practices to achieve a shared goal. However, actions to increase harmonization have been fragmented, generally only involving 2 of the 10 data collection efforts at a time, and limited in scope. The Office of Management and Budget (OMB) through its authority to coordinate federal statistics has previously convened interagency working groups, such as the Interagency Working Group for Research on Race and Ethnicity, to improve federal statistics. OMB has no plans to convene a working group on sexual violence data. Additional collaboration, facilitated by OMB, between agencies that manage data collection efforts about which differences help or hinder the overall understanding of sexual violence could help to clarify the scope of the problem of sexual violence in the United States. What GAO Recommends GAO recommends that Education, HHS, and DOJ make information that is included in their measurements of sexual violence publicly available. GAO also recommends that OMB establish a federal interagency forum on sexual violence data. Education, HHS, and DOJ agreed with the recommendation. OMB stated that convening a forum may not be the most effective use of resources at this time, in part because the data collection efforts are not far enough along in their research. However, OMB said it will consider convening or sharing information across agencies in the future.

gao_GAO-13-852T

gao_GAO-13-852T_0

Specifically, ESRA contains several key provisions related to the management, core functions, and processes of IES: all research conducted by IES is to use scientifically based research standards that include, where appropriate, making claims of causal relationships only in random assignment experiments; education evaluations conducted by IES are to employ experimental designs using random assignment, when feasible; all research, statistics, and evaluation reports conducted by or supported through IES must be subjected to rigorous peer review before being published or otherwise made available to the public; and the establishment of an advisory board—the NBES—whose duties include (1) advising and consulting with the Director of IES regarding its policies and approving the Director’s overall research priorities, and (2) reviewing and approving procedures for peer review and reviewing the work of IES to ensure the consistency of scientifically valid research. In addition to IES, other entities conduct education-related research and evaluations, and ESRA includes general requirements for the Director of IES to coordinate its research and evaluation work with these entities, both within Education and across the rest of the federal government. IES Has Supported High-Quality Research, but Lacks Key Processes and Performance Measures in Some Areas In our ongoing work, we found that IES has substantially improved the education research field. In 2007, the Office of Management and Budget (OMB) assessed IES’s research and concluded that since its inception, IES had transformed the quality and rigor of research within Education and increased demand for scientifically based evidence of effectiveness in the education field as a whole. Likewise, many stakeholders we spoke with said IES’s research standards have improved the quality of Education’s research and had a positive influence on education research generally. IES’s support of these multiple types of methodologies allows it to better meet its various stakeholders’ needs. Although IES has made recent efforts to increase the relevance of its research, IES does not have a structured process for incorporating feedback from policymakers and practitioners into its research agenda. In addition, according to our internal control standards and leading practices on performance management, agencies should establish performance measures for their activities and continually compare actual performance data against these goals. IES officials told us they have begun work on revising their performance measures. Officials told us that they plan to include revised performance measures in Education’s fiscal year 2015 budget request for IES, and that it has begun discussions with OMB to establish these new measures. Research and Technical Assistance Groups Take Steps to Disseminate Relevant Research, but IES Has Not Fully Assessed These Efforts Research and technical assistance groups have taken various steps to provide relevant research to the education field. Despite these efforts, stakeholders—including practitioners and policymakers—have raised concerns about the relevance and dissemination of some of the research and products these groups have produced. As a result, they do not always adapt their research findings in a format that is readily understandable by practitioners, such as by producing non-technical reports and shorter research summaries. In addition to concerns about relevance, REL and R & D Center dissemination efforts are not always reaching policymakers and practitioners. Further, IES does not collect sufficient information about RELs and R & D Centers to manage these groups’ efforts to disseminate relevant research. In addition, IES collects limited information to assess the R & D Centers’ dissemination efforts because IES does not require R & D Centers to report on their specific dissemination strategies or the strategies’ effectiveness. IES Coordinates with Other Federal Agencies, but Education Faces Challenges in Funding Program Evaluations IES coordinates with other federal education research agencies on projects to increase federal agencies’ use of research evidence in guiding funding decisions. For example, IES co-led a joint Education-National Science Foundation working group to develop common evidence guidelines for federally-funded research in education. Specifically, officials reported that Education does not have the authority to combine evaluation funds from programs across the Department and use them to evaluate any program.

Why GAO Did This Study The federal government has a longstanding role in conducting education research and collecting related data. The Education Sciences Reform Act of 2002 established IES as Education's primary research and evaluation arm. With a budget of just under $600 million in fiscal year 2013, IES has a broad mission to provide its research, evaluations, and statistics to a wide variety of stakeholders, including researchers, parents, educators, and the general public. This testimony reports on ongoing GAO work about IES. A full report will be issued later this year. Based on preliminary findings, this testimony will focus on: (1) the extent to which IES supports high-quality research and fulfills its mission, (2) the extent to which selected Education research and technical assistance groups disseminate relevant products to the education field, and (3) IES's coordination within Education and with other federal agencies. For this work, GAO reviewed agency documents and relevant federal legislation, interviewed agency officials and stakeholders, and analyzed information from selected research and technical assistance groups. GAO also compared IES's practices to established guidelines for internal controls and effective program management and performance reporting. What GAO Found The Institute of Education Sciences (IES) supports high-quality research, according to stakeholders, but lacks certain key procedures needed to fulfill other aspects of its mission. Since its inception, IES has substantially improved the quality of education research. However, stakeholders expressed some concerns about IES's ability to produce timely and relevant research that meets their various needs. For example, IES's efforts to respond quickly to its stakeholders are slowed, in part, because the time IES's products have spent in peer review substantially increased this past year, and IES does not monitor some aspects of these timeframes. In addition, IES does not have a structured process for incorporating stakeholder input into its research agenda, which previous GAO work has shown to be key to sound federal research programs. Lastly, IES's performance measures do not fully reflect its current programs, which is not consistent with GAO's leading practices for performance management. IES officials said, however, that they have begun to develop new performance measures for all of their programs. Although the Department of Education's (Education) research and technical assistance groups have taken steps to produce and disseminate relevant research to the field, IES does not always assess these efforts. Some stakeholders raised concerns about the relevance and dissemination of research and products from the Regional Educational Laboratories (REL) and Research and Development Centers (R & D Center). For example, they told us that these groups do not always adapt their products for use by both policymaker and practitioner audiences. Further, IES has not fully assessed REL and R & D Center relevance and dissemination efforts. As a result, IES does not know if these efforts are effective in meeting their mandated goal of providing usable research and information to policymakers and practitioners. GAO's prior work on information dissemination suggests that further assessment could help to inform IES's oversight of the RELs and R & D Centers to improve these groups' dissemination to key audiences. IES works with federal education research agencies to increase the use of research evidence in federal decision-making, but according to officials, has limited ability to prioritize evaluations. IES and the National Science Foundation recently developed guidelines to help improve the quality of evidence resulting from federally-funded education research, which stakeholders said will benefit the education field. Within the department, IES plans evaluations of Education programs in concert with various other offices. However, Education officials said funding and program evaluation requirements prevent the agency from combining evaluation funds across programs, which limits their ability to conduct the evaluation projects they consider most important.

gao_NSIAD-95-24

gao_NSIAD-95-24_0

RRF Use During the Persian Gulf War Of the 96 ships that were in the RRF in August 1990, 78 were called upon to support the Persian Gulf War. Specifically, we determined whether (1) the changes implemented to address problems encountered during war activations have improved the ships’ overall readiness, (2) the readiness level of the highest priority ships exceeds that of other strategic mobility components, and (3) a further decline in the number of available U.S. merchant mariners would have a long-term effect on crewing the force. It identified and corrected equipment deficiencies, instituted more uniform and comprehensive specifications for the deactivation and preservation of RRF ships, strengthened ship manager controls by expanding and clarifying the manager’s contractual responsibilities, and developed and implemented automated information systems for tracking maintenance repairs. These successful activations resulted largely from maintenance and repairs made during and after the war. Conclusions The readiness of the RRF has improved since the Persian Gulf War due to the $1 billion invested in the program. RRF Readiness Exceeds Other Deployment Components and Is Not Supportable On the basis of DOD’s 1992 Mobility Requirements Study, MarAd plans to keep 63 RRF ships in a high state of readiness (i.e., ready to activate within 4 or 5 days) starting in fiscal year 1996. Ability to Unload Ships Is Limited in Underdeveloped Overseas Ports The Army’s ability to meet its mobility requirements is also affected by its capability to deliver forces to underdeveloped or damaged overseas seaports. As part of that concept, auxiliary crane ships will be used to unload RRF ships. Therefore, MarAd should not have a labor supply problem for crewing RRF ships in the near term. As a result, the number of shipboard jobs decreased. Recommendation We recommend that the Secretary of Transportation direct the Maritime Administrator to annually assess whether an adequate number of experienced U.S. merchant mariners would be available to crew RRF ships within DOD’s specified time frames.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Ready Reserve Force (RRF) program, focusing on: (1) the readiness of RRF ships to respond to large-scale contingencies; (2) the program changes that were implemented to improve ship readiness and address problems encountered during the Persian Gulf War; (3) whether the readiness level of the highest-priority ships exceeds other strategic mobility components; and (4) the effect of further decreases in the number of available U.S. merchant mariners on RRF crew availability. What GAO Found GAO found that: (1) as a result of the problems it encountered during the Persian Gulf War, the Maritime Administration (MARAD) identified and corrected equipment deficiencies, instituted comprehensive specifications for the deactivation and preservation of RRF ships, strengthened ship manager controls, developed automated information systems for tracking maintenance repairs, and implemented new strategies for maintaining high-priority ships; (2) RRF ships will be able to meet their delivery schedules and sail within specified time frames as a result of maintenance and repairs performed during and after the Persian Gulf War; (3) MARAD ability to activate ships within 4 or 5 days exceeds the readiness level of other strategic mobility components; (4) the Army's ability to transfer unit equipment from key Army installations to seaports is constrained by deteriorated facilities; (5) although the Army plans to increase its capability to activate ships within 4 or 5 days, most projects will not be completed by 1999; (6) the Department of Defense has not justified maintaining 63 ships in a high state of readiness; (7) although the reduced number of available mariners should not immediately affect MARAD ability to crew RRF ships, its future ability to crew RRF ships is questionable; and (8) none of the proposed alternatives to resolve this situation have been adopted.

gao_GAO-02-274

gao_GAO-02-274_0

The formula, first adopted in 1982 under the Job Training Partnership Act, was grandfathered into the dislocated worker program under WIA. With Greater Flexibility, Local Workforce Areas Tailored Services to Meet Dislocated Worker Needs With the greater flexibility granted by WIA, local workforce areas are likely to offer services tailored to local needs and services that emphasize a quick return to employment. Officials from several of the local areas that we visited confirmed that they viewed WIA as a work-first program that emphasizes returning dislocated workers to the workforce. Of these areas, nine enrolled fewer dislocated workers and five enrolled an equal or greater number of dislocated workers in training under WIA (see fig. WIA Flexibility Allowed States To Use Set-Aside Funds for Various Statewide Activities in Addition to Rapid Response States used the flexibility under WIA to decide how much of their set-aside funds to spend on rapid response for dislocated workers and how much to spend on other statewide activities. In fact, almost all of the states that had a trigger for state rapid response said that local staff in their states may have provided rapid response services for layoffs and plant closings that were too small to trigger rapid response by the state unit. During program year 2000, the unit responded to 158 events affecting 50 or more workers and 149 events affecting fewer than 50 workers.

What GAO Found Under the Workforce Investment Act, local workforce areas are likely to offer dislocated workers services that are tailored to local needs and that emphasize a quick return to employment. Nine of the local workforce areas that GAO visited emphasized a quick return to work and enrolled fewer dislocated workers into training than were enrolled under the Job Training Partnership Act (JTPA). Five local areas enrolled into training an equal or greater number of dislocated workers than were enrolled under JTPA. States used the act's flexibility to decide how much of their set-aside funds to spend on rapid response for dislocated workers and how much to spend on other statewide activities. Most of the 50 states that responded to a GAO survey on rapid response activities said that their state unit provided services when layoffs and plant closings involved 50 or more workers and that the state generally relied on local workforce area officials to provide rapid response services for layoffs affecting fewer workers. Workforce officials in several states expressed concern that the act's dislocated worker funding formula causes dramatic fluctuations in funding that are unrelated to the number of dislocated workers in the state.

gao_GAO-08-1031

gao_GAO-08-1031_0

Background Iraq possesses the third largest oil reserve in the world, estimated at a total of 115 billion barrels. As of June 2008, Iraq’s crude oil export averaged 2.01 million barrels per day (mbpd), according to Iraqi oil export receipt data (see fig. 2). Iraq’s Revenues from 2005 through 2007 From 2005 through 2007, the Iraqi government generated an estimated $96 billion in cumulative revenues. Iraq’s Estimated Revenues for 2008 For 2008, we estimate that Iraq could generate between $73.5 billion to $86.2 billion in total revenues. As a result, we project that Iraq could generate between $66.5 billion and $79.2 billion in oil revenues in 2008, more than twice the average annual amount Iraq generated from 2005 through 2007. For the last 6 months of 2008, we varied the volume exported from 1.89 to 2.01 mbpd and price received from $96.88 to $125.29 per barrel. Government of Iraq’s 2005 through 2007 Expenditures From 2005 through 2007, the Iraqi government spent an estimated $67 billion on a variety of operating and investment activities, as reported by the Ministry of Finance. Investment expenses include capital goods and capital projects such as structures, machinery, and vehicles. The Iraqi government spent about $947 million, or 1 percent of its total expenditures for the maintenance of Iraqi- and U.S.-funded investments. These expenses include maintenance of roads, bridges, vehicles, buildings, water and electricity installations, and weapons. For example, in 2007, the Iraqi government spent 80 percent of its $28.9 billion operating budget and 28 percent of its $12.2 billion investment budget. Estimated Government of Iraq’s Expenditures for 2008 In 2008, we estimate that the Iraqi government could spend between $35.3 billion and $35.9 billion of its $49.9 billion 2008 budget. Iraq’s Financial Deposits through 2007 and Budget Surplus As of December 31, 2007, the Iraqi government had financial deposits of $29.4 billion held in the Development Fund for Iraq (DFI) at the New York Federal Reserve Bank, central government deposits at the Central Bank of Iraq (CBI), and central government deposits in Iraq’s commercial banks, which includes state-owned banks such as Rafidain and Rasheed (see table 3). If approved and then spent, the proposed budget supplemental would reduce the projected surplus. United States Funding on Stabilization and Reconstruction Activities in Iraq and Iraqi Funding for Similar Activities Since fiscal year 2003, Congress has appropriated about $48 billion to U.S. agencies to finance stabilization and reconstruction efforts in Iraq, including developing Iraq’s security forces, enhancing Iraq’s capacity to govern, and rebuilding Iraq’s oil, electricity, and water sectors, among others. Allocations in the security sector account for $22.5 billion of the U.S. amount. Factors Affecting Iraq’s Efforts to Accelerate Spending U.S. government, coalition, and international agencies have identified a number of factors affecting the Iraqi government’s ability to spend more of its revenues on capital investments intended to rebuild its infrastructure. These factors include Iraq’s shortage of trained staff, weak procurement and budgeting systems, and violence and sectarian strife. As we have previously reported, the United States has funded efforts since 2005 to build the capacity of key civilian ministries and security ministries to improve the Iraqi government’s ability to effectively execute its budget for capital projects. Treasury agreed with the findings of this report. Treasury noted that Iraq has adequate funds to make and maintain capital investments that deliver services and create conditions that foster economic growth. Appendix I: Scope and Methodology In this report, we discuss (1) Iraq’s estimated revenues from 2005 through 2008, (2) Iraq’s estimated expenditures from 2005 through 2008, (3) Iraq’s financial deposits through 2007 and budget surpluses, (4) U.S. cumulative expenditures on stabilization and reconstruction activities in Iraq since 2003, and (5) factors affecting Iraq’s efforts to accelerate spending. To complete this work, we analyzed relevant data, reviewed U.S. agency and International Monetary Fund (IMF) documents, and interviewed officials from the Departments of State, Defense, and the Treasury; Department of Energy’s Energy Information Administration (EIA); and the IMF. Crude oil export revenues are based on export oil receipts data from the Central Bank of Iraq (CBI) provided by the Department of the Treasury.

Why GAO Did This Study Iraq has an estimated 115 billion barrels of crude oil reserves, the third largest in the world. Oil export revenues are critical to Iraq's reconstruction, accounting for over 90 percent of the Iraqi government's revenues. In June 2008, GAO reported low 2007 spending rates by the Iraqi government for some critical sectors in the face of declining U.S. investments in these sectors. This report examines (1) Iraq's estimated revenues from 2005 through 2008, (2) Iraq's estimated expenditures from 2005 through 2008, (3) Iraq's financial deposits through 2007 and budget surpluses, (4) U.S. cumulative expenditures on stabilization and reconstruction activities in Iraq since 2003, and (5) factors affecting Iraq's efforts to accelerate spending. GAO analyzed relevant data and reviewed documents, including Central Bank of Iraq oil receipts data, International Monetary Fund's (IMF) reports, translated copies of Iraqi budget and expenditures, and U.S. agency funding data and reports. GAO also interviewed officials from the Departments of Defense (DOD), Energy, State, Treasury, and the IMF. This report contains no recommendations. Treasury agreed with the report's findings and stated that Iraq has adequate funds to make and maintain capital investments that deliver services and foster economic growth. State provided technical comments. DOD had no comments. What GAO Found From 2005 through 2007, the Iraqi government generated an estimated $96 billion in cumulative revenues, of which crude oil export sales accounted for about $90.2 billion, or 94 percent. For 2008, GAO estimates that Iraq could generate between $73.5 billion and $86.2 billion in total revenues, with oil exports accounting for between $66.5 billion to $79.2 billion. Projected 2008 oil revenues could be more than twice the average annual amount Iraq generated from 2005 through 2007. These projections are based on actual sales through June 2008 and projections for July to December that assume an average export price from $96.88 to $125.29 per barrel and oil export volumes of 1.89 to 2.01 million barrels per day. From 2005 through 2007, the Iraqi government spent an estimated $67 billion on operating and investment activities. Ninety percent was spent on operating expenses, such as salaries and goods and services, and the remaining 10 percent on investments, such as structures and vehicles. The Iraqi government spent only 1 percent of total expenditures to maintain Iraq- and U.S.-funded investments such as buildings, water and electricity installations, and weapons. While total expenditures grew from 2005 through 2007, Iraq was unable to spend all its budgeted funds. In 2007, Iraq spent 80 percent of its $29 billion operating budget and 28 percent of its $12 billion investment budget. For 2008, GAO estimates that Iraq could spend between $35.3 billion and $35.9 billion of its $49.9 billion budget. As of December 31, 2007, the Iraqi government had accumulated financial deposits of $29.4 billion, held in the Development Fund for Iraq and central government deposits at the Central Bank of Iraq and Iraq's commercial banks. This balance is the result, in part, of an estimated cumulative budget surplus of about $29 billion from 2005 to 2007. For 2008, GAO estimates a budget surplus of between $38.2 billion to $50.3 billion. If spent, a proposed Iraqi budget supplemental of $22 billion could reduce this projected surplus. Since fiscal year 2003, the United States appropriated about $48 billion for stabilization and reconstruction efforts in Iraq; it had obligated about $42 billion of that amount as of June 2008. U.S. agencies spent about $23.2 billion on the critical security, oil, electricity, and water sectors. From 2005 through April 2008, Iraq spent about $3.9 billion on these sectors. U.S. government, coalition, and international officials have identified a number of factors that have affected the Iraqi government's ability to spend more of its revenues on capital investments. These factors included the shortage of trained staff; weak procurement and budgeting systems; and violence and sectarian strife. The United States has funded activities to help build the capacity of key civilian and security ministries to improve Iraq's ability to execute its capital project budget.

gao_GAO-02-55

gao_GAO-02-55_0

A key component of these services is FAA’s air traffic controller workforce, which includes its air traffic controllers and their supervisors. In July 1998, in negotiating with its air traffic controllers’ union, NATCA, FAA agreed to a national plan to reduce the number of supervisors and increasingly use CICs to provide watch supervision. Nationwide, FAA’s facilities selected over 8,250 air traffic controllers to be CICs. A total of 8,268 controllers—over 55 percent of the 15,000 controllers at FAA facilities— have been certified as CICs. Although supervisors certified that most controllers who took the training were qualified to be CICs and FAA conducted assessments of training at 15 facilities, FAA has not obtained student evaluations from most of those who completed the course or conducted an overall evaluation of the training’s effectiveness. Furthermore, FAA has not conducted an overall evaluation of the training program. Implementation of Quality Assurance Measures for the CIC Expansion Was Inconsistent Five of the 12 facilities we visited did not have quality assurance measures in place for the CIC expansion even though, according to FAA, such measures should be used. FAA believes it needs more data than it currently collects to comprehensively measure controller productivity. Cost Savings Will Be Less Than FAA Estimated Currently, FAA can expect about $23.1 million less in savings than it first estimated after taking into account two factors—one which reduces its net savings and one which increases them (partially offsetting the reduction): (1) FAA’s initial estimate did not take into account the 10-percent premium controllers earn for serving as CICs (which it began paying upon signing the agreement) and (2) supervisory attrition to date has been happening somewhat faster than FAA first estimated. We estimate that the CIC premium will amount to over $41.5 million over the life of the 1998 agreement (through fiscal year 2003). For example, FAA estimated it would lose by attrition about 100 supervisors each fiscal year. Recommendations for Executive Action To better ensure that controllers develop and maintain proficiency in CIC duties and that the reductions in supervisors do not adversely affect safety, the Secretary of Transportation should direct the Federal Aviation Administrator to evaluate the effectiveness of the CIC training program to verify that it develops the knowledge and skills controllers need to perform watch supervision duties, provide periodic refresher training as needed in CIC duties for controllers, better communicate and enforce its requirement that all of its facilities have in place CIC quality assurance procedures to measure the effects of supervisory reductions and the increased use of CICs, and assess the productivity of its controller workforce in each of its upcoming annual status reports on the 1998 agreement. Section 4. Section 5.

Why GAO Did This Study Each day, nearly two million passengers on 25,000 flights depend on the Federal Aviation Administration's (FAA) Air Traffic Control (ATC) system to safely reach their destinations. Because the ATC system requires thousands of controllers, each of whom typically manages just a section of airspace or one aspect of an aircraft's takeoff or landing, FAA depends on supervisors to monitor air traffic operations and controllers' workload and performance to ensure that the system is operating safely. In negotiating its 1998 collective bargaining agreement with its controllers' union, FAA agreed to a national plan that would reduce by attrition the number of supervisors who oversee air traffic controllers. To avoid compromising safety, FAA will increasingly have its controllers performing supervisory duties as Controllers-in-Charge (CIC) when supervisors are not present. Nationwide, FAA has selected 8,268 controllers to serve as CICs, which is about 55 percent of its air traffic controller workforce. What GAO Found GAO found that the materials for FAA's CIC training program were through and comprehensive, but FAA has little assurance that the training was effectively presented and achieved its objectives. Although FAA assessed training at a few facilities, the agency has not obtained evaluations from most of the students who completed the course or conducted an overall evaluation of whether the training was effective. FAA has not consistently implemented its quality assurance procedures for the CIC expansion. Five of the 12 facilities GAO visited did not have quality assurance measures in place for the CIC expansion, and the remaining seven facilities relied on their existing quality assurance programs to monitor the impact of the CIC expansion. The reduction of supervisors will save FAA $141.5 million, or about $23.1 million less than it estimated. FAA did not factor in the 10-percent premium FAA pays controllers for serving as CICs, which GAO estimates will cost $41.5 million over the five-year life of the agreement, but supervisory attrition has been happening faster than FAA estimated, increasing its net savings by about $18.4 million. To fully assess productivity gains from its initiatives, FAA believes it needs more data. FAA expects to have a system in place to capture productivity data by fiscal year 2002.

gao_AIMD-95-5

gao_AIMD-95-5_0

In addition, the NMMSS provides NRC with data on nuclear materials accountability and safeguards for NRC licensees. U.S. Ability to Track Nuclear Materials Internationally Is Limited The United States relies primarily on the NMMSS to track the nuclear materials that it exports to foreign countries. However, this system does not have all of the information needed to track the current location and status of all nuclear materials of U.S. origin that are supplied to foreign countries. The amounts, types, and reliability of the data contained in the NMMSS depend largely on data reported under the international agreements for cooperation, as well as on foreign countries’ and on U.S. and foreign facilities’ willingness to report complete and accurate data. In addition, DOE did not adequately plan the development effort for the new NMMSS. In addition, because the new NMMSS will simply replicate the current NMMSS’ functions, it will be subject to the same nuclear materials tracking limitations that existed previously. DOE has initiated efforts to improve the United States’ ability to track nuclear materials internationally. Physical Protection of Exported U.S.-Supplied Nuclear Materials Requires Foreign Countries’ Cooperation To ensure the physical protection of exported U.S.-supplied civilian-use nuclear materials, the United States relies on the protection systems in recipient countries, these countries’ compliance with IAEA’s guidelines, and U.S. evaluations of the adequacy of their physical protection systems (e.g., security devices and guards, etc.). We also reviewed the new NMMSS’ planning documentation.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed how the United States tracks its exported civilian nuclear materials and ensures their physical protection, focusing on the: (1) capabilities of the Department of Energy's (DOE) computerized Nuclear Materials Management and Safeguards System (NMMSS) to track the international movement of nuclear materials; and (2) adequacy of DOE planned new NMMSS. What GAO Found GAO found that: (1) the United States relies primarily on NMMSS to track exported nuclear materials, but the system does not have enough information to track all nuclear materials that are supplied to foreign countries; (2) the reliability of NMMSS data depends on the data reported under international agreements, as well as foreign countries' willingness to report complete and accurate data; (3) the new NMMSS will replicate current NMMSS functions and contain the same tracking limitations that currently exist; (4) DOE has not adequately planned the development effort for the new NMMSS and cannot ensure that the new NMMSS will meet users' needs; (5) neither the current nor planned new NMMSS can provide data on nuclear materials of foreign origin; (6) DOE collects information on nuclear materials worldwide through other sources that may not always be accurate; (7) the U.S. government's ability to ensure that exported nuclear materials are adequately protected is contingent on foreign countries' cooperation; and (8) while the United States conducts on-site evaluations of foreign countries' physical protection systems, recommendations that may result from these visits are not binding on the country.

gao_RCED-96-5

gao_RCED-96-5_0

Federal negotiators involved in this effort were not trying to build collaboration and consensus among federal and nonfederal stakeholders but to reach a fair settlement for the federal government. Lessons Learned in South Florida Among the lessons learned so far in implementing environmental restoration efforts in South Florida is that nonfederal stakeholders would generally prefer to present their concerns, positions, and supporting documentation during rather than after the development of federal proposals to address environmental concerns. In the final analysis, the most that a federal agency may be able to achieve is an open airing and full consideration of all views within the constraints imposed by external factors, and any conclusion about the extent to which an agency or effort meets this objective is highly subjective. Federal agencies have involved nonfederal stakeholders in their efforts to restore the environment of South Florida, and some, including the Interagency Task Force on the South Florida Ecosystem and the Corps, are considering alternatives to increase public involvement. The recommendation now focuses on constraints to formal participation by nongovernmental interests in federal restoration efforts. In one instance, the working group denied several requests by the chairman of the Florida Keys National Marine Sanctuary Advisory Council (see app. The overall strategy for involving the public in the reconnaissance phase was to solicit information from the public for use by the study team and then provide feedback to the public on how the information was being used. GAO’s Response: We revised the report to recognize that the working group had expanded its membership to include state and tribal officials.

Why GAO Did This Study Pursuant to congressional requests, GAO reviewed: (1) federal efforts to involve nonfederal stakeholders in environmental restoration efforts in South Florida; and (2) the lessons learned about federal and nonfederal collaboration and consensus-building in South Florida that might be applicable elsewhere. What GAO Found GAO found that: (1) federal agencies have involved nonfederal stakeholders in their environmental restoration efforts in South Florida by making their meetings and draft products publicly available, establishing groups with nonfederal members, holding workshops, soliciting information from the public and then providing feedback on how it was used, and entering into formal mediation; (2) the working group of the Interagency Task Force on the South Florida Ecosystem includes state and tribal officials, but it does not include local officials and representatives of nongovernmental interests; (3) restrictions on and uncertainties about advisory committees have limited nonfederal interests in federal restoration efforts except those for the Florida Keys National Marine Sanctuary; (4) nonfederal stakeholders prefer to present their environmental concerns during rather than after the development of federal environmental proposals; (5) external constraints often dictate the extent of nonfederal involvement in agency activities and preclude a consensus on appropriate solutions; and (6) the most federal agencies may be able to achieve is an open airing and full consideration of all views within the constraints imposed by external factors.

gao_GAO-11-740

gao_GAO-11-740_0

TSA Has Revised Explosives Detection Requirements for Checked-Baggage- Screening Systems, but Faces Challenges in Deploying Equipment to Meet the Requirements In 2005, TSA revised explosives detection requirements for the EDS; however, some number of the EDSs are currently operating at the levels to detect explosives as set forth only in the 2005 requirements. In January 2010, TSA again revised the EDS explosives detection requirements and plans to deploy EDSs meeting these requirements in a tiered and phased approach over a number of years. However, as of January 2011, some number of the EDSs in TSA’s fleet are configured to detect explosives at the levels established only in the 2005 requirements. At all airports that use EDSs to screen checked baggage, ETD machines are used in conjunction with EDSs to screen checked baggage for explosives. First, TSA has experienced challenges in collecting explosives data on the physical and chemical properties of certain explosives needed by vendors to develop EDS detection software and needed by TSA before procuring and deploying EDSs to meet the 2010 requirements. However, officials stated that they subsequently decided to collect explosives data at the same time as implementing the current EDS acquisition because TSA and other stakeholders believed that the data collection effort would be straightforward and that the new requirements could be easily applied to machines procured in the current EDS acquisition. For example, by completing data collection for each of the phases of the 2010 EDS requirements prior to pursuing procurements for EDSs that meet those requirements, TSA could avoid additional delays to the acquisition schedule due to any data collection challenges. Documenting a plan to separate data collection efforts and certification from future procurements could help TSA ensure it avoids the challenges it has encountered during the current procurement. However, TSA has not yet developed a plan or cost estimate for the planned upgrades. While there is no IMS for the EBSP, TSA has established a schedule for the current EDS acquisition. TSA Has No Plan in Place Outlining How It Will Upgrade Deployed EDSs to Fully Meet the 2010 Requirements TSA officials stated that they expect to upgrade an unknown number of the current fleet of 2,297 EDSs and 260 of the EDSs to be purchased under the current acquisition after they are deployed to airports to fully meet all phases of the 2010 requirements. However, until TSA develops a plan identifying how it will approach the upgrades for currently deployed EDSs—and the plan includes such items as estimated costs, the number of machines that can be upgraded, time frames for upgrading them, and the number of times a given machine must be upgraded to meet the 2010 EDS requirements—it will be difficult for TSA to provide reasonable assurance that its upgrade approach is feasible or cost- effective. DHS also stated that, per the recommendations of GAO and DHS, TSA is developing a master schedule to document timelines associated with various projects. DHS concurred with our sixth recommendation to develop a plan to deploy EDSs that meet the most recent EDS explosives detection requirements and ensure that new machines, as well as machines deployed in airports, will be operated at the levels established in those requirements. GAO staff who made major contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology This report discusses: (1) the extent to which TSA has revised explosives detection requirements and deployed EDSs and ETDs to meet these revised requirements; (2) any challenges that TSA and the Department of Homeland Security’s (DHS) Science and Technology Directorate (S&T) have experienced in implementing the EDS acquisition; and (3) the extent to which TSA’s approach to its EDS acquisition meets best practices for schedule and cost estimates, and includes plans for potential upgrades to deployed EDSs. Appendix III: GAO’s Assessment of the Extent to Which the Electronic Baggage- Screening-Program Schedule Meets Established Best Practices In determining the extent to which the Transportation Security Administration’s (TSA’s) Electronic Baggage Screening Program (EBSP) schedule meets established best practices, we identified that TSA did not have an integrated master schedule (IMS) for the program.

Why GAO Did This Study Explosives represent a continuing threat to aviation security. The Transportation Security Administration (TSA), within the Department of Homeland Security (DHS), seeks to ensure through the Electronic Baggage Screening Program (EBSP) that checked-baggage-screening technology is capable of detecting explosives. Generally, the explosives detection system (EDS) is used in conjunction with explosives trace detection (ETD) machines to identify and resolve threats in checked baggage. As requested, GAO assessed the extent to which: (1) TSA revised explosives detection requirements and deployed technology to meet those requirements, and (2) TSA's approach to the current EDS acquisition meets best practices for schedules and cost estimates and includes plans for potential upgrades of deployed EDSs. GAO analyzed EDS requirements, compared the EDS acquisition schedule against GAO best practices, and interviewed DHS officials. This is a public version of a sensitive report that GAO issued in May 2011. What GAO Found TSA revised EDS explosives detection requirements in January 2010 to better address current threats and plans to implement these requirements in a phased approach. The first phase, which includes implementation of the previous 2005 requirements, is to take years to fully implement. However, deploying EDSs that meet 2010 requirements could prove difficult given that TSA did not begin deployment of EDSs meeting 2005 requirements until 4 years later in 2009. As of January 2011, some number of the EDSs in TSA's fleet are detecting explosives at the level established in 2005. The remaining EDSs in the fleet are configured to meet the 1998 requirements because TSA either has not activated the included software or has not installed the needed hardware and software to allow these EDSs to meet the 2005 requirements. Developing a plan to deploy and operate EDSs to meet the most recent requirements could help ensure EDSs are operating most effectively and should improve checked-baggage screening. However, TSA has faced challenges in procuring the first 260 EDSs to meet 2010 requirements. For example, due to the danger associated with some explosives, TSA and DHS encountered challenges in developing simulants and collecting data on the explosives' physical and chemical properties needed by vendors and agencies to develop detection software and test EDSs prior to the current acquisition. Also, TSA's decision to pursue EDS procurement during data collection complicated both efforts and resulted in a delay of over 7 months for the current acquisition. Completing data collection for each phase of the 2010 requirements prior to pursuing EDS procurements that meet those requirements could help TSA avoid additional schedule delays. TSA has established a schedule for the current EDS acquisition, but it does not fully comply with best practices, and TSA has not developed a plan to upgrade its EDS fleet. For example, the schedule is not reliable because it does not reflect all planned program activities and does not include a timeline to deploy EDSs or plans to procure EDSs to meet subsequent phases of the 2010 requirements. Developing a reliable schedule would help TSA better monitor and oversee the progress of the EDS acquisition. TSA officials stated that to meet the 2010 requirements, TSA will likely upgrade many of the current fleet of EDSs as well as the first 260 EDS machines to be purchased under the current acquisition. However, TSA has no plan in place outlining how it will approach these upgrades. Because TSA is implementing the 2010 requirements in a phased approach, the same EDS machines may need to be upgraded multiple times. TSA officials stated that they were confident the upgrades could be completed on deployed machines. However, without a plan, it will be difficult for TSA to provide reasonable assurance that the upgrades will be feasible or cost-effective. What GAO Recommends GAO recommends that TSA, among other things, develop a plan to ensure that new machines, as well as those machines currently deployed in airports, will be operated at the levels in established requirements, collect explosives data before initiating new procurements, and develop a reliable schedule for the EBSP. DHS concurred with all of GAO's recommendations and has initiated actions to implement them.

gao_GAO-13-417

gao_GAO-13-417_0

In fiscal year 2012, the federal government obligated about $307 billion to acquire services. In 2002, GAO reported that leading companies of that time committed to a strategic approach to acquiring services—a process that moves a company away from numerous individual procurements to a broader aggregate approach—including developing knowledge of how much they were spending on services and taking an enterprise-wide approach to services acquisition. This enables companies to target the full range of services they buy. Two factors—the degree of complexity of the service and the number of available suppliers—determine the choice of one of four general categories of procurement tactics appropriate for that service: leveraging scale, standardizing requirements, prequalifying suppliers, and understanding cost drivers. Companies we reviewed are not content to remain limited by their environment; over the long term, they generally seek to reduce the complexity of requirements and bring additional suppliers into the mix in order to commoditize services and leverage competition. For commodity services with many suppliers, such as administrative support, facilities maintenance, and housekeeping, companies generally focus on leveraging scale and competition to lower cost. For knowledge-based services with few suppliers, such as engineering and management support and research and development services, companies aim to maximize value by better understanding and negotiating individual components that drive cost. Opportunities Exist for Federal Agencies to Adopt Commercial Practices Federal agencies have opportunities to leverage leading companies’ practices for purchasing services in order to lower costs and maximize the value of the services they buy. In our September 2012 report on strategic sourcing, we found that most of the agencies we reviewed leveraged only a fraction of their buying power. Moreover, leading companies have saved between 4 and 15 percent annually—over prior year spending—on services using these practices. A savings rate of 4 percent applied to the $307 billion spent by federal agencies on services in fiscal year 2012 would equate to $12 billion in savings. through these initiatives. Agencies Need to Overcome Key Challenges to Improve Strategic Sourcing Efforts Agencies also continued to face challenges in obtaining and analyzing reliable and detailed data on spending, securing leadership support for strategic sourcing, and applying this approach to acquiring services. Agency officials also stated several disincentives that can discourage strategic sourcing efforts, such as a perception that reporting savings due to strategic sourcing could lead to program budgets being cut in subsequent years.leading companies stated they have focused their efforts on services, such as telecommunications and information technology services, over the past 5-7 years because of the growth in spending in that area, and have achieved significant savings. Recent Agency and OMB Actions Could Improve and Expand Strategic Sourcing of Services We have recommended that selected agencies and OMB take actions to increase the use of strategic sourcing. have devised strategies and tactics to manage sophisticated services. The simple dynamic is that adopting leading commercial practices can enable agencies to provide more service for the same budget or the same service with a smaller budget. Accordingly, we (1) assessed key practices used by leading companies in purchasing services, and (2) examined potential opportunities for federal agencies to incorporate these practices. To determine leading companies’ practices for acquiring services, we selected a nongeneralizable sample of companies based on a literature search and recommendations from experts. An industry group: Institute for Supply Management. A consulting organization: A.T. Kearney. We compared companies’ procurement practices with those identified in our prior work. Specifically, to compare purchased services, we identified the top services leading companies purchase through interviews and reviewed FPDS-NG data from fiscal years 2010 and 2012 to identify the top ten services purchased by the federal government.

Why GAO Did This Study In fiscal year 2012, the federal government spent $307 billion to acquire services. The private sector is also reliant on services. Over the last 5-7 years, leading companies have been examining ways to manage their services in order to maximize returns and minimize inefficiencies. Given the amount of federal spending on services, GAO was asked to identify leading practices used by large commercial organizations for purchasing services. GAO identified (1) leading company practices for purchasing services, and (2) potential opportunities for federal agencies to incorporate these practices based on prior work. To determine leading companies' practices in this area, GAO selected a nongeneralizable sample of companies based upon a literature search and recommendations from Defense and industry organizations that have studied services acquisition. GAO identified and interviewed officials from seven companies, an industry group, and a consulting organization. To identify opportunities for agencies to adopt leading practices, GAO compared the types of services purchased by agencies in fiscal year 2012 with those purchased by companies. GAO also relied on prior, relevant work related to federal procurement of services and OMB initiatives for expanding agencies' use of strategic sourcing. What GAO Found Officials from leading companies GAO spoke with reported saving 4-15 percent over prior year spending through strategically sourcing the full range of services they buy--a process that moves away from numerous individual purchases to an aggregate approach. The federal government and leading companies buy many of the same services, such as facilities management, engineering, and information technology. Companies' keen analysis of spending, coupled with central management and knowledge sharing about the services they buy, is key to their savings. Their analysis of spending patterns can be described as comprising two essential variables: the complexity of the service and the number of suppliers for that service. Knowing these variables for any given service, companies tailor their tactics to fit the situation; they do not treat all services the same. Company tactics fall into four basic categories: (1) Standardize requirements, (2) Understand cost drivers, (3) Leverage scale, and (4) Prequalify suppliers. To illustrate how buying tactics are tailored, Walmart leverages its scale to compete basic or commodity services that have many suppliers, such as maintenance. When buying sophisticated services with few suppliers, such as consulting, Dell negotiates cost drivers such as labor rates. The framework is dynamic: over the long term, companies seek to reduce complexity and bring in additional suppliers to take advantage of market forces like competition. Federal agencies have sizable opportunities to leverage leading commercial practices to lower costs and maximize the value of the services they buy. In September 2012, GAO reported that large procurement agencies such as the Department of Defense and Veterans Affairs leveraged only a fraction of their buying power through strategic sourcing and faced challenges analyzing reliable data on spending, securing leadership support, and applying this approach to acquiring services. GAO recommended that these agencies and the Office of Management and Budget (OMB) issue guidance, develop metrics, and take other actions. The agencies and OMB concurred. OMB directed agencies to take actions to overcome these challenges. Potential savings are significant considering a savings rate of 4 percent applied to the $307 billion spent by federal agencies on services in fiscal year 2012 would equate to $12 billion. What GAO Recommends GAO has made recommendations in previous reports to help agencies strengthen strategic sourcing practices, which agencies concurred with and have planned actions under way.

gao_GAO-02-500T

gao_GAO-02-500T_0

The Workforce Investment Act (WIA) was passed in 1998 to consolidate services for many employment and training programs, requiring states and localities to use a centralized service delivery structure—the one-stop center system—to provide most federally funded employment and training assistance. Nearly all states reported some coordination at the state or local level, achieved with methods ranging from informal linkages (such as information sharing or periodic program referrals) to formal linkages (such as memoranda of understanding), shared intake, or integrated case management. Coordinating TANF Services with One- Stop Centers Has Continued to Present Challenges to States and Localities Despite increases in coordination between the TANF program and one- stops from 2000 to 2001, states and localities have continued to face challenges in coordinating their TANF work programs with one-stop centers. However, other challenges cannot be easily resolved at the local level. States developed ways to overcome these challenges to colocation in order to meet the needs of TANF clients. Developing More Compatible Program Definitions and Requirements As states and localities attempted to coordinate services for TANF clients through the one-stop, they encountered challenges to harmonizing program definitions and meeting reporting requirements.

What GAO Found The Workforce Investment Act (WIA) brought most federally funded employment and training services into a single, one-stop center system. Coordination between Temporary Assistance for Needy Families (TANF) programs and one-stop centers has increased since the act was implemented in 2000. Nearly all states reported some coordination at either the state or the local level. Most often, coordination took one of two forms: colocation, in which a client accesses TANF programs at the local one-stop, or referrals and electronic links to off-site programs. Despite progress, states and localities continue to report problems because of infrastructure limitations and varying program definitions and reporting requirements. Some of these challenges could be overcome through state and local innovation, but others will be resolved only through federal intervention. Early evidence suggests that states and localities are increasing their efforts to bring services together to fit local needs. As states and localities have begun to recognize the shared goals of the workforce and welfare systems, they have developed ways to coordinate services.

gao_GAO-16-368

gao_GAO-16-368_0

DOD and State officials reviewed proposals—approved by the geographic combatant command and ambassador or chief of mission—and selected projects to recommend to the Secretaries of Defense and State. PPD 23 identified key project planning elements for the United States to consider, including project objectives, absorptive capacity, baseline assessments, and sustainment plans. Each of these 41 notifications included (1) information about project objectives; (2) a similar statement, noting that the partner nation “has been assessed as capable to absorb effectively and benefit from the assistance proposed via this program;” (3) a description of the assessment framework; and (4) a statement about arrangements for sustainment, such as “while might provide some national funds to help sustain this capability, it is very likely that Foreign Military Financing (FMF) will also be required to support future year sustainment and training of this capability.” Fiscal Year 2015 Project Proposals Consistently Documented Consideration of Only One of Four Key Elements While DOD officials told us that they considered each of four key elements highlighted in PPD 23, fiscal year 2015 Global Train and Equip project proposal packages did not always document consideration of baseline assessments and sustainment plans, and rarely did so for absorptive capacity. However, despite agency guidance, such documentation was not always complete. Incomplete assessments may affect DOD’s ability to design appropriate capacity building projects and to assess project outcomes, thus limiting information on program effectiveness that could help inform future assistance decisions. The remaining 13 proposals did not include sustainment cost estimates. Clearly documenting information such as estimates of annual sustainment costs could help improve decision makers’ ability to assess the sustainability of proposed projects in making funding decisions. DOD Reporting on Project Assessments Has Not Met Statutory Deadlines but Indicates Some Progress in Building Foreign Partner Capacity DOD reporting to Congress on the achievement of Global Train and Equip project objectives has not met reporting deadlines, but those reports—dating back to 2012—indicate that projects have made some progress building partner capacity to combat terrorism and conduct stability operations. DOD’s fiscal year 2012, 2013, 2014, and 2015 reports included assessments of the recipient units of 61 of the 208 projects implemented in fiscal years 2006 through 2013, which represents 28 percent of the $2 billion in assistance implemented in those fiscal years. Proposal design and interpretation. As pictured in figure 7, this same assessment reported that spotting scopes provided to enhance counterterrorism capabilities were too tall for use in a prone position, exposing the spotter. Equipment delivery and procurement. DOD’s fiscal year 2013, 2014, and 2015 assessment reports were late. Recommendations for Executive Action To improve management of and reporting on the Global Train and Equip program, we recommend that the Secretary of Defense take the following three actions: take steps to require that information about the absorptive capacity of recipient units be documented in project proposal packages, take steps to ensure that documentation requested in project proposal packages is complete, and take steps to develop a process for improving the timely completion and submission of required assessment reports to Congress. This report examines (1) the extent to which the Department of Defense (DOD) considered and documented consideration of key security assistance planning elements for fiscal year 2015 project proposals and (2) the results that have been reported on the achievement of project objectives since fiscal year 2009. DOD uses a standard framework for evaluating the capabilities and performance of each recipient unit. Appendix II: Allocation of Funds for Fiscal Year 2015 Global Train and Equip Projects Combatant command U.S. Africa Command U.S. European Command Total Appendix III: State and DOD Views on the Availability of Funds for Long-term Sustainment of Global Train and Equip Projects DOD’s fiscal year 2015 Global Train and Equip project proposal template did not request information about the sources of U.S. funds to be used for long-term sustainment.

Why GAO Did This Study The United States has undertaken several efforts, including DOD's Global Train and Equip program, to build the capacity of its foreign partners to counter terrorism. Funding allocated for this program totals $2.3 billion since 2009. DOD and State select projects from proposals that use a standard planning template. Once projects are approved by DOD with concurrence from State, DOD submits congressional notifications that summarize certain aspects of each project. The fiscal year 2015 National Defense Authorization Act included a provision for GAO to review the Global Train and Equip Program. This report examines (1) the extent to which DOD considered and documented consideration of key security assistance elements for fiscal year 2015 project proposals, and (2) the results that have been reported on the achievement of project objectives since fiscal year 2009. GAO analyzed agency data and program documents, and interviewed DOD and State officials in Washington, D.C., and at selected combatant commands and embassies. What GAO Found The Departments of Defense (DOD) and State (State) officials consistently considered four key security assistance project planning elements for fiscal year 2015 Global Train and Equip project proposals. However, project proposals did not always adhere to federal internal control standards for clearly documenting three of those elements—absorptive capacity, project assessment, and sustainment plans. For example, DOD did not require project proposal packages to document information about the recipient unit's absorptive capacity. In addition, assessments of recipient unit baseline capabilities did not always include all information required by agency guidance to facilitate project assessment. Lastly, 13 of 54 project proposals did not include required estimates of annual sustainment costs. The sharp increase in funding for program activities in fiscal year 2015, as shown in the figure above, heightens the importance of documenting consideration of key planning elements to provide decision makers sufficient information about recipient units' ability to use and sustain assistance. Moreover, incomplete baseline assessments may limit DOD's ability to conduct project assessments to inform future funding decisions. DOD reporting on Global Train and Equip project assessments has not met statutory deadlines but identifies some progress in building partner nation capabilities. Despite a legal requirement to complete and submit to Congress annual assessments within 90 days of the end of each fiscal year, DOD's fiscal year 2013, 2014, and 2015 assessment reports were submitted up to 21 months late. Untimely reporting may limit decision makers' ability to use assessments to inform future project selection and sustainment decisions. DOD's assessments—which cover 28 percent of funds allocated in fiscal years 2006 through 2013—indicate some progress in building capability to combat terrorism and conduct stability operations. They also identify factors that challenge the achievement of project objectives such as proposal design and interpretation and equipment delivery and procurement. For example, one country received sniper spotting scopes that were too tall for use in a prone position, exposing the spotter. What GAO Recommends GAO is making two recommendations to enhance DOD's documentation and management of the Global Train and Equip program and one to ensure timely completion of required assessment reporting to Congress. DOD concurred with GAO's recommendations.

gao_GAO-13-607

gao_GAO-13-607_0

Flood Zone Designations NFIP studies and maps flood risks, assigning flood zone designations from high to low depending on the risk of flooding. Subsidized rates are not based on actual flood risk. 1). Most Subsidized Policies Continue to Receive Discounted Rates and Have Mixed Characteristics Relative to Financial Indicators The Biggert-Waters Act eliminated subsidies on approximately 438,000 policies, and with the continuing implementation of the act, more of the subsidies on the approximately 715,000 remaining policies are expected to be eliminated over time. Our analysis of NFIP data on the location of properties that would continue to receive subsidized rates shows that remaining subsidized policies would cover properties in every state and territory in which NFIP operates. Data Constraints Limit FEMA’s Ability to Estimate the Cost of Subsidies and Establish Full-Risk Rates on Previously Subsidized Policies The cost of subsidized policies to NFIP can be measured in terms of forgone net premiums (the difference between subsidized and full-risk rates, adjusted for premium-related expenses). FEMA also does not have information on the flood risk of properties with previously subsidized rates, which is needed to establish full-risk rates for these properties going forward. Historical Cost of Subsidies Difficult to Estimate FEMA does not have sufficient data to estimate the aggregate cost of subsidies. In 1978 about 76 percent of policies were subsidized compared with about 20 percent in 2012. FEMA Lacks the Information Needed to Establish Full-Risk Rates That Reflect Risk of Flooding for Remaining Subsidized Policies FEMA generally lacks information to establish full-risk rates that reflect flood risk for active policies that no longer qualify for subsidies as a result of the Biggert-Waters Act and also lacks a plan for proactively obtaining The act requires FEMA to phase in full-risk rates on such information.these policies. Federal internal control standards state that agencies should identify and analyze risks associated with achieving program objectives, and use this information as a basis for developing a plan for mitigating the risks. Although subsidized policies have been identified as a risk to the program because of the financial drain they represent, FEMA does not have a plan to expeditiously and proactively obtain the information needed to set full- risk rates for all of them. Instead, FEMA will rely on certain policyholders to voluntarily obtain elevation certificates. Several Options Exist for Reducing the Financial Impact of Remaining Subsidized Policies Through our previous work as well as interviews we conducted and literature we reviewed for this report, we identified three broad options that could help address NFIP’s financial situation: (1) adjust the pace of the elimination of subsidies, (2) target assistance or remaining subsidies by the financial need of property owners, and (3) increase mitigation efforts. NFIP has been on our high-risk list since 2006 because of concerns about its long-term financial solvency and management issues. As a result, the rates that FEMA plans to implement may not adequately reflect a property’s actual flood risk, and some policyholders may be charged too much and some too little for their premiums. This report discusses (1) the number, location, and financial characteristics of properties that continue to receive subsidized rates compared with full-risk rate properties, (2) information needed to estimate the historic financial impact of subsidies and establish rates that reflect the risk of flooding on properties with previously subsidized rates, and (3) options to reduce the financial impact of remaining subsidized properties. We applied the Federal Emergency Management Agency’s (FEMA) algorithm to determine which policies were subsidized, and applied FEMA’s interpretation of the provisions in the Biggert-Waters Act that eliminate subsidies to determine which policies would retain their subsidies.FEMA’s implementation of legislative requirements authorizing subsidized rates for certain properties in high-risk locations. In addition, we interviewed NFIP officials and representatives of insurance industry organizations and floodplain managers. We analyzed home value and household income indicators together and found that counties with the highest median household incomes and highest median home values had higher percentages of remaining subsidized policies than nonsubsidized policies in SFHAs.

Why GAO Did This Study FEMA, which administers NFIP, estimated that in 2012 more than 1 million of its residential flood insurance policies--about 20 percent--were sold at subsidized rates; nearly all were located in high-risk flood areas. Because of their relatively high losses and lower premium rates, subsidized policies have been a financial burden on the program. Due to NFIP's financial instability and operating and management challenges, GAO placed the program on its high-risk list in 2006. The Biggert-Waters Act eliminated subsidized rates on certain properties and mandated GAO to study the remaining subsidized properties. This report examines (1) the number, location, and characteristics of properties that continue to receive subsidized rates compared with full-risk rate properties; (2) the information needed to estimate the historic cost of subsidies and establish rates for previously subsidized policies that reflect the risk of flooding; and (3) options to reduce the financial impact of remaining subsidized policies. GAO analyzed NFIP data on types of policies, premiums, and claims and publicly available home value and household income data. GAO also interviewed representatives from FEMA, insurance industry associations, and floodplain managers. What GAO Found The Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act) immediately eliminated subsidies for about 438,000 National Flood Insurance Program (NFIP) policies, but subsidies on an estimated 715,000 policies across the nation remain. Depending on factors such as policyholder behavior, the number of subsidized policies will continue to decline over time. For example, as properties are sold and the Federal Emergency Management Agency (FEMA) resolves data limitations and defines key terms, more subsidies will be eliminated. GAO analysis found that remaining subsidized policies would cover properties in every state and territory where NFIP operates, with the highest numbers in Florida, Louisiana, and California. In comparing remaining subsidized and nonsubsidized policies GAO found varying characteristics. For example, counties with the highest and lower home values had a larger percentage of subsidized versus nonsubsidized policies. Data constraints limit FEMA's ability to estimate the aggregate cost of subsidies and establish rates reflecting actual flood risks on previously subsidized policies. FEMA does not have sufficient historical program data on the percentage of full-risk rates that subsidized policyholders have paid to estimate the financial impact--in terms of the difference between subsidized and full-risk premium rates--to NFIP of subsidies. Also, because not all policyholders are required to provide documentation about their flood risk, FEMA generally lacks information needed to apply full-risk rates (as required by the Biggert-Waters Act) on previously subsidized policies. FEMA is encouraging these policyholders to voluntarily submit this documentation. Federal internal control standards state that agencies should identify and analyze risks associated with achieving program objectives and develop a plan for obtaining needed data. Without this documentation, the new rates may not accurately reflect a property's full flood risk, and policyholders may be charged rates that are too high or too low relative to their risk of flooding. Options from GAO's previous and current work for reducing the financial impact of subsidies on NFIP include (1) adjusting the pace of subsidy elimination, (2) targeting assistance or subsidies based on financial need, or (3) increasing mitigation efforts, such as relocation or elevation that reduce a property's flood risk. However, these options have advantages and disadvantages. Moreover, the options are not mutually exclusive, and combining them could help offset some disadvantages.FEMA should develop and implement a plan to obtain flood risk information needed to determine full-risk rates for properties with previously subsidized rates. FEMA agreed with the recommendation. What GAO Recommends FEMA should develop and implement a plan to obtain flood risk information needed to determine full-risk rates for properties with previously subsidized rates. FEMA agreed with the recommendation.

gao_GAO-04-436

gao_GAO-04-436_0

Program Has Reached a Large, Diverse Audience, but Measuring Improvements in Mutual Understanding Is Difficult As of December 2003, Open World reported bringing 6,800 Russian delegates from seven geographic regions to visit over 1,200 communities in all U.S. states. Stakeholders Generally Cite Positive Impacts of Program Based on our analysis of responses to participant surveys conducted by Open World, as well as our interviews with Open World alumni in Russia, delegates generally hold highly favorable views of their experience in the program. While measuring the impact of exchange programs is difficult because the full effects of such programs may not be known for years, Open World officials agree that such an evaluation is necessary and hope to conduct one in the near future. Open World Lacks Formalized Financial Management and Accountability Mechanisms Open World does not have the formalized financial management and accountability mechanisms—formalized policies, audited financial statements, an audit or financial management advisory committee, or full program data—that would provide Congress and other decision makers with the timely, reliable cost and performance information that is especially important for a permanent, expanding program. Although Open World has established procedures for reviewing and approving transactions and analyzing financial reports, these procedures have not been formalized in written policies. Most delegates viewed their program experiences very favorably, and many say they have taken concrete actions to adapt what they learned from their U.S. visits to the Russian environment. However, because the program does not have formalized strategic and performance plans with systematic performance measurement indicators, it is difficult to determine the extent to which Open World is targeting and reaching the right people and providing delegates with the right types of experiences, including those that result in improved mutual understanding. Now that Open World has permanent status and is expanding its scope, it is appropriate for the program to turn its attention to enhancing its strategic and performance planning and financial management and accountability mechanisms. Recommendations To enhance Open World’s management, particularly in light of the program’s expansion, this report makes recommendations to the Chairman of the Board of Trustees of the Open World Leadership Center to (1) establish strategic and performance plans that articulate Open World’s direction and set measurable goals and indicators; (2) strengthen the program’s mechanisms for collecting data and reporting on program performance; (3) assess whether the current procedures provide adequate internal control over expenditures and grantee oversight; (4) develop and implement written, management-approved policies, procedures, and internal controls for Open World’s resources and expenditures; (5) develop and implement controls and requirements for grantees to provide accountability for grant expenditures to ensure that funds are spent for their intended purposes; (6) develop and implement plans for routinely preparing financial statements that are annually subject to an independent audit; (7) consider establishing an audit committee or financial management advisory committee to provide the Board of Trustees and management with independent advice on financial management, accountability, and internal control issues; and (8) estimate and disclose the value of contributed services from U.S. volunteers to better reflect the total scope of the program.

Why GAO Did This Study Congress created the Russian Leadership Program in 1999 as a pilot project to promote mutual understanding by exposing emerging Russian leaders to the American economic system and democratic institutions. In 2003, Congress renamed the program the Open World Leadership Center, expanded its scope, and extended eligibility to a number of other countries. Because Open World had not been independently evaluated, GAO was asked to review (1) the program's progress toward achieving its overall purpose and (2) whether it has appropriate financial management and accountability mechanisms in place. What GAO Found Open World has exposed a large, broad, and diverse group of Russians to U.S. economic and political systems. As of December 2003, the program brought about 6,800 men and women from Russia's seven geographic regions to more than 1,200 U.S. communities. Our analysis found that most delegates generally hold highly favorable views of their experience in the program. Many found ways to adapt what they learned to the Russian environment. Also, embassy officials said Open World complemented U.S. mission activities. However, because the program does not have formalized strategic and performance plans with measurable indicators, it is difficult to determine the extent to which it is targeting and reaching the right people and giving them experiences that result in improved mutual understanding. While Open World does survey delegates about their experiences, it has not yet conducted a full program evaluation to determine progress toward its long-term goals. Open World officials agree that such an evaluation is necessary and hope to conduct one in the near future. Open World does not have the formalized financial management and accountability mechanisms that would provide Congress and other decision makers with timely and reliable information about its cost and performance. Now that Open World has permanent status and is expanding its scope, it is appropriate for the program to turn its attention to enhancing these mechanisms. Its procedures for reviewing program transactions and analyzing financial reports have neither been evaluated for their adequacy nor formalized in writing; and it does not prepare financial statements that can be subject to an independent audit. In addition, Open World does not have an audit or financial management advisory committee to advise the Board of Trustees on financial management, accountability, and internal control issues. Finally, Open World is not disclosing the value of services contributed by U.S. volunteers who support the program--information that generally accepted accounting principles encourage entities to disclose, if practicable.

gao_GAO-02-841

gao_GAO-02-841_0

There was minimal program oversight, providing few checks on spending growth. Distribution of Patients Across Payment Categories Has Changed Among patients primarily receiving rehabilitation care, more were classified at their initial assessment into moderate rehabilitation payment group categories and fewer into the intensive and low rehabilitation categories since the implementation of PPS. Providers reported that the payments for the moderate rehabilitation payment groups were more favorable, relative to their costs, than other payment groups. More Patients Initially Categorized into Payment Groups with Payment Increases Although the proportion of SNF Medicare patients initially classified into rehabilitation payment group categories remained the same overall, the distribution of patients within these categories changed considerably from first quarter 1999 to first quarter 2001 (see table 1). Among the patients initially classified into the extensive and special care or clinically complex categories (all of which were increased 20 percent by BBRA), the share of patients initially assessed as requiring the most intensive care—those in the extensive services category—increased to become about two-thirds of patients in these categories, while the share of patients in the special care and clinically complex categories decreased. Two years later, less than 13 percent received this much therapy. In 1999, 5 percent of patients initially assessed in the high rehabilitation payment group category received 480 minutes or more of therapy per week. SNFs have (1) changed their patient assessment practices and (2) reduced the amount of therapy services provided to Medicare beneficiaries.

What GAO Found In 1998, the Health Care Financing Administration implemented a prospective payment system (PPS) for skilled nursing facility (SNF) services provided to Medicare beneficiaries. PPS is intended to control the growth in Medicare spending for skilled nursing and rehabilitative services that SNFs provide. Two years after the implementation of PPS, the mix of patients across the categories of payment groups has shifted, as determined by the patients' initial minimum data set assessments. Although the overall share of patients classified into rehabilitation payment group categories based on their initial assessments remained about the same, more patients were classified into the high and medium rehabilitation payment group categories, and fewer were initially classified into the most intensive (highest paying) and least intensive (lowest paying) rehabilitation payment group categories. Two years after PPS was implemented the majority of patients in rehabilitation payment groups received less therapy than was provided in 1999. This was true even for patients within the same rehabilitation payment group categories. Across all rehabilitation payment group categories, fewer patients received the highest amounts of therapy associated with each payment group.

gao_GAO-15-10

gao_GAO-15-10_0

Authorized Positions at DOD Headquarters Organizations We Reviewed Have Generally Increased since Fiscal Year 2001, and Plans for Future Reductions are Not Finalized 10 U.S.C. In 2013, the Secretary of Defense set a target for reducing DOD components’ total management headquarters budgets by 20 percent for fiscal years 2014 through 2019, including costs for civilian personnel and contracted services, while striving for a goal of 20 percent reductions to authorized military and civilian personnel. However, the department has not finalized its reduction plans. Number of Authorized Positions at OSD and the Joint Staff Increased since 2001, but Levels Have Begun to Decline or Level Off in Recent Years OSD experienced an overall increase in its authorized military and civilian positions from fiscal years 2001 through 2013, representing a net increase of 20 percent from 2,205 authorized positions in fiscal year 2001 to 2,646 authorized positions in fiscal year 2013. In addition, DOD officials said converting functions performed by contracted services to civilian positions, and the transfer of positions from other organizations also contributed to the increases. As of December 2014, DOD’s plan had not been issued. DOD Headquarters Organizations in Our Review Do Not Systematically Determine or Periodically Reassess Their Personnel Requirements The headquarters organizations we reviewed—OSD, the Joint Staff, and the secretariats and staffs for the Army, Navy, and Air Force, and Headquarters, Marine Corps—do not determine their personnel requirements as part of a systematic requirements-determination process, nor do they have procedures in place to ensure that they periodically reassess them as outlined in DOD and other guidance. Current personnel levels for these headquarters organizations are traceable to statutory limits enacted during the 1980s and 1990s to force efficiencies and reduce duplication. However, these limits have been waived since fiscal year 2002 and have little practical utility because of statutory exceptions to certain categories of personnel and because the limits do not include personnel in supporting organizations that perform headquarters-related functions. Without systematic determinations of personnel requirements and periodic reassessments of them using organizational and workforce analyses, DOD will not be well-positioned to proactively identify efficiencies and limit personnel growth within these headquarters organizations. Moreover, until such requirements are determined, Congress will not have the information needed to reexamine existing statutory limits. Some Organizations Are Modifying Their Requirements- Determination Processes, but These Efforts Are Not Complete All but one of the organizations we reviewed have recognized problems with requirements determination and some are beginning to take steps to modify their related processes, but these efforts are not yet complete. Recommendations for Executive Action To ensure that headquarters organizations are properly sized to meet their assigned missions and use the most cost-effective mix of personnel, and to better position DOD to identify opportunities for more efficient use of resources, we recommend that the Secretary of Defense direct the following three actions: conduct a systematic determination of personnel requirements for OSD, the Joint Staff, and the military services’ secretariats and staff, which should include analysis of mission, functions, and tasks, and the minimum personnel needed to accomplish those missions, functions, and tasks; submit these personnel requirements, including information on the number of personnel within OSD and the military services’ secretariats and staffs that count against the statutory limits, along with any applicable adjustments to the statutory limits, in the next Defense Manpower Requirements Report to Congress or through separate correspondence, along with any recommendations needed to modify the existing statutory limits; and establish and implement procedures to conduct periodic reassessments of personnel requirements within OSD and the military services’ secretariats and staffs. Matter for Congressional Consideration Congress should consider using the results of DOD’s review of headquarters personnel requirements to reexamine the statutory limits. In the letter, the Army also noted concerns that a statement in our draft report—namely, that the organizations that support the Army Secretariat and staff are almost three times as large but are excluded from the statutory limits—may be misleading and lack appropriate context. This report (1) identifies past trends, if any, in personnel resources devoted to OSD, the Joint Staff, and the secretariats and staffs of the military services and any plans for reductions to these headquarters organizations; and (2) evaluates the extent to which the Department of Defense (DOD) determines and reassesses personnel requirements for these headquarters organizations. DOD is still in the process of compiling complete data on contractor full-time equivalents. This appendix shows how these resources are distributed in the Army, as well as the changes in these resources from fiscal year 2001 through fiscal year 2013. The staff of Headquarters, Marine Corps, comprises military and civilian personnel and personnel performing contracted services.

Why GAO Did This Study Facing budget pressures, DOD is seeking to reduce headquarters activities of OSD, the Joint Staff, and the military services' secretariats and staffs, which primarily perform policy and management functions. GAO was mandated to review personnel resources devoted to these headquarters organizations from fiscal years 2001 through 2013. This report (1) identifies past trends in personnel resources for these organizations and any plans for reductions; and (2) evaluates the extent to which DOD determines and reassesses personnel requirements for the organizations. GAO analyzed data on authorized military and civilian positions and contracted services from fiscal years 2001 through 2013. GAO reviewed DOD's headquarters reductions plans and processes for determining and reassessing personnel requirements. What GAO Found Over the past decade, authorized military and civilian positions have increased within the Department of Defense (DOD) headquarters organizations GAO reviewed—the Office of the Secretary of Defense (OSD), the Joint Staff, and the Army, Navy, Marine Corps, and Air Force secretariats and staffs—but the size of these organizations has recently leveled off or begun to decline, and DOD's plans for future reductions are not finalized. The increases varied by organization, and DOD officials told GAO that the increases were due to increased mission responsibilities, conversion of functions performed by contracted services to civilian positions, and institutional reorganizations. For example, authorized military and civilian positions for the Army Secretariat and Army Staff increased by 60 percent, from 2,272 in fiscal year 2001 to 3,639 in fiscal year 2013, but levels have declined since their peak of 3,712 authorized positions in fiscal year 2011. In addition to civilian and military personnel, DOD also relies on personnel performing contracted services. Since DOD is still in the process of compiling complete data on personnel performing contracted services, trends in these data could not be identified. In 2013, the Secretary of Defense set a target to reduce DOD components' headquarters budgets by 20 percent through fiscal year 2019, including costs for contracted services, while striving for a similar reduction to military and civilian personnel. However, DOD has not finalized plans to achieve these reductions. DOD was required to report to Congress by June 2014 on efforts to streamline management headquarters, but needed an extension until late summer 2014 for the report due to staff turnover. As of December 2014, DOD's plan had not been issued. GAO found that DOD headquarters organizations it reviewed do not determine their personnel requirements as part of a systematic requirements-determination process, nor do they have procedures in place to ensure that they periodically reassess these requirements as outlined in DOD and other guidance. Current personnel levels for these headquarters organizations are traceable to statutory limits enacted in the 1980s and 1990s to force efficiencies and reduce duplication. However, these limits have been waived since fiscal year 2002. If the limits were in force in fiscal year 2013, the Army and Navy would exceed them by 17 percent and 74 percent, respectively. Moreover, the limits have little practical utility because of statutory exceptions for certain categories of personnel and because the limits exclude personnel in supporting organizations that perform headquarters-related functions. For example, the organizations that support the Army Secretariat and Army Staff are almost three times as large as the Secretariat and Staff, but personnel who perform headquarters-related functions in these organizations are excluded from the limits. All but one of the organizations GAO reviewed have recognized problems in their existing requirements-determination processes. The OSD, the Navy, and the Marine Corps are taking steps to modify their processes, but their efforts are not yet complete. Without a systematic determination of personnel requirements and periodic reassessment of them, DOD will not be well positioned to proactively identify efficiencies and limit personnel growth within these headquarters organizations. Moreover, until DOD determines personnel requirements, Congress will not have critical information needed to reexamine statutory limits enacted decades ago. What GAO Recommends GAO recommends that DOD (1) conduct a systematic determination of personnel requirements at these headquarters organizations; (2) submit the requirements to Congress with adjustments and recommended modifications to the statutory limits; and (3) periodically reassess personnel requirements within OSD and the military services' secretariats and staffs. Congress should consider using DOD's review of headquarters personnel requirements to reexamine existing statutory limits. DOD partially concurred, stating it will use its existing processes, but will investigate other methods to improve the determination and reporting of requirements. GAO believes the recommendations are still valid, as discussed in the report.

gao_GAO-11-938T

gao_GAO-11-938T_0

Figure 1 shows TSA’s layers of aviation security. TSA Has Taken Actions To Validate the Science Underlying Its Behavior Detection Program, but More Work Remains We reported in May 2010 that TSA deployed SPOT nationwide before first determining whether there was a scientifically valid basis for using behavior and appearance indicators as a means for reliably identifying passengers who may pose a risk to the U.S. aviation system. DHS’s Science and Technology Directorate completed a validation study in April 2011 to determine the extent to which SPOT was more effective than random screening at identifying security threats and how the program’s behaviors correlate to identifying high-risk travelers. However, as noted in the study, the assessment was an initial validation step, but was not designed to fully validate whether behavior detection can be used to reliably identify individuals in an airport environment who pose a security risk. According to DHS, additional work will be needed to comprehensively validate the program. TSA also stated that the program was based upon scientific research available at the time regarding human behaviors. According to TSA, as of August 2011, TSA is pilot testing revised procedures for BDOs at Boston-Logan airport to engage passengers entering screening in casual conversation to help determine suspicious behaviors. TSA plans to expand this pilot program to additional airports in the fall of 2011. Thus, we recommended that the Secretary of Homeland Security convene an independent panel of experts to review the methodology of the validation study on the SPOT program being conducted to determine whether the study’s methodology was sufficiently comprehensive to validate the SPOT program. DHS concurred and stated that its validation study, completed in April 2011, included an independent review of the study with input from a broad range of federal agencies and relevant experts, including those from academia. DHS’s validation study found that SPOT was more effective than random screening to varying degrees. In May 2010, we reported weaknesses in TSA’s process for maintaining operational data from the SPOT program database. TSA is currently reviewing the study’s findings and assessing the steps needed to address DHS’s recommendations but does not have time frames for completing this work. TSA Has Taken Actions to Strengthen Airport Perimeter and Access Controls Security, but Issues Remain We reported in September 2009 that TSA has implemented a variety of programs and actions since 2004 to improve and strengthen airport perimeter and access controls security, including strengthening worker screening and improving access control technology. According to TSA officials, this program was developed to help counteract the potential vulnerability of airports to an insider attack—an attack from an airport worker with authorized access to secure areas. We recommended that TSA develop a comprehensive risk assessment, along with milestones for completing the assessment. DHS concurred with our recommendation and said it would include an assessment of airport perimeter and access control security risks as part of a comprehensive assessment for the transportation sector—the Transportation Sector Security Risk Assessment (TSSRA). We also recommended that, as part of a comprehensive risk assessment of airport perimeter and access controls security, TSA evaluate the need to conduct an assessment of security vulnerabilities at airports nationwide. Since we issued our report in September 2009, TSA had not conducted JVAs at Category III and IV airports. TSA stated that the TSSRA is to provide a comprehensive risk assessment of airport security, but could not tell us to what extent it has studied the need to conduct JVAs of security vulnerabilities at airports nationwide. Additionally, in August 2011 TSA reported that its national inspection program requires that transportation security inspectors conduct vulnerability assessments at all commercial airports, which are based on the joint vulnerability assessment model. We have not yet assessed the extent to which transportation security inspectors consistently conduct vulnerability assessments based on the joint vulnerability model. We reviewed this plan and its accompanying aviation model annex and found that while the plan provided a high-level summary of program activities for addressing airport security such as the screening of workers, the extent to which these efforts would be guided by measurable goals and priorities, among other things, was not clear. Providing such additional information would better address the intent of our recommendation.

Why GAO Did This Study The attempted bombing of Northwest flight 253 in December 2009 underscores the need for effective aviation security programs. Aviation security remains a daunting challenge with hundreds of airports and thousands of flights daily carrying millions of passengers and pieces of checked baggage. The Department of Homeland Security's (DHS) Transportation Security Administration (TSA) has spent billions of dollars and implemented a wide range of aviation security initiatives. Two key layers of aviation security are (1) TSA's Screening of Passengers by Observation Techniques (SPOT) program designed to identify persons who may pose a security risk; and (2) airport perimeter and access controls security. This testimony provides information on the extent to which TSA has taken actions to validate the scientific basis of SPOT and strengthen airport perimeter security. This statement is based on prior products GAO issued from September 2009 through September 2011 and selected updates in August and September 2011. To conduct the updates, GAO analyzed documents on TSA's progress in strengthening aviation security, among other things. What GAO Found DHS completed an initial study in April 2011 to validate the scientific basis of the SPOT program; however, additional work remains to fully validate the program. In May 2010, GAO reported that TSA deployed this program, which uses behavior observation and analysis techniques to identify potentially high-risk passengers, before determining whether there was a scientifically valid basis for using behavior and appearance indicators as a means for reliably identifying passengers who may pose a risk to the U.S. aviation system. TSA officials said that SPOT was deployed in response to potential threats, such as suicide bombers, and was based on scientific research available at the time. TSA is pilot testing revised program procedures at Boston-Logan airport in which behavior detection officers will engage passengers entering screening in casual conversation to help determine suspicious behaviors. TSA plans to expand this pilot program in the fall of 2011. GAO recommended in May 2010 that DHS, as part of its validation study, assess the methodology to help ensure the validity of the SPOT program. DHS concurred and stated that the study included an independent review with a broad range of agencies and experts. The study found that SPOT was more effective than random screening to varying degrees. However, DHS's study was not designed to fully validate whether behavior detection can be used to reliably identify individuals in an airport environment who pose a security risk. The study also noted that additional work was needed to comprehensively validate the program. TSA officials are assessing the actions needed to address the study's recommendations but do not have time frames for completing this work. In September 2009 GAO reported that since 2004 TSA has taken actions to strengthen airport perimeter and access controls security by, among other things, deploying a random worker screening program; however, TSA had not conducted a comprehensive risk assessment or developed a national strategy. Specifically, TSA had not conducted vulnerability assessments for 87 percent of the approximately 450 U.S. airports regulated for security by TSA in 2009. GAO recommended that TSA develop (1) a comprehensive risk assessment and evaluate the need to conduct airport vulnerability assessments nationwide and (2) a national strategy to guide efforts to strengthen airport security. DHS concurred and TSA stated that the Transportation Sector Security Risk Assessment, issued in July 2010, was to provide a comprehensive risk assessment of airport security. However, this assessment did not consider the potential vulnerabilities of airports to an insider attack--an attack from an airport worker with authorized access to secure areas. In August 2011, TSA reported that transportation security inspectors conduct vulnerability assessments annually at all commercial airports, including an evaluation of perimeter security. GAO has not yet assessed the extent to which inspectors consistently conduct vulnerability assessments. TSA also updated the Transportation Systems-Sector Specific Plan, which summarizes airport security program activities. However, the extent to which these activities were guided by measurable goals and priorities, among other things, was not clear. Providing such additional information would better address GAO's recommendation. What GAO Recommends GAO has made recommendations in prior work to strengthen TSA's SPOT program and airport perimeter and access control security efforts. DHS and TSA generally concurred with the recommendations and have actions under way to address them.

gao_GAO-16-136

gao_GAO-16-136_0

Rather, according to GSA officials, GSA focuses on providing guidance and advice to federal agencies on utilization by (1) developing written guidance and reviewing agencies’ Vehicle Allocation Methodology (VAM) update submissions and (2) holding conversations with federal agencies’ fleet managers about vehicle utilization at least annually. Agencies Use a Variety of Utilization Criteria, and Two Agencies That Could Not Determine if Some Vehicles Met These Criteria in Fiscal Year 2014 Have Taken Steps to Address the Issues While the FPMR provide general mileage guidelines that can be used as criteria for vehicle utilization—12,000 miles per year for passenger vehicles and 10,000 miles per year for light trucks—it also authorizes agencies to develop their own criteria to determine vehicle utilization where miles-traveled guidelines are not appropriate. The agency paid more than $1.1 million to GSA in fiscal year 2014 for these vehicles. BIA officials could not readily provide the justifications for 282 vehicles that did not meet utilization criteria. According to VHA officials, justifications are stored with local fleet managers and are not readily accessible to headquarters officials. All five selected agencies took actions to reduce vehicles that did not meet utilization criteria or pass the justification process; yet three agencies cumulatively retained over 500 such vehicles, paying GSA $1.7 million for these vehicles in fiscal year 2014. See table 6. VHA policy does not require justification for all vehicles that do not meet utilization criteria. As a result, GSA may be missing a potential opportunity to help agencies ensure that their leased fleet is the optimum size. Additionally, some agencies have not eliminated or reassigned vehicles that did not meet utilization criteria or pass a justification review. By not taking corrective action, agencies could be spending millions of dollars on vehicles that may not be needed. To provide better assurance that Fleet Service Representatives (FSR) are having conversations with leasing customers about utilization in accordance with GSA expectations, we recommend that the Administrator of GSA develop a mechanism to help ensure that these conversations occur. In written comments, Interior concurred with the recommendation for NPS to take corrective action to address each leased vehicle that has not met the agency’s utilization criteria or successfully passed the utilization justification process and specified the actions that NPS, as well as BIA, are implementing or planning to enhance their leased-vehicle programs. While VA agreed with our recommendations to address underutilized vehicles, it disagreed with our conclusion that 14 percent of VHA’s leased fleet is “unneeded, costing taxpayers an unnecessary $3 million.” Based on our analysis of VA data, our report found that VHA paid $3 million in fiscal year 2014 for leased vehicles that did not meet utilization criteria and did not have readily available justifications. We did not state that these vehicles were unneeded. This report assesses: (1) the extent to which GSA data on leased vehicles are reliable, (2) GSA’s role in identifying and reducing underutilized leased vehicles, and (3) the extent to which the assessment processes used by selected federal agencies facilitate the identification and removal of underutilized leased vehicles, and any cost savings that could be achieved by reducing any underutilized vehicles. For objectives 2 and 3, we judgmentally selected five federal vehicle fleets from five federal agencies, including the U.S. Air Force (Air Force); U.S. Department of the Interior’s National Park Service and Bureau of Indian Affairs; National Aeronautics and Space Administration; and U.S. Department of Veterans Affairs’ Veterans Health Administration. These results are not generalizable to their overarching agencies or other federal agencies. To determine the extent to which the assessment processes used by selected federal agencies facilitate the identification and removal of underutilized leased vehicles, we reviewed and analyzed: pertinent federal laws and regulations; GSA guidance that described the VAM process; and internal policies and procedures that the selected federal agencies use to identify underutilized vehicles in five fleets, such as fleet handbooks; and interviewed officials from GSA and the five federal agencies about the agencies’ responsibilities in identifying underutilized leased vehicles. We also analyzed over 15,500 fiscal year 2014 vehicle records from the five agencies that we reviewed.

Why GAO Did This Study Federal agencies spent about $1 billion in fiscal year 2014 to lease about 186,000 vehicles from GSA. Assessing the utilization of leased vehicles is important to agency efforts to manage their fleet costs. GAO was asked to examine federal processes for assessing the utilization of leased vehicles. This report addresses, among other objectives, (1) GSA's role in identifying and reducing underutilized leased vehicles and (2) the extent to which the processes used by selected federal agencies facilitate the identification and removal of underutilized leased vehicles, and any cost savings that could be achieved by reducing underutilized vehicles. GAO selected five agencies using factors such as fleet size, and analyzed over 15,500 fiscal-year 2014 vehicle records. At the five agencies, GAO surveyed fleet managers with at least 20 leased vehicles; reviewed fleet policies and guidance; and interviewed federal officials. These findings are not generalizable to all agencies or fleet managers. What GAO Found The General Services Administration (GSA) provides guidance to agencies to assist them in reducing underutilized leased vehicles. This guidance can be written (such as bulletins) or advice from GSA's fleet service representatives (FSR) to agency fleet managers. FSRs assist agencies with leasing issues, and GSA expects its FSRs to communicate with fleet managers about vehicle utilization at least annually. However, 18 of 51 fleet managers GAO surveyed reported that they had never spoken to their FSR about vehicle utilization. GSA has no mechanism to ensure these discussions occur and therefore may miss opportunities to help agencies identify underutilized vehicles. While the selected agencies—the Air Force, the Bureau of Indian Affairs (BIA), the National Aeronautics and Space Administration (NASA), the National Park Service (NPS) and the Veterans Health Administration (VHA)—took steps to manage vehicle utilization, their processes did not always facilitate the identification and removal of underutilized vehicles. Certain selected agencies (1) could not determine if all vehicles were utilized, (2) could not locate justifications for vehicles that did not meet utilization criteria, or (3) kept vehicles that did not undergo or pass a justification review. These agencies paid GSA about $8.7 million in fiscal year 2014 for leased vehicles that were retained but did not meet utilization criteria and did not have readily available justifications (see table). Of the selected agencies, NASA and VHA did not apply their utilization criteria to nearly 400 vehicles, representing about $1.2 million paid to GSA in fiscal year 2014. However, these agencies have taken steps to rectify the issue. The Air Force, BIA, NPS, and VHA could not readily locate justifications for over 1,500 leased vehicles that did not meet utilization criteria, representing about $5.8 million. BIA and NPS are planning action to ensure justifications are readily available in the future. As of May 2015, NPS and VHA had retained more than 500 vehicles—costing $1.7 million in fiscal year 2014—that were not subjected to or did not pass agency justification processes. While costs paid to GSA may not equal cost savings associated with eliminating vehicles, without justifications and corrective actions, agencies could be spending millions of dollars on vehicles that may not be needed. What GAO Recommends GAO recommends, among other things, that GSA develop a mechanism to help ensure that FSRs speak with fleet managers about vehicle utilization, that the Air Force and VHA modify their processes for vehicle justifications, and that NPS and VHA take corrective action for vehicles that do not have readily accessible written justification or did not pass a justification review. Each agency concurred with the recommendations and discussed actions planned or underway to address them.

gao_GAO-08-25

gao_GAO-08-25_0

A statistical measurement of the degree to which prices fluctuate over time is known as “volatility” and can be applied to prices in both the physical and financial markets. For price discovery, markets need current information about supply and demand, a large number of participants, and transparency. The President’s Working Group’s 1999 report on OTC derivatives focused on changes to the CEA that in their view would “promote innovation, competition, efficiency, and transparency in OTC derivatives markets, to reduce systemic risk, and to allow the United States to maintain leadership in these rapidly developing markets.” Derivatives on energy commodities, which are within the act’s definition of “exempt commodity,” may be traded in exempt commercial markets by eligible commercial entities, a category of traders broadly defined in the CEA to include firms with a commercial interest in the underlying commodity as well as other sophisticated investors, such as hedge funds. Because of these concurrent changes, identifying the causes of the increases in energy prices in both the physical and futures markets for crude oil, unleaded gasoline, heating oil, and natural gas is difficult. Tight Supply and Rising Demand for Physical Energy Commodities Contributed to the Increase in Futures and Spot Prices The energy physical markets have undergone substantial change and turmoil from 2002 through 2006, which affected prices in the spot and futures markets. Moreover, these parties have observed that the lack of spare capacity in certain areas, such as production, transportation, and storage, can affect prices. The effects of these changes on energy prices are not clear. Some market participants and observers have concluded that large purchases of oil futures contracts by speculators in effect have created an additional demand for oil that has led to higher prices; others disagree. However, unleaded gasoline and heating oil experienced less dramatic growth in their trading volumes during this period. To be a regulated futures exchange, an exchange must demonstrate to CFTC that the exchange complies with (1) the criteria for designation under section 5(b) of the CEA for, among other things, the prevention of market manipulation, fair and equitable trading, the conduct of trading facilities, and the financial integrity of transactions conducted on the board; (2) the set of core principles under section 5(d) of the act establishing their regulatory responsibilities; and (3) the provisions on application procedures of part 38 of the CFTC rules. While not subject to general CFTC oversight, these markets are subject to CFTC rule 36.3, which provides for the dissemination of exempt commercial market trading data should exempt commercial market prices be used to price cash markets and contains notification, recordkeeping, and reporting requirements. Also, exempt commercial market participants are subject to CFTC’s enforcement authority for the antimanipulation and antifraud provisions of the CEA. CFTC staff also analyze trading using data from other sources. OMB further stated that the outcome-related measures established for enforcement do not fully reflect progress on meeting the program’s overall goals. Conclusions The rise in energy prices can be and has been attributed to a variety of factors. Other markets are largely unregulated. Unless resolved, questions will continue about the scope of CFTC’s authority. However, CFTC does not maintain complete records of its surveillance activities. Recommendations for Executive Action To improve the oversight and available information on energy futures trading, we recommend that the Acting CFTC Chairman take the following three actions: reexamine the classifications in the COT reports to determine if the commercial and noncommercial trading categories should be refined to improve the accuracy and relevance of public information provided to the energy futures markets; explore ways to routinely maintain written records of inquiries into possible improper trading activity and the results of these inquiries to more fully determine the usefulness and extent of CFTC’s surveillance, antifraud, and antimanipulation authorities; and examine ways to more fully demonstrate the effectiveness of CFTC enforcement activities by developing additional outcome-related performance measures that more fully reflect progress in meeting the program’s overall goals. Appendix I: Scope and Methodology To examine trends and patterns of trading activity in the energy derivatives markets and physical markets, we analyzed data on futures, spot, and over-the-counter (OTC) derivative markets. To examine how CFTC monitors and detects market abuses in the trading of energy futures, and enforcement actions taken in response to identified abuses, we gathered information from officials at CFTC headquarters and the New York Regional Office. NYMEX officials stated that trade practice surveillance information may be used as part of market surveillance, but this surveillance is not as focused on price movements and involves different types of monitoring, such as physically observing floor trading by people entering orders, and, in effect, is similar to “police on the beat.” The officials added that with their recent use of the Chicago Mercantile Exchange’s Globex electronic trading system to trade energy futures, their trade practice surveillance system is changing, with more emphasis on monitoring access to, and activity on, the Globex system in NYMEX contracts. The Commodity Exchange Act: Issues Related to the Commodity Futures Trading Commission’s Reauthorization.

Why GAO Did This Study Prices for four energy commodities--crude oil, heating oil, unleaded gasoline, and natural gas--have risen substantially since 2002. Some observers believe that higher energy prices are the result of changes in supply and demand. Others believe that increased futures trading activity has also contributed to higher prices. This report, conducted under the Comptroller General of the United States' authority, examines (1) trends and patterns in the physical and energy derivatives markets, (2) the scope of the Commodity Futures Trading Commission's (CFTC) regulatory authority over these markets, and (3) the effectiveness of CFTC's monitoring and detection of market abuses and enforcement. For this work, GAO analyzed futures and large trader data and interviewed market participants, experts, and officials at six federal agencies. What GAO Found Rising energy prices have been attributed to a variety of factors, among them recent trends (2002-2006) in the physical and futures markets. These trends include (1) factors in the physical markets, such as tight supply, rising demand, and a lack of spare production capacity; (2) higher than average, but declining, volatility (a measure of the degree to which prices fluctuate over time) in energy futures prices for crude oil, heating oil, and unleaded gasoline; and (3) growth in several key areas, including the number of noncommercial participants in the futures markets (including hedge funds), the volume of energy futures contracts traded, and the volume of energy derivatives traded outside of traditional futures exchanges. Because these changes took place concurrently, the effect of any individual trend or factor is unclear. On the basis of its authority under the Commodity Exchange Act (CEA), CFTC focuses its oversight primarily on the operations of traditional futures exchanges, such as the New York Mercantile Exchange, Inc. (NYMEX), where energy futures are traded. Energy derivatives are also traded on other markets, namely, exempt commercial and over-the-counter (OTC) markets, that are exempt from CFTC oversight. Both types of markets have seen their volumes climb in recent years. Exempt commercial markets are electronic trading facilities where certain commodities, such as energy, are traded between large, sophisticated participants. OTC markets allow eligible parties to enter into contracts directly, without using an exchange. While the exempt commercial and OTC markets are subject to the CEA's antimanipulation and antifraud provisions and CFTC enforcement of those provisions, some market observers question whether CFTC needs broader authority to oversee these markets. CFTC is currently examining the effects of trading in the regulated and exempt energy markets on price discovery and the scope of its authority over these markets--an issue that will warrant further examination as part of the CFTC reauthorization process. Moreover, because of changes and innovations in the market, the methods used to categorize these data can distort the information reported to the public, which may not be completely accurate or relevant. CFTC conducts daily surveillance of trading on NYMEX that is designed to detect and deter fraudulent or abusive trading practices involving energy futures contracts. To detect abusive practices, such as potential manipulation, CFTC uses various information sources and relies heavily on trading activity data for large market participants. Using this information, CFTC staff may pursue alleged abuse or manipulation. However, because the agency does not maintain complete records of all such allegations, this lack of information makes it difficult to determine the usefulness and extent of these activities. In addition, CFTC's performance measures for enforcement do not fully reflect the program's goals and purposes, which could be addressed by developing additional outcome-based performance measures that more fully reflect progress in meeting the program's overall goals.

gao_GAO-14-445

gao_GAO-14-445_0

When Congress passed TRIA in 2002, its purposes included making terrorism insurance widely available and affordable for businesses. Comprehensive Data on Terrorism Insurance Are Not Readily Available and Treasury’s Analysis to Better Understand Fiscal Exposure Has Been Limited Comprehensive data on the terrorism risk insurance market are not readily available. However, federal internal control standards state that agencies should identify and obtain relevant and needed data to be able to meet program goals. Treasury Performs Limited Analysis to Help Estimate Federal Fiscal Exposure under TRIA Treasury has conducted limited analysis to help estimate the potential magnitude of the federal government’s fiscal exposure under TRIA under different scenarios of potential terrorist attacks. According to the insurers and other industry participants we spoke to, insurers’ best practices also show that an insurer’s analysis of the location and amount of coverage written is prudent for understanding the financial risks of a potential terrorist attack of a specific size. Without analyzing comprehensive market data on the type and amount of coverage provided from all insurers participating in the market, Treasury does not have enough information to help understand potential federal spending under various scenarios of potential terrorist attacks. According to the responses, on average terrorism insurance premiums made up less than 2 percent of commercial property and casualty premiums, or roughly $1.7 billion in calendar year 2012 (the range for the 15 insurers was 0.7 to 3 percent). Since 2010, both take-up rates and estimated terrorism insurance premiums have been relatively stable (see fig. TRIA Expiration or Modification Could Affect Availability of Terrorism Coverage and Federal Fiscal Exposure, but Additional Clarification of Covered Risks Is Needed Insurers and other industry participants cited concerns about the availability and price of terrorism coverage if TRIA expired or was changed substantially, but some changes could reduce the government’s fiscal exposure. For example, some insurers we interviewed said they would stop covering terrorism risks if TRIA expired. Insurers also expressed concerns about impacts on their solvency if the deductible or coshare percentages were increased. Such a scenario would approximate current-dollar losses similar to those that resulted from the September 11, 2001, terrorist attacks. The insurers’ share of losses increases with any decrease in federal fiscal exposures. While Treasury stated that the information available from other sources has been sufficient for purposes of responding to TRIA’s reporting requirements, more data and periodic assessments of the market would help Treasury assess whether the program goals of ensuring the continued widespread availability and affordability of terrorism risk insurance and addressing market disruptions are being met, and advance decision making about any potential program changes and the impact of those program changes on the market. Treasury agreed to collect the data needed to analyze the terrorism insurance market and to periodically assess these data for certain purposes, such as for differences in terrorism insurance by company size, geography, or industry sector and effects on the market for terrorism risk insurance of changing program parameters. Appendix I: Objectives, Scope, and Methodology The objectives of our report were to (1) evaluate the extent of available data and the U.S. Department of the Treasury’s (Treasury) efforts in determining the government’s exposure for the terrorism risk insurance program, (2) describe changes in the terrorism insurance market since 2002, and (3) evaluate potential impacts of selected changes to the Terrorism Risk Insurance Act (TRIA).

Why GAO Did This Study Congress passed TRIA in 2002 to help ensure the availability and affordability of terrorism insurance for commercial property and casualty policyholders after the September 11, 2001, terrorist attacks. TRIA was amended and extended twice and currently will expire at the end of 2014. Under TRIA, Treasury administers a program in which the federal government and private sector share losses on commercial property and casualty policies resulting from a terrorist attack. Because the federal government will cover a portion of insured losses, the program creates fiscal exposures for the government. GAO was asked to review TRIA. This report evaluates (1) the extent of available data on terrorism insurance and Treasury's efforts in determining federal exposure, (2) changes in the terrorism insurance market since 2002, and (3) potential impacts of selected changes to TRIA. To address these objectives, GAO analyzed insurance data, information from 15 insurers selected primarily based on size of insurer, interviewed Treasury staff and industry participants, updated prior work, and developed examples to illustrate potential fiscal exposure under TRIA. What GAO Found Comprehensive data on the terrorism insurance market are not readily available and Department of the Treasury (Treasury) analysis to better understand federal fiscal exposure under various scenarios of terrorist attacks has been limited. Treasury compiled some market data from industry sources, but the data are not comprehensive. Federal internal control standards state that agencies should obtain needed data and analyze risks, and industry best practices indicate that analysis of the location and amount of coverage helps understand financial risks. However, without more data and analysis, Treasury lacks the information needed to help ensure the goals of the Terrorism Risk Insurance Act (TRIA) of ensuring the availability and affordability of terrorism risk insurance and addressing market disruptions are being met and to better understand potential federal spending under different scenarios. Available data show that terrorism insurance premiums and other market indicators are stable. For example, estimated terrorism insurance premiums have been relatively constant since 2010 (see figure). Insurers told GAO that, in 2012, terrorism insurance premiums made up on average less than 2 percent of commercial property and casualty premiums. According to industry participants, prices for terrorism coverage have declined, the percentage of businesses buying coverage seems to have leveled recently, and insurers' ability to provide it has remained constant. Insurers and other industry participants cited concerns about the availability and price of terrorism coverage if TRIA expired or was changed substantially, but some changes could reduce federal fiscal exposure. Some insurers GAO contacted said they would stop covering terrorism if TRIA expired. Changes such as increasing the deductible or threshold for required recoupment of the government's share of losses through surcharges on all commercial policyholders could reduce federal fiscal exposure. Most insurers GAO contacted expressed concerns about solvency and ability to provide coverage if their deductible or share of losses increased. Insurers were less concerned about increases to the thresholds for government coverage to begin or to the required recoupment of the government's share of losses. What GAO Recommends Treasury should collect and analyze data on the terrorism insurance market to assess the market, estimate fiscal exposure under different scenarios, and analyze the impacts of changing program parameters. Treasury agreed with these recommendations.

gao_HEHS-99-23

gao_HEHS-99-23_0

Medicare’s home health care expenditures rose from $3.7 billion in 1990 to $17.8 billion in 1997. Surety Bond Specifications Determine Cost and Availability A surety bond is a three-party agreement. This scrutiny is one of the benefits of requiring a surety bond. Collateral, which ensures the compensation of the surety, is typically required when there is a greater risk of a loss because of the type of guarantee provided by the bond or the capacity of the firm to repay the surety. However, the effect of Florida Medicaid’s program integrity measures has few implications for Medicare’s imposition of a surety bond requirement. The state also targets the surety bond requirement to new and problem providers. HCFA Designed the Surety Bond Requirement to Recover Overpayments and Increase HHA Scrutiny HCFA, concerned about increases in overpayments to HHAs, structured the bond as a financial guarantee that agencies’ Medicare overpayments would be repaid, and it raised the required amount of the bond for larger agencies above the $50,000 specified by the BBA. Unrecovered Overpayments Are Currently a Small Share of Medicare’s HHA Payments HCFA specified a financial guarantee bond in its regulation and raised the value of the bond above the legislated minimum for larger agencies because of its concern about the recovery of overpayments to HHAs. Uncollected overpayments represented less than 1 percent of Medicare’s 1996 spending for home health care services. HCFA estimates that about 60 percent of HHAs had overpayments in 1996. One surety that underwrote about 13 percent of the HHA surety bonds sold before the postponement of the requirement told us that its fees ranged from 0.5 to 3 percent of the face value of the bonds. However, the value of this scrutiny would probably diminish with an HHA’s continued participation in Medicare. Similar Surety Bond Requirements for DME Suppliers, CORFs, and Rehabilitation Agencies Will Benefit Medicare but May Affect Small-Provider Participation HCFA intends to propose surety bond requirements for DME suppliers, CORFs, and rehabilitation agencies that will parallel those for HHAs—a financial guarantee bond with a face value equal to the greater of $50,000 or 15 percent of Medicare payments. The scrutiny provided by sureties will offer a review of their business practices and financial qualifications. Specifying the terms of a bond as HCFA did will provide incentives for HHAs to return overpayments. Such screening is most useful for new agencies. Recommendations to the Administrator of HCFA We recommend that to implement BBA’s surety bond requirement for HHAs, the HCFA Administrator revise the present regulation so that all HHAs obtain one financial guarantee surety bond in the amount of $50,000 for the guaranteed return of overpayments for both Medicare and Medicaid. Matters for Congressional Consideration With respect to the surety bond requirements that we are recommending, the Congress may wish to consider exempting from a surety bond requirement HHAs that have demonstrated fiscal responsibility—for example, those that have maintained a bond for a specified period of time and have returned any overpayments—and eliminating the option for HHAs of substituting a Treasury note, U.S. bond, or other federal public debt obligation for a surety bond. One representative thought that the Florida Medicaid program’s experience with surety bonds may be more relevant to Medicare’s experience than we do. Scope and Methodology To examine the surety bond issue, we reviewed our earlier extensive work on home health care and studied the regulation implementing the surety bond requirement in the Balanced Budget Act of 1997 (BBA) and related revisions and program memoranda, Department of Health and Human Services Office of Inspector General reports, and congressional hearing testimony. HCFA provided us with data on comprehensive outpatient rehabilitation facilities (CORF) and rehabilitation agencies.

Why GAO Did This Study Pursuant to a congressional request, GAO evaluated the surety bond requirements for home health agencies (HHA) participating in Medicare, focusing on: (1) analyzing the key features of surety bonds that affect their costs and effect; (2) examining the Florida Medicaid program's experience with a surety bond requirements for HHAs and its relevance to the Medicare surety bond requirement; (3) reviewing the rationale for the surety bond requirements the Health Care Financing Administration (HCFA) selected, the cost and availability of bonds, the benefits for Medicare, and the implications of substituting a government note for a surety bond as set forth in a Department of the Treasury regulation; and (4) drawing implications from the implementation of the HHA surety bond requirement for implementing a similar surety bond provision for durable medical equipment (DME) suppliers, comprehensive outpatient rehabilitation facilities (CORF), and rehabilitation agencies. What GAO Found GAO noted that: (1) a surety bond is a three-party agreement in which a company, known as a surety, agrees to compensate the bondholder if the bond purchaser fails to keep a specified promise; (2) the terms of the bond determine the bond's cost and the amount of scrutiny the purchaser faces from the surety company; (3) when the terms of bonds increase the risk of default, more firms have difficulty purchasing them; (4) the likelihood that a firm will be unable to repay a surety increases fees charged and collateral requirements or the surety's unwillingness to sell it a bond; (5) Florida Medicaid's experience offers few insights into the potential effect of Medicare's surety bonds because the state implemented its surety bond requirement selectively, for new and problem HHAs, in combination with several other program integrity measures; (6) after implementation, Florida officials reported that about one-quarter of its Medicaid-participating HHAs had left the program, however, this exodus was not caused primarily by the surety bond requirement; (7) HCFA requires a surety bond guaranteeing HHAs repayment of Medicare overpayments, and it has set the minimum level of the bond as the greater of $50,000 or 15 percent of an agency's Medicare revenues out of concern that about 60 percent of HHAs had overpayments in 1996, amounting to about 6 percent of Medicare's HHA spending, and that, in their opinion, overpayments would increase in the future; (8) yet, HCFA's experience shows that most overpayments are returned, so that the net unrecovered overpayments were less than 1 percent of Medicare's home health care expenditures in 1996; (9) HCFA's implementing regulation requiring a bond guaranteeing the return of overpayments made for any reason rather than only those attributable to acts of fraud or dishonesty increases the risk of default; (10) sureties' scrutiny, which focuses primarily on an agency's business practices and financial status, is probably useful for screening new HHAs; (11) a Treasury regulation that allows the substitution of a government note for any federally required surety bond may undermine the purpose of the bond because HHAs could avoid surety scrutiny; (12) the Balanced Budget Act also requires the DME suppliers, CORFS, and rehabilitation agencies obtain a surety bond valued at a minimum of $50,000; and (13) Medicare will benefit from greater scrutiny of these organizations and their stronger incentives to avoid overpayments.

gao_GAO-10-444

gao_GAO-10-444_0

Background SSA administers two federal programs under the Social Security Act that provide benefits to people with disabilities who are unable to work: The DI program provides cash benefits to workers with disabilities and their dependents based on their prior earnings. Federal Employees Receiving SSA Disability Benefits Our analysis of federal civilian salary data and SSA disability data found that about 7,000 individuals at selected agencies had been wage-earning employees for the federal government while receiving SSA disability benefits during fiscal year 2008. Our analysis of federal salary data from October 2006 through December 2008 found that about 1,500 federal employees’ records indicate that they may be improperly receiving payments. According to SSA officials, SSA currently does not obtain payroll records from the federal government to identify SSA disability beneficiaries or recipients who are currently working. As figure 2 shows, about 62,000 of these 144,000 individuals, or about 43 percent, had CDLs that were issued after SSA determined that the individuals met the federal requirements for full disability benefits. Our analysis of DOT data on commercial carriers found about 7,900 individuals who registered as transportation businesses and also received SSA disability benefits. In addition, DI beneficiaries may have a passive interest in the business, which would not affect their eligibility for benefits. SSA officials stated that these records do not have specific income records associated with them. Examples of Individuals Receiving SSA Disability Benefits Fraudulently and/or Improperly Based on our overall analysis above, we nonrepresentatively selected 20 examples of federal employees, commercial drivers, and registrants of commercial vehicle companies who received disability payments fraudulently and/or improperly. Thus, we concluded that SSA made improper payments to these individuals because SSA was aware of the employment but continued to make disability payments to those individuals. For 18 of these 20 cases, the individuals also received $250 stimulus checks as part of the Recovery Act while they were improperly receiving SSA disability payments. (See http://www.gao.gov/products/GAO-10-444.) Recommendations for Executive Action To enhance SSA’s ability to detect and prevent fraudulent and improper payments in its disability programs, we recommend that the Commissioner of Social Security take the following two actions to improve the agency’s processes: Evaluate the feasibility (including consideration of any costs and operational and system modifications) of incorporating the AERO process to identify individuals who have returned to work. SSA agreed with all our recommendations. As with the 10 cases discussed in the body of this report, the Social Security Administration (SSA) did not prevent improper payment of Social Security disability benefits to these individuals. Appendix II: Attributes of Selected Cases of SSA Disability Beneficiaries and Recipients Who Fraudulently and/or Improperly Received Benefits While Working Our investigations detailed examples of 20 federal employees, commercial drivers, and owners of commercial vehicle companies who fraudulently and/or improperly received disability payments. GAO Comments 1. 2. As such, our analysis provides an indicator of potentially improper or fraudulent activity related to federal employees, commercial drivers, and owners of commercial vehicle companies receiving SSA disability payments. The American Recovery and Reinvestment Act of 2009 states that these stimulus benefit payments should be provided to individuals who are entitled to DI benefit payments or are eligible for SSI cash benefits. 12.

Why GAO Did This Study The Social Security Administration (SSA) administers two of the nation's largest cash benefits programs for people with disabilities: the Social Security Disability Insurance (DI) program, which provides benefits to workers with disabilities and their family members, and the Supplemental Security Income (SSI) program, which provides income for individuals with disabilities who have limited income and resources. In 2008, SSA provided about $142 billion in financial benefits for these two programs. As part of the American Recovery and Reinvestment Act of 2009, the federal government also paid $250 to each SSA recipient, such as DI beneficiaries, SSI recipients, and old-age retirement beneficiaries. GAO was asked to (1) determine whether federal employees and commercial drivers and company owners may be improperly receiving disability benefits and (2) develop case study examples of individuals who fraudulently and/or improperly receive these benefits. To do this, GAO compared DI and SSI benefit data to civilian payroll records of certain federal agencies and carrier/driver records from the Department of Transportation (DOT) and 12 selected states. GAO also interviewed SSA disability beneficiaries and recipients. What GAO Found GAO analysis of SSA and federal salary data found that there are indications that about 1,500 federal civilian employees may have improperly received benefits. In addition, GAO obtained data from 12 selected states and found that 62,000 individuals received or had renewed commercial driver's licenses after SSA determined that the individuals met the federal requirements for full disability benefits. Under DOT regulations, these individuals' eligibility must be medically certified every 2 years. Lastly, GAO found about 7,900 individuals with registered transportation businesses who were receiving SSA disability benefits. SSA regulations allow certain recipients to work and still receive their disability benefits. Thus, each case would require an investigation to determine whether there were fraudulent payments, improper payments, or both. The GAO analyses provide an indicator of potentially improper and fraudulent activity related to SSA benefits for federal employees, commercial drivers, and registrants of commercial vehicle companies. SSA currently does not perform a federal payroll or DOT records match to identify individuals improperly receiving benefits. GAO nonrepresentatively selected and investigated 20 examples of individuals who improperly and in some cases fraudulently received disability payments. For these 20 cases, SSA did not have the processes to effectively prevent improper and/or fraudulent payments. To see video clips of three individuals working at their federal jobs, see http://www.gao.gov/products/GAO-10-444 . GAO identified several issues arising from the investigations. For example, SSA continued to improperly pay individuals who informed SSA of their employment. Using a process called Automated Earnings Reappraisal Operations (AERO), SSA examined the earnings for several individuals and automatically increased these individuals' disability payments because of raises in salary from their federal employment. SSA officials stated that they currently do not use AERO to identify individuals who have returned to work. In addition, 18 individuals received $250 stimulus payments while they were improperly receiving SSA disability payments. What GAO Recommends GAO makes two recommendations for SSA to detect and prevent fraudulent and improper payments. SSA agreed with our recommendations, but disagreed with some facts presented.

gao_GAO-16-315

gao_GAO-16-315_0

Within these goals, states are responsible for designing, implementing, and administering their welfare programs to comply with federal requirements, as defined by federal law and HHS. Each state’s TANF block grant amount is generally based on the amount of the state’s spending under AFDC. In addition, during the most recent recession, the federal government created a $5 billion Emergency Contingency Fund for state TANF programs through the American Recovery and Reinvestment Act of 2009 (Recovery Act), available in federal fiscal years 2009 and 2010. PRWORA coupled the block grant with an MOE provision, which requires states to maintain a portion of their own historic financial commitment to their welfare programs as a condition of receiving their full federal TANF allotments. In addition to its own spending, under HHS regulations, a state is permitted to count toward its TANF MOE requirement certain in-kind or cash expenditures by third parties—such as nongovernmental organizations (including nonprofit organizations or other private parties)—as long as the expenditures meet other TANF MOE requirements, including those related to eligible families and allowable activities. We have not updated this analysis, and information on how many states use excess MOE to reduce their required work participation rate is not readily available, according to HHS officials. On the other hand, some stakeholders have noted that allowing states to count nongovernmental third-party expenditures as MOE spending helps states meet TANF requirements and facilitates public and private partnerships. While Most States Do Not Regularly Count Nongovernmental Third-Party Expenditures as TANF MOE Spending, Some States Make Greater Use of It than Other States One-Third of States Counted Nongovernmental Third- Party Expenditures as TANF MOE Spending in Fiscal Year 2015 In fiscal year 2015, around one-third of states (16 of 51) reported counting nongovernmental third-party expenditures as TANF MOE spending. After peaking at 24 states in 2010—the last year Recovery Act Emergency Contingency Funds were available—the number of states counting such expenditures as TANF MOE spending fell. However, since that time the number of states that have counted nongovernmental third-party expenditures toward TANF MOE requirements has remained higher than pre-Recovery Act levels (see fig. 1). 2). States Most Often Reported Food Assistance as the Nongovernmental Third-Party Provided Service Counted as TANF MOE Spending According to our survey, most states that reported having counted nongovernmental third-party expenditures toward their state’s TANF MOE requirement in federal fiscal year 2015 also reported counting expenses related to food assistance service as TANF MOE spending. Similarly, officials in Arizona reported that through an agreement with the Association of Arizona Food Banks, the state counts toward its TANF MOE requirement the value of the food assistance services the food bank provides to families considered eligible for TANF services as defined by the state and the administrative expenses associated with providing this service. Agency Comments and Our Evaluation We provided a draft of this report to HHS. HHS provided written comments, reproduced in appendix II, in which the agency agreed with our findings. At that time, we will send copies of this report to the appropriate congressional committees, the Secretary of Health and Human Services, and other interested parties.

Why GAO Did This Study Each year, TANF block grants, which are overseen by the U.S. Department of Health and Human Services (HHS), provide $16.5 billion in federal funds to states to assist low-income families. States are also required to spend a significant amount of their own funds under TANF, but they can include certain expenditures made by nongovernmental third parties toward their MOE requirement. Some stakeholders support this option because it helps states meet MOE requirements, but others question whether this approach is consistent with program goals. GAO was asked to update the information presented in its 2012 report on this topic ( GAO-12-929R ). This report updates information on, among other things, (1) the extent to which states count nongovernmental third-party expenditures for services as TANF MOE spending, and (2) the types of nongovernmental third-party services provided that states counted as TANF MOE spending. To obtain this information, GAO surveyed state TANF directors in all 50 states and the District of Columbia and reached a 100-percent response rate. GAO also reviewed relevant federal laws and regulations, reviewed HHS expenditure data, and interviewed HHS officials. Lastly, GAO interviewed TANF officials in three states selected to reflect geographic diversity and variety among other factors. What GAO Found Nearly one-third of states (16 of 51) reported counting nongovernmental third-party expenditures toward their states' required spending level under the Temporary Assistance for Needy Family (TANF) block grant in fiscal year 2015, according to GAO's survey of all state TANF directors. TANF requires states to maintain a significant portion of their own historic financial commitment, called maintenance of effort (MOE), to welfare-related programs. In addition to its own spending, a state may count toward its MOE requirement certain in-kind or cash expenditures by nongovernmental third parties—such as food banks—as long as these services are allowable under TANF, are provided to needy families, and the state meets other requirements. The number of states counting such expenditures as MOE spending increased substantially between fiscal years 2009 and 2010, perhaps in part due to requirements necessary to obtain additional funding under the American Recovery and Reinvestment Act of 2009 (Recovery Act). After fiscal year 2010, the number of states counting nongovernmental third-party expenditures toward their TANF MOE requirements fell, but remained higher than pre-Recovery Act levels for other reasons. States that reported such expenditures as TANF MOE spending cited reasons such as developing public-private partnerships and meeting state MOE requirements. Of the 16 states that reported counting nongovernmental third-party expenditures as TANF MOE spending in fiscal year 2015, most said the types of services they counted involved food assistance and programs serving youth, according to GAO's survey. For example, one state reported working with a food bank to count the value of the food the bank provided to families deemed needy under state TANF rules. What GAO Recommends GAO is not making recommendations in this report. HHS agreed with the findings, and provided written comments on the report.

gao_GAO-12-629

gao_GAO-12-629_0

Specifically, an estimate is comprehensive when it accounts for all possible costs associated with a program, is structured in sufficient detail to ensure that costs are neither omitted nor double counted, and documents all cost- influencing assumptions; well-documented when supporting documentation explains the process, sources, and methods used to create the estimate, contains the underlying data used to develop the estimate, and is adequately reviewed and approved by management; accurate when it is not overly conservative or optimistic, is based on an assessment of the costs most likely to be incurred, and is regularly updated so that it always reflects the current status of the program; and credible when any limitations of the analysis because of uncertainty or sensitivity surrounding data or assumptions are discussed, the estimate’s results are cross-checked, and an independent cost estimate is conducted by a group outside the acquiring organization to determine whether other estimating methods produce similar results. While the eight agencies varied in the extent to which their cost- estimating policies and procedures addressed best practices, most did not address several key components of an effective policy. Clear requirement for cost estimating: Six of the eight agencies fully addressed this policy component by establishing a clear requirement for all programs to perform life-cycle cost estimates, and in certain cases specified more stringent requirements for programs designated as major investments. Agencies that do not establish a central and independent cost-estimating team may lack the ability to improve the implementation of cost-estimating policies, support cost-estimating training, and validate the reliability of program cost estimates at the department or agency level. Without establishing a standard structure for defining work products, agencies will not be positioned to ensure that they can effectively compare programs and collect and share data among programs. Until the selected agencies address the identified weaknesses in their cost-estimating policies, it will be difficult for them to make effective use of program cost estimates for informed decision making, realistic budget formation, and meaningful progress measurement. Selected Agencies’ Program Cost Estimates Do Not Provide a Fully Reliable Basis for Program and Budget Decisions A reliable cost estimate is critical to the success of any government acquisition program, as it provides the basis for informed investment decision making, realistic budget formulation and program resourcing, and meaningful progress measurement. These practices can be organized into four characteristics— comprehensive, well-documented, accurate, and credible. While all 16 major acquisition programs we reviewed had developed cost estimates and were using them to inform decision making, all but one of the estimates were not fully reliable and did not provide a sound basis for informed program and budget decisions. However, nearly all of these programs had estimates that did not fully reflect important cost-estimating practices. Inadequate Implementation Was Largely Due to Weaknesses in Policy The lack of reliable cost estimates across the investments exists in part because of the weaknesses previously identified in the eight agencies’ cost-estimating policies. Recommendations for Executive Action To address weaknesses identified in agencies’ policies and practices for cost estimating, we are making the following recommendations: We recommend that the Secretaries of Agriculture, Commerce, Homeland Security, Labor, and Veterans Affairs, the Attorney General, and the Administrator of the Environmental Protection Agency direct responsible officials to modify policies governing cost estimating to ensure that they address the weaknesses that we identified. These agencies generally agreed with our results and recommendations, although EPA disagreed with our assessment of the cost-estimating practices used for one of its programs. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) assess the extent to which selected departments and agencies have appropriately implemented cost- estimating policies and procedures, and (2) evaluate whether selected information technology (IT) investments at these departments and agencies have reliable cost estimates to support budget and program decisions. For this review, we assessed eight federal agencies and 16 investments. These agencies were the Departments of Agriculture, Commerce, Defense, Homeland Security, Justice, Labor, and Veterans Affairs, and the Environmental Protection Agency. According to program documentation, these increases were due, in part, to incorporating costs for the operation and maintenance of the system.

Why GAO Did This Study The federal government plans to spend at least $75 billion on information technology (IT) investments in fiscal year 2012. The size of this investment highlights the importance of reliably estimating the costs of IT acquisitions. A reliable cost estimate is critical to the success of any IT program, providing the basis for informed decision making and realistic budget formation. Without the ability to generate such estimates, programs risk missing their cost, schedule, and performance targets. GAO was asked to (1) assess selected federal agencies’ implementation of cost-estimating policies and procedures, and (2) evaluate whether selected IT investments at these agencies have reliable cost estimates to support budget and program decisions. To do so, GAO compared policies and procedures to best practices at eight agencies. GAO also reviewed documentation supporting cost estimates for 16 major investments at these eight agencies—representing about $51.5 billion of the planned IT spending for fiscal year 2012. What GAO Found While the eight agencies GAO reviewed—the Departments of Agriculture, Commerce, Defense, Homeland Security, Justice, Labor, and Veterans Affairs, and the Environmental Protection Agency—varied in the extent to which their cost-estimating policies and procedures addressed best practices, most had significant weaknesses. For example, six of the eight agencies had established a clear requirement for programs to develop life-cycle cost estimates. However, most of the eight agencies’ policies lacked requirements for cost-estimating training, a standard structure for defining work products, and a central, independent cost-estimating team, among other things. The weaknesses in agencies’ policies were due, in part, to the lack of a priority for establishing or enhancing department or agency-level cost-estimating functions. Until agencies address weaknesses in their policies, it will be difficult for them to make effective use of program cost estimates for informed decision making, realistic budget formation, and meaningful progress measurement. The 16 major acquisition programs had developed cost estimates and were using them, in part, to support program and budget decisions. However, all but 1 of the estimates were not fully reliable—meaning that they did not fully reflect all four characteristics of a reliable cost estimate identified in the GAO cost-estimating guide: comprehensive, well-documented, accurate, and credible. For example, the estimates for many of these investments did not include all life-cycle costs, such as costs for operating and maintaining the system; did not adequately document the source data and methodologies used to develop the estimate; were not regularly updated so that they accurately reflected current status; and lacked credibility because they were not properly adjusted to account for risks and uncertainty. The inadequate implementation of cost-estimating best practices was largely due to weaknesses in agencies’ policies. Until cost-estimating best practices are fully implemented, these programs face an increased risk that managers will not be able to effectively use their cost estimates as a sound basis for informed program and budget decision making. What GAO Recommends GAO is recommending that the selected agencies modify cost-estimating policies to be consistent with best practices and update future cost estimates of the selected acquisition programs to address identified weaknesses. The seven agencies that commented on a draft of this report generally agreed with GAO’s results and recommendations, although the Environmental Protection Agency disagreed with the assessment of one of its investments. However, GAO stands by its assessment.

gao_GAO-06-962

gao_GAO-06-962_0

These operations have required large numbers of forces with support skills, such as military police and civil affairs. Army Combat Support and Combat Service Support Skills Are in Increasingly Short Supply, and Data on Skilled Individuals Available for Future Deployments Are Not Integrated into the Sourcing Process Ongoing operations in Iraq and Afghanistan have created continuing high demand for certain combat support and combat service support skills, including military police, engineering, and civil affairs, and officials charged with sourcing future rotations have a limited view of what personnel remain available for future rotations. The supply of personnel already trained in high- demand skills and eligible to deploy has decreased as operations have continued because many personnel with these skills are reservists whose deployments and duration of involuntary active duty service under the partial mobilization authority are limited by DOD and Army policy. However, DOD officials charged with identifying forces for future rotations have not had a source of readily available, comprehensive personnel data on deployment histories and skills across the services. Further, without complete, reliable, and accessible data that provide greater visibility over its available forces, DOD will lack analytical bases for requesting changes in or exceptions to current deployment policies when needed. However, DOD officials charged with identifying the personnel who could be reassigned or retrained to meet requirements were challenged because they did not have information that linked data on personnel who remained eligible to deploy and their skills across the services. Moreover, it does not provide an ability to make future projections about whether DOD will be able to meet future requirements or will need to consider other alternatives. Until DOD systematically integrates such data into its process for identifying forces, it will continue to use an inefficient process and make important decisions about how to meet the combatant commander’s requirements based on limited information. DOD Has Not Conducted a Comprehensive, Data- Driven Analysis of Options to Enhance the Availability of Personnel with High- Demand Skills for Future Rotations Although DOD found ways to meet the combatant commander’s requirements for high-demand skills through the 06-08 rotation, it has not undertaken a comprehensive analysis of options to support future rotations in Iraq and Afghanistan should they continue for a number of years. Identifying forces for future rotations is likely to become more difficult for DOD without comprehensive analyses of options for meeting potential future requirements. Additionally, without linking data to options, the services may have difficultly deploying all reservists at least once before other reservists are required to deploy for a second time, which is a key goal of officials in OSD. If DOD had data- driven analyses of options to increase available skilled personnel, DOD leaders would have a better basis for considering policy changes and congressional decision makers would have more complete information with which to carry out their oversight responsibilities with regard to the size and composition of the force, mobilization policies, and other issues. Recommendations for Executive Action To facilitate DOD’s decision making to meet the demands associated with the Global War on Terrorism and to increase the availability of skilled personnel, we recommend that the Secretary of Defense take the following two actions: Integrate comprehensive data that identify active and reserve personnel according to deployment history and skill set, including personnel who are available to deploy, with DOD’s sourcing process before identifying combat support and combat service support personnel for the next rotation to Iraq and Afghanistan. Such analyses should include an assessment of options, such as using more personnel with support skills from the Army and other services; transferring more positions to high-demand areas; changing deployment lengths; and increasing Army end strength, which would increase the availability of personnel in high-demand skills. To assess the extent to which DOD has conducted a comprehensive, data- driven analysis of its alternatives to continue meeting requirements for high-demand forces, we met with officials in the Office of the Under Secretary of Defense for Personnel and Readiness (Readiness, Programming and Assessment), the Joint Chiefs of Staff, the U.S. Army’s Office of the Deputy Chief of Staff for Operations and Plans, and the U.S. Joint Forces Command Joint Deployment Operations Division to determine whether the department had plans to conduct assessments. GAO Comments 1. 2.

Why GAO Did This Study Since the terrorist attacks of September 11, 2001, the war on terrorism has dominated the global security environment. Ongoing overseas operations and heavy reliance on reservists have raised concerns about how the Department of Defense (DOD) will continue to meet its requirements using an all-volunteer force. The Army, in particular, has faced continuing demand for large numbers of forces, especially for forces with support skills. GAO was mandated to examine the extent of DOD's reliance on personnel with high-demand skills and its efforts to reduce or eliminate reliance on these personnel. Accordingly, GAO assessed (1) the combat support and combat service support skills that are in high demand and the extent to which DOD officials have visibility over personnel who are available for future deployment and (2) the extent to which DOD has conducted a comprehensive, data-driven analysis of alternatives for providing needed skills. What GAO Found Ongoing operations in Iraq and Afghanistan have required large numbers of ground forces, creating particularly high demand for certain combat support and combat service support skills, such as military police and civil affairs. After determining which requirements can be met with contractor personnel, DOD then determines how to meet requirements for military personnel. DOD officials charged with identifying forces have not had full visibility over the pool of skilled personnel available for future deployments. For some skills, the combatant commander's operational requirements have exceeded the initial supply of readily available trained military forces. DOD has met demands for these skills through strategies such as reassigning or retraining personnel. However, many of the skilled personnel in high demand are reservists whose involuntary active duty is limited under the current partial mobilization authority and DOD and Army policy. To meet requirements, officials charged with identifying personnel for future rotations developed an inefficient, labor-intensive process to gather information needed for decision making because integrated, comprehensive personnel data were not readily available. DOD is taking steps to develop comprehensive data that identify personnel according to deployment histories and skills; however, until DOD systematically integrates such data into its process for identifying forces, it will continue to make important decisions about personnel for future rotations based upon limited information and lack the analytical bases for requesting changes in or exceptions to deployment policies. Although DOD has developed several strategies to meet the combatant commander's requirements for previous rotations, it has not undertaken comprehensive, data-driven analysis of options that would make more personnel available for future rotations in Iraq and Afghanistan. A key reason why DOD has not conducted comprehensive analyses of options is that its process for identifying forces focuses on one rotation at a time and does not take a long-term view of potential requirements. Prior GAO work has shown that reliable data about current and future workforce requirements are essential for effective strategic planning, as is the data-driven analysis of the number of personnel and the skill mix needed to support key competencies. With data that link deployment dates and skills, DOD could assess options, including using more personnel with support skills from the Army and other services, transferring more positions to high-demand areas, and changing deployment lengths. Each of these options has both advantages and disadvantages. However, without a comprehensive analysis of the options and their related advantages and disadvantages, DOD will be challenged to plan effectively for future requirements and to meet recruiting goals. Additionally, without linking data and options, the services may have difficulty deploying all reservists once before other reservists are required to deploy for a second time, which is a key DOD goal. Moreover, the Secretary of Defense and Congress will not have complete information with which to make decisions about the size and composition of the force, mobilization policies, and other issues.

gao_GAO-01-442

gao_GAO-01-442_0

Conclusion Demonstration studies, despite some methodological limitations, provide program managers and policymakers with some useful information about the types of WIC nutrition service interventions that can have positive impacts on participants. However, only one recent demonstration study provides any information on the costs associated with implementing various interventions. Given the limited resources available to provide WIC nutrition services, information about the costs to provide effective services could play a critical role in managers’ decisions to implement the intervention and policymakers’ decisions about funding the intervention.

What GAO Found Despite methodological limitations, demonstration studies provide program managers and policymakers with some useful information on the types of Special Supplemental Program for Women, Infants and Children (WIC) nutrition service interventions that can have positive results for participants. However, only one recent demonstration study provides any information on the costs associated with implementing various interventions. Given the limited resources available to provide WIC nutrition services, information on the costs to provide effective services could play a critical role in managers' decisions to implement the intervention and policymakers' decisions on funding the intervention.

gao_GAO-13-160

gao_GAO-13-160_0

Common Themes among Private Entities Pertain to Performance Measurement and Incentive Payment; Physician Organizations Largely Concur with These Themes We identified several common themes among private entities with physician payment initiatives in our study. Stakeholders Largely Agreed That Performance Measurement and Incentive Payment Should Be at the Physician-Group Level Private Entities Private entities in our study generally based incentive payments on the performance of physician groups rather than individual physicians largely because of methodological issues and the importance of reinforcing group-wide accountability. BCBS MI’s PGIP has an incentive pool that provides for a bonus payment depending on performance on specific subinitiatives in which participating physician organizations choose to participate. From the physicians’ perspective, timely incentive payment cycles from private entities can be helpful for monitoring and adjusting performance. Physician organizations included in our review stated that incentive payments should be distributed soon after the achievement of performance to make the most difference. CMS’s Efforts to Tie Physician Payments to Quality and Efficiency Reflect, to Varying Degrees, Common Themes of Private Entities with Physician Payment Initiatives CMS’s efforts—particularly through the Value Modifier program—to reform the Medicare physician payment system reflect, to varying degrees, the common themes we identified among private entities with physician payment initiatives. Although these steps are designed to raise the number of physicians whose performance will be measured at the group level, CMS has not yet developed a method of reliable measurement for physicians in small practices in the Value Modifier program. CMS Has Begun Standardizing Metrics and Seeking Ways to Better Measure Specialty Care According to CMS officials, the agency is taking steps to both develop a standard set of metrics across its programs and enlarge the number of specialty care metrics in use. CMS to Target Outlier Performers and Use Absolute Benchmarks but Not Reward Improvement under Value Modifier Program CMS plans to implement the Value Modifier by providing incentives only to physicians determined to be performance outliers on the basis of benchmarks using absolute targets based on existing performance, but not performance improvement. For instance, most of the private entities in our study provide incentives that are tied to absolute performance benchmarks or some combination of absolute benchmarks and improved performance; in addition to approving the use of absolute benchmarks, physicians in our review favored incentives that reward improvement because baseline levels of performance vary. While CMS has noted the need for 1 year to ensure accurate data, most of the private entities we contacted make incentive payments within 7 months of the end of the performance period so that physicians can readily see the financial effect of their performance. CMS’s 1-year time lag between performance measurement and payment adjustment may diminish the significance of the incentive to physicians. Recommendations for Executive Action As CMS continues to implement and refine the Value Modifier program to enhance the quality and efficiency of physician care, the Administrator of CMS should consider whether certain private-sector practices could broaden and strengthen the program’s incentives. Specifically, she should consider developing at least some performance benchmarks that reward physicians for improvement as well as for meeting absolute performance benchmarks, and making Value Modifier adjustments more timely in order to better reflect recent physician performance. Specifically, HHS stated that it will consider developing performance benchmarks that reward physician improvement once the agency has greater physician reporting on quality measures; as it develops the technology to handle claims data and quality data more rapidly, it will look for ways to decrease the gap between the performance period and the application of the Value Modifier; and it will seek to develop strategies to reliably measure the performance of solo and small physician practices.

Why GAO Did This Study The Middle Class Tax Relief and Job Creation Act of 2012 required that GAO examine private-sector initiatives that base or adjust physician payment rates on quality and efficiency, and the initiatives’ applicability to the Medicare program. This report provides information on (1) common themes among private entities with payment incentive initiatives, and physician perspectives on those themes; and (2) the extent to which CMS’s financial incentive initiatives for Medicare physicians reflect such themes. GAO acquired information from nine private entities on 12 initiatives selected from expert referrals to include various sizes, types, and geographic locations. GAO also obtained information from physician groups, state medical societies, and national physician organizations. GAO additionally interviewed CMS officials and reviewed relevant CMS documents. What GAO Found GAO identified several common themes among private entities under review with initiatives that provide incentives for high-quality, efficient care, and selected physician organizations generally support these themes. Specifically: Private entities generally measure performance and make incentive payments at the physician-group level rather than at the individual-physician level. Physician organizations favor this approach. Private entities use nationally endorsed performance metrics and noted the need for a standardized set of metrics across all payers. Physician organizations concur that a standardized set of metrics would be less administratively complex. Most private entities in GAO's study provide financial incentives tied to meeting absolute benchmarks--fixed performance targets--or a combination of absolute benchmarks and performance improvement. Physician organizations prefer incentives tied to absolute benchmarks over those based on how physicians perform relative to their peers. Physician organizations also favored incentives that reward improvement because baseline levels of performance vary. While private entities' incentive payments vary in size and in method, private entities typically provide such payments within 7 months of the end of the performance measurement period. Physician organizations stated that financial incentives should be distributed soon after the measurement period to have the greatest effect on performance. The efforts of the Centers for Medicare & Medicaid Services (CMS)--the agency within the Department of Health and Human Services (HHS) that administers the Medicare program--to transform the physician payment system in Medicare reflect, to varying degrees, the themes that GAO identified among selected private entities with physician payment incentives. Specifically, CMS is taking steps to do the following: Focus on group-level performance measurement and payment adjustments in the Value-based Payment Modifier (Value Modifier) program, designed to adjust Medicare payments to physicians using performance data on the quality and cost of care provided. However, CMS has yet to develop a method of reliably measuring the performance of physicians in small practices in the Value Modifier program. Apply Value Modifier payment adjustments to outlier physicians--rewarding high performers and penalizing poor performers--using absolute performance targets but not performance improvement. Under this benchmarking strategy, it is likely that only high performers will elect to participate in the program's payment adjustment. Annually adjust payments through the Value Modifier 1 year after the performance measurement period ends, rather than applying the Value Modifier closer to the time of service delivery. This time lag between performance and payment adjustment may diminish the significance of the incentive to physicians. What GAO Recommends CMS should consider whether certain private-sector practices could broaden and strengthen the Value Modifier program's incentives. Specifically, the agency should consider rewarding physicians for performance improvement as well as for meeting absolute benchmarks, and making more timely payment adjustments to better reflect recent physician performance. Furthermore, the agency should develop a strategy to reliably measure the performance of solo or small physician practices. HHS concurred with all of GAO's recommendations for CMS.

gao_GAO-02-1020

gao_GAO-02-1020_0

Building the second-generation vehicle will be a considerably complex and challenging endeavor for NASA—from both a technical and business standpoint. Important Decisions to Be Made Before Requirements Can Be Defined According to a NASA official, NASA plans to define the basic requirements for its second-generation space transportation—that is, what the crew size will be, what the payload capacity will be, and what designs or architectures are worth pursuing—by November 2002. First, NASA must complete its ongoing reassessment of its overall space transportation plan. This evaluation is being done as part of NASA’s development of a budget proposal for fiscal year 2004. Second, NASA is currently reassessing the future of the International Space Station. Key Management Controls Are Not Yet Implemented NASA cannot implement key management controls for the SLI program until it defines its basic requirements. It is important that NASA develop such measures as soon as possible. NASA must first decide whether developing a second-generation vehicle to be deployed in 2014 to 2015 is still a worthwhile endeavor, given plans to extend the life of the space shuttle and cut back on the space station’s capabilities, and if so, what specific direction the program should take and how it will fit in with DOD efforts. Until it does so, NASA will not be able to assure its managers and the Congress that the initial investment is being spent wisely and that risks are being reduced, and it will not be able to predict what the total costs of the program will be. Reassess the schedule for defining the requirements for the Space Launch Initiative in order to ensure that the agency takes the following actions before making final decisions on basic requirements and selecting three architectures to pursue: (1) complete the reassessment of NASA’s integrated space transportation plan, (2) reach consensus with its international partners on the future of the space station, and (3) reach consensus with the Department of Defense on its role in the SLI effort. 4.

What GAO Found In 2001, the National Aeronautics and Space Administration (NASA) began undertaking a new effort--the Space Launch Initiative (SLI)--to develop a new generation of space transportation vehicles. SLI is expected to result in development of the second generation of reusable launch vehicles, the space shuttle being the first generation. NASA plans to define basic requirements for its second-generation reusable launch vehicle--that is, what the crew size will be, what the payload capacity will be, and what designs or architectures are worth pursuing--by November 2002. However, considerable challenges must be addressed before NASA can accomplish this. First, NASA has to complete a reassessment of its overall space transportation plans. Second, NASA is currently reassessing the future of the International Space Station. The decisions it will make as part of this evaluation, such as how many crew will operate the station, will have a dramatic impact on NASA's requirements for a second-generation vehicle. Third, NASA needs to decide whether the SLI program will be developed jointly with the Department of Defense (DOD) and, if so, how can it accommodate DOD's requirements for a reusable launch vehicle. Until NASA finalizes its basic requirements for SLI, it cannot implement management controls that are essential to predicting what the total costs of the program will be and to minimizing the risks with NASA's planned initial investment of $4.8 billion. It is important for NASA to implement management controls for SLI as soon as possible, so that it can provide its managers and Congress with the information needed to ensure that the program is on track and able to meet expectations.

gao_GAO-14-563T

gao_GAO-14-563T_0

Trends in DOD’s Portfolio of Major Acquisitions There can be little doubt that we can—and must—get better outcomes from our weapon system investments. As seen in table 1, the value of these investments in recent years has been on the order of $1.5 trillion or more, making them a significant part of the Federal discretionary budget. Also, as indicated in table 1, 42 percent of programs have had unit cost growth of 25 percent or more. For example, 50 of the 80 programs in the portfolio reduced their total acquisition costs over the past year. A number of these programs have improved their buying power by finding efficiencies. It is the “how to” side of acquisitions. Recent, significant changes to the policy include those introduced by the Weapon Systems Acquisition Reform Act of 2009 and the Department’s own “Better Buying Power” initiatives which, when fully implemented, should further strengthen practices that can lead to successful acquisitions. The policy provides a framework for developers of new weapons to gather knowledge at appropriate stages that confirms that their technologies are mature, their designs are stable, and their production processes are in control. These improvements do not yet signify a trend or suggest that a corner has been turned and, in fact, we found in our annual assessment of programs that most are not yet fully following a knowledge-based acquisition approach. In other words, the reforms have not yet been institutionalized within the services. Further, some programs are significantly at odds with the acquisition process. The question is why aren’t we doing it?” To that point, reforms have been aimed mainly at the “what” versus the “why.” They have championed sound management practices, such as realistic estimating, thorough testing, and accurate reporting. Seen this way, the practices prescribed in policy are only partial remedies. The acquisition of weapons is much more complex than this and involves very basic and strongly reinforced incentives to pursue weapons that are not always feasible and affordable. I will now discuss several factors that illustrate the pressures that create incentives to deviate from sound acquisition management practices. While the department has worked hard to overcome this fragmented decision making paradigm and policies have been written to force more integrated decisions and more accountability, we continue to see programs that have experienced cost and schedule growth. Collectively, as participants’ needs are translated into actions on weapon programs, the purpose of such programs transcends efficiently filling voids in military capability. Government and industry defense managers often go to great lengths to preserve the myth that large defense programs are developed and produced through the free enterprise system.” But neither the defense industry nor defense programs are governed by the free market; “major defense acquisition programs rarely offer incentives resembling those of the commercial marketplace.” The Right People Dr. Fox also points out that in private industry, the program manager concept works well because the managers have genuine decision-making authority, years of training and experience, and understand the roles and tactics within government and industry. Other acquisition reform studies over the past decade have highlighted this issue as well. Drawing on our extensive body of work in weapon system acquisition, there are six areas of focus regarding where to go from here. These are not intended to be all-encompassing, but rather, practical places to start the hard work of realigning incentives with desired results. DOD must be open to examining best practices and implementing new rules to really integrate the processes into one and holding all communities accountable for decisions. Identify significant program risks upfront and resource them: Weapon acquisition programs by their nature involve risks, some much more than others. More closely align budget decisions and program decisions: Because budget decisions are often made years ahead of program decisions, they depend on the promises and projections of program sponsors. Investigate other tools to improve program outcomes: There are ways to structure an acquisition program that would create opportunities for better outcomes.

Why GAO Did This Study DOD's acquisition of major weapon systems has been on GAO's high risk list since 1990. Over the past 50 years, Congress and DOD have continually explored ways to improve acquisition outcomes, including reforms that have championed sound management practices, such as realistic cost estimating, prototyping, and systems engineering. While some progress has been made, too often GAO reports on the same kinds of problems with acquisition programs today that it did over 20 years ago. The topic of today's hearing is: “Reform of the Defense Acquisition System.” To address the topic, this testimony discusses (1) the performance of DOD's major defense acquisition program portfolio; (2) the management policies and processes currently in place to guide those acquisitions; (3) the incentives to deviate from otherwise sound acquisition practices; and (4) suggestions to temper these incentives. This statement draws from GAO's extensive body of work on DOD's acquisition of weapon systems. What GAO Found The Department of Defense (DOD) must get better outcomes from its major weapon system investments, which in recent years have totaled around $1.5 trillion or more. Recently, there have been some improvements, owing in part to recent reforms. For example, 50 of the 80 weapon system programs in the portfolio reduced their total acquisition costs over the past year, and a number of them also improved their buying power by finding efficiencies. Still, cost and schedule growth remain significant; 42 percent of programs have had unit cost growth of 25 percent or more. DOD's acquisition policy provides a structured framework for developers to gather knowledge at appropriate stages that confirms that their technologies are mature, their designs stable, and their production processes are in control. The Weapon Systems Acquisition Reform Act of 2009 and DOD's recent “Better Buying Power” initiatives introduced significant changes that, when fully implemented, should further strengthen practices that can lead to successful acquisitions. While recent reforms have benefited individual programs, it is premature to say there is a trend or a corner has been turned. The reforms still face implementation challenges and have not yet been institutionalized within the services. Reforms that focus mainly on the mechanisms of the acquisition process are only partial remedies because they do not address incentives to deviate from sound practices. Weapons acquisition is a complex system, complete with incentives to pursue programs that are not always feasible and affordable. These incentives stem from several factors. For example, the fragmented decision making paradigm in DOD and different participants involved in the acquisition process impose conflicting demands on weapon programs so that their purpose transcends filling voids in military capability. Also, the budget process forces funding decisions to be made well in advance of program decisions, encouraging undue optimism. Finally, DOD program managers' short tenures and limitations in experience and training can foster a short-term focus and put them at a disadvantage with their industry counterparts. Drawing on its extensive body of work in weapon systems acquisition, GAO sees several areas of focus regarding where to go from here: 1) examining best practices to integrate critical requirements, resources, and acquisition decision making processes; 2) attracting, training, and retaining acquisition staff and managers so that they are both empowered and accountable for program outcomes; 3) at the start of new programs, using funding decisions to reinforce desirable principles such as well-informed acquisition strategies; 4) identifying significant risks up front and resourcing them; 5) exploring ways to align budget decisions and program decisions more closely; and 6) investigating tools, such as limits on system development time to improve program outcomes. These are not intended to be all-encompassing, but rather, practical places to start the hard work of holding decision makers more accountable and realigning incentives with desired results.

gao_GAO-01-796

gao_GAO-01-796_0

Conclusions Inefficiencies in the current process increase both the time it takes to pay the attorney fees and the costs of administration. One segment of attorney fee processing—the fee approval process—was substantially simplified in 1991. Systems support could streamline the second segment of the processing—the fee payment—thus lowering the annual administrative costs and cutting processing time. If SSA automated this final segment of the fee processing, it could help improve customer service for both claimants and their attorneys. We found that despite internal recommendations for a new system, SSA has repeatedly postponed its plans to improve the attorney fee payment process. Indeed, even though these improvements have been part of SSA’s system’s plans since at least 1998, SSA has yet to establish a firm schedule for carrying out its plans. Additionally, while SSA has a draft plan for improving the process, agency officials told us that details related to the plan have not been completed and SSA has yet to complete a cost estimate for the project. There are also other gaps in the plan—such as not creating an attorney master file or establishing an electronic connection between the payment processing staff and the OHA fee approval staff—where taking additional actions could improve the process. Furthermore, SSA’s performance plan did not have goals related to attorney fees—neither for cost reduction of the program nor payment timeliness. SSA would need such goals as part of its current planning effort for improving the attorney fee payment process as well as for its future operations. Without such quantifiable goals, future efforts to track and oversee SSA’s progress in these areas will be difficult. Appendix II: Comments from the Social Security Administration

Why GAO Did This Study To ensure that people claiming disability insurance benefits can obtain legal representation at a fair price, the Social Security Act requires that the Social Security Administration (SSA) regulate the fees that attorneys charge people to represent their disability claims before the agency. Inefficiencies in the current process increase both the time it takes to pay the attorney fees and the costs of administration. One segment of attorney fee processing--the fee approval process--was substantially simplified in 1991. Systems support could streamline the second segment of the processing--the fee payment--thus lowering the annual administrative costs and cutting processing time. By automating this final segment of the fee processing, SSA could help improve customer service for both claimants and their attorneys. What GAO Found GAO found that despite internal recommendations for a new system, SSA has repeatedly postponed its plans to improve the attorney fee payment process. Indeed, even though these improvements have been part of SSA's system's plans since 1998, SSA has yet to establish a firm schedule for carrying out its plans. Additionally, although SSA has a draft plan for improving the process, agency officials told GAO that the details of the plan have not been completed and SSA has yet to complete a cost estimate for the project. There are also other gaps in the plan--such as not creating an attorney master file or establishing an electronic connection between the payment processing staff and the Office of Hearings and Appeals fee approval staff--where taking additional actions could improve the process. Furthermore, SSA's performance plan did not have goals related to attorney fees--neither for cost reduction of the program nor payment timeliness. SSA would need such goals as part of its current planning effort for improving the attorney fee payment process as well as for its future operations. Without such quantifiable goals, future efforts to track and oversee SSA's progress in these areas will be difficult.

gao_GAO-09-434

gao_GAO-09-434_0

Improving Agencywide Management Our past work has identified several major management challenges at EPA, including ensuring consistent environmental enforcement and compliance, addressing human capital issues, and improving the development and use of environmental information. Addressing human capital issues. Transforming EPA’s Processes for Assessing and Controlling Toxic Chemicals EPA’s ability to effectively implement its mission of protecting public health and the environment depends on credible and timely assessment of the risks posed by toxic chemicals. However, EPA has failed to develop sufficient chemical assessment information to determine whether it should establish controls to limit public exposure to many chemicals that may pose substantial health risks. Because of the importance of this issue, and the lack of progress in implementing much-needed change to TSCA, in January 2009 we added transforming EPA’s processes for assessing and controlling toxic chemicals to our list of high-risk areas needing added attention by Congress and the executive branch. Improve Implementation of the Clean Air Act The Clean Air Act, a comprehensive federal law that regulates air pollution from stationary and mobile sources, was passed in 1963 to improve and protect the quality of the nation’s air. In recent years, our work has identified several key challenges in implementing the Clean Air Act, and made recommendations to EPA intended to enhance the effectiveness of its clean air programs. EPA also faces a number of challenges related to clean air regulatory decisions that have been vacated or remanded to the agency by the courts. EPA partners with federal, state, and local agencies, as well as nongovernmental organizations, to develop and implement approaches that can reduce pollution in our nation’s significant water bodies. In addition, in coming years among the most daunting water pollution control problems will be those faced by the nation’s water utilities in grappling with the multibillion-dollar costs of upgrading aging and deteriorating infrastructures and building new ones to serve a growing population. Of note, EPA will receive $6 billion in additional water infrastructure funding from the recently passed stimulus bill. Speeding the Pace of Cleanup at Superfund and Other Hazardous Waste Sites In 1980, Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act, establishing the Superfund program and giving the federal government the authority to respond to chemical emergencies and to clean up hazardous waste sites on private and public lands. Furthermore, citing competing priorities and lack of funds, EPA has not implemented a 1980 statutory mandate under Superfund to require businesses handling hazardous substances to demonstrate their ability to pay for potential environmental cleanups—that is, to provide financial assurances. We have previously reported that the federal government’s approach to climate change has been ad hoc, not comprehensive, and not well coordinated across government agencies. Specifically, the federal government lacks a comprehensive approach for targeting federal research dollars at the development and deployment of low-carbon technologies. EPA’s mission is, without question, a difficult one: its policies and programs affect virtually all segments of the economy, society, and government, and it is in the unenviable position of enforcing myriad inherently controversial environmental laws and maintaining a delicate balance between the benefits to public health and the environment with the cost to industry and others. Reducing Pollution in the Nation’s Waters Environmental Health: EPA Efforts to Address Children’s Health Issues Need Greater Focus, Direction, and Top-Level Commitment. Speeding the Pace of Cleanup at Superfund and Other Hazardous Waste Sites Electronic Waste: Harmful U.S. Exports Flow Virtually Unrestricted Because of Minimal EPA Enforcement and Narrow Regulation.

Why GAO Did This Study The Environmental Protection Agency's (EPA) overarching mission is to protect human health and the environment by implementing and enforcing environmental laws intended to improve the quality of the nation's air and water and to protect its land. EPA's policies and programs affect virtually all segments of the economy, society, and government. As such, it operates in a highly complex and controversial regulatory arena. In recent years, GAO has identified several key challenges EPA faces and corrective actions that would enable the agency to more effectively accomplish its mission. GAO was asked to identify challenges at EPA that hinder its ability to implement its programs effectively, based on prior GAO work. These challenges include (1) improving agencywide management, (2) transforming EPA's processes for assessing and controlling toxic chemicals, (3) improving implementation of the Clean Air Act, (4) reducing pollution in the nation's waters, (5) speeding the pace of cleanup at Superfund and other hazardous waste sites, and (6) addressing emerging climate change issues. What GAO Found EPA faces the following challenges that hinder its ability to implement its programs effectively: (1) improving agencywide management, (2) transforming EPA's processes for assessing and controlling toxic chemicals, (3) improving implementation of the Clean Air Act, (4) reducing pollution in the nation's waters, (5) speeding the pace of cleanup at Superfund and other hazardous waste sites, and (6) addressing emerging climate change issues. EPA has launched various initiatives to address crosscutting general management issues, including environmental enforcement and compliance, human capital management, and the development and use of environmental information. However, these initiatives have generally fallen considerably short of their intended results. EPA has failed to develop sufficient chemical assessment information to limit public exposure to many chemicals that may pose substantial health risks. In January 2009, GAO added a new issue--the need to transform EPA's process for assessing and controlling toxic chemicals--to its list of high-risk areas warranting increased attention by Congress and the executive branch. EPA faces many important challenges related to implementation of the Clean Air Act, including those highlighted by GAO regarding its coordination with other federal agencies, analyses of health impacts from air pollution, and delays in regulating mercury and other air toxics. EPA also faces challenges relating to numerous regulatory proposals that have been overturned or remanded by the courts. EPA partners with federal, state, and local agencies and others to reduce pollution in the nation's waters. Among the most daunting water pollution control problems, the nation's water utilities face billions of dollars in upgrades to aging and deteriorating infrastructures that left unaddressed can affect the quality of our water. EPA will receive $6 billion in additional water infrastructure funding from the recently passed stimulus bill. Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act, better known as Superfund, in 1980, giving the federal government the authority to ensure the cleanup of hazardous waste sites both on private and public lands. Nonetheless, several key management problems have not been resolved since that time. For example, citing competing priorities and lack of funds, EPA has not implemented a 1980 statutory mandate under Superfund to require businesses handling hazardous substances to provide financial assurances to pay for potential environmental cleanups. In GAO's view, the federal government's approach to climate change has been ad hoc and is not well coordinated across government agencies. For example, the federal government lacks a comprehensive approach for targeting federal research dollars toward the development and deployment of low-carbon technologies.

gao_GAO-06-740T

gao_GAO-06-740T_0

For example, the guidance instructed agencies to consider telework—also referred to as telecommuting or flexiplace—as an option in their continuity planning. Few Agencies Demonstrated That They Had Adequately Prepared to Use Telework in a COOP Event Although more agencies reported plans for essential team members to telework during a COOP event than in our 2004 survey, few documented that they had made the necessary preparations to effectively use telework during an emergency. While FPC 65 does not require agencies to use telework during a COOP event, it does state that they should consider the use of telework in their continuity plans and procedures. The agencies that did plan to use telework in emergencies did not consistently demonstrate that they were prepared to do so. We previously identified steps agencies should take to effectively use telework during an emergency. However, only one agency documented that it had notified its team members that they were expected to telework during such an event. In March 2006, FEMA disseminated guidance to agencies regarding the incorporation of pandemic influenza considerations into COOP planning. It suggests the use of telework during such an event. Earlier this month, after we briefed your staff, the White House released an Implementation Plan in support of the National Strategy for Pandemic Influenza. This plan calls on OPM to work with DHS and other agencies to revise existing telework guidance and issue new guidance on human capital planning and COOP. The plan establishes an expectation that these actions will be completed within 3 months. If the forthcoming guidance from DHS and other responsible agencies does not require agencies to make the necessary preparations for telework, agencies are unlikely to take all the steps necessary to ensure that employees will be able to effectively use telework to perform essential functions during any COOP event. In addition, inadequate preparations could limit the ability of nonessential employees to contribute to agency missions during extended emergencies, including a pandemic influenza scenario. Although FEMA’s recent telework guidance does not address the steps agencies should take to prepare to use telework during an emergency event, new guidance on telework and COOP is expected to be released later this year. Among other things, we recommended that the Secretary of Homeland Security direct the FEMA Director to establish a time line for developing, in consultation with OPM, guidance on the steps that agencies should take to adequately prepare for the use of telework during a COOP event. In commenting on a draft of the report, the Director of DHS’s Liaison Office partially agreed with this recommendation and stated that FEMA will coordinate with OPM in the development of a time line for further telework guidance. In addition, he stated that both FEMA and OPM have provided guidance on the use of telework. However, as stated in our report, present guidance does not address the preparations agencies should make for using telework during emergencies. With the release of the White House’s Implementation Plan regarding pandemic influenza, a time line has now been established for the issuance of revised guidance on telework; however, unless the forthcoming guidance addresses the necessary preparations, agencies may not be able to use telework effectively to ensure the continuity of their essential functions.

Why GAO Did This Study To ensure that essential government services are available in emergencies, federal agencies are required to develop continuity of operations (COOP) plans. The Federal Emergency Management Agency (FEMA), within the Department of Homeland Security (DHS), is responsible for providing guidance to agencies on developing such plans. Its guidance states that in their continuity planning, agencies should consider the use of telework--that is, work performed at an employee's home or at a work location other than a traditional office. The Office of Personnel Management (OPM) recently reported that 43 agencies have identified staff eligible to telework, and that more than 140,000 federal employees used telework in 2004. OPM also reported that many government operations can be carried out in emergencies using telework. For example, telework appears to be an effective strategy for responding to a pandemic--a global outbreak of disease that spreads easily from person to person and causes serious illness and death worldwide. In previous work, GAO identified steps that agencies should take to effectively use telework during an emergency. GAO was asked to testify on how agencies are addressing the use of telework in their continuity planning, which is among the topics discussed in a report being released today (GAO-06-713). What GAO Found Although agencies are not required to use telework in continuity planning, 9 of the 23 agencies surveyed reported plans for essential team members to telework during a COOP event, compared to 3 in GAO's previous survey. However, few documented that they made the necessary preparations to effectively use telework during such an event. For example, only 1 agency documented that it had communicated this expectation to its emergency team members. One reason for the low levels of preparations reported is that FEMA has not provided specific guidance on preparations needed to use telework during emergencies. Recently, FEMA disseminated guidance to agencies on incorporating pandemic influenza considerations into COOP planning. Although this guidance suggests the use of telework during such an event, it does not address the steps agencies should take when preparing to use telework during an emergency. Without specific guidance, agencies are unlikely to adequately prepare their telework capabilities for use during a COOP event. In addition, inadequate preparations could limit the ability of nonessential employees to contribute to agency missions during extended emergencies, including pandemic influenza. In its report released today, GAO recommends, among other things, that FEMA establish a time line for developing, in consultation with the OPM, guidance on preparations needed for using telework during a COOP event. In commenting on a draft of the report, DHS partially agreed with GAO's recommendation and stated that FEMA will coordinate with OPM in developing a time line for further telework guidance. DHS also stated that both FEMA and OPM have provided telework guidance. However, as GAO's report stated, present guidance does not address the preparations federal agencies should make for using telework during emergencies. On May 3 the White House announced the release of an Implementation Plan in support of the National Strategy for Pandemic Influenza. This plan calls on OPM to work with DHS and other agencies to revise existing telework guidance and issue new guidance on human capital planning and COOP. The plan establishes an expectation that these actions will be completed within 3 months. If the forthcoming guidance does not require agencies to make necessary preparations for telework, agencies are unlikely to take all the steps necessary to ensure that employees will be able to effectively use telework to perform essential functions in extended emergencies, such as a pandemic influenza.

gao_GAO-08-357T

gao_GAO-08-357T_0

For example, if a vessel’s limit of liability is $10 million and a spill resulted in $12 million in costs, the responsible party only has to pay up to $10 million—the Fund will pay for the remaining $2 million. OPA consolidated the liability and compensation provisions of four prior federal oil pollution initiatives and their respective trust funds into the Oil Spill Liability Trust Fund and authorized the collection of revenue and the use of the money, with certain limitations, with regard to expenditures. OPA also defines the costs for which responsible parties are liable and for which the Fund is made available for compensation in the event that the responsible party does not pay or is not identified. Oil Spills Costing At Least $1 Million Occurred Infrequently Between 1990 and 2006, but Estimated Costs Total $860 Million to $1.1 Billion On the basis of information we were able to assemble about responsible parties’ expenditures and payments from the Fund, we estimate that 51 oil spills involving removal costs and damage claims totaling at least $1 million have occurred from 1990 to 2006. These 51 spills occurred in a variety of locations and involved a range of vessel types. In addition, as figure 4 shows, 30 of the 51 spills involved cargo/freight vessels and tank barges, 12 involved fishing and other types of vessels, and 9 involved tanker vessels. Key Factors Affect Oil Spill Costs in Unique Ways Location, time of year, and type of oil are key factors affecting oil spill costs, according to industry experts, agency officials, and our analysis of spills. According to state officials with whom we spoke and industry experts, there are three primary characteristics of location that affect costs: Remoteness: For spills that occur in remote areas, spill response can be particularly difficult in terms of mobilizing responders and equipment, and they can complicate the logistics of removing oil from the water—all of which can increase the costs of a spill. The time of year in which a spill occurs also affects response efforts because of possible inclement weather conditions. Type of Oil Spilled Impacts the Extent of the Response Effort and the Amount of Damage The type of oil spilled affects the degree to which oil can be cleaned up and removed, as well as the nature of the natural resource damage caused by the spill. Key Factors Will Likely Influence Cost of San Francisco Spill The total costs of the San Francisco spill are currently unknown. However, some of the same key factors that have influenced the cost of 51 major oil spills will likely have an effect on the costs in the San Francisco spill. Fund Has Been Able to Cover Costs Not Paid by Responsible Parties, but Risks Remain The Fund has been able to cover costs from major spills that responsible parties have not paid, but risks remain. Specifically, the current liability limits for certain vessel types, notably tank barges, may be disproportionately low relative to costs associated with such spills. Ten of the 51 major oil spills that occurred since 1990 resulted in limit-of- liability claims on the Fund. By comparison, the 51 major oil spills since 1990 cost, in total, between $860 million and $1.1 billion. Given these concerns, in our September 2007 report, we recommended that the Commandant of the Coast Guard (1) determine whether and how liability limits should be changed, by vessel type, and make recommendations about these changes to the Congress and (2) adjust the limits of liability for vessels every 3 years to reflect significant changes in inflation, as appropriate.

Why GAO Did This Study When oil spills occur in U.S. waters, federal law places primary liability on the vessel owner or operator--that is, the responsible party--up to a statutory limit. As a supplement to this "polluter pays" approach, a federal Oil Spill Liability Trust Fund administered by the Coast Guard pays for costs when a responsible party does not or cannot pay. This testimony is based on GAO's September 2007 report on oil spill costs and select program updates on the recent San Francisco spill. Specifically, it answers three questions: (1) How many major spills (i.e., at least $1 million) have occurred since 1990, and what is their total cost? (2) What factors affect the cost of spills? and (3) What are the implications of major oil spills for the Oil Spill Liability Trust Fund? What GAO Found On the basis of cost information collected from a variety of sources, GAO estimates that 51 spills with costs of at least $1 million have occurred from 1990 to 2006 and that responsible parties and the federal Oil Spill Liability Trust Fund (Fund) have spent between $860 million and $1.1 billion for oil spill removal costs and compensation for damages (e.g., lost profits and natural resource damages). Since removal costs and damage claims may stretch out over many years, the costs of the spills could rise. The 51 spills varied greatly from year to year in number and cost. All vessel types were involved with the 51 major spills GAO identified, with cargo/freight vessels and tank barges involved with 30 of the 51 spills. According to industry and agency officials, three main factors affect the cost of spills: a spill's location, the time of year, and the type of oil spilled. Spills that occur in remote areas, for example, can increase costs involved in mobilizing responders and equipment. Similarly, a spill occurring during tourist or fishing season might produce substantial compensation claims, while a spill occurring during another time of year may not be as costly. The type of oil affects costs in various ways: fuels like gasoline or diesel fuel may dissipate quickly but are extremely toxic to fish and plants, while crude oil is less toxic but harder to clean up. The total costs of the recent San Francisco oil spill are unknown, but these identified factors are likely to influence the costs. To date, the Fund has been able to cover costs from major spills that responsible parties have not paid, but risks remain. Specifically, GAO's analysis shows that the new 2006 limits of liability for tank barges remain low relative to the average cost of such spills. Since 1990, the Oil Pollution Act (OPA) required that liability limits be adjusted above the limits set forth in statute for significant increases in inflation, but such changes have never been made. Not making such adjustments between 1990 and 2006 potentially shifted an estimated $39 million in costs from responsible parties to the Fund.

gao_GAO-08-976

gao_GAO-08-976_0

According to available VHA data, VHA used miscellaneous obligations to record estimated obligations of over $6.9 billion for mission-related goods and services. As shown in figure 3, about $3.8 billion (55.1 percent) was for fee-based medical and dental services for veterans, and another $1.4 billion (20.4 percent) was for drugs, medicines, and hospital supplies. The remainder was for, among other things, state veterans homes, transportation of veterans to and from medical centers for treatment, and logistical support and facility maintenance for VHA medical centers nationwide. VHA officials stated that miscellaneous obligations facilitate the payment for contracted goods and services when the quantities and delivery dates are not known. Deficiencies in Design of Controls over Miscellaneous Obligations Increase the Risk of Fraud, Waste, and Abuse VA policies and procedures were not designed to provide adequate controls over the use of miscellaneous obligations. According to our Standards for Internal Control in the Federal Government, agency management is responsible for developing detailed policies and procedures for internal control suitable for their agency’s operations and ensuring that they provide for adequate monitoring by management, segregation of duties, and supporting documentation for the need to acquire specific goods in the quantities purchased. Collectively, these control design flaws increase the risk of fraud, waste, and abuse (including employees converting government assets to their own use without detection). We reviewed the new guidance and found that while it offered some improvement, it did not fully address the specific control design flaws we identified. Furthermore, VA officials told us that this guidance was not subject to any legal review. In May 2008, VHA management finalized the interim guidance. Recommendations for Executive Action In order for VA to reduce the risks associated with the use of miscellaneous obligations, we recommend that the Secretary of Veterans Affairs, in conjunction with VA’s Office of General Counsel, develop and implement policies and procedures consistent with federal appropriations law and internal control standards that establish a process for the review of miscellaneous obligations by contracting officials, including requiring appropriate documentation that the review has occurred; segregate duties for (1) creating, approving, and recording miscellaneous obligations; (2) the certification and payment of invoices; and (3) the receipt of the resulting goods or services; document the purposes, vendors, and contract numbers of establish an oversight mechanism to ensure that these control policies and procedures are fully and effectively implemented. However, according to senior agency officials, the IFCAP database is the most complete record of miscellaneous obligations available at VHA and can be used to provide an assessment of how miscellaneous obligations were used during fiscal year 2007. To determine whether VHA’s policies and procedures are designed to provide adequate controls over the use of miscellaneous obligations, we first reviewed VHA’s policies and procedures governing the use of miscellaneous obligations at VA.

Why GAO Did This Study The Veterans Health Administration (VHA) has been using miscellaneous obligations for over 60 years to record estimates of obligations to be incurred at a later time. The large percentage of procurements recorded as miscellaneous obligations in fiscal year 2007 raised questions about whether proper controls were in place over the authorization and use of billions of dollars. GAO was asked to review (1) how VHA used miscellaneous obligations during fiscal year 2007, and (2) whether Department of Veterans Affairs (VA) policies and procedures were designed to provide adequate controls over their authorization and use. GAO obtained and analyzed available VHA data on miscellaneous obligations, reviewed VA policies and procedures, and reviewed a nongeneralizable sample of 42 miscellaneous obligations at three case study locations. What GAO Found VHA recorded over $6.9 billionof miscellaneous obligationsfor the procurement of mission-related goods and services in fiscal year 2007. According to VHA officials, miscellaneous obligations were used to facilitate payment for goods and services when the quantities and delivery dates are not known. According to VHA data, almost $3.8 billion (55.1 percent) of VHA's miscellaneous obligations was for fee-based medical services for veterans and another $1.4 billion (20.4 percent) was for drugs and medicines. The remainder funded, among other things, state homes for the care of disabled veterans, transportation of veterans to and from medical centers for treatment, and logistical support and facility maintenance for VHA medical centers nationwide. GAO's Standards for Internal Control in the Federal Government states that agency management is responsible for developing detailed policies and procedures for internal control suitable for their agency's operations. However, VA policies and procedures were not designed to provide adequate controls over the authorization and use of miscellaneous obligations with respect to oversight by contracting officials, segregation of duties, and supporting documentation for the obligation of funds. Collectively, these control design flaws increase the risk of fraud, waste, and abuse (including employees converting government assets to their own use without detection). These control design flaws were confirmed in our case studies at VHA Medical centers in Pittsburgh, Pennsylvania; Cheyenne, Wyoming; and Kansas City, Missouri. In May 2008, VHA issued revised guidance on required procedures for authorizing and using miscellaneous obligations. GAO reviewed the revised guidance and found that while it offered some improvement, it did not fully address the specific control design flaws GAO identified. Furthermore, according to VA officials, VA's policies governing miscellaneous obligations have not been subject to legal review by VA's Office of General Counsel. Such a review is essential to ensure that policies and procedures comply with applicable federal appropriations law and internal control standards.

gao_GAO-11-660

gao_GAO-11-660_0

Studies Have Recommended Changes to WMATA’s Governance Three reports issued in 2010 identified weaknesses in WMATA’s management and board oversight and called for change in WMATA’s governance structure and procedures. Stakeholders Believe Inadequate Delineation, Documentation, Communication, and Self-Assessment of the Board’s Responsibilities Have Led to Occasional Lack of Strategic Focus WMATA board members, officials, and other stakeholders have reported that the board sometimes focuses on management’s day-to-day responsibilities rather than higher level board responsibilities such as policy, oversight, and strategic planning. This lack of strategic focus may have resulted from inadequate delineation and documentation of the board’s responsibilities, as well as inadequate communication among board members. For example, in the past, WMATA’s board procedures were subject to change by the annually rotated chairperson. As a result, the board is lacking a key mechanism for regular, ongoing measurement of its performance. Additionally, in April 2011, the board released draft bylaws intended to be permanent and amendable only by a majority vote of the board. The types of oversight information available to the board are important because they can provide the board with understanding about areas in need of attention and improvement regarding the operations and finances of the agency. However, past board practices such as infrequent meetings of the Audit and Investigations Subcommittee and the lack of routine briefings on the status of recommendations from outside parties may have impaired the ability of the board to use this information to effectively carry out its oversight role. However, given the variety in other transit agencies’ practices and the lack of clear criteria on how often audit committees should meet, there is no clear standard against which to measure WMATA’s practices. WMATA Has Made Progress, but Does Not Fully Address All Elements of Sound Strategic Planning WMATA Has Established Some Strategic Planning Elements WMATA has developed elements of strategic planning over the past 4 years, but the agency’s board and management could improve their strategic focus and long-term planning processes. WMATA officials acknowledged several failed efforts at strategic planning, which they said occurred because of a lack of management support and employee buy-in, a lack of specific actions to execute the plans, and a focus on tactical versus strategic decision making. WMATA has developed several elements of effective strategic planning through its strategic framework and execution plans, such as a mission statement, goals, objectives, strategies, and metrics. As WMATA takes steps to clarify the roles and responsibilities of the board and management in its draft bylaws, it needs to ensure that a clear delineation of the roles and responsibilities of each are adopted and effectively implemented. Improve the agency’s strategic planning process by (1) defining and documenting roles for the board, management, and stakeholders in strategic planning; (2) ensuring that the strategic plan is sufficiently long term; (3) ensuring that board-approved strategic goals and objectives are linked to updated performance measures; (4) including internal and external assessments and program evaluations; and (5) reviewing the strategic plan on a regular basis and updating it as needed. Conduct a regular assessment of the board’s performance, including elements such as an evaluation of the effectiveness of the board’s organization, structure, and functioning, and its impact on performance. We selected leading governance practices relevant to transit agencies from several sources, including those practices used in previous GAO work on public and private sector governance challenges at several organizations and non-GAO studies, reports, and recommendations concerning the governance of transit agencies, other similar organizations, and corporations. Therefore, “the board should increase the term length of the chair from one to two years.” In addition, responsibilities should be clearly defined to ensure “the chair has sufficient authority to assume a true leadership role.” Leading Governance Practice and Other Transit Agencies Leading governance practices state that a strong chairperson is essential for an effective transit board and note that it is the chair’s role to lead and motivate the board in achievement of the transit system’s mission, strategic goals, and performance.

Why GAO Did This Study The Washington Metropolitan Area Transit Authority's (WMATA) public rail transit and bus systems are vital to the national capital region. However, the 35-year-old rail system has experienced safety and reliability problems, including fatal accidents. A 16-member board of directors governs WMATA, setting policies and providing oversight. Recent reports have noted weaknesses in WMATA's governance structure and recommended changing it. GAO assessed WMATA's governance in terms of the board's roles and responsibilities, oversight, and strategic planning. To do so, GAO compiled leading practices from previous GAO work on public and private sector governance, non-GAO transit governance studies, and strategic planning standards; then compared WMATA's approach to those practices. GAO also spoke with six transit agencies selected based on board composition and ridership, among other things. What GAO Found Although some requirements and guidance for board roles and responsibilities are provided in the WMATA compact and board procedures, WMATA board members, officials, and other stakeholders have reported that sometimes the board focuses on management's day-to-day responsibilities rather than higher level board responsibilities such as oversight and strategic planning. This focus may have resulted from, for example, inadequate delineation and documentation of the board's responsibilities as well as inadequate communication among board members. In addition, while leading governance practices state that effective transit boards monitor the effectiveness of the board's organization, structure, and functioning through a regular board selfassessment, WMATA's board does not do so. As a result, the board lacks a key mechanism for regular, ongoing measurement of its performance. In April 2011, the board released draft bylaws that clarify the roles and responsibilities for the board and propose that the board chair coordinate a board selfevaluation. These draft bylaws represent a good first step toward addressing some of the concerns discussed in this report but will need to be adopted and then effectively implemented to achieve their desired effect. The board's oversight role is supported by the board's committee structure, which provides a communication channel for information to reach the board. Past board practices such as infrequent meetings of the Audit and Investigations Subcommittee and the lack of routine briefings on outside safety recommendations may have impaired the ability of the board to use information about areas in need of improvement regarding the operations and finances of the agency. However, given the variety in other transit agencies' practices and the lack of clear criteria on how often audit committees should meet, there is no clear standard against which to measure WMATA's practices. The board's draft bylaws propose changes to the organization of the board's committee structure. WMATA has developed elements of strategic planning over the past 4 years, but the agency's board and management could enhance their strategic focus and long-term planning processes to improve performance. WMATA acknowledged several failed past efforts at strategic planning. WMATA officials said that prior attempts failed due to a lack of management support, employee buy-in, and specific actions to execute the plans; and a focus on tactical versus strategic decision making. WMATA management has developed several elements of strategic planning, such as a mission statement, goals, objectives, and strategies. However, the agency's strategic planning process could benefit from more board and stakeholder involvement, internal and external environmental assessments, longer time frames, program evaluations, and updated performance metrics. In June 2011, the board launched an effort to overhaul its strategic planning process. What GAO Recommends GAO recommends among other things that the WMATA board of directors follow through with its efforts to clarify the roles and responsibilities of the board; conduct a regular self-assessment of the board's effectiveness; and improve its strategic planning process by actions such as increasing the board's involvement in the process and updating the agency's performance metrics. WMATA reviewed a draft of this report and noted that it has taken recent actions that begin to address some issues covered in this report.

gao_GAO-07-1034

gao_GAO-07-1034_0

Organizations Have Taken Steps to Collaborate, but Continue to Face Challenges Global, regional, and country-level organizations recognize the importance of collaborating to effectively combat human trafficking. They may treat foreign trafficking victims as illegal immigrants and deport them back to their home countries, rather than protect them. Host governments bear ultimate responsibility for combating trafficking within their borders, and governments of the countries we visited have taken some steps to collaborate. For example, the Indonesian and Thai governments have passed national antitrafficking laws and enacted national action plans that define common outcomes, outline strategies, and assign roles and responsibilities. Although both the Indonesian and Thai governments hold interagency meetings, the ministries responsible for coordinating antitrafficking efforts have limited authority and operational capacity, according to officials we interviewed. The U.S. embassies in the three countries we visited, Indonesia, Thailand, and Mexico, include trafficking in persons in their mission performance plans, which establish combating trafficking as a component of the U.S. government’s overall strategy in each country. U.S. Government- Funded Antitrafficking Projects Lack Some Key Monitoring Elements; Little Is Known about Project Impact Due to Difficulties in Conducting Evaluations Antitrafficking project documents we reviewed generally include monitoring elements, such as an overarching goal and related activities; however, they often lack other monitoring elements, such as targets for measuring performance. These factors include questionable estimates of the number of trafficking victims at the project level, which are needed to evaluate the effectiveness of specific antitrafficking interventions. However, the office has not established written guidance for conducting such oversight. Factors Impede Evaluations of Antitrafficking Projects and Little Is Known about Project Impact Various factors impede impact evaluations of antitrafficking projects. First, data on human trafficking are questionable, including estimates of the number of trafficking victims, making it difficult to determine a preproject baseline. Expert Panel Identified Ways to Address the Difficulties of Monitoring and Evaluating Antitrafficking Projects A GAO-convened panel of experts identified and discussed ways to address the factors that make it difficult to monitor and evaluate antitrafficking projects. Panelists suggested approaches to improve the monitoring and evaluation of antitrafficking projects, by improving information on the severity of human trafficking and addressing weaknesses in the design of antitrafficking projects. Panel members suggested several sampling methods that have been used to sample other hard-to-reach populations, including the homeless, hidden migrants, missing and exploited children, domestic violence victims, inmates, and drug users. One suggested method is sampling of “hot spots”—an intensive search for victims in areas known to have high concentrations of victims or in areas to which many victims return. They also recommended that officials design projects that clearly link activities to intended outcomes, identify measurable indicators, and establish procedures for setting and modifying targets. As organizations around the world increasingly collaborate in combating trafficking, their ultimate success will depend on the extent to which they are able to overcome difficult challenges, such as varying levels of government commitment and capacity, that have impeded collaboration in the past. However, few impact evaluations have been completed due to the difficulties involved. Objectives, Scope, and Methodology Our objectives were to examine (1) collaboration among organizations involved in international antitrafficking efforts, (2) U.S. government agencies’ monitoring of antitrafficking projects and difficulties in evaluating these projects, and (3) suggestions for strengthening monitoring and evaluation. Moreover, project-level estimates are needed for baselines by which to evaluate how effectively interventions are reducing trafficking.

Why GAO Did This Study Human trafficking--a worldwide crime involving the exploitation of men, women, and children for others' financial gain--is a violation of human rights. Victims are often lured or abducted and forced to work in involuntary servitude. Since 2001, the U.S. government has provided about $447 million to combat global human trafficking. As GAO previously reported, estimates of the number of trafficking victims are questionable. In this report, GAO examines (1) collaboration among organizations involved in international antitrafficking efforts, (2) U.S. government monitoring of antitrafficking projects and difficulties in evaluating these projects, and (3) suggestions for strengthening monitoring and evaluation. GAO analyzed agency documents; convened an expert panel; interviewed officials; and conducted fieldwork in Indonesia, Thailand, and Mexico. What GAO Found While governments, international organizations, and nongovernmental organizations have recognized the importance of collaborating and have established some coordination mechanisms and practices, they will need to overcome challenges that have impeded collaboration in the past for their efforts to be successful. In two of the three countries GAO visited, it found that host governments--which bear ultimate responsibility for combating trafficking within their borders--have passed national antitrafficking laws and enacted national action plans. However, organizations continue to face numerous challenges when collaborating to combat human trafficking, including varying levels of government commitment and capacity. For example, some governments treat foreign trafficking victims as illegal immigrants and deport rather than protect them. In addition, according to officials in two of the three countries GAO visited, the ministries responsible for coordinating antitrafficking efforts have limited authority and capacity. U.S. government-funded antitrafficking projects often lack some important elements that allow projects to be monitored, and little is known about project impact due to difficulties in conducting evaluations. Project documents GAO reviewed generally include monitoring elements, such as an overarching goal and related activities, but often lack other monitoring elements, such as targets for measuring performance. To oversee projects, State officials supplement their efforts with assistance from U.S. embassy staff, but have not established written guidance for oversight. Officials said that they are working to improve performance measures and develop monitoring guidance. Conducting impact evaluations of antitrafficking projects is difficult due to several factors, including questionable project-level estimates of the number of trafficking victims. These estimates are needed for baselines by which to evaluate how effectively specific interventions are reducing trafficking. Elements in the design of certain projects, such as objectives that are too broad, further impede evaluation. Because of these difficulties, few impact evaluations have been completed, and little is known about the impact of antitrafficking interventions. A GAO-convened panel of experts identified and discussed ways to address the factors that make it difficult to monitor and evaluate antitrafficking projects. Panelists' suggested approaches included improving information on the nature and severity of trafficking and addressing monitoring and evaluation in project design. To improve information on trafficking, panelists suggested methods that have been used to sample other hard-to-reach populations, including domestic violence victims. One suggested method is sampling of "hot spots"--an intensive search for victims in areas known to have high concentrations of victims. To address weaknesses in project design that impede monitoring and evaluation, panelists suggested that officials design projects that clearly link activities to intended outcomes, identify measurable indicators, and establish procedures for setting and modifying targets.

gao_AIMD-95-165

gao_AIMD-95-165_0

Background NMMSS is the United States’ official nuclear materials tracking and accounting system. In its official response to the recommendations in our prior report, DOE stated that it did not concur with our recommendations and that it did not believe it would be cost-effective to delay its effort to transition from the existing system to the new system. However, because of DOE’s lack of basic planning, it does not know if the system will fulfill the needs of its major users or be cost-effective. These practices include (1) generating clear, complete, and accurate documentation throughout the system development process, (2) placing the software development under configuration management, and (3) ensuring that the system successfully completes acceptance testing prior to becoming operational. However, because DOE has not required the subcontractor to follow any of these practices for the replacement NMMSS, the Department does not know how much of the system development is completed and whether the part that is completed performs as required. As a result, the risk of system failure is inordinately high. Because little system documentation exists, and the contract does not require any interim deliverables that measure system performance, DOE does not know the status of the system development. DOE Does Not Plan to Adequately Test NMMSS During acceptance testing, tests are performed to determine if a system will meet its hardware, software, performance, and user operational requirements. Address Correction Requested

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) progress in developing a new nuclear materials tracking system, focusing on: (1) DOE actions to implement previous GAO recommendations concerning the system; and (2) whether DOE is adequately addressing key system development risks. What GAO Found GAO found that: (1) DOE has not implemented any of the GAO recommendations regarding new system planning and analysis and has no plans to do so because it believes its planning is sufficient and delaying the system would lead to unnecessary costs; (2) DOE does not know if its new system will meet users' needs or be cost-effective; (3) DOE has not addressed the subcontractor's failure to document its system development process and to place its software under configuration management, or its failure to require acceptance testing before taking delivery of the system and plan for parallel operations of the new and old systems to check the new system's performance; and (4) the risk of system failure is high, since DOE does not know the status of the system development effort or whether certain system components will perform as required.

gao_HEHS-98-26

gao_HEHS-98-26_0

One donor may provide organs to several different patients. 1). 3. Organ donation among minority populations, however, has increased over time. 2.) Of these OPOs, adjacent OPOs took over the service areas of two and a portion of the third’s. The fourth OPO merged operations with another OPO, and the fifth, determined to be a new entity, was exempt from meeting the performance standard. HCFA’s Current Standard Is Not the Best Measure of OPO Performance HCFA’s current standard does not accurately measure OPOs’ performance in procuring organs usable for transplantation for several reasons. These characteristics vary by region and by OPO and can pose advantages or disadvantages to an OPO’s ability to procure donors. Although the affected OPOs are to consider their total populations and agree on population adjustments, OPOs did not account for about 2.1 million people in their population data. Adjusting for Cause of Death and Age More Accurately Estimates Number of Potential Donors Than Number of Deaths Alone Measuring OPO performance according to the number of service area deaths adjusted for cause of death and age more accurately reflects the number of potential donors than measuring performance according to the number of all service area deaths. Again, this may be less problematic when HCFA moves to a 4-year recertification cycle. To assess the OPOs using these alternative measures, we used the 1994-95 OPO data on the categories HCFA used to assess performance. Five OPOs would have been subject to termination for failing to meet at least 75 percent of the national average for at least three of the five performance categories using HCFA’s population-based standard; three of these five OPOs would also have failed using a standard based on the number of deaths or adjusted deaths. An Alternative Standard Using Medical Records Reviews Would More Accurately Determine the Number of OPOs’ Potential Donors but May Be Costly A standard using the number of donors and the number of organs recovered and transplanted compared with the number of potential organ donors would more accurately assess OPO performance. In addition, the degree to which added expense will be incurred to conduct the reviews and analyze the results is not clear. HCFA’s current population-based performance standard cannot accurately assess OPOs’ ability to meet the goal of acquiring all usable organs because it does not identify the number of potential donors within the OPOs’ service areas. We identified performance measures as alternatives to the current population-based standard. Two other alternative measures that HCFA did not consider—medical records reviews and modeling—show more promise for accurately identifying the number of potential donors. Although most OPOs are conducting some form of medical records reviews and therefore incurring the costs of these reviews, HCFA must consider its own and the OPOs’ additional expense involved in standardizing such reviews. At least one group is developing a modeling method using substitute measures to provide a valid measure for estimating the number of potential donors. Recommendations To better ensure that HCFA accurately assesses OPOs’ organ procurement performance and that OPOs are maximizing the number of organs procured and transplanted, we recommend that the Secretary of Health and Human Services direct HCFA to evaluate the ongoing development of methods for determining the number of potential donors for an OPO. We interviewed officials and obtained documentation from the Health Care Financing Administration (HCFA) and the Health Resources and Services Administration’s Division of Transplantation.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed whether the Health Care Financing Administration's (HCFA) population-based standard appropriately measures the extent to which organ procurement organizations (OPO) are maximizing their ability to identify, procure, and transplant organs and tissue, focusing on: (1) the strengths and weaknesses of the current standard; and (2) alternatives to the current standard. What GAO Found GAO noted that: (1) HCFA chose a population-based standard to assess OPO performance after considering the availability and cost to the OPOs of obtaining and analyzing various types of data; (2) when HCFA first applied this standard in 1996, five OPOs were subject to action for failing to meet the standard; (3) this resulted in two OPOs' service areas being taken over by adjacent OPOs, a portion of one OPO's service being taken over by an adjacent OPO, and the merger of one OPO with another; (4) the fifth OPO that failed the standard was determined to be a new entity and not subject to meeting the performance standard; (5) HCFA's current population-based standard, however, is not an accurate measure for assessing OPO performance because OPO service areas consist of varying populations; (6) although potential organ donors share certain characteristics, including causes of death, absence of certain diseases, and being in a certain age group, OPO service area populations have generally differing characteristics; (7) thus, the number of potential organ donors may vary greatly for OPOs serving equally sized populations; (8) GAO ranked the OPOs, using 1994-95 OPO procurement and transplant data, according to three measures--population, number of deaths, and adjusted deaths; (9) although three OPOs would not qualify for recertification under any of these measures, the number of and which OPOs would not qualify vary depending on the measure used; (10) HCFA did not consider two alternative measures--medical records reviews and modeling--that show promise for determining OPOs' ability to acquire all usable organs; (11) consistently applied and uniform reviews of hospital medical records with verifiable results may accurately assess the number of OPOs' potential donors; (12) because most OPOs already conduct some records review, any added expense and increase to the cost of organs may be negligible; (13) the cost of producing independently verified estimates of the number of each OPO's potential donors may be substantial, however, and the expense and impact on OPOs and organ cost must be considered; (14) though not yet fully developed, a modeling approach using substitute measures to determine the number of potential donors may be less expensive and easier to execute; (15) unless OPO performance is measured according to the number of potential donors, HCFA cannot determine OPOs' effectiveness in acquiring organs; and (16) the measures GAO has identified provide alternatives for HCFA to pursue to more accurately assess OPO performance.

gao_GAO-01-388

gao_GAO-01-388_0

The Office of Management and Budget formalized the policy in Circular A-76, issued in 1966. Impact of A-76 Competitions on Affected Employees’ Employment, Pay, and Benefits Varies The impact on employment, pay, and benefits of individual employees affected by A-76 studies varies depending on factors such as the results of the competitions, the availability of other government jobs, and other more individual factors such as retirement eligibility. Pay may also be affected by the location and technical nature of the work. These factors make it difficult to draw universal conclusions about the effects of A-76 decisions on affected federal employees’ employment options, pay, and benefits. The studies showed that about half of the civilian government employees remained in federal service, either in the new or another government organization.

What GAO Found Office of Management and Budget Circular A-76 competitions have reduced the estimated costs of Defense Department activities primarily through reducing the number of positions needed to perform activities being studied. The impact on employment, pay, and benefits of individual employees affected by A-76 studies varies depending on factors such as the results of the competitions, the availability of other government jobs, and other individual factors such as retirement eligibility. Pay may also be affected by the location and technical nature of the work. These factors make it difficult to draw universal conclusions about the effects of A-76 decisions on affected federal employees; employment options, pay, and benefits. GAO's analysis of three completed A-76 studies showed that about half of the civilian government employees remained in federal service following the studies, either in the new or another government organization with similar pay and benefits. There were relatively few involuntary separations.

gao_GAO-14-737T

gao_GAO-14-737T_0

Background The Improper Payments Information Act of 2002 (IPIA)—as amended by the Improper Payments Elimination and Recovery Act of 2010 (IPERA) and the Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA)—requires federal executive branch agencies to (1) review all programs and activities, (2) identify those that may be susceptible to significant improper payments,amount of improper payments for those programs and activities, (4) implement actions to reduce improper payments and set reduction targets, and (5) report on the results of addressing the foregoing requirements. Office of Management and Budget, Revised, Financial Reporting Requirements, OMB Circular No. OMB and Agencies Reported Estimates of Improper Payments Federal agency improper payment estimates totaled $105.8 billion in fiscal year 2013, a decrease of $1.3 billion from the prior year’s revised estimate of $107.1 billion. The $105.8 billion in estimated federal improper payments reported for fiscal year 2013 was attributable to 84 programs spread among 18 agencies. For example, with OMB approval an agency can obtain relief from estimating improper payments if the agency has reported improper payments under the threshold for significant improper payments at least 2 consecutive years. Consequently, the specific programs included in the government-wide improper payment estimate may change from year to year. For example, a net of 10 additional programs were added to the government-wide estimate by OMB in fiscal year 2013 when compared to fiscal year 2012.Department of Education’s improper payment estimate for the Direct Loan program, approximately $1.1 billion, was included in the government-wide improper payment estimate for the first time in fiscal year 2013. Challenges in Achieving Complete and Accurate Reporting of Improper Payments In our fiscal year 2013 audit of the Financial Report of the United States Government, we reported the issue of improper payments as a material weakness in internal control because the federal government is unable to determine the full extent to which improper payments occur and reasonably assure that appropriate actions are taken to reduce them.the agency level, we also found that existing internal control weaknesses—such as financial system limitations and information system control weaknesses—heighten the risk of improper payments occurring. Specifically, four federal agencies did not report fiscal year 2013 estimated improper payment amounts for four risk-susceptible programs. For example, HHS’s fiscal year 2013 reporting cited statutory limitations for its state-administered Temporary Assistance for Needy Families (TANF) program, which prohibited it from requiring states to participate in developing an improper payment estimate for the TANF program. In addition, two programs that reported estimates in fiscal year 2013 were not included in the government-wide totals because their estimation methodologies were not approved by OMB. In addition to noncompliance reported in financial statement audits, various IGs reported deficiencies related to compliance with the criteria listed in IPERA for fiscal year 2013 at their respective federal agencies, including risk-susceptible programs that did not have reported improper payment estimates, estimation methodologies that were not statistically valid, and risk assessments that may not accurately assess the risk of improper payment. Strategies to Reduce Improper Payments As previously reported, there are a number of strategies that can help agencies in reducing improper payments, including analyzing the root causes of improper payments and implementing effective preventive and detective controls. Designed and implemented effectively, these strategies could help advance the federal government’s efforts to reduce improper payments. According to OMB guidance, agencies are required to classify the root causes of estimated improper payments into three general categories for reporting purposes: (1) documentation and administrative errors, (2) authentication and medical necessity errors, and (3) verification errors.improper payments for their respective programs in their fiscal year 2013 financial reports using these categories, a more detailed analysis beyond these general categories regarding the root causes can help agencies to identify and implement more effective preventive, detective, and corrective actions in the various programs. Many agencies and programs are in the process of implementing preventive controls to avoid improper payments, including overpayments and underpayments.controls may involve a variety of activities such as up-front validation of eligibility, predictive analytic tests, and training programs. The following are examples of preventive strategies, some of which are currently under way. Up-front eligibility validation through data sharing. Implementing Effective Detective Controls to Identify and Recover Overpayments Although strong preventive controls remain the frontline defense against improper payments, effective detection techniques can help to quickly identify and recover those overpayments that do occur. Data mining. Recovery auditing.

Why GAO Did This Study Over the past decade, GAO has issued numerous reports and testimonies highlighting improper payment issues across the federal government as well as at specific agencies. The Improper Payments Information Act of 2002, as amended by the Improper Payments Elimination and Recovery Act of 2010 and the Improper Payments Elimination and Recovery Improvement Act of 2012, requires federal executive branch agencies to (1) review all programs and activities, (2) identify those that may be susceptible to significant improper payments, (3) estimate the annual amount of improper payments for those programs and activities, (4) implement actions to reduce improper payments and set reduction targets, and (5) report on the results of addressing the foregoing requirements. In general, reported improper payment estimates include payments that should not have been made, were made in the incorrect amount, or were not supported by sufficient documentation. This testimony addresses (1) federal agencies' reported estimates of improper payments, (2) remaining challenges in meeting current requirements to estimate and report improper payments, and (3) strategies for reducing improper payments. This testimony is primarily based on GAO's fiscal year 2013 audit of the Financial Report of the United States Government and prior GAO reports related to improper payments issued over the past 3 years. The testimony also includes improper payment information recently presented in federal agencies' fiscal year 2013 financial reports. What GAO Found Federal agencies reported an estimated $105.8 billion in improper payments in fiscal year 2013, a decrease from the prior year revised estimate of $107.1 billion. The fiscal year 2013 estimate was attributable to 84 programs spread among 18 agencies. The specific programs included in the government-wide estimate may change from year to year. For example, with Office of Management and Budget (OMB) approval, an agency can obtain relief from estimating improper payments if the agency has reported improper payments under a certain threshold for at least 2 consecutive years. A net of 10 additional programs were added to the government-wide estimate by OMB in fiscal year 2013 when compared to fiscal year 2012. For fiscal year 2013, GAO identified the federal government's inability to determine the full extent to which improper payments occur and reasonably assure that appropriate actions are taken to reduce them as a material weakness in internal control. In addition, existing internal control weaknesses at the agency level continued to increase the risk of improper payments occurring. In fiscal year 2013, four agencies did not report estimates for four risk-susceptible programs, including the Department of Health and Human Services' (HHS) Temporary Assistance for Needy Families (TANF) program. HHS cited a statutory barrier that prevents it from requiring states to estimate improper payments for TANF. Estimates reported for two programs were also not included in the government-wide total because their estimation methodologies were not approved by OMB. Further, inspectors general reported deficiencies related to compliance with criteria listed in the Improper Payments Elimination and Recovery Act of 2010 for fiscal year 2013, such as the use of estimation methodologies that were not statistically valid. As GAO has previously found, a number of strategies across government, some of which are currently under way, could help to reduce improper payments. For example Analysis of the root causes of improper payments can help agencies target effective corrective actions. Some agencies reported root causes of improper payments using three error categories required by OMB (documentation and administrative, authentication and medical necessity, and verification). However, because the three categories are general, more detailed analysis to understand the root causes could help agencies identify and implement more effective corrective actions. Designing and implementing strong preventive controls can help defend against improper payments, increasing public confidence and avoiding the difficult “pay and chase” aspects of recovering improper payments. Preventive controls involve activities such as up-front validation of eligibility through data sharing, predictive analytic tests, and training programs. Implementing effective detection techniques to quickly identify and recover improper payments after they have been made is also important to a successful reduction strategy. Detection activities include data mining and recovery audits. Another area for further exploration is the broader use of incentives to encourage and support states in efforts to implement effective preventive and detective controls in state-administered programs.

gao_GAO-05-211

gao_GAO-05-211_0

The Service Spends a Significant Portion of Recovery Funds on the Highest Priority Species The Fish and Wildlife Service spent its recovery funds in a manner generally consistent with species priority in fiscal years 2000 through 2003. From fiscal years 2000 to 2003, the Service spent 44 percent of its recovery funds attributable to individual species on those species with the highest priority, the 415 species ranked 1 through 3 on the 18-point priority ranking scale (see fig. We analyzed spending by species status (endangered or threatened) and found that the Service spent a majority (64 percent) of its recovery funds on endangered species during fiscal years 2000 through 2003. The Service Considers Factors Besides Species Priority When Allocating Recovery Funds but Does Not Assess the Results of Its Funding Decisions When Service officials allocate recovery funds, they base these decisions to a significant extent on factors other than a species’ priority ranking. At the headquarters level, a formula that accounts for each region’s workload, but not species’ priority rankings, determines how recovery funds are allocated. Each regional office allocates recovery funds to their field offices differently, but in no case is priority ranking the driving factor. Instead, regional officials focus primarily on partnership opportunities, though regional officials told us they do try to provide funds to species that have a high degree of threat. Although field office staff we spoke with use priority rankings, they also emphasized the importance of having flexibility to allocate funds to develop partnerships. The Service does not know the extent to which these disparate allocation systems yield results consistent with the Service’s priority guidelines because the Service does not have a process to routinely measure the extent to which it is spending its recovery funds on higher priority species. 9). Without this information, the Service cannot ensure that it is spending its recovery funds on such species, and in cases where it is not, determine whether the funding decisions are appropriate. Conclusions The Service faces a very difficult task—recovering more than 1,200 endangered and threatened species to the point that they no longer need the protection of the Endangered Species Act. There are few easy solutions. Recommendations for Executive Action To help ensure that the Service allocates recovery resources consistent with the priority guidelines over the long term and in a transparent fashion, we recommend that the Secretary of the Interior require the Service to take the following two actions: (1) periodically assess the extent to which it is following its recovery priority guidelines and identify how factors other than those in the guidelines are affecting its funding allocation decisions, and (2) report this information publicly, for example, in its biennial recovery report to Congress. Fish and Wildlife Service’s allocation of recovery funds compares with its recovery priority guidelines and (2) determined what factors influence the Service’s recovery funding allocation decisions.

Why GAO Did This Study Currently there are more than 1,260 species listed as endangered or threatened under the Endangered Species Act of 1973. While few species have gone extinct since 1973, only 9 have been "recovered" or removed from the list because they no longer need the act's protection. This has raised questions about how the U.S. Fish and Wildlife Service (Service) allocates its recovery funds. Proponents of the act believe that the Service's recovery funds are only a small fraction of what is needed to make greater recovery progress. The act and agency guidelines require the Service to prioritize species to guide recovery fund allocation. In fiscal year 2000 through 2003, the Service spent $127 million dollars in recovery funds attributable to individual species. In this report, GAO analyzed (1) the extent to which the Service's allocation of recovery funds compares with its recovery priority guidelines and (2) what factors influence the Service's recovery allocation decisions. What GAO Found The Service spent its recovery funds in a manner generally consistent with species priority in fiscal years 2000 through 2003, spending almost half (44 percent) of the $127 million on the highest priority species (see figure below). Species in the next two highest priority groups received almost all of the remaining recovery funds (51 percent). Species in the three lowest priority groups received very little funding (6 percent). Most listed species (92 percent) are in the top three priority groups. When Service officials allocate recovery funds, they base their decisions to a significant extent on factors other than a species' priority ranking. At the headquarters level, a formula that focuses on each region's workload determines how recovery funds are allocated to regional offices. Each regional office allocates its recovery funds to their field offices differently, but in no case is priority ranking the driving factor. Instead, regional officials focus primarily on opportunities for partnerships, though they told us that they also focus on species facing the gravest threats. Field office staff we spoke with emphasized the importance of pursuing funding partnerships in order to maximize their scarce recovery funds. The Service does not know the effect of these disparate allocation systems because it does not have a process to routinely measure the extent to which it is spending its recovery funds on higher priority species. While we found that for fiscal years 2000 through 2003 the Service spent a majority of its recovery funds on high priority species, without periodically assessing its funding decisions, the Service cannot ensure that it spends its recovery funds on the species that are of the greatest priority and, in cases where it does not, determine whether its funding decisions are appropriate.

gao_GAO-03-852T

gao_GAO-03-852T_0

OMB previously reported six common security weaknesses for the federal government. Actions and progress for these weaknesses reported by OMB in its fiscal year 2002 report were as follows: Lack of senior management attention to information security. Agencies Show Limited Progress in Implementing Security Requirements Our analyses of agency performance measure data and individual agencies’ efforts to implement information security requirements showed limited progress in many cases. This limited progress is indicated despite other benefits that that have resulted from GISRA implementation, such as increased management attention to and accountability for information security; important actions by the administration, such as integrating information security into the President’s Management Agenda Scorecard; an increase in the types of information being reported and made available for oversight: and the establishment of a baseline for measuring agencies’ performance. Specifically, excluding data for the National Aeronautics and Space Administration (NASA), our analysis showed that increases for these same measures only ranged from 3 to 10 percent. As a performance measure for this requirement, OMB required agencies to report the number and percentage of systems for which security controls have been tested and evaluated during fiscal years 2001 and 2002. Our analyses of agencies’ fiscal year 2002 corrective action plans, IGs’ evaluations of these plans, and available quarterly updates showed that the usefulness of these plans as part of agency management’s overall process to identify and correct their information security weaknesses could be limited when they do not identify all weaknesses or provide realistic completion estimates. Agencies Face Continuing Challenges to Implement Effective Information Security Management Programs The governmentwide weaknesses identified by OMB in its reports to the Congress, as well as the limited progress in implementing key information security requirements, continue to emphasize that agencies have not effectively implemented programs for managing information security. In particular, FISMA provisions established additional requirements that can assist the agencies in implementing effective information security programs, help ensure that agency systems incorporate appropriate controls, and provide information for administration and congressional oversight. However, in addition to these steps, achieving significant and sustainable results will likely require agencies to integrate such techniques into overall security management programs and processes that prioritize and routinely monitor and manage their information security efforts.

Why GAO Did This Study Since 1996, GAO has reported that poor information security in the federal government is a widespread problem with potentially devastating consequences. Further, GAO has identified information security as a governmentwide high-risk issue in reports to the Congress since 1997--most recently in January 2003. To strengthen information security practices throughout the federal government, information security legislation has been enacted. This testimony discusses efforts by federal departments and the administration to implement information security requirements mandated by law. In so doing, it examines overall information security weaknesses and challenges that the government faces, and the status of actions to address them, as reported by the Office of Management and Budget (OMB). GAO's evaluation of agency efforts to implement federal information security requirements and correct identified weaknesses. New requirements mandated by the Federal Information Security Management Act of 2002 (FISMA). What GAO Found Based on the fiscal year 2002 reports submitted to OMB, the federal government has made limited overall progress in implementing statutory information security requirements, although a number of benefits have resulted. Among these benefits are several actions taken and planned to address governmentwide information security weaknesses and challenges, such as lack of senior management attention. Nevertheless, as indicated by selected quantitative performance measures for the largest federal agencies, progress has been limited. Specifically, excluding data for one agency that were not comparable for fiscal years 2001 and 2002, improvements for 23 agencies ranged from 3 to 10 percentage points for the selected measures. GAO's analyses of agencies' reports and evaluations confirmed that many agencies have not implemented security requirements for most of their systems, such as performing risk assessments and testing controls. Further, the usefulness of agency corrective action plans may be limited when they do not identify all weaknesses or contain realistic completion dates. Agencies also continue to face challenges in effectively implementing and managing their overall information security programs. FISMA provisions establish additional requirements that, among other things, can assist agencies in implementing effective information security programs. However, attaining significant and sustainable results in implementing such requirements will also likely require processes that prioritize and routinely monitor and manage agency efforts, as well as continued congressional and administration oversight.

gao_GAO-10-401T

gao_GAO-10-401T_0

Assessing Potential Vulnerabilities Related to Not Screening against All Watchlist Records and Ensuring Clear Lines of Authority over the Watchlist Process Would Provide for Its More Effective Use Agencies Rely upon Standards of Reasonableness in Assessing Individuals for Nomination to TSC’s Watchlist, but Did Not Connect Available Information on Mr. Abdulmutallab to Determine Whether a Reasonable Suspicion Existed Federal agencies—particularly NCTC and the FBI—submit to TSC nominations of individuals to be included on the consolidated watchlist. To decide if a person poses enough of a threat to be placed on the watchlist, agencies are to follow Homeland Security Presidential Directive (HSPD) 6, which states that the watchlist is to contain information about individuals “known or appropriately suspected to be or have been engaged in conduct constituting, in preparation for, in aid of, or related to terrorism.” HSPD-24 definitively established the “reasonable suspicion” standard for watchlisting by providing that agencies are to make available to other agencies all biometric information associated with “persons for whom there is an articulable and reasonable basis for suspicion that they pose a threat to national security.” NCTC is to consider information from all available sources and databases to determine if there is a reasonable suspicion of links to terrorism that warrants a nomination, which can involve some level of subjectivity. However, the White House’s review of the December 25 attempted terrorist attack raised questions about the effectiveness of the criteria, and the President tasked the FBI and TSC with developing recommendations for any needed changes to the nominations guidance and criteria. Weighing and responding to the potential impacts that changes to the nominations guidance and criteria could have on the traveling public and the airlines will be important considerations in developing such recommendations. Agencies Do Not Screen Individuals against All Records in the Watchlist, Which Creates Potential Security Vulnerabilities; GAO Continues to Recommend That Agencies Assess and Address These Gaps In reacting to the December 25 attempted terrorist attack, determining whether there were potential vulnerabilities related to the use of watchlist records when screening—not only individuals who fly into the country but also, for example, those who cross land borders—are important considerations. In our October 2007 report, we noted that this is because screening against certain records may not be needed to support a respective agency’s mission or may not be possible because of computer system limitations, among other things. TSA is implementing a new screening program that the agency states will have the capability to screen an individual against the entire watchlist. Under this program, called Secure Flight, TSA will assume from air carriers the responsibility of comparing passenger information against the No Fly and Selectee lists. Further, the office noted that it also provided a sensitive version of the report to the Congress in October 2008. We recommended that the Homeland Security Council ensure that a governance structure was in place, but the council did not comment on our recommendation. Recent Work Highlights the Importance of Conducting Vulnerability Assessments and Operational Testing Prior to Deployment of New Checkpoint Technologies While TSA Has Not Yet Deployed Any New Checkpoint Technologies Nationwide, It Plans to Have Installed Almost 200 AITs by the End of 2010 As we reported in October 2009, in an effort to improve the capability to detect explosives at aviation passenger checkpoints, TSA has 10 passenger screening technologies in various phases of research, development, procurement, and deployment, including the AIT (formerly Whole Body Imager). TSA plans to procure and deploy a total of 878 units at all category X through category IV airports. The test results are then incorporated in the source selection plan. While recently providing GAO with updated information to our October 2009 report, TSA stated that operational testing for the AIT was completed as of the end of calendar year 2009. We are in the process of verifying that TSA has tested all of the AIT’s functional requirements in an operational environment. TSA estimates that the 9 remaining ETPs will be removed from airports by the end of calendar year 2010. In the future, using validated technologies would enhance TSA’s efforts to improve checkpoint security. However, TSA has not assessed whether these and other tactics that terrorists could use to evade detection by screening technologies, such as AIT, increase the likelihood that the screening equipment would not detect the hidden weapons or explosives. Thus, without an assessment of the vulnerabilities of checkpoint technologies, it is unclear whether the AIT or other technologies would have been able to detect the weapon Mr. Abdulmutallab used in his attempted attack.

Why GAO Did This Study The December 25, 2009, attempted bombing of flight 253 raised questions about the federal government's ability to protect the homeland and secure the commercial aviation system. This statement focuses on the government's efforts to use the terrorist watchlist to screen individuals and determine if they pose a threat, and how failures in this process contributed to the December 25 attempted attack. This statement also addresses the Transportation Security Administration's (TSA) planned deployment of technologies for enhanced explosive detection and the challenges associated with this deployment. GAO's comments are based on products issued from September 2006 through October 2009 and selected updates in January 2010. For these updates, GAO reviewed government reports related to the December 25 attempted attack and obtained information from the Department of Homeland Security (DHS) and TSA on use of the watchlist and new technologies for screening airline passengers. What GAO Found The intelligence community uses standards of reasonableness to evaluate individuals for nomination to the consolidated terrorist watchlist. In making these determinations, agencies are to consider information from all available sources. However, for the December 25 subject, the intelligence community did not effectively complete these steps and link available information to the subject before the incident. Therefore, agencies did not nominate the individual to the watchlist or any of the subset lists used during agency screening, such as the "No Fly" list. Weighing and responding to the potential impacts that changes to the nomination criteria would have on the traveling public will be an important consideration in determining what changes may be needed. Also, screening agencies stated that they do not check against all records in the watchlist, partly because screening against certain records may not be needed to support a respective agency's mission or may not be possible because of the requirements of computer programs used to check individuals against watchlist records. In October 2007, GAO reported that not checking against all records may pose a security risk and recommended that DHS and the FBI assess potential vulnerabilities, but they have not completed these assessments. TSA is implementing an advanced airline passenger prescreening program--known as Secure Flight--that could potentially result in the federal government checking passengers against the entire watchlist under certain security conditions. Further, the government lacks an up-to-date strategy and implementation plan--supported by a clearly defined leadership or governance structure--which are needed to enhance the effectiveness of terrorist-related screening and ensure accountability. In the 2007 report, GAO recommended that the Homeland Security Council ensure that a governance structure exists that has the requisite authority over the watchlist process. The council did not comment on this recommendation. As GAO reported in October 2009, since TSA's creation, 10 passenger screening technologies have been in various phases of research, development, procurement, and deployment, including the Advanced Imaging Technology (AIT)--formerly known as the Whole Body Imager. TSA expects to have installed almost 200 AITs in airports by the end of calendar year 2010 and plans to install a total of 878 units by the end of fiscal year 2014. In October 2009, GAO reported that TSA had not yet conducted an assessment of the technology's vulnerabilities to determine the extent to which a terrorist could employ tactics that would evade detection by the AIT. Thus, it is unclear whether the AIT or other technologies would have detected the weapon used in the December 25 attempted attack. GAO's report also noted the problems TSA experienced in deploying another checkpoint technology that had not been tested in the operational environment. Since GAO's October report, TSA stated that it has completed the testing as of the end of 2009. We are currently verifying that all functional requirements of the AIT were tested in an operational environment. Completing these steps should better position TSA to ensure that its costly deployment of AIT machines will enhance passenger checkpoint security.

gao_RCED-99-15

gao_RCED-99-15_0

For example, if a preference customer of Southeastern paid a combined 3.5 cents per kWh for power from the PMA and other sources in 1995 and paid 3.9 cents for power from non-PMA sources, we assumed the customer’s rates would rise from 3.5 to 3.9 cents—a relatively small increase of 0.4 cent—if it had to pay market rates for all its power. Slightly more than half of the PMA’s preference customers may see increases of less than 0.1 cent per kWh. In most of Southeastern’s states, the maximum increase that a preference customer would pass on to its residential end-users ranges between $1 and $8 per month, depending on the state. In states served by Western, preference customers may see a variety of rate increases. Preference customers who may see these larger increases typically paid relatively low rates, ranging from 1.5 to 3.0 cents per kWh and bought most or all of their power from Western. Taken together, Southwestern’s preference customers may experience higher rate increases than Southeastern’s customers but lower increases than Western’s. As shown in figure 2, in most of Southwestern’s states, a majority of the preference customers may see relatively small increases of 0.5 cent per kWh or less on base rates that typically ranged from 1.5 to 3.5 cents. However, in Oklahoma, 79 percent of the preference customers may see larger increases that exceed 1.5 cents per kWh. A preference customer’s rate increase also depends on what portion of its total power comes from the PMA. Preference Customers Serve Varying Portions of Many States As shown in figure 3, preference customers that are directly served by Southeastern, Southwestern, and Western reported serving varying portions of 29 states across the nation. In Income, End-Users Are Similar to the Population of the Entire State; Most Service Areas Are Either Urban or “Mixed” Although preference customers serve areas with incomes lower than the national average, most of the households they serve have incomes that are similar to those in the entire state. In addition, about 47 percent of the towns preference customers reported serving are rural. Bonneville Power Administration Southeastern Power Administration Southwestern Power Administration Western Area Power Administration Both Western and Southwestern market power in Kansas. Others suggest that the PMAs be required to charge market rates for power. More specifically, you asked that we identify (1) the extent to which preference customers’ rates may change by state if market rates are charged, (2) the areas the three PMAs’ preference customers report serving, and (3) the incomes in these areas and the extent to which they are urban or rural. These customers buy power directly from the PMA. State-Specific Data on Potential Rate Impacts and Service Area Demographics This appendix provides, for each state that receives PMA power from Southeastern, Southwestern, and/or Western, (1) the counties and towns that the preference customers included in our analysis report serving and a map showing these areas and (2) the estimated rate changes if market rates are charged, by number and percentage of preference customers; household incomes in areas potentially receiving power; the extent to which these areas are urban or rural; and the extent to which the individual state’s total power consumption is provided by the PMA(s) through the preference customers included in our analysis. 6. 7. 8. 10. 11. 12. 13. 14. 15.

Why GAO Did This Study Pursuant to a congressional request, GAO provided a state-by-state analysis of the preference customers who buy power from the Southeastern Power Administration, the Southwestern Power Administration, and the Western Area Power Administration, focusing on the: (1) extent to which preference customers' rates may change if market rates are charged; (2) areas the three power marketing administrations' (PMA) preference customers report serving; and (3) incomes in these areas and the extent to which they are rural or urban. What GAO Found GAO noted that: (1) overall, slightly more than two-thirds of the preference customers that purchase power directly from the Southeastern, Southwestern, and Western Area power administrations may see relatively small or no rate increases if these PMAs begin to charge market rates for the power they produce; (2) in particular, given GAO's assumptions, almost all of Southeastern's preference customers would see average rate increases of up to one-half cent per kilowatt hour (kWh) on rates that in 1995 typically ranged from 3.5 to 6.0 cents per kWh; (3) most of these preference customers would see increases of less than one-tenth cent per kWh; (4) if the preference customers served by Southeastern pass the higher rates on proportionally to their residential end users, most end users would see their monthly electricity bill increase by less than $1, while the maximum increase would range in most states between $1 and $8, depending on the state; (5) preference customers who receive power from Western may see a variety of rate increases if market rates are charged; (6) as a group, Southwestern's preference customers may see rate increases that lie between those for Southeastern's and Western's customers; (7) most of Southwestern's preference customers may see relatively low rate increases of up to one-half cent per kWh on rates that typically ranged between 1.5 and 3.5 cents per kWh; (8) however, almost all preference customers in Oklahoma may see larger rate increases that exceed 1.5 cents per kWh; (9) in general, a preference customer's rate increase depends primarily on what portion of its total power comes from the PMA and how close the PMA's rate is to the market rate; (10) preference customers included in GAO's analysis that purchased power directly from the PMAs serve varying portions of 29 states; (11) the populations in the areas preference customers serve generally have median incomes that are similar to the median income in the entire state; (12) in about two-thirds of the states GAO examined, the preference customers serve counties and towns whose median household incomes are within 15 percent of the statewide median income; (13) however, in some states, preference customers primarily serve poorer areas and households; (14) nationwide, about half of the towns that preference customers serve are urban and about half are rural; and (15) most of the counties are mixed, about 40 percent are rural, and the remainder are urban.

gao_GAO-09-753

gao_GAO-09-753_0

The EAS Program Is Providing Air Service to More Communities, but Service Is Costing More and the Number of Carriers Providing Service Is Declining EAS Program Obligations and Appropriations Have Generally Increased to Support Service to More Communities and Higher Carrier Subsidies The number of communities served by the EAS program in the continental United States has risen in recent years— from 87 communities as of June 1, 2003, to 102 communities as of November 1, 2008. The administration has requested about $175 million for the program in 2010, which would represent a further increase in program funding. The number of carriers providing EAS service has declined from 34 as of February 1987 to 10 in 2009. The EAS Program’s Ability to Provide Service Is Affected by the Financial Viability of Service on EAS Routes Program Requirements and Other Factors Appear to Contribute to Increasing Costs of EAS Service for Carriers and Higher Program Subsidies from DOT Many of the expert panelists and other stakeholders we interviewed stated that some EAS program requirements significantly add to the cost of providing subsidized air service to communities. Although fuel prices typically vary over time, in 2008 fuel began to comprise an increasing portion of airlines’ costs, in some cases contributing to carriers ceasing operations. Whatever the cause, relatively high fares for EAS flights can make those flights less attractive, compared to the alternative of driving to another airport. The growth of low-cost carriers has created alternatives to EAS service. Options for Modifying the EAS Program and Instituting a Multi- modal Approach to Community Transportation Changes to Certain EAS Program Requirements Could Help Carriers Operate More Effectively and Potentially Reduce Program Costs Congress and others have been aware of the increasing difficulty EAS carriers face in providing service to communities. Six of the 17 members of our expert panel who addressed this issue of service frequency believed such a change would make the program more effective. The 17 members on our panel who addressed this issue all believed that the EAS program needed substantive change to make it more effective in supporting small communities’ access to the national transportation network, and that a multimodal approach to provide financial assistance to small community transportation could potentially be more responsive to communities’ needs. Selecting Options for the EAS Program Is Difficult, but Tools Exist for Assessing the Options and Improving Program Evaluation Selecting Options to Implement Is Difficult and Depends on How Program Objectives Are Defined Over the years, Congress has made incremental changes to the program such as changing the eligibility criteria or funding; however the program’s approach remains little changed since it was implemented 30 years ago. Using GAO’s Re- examination Approach to Revisit the EAS Program’s Objectives Could Help Clarify the Extent to which Different Options Meet those Objectives Changes in the aviation industry and the nation’s financial situation over the past 30 years may make this an opportune time to revisit program objectives and evaluate design options for the program. For example, defining the EAS program’s objective as subsidizing scheduled commercial air service at communities that would not otherwise have air service, as the program has operated since it began, could lead to one program design and related performance measures addressing such factors as the number of communities with subsidized air service, the cost effectiveness of that service, and various measures for the quality of that service. For example, Geographic Information Systems (GIS) analysis can be used to evaluate community access to transportation—both to air service and to other modes. Rural and small community populations have shifted in the 30 years since deregulation—the EAS program may not be serving communities that have the greatest need for subsidized air service, in terms of other transportation options they may have. Others may not have an airfield at all.

Why GAO Did This Study Since 1978, the Essential Air Service (EAS) program has subsidized air service to eligible communities that would otherwise not have scheduled service. The cost of this program has risen as the number of communities being served and subsidies to air carriers have increased. At the same time, the number of carriers providing EAS service has declined. Given continuing concerns over the EAS program's long-term prospects, GAO was asked to review the program. GAO reviewed (1) the characteristics and current status of the EAS program, (2) factors affecting the program's ability to provide air service, (3) options for revising the program, and (4) tools for assessing the program, the options for its revision, and the program's performance. GAO interviewed stakeholders and reviewed the results of an expert panel convened by GAO, Department of Transportation (DOT) data and program documentation, and potential methodologies for assessing federal programs. What GAO Found The EAS program has changed relatively little in 30 years, but current conditions raise concerns about whether the program can continue to operate as it has. Over the past 2 years subsidies to carriers have been increasing, along with EAS program obligations to fund those subsidies. In response, the administration is requesting $175 million for the EAS program in fiscal year 2010, a $50 million increase over recent funding levels. At the same time, the number of carriers providing subsidized air service is declining, from 34 in 1987 to 10 in 2009. More than one-third of the EAS-supported communities temporarily lost service in 2008, when 3 carriers ceased operations. Several factors contribute to the increasing difficulty in providing subsidized air service. The EAS program has statutory requirements for minimum aircraft size and frequency of flights, effectively requiring carriers to provide service that may not be "right-sized" for some small markets. Also, the growth of air service especially by low-cost carriers--which today serve most U.S. hub airports---weighed against the relatively high fares and inconvenience of EAS flights, can lead people to bypass EAS flights and drive to hub airports. Moreover, the continued urbanization of the United States may have eroded the potential passenger base in some small and rural EAS communities. While Congress, DOT, GAO, and others have proposed various revisions to the EAS program, Congress has not authorized many changes to program requirements. Proposed Federal Aviation Administration reauthorization legislation would include performance-based incentives, among other changes. GAO and others have suggested increasing flexibility and other changes that could make EAS service more sustainable for smaller communities. Finally, members of an expert panel organized by GAO all believed that small and rural communities would benefit from a multimodal approach to transportation. Generally they believed that other modes of transportation could be more responsive to communities' transportation needs in some cases. Although it is difficult to select options for the EAS program since stakeholders do not always agree on program objectives, certain analytical tools can help policymakers assess the EAS program. Tools include a re-examination framework to revisit the program's objectives, and help evaluate options to make the program more effective. Other analytical tools include an analytical approach GAO developed that, for a sample of small and rural communities, identified their access to different modes of transportation. This approach has the potential for broader application to examinations of communities' access to the national transportation network. Finally, once a change is implemented, performance measures can be used to periodically evaluate program effectiveness.

gao_GAO-15-272

gao_GAO-15-272_0

Specifically, we used NNSA’s data to identify contaminated nonoperational facilities, operational facilities that will be considered nonoperational over the next 25 years, and the annual cost to maintain these facilities. In addition, we visited two of the six NNSA sites with contaminated facilities—Lawrence Livermore National Laboratory (LLNL) in California and the Y-12 National Security Complex (Y-12) in Tennessee—to view contaminated facilities and interview officials that are familiar with facility surveillance and maintenance. To determine the extent to which EM considers the risks of NNSA’s contaminated nonoperational facilities and the costs to maintain them, we reviewed DOE and EM policies and guidance documents related to the facility transfer process and prioritization of EM’s cleanup work. 1). Until EM has funds available to immediately begin disposition, program offices, such as NNSA, are responsible for maintaining their nonoperational facilities through activities known as surveillance and maintenance. NNSA Has Identified 83 Facilities to Be Transferred to EM for Disposition, and the Condition of Nonoperational Facilities Continues to Degrade NNSA has identified 83 contaminated facilities for potential transfer to EM for disposition over a 25-year period, 56 of which are currently nonoperational. NNSA is maintaining these facilities for future transfer to EM, but the condition of nonoperational facilities continues to degrade, resulting in increasing costs to NNSA to maintain them to prevent the spread of contamination. NNSA Has Identified 83 Contaminated Facilities for Transfer to EM According to NNSA facility data, NNSA has identified 83 contaminated facilities at six of its eight sites for potential transfer to EM for disposition over 25 years, 27 of which are operational, and 56 are nonoperational (see fig. 2). EM officials stated that, while EM confirmed in 2009 that 14 NNSA facilities were eligible for transfer to EM, none of those facilities have been transferred and remain part of the 56 nonoperational facilities managed by NNSA. As a result, EM officials told us they estimate that EM may not be able to accept any facilities for transfer until at least 2030 due to budget uncertainties. Specifically, site officials now detect radiological and toxicological contaminants— beryllium, mercury, and black mold—in areas where they were not detected 2 years earlier (see fig. Additional repair activities were planned in fiscal year 2014, but even with these additional repairs, according to NNSA documents, the overall risk of the facility to workers and the environment will not be significantly reduced. EM Does Not Consider Risks or Costs of NNSA’s Contaminated Nonoperational Facilities When Prioritizing Cleanup Activities When developing its annual plans and schedules for decontaminating and decommissioning facilities, EM does not consider the human health and environmental risks of NNSA’s contaminated nonoperational facilities that are eligible for transfer, but have not yet been transferred to EM. According to the 2006 DOE Deputy Secretary Program Decision Memorandum, EM is to incorporate DOE’s contaminated nonoperational facilities into its planning for decontamination and decommissioning, commensurate with the risk such activities pose. EM officials told us that EM does not include contaminated nonoperational facilities maintained by NNSA and other program offices in its planning until EM officials believe they will have available funding to begin decontamination and decommissioning. Conditions at many of NNSA’s contaminated facilities, some of which have been nonoperational for many years, continue to worsen, resulting in increased costs and risks, which are not considered by EM when prioritizing its cleanup work. Recommendations for Executive Action We recommend the Secretary of Energy direct the Office of Environmental Management (EM) to take the following two actions to aid EM in its decision making on which facilities to accept and decontaminate and decommission: To ensure that EM’s annual process to prioritize facilities for decontamination and decommissioning considers all relevant risks from NNSA, EM should integrate its lists of facilities prioritized for disposition with all NNSA facilities that meet EM’s transfer requirements, and EM should include this integrated list as part of the Congressional Budget Justification for DOE. DOE, however, did not state whether it concurred with the report’s recommendations.

Why GAO Did This Study Seventy years of nuclear weapons production and energy research by DOE and its predecessor agencies generated radioactive waste, resulting in thousands of contaminated facilities. Some facilities pose risks to workers near the facilities and to the environment. NNSA, a separately organized agency within DOE, now manages many of these contaminated facilities, and though many are no longer in use, others are still operational. Once NNSA considers these facilities to be nonoperational, they may be eligible for transfer to EM, whose mission includes disposing of contaminated facilities through decontamination and decommissioning. In 2007, EM updated its facility transfer process, but until EM accepts these facilities, NNSA is responsible for their maintenance. The Senate Armed Services Committee Report accompanying the National Defense Authorization Act for Fiscal Year 2014 mandated GAO to assess the inventory of facilities that NNSA plans to transfer to EM for disposition. This report examines (1) how many facilities NNSA has identified for transfer to EM for disposition and their condition and (2) the extent to which EM considers risks of NNSA's contaminated nonoperational facilities and the costs to maintain them when prioritizing its cleanup activities. GAO reviewed documents and interviewed officials from NNSA and EM and visited two NNSA sites that have some of the most contaminated facilities. What GAO Found The National Nuclear Security Administration (NNSA) has identified 83 facilities at six of its eight sites for transfer to the Department of Energy's (DOE) Office of Environmental Management (EM) for disposition, and the condition of NNSA's facilities awaiting transfer continues to degrade. NNSA plans to transfer all 83 facilities to EM over the next 25 years. Twenty-seven of them are still operational but are expected to become nonoperational in the next 25 years, and 56 are nonoperational now. In 2009, EM agreed to accept 14 NNSA facilities when it had funds available to begin decontamination and decommissioning. Six years later, none of these facilities have been transferred, and EM officials said they may not be able to accept these or other NNSA facilities until at least 2030 due to budget uncertainties and other priorities. Meanwhile, as NNSA maintains contaminated nonoperational facilities, the facilities' condition continues to worsen, resulting in increased costs to maintain them, and NNSA documents show that some facilities will require significant additional maintenance to prevent the spread of contamination. For example, the Alpha-5 facility at NNSA's Y-12 National Security Complex in Tennessee has degraded to the extent that site officials now detect contaminants, such as mercury, in areas where they were not detected 2 years earlier, and additional funds are needed to repair its failing roof. EM does not consider the risks of NNSA's nonoperational facilities when prioritizing its cleanup activities. Specifically, when developing its annual facility disposition plans, EM does not consider the human health or environmental risks of NNSA's contaminated nonoperational facilities that meet its transfer requirements but have not yet been transferred. A 2006 DOE Deputy Secretary Program Decision Memorandum stated that EM is to incorporate DOE's contaminated nonoperational facilities into its planning for decontamination and decommissioning, commensurate with the risk such activities pose. EM officials told GAO that they do not include facilities maintained by NNSA in their planning until they have available funding to begin cleanup work. However, without integrating NNSA's inventory of nonoperational facilities into its process for prioritizing facilities for disposition, EM may be prioritizing cleanup for lower-risk facilities under its management ahead of facilities at NNSA that may present a higher risk of spreading contamination. Alpha-5, a Nonoperational Facility, Shows Degradation Over 2 Years What GAO Recommends GAO recommends, among other things, that EM integrate into one prioritized list all NNSA facilities that meet EM's transfer requirements. EM neither agreed nor disagreed with the recommendation, stating it has formed a working group that may address GAO's findings.

gao_GGD-98-187

gao_GGD-98-187_0

Inappropriate deletions of TECS lookout records could negatively affect Customs’ ability to detect drug smuggling. 3. 4. 5. All records must be viewed by the supervisor. Separation of Duties The Comptroller General’s internal control standards require that key duties and responsibilities in authorizing, processing, recording, and reviewing transactions should be separated among individuals. Documentation of Transactions The Comptroller General’s standards require that internal control systems and all transactions and other significant events are to be clearly documented, and that the documentation is to be readily available for examination. This standard requires supervisors to continuously review and approve the assigned work of their staffs, including approving work at critical points to ensure that work flows as intended. Although our review was limited to Customs headquarters, three CMCs, and three ports of entry, because of the lack of systemwide (1) internal control standards concerning deletion authority and (2) specific guidance concerning the deletion of TECS records that comply with the Comptroller General’s standards for internal controls, it is possible that TECS lookout records are not adequately safeguarded in other CMCs and other ports of entry as well.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the internal control techniques the Customs Service has in place to safeguard certain law enforcement records in the Treasury Enforcement Communications System (TECS) from being inappropriately deleted. What GAO Found GAO noted that: (1) Customs did not have adequate internal controls over the deletion of TECS lookout records; (2) standards issued by the Comptroller General require that: (a) key duties and responsibilities in authorizing, processing, recording, and reviewing transactions should be separated among individuals; (b) internal control systems and all transactions and other significant events should be clearly documented; and (c) supervisors should continuously review and approve the assigned work of their staffs; (3) however, guidance on TECS does not require these safeguards and Customs officials at the three ports GAO visited had not implemented these controls; (4) as a result, Customs employees could inappropriately remove lookout records from TECS; and (5) although GAO's review was limited to Customs headquarters, three Customs Management Centers, and three ports of entry, because of the lack of adequate systemwide internal control standards over deletion authority, it is possible that TECS lookout records may not be adequately safeguarded in other ports of entry as well.

gao_GAO-07-447T

gao_GAO-07-447T_0

Congress appropriated approximately $40 billion over 10 years (from fiscal year 1998 through 2007) for distribution among states with approved SCHIP plans. SCHIP Allotments to States SCHIP allotments to states are based on an allocation formula that uses (1) the number of children, which is expressed as a combination of two estimates—the number of low-income children without health insurance and the number of all low-income children, and (2) a factor representing state variation in health care costs. Under federal SCHIP law and subject to certain exceptions, states have 3 years to use each fiscal year’s allocation, after which any remaining funds are redistributed among the states that had used all of that fiscal year’s allocation. SCHIP Enrollment Has Grown Rapidly; States’ Rates of Uninsured Children Vary Significantly SCHIP enrollment increased rapidly over the first years of the program, and has stabilized for the past several years. Of these 6.1 million enrollees, 639,000 were adults. States’ SCHIP Programs Reflect a Variety of Approaches to Providing Health Care Coverage States’ SCHIP programs reflect the flexibility allowed in structuring approaches to providing health care coverage, including their choice among three program designs—Medicaid expansions, separate child health programs, and combination programs, which have both a Medicaid expansion and a separate child health program component. 3). Some states have chosen to cover children in families with higher income levels in their Medicaid programs. In fiscal year 2005, 41 states used SCHIP funding to cover children in families with incomes up to 200 percent of FPL or higher, including 7 states that covered children in families with incomes up to 300 percent of FPL or higher. Most SCHIP Programs Require Cost-Sharing, but Amounts Charged Vary Considerably In 2005, most states’ SCHIP programs required families to contribute to the cost of care with some kind of cost-sharing requirement. As of February 2007, we identified 14 states with approved waivers to cover at least one of three categories of adults: parents of eligible Medicaid and SCHIP children, pregnant women, and childless adults. States’ SCHIP Spending Was Initially Low but Now Threatens to Exceed Available Funding SCHIP program spending was low initially, as many states did not implement their programs or report expenditures until 1999 or later, but spending was much higher in the program’s later years and now threatens to exceed available funding. But as spending has grown, the pool of funds available for redistribution has shrunk. These shortfall states were more likely to have a Medicaid component to their SCHIP program, cover children across a broader range of income groups, and cover adults through section 1115 waivers than were the 32 states that were not projected to have shortfalls. To cover projected shortfalls that several states faced, Congress appropriated an additional $283 million in fiscal year 2006. Program Spending, Low in SCHIP’s Early Years, Exceeded Allotments by 2002 SCHIP program spending began low, but by fiscal year 2002, states’ aggregate annual spending from their federal allotments exceeded their annual allotments. States that have outspent their annual allotments over the 3-year period of availability have also relied on redistributed SCHIP funds to cover excess expenditures. In fiscal years 2000 and 2003, Congress amended statutory provisions for the redistribution and availability of unused SCHIP allotments from fiscal years 1998 through 2001, reducing the amounts available for redistribution and allowing states that had not exhausted their allotments by the end of the 3-year period of availability to retain some of these funds for additional years. Some States Consistently Spent More than Their Allotted Funds Some states consistently spent more than their allotted funds, while other states consistently spent less. When we compared the 18 states that were projected to have shortfalls with the 32 states that were not, we found that the shortfall states were more likely to have a Medicaid component to their SCHIP program, to have a SCHIP eligibility corridor broader than the median, and to cover adults in SCHIP under section 1115 waivers (see table 4). These include the following: Maintaining flexibility without compromising the goals of SCHIP. Considering the federal financing strategy, including the financial sustainability of public commitments. Assessing issues associated with equity. Children’s Health Insurance: SCHIP Enrollment and Expenditure Information. This is a work of the U.S. government and is not subject to copyright protection in the United States.

Why GAO Did This Study In August 1997, Congress created the State Children's Health Insurance Program (SCHIP) with the goal of significantly reducing the number of low-income uninsured children, especially those who lived in families with incomes exceeding Medicaid eligibility requirements. Unlike Medicaid, SCHIP is not an entitlement to services for beneficiaries but a capped allotment to states. Congress provided a fixed amount--$40 billion from 1998 through 2007--to states with approved SCHIP plans. Funds are allocated to states annually. States have 3 years to use each year's allocation, after which unspent funds may be redistributed to states that have already spent all of that year's allocation. GAO's testimony addresses trends in SCHIP enrollment and the current composition of SCHIP programs across the states, states' spending experiences under SCHIP, and considerations GAO has identified for SCHIP reauthorization. GAO's testimony is based on its prior work; analysis of the Current Population Survey, a monthly survey conducted by the U.S. Census Bureau (2003-2005); information from states' annual SCHIP reports (2002-2005); and SCHIP enrollment and expenditure data from the Centers for Medicare & Medicaid Services (1998-2005). What GAO Found SCHIP enrollment increased rapidly during the program's early years but has stabilized over the past several years. As of fiscal year 2005, the latest year for which data were available, SCHIP covered approximately 6 million enrollees, including about 639,000 adults, with about 4.0 million enrollees in June of that year. States' SCHIP programs reflect the flexibility the statute allows in structuring approaches to providing health care coverage. As of July 2006, states had opted for the following from among their choices of program structures allowed: a separate child health program (18 states), an expansion of a state's Medicaid program (11), or a combination of the two (21). In addition, 41 states opted to cover children in families with incomes at 200 percent of the federal poverty level (FPL) or higher, with 7 of these states covering children in families with incomes at 300 percent of FPL or higher. Thirty-nine states required families to contribute to the cost of their children's care in SCHIP programs through a cost-sharing requirement, such as a premium or copayment; 11 states charged no cost-sharing. As of January 2007, GAO identified 15 states that had waivers in place to cover adults in their programs; these included parents of eligible Medicaid and SCHIP children, pregnant women, and childless adults. SCHIP spending was initially low, but now threatens to exceed available funding. Since 1998, some states have consistently spent more than their allotments, while others spent consistently less. States that earlier overspent their annual allotments over the 3-year period of availability could rely on other states' unspent SCHIP funds, which were redistributed to cover other states' excess expenditures. By fiscal year 2002, however, states' aggregate annual spending began to exceed annual allotments. As spending has grown, the pool of funds available for redistribution has shrunk. As a result, 18 states were projected to have "shortfalls" of SCHIP funds--meaning they had exhausted all available funds--in at least one of the final 3 years of the program. These 18 states were more likely than the 32 states without shortfalls to have a Medicaid component to their SCHIP programs, cover children across a broader range of income groups, and cover adults in their programs. To cover projected shortfalls faced by several states, Congress appropriated an additional $283 million for fiscal year 2006. SCHIP reauthorization occurs in the context of debate on broader national health care reform and competing budgetary priorities, highlighting the tension between the desire to provide affordable health insurance coverage to uninsured individuals, including low-income children, and the recognition of the growing strain of health care coverage on federal and state budgets. As Congress addresses reauthorization, issues to consider include (1) maintaining flexibility within the program without compromising the primary goal to cover children, (2) considering the program's financing strategy, including the financial sustainability of public commitments, and (3) assessing issues associated with equity, including better targeting SCHIP funds to achieve certain policy goals more consistently nationwide.

gao_GAO-06-1046

gao_GAO-06-1046_0

Clearly, this limits the extent to which federal agencies can oversee grantee performance. Nonfinancial mechanisms would include altered oversight or flexibility. Accountability Provisions Can Be Employed at Different Phases of the Grant Life Cycle Accountability mechanisms can be used in different phases of the grant life cycle by different actors, including Congress, granting agencies, and grantees themselves, and the lessons learned from one grant cycle can be used to improve a performance accountability mechanism in the next (see fig. Accountability Mechanisms Can Be Tailored to Specific Situations Selecting appropriate performance measures and linking them to performance accountability mechanisms is not a one-size-fits-all process; rather, accountability provisions are tailored to reflect the program’s characteristics. Strategies Support Successful Selection, Design, and Implementation of Performance Accountability Mechanisms Collectively, five key strategies appear to facilitate the effective selection, design, and implementation of performance accountability mechanisms. These strategies are ensure mechanisms are of sufficient value, periodically renegotiate and revise mechanisms, ensure appropriate measurement selection and usage, ensure grantor and grantee technical capacity, and implement system in stages. In addition to these strategies, we noted extensive use of partnerships and collaborations and regular and effective oversight and feedback, which appeared critical to the success of accountability provisions in a third- party environment. In addition, the use of national program evaluation studies and research and demonstration grants can provide valuable information to assist in agency and congressional oversight of and knowledge about accountability mechanisms. OMB recognized the value in sharing information on performance accountability mechanisms, but has not yet focused on this issue. Appendix I: Objectives, Scope, and Methodology The objectives of this report were to identify (1) the challenges to performance accountability in grants; (2) the kinds of mechanisms that are being used to improve grant performance and how; and (3) given the findings of questions 1 and 2, what strategies the federal government can use to encourage the use of these mechanisms, as appropriate. To illustrate the mechanisms and strategies identified through our content analysis, we used relevant case examples found in the literature. To further illustrate the mechanisms and design and implementation strategies, we also selected four additional case illustrations—two federal grant programs and two nonfederal contract cases. How Federal Programs Use Outcome Information: Opportunities for Federal Managers. 5, no.

Why GAO Did This Study Maximizing the extent to which grants achieve their long-term performance goals is critical to successfully addressing the challenges of the 21st century. While performance accountability mechanisms are fairly new to federal grants, they have been used in contracts for some time and lessons learned have begun to inform federal grant design. Given this, GAO was asked to examine (1) challenges to performance accountability in federal grants, (2) mechanisms being used to improve grant performance, and (3) strategies the federal government can use to encourage the use of these mechanisms. GAO performed a content analysis of relevant literature and interviewed experts. To illustrate the mechanisms and strategies found in the literature, GAO used examples from the literature and selected additional case illustrations--two federal grant programs (vocational education and child support enforcement) and two nonfederal contracts--for further study. What GAO Found Accountability provisions in federal grants can vary widely. They can be financial (e.g., bonus payments) or nonfinancial (e.g., altered oversight or flexibility), and can be employed by various actors at different stages in the grant life cycle. Mechanisms need to be tailored to specific situations since there is no "one-size-fits-all" solution. Collectively, five key strategies appear to facilitate the effective design and implementation of performance accountability mechanisms. They are as follows: 1. ensure mechanisms are of sufficient value to motivate desired behaviors, 2. periodically renegotiate and revise mechanisms and measures, 3. ensure appropriate measurement selection, 4. ensure grantor and grantee technical capacity, and 5. allow for phased implementation. In addition to these strategies, collaboration, oversight, and feedback also appear critical to the success of performance accountability mechanisms. Opportunities exist to improve the design and implementation of federal grants. A results-focused design can enable and facilitate the use of accountability provisions. National program evaluation studies and demonstration grants can provide valuable information to support oversight of and knowledge about accountability mechanisms. Finally, the Office of Management and Budget (OMB), agencies, and grantees can benefit from sharing good practices and lessons learned regarding performance accountability provisions. OMB recognized the value in sharing information on performance accountability mechanisms, but has not yet focused on this issue.

gao_GAO-15-151

gao_GAO-15-151_0

In fiscal year 2013, Education provided over $136 billion in financial aid to students, including loans and grants. States may also fund public colleges through grants or contracts for activities such as research projects. Students may receive grant aid from the state, the federal government, or the college they are attending. From Fiscal Years 2003 through 2012, State Funding for Public Colleges Decreased, while Tuition and Out-of- Pocket Costs for Students Increased State Funding for Higher Education Decreased by 12 Percent Overall and by 24 Percent per Student In the decade spanning fiscal years 2003 to 2012, state funding provided to public colleges decreased, both overall and when measured per student. State funding declines may be attributable, in part, to prevailing economic conditions and competing state budget priorities. Meanwhile, growth in tuition revenue outpaced that of all other types of revenue over this period, increasing from 17 percent to 25 percent and making tuition the top single source of revenue for public colleges. Thus, when all grant aid is taken into account, out-of- pocket costs for students, or estimated average net tuition, increased by 19 percent across all public colleges from $1,874 in the 2003-2004 school year to $2,226 in the 2011-2012 school year. Students and their families are now bearing the cost of college as a larger portion of their total family budgets. However, the number of certificates completed rose after the policy was introduced. Current Federal Higher Education Programs Engaging with States Are Limited, but Various Approaches Could Help Expand Federal Incentives to States to Improve College Affordability Federal Higher Education Programs are Targeted More at Student Financial Aid than Programs Involving States on College Affordability Current federal funding for higher education is primarily targeted at supporting students rather than on collaborating with states on higher education policies affecting affordability. Several Potential Approaches Were Identified That Could Be Used to Incentivize States to Improve Affordability Based on interviews with experts and organizations as well as our review of Education documents and relevant literature, we identified three approaches that could be used to incentivize states to improve college affordability. Moreover, some experts and organizations cautioned that the approaches could have cost implications for the federal government and consequences for students. Creating new grant programs would also have cost implications for the federal government and could have consequences for students. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Overview This report examines: (1) how state financial support and tuition have changed at public colleges over the past decade, (2) how states’ higher education policies have affected affordability, and (3) how the federal government works with states to improve college affordability, and what additional approaches are available for doing so. In conducting this work, we analyzed trends in state funding for public colleges, state student aid, and tuition using public sector data from Education’s Integrated Postsecondary Education Data System (IPEDS), National Postsecondary Student Aid Study (NPSAS), and the National Association of State Student Grant and Aid Programs (NASSGAP) databases.

Why GAO Did This Study There is widespread concern that the rising costs of higher education are making college unaffordable for many students and their families. Federal and state support is central to promoting college affordability; however, persistent state budget constraints have limited funding for public colleges. GAO was asked to study state policies affecting affordability and identify approaches to encourage states to make college more affordable. This report examines, among other things, how state financial support and tuition have changed at public colleges over the past decade. It also examines how the federal government works with states to improve college affordability and what additional approaches are available for doing so. In conducting this work, GAO analyzed trends in state funding for public colleges, tuition, and state student aid using data from the U.S. Department of Education for all public sector colleges from fiscal years 2003 through 2012, the most recent data available at the time of this study. GAO also identified academic studies on state higher education policies and affordability published since 2011 and interviewed 25 academic experts and organizations in the fields of higher education or state policy. Finally, GAO reviewed Education programs and proposals and obtained perspectives from experts and organizations to identify approaches the federal government could use to incentivize state action. What GAO Found From fiscal years 2003 through 2012, state funding for all public colleges decreased, while tuition rose. Specifically, state funding decreased by 12 percent overall while median tuition rose 55 percent across all public colleges. The decline in state funding for public colleges may have been due in part to the impact of the recent recession on state budgets. Colleges began receiving less of their total funding from states and increasingly relied on tuition revenue during this period. Tuition revenue for public colleges increased from 17 percent to 25 percent, surpassing state funding by fiscal year 2012, as shown below. Correspondingly, average net tuition, which is the estimated tuition after grant aid is deducted, also increased by 19 percent during this period. These increases have contributed to the decline in college affordability as students and their families are bearing the cost of college as a larger portion of their total family budgets. GAO found that federal support for higher education is primarily targeted at funding student financial aid— over $136 billion in loans, grants, and work-study in fiscal year 2013—rather than at programs involving states. GAO identified several potential approaches that the federal government could use to expand incentives to states to improve affordability, such as creating new grants, providing more consumer information on affordability, or changing federal student aid programs. Each of these approaches may have advantages and challenges, including cost implications for the federal government and consequences for students. What GAO Recommends GAO does not make recommendations in this report.

gao_GAO-08-683

gao_GAO-08-683_0

To protect the over 1 million federal employees and about 9,000 GSA facilities from the risk of terrorist and criminal attacks, in fiscal year 2007, FPS had about 1,100 employees, of which 541, or almost 50 percent, were inspectors, as shown in figure 1. FPS also has about 15,000 contract guards. FPS provides law enforcement and physical security services to its customers. FPS’s Ability to Accomplish Its Mission Is Hampered by Operational Challenges and Its Actions May Not Fully Resolve These Challenges FPS currently faces several operational challenges, such as a decrease in staff, that make it difficult to accomplish its facility protection mission. FPS is taking steps to address these challenges. However, since transferring from GSA to DHS, FPS’s staff has declined and the agency has managed its staffing resources in a manner that has diminished security at GSA facilities and increased the risk of crime or terrorist attacks at many GSA facilities. For example, according to FPS, it has investigated significant crimes at multiple level IV facilities, but the security cameras installed in those buildings were not working properly, preventing FPS investigators from identifying the suspects. However, these actions may not fully resolve its operational challenges because, for example, some inspectors may not be able to perform both law enforcement and physical security duties simultaneously. According to FPS, this approach will provide it with the capabilities and flexibility to perform law enforcement and physical security services. FPS Faces Funding Challenges, and Its Actions to Address Them Have Had Adverse Implications FPS’s collections have not been sufficient to cover its projected operational costs in recent years, and FPS has faced projected shortfalls twice in the last 4 years. For example, in fiscal year 2003, the Federal Buildings Fund provided for the approximately $140 million difference between FPS’s collections and costs. In fiscal year 2008, the basic security fee increased to 62 cents per square foot, and FPS is projecting that the fee will be sufficient to cover its operational costs and that it will not have to implement any cost-saving measures, although a FPS official noted that the loss of staff in recent years has helped decrease its operational costs. FPS’s Basic Security Fee Does Not Account for Risk and Raises Questions about Equity FPS’s primary means of funding its operations is the fee it charges tenant agencies for basic security services, as shown in figure 7. However, since transferring to DHS, FPS has not complied with this schedule. Several Stakeholders Have Expressed Concern about FPS’s Ability to Determine Its Costs of Providing Security Services Several stakeholders have raised questions about whether FPS has an accurate understanding of the cost of providing security at GSA facilities. These measures include determining whether security countermeasures have been deployed and are fully operational, the amount of time it takes to respond to an incident, and the percentage of BSAs completed on time. However, FPS has not developed outcome measures to evaluate the net effect of its efforts to protect GSA facilities. While output measures are helpful, outcome measures are also important because they can provide FPS with broader information on program results, such as the extent to which its decision to move to an inspector- based workforce will enhance security at GSA facilities or help identify the security gaps that remain at GSA facilities and determine what action may be needed to address them. Recommendations for Executive Action To improve its ability to address its operational and funding challenges and to ensure that it has useful performance measures and reliable information to assess the effectiveness of efforts to protect GSA facilities, we recommend that the Secretary of Homeland Security direct the Director of FPS to take the following six actions: develop and implement a strategic approach to manage its staffing resources that, among other things, determines the optimum number of employees needed to accomplish its facility protection mission and allocate these resources based on risk management principles and the agency’s goals and performance measures; clarify roles and responsibilities of local law enforcement agencies in regard to responding to incidents at GSA facilities; improve FPS’s use of the fee-based system by developing a method to accurately account for the cost of providing security services to tenant agencies and ensuring that its fee structure takes into consideration the varying levels of risk and service provided at GSA facilities; evaluate whether FPS’s current use of a fee-based system or an alternative funding mechanism is the most appropriate manner to fund the agency; develop and implement specific guidelines and standards for measuring its performance, including outcome measures to assess its performance and improve the accountability of FPS; and improve how FPS categorizes, collects, and analyzes data to help it better manage and understand the results of its efforts to protect GSA facilities. Appendix I: Scope and Methodology To determine any operational challenges the Federal Protective Service (FPS) faces in protecting General Services Administration (GSA) facilities and actions it has taken to address those challenges, we interviewed about 170 FPS police officers, inspectors, special agents, support personnel, and administrators at headquarters and at 7 of FPS’s 11 regions.

Why GAO Did This Study In 2003, the Federal Protective Service (FPS) transferred from the General Services Administration (GSA) to the Department of Homeland Security (DHS). FPS provides physical security and law enforcement services to about 9,000 GSA facilities. To accomplish its mission of protecting GSA facilities, FPS currently has an annual budget of about $1 billion, 1,100 employees, and 15,000 contract guards located throughout the country. Recently, FPS has faced several challenges protecting GSA facilities and federal employees. This report provides information and analysis on (1) FPS's operational challenges and actions it has taken to address them, (2) funding challenges FPS faces and actions it has taken to address them, and (3) how FPS measures the effectiveness of its efforts to protect GSA facilities. To address these objectives, we conducted site visits at 7 of FPS's 11 regions and interviewed FPS, GSA, tenant agencies, and local law enforcement officials. What GAO Found FPS faces several operational challenges that hamper its ability to accomplish its mission, and the actions it has taken may not fully resolve these challenges. FPS's staff decreased by about 20 percent between fiscal years 2004 and 2007. FPS has managed the decreases in its staffing resources in a manner that has diminished security at GSA facilities and increased the risk of crime or terrorist attacks at many GSA facilities. For example, with the exception of a few locations, FPS no longer provides proactive patrols at GSA facilities to detect and prevent criminal incidents and terrorism-related activities. FPS also continues to face problems with managing its contract guard program and ensuring that security countermeasures, such as security cameras and magnetometers, are operational. For example, according to FPS, it has investigated significant crimes at multiple high-risk facilities, but the security cameras installed in those buildings were not working properly, preventing FPS investigators from identifying the suspects. To address some of its operational challenges, FPS is moving to an inspector-based workforce, which seeks to eliminate the police officer position and rely primarily on FPS inspectors for both law enforcement and physical security activities. FPS believes that this change will ensure that its staff has the right mix of technical skills and training needed to accomplish its mission. FPS is also hiring an additional 150 inspectors and developing a new system for completing building security assessments. However, these actions may not fully resolve FPS's operational challenges because, for example, inspectors might not be able to fulfill both law enforcement and physical security roles simultaneously. FPS also faces funding challenges, and the actions it has taken to address them have had some adverse implications. To fund its operations, FPS charges each tenant agency fees for its security services. In fiscal years 2005 and 2006, FPS's projected expenses exceeded its collections and DHS had to transfer funds to make up the difference. FPS also instituted cost-saving measures such as restricting hiring and travel and limiting training and overtime. According to FPS, these measures have affected staff morale, safety and increased attrition. FPS has been authorized to increase the basic security fee four times since it transferred to DHS, currently charging tenant agencies 62 cents per square foot for basic security services. Because of these actions, FPS's collections in fiscal year 2007 were sufficient to cover costs, and FPS projects that collections will also cover costs in fiscal year 2008. However, FPS's primary means of funding its operations--the basic security fee--does not account for the risk faced by specific buildings, the level of service provided, or the cost of providing services, raising questions about equity. Several stakeholders also expressed concern about whether FPS has an accurate understanding of its costs to provide security at federal facilities. FPS has developed output measures, but lacks outcome measures to assess the effectiveness of its efforts to protect federal facilities. Its output measures include determining whether security countermeasures have been deployed and are fully operational. However, FPS has not developed outcome measures to evaluate its efforts to protect federal facilities that could provide FPS with broader information on program results. FPS also lacks a reliable data management system for accurately tracking performance measures.

gao_HEHS-98-198

gao_HEHS-98-198_0

Under New CDR Plan, All Required CDRs Will Be Complete or Under Way by End of Fiscal Year 2002 By the end of fiscal year 2002, if SSA’s new CDR plan is completed as envisioned, all the CDRs required by law will be complete or under way, including those that are overdue and those due to begin by the end of 2002 (see app. When DDSs award disability benefits, they set dates for starting CDRs, and every month these prescheduled CDR start dates come due for many beneficiaries. Once CDRs are initiated, however, the time required to complete them can be lengthy. SSA estimates that DDS full medical reviews require about 1 year to complete from the time cases are identified and selected. Thus, many CDRs cannot be completed by the end of the year in which they come due. SSA estimates that about 835,000 required CDRs that are due to start in fiscal year 2002 will not be completed by year-end; according to SSA, these CDRs will be completed in fiscal year 2003. Adequacy of CDR Processing Capacity and Authorized Funding Hinge on Key SSA Assumptions According to SSA, in formulating its CDR plan, SSA consulted with DDSs to plan caseloads for fiscal years 1998 through 2002 that will not exceed the DDSs’ case processing capacity. However, DDSs could potentially encounter additional caseloads not envisioned in SSA’s plan. Furthermore, if the volume of initial disability applications or requests for reconsideration of denied applications is larger than assumed by SSA, DDSs may have to accumulate larger backlogs of these cases in order to complete CDR full medical reviews. Such events, if they occur, could lead SSA to decide to increase DDS capacity; but timely expansion of DDS capacity faces potential barriers. DDSs May Need to Conduct More CDR Full Medical Reviews If Mailers Cannot Be Used to the Full Extent Planned Of the 8.1 million CDRs planned for fiscal years 1998 through 2002, SSA plans to conduct 4.3 million (53 percent) through the use of mailers and 3.8 million (47 percent) through DDS full medical reviews (see table 2). However, for several beneficiary groups, SSA is still developing statistical formulas for selecting appropriate beneficiaries to receive mailers. For example, state DDSs could request that SSA use its federal DDS in Baltimore, Md., to process CDRs or to process initial disability applications, thus freeing up state DDS staff to process CDRs. Authorized Funding Should Be Adequate to Fund Substantial Increases in Full Medical Reviews Under the assumptions in the new CDR plan, the CDR funding authorized by the Congress should be sufficient to process the 8.1 million CDRs planned for fiscal years 1998 through 2002. If SSA’s assumptions do not hold, unexpected increases in these other disability workloads could result. SSA plans to publish the results of this study during fiscal year 1998. II.1 for an example of the CDR mailer.)

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on whether: (1) the Social Security Administration's (SSA) plan to process 8.1 million continuing disability reviews (CDR) during fiscal years 1998 through 2002 will result in CDRs being done for all beneficiaries for whom CDRs are required by law; and (2) disability determination services' (DDS) CDR processing capacity and the CDR funding authorized by Congress for fiscal years 1998 through 2002 will be sufficient to process the CDRs required by law. What GAO Found GAO noted that: (1) by the end of fiscal year (FY) 2002, if SSA completes its new CDR plan as envisioned, all CDRs required by law will be complete or under way, including those that are overdue and those due to be started by the end of FY 2002; (2) when DDSs award disability benefits, they set due dates for starting CDRs, and every month these prescheduled CDR start dates come due for many beneficiaries; (3) because CDRs can require up to 1 year to complete from the time beneficiaries are selected for CDRs, many CDRs cannot be completed by the end of the fiscal year in which they become due; (4) SSA estimates that about 835,000 of the required CDRs due to be started in FY 2002 will not be completed by yearend; (5) these CDRs will be completed in FY 2003, according to SSA; (6) of the 8.1 million CDRs planned for fiscal years 1998 to 2002, SSA plans to complete 53 percent through brief questionnaires mailed to selected beneficiaries and 47 percent through full medical reviews conducted by DDSs; (7) according to SSA, in formulating its plan, SSA consulted with DDSs to plan caseloads that will not exceed the DDSs' case processing capacity; (8) however, DDSs could potentially encounter additional caseloads not envisioned in SSA's plan; (9) for several beneficiary groups, SSA is still working to develop statistical formulas for selecting appropriate mailer recipients; (10) if DDSs have to conduct more full medical reviews to replace CDR mailers, the authorized funds could prove inadequate because full medical reviews cost significantly more than mailers; (11) if SSA's assumptions about economic growth and unemployment do not prove accurate or if the test results for SSA's disability process redesign plan are not positive, the volume of initial disability applications and requests for reconsideration of denied applications could potentially be larger than assumed by SSA; (12) if so DDSs could face even larger backlogs of these non-CDR cases in order to complete CDR full medical reviews in a timely manner; (13) recognizing the potential uncertainty of the CDR and non-CDR workloads, SSA plans to monitor them closely; (14) SSA acknowledged that its CDR plan may require revisions and that unexpected workload increases, if they occur, could lead SSA to decide to increase the case processing capacity of state DDSs; and (15) potential barriers to the timely expansion of DDS capacity exist as well, such as shortages of qualified applicants and office space, state hiring freezes, and the time required to train and mentor new staff.

gao_GAO-04-486T

gao_GAO-04-486T_0

Its current program to provide long- distance telecommunications services—FTS2001—has two goals: to ensure the best service and price for the government, and to maximize competition for services. Related governmentwide telecommunications services are provided by other GSA contracts: the Federal Wireless Telecommunications Service contract and the FTS Satellite Service contracts. GSA’s Networx Program Development Actions Are Continuing GSA is now planning its FTS Networx acquisition program, including the awarding of new governmentwide contracts for a broad range of long distance and international voice and data communications services, wireless services, and satellite telecommunications services. Provide expanded opportunities for small businesses. To achieve those goals, the program calls for two acquisitions—Networx Universal and Networx Select. In contrast, GSA plans to award multiple contracts for a more geographically limited set of services under Network Select. Challenges Remain Before Finalizing the Networx Acquisition Program Strategy Notwithstanding the acquisition planning activities completed by GSA and the IMC to date, these entities face significant challenges in finalizing their program strategy to ensure that Networx is appropriately defined, structured, and managed to deliver those telecommunications services and solutions that will enable federal agencies to most efficiently and effectively meet their mission needs. Specifically, these challenges include: Ensuring that adequate inventory information is available to planners to provide an informed understanding of governmentwide requirements. Establishing measures of success to aid acquisition decision-making and enable effective program management. Initiating the implementation planning actions needed to ensure a smooth transition from current contracts to Networx. Further, the value of this critical program to customer agencies will be improved through the application of lessons learned in streamlining and prioritizing the contract modification process, in effectively and expeditiously resolving billing problems, and in holding contractors accountable for meeting agency requirements in a timely manner.” Those in industry who commented on the Networx request for information also noted the need for strong and comprehensive program management to ensure successful transition, including not only the availability of accurate inventories but also defined contractor and government responsibilities. GSA has emphasized that its development of the Networx program included an analysis of lessons learned from existing programs and previous acquisitions. In summary, Mr. Chairman, Networx represents a critical opportunity to leverage the strength and creativity of the telecommunications marketplace to make the vision of delivering to agencies the telecommunications business solutions they need to perform their missions better and more cost-effectively a reality, and in so doing to carry the federal government forward well into the 21st century. Likewise critical will be stakeholder commitment.

Why GAO Did This Study The Genera1 Services Administration (GSA) has initiated planning for its next-generation telecommunications acquisition program, known as Networx, which will replace the current Federal Telecommunications System (FTS) 2001 for longdistance and international services. It will also replace contracts for wireless and satellite communications products and services. Planning for this acquisition is occurring within an environment of tremendous change--in the industry, in underlying services and technology, and potentially in the regulatory environment. In this context, Networx can offer a significant opportunity for the federal government to flexibly acquire telecommunications services at competitive rates and apply innovative solutions to improving agency operations. At the request of the Chairman of the House Committee on Government Reform, GAO is providing an overview of acquisition planning steps completed to date, along with its assessment of challenges facing GSA and federal agencies as this acquisition proceeds. What GAO Found Over the past year, GSA has acted to ensure that all interested parties-- including industry and agency users--have had a chance to comment on the development of the successor to FTS2001 and associated contracts. In its planning for the Networx acquisition, GSA cited five goals for the program: (1) continuity of telecommunications services, (2) best value, (3) strong competition, (4) a broad range of services and providers in a changing marketplace, and (5) expanded opportunities for small businesses. To achieve this, GSA plans two acquisitions: Networx Universal--broadranging services with global coverage, and Networx Select--leading-edge services but more geographically limited. To take full advantage of the opportunities offered in these new contracts, GSA will need to address four key challenges: (1) ensuring that an adequate inventory of information about existing telecommunications services and assets is available, to give planners an informed understanding of governmentwide requirements; (2) establishing specific measures of success to aid acquisition decision making and effective program management; (3) structuring and scheduling the contracts to ensure timely delivery of competitively priced telecommunications services that meet agency mission needs; and (4) ensuring a smooth transition from the current contracts by initiating appropriate implementation planning actions. Both leadership from GSA and commitment from stakeholders in resolving these issues will be essential to establishing efficient, cost-effective, and secure telecommunications services. If this can be achieved, the Networx contracts will be optimally positioned to leverage the power and creativity of today's telecommunications marketplace to carry the federal government forward well into the 21st century.

gao_GAO-06-273

gao_GAO-06-273_0

As public use of the Internet grew from the mid-1990s onward, Internet access and electronic commerce became potential targets for state and local taxation. Some state and local governments raised additional tax revenues and applied existing taxes to Internet transactions. Objectives, Scope, and Methodology To determine the scope of the Internet tax moratorium, we reviewed the language of the moratorium, the legislative history of the 1998 act and the 2004 amendments, and associated legal issues. Internet Access Services, Including Bundled Access Services, May Not Be Taxed, but Acquired Services May Be The moratorium bars taxes on the service of providing access, which includes whatever an access provider reasonably bundles in its access offering to consumers. As noted above, the moratorium applies only to taxes imposed on “Internet access,” which is defined in the law as “a service that enables users to access content, information, electronic mail, or other services offered over the Internet.…” In other words, it is the service of providing Internet access to the end user—not the acquisition of capacity to do so—that constitutes “Internet access” subject to the moratorium. Some providers and state officials have construed the moratorium as barring taxation of acquired services, reading the 2004 amendments as making acquired services tax exempt. A tax on acquired services is not a tax directly imposed on the service of providing Internet access. While the Revenue Impact of Eliminating Grandfathering Would Be Small, the Moratorium’s Total Revenue Impact Has Been Unclear and Any Future Impact Would Vary by State According to CBO data, grandfathered taxes in the states CBO studied were a small percentage of those states’ tax revenues. In general, any future impact related to the moratorium will differ from state to state. According to Information in CBO Reports, States Would Lose a Small Fraction of Their Tax Revenues If Grandfathered Taxes on Dial-up and DSL Services Were Eliminated In 2003, CBO reported how much state and local governments that had grandfathered taxes on dial-up and DSL services would lose in revenues if the grandfathering were eliminated. For instance, Kansas’s total includes about $2 million for localities and North Dakota’s about $400,000 for localities. Timing of Moratorium Might Have Precluded Many States from Taxing Access Services, with Unclear Revenue Implications Because it is difficult to predict what states would have done to tax Internet access services had Congress not intervened when it did, it is hard to estimate the amount of revenue that was not raised because of the moratorium. Any Future Impact of the Moratorium Will Vary by State Although as previously noted the impact of eliminating grandfathering would be small in states studied by CBO or by us, any future impact related to the moratorium will vary on a state-by-state basis for many reasons. As another example, North Dakota imposed a sales tax on retail consumers’ communications services, including Internet access services, at an average state and local combined rate of 6 percent. Ohio and Rhode Island taxed both the provision of access services and acquired services, and California and Virginia officials told us their states taxed neither. A broader view of what could be included in Internet access bundles would result in potential revenue losses much greater than we indicated. On the other hand, the moratorium does not bar taxes on acquired services. The portion of the definition that was amended in 2004 was the exception: that is, telecommunication services are excluded from nontaxable “Internet access,” except to the extent such services are “purchased, used, or sold by a provider of Internet access to provide Internet access.” Thus, we conclude that the fact that services are “purchased, used, or sold” by an Internet provider has meaning only in determining whether these services can still qualify for the moratorium notwithstanding that they are “telecommunications services;” it does not mean that such services are independently nontaxable irrespective of whether they are part of the service an Internet provider offers to an end user. This was about 0.02 percent of Mississippi’s 2004 tax revenues of about $5.1 billion.

Why GAO Did This Study According to one report, at the end of 2004, some 70 million U.S. adults logged on to access the Internet during a typical day. As public use of the Internet grew from the mid-1990s onward, Internet access became a potential target for state and local taxation. In 1998, Congress imposed a moratorium temporarily preventing state and local governments from imposing new taxes on Internet access. Existing state and local taxes were grandfathered. In amending the moratorium in 2004, Congress required GAO to study its impact on state and local government revenues. This report's objectives are to determine the scope of the moratorium and its impact, if any, on state and local revenues. For this report, GAO reviewed the moratorium's language, its legislative history, and associated legal issues; examined studies of revenue impact; interviewed people knowledgeable about access services; and collected information about eight case study states not intended to be representative of other states. GAO chose the states considering such factors as whether they had taxes grandfathered for different forms of access services and covered different urban and rural parts of the country. What GAO Found The Internet tax moratorium bars taxes on Internet access services provided to end users. GAO's interpretation of the law is that the bar on taxes includes whatever an access provider reasonably bundles to consumers, including e-mail and digital subscriber line (DSL) services. The moratorium does not bar taxes on acquired services, such as high-speed communications capacity over fiber, acquired by Internet service providers (ISP) and used to deliver Internet access. However, some states and providers have construed the moratorium as barring taxation of acquired services. Some officials told us their states would stop collecting such taxes as early as November 1, 2005, the date they assumed that taxes on acquired services would lose their grandfathered protection. According to GAO's reading of the law, these taxes are not barred since a tax on acquired services is not a tax on Internet access. In comments, telecommunications industry officials continued to view acquired services as subject to the moratorium and exempt from taxation. As noted above, GAO disagrees. In addition, Federation of Tax Administrators officials expressed concern that some might have a broader view of what could be included in Internet access bundles. However, GAO's view is that what is included must be reasonably related to providing Internet access. The revenue impact of eliminating grandfathering in states studied by the Congressional Budget Office (CBO) would be small, but the moratorium's total revenue impact has been unclear and any future impact would vary by state. In 2003, when CBO reported how much states and localities would lose annually by 2007 if certain grandfathered taxes were eliminated, its estimate for states with grandfathered taxes in 1998 was about 0.1 percent of those states' 2004 tax revenues. Because it is hard to know what states would have done to tax access services if no moratorium had existed, the total revenue implications of the moratorium are unclear. In general, any future moratorium-related impact will differ by state. Tax law details and tax rates varied among states. For instance, North Dakota taxed access service delivered to retail consumers, and Kansas taxed communications services acquired by ISPs to support their customers.

gao_GAO-13-758

gao_GAO-13-758_0

Section 1512 of the Recovery Act requires recovery fund recipients to report quarterly on Recovery Act-related spending. Transparency Efforts Under Way Focus On Standardizing Data to Integrate Systems and Enhance Spending Oversight With Its Role Limited to Providing Strategic Direction, the GAT Board Is Leveraging Ongoing Agency Initiatives for Implementation The GAT Board’s role is to provide strategic direction for enhancing federal spending transparency. These initiatives include efforts to modernize systems or improve agency management, designed to improve existing business processes as well as improve data transparency. The GAT Board’s initial plans largely focus on efforts at the federal level and some progress has been made to bring greater consistency to award identifiers. Initial efforts are focused on identifying approaches to standardize contract and grant data elements. As Transparency Efforts Get Under Way, Opportunities Remain to Incorporate Lessons Learned from the Recovery Act The GAT Board’s mandated responsibilities include working with the Recovery Board to build on lessons learned and applying approaches developed by the Recovery Board to new efforts to enhance the transparency of federal spending. As discussed above, the GAT Board, the Recovery Board, OMB, and other federal agencies have initiatives under way to improve federal spending transparency. A lack of uniform standards could also increase the burden on federal fund recipients. Moreover, collecting data that already exists in agency award systems is also inefficient and burdensome to recipients. For example, initial guidance in February 2009 began to lay out information that would be reported on Recovery.gov, and the steps needed to meet reporting requirements, such as including recipient reporting requirements in grant awards and contracts. However, mechanisms for obtaining input from non-federal stakeholders are limited to the public rule-making process. Although the GAT Board’s mandate includes a requirement for it to work with the Recovery Board to apply the approaches developed by the latter across the federal government, the extent to which the work of the ROC is being incorporated into the GAT Board’s effort to develop approaches for using data analytics to improve oversight is unclear. Conclusions Ensuring the transparency of more than $3.7 trillion in federal spending annually, including more than $1 trillion awarded through contracts, grants, and loans, and an additional $1 trillion in forgone revenue from tax expenditures is an important national goal. Moreover, by listening to stakeholders during Recovery Act implementation, OMB and the Recovery Board heard concerns and made changes to plans and guidance accordingly. Recommendations for Executive Action We recommend that the Director of OMB, in collaboration with the members of the GAT Board, take the following two actions: Develop a plan to implement comprehensive transparency reform, including a long-term timeline and requirements for data standards, such as establishing a uniform award identification system across the federal government. Increase efforts for obtaining input from stakeholders, including entities receiving federal funds, to address reporting challenges, and strike an appropriate balance that ensures the accuracy of the data without unduly increasing the burden on those doing the reporting. Matter for Congressional Consideration To ensure effective decision making and the efficient use of resources dedicated to enhancing the transparency of federal spending data, Congress should consider legislating transparency requirements and establish clear lines of authority to ensure that recommended approaches for improving spending data transparency are implemented across the federal government. We have provided additional information on this in the report. For our recommendation on increasing efforts to obtain stakeholder input as transparency initiatives are developed, OMB staff agreed that increasing efforts to obtain stakeholder input was important and pointed to their outreach to date particularly in seeking stakeholder comments on the grants reform process, which they said included discussions on standardizing financial information collected from recipients during the pre-award and post-award phases of the grant process. However, as we have previously concluded, given the importance of clear requirements and consistent leadership for ensuring approaches are institutionalized and sustained over the long term, legislation will help ensure effective implementation of comprehensive transparency reform. To accomplish this, we (1) reviewed federal initiatives to improve the accuracy and availability of federal spending data; and (2) assessed the extent to which lessons identified by GAO and federal fund recipients from the operation of Recovery.gov and USAspending.gov are being addressed by these new transparency initiatives. To address these objectives, we examined data collection and reporting requirements under FFATA and the Recovery Act, the June 2011 Executive Order that established the GAT Board, Executive Order 13,576, “Delivering an Efficient, Effective, and Accountable Government,” relevant OMB guidance and memoranda, such as OMB-10-06, Open Government Directive and Improving Data Quality for USAspending.gov, and reports outlining action plans and recommendations created by the GAT Board, the Recovery Board, and other federal entities charged with developing approaches to improve federal data transparency. Appendix II: Government Accountability and Transparency Board and Work Group Agency Partners The Government Accountability and Transparency Board (GAT Board) is composed of the following 11 members designated by the President from among agency Inspectors General, agency Chief Financial Officers or Deputy Secretaries, and senior officials from OMB.

Why GAO Did This Study The federal government spends more than $3.7 trillion annually, with more than $1 trillion awarded through contracts, grants, and loans. Improving transparency of spending is essential to improve accountability. Recent federal laws have required increased public information on federal awards and spending. GAO was asked to review current efforts to improve transparency. This report examines (1) transparency efforts under way and (2) the extent to which new initiatives address lessons learned from the Recovery Act. GAO reviewed relevant legislation, executive orders, OMB circulars and guidance, and previous GAO work, including work on Recovery Act reporting. GAO also interviewed officials from OMB, the GAT Board, and other federal entities; government reform advocates; associations representing fund recipients; and a variety of contract and grant recipients. What GAO Found Several federal entities, including the Government Accountability and Transparency Board (GAT Board), the Recovery Accountability and Transparency Board (Recovery Board), and the Office of Management and Budget (OMB), have initiatives under way to improve the accuracy and availability of federal spending data. The GAT Board, through its working groups, developed approaches to standardize key data elements to improve data integrity; link financial management systems with award systems to reconcile spending data with obligations; and leverage existing data to help improve oversight. With no dedicated funding, GAT Board plans are incremental and leverage ongoing agency initiatives designed to improve existing business processes as well as improve data transparency. These initiatives are in an early stage, and some progress has been made to bring greater consistency to award identifiers. The GAT Board's mandate is to provide strategic direction, not to implement changes. Further, while these early plans are being developed with input from a range of federal stakeholders, the GAT Board and OMB have not developed mechanisms for obtaining input from non-federal fund recipients. Lessons from implementing the transparency objectives of the Recovery Act could help inform these new initiatives: Standardize data to integrate systems and enhance accountability . Similar to the GAT Board's current focus on standardization, the Recovery Board recognized that standardized data would be more usable by the public and the Recovery Board for identifying potential misuse of federal funds. However, reporting requirements under the Recovery Act had to be met quickly. Because agencies did not collect spending data in a consistent manner, the most expedient approach was to collect data from fund recipients, even though similar data already existed in agency systems. Given the longer timeframes to develop current transparency initiatives, OMB and the GAT Board are working toward greater data consistency by focusing on data standards. Their plans, however, do not include long-term steps, such as working toward uniform award identifiers that would improve award tracking with less burden on recipients. Obtain stakeholder involvement as reporting requirements are developed . During the Recovery Act, federal officials listened to the concerns of recipients and made changes to guidance in response, which helped ensure they could meet those requirements. Without similar outreach under current initiatives, reporting challenges may not be addressed, potentially impairing the data's accuracy and completeness, and increasing burden on those reporting. Delineate clear requirements and lines of authority for implementing transparency initiatives . Unlike the present efforts to expand spending transparency, the Recovery Act provided OMB and the Recovery Board with clear authority and mandated reporting requirements. Given this clarity, transparency provisions were carried out successfully and on time. Going forward, without clear, legislated authority and requirements, the ability to sustain progress and institutionalize transparency initiatives may be jeopardized as priorities shift over time. What GAO Recommends GAO recommends that the Director of OMB, with the GAT Board, develop a long-term plan to implement comprehensive transparency reform, and increase efforts for obtaining stakeholder input to ensure reporting challenges are addressed. Further, Congress should consider legislating transparency requirements and establishing clear authority to implement these requirements to ensure that recommended approaches for improving transparency are carried out across the federal government. The GAT Board, OMB and other cognizant agencies generally concurred with GAO's recommendations and provided further information, which was incorporated into the report as appropriate.

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For states that did not establish a marketplace, PPACA required the federal government to establish and operate a marketplace for that state, referred to as the federally facilitated marketplace. The CMS Center for Consumer Information and Insurance Oversight has overall responsibilities for federal systems supporting the federally facilitated marketplace and for overseeing state marketplaces. Marketplace Enrollment Is Facilitated by Data Exchanges among Many Interconnected Systems and Partners The process of enrolling for insurance through Healthcare.gov is facilitated by a number of major systems managed by CMS. Federal Data Services Hub: This system acts as a single portal for exchanging information between the FFM system and other systems or external partners, which include other federal agencies, state-based marketplaces, other state agencies, other CMS systems, and issuers of qualified health plans. In addition, CMS relies on a variety of federal, state, and private-sector entities to support Healthcare.gov-related activities, and these entities exchange information with CMS’s systems: Federal agencies such as the Social Security Administration (SSA), Department of Homeland Security (DHS), and Internal Revenue Service (IRS), along with Equifax, Inc. (a private-sector credit agency under contract with CMS) provide or verify information used in making determinations of a person’s eligibility for coverage and financial assistance. The Department of Defense (DOD), Office of Personnel Management (OPM), Peace Corps, and Department of Veterans Affairs (VA) assist in determining whether a potential applicant has alternate means for obtaining minimum essential coverage. In addition to accessing the plan management and financial management modules of the FFM, issuers of qualified health plans receive information from the system when an individual completes the application process. CMS Established a Security and Privacy Program for Healthcare.gov and Related Systems, but Actions Are Needed to Resolve Weaknesses While CMS has security and privacy-related protections in place for Healthcare.gov and related systems, weaknesses exist that put the personal information these systems collect, process, and maintain at risk of inappropriate modification, loss, or disclosure. CMS established security-related policies and procedures for Healthcare.gov. Specifically, it assigned overall responsibility for securing the agency’s information and systems to appropriate officials, including the agency CIO and Chief Information Security Officer, and designated information system security officers to assist in certifying particular CMS systems; documented information security policies and procedures to safeguard the agency’s information and systems; developed a process for planning, implementing, evaluating, and documenting remedial actions to address identified information security deficiencies; and established interconnection security agreements with the federal agencies with which it exchanges information, including DOD, DHS, IRS, SSA, and VA; these agreements identify the requirements for the connection, the roles and responsibilities of each party, the security controls protecting the connection, the sensitivity of the data to be exchanged, and the required training and background checks for personnel with access to the connection. Without complete system security plans, agency officials will be hindered in making fully informed judgments about the risks involved in operating those systems. Security Control Weaknesses Could Threaten Healthcare.gov Information and Systems CMS did not effectively implement or securely configure key security controls on the systems supporting Healthcare.gov. Collectively, these weaknesses put Healthcare.gov systems and the information they contain at increased and unnecessary risk of unauthorized access, use, disclosure, modification, and loss. CMS Had Not Established a Shared Understanding of How Security Was to Be Implemented for Healthcare.gov-Related Systems The security weaknesses we identified occurred in part because CMS did not ensure that the multiple parties contributing to the development of the FFM system had a shared understanding of how security controls were to be implemented. CMS Should Act to Improve Security and Privacy Protections for Healthcare.gov In our September 2014 report, we made the following six recommendations aimed at improving the management of the security of Healthcare.gov: 1. 2. Ensure that all privacy risks associated with Healthcare.gov are analyzed and documented in privacy impact assessments. 6. In its comments on our draft reports, HHS concurred with 3 of the 6 recommendations to fully implement its information security program, partially concurred with the remaining 3 recommendations, and concurred with all 22 of the recommendations to resolve technical weaknesses in security controls, describing actions it had under way or planned related to each of them. While CMS has taken important steps to apply security and privacy safeguards to Healthcare.gov and its supporting systems, significant weaknesses remain that put these systems and the sensitive, personal information they contain at risk of compromise. Given the complexity of the systems and the many interconnections among external partners, it is particularly important to analyze privacy risks, effectively implement technical security controls, comprehensively test the security controls over the system, and ensure that an alternate processing site for the systems is fully established.

Why GAO Did This Study PPACA requires the establishment of health insurance marketplaces in each state to assist individuals in comparing, selecting, and enrolling in health plans offered by participating issuers. CMS is responsible for overseeing these marketplaces, including establishing a federally facilitated marketplace in states that do not establish their own. These marketplaces are supported by an array of IT systems, including Healthcare.gov, the website that serves as the consumer portal to the marketplace. This statement is based on two September 2014 reports examining the security and privacy of the Healthcare.gov website and related systems. The specific objectives of this work were to (1) describe the planned exchanges of information between the Healthcare.gov website and other organizations and (2) assess the effectiveness of programs and controls implemented by CMS to protect the security and privacy of the information and IT systems supporting Healthcare.gov. What GAO Found Enrollment through Healthcare.gov is supported by the exchange of information among many systems and entities. The Department of Health and Human Services' (HHS) Centers for Medicare & Medicaid Services (CMS) has overall responsibility for key information technology (IT) systems supporting Healthcare.gov. These include, among others, the Federally Facilitated Marketplace (FFM) system, which facilitates eligibility and enrollment, plan management, and financial management, and the Federal Data Services Hub, which acts as the single portal for exchanging information between the FFM and other systems or external partners. CMS relies on a variety of federal, state, and private-sector entities to support Healthcare.gov activities. For example, it exchanges information with the Department of Defense, Department of Homeland Security, Department of Veterans Affairs, Internal Revenue Service, Office of Personnel Management, Peace Corps, and the Social Security Administration to help determine applicants' eligibility for healthcare coverage and/or financial assistance. Healthcare.gov-related systems are also accessed and used by CMS contractors, issuers of qualified health plans, state agencies, and others. While CMS has security and privacy-related protections in place for Healthcare.gov and related systems, weaknesses exist that put these systems and the sensitive personal information they contain at risk. Specifically, CMS established security-related policies and procedures for Healthcare.gov, including interconnection security agreements with the federal agencies with which it exchanges information. It also instituted certain required privacy protections, such as notifying the public of the types of information that will be maintained in the system. However, weaknesses remained in the security and privacy protections applied to Healthcare.gov and its supporting systems. For example, CMS did not ensure system security plans contained all required information, which makes it harder for officials to assess the risks involved in operating those systems; analyze privacy risks associated with Healthcare.gov systems or identify mitigating controls; fully establish an alternate processing site for Healthcare.gov systems to ensure that they could be recovered in the event of a disruption or disaster. In addition, a number of weaknesses in specific technical security controls jeopardized Healthcare.gov-related systems. These included certain systems supporting the FFM not being restricted from accessing the Internet and inconsistent implementation of security patches, among others. An underlying reason for many of these weaknesses is that CMS did not establish a shared understanding of security roles and responsibilities with all parties involved in securing Healthcare.gov systems. Until these weaknesses are addressed, the systems and the information they contain remain at increased risk of unauthorized use, disclosure, modification, or loss. What GAO Recommends In its September 2014 reports GAO made 6 recommendations to HHS to implement security and privacy controls to enhance the protection of systems and information related to Healthcare.gov. In addition, GAO made 22 recommendations to resolve technical weaknesses in security controls. HHS agreed with 3 of the 6 recommendations, partially agreed with 3, agreed with all 22 technical recommendations, and described plans to implement them.

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Veterans can reapply to the VR&E program at any time. In addition, almost 60 percent of IL track veterans served in the U.S. Army and less than 1 percent served in the National Guard or Reserves. 6). Regardless of disability rating level, the most prevalent disabilities among this group were Post-traumatic Stress Disorder (PTSD), tinnitus (“ringing in the ears”), and hearing loss. For all veterans who entered the IL track in fiscal year 2008, we estimate that VR&E purchased a total of almost $14 million in goods and services. By the end of fiscal year 2011, as shown in figure 10, about 89 percent of veterans who began an IL plan in fiscal year 2008 had been classified by VR&E as “rehabilitated.” About 5 percent of cases were “discontinued” or closed by VR&E because the rehabilitation goals in the veteran’s IL plan were not completed. For example, in one case we reviewed, the IL plan for a veteran with rheumatoid arthritis only called for the purchase and installation of eight door levers and a grab rail for the bathtub, so that the veteran could enter the rooms of his home without pain or assistance, and be able to safely enter and exit the bathtub without fear of falling. While the overall IL rehabilitation rate nationwide of 89 percent is fairly high, we found that the percentage of veterans who began an IL plan in fiscal year 2008 and were rehabilitated by the end of fiscal year 2011 varied by regional office. The average time for veterans to complete their IL plans also varied by veteran age. VR&E Exercises Limited Oversight of the IL Track National oversight of VR&E’s IL track is limited in four key areas: (1) ensuring compliance with case management requirements; (2) monitoring regional variation in IL track caseload and benefits provided; (3) adequacy of policies and procedures for approving expenditures on goods and services for IL track veterans; and (4) availability of critical program management information. Regional Offices May Not Be Complying with VR&E Case Management Requirements Based on VR&E’s compliance reports from two of the regional offices we visited and interviews with staff in these offices, we found that some offices may not be complying with certain VR&E case management requirements governing the IL track. VR&E Does Not Systematically Monitor Variation in IL Track Caseload Size and Benefits Provided While IL track caseload size and benefits vary across regions, VR&E does not systematically monitor these variations. To oversee administration of the IL track, VR&E has relied on the information provided through its general quality assurance (QA) activities and a series of periodic ad hoc studies. Under this policy, regional offices are permitted to purchase a broad range of items without any Central Office approval, resulting in some offices purchasing goods and services that may be questionable or that are costly. For example, in one of the 182 IL cases we reviewed, VR&E Central Office would not have been required to approve total expenditures of $18,829 for a riding lawn mower—which VR&E policy prohibits—and other IL goods and services including a bed, bed frame, desktop computer, and woodworking equipment. A VR&E policy letter to VA regional offices, dated December 14, 2010, states that “VR&E Service will monitor new IL programs by tracking the number of veterans entering independent living case status in each fiscal year and notify the field of any necessary action if the 2,700 statutory limit is being approached.” However, in analyzing VR&E’s administrative data, we found that VR&E counts the number of IL plans developed annually and not the number of individual veterans admitted to the track. Based on data from CWINRS, 403 (4 percent) of the 9,215 veterans beginning an IL plan during fiscal years 2008 through 2011 had more than one plan during that time. Conclusions VR&E’s IL track can provide a wide range of benefits to help veterans with service-connected disabilities maximize their ability to live independently when the achievement of an employment goal is not currently feasible. Work with the Undersecretary for Health to explore options on ways to enhance coordination to ensure IL track veterans’ needs are met by VHA, when appropriate, in a timely manner. VA generally agreed with our conclusions, and concurred with our three recommendations. With regards to our recommendation that VA enhance coordination between VR&E and VHA on the provision of IL benefits to veterans, VA noted there are efforts underway that will permit VR&E counselors to make IL referrals to VHA providers through VHA’s Compensation and Pension Record Interchange system, also referred to as CAPRI. Appendix I: Objectives, Scope, and Methodology The objectives of this report were to examine (1) the characteristics of veterans who have participated in the IL track, as well as the types and costs of benefits they were provided; (2) the extent to which their independent living plans were completed, and the time it took; and (3) the extent to which the IL track has been administered appropriately and consistently. Analysis of IL Veteran Cases To obtain information on the types of benefits provided through the IL track, as well as the costs and coordination of these benefits, we conducted a case file review of a random, generalizable sample of 182 veterans whose cases started in the IL track at some point during fiscal year 2008. We estimated our models using VA administrative data on veterans who began exactly one IL plan from fiscal years 2008 through 2011.

Why GAO Did This Study The IL "track"--one of five tracks within VA's VR&E program--provides a range of benefits to help veterans with service-connected disabilities live independently when employment is not considered feasible at the time they enter the VR&E program. These benefits can include counseling, assistive devices, and other services or equipment. GAO was asked to review issues related to the IL track. This report examines (1) the characteristics of veterans in the IL track, and the types and costs of benefits they were provided; (2) the extent to which their IL plans were completed, and the time it took to complete them; and (3) the extent to which the IL track has been administered appropriately and consistently across regional offices. To conduct this work, GAO analyzed VA administrative data from fiscal years 2008 to 2011, and reviewed a random, generalizable sample of 182 veterans who entered the IL track in fiscal year 2008. In addition, GAO visited five VA regional offices; interviewed agency officials and staff; and reviewed relevant federal laws, regulations, and agency policies and procedures. What GAO Found Of the 9,215 veterans who entered the Department of Veterans Affairs' (VA) Independent Living (IL) track within the Vocational Rehabilitation and Employment (VR&E) program in fiscal years 2008 to 2011, most were male Vietnam era veterans in their 50s or 60s. Almost 60 percent served in the U.S. Army, and fewer than 1 percent served in the National Guard or Reserve. The most prevalent disabilities among these veterans were post-traumatic stress disorder and tinnitus. GAO's review of 182 IL cases from fiscal year 2008 found that VR&E provided a range of IL benefits to veterans. Among these cases, the most common benefits were counseling services and computers. Less common benefits included gym memberships, camping equipment, and a boat. GAO estimated that VR&E spent nearly $14 million on benefits for veterans entering the IL track in fiscal year 2008--an average of almost $6,000 per IL veteran. Most veterans completed their IL plans, which identify their individual goals to live independently and the benefits VR&E will provide. About 89 percent of fiscal year 2008 IL veterans were considered by VR&E to be "rehabilitated," that is, generally, to have completed their IL plans by the end of fiscal year 2011. VR&E discontinued or closed about 5 percent of cases for various reasons, such as the veteran declined benefits. Six percent of cases were open at the end of fiscal year 2011. Because the complexity of IL cases varied depending on veterans' disabilities and needs, some cases were fairly simple for VR&E to close. For example, one IL case only called for the installation of door levers and a bathtub rail. Another more complex case involved the provision of a range of IL benefits, including home modifications. Rehabilitation rates across regions varied from 0 to 100 percent, and regions with larger IL caseloads generally rehabilitated a greater percentage of IL veterans. While IL plans nationwide were completed in 384 days, on average, completion times varied by region, from 150 to 895 days. VR&E exercises limited oversight to ensure appropriate and consistent administration of the IL track across its regions. First, some regions may not be complying with certain case management requirements. For instance, while VR&E is required to coordinate with the Veterans Health Administration (VHA) on IL benefits, VR&E counselors have difficulty obtaining timely responses from VHA. VHA physicians respond to VR&E's IL referrals late or not at all, resulting in delayed benefits or VR&E providing the benefits instead of VHA. Second, VR&E does not monitor regional variation in IL caseloads and benefits provided. Instead, it has relied on its quality assurance reviews and ad hoc studies, but these are limited in scope. Third, given counselors have broad discretion in selecting IL benefits, VR&E's written policies for approving IL expenditures may not be appropriate as regions were permitted to purchase a range of items without any Central Office approval, some of which were costly or questionable. For example, in one case, Central Office review would not have been required for expenditures of $18,829 for a riding mower, which is prohibited, and other items. Finally, VR&E's system does not collect IL costs and benefits provided. VR&E also lacks accurate data on the number of IL veterans served. While the law currently allows 2,700 veterans to enter the IL track annually, data used to monitor the cap are based on the number of IL plans developed, not on the number of individual veterans admitted. Veterans can have more than one plan in a fiscal year, so one veteran could be counted multiple times towards the cap. What GAO Recommends GAO recommends that VR&E explore options to enhance coordination with VHA; strengthen its oversight of the IL track; and reassess its policy for approving benefits. VA generally agreed with GAO's conclusions and recommendations.

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The Stafford Loan program is the largest source of federal financial aid available to postsecondary students. Any Impact of Increases in Loan Limits on Rising College Prices Is Difficult to Discern For more than a decade, college prices have been rising consistently across most types of institutions of higher education and continued to rise after the Stafford loan limits increased, but it is difficult to establish if a direct relationship exists. Although college prices went up, we were unable to determine whether or not these increases resulted from the loan limit increases because of the interference of various economic factors occurring around the same time these loan limit increases went into effect. Specifically, when the loan limit increases went into effect, the nation was in a recession which created one of the most tumultuous and complex economic environments in recent history, affecting families’ employment, income, and net worth (see fig. As shown earlier, the availability and types of federal and institutional financial aid available to students increased around the time the new loan limits went into effect (see table 1), also making it difficult to discern any effect those loan limits may have had. Finally, Stafford student loan borrowing that occurred after the loan limit increases presented a mixed picture. The proportion of students taking out the maximum in Stafford student loans continued to decline between academic years 2007-08 and 2011-12 for unsubsidized (24 to 20 percent) and combined loans (61 to 58 percent) but not for subsidized loans, which increased from 54 to 57 percent in the number of students borrowing the maximum loan amount (see figure 5). Private Student Loan Borrowing Declined After the Loan Limits Increased The landscape of private education borrowing has changed since the loan limit increases took effect. 8). At for-profit 2- and 4- year institutions, there was about an 11 percent decrease in the average amount of private student loans borrowed and a 22 percent increase in the amount of federal student loans. Lenders responded to the crisis by tightening their lending criteria, making it more difficult for some students to obtain these loans, according to a study by the CFPB which was echoed by lenders and subject matter specialists we interviewed. Enacted in 2008, the Higher Education Opportunity Act (HEOA) amended the Truth in Lending Act (TILA) and the Higher Education Act of 1965 to add new disclosure requirements related to private student loan rates, terms, and the availability of federal student loans. The Department of Education and the Consumer Financial Protection Bureau had no comments. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology This appendix discusses our methodology for the study, which was framed around two objectives: (1) the extent, if any, that Stafford loan limit increases affected tuition, fees, and room and board prices at institutions of higher education; and (2) the trends in private student loan borrowing since the loan limits took effect. 3. To determine the extent to which students borrowed Stafford loans at their maximum levels in academic year 2011-12, we used NPSAS data. Interviews with College Officials, Private Student Lenders and Other Experts To provide the schools’ perspectives about the role of loan limit increases on college prices and federal and private borrowing trends, we supplemented our data analysis with interviews with college officials at eight institutions. We also asked them a series of questions about private student loans, including trends in private student borrowing among their students and the type of information they provide students to help inform their decision about whether to borrow private student loans. For example, the college may be located in an expensive region of the country. This implies that the model specification could be different for different sectors. As shown in table 7, for example, for private, nonprofit 4-year colleges (B1 = – $698, B4 = $661, and B5 = $683), the average academic year change in college prices for years prior to the academic year 2007-08 loan limit increase is $661, the average change in college prices in the 2007-08 academic year compared to the prior year is $646, the average academic year change in college prices in years following the academic year 2007-08 loan limit increase is $683, and the average academic year change in college prices related to the loan limit increase is -$15 in the 2007-08 academic year. Our results suggest that average academic year college prices generally increased across all types of colleges prior to the increases in the Stafford loan limits in academic years 2007-08 and 2008-09, and after the loan limit increases. Second, we consulted academic literature on student financial aid and tuition.

Why GAO Did This Study A college education can increase the choices and opportunities available to individuals, but high college tuition rates have prompted concerns that a college education may be an unattainable goal for some. To help students finance their education, Congress passed a law that raised the ceiling on the amount students can borrow under the federal Stafford Loan Program (referred to in the law as "loan limits"). The Ensuring Continued Access to Student Loans Act of 2008 mandated a series of GAO reports over a 5 year period assessing the impact of these increases in the loan limits on tuition and other expenses and on private student loan borrowing. For this final report, GAO examined: (1) the extent to which, if any, the Stafford loan limit increases affected tuition, fees and room and board prices at institutions of higher education; and (2) the trends in private student loan borrowing since the loan limits took effect. GAO developed a statistical model to explore whether the loan limit increases in academic years 2007-08 and 2008-09 had an impact on college prices in subsequent years. GAO analyzed data from the Department of Education (Education) and the Consumer Financial Protection Bureau (CFPB), and interviewed officials from eight higher education institutions that represented a mix of college sectors in different regions of the country, three of the largest private student lenders, federal officials, and subject matter specialists. What GAO Found For more than a decade, college prices have been rising consistently and have continued to rise at a gradual pace after the Stafford loan limit increases were enacted in 2008 and 2009. However, it is difficult to determine if a direct relationship exists between increases in college prices and the Stafford loan limit increases because of the confluence of many other factors that occurred around the time the loan limit increases took effect. Specifically, when the loan limit increases took effect, the nation was in a recession, which created one of the most tumultuous and complex economic environments in recent history. GAO's analysis found that the economic effects of the recession, which affected families' employment, income, and net worth make it difficult to isolate the impact the recession had on students' decisions to borrow money to finance college expenses versus the impact of the loan limit increases. Further, federal, state, and institutional aid available to students also increased significantly around the same time the loan limit increases went into effect. It is difficult to determine the extent to which the increased availability of this financial aid influenced the decisions of students on whether and how much money they should borrow versus the availability of increased loan limits. Conversely, GAO's analysis shows that even though college prices continued to increase at a gradual pace over the last decade as well as after the loan limits increased, enrollment, which can be sensitive to price increases, also generally continued to grow across both public and private institutions and in all regions of the country. Around the time that the loan limit increases took effect, the number of students taking out private education loans decreased across all types of institutions; lenders were making fewer loans and students borrowed less. Specifically, before the loan limit increases, the number of students borrowing private loans for academic year 2007-08 was about 2.8 million; after the limits went into effect the number dropped by over 50 percent to about 1.3 million for academic year 2011-12. Similarly, the average amount of money that students borrowed from private student loans decreased by about 17 percent after the loan limits went into effect. For example, for academic year 2007-08 students' private student loans averaged about $7,048 and for academic year 2011-12 this had dropped to about $5,870. According to the federal and institutional officials as well as financial lending experts that GAO spoke with, many factors may explain the changed private loan landscape. For example, these officials and experts noted that: lenders tightened lending criteria—such as requiring higher credit scores and co-signers—making it more difficult to obtain these loans; Congress enacted new protections to raise students' awareness about private loans, including disclosures of loan rates and terms; and colleges took steps to help students find alternatives to private borrowing and reduce reliance on private loans, such as increasing institutional aid and providing financial literacy counseling to help inform students about their federal assistance options. What GAO Recommends GAO makes no recommendations in this report. Education and CFPB had no comments.

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Bus Rapid Transit is not a single type of transit system; rather it encompasses a variety of approaches, including buses using exclusive busways or HOV lanes with other vehicles, and improving bus service on city arterial streets. Buses on HOV lanes operate on limited-access highways designed for long-distance commuters. 2.) In addition to the New Starts Program, transit agencies may use other FTA funds, such as those from the Bus Capital Program and the Urbanized Area Formula Grant Program, to fund Bus Rapid Transit projects. New Starts Funding Provided to Few Bus Rapid Transit Projects FTA’s New Starts Program is the primary federal program to support construction of new transit systems and extensions to existing systems. First, few Bus Rapid Transit projects are ready for funding consideration. It projects about $462 million in remaining commitment authority for the last year of the current program. Lastly, some Bus Rapid Transit projects are not eligible for New Starts funding because projects must operate on separate rights- of-way for the exclusive use of mass transit and high-occupancy vehicles. Bus Rapid Transit Capital Costs Per Mile Generally Lower Than Light Rail The Bus Rapid Transit projects that we reviewed cost less on average to build than the Light Rail projects, on a per-mile basis. Other types of Bus Rapid Transit systems had lower capital costs. Operating Costs Vary for Bus Rapid Transit and Light Rail Systems We found mixed results when we compared the operating costs for Bus Rapid Transit and Light Rail in each of the six cities that operated both types of systems. Light Rail system ridership also varies widely. Bus Rapid Transit Operation Can Be Phased in Bus Rapid Transit systems differ from Light Rail systems in that they provide greater flexibility in how they can be implemented and operated.

What GAO Found To make buses a more reliable and effective high-speed transit alternative, a new concept-- Bus Rapid Transit--proposes (1) running buses on highways exclusively for them or on HOV lanes or (2) improving service on busier routes on city streets. Federal support for Bus Rapid Transit projects may come from several different sources, including the Federal Transit Administration's New Starts, Bus Capital, and Urbanized Area Formula Grants programs, but its use is constrained. Two Bus Rapid Transit projects have received about $831 million in funding commitments from the current New Starts Program. Few additional Bus Rapid Transit projects will likely receive funding commitments under the current New Starts Program, which expires in 2003, because few Bus Rapid Transit projects are ready to compete for funding; many projects are eligible to compete for the $462 million that is projected to remain available for fiscal year 2003; and some types of Bus Rapid Transit projects are ineligible for New Starts funding because projects are required to operate on separate right-of-ways for the exclusive use of mass transit and high-occupancy vehicles. The Bus Rapid Transit systems generally had lower capital costs per mile than did the Light Rail systems in the cities GAO reviewed, although neither system had a clear advantage in operating costs. Precise operating cost comparisons for Bus Rapid Transit and Light Rail systems within and between cities are difficult because of differences among transit agencies, transit systems, and how they account for costs. The performance characteristics also varied widely, with the largest Bus Rapid Transit system ridership about equal to the largest Light Rail ridership. Each program offers various advantages and disadvantages. Bus Rapid Transit provides a more flexible approach than light rail because buses can be routed to eliminate transfers; buses can operate on busways, HOV lanes, and city arterial streets; and the Bus Rapid Transit concept can be implemented in stages. However, transit officials repeatedly said that buses have a poor public image.

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Specifically, FISMA requires that information security programs include, among other things, the following: risk-based policies and procedures that cost-effectively reduce information security risks to an acceptable level and ensure that information security is addressed throughout the life cycle of each information system; periodic testing and evaluation of the effectiveness of information security policies, procedures, and practices that include testing of management, operational, and technical controls for every system identified in the agency’s required inventory of major information systems; a process for planning, implementing, evaluating, and documenting remedial actions to address any deficiencies in the information security policies, procedures, and practices of the agency; procedures for detecting, reporting, and responding to security incidents; plans and procedures to ensure continuity of operations for information systems that support the operations and assets of the agency. In addition to the service models that describe what can be provided, NIST and other entities describe four deployment models that relate to how the cloud service is provided. A public cloud is available to any paying customer and is owned and operated by the service provider. Cloud Computing Has Both Positive and Negative Information Security Implications Cloud computing can both increase and decrease the security of information systems. Potential information security benefits include those related to the use of virtualization, such as faster deployment of patches, and from economies of scale, such as potentially reduced costs for disaster recovery. Risks include those related to dependence on the security assurances of a vendor; dependence on the vendor; and concerns related to multitenancy, or sharing computing resources among different organizations. However, these risks may vary based on the cloud deployment model. For example, NIST states that private clouds may have a lower threat exposure than community clouds, which may have a lower threat exposure than public clouds. Federal Agencies Have Begun Efforts to Address Information Security Issues for Cloud Computing, but Specific Guidance Is Lacking and Efforts Remain Incomplete Federal agencies have started to address information security when using cloud computing; however, they have not always developed corresponding guidance. Furthermore, agencies that have implemented cloud computing efforts have faced challenges in implementing existing federal information security guidance and identified the need to streamline and automate the process of implementing this guidance. While several governmentwide cloud computing security activities are under way by organizations such as OMB and the General Services Administration (GSA), significant work remains to be completed. Other agency concerns related to the division of information security responsibilities between customer and vendor. However, these initiatives have not yet been completed. Cloud computing is an emerging model for IT, and NIST has not yet established guidance specific to cloud computing. Until federal guidance and processes that specifically address information security for cloud computing are developed, agencies may be hesitant to implement cloud computing, and those programs that have been implemented may not have effective information security controls in place. To assist federal agencies in implementing appropriate information security controls when using cloud computing, we recommend that the Secretary of Commerce direct the Administrator of NIST to issue cloud computing information security guidance to federal agencies to more fully address key cloud computing domain areas that are lacking in SP 800-53, such as virtualization, data center operations, and portability and interoperability, and include a process for defining roles and responsibilities of cloud computing service providers and customers. The Office of Management and Budget’s comments are reprinted in appendix III. In written comments on a draft of this report, the Administrator of GSA stated that GSA agreed in part with our findings and recommendation to complete the procurement for infrastructure as a service cloud computing technologies and ensure that it includes full consideration of the information security challenges of cloud computing. Appendix I: Objectives, Scope, and Methodology The objectives of our review were to (1) identify the models of cloud computing; (2) identify the information security implications of using cloud computing services in the federal government; and (3) assess federal guidance and efforts to address information security when using cloud computing. To identify cloud computing models, we reviewed publications, white papers, and other documentation from public and private sector organizations. We then obtained relevant information through interviews with officials from the National Institute of Standards and Technology (NIST) and private sector organizations that offer cloud computing services.

Why GAO Did This Study Cloud computing, an emerging form of computing where users have access to scalable, on-demand capabilities that are provided through Internet-based technologies, has the potential to provide information technology services more quickly and at a lower cost, but also to introduce information security risks. Accordingly, GAO was asked to (1) identify the models of cloud computing, (2) identify the information security implications of using cloud computing services in the federal government, and (3) assess federal guidance and efforts to address information security when using cloud computing. To do so, GAO reviewed relevant publications, white papers, and other documentation from federal agencies and industry groups; conducted interviews with representatives from these organizations; and surveyed 24 major federal agencies. What GAO Found Cloud computing has several service and deployment models. The service models include the provision of infrastructure, computing platforms, and software as a service. The deployment models relate to how the cloud service is provided. They include a private cloud, operated solely for an organization; a community cloud, shared by several organizations; and a public cloud, available to any paying customer. Cloud computing can both increase and decrease the security of information systems in federal agencies. Potential information security benefits include those related to the use of virtualization, such as faster deployment of patches, and from economies of scale, such as potentially reduced costs for disaster recovery. Risks include dependence on the security practices and assurances of a vendor, dependency on the vendor, and concerns related to sharing of computing resources. However, these risks may vary based on the cloud deployment model. Private clouds may have a lower threat exposure than public clouds, but evaluating this risk requires an examination of the specific security controls in place for the cloud's implementation. Federal agencies have begun efforts to address information security issues for cloud computing, but key guidance is lacking and efforts remain incomplete. Although individual agencies have identified security measures needed when using cloud computing, they have not always developed corresponding guidance. For example, only nine agencies reported having approved and documented policies and procedures for writing comprehensive agreements with vendors when using cloud computing. Agencies have also identified challenges in implementing existing federal information security guidance and the need to streamline and automate the process of implementing this guidance. These concerns include having a process to assess vendor compliance with government information security requirements and the division of information security responsibilities between the customer and vendor. Furthermore, while several governmentwide cloud computing security initiatives are under way by organizations such as the Office of Management and Budget (OMB) and the General Services Administration (GSA), little has been completed as a result of these efforts. For example, OMB has not yet finished a cloud computing strategy. GSA has begun a procurement for cloud computing services, but has faced challenges in completing the procurement due in part to information security concerns. In addition, while the Department of Commerce's National Institute of Standards and Technology has begun efforts to address cloud computing information security, it has not yet issued cloud-specific security guidance. Until specific guidance and processes are developed to guide agencies in planning for and establishing information security for cloud computing, they may not have effective information security controls in place for cloud computing programs. What GAO Recommends GAO is recommending that the Office of Management and Budget, General Services Administration, and the Department of Commerce take several steps to address cloud computing security, including completion of a strategy, consideration of security in a planned procurement of cloud computing services, and issuance of guidance related to cloud computing security. In comments on a draft of this report, these agencies generally concurred with GAO's recommendations and described efforts under way to implement them.

gao_T-HEHS-99-52

gao_T-HEHS-99-52_0

While women, on average, have lower earnings than men, the program has several features that are advantageous to women. Because women typically earn less than men, women’s monthly benefits replace a larger proportion of their earnings. How Women Might Be Affected by Various Reform Proposals Within the Existing Program Structure The changes contained in various Social Security reform proposals would likely have a disproportionate effect on women. Women, especially elderly women, are more likely to rely heavily, if not entirely, on Social Security. The comparable impact on men from an extension to 38 or 40 years is 3.1 percent and 5.2 percent, respectively. How Women Might Fare Under a System Restructured to Include Individual Accounts Many reform proposals would fundamentally restructure Social Security by creating retirement accounts that would be owned and managed by individuals. Studies indicate that, compared with men, women might choose a relatively low-risk investment strategy that earns them lower rates of return for their retirement income accounts. individual accounts and still end up with very different monthly benefits if they were to purchase annuities and if the annuities were based on gender-specific life tables. Thus, while the total lifetime annuity benefits for men and women may be similar, the monthly benefit women receive, either as retirees or as survivors, will likely be lower and could result in a lower standard of living in retirement. Other groups of women will also need to be considered if individual accounts are introduced. Under current Social Security provisions, divorced spouses and survivors are entitled to receive benefits based on their former spouse’s complete earnings record if they were married at least 10 years. Conclusions While the Social Security system has benefited women significantly through the spousal benefit and the progressivity of the benefit formula, women generally receive lower Social Security benefits than men because they work fewer years and earn lower wages. Because of women’s longer life expectancy, the creation of mandatory individual retirement accounts could also decrease women’s benefits relative to men’s if women continue to invest more conservatively than men. 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 reviewed: (1) how women currently fare under social security; (2) how they might be affected by some of the proposed changes in benefits to restore solvency; and (3) how women might fare under a system restructured to include individual accounts. What GAO Found GAO noted that: (1) women have benefited significantly from the social security program; (2) many women who work are advantaged by the progressive benefit formula that provides larger relative benefits to those with lower lifetime earnings; (3) women who did not work or had low lifetime earnings and who were married benefit from the program's spousal and survivor benefit provisions; (4) however, women typically receive lower monthly benefits than men because benefits are based on earnings and the number of years worked; (5) any across-the-board benefit cuts to restore solvency might fall disproportionately on women as a group because they rely more heavily on social security income than men; (6) other types of reform approaches can have positive or negative effects on women depending on how the reforms are designed; (7) restructuring social security to include individual accounts also will likely have different effects on men and women; (8) because women earn less than men, contributions of a fixed percentage of earnings would put less into women's individual retirement accounts; (9) available evidence indicates that women also tend to invest more conservatively than men, and thus would likely earn smaller returns on their accounts, although they would bear less risk; (10) in addition, how such accounts are structured will be extremely important to women; (11) for example, whether individuals will be required to purchase annuities with the proceeds of their accounts at retirement and how the annuities are priced could affect women quite differently from men; and (12) how benefits might be distributed to divorcees and how accounts are transferred to survivors could affect the retirement income of some elderly women.

gao_GAO-02-231T

gao_GAO-02-231T_0

As a result of these analyses, we have identified information security as a governmentwide high- risk issue in reports to the Congress since 1997—most recently in January 2001. Our most recent analyses, of reports published from July 2000 through September 2001, continue to show significant weaknesses in federal computer systems that put critical operations and assets at risk.Weaknesses continued to be reported in each of the 24 agencies included in our review, and they covered all six major areas of general controls—the policies, procedures, and technical controls that apply to all or a large segment of an entity’s information systems and help ensure their proper operation. Nevertheless, the results leave no doubt that serious, pervasive weaknesses persist. Audit coverage for nonfinancial systems is also likely to increase as agencies review and evaluate their information security programs as required by government information security reform provisions. Success in achieving these benefits will require agencies and others involved to ensure that the systems supporting E-government are protected from fraud, inappropriate disclosures, and disruption. Accordingly, it is important that federal information security efforts be guided by a comprehensive strategy for improvement.

What GAO Found Federal agencies rely extensively on computer systems and electronic data to support their missions. The security of these systems is essential to avoiding disruptions in critical operations and to prevent data tampering, fraud, and inappropriate disclosure of sensitive information. GAO analyzed information security audits and evaluations at 24 major federal departments and agencies since July 2000. This testimony summarizes (1) the pervasive weaknesses that led GAO to begin reporting information security as a government-wide high-risk issue in 1997, (2) the serious risks that these weaknesses pose at selected agencies and common weaknesses that agencies need to address to improve their information security programs, and (3) the importance of establishing strong agency-wide security management programs and developing a comprehensive government-wide strategy for improvement.

gao_T-AIMD-98-233

gao_T-AIMD-98-233_0

“perform and complete the planning needed to serve as the basis for funding the development and implementation of the computerized loan monitoring system, including— (1) fully defining the system requirement using on-line, automated capabilities to the extent feasible; (2) identifying all data inputs and outputs necessary for timely report generation; (3) benchmark loan monitoring business processes and systems against comparable industry processes and, if appropriate, simplify or redefine work processes based on these benchmarks; (4) determine data quality standards and control systems for ensuring information accuracy; (5) identify an acquisition strategy and work increments to completion; (6) analyze the benefits and costs of alternatives and use to demonstrate the advantage of the final project; (7) ensure that the proposed information system is consistent with the agency’s information architecture; and (8) estimate the cost to system completion, identifying the essential cost element.” The act also required SBA, within 6 months of enactment, to submit a report to the Congress and to us on its progress in carrying out these mandated actions. SBA’s Project Plan for Completing the Mandated Actions SBA’s project plan provides information in many key areas to explain how it intends to complete the mandated actions. The plan delineates the project’s goals and objectives, resource requirements, quality standards and control systems, assumptions, methodologies, work breakdown structure with a timetable for completion of tasks, and estimated costs. According to the project plan, SBA’s strategy for achieving these goals is to build on “best industry practices,” reengineer inefficient business processes, and implement contemporary technologies. SBA included estimates of the personnel resources that it would need to execute the project plan. It estimated that 18 staff would be needed for the first phase of the project, which addresses the completion of the mandated actions, and that an additional three staff would be needed for the development phase. To address the quality standards and controls to be used for the loan monitoring system project, the plan includes work elements to establish systems development standards and procedures and process change control procedures. The plan recognizes that the project includes a number of assumptions that may affect its success. It identifies seven key assumptions that SBA made but will need to validate during the project. The project plan also cites the methodologies that SBA plans to use or is considering for key areas of the project. According to the project plan, SBA estimates that the loan monitoring system will cost about $20 million to complete. Challenges and Risks in Executing SBA’s Project Plan While developing the project plan is a good start, SBA must still successfully execute it to complete the eight mandated actions. Establishing Software Project Management Capability SBA recognizes the need to establish defined processes for software project management and use them on this project. Using Methodologies and Practices for the First Time The loan monitoring system project team will be using, for the first time, methodologies it has selected for benchmarking, business process reengineering, information technology architecture development, project management, and systems development. Implementing the Project Without an Information Technology Architecture SBA plans to work concurrently on an information technology architecture and the loan monitoring system as separate projects. In conclusion, the extent to which SBA meets these challenges and manages these risks will determine how well business processes and systems requirements are defined, and the quality of support for decision-making on the purchase or development of the needed system.

Why GAO Did This Study GAO discussed the Small Business Administration's (SBA) activities to complete planning for its loan monitoring system, as required by the Small Business Reauthorization Act of 1997, focusing on SBA's project plan for completing the mandated actions. What GAO Found GAO noted that: (1) SBA's project plan provides information in many key areas to explain how it intends to complete the mandated actions; (2) the plan delineates the project's goals and objectives, resource requirements, quality standards and control systems, assumptions, methodologies, work breakdown structure with a timetable for completion of tasks, and estimated costs; (3) according to the project plan, SBA's strategy for achieving these goals is to build on best industry practices, reengineer inefficient business processes, and implement contemporary technologies; (4) in support of these goals, SBA also established objectives for the loan monitoring system; (5) SBA included estimates of the personnel resources that it would need to execute the project plan; (6) it estimated that 18 staff would be needed for the first phase of the project, which addresses the completion of the mandated actions, and that an additional three staff would be needed for the development phase; (7) to address the quality standards and controls to be used for the loan monitoring system project, the plan includes work elements to establish systems development standards and procedures and process change control procedures; (8) the plan recognizes that the project includes a number of assumptions that may affect its success; (9) it identifies seven key assumptions that SBA made but will need to validate during the project; (10) the project plan also cites the methodologies that SBA plans to use or is considering for key areas of the project; (11) according to the project plan, SBA estimates that the loan monitoring system will cost about $20 million to complete; (12) while developing the project plan is a good start, SBA must still successfully execute it to complete the eight mandated actions; (13) in executing the plan, SBA will face formidable technical and management challenges and risks; (14) SBA recognizes the need to establish defined processes for software project management, and use them on this project; (15) the loan monitoring system project will be using, for the first time, methodologies it has selected for benchmarking, business process reengineering, information technology architecture development, project management, and systems development; (16) SBA plans to work concurrently on an information technology architecture and the loan monitoring system as separate projects; and (17) the extent to which SBA meets these challenges and manages these risks will determine how well business processes and systems requirements are defined, and the quality of support for decisionmaking on the purchase or development of the needed system.

gao_GAO-08-1021T

gao_GAO-08-1021T_0

Some Gains Made; Certain Security, Legislative, and Economic Challenges Remain The United States has made some progress in achieving key goals stated in The New Way Forward; many challenges remain. DOD reports that about 65 percent of Iraqi army battalions are leading counterinsurgency operations. 2). The number of independent Iraqi security forces as measured by Operational Readiness Assessments (ORA) level 1 continues to be an important measure of the capabilities of Iraqi security forces. However, as of mid-July 2008, 8 provincial governments do not yet have lead responsibility for security in their provinces. Security conditions remain volatile and dangerous. Iraq Has Enacted Legislation to Promote Reconciliation, but Critical Laws Are Still Being Debated To facilitate national reconciliation, The New Way Forward identified legislation that the Iraqi government committed to enact with U.S. support and set a goal for enacting all key legislation by December 2007. In early 2008, the Iraqi government enacted laws to return some Ba’athists to government service, give amnesty to certain detainees in Iraq’s justice system, and define provincial powers. Iraq Has Made Limited Progress in Spending Its Capital Investment Budgets and Has Not Met Oil Production Goals or Demand for Electricity The New Way Forward emphasized the need to build capacity in Iraq’s ministries and help the government execute its capital investment budget; this is particularly important as the $48 billion in U.S. funding for Iraq reconstruction and stabilization efforts is almost 90 percent obligated. However, expenditure data from Iraq’s Ministry of Finance show that, between 2005 and 2007, Iraq spent only 24 percent of the $27 billion it budgeted for its own reconstruction efforts. Overall crude oil production has increased or improved for short periods; however, the early July 2008 average crude oil production capacity of about 2.5 million barrels per day has not reached the U.S. goal of 3 million barrels per day. Meanwhile, the daily supply of electricity met only 54 percent of demand in early July 2008. The State Department reports that U.S. goals for Iraq’s water sector are close to being reached. Need for Updated U.S. Strategy in Iraq Since late 2003, the United States has employed numerous strategies and plans to address the security and reconstruction needs of Iraq. To address the high levels of violence, the administration announced The New Way Forward strategy in January 2007. While the documents that comprise The New Way Forward and the phase that follows clearly state the importance the Administration places on continued U.S. support for Iraq, they represent an incomplete strategic plan because they only articulate goals and objectives for the near-term phase that ends in July 2008. Current Strategic and Operational Plans for Iraq In response to the escalating violence, the President in January 2007 announced The New Way Forward, which established a new phase in U.S. operations in Iraq. State and DOD cite the classified MNF-I/U.S. We will provide more information on the Joint Campaign Plan in the closed portion of this hearing. Recommendation The New Way Forward and the military surge that was central to it end in July 2008. Moreover, the UN mandate authorizing MNF-I to maintain security and stability in Iraq expires December 31, 2008; the United States and Iraq are negotiating the legal framework to allow the United States and its coalition partners to conduct operations to support the Iraqi government after the UN mandate ends. Given these uncertainties, the decreasing levels of enemy-initiated attacks, and weaknesses in current DOD and State plans, an updated strategy is needed for how the United States will help Iraq achieve key security, legislative, and economic goals. Accordingly, we recommend that DOD and State, in conjunction with relevant U.S. agencies, develop an updated strategy for Iraq that defines U.S. goals and objectives after July 2008 and addresses the long-term goal of achieving an Iraq that can govern, defend, and sustain itself.

Why GAO Did This Study In January 2007, the President announced a new U.S. strategy to stem the violence in Iraq and help the Iraqi government foster conditions for national reconciliation. In The New Way Forward, the Administration articulated near-term goals to achieve over a 12- to 18-month period and reasserted the end state for Iraq: a unified, democratic, federal Iraq that can govern, defend, and sustain itself and is an ally in the war on terror. To support this strategy, the United States increased its military presence and financial commitments for Iraq operations. This testimony discusses (1) progress in meeting key security, legislative, and economic goals of The New Way Forward; and (2) past and current U.S. strategies for Iraq and the need for an updated strategy. GAO reviewed documents and interviewed officials from U.S. agencies, MNF-I, the UN, and the Iraqi government. GAO also had staff stationed in Baghdad. Since 2003, GAO has issued about 140 Iraq-related products, which provided baseline information for this assessment. What GAO Found The United States has made some progress in achieving key goals stated in The New Way Forward. Looking forward, many challenges remain, and an updated strategy is essential. In the security area, violence--as measured by the number of enemy-initiated attacks--decreased about 80 percent from June 2007 to June 2008, trained Iraqi security forces have increased substantially, and many units are leading counterinsurgency operations. However, as of July 2008, 8 of 18 provincial governments do not yet have lead responsibility for security in their provinces, and DOD reported that, in June 2008, less than 10 percent of Iraqi security forces were at the highest readiness level and therefore considered capable of performing operations without coalition support. The security environment remains volatile and dangerous. In the legislative area, Iraq has enacted key legislation to return some Ba'athists to government, grant amnesty to detained Iraqis, and define provincial powers. The unfinished Iraqi legislative agenda includes enacting laws that will provide the legal framework for sharing oil revenues, disarming militias, and holding provincial elections. On economic and infrastructure issues, Iraq spent only 24 percent of the $27 billion it budgeted for its reconstruction efforts between 2005 and 2007. Although crude oil production improved for short periods, the early July 2008 average production capacity of about 2.5 million barrels per day was below the U.S. goal of 3 million barrels per day. In addition, while State reports that U.S. goals for Iraq's water sector are close to being reached, the daily supply of electricity in Iraq met only slightly more than half of demand in early July 2008. Since 2003, the United States has developed and revised multiple strategies to address security and reconstruction needs in Iraq. The New Way Forward responded to failures in prior U.S. plans and the escalating violence that occurred in 2006. However, this strategy and the military surge that was central to it end in July 2008, and many agree that the situation remains fragile. What GAO Recommends GAO recommends an updated strategy for Iraq for several reasons. First, much has changed in Iraq since The New Way Forward began in January 2007. Violence is down, U.S. surge forces are leaving, and the United States is negotiating a security agreement with Iraq to replace the expiring UN mandate. Second, The New Way Forward only articulates U.S. goals and objectives for the phase that ends in July 2008. Third, the goals and objectives of The New Way Forward are contained in disparate documents rather than a single strategic plan. Furthermore, the classified MNF-I/U.S. Embassy Joint Campaign Plan is not a strategic plan; it is an operational plan with limitations that GAO will discuss during the closed portion of the hearing.

gao_GAO-04-478T

gao_GAO-04-478T_0

To help agencies more effectively manage IT, the Congress has established a statutory framework of requirements and roles and responsibilities relating to information and technology management. In particular, the Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996 require agency heads, acting through agency CIOs to, among other things, better link their IT planning and investment decisions to program missions develop and maintain a strategic information resources management (IRM) plan that describes how IRM activities help to accomplish agency missions; develop and maintain an ongoing process to establish goals for improving IRM’s contribution to program productivity, efficiency, and effectiveness; methods for measuring progress toward these goals; and clear roles and responsibilities for achieving these goals; develop and implement a sound IT architecture; implement and enforce IT management policies, procedures, standards, and guidelines; establish policies and procedures for ensuring that IT systems provide reliable, consistent, and timely financial or program performance data; and implement and enforce applicable policies, procedures, standards, and guidelines on privacy, security, disclosure, and information sharing. Strategic planning defines what an organization seeks to accomplish and identifies the strategies it will use to achieve desired results. Although the agencies largely had one or more of the required performance measures in place, these measures were not always linked to the agencies’ enterprisewide IT goals. Agencies’ Use of IT Investment Management Practices Was Mixed Critical aspects of IT investment management include developing well- supported proposals, establishing investment management boards, and selecting and controlling IT investments. Among the variety of reasons that agencies cited for not having IT investment management practices fully in place were that the CIO position had been vacant, that not including a requirement in the IT investment management guide was an oversight, and that the process was being revised. Improving Agencies’ IT Strategic Planning/Performance Measurement and Investment Management To help agencies improve their IT strategic planning/performance measurement and investment management, we have made numerous recommendations to agencies and issued guidance. Specifically, in our January 2004 report we made recommendations to the 26 agencies in our review regarding practices that were not fully in place. In this vein, today we are releasing the latest version of our ITIM framework. This framework identifies and organizes critical processes for selecting, controlling, and evaluating IT investments into a framework of increasingly mature stages (see fig. 2). In summary, our January 2004 report indicates that the federal government can significantly improve its IT strategic planning, performance measurement, and investment management. Such improvement would better ensure that agencies are being responsible stewards of the billions of dollars for IT with which they have been entrusted, by helping them to invest these monies wisely. Appendix I: Information Technology (IT) Strategic Planning/Performance Measurement and Investment Management Practices Table 1 describes the 12 IT strategic planning/performance measurement and the 18 IT investment management practices that we used in our January 2004 report on the government’s performance in these areas.

Why GAO Did This Study The federal government spends billions of dollars annually on information technology (IT) investments that are critical to the effective implementation of major government programs. To help agencies effectively manage their substantial IT investments, the Congress has established a statutory framework of requirements and roles and responsibilities relating to information and technology management, that addresses, for example, (1) IT strategic planning/performance measurement (which defines what an organization seeks to accomplish, identifies the strategies it will use to achieve desired results, and then determines how well it is succeeding in reaching resultsoriented goals and achieving objectives) and (2) IT investment management (which involves selecting, controlling, and evaluating investments). GAO was asked to summarize its January 2004 report on IT strategic planning/performance measurement and investment management (Information Technology Management: Governmentwide Strategic Planning, Performance Measurement, and Investment Management Can Be Further Improved, GAO-04-49 , January 12, 2004) and to discuss how agencies can improve their performance in these areas. What GAO Found GAO recently reported that the use of important IT strategic planning/performance measurement and investment management practices by 26 major federal agencies was mixed. For example, agencies generally had IT strategic plans and goals, but these goals were not always linked to specific performance measures that were tracked. Agencies also largely had IT investment management boards, but no agency had the practices associated with the oversight of IT investments fully in place. Although they could not always provide an explanation, agencies cited a variety of reasons for not having practices fully in place, including that the chief information officer position had been vacant and that the process was being revised. By improving their IT strategic planning, performance measurement, and investment management, agencies can better ensure that they are being responsible stewards of the billions of dollars for IT that they have been entrusted with through the wise investment of these monies. To help agencies improve in these areas, GAO has made numerous recommendations to agencies and issued guidance. For example, in the January 2004 report, GAO made recommendations to the 26 agencies regarding practices that were not fully in place. In addition, today GAO is releasing the latest version of its Information Technology Investment Management (ITIM) framework, which identifies critical processes for selecting, controlling, and evaluating IT investments and organizes them into a framework of increasingly mature stages; thereby providing agencies a road map for improving IT investment management processes in a systematic and organized manner.

gao_GAO-12-538

gao_GAO-12-538_0

In a February 2012 FEMA town hall meeting, FEMA’s Administrator acknowledged that there are inconsistencies across the FEMA regions, and noted that due to differences in how regions operate, it is problematic to deploy someone based in one region to another during a disaster.cadre manager we interviewed cited inconsistency in policy application saying, “there is an ongoing problem of the right hand not knowing what the left hand is doing with respect to when policies are implemented or are in conflict with one another”. which describes FEMA’s mission, purpose, and defines the agency’s principles, FEMA advocates the practice of consistent decision making by those with authority to act.monitoring of the regional implementation of DAE policies and procedures, as well as how DAEs implement disaster policies, could help provide FEMA with reasonable assurance that disaster assistance is being implemented by DAEs in accordance with policy and consistently across regions. FEMA Has Not Established Standardized Hiring and Salary Criteria for DAEs FEMA has not established standardized hiring criteria for prospective DAEs, and FEMA headquarters provides limited guidance to regions on which to base DAE salary determinations. better positioned to hire people with the requisite skills and have reasonable assurance that hiring decisions are being made consistently across regions. IWMO and OCCHCO officials noted in March 2012 that performance management is a critical component of the supervision of DAEs and stated that it must be improved in fiscal year 2012 during FEMA’s Disaster Workforce Transformation effort. In addition, 13 of 16 regional cadre managers stated that the appraisal process could be improved in various ways, such as implementing a rating scale instead of a pass/fail rating. FEMA’s DAE Training Is Not Consistent with Key Attributes of Effective Training and Development Programs FEMA’s DAE training is not consistent with key attributes of effective training and development programs that could help to ensure that its training and development investments are targeted strategically. FEMA Does Not Have a Plan to Ensure DAEs Receive Required Training FEMA does not have a plan with time frames and milestones to ensure DAEs receive training, including required training for its new credentialing program, FQS. Thirteen of 16 regional cadre managers said that they would like more opportunities for DAEs to receive training. Systematically Tracking Training Cost Could Allow FEMA to Better Plan for Future Training Expenses FEMA does not track how much of the Disaster Relief Fund is spent on training for DAEs while deployed to JFOs. FEMA Announced Impending Transformation of DAE Program, but It Is Too Soon to Evaluate the Effectiveness of the Agency’s Planned Actions On April 17, 2012 FEMA announced plans to transform the DAE program. Conclusions FEMA relies heavily upon DAEs to respond to disasters. The agency has taken steps to improve the program, such as establishment of a credentialing program, FQS, and a planned transformation of the DAE program; however, it is too soon to assess the extent to which these efforts will address the challenges we identified with FEMA’s management of the DAE program, the workforce, and training. Furthermore, FEMA’s decentralized structure allows for flexibility; however, establishing a mechanism to ensure ongoing monitoring of regional implementation of DAE policies and procedures and DAEs’ implementation of FEMA’s disaster policies and procedures can assist management in ensuring that disaster assistance is conducted in accordance with policy and consistently applied across regions. Further, FEMA’s human capital controls do not adhere to internal control standards for hiring, compensation, and performance appraisals. Establishing a plan with milestones for training DAEs would provide FEMA with a roadmap to train its DAE workforce and ensure accountability for qualifying DAEs under FQS. Establish a mechanism to monitor both its regions’ implementation of DAE policies and procedures and DAEs’ implementation of FEMA’s disaster policies and procedures to ensure consistency. In regards to the fifth recommendation, that FEMA establish a more rigorous performance appraisal system that includes criteria and guidance to serve as a basis for performance ratings, as well as how ratings could be used, and a process to address performance deficiencies, DHS agreed. Appendix I: Objectives, Scope, and Methodology The objectives of this report were to determine (1) to what extent does the Federal Emergency Management Agency (FEMA) have policies and procedures in place to govern the Disaster Assistance Employee (DAE) program; (2) to what extent are FEMA’s human capital controls over the DAE workforce consistent with internal control standards; and (3) to what extent does FEMA’s DAE training incorporate key attributes of effective training and development programs. The results of the focus groups are not generalizable.

Why GAO Did This Study Since fiscal year 2007 FEMA has obligated $33 billion in disaster assistance payments. FEMA relies heavily upon its cadre of DAEs, a reserve workforce who interact with disaster survivors. GAO was asked to review the management and training of DAEs. Specifically, this report addresses the extent to which (1) FEMA has policies and procedures in place to govern the DAE program; (2) FEMA’s human capital controls over the DAE workforce are consistent with internal control standards; and (3) FEMA’s DAE training incorporates key attributes of effective training and development programs. In addition, GAO describes FEMA’s initiative to transform the DAE program announced in April 2012. GAO reviewed management documents such as program-specific and human capital-related guidance, interviewed FEMA officials, and conducted 16 focus group sessions with DAEs in four selected joint field offices chosen to provide geographic dispersion, among other factors. The results of the focus groups are not generalizable, but provide valuable insight into DAE experiences. What GAO Found The Federal Emergency Management Agency (FEMA) has taken steps to enhance its management of the Disaster Assistance Employee (DAE) program, such as through the establishment of a credentialing program, the FEMA Qualification System (FQS); however, management controls and training could be strengthened. For example, FEMA does not monitor how the regions implement DAE policies and how DAEs implement disaster policies across regions to ensure consistency. FEMA’s Administrator noted that due to differences in how regions operate, it is problematic to deploy someone based in one region to another during a disaster. Establishing a mechanism to monitor both the regional implementation of DAE policies and procedures and DAE’s implementation of disaster policies could help provide FEMA with reasonable assurance that disaster assistance is conducted in accordance with policy and implemented consistently. FEMA’s human capital controls could be strengthened. FEMA’s regional DAE managers are responsible for hiring DAEs, but FEMA has not established hiring criteria and has limited salary criteria. By establishing standardized criteria for making hiring and salary decisions, FEMA would be better positioned to hire people with requisite skills and better ensure consistency across regions. Likewise, FEMA’s performance appraisal system for DAEs is not consistent with internal control standards. FEMA does not have criteria for supervisors to assign DAEs satisfactory or unsatisfactory ratings. Thirteen of 16 regional DAE managers GAO interviewed stated that the appraisal process could be improved, such as implementing a rating scale instead of a pass/fail rating. FEMA officials noted that performance management is a critical component in DAE supervision and must be improved in fiscal year 2012. Establishing a more rigorous performance management system that includes criteria for given performance elements as well as guidance could help FEMA ensure that DAEs’ performance appraisals more accurately reflect performance and provide needed information to managers. FEMA’s DAE training is not consistent with key attributes of effective training and development programs, such as a plan for training staff. FEMA does not have a plan to ensure DAEs receive necessary training such as FQS requirements. Further, 13 of 16 regional DAE managers GAO spoke to said that they would like more opportunities for DAEs to receive training. A plan to ensure that all DAEs have opportunities for training and completing FQS requirements with related milestones would provide FEMA with a roadmap and ensure accountability for qualifying DAEs under FQS. In addition, FEMA does not track how much of the Disaster Relief Fund is spent on training for DAEs. Developing a systematic process to track training costs could provide FEMA with information to help it determine whether it is allocating its resources effectively. In an April 2012 memo, FEMA announced plans to transform the DAE program beginning in June 2012; however, this effort is still in the early stages and as a result, it is too soon to evaluate the effectiveness of FEMA’s planned actions. What GAO Recommends GAO recommends, among other things, that FEMA establish a mechanism to monitor both its regions’ implementation of DAE policies and DAEs’ implementation of disaster policies; criteria for hiring and compensating DAEs; and a plan to train DAEs within a set time frame. DHS concurred with the recommendations.

gao_AIMD-99-57

gao_AIMD-99-57_0

The problem comes from how computers and other microprocessors have recorded and computed dates for the past several decades. Nearly a third of the airports that responded to our questionnaire reported that they will not complete their preparations for the Year 2000 problem by FAA’s recommended date of June 30, 1999, and have no contingency plans in place. However, a substantial number of the airports (about a third of the large airports, about a quarter of the medium-sized airports, and half of the small airports) reported they had no contingency plans, did not know of such plans for any of their core functions, or did not respond. 3). 4). 5). 6). However, manual procedures could seriously reduce an airport’s efficiency, thus causing delays that could ripple through the NAS. First, contractors with appropriate expertise can provide the trained personnel that an airport might lack and might be able to repair equipment faster than that airport’s staff. Officials at large airports, in particular, acknowledged the importance of contractors. Aviation Industry Associations Have Been Assisting Airports’ Year 2000 Efforts Aviation industry associations have been working to help ensure airports will be prepared to operate through and beyond the year 2000. FAA Is Helping Airports Prepare for the Year 2000 To maintain the continued operation of the NAS, several offices within FAA are collaborating to help ensure airports are adequately prepared for the year 2000. The Year 2000 program office intends to plan for any disruptions that could occur if the nation’s airports are not prepared for potential delays caused by Year 2000-related equipment malfunctions. The Associate Administrator for Airports has also set criteria for verifying the Year 2000 readiness of airports’ equipment that is used to meet FAA’s safety and security requirements and has established a national team to monitor the airports’ progress in preparing this equipment for the date change. FAA has also formed an Aviation Industry Year 2000 Steering Committee to (1) serve as the focal point to promote the exchange of information on the status of Year 2000 preparations with industry representatives and (2) identify and facilitate the effective resolution of Year 2000 issues that could affect the safety, the security, and the efficiency of the NAS. Conclusions Because the problems confronting airports as they prepare for the year 2000 are complex and airports’ preparations are still in process, it is not clear at this time (1) which airports could suffer equipment malfunctions on and after January 1, 2000, and (2) whether any malfunctions could decrease airports’ efficiency or create escalating delays throughout the NAS. But some airports have reported that they are using an ad hoc approach to prepare their equipment for the year 2000, and some have reported that they will not complete their Year 2000 preparations by FAA’s recommended date of June 30, 1999, and that they currently lack contingency plans. Because of the interdependence among airline flights and airport facilities, decreased efficiency and delays at one airport could cause delays at other airports and eventually impede the flow of air traffic throughout the nation, especially if those delays occur at airports that serve as hubs.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the status of airports' efforts to prepare for the year 2000, focusing on: (1) the status of airports' efforts to help ensure that their computers and electronic equipment will function properly on and after January 1, 2000; (2) how the safety, the security, and the efficiency of the National Airspace System will be affected if airports' year 2000 preparations are not completed in time; and (3) the factors that will affect the progress of airports' preparations for the year 2000. What GAO Found GAO noted that: (1) the nation's airports have been making progress in preparing for the year 2000; (2) however, there is substantial variation in the progress they have achieved and the approaches they have been taking; (3) among the airports responding to GAO's survey, about one-third reported that they would meet the June 30, 1999 date the Federal Aviation Administration (FAA) recommended to complete preparations for addressing the year 2000 date change; another one-third did not report that they would meet this date but had begun contingency planning to help ensure continued operations if equipment malfunctions; and a final one-third did not meet either of these criteria; (4) the final third are mostly small airports, but they include 9 of the nation's 50 largest airports; (5) officials at airports and FAA agreed that adequate safeguards are in place to ensure the safety and the security of the National Airspace System before and after the year 2000 date change; (6) however, airports that do not meet FAA's June 1999 recommended preparation date are at increased risk of experiencing some equipment malfunctions; (7) if manual procedures must be substituted for operations normally controlled by automated equipment, an airport's efficiency--its ability to handle its normal number of scheduled flights per day--would decrease and thus cause flight delays; (8) because of the interdependence among airline flights and airport facilities, delays at one airport could cause delays at other airports and eventually affect the efficiency of the National Airspace System; (9) the severity of these delays would depend to a large extent on the size of the airports and which equipment malfunctions; (10) FAA, airport, and other aviation industry officials cited several factors that have affected the timeliness of year 2000 preparations, including an airport's use of contractors, the assistance provided by aviation industry associations, and the activities undertaken by Congress and by FAA; (11) contractors have helped some airports prepare for the year 2000 by providing them with the trained personnel they lack; and (12) aviation industry associations have helped increase airports' awareness of the implications of the year 2000 through discussions at seminars and workshops and by identifying airport equipment that might be vulnerable to problems caused by the date change.

gao_GAO-15-80

gao_GAO-15-80_0

Afterward, over several years, outside contractors’ laboratories developed and validated several genetic tests to analyze the B. anthracis samples for the presence of certain genetic mutations. This possible explanation of genetic similarity between spores in the letters and in RMR-1029 was not rigorously explored during the course of the investigation, further complicating the interpretation of the apparent association between the B. anthracis genotypes discovered in the attack letters and those found in RMR-1029.” Genetic Tests Generally Were Verified and Validated but Lack of a Validation Framework Limited Statistical Confidence for Interpreting Results We found that the genetic tests used to screen the FBI’s repository of B. anthracis samples demonstrated through the verification and validation testing that they generally met the FBI’s minimum validation requirements. Validation Test Results Met the FBI Requirements but Did Not Demonstrate a Level of Statistical Confidence We found that (1) the genetic tests used to screen the FBI’s repository of B. anthracis samples met the FBI’s validation requirements, (2) the validation tests were not required to and did not demonstrate a level of statistical confidence for interpreting the validation test results, and (3) some information on the sensitivity and specificity of the genetic tests was not characterized until after validation (postvalidation testing). When we compared the FBI’s statistical approach to these six characteristics, we found that three could be improved to strengthen the significance of its evidence for future investigations. We found that the FBI has taken some steps to include such expertise in future investigations by building formal forensic statistical expertise both internally and externally. The FBI’s Statistical Approach Could Have Been Improved for Three of the Six Characteristics of a Statistical Framework We believe that the six general characteristics described above make up a comprehensive statistical framework that could have allowed the FBI to quantify significance and probative value of the scientific evidence collected in a statistically meaningful way and could have strengthened the evidence it collected. The FBI’s Research Did Not Provide Full Understanding of the Methods and Environmental Conditions That Give Rise to Genetic Mutations Although the specific genetic mutations used as genetic markers to determine a match or exclusion were adequately characterized, the FBI did not conduct studies to understand the methods and environmental conditions that gave rise to the mutations. By instituting more rigorous controls over sample identification and collection for future investigations, the FBI can improve the completeness and accuracy of a repository. In addition, we identified a key scientific gap that is related to the verification and validation of the genetic tests and the statistical analyses—that is, the significance of using genetic mutations in B. anthracis as genetic markers for analyzing evidentiary samples. DHS has funded some research on this gap but this research is not yet complete, and it is not yet known whether it will fully address the gap. This gap is related to the significance of using genetic mutations as genetic markers for analyzing evidentiary samples to determine their origins. Such research is a step in the right direction, since the FBI has indicated that it is likely to use genome sequencing methods in future investigations to analyze evidence. The framework should be applied at the outset of an investigation involving an intentional release of B. anthracis, or any other microbial pathogen. Developing such a framework could also be facilitated by a written plan. Key contributors to the report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology The scope of our work was limited to a review of the scientific methods employed to validate the genetic tests used to screen the FBI’s repository of Ames B. anthracis samples, the procedures used to identify and collect samples of Ames B. anthracis in the creation of the FBI’s repository, and the statistical analyses and interpretation of the results of the genetic tests. We did not address any other scientific methods or any of the traditional investigative techniques used to support the FBI’s conclusions in this case, and we take no position on the FBI’s conclusions when it closed its investigation in 2010. What are the characteristics of an adequate statistical approach for analyzing the repository samples and to what extent was the statistical approach used adequate? If not adequate, how could this approach be improved for future efforts? To determine any remaining scientific concerns and uncertainties regarding the validation of the genetic tests and statistical approaches that would need to be addressed in future analyses, we reviewed relevant federal agencies’ and their contractors’ documents, published literature, and industry documentation on the validation of polymerase chain- reaction based tests, such as those for detecting rare variants, and related scientific concerns and uncertainties that could affect a future investigation.

Why GAO Did This Study In 2001, the FBI investigated an intentional release of B. anthracis , a bacterium that causes anthrax, which was identified as the Ames strain. Subsequently, FBI contractors developed and validated several genetic tests to analyze B. anthracis samples for the presence of certain genetic mutations. The FBI had previously collected and maintained these samples in a repository. GAO was asked to review the FBI's genetic test development process and statistical analyses. This report addresses (1) the extent to which these genetic tests were scientifically verified and validated; (2) the characteristics of an adequate statistical approach for analyzing samples, whether the approach used was adequate, and how it could be improved for future efforts; and (3) whether any remaining scientific concerns regarding the validation of genetic tests and statistical approaches need to be addressed for future analyses. GAO reviewed agency and contractor documentation, conducted literature reviews, and conducted statistical analyses of the repository data. GAO's review focused solely on two aspects of the FBI's scientific evidence: the validation of the genetic tests and the statistical approach for the analyses of the results. GAO did not review and is not taking a position on the conclusions the FBI reached when it closed its investigation in 2010. What GAO Found After the 2001 Anthrax attacks, the genetic tests that were conducted by the Federal Bureau of Investigation's (FBI) four contractors were generally scientifically verified and validated, and met the FBI's criteria. However, GAO found that the FBI lacked a comprehensive approach—or framework—that could have ensured standardization of the testing process. As a result, each of the contractors developed their tests differently, and one contractor did not conduct verification testing, a key step in determining whether a test will meet a user's requirements, such as for sensitivity or accuracy. Also, GAO found that the contractors did not develop the level of statistical confidence for interpreting the testing results for the validation tests they performed. Responses to future incidents could be improved by using a standardized framework for achieving minimum performance standards during verification and validation, and by incorporating statistical analyses when interpreting validation testing results. GAO identified six characteristics of a statistical framework that can be applied for analyzing scientific evidence. When GAO compared the approach the FBI used to this framework, it found that that the FBI's approach could have been improved in three of six areas. First, the FBI's research did not provide a full understanding of the methods and conditions that give rise to genetic mutations used to differentiate between samples of B. anthracis . Second, the FBI did not institute rigorous controls over the sampling procedures it used to build the repository of B. anthracis samples. Third, the FBI did not include measures of uncertainty to strengthen the interpretation of the scientific evidence. GAO found that since 2001 the FBI has taken some steps to build formal forensic statistical expertise. The FBI's approach to future incidents could benefit from including such expertise early in an investigation. The lack of an understanding of how bacteria change (mutate) in their natural environment and in a laboratory is a key scientific gap that remains and could affect testing conducted in future incidents. Specifically, the significance of using such mutations as genetic markers for analyzing evidentiary samples to determine their origins is not clear. This gap affects both the development of genetic tests targeting such mutations and statistical analyses of the results of their use on evidentiary samples. The Department of Homeland Security is currently funding some research on genetic changes in bacteria and genome sequencing methods, among others. Such research is a step in the right direction since the FBI is planning to use genome sequencing methods in future investigations. However, because this research may not be complete for several more years, the extent to which it will close this gap is not known. What GAO Recommends GAO recommends that the FBI develop a framework for validation and statistical approaches for future investigations. The FBI agreed with our recommendations.

gao_GAO-05-250

gao_GAO-05-250_0

Overall, SSA paid approximately $2.4 billion to about 430 thousand foreign beneficiaries in fiscal year 2004, including about $206 million paid to approximately 102,000 totalized beneficiaries. SSA has pending totalization agreements with Mexico and Japan. SSA Lacks A Formal Process to Assess the Accuracy and Reliability of Foreign Countries’ Data When Entering into Totalization Agreements, but Recent Initiatives Appear Promising SSA’s policies and procedures for assessing the accuracy and reliability of important information from foreign countries—such as birth and death data—when entering into totalization agreements remain generally informal, despite recent initiatives for improvement. Historically, the agency has focused on broad policy issues and systems compatibility, rather than integrity and reliability of earnings data and authenticity of evidentiary documents. For example, during preliminary negotiations for an agreement with Mexico, SSA conducted a limited review of that country’s social security system and policies in August 2002, but did not assess the accuracy and reliability of data needed to pay benefits or the relevant controls over that data. SSA has developed a standardized questionnaire for foreign social security officials to help the agency identify and assess the reliability of earnings data in countries under consideration for future totalization agreements. As a result of this review, SSA reported that it is scrutinizing documents from that country more closely to ensure that only truly entitled beneficiaries receive payments. All these initiatives are positive steps in SSA’s efforts to identify and assess the potential risks posed by inaccurate or unreliable foreign data when entering into totalization agreements. In particular, without a more formal mechanism in place, given expected retirement of key management officials in coming years, SSA risks the loss of critical institutional knowledge, thus diminishing the agency’s ability to effectively assess risks associated with future agreements. SSA Is Limited In Its Ability to Verify Individuals’ Initial and Continuing Eligibility for Benefits We identified potential vulnerabilities in SSA’s existing policies and procedures for verifying individuals’ eligibility for benefits once an agreement is in force. First, under existing totalization agreements, SSA generally accepts documentation from foreign countries’ social security agencies with no independent verification of this information when establishing an individuals’ initial eligibility for benefits. While SSA lacks the ability to perform this type of independent verification with foreign countries, it does have some tools at its disposal—validation surveys and personal questionnaires—to verify an individual’s identity and continuing eligibility. Other countries such as Sweden may only be reviewed once every 30 years. However, these questionnaires typically rely on beneficiaries to accurately self-report such information with no independent verification to determine the reliability of the responses. Moreover, while SSA routinely uses computer matches with databases in the U.S. to help it verify domestic beneficiaries’ initial and continuing eligibility for benefits, it does not currently have the capacity to perform such matches for foreign beneficiaries. While officials reported that such a match would be a useful tool for identifying unreported deaths, SSA is partly limited in its ability to conduct such matches with all other totalized countries because it does not currently capture foreign social insurance numbers on its computer systems. Given the likely growth in the number of foreign beneficiaries in coming years, including totalized beneficiaries, the trust funds will likely face increased exposure if existing processes are not improved. 2. SSA also commented on our observation that it regularly accepts critical documentation from foreign countries without independently verifying the accuracy of such information.

Why GAO Did This Study Since 1977, the U.S. has entered into bilateral social security totalization agreements with 20 foreign countries. In fiscal year 2004, the Social Security Administration (SSA) paid approximately $206 million to 102,000 beneficiaries in these countries based on their eligible periods of coverage. If put into force, pending agreements with Mexico and Japan will increase the number of beneficiaries receiving totalized benefits, as well as the amount of benefits paid. Given the costs to the Social Security Trust Funds posed by existing and pending agreements, GAO was asked to (1) document SSA's policies and procedures for assessing the accuracy of foreign countries' data when entering into a totalization agreement, and (2) examine SSA's processes for verifying beneficiaries' initial and continuing eligibility for benefits once an agreement is in force. What GAO Found SSA's policies and procedures for assessing the accuracy and reliability of important information from foreign countries--such as birth and death data--when entering into totalization agreements remain generally informal, but recent initiatives for improvement seem promising. Historically, SSA has conducted only limited reviews, focusing primarily on broad policy issues and systems compatibility, rather than the integrity and reliability of earnings data and evidentiary documents. For example, during preliminary negotiations with Mexico, SSA conducted a limited review of that country's social security system but did not assess the reliability of that country's data. SSA has also developed several initiatives to identify risks associated with totalization agreements. These include: developing a standardized questionnaire for assessing the reliability of foreign earnings data, soliciting input from other government agencies, and using a matrix to compare potential agreement countries. SSA is also conducting "vulnerability assessments" to detect potential problems with foreign countries' documents. All of these tools are positive steps to help SSA assess potential risks posed by unreliable foreign data. However, SSA has not integrated these initiatives into formal procedures. Given the upcoming retirement of key management officials, SSA may lose critical institutional knowledge, which may limit the agency's ability to assess risks associated with future agreements. Our review identified potential vulnerabilities in SSA's policies and procedures for verifying individuals' eligibility for benefits once an agreement is in force. When establishing an individual's initial eligibility for benefits, the agency generally accepts critical documentation from foreign countries, without independently verifying the accuracy of such information. We also found that SSA's two primary tools for determining an individual's continuing eligibility--validation surveys and personal questionnaires--may be insufficient to ensure that only truly eligible individuals receive benefits. For example, SSA mails questionnaires to all beneficiaries living abroad (including totalized beneficiaries) at least once every 2 years requesting information on their eligibility status, but does not independently verify the responses on these questionnaires. These questionnaires rely on beneficiaries to accurately self-report important information that may affect their eligibility for benefits, with no additional verification. SSA does not currently have the ability to independently verify the responses on these questionnaires using computer matches or other forms of third-party verification, as it does with domestic beneficiaries. The agency's inability to conduct matches with foreign countries is partly because it does not capture beneficiaries' foreign social insurance numbers on its systems.

gao_GAO-11-670T

gao_GAO-11-670T_0

To help reduce or eliminate the long-term risk of flood damage to buildings and other structures insured by NFIP, FEMA has used a variety of mitigation efforts, such as elevation, relocation, and demolition. In response to the magnitude and severity of the losses from the 2005 hurricanes, Congress increased NFIP’s borrowing authority from Treasury to about $20.8 billion. Efforts to Reform NFIP’s Financial Structure Will Require Balancing Public Policy Goals We have previously identified four public policy goals for evaluating the federal role in providing natural catastrophe insurance: charging premium rates that fully reflect actual risks, limiting costs to taxpayers before and after a disaster, encouraging broad participation in natural catastrophe insurance encouraging private markets to provide natural catastrophe insurance. I will discuss the key areas that need to be addressed, actions that can be taken to help achieve these goals, and the trade-offs that would be required. First, the act requires FEMA to charge many policyholders less than full-risk rates to encourage program participation. Specifically, increasing rates could: result in premium rates that more fully reflected the actual risk of loss; decrease costs for taxpayers by reducing costs associated with postdisaster borrowing to pay claims; and encourage private market participation, because the rates would more closely approximate those that would be charged by private insurers. Limiting Taxpayer Costs Could Be Achieved by Increasing Premium Rates, but Further Mitigation Efforts Could Incur Up- Front Costs In order to reduce expenses to taxpayers that can result when NFIP borrows from Treasury, NFIP needs to be able to generate enough in premiums to pay its claims, even in years with catastrophic losses—a goal that is closely tied to that of eliminating subsidies and other reduced rates. Unlike private insurance companies, NFIP does not purchase reinsurance to cover catastrophic losses. Increasing mitigation efforts could further reduce flood damage to properties and communities, helping to put NFIP on a firmer financial footing and reducing taxpayers’ exposure. For example, FEMA has three separate flood mitigation programs. Outreach efforts would need to include areas with low and moderate flood risks to help ensure that the risk pool remained diversified. However, identifying ways to achieve that end has generally been elusive. FEMA’s Operational and Management Issues May Limit Progress in Achieving NFIP Goals As Congress weighs NFIP’s various financial challenges in its efforts to reform the program, it must also consider a number of operational and management issues that may limit efforts to meet program goals and impair NFIP’s stability. For example, most recently we have identified a number of issues impairing the program’s effectiveness in areas that include the reasonableness of payments to Write-Your-Own (WYO) insurers, the adequacy of financial controls over the WYO program, and the adequacy of oversight of non- WYO contractors. In our report, which reviews FEMA’s management of NFIP, we addressed, among other things, (1) the extent to which FEMA’s management practices affect the agency’s ability to meet NFIP’s mission and (2) lessons to be learned from the cancellation of FEMA’s most recent attempt to modernize NFIP’s flood insurance policy and claims processing system. Unless it takes further steps to address these management challenges, FEMA will be limited in its ability to manage NFIP’s operations or better ensure program effectiveness. DHS agreed with these recommendations and FEMA has begun to take steps to begin addressing some of them. Closing Comments Congressional action is needed to increase the financial stability of NFIP and limit taxpayer exposure. GAO previously identified four public policy goals that can provide a framework for crafting or evaluating proposals to reform NFIP. Third, Congress could encourage FEMA to continue to increase participation in the program by expanding targeted outreach efforts and limiting postdisaster assistance to those individuals who choose not to mitigate in moderate- and high-risk areas. For its part, FEMA needs to take action to address a number of fundamental operational and managerial issues that also threaten the stability of NFIP and have contributed to its remaining on GAO’s high-risk list. These include improving its strategic planning, human capital planning, intra-agency collaboration, records management, acquisition management, and information technology. While FEMA continues to make some progress in some areas, fully addressing these issues is vital to its long-term operational efficiency and financial stability. GAO-11-17. Financial Management: Improvements Needed in National Flood Insurance Program’s Financial Controls and Oversight. Federal Emergency Management Agency: Ongoing Challenges Facing the National Flood Insurance Program. Federal Emergency Management Agency: Improvements Needed to Enhance Oversight and Management of the National Flood Insurance Program. GAO/AIMD-00-21.3.1.

Why GAO Did This Study The National Flood Insurance Program (NFIP) has been on GAO's high-risk list since 2006, when the program had to borrow from the U.S. Treasury to cover losses from the 2005 hurricanes. The outstanding debt is $17.8 billion as of June 2011. This sizeable debt, plus operational and management challenges that GAO has identified at the Federal Emergency Management Agency (FEMA), which administers NFIP, have combined to keep the program on the high-risk list. NFIP's need to borrow to cover claims in years of catastrophic flooding has raised concerns about the program's long-term financial solvency. This testimony (1) discusses ways to place NFIP on a sounder financial footing in light of public policy goals for federal involvement in natural catastrophe insurance and (2) highlights operational and management challenges at FEMA that affect the program. In preparing this statement, GAO relied on its past work on NFIP, including a June 2011 report on FEMA's management of NFIP, which focused on its planning, policies, processes, and systems. The management review included areas such as strategic and human capital planning, acquisition management, and intra-agency collaboration. What GAO Found Congressional action is needed to increase the financial stability of NFIP and limit taxpayer exposure. GAO previously identified four public policy goals that can provide a framework for crafting or evaluating proposals to reform NFIP. These goals are: (1) charging premium rates that fully reflect risks, (2) limiting costs to taxpayers before and after a disaster, (3) encouraging broad participation in the program, and (4) encouraging private markets to provide flood insurance. Successfully reforming NFIP would require trade-offs among these often competing goals. For example, nearly one in four policyholders does not pay full-risk rates, and many pay a lower subsidized or "grandfathered" rate. Reducing or eliminating less than full-risk rates would decrease costs to taxpayers but substantially increase costs for many policyholders, some of whom might leave the program, potentially increasing postdisaster federal assistance. However, these trade-offs could be mitigated by providing assistance only to those who need it, limiting postdisaster assistance for flooding, and phasing in premium rates that fully reflect risks. Increasing mitigation efforts to reduce the probability and severity of flood damage would also reduce flood claims in the long term but would have significant up-front costs that might require federal assistance. One way to address this trade-off would be to better ensure that current mitigation programs are effective and efficient. Encouraging broad participation in the program could be achieved by expanding mandatory purchase requirements or increasing targeted outreach to help diversify the risk pool. Such efforts could help keep rates relatively low and reduce NFIP's exposure but would have to be effectively managed to help ensure that outreach efforts are broadly based. Encouraging private markets is the most difficult challenge because virtually no private market for flood insurance exists for most residential and commercial properties. FEMA's ongoing efforts to explore alternative structures may provide ideas that could be evaluated and considered. Several operational and management issues also limit FEMA's progress in addressing NFIP's challenges, and continued action by FEMA will be needed to help ensure the stability of the program. For example, in numerous past reports, GAO identified weaknesses in areas that include financial controls and oversight of private insurers and contractors, and made many recommendations to address them. While FEMA has made progress in addressing some areas, GAO's June 2011 report identified a number of management challenges facing the program, including strategic and human capital planning, records management, collaboration among offices, and financial and acquisition management. In this report, we also made a number of recommendations to address these challenges. FEMA agreed with the recommendations and discussed the steps being taken to address some of them. What GAO Recommends GAO has made numerous recommendations aimed at improving financial controls, oversight of private insurers and contractors, and FEMA's management of NFIP. DHS generally agreed with our recommendations.

gao_GAO-09-514

gao_GAO-09-514_0

In order to determine how these recommendations fit within IRS’s management and internal control structure, we compared the open recommendations and the issues that gave rise to them, to the control activities listed in the internal control standards and to the list of major factors and examples outlined in our Internal Control Management and Evaluation Tool. Over the years since we first began auditing IRS’s financial statements in fiscal year 1992, IRS has taken actions that enabled us to close over 200 of our financial management-related recommendations. At the same time, however, our audits continue to identify additional internal control issues, resulting in further recommendations for corrective action, including 16 new financial management-related recommendations resulting from our fiscal year 2008 financial audit. Status of Recommendations Based on the Fiscal Year 2008 Financial Statement Audit In July 2008, we issued a report on the status of IRS’s efforts to implement corrective actions to address financial management recommendations stemming from our fiscal year 2007 and prior year financial audits and other financial management-related work. While most of these can be addressed in the short term, a few, particularly those concerning IRS’s automated systems, are complex and will require several more years to fully and effectively address. Recommendations resulting from the information security issues identified in our annual audits of IRS’s financial statements are reported separately because of the sensitive nature of these issues. Open Recommendations Grouped by Control Activity Linking the open recommendations from our financial audits and other financial management-related work, and the issues that gave rise to them, to internal control activities that are central to IRS’s tax administration responsibilities provides insight regarding their significance. IRS collects trillions of dollars in taxes each year, a significant amount of which is collected in the form of checks and cash accompanied by tax returns and related information. IRS has made substantial progress in improving its financial management since its first financial audit, as evidenced by unqualified audit opinions on its financial statements for the past 9 years, resolution of several material internal control weaknesses and significant deficiencies, and actions taken resulting in the closure of hundreds of financial management recommendations. This progress has been the result of hard work by many individuals throughout IRS and sustained commitment of IRS leadership. Nonetheless, more needs to be done to fully address the agency’s continuing financial management challenges. Effective implementation of the recommendations we have made and continue to make through our financial audits and related work could greatly assist IRS in improving its internal controls and achieving sound financial management. IRS added corrective actions to address issues found during the review. Management Report: Improvements Are Needed to Enhance IRS’s Internal Controls and Operating Effectiveness (GAO-09-513R, June 2009) Because this is a recent recommendation, GAO did not obtain information on IRS’s status in addressing it. This, in turn, can significantly affect both the level of enforcement tax revenue collected and improper refunds disbursed.

Why GAO Did This Study In its role as the nation's tax collector, the Internal Revenue Service (IRS) has a demanding responsibility to annually collect trillions of dollars in taxes, process hundreds of millions of tax and information returns, and enforce the nation's tax laws. Since its first audit of IRS's financial statements in fiscal year 1992, GAO has identified a number of weaknesses in IRS's financial management operations. In related reports, GAO has recommended corrective actions to address those weaknesses. Each year, as part of the annual audit of IRS's financial statements, GAO makes recommendations to address any new weaknesses identified and follows up on the status of IRS's efforts to address the weaknesses GAO identified in previous years' audits. The purpose of this report is to (1) provide the status of audit recommendations and actions needed to fully address them and (2) demonstrate how the recommendations relate to control activities central to IRS's mission and goals. What GAO Found IRS has made significant progress in improving its internal controls and financial management since its first financial statement audit in 1992, as evidenced by 9 consecutive years of clean audit opinions on its financial statements, the resolution of several material internal control weaknesses, and actions resulting in the closure of over 200 financial management recommendations. This progress has been the result of hard work throughout IRS and sustained commitment at the top levels of the agency. However, IRS still faces financial management challenges. At the beginning of GAO's audit of IRS's fiscal year 2008 financial statements, 81 financial management-related recommendations from prior audits remained open because IRS had not fully addressed the issues that gave rise to them. During the fiscal year 2008 financial audit, IRS took actions that GAO considered sufficient to close 35. At the same time, GAO identified additional internal control issues resulting in 16 new recommendations. In total, 62 recommendations remain open. To assist IRS in evaluating and improving internal controls, GAO categorized the 62 open recommendations by various internal control activities, which, in turn, were grouped into three broad control categories. The continued existence of internal control weaknesses that gave rise to these recommendations represents a serious obstacle that IRS needs to overcome. Effective implementation of GAO's recommendations can greatly assist IRS in improving its internal controls and achieving sound financial management and can help enable it to more effectively carry out its tax administration responsibilities. Most can be addressed in the short term (the next 2 years). However, a few recommendations, particularly those concerning IRS's automated systems, are complex and will require several more years to effectively address.

gao_GAO-09-783T

gao_GAO-09-783T_0

For example, for pandemic planning purposes, essential functions may be more inclusive and extend longer than the 30-day traditional COOP-essential functions. Agencies Report Being in Various Stages of Planning for the Protection of Their Employees in the Event of a Pandemic Our survey questions for the 24 agencies were drawn from pandemic planning checklists and federal guidance to help agencies plan for protecting their employees during a pandemic. Nineteen agencies reported that they had identified essential functions at both the department and component levels that cannot be continued through telework in the event of pandemic influenza or, in the case of the Office of Personnel Management (OPM), the U.S. Agency for International Development (USAID), and the National Science Foundation (NSF), determined that all of their essential or important government functions could be performed remotely. Although many of the agencies’ pandemic influenza plans rely on social distancing strategies, primarily telework, to carry out the functions of the federal government in the event of a pandemic outbreak, only one agency, NSF stated that it tested its IT infrastructure to a great extent. On the other hand, five agencies reported testing their IT systems to little or not extent. Pandemic Preparations for Correctional Workers, Production Staff Responsible for Disbursing Federal Payments, and Air Traffic Controllers Are in Various Stages of Development BOP Has Taken Steps to Protect Correctional Workers in the Event of a Pandemic BOP, a component of DOJ, has the mission of protecting society by confining offenders in the controlled environments of prisons and community-based facilities that are safe, humane, cost-efficient, and appropriately secure and that provide work and other self-improvement opportunities to assist offenders in becoming law-abiding citizens. The Air Traffic Organization, FAA’s line of business responsible for the air traffic management services that air traffic controllers provide, had not directed facilities, such as its air route traffic control centers, to develop pandemic-specific plans or incorporate these pandemic plans into their all- hazards contingency plans. FAA recently completed a study examining the feasibility of air traffic controllers using powered air purifying respirators. Because of a number of concerns with using the respirators, such as noise, visibility, and comfort, FAA officials concluded that their long-term use during a pandemic appears to be impractical. The Office of Aviation Medicine’s policy on the use of antiviral medication for prophylactic use by on-duty controllers was still in draft as of early 2009. Monitoring and Reporting on Agencies’ Pandemic Workforce Protection Plans Could Improve Efforts to Protect Employees in the Event of a Pandemic The survey results from the 24 CFO Act agency pandemic coordinators, as well as information from the case study agencies, indicate that a wide range of pandemic planning activities are under way and that all of the agencies are taking steps to some degree to protect their workers in the event of a pandemic. Under the HSC’s Implementation Plan, DHS was charged with, among other things, monitoring and reporting to the Executive Office of the President on the readiness of departments and agencies to continue their operations while protecting their workers during an influenza pandemic. DHS officials said they were informed that they did not have to prepare a report. Concluding Observations and Prior Recommendations The spring 2009 outbreak of H1N1 influenza accentuates the responsibility of agencies to have pandemic plans that ensure their ability to continue operations while protecting their workers who serve the American public. In addition, there is no real monitoring mechanism in place to ensure that agencies’ workforce pandemic plans are complete. A monitoring process should be in place that would ensure that federal agencies are making progress in developing their plans to protect their workforce in the event of a pandemic and that agencies have the information and guidance they need to develop operational pandemic plans. To address this issue, our report recommended that the HSC request that the Secretary of Homeland Security monitor and report to the Executive Office of the President on the readiness of agencies to continue their operations while protecting their workers during an influenza pandemic. We also suggested that to help support its oversight responsibilities, the Congress may want to consider requiring DHS to report to it on agencies’ progress in developing and implementing their pandemic plans, including any key challenges and gaps in the plans. DHS commented that our recommendations would contribute to its future efforts to ensure that government entities are well prepared for what may come next.

Why GAO Did This Study As evidenced by the spring 2009 outbreak of the H1N1 virus, an influenza pandemic remains a real threat to the nation and the world and has the potential to shut down work critical to the smooth functioning of society. This testimony addresses (1) the extent to which federal agencies have made pandemic plans to protect workers who cannot work remotely and are not first responders; (2) the pandemic plans selected agencies have for certain occupations performing essential functions other than first response; and (3) the opportunities to improve agencies' workforce pandemic plans. The issues discussed in the testimony are based on the GAO report, Influenza Pandemic: Increased Agency Accountability Could Help Protect Federal Employees Serving the Public in the Event of a Pandemic ( GAO-09-404 , June 12, 2009). In this report, GAO recommended that the Homeland Security Council (HSC) request that the Department of Homeland Security (DHS) monitor and report to the Executive Office of the President on the readiness of agencies to continue operations while protecting their employees in the event of a pandemic. To help carry out its oversight role, the Congress may want to consider requiring a similar report from DHS. The HSC noted that it will give serious consideration to the findings and recommendations in the report, and DHS said the report will contribute to its efforts to ensure government entities are well prepared for what may come next. What GAO Found GAO surveyed the 24 agencies employing nearly all federal workers to gain an overview of governmentwide pandemic influenza preparedness efforts and found that a wide range of pandemic planning activities are under way. However, as of early 2009, several agencies reported that they were still developing their pandemic plans and their measures to protect their workforce. For example, several agencies had yet to identify essential functions during a pandemic that cannot be performed remotely. In addition, although many of the agencies' pandemic plans rely on telework to carry out their functions, five agencies reported testing their information technology capability to little or no extent. To get a more in-depth picture of agency planning, GAO selected three case study agencies that represent essential occupations other than first response that cannot be performed remotely. The three case study occupations--correctional workers, production staff disbursing federal checks, and air traffic controllers--showed differences in the degree to which their individual facilities had operational pandemic plans. For example, the Bureau of Prisons' correctional workers had only recently been required to develop pandemic plans for their correctional facilities. Nevertheless, the Bureau of Prisons has considerable experience limiting the spread of infectious disease within its correctional facilities and had also made arrangements for antiviral medications for a portion of its workers and inmates. The Department of the Treasury's Financial Management Service, which has production staff involved in disbursing federal payments such as Social Security checks, had pandemic plans for its four regional centers and had stockpiled personal protective equipment such as respirators, gloves, and hand sanitizers at the centers. Air traffic control management facilities, where air traffic controllers work, had not yet developed facility pandemic plans or incorporated pandemic plans into their all-hazards contingency plans. The Federal Aviation Administration had recently completed a study to determine the feasibility of the use of respirators by air traffic controllers and concluded that their long-term use during a pandemic appears to be impractical. There is no mechanism in place to monitor and report on agencies' progress in developing workforce pandemic plans. Under the National Strategy for Pandemic Influenza Implementation Plan, DHS was required to monitor and report on the readiness of departments and agencies to continue operations while protecting their employees during an influenza pandemic. The HSC, however, informed DHS in late 2006 or early 2007 that no specific reports on this were required to be submitted. Rather, the HSC requested that agencies certify to the council that they were addressing in their plans the applicable elements of a pandemic checklist in 2006 and again in 2008. This process did not include any assessment or reporting on the status of agency plans. Given agencies' uneven progress in developing their pandemic plans, monitoring and reporting would enhance agencies' accountability for protecting their employees in the event of a pandemic.

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gao_GAO-15-363_0

FCC has primary responsibility for regulating broadband. FCC adopted a transparency rule requiring ISPs to provide consumers with information on their services’ performance characteristics. However, the information available to consumers is not standardized, and some stakeholders stated that this lack of standardization makes it difficult for consumers to compare broadband services. However, the reports are not targeted toward consumers, and stakeholders stated that consumers might not be aware of the information. In addition, ISPs may provide speed test tools However, the information from speed tests may not provide consumers with the information they need to understand what factors are affecting their broadband performance. Studies we reviewed and stakeholders we spoke with noted that speed tests can be affected by a variety of factors, which makes it difficult for consumers to identify what specific problem is affecting their broadband performance. FCC collaborated with industry and public interest stakeholders when designing the MBA program. FCC Has Taken Steps to Evaluate Its Efforts to Inform Consumers, but Could Enhance Its Performance Information and Measures FCC has taken steps to determine whether its efforts to provide consumers with broadband performance information—such as the transparency rule and MBA program—are effective and meeting consumers’ needs. ), and FCC tried to address this issue through the transparency rule. FCC’s Ability to Evaluate Its Efforts Is Limited by a Lack of Useful Performance Information and Relevant Performance Goals and Measures FCC Obtains Inconsistent and Incomplete Performance Information from Stakeholder Comments and Consumer Complaints We have previously found that leading organizations that have progressed toward results-oriented management use performance information as a basis for decision-making and that the usefulness of performance information can be affected by its completeness, accuracy, consistency, validity, and credibility, among other things. Although stakeholder comments and consumer complaints can provide FCC with valuable insights on topics of interest to the commission, the information FCC obtains from these sources lacks some of the characteristics of useful performance information, such as consistency and completeness. Consequently, several Open Internet comments we reviewed filed by ISPs and industry associations questioned FCC’s reliance on complaints as a basis for decision-making. FCC Lacks Performance Goals and Measures to Monitor Its Efforts to Inform Consumers FCC’s current strategic plan includes strategic objectives related to informing consumers about broadband networks—reflecting its position that informed consumers help facilitate competition in the broadband market. More Americans are accessing broadband and relying on their broadband service for an increasingly diverse range of uses, including education, medicine, public safety, and entertainment. Recommendations for Executive Action To help FCC determine whether its efforts to provide consumers with broadband performance information are effective and meeting consumers’ needs, and whether additional efforts—such as a standardized label suggested by FCC’s transparency working group— could benefit consumers, FCC should take the following two actions: 1. conduct or commission research on the effectiveness of FCC’s efforts to provide consumers with broadband performance information and make the results of this research publicly available, and 2. establish performance goals and measures under the agency’s relevant strategic objectives that allow it to monitor and report on the impact and effectiveness of its efforts. Appendix I: Objectives, Scope, and Methodology The objectives of this report were to examine (1) what information is currently available to consumers regarding broadband performance and the limitations of this information, if any, and (2) how does the Federal Communications Commission (FCC) evaluate its efforts to provide consumers with broadband performance information? We also conducted a literature review to identify articles and studies relevant to broadband performance measurement and disclosure of broadband performance information to consumers. To determine how FCC evaluates its efforts to provide consumers with broadband performance information, we interviewed FCC officials regarding their efforts to provide consumers with broadband performance information and evaluate and monitor the effectiveness of these efforts and reviewed relevant FCC documents, including its strategic and performance plans, consumer surveys, and resources available to consumers on FCC’s website.

Why GAO Did This Study Broadband is increasingly seen as an essential communications service, with applications in education, medicine, public safety, and entertainment. However, consumers can experience broadband performance problems. FCC, which has primary responsibility for regulating broadband, has taken steps to measure broadband performance and to require that ISPs give consumers information about the performance of their services. GAO was asked to review issues related to broadband performance information. This report examines (1) broadband performance information available to consumers and its limitations, if any, and (2) FCC's actions to evaluate its efforts to provide consumers with broadband performance information. To address these objectives, GAO reviewed FCC proceedings; conducted a literature review; analyzed comments filed with FCC regarding broadband performance information; and interviewed FCC officials and various stakeholders from industry and public interest groups. What GAO Found Consumers can access broadband performance information from several sources, including Internet service providers (ISP), online speed tests, and the Federal Communications Commission (FCC); however, the information has some limitations. For example: ISP information: FCC's transparency rule requires ISPs to disclose broadband performance information, but ISPs' disclosures vary, and some stakeholders said that the lack of standardization of disclosures can make it difficult for consumers to compare broadband services. Some ISPs, however, question the need and benefit of standardized disclosures. FCC recently adopted enhancements to the transparency rule, such as specifying what information ISPs must disclose, and FCC is considering potential disclosure formats. Speed tests: Consumers can use information from these tests to verify their broadband speeds. However, speed tests can be affected by many factors and may not detect congestion affecting a specific website. Thus, it can be difficult for consumers to identify the cause of their broadband performance problems. FCC reports: Through the Measuring Broadband America (MBA) program, FCC tests ISPs' networks and compares their actual and advertised speeds in an annual report . However, the report is not targeted toward consumers, and stakeholders stated that consumers may not be aware of the report. FCC has taken steps to evaluate its efforts to provide consumers with broadband performance information, such as its transparency rule and MBA program; however, FCC's ability to evaluate its efforts is limited by a lack of useful performance information and relevant performance goals and measures. For instance, while FCC obtains information about the effectiveness of its efforts from stakeholders' comments and consumers' complaints, FCC has not sought performance information from more objective sources, such as consumer research—as has been done by other government entities. Further, although consumer complaints can provide FCC with valuable insights on topics of interest to the commission, FCC has acknowledged that complaints may not provide a complete picture of consumer's information needs and some industry stakeholders have questioned FCC's reliance on complaints as a basis for making decisions. In addition, although FCC's strategic plan includes strategic objectives related to informing consumers about broadband networks, FCC lacks performance goals and measures to monitor the impact and effectiveness of its efforts to provide consumers with broadband performance information. GAO has previously reported that critical elements of effective performance management include information that is complete and consistent, with performance measures linked to goals. Without such information and measures, FCC cannot be assured that its efforts to provide consumers with broadband performance information are effective and meeting consumers' needs. What GAO Recommends FCC should take additional steps to evaluate its efforts to provide consumers with broadband performance information. This should include: (1) conducting or commissioning research on the effectiveness of its efforts and making the results publicly available, and (2) establishing performance goals and measures that allow FCC to monitor and report on these efforts. FCC concurred with GAO's recommendations.

gao_GAO-10-45

gao_GAO-10-45_0

The swiped transaction provides more information to the issuer authorizing the sale, and issuers and card networks consider such transactions to be less risky because the card was present. Fees Merchants Pay for Accepting Credit Cards Have Increased over Time and May Be Related to Competition for Issuers in the Credit Card Market The amounts merchants pay to accept credit cards is increasing, as Federal Reserve data indicate that consumers increasingly use credit cards to make payments, but also because network competition in the credit card market may be contributing to rising interchange fees. However, concerns remain over whether the level of interchange fee rates reflect the ability of some card networks to exercise market power by raising prices without suffering competitive effects, or whether these fees are the result of the costs that issuers incur to maintain their credit card programs. Issuers, particularly smaller issuers such as community banks and credit unions, report relying on interchange fees as a significant source of revenue for their credit card operations, and analyses by banking regulators indicate that card activities traditionally have been among the most profitable types of activities for large banks. However, consumers who do not use credit cards may be made worse off by paying higher prices for goods and services, as merchants pass on their increasing card acceptance costs to their customers. However, representatives of the large merchants with whom we spoke with said that their increased payment costs had not led to a corresponding increase in sales, particularly for cards with higher interchange fees such as rewards cards. In addition, these merchants reported that their ability to negotiate lower payment costs was limited by their inability to refuse popular network cards as well as network rules for card acceptance, which, among other things, preclude merchants from adding surcharges for credit card payments or rejecting higher-cost cards. Finally, although interchange fees are not regulated at the federal level in the United States, concerns regarding card costs have prompted DOJ investigations and private lawsuits, and authorities in more than 30 countries have taken or are considering taking actions to address such fees and other card network practices. Merchants Reported Benefits from Credit Card Acceptance Include Increased Sales, Faster Payments, and Lower Labor Costs Merchants can receive a variety of benefits—primarily, increased sales— from accepting credit card payments. Preferred treatment: Merchants may not direct consumers away from or to a certain network’s cards. These options generally have involved one or more of the following approaches: (1) setting or limiting interchange fees; (2) requiring their disclosure to consumers; (3) prohibiting card networks from imposing rules on merchants, such as those that limit merchants’ ability to discriminate among different types of cards or levy a surcharge for credit cards; and (4) granting antitrust waivers to allow merchants and issuers to voluntarily negotiate rates. Both RBA and the European Commission have used this approach, and regulators in other countries have worked with Visa and MasterCard to voluntarily reduce their interchange rates. If interchange fees for merchants were lowered, consumers could benefit from lower prices for goods and services, but proving such an effect is difficult, and consumers may face higher costs for using their cards. Agency Comments and Our Evaluation We provided a draft of this report to the Department of Justice, the Board of Governors of the Federal Reserve, the Federal Trade Commission, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision for their review and comments. Appendix I: Objectives, Scope, and Methodology Our objectives were to describe (1) how the fees merchants pay for accepting credit cards have changed over time and the factors affecting the competitiveness of the credit card market, (2) how credit card competition has affected consumers, (3) the benefits and costs to merchants of accepting cards and their ability to negotiate those costs, and (4) the potential impact of various options intended to lower merchant card fee costs.

Why GAO Did This Study When a consumer uses a credit card to make a purchase, the merchant does not receive the full purchase amount because a certain portion of the sale is deducted to compensate the merchant's bank, the bank that issued the card, and the card network that processes the transaction. The level and growth of these rates have become increasingly controversial. The 2009 Credit Card Accountability, Responsibility, and Disclosure Act directed GAO to review (1) how the fees merchants pay have changed over time and the factors affecting the competitiveness of the credit card market, (2) how credit card competition has affected consumers, (3) the benefits and costs to merchants of accepting cards and their ability to negotiate those costs, and (4) the potential impact of various options intended to lower merchant costs. To address these objectives, GAO reviewed and analyzed relevant studies, literature, and data on the card payment market and interviewed industry participants, including large and small card issuers (including community banks and credit unions), card processors, card networks, large merchants representing a significant proportion of retail sales, and small merchants from a variety of industries, and academic experts. GAO provided a draft of this report to the Department of Justice, the Federal Trade Commission, and federal banking regulators, and we incorporated their technical comments where appropriate. What GAO Found According to Federal Reserve analysis, total costs of accepting credit cards for merchants have risen over time as consumers use cards more. Part of these increased costs also may be the result of how Visa and MasterCard competed to attract and retain issuers to offer cards by increasing the number of interchange fee categories and the level of these rates. Concerns remain over whether the level of these rates reflects market power--the ability of some card networks to raise prices without suffering competitive effects--or whether these fees reflect the costs that issuers incur to maintain credit card programs. Issuers, particularly smaller issuers such as community banks and credit unions, report relying on interchange fees as a significant source of revenue for their credit card operations, and analyses by banking regulators indicate such operations traditionally have been among the most profitable types of activities for large banks. Some consumers have benefited from competition in the credit card market, as cards often have no annual fees, lower interest rates than they did years ago, and greater rewards. However, consumers who do not use credit cards may be paying higher prices for goods and services, as merchants pass on their increasing card acceptance costs to all of their customers. For merchants, the benefits of accepting credit cards include increased sales and reduced labor costs. However, representatives from some of the large merchants with whom we spoke said their increased payment costs outstripped any increased sales. These merchants also reported that their inability to refuse popular cards and network rules (which prevent charging more for credit card than for cash payments or rejecting higher-cost cards) limited their ability to negotiate payment costs. Interchange fees are not federally regulated in the United States, but concerns about card costs have prompted federal investigations and private lawsuits, and authorities in more than 30 countries have taken or are considering taking actions to address such fees and other card network practices. Proposals for reducing interchange fees in the United States or other countries have included (1) setting or limiting interchange fees, (2) requiring their disclosure to consumers, (3) prohibiting card networks from imposing rules on merchants that limit their ability to steer customers away from higher-cost cards, and (4) granting antitrust waivers to allow merchants and issuers to voluntarily negotiate rates. If these measures were adopted here, merchants would benefit from lower interchange fees. Consumers would also benefit if merchants reduced prices for goods and services, but identifying such savings would be difficult. Consumers also might face higher card use costs if issuers raised other fees or interest rates to compensate for lost interchange fee income. Each of these options also presents challenges for implementation, such as determining at which rate to set, providing more information to consumers, or addressing the interests of both large and small issuers and merchants in bargaining efforts.

gao_GAO-10-531

gao_GAO-10-531_0

Although Trea Undertook a Deliberative Process in Deciding to E TARP, It Could Strengthen Coordination The Decision to Extend TARP Involved Terminating and Winding Down Some Programs and Making New Commitments in Select Areas On December 9, 2009, the Secretary announced that he was extending Treasury’s authority under EESA to purchase, commit to purchase, or commit to guarantee troubled assets until October 3, 2010 (TARP expiration date). Nevertheless, the extension has formally moved TARP from a program with a heavy focus on capitalizing institutions and stabilizing securitization markets to one focused primarily on mitigating preventable foreclosures and improving financial conditions for small banks and small businesses. Treasury Could Strengthen Its Interagency Coordination and Consultation As part of a robust analytic framework for decision making, we recommended that the Secretary coordinate with the Federal Reserve and FDIC to help ensure that the decision to extend or terminate TARP was considered in a broader market context. However, the extent of Treasury’s coordination with FDIC, while sufficient for the decision to extend TARP, should be enhanced and formalized for any upcoming decisions that would benefit from interagency collaboration. Treasury Considered a Number of Qualitative and Quantitative Factors for Key Decisions Associated with the TARP Extension Treasury considered a number of qualitative and quantitative factors for key decisions associated with the TARP extension. Important factors considered for the extension of TARP centered on ongoing weaknesses in key areas of the economy. Treasury underscored that while analysis was possible on the need for or success of individual programs, the fragile state of the economy and remaining downside risks were an ongoing source of uncertainty. Considering this uncertainty, Treasury wanted to extend TARP through October 2010 in order to retain resources to respond to financial instability. Treasury could strengthen its analytical framework by identifying clear objectives for small business programs and explaining how relevant indicators motivated TARP program decisions. Appendix I: Scope and Methodology The objectives of this report are to determine (1) the process the Department of the Treasury (Treasury) used to decide to extend the Troubled Asset Relief Program (TARP) and the extent of coordination with relevant agencies and (2) the analytical framework and quantitative indicators Treasury used to decide to extend TARP. In particular, we reviewed four public documents Treasury identified as central to its efforts to describe and communicate the framework it used to make decisions related to the extension of TARP to Congress and the public (1) the September 2009 report “The Next Phase of Government Financial Stabilization and Rehabilitation Policies”; (2) the December 9, 2009, letter to Congressional leadership certifying the extension of TARP; (3) Secretary Geithner’s December 10 testimony to the Congressional Oversight Panel; and (4) the “Management Discussion and Analysis” portion of the fiscal year 2009 Office Financial Stability Agency Financial Report.

Why GAO Did This Study The Department of the Treasury's (Treasury) authority to purchase, commit to purchase, or commit to guarantee troubled assets was set to expire on December 31, 2009. This important authority has allowed Treasury to undertake a number of programs to help stabilize the financial system. In December 2009, the Secretary of the Treasury extended the authority to October 3, 2010. In our October 2009 report on the Troubled Asset Relief Program (TARP), GAO suggested as part of a framework for decision making that Treasury should coordinate with relevant federal agencies, communicate with Congress and the public, and link the decisions related to the next phase of the TARP program to quantitative analysis. This report discusses (1) the process Treasury used to decide to extend TARP and the extent of coordination with relevant agencies and (2) the analytical framework and quantitative indicators Treasury used to decide to extend TARP. To meet the report objectives, GAO reviewed key documents related to the decision to extend TARP, interviewed agency officials and analyzed financial data. What GAO Found The extension of TARP involved winding down programs while extending others, transforming the program to one focused primarily on preserving homeownership, and improving financial conditions for small banks and businesses. While the extension of TARP was solely the Treasury's decision, it was taken after significant deliberation and involved interagency coordination. Although sufficient for the decision to extend, the extent of coordination could be enhanced and formalized for any upcoming decisions that would benefit from interagency collaboration, especially with the Federal Deposit Insurance Corporation (FDIC). Treasury considered a number qualitative and quantitative factors for key decisions associated with the TARP extension. Important factors considered for the extension of new commitments centered on ongoing weaknesses in key areas of the economy. Treasury underscored that while analysis was possible on the needs or success of individual programs, the fragile state of the economy and remaining downside risks were difficult to know with certainty. Considering this uncertainty, Treasury wanted to extend TARP through October 2010 in order to retain resources to respond to financial instability. Going forward, Treasury could strengthen its current analytical framework by identifying clear objectives for small business programs and providing explicit linkages between TARP program decisions and the quantitative analysis or indicators used to motivate those decisions. What GAO Recommends GAO recommends that the Secretary of the Treasury (1) formalize coordination with FDIC for future TARP decisions and (2) improve the transparency and analytical basis for TARP program decisions. Treasury generally agreed with our recommendations.

gao_GAO-16-781

gao_GAO-16-781_0

Health Concerns Related to the Use of Burn Pits Although burn pits help base commanders to manage waste, they also produce smoke and harmful emissions that military and other health professionals believe may result in acute and chronic health effects for those exposed. DOD’s Report on the Disposal of Covered Waste in Burn Pits Generally Addressed Mandate Requirements On the basis of our assessment of DOD’s March 2016 burn pit report, we found that it generally addressed the requirements in section 313 of the NDAA for Fiscal Year 2015. Central Command, U.S. Africa Command, U.S. European Command, U.S. Pacific Command, and U.S. Southern Command—to provide information on the requirements in section 313, which included providing information on the policies and procedures related to the disposal of covered waste in burn pits during contingency operations. Section 313 contains seven specific reporting elements that DOD was required to address in its report. We determined, based on our assessment, that DOD’s report fully addressed four of the seven reporting requirements and partially addressed the remaining three. Table 1 summarizes our analysis of the extent to which DOD’s report addressed each of the specific requirements in section 313. For example, we assessed reporting requirement 3 to be partially addressed because DOD’s report included guidance used to distinguish categories of waste but did not include information about whether the categories were appropriately and clearly distinguished in environmental surveys and assessments. The Office of the Secretary of Defense tasked lower-level commands, including each of the military services, the Joint Staff, and the combatant commands, to provide information for the report. DOD Established Guidance to Meet Applicable Law, but Most Combatant Commands Have Not Issued Policies and Procedures for Implementing DOD Guidance on Burn Pit Use While DOD issued guidance on burn pit use, as required by law, it is not clear how the guidance will be implemented in future contingency operations because the overseas combatant commands, except for CENTCOM, have not issued related policies and procedures for implementing this guidance. As previously stated, in response to section 317 of the National Defense Authorization Act of Fiscal Year 2010, in 2011 DOD issued DOD Instruction 4715.19. This instruction defines covered waste as hazardous waste, medical waste, and other items including tires, treated wood, batteries, and plastics, among other things. CENTCOM is the only overseas geographic combatant command that has established policies and procedures that govern waste management during contingency operations, including implementing the DOD burn pit guidance. According to officials from the other overseas geographic combatant commands, their commands have not developed similar policies and procedures because they do not utilize burn pits and there is an absence of current contingency operations in their respective areas of responsibility. Nonetheless, while most of the overseas geographic commands may not currently be involved in contingency operations within their areas of responsibility, waste disposal would likely be required if such operations arise in the future, and the use of burn pits would be one option for disposing of waste. However, the instruction does not specify how combatant commanders will ensure compliance with requirements in the instruction, including which organizations within the commands would be responsible for notifications, or how they would monitor and report on the use of any burn pits. DOD has not Fully Assessed the Health Risks of Burn Pits The impacts from exposing individuals to burn pit emissions are not well understood, and DOD has not fully assessed these health risks. However, the officials also stated that DOD does not have enough data to confirm whether direct exposure to burn pits causes long-term health issues. Although DOD and the Department of Veterans Affairs have commissioned studies to enhance their understanding of airborne hazards, including burn pit emissions, the current lack of data on emissions specific to burn pits limits DOD’s ability to fully assess potential health impacts on servicemembers and other base personnel, such as contractors. For example, in a 2011 study that was contracted by the Department of Veterans Affairs, the Institute of Medicine stated that it was unable to determine whether long-term health effects are likely to result from burn pit exposure due to inadequate evidence of an association. Moreover, although DOD and the Department of Veterans Affairs have commissioned studies to enhance their understanding of airborne hazards during deployments, given that DOD may have to use burn pits in future contingency operations, as allowed under current policies, ensuring that research efforts specifically examine the relationship between direct, individual exposure to burn pit emissions and long-term health issues could help improve the understanding and potentially minimize risks related to such exposure. In its written comments, DOD concurred with our first recommendation and partially concurred with our second and third recommendations.

Why GAO Did This Study Burn pits help base commanders manage waste generated by U.S. forces overseas, but they also produce harmful emissions that military and other health professionals believe may result in chronic health effects for those exposed. Section 313 of the NDAA for FY 2015 requires the Secretary of Defense to review DOD compliance with law and guidance regarding the disposal of covered waste in burn pits. DOD submitted a report on the results of its review in March 2016. Section 313 also includes a provision for GAO to assess DOD's report and its compliance with applicable DOD instruction and law. This report evaluates the extent to which (1) DOD's report addressed the elements required in section 313; (2) DOD, including combatant commands, issued guidance for burn pit use that addresses applicable legislative requirements; and (3) DOD has assessed any health risks of burn pit use. GAO compared DOD's report to elements required in section 313, reviewed policies and procedures and interviewed DOD officials. What GAO Found In assessing the Department of Defense's (DOD) March 2016 report to Congress on the use of burn pits, GAO found that it generally addressed the requirements in section 313 of the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2015. To complete this report, DOD tasked the military services, the Joint Staff, and the overseas combatant commands to provide information on the requirements in the mandate, including policies and procedures related to the disposal of covered waste (including certain types of hazardous waste, medical waste, and items such as tires, treated wood, and batteries) in burn pits during contingency operations. GAO found that DOD's report fully addressed four of the seven reporting requirements and partially addressed the remaining three. For example, the report addressed who is responsible for ensuring compliance with the legislative requirements, but partially addressed whether the waste categories are appropriately and clearly distinguished in surveys and assessments. Although DOD established guidance to meet applicable legislative requirements through the issuance of DOD Instruction 4715.19, U.S. Central Command is the only overseas geographic combatant command that has established complementary policies and procedures for implementing this guidance. The instruction applies to all the combatant commands, but it does not specify how combatant commanders will ensure compliance with requirements in the instruction. Officials from the other geographic combatant commands stated that their commands have not developed similar policies and procedures because they do not utilize burn pits and there is an absence of current contingency operations in their respective areas of responsibility. Nonetheless, while most of the overseas geographic commands may not currently be involved in contingency operations within their areas of responsibility, waste disposal would likely be required if such operations arise in the future, and the use of burn pits would be one option for disposing of waste. Establishing policies and procedures would better position these commands to implement DOD's instruction. The effects of exposing individuals to burn pit emissions are not well understood, and DOD has not fully assessed these health risks. DOD officials stated that there are short-term effects from being exposed to toxins from the burning of waste. However, the officials also stated that DOD does not have enough data to confirm whether direct exposure to burn pits causes long-term health issues. Although DOD and the Department of Veterans Affairs have commissioned studies to enhance their understanding of burn pit emissions, the current lack of data on emissions specific to burn pits and related individual exposures limits efforts to characterize potential long-term health impacts on servicemembers and other base personnel. A 2011 report by the Institute of Medicine outlined the data needed for assessing exposures and potential related health risks, and the Department of Veterans Affairs has established a registry to collect some information. However, DOD has not undertaken data-gathering and research efforts to specifically examine this relationship to fully understand any associated health risks. What GAO Recommends GAO made three recommendations to include establishing policies and procedures and ensuring research specifically examines the relationship between direct burn pit exposure and long-term health issues. DOD concurred with the first recommendation and partially concurred with the second, citing research it has or has plans to conduct. GAO agrees this research contributes to general understanding but continues to believe more specific research is needed.

gao_GAO-08-514T

gao_GAO-08-514T_0

Background DOD and VA offer health care benefits to active duty servicemembers and veterans, among others. As part of the Army’s Medical Action Plan, the Army has developed a new organizational structure—Warrior Transition Units—for providing an integrated continuum of care for servicemembers who generally require at least 6 months of treatment, among other factors. The military also provides legal counsel to servicemembers in the disability evaluation process. Based on the results of this exercise, DOD and VA implemented the selected pilot design using live cases at three Washington, D.C.-area military treatment facilities including Walter Reed Army Medical Center in November 2007. The Army Continues to Increase Support to Servicemembers Undergoing Medical Treatment and Disability Evaluation, but Faces Challenges Reaching Stated Goals The Army has made strides increasing key staff positions in support of servicemembers undergoing medical treatment as well as disability evaluation, but faces a number of challenges to achieving or maintaining stated goals. Although the Army has made significant progress in staffing its Warrior Transition Units, several challenges remain, including hiring medical staff in a competitive market, replacing temporarily borrowed personnel with permanent staff, and getting eligible servicemembers into the units. Despite Hiring Efforts, Army Faces Challenges Providing Sufficient Staff to Help Servicemembers Navigate the Disability Evaluation Process Injured and ill servicemembers who must undergo a fitness for duty assessment and disability evaluation rely on the expertise and support of several key staff—board liaisons, legal personnel, and board physicians— to help them navigate the process. With respect to board liaisons, the Army has expanded hiring efforts and met its goals for reducing caseloads at most treatment facilities, but not at some of the facilities with the most servicemembers in the process. In August 2007, the Army established an average caseload target of 30 servicemembers per board liaison. As of February 2008, the Army had expanded the number of board liaisons by about 22 percent. 2.) DOD-VA Joint Disability Evaluation Process Pilot Geared Toward Quick Implementation, but Pilot Evaluation Plans Lack Key Elements DOD and VA have joined together to quickly pilot a streamlined disability evaluation process, but evaluation plans currently lack key elements. In August 2007, DOD and VA conducted an intensive 5-day “table top” exercise to evaluate the relative merits of four potential pilot alternatives. Though the exercise yielded data quickly, there were trade-offs in the nature and extent of data that could be obtained in that time frame. In November 2007, DOD and VA jointly initiated a 1-year pilot in the Washington, D.C. area using live cases, although DOD and VA officials told us they may consider expanding the pilot to other locations beyond the current sites around July 2008. However, pilot results may be limited at that and other critical junctures, and pilot evaluation plans currently lack key elements, such as criteria for expanding the pilot. Further, pilot planners have not laid out an approach for measuring the pilot’s performance on key metrics— including timeliness and accuracy of decisions—against the current process. Selection of the comparison group cases is a significant decision, because it will help DOD and VA determine the pilot’s impact, compared with the current process, and help planners identify needed corrections and manage for success. Concluding Observations Over the past year, the Army has made substantial progress toward improving care for its servicemembers.

Why GAO Did This Study In February 2007, a series of Washington Post articles about conditions at Walter Reed Army Medical Center highlighted problems in the Army's case management of injured servicemembers and in the military's disability evaluation system. These deficiencies included a confusing disability evaluation process and servicemembers in outpatient status for months and sometimes years without a clear understanding about their plan of care. These reported problems prompted various reviews and commissions to examine the care and services to servicemembers. In response to problems at Walter Reed and subsequent recommendations, the Army took a number of actions and DOD formed a joint DOD-VA Senior Oversight Committee. This statement updates GAO's September 2007 testimony and is based on ongoing work to (1) assess actions taken by the Army to help ill and injured soldiers obtain health care and navigate its disability evaluation process; and to (2) describe the status, plans, and challenges of DOD and VA efforts to implement a joint disability evaluation system. GAO's observations are based largely on documents obtained from and interviews with Army, DOD, and VA officials. The facts contained in this statement were discussed with representatives from the Army, DOD, and VA. What GAO Found Over the past year, the Army significantly increased support for servicemembers undergoing medical treatment and disability evaluations, but challenges remain. To provide a more integrated continuum of care for servicemembers, the Army created a new organizational structure--the Warrior Transition Unit--in which servicemembers are assigned key staff to help manage their recovery. Although the Army has made significant progress in staffing these units, several challenges remain, including hiring medical staff in a competitive market, replacing temporarily borrowed personnel with permanent staff, and getting eligible servicemembers into the units. To help servicemembers navigate the disability evaluation process, the Army is increasing staff in several areas, but gaps and challenges remain. For example, the Army expanded hiring of board liaisons to meet its goal of 30 servicemembers per liaison, but as of February 2008, the Army did not meet this goal at 11 locations that support about half of servicemembers in the process. The Army faces challenges hiring enough liaisons to meet its goals and enough legal personnel to help servicemembers earlier in the process. To address more systemic issues, DOD and VA promptly designed and are now piloting a streamlined disability evaluation process. In August 2007, DOD and VA conducted an intensive 5-day exercise that simulated alternative pilot approaches using previously-decided cases. This exercise yielded data quickly, but there were trade-offs in the nature and extent of data that could be obtained in that time frame. The pilot began with "live" cases at three treatment facilities in the Washington, D.C. area in November 2007, and DOD and VA may consider expanding the pilot to additional sites around July 2008. However, DOD and VA have not finalized their criteria for expanding the pilot beyond the original sites and may have limited pilot results at that time. Significantly, current evaluation plans lack key elements, such as an approach for measuring the performance of the pilot--in terms of timeliness and accuracy of decisions--against the current process, which would help planners manage for success of further expansion.

gao_GAO-04-1093T

gao_GAO-04-1093T_0

USTR’s Special 301 reports on the adequacy and effectiveness of intellectual property protection around the world demonstrate that, from a U.S. perspective, intellectual property protection is weak in developed as well as developing countries and that the willingness of countries to address intellectual property issues varies greatly. Agencies Undertake Three Types of IPR Efforts The efforts of U.S. agencies to protect U.S. intellectual property overseas fall into three general categories—policy initiatives, training and technical assistance, and U.S. law enforcement actions. U.S. Law Enforcement Efforts A small number of agencies are involved in enforcing U.S. intellectual property laws, and the nature of these activities differs from other U.S. government actions related to intellectual property protection. Several Mechanisms Coordinate IPR Efforts, but Their Usefulness Varies Several interagency mechanisms exist to coordinate overseas intellectual property policy initiatives, development and assistance activities, and law enforcement efforts, although these mechanisms’ level of activity and usefulness varies. A specialized subcommittee is central to conducting the Special 301 review and determining the results of the review. National Intellectual Property Law Enforcement Coordination Council The National Intellectual Property Law Enforcement Coordination Council (NIPLECC), created by the Congress in 1999 to coordinate domestic and international intellectual property law enforcement among U.S. federal and foreign entities, seems to have had little impact. Weak Enforcement Overseas The efforts of U.S. agencies have contributed to the establishment of strengthened intellectual property legislation in many foreign countries, however, the enforcement of intellectual property rights remains weak in many countries, and U.S. government and industry sources note that improving enforcement overseas is now a key priority. Challenges to U.S. Efforts In addition, U.S. efforts confront numerous challenges. Many economic factors complicate and challenge U.S. and foreign governments’ efforts, even in countries with the political will to protect intellectual property. This is a work of the U.S. government and is not subject to copyright protection in the United States.

Why GAO Did This Study Although the U.S. government provides broad protection for intellectual property, intellectual property protection in parts of the world is inadequate. As a result, U.S. goods are subject to piracy and counterfeiting in many countries. A number of U.S. agencies are engaged in efforts to improve protection of U.S. intellectual property abroad. This testimony, based on a recent GAO report, describes U.S agencies' efforts, the mechanisms used to coordinate these efforts, and the impact of these efforts and the challenges they face. What GAO Found U.S. agencies undertake policy initiatives, training and assistance activities, and law enforcement actions in an effort to improve protection of U.S. intellectual property abroad. Policy initiatives include assessing global intellectual property challenges and identifying countries with the most significant problems--an annual interagency process known as the "Special 301" review--and negotiating agreements that address intellectual property. In addition, many agencies engage in training and assistance activities, such as providing training for foreign officials. Finally, a small number of agencies carry out law enforcement actions, such as criminal investigations involving foreign parties and seizures of counterfeit merchandise. Agencies use several mechanisms to coordinate their efforts, although the mechanisms' usefulness varies. Formal interagency meetings--part of the U.S. government's annual Special 301 review--allow agencies to discuss intellectual property policy concerns and are seen by government and industry sources as rigorous and effective. However, the National Intellectual Property Law Enforcement Coordination Council, established to coordinate domestic and international intellectual property law enforcement, has struggled to find a clear mission, has undertaken few activities, and is generally viewed as having little impact. U.S. efforts have contributed to strengthened intellectual property legislation overseas, but enforcement in many countries remains weak, and further U.S. efforts face significant challenges. For example, competing U.S. policy objectives take precedence over protecting intellectual property in certain regions. Further, other countries' domestic policy objectives can affect their "political will" to address U.S. concerns. Finally, many economic factors, as well as the involvement of organized crime, hinder U.S. and foreign governments' efforts to protect U.S. intellectual property abroad.

gao_GAO-11-880T

gao_GAO-11-880T_0

As a result, the share of child-only cases in the overall TANF caseload increased from about 35 percent to about half. Cases in which the parents were ineligible due to immigration status almost doubled and increased from 11 percent of the TANF child-only caseload in fiscal year 2000 to 19 percent in fiscal year 2008 (see fig. 4) as states shifted spending to purposes other than cash assistance, which is allowed under the law. Because states are primarily required to report data to HHS on families receiving TANF cash assistance but not other forms of assistance, gaps exist in the information gathered at the federal level to understand who TANF funds are serving and services provided, and to ensure state accountability. When we first reported on these data limitations to this Subcommittee in 2002, we noted that state flexibility to use TANF funds in creative ways to help low-income families has resulted in many families being served who are not captured in the data reported to the federal government. However, before DRA, concerns had been raised about the consistency and comparability of states’ work participation rates and the underlying data on TANF families participating in work activiti Although DRA was generally expected to strengthen TANF work requirements and improve the reliability of work participation data and program integrity by implementing federal definitions of work activities and participation verification requirements, the proportion of families receiving TANF cash assistance who participated in work activities for the required number of hours each week changed little after DRA, as did the types of work activities in which they most frequently participated. Although fewer than 50 percent of all families receiving TANF cash assistance participated in work activities for the required number of hours both before and after DRA, many states have been able to meet their work participation rate requirements because of various policy and funding options allowed in federal law and regulations. Specifically, factors that influenced states’ work participation rates included not only the number of families receiving TANF cash assistance who participated in work activities, but also 1. decreases in the number of families receiving TANF cash assistance, 2. state spending on TANF-related services beyond what is required, 3. state policies that allow working families to continue receiving TANF 4. state policies that provide nonworking families cash assistance outside of the TANF program. Specifically, decreases in the numbers of families receiving TANF cash assistance over a specified time period are accounted for in each state’s caseload reduction credit, which essentially then lowers the states’ required work participation rate from 50 percent. For example, in fiscal year 2009, 38 of the 45 states that met their required work participation rates for all TANF families did so in part because of their caseload declines (see fig.5). However, while states’ caseload reduction credits before DRA were based primarily on their caseload declines, after DRA, states’ spending of their own funds on TANF-related services also became a factor in some states’ credits. Specifically, states are required to spend a certain amount of their funds every year in order to receive their federal TANF block grants. In addition, as before DRA, states have continued to take advantage of the various policy and funding options available to increase their TANF work participation rates. Appendix I: How a State’s Work Participation Rate Is Calculated When It Claims State Expenditures in Excess of Its Requirement Federal law allows states to apply for caseload reduction credits, which decrease their required work participation rates.

Why GAO Did This Study The Temporary Assistance for Needy Families (TANF) program, created in 1996, is one of the key federal funding streams provided to states to assist low-income families. A critical aspect of TANF has been its focus on employment and self-sufficiency, and the primary means to measure state efforts in this area has been TANF's work participation requirements. When the Deficit Reduction Act of 2005 (DRA) reauthorized TANF, it also made changes that were generally expected to strengthen these work requirements. Given the impending extension or reauthorization of TANF, this testimony primarily draws on previous GAO work to focus on (1) how the welfare caseload and related spending have changed since TANF was created and (2) how states have met work participation rates since DRA. To address these issues, in work conducted from August 2009 to May 2010, GAO analyzed state data reported to the Department of Health and Human Services (HHS); surveyed state TANF administrators in 50 states and the District of Columbia; conducted site visits to Florida, Ohio, and Oregon, selected to provide geographic diversity and variation in TANF program characteristics; and reviewed relevant federal laws, regulations, and research. In July 2011, GAO updated this work by analyzing state data reported to HHS since that time. In addition, GAO gathered information on caseload changes through its forthcoming work on TANF child-only cases. What GAO Found Between fiscal years 1997 and 2008, the total number of families receiving welfare cash assistance decreased by almost 50 percent. At the same time, there have also been changes in the types of families receiving cash assistance. Specifically, child-only cases--in which the children alone receive benefits--increased from about 35 percent of the overall TANF caseload in 2000 to about half in 2008. As the number of families receiving TANF cash assistance declined, state spending shifted to support purposes other than cash assistance, which is allowed under the law. However, because states are primarily required to report data to HHS on families receiving cash assistance and not on families receiving other forms of aid funded by TANF, this shift in spending has left gaps in the information gathered at the federal level to understand who TANF funds are serving and ensure state accountability. Nationally, the proportion of TANF families who met their work requirements changed little after DRA was enacted, and many states have been able to meet their work participation rate requirements because of various policy and funding options allowed in federal law and regulations. Although federal law generally requires that a minimum of 50 percent of families receiving TANF cash assistance in each state participate in work activities, both before and after DRA, about one-third of TANF families nationwide met these requirements. Nonetheless, many states have been able to meet their required work participation rates because of policy and funding options. For example, states receive a caseload reduction credit, which generally decreases each state's required work participation rate by the same percentage that state caseloads decreased over a specified time period. States can further add to their credits, and decrease their required work rates, by spending their own funds on TANF-related services beyond the amount that is required to receive federal TANF funds. In fiscal year 2009, 7 states met their rates because 50 percent or more of their TANF families participated in work activities for the required number of hours. However, when states' caseload decreases and additional spending were included in the calculation of state caseload reduction credits, 38 other states were also able to meet their required work participation rates in that year.

gao_T-RCED-98-37

gao_T-RCED-98-37_0

Nature and Extent of Fraud, Waste, and Abuse The two main areas of fraud, waste, and abuse involve (1) overpayment of food stamp benefits and (2) trafficking. Concerning the first area, overpayments occur when ineligible persons are provided food stamps and when eligible persons are provided more than they are entitled to receive. In 1996, for example, the states overpaid recipients an estimated $1.5 billion—or 6.92 percent—of the approximately $22 billion in food stamps issued. With respect to trafficking—the second main area of fraud, waste and abuse—program regulations specify that participants must use food stamps only to purchase food items from the retailers authorized by FCS to accept food stamps. Numerous retailers are caught each year accepting food stamps from recipients, giving them a discounted value of the stamps in cash (for example, 70 cents on the dollar), and then redeeming the stamps at full face value from the government. However, a 1995 FCS study estimated that up to $815 million, or about 4 percent of the food stamps issued, was exchanged for cash by authorized retailers during fiscal year 1993. Roles and Responsibilities of the Federal Agencies in Minimizing Fraud, Waste, and Abuse The Food Stamp Program is administered by USDA’s FCS in partnership with the states. FCS provides nationwide criteria for determining who is eligible for assistance and the amount of benefits recipients are entitled to receive. The states are responsible for the day-to-day operation of the program, including meeting with applicants and determining their eligibility and benefit levels. Under the QC System, the states must review a sample of their household cases each year to determine the accuracy of the eligibility and benefit determinations made by state caseworkers and the extent of payment errors—both overpayments and underpayments. According to USDA’s data, overpayments in the Food Stamp Program have declined since 1993. With respect to trafficking, our 1995 report stated that FCS’ controls and procedures for authorizing and monitoring the retailers that participate in the Food Stamp Program did not deter or prevent retailers from trafficking in food stamps. Furthermore, FCS’ monitoring process was inadequate to detect authorized retailers that were violating program regulations. The OIG has also taken an active role in monitoring and reviewing EBT systems and developing the automated system to analyze EBT data to identify fraud in the Food Stamp Program. Observations on the Use of Electronic Benefits Transfer Systems Food stamp benefits have historically been distributed in the form of printed coupons. Under such systems, recipients receive plastic debit cards to obtain their food stamps and pay for purchases through point-of-sale terminals installed at check-out counters in food stores. EBT systems reduce the likelihood of benefit theft. While EBT systems make a major contribution to reducing certain aspects of food stamp fraud, they will not eliminate all fraud.

Why GAO Did This Study GAO discussed fraud, waste, and abuse in the Food Stamp Program, focusing on: (1) the nature and extent of the problem; (2) the roles and responsibilities of the major federal agencies involved in minimizing it; and (3) the potential of electronic benefits transfer (EBT), a system of benefit delivery that replaces the traditional food stamp coupons with a debit card, to reduce it. What GAO Found GAO noted that: (1) fraud, waste, and abuse in the Food Stamp program takes two primary forms: (a) overpayments to food stamp recipients; and (b) the use of food stamps to obtain cash or other non-food items, a process known as trafficking; (2) according to the Department of Agriculture (USDA), in fiscal year (FY) 1996, about $1.5 billion was paid out to individuals who either should not have received any food stamps at all or received more than they were entitled to receive; (3) these overpayments represented nearly 7 percent of the approximately $22 billion in food stamps provided; (4) overpayments are caused by both inadvertent and intentional errors made by recipients and errors made by state caseworkers; (5) program regulations specify that recipients use food stamps only to purchase food from authorized retailers; (6) USDA recently estimated that up to $815 million in food stamps, approximately 4 percent of the food stamps issued, were traded for cash in FY 1993 through retail stores; (7) numerous retailers are caught each year paying recipients a discounted value of the stamps and then redeeming the stamps at full face value; (8) there are no reliable data on the extent of trafficking that occurs before food stamps are redeemed by an authorized retailer; (9) the Food and Consumer Service (FCS) administers the Food Stamp Program in partnership with the states, which are responsible for the day-to-day operation of the program, including determining applicants' eligibility and benefit levels; (10) FCS provides criteria for determining eligibility and the amount recipients are entitled to receive; (11) FCS monitors the accuracy of state benefit determinations and operates a system of incentives and sanctions to encourage states to reduce the errors; (12) FCS approves retailers to participate in the program and monitors and investigates their activities to identify those potentially violating program regulations; (13) USDA's Inspector General devotes a substantial share of its audit and investigative resources to identifying program irregularities, especially trafficking; (14) EBT systems have the potential to reduce some aspects of the fraud, waste, and abuse in the Food Stamp Program, but not others; (15) by providing a clear paper trail of all food stamp transactions, EBT systems help reviewers identify trafficking activities and remove or prosecute retailers engaged in such activities; (16) EBT systems also address problems associated with food stamp theft; and (17) EBT cannot address problems associated with determining eligibility or benefit levels.

gao_GAO-15-111

gao_GAO-15-111_0

HFIAA did not affect the phase out schedule of these subsidies—which represented about 41 percent of all subsidized policies, as of September 30, 2013 (see fig. FEMA Lacks Data to Measure Forgone Premiums Accurately and Estimates Vary Widely Because Flood Risk Information Is Limited, the Forgone Premiums Associated with Subsidized Policies Cannot Be Measured Accurately FEMA does not collect the flood risk information for most subsidized policies and therefore cannot accurately determine forgone premiums (the difference between subsidized premiums paid and the premiums that would be required to cover the full risk of losses) associated with subsidized policies. However, according to FEMA officials, FEMA will not continue to collect this information with the restoration of these subsidies under HFIAA. We recommended that FEMA develop and implement a plan to obtain the flood risk information needed to determine full-risk rates for properties with subsidized rates. Although FEMA has taken some steps, we maintain the importance of fully implementing this recommendation and obtaining flood risk information to measure accurately forgone premiums associated with subsidies. We estimated forgone premiums at $16–25 billion during 2002–2013, using FEMA’s statement that eliminating subsidies would increase NFIP premiums 50–75 percent after expenses. This amount—as much as $1 billion a year—could have been available for losses or debt repayment. As FEMA also would have incurred additional expenses if it had been able to collect the forgone premiums, we estimated that FEMA might have had $13–16 billion in premiums net of expenses. The changes became effective on October 1, 2013. FEMA maintained documentation of change requests and responses provided to the contractor’s questions and has regular reports from the contractor to monitor performance, but these documents did not capture critical information needed to oversee the contractor’s progress toward completion of the data system changes. As a result of not proactively monitoring or verifying the implementation of data system changes, premium data for the policies between the implementation of the Biggert-Waters Act and enactment of HFIAA were unreliable and some policyholders were charged inaccurate rates. FEMA agreed with our previous recommendation (from July 2013) that it develop and implement a plan to obtain information on the relative risk of flooding and property elevations for subsidized policies. In addition, FEMA was unaware of the extent of delays and errors in its data system. Federal internal control standards call for agencies to have controls in place to help ensure the accuracy of all transactions and to determine if data system changes have been made properly. FEMA’s contracting officer’s representative handbook also states that a contractor’s performance should be monitored to ensure progress toward completion of specified requirements. However, FEMA lacked sufficient controls to oversee its contractor’s and software vendors’ implementation of data system changes before the changes were effective and therefore premium data and other information on policies subject to full-risk rates between October 1, 2013, and March 21, 2014 (the enactment of HFIAA) are unreliable. Moreover, FEMA is planning further changes to its system in 2015. Recommendations for Executive Action To better ensure that future data system changes are fully and accurately implemented before they become effective, we recommend that the Secretary of the Department of Homeland Security (DHS) direct the FEMA Administrator to take the following three actions: Institute internal controls, such as testing a sample of policies, to validate that the data system contractor fully implemented changes and edit checks before program changes become effective. Appendix I: Objectives, Scope, and Methodology The Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act) mandated that we conduct a number of studies about the National Flood Insurance Program (NFIP), including a study on the cost of forgone premiums of the properties that receive subsidized rates. We therefore calculated a premium based on FEMA’s rates and found additional problems with the premiums in the data.

Why GAO Did This Study As of September 30, 2013, FEMA, which administers NFIP, had more than 1.1 million subsidized flood insurance policies—about 21 percent of all of its policies. Because their premiums do not reflect the full risk of losses, subsidized policies have been a financial burden on the program. Due to NFIP's financial instability and operating and management challenges, GAO placed the program on its high-risk list in 2006. The Biggert-Waters Act mandated GAO to report on the forgone premiums from subsidies in NFIP. This report examines the forgone premiums associated with subsidies during 2002–2013 along with data reliability issues discovered in GAO's examination. Data for earlier periods were unavailable. GAO analyzed NFIP premium data, published statements about the size of the subsidies, and expenses associated with premiums. GAO also interviewed FEMA officials. What GAO Found The actual forgone premiums—the difference between subsidized and full-risk premiums—to the National Flood Insurance Program (NFIP) due to subsidies cannot be measured. The Federal Emergency Management Agency (FEMA) does not collect flood risk information for all subsidized policies, which is needed to calculate their full-risk premium rates. GAO recommended in July 2013 that FEMA develop and implement a plan to obtain this information. FEMA agreed with the recommendation, but has not yet fully implemented it. Although FEMA is phasing out subsidies through statutorily required rate increases, collecting this information remains important because the number of subsidized policies—and associated financial impacts—could grow over time with the restoration of certain subsidies under the Homeowner Flood Insurance Affordability Act of 2014 that previous legislation had eliminated. Working with available data and FEMA's published statements describing the size of the subsidies, GAO estimated forgone premiums in the range of $16–25 billion for 2002–2013 but estimates vary based on the calculation used. As FEMA would have incurred additional expenses if it had been able to collect the forgone premiums, GAO estimated that FEMA might have had $11–17 billion in premiums net of expenses, or as much as $1 billion a year, for losses or debt repayment. FEMA did not have sufficient controls or monitoring in place to validate system changes (made because of the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act)) before they became effective, and some premium data were unreliable. Federal internal control standards suggest that agencies have controls, such as validating implementation of changes, to help ensure the accuracy of transactions. A FEMA contracting handbook also calls for monitoring a contractor's progress toward completion of specified requirements. However, FEMA did not validate that its contractor fully implemented changes and system checks, or verify the changes in vendors' software, before program changes became effective in October 2013. FEMA's monitoring reports also did not capture critical information to oversee the contractor's progress toward completion of the required changes. As a result, premium data on policies GAO analyzed are unreliable in the time period studied, some policyholders were charged inaccurate rates, and the full extent of delays and errors went undetected for nearly a year. Without better monitoring and controls over future changes, FEMA risks further inaccuracies in its data system. What GAO Recommends GAO recommends that FEMA institute controls to validate implementation of data system changes and track progress toward completion in its monitoring reports. GAO also maintains its position that a recommendation made in July 2013 ( GAO-13-607 ) that FEMA develop and implement a plan to obtain flood-risk information needed to determine full-risk rates for properties with subsidized rates is valid and should be fully implemented. FEMA agreed with the new recommendations and discussed its approach for addressing the July 2013 recommendation.

gao_GAO-16-172

gao_GAO-16-172_0

§ 129a, and to ensure that the savings are not achieved through unjustified transfers of functions between or among the military, civilian, and service contractor personnel workforces of DOD, consistent with authorities available to the department under sections 129a, 2330a, 2461, and 2463 of title 10 of the United States Code; provide an initial report including a comprehensive description of the plan to achieve savings no later than 120 days after enactment of the NDAA; provide status reports describing the implementation of the plan in the prior year as part of the budget submitted by the President to Congress for each of fiscal years 2015 through 2018; in each status report, provide a summary of savings achieved through personnel reductions and the number of military, civilian, and contractor personnel reduced; and in each status report include an explanation where any savings fall short of the annual target. DOD’s Reports and Roles and Responsibilities DOD has submitted two reports to Congress in response to section 955. DOD’s Reports Did Not Fully Address Most of the Statutory Requirements DOD’s September 2014 and February 2015 reports did not fully address most statutory requirements related to the civilian and contractor workforces. Specifically, of the six statutory requirements, DOD partially addressed three statutory requirements and did not address three statutory requirements. Achieving Required Cost Savings in Civilian Workforce Is Uncertain Due to Incomplete Reporting by DOD, and Planned Increases in Contract Workforce Spending Pose a Challenge to Achieving Required Savings DOD Has Made Civilian Personnel Reductions, but the Reductions May Not Achieve Required Savings According to its section 955 reports, DOD has made civilian personnel reductions; however, our analysis shows that the reductions may not achieve the savings required by section 955. Section 955 requires DOD to achieve savings in the cost of the civilian and contractor workforces between fiscal year 2012 and fiscal year 2017 not less than the savings in military basic pay, in percentage terms, resulting from reductions in military end strength over the same period, and also requires DOD to report on the savings achieved in each of its annual status reports. In its reports, however, DOD provides information on reductions to civilian full- time equivalents (FTE), but does not report the civilian personnel costs associated with the reductions, and as a result it is not clear whether its reductions will achieve the savings required under section 955. Because DOD’s focus has been on making and reporting FTE reductions, not cost savings as required by 955, DOD and Congress do not have information on the extent to which the reductions will achieve savings, and DOD may risk falling short of the statutory requirement for cost savings in the civilian workforce. DOD has not provided an explanation of the reasons for the shortfall as required by section 955. Based on our analysis of DOD’s section 955 reports and related documents, DOD would need to reduce its spending on the contractor workforce by about $4.1 billion between fiscal year 2012 and fiscal year 2017 in order to match the approximately 7.0 percent level of reduction in military average strength over the same period. If carried out, this will mean that about half the reduction to contractor workforce spending through fiscal year 2017 that DOD has identified as its goal remains to be made. In addition, the official stated that complying with spending limitations under section 808 of the NDAA for Fiscal Year 2012, rather than section 955, has been a main focus of their efforts to limit spending on the contractor workforce in recent years. Without this information, however, it is uncertain whether DOD will achieve the required section 955 savings in contractor spending or whether Congress will have the information needed to have insight into what additional actions are required to achieve this goal. The information to be included in future status reports includes a comprehensive description of a plan to achieve savings for the civilian workforce and contractor workforce for fiscal year 2012 through fiscal year 2017; a description demonstrating that the plan is consistent with policies and procedures implementing workforce-management laws and steps the department is taking to ensure that no unjustified transfers between workforces take place as part of the implementing plan; status reports to be included in the President’s budget request for fiscal years 2017 and 2018 describing the implementation of the plan in the prior year; the cost of covered civilian personnel and military basic pay for fiscal years 2012 through 2017, and an assessment of these costs in regard to their compliance with the statutory requirements set forth in section 955; and an explanation for any shortfall in its reductions for the civilian and contractor workforces, and a description of actions DOD is taking to achieve the required savings. Appendix I: Scope and Methodology To determine the extent to which the Department of Defense’s (DOD) September 2014 and February 2015 reports met the requirements specified in section 955 of the National Defense Authorization Act (NDAA) for fiscal year 2013, we reviewed DOD instructions and other related documentation to identify DOD’s efforts to address the statutory requirements of section 955.

Why GAO Did This Study With long-term fiscal challenges likely to continue, DOD must operate strategically and efficiently, including through cost-effective management of its human capital. Section 955 of the NDAA for Fiscal Year 2013 required DOD to, among other things, develop and implement a plan to achieve savings in the total funding for civilian and contractor workforces from fiscal years 2012 through 2017. Section 955 also includes a provision that GAO review each of the Section 955 reports DOD submits to Congress to determine whether the required savings are being achieved and whether the plan is being implemented consistently with workforce-management laws. This report addresses the extent to which (1) DOD, as shown in its September 2014 and February 2015 reports, is meeting the requirements specified in section 955 and (2) has achieved the cost savings required under section 955 and identified the savings in these reports. GAO reviewed the two reports DOD has submitted to Congress and supporting documents and interviewed cognizant officials. What GAO Found The Department of Defense's (DOD) September 2014 and February 2015 reports did not fully address most statutory requirements identified in section 955 of the National Defense Authorization Act (NDAA) for fiscal year 2013. Specifically, DOD partially addressed three statutory requirements and did not address three statutory requirements. For example, DOD's September 2014 report to Congress partially addressed the requirement to develop and implement a plan for achieving savings by outlining reductions in its civilian and contractor workforces, but DOD does not describe a process for implementing the planned reductions. Also, DOD did not address savings the department intends to achieve through reductions in the number of military, civilian, and contractor personnel. Instead the report outlined reductions in full-time equivalent (FTE) positions, which may not equate to savings, and did not outline savings in funding for the contractor workforce beyond fiscal year 2015. Without this information, Congress has limited assurance on how the department will achieve required savings and whether the savings will be achieved in a manner that is consistent with workforce-management laws. Moreover, according to its reports, DOD has made civilian personnel reductions; however, GAO's analysis indicates that the reductions may not achieve the savings required by section 955, and DOD has not provided an explanation of the reasons for the projected shortfall in achieved savings in the contractor workforce. Section 955 requires DOD to achieve savings in the cost of the civilian and contractor workforces between fiscal year 2012 and fiscal year 2017 at least as large in percentage terms as the savings in military basic pay resulting from reductions in military end strength over the same period. In its section 955 reports, DOD reports on reductions to civilian FTEs, but does not report the civilian personnel savings associated with the reductions. Civilian FTEs by themselves, however, may not be reliable measures of the cost of the civilian workforce. For instance, GAO's analysis shows that from fiscal years 2012 through 2016, civilian FTEs declined by 3.3 percent, but civilian personnel costs declined by only 0.9 percent adjusted for inflation. Because DOD's focus has been on making and reporting on FTE reductions, DOD and Congress lack information on the extent to which the reductions will achieve savings, and DOD may risk falling short of the statutory requirement for cost savings in the civilian workforce. In addition, in its fiscal year 2016 budget, DOD shows a planned increase in spending on the contractor workforce that, if carried out, will mean that about half the reduction to contractor workforce spending that DOD has identified as its goal through fiscal 2017 remains to be achieved. Further, GAO's analysis shows that DOD would need to reduce its spending on the contractor workforce by about $4.1 billion from fiscal year 2012 through fiscal year 2017 in order to match the approximately 7.0 percent reduction in military average strength over the same period. DOD has not provided an explanation of the reasons for the shortfall as required by section 955, in part because complying with other statutory requirements has been a main focus of DOD's efforts to limit spending on the contractor workforce. Without this information, it is uncertain whether DOD will achieve the required section 955 savings in contractor spending, which hinders Congress's insight into what additional actions are required to achieve this goal. What GAO Recommends GAO recommends that the Secretary of Defense fully address ongoing section 955 requirements in its next two status reports to Congress. DOD generally concurred with the recommendation.

gao_GAO-07-1264T

gao_GAO-07-1264T_0

In reporting on VA’s IT management over the past several years, we have highlighted challenges the department has faced in enabling its employees to help veterans obtain services and information more quickly and effectively while also safeguarding personally identifiable information. In response to the challenges that we and others have noted, the department officially began its effort to provide the CIO with greater authority over IT in October 2005. Multiple Factors Increasing Risk to Success of Realignment Although VA has fully addressed two of six critical success factors that we identified as crucial to a major organizational transformation such as the realignment, it has not fully addressed the other four factors, and it has not kept to its scheduled timelines for implementing new management processes that are the foundation of the realignment. Ensuring commitment from top leadership. The department has fully addressed this success factor. Establishing a governance structure to manage resources. VA has not identified such an implementation team to manage the realignment. In our view, having a dedicated implementation team to manage major change initiatives is crucial to successful implementation of the realignment. In a report released last week, we stated that although VA has made progress in addressing security weaknesses, it has not yet fully implemented key recommendations to strengthen its information security practices. It has not implemented two of our four previous recommendations and 20 of 22 recommendations made by the department’s inspector general. Since the May 2006 security incident, VA has begun or has continued several major initiatives to strengthen information security practices and secure personally identifiable information within the department. These initiatives include the realignment of its IT management structure, as discussed earlier. Under the realignment, the management structure for information security has changed. Thus, responsibility for information security functions within the department is divided. VA officials indicated that the heads of the two organizations are communicating about the department’s implementation of security policies and procedures, but this communication is not defined as a role or responsibility for either position in the new management organization book, nor is there a documented process in place to coordinate the management and implementation of the security program. In addition to the realignment initiative, the department also has others under way to address security weaknesses. These include developing an action plan to correct identified weaknesses; establishing an information protection program; improving its incident management capability; and establishing an office to be responsible for oversight of IT within the department. However, implementation shortcomings limit the effectiveness of these initiatives. Until the department addresses recommendations to resolve identified weaknesses and implements the major initiatives it has undertaken, it will have limited assurance that it can protect its systems and information from the unauthorized use, disclosure, disruption, or loss. We also made recommendations to improve the department’s ability to protect its information and systems, including the development of various processes and procedures to ensure that tasks in the department’s security action plans have time frames for implementation. 2 Addresses long- and short-term objectives, business direction, and their impact on IT, the IT culture, communications, information, people, processes, technology, development, and partnerships 2 Defines a structure of relationships and processes to direct and control the See note a Identifies potential events that may affect the organization and manages risk to be within acceptable levels so that reasonable assurance is provided regarding the achievement of organization objectives 2 Creates, maintains, promotes, and governs the use of IT architecture models and standards across and within the change programs of an organization 1 Assesses all applications, services, and IT projects that consume resources in order to understand their value to the IT organization 2 Manages the department’s information security program, as mandated by the Federal Information Security Management Act (FISMA) of 2002 3 Generates ideas, evaluates and selects ideas, develops and implements innovations, and continuously recognizes innovators and learning from the experience 1 Plans, organizes, monitors, and controls all aspects of a project in a continuous process so that it achieves its objectives 1 Manages and prioritizes all requests for additional and new technology solutions arising from a customer’s needs 3 Determines whether and how well customers are satisfied with the services, solutions, and offerings from the providers of IT 1 Provides sound stewardship of the monetary resources of the organization 3 Establishes a pricing mechanism for the IT organization to sell its services to internal or external customers and to administer the contracts associated with the selling of those services 3 Enables the IT organization to understand the marketplace it serves, to identify customers, to “market” to these customers, to generate “marketing” plans for IT services and support the “selling” of IT services to internal customers 2 Ensures adherence with laws and regulations, internal policies and procedures, and stakeholder commitments 1 Maintains information regarding technology assets, including leased and purchased assets, licenses, and inventory 2 Enables an organization to provide the optimal mix of staffing (resources and skills) needed to provide the agreed-on IT services at the agreed-on service levels 2 Manages service-level agreements and performs the ongoing review of service achievements to ensure that the required and cost-justifiable service quality is maintained and gradually improved 1 Ensures that agreed-on IT services continue to support business requirements in the event of a disruption to the business 3 Develops and exercises working relationships between the IT organization and suppliers in order to make available the external services and products that are required to support IT service commitments to customers 3 Promotes an integrated approach to identifying, capturing, evaluating, categorizing, retrieving, and sharing all of an organization’s information assets 2 Translates provided customer (business) requirements and IT stakeholder- generated requirements/constraints into solution-specific terms, within the context of a defined solution project or program 1 Creates a documented design from agreed-on solution requirements that describes the behavior of solution elements, the acceptance criteria, and agreed-to measurements 3 Brings together all the elements specified by a solution design via customization, configuration, and integration of created or acquired solution components See note a Validates that the solution components and integrated solutions conform to design specifications and requirements before deployment 2 Addresses the delivery of operational services to IT customers by matching resources to commitments and employing the IT infrastructure to conduct IT operations 3 Ensures that all data required for providing and supporting operational service are available for use and that all data storage facilities can handle normal, expected fluctuations in data volumes and other parameters within their designed tolerances.

Why GAO Did This Study The Department of Veterans Affairs (VA) has encountered numerous challenges in managing its information technology (IT) and securing its information systems. In October 2005, the department initiated a realignment of its IT program to provide greater authority and accountability over its resources. The May 2006 security incident highlighted the need for additional actions to secure personal information maintained in the department's systems. In this testimony, GAO discusses its recent reporting on VA's realignment effort as well as actions to improve security over its information systems. To prepare this testimony, GAO reviewed its past work on the realignment and on information security, and it updated and supplemented its analysis with interviews of VA officials. What GAO Found VA has fully addressed two of six critical success factors GAO identified as essential to a successful transformation, but it has yet to fully address the other four, and it has not kept to its scheduled timelines for implementing new management processes that are the foundation of the realignment. That is, the department has ensured commitment from top leadership and established a governance structure to manage resources, both of which are critical success factors. However, the department continues to operate without a single, dedicated implementation team to manage the realignment; such a dedicated team is important to oversee the further implementation of the realignment, which is not expected to be complete until July 2008. Other challenges to the success of the realignment include delays in staffing and in implementing improved IT management processes that are to address long-standing weaknesses. The department has not kept pace with its schedule for implementing these processes, having missed its original scheduled time frames. Unless VA dedicates a team to oversee the further implementation of the realignment, including defining and establishing the processes that will enable the department to address its IT management weaknesses, it risks delaying or missing the potential benefits of the realignment. VA has begun or continued several major initiatives to strengthen information security practices and secure personally identifiable information within the department, but more remains to be done. These initiatives include continuing the department's efforts to reorganize its management structure; developing a remedial action plan; establishing an information protection program; improving its incident management capability; and establishing an office responsible for oversight and compliance of IT within the department. However, although these initiatives have led to progress, their implementation has shortcomings. For example, although the management structure for information security has changed under the realignment, improved security management processes have not yet been completely developed and implemented, and responsibility for the department's information security functions is divided between two organizations, with no documented process for the two offices to coordinate with each other. In addition, VA has made limited progress in implementing prior security recommendations made by GAO and the department's Inspector General, having yet to implement 22 of 26 recommendations. Until the department addresses shortcomings in its major security initiatives and implements prior recommendations, it will have limited assurance that it can protect its systems and information from the unauthorized disclosure, misuse, or loss of personally identifiable information.

gao_GAO-07-737

gao_GAO-07-737_0

For example, our analysis of the lists of data breaches compiled by three private research and advocacy organizations shows more than 570 breaches reported by the news media from January 2005 through December 2006. Data breaches have occurred across a range of entities, including federal, state, and local government agencies; retailers; financial institutions; colleges and universities; and medical facilities. State Agencies Some states require entities experiencing data breaches to report them to designated state agencies. These breaches also have varied in size and in the types of data compromised. Several cases have been identified in which a data breach appears to have resulted in identity theft, but available data and information from law enforcement and industry association representatives indicated that most breaches have not resulted in detected incidents of identity theft. Many of the law enforcement officials said that, based on their experience, data breaches that result in harm have usually involved fraud on existing accounts (such as credit card fraud) rather than the unauthorized creation of new accounts. Of 24 Large Publicly Reported Breaches, 4 Apparently Resulted in Known Cases of Identity Theft Using lists of data breaches compiled by the Identity Theft Resource Center, Privacy Rights Clearinghouse, and Congressional Research Service, we identified the 24 largest breaches (measured by number of records) that were reported in the news media from January 2000 through June 2005. For example, federal officials and representatives of a private group that assists victims said that consumers who are notified of a breach often assume that any perceived mistakes on their credit card statements or credit report were a result of the breach. In contrast, the unauthorized creation of new accounts—such as using someone else’s identity to open credit card or bank accounts, originate home mortgages, file tax returns, or apply for government benefits—can result in substantial financial costs and other hardships. Breach Notification Requirements Can Serve to Encourage Better Data Security Practices and Alert Consumers, but They Also Present Costs and Challenges Breach notification requirements have several potential benefits, including creating incentives for entities to improve their data security practices (and thus prevent potential breaches from occurring), allowing affected consumers to take measures to prevent or mitigate identity theft, and serving to respect individuals’ basic right to know when their personal information is compromised. At the same time, breach notification requirements present costs, both for developing compliance strategies and for actual notifications in the event of a breach. Further, there is the risk of overnotification, or inundating consumers with frequent notifications of breaches that may present little or no risk of identity theft or other harm. Thus, policymakers face the challenge of setting a notification standard that allows individuals to take steps to protect themselves where the risk of harm exists, while ensuring they are only notified in cases where the level of risk warrants such action. These groups have advocated a strong notification standard because, they say, the link between breaches and identity theft is not always clear and entities are not well equipped to assess the risk of harm resulting from a given breach. Should Congress choose to enact a federal breach notification requirement, use of the risk- based approaches that the federal banking regulators and the President’s Identity Theft Task Force advocate could avoid undue burden on organizations and unnecessary and counterproductive notifications to consumers. Appendix I: Scope and Methodology Our report objectives were to examine (1) what is known about the incidence and circumstances of breaches of sensitive personal information; (2) what information exists on the extent to which breaches of sensitive personal information have resulted in identity theft; and (3) the potential benefits, costs, and challenges associated with breach notification requirements.

Why GAO Did This Study In recent years, many entities in the private, public, and government sectors have reported the loss or theft of sensitive personal information. These breaches have raised concerns in part because they can result in identity theft--either account fraud (such as misuse of credit card numbers) or unauthorized creation of new accounts (such as opening a credit card in someone else's name). Many states have enacted laws requiring entities that experience breaches to notify affected individuals, and Congress is considering legislation that would establish a national breach notification requirement. GAO was asked to examine (1) the incidence and circumstances of breaches of sensitive personal information; (2) the extent to which such breaches have resulted in identity theft; and (3) the potential benefits, costs, and challenges associated with breach notification requirements. To address these objectives, GAO reviewed available reports on data breaches, analyzed 24 large data breaches, and gathered information from federal and state government agencies, researchers, consumer advocates, and others. What GAO Found While comprehensive data do not exist, available evidence suggests that breaches of sensitive personal information have occurred frequently and under widely varying circumstances. For example, more than 570 data breaches were reported in the news media from January 2005 through December 2006, according to lists maintained by private groups that track reports of breaches. These incidents varied significantly in size and occurred across a wide range of entities, including federal, state, and local government agencies; retailers; financial institutions; colleges and universities; and medical facilities. The extent to which data breaches have resulted in identity theft is not well known, largely because of the difficulty of determining the source of the data used to commit identity theft. However, available data and interviews with researchers, law enforcement officials, and industry representatives indicated that most breaches have not resulted in detected incidents of identity theft, particularly the unauthorized creation of new accounts. For example, in reviewing the 24 largest breaches reported in the media from January 2000 through June 2005, GAO found that 3 included evidence of resulting fraud on existing accounts and 1 included evidence of unauthorized creation of new accounts. For 18 of the breaches, no clear evidence had been uncovered linking them to identity theft; and for the remaining 2, there was not sufficient information to make a determination. Requiring affected consumers to be notified of a data breach may encourage better security practices and help mitigate potential harm, but it also presents certain costs and challenges. Notification requirements can create incentives for entities to improve data security practices to minimize legal liability or avoid public relations risks that may result from a publicized breach. Also, consumers alerted to a breach can take measures to prevent or mitigate identity theft, such as monitoring their credit card statements and credit reports. At the same time, breach notification requirements have associated costs, such as expenses to develop incident response plans and identify and notify affected individuals. Further, an expansive requirement could result in notification of breaches that present little or no risk, perhaps leading consumers to disregard notices altogether. Federal banking regulators and the President's Identity Theft Task Force have advocated a notification standard--the conditions requiring notification--that is risk based, allowing individuals to take appropriate measures where the risk of harm exists, while ensuring they are only notified in cases where the level of risk warrants such action. Should Congress choose to enact a federal notification requirement, use of such a risk-based standard could avoid undue burden on organizations and unnecessary and counterproductive notifications of breaches that present little risk.

gao_GAO-15-241T

gao_GAO-15-241T_0

Much Work Remains to Improve the Quality of Federal Spending Data Congress and the Administration Have Acted to Make More Data Available and Accessible The federal government spends more than $3.5 trillion annually, but data on this spending lack transparency. Moreover, the data are often incomplete or have quality limitations. That data are to be available on the web in machine-readable and open formats. Lastly, to improve the quality of data submitted to USAspending.gov, the act requires Inspectors General (IG) to assess the completeness, timeliness, quality, and accuracy of the spending data submitted by their respective agencies and the use of the data standards. These challenges relate to the quality and completeness of data submitted by federal agencies. We found that only between 2 percent and 7 percent of the awards contained information that was fully consistent with agencies’ records for all 21 data elements we examined. DATA Act Implementation Efforts Under Way Need to Address Known Challenges Initial Actions Are Focused on Data Standards, Stakeholder Outreach, and Establishing Plans to Monitor Compliance Across the federal government, initiatives are under way to implement key provisions of the DATA Act. In response, Treasury and OMB convened a data transparency town hall meeting in late September 2014 so the public could provide input to Treasury officials responsible for developing data standards. The Treasury IG is leading the IG community’s efforts to develop a comprehensive framework of audit procedures, in consultation with us, to ensure IGs meet their auditing and reporting responsibilities under the act. The act requires us to review IG reports on agency spending data quality and use of data standards in compliance with the act, and IGs are to consult with us to assess the completeness and accuracy of agency data. The first of these issues involves developing and defining common data elements across multiple reporting areas. To address this issue for DATA Act implementation, the DOD and the Department of Health and Human Services (HHS) are examining data elements used by the procurement and grants communities to identify financial data elements common to both communities that can be standardized.assessment focuses on 72 data elements that are linked to five data Their areas: (1) identification of award; (2) awardee/recipient information; (3) place of performance; (4) period of performance; and (5) identification of agencies. Another related issue is how to enhance data transparency while protecting individual privacy and national security. Effective Implementation of the DATA Act Would Help Address Ongoing Government Management Challenges and Enhance Oversight When fully and effectively implemented, the DATA Act holds great promise for improving the efficiency and effectiveness of the federal government, and for addressing persistent government management challenges. Absent this information, Congress and agencies cannot make fully informed decisions on how federal resources should be allocated and the potential budget trade-offs. The lack of program comparability hampers decision makers’ ability to identify duplicative programs and accurately measure the cost and magnitude of federal investments. Effective implementation of the DATA Act could also provide additional data analytic tools for agencies to detect, reduce, and prevent improper payments. as well as on the 2013 and 2012 Statements of Changes in It is important to note, however, that since the enactment of key financial management reforms in the 1990s, significant progress has been made in improving financial management activities and practices. For fiscal year 2013, almost all of the 24 Chief Financial Officers (CFO) Act agencies received unmodified (“clean”) audit opinions on their respective entities’ financial statements, up from 6 CFO Act agencies for fiscal year 1996. Addressing Impediments to an Opinion on the Accrual-Based Consolidated Financial Statements Three major impediments continued to prevent us from expressing an opinion on the U.S. government’s accrual-based consolidated financial statements: (1) serious financial management problems at DOD that have prevented its financial statements from being auditable, (2) the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal entities, and (3) the federal government’s ineffective process for preparing the consolidated financial statements. We have made numerous recommendations to DOD to address these financial management issues. because only some of the General Fund is reported in Treasury’s department-level financial statements. Long-Term Federal Fiscal Challenges The 2013 Financial Report includes comprehensive long-term fiscal projections for the U.S. government that, consistent with our recent simulations, show that while the near-term outlook has improved—absent policy changes—the federal government continues to face an unsustainable long-term fiscal path. When fully and effectively implemented, the DATA Act will improve the accountability and transparency of federal spending data (1) by establishing government-wide financial data standards so that data are comparable across agencies and (2) by holding federal agencies more accountable for the quality of the information disclosed.

Why GAO Did This Study The federal government spends $3.5 trillion annually, but data on this spending are often incomplete or have quality limitations. Effective implementation of the DATA Act would help address the federal government's persistent management and oversight challenges by providing for standardized, high-quality data. The DATA Act also will increase the accessibility of data to benefit the public and the business community by requiring, among other things, that data be made available in machine-readable and open formats. This statement focuses on (1) the condition of information detailing federal spending as reported in our June 2014 report; (2) efforts to date to implement and plan for meeting key provisions of the DATA Act, including potential implementation challenges as well as GAO's plan; (3) the importance of the DATA Act for addressing government management and oversight challenges; and (4) results of GAO's audit of the fiscal year 2013 U.S. government's financial statements, including efforts to improve financial management at DOD. This statement is primarily based upon our published and on-going work covering GAO's work on federal data transparency, fragmentation, overlap and duplication, improper payments, and government efficiency, effectiveness, and financial reporting. GAO has made numerous recommendations to OMB, Treasury, and other executive branch agencies in these areas, and this statement reports on the status of selected recommendations. What GAO Found GAO's prior work on federal data transparency has found persistent challenges related to the quality and completeness of the spending data agencies report to USAspending.gov. For example, GAO reported in June 2014 that roughly $619 billion in assistance awards were not properly reported. In addition, few reported awards—between 2 and 7 percent—contained information that was fully consistent with agency records for all 21 data elements GAO examined. GAO's work also found that a lack of government-wide data standards limits the ability to measure the cost and magnitude of federal investments and hampers efforts to share data across agencies to improve decision-making and oversight. The Digital Accountability and Transparency Act of 2014 (DATA Act) was enacted to help address these challenges. Among other things, the DATA Act requires (1) the establishment of governmentwide data standards by May 2015, (2) disclosure of direct federal spending with certain exceptions, (3) agencies to comply with the new data standards, and (4) Inspectors General audits of the quality of the data made available to the public. Initial implementation efforts are focused on obtaining public input, developing data standards and establishing plans to monitor agency compliance with DATA Act provisions. These efforts include, for example, a data transparency town hall meeting co-hosted by the U.S. Department of the Treasury (Treasury) and the Office of Management and Budget (OMB) to obtain public stakeholder input on the development of data standards, and Treasury Inspector General's efforts, in consultation with GAO, to develop a comprehensive audit framework to assess agency compliance and ensure new standardized data elements are effective once implemented. Effective implementation will need to address key technical issues including developing and defining common data elements across multiple reporting areas and enhancing data transparency while protecting individual privacy and national security. Effective implementation would help promote transparency to the public and address ongoing government management challenges by expanding the quality and availability of federal spending data. Having better data also will make it possible to gauge the magnitude of the federal investment, help agencies make fully informed decisions about how federal resources should be allocated, and provide agencies and the audit community with additional data analytic tools to detect and prevent improper payments and fraudulent spending. GAO also reports on its annual audit of the consolidated financial statements of the U.S. government. Almost all of the 24 Chief Financial Officers Act agencies received unmodified (“clean”) opinions on their respective entities' fiscal year 2013 financial statements. However, three long-standing major impediments, including serious financial management problems at the U.S. Department of Defense (DOD), prevented GAO from expressing an opinion on the U.S. government's 2013 accrual-based consolidated financial statements. In addition, while progress has been made to reduce the deficit in the near term, comprehensive long-term fiscal projections, consistent with GAO's recent simulations, show that absent policy changes, the federal government continues to face an unsustainable long-term fiscal path.